UNIVERSITI TEKNOLOGI MARA

FACULTY OF BUSINESS MANAGEMENT

GROUP ASSIGNMENT #1/ GROUP PROJECT

Matric no Full name Signature

2020137389 SITI YUSNIZA BINTI DARASIN

Prepared for:

MISS BERNARDETTE @ JACYNTA HENRY

Date of Submission:

11/11/2022
TABLE OF CONTENT
INTRODUCTION ................................................................................................................................ 3

SWOT analysis ...................................................................................................................................... 4

In view of the Chinese consumers’ heavy emphasis on health and food safety, what marketing
strategies can Yum China adopt? ....................................................................................................... 6

Evaluate KFC China’s strategy to position the restaurant as a luxury food brand. Did that
cause KFC to be more susceptible to scandals and less able to recover? ........................................ 7

Conclusion ............................................................................................................................................. 8
INTRODUCTION

Yum! Brands, Inc. (YUM) is a grows faster business. The company creates, runs,
franchises, and licences a global network of quick-service restaurants, both traditional and non-
traditional. It owns and operates restaurants under the KFC, Pizza Hut, Taco Bell, and The
Habit Burger Grill brands. The company's restaurants offer dine-in or carry-out, delivery, and
drive-thru options, and it operates globally. YUM's headquarters are in Louisville, Kentucky,
in the United States.

Yum Brands announced its plans to split into two distinct, publicly listed companies,
with Yum China operating as a separate entity. Yum China is also the top retail developer in
their country, with 6,800 restaurants in over 1000 cities. China is a huge market for the
company. Even though Yum China is one of the fastest growing fast-food companies, the firm
is dealing with a number of difficulties that are making it difficult to recover.

Their Recipe for Growth approach incorporates four growth drivers and serves as the
cornerstone for long-term, sustainable performance. These drivers will enable them to meet
their obligations to offer good food, make their food available to consumers, and provide an
environment for staff to grow and make a difference. The country's expansion potential are
important for them.
SWOT analysis

Strength

1. Yum brands have a full control on the Chinese food industry, where KFC is the market
leader and has a high turnover due to the popularity of non-vegetarian food. Yum has
decided to split into two firms since it is so popular in China, which are Yum China and
Yum brands
2. The company today manages over 41,000 restaurants distributed throughout 125
countries and territories; it consists a huge number for a restaurant franchise from all
over the world. As a result of the large number of restaurants available, the company
provides a diverse menu for consumers based on local preferences in China.

Weakness

1. have limited alternatives for localization. Better localisation, on the other hand,
localization will boost the brand's total income. But in order to have the better
localization, they will need to reduce its product such as Taco Bell or Pizza Hut.
2. YUM! China disregards food safety and has no concern for its consumers. This is
especially true in China, where customers have had several negative food experiences,
stressing the importance of assuring them that their food is safe.

Opportunities

1. Yum China has a solid platform consists of very well experienced workforce that
support the brand. Despite the difficulties it faces, Yum China thinks there is still a lot
of space for growth given its category-leading brands and a fast growing consumer
class.
2. Yum China has been given the chance to access a new emerging market due to the
development of various technology standards and government free trade agreements.
3. Yum China has the chance to use a differentiated pricing approach in the new market
due to the new technology. It will allow the business to attract new customers with
various value-oriented propositions while retaining its existing ones with excellent
service.
 4. Yum China may be able to expand its market by taking advantage of emerging trends
in customer behaviour. It gives the company a fantastic opportunity to develop new
revenue sources and diversify into other product categories.

Threats

1. Competitor that provides same service and product which gives advantage on their
restaurant atmosphere where it is new and modern that will attract customers easily.
2. Increasing costs for raw materials could threaten Yum China's profitability.
3. Because the market for these highly valuable products is periodic, any unlikely
occurrence during the busiest time of the year could have a short- to medium-term
negative influence on the company's profitability.
4. Over the past two years, stable revenue has increased the number of competitors in
the business, which has decreased profitability and overall sales.
In view of the Chinese consumers’ heavy emphasis on health and food safety, what
marketing strategies can Yum China adopt?
Health and food safety has become concern to the Chinese consumers due to many
issues related to the food supplied in the market. Because of that, KFC China is less desirable
option for the consumers and more prefer to dine at home and it is affecting slower growth for
Yum China. Therefore, Yum China came up with marketing strategies to overcome the
problems and to attract consumers to stay with their brand. One of the marketing strategies can
Yum China adopt is to conduct a marketing campaign to assure customers on the food safety
of its brand. Marketing campaign is a good strategy to give information to consumers of the
safety of its product. Campaign does not only refer to demonstrations but it can include
advertising and promoting products using a variety of medium including social media,
television, radio, flyers, and other interactive methods. The consumers will achieve many
information especially about the food safety and Yum China also can regain consumers trust,
indirectly helps generate brand awareness and sales.

Next, Yum China can increased its direct communication with customers using social
media. Social media is one of the tools used by many company to keep in touch with the
customers nowadays. Through social media, Yum China can connected with thousand people
around the world. Yum China’s restaurant such KFC China get high expectations from the local
with its nutritious and safety foods. The customers are very disappointed when the restaurant
involved in any unhealthy food issues. Therefore, Yum China needs to convince the customers
through the fastest way which is directly communicate with customers in social media. They
can update about the safety issues of their food or status to the customers in social media. Other
than that, social media not just advertising or promoting products, Yum China also be able to
answer for any queries or seeking for feedback from the customers directly.

Lastly, the marketing strategy that Yum China can adopt is by focusing greater product
customization, more transparency, industry-leading innovation, and increased interaction
through social and digital media. Because of the KFC China related to health and safety food
challenges, Yum China will place an emphasis on stronger brand positioning and insight-driven
marketing strategies. It is crucial for the business to regain consumer confidence and to have a
robust system in place to guarantee food safety.
Evaluate KFC China’s strategy to position the restaurant as a luxury food brand. Did
that cause KFC to be more susceptible to scandals and less able to recover?

To position KFC China establishing itself as a luxury food brand, one of their methods
is where they will focus on the nutrition of their product, more flavourful menu and the limited
place for customers to come as to satisfy the customers who pays more, just for the taste of
familiar chicken. Moreover, KFC China intends to charge their customers a premium price for
their product while providing a convenient dine-in environment where the customer's
expectations will be met due to the nutrition and comfort that they are providing. Besides, Yum
China will need to change the environment of its restaurant into a more relaxing eating area,
which noise are reduced, space is vast and weather-friendly temperature. Other than that, KFC
China also has modified their menu and marketing campaign in order attract customer attention
to visit all KFC China store.

However, even when KFC China Strategy able to position their restaurant as a luxury
food brand, the scandals that they are still facing are less able to recover from it due to their
food quality. The main issue why KFC China is having a hard time to recover because the
restaurant which is KFC China are not able to reach their customer satisfaction due to the
quality food of product. It all comes from their suppliers as they try to reassure customers in
the country who are worried about chicken safety worries, despite the fact that we all know the
chicken is being injected to make them bigger in size in a short period of time. The firm has
since stated that it would tighten supply chain control and enforce stronger criteria on its
chicken growers. The corporation also removed over a thousand smaller producers from its
network, citing difficulties in controlling their operations.

According to the article we read, KFC China may not be more susceptible or capable
of dealing with problems due to its strategy of transforming KFC locations into a more luxury
restaurant. Which could not help them recover from the scandals. This is due to the fact that
individuals or customers are not trusting the supplier, which they want a better-quality chicken
for the premium price that they willing to pay. It would bring a lot of suspicious of the amount
of supplier reducing, but the number of chickens is increasing.
Conclusion
To conclude, Yum! Brands has experienced several challenges over its journey. They
overcame the problems that they are facing. Now, Yum China has established itself as the
market leader in China as a consequence of their efforts. Yum China must be more creative,
relevant, and efficient in exceeding its consumers' expectations regarding its products in order
to reach their aims. Aside from strengthening their brand's reputation, they must focus on the
dependability and well-being of their services. Even if Yum China is the most successful
fastfood restaurant chain in China, the corporation must ensure that its products are safe for
customers to consume. Also, as they want to sustain their business, an idea generation and
marketing strategy will be needed the most when it comes to maintain their market leading.