Brand Management Of An International Firm: A Case Study Of Kentucky Fried Chicken (KFC) Essay.

Literature Survey

Describe about the Brand Management of an International Firm.

The purpose of branding is to distinguish one product from that of another. The American Marketing Association defines brand as “name, term, sign, symbol or design or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition.” This would mean that whenever an organization creates a product and the product is given name or a logo or anything, which differentiates it from another product, then the organization creates a brand (Keller 2013).

Different organizations use different elements to differentiate the organization from another organization. Brand management is both tangible and intangible. The tangible elements would be the look and the feel of the product. Examples of organizations having tangible elements are NOKIA, SAMSUNG, Apple, and General Electric. The intangible elements would be the relationship that   the organization has with its customers. Examples of organizations having the intangible elements can be from the banking sector (Heding, Knudtzen, & Bjerre, 2016).

In the present study, Kentucky Fried Chicken (KFC) a firm that specializes in branding Fried Chicken would be chosen. KFC as it is popularly known opened its first restaurant in 1952 in Utah, United States. Harland Sanders a school dropout founded it.  KFC has outlets all over the world, opened about 2365 restaurants in 2015. Its presence is felt in 120 countries with more than 15,000 restaurants. It expects to give a 10% operating profit growth in 2016 ("2015 Yum! Brands Annual Report", 2016).

In the modern world, every organization wants to be projected as a brand. Branding by an organization can be compared to building a strategic asset. The very existence of an organization sometimes balances on the name and fame it has acquired. The name of the organization has the strength to influence the market.  This influence may be lost if the brand management is poor. A band is an amalgamation of three factors: the product and services offered by the organization, the name of the organization and the concept of the organization (Kapferer 2012).

Food is an integral part of our daily life. The food that we eat is a reflection of our culture, our habit and our wellbeing. The tweets on the social media reflected the eating habits and profile of the person. Tweets between friends on the subject of food showed that the tweets reflected a demographic profile of the person irrespective of their culture (Abbar, Mejova, and Weber 2015).

Consumer Behavior and Branding in the Fast-Food Industry

A cross cultural study done to analyse the perceived knowledge of wine between Australians and Koreans found that Australians had more knowledge of the health benefits of red wine. But Koreans consumed more red wine. Red wine was chosen since it is consumed in both Australia and Korea. The study was conducted on wine drinkers who were more than 18 years of age. (Yoo et. al. 2013).

Fast food outlets are growing at an enormous rate. A study conducted in Manado city analysed the consumer behaviour and the preference of the consumer towards the food. The preferred fast food brands selected were McDonald’s, KFC and A&W.  The analysis found that price was the most important factor in determining the fast food chain. The other important factors in determining the fast food outlet was the atmosphere, location, cleanliness, the speed of service and the taste of the food. (Wibowo and Tielung 2016).

In the hospitality and fast food sector corporate social responsibility is a very important factor in making consumer food chooses. A cross cultural study across North America and Europe found that social and environmental responsibility to vary across consumer valuation. The study also found significant differences in awareness, purchase intentions and trust of the different food chains between the consumers. Similar to previous conclusions the CSR in North America is more as compared the European markets (Mueller Loose and Remaud 2013).

A cross-cultural study (Western and non-Western) conducted to assess the influence of technology on food products found that the consumer valued the economic value of the food more than the taste value. The study found that across cultures there exists consumers who are both pro and anti to the use of technology in the processing of food products. The study suggested that the consumer valuation for the use of technology is a multidimensional concept.  (Perrea, Grunert and Krystallis  2015).

A cross cultural study found that the aesthetics of a food product influences the choice of the food. Two groups of consumers from America and China were presented with various liquid drinks in transparent glasses having different shapes. The study was designed to understand the consumer preferences to the type / shape of the receptacle, the colour / aesthetics of the drink and the type of drink. The study found that in all the three categories in which the study was conducted the choice of the consumer differed across cultural differences (Wan et.al. 2014).

The Importance of Packaging and Customer Loyalty in Brand Management

For a food product the packaging is the first object with which the consumer comes in contact. The packaging of the food product gives important information regarding the quality of the food and information of the food product. The study was conducted giving four cues which gave the consumer to make an informed choice. The study was conducted across two countries in Europe with different cultural backgrounds. The study found that different symbols gave different meanings across cultures. The study also found that symbols or visual cues to be as strong as written information to influence consumer choice (Carrillo et.al. 2014).

Consumer behaviour towards purchase of organic foods differs across cultures and religion. In a study conducted on US and Korean consumers it found that there were significant differences in the buying behaviour. The buying behaviour was influenced by the religious beliefs of the consumers. The study found that Buddhists were more inclined to sustainable behaviors irrespective of their place or country of residence (Minton, Kahle and Kim 2015).

Customer equity (value, brand and relationship) is a concept in the brand management of a product. A study conducted amongst the Europeans and Chinese consumers found that the consumer’s preferences varied across all the three variables of equity. The study was conducted in two locations. A banking sector and a supermarket location were chosen for the purpose of the study. The study found that the Chinese consumers were more loyal as compared to the European consumers. The study also revealed the impact of the equity drivers on the western cultures were more as compared to the eastern cultures. The study also indicated that the same marketing strategy cannot be followed across diverse cultures. This being a reason that MNC’s originating in western nations have not been able to have the same growth in eastern nations (Zhang, Doorn and Leeflang 2014).

A study conducted to identify the overall effects of culture, loyalty and price on the complaint behaviour pattern of the consumer evidenced significant differences across cultures. The study indicated that customer loyalty in relation to service failures in the hospitality industry differed across cultures. The study indicated that there were significant differences amongst the behaviour of first time and loyal customers (Kim, Lee and Mattila 2014)

Customer loyalty is a very critical for the growth of an organization. For any organization to grow profitably it should be able to deliver satisfactory goods to the customers at affordable prices. The gap between satisfactory goods and affordable does not mean that the customer will express displeasure, but it surely means that the customer would most likely visit a competitor. A study by Bennet on aggressive consumer behaviour found that only 5% of the customers complained.  Customers in a hospitality industry are the most important asset. The presence or absence of customer can mean a difference in profit and loss to the industry. By the process of complaining the customer only expressing his displeasure (Eid 2013).

Marketing Strategies for Diverse Cultures

The purchase behaviour of a consumer is variant across culture and religion. This is reflected in the promotional strategy that McDonald follows in UAE as compared to that in Europe (Begum 2015).

The hospitality industry’s success depends on its ability to cater to the needs of customers across cultures. A study done to measure the brand management of the hotel industry found that the image of a hotel depends on the perceived quality of service, the awareness, image and the reliability of the brand. The study used a cross-cultural analysis by studying the variables like the language spoken by the tourist, the residence country of the tourist and the hotel in which the tourist stayed.  The study found that to study the brand management of the hospitality sector there were an infinite number of grouping variables and studying a cross-cultural and cross-religious preference cannot be limited  (Oh and Hsu 2014).

The aim of the research is to analyse the impact of cultural diversity and the cross-cultural differences on the brand management of Kentucky Fried Chicken (KFC).

The research questions for this research are as follows:

How the brand management of KFC is is influenced by the culture diversity and cultural differences of a place?

What is the relationship between cultural diversity/ difference and the brand management at KFC?

How cultural diversity of a place creates cross-cultural issues/challenges at the workplace for KFC?

How cultural diversity affects the brand image, reputation and value of KFC at the global level?

What strategies are used by KFC to manage the cultural diversity as well as to solve the cross-cultural issues in the global market?

On the basis of the above research questions and the brand management of the fast food chain the hypothesis are developed. The hypotheses to be tested are

H1: Cultural diversities have no impact on the brand management of the fast food chain KFC

H2: Cross-cultural diversities and cultural differences have no impact on the brand equity of the fast food chain KFC

H3: Cross-cultural issues have no impact at the workplace of the fast food chain KFC

The objective of the research is as follows:

To find the relationship between the cultural diversity and or differences in brand management at KFC

To study the relationship between the cultural diversity and cultural challenges at KFC

How does KFC cope with the challenge of cultural diversity and cultural difference

How does KFC manage its reputation as the market leader in fried chicken at the global level.

Conclusion

The strategies used by KFC to manage the cross cultural diversity and cross-cultural issues at the global level

To address the present research a survey questionnaire would be developed which would be administered to the customers and employees of the fast food chain KFC. The questionnaire would test how cross-cultural and diverse relation of the fast food giant affects the consumer’s choice of food. The research also focuses on whether fast food giant like KFC has different frameworks to work at different regions of the world. The research would analyse how KFC brand manages and represents itself in a cross-cultural situation. The demography of the people would be studied. The correlation between the choice of food and the cultural background of the customer would indicate the customers’ food habit. A t-test would be done to analyse how the KFC adapts to the needs of the customer. Finally the reliability of the data would be studied.

Figure 1: Gantt chart of the research

(Source: created by author)

The present research is based on the inquisitiveness that how international organization brand manage themselves in a cross-cultural situation. An organization in its process of expansion grows from one country to another. In this process, it sometimes expands into regions which have different cultures, religions, beliefs. To be a profit making organization in such regions it has to tweak its philosophy. The present research aims to find how KFC has made changes in its working so that can work in a cross-cultural situation. The approach is to collect data from the customers of KFC from a region / place where there is an amalgamation of cultures, religions, languages of people. The data thus collected would represent a cross-cultural data. The analysis of the data would represent if KFC has been able to promote itself as an international organization keeping in view the different cultures and value ethics of the people. Most of the international organizations in the catering, fast food, hospitality industry do make changes in their philosophy so that they can survive in a cross-cultural situation.

The most important task of the researcher is to design a sampling plan. Since for the present research qualitative data collection method will be used hence the sample size would also be kept small. For the purpose of the research, a sample of 200 customers of the fast food chain KFC would be selected at random. The entire 200 customer would be mailed a survey questionnaire. 

Since the present research focuses about cultural diversity and cross-cultural differences the customers selected would have to be from diverse cultural backgrounds. For selecting the customers a metropolitan city would be chosen where cross-cultural people stay. The customers selected would be regular and loyal customers of the fast food giant. Only then can we randomly select people with different cultural backgrounds.  The sample of the customers would consist of an equal number of people coming from different cultural backgrounds. The customers thus selected should also have different language backgrounds. Since the customers selected would have different cultural backgrounds it could safely mean that they have different religious beliefs also. The customers should also have different lifestyles and values of life.

The sample would also consist of an equal number of customers of both the gender. The sample would also have an adequate number of customers of all age groups.

The demographic profile of the participants would be studied. This profile would be the most important factor in determining the extent of cross-cultural and diverse sampling of the consumers / customers. It would also indicate the food preferences of the customers vis-a-vis their religion and culture.

The correlation of the food of choice for the customer against the cultural background of the customer would be studied. This would indicate the evolution of brand management by the fast food giant.

A test for the difference in means of different statements by the consumer with regard to the tangible and intangible variables that affect the brand management of the fast food giant would be done. This would indicate how the fast food giant adapted to the growing demands of changes in a cross-cultural situation. This would also indicate how KFC evolves its menus, aesthetics, and other equity variables in a global scenario. The tests would be done at 95% level of confidence.

A previous study by Begum (2015) has indicated the consumer expectation from fast food giants in a diverse cross-cultural situation. The results showed that the fast food giants like KFC and McDonald improve and make changes in their brands to cater to the needs of varied consumers / customers. A study by Nadiri and Gunay (2013) points to the fact that the catering industry creates a “quality of experience” so that it can achieve more customer satisfaction and create a brand of loyal customers. The catering industry brand manages its equity according to the culture and religion of the country. The hospitality, catering, fast food industry have brand managed themselves and are way ahead in offsetting any negative impacts of cross-cultural diversity as against other MNCs which are still struggling brand image themselves.      

Conclusion

It can be concluded from the present study that multinational organizations in the field of hospitality, fast food have adapted to the ever growing requirements of the customer. They very well understand the cultural diversity and cultural differences that are present throughout the world. Multinational brands in the fast food sector have learnt that the less they know about the culture of the place (in which they are doing business) the more is their loss. Thus multinational brands have adapted themselves so that they get moulded into the beliefs, values and customs of the region while keeping their identity intact.

References

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