Executive Summary
The manufacturing sector has been involved in the production of consumer products for a long time. The goods have been produced and selected to suits specific segments in the market. Different positioning strategies of the products’ development were examined before the goods have been supplied to the market. While doing the market segmentation for the products, the target market has been well studied and investigated.
However, from study on the two companies discussed below, it is evident that some major points have been overlooked. The failure to meet the target market needs concerns the people with special needs in the society. This group of population includes the sick like the diabetics, those who experience high blood pressure, and others.
Does this mean that the needs of these individuals can never be met because they are not included in the target market or simply because they are a minority within the society? Such individuals should be paid the equal attention to and treated just as the rest of the people who are considered normal
. They also have certain wishes, and these manufacturing companies should carry out a research to establish the special needs of these individuals, and come up with some of the products to cater for that market segment (Thomas, 2006).
The analysis of the two companies shows how the theory of marketing has been implemented in our society in terms of the market segmentation, target markets, and strategic marketing.
Industry background
A manufacturing industry involves processing of raw materials to finished products. These industries are classified based on the source of the raw materials, for example agro based industries are agriculturally oriented whereas mineral based are classified in form of the mineral elements collected raw and refined to their products.
These industries could also be classified according to the major role played whether the products are supplied raw or as finished products to consumers. They could also be classified on the basis of capital invested, small versus large-scale industries; also on the basis of ownership whether public, privately owned, a joint sector industry, or a co-operative sector industry
Companies’ background
McDonald’s Corporation is one of the leading fast food chains of restaurants in the world dealing with the production and supply of hamburgers. The company whose headquarters are in the United States of America began long ago in 1940 and has managed to spread all over the world, with branches in close to 119 countries (Derdak and Pederson, 2004, p. 108).
McDonald’s Corporation initially began as a barbecue restaurant before specializing in hamburgers production. This was under the leadership and management of Maurice and Richard McDonald.
However, in 1955, Ray Kroc became a member of the company through agency franchising but later the company from the McDonalds (Derdak and Pederson, 2004, p. 109). Ray Kroc is therefore behind the success of the McDonald’s Corporation with regard to its worldwide growth.
Kentucky Fried Chicken (KFC) was founded in 1997 after splitting off from PepsiCo in the name of Tricon Global Restaurants. Harland Sanders of Kentucky was the man behind the creation of this company. The common products that KFC deals with are sandwiches, chicken pieces, salads, and wraps. However, the primary product that is produced by KFC is fried chicken.
KFC has managed to spread in Kentucky, the United States of America and in Louisville among other places. As such, the company boasts of over 3,700 units internationally. Most of these units are franchisers who assist in the distribution of the products.
Product overview
As mentioned earlier in the paper, McDonalds specializes in the production of hamburgers. Hamburger can be described as a snack that is made from minced beef which is then sandwiched in bread amongst other ingredients such as tomatoes, sauce, lettuce and mayonnaise just to mention a few.
Hamburgers from McDonalds have been ranked the best all over the world for a long time now. McDonalds offer a wide range of different types of hamburgers ranging from the Big Mac, Angus Deluxe, McDouble, and Cheeseburger among others.
Below is a picture of one of the different types of burgers produced by McDonalds.
Fig. (Derdak and Pederson, 2004, p. 109)
On the other hand, KFC produces various products some of which include sandwiches, chicken pieces, salads, and wraps. However, the main product of KFC is their fried chicken, which is loved by many. Their fried chicken is normally cooked by grilling in oven.
Despite the fact that KFC’s fried chicken is a preference to many the company uses oils that are partially hydrogenated in preparation of the chicken. As such, the oil normally has high levels of unsaturated fatty acids, which increase the risk of people suffering from fat related illnesses such as heart diseases.
Below is a picture of Kentucky’s fried chicken
Fig. (Queste et al. 2004, p. 76)
Strategic marketing
This is the business of selling and promoting products of different companies either through research or through marketing. This entails detailed structured approaches, which define what a company is trying to achieve thus an integrated campaign, or a team of skilled and dedicated individuals is required to help achieve the defined objectives of the campaign.
Strategic marketing determines where the organization is going to be in the coming years in terms of development and other factors. There are a number of issues involved for instance a SWOT analysis, a plan, goals, objectives and an appropriate model.
SWOT analysis should be carried out both internally and externally to enhance strategic decision-making. At internal level, the analysis helps in future planning as it articulates present operations. It can divulge trends, indiscretions, limitations, as well as opportunities.
There should be a mission, which the organization is aligning with. There should also be well set goals and objectives to be achieves because of strategy planning. An action plan or activities are the implementation of the strategic plan where duties are allocated and resources mobilized.
Evaluation should be carried out to establish whether the strategy plan has worked. Strategic consulting can also be used in strategic planning as well as using personality and style match. Rewards and incentives can also be used for both the employees and the customers.
A comparison of the strategic marketing techniques used by both companies (McDonalds and KFC) it is by no doubt that, both have managed to market their products and services effectively. However, McDonalds seem to have invested more in their marketing strategy given the wide scope of market it has all over the globe.
For instance, a look at McDonald’s and KFC’s homepages, that of McDonald is of high degree of content and advertising material that gives the visitors to the home page who make the consumers, sufficient information regarding the company’s products.
Secondly, McDonalds has more outlets all over the world compared to those of KFC. It is therefore, recommended that the management of KFC invest more in their strategy marketing techniques in order to reach the standards of McDonalds and other companies in the food service industry.
Macro environmental forces
Macro environmental forces are the ones that are not directly related to an organization. They are sociocultural, political, technological, International and economic variables (Pride & Ferrell, 2012).
Such variables originate outside the organizations, so they cannot be controlled internally, thus their impact is meant to strengthen company’s forces as it retains its competitive advantage. As for the case of both companies, which happen to belong in the fast food restaurant services, the possible macro environmental forces include weather, legal authorities, and the government among other forces.
Micro environmental forces
Micro environmental forces are forces that are directly related to the organization. They develop from within and easily controlled because their roots can be established, traced, and uprooted. The common micro environmental forces that are bound to be faced by the two companies (McDonalds and KFC) include customer complaints, distributors and the suppliers of the raw materials especially in the food service sector
SWOT analysis
SWOT stands for strengths, weaknesses, opportunities, and threats in an organization. Strengths and weaknesses are internal, relate to the present situation whereas opportunities and threats are external, and refer to the environmental changes, which affect the business.
Due to SWOT analysis, an organization is able to identify how to improve its business, be aware of its competitors, and know whether the company utilizes the best opportunities available in the market, in order to be in a position to establish how it should respond to changes in the external environment.
Market segmentation is a marketing term, which refers to the way players within the market are grouped in different categories depending on their common needs and the ways they respond to a marketing action.
It helps organizations target at different types of consumers in the market who value their products more than their fellow customers do. Three ways to group, these consumers are through considering the commonality of their needs, uniqueness of their wishes and similar responses (Pride et al. 2009).
McDonalds SWOT Analysis
KFC SWOT Analysis
Target Markets
Target market refers to the targeted customers within an organization’s reach. It would also mean a specific group of individual customers or groups at which an organization aims while developing and producing its products (Lamb, Hair, & McDaniel, 2012). Most of the targeted markets of both companies are the young adults who are the most lovers of snacks and fast foods such as hamburger and fried chicken.
Targeting strategies are marketing strategies generally used when advertising a product as a way of maximizing its sales. There are different ways of doing this basing on the target audience. These include consumer based, segment based, context based, and behavioral based marketing strategies.
Targeting strategy refers to the process that is used in the selection of potential customers to whom an organization sells its products. This involves segmenting the market. Undifferentiated targeting strategy involves conveying a similar promotional message.
Concentrated involves designing a promotional script that is specific to a target group while differentiated involves designing more than one promotional message, each communicating a different message.
Positioning strategy
This may refer to as using an organization’s product characteristics, price, consumption of the product, competitors, cultural symbols, product class and product process to position some targeted customers to purchase the product (Summers et al. 2004).
There are different ways of expressing the positioning strategy; these include using customer benefits to position the market (Ingram et al. 2012). This focuses mostly on the characteristics of the product or the benefits a customer will gain from the product.
Price can also be used as positioning strategy in a way that it depicts the quality of the product; a cheap item is of low quality while an expensive one is supposed to have a better quality. A positioning strategy is based on use of a product whether it is currently of importance or not. A product could also be positioned strategically in the market based on how it has been processed.
Similarly, positioning strategy can also include some cultural symbols. Both companies have implemented positioning strategies based on class, competitors and use or application of their products (Dann & Dan, 2004).
Recommendations
From the SWOT analysis of both McDonalds and KFC companies, it is evident that both companies are facing similar threats of changes in lifestyle. Given the several cases of fat related illnesses, such as heart diseases and obesity, most of the people have refrained from consuming foods that are produced using oil or rather contain high contents of the unsaturated fats.
Fried chicken by KFC and Hamburgers by the McDonalds are some of the foods that are being campaigned against by governments and other stakeholders in the health sector. In the event that the consumers welcome these campaigns, it will mean a great loss to the companies as their sales will be significantly affected.
It is therefore recommended that both companies invest in research and development in order to come up with products that do not compromise the health of consumers. For instance, KFC could turn to the new way of frying using the airfryier, which uses superheated air instead of cooking oil and fats yet producing products that taste same as those fried in oils.
McDonalds could follow suit by producing tasty vegetable burgers or burgers with lean meats. In addition to this, it is important that both companies invest in proper marketing techniques in order to ensure proper market segmentation and targeting (Kotler et al. 2009).
As for KFC, it is yet to venture in other international markets such as South Africa among others. This should be used as an investment opportunity by making plans to have their products and services sold in most parts of the world especially in nations where it has not ventured. This will not only expand its market distribution and in turn, the sales of the company will go up resulting to high profits.
McDonalds on the other hand is also expected to venture into other countries such as China and India in a bid to upgrade its market penetration. In the same case, the sales of the company will go up and hence an increase in the profits.
Conclusion
From the above report analysis, it is clear that McDonalds and KFC are amongst the most successful companies in the food service sector. Both are restaurants with branches all over the world with McDonald having a greater network of franchising than KFC.
Nevertheless, it is important to note that both companies deal with products in the category of snacks or fast foods whereby McDonald specializes in hamburgers while KFC specializes in fried chicken among other products.
Despite the tastiness of both food products, they have been criticized by stakeholders in the healthcare industry because of their high quantities of calories, which are harmful to the health of consumers. However, these critics should not be a hindering factor in the business of both companies as everything has its extent of toxicity and not the fast food products only.
Reference List
Dann, S & Dan, S 2004, Introduction to marketing. Wiley, Australia.
Derdak, T., and Pederson, J 2004, “McDonald’s”, International directory of company histories, vol. 67 no.3, pp. 108–109.
Ingram, TN, LaForge, RW, & Avila, R A 2012, Sales management: Analysis and decision making. M E Sharpe Inc., New York.
Kotler, P, Adam, S, Denize, S, & Armstrong, G 2009, Principles of marketing, 4th ed, Prentice Hall, Australia.
Lamb, C, Hair, J & McDaniel, C 2012. Essentials of marketing, South-Western Cengage Learning, Ohio.
Pride, W, & Ferrell, O 2012, Marketing, Cengage Learning, Ohio.
Pride, W, Elliot, P, Rundle-Thiele, S, Waller, D, Paladino, A & Ferrel, OC 2009, Marketing: Core concepts and applications. John Wiley & Sons, Australia.
Queste, P, McGuiggan, R, McCarthy, E & Perrault , W 2004, Basic Marketing: Creating and delivering value, 4th ed, McGraw-Hill, New York.
Summers, J, Gardiner, M, Lamb, C & Hair, C 2004, Essentials of marketing, 3rd Asia Pacific ed, Cengage Learning, Sydney.
Thomas, A 2006, Direct marketing in action: Cutting-edge strategies for finding and keeping the best customers, Praeger Publishers, Westport, Conn.