groupassignment topic kfcs localization campaign in vietnam

About KFC Global...22.Introducing KFC in Vietnam...22.1.The chain of KFC stores in Vietnam22.2.Customer market and target 22.3.About the product 22.4.Business philosophy 2II.GENERAL INTR

GROUP ASSIGNMENT

KFC’S LOCALIZATION CAMPAIGN IN VIETNAM

TEACHER: Master NGUYEN THI DOAN TRANGSTUDENT: GROUP 4

CLASS: BA1702

MAJOR: DIGITAL MARKETING

TABLE OF CONTENTSI INTRODUCTION OF KFC 2

1 About KFC Global 22.Introducing KFC in Vietnam 2

2.1.The chain of KFC stores in Vietnam2

2.2.Customer market and target 22.3.About the product 22.4.Business philosophy 2II.GENERAL INTRODUCTION OF CULINARY ARTS IN VIETNAM 2

1.Introducing Vietnamese cuisine 22.Current status of the fast-food market

in Vietnam 2III.KFC CAMPAIGN IN VIETNAM

MARKET 2

1.KFC's failed campaigns in the Vietnam

market 22.Analysis of KFC's "localization

campaign" in Vietnam 22.1.Product policy (Product) 2

2.2.Price policy (Price) 22.3.Distribution Policy (Place) 22.4.Promotion policy (Promotion) 2IV.CONCLUSION 2

V.REFERENCE 2

Every day, more than 12 million customers areserved at KFC restaurants in 109 countries andterritories around the world KFC operates more than5,200 restaurants in the United States and more than1500 worldwide KFC is world-famous for its OriginalRecipe, a secret blend of 11 different herbs and spicesperfected by Harland Sanders more than half a centuryago Customers around the world can also enjoy morethan 300 different products KFC is part of Yum!Brands, which is the largest restaurant businesscompany with more than 36,000 branches worldwide.

The company is ranked 239 on the Fortune 500 list, with over $11 billion in revenue in 2008.2.Introducing KFC in Vietnam

2.1.The chain of KFC stores in Vietnam

After a series of successes of the chain of fast-food restaurants with the KFC brand (over10,000 restaurants have been developed worldwide), in Vietnam KFC entered the market for the

Figure 1: Density of KFC storesaround the world.

first time in December 1997 at the Saigon Super Bowl commercial center Now this chain offast-food restaurants is present in most of the streets of Vietnam.

The first restaurant development milestones in the provinces:-12/1997 – Ho Chi Minh City

-06/2006 – Hanoi

-08/2006 – Hai Phong & Can Tho-07/2007 – Dong Nai - Bien Hoa-01/2008 – Vung Tau

-05/2008 – Hue

-12/2008 – Buon Ma Thuot-11/2009 – Da Nang-04/2010 – Binh Duong-11/2010 – Vinh City, Nghe An-05/2011 – Nha Trang City - Khanh Hoa-06/2011 – Long Xuyen - An Giang-08/2011 – Quy Nhon and Rach Gia-09/2011 – Phan Thiet

-12/2011 – Hai Duong

KFC has a wide chain of stores in all districts in Ho Chi Minh City and a strong deliveryteam, delivering goods to your door in the fastest time A perfect and convenient type of lung forconsumers In addition, KFC also has stores in Hanoi, and other provinces.

2.2.Customer market and target

Figure 2: Kentucky Fried Chicken Store in HoChi Minh City (2005).

- Customer market: KFC chooses a set of customers according to 2 criteria:

+ Age: KFC mainly affects young people from 17 to 29 years old, families withchildren KFC mainly focuses on the dynamic trend, the fast access to the culture ofVietnamese young people.

+ Profession: KFC is aimed at pupils, students, people working in the city.

+ Income: KFC affects people with good and stable incomes This is the market segmentthat KFC focuses on.

- Target market:

KFC mainly focuses on large cities with densely populated areas such as Hanoi and Ho ChiMinh City Ho Chi Minh City, Hai Phong, Da Nang which mainly Hanoi and Ho Chi Minh City.

2.3.About the product

- KFC's main products are Buckets, Burgers, Twisters, and Colonel Crispy Strips chickenwith extra dishes with hometown style.

- The menu list is also divided by servings of traditional fried chicken, convenient everyday, meals for children, soft drinks, snacks, side foods, salads, desserts,…

- Some KFC Vietnam products - Traditional Fried Chicken - Boneless Crispy ChickenRice - Shrimp Burger Combo - Crispy Spicy Chicken Combo - Seafood Combo.

Figure 3: KFC organizes events for childrencustomers.Figure 4: Customers of KFC.

2.4.Business philosophy

Business philosophy: "To be the leader in western-style quick-service restaurants throughfriendly service, good quality food, and dean atmosphere".

- Target:

+ Build an organization with unsurpassed devotion.

+ Always deliver high quality and value in products and services.

+ Maintaining a commitment to continuous improvement for new and evolvinginnovations, the first is always the leader in the constantly changing market.

+ Create financial resources and regional profits for investors as well as employees ofthe company.

- Mission: to maximize profits, enhance shareholder value and deliver sustainablegrowth year after year.

Figure 5: The typical products of KFC such as fried chicken, french fries, Pepsi,

- Vision: four strategies to enter the Vietnam market of KFC Vietnam To have a leadingintegrated group food service in the Asia Pacific region based on consistent qualityproducts and focus on exceptional customer service.

II GENERALINTRODUCTIONOFCULINARY ARTS IN VIETNAM

1.Introducing Vietnamese cuisine

In the culture in the countries, food is a veryspecific thing, in Vietnam, too, the cuisine isvery important to the culture of Vietnam, for thepeople in Vietnam, the culinary culture is notonly is used to eat and enjoy but it is also used toconvey the traditions and culture of Vietnam Ifyou are a person who loves to eat, please join mein learning about the culinary culture of Vietnam.First of all, we need to know what cuisine is,cuisine is the way to call the preparation ofdishes, which are the available sources of ingredients to combine according to each other'seating habits, and the cuisine in Vietnam is very well prepared diverse, looking very close tonature.

Figure 6: Vietnamese street food.

Vietnamese cuisine is characterized by the neutrality ofingredients that are not too spicy, too sweet, or too fatty.Auxiliary ingredients (seasonings) for processingVietnamese dishes are extremely rich, including manyherbs such as basil, perilla, marjoram, onions, dill, Chineseflavor, Real spices ingredients such as chili, pepper,lemongrass, chives, garlic, ginger, lemon fruit, or youngleaves Fermented spices like batches, shrimp paste,vinegar, or bitter candy, coconut milk,… When enjoyingthe dishes, the nature of the above-mentioned synthesis

of ingredients becomes even more obvious: Vietnamese people rarely eat any separate dishes,enjoy each dish, but a meal is often a combination dishes from start to finish The typical spicesof the above-mentioned tropical Southeast Asian peoples are used harmoniously with each other,such as a dish that is easy to cause cold stomach (welding) and must have hot and spicy spices(heat properties), accompanying and vice versa Hot (warm) ingredients must be cooked withcold (cool) ingredients to create a balance for the dish Incompatible dishes that cannot becombined in one dish or eaten at the same time because they are not delicious, or are potentiallyharmful to health are also drawn down by folk experiences passed down through generations.

2.Current status of the fast-food market in Vietnam

The name "fast food" refers to foods that are prepared and served to customers at a restaurantor shop However, it is not necessary to sit at those places to solve the stomach problem, one canbuy it to take home, often called "take-away", "take-out" or " it's big" Understood by the term"fast food", it can be said that in Vietnam, there are also many types of "fast food" on the street,such as banh mi, sticky rice and most especially, street vendors on the street Not only is thefast-food industry constantly developing, but especially in recent years, the Vietnamese marketis said to be a very valuable and potential "cake" that foreign fast food businesses are aiming forhey Therefore, the rapid rush of big-name brands into our country's market has partly helped the

Figure 7: The variety of saucein Vietnamese cuisine.

culinary industry to develop and the society to integrate with the world, but on the other hand, atleast it has made domestic businesses falter For Vietnam today, the fast-food industry is a high-growth industry in the food consumption industries, a potential market that makes manybusinesses pay attention and invest in the food industry.

III KFC CAMPAIGN IN VIETNAM MARKET

1.KFC's failed campaigns in the Vietnam market

KFC has encountered many difficulties when approaching the Vietnamese market whenconsumers are still not familiar with the concept of "fast food" and its taste Therefore, KFC hascontinuously lost money for 7 consecutive years since having its first store The number of KFCstores grows very slowly and after 7 years there are only 17 stores This slow development isbecause KFC's distribution system is mainly expanded through retail space leasing, but the storeopening and rental fees are very high, making it difficult to have more stores.

Vietnamese people have a rather fastidiousview of food Although Vietnamese peopleoften say "you can eat anything", the criterionof "anything can be eaten" must include: cheapprice, delicious food, convenience, goodservice, full of nutrition and should not besuperficial for "Delicious, nutritious andcheap" - Criteria that almost every Vietnameseput first, including the middle class.

The obesity rate of Vietnamese people isonly 3.6% If you calculate this figurecompared to friends in the region, the obesityrate of Vietnamese people is relatively low This comes from the vegetable-loving diet of theVietnamese In most fast foods, vegetables are the main ingredients, which both play a role instimulating taste, smell, and sight, and provide "green" substances to the dish Even whenVietnamese people eat fried foods such as banh xeo, spring rolls, ram corn, there is always thepresence of a large number of vegetables

Figure 8: KFC store on Nguyen Thi MinhKhai street, Ho Chi Minh city.

2.Analysis of KFC's "localization campaign" in Vietnam

2.1.Product policy (Product)

2.1.1 Cultural factors affect KFC's product policy inVietnam

• About Vietnamese culinary culture:

In the culinary tradition of Vietnamese people, there are many different ways of processingand expression, which can be generalized into the following characteristics:

- Low fat: Vietnamese dishes are mainly made from vegetables, fruits, and tubers, sothey don't use as much meat as Western countries, don't use a lot of fat, don't like thegreasy taste, but prefer watery dishes Furthermore, grease can make people moresusceptible to cardiovascular diseases

- Like the rich taste: When preparing food, Vietnamese people often use tears,combining a lot of other spices, So Vietnamese food will be rich Each differentdish has a dipping sauce to suit your taste.

- The synthesis of many substances, many flavors: Vietnamese dishes often includemany foods such as meat and shrimp Crab with vegetables, beans, rice,

Figure 9: Vegetable soups in Vietnam.

- Dislikes industrial products: With the rich resources and traditions of Vietnam, almostall Vietnamese people grow crops, raise livestock and get food from there.

• Culinary influences from neighboring countries in Southeast Asia

Like Thailand: The influence of Thai idols and movies, new trends from food culture Thaiculture is gradually being known by many young Vietnamese Because it is the same asSoutheast Asia, the taste of Thai cuisine is very suitable for Vietnamese people, quicklyintegrating with Vietnamese dishes.

• Religion:

Vietnam is a multi-faith and multi-religious country.

Beliefs guide their behaviors, including consumer behavior The followers of Buddhismregularly fast on the full moon and the first day of the lunar calendar, these days they only eatvegetables and vegan food.

2.1.2 KFC's product policy

KFC's main products are Buckets, Burgers, Twisters, and Colonel Chicken KFC's 4Pmarketing strategy KFC's original product was crispy chicken pieces under pressure, seasonedwith a recipe of 11 herbs and spices created by Colonel Sanders When entering Vietnam, KFCalso changed its taste, size, and design to match Vietnamese cuisine Besides traditional dishessuch as fried chicken and hamburgers, KFC also processes other dishes such as gravy chickenrice, Jumbo mixed cabbage, soft bread and is also smaller in size to suit eating habits ofVietnamese consumers.

Pepsi sweets such as Lipton ice tea, Kacchiato, have created excitement and diversity forusers.

• Keeping up with youth trends and diversity from neighboring countriesKorean trend and is interested in by a lot of young people like Korean BBQ sauce chicken,…

• Customer psychology:

Know that the trend of healthy and healthy eating is gradually increasing among people So in2007, KFC changed the low-fat chicken frying oil in stores

• When the outbreak of disease affects business:

In 2004 and 2005, many flu outbreaks occurred, KFC planned to import frozen chicken fromNorth America, KFC implemented a clean and hygienic chicken processing process and addedthe restaurant's menu with dishes made from fish, beef, pork instead of chicken for customers'peace of mind.

2.2.Price policy (Price)

2.2.1 Cultural factors affect pricing policy

The consumption culture of Vietnamese people is greatly influenced by the economy, mostVietnamese are laborers, so they have a cheap mentality They will prioritize dishes that areworth the money in return for their labor Adults in Vietnam will find it difficult to pay morethan usual for fast food Young people are always ready to try new things, trends.

2.2.2 Price policy of KFC

This is considered an effective strategy because aftersuffering losses for nearly 10 years, in 2006, KFC started tomake a profit and quickly dominated the fast-food marketshare in Vietnam.

Although the price is not too much, this has stronglyinfluenced the psychology of customers about the leadingbrand image and thinking that products with higher priceswill have better quality.

Targeting its target audience, which is the middle and upper classes, KFC flexibly usesdifferent pricing strategies to suit different customers, specifically:

Optional pricing: With this approach, KFC tries to

increase the amount they spend when they start buying Customers can purchase main dishesfrom the menu and choose to add “additional dishes” or side dishes, desserts to match the maincourse purchased.

Package price: KFC combines products and forms a combo package that provides customerswith a more favorable price when choosing to buy individually It is this that encouragescustomers to buy more items, combos are also deployed flexibly and optionally to both meet theright preferences and suit the pocket of Vietnamese consumers.

2.3 Distribution Policy (Place)

2.3.1 Cultural factors affect KFC's distribution system inVietnam

In 2020, the fast-food market in Vietnam will grow stronger thanks to the participation ofdoor-to-door delivery applications According to a 2020 survey, after the pandemic, up to 88%of consumers choose to buy fast food through delivery platforms such as Grabfood, Baemin, with brands used by many people including KFC (News, V (2022)) Food accounts for thehighest percentage of online shopping today.

Moreover, In Vietnam, the food culture is always promoted with the needs of delicious food,time-saving, beautiful space, or the need for a brand, Then KFC - belongs to the type of foodstore that is an effective solution to the needs of people to eat At the same time, hitting thementality of favoring Western-style, KFC has chosen locations closest to consumers such assupermarkets, shopping malls, or large locations for easy access such as Ho Chi Minh City, HaNoi, Da Nang, and Hai Phong city,… in which KFC has chosen for itself two main markets, HaNoi and Ho Chi Minh city KFC is also a franchised distribution channel and is currentlyinvesting in an online delivery system called KFC delivery to expand distribution.

Figure 10: KFC combo.