The price strategy which KFC is currently adopting is geographical pricing. It is because the menu prices is set differently in each country. For example, KFC Malaysia snack plate is priced at RM 5.95 while snack plate in Singapore is priced at SGD 6.40. Generally, they use market penetration pricing for new products. KFC sets their price slightly lower as compared to their competitors in order to entice customers away from their competitors. With this strategy, it gives customer the awareness and urge to buy in view of their low pricing as compared to other competitors. For example, KFC Zinger Double Down set priced at RM 9.95 with includes two pieces of meat while McDonald Spicy Mc Deluxe Burger set at RM 9.45 with includes only one piece …show more content…
They placed their product for a high price and target the middle and upper class people. According to Behera (2008), the pricing strategy include not only the price list but also comprise of on going offers, discounts and promotions. KFC is using skimming pricing strategy on the new product to reach a segment of the market that is relatively price insensitive and thus willing to pay for a premium price for a product. As the product is new, company need to adjust the price from time to time base on customer respond and cost of production. The product price will be firstly placed in the range of RM8 to RM15, base on the type and size of the meal ordered. According to Wisnudewobroto (2011), KFC placed their products for high price but not overly high. However, to compete with other competitors, KFC trickle down their price for only the selected items during mealtime to focus on both middle and lower class people to penetrate both sides of the market. If the product price are too low, it might lead to customer perception that the food have a poor quality, while charging for the product too high price might cause customer to switch their preferences to other competitors. KFC also will take into consideration on the probable reaction from other competitors in the pricing …show more content…
A consumer can buy dishes from the basic menu and go for add-ons which is optional pricing and there are combo offers which comprise a mix of items. KFC has variety of options in each category. For example, in Bucket, there are menus with 8pcs, 12pcs and also 12pcs variety bucket (Hot & Crispy Original Recipe and Chicken Strips). KFC come up with different pricing and bundling strategies for the new launch product which are Vege burger and Vege Wrap such as lunch treat, combo meal and family meal. The superworthy meal enable to attract middle and lower class people to increase overall sales
In the podcast “Chuck E. Cheese’s: Where a Kid Can Learn Price Theory”, Stephen J. Dubner discusses the current violent outbreaks, along with some possible theories. One of his listeners, Nathan Corroy, a financial adviser in Milwaukee, Wisconsin, mentions that a contributing factor may be the pricing strategy. Right now, all the arcade games at Chuck E. Cheese’s cost one token to play, even though some games last longer than others. Thus, Dubner asks an important question “How does the price of a good or a service effect consumer behavior?” (Dubner).
The everyday low pricing strategy works best in a broader store positioning strategy and supported with advertising. Hi-Value doesn’t need to be the lowest priced supermarket in the area for the everyday low pricing strategy to work. Lowering pricing needs to be used by all in the area or else Hi-Value will confuse our store image and positioning. Hi-Value must look at recent consumer research to see how we are positioned and how this pricing will change our image. There is potential to reduce operating costs.
In the review of the corporate level strategy, we can see many different competitive advantages branching from their use of corporate diversification and vertical integration. Going deeper into those strategies the three elements that allow for a competitive advantage for The Kroger Co. include operating into different markets, having a successful customer reward program, and by having many different locations nationwide under many different brand names. The VRIO analysis found that all three of these give Kroger’s a sustainable competitive advantage by being valuable, rare, costly to imitate and having the right organization structure business wide. In the review of the business level strategy, there were just as many different competitive
What types of marketing strategies is chick-fil-A following? The type of strategy that the founder and CEO S. Truett Cathy developed for Chick-Fil-A was a target marketing strategy. The reason is because S. Truett Cathy focused on building the companies and other strategies that he used around his Christianity beliefs. Chick-Fil-A also made sure that every employ focused on delivering the best service they could to every customer that they served.
Introduction The restaurant industry in the United States had annual sales of $ 631.8 billion and employs 12.9 million people in 2012. Even in times of recession there is little evidence that this industry has seen a decline especially in its fast food and quick service segment. But with a depressed economy with no immediate upward trend in the near future, majority of the customers indicated that they would either curtail their spending on eating or best maintain its current level which is certainly going to affect the future of many restaurants in the industry. Chipotle is part of the fast casual segment of the U.S industry with over 1,600 restaurants.
To get the worth of quality and to get maximum profits they implement this pricing strategy. Dominos introduces new entrants to the market with lowered prices, but not to a greater extent. This happens because Dominos’ quality food products are not home-produced and they are imported from different countries keeping in view the best
What are the two types of core competencies that drive a firm’s competitive advantage? Which firms demonstrate a clear competitive advantage because of (a) major value-creating skills/core capabilities and/or (b) superior assets or resources? Which firms have demonstrated sustainable sources of competitive advantage? The two core competencies that drive a firm’s competitive advantage are cost leadership and differentiation.
In addition the McWrap costs four times the price of a McChicken, which changes the customer’s perception of the low cost chain. The customers are always quite sensitive to increased prices, especially when it comes to new products bearing in mind that McDonald’s customer base includes the low wage income group. It can therefore cause loss of both potential customers as well as current
KFC has handle this is situation very tactfully and has obeyed the policies of the Government as prescribed by the government in order to run this kind of business. The other major factor is the pricing policies. KFC maintain and design its price policies keeping in view the income and income distribution of the people living in the country. That’s why all the classes are the target market of KFC.
“buffs” for e.g. customers which can be seen as innovators or early adopters and shoe high interest in every new release of Samsung. These customers are easily enthused by the new technologies like smartphones and other add ons as they are lee price sensitive. Following figure shows the dimension of value creation: Dimension of value creation Pricing tactics Since Samsung is present is present in so many product categories, the company follows a variety of pricing tactics the pricing strategies can be divided to match the product it used for. Skimming strategy with this strategy, Samsung brings a new product in the market, for e.g.S7 edge, initially it uses skimming price for the product, where it tries to get high value in the start before competitors catch the product.
6.1.2 Price Price is the value or amount that customer pays to buy a product. For instance, for our Star Lab ice cream shop, we need to consider the cost of production of our ice cream, price of our main competitor and our potential customers demographics in order to succeed this competitive market. (C. Breidert, 2007, p.9) 6.1.2.1 Pricing Strategy Pricing strategy that can be used by our company such as penetration pricing, cost-plus pricing, value based pricing and more. But we think that market penetration pricing is the best pricing strategy to be used by our business.
The company also uses broad differentiation as a supporting strategy. This secondary strategy involves developing the business and its products to make them distinct from competitors. McDonald’s applies the broad differentiation strategy in one of their product line. For example, McDonald’s introduce the McCafé products line, in this strategy McDonald enables to get customer during off peak hours. Vertical integration is also one of the strategic objective linked to McDonald’s cost-leadership strategy.
Differentiation: In a differentiation strategy a firm seeks to be unique in its industry. KFC follows a differentiation strategy as the recipe for its products is very unique and never been imitated. 3. Focus:
KFC is committed to making sure their people grow to their highest potential. KFC does their best to provide an interesting and exciting job for their employees. Operations KFC is a subsidiary of Yum! Brands, one of the biggest restaurant chain in the world. KFC had sales of $23 billion in 2013.
The concept of KFC, complete with a taste of victory, and satisfying experience, was brought to the Middle East by the Americana group. They have started from one restaurant in Kuwait, which opened on September 25, 1973, the franchise has grown rapidly with more restaurants open in the Arab country in Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Oman, Egypt, Jordan, Lebanon,