MBA Assignment (Marketing Management)JANE MAKWINJASTUDENT ID NO: 0134JMMJMM0614DATE OF SUBMISION: 15/08/2014 LECTURER: Vincent Wee Eng Kim

Table of Contents1.0Executive summary12.0Introduction23.0Consumer behavior33.1THE BUYER DECISION PROCESS34.1 Subculture64.2HOFSTEDES CULTURAL DIMENSION64.3Culture and Marketing94.4Culture and competitive positioning95.0ANALYSIS OF KFC CHINA & CULTURE105.1Company background105.2Localization in china115.3Chinese values115.5Customs in china125.6Translations and language136.0Competitive positioning146.1Product innovation146.2Pricing strategy146.3Distribution strategy for KFC China146.4Public relations of KFC China157.0SUCCESS ATTRIBUTES157.1People157.2Locality167.3Product category168.0Conclusion17

1.0Executive summary

This report was commissioned to analyze culture as a determinant of consumer buyer behavior which is an external factor and how does it influences the buyer decision making of the consumer. The analysis of the consumer behavior and the buyer decision process is discussed and their relationship with culture. KFC Company is used as a product category for consumers to determine the culture influence in the China market and how KFC position itself within the local Chinese environment.

From the research it is evident that KFC chine has gradually increased its market share since its operation in China by the year 1987 with 20% of profit margins and has annual revenue of $1 million only in China market therefore out performing all of its competitors in the fast food business. This is achieved through competitive positioning in which KFC has localized itself through its menu and including Chinese language in order to meet the needs of the consumers. Furthermore the report shows that KFC china not only has customized the menu but it also celebrates with all people from different culture. The spring festival is the most commonly celebrated in the beginning of Chinese New Year. With this, new 20 products are implemented every year tailored towards the local tastes. KFC has also able to meeting the eating habits of Chinese consumers who values family dining a norm. Other factors that, this report elaborates is the leadership and culture and their contribution success factors of KFC china. Therefore it is recommended for KFC to also include local Chinese in the leadership team as they better understand the Chinese culture and subculture thus increased sales. Although it is successful in china, KFC should increase more outlets since they now better understand the culture of Chinese and have adapted well within the region.

2.0Introduction

In today, s business world, business are want to create competitive advantage due to intense competition that occurs. Therefore marketers of the businesses have to cater for their consumers needs by understanding consumers decisions when purchasing a product or service (Smith & Fisher). Consumers are faced with competing companies offering a variety of goods or services therefore, decision and the factors impacting their behavior should be clearly analyzed. According to (Darley, p.96, 2010) consumer s decision are often made through five stages which include; need recognition, searching information, evaluating alternatives , post-purchase behavior and purchasing decisions. However marketers should focus on the whole buying process rather than the purchasing decision only. Internal and external characteristics are the main factors which influences the consumers purchase decision and behavior. The internal characteristics comprises of personal and psychological whereas external characteristics includes cultural and social factors. In this research context, the emphasis is on one variable of any choice thus culture will be discussed as an external variable.

3.0Consumer behavior

Goel & Hofman (2010) Consumer behavior is defined as the process through which the buyer makes purchase decision across various products/ services. It is the behavior shown by the consumers while buying and using the products or services which satisfy their needs and desires. Therefore it is vital for marketers to develop understanding and to know reasons the reasons why consumers purchase certain goods and services. With that information, they can able to know the needed products and identify the best ways to present the goods to the consumers in the market place. Consumer behavior further tries to understand process of buyer decision making and characteristics of individuals such as personality and preferences are learnt in order to understand the consumer s wants(Villie, 2009). It further evaluates factors which influence consumers such as the society, family and friends and also it allows companies to adopt relationship marketing. Cultural influences are an external major factor which influences consumer s behavior.

3.1THE BUYER DECISION PROCESS

Figure 1: Source: (Buyer Decisions, Kotler, 2009)

Fig. 1 indicates the purchase decision process and what a buyer encounters in the choice making process regarding the type of goods or services to buy and this process is in stages.

Problem recognition- at this stage buyers identify what they need to purchase in comparison with their needs and wants (Sinha, 2011). These needs can be influenced mostly by internal factors which are personal and psychological. Also marketers sometimes stimulate the need by providing information about the product. For example, an advertisement about new clothes can stimulate the consumers recognition that the need new clothing

Information search- after they identify their needs; consumers have to now source for information of what they will purchase (Lee & Cranage, 2010). Searching information could be external (word of mouth) or internal and if the search is a success the buyer is left other alternatives (evoked sets). The information search can be on low evolvement purchase or high evolvement.

Evaluation of alternatives- this is the stage whereby the buyer evaluates the options available. With the information search gathered the consumers are able to know what they want and what they do not want. Comparison of brands is made based on price and quality factor during the process.

Purchase decision it the stage whereby the buyer has concluded on the best choice brand to purchase after evaluation of the alternatives. The decision could be made based and the product, packaging or services. Zhang & Wang (2012) discussed that, attitudes from people close (significant others) to you such as friends can influence this decision. For example, a consumer deciding to eat KFC informs their friend and in turn the friend will persuade them to buy Kenny Rogers as it offers healthy meals; therefore the consumer is likely to change their initial decisions made. Another factor which influences the purchase decision is the unexpected situations

Post Evaluation- purchase it is determined by two outcomes which is satisfaction or dissatisfaction which evaluates the decisions. The consumer evaluates if the decision made is right or not (cognitive Dissonance) and therefore marketers can reduce this behavior by offering warranties, after sales services, coupons and rewards points(Roberts, 2011).

4.0CULTURAL INFLUENCES

Effect of culture on consumer behavior

Culture determines the way people live and it is usual dynamic depending on societies. It is a way of life, which comprises of the core values, traditions, attitudes, language, peoples tastes and preferences and it also communicates the thoughts of the society (Francis, 2013). It also includes artifacts, sign and symbols. It is a broad aspect that determines the consumers behavior thus marketers have to understand its key role on consumers decision. Changes in the trend and cultural values & norms should be monitored and recognize by marketers so they can satisfy their customers needs and determine the business and marketing strategies which work well and effectively (Rosso & Diane, 2011). However, these changes vary from country to country so marketer should pay attention to things that are offensive or not. Therefore, there is a need for new product development if there are any changes in the cultural shift. (Palmer et al. 2012) mentioned that, Another element that makes up culture is beliefs as people in the society usually show some similarities, for instance eight symbolizes wealth in a Chinese culture therefore anything that has to do with the number indicates prosperity. Non-behavior of individuals is related to tradition, which marketers have to understand in a competitive environment. As a result, marketers have to learn the culture factors in analyzing the consumers behavior as it has been a crucial aspect of market segmentation, positioning, and target market (Kim, 2011).

4.1 Subculture

Cultures are different entities which have different values. This means each culture consists of smaller groups known as subcultures. These groups have distinct modes behavior of their own and therefore marketers need to understand the difference between these groups so they could effectively develop more strategies. Subcultures are formed through geographic regions, ethnicity, gender groups and religions and usually preferences vary depending on how people live with each other (Russell, 2009). Brands usually consider these groups for the market segmentation so that they can adopt the product or communicate the strategy for particular needs of the segment.

4.2HOFSTEDES CULTURAL DIMENSION

(Minkov, 2011) mentioned that, Hofstede is the theory model regarding the cross cultural which helps business to understand how different nation culture is in various countries. The framework is applicable for advertising, ethics