Micro Analysis Of KFC New Zealand Market Strategies And Environment Analysis

Background of KFC

The report talks about the marketing strategies of KFC New Zealand KFC. Each and every company perform marketing strategies that help the company to achieve the strategic goals of the company. A KFC New Zealand market strategy along with the environmental analysis is discussed in the report. The internal, as well as external environment creates an impact on the working of the company. The role of the marketing manager in the company is to propose the future marketing strategies of the company which is discussed in the paper. The marketing strategies are proposed by the manager after analyzing the market of the New Zealand. The implementation of the strategies needs the estimation of the budget and action plan of the company which is discussed in the report.

Brief background of company 

The company came into the existence in the year 1896 in Sander’s family kitchen. The colonel son of sander’s loved to cook after his dad passed away his mother started working and he himself started cooking food. After performing the experiment with 11 herbs and spices he made chicken. Gradually he started the business, the quality of the chicken was so good that gradually he was becoming famous and then he started expanding the business in approximately 600 outlets in US and Canada. This shows the beginning of the KFC; currently, there is availability of more than 9,000 KFC stores in approximately 86 countries across the world (Restaurants Brands New Zealand Limited, 2011)

Overview of KFC New Zealand 

KFC came in New Zealand in the year 1971; first store opening took place in Auckland with its original chicken recipe that consists of Kiwis and coated with colonel’s famous 11 herbs and spices. Since then the KFC introduced a huge range of new taste experiences that consists of Wicked Wings, Hot and Spicy Chicken, Chicken Fillet Burger, Krushers, Twisters, and Quarter packs which became popular with Kiwis (KFC, 2017).

Mission/ Vision

The company has opened 68 stores in New Zealand and now the company is planning to transform the stores with special features that include booth seating, outdoor seating, and plasma screens. The mission for the New Zealand KFC is to update all stores. The vision of the company is to provide the quality food that satisfies the need of the customers.

Value and beliefs

• KFC believes that food safety and quality is a top priority, this is the reason the company commits to highest standards of food safety and quality.
• Nutrition is required, the nutrition strategy that the company emphasis on consist of nutritional improvement in product ingredients and transparency in product nutrition (Moeng, 2015).
• KFC believes that employees have right to work in safe environment and company recognizes the importance of employees (KFC, 2017).

Each and every organization performs the business activity to accomplish the strategic goals. The KFC New Zealand aims to provide tasty, health-conscious, and the chicken-based products that customer can buy again and again. KFC’s objective is to provide the quality food, a hygienic environment and to maintain the dynamic and positive customer experience. Talking about the corporate strategy of the company, the aim of the company is to attract more and more customers towards their outlets so that they can increase the profitability of the company. The major aim of the company is to expand the business and to grow in the international market.

Product portfolio of the organization 

The KFC Company provide the wide range of products in the market. The major product of the company is pressure fried chicken with 11 herbs and spices. The large portion of the fried chicken is served in a cardboard bucket; this is a well-known feature of the chain which was firstly introduced by Pete Harman in the year 1957. The KFC New Zealand has expanded its product range, the company has started offering Snacks, Burgers, Toasted Wraps, Chicken, Box meal, Rice Bowlz, Krushers, share a bucket and much more.

Overview of KFC in New Zealand

Current market environment 

The market environment consists of macro and micro market analysis. In a macro analysis, Company makes use of Pestle analysis and Porter’s five forces analysis.

Pestle analysis 

 This analysis helps the organization in identifying the external factors that can affect the working of the organization. KFC Company also gets affected with some of these factors which are discussed below.

• Trade regulations- KFC provides the services at different places across the world. The government policies, laws and policies can change the business strategy of the company. This affects the working of the company and the entry of the company in the different countries. Across the world, the different government has different laws and regulations (New Zealand Foreign Affairs and Trade, 2017).
• Entry mode regulations- The regulations on the entry mode can affect the entrance of the company in different countries and company will not be able to expand the business (McCammon, 2016). The change in the government of any country will bring the changes in the trade regulations. There is a need for the stability that helps the company to perform the smooth working.

The Economic factors consist of GDP, purchasing power, income, population, and inflation.

• Disposable income of the buyers: – Talking about New Zealand, the GDP per capita of the country is 39,426.62 USD (2016) and the gross national income is 177.7 billion PPP dollars (2016). The disposable income of the country shows that the people of the country can afford the prices of the products offered by the KFC. People of New Zealand find it worth spending amount on KFC, as they are satisfied with the product they are using.
• Unemployment rates: – The unemployment rate in March 2017 quarter was 4.9, the unemployment is growing in a country but with the expansion of the KFC outlets in a country, there are changes of decline in the unemployment (Kelsey, 2015).

The social factors can create an impact on the working of the KFC Company. The products of KFC are in demand by the people of different age group; the company targets the people having the age group of 6 to 65.  

• Population demographics- The distribution of wealth is clear with the diagram which shows that the New Zealand us having the most unevenly distributed over the decade. In the latest survey of household wealth, New Zealand richest individual in top 10 % held 60% all wealth by the end of 2015. The 40% of the poorest hold the 3% of the wealth and middle 50% people hold 47% wealth. The company provides the products to the people having middle and rich class. The company is able to earn the good profit out the New Zealand outlets (McCammon, 2016).
• Lifestyle trends- The lifestyle of the people is not specific for the company like KFC, as it doesn’t target the customers believes in lifestyle, though there is a possibility of the changes of the target in the near future. Customer behavior can create the negative effect on the sales of the product of the company. There are many people across the world who don’t like to eat chicken those people don’t visit the outlets. This depends on the preference of the customer; most of the people don’t like to eat chicken all the time this shows the buying pattern of the customers. In the near future, it is assumed that more and more people will like to eat chicken so the demand of the product will increase but it depends on the customer preferences. This affects the business of the KFC New Zealand (Hasan, 2013).

Technology advancement is enhancing the competition among the food companies.

• New technological platforms- The new technological platform use is increasing in the market. KFC launched a new app which is an ordering and payment app, this app helps the customers to place the order with the use of the cell phone and customer can make the online payment. If the customer wants to dine in or take out then they have to check in to let the employees know they are present in the outlet physically and they don’t want to wait in the lines. This app was introduced by the KFC because they found due to technological use many companies tried to stop potential customers to visit the store. There are many people in New Zealand who want to dine out after work at the nearest place where they can good food to it; through technology, they can check the nearest place where they can get the food according to their needs.
• New discoveries and innovations- The use of new discoveries and innovation is becoming important for this business as they want to make the profit and they don’t want to leave their customers or potential customers (Samnani, 2014). The technology advancement takes place frequently to face the same KFC New Zealand need to adopt the technology so that they can keep attracting the customers towards the company.
• Trademark- Legal factors include the regulation and the policies of the government that can be a barrier for the company in overseas. The company uses the patent and the trademark so that they can protect the cooking recipes from the sealing.
• CSR- It is the responsibility of the company to fulfil the corporate social responsibility of the KFC NZ. If in case the company doesn’t follow the legal laws, the company can face the problems in the working.
• Environmental protections laws- Company buys the product for the packaging of the product that can create the deforestation in the country and can harm the environment. The company should make sure that they are following the environmental protection laws; Environment Act 1986, of the country otherwise they have to face the legal actions. The government created the New Zealand Commission for the Environment, March 1974 (Ministry of Environment, 2017).
• Waste Disposal laws- The waste disposal laws; Waste Minimisation Act 2008, need to be followed by the company because a company is involved in the food and beverage industry (Hasan, 2013). This disposal of the waste product will show the concern towards the environment of the company and will lead to the sustainability (Ministry of Environment, 2017).

The nature of the competition within the industry is must to be identified and evaluated by the company. The food industry faces the competition and this is the reason KFC New Zealand wants to evaluate the nature of the competition (Valero, 2016).

The threat of substitute to the KFC New Zealand is high the reason being that there is an availability of the international fast food chain which gives the competition to the KFC. For instance, McDonald is one of the greatest market rivals for KFC.

The fast-food restaurants offer chicken burgers. This is the reason fast food restaurant became popular in the market. To face the threat of the substitutes KFC Company started providing the extra facilities to the customer who visits the outlet such as Wi-Fi services and morning services (Alonzi, & Condon, 2015). The company might face the threat of cost due to which the more by can switch but in this case, the product offered by the KFC and the competitors so neither they can increase the prices nor they can reduce the prices because the company knows very well the effect of the cost on the customers.

Intensity of competitive rivalry – High 

The fast food market is having the high intensive competition. KFC definitely faces the high level of intense competition especially from the other food chains that include McDonald’s. The high level of competition forces KFC to improve the tools that make sure it competes effectively. To retain the customers KFC New Zealand has used to retain customers by presenting smart card for kids that provide the discount in KFC as well as in other outlets Sunway Lagoon, MPH Bookstore and Zoo Melaka. The size of the competitors is almost same; the strategy is used by the company to retain the customer. The competitors brand is well-known brand and maintains a good position in the market. The use of sources by a competitor for performing the activity of advertisement is similar than KFC.  

The KFC believes in providing the fine and standard quality of product talking about the competitor’s quality of product there is hardly any difference in the quality. Each and every brand believes in providing the quality products to the customer because this is the only way to meet the expectation of the customer which leads to the customer satisfaction. The customer satisfaction leads to the customer loyalty towards the brand, to maintain the customer loyalty brand provides the rewards and loyalty bonus to customers. In Today’s competitive world what matters for the company is the strong brand name because of which the company can attract more of the customers.

Mission and Vision

Bargaining power of buyers – Medium

The buyers of the KFC products can easily find the other products in competition to KFC. The consumer can easily visit simple outlets such as McDonald’s, Subway and Pizza Hut. This enhances the difficulties for KFC to increase prices due to stiff competition from competitors. If in case the customer finds the rise in the prices then the customer can easily switch to the other outlet and can easily buy the similar sort of product. This is the reason that company can’t increase the prices.

There are many buyers to stick to the brand and are being loyal to a brand. It is easy for the customer to switch on the product if they want there is no role of cost because the similar cost is kept by the competitors. The KFC is adding services and other products as well so that they will be able to attract the customer through innovative ways.

Bargaining power of the suppliers- Low 

The company has access to many suppliers for their main product chicken. There are numerous suppliers who can provide chicken to the company. The company can easily switch, the cost of switching of the suppliers is low (Valero, 2016). The herbs are taken by the company from the supplier who can provide them unique ingredients for their secret and famous chicken recipe. The company has a brand name and reputation in the market, this is the reason suppliers contact the company on their own.

Threat of new entrants- Medium 

The fast-food industry is very vast industry; the companies can easily enter into the market but they need huge investment, marketing, and the product development before entering the market. If in case any new fast food company exist then also the brand value is strong the product provided by the company us unique which leads to the loyalty of customers towards the brand. The product provided by the company is unique in taste and healthy which make it different from other products.

Market situation 

Competitor analysis 

In this competitor analysis, there is a description of the strength and weakness of the KFC New Zealand. It also includes the competitor’s product feature so that company can understand the requirement of changes in their business (Sidek, & Backhouse, 2014).

McDonald’s strength and weakness

• The strength of the Brand is adding different varieties in their menus such as coffee, smoothies, chicken burger, veg burger and much more. The company has good brand value and position in the market.
• The weakness of the brand is that they are not able to find the prime location to sell their products in the market; it is harder to make a profit from the outlets.  

Burger king strength and weakness

• The strength of the company is differentiation of the products, the strong image in front of the customer along with the high market penetration.
• The weakness of the brand is they have low control on franchising model, this is the reason the brand is taking time to expand the business (Inam, Janjua, & Malik, 2016).

Competitor	Brand	Product features/benefits
McDonald’s	McDonald’s	The company is well known for its burgers, chicken products provided by the company are adding to the menu of a company. The beef burgers now available on its menu along with the four new burgers. Now the company’s half menu is filled with the products that include chicken.
Burger King	Burger King	The Brand is well known for the burgers as it is clear from its name. The products that are giving competition to the KFC include Chicken Burger, Chicken fries, Chicken wings and Chicken Nuggets. Providing Chicken in different dishes attracts the customers and gives competition to KFC.

Marketing strategies 

Marketing strategies play a vital role in the working of the company. The marketing strategies consist of the segmentation, targeting, and positioning of KFC considering the external environment analysis of the company. The future marketing strategies are formed by the marketing manager of the KFC.

KFC has outlets internationally and the brand is selling products to fulfill the needs of the customer. The geographic segmentation consists of nations, states, regions, countries, neighborhoods, and cities (Nasiopoulos, Sakas, Vlachos, & Mavrogianni, 2015). The KFC New Zeeland is having approximately 68 outlets in a country but considering the competitor McDonald’s is having 141 outlets in New Zealand. In the near future, the company is planning to open more outlets in New Zealand so that they can face the competitors. The opening of new outlets is not an easy task for the company they need to select the prime location where they want to open outlets. The prime location is must for the company because this is the only way to target the most of the population (Khalili, 2014).

Values and Beliefs

Demographic segmentation 

The demographic segmentation refers to as the division of a market into different segments based on age, gender, size, family, income, and other segments.

• Age– There is no limit of age on which the company is willing to focus, the company should maintain this segment as same for the near future. Though, considering the usage of the products by the target audience, youth is the primary target in the age segment.
• Income- The Company is targeting the people who are willing to purchase the product or having the high purchasing power in New Zealand. The customer to whom the company is will target include the people belongs to the rich and the middle-income group people. The low-income group customer will not be able to purchase the products; on the other hand, the rich people will be satisfied with the availability of the product and the quality of the product. The preferable income segment for the future will be a high and medium group.

The psychographic segmentation is the segmentation which is based on the division of people on the basis of social class, lifestyle and personality characteristics (Lovelock, & Patterson, 2015).

• Lifestyle- The KFC does not target any people on the basis of lifestyle, the company says that this is not important that the people who are having a living standard will only be able to consume the product or will value the brand. It can be anyone, it doesn’t matter that target audience believes in lifestyle or not (Weinstein, & Cahill, 2014).
• Personality- Considering the analysis, there is no need to segment the people on the basis of the personality.

This segment is related to Knowledge, attitude, and response to the customer towards the products of the company. This is the reason this segment include the groups having the knowledge, attitude towards the brand, response towards the product (Suresh, 2017).

• Occasions– The KFC New Zealand welcome their customer on occasions to celebrate their happiness with the company along with this the company needs to offer some of the special discount offers on occasion which makes the customer feel special. Though KFC is doing so, on cricket match company is offering popcorn chicken, on Valentine’s Day the company offers special discount offers. Similarly, the company should offer the discount to the customer who celebrates their birthdays and on get together (KFC, 2017).
• Loyalty status– Each business want to retain their customer with them, no one is willing to lose their customers. KFC marketers also target to retain the customers so that they can grow in the market. The rivals of KFC is increasing day by day in New Zealand market, to face that company should offer loyalty bonus points only to adults only but to kids also.  

A target market is a particular group of customer or segment of a customer at which the products and services are aimed at the company. The above discussed are the segments that are offered to the KFC, the company can emphasis on any target market from which the company will be able to make the maximum of the profit. Considering the analysis, each and every customer is valuable for the company (Harrington, et.al. 2017).

There are different target market strategies such as undifferentiated, differentiated, concentrated and micro marketing targeting. These strategies can be followed by the companies but it totally varies from company to company along with that it varies from a market in which the company is having outlets. The KFC New Zealand can use the undifferentiated theory of targeting strategy. The undifferentiated targeting strategy is mostly used by the companies who want to communicate the benefits of the product to everyone not even to any specific segment (Weinstein, 2014). The KFC should follow the same strategy to appeal for their products in the market to everyone not only to any particular segment.

Each and every business in the competitive world wants to earn revenue out of the business. The KFC products are available for all segments; the company doesn’t need to target any of the specific segments of the people. The products provided by the KFC is not for any particular segment but they are available for all the target audience to whom the company can offer their products to attracts more and more customer and this is a way to enhance the profitability along with market share.

Market positioning analysis 

The positioning is arranging for a product to occupy a space in the marketplace. The positioning occurs after the target segment is decided by the marketing manager of the company. It is must to decide how it separates its market offering for targeted segments (Grant, 2016). KFC is not targeting to the particular segment but it is offering its products or services to a large number of audience. It is must maintain the unique selling proposition of company this will help to form the position in the marketplace. The unique selling proposition of the company consists of quality of the products that are provided to the customers, additional services such as Wi-Fi, discount coupons and availability of the product in morning, availability of app (KFC, 2017). The company is maintaining the position with high quality and moderated process of a product in New Zealand.

Product Portfolio of KFC New Zealand

The KFC New Zealand is having a competitive advantage that is helping the company to form a place or position in the market. The company is having a smooth and effective supply chain and distribution system that helps the company to make the product available to the customers. The secret recipe of KFC is a major competitive advantage of the company along with different spices used by the company. KFC focus is only on chicken which is different from the competitors, the competitor McDonald focuses on the burgers. The company is providing the highly values benefits to the customer as compared to the competitors.

Marketing Mix analysis

The marketing mix is a combination of the factors that are controlled by the company to influence the customers so that they can purchase the product of the company. The marketing mix strategy consists of product, price, place, and promotion strategy of the company (Armstrong, Adam, Denize, & Kotler, 2014).

Product strategy analysis 

The product that the company is offering to its customer is mainly chicken. Chicken is the core product that is demanded by the buyers of KFC. The company provides a fried chicken in different forms to the customers of the New Zealand (Lee, Conklin, Cranage, & Lee, 2014).

Packaging- The packaging of the KFC is selected by the marketing manager considering the performance against the heat retention, moisture removal, and grease absorption. The packaging of the KFC is adapted to maximize the performance considering the three criteria’s.

Brand- Brand identity is identified with properties, presentations, product, and publications. The people of New Zealand have positive impression of KFC because this brand has satisfied the needs of the customers.

KFC do provide benefits to the customers that can be in the form of the infrastructure facilities, internet accessibility, and discount coupons to special customers.

Price strategy analysis

The pricing strategy plays a vital role for the company; this is the only way with the help of which the company will be able to make the profitability. KFC New Zealand needs to use market skimming pricing strategy and it is suggested by the marketing manager of the company. In this pricing strategy, the company keeps the high prices and KFC targets the middle to upper-class people. Gradually the KFC trickle down the prices considering the competitors of KFC. According to the marketing manager, the price of any product is equal to cost plus desirable profit (West, Ford, & Ibrahim, 2015). Though, the company keeps changing the price considering the exchange rate, inflation and tax policies of New Zealand.

Place strategy analysis 

The marketing manager of the KFC Company makes sure that they provide the products and services at a maximum number of outlets in New Zealand. This is the reason that the company should follow the intensive place strategy. The intensive distribution strategy shows the availability of the product at all outlets available in the market. The KFC wants to provide their products in a maximum number of outlets available in New Zealand because they want to enhance the availability of product so that they will be able to retain their customers with them. This enhances the profit of the company along with the brand awareness which leads to the good market share.

Current Market Environment

Promotional strategies analysis 

Promotion strategies play a vital role for business because this is the only way to communicate to the target audience about the product that the company is offering. The promotion can be done by KFC in Different ways (Hoffmann, 2014).

Sales promotion – KFC should make use of sales promotion, the outlets of KFC should offer various coupons to buy chicken from their outlets. This will promote the sales of the company, more and more customer visit the stores to buy the chicken. The company provides the details related to the offer going on in outlets through an advertisement that can be online or through print media (Subhasis, & Kannan, 2015).

Public relations – The Company is not just restaurants which provide the quality food products to the customer but KFC also believes in a socially conscious corporate citizen. The company is involved in promoting and funding to communities. To enhance the relationship with the citizen company should conduct different training classes and seminars in New Zealand.

Online and social media marketing – The company need to perform the promotion activity through online and social media promotional activity. This is the way to make the people aware about the company’s profile and products introduced by the company. An online advertisement about the offers and products make the customer attracted towards the products (Vinerean, Cetina, Dumitrescu, & Tichindelean, 2013).

Budgets 

A budget is a financial plan that estimates the amount that the company will spend while conducting the activities (Tiago, & Veríssimo, 2014). The marketing mix budget of the KFC Company is discussed below.

Marketing Mix Activities	Items	Total ($NZ000’s)
Product	· Packaging of Product – $ 500	500
Place	· Lease of outlets- $ 28,000 · Maintenance of place – $ 500	28, 500
Promotion	· Sales promotion                 Coupons and other discounts – $ 400 · Public relation                 Conducting Seminar and training- $ 300                 Funding – $ 500 · Online media                  Facebook- $ 500                  Twitter – $ 600                  Instagram – $ 400                  Email marketing- $ 300	Sales promotion- 400 Public relation- 800 Online media- 1800
		Total – $ 32,000

The above budget includes the estimation of the amount that the company will spend on marketing Mix for marketing action plan. The elements such as product, place, and promotion are included in the budget forecast.

Marketing action plan 

The marketing action plan focuses on the path that is followed by the company to achieve the goals and objectives of the company. KFC action plan for the year 2018 is discussed below considering the marketing mix of the company (Rogers, & Davidson, 2015).

Marketing Action Plan for the year 2018

Marketing mix activities	Responsibilities/ Accountabilities	Interdepartmental support	Timeline Start/ End	Indicative budget ($NZ000’s)
Product (Packaging of the product is the activity on which company need to focus)	Production department	Packaging manager	January 2018- March 2018 (3 months)	$ 500
Place (lease of the outlets)	Administrative department	Property administrative manager	January 2018- December 2018 (1 year)	$ 28,000
Promotion (the activities include the promotion of products and services through sales promotion, public relation, and online media)	Marketing department	General Marketing manager and assistant marketing manager	July 2018- December 2018 (6 months)

The marketing controls are used by the company to measure, monitor, and review the organizations marketing strategies (Smith, 2014).

• Sales metrics– The sales metrics are used by the company to measure the data that monitor to gauge performance and make an adjustment to accomplish the goals of the company (Lee, & Heppner, 2015). KFC make use of sales metrics to analyze the performance in sales. After implementing the action plan and promotion activity sales metrics helps KFC in evaluating the changes took place in the sales of the company.
• Customer metrics- The customer metrics is a technique to measure the value of the customer for the KFC New Zealand. Through, this the KFC can check the customer satisfaction and customer loyalty towards the brand.
• Customer readiness to buy metrics- This metrics is useful for the KFC so that they can evaluate the awareness of the brand (Arslanagic-Kalajdzic, & Zabkar, 2015). The target audience of New Zealand is aware of the benefits of the product, the preference of the product related to the product and the suitability to the customers.

Conclusion 

The report is based on the current environment critical analysis of the KFC New Zealand. It includes the proposed future marketing strategies being the marketing manager of the KFC. The report consists of the external analysis of the KFC New Zealand which can impact the company decision; the external analysis includes the pestle analysis and the porter’s five forces. This external analysis helps the company in analyzing the environment and the competitors that affect the decision of the company. Furthermore, there is a discussion about the market situation and marketing strategies of the company which includes the segmentation and the target market of the company.

The report also includes the discussion about the future marketing mix for KFC and the budget which shows the amount invested by the company. At the end, it includes the marketing plan and the measurement control through which the KFC will review the performance after the implementation of a plan.  

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