Environmental Factors That Affect Global and Domestic

¶ … environmental factors that affect global and domestic marketing decisions for KFC. The paper will focus primarily on KFC's presence in China, comparing some of the differences in the decisions that were made for KFC in the marketing sector in the U.S. As compared to the Chinese market. With this in mind, it will look at the way the environmental factors have played an essential role in shaping these differences.

It is difficult to start by classifying which of the factors is most important in shaping this decision, so the first factor that can be analyzed is the demographics, mainly because it primarily affects the market segmentation strategy that KFC uses. The urban population in China is better educated and has a higher income than the rural population. At the same time, it is more cosmopolitan and it looks to the West to adopt new traditions and norms.

This, combined with other socio-economic and psychological factors (the openness of the urban population towards other cultures, the fact that the urban population travels more widely etc.) have led KFC to focus primarily on this segment of the population in China. Most of the KFC restaurants have been opened in urban regions, starting with the Eastern Coast and moving inland as this became saturated over time.

In the U.S., there is no such distinction between urban and rural, except, perhaps, for the geographic factor that moves fast foods into larger malls and outlets outside the city. An important environmental factor that affects marketing decisions that KFC makes in China is the political factor, particularly through its ramifications into areas such as legislation. As known, China is a one-party political system, where the Communist Party regulates everything. Marketing campaigns led by the government against foreign companies are not unusual and KFC was not an exception.

For example, in the last years, governmental-led and dominated newspapers pressured KFC by supporting the idea that the company uses chicken with antibiotics and that its ice water does not respect the sanitary norms in China. As mentioned, this is usually a way in which the Chinese Communist Party aims to reassert itself in the face of foreign companies.

One should remember (and this is discussed in more detail in the lines below) that China remains a culture where so much of the individual's actions and reactions are governed by the idea of "face." Losing and winning face is just as important as making a profit, so the government, the political party in power, wants to show, from time to time, to gain face, that it is the party that leads and has the power.

This is obviously not the case in the U.S., where a pluriparty democracy allows for all forces in society to be heard and where this type of pressures over companies are very uncommon, inexistent, and, usually, punishable by law. Discussing the legislative factor, these play an important role in the marketing decision making process, because they create the regulatory basis that everything from advertising to promotional campaigns need to abide by.

China is restrictive in some of the regulations that it imposes on advertisements, so KFC's marketing strategies are influenced by this environmental factor as well. Probably, the most important of elements to discuss in this context is the issue of cultural differences. Cultural differences between China and the U.S. remain huge, despite the globalization process that went a long way to level some of these differences.

The marketing decisions that KFC makes in China needs to take into consideration these cultural differences, to the degree to which some of the decisions will be completely different than those in the U.S. One can start with a relatively simple example: the KFC logo.

Translated from English to Chinese, because of the obvious language differences that included a different, phonetic alphabet in China, the logo became "eat your fingers off!," from "finger lickin' good." This is all related to cultural differences and to potential pitfalls in the marketing decisions because of these differences. The cultural differences between China and the U.S.

and, in a wider sense, the socio-economic and psychological differences between the two people affect most of the marketing decisions that KFC needs to make in China, from the marketing mix to the marketing strategies. To give just a couple of examples, the pricing strategy in China is different than the U.S., where the targeted segment is the lower income segment of the population, usually with medium-level education.

In China, the concept for KFC is different: it targets middle class, so the prices are slightly higher, to give the overall impression that this is a more upscale restaurant. This is reflected in the way the locations are decorated as well, for example. Another important element of the marketing mix that needs to adapt to the cultural differences is the menu itself, namely the product that KFC offers to its consumers.

In China, the menu was complemented with traditional Chinese dishes that could make it more acceptable for the Chinese target consumers. This type of approach has remained to this day. Compared to the KFC menu in the U.S., entirely focused on chicken, the Chinese menu includes shrimp or even beef. Perhaps one of the factors that provides for the least difference between the U.S. And China when it comes to marketing decisions is the technological factor.

Social marketing and other technology-based approaches have become fundamental in promoting a company onto a market. With.