KFC and Its Franchising Strategy - Essay Example

 KFC and Its Franchising Strategy Kentucky Fried Chicken popularly known as KFC is fast food restaurant specialized in serving fried chicken. The company is headquartered at Louisville, Kentucky, USA. The company was founded by Harland Sanders. The company has its roots back in 1930. However the first outlet of the company was inaugurated in the 1952. The company began its venture through franchising mode. The company mainly sells fried chicken products and other fast foods as well. Presently the company has 15000 outlets with its presence in more than 105 countries (KFC, “About us”). It has almost 455000 employees. Currently the company has a turnover of $15 billion. The success of the company is mainly due its product and a sound marketing strategy. However the international expansion of the company also added to its huge success. The company undertakes its international expansion with franchisee system. A franchised system is a process by which the company allows another organization to use its name and market its product. The organization which uses the name of the company to market the products is known as franchisee. A franchisee thus holds the right to market the products in a particular geographic area (“Franchise”). KFC operates with franchise system in the international arena. The company was also highly benefitted by this type of operation as the financial risk was greatly minimized and company had taken other risks against it. Also franchised system has helped the company to understand the culture of the local community and develop the product line accordingly. For example in India the company never sells any beef product as it is against the social culture. However in countries like Pakistan, Afghanistan and other place of the world, the company sells beef products. As a consequence the franchised system helps the company to adopt according to the regional taste. Also the franchised system helped the company to decide the pricing strategy. It has a network of 1500 franchisee (Yum franchises, “Yum brands”). The international franchising strategy of the company is both offensive as well as defensive and thus made the firm less dependent on the home country about the revenues and demands. The company has also been able to generate high profits from international franchising strategy. Moreover the franchising has system has driven the company to the international avenue. The franchising strategy of the company has also helped the company to accomplish the following:- International brand recognition by making its presence all over the world. The company strategically chosen franchised mode apart from other mode of operation, as the franchised system offered less financial burden and also allowed the company to adapt according to the local culture. Franchisee mode is also a safe way of conducting the business. It also allowed KFC to undertake an end to end marketing and distribution system. Hence on a whole it can be concluded that apart from its product mix, promotional technique and other competencies franchised system hugely helped the company to grow their business into a global organization. Skoda and its Positioning Strategy Skoda is an automobile manufacturing and marketing company based on Czech Republic (“Volkswagen aims at becoming top global car-maker riding on the Skoda” 2011). However in the year 2000 Skoda became a fully owned subsidiary brand of Volkswagen Auto group of Germany. The brand is mainly positioned as the entry brand of the entire brand. Within the group the company was positioned at even higher that Volkswagen. It started the venture by manufacturing what is known as people’s car. Nowadays Skoda is positioned as the alternative of Volkswagen. Hence it can be clearly stated as the positioning strategy of Skoda was based on its features. It has successfully positioned itself as the family car which offers value to the price. Volkswagen group has highly resisted in scrapping the brand image of Skoda. Despite the negative word of mouths in the UK market, it has successfully maintained a respectable position in the Eastern Europe and countries belonging to Western European countries. However the company also tried to reposition itself as one of the premier cars of the world. It tried to position as a automobile which never had any negative word of mouth and a car which regularly wins car of the year award. Moreover the optimistic feedbacks and a range of attributes associated with it have changed the viewpoint and perception of the customers about Skoda. However in the context with developing countries Skoda is a costly car and in those countries it has positioned itself as the luxury car but offers high value against the price charged. Figure 1: Position strategy of Skoda. High Price High Value Low Value Low Price Mercedes Benz; - BMW; - - Skoda (Author’s Creation) The company then accordingly developed its positioning strategies in order to remain in context with the positioning strategy. The company uses all the 4 P’s of marketing mix very effectively. The products of the company are made with quality raw materials. Apart from the development of product the company is also sensitive towards its pricing. The pricing is done in context with the positioning strategy. However it also depends upon the geographic location it is catering. The promotion of the products is done mainly by using Television commercials and also using print media such as newspaper advertisements and magazine billboards. Still the company is trying to enhance its marketing strategy by developing more improved products, strong distribution network and also offering more value to the customers. The aforementioned marketing strategy of the company has helped it in a big way to get success by deploying the positioning strategy. Hence it can be concluded that the positioning strategy adopted by the company i.e. a car which offers value to its customer is best suited in order to get success. Also the marketing strategy of the company is in context with it, which is hugely impacting in the success of the company. Table of Contents KFC and Its Franchising Strategy 1 Skoda and its Positioning Strategy 3 References 7 References KFC. “About Us.” KFC. KFC, 2012. Web. 07 July 2012. “Franchise.” Cambridge Dictionaries Online. Cambridge University Press, 2011. Web. 07 July 2012. “Volkswagen aims at becoming top global car-maker riding on the Skoda.” Kashmir monitor. Kashmir Monitor, 2012. Web. 07 July 2012. “Yum brands.” Yum Franchises. n.p., n.d. Web. 07 July 2012. Read More