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Prices for McDonalds Products in Kenya - Essay Example

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The paper "Prices for McDonalds Products in Kenya" states that the management of fast food businesses should ensure that their strategic decision-making is directed towards achieving the company’s overall objectives and at the same time remain relevant to their market…
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Prices for McDonalds Products in Kenya
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? McDonalds in Kenya Fast foods are foods that are considered easy to prepare in terms of the time it takes food to be readyfor consumption. Fast foods take very little time to prepare because they need minimal ingredients and/or require little cooking. Fast food was first popularized in the United States of America (USA) where foods that require minimal preparation time started being sold in restaurants. The fast food business has picked momentum in other parts of the world in what can be termed as a cultural export from the US. Franchises have sprung up to become multi-billion dollar business empires like the McDonalds franchise. Fast foods are composed local readily available foodstuff that is easy and ready to eat with minimal preparation and/or cooking. The fast food business is being introduced into regions of the world where it would not have been economically sound to do so a few years back. This is because the market for fast foods was not there, and it was undeveloped o support such endeavours. The expansion started in the Asian markets in countries like India, Singapore and Vietnam to mention just a few. Africa is now being viewed as the next frontier in almost all fronts of business from mining to technological advances, innovation and inventions. Kenya is a leading country in Africa in terms of political, economic and environmental stability that acts as a conducive environment for business start-ups and growth. Kenya is regarded as a leader in many aspects especially when it comes to considering it a location to set up a business. This is because the country acts as a gateway into the wider Eastern African region because of its port at the coast with the Indian Ocean and well-developed road network. Infrastructure is the key to business development in any part of the world because it determines the success or failure of a business. Infrastructure should be considered when setting up a business, and includes a myriad of factors that are important to a business. It is composed of both tangible attributes like roads, buildings and intangible factors like skilled labour and technological expertise. Kenya is a country that is considered an oasis of stability and peace in a region where the neighbouring countries are ravaged by various calamities and disasters. Political stability is essential for the success of any business and Kenya provides this strategically. This is terms of infrastructure and political stability that provides a calm environment for businesses to proper and break even. The country’s economy is largely based on agriculture, but there emerging opportunities for other sectors of the economy to be based on like mining. These new opportunities have placed Kenya on the path of entering into the bracket of emerging world economies like Brazil and Far East countries. Politically, Kenya is more stable than its neighbours, which can be attributed to its half a century of stable political leadership since its independence from its colonial masters the British. This has been further enhanced by the country’s adoption of a new constitution, which has placed the country among the best leaders in terms of the best bill of human rights and organs for protecting them in the constitution. Political leadership determines a country’s economic policies and they affect both external and internal business environment. Kenya’s business environment can be considered as one that is need of external or foreign investment, which expected to help the country exploit its newfound resources. Foreign investments are essential for a country’s development because it brings in the much-needed expertise and experience in various sectors of the economy. Political goodwill is essential in encouraging direct foreign investment in country because it is responsible for instituting and maintaining conducive economic policies. Kenya offers these attributes at a time when the region and Africa as a whole is in the public limelight as being positioned as the next big thing in business. Kenya is culturally rich and diverse country because of its numerous ethnic, traditional and cultural mixtures. Kenya is composed of 42 ethnic groups that are indigenous to Kenya and other ethnicities that have settled in the country because of its favourable environment. There are many expatriates in Kenya who can be attributed to have introduced their culture and way of thinking into the minds of the country folk. Kenya’s diversity of its people puts it at an advantage because they are in position to tolerate other people’s traditions. The fast food business is a viable venture because of the country’s ranking as one with the highest literacy levels in the world developing countries. High education standards in the country mean that there is ready market for fast foods. This explained by translating the high literacy levels into an able workforce that will have substantial purchasing power. A business environment needs to be in an environment that supports its endeavours to make a profit and sustain its activities (Hudson, 2013 np). The Kenyan economy especially in the urban centres and cities provides a conducive business environment for fast food business. McDonalds can take advantage and become a leader in the African emerging economies where it can reap the benefits of being a trendsetter. Burgeoning youthful population that makes up majority of the workforce characterizes Kenyan urban centres (Schulz, 2012 pg58). This population composition is ripe for supporting a fast food business because it composed of a population that is busy and does not have time for conventional foods. The Kenyan youthful workforce is increasingly favouring fast foods because it provides a cheaper and less time-consuming source of food for their households. The economic situation in the country is improving annually which means that there is an increase in the working class population in the country. Countries with large working class populations have been documented to have highest success rates for fast food businesses. This is garnered from the number of health related problems that are caused by over consumption of fast food meals. This is evident in countries like Britain and the United States, which have high portions of their populations being obese or suffering from related illnesses and conditions like diabetes (Minnaar et al, 2013 np). Research studies have established that the working class and poor households have the highest chances of suffering from these complications. Studies have shown that fast foods are the most favoured options for these households. This is because fast foods are cheap and easy to access an aspect that favourable for these households and their budgets. The Kenyan urban population is typical of the above mentioned statistics and it is a viable location for a fast food business like McDonalds. The Kenyan market is characterized by changing demographic population with the majority of the population being below forty years of age (Hackett, 1976 pg58). The represents the most productive age inn any population and it is a ripe target for business wishing to expand. Majority of this population is composed of the working class that translates to opportunities for businesses. This characterized by increased purchasing power for the masses. Introduction of McDonalds in the Kenyan capital city of Nairobi and other major cities like Mombasa and Kisumu would tap into this burgeoning market (Johnson and Hari, 2012 np). The working class needs a culture and/or activity or product that identifies with their newfound status and the fast food culture is a status symbol for such. Introduction of product, commodity and service into the market when it is needed strategy that works for expanding businesses in new markets Kordelin, Akseli, and Iiro Salminen, 2007 pg18). Introducing these services and/or commodities in such just at the right time ensures that the business is successful. The place or location of introducing products into a new market is another strategy that suits Kenya because of the country’s emergence as ripe ground for businesses to set up shop. The growing economy that is being spurred by new discoveries of minerals like rare earth metals and oil and gas mean that the country will be an emerging market for new products and services from within and without. The prices for McDonalds’ products in Kenya can be designed to suit the high-class portion of the population that is going to be able to afford these products (Drabner, 2003 pg8). The working class and poor households can be roped in by fusing traditional Kenyan recipes with the new recipes that are recognizable with company’s brand name. International fast food brands have seen the opportunity in Kenya and brands like the Kentucky Fried Chicken (KFC) franchise has set outlets the Kenyan cities (US ITC). Getting the brand’s message across to the target market can prove to be a difficult task to successfully accomplish. In order to ensure success in any new market a business should contract the services of an already established marketing firm in their target location (Moore, 2010 pg79). This helps a new company venture into a new market with all appropriate information in order to operate efficiently and effectively. Lack of adequate and useful information on new markets predisposes a new entrant to increased chances of failure. Promotion of a brand’s products to the target market should be of paramount importance to any new entrant into the Kenyan fast food market (Beck, Wouter and Robin, 2012 pg158). Adherence to the above-mentioned strategies is a sure way of ensuring the success of a fast food outlet in the Kenya. Global marketing is focused on sellers taking advantage of their buyers’ needs in a relationship that is meant to obtain and retain customers (Lee & Carter, 2009 pg182). The nature of global trade involves marketing of goods and services away from a businesses’ home country. Global marketing takes various forms and can be domestic, regional exporters, exporter and international global marketing. All this involves operating in multiple markets that are different from each other requiring competent expertise on marketing in each respective Market. Global marketing has been promoted by globalization, which has revolutionized communication and transportation all over the world (Kotler et al, 2005 pg128). This has been due to rapid technological advancement in telecommunications, the internet and global travel through efficient and fast transportation of goods and services. Global marketing requires that companies increase their global competitiveness in order to remain relevant in the market. In the case, that is the context of this paper; opportunistic global market development strategy is classic case of diversifying their markets (Keegan & Green, 2008 pg188). This strategy enables company to expand its business to new and emerging markets in any part of the world. Africa is recognized as the next frontier in terms of availability of raw materials and markets for products other parts of the world. Kenya is a country that offers global marketing firms comparative advantage, economic trends, tax structures that are favourable to global trade and product life cycle and peace (Chee & Harris, 1998 pg78). The country offers a healthy launching pad for McDonalds in its future opportunities of expanding into the regional east Africa region. This is due to the country’s ability to give a global marketing firm a geographical and regional emphasis upon which to base its operations (Svend, 2007 pg232). The opportunistic global market development strategy can be game changer for a fast food business into any part of Africa and especially Kenya. This strategy will offer McDonalds the ability to diversify in to the new market with new products and services, and at the same time have a competitive advantage (Paliwoda & Thomas, 1998 pg120). This is because there cultural and traditional aspects in any given market that offer some resistance to the entry of new products into their market (Fifield & Lewis, 2000 pg129). The use of this strategy will enable McDonalds to change with the new market and meet the demands of the new market in line with company’s principles and objectives. This is achieved through the fusion of cultural and traditional ways of doing business to ensure acceptance from the local and target population (Marieke, 2005 pg48). The management of fast food business should ensure that their strategic decision-making is directed towards achieving the company’s overall objectives and at the same time remain relevant with their market (Doole & Lowe, 2001 pg162). This strategy requires careful planning and decision making especially on macro-environmental issues that affect businesses. The entry of an expanding fast food business in Kenya would be the right move in the current political and socioeconomic climate. This is because there is a lot of political and socioeconomic goodwill in the country and the whole Eastern Africa region. Bibliography Beck, S., Wouter, D. and Robin, M. "Franchising in Frontier Markets: What's Working, What's Not, and Why." innovations 5, no. 1 (2010): 153-162. Chee, H. & Harris, R. Global Marketing Strategy. London: Pitman. 1998. Doole, I & Lowe, R. Global Marketing Strategy Analysis, Development and Implementation, Thomson Learning. 2001. Drabner, T. Market entry strategies and their applicability to SMEs-The winding road to foreign business. GRIN Verlag, 2003. Fifield, P & Lewis K. Global Marketing Strategy, Butterworth-Heinemann. 2000. Hackett, D. W. "The international expansion of US franchise systems: status and strategies." Journal of International Business Studies (1976): 65-75. Hudson, J. East Africa's hub The experience of doing business in Kenya. South African Institute of International Affairs (SAIIA), 2010. Johnson, M. W., and Hari Nair. "New business models in emerging markets,„." Harvard Business Review (2011). Keegan, W. & Green, M. Global Marketing. 5th Edition. London: Prentice Hall. 2008. Kordelin, Akseli, and Iiro Salminen. "Adapting a service concept to the needs of international companies: Mr. Jones Bar & Kitchen." (2007). Kotler, P. Et al. Principles of Marketing, 4th European Ed., Essex Pearson. Ebook via Myilibrary. 2005. Lee, K & Carter, S. Global Marketing Management. 2nd Edition. London: Oxford. 2009. Marieke de Mooij. Global Marketing and Advertising understanding Cultural Paradoxes. 2nd Edition. 2005. Minnaar, Amanda., John, R. N. T., Steven H., John, D. K., and Nelson KO Ojijo. "Capacity Development for Modernizing African Food Systems (MAFS)." (2013). Moore, G. Fairness in International Trade. Illustrated Edition. London: Springer. 2010. Paliwoda S & Thomas M. Global Marketing, Butterworth Heinemann. 1998. Schulz, R. N. "EFFECTS OF BRANDING ON RESTAURANTS’IMAGE: A CASE OF SELECTED RESTAURANTS IN NAIROBI, KENYA." European Journal of Business and Social Sciences 1, no. 8 (2012): 56-66. Svend, H. Global Marketing, A Decision Oriented Approach. London:Prentice Hall. 2007. US International Trade Commission. Sub-Saharan Africa: Effects of Infrastructure Conditions on Export Competitiveness, Third Annual Report. DIANE Publishing. Read More

 

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