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KFC (MALAYSIA) MARKETING STRATEGY IN FAST FOOD INDUSTRY

1.0 EXECUTIVE SUMMARY IN FAST FOOD INDUSTRY

Malaysians were first introduced to fast foods when A&W established its first restaurant in 1963. Since then, consumers' acceptance of fast foods has been on the upward trend. This is manifested by the proliferation of fast food outlets in Petaling Jaya and Kuala Lumpur, such as McDonald's, Kentucky Fried Chicken (KFC), Grandy's, Pizza Hut and Shakey's Pizza, especially during the past ten years. These restaurants are franchised outlets that serve standardised western style menus, prepared according to strict specifications and charge fixed prices.

There is still scope for new chains as the fast food market in Malaysia is a growing one. This is attributed to :-

a. Expanding population and its changing demographic characteristics (such as a young
population which is less traditionally bound and hence, more receptive to the American
fast food concept);
b. Increasing affluence of the people;
c. Changing lifestyles, such as preferences for leisure, convenience and eating out; d. Changing role and independence of women as more of them enter the labour market; and e. Urbanisation, as urban families can afford and are more willing to incur higher

expenditures on food.

These changes have encouraged the development of diverse eating habits and tastes among consumers for convenience foods, such as fast foods. Although some chains (like Orange Julius, Popeye's) have failed, others (McDonald's, KFC) have been very successful. Due to the high costs of setting up and operating a fast food restaurant, financial strength stands out as an important point factor for the long-term survival of these ventures. Indeed the trend is that fast food chains are managed by public-listed companies since these large operators usually have the resources to

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KFC (MALAYSIA) MARKETING STRATEGY IN FAST FOOD INDUSTRY

sustain the business (for example, QSR Brands owns KFC). The cost of entering the industry is substantial, with a franchise fee ranging from RM 750,000 to RM 1.5 million plus an additional initial capital outlay of about RM1 million for equipment, renovations and decor. A fast food restaurant depends on its turnover to recoup not only these setup costs, but also recurring expenses, such as rent, wages, electricity for lighting, air-conditioning and kitchen equipment, as well as disposables such as paper cups and plastic spoons. Besides, expenditure is also incurred on advertising and promotion to establish consumer awareness and support. On the other hand, unit price is low, for example, the price of a burger averages between RM 3 and RM 5. To sustain the business, it is necessary to maintain a sufficiently high volume of sales. It is estimated that a monthly turnover of at least RM 50,000 to RM 70,000 should be achieved just to break even.

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KFC (MALAYSIA) MARKETING STRATEGY IN FAST FOOD INDUSTRY

2.0 P.E.S.T ANALYSIS IN FASTFOOD INDUSTRY

2.1. Political Analysis

2.1.1.Malaysia is a politically stable country which enables business to carry out their operations without many distractions. Also, this stability has enabled the development of fast food to take place. An example would be the smooth development of our growth economy. The stable environment enables us to plan and go all out in marketing our products without any fears of life-taking shooting scene. Besides, we need not incur unnecessary costs due to any destruction caused by the chaotic environment. Now, this politically stable environment would ensure the smooth and successful marketing fast food industry;

2.1.2.Malaysia Health & Safety guidelines are also implemented in a highly manner. Strict procedure with proper checking by our Health Department safeguard and guarantees our fast food are in high quality and safe to eat. This added by the implemented of Halal Food procedure;

2.1.3.Franchising in Malaysia is...
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