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Company is used as a product category for consumers to determine the culture influence in the China market and how KEF position itself within the local Chinese environment. From the research it is evident that KEF chine has gradually increased its market share since its operation in China by the year 1987 with 20% of profit margins and has annual revenue of $1 million only in China market therefore out performing all of its competitors in the fast food business. This is achieved through competitive positioning in which KEF has localized itself through its menu and including Chinese language in order to meet the needs of the consumers.
Furthermore the report shows that KEF china not only has customized the menu but it also celebrates with all people from different culture. The spring festival is the most commonly celebrated in the beginning of Chinese New Year. With this, new 20 products are implemented every year tailored towards the local tastes. KEF has also able to meeting the eating habits of Chinese consumers who values family dining a norm. Other factors that, this report elaborates is the leadership and culture and their contribution success factors of KEF china. Therefore it is recommended for
KEF to also include local Chinese in the leadership team as they better understand the Chinese culture and subculture thus increased sales. Although it is successful in china, KEF should increase more outlets since they now better understand the culture of Chinese and have adapted well within the region. 2. Introduction In today, s’ business world, business are want to create competitive advantage due to intense competition that occurs. Therefore marketers of the businesses have to cater for their consumer’s needs by understanding consumer’s decisions when purchasing a product or service (Smith & Fisher).
Consumers are faced with competing companies offering a variety of goods or services therefore, decision and the factors impacting their behavior should be clearly analyzed. According to (Darrel, p. 96, 2010) “consumer ‘s decision are often made through five stages which include; need recognition, searching information, evaluating alternatives , post-purchase behavior and purchasing decisions”. However marketers should focus on the whole buying process rather than the purchasing decision only. Internal and external characteristics are the main factors which influences the consumers purchase decision and behavior.
The internal characteristics comprises of personal and psychological whereas external characteristics includes cultural and social factors. In this research context, the emphasis is on one variable of any choice thus culture will be discussed as an external variable. 3. Consumer behavior Geol. & Hofmann (2010) Consumer behavior is defined as the process through which the buyer makes purchase decision across various products/ services. It is the behavior shown by the consumers while buying and using the products or services which satisfy their needs and desires.
Therefore it is vital for marketers to develop understanding and to know reasons the reasons why consumers purchase certain goods and services. With that information, they can able to know the needed products and identify the best ways to present the goods to the consumers in the market place. Consumer behavior further tries to understand process of buyer decision making and characteristics of individuals such as personality and preferences are learnt in order to understand the consumer ‘s wants(Billie, 2009).
It further evaluates factors which influence consumers such as the society, family and friends and also it allows companies to adopt relationship marketing. Cultural influences are an external major factor which influences consumer s behavior. 3. 1 THE BUYER DECISION PROCESS Figure 1 : Source: (Buyer Decisions, Kettle, 2009) Fig. 1 indicates the purchase decision process and what a buyer encounters in the choice making process regarding the type of goods or services to buy and this process is in stages. Problem recognition- at this stage buyers identify what they need to purchase in comparison with their needs and wants (Sinai, 2011).
These needs can be influenced mostly by internal factors which are personal and psychological. Also marketers sometimes stimulate the need by providing information about the product. For example, an advertisement about new clothes can stimulate the consumers recognition that the need new clothing Information search- after they identify their needs; consumers have to now source for information of what they will purchase (Lee & Carnage, 2010). Searching information could be external (word of mouth) or internal and if the search is a success the buyer is left other alternatives (evoked sets).
The information search can be on low -velveteen purchase or high velveteen. Evaluation of alternatives- this is the stage whereby the buyer evaluates the options available. With the information search gathered the consumers are able to know what they want and what they do not want. Comparison of brands is made based on price and quality factor during the process. Purchase decision – it the stage whereby the buyer has concluded on the best choice brand to purchase after evaluation of the alternatives. The decision could be made based and the product, packaging or services.
Ghana & Wang (2012) discussed that, attitudes from people close (significant others) to you such as friends can influence this decision. For example, a consumer deciding to eat KEF informs their friend and in turn the friend will persuade them to buy Kenny Rogers as it offers healthy meals; therefore the consumer is likely to change their initial decisions made. Another factor which influences the purchase decision is the unexpected situations Post Evaluation- purchase it is determined by two outcomes which is satisfaction or dissatisfaction which evaluates the decisions.
The consumer evaluates if the decision made is right or not (cognitive Dissonance) and therefore marketers can reduce this behavior by offering warranties, after sales services, coupons and rewards points(Roberts, 2011). 4. CULTURAL INFLUENCES Effect of culture on consumer behavior Culture determines the way people live and it is usual dynamic depending on societies. It is a way of life, which comprises of the core values, traditions, attitudes, language, peoples’ tastes and preferences and it also communicates the thoughts of the society (Francis, 2013). It also includes artifacts, sign and symbols.
It is a broad aspect that determines the consumer’s behavior thus marketers have to understand its key role on consumer’s decision. Changes in the trend and cultural values & norms should be monitored and recognize by marketers so they can satisfy their customer’s needs and determine the business and marketing strategies which work well and effectively (Ross & Diane, 2011). However, these changes vary from country to country so marketer should pay attention to things that are offensive or not. Therefore, there is a need for new product development if there are any changes in the cultural shift. (Palmer et al. 012) mentioned that, “Another element that makes up culture is beliefs as people in the society usually show some similarities, for instance eight symbolizes wealth in a Chinese culture therefore anything that has to do with the number indicates prosperity’. Non-behavior of individuals is related to tradition, which marketers have to understand in a competitive environment. As a result, marketers have to learn the culture factors in analyzing the consumer’s behavior as it has been a crucial aspect of market segmentation, positioning, and target market (Kim, 2011). 4. 1 Subculture Cultures are different entities which have different values.
This means each culture consists of smaller groups known as subcultures. These groups have distinct modes behavior of their own and therefore marketers need to understand the difference between these groups so they could effectively develop more strategies. Subcultures are formed through geographic regions, ethnicity, gender groups and religions and usually preferences vary depending on how people live with each other (Russell, 2009). Brands usually consider these groups for the market segmentation so that they can adopt the product or communicate the strategy for particular needs of the segment. . OFFSIDE’S CULTURAL DIMENSION (Moving, 2011) mentioned that, Hefted is the theory model regarding the cross ultra which helps business to understand how different nation culture is in various countries. The framework is applicable for advertising, ethics (decision making) and global brand strategies. Hefted (1980) model comprises of the key five dimensions of culture: Uncertainty Avoidance, Masculinity/Femininity, Power Distance, Individualism/Collectivism and Long Term/short Term orientation. Figure, 2. Source 🙁 E-Business Review, 2009) Fig. Illustrates the five cultural dimensions of Hefted which acts as a guide for assessing a particular culture and decision making. Power distance- it focuses on inequality of power across countries within companies. Power distance further analyses people’s feelings within the society and the low power distances views power relations as equals. Individualism versus collectivism-discusses how individual societies tend to be focused on themselves than the group while on the collectivist side it’s all about the whole group (society) with cohesiveness and they are strongly integrated.
The uncertainty avoidance- is all about the society tolerance for uncertainty and ambiguity with cultures of high index having less tolerance of changes and there is rigid laws implemented. For the societies with low index there is flexibility, embracing change and having fewer laws. Masculinity versus femininity- basically is all about genders and how emotional roles are distributed. Stereotyping is measured on this dimension and its importance on culture and masculine factors covered include materialism, ambition and power.
Feminine values are more focused in human relationships and societies with high masculinity usually have lots of gender difference and there is more competition (Powell & Dainty, 2009). However, the cultures that have low masculinity possess less gender differences and building legislations is vital. Long term versus short-term orientation-let discuss the horizon time of the society whereby cultures who are short term oriented regard methods which are traditional, relationship building is a long term. This type of society believes in doing things through interconnecting the past and the future.
Oppositely, short-term cultures always looking forward and the past or present is not considered. It is all about attaining goals and rewards are highly valued Cohn, 2011). Indulgence versus restraint- in this dimension the culture is supposed to be able to satisfy immediate needs and the member’s personal desires. Cultures that are restraint are characterized stricter social rules and norms. 4. Culture and Marketing Marketers of multinational companies should consider cultural differences when doing business across the borders with planned marketing strategies.
Understanding consumer s behavior, firms are able to finalize that marketing mix decision. These marketing mix comprises of four variables which includes, product, place, promotion and price and they have impact on the marketing decisions as they determines the rate of demand for products/services. Cookery & Gloria (p. 0, 2011). For promotion variable it shows marketing tools required for promoting the business such as direct selling, advertisements, promotions and publicity. The place determines where your business can be find, distribution channels and warehouses.
As for price, factors such as the discounts mark up sales, allowances are important and the product itself it the main determinant of consumer’s buying decisions and is usually hard to adapt (Peter, 2013). The product should consider quality, packaging, size and branding. Multinationals are now developing cultural product positioning strategies on cross ultra basis. Therefore in order to gain competitive advantage these companies are employing competitive positioning to differentiate themselves and creating value in the market. Lucas, 2011) Stated that, “competitive positioning is about, carving out a spot in competitive environment and making sure the company deliver on the strategy’. That, is to say, it assist companies to gather information about the market segmentation and therefore making better decisions. A viable competitive strategy includes the company s market profile which specifies the business rivals, size and the growth stages. An effective competitive strategy also should analyses the strengths, opportunities, threats and weakness(Adam & Michael, 2010).
The positioning strategy and value prepositions are part of a good competitive strategy that companies should include. However, To differentiate products culturally, characteristics, products benefits and features are used in the competitive positioning strategy Source: (marketing, 2014) 5. 1 Company background Kentucky Fried Chicken is one of the largest fast food franchises globally which offers fried chicken products. KEF started it operation in Beijing China in the year 1987 wrought Sino-foreign Joint venture which is the biggest fast food business in china.
Its restaurants are over 4600 branches today, serving 10 million customers per day. KEF has vastly grown in Beijing and it has impacted the childhood experiences of Chinese. Research shows that it has become an integral part of the Beijing children’s social lives and have adopted as part of their culture (KEF website). 5. Localization in china KEF china offers some standardized products in the menu but it has able to innovate and become unique in the Chinese environment, the company has able to localize he menu by adding some Chinese cuisine such as Dragon twister and herbal teas.
By doing so, KEF is incorporating some local spices in order to meet their tastes. Research shows that, KEF launches 20 new products yearly so it can remain competitive and to satisfy the Chinese people’ needs thus providing variety and plenty choices for its consumers (Berry, 2010). 5. Chinese values In china people values are incorporated by KEF by targeting the children and the elder people. It makes people feel like they are at home during their dining as the environment is tailored towards family lifestyle.
Furthermore the company uses some elements in sales and promotions, advertisements and decorations in doors. These elements comprises of family reunions, love and care between married couples (Shapiro, 2014). KEF also makes sure values are passed through generations by continuing to diversify menu and adapting local tastes therefore influencing consumers’ purchasing decisions. Their commercial are simple and engaging as it tends to use some funny scenes of or by introducing some storyline as mentioned by (Sender & Sheila, 2013). This allows consumers to easily understand the commercial.
The cartoon which comes with the kids meals are also made in Asian version mostly the Japanese cartoons such as Astor boy. 5,eating habits in China In china it is a norm for people to use dinning in restaurants as a way of communicating with each other. It used as an occasion to meet up with people probably friends therefore KEF notes that and considers that aspect as function to consumers. With some studies it is evident that, people in china often prefers to meet their friends at the restaurant rather than in their house (Taylor, 2010).
With such habits KEF restaurants have able to strategically locate themselves along the main streets but most of the restaurants are built in populated cities. These restaurants have the playground for kids to cater for parents who needs time off to stay for a bit longer. Although KEF has delivery and drive thru service, Chinese people still prefer dining in the restaurant so they can able to chat, relax with each other while eating. Most of the sales are made from dining inside the restaurant 5. Customs in china KEF has gone to greater lengths to learn and adapt Chinese customs such as festivals.
Every year Chinese do celebrate the Spring festival which starts the same mime with Chinese new year (Shank, 2014). Therefore during this celebration, the KEF restaurants are decorated in conjunction Chinese elements such as red color, animal signs for which correspond to that particular New Year. Also these elements are included in the other on advertisements and the packages of the products. Ambiance is created in the restaurants through traditional Chinese music during the spring festival and Colonel Sanders will be dress on Chinese traditional clothing.
However, KEF does not only focus on the spring festival rather it celebrates with all including he Muslims who are based in Rummy the capital of Gaining. KEF has position itself there by holding parties for those who have gone for circumcision (religious ritual) 5. Translations and language Language difference is a major barrier for multinational companies therefore they need to clearly understand the translated versions when doing business in other countries. According Catkin (2010), Chinese are perceived to be showing interest on brands that are pronounced in a funny way because it makes it easier for them to easily remember.
The mother company of KEF, Yum Brands, Inc ‘s name had to be reinstated in “Abashing” which in Chinese language it meaning is “we will always win the victory’. Moreover, part of the menu has been modified to other lingual name so as to meet the consumer s’ decision and also to adapt within the cross cultural regions. The cultures of Chinese focuses mostly on sharing happiness and having family reunions thus KEF always portrays it through beautiful name and that are meaningful. Another aspect is the menu; it has been tailored in an understandable and easier way.
KEF also has gone to an extent of changing their slogan to “Life is so tasty with KEF” specifically made for China market. . Competitive positioning 6. 1 Product innovation Due to intense competition from its rivalries KEF China makes sure they are continuing to innovating their products. Chinese are culturally oriented as they possess a highly sensible cultural identity mostly on to their traditional foods. KEF has effectively combined the culture of the Chinese with innovation thus consumers having a wide choice of food on menus for them to choose from.
A good example of innovative product is the Old Beijing Chicken volume it has also positioned itself as leading fast food Company in China thus making competition intense for its monitors. 6. Pricing strategy Pricing strategies are not widely adopted by KEF instead they more into product strategies. People value the relationship between in consumer prices and personal image china as the country has a society of large power distance. It is therefore empirical for KEF china to hold constant prices in order to keep up its image to the consumers without waving their prices.
On the other hand, Chicane’s the eating habits of collective tendencies should be noted when promoting their products in the restaurants. For instance, providing family buckets instead of using one product nice Chinese are family oriented 6. Distribution strategy for KEF China The culture of China is oriented towards masculinity and has a distinctive power distance therefore employees cannot complete some vital minor issues which are very crucial to the food industry as consumers could easily notice those issues.
However KEF need to recruit employees who are attentive so they can deliver quality to the Chinese society so the company can be more successful 6. Public relations of KEF China Reflecting on the company’s supply chain it is clear that the management is not attaining a desired effectuate 7. SUCCESS ATTRIBUTES KEF China has successfully penetrated the Chinese market therefore several factors are attributed to it. These factors are including the main ingredients in its recipe, the people and the strategy that is it deploys.
The strategy that KEF is using is really working well as it has incorporated the Chinese culture and heritage and also by continually meeting the demands of the dynamic business environment. It first started by leveraging the local resources and selecting the local investors along with the government and forming Joint ventures. However when china revised that isolations pertaining business operation, KEF left Joint venture and directly operated itself in the Chinese market thus avoiding dissolutions or disagreements with its investors.
This was a very smart move for KEF as it has able to dominate the fast food market in china and very successful. 7. 1 People Leadership plays a key role also on the success of KEF Company as it adheres to the leadership team called “Taiwan Gang”. This team comprises of a team that is from outside China and it is well experienced with the fast food industry. They possess ten to twenty years of experience which leads to proper knowledge regarding the arrest context therefore making KEF a very successful company.
With knowledge team, consumer behavior and purchase decisions are able to be tailored for as the team truly understand and have the intuitive market context. The leadership team also contributes to sustainability and the competitive advantage as they have the ability to be creative, come up with good ideas and quickly execute the ideas to meet the fast changing business environment. 7. Locality Although KEF is a western company, it has decided to go local when entering the China market/economy. KEF China is always introducing new products every year ore than its rivalry.
The products best fit the local tastes of Chinese consumer. It is only in China; KEF is dominant over McDonald’s due to blending well with Chinese culture. The KEF ‘S core products is widely accepted in China , the menu was localized highly such as the Chinese porridge known as conge , and Chinese dough fritters (TIA) which is served for breakfast in all the KEF outlets. Furthermore, its core product chicken is advantageous for the company because most of the Chinese prefer chicken and pork therefore having advantage over other competitor who are offering beef as a core product such as McDonald’s. Product category With reference to Cuff’s cultural and competitive positioning context, it is evident that the best product category that fits KEF is the convenience products. Consumers in China frequently make purchases of KEF due to the cross cultural difference it has tailored for in their products. KEF has outlets in almost every street in Beijing and also offers a lower prices and it stable so its consumers can perceive it as the same. It has further went on to rely on advertising, having sales promotions that meet the needs and culture of the Chinese consumers. 8. Conclusion
In conclusion, it is crucial for business operating on cross cultural basis to understand the consumer behavior and buyer purchase decisions. This helps the company to survive and gain competitive advantage by incorporating the culture of the people in the products/services. KEF has able to incorporate Chinese culture through changing its standardized menu to the meet the local tastes in China. Chinese consumers consider KEF to be part of their culture and it goes from generations to generations. It is therefore can be said; KEF china has positioned well and has gained a competitive advantage in the fast food industry of china.