Promotion strategy: The utilization of Standardization and Customization
a. Description of all the Components of Promotion Strategy
Definition of some components of promotion strategy must be done before further discussion. Such terms include advertising, sales promotion, public relations, personal selling, and direct marketing.
Advertising is a marketing communication that employs an openly sponsored, non-personal message to promote or sell a product, service, or idea. It promotes information of a brand image by using a strong appeal to the emotions of the desired audience.
Sales promotion is a short-term that includes several communication activities. These activities attempt to provide added value customers, wholesalers, retailers, or other organizations. Public relations refer to disseminating information through publicity stunts that may not involve the organization itself. However, the company itself initiates such activity sometimes, especially in the current age of social media. Personal selling is the proliferation of information through face-to-face contact between potential customers and a representative from the company. This can either be done in public or through appointment setting. Direct marketing is the act of directly selling or pitching products.
b. Promotion Strategy Components that Are More Standardizable for Consumer or Industrial Products
Among the promotion strategy components, advertising can be more standardizable for a set of products or services. Through focusing on building up brand image, a standard method of promoting can be made. On the other hand, sales promotion is also applicable. Its methodical approach is perfect as a standardizable component for industrial products and customers. Aside from the two mentioned, public relations can also be standardized as long as the market’s general characteristics are acquired.
c. Identification and Processes of the Two Firms in the Two Cases
In the case of KFC- Japan, direct personal selling strategy can be found in their expansion processes in Tokyo. In order to keep up with the people in the country, they adapted to the local taste and eating patterns. They found out that the Japanese do not like mashed potatoes and substituted French fries for it.1 They also customized their barrels and created smaller ones that only contain 12 chicken pieces instead of the original 21.2 Airbus applied direct personal selling strategy to the customers themselves. They did this by considering wider foot spaces for passengers.3 The industry would usually demand standardized measurements for such applications.
4. HBS Kentucky Fried Chicken _x0096_ Japan (KFC- J) Case
a. Central Problem for KFC-J
The central problem in the KFC-J case is connected to the proper balance between the support and authority of the higher management of KFC-International and providing creative freedom to the local management of branches in different countries. There seems to be a dilemma among the different positions in the hierarchy, especially in regards to stores in other nations. Managers in other countries complain for the lack of support of executives and the methodical process of doing things in the business based on a specific manual. On the other hand, those in upper positions in the headquarters are pointing out the incompetence of the leaders in different branches overseas.
b. Four Key Action Issues
One of the action issues is the presence of a methodical process in which creative freedom can be allowed by higher management to other countries when building a chain of stores. Executive level authorities should be able to provide active support to local retailers outside the US. Inspection and proper handling of country managers should be in place to avoid abuse and incompetence. Higher management should be more open regarding the experiences of those people working in the local levels.
c. Issues that Deal with Marketing Process Standardization
One of the issues that deal with marketing process standardization is the presence of a manual wherein advertising strategies and other technical information are being followed by all branches. While this can be applied on some places in the US, it would be very hard to do this on stores overseas. Another issue is the presence of traditional menu items in KFC. Since some countries do not prefer such items, the market process standardization set by main headquarters need to be altered.
d. Three Stages in Country’s Management Evolution
When the owner of KFC started the company, he relied on the goodness of people and management controls were not put in place.4 The first evolution happened during the acquisition of the organization in the 1960s. Proper management and strategic concepts were put in place which allowed drastic growth for the company. However, people on the local management areas only answered to the executives and most did not develop any operational skills.5 The second stage happened in the 1970s wherein KFC initially tried opening up a chain of branches outside of the United States, most specifically in Japan. While the local managers were given the financial means to start a retail store, they did not have enough expertise. Support from higher management is also lacking. This opened up the third stage of evolution in managing KFC. More creative freedom was given to local managers. However, more support is still needed as KFC tries to penetrate markets in other countries.
e. Implications and Cues That Can Be Drawn from the Case
As KFC learns during its transition from different stages in management evolution, implications and cues for such can be drawn. One of the key issues in managing Loy Weston is to be able to provide the proper balance of giving him creative freedom while also implementing strict processes for him to abide. There should be quality standards from the company. As a manager of this subordinate in HQ, some of the options involve letting him submit local strategic plans that higher management need to check for approval. This would allow executives to give him the support he needs while also giving him more freedom to navigate and adjust the company’s offering in another country. The best option that Mayer should consider is to give Weston the freedom but let him frequently report to HQ regarding his ideas. He should not just decide everything for himself unless approval is set by the executives.
5. Airbus A3XX Case
a. Problem Facing Airbus
The problem with the case of Airbus is whether they should continue with their plans to build and commercialize the world’s largest commercial jet. The dilemma is while market research shows that passengers would prefer the added space it would provide, demand seems to be low in terms of industrial studies.6
b. Arguments for and against launch of Airbus A3XX
Arguments regarding for and against the launch of Airbus A3XX can be seen through the pros and cons related to the dilemma of the case. It seems like passengers are excited about the idea of having increased space capacity. At the same time, this would also create more opportunities for income. On the other hand, such proposition is risky because of possibly low demand. While increased space may appeal to passengers, the cost and availability may not appeal to them. Busy travelers may not consider those advantages. Aside from that, there are also legal concerns and other technicalities.
c. Consideration that should be taken into Account
Considerations that should be taken into account include the demand and market viability of the jets. Other factors like legal concerns and technicalities should also be heavily considered in the decision. While at first glance it may create more profit due to customer’s positive response to increased space and comfort, long term viability should also be considered.
d. Identification and Discussion
I. Target Market Suggestion
For A3XX, a suggested target market is business travelers and people who go to vacations on far away places. The key here is to get those segments that require long time for travels.
II. Product Strategy Consideration
A product strategy that A3XX needs to consider is differentiation, in which they select customers who are willing to pay a certain premium for space and comfort while providing topnotch and high quality service during long flights.
III. Promotion Strategy Consideration
The promotion strategy that needs to be considered is direct personal selling. They should scope out their target market and consider a face-to-face and in-person style of marketing for the higher end passengers.
IV. Pricing Strategy Suggestion
Pricing strategy of A3XX should focus on the style of promotion and product mentioned above. It should be priced at a rate higher than existing rates because higher end markets are the target.
V. Distribution Strategy Suggestion
For the distribution strategy, it can be suggested that A3XX service the jets on their own in order to apply the strategies mentioned above directly. If they sell the jets to airlines, it may not succeed well if those companies use the jets for the masses. Creating their own airline organization is an option they could also consider.
Bartlett, Christopher A. and U. Srinivasa Rangan. Kentucky Fried Chicken (Japan) Limited. Boston, MA: Harvard Business School, 1992.
Esty, Benjamin. Airbus A3XX: Developing the World’s Largest Commercial Jet (A). Boston, MA: Harvard Business School, 2004.