mcdonalds marketing strategy in malaysia6

7/29/2019 Mcdonalds Marketing Strategy in Malaysia6

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UNIVERSITI PUTRA MALAYSIA

A CASE STUDY ON

CHILDREN MARKETING OF KFC

ANG SAE MING

GSM 1999 22


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A CASE STUDY ON

CHLDR MATIG OF KFC

ANGSAENG

GO 1393

BA

Y OF EUCAION AND AAEN

UNERSY PURA ALAYSA

SEPEMER 1999


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Pengesh Lapor

Deg saya Ang Sae Ming, nombo matik GSO 1393 pelaj yg

mengkhiri pengaji A Y-U menyatk bhawa sega hasil

kea PSN598 adlh us ha as saya sendii.

Please note that this project paer is submitted for the urose of

llment othe requirement oAroam. Certain iormation and

contains m be deemed rivate and codential, th no reference or

reroduction o any part o this paer shall be removed without

ackowledgement of author

Ka Lmp

23 Septembe 199


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OWLDGTS

sh to covey y scee thaks to y supevso D Jal Boje o hs valuable

gace , I appecate hs patece a te spet to assst e copletg ths

gauato pojects pape

I also sh to covey y heaest thaks to Ta Haj Yaacob o s patece a

valuable help to coplete ths A sty


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PARTl

CASE


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Lst of Table Page

A d P Budge and Saes rackng - Chdren Markeng

2 rand mage racng

3 Cusomer Experence Monor

2 Fas Food Chain Year of En

22 Growh Fro 3 - 8

23 Fore Fas Food Chain Number of Ole

2 WO Anayss Eea

Oprtniy Ad reas

SWO Analss Ineal

2 Strengh and Weaess

28 PACE Envnmena ay

2 SPACE ndsal reng

2 SPACE Fnanca Srength

SACE Cometve Advange

26

2

27

36

3

43

8

49

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List f hn

23

Bnd he Par

ldng(Maysia) hdMlds P L Vs susdies

s f Exi

1

2.

SP dl hildn Mkting

Gdelkng u ktig Wk

2

2360

:

4350


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the pojecion, hou it is co t e poe of childen mkin is for long-

tr oya d bnd buiding.

Howeve when e com deone oneshp hdn mk g

s evewe he un eds ob eamd to have ne diecon nd sate.

The s s a he e oowed sis on he 2n p hesnd oo

aomaned w Sae ouato memnato d o evao

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THE SENAO

August 999 Dato Abdulah Omar, a wel kown corporate gure in Malsia and

anothr o partnrs hav bn invitd to join th board of KFC Holdings (alaysia)

B by former maor holder cum Managing Director Dato Hai Ishak Ismai. Dato Hai

sha relinquished the shar as he neds to take long brea to concentrate on other

oversea business Dato Abduah is appointed as CEO cum Managing Director to

overse the hole fast food bUSness stablishment

In order to get into binss opration imediately Dat h caled for departental

meting starting om departnts lik inance Operation and arketing as these

three departents pl important role in company's cash ow one is contol the

income and expnditure one is genrating sales and anothr has big budget to spnd in

adertising and promotions

As an accotant by profession Date Abdulah not realy believes in adertising

pendit, as it as so dcult to quant the impact His opinion to build customrs

loyal is nothing than to oer products at aordable price

Dato Abduah as sprised to acknoldg that Children arketing unit alone was

btd to R5 M A & P, the aount is about euivalent to pro befor t to

maor listing compa in the second board of LE


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Though he heard about international praise on Children Marketing activities by ricon,

he anchio baed in Dalla he wa no oo impeed ih i in fac he i hining o

crap o the unit to iproe the year end prot argin.

COORATE BACKGROUD-

C HOLDINS (MALAYSIA) BH

KC come to Maaysia in 973, he Americ chse fast food since has expding

agessively to become the largest Ft Food chain in Malaysia, it has 275 outlets wi

market share of 55% versus the closer compettor McDonad's of 130 outlets and 30%

market share, A & W wth 70 outlets and 16 % market share.

KC Holdings (alaysia) Bhd the sole anchsee and orator of the fast food chain

aso ventures into other busness such a chicken , esh chcken retil, bery and

chilli sauce manufacturing I is elieved that e ventures wll support restaurant demand

as well as create opportunt for ture cash ow

The chse has been protable and deaing i cash busness it has gone through may

onerhp keovers by corrate and big conglomerates such as Kong Gun olding

M, Golden Plus and Leong Hup the cuent conoled shareholder is Punca

baat Sd hd Each changes, the ne management wll implement new sate ad

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PER?U{fAKNr.VERSl PU Y

policy that are dierent om prevous, gratelly the senor executives have adopted

well and deliver prot Business owthaplned

Being one of the wo markes at out orm McDonald's globally another is KC

Thailand KC alaysia has won numerous global award and enjoy prestge status as

lead arketerithe eye of ancser Tricon Resut Inteaional USA Thus here s

always a pressue to be te best rfoer in boh n arketing stateg and restaurt

oraions .

C Malaysia once agan took he lead by sg up the rst chldren arkeng

proam in the Tcon syste

CHILDN MATG

e idea to set up cden marketng unit crossed arketing directors mind about six

year ago he marketing drector M S K Wong oinedKC wih elve yeas

expeence in arketing chlden daiy products foerly workng in ultinationals like

Nestle and Dutc Baby He inspired by a reseac ndings sent by hs fomer

universit pofessor r Jaes U cea, professor of Marketng n Texas A&

M

Unversty Enclosed he research repors the leer readabelow

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DSK W

I e y eqes, le me se e itee mibl y, hichI

le che mkg ech:

Tee e 2 surces es a which is eihe ich m

s h co

Che ec iuece 8 bi nual /e ce ec ee

a le$00 . Sch , eves, e pel e ass ld em

US.

Aeig hle h le a l b p erae lizg

ulc es ee mk i cgg

ge chie a mk ce y chie's e ee,

ch l seee fli, achevem ,cge hi a

U beig he m ael u i he l ea uee his

wl S ch Je Hge a H mvesheeae ee

ly le, e chle k joa chs

Mkg ce s eve . se a c a , ch Md' se

s 4s ag Leg Mae to l hi

Reg

es

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INCEPTION OF KDS' FU CLUB

As bieed by Maketing Director, S K Wong a coupes o eas ago he staed oong

for suite erson to assig o aunching chde maeting pa M Lw ng

Moon as ecomended basedo is worng exence and hard okingatude.

M. o en worked it a ou o s ad ly rsented a workng ar aer a

year Aong others the objective o chde arkeing se s " To srehe brad

oat ith kids b enfocing KFC'S brnd rsonat of and eoive apas t

atacts KFC ce to anoter ies toe hen it aunch e C Kids Fu Cub

on 8 ugut 1994.

he se o the ids cub is to bud the and oaty between i and KC as it

as s beeved that i these young custoers oa to KC eeny hen they grew u

as eea ater on ave teir o my tey wi si come bac to KC

he ee ebershp as oered to a ids age 12 ad beo in aaysia and Bnei

o si u at KFC insnty hey woud ge heir credt card oo aie mebeh

d a goodie ba contains hocoate to badge d saoe set ids cb

ebe eoyed benets e dscou chae o d cub ae toy d

pties sciay organized by

ato Abduah noted membehi reahed 30,000 peoe and it is e agest kds

cub in aaysia Hoever no record ca b raced if a these member are active as

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membesp cd dd no come wt maetc st no sm h, KC returt too

dd o have e cad eade o kee tact e memes' tsacton.

S K Wong hglged a e club dd no ml y news lete o membes due o te

g cos of posage esauan a well spead n couny ac as nfomaon

ansmsson pon Te ds club conceps hbeen adoped by KC anso Tcon

Restaans Ineaonal and noduce o global me.

CHILDRE MARKIG AD PROMOIOAL

ACITIES

I ew of e enouagng esponse on ds club membesp applcaon e peous

manang deco fel a soul exploe e te poenal mae n 1998 alone

one quae of maeng adesng budge o R5 mllon was allocaed fo clden

maeng. Below s oulne befed by S K Wong on s maeng aces a wee

launced poessely :

1 Waer Brothers licensing tie-up

Snce 1994 KC as sgned up w We Boes fo lcensng pogam a

sm of US$00OOO lcese fee o be pa o US based consme podcs

eneng company o allowKCo use e fmous Looney Tunes caaces n

eelopng pon of pcase maeals oys and saone fo ds club

membe. Te lcense us ges leeage o KC o wo wold class

poducon ouse on clden maetng.

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So far, the relatoship gomg well as it s wm-wm stato were C

captazed the word faous characters for ow ketg actvtes o the other

hd t helps to proote te Wer Brotes characters to local arket ch

s currety ag behd by strog Dsey's Mckey Mouse ad soe ove

characters lke Lo Kig Allad ad Wne the Pooh.

has etered to the 5t ear coract d has teto to cotue for

aoter3 years

2. ds Fun lub Magazne

Te chle agae release 4 sses yely e qaterly publshg cotas

60 pages cocs terestg sto ad actvtes KC food coupos ad cotest

th arvelos przes No advertsg page fod except prodcts.

Te age s als a coucato chel to updates atest happeg of

clb to ebers t as avalable to ebers at cost however o eers ca

purchase at ch er cost

It s derstae hat rkeg rsoel are ot experts clde

pubsg the agze s cotracted ot to a ell o oca publshg

hose the copay hadles cocepts ad creatve developet edtoral colour

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seprtion nd pitig jobs. he mgne is only avilae t KC outes, nt

on n newsst or ook shops

Customers compned t e mne's cotents s deterort , d reese

dte re ot pct er more s oe of expsve mze tow

3. 2 roon sonsorsh

s beeve tt ds e crtoo pro, KC etered to coct w R

to sposor Wer Bros croon prorm t s on r9.05 m ever Sud

ced "Wts Up D?" In between the oe our prorm tere were wo ost

to terct ndl bout ds' stu

Te prorm ter c to KC Hor to er ece KC

brd S K Wo sessed t e seecto of croo pro t be

cre te seecto sct mted to tose cod cutvte m vue d

o-vence to reec te C brd me

Te sorsp cost s 0,OOO per wee t bee te top tree ds'

po cross V o in Maysia , clamg e average ratg p of

13. Te t s Ds's Advete of 18 rtn t, te cdren sow

owever s o Srd mo t 3

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Howevr e pat thee month is a iapponent, the rang op to 8 nt

ue to st comton omN7wch as moe volent an exctng caoos

durg the e te bet wKCou.

4. Rtaurant Kds' Corner

Each resaurt ha a bu dspay coer w noce boar sca eveop

premum that wou be spaye for member pchase I ao he oce

boa see he puse to upate any atest new o happeng to kd' cub

membes

The ban maager Ang Sae Mng rghty sa t s dct to mat ts

coers as sae pemm a toys ae ot easy avaabe ue to seeco

proceues many mnage seem want to have a y on ctera, es,

pcng

Aoer ssue s ress cs do not py muh aeno on ths spay t

s such n ce reant he t was empy broken y It wa an eye sore

to ce seor manement

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5. Kds' Fun Meal

Kids' Fun Meal was emulated om McDonalds Happy Meal, whereby, 4 combo

meal comrised C food Iced lo and a small Fun ries were sold at special

discounted price. A Free toy is given with every puchase

Kids' Fun Meal was rst launched in 5 June 1996 during the earlier stage the

price and menu ket changing to ascertai the comfortable prot margn fd

combination and suitabili of toy Lately the kd's meal renamed Chcky eal to

reect new image and new combos oers

The ds meal romotion lanched eer sx weeks th derent toys sourced

om Hong Kong each was suprted with 20 seconds TVC and ll POP

conald's inteaional has established apy eal promotion whereby total

order for toy reachig 60 mion pieces for each global promotion versus

300000 ieces ordered by C alaysia ue to the litle volume, C

Malaysia could notenjoy economics of scale many times compromise on sub

qualiy and hgh rce due to limited choice.

6 Chilren Birthay parti

The parties would be organized upon request by arents With minimum

urchase ofR10 for 0 kds C mascot-Chcy will make aearance in the

paries whch were conducted by hostess at selected restaurant

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The pay program received average repon due to poor pulicit and also

expeece hostesses.

7. Mascot road show

Wi the ssio of Wer Brs, KFC h oraed many act

apperces at vros FC outlets over all cont.

Tweey bird B By Da Dck ad Tamaia togeher Ccky had

Vsted my otets to meet members these were speca and memorabe

occsions or ds

8 Undepileg Chiden Fund (TabungPeyayangKC)

FC has located R 2 llio or chty cose yely besides orating

herg paired resaut amet's posopy s aways wat to b a

gd corate ctizen le wth goveet's cm whereby cea

pot gai wee doa t derpveged oup in Maays soce by dong

so FC to gan a ot o favorabe ubc.

abg Peyayg C or C Love ad Care Fd is the ast cariy

om the objecve s to beet the ohaes oside e g le

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ven tat pvleged pples in major to e well ae ce o by oter

coporae compae.

The Tabung Penyayag KC w aunce n December 1997 by Mnir of

Wefare Socie i .I wic, wi ee K' Fu Mea o

wou onae 0 en o e fd aeaey come c ona og e

coeco box payi oofea case

The oecto n c o edy opnag om o far a um of

R50,OOO been oae for he pue

MKETNG OPERATION D SUPPORTS

Low Kang Moo mkeg manager ea e eco cey e wa ao

nuce o Dao Abu he epaea meeg ogeer wh bn manaer

g ae Mig a mkeg i Haia e eam a be worig

ogeher ince he cepon of' un ub 994.

To e e oco i o a e job nco ae eeng

aeing gency eig pre ppe oe it and pnn ad eecon of

markprgam

The bie ion i icoe aue o oo co-wore he beiee

a he co come o meo mreig e b wio he pr om

oto ee hey can no uccee Qog o my ncien he mang fe

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that most of pomotion activiies fail due to inecient of oeaon sta in crg out

the duty, uch a dplayng POP mateial, uggestng sellng, tock pojecton and

sale acng.

Conay to t, oatons diecto has befed Dato Abdullah Oma on anothe vesion

of stoy Dato was told that maketng depaent fal to focus e compy objectve,

they ongly believe tat C' man custome ae adult te paent has nal y on

clden ode, moe oe e clden maketng p e no noely , mostly e

duplcate om comttos. The most seious s pomoton bef always come late, they

have no choce b to lanch as plan, toug thee ae a lot of conan on tang and

lotcargement.

Opeaton pesonel such ea manage and etauant manage eemed neve had h

egad on ths chlden pog Opeaton pesonnel felt that th was wate of tme to

do the cld bses, as a lot of manal wok on kd club membesp pcesng,

ellng kd pemm d matence of kd; coe W o out tentons,

opeaon had not povde accuate ale etng, membeshp applcaton fom to

maketg Dept. ad the band maage.

Dato Abdula wonde could pn o long thout oluton, pjecte

C a tat of" old Clas Kd Maketng" and alway ecevng ovesea delegate

vtato but n actl fact t s not a geat as t loos to be. He plan to meet bot

aketng ad opeaton decto epaately to esolve the sues

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FANCIAL LICATION

Dato Abduah interested to nd out the ret of nvestment, aer a it has been arond

o ao e yeas, some eakeen analysis shold e condced o jsi is'

existence

Table .

an Sale rckn for KFCChi\. Mkt KFC saes (servi Competitor sesea A & P Budet ids Mea Toy Magazine HMe McDToy MickeyMgn

9 200000 0 20000 80,000 200000 500000 30000

995 00000 0 200000 200 00000 00000 45000

99 000000 500000 00000 0000 500000 700000 4500099 000000 200000 400000 40000 400000 800000 40000998 5000000 2800000 450000 40000 3200000 900000 35000

Souce: KFC intea

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RESEARCH CONDUCTED

Brand Image rackng (IT) and Cstomer exprence Monor (CEM) are 2 tools

deveopd by rcon Restat nteona to ontor t brad wer d custoe'

satisfacton, oth wee fome coissioned to AcNelsen and Soes Neson

Reaseach.

ae 1.2

BANDIMAGETRACNG

Category Category: Pla kid's

r KFC S1994 Win

995 W

996 e

1997 W

998 ie

Table 3

CUSTOMER EXPRIECE NICaegory oo ks oo kds

Ye K V

994 ose

99 Wn

99

997

998 ie

Sour KC

McDonl

Lose

LoseieLseie

O

Wn

Lose[se

KFC vs I&WWin ose

Wi LoseW LoseWn os

ie ie

C vsA&WTie e

Win ose

Lse

Isei Tie

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COPETTO ACTVTES

Low Kang Moon has some hngs o boos au, McDonald's d oher

compeo have eaced agessiely e he lanch the d Fun Clu :

McDonalds

The fas food chan oo lanchd Ronald cDonad i' club in 1998 mems wee

oeed ee ies and oange jice on each si o McDonads oules. Subsequeny) e

chain inoducd ccken como in Hapy eal men ic ilo w an opon

epace so dnks

Amos a te se ime McDonald Ieaional sied p 10 yea aeemn w

Dsney o aunh Dsney sees pemu oy n appy Mea enu The nue o

happy mea pomoion was aso inceaed om 8o 10 anu.

cDonad's aso pomog day pay pacage heay by oeing ee pzs o

iday oe ha i aso sponsos T coon pam oo only limid o

weeks

Ex meng vice pesiden om McDonads alasia evealed o oe of close iend

n C a McDonds neaon s yeng on KC Malaysa bause e success

od ve ecssion es on gloal me

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mcdonalds marketing strategy in malaysia6

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