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UNIVERSITI PUTRA MALAYSIA
A CASE STUDY ON
CHILDREN MARKETING OF KFC
ANG SAE MING
GSM 1999 22
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A CASE STUDY ON
CHLDR MATIG OF KFC
ANGSAENG
GO 1393
BA
Y OF EUCAION AND AAEN
UNERSY PURA ALAYSA
SEPEMER 1999
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Pengesh Lapor
Deg saya Ang Sae Ming, nombo matik GSO 1393 pelaj yg
mengkhiri pengaji A Y-U menyatk bhawa sega hasil
kea PSN598 adlh us ha as saya sendii.
Please note that this project paer is submitted for the urose of
llment othe requirement oAroam. Certain iormation and
contains m be deemed rivate and codential, th no reference or
reroduction o any part o this paer shall be removed without
ackowledgement of author
Ka Lmp
23 Septembe 199
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OWLDGTS
sh to covey y scee thaks to y supevso D Jal Boje o hs valuable
gace , I appecate hs patece a te spet to assst e copletg ths
gauato pojects pape
I also sh to covey y heaest thaks to Ta Haj Yaacob o s patece a
valuable help to coplete ths A sty
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PARTl
CASE
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Lst of Table Page
A d P Budge and Saes rackng - Chdren Markeng
2 rand mage racng
3 Cusomer Experence Monor
2 Fas Food Chain Year of En
22 Growh Fro 3 - 8
23 Fore Fas Food Chain Number of Ole
2 WO Anayss Eea
Oprtniy Ad reas
SWO Analss Ineal
2 Strengh and Weaess
28 PACE Envnmena ay
2 SPACE ndsal reng
2 SPACE Fnanca Srength
SACE Cometve Advange
26
2
27
36
3
43
8
49
9
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List f hn
23
Bnd he Par
ldng(Maysia) hdMlds P L Vs susdies
s f Exi
1
2.
SP dl hildn Mkting
Gdelkng u ktig Wk
2
2360
:
4350
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the pojecion, hou it is co t e poe of childen mkin is for long-
tr oya d bnd buiding.
Howeve when e com deone oneshp hdn mk g
s evewe he un eds ob eamd to have ne diecon nd sate.
The s s a he e oowed sis on he 2n p hesnd oo
aomaned w Sae ouato memnato d o evao
2
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THE SENAO
August 999 Dato Abdulah Omar, a wel kown corporate gure in Malsia and
anothr o partnrs hav bn invitd to join th board of KFC Holdings (alaysia)
B by former maor holder cum Managing Director Dato Hai Ishak Ismai. Dato Hai
sha relinquished the shar as he neds to take long brea to concentrate on other
oversea business Dato Abduah is appointed as CEO cum Managing Director to
overse the hole fast food bUSness stablishment
In order to get into binss opration imediately Dat h caled for departental
meting starting om departnts lik inance Operation and arketing as these
three departents pl important role in company's cash ow one is contol the
income and expnditure one is genrating sales and anothr has big budget to spnd in
adertising and promotions
As an accotant by profession Date Abdulah not realy believes in adertising
pendit, as it as so dcult to quant the impact His opinion to build customrs
loyal is nothing than to oer products at aordable price
Dato Abduah as sprised to acknoldg that Children arketing unit alone was
btd to R5 M A & P, the aount is about euivalent to pro befor t to
maor listing compa in the second board of LE
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Though he heard about international praise on Children Marketing activities by ricon,
he anchio baed in Dalla he wa no oo impeed ih i in fac he i hining o
crap o the unit to iproe the year end prot argin.
COORATE BACKGROUD-
C HOLDINS (MALAYSIA) BH
KC come to Maaysia in 973, he Americ chse fast food since has expding
agessively to become the largest Ft Food chain in Malaysia, it has 275 outlets wi
market share of 55% versus the closer compettor McDonad's of 130 outlets and 30%
market share, A & W wth 70 outlets and 16 % market share.
KC Holdings (alaysia) Bhd the sole anchsee and orator of the fast food chain
aso ventures into other busness such a chicken , esh chcken retil, bery and
chilli sauce manufacturing I is elieved that e ventures wll support restaurant demand
as well as create opportunt for ture cash ow
The chse has been protable and deaing i cash busness it has gone through may
onerhp keovers by corrate and big conglomerates such as Kong Gun olding
M, Golden Plus and Leong Hup the cuent conoled shareholder is Punca
baat Sd hd Each changes, the ne management wll implement new sate ad
4
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PER?U{fAKNr.VERSl PU Y
policy that are dierent om prevous, gratelly the senor executives have adopted
well and deliver prot Business owthaplned
Being one of the wo markes at out orm McDonald's globally another is KC
Thailand KC alaysia has won numerous global award and enjoy prestge status as
lead arketerithe eye of ancser Tricon Resut Inteaional USA Thus here s
always a pressue to be te best rfoer in boh n arketing stateg and restaurt
oraions .
C Malaysia once agan took he lead by sg up the rst chldren arkeng
proam in the Tcon syste
CHILDN MATG
e idea to set up cden marketng unit crossed arketing directors mind about six
year ago he marketing drector M S K Wong oinedKC wih elve yeas
expeence in arketing chlden daiy products foerly workng in ultinationals like
Nestle and Dutc Baby He inspired by a reseac ndings sent by hs fomer
universit pofessor r Jaes U cea, professor of Marketng n Texas A&
M
Unversty Enclosed he research repors the leer readabelow
5
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DSK W
I e y eqes, le me se e itee mibl y, hichI
le che mkg ech:
Tee e 2 surces es a which is eihe ich m
s h co
Che ec iuece 8 bi nual /e ce ec ee
a le$00 . Sch , eves, e pel e ass ld em
US.
Aeig hle h le a l b p erae lizg
ulc es ee mk i cgg
ge chie a mk ce y chie's e ee,
ch l seee fli, achevem ,cge hi a
U beig he m ael u i he l ea uee his
wl S ch Je Hge a H mvesheeae ee
ly le, e chle k joa chs
Mkg ce s eve . se a c a , ch Md' se
s 4s ag Leg Mae to l hi
Reg
es
6
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INCEPTION OF KDS' FU CLUB
As bieed by Maketing Director, S K Wong a coupes o eas ago he staed oong
for suite erson to assig o aunching chde maeting pa M Lw ng
Moon as ecomended basedo is worng exence and hard okingatude.
M. o en worked it a ou o s ad ly rsented a workng ar aer a
year Aong others the objective o chde arkeing se s " To srehe brad
oat ith kids b enfocing KFC'S brnd rsonat of and eoive apas t
atacts KFC ce to anoter ies toe hen it aunch e C Kids Fu Cub
on 8 ugut 1994.
he se o the ids cub is to bud the and oaty between i and KC as it
as s beeved that i these young custoers oa to KC eeny hen they grew u
as eea ater on ave teir o my tey wi si come bac to KC
he ee ebershp as oered to a ids age 12 ad beo in aaysia and Bnei
o si u at KFC insnty hey woud ge heir credt card oo aie mebeh
d a goodie ba contains hocoate to badge d saoe set ids cb
ebe eoyed benets e dscou chae o d cub ae toy d
pties sciay organized by
ato Abduah noted membehi reahed 30,000 peoe and it is e agest kds
cub in aaysia Hoever no record ca b raced if a these member are active as
7
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membesp cd dd no come wt maetc st no sm h, KC returt too
dd o have e cad eade o kee tact e memes' tsacton.
S K Wong hglged a e club dd no ml y news lete o membes due o te
g cos of posage esauan a well spead n couny ac as nfomaon
ansmsson pon Te ds club conceps hbeen adoped by KC anso Tcon
Restaans Ineaonal and noduce o global me.
CHILDRE MARKIG AD PROMOIOAL
ACITIES
I ew of e enouagng esponse on ds club membesp applcaon e peous
manang deco fel a soul exploe e te poenal mae n 1998 alone
one quae of maeng adesng budge o R5 mllon was allocaed fo clden
maeng. Below s oulne befed by S K Wong on s maeng aces a wee
launced poessely :
1 Waer Brothers licensing tie-up
Snce 1994 KC as sgned up w We Boes fo lcensng pogam a
sm of US$00OOO lcese fee o be pa o US based consme podcs
eneng company o allowKCo use e fmous Looney Tunes caaces n
eelopng pon of pcase maeals oys and saone fo ds club
membe. Te lcense us ges leeage o KC o wo wold class
poducon ouse on clden maetng.
8
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So far, the relatoship gomg well as it s wm-wm stato were C
captazed the word faous characters for ow ketg actvtes o the other
hd t helps to proote te Wer Brotes characters to local arket ch
s currety ag behd by strog Dsey's Mckey Mouse ad soe ove
characters lke Lo Kig Allad ad Wne the Pooh.
has etered to the 5t ear coract d has teto to cotue for
aoter3 years
2. ds Fun lub Magazne
Te chle agae release 4 sses yely e qaterly publshg cotas
60 pages cocs terestg sto ad actvtes KC food coupos ad cotest
th arvelos przes No advertsg page fod except prodcts.
Te age s als a coucato chel to updates atest happeg of
clb to ebers t as avalable to ebers at cost however o eers ca
purchase at ch er cost
It s derstae hat rkeg rsoel are ot experts clde
pubsg the agze s cotracted ot to a ell o oca publshg
hose the copay hadles cocepts ad creatve developet edtoral colour
9
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seprtion nd pitig jobs. he mgne is only avilae t KC outes, nt
on n newsst or ook shops
Customers compned t e mne's cotents s deterort , d reese
dte re ot pct er more s oe of expsve mze tow
3. 2 roon sonsorsh
s beeve tt ds e crtoo pro, KC etered to coct w R
to sposor Wer Bros croon prorm t s on r9.05 m ever Sud
ced "Wts Up D?" In between the oe our prorm tere were wo ost
to terct ndl bout ds' stu
Te prorm ter c to KC Hor to er ece KC
brd S K Wo sessed t e seecto of croo pro t be
cre te seecto sct mted to tose cod cutvte m vue d
o-vence to reec te C brd me
Te sorsp cost s 0,OOO per wee t bee te top tree ds'
po cross V o in Maysia , clamg e average ratg p of
13. Te t s Ds's Advete of 18 rtn t, te cdren sow
owever s o Srd mo t 3
10
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Howevr e pat thee month is a iapponent, the rang op to 8 nt
ue to st comton omN7wch as moe volent an exctng caoos
durg the e te bet wKCou.
4. Rtaurant Kds' Corner
Each resaurt ha a bu dspay coer w noce boar sca eveop
premum that wou be spaye for member pchase I ao he oce
boa see he puse to upate any atest new o happeng to kd' cub
membes
The ban maager Ang Sae Mng rghty sa t s dct to mat ts
coers as sae pemm a toys ae ot easy avaabe ue to seeco
proceues many mnage seem want to have a y on ctera, es,
pcng
Aoer ssue s ress cs do not py muh aeno on ths spay t
s such n ce reant he t was empy broken y It wa an eye sore
to ce seor manement
11
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5. Kds' Fun Meal
Kids' Fun Meal was emulated om McDonalds Happy Meal, whereby, 4 combo
meal comrised C food Iced lo and a small Fun ries were sold at special
discounted price. A Free toy is given with every puchase
Kids' Fun Meal was rst launched in 5 June 1996 during the earlier stage the
price and menu ket changing to ascertai the comfortable prot margn fd
combination and suitabili of toy Lately the kd's meal renamed Chcky eal to
reect new image and new combos oers
The ds meal romotion lanched eer sx weeks th derent toys sourced
om Hong Kong each was suprted with 20 seconds TVC and ll POP
conald's inteaional has established apy eal promotion whereby total
order for toy reachig 60 mion pieces for each global promotion versus
300000 ieces ordered by C alaysia ue to the litle volume, C
Malaysia could notenjoy economics of scale many times compromise on sub
qualiy and hgh rce due to limited choice.
6 Chilren Birthay parti
The parties would be organized upon request by arents With minimum
urchase ofR10 for 0 kds C mascot-Chcy will make aearance in the
paries whch were conducted by hostess at selected restaurant
2
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The pay program received average repon due to poor pulicit and also
expeece hostesses.
7. Mascot road show
Wi the ssio of Wer Brs, KFC h oraed many act
apperces at vros FC outlets over all cont.
Tweey bird B By Da Dck ad Tamaia togeher Ccky had
Vsted my otets to meet members these were speca and memorabe
occsions or ds
8 Undepileg Chiden Fund (TabungPeyayangKC)
FC has located R 2 llio or chty cose yely besides orating
herg paired resaut amet's posopy s aways wat to b a
gd corate ctizen le wth goveet's cm whereby cea
pot gai wee doa t derpveged oup in Maays soce by dong
so FC to gan a ot o favorabe ubc.
abg Peyayg C or C Love ad Care Fd is the ast cariy
om the objecve s to beet the ohaes oside e g le
13
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ven tat pvleged pples in major to e well ae ce o by oter
coporae compae.
The Tabung Penyayag KC w aunce n December 1997 by Mnir of
Wefare Socie i .I wic, wi ee K' Fu Mea o
wou onae 0 en o e fd aeaey come c ona og e
coeco box payi oofea case
The oecto n c o edy opnag om o far a um of
R50,OOO been oae for he pue
MKETNG OPERATION D SUPPORTS
Low Kang Moo mkeg manager ea e eco cey e wa ao
nuce o Dao Abu he epaea meeg ogeer wh bn manaer
g ae Mig a mkeg i Haia e eam a be worig
ogeher ince he cepon of' un ub 994.
To e e oco i o a e job nco ae eeng
aeing gency eig pre ppe oe it and pnn ad eecon of
markprgam
The bie ion i icoe aue o oo co-wore he beiee
a he co come o meo mreig e b wio he pr om
oto ee hey can no uccee Qog o my ncien he mang fe
14
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that most of pomotion activiies fail due to inecient of oeaon sta in crg out
the duty, uch a dplayng POP mateial, uggestng sellng, tock pojecton and
sale acng.
Conay to t, oatons diecto has befed Dato Abdullah Oma on anothe vesion
of stoy Dato was told that maketng depaent fal to focus e compy objectve,
they ongly believe tat C' man custome ae adult te paent has nal y on
clden ode, moe oe e clden maketng p e no noely , mostly e
duplcate om comttos. The most seious s pomoton bef always come late, they
have no choce b to lanch as plan, toug thee ae a lot of conan on tang and
lotcargement.
Opeaton pesonel such ea manage and etauant manage eemed neve had h
egad on ths chlden pog Opeaton pesonnel felt that th was wate of tme to
do the cld bses, as a lot of manal wok on kd club membesp pcesng,
ellng kd pemm d matence of kd; coe W o out tentons,
opeaon had not povde accuate ale etng, membeshp applcaton fom to
maketg Dept. ad the band maage.
Dato Abdula wonde could pn o long thout oluton, pjecte
C a tat of" old Clas Kd Maketng" and alway ecevng ovesea delegate
vtato but n actl fact t s not a geat as t loos to be. He plan to meet bot
aketng ad opeaton decto epaately to esolve the sues
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FANCIAL LICATION
Dato Abduah interested to nd out the ret of nvestment, aer a it has been arond
o ao e yeas, some eakeen analysis shold e condced o jsi is'
existence
Table .
an Sale rckn for KFCChi\. Mkt KFC saes (servi Competitor sesea A & P Budet ids Mea Toy Magazine HMe McDToy MickeyMgn
9 200000 0 20000 80,000 200000 500000 30000
995 00000 0 200000 200 00000 00000 45000
99 000000 500000 00000 0000 500000 700000 4500099 000000 200000 400000 40000 400000 800000 40000998 5000000 2800000 450000 40000 3200000 900000 35000
Souce: KFC intea
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RESEARCH CONDUCTED
Brand Image rackng (IT) and Cstomer exprence Monor (CEM) are 2 tools
deveopd by rcon Restat nteona to ontor t brad wer d custoe'
satisfacton, oth wee fome coissioned to AcNelsen and Soes Neson
Reaseach.
ae 1.2
BANDIMAGETRACNG
Category Category: Pla kid's
r KFC S1994 Win
995 W
996 e
1997 W
998 ie
Table 3
CUSTOMER EXPRIECE NICaegory oo ks oo kds
Ye K V
994 ose
99 Wn
99
997
998 ie
Sour KC
McDonl
Lose
LoseieLseie
O
Wn
Lose[se
KFC vs I&WWin ose
Wi LoseW LoseWn os
ie ie
C vsA&WTie e
Win ose
Lse
Isei Tie
7
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COPETTO ACTVTES
Low Kang Moon has some hngs o boos au, McDonald's d oher
compeo have eaced agessiely e he lanch the d Fun Clu :
McDonalds
The fas food chan oo lanchd Ronald cDonad i' club in 1998 mems wee
oeed ee ies and oange jice on each si o McDonads oules. Subsequeny) e
chain inoducd ccken como in Hapy eal men ic ilo w an opon
epace so dnks
Amos a te se ime McDonald Ieaional sied p 10 yea aeemn w
Dsney o aunh Dsney sees pemu oy n appy Mea enu The nue o
happy mea pomoion was aso inceaed om 8o 10 anu.
cDonad's aso pomog day pay pacage heay by oeing ee pzs o
iday oe ha i aso sponsos T coon pam oo only limid o
weeks
Ex meng vice pesiden om McDonads alasia evealed o oe of close iend
n C a McDonds neaon s yeng on KC Malaysa bause e success
od ve ecssion es on gloal me
18
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