Kentucky Fried Chicken Holdings Malaysia Berhad Marketing Essay

Kentucky Fried Chicken Holdings Malaysia Berhad Marketing EssayKFC is an abbreviation of Kentucky Fried Chicken is a chain of fast food restaurant based in Louisville Kentucky, in the United Stated and was founded by Colonel Harland Sanders in 1952. Since he was only 9 course of instructions old, he disc everywhereed his penchant for cooking. Through the years he grew up to become a personage the world knows as Colonel Sanders, founder of KFC. KFC mainly sells poulet pieces, wraps, salads and sandwiches. While its main focus isfried chicken, KFC also offers a line of grilled and roasted chicken products,side dishesanddesserts.Although Harland Sanders died in 1980, he remains as a important person of the companys branding and advertisement, and formerly known as Colonel Sander, is a metonym for the company itself. In 1991, the company adopted KFC, an abbreviated from of its name but starting in April 2007, the company began employ Kentucky Fried Chicken, its own fender name for its signage, packaging and advertisement.Kentucky Fried Chicken recipe includes blends of 11 herbs and spices and become franchising to the rest of America. By the early 70s, that circumscribed recipe reached Malaysia. Today, KFC Malaysia continues to coif finger lickin good, succulent pieces of chicken. Its delicious aroma was get most Malaysian citizen and became popularly amongst them. KFC prides itself as a fast-food restaurant give customers gigantic tasting chicken with a selection of home-styled side dishes and dessert.The first KFC restaurant was opened in 1973 on Jalan Tunku Abdul Rahman. Until now, KFC Malaysia reached about 500 franchised around Malaysia and still counting. striking tasting chicken has become synonymous with KFC, and has been enjoyed by Malaysians ever since. Now KFC Malaysia has developed its own distinctive Malaysian personality of its own.The Companys BackgroundKFC Holdings (Malaysia) Bhd., (KFC Holdings) is a mark chicken sell chain operator. K FC Holding in Malaysia operates about 500 KFC restaurant nationwide also operates the RasaMas chain of restaurant about 35 outlets. or so 52 Kedai Ayamas owning by the Group of KFC Holding, making this company as nations first branded chicken and chicken-based retail chain.Not only serve fast-food as main business, KFCH also widely involved in poultry production and wreaking, as well as a host of ancillary businesses much(prenominal) as vegetable farming, baking and sauce production.KFCH has emerged as strong big company in Malaysias businesses and retail world with high reputation for slender product, efficient friendly service and financial strength. Undeniably, KFCH is the only KFC restaurant operator in world whose serve Western Quick Service Restaurant trade greater than that of McDonalds.KFC Holdings (Malaysia) Bhd (KFCH) operates service not only being the franchisee of KFC chain of restaurant in Malaysia but also in Singapore, Brunei, Cambodia and India.1.2 Board of Dir ector ( decision maker Director)Kamaruzzaman bin Abu Kassim hot seatNon Independent Non Executive DirectorAhamad bin MohamadDeputy ChairmanNon Independent Non Executive DirectorJamaludin bin Md AliManaging Director / Chief Executive officeholderKua Hwee SimIndependent Non Executive DirectorTan Sri Dato Dr Yahya bin AwangIndependent Non Executive DirectorHassim bin BabaIndependent Non Executive DirectorDatuk Ismee bin IsmailNon Independent Non Executive DirectorDatin Paduka Siti Sadiah binti Sheikh BakirNon Independent Non Executive DirectorDuring the KFCHs period of services, below interpret the awards and achievement of the KFCH from year 2008 until year 2010 prizeYear accolade consistencyTrusted Brand2010Yum BrandsReaders Digest Most Trusted Brands2010Readers DigestPutra Brand Award 2010 (Silver)2010Putra Brand Awards Association of AccreditedIndustrial Excellence Award for Service Sector2008Malaysia 100Brand Excellence in Product Branding for Fast Food Chicken Category2008Bran d LaureateKFC good deal Excellence Award2008Yum BrandsBest Operations Excellence Award2008Yum BrandsRestaurant Excellence Award2008Yum BrandsMarketing Excellence Award2008Yum BrandsFranchisee Of The Year2008Yum BrandsYum Reel announce Excellence Brand2009Yum BrandsEffie Award (Bronze)2009EffieReaders Digest Most Trusted Brands2009Readers DigestFranchisee Of The Year2009Yum BrandsTable 1.1 KFCs award and achievement from 2008 to 2010.AwardYearAwarding BodyBest Brand Category2008Brand LaureateOutstanding Product Innovation Award2009Malaysian Live derivation Industry Awardsemailprotected Awards2009Livestock Asia Expo meeting placeTable 1.2 Ayamass award and achievement from 2008 to 2009.Nature of BusinessKFCH handles over 620 KFC outlets comprising of Malaysia, Singapore, Brunei, Cambodia and India and over 35 RasaMas restaurants in Malaysia and Brunei. Over the year, KFC Holdings (Malaysia) Bhd. (KFC Holdings) improve in advancement of fast-food with its original recipe of kentuck y fried chicken, KFC Holdings also engaged in the business of poultry, processing, restaurants and property holding.Other than that, KFC Holdings is also engaged in operating hatchery, stock breeder farms, poultry retail and convenience food store chains. Chicken, fresh bun, cakes, snacks, sauces, chicken rice meals and Freezer to Fryer products are the examples of products offered by the company.The businesses units serve by KFC Holdings areRestaurants KFC and RasaMasAyamas retail fowl IntegrationAncillary OperationsRestaurantsKFC is the best-conventional brands in Western Quick Service Restaurants market not only in Malaysia but also worldwide. Report has been record that over 620 KFC restaurants in Malaysia, Brunei, Singapore, Cambodia and India. Recent product was emerged by KFC Holdings such as Egg Tart offer to customers as a variety alternative to attract peoples.Successful first steps were taken by the company to re-brand Rasa Ayamas outlets by established RasaMas as dine -in restaurants. The first Rasa Ayamas Restaurant opened in 1996 and the aims is to brings all its ready-to-eat cooked food under the Rasa Ayamas name also to promote the Ayamas processed products to all Malaysians citizen.Ayamas RetailAyamas Retail is Malaysias first branded poultry retail chain established by KFC Holdings. The services given by the Ayamas is to sell chicken and chicken-based products in an air-conditioned environment to fulfill customers need. It is also offer a selection of chicken roasters and light, chicken-based snacks.In 1988, the first convenience store was opened at Seapark and afterwards there are about 52 stores under the name Kedai Ayamas. The products are at tip-top of quality halal branded chicken that been processes and packaging by the companys own processing plants.Poultry IntegrationThe KFC Holdings processing plants process poultry for restaurants around the nationwide while focusing to achieve cost-efficiency while maintaining halal and high qual ity standards. The poultry integrator and operations consist of breeder farms and hatchery, feed mills, poultry farms, contract broiler farming and processing and further processing plants was undertaken by the Ayamas Food Corporation Bhd.Other than that, the Ayamas operations also to supply unharmed chicken and cut chicken parts further processes chicken product to the domestic market as well as to export the products to nearby commonwealth such as Singapore, Brunei, Hong Kong and Middle East.Figure 1.2 Marketing division of Ayamas Poultry Integrations.Ancillary OperationsKFC Holdings on its own complement core business thus take benefits from an integrated ancillary support system that comprises the sauce manufacturing, bakery and commissary operations. The Region Food Industries Sdn Bhd (RFI) is the company that leading the sauce manufacturers with producing about 12 one million million bottles per annum.Financial PerformanceFigure 1.3 Graph shows the performance of KFC Holdi ngs (Malaysia) Bhd on 11 February 2011.The financial performance was reported that the company resulting a moderate improvement on the services that provided by the company since it was established. Through its subsidiaries, the company operates in three segments known as restaurants, integrated poultry and ancillary. Since that, the company became strengthen and establishes franchises around Malaysia as the financial performance show a good condition.Chairman of KFC Holdings said that gross gross gross revenue at restaurants since its open more than a year jumped 16 percent in 2008,double the rate of 2007 and then three times faster than the global average for KFC outlets. KFC Holdings (Malaysia) Bhd., the best performer on the nations benchmark stock index, said it will sustain the quick yield in at least 10 years as demand for deep-fried chicken defies an stinting slowdown (Chan Tien Hi, December 3, 2008).KFC SALES GROWTH RATESTable 1.3 Summary of Earnings Table of KFC Hold ings (M) from 2005 until 2009.Table 1.4 P L Breakdown of KFC Holdings (M) from 2005 until 2009.The table 1.3 and 1.4 on earlier page shows the sales growth rates of KFC Holdings (M) from year 2005 until 2009. It was shown that KFC Berhad remains by far one of the cheapest mid-large cap consumer companies in Malaysia. It can be seen on the table of the overleaf for vicinityal comparison. The sales growth rate was increase from 2005 to 2009 for example the Dividend Yield on year 2005 is 2.5 percent then each year been increased which year 2009, the yield is increased to 7.8 percent.It was reported that KFC Holdings generated revenue of RM1, 206, 9 million which accounted for a 10.9 percent increase over 2009. Since the sales increased over the country and show good performances, the issuing of Malaysian KFC outlets has increased to 399 in 2007 and now was increased to 500 outlets all around Malaysia. It is also was evaluate that the number of outlets will increase by the year of 2012.At end of March 2007, the research house imputing that 2 percent of selling price was implemented by Malaysian KFC outlets, and 3 to 4 percent selling price increase implemented at Singapore KFC outlets in November 2006. Since the selling price increased, KFC branches were growing fastest around nationwide. Apart from that, KFC Holdings (M) also increased the number of Ayamas Restaurant outlets to 19 from 14 outlets for 2007 and then from 14 to 21 outlets for 2008.The growth accelerated earnings by this company in 2QFY09 (+4.2%yoy to RM31.7m) as compared with +1.4%yoy in 1QFY09. The higher growth was due to higher contribution and better margin from KFC restaurant division.Chart 1.1 KFC Turnover dislocation (9M06) on 2006Chart 1.2 KFC Pretax profit breakdown (9M06) on 2006Below show the pie charts of turnover breakdown and pretax profit breakdown for KFC Holdings (M) on year 2006. Chart 1.2 show that the earnings that been driven by KFC restaurants chains, which account for almost 90 percent of group pretax profit. The turnover breakdown by year 2006 was almost 60 percent. Overall, it was expected that KFC is delivermid-single digit revenue growth, which driven by high single digit growth in Malaysia KFC restaurant operations.SALES TRENDFigure 1.4 KFC Holdings (M) sales growth from 2005 until 2009.Figure above shows the sales growth of KFC Holdings (M) from year 2005 to 2009. It is show that the sales were decreased from 6.5 percent on 2005 to 4.4 percent on 2006. Then the sales were decreased once again on year 2007 and record the growth about 4.0 percent. The sales were decreased because of the economical growth for the year came with a mlange of highs and lows whereby the country at that time was unstable due to fuel crisis. This crisis bring on the the impact of higher food and oil prices left a decrease in consumption and business profits.However, on 2008, the economic began stable therefore the domestic sales prospects of KFC Holdings of Malays ia were increased due to stability of economic. As a result, sales growth for the whole of 2008 inclined increased to 5.0 percent compared to 4.0 percent in 2007. During the year of 2008, KFC Malaysia aggressively drove restaurant image enhancements. Many steps were taken to improve the overall KFC dining experience for the valued customer.For year 2009, KFC Malaysia became strong market activities and launch a disciplined operations therefore the sales exertion and profitability was increased again in 2009 with 7.2 percentages compared the year before. Expansion of restaurant at that times record greater growth in Peninsular Malaysia region also in Sabah and Sarawak regions. The expected increases in sales growth of KFCs products was due to ongoing enhancement measures and the strong supportive of valued customers.YEAR noshDINNER19853.954.9519965.306.6020046.708.80Present6.808.90Table 1.5 Snapshots of KFCs meal prices during selective periodsfrom year 1985 until now.Since year of 1985, the price of KFCs meals were become increased due to economic growth ever since. However, since the economic grew more standardize, the price of KFCS meals were increased accordingtocurrency appreciationandthe economy.The people ofMalaysiaare also abletobuytheKFCs meals at reasonable price. However, this factor was not affecting the buyers but every year the sales growth even more increased.Years ago, the prices of meals at KFC were costly in range of RM3.00 to RM5.00. These days, getting a decent meal at KFC which include snack plate and a drink, inclusive of service charges were costly little than RM9.00 to RM10.00, which is not much more expensive than dining at hawker shops.CONCLUSIONThe economic growth of our country came with a mlange of highs and lows. Sometimes the economic condition is at a stable place whereby the economic growth was steady. However, since fuel crisis came up in year 2007, the global economic downturn created cautionary, vaporific and fragile mark et by year end. Since the crisis came up, the sales rates of KFC Holdings (M) was record downturn due to the impact of higher food and oil prices.The group of KFC Holdings (M) were toilsome to survive by came up with a lots of plan strategies to further the operations of the group. KFC group were committed to enhance performance during that year by introduced bracing meals to the restaurants and new product to the Ayamas Retails. Since the strategies were launched, in 2008, the group recorded an impressive revenue growth of 26 percent to RM2, 179.8 million from RM1, 703.4 million in 2007. In the previous year, the profit before tax also increased to RM167.5 million against RM150.6 million.The increasing of stellar performance also resulted on earnings per share whereby in thirty-first December 2007, it was recorded that the increased by 13.7 percent from 52.59 sen to 59.78 sen in 31st December 2008. On that year, the revenue from KFC restaurants contributed about 75 percent to the Groups total turnover, 20 percent and 5 percent was contributed by the poultry and ancillary businesses.Since that, the improvement of KFCHs sales growth become surprisingly increased in year 2009. Therefore, on 2nd January 2009, KFCH became a subsidiary of QSR Brands Bhd (QSR) and record that there is another 865,300 ordinary KFCH shares, increasing the QSRs total holding in KFCH to 50.25 percent. This is became the significant milestone for the group to enhance the management capability on the sales growth of the business. The benefit of long term is to exercise result in management stability and positive income contribution of the group.Now the business of KFCH were at its stable condition and expand more further resulting on the increasing of sales growth each year. Since now and then, KFC becomes the biggest Malaysian fast-food operator with about 500 franchises of KFC restaurants and 26 of Ayamas outlets all around the country.