HBM110N Fundamentals of Marketing, Semester One, 2011 Executive Summary Burger King (BK) is an internationally renowned hamburger fast food restaurant headquartered in Miami-Dade Country, Florida, United States. It currently has 20 outlets in Malaysia. Commissioned by BK, this report focuses on an initial analysis of the current industry and market situation in Malaysia for assessing the feasibility of expanding BK to Sarawak. Therefore, the Marketing Management Process; market analysis, planning, implementation and control, stated by Kotler et al. (2009, p. 54), is carried out through provision of industry definition, analyzing of current market opportunities and target market selection. The industry definition categorized BK as one of the fast food outlet under food services in the hospitality industry. To evaluate current marketing opportunities, the main competitors are being identified. On the other hand, macro environmental analysis and SWOT analysis are being conducted to obtain a better understanding of the internal and external factors. Besides, consumer behavior is being analyzed and it includes decision making process and buying decision behavior. Further marketing research is also done through 4 steps of marketing research process for better understanding of the problems faced by BK in the current market. For selection of target market, choice of segmentation base is justified demographically (age and income). Then, a table representing the profile of segments is generated. The selected market segments are being evaluated and a market coverage strategy is being proposed. Positioning strategies are suggested as a basis to build relationship between BK and its customers. There are also strategic recommendations based on 4 marketing mix which suggest marketing strategies to attract customers. The short and long term projection of BK is also estimated to predict the feasibility of the expansion, assuming that all the suggested marketing strategies are implemented appropriately. i HBM110N Fundamentals of Marketing, Semester One, 2011 Table of Contents 1 Introduction and Overview .................................................................................................. 1 1.1 Introduction to the Report ........................................................................................... 1 1.2 Industry Definition ...................................................................................................... 1 2 Analysing Marketing Opportunities ................................................................................... 2 2.1 Competitor Overview.................................................................................................. 2 2.1.1 McDonald‟s..................................................................................................... 2 2.1.2 Kentucky Fried Chicken (KFC). ..................................................................... 2 2.1.3 SugarBun......................................................................................................... 2 2.1.4 Pizza Hut ......................................................................................................... 2 2.2 Macro Environmental Analysis .................................................................................. 4 2.3 SWOT Environmental Analysis ................................................................................. 5 2.3.1 Opportunities................................................................................................... 5 2.3.2 Threat .............................................................................................................. 5 2.3.3 Weaknesses ..................................................................................................... 6 2.3.4 Strength ........................................................................................................... 6 2.4 Consumer Behavioral Analysis................................................................................... 6 2.4.1 Decision Making Process ................................................................................ 6 2.4.2 Buying Decision Behavior .............................................................................. 7 2.5 Further Marketing Research ....................................................................................... 7 3 Selecting Target Market ....................................................................................................... 8 3.1 Justification for Choice of Market Segmentation Base .............................................. 8 3.1.1 Age .................................................................................................................. 8 3.1.2 Income............................................................................................................. 8 3.2 Profile of Market Segmentation .................................................................................. 9 3.2.1 Age .................................................................................................................. 9 3.2.2 Income........................................................................................................... 10 ii HBM110N Fundamentals of Marketing, Semester One, 2011 3.3 Target Market Choice and Justification .................................................................... 10 3.3.1 Evaluation of Market Segments .................................................................... 10 3.3.2 Market Coverage Strategies .......................................................................... 12 3.4 Proposed Positioning Strategy .................................................................................. 12 3.4.1 Positional Direction ...................................................................................... 12 3.4.2 Competitive Advantages ............................................................................... 13 3.5 Strategic Recommendations...................................................................................... 14 3.5.1 Product .......................................................................................................... 14 3.5.2 Price .............................................................................................................. 14 3.5.3 Distribution (Place) ....................................................................................... 14 3.5.4 Promotion ...................................................................................................... 14 3.6 Short and Long-Term Projection .............................................................................. 15 4 Conclusion ........................................................................................................................... 16 5 References ............................................................................................................................ 17 iii HBM110N Fundamentals of Marketing, Semester One, 2011 1 Introduction and Overview 1.1 Introduction to the Report Burger King (BK) Malaysia is considering whether to expand to Sarawak and we have been commissioned to conduct an initial analysis in the Malaysian market. Therefore, this preliminary marketing report is developed to give recommendations to BK Malaysia regarding the feasibility and profitability of their expansion. The business targets at kids, teens and adults. The business may be operated by Cosmo Restaurant Sdn Bhd since they own the most franchises of BK in Malaysia. 1.2 Industry Definition Leisure Cafes McDonald's Accommodations Restaurants KFC Hospitality Industry Food Services Fast Food Outlets Sugarbun Tourism Public Houses Pizza Hut Night Clubs Burger King Figure 1 Industry Definition for BK (Stanley St Labs n.d.) Figure 1 above shows industry definition for BK. It is started with hospitality industry that is divided into four categories; leisure, accommodations, food services and tourism. The food services are then divided into cafes, restaurants, fast food outlets, public houses and night clubs. Based on Figure 1, BK is under the fast food outlets category. Launching Burger King in Sarawak 1 HBM110N Fundamentals of Marketing, Semester One, 2011 2 Analysing Marketing Opportunities 2.1 Competitor Overview Based on industry definition shown in Figure 1, some of the most popular fast food outlets in Malaysian market are McDonald‟s, Kentucky Fried Chicken (KFC), SugarBun and Pizza Hut. These fast food outlets will be the main competitor for BK in the market. 2.1.1 McDonald‟s. McDonald‟s is famous for their hamburger and they are the world‟s largest chain of hamburger fast food outlets. Some of the marketing strategies conducted by them are such as giving out free Coca-Cola Can Glass to the customers if any large McValue meal is purchased with a sundae. If customers come to the outlets between 12pm to 3pm, the McValue lunch set will be cheaper. Also, they have a weekday breakfast special promotion set whereby the price starts from RM4 and there are free refills for dining in customers (Golden Arches Restaurants Sdn. Bhd n.d.). 2.1.2 Kentucky Fried Chicken (KFC). KFC is well-known for their fried chicken that is cooked with 11 types of herbs and spices. Besides chicken they also sell rice, porridge, burger, desserts, soup and some beverages. The only thing that KFC lacks in the menu is noodle or pasta. To compete with McDonald‟s, KFC offers breakfast set that starts with similar price which is RM4. Other marketing strategies used by KFC are