A comparison of KFC and McDonald’s marketing strategy
in China: Localization or Globalization
McDonald’s is the greatest fast food chain in the world, its company sales and operate income was largely exceeded KFC on a global scale, but it confronted a strong challenge from KFC when it emerged into China. This essay analyzes the comparison between KFC and McDonald’s marketing strategy, emphases on finding the similarities and differentiations from “Seven P Formula” and finally makes a conclusion that localization is more suitable than globalization as the marketing strategy when fast food chain emerged in China’s market.
Localization or Globalization has long been discussed when choosing strategic orientation in international marketplace. These two international marketing philosophies influenced enterprises’ current situation and future development. There are two fast food international companies named McDonald’s and Kentucky Fried Chicken (KFC) who initially adopted different marketing strategies in China that led to differentiation for their future development. McDonald’s first franchise was founded in the United States in 1955, serve people for hamburger, french fries and other type of fast food, while KFC also from the same country, is now one brand of Yum, which first restaurant was founded in 1952 and mainly sells unique taste cooked chicken. From global scope, McDonald’s is exceeding KFC from company sales, operating profit to worldwide system units. McDonald’s company- operated sales were ＄18875 million, operating income was ＄8764 million and it had 35429 systemwide restaurants in 2013(McDonald’s, 2013), while KFC’s company sales were ＄11184 million, operating profit was ＄1798 million and there were 18875 KFC restaurants in 2013(YUM, 2013). However, as these two global fast-food brands emerged in China, the situation has been reversed. McDonald’s annual report uses APMEA (Asia Pacific, Middle East and Africa) as representative of Asian but not show the profit from China while KFC can saw significant progress in China, and it highlighted the progress in new restaurants, recruits and volume growth in annual report. The difference between these two fast food companies was mainly due to their marketing strategies. That is, localization is more suitable than globalization as the marketing strategy when fast food chain emerged in China’s market.
The concept of marketing has long been defined by different people. The easiest one to understand may be a process of planning and executing, from price, products, ideas and services to satisfy customers and organizations objectives (Ferrell et al, 1987). This definition emphases marketing as a process preformed in organization, which has an overview of its practical function. It has mutually beneficial between providers and customers’ exchange, where provider’s goal is to offer products and service to achieve profit and customer’s goal is to purchase products which benefit their daily life. Marketing strategy could be the plan that identifying what is the customers’ requirement and what marketing goals and objectives could be achieved if selling particular goods and services in an available time (Jonathan, 2009). Briefly is the competitive plan that the organization will have. Marketing strategy enables an organization to have an understanding on the environment and achieve its goals and objectives by using its resources that can meet the needs of customs (Douglas et al, 2010). A good marketing strategy would effectively improve company to supervise their value and create consumers’ brand loyalty. Localization is a strategy that advocates enterprises to adapt to local culture. The process often set up their products, services and promotion customized relate to local market. Enterprise should try to integrate into and treat them as an inherent member but not a foreigner to the local culture in the target market, which emphasizes the...
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