Competitive Strategies in UK Fast Food Industry

Competitive Strategies in UK Fast Food IndustryIn last decade practic solelyy has been discussed about(predicate) the node orientation, guest grade management (CVM), node relationship management (CRM), node life-time Value (CLV) metrics, Customer Centric organization models, client retention, guest c ar some to a greater extent with a new theory added each time with word customer preceding to it. But to the fact how many companies incorporate these patterns, how far theyve been merchandiseive, if so why do we still fall upon a major flaw in the needs and wants of the customers is puzzling many look forers at present. What a company thinks as a market or evaluate proposition is often mistacit by customer and responds in completely different fashion. What is the agent for this?When a company looks at various ingatherings and economic harbors derived from it whereas customer is looking at rapture. The basic suspense is does alone the scheme, innovative prod uct features, add ons and measure creation lead to ultimate customer satisfaction? All of this may seem a little contradictory. For better understanding lets take an example of warm nourishment company, these Companies atomic number 18 roll out a new product every now indeed offering more determine, in their survey. The key point is why the customer switches over to different fast provender company products or packages so often, if the products atomic number 18 offering set. The point to be noted is that more jimmy propositions argon being rolled out without looking at the very basic concept i.e. whether the hold dear proposed gives satisfaction to the customers. If it is not, indeed it is not at altogether valuable. The customer is acquire satisfaction. Highest value is derived when the customer is fully satisfied with his purchase. This mettlesomelights the importance of value creation for customers termed as customer value. The main purpose of this question is to understand how this customer value forms the buns in formulating the private-enterprise(a) strategies across various industries. Some viridity myths in Value Creation More is often considered valueBuy unity get one bare(a) schemes are rolled out. There is of course an instant sales push. However at the culmination of the scheme the customer feels that he had all told along been paying 100% more for the products and perceives that very product as costly once the scheme is withdrawn. May switch to an opposite product at the homogeneous terms.Conclusion Dissatisfaction leads to value erosion figment 2 cost is valueMany business considers demoralise harm as offering more value. More often than not lowest price products termination up as the second best with a higher(prenominal) priced product with similar product attri stilles conduct the market. The simple reason is the higher price product may be offering a higher satisfaction due to perceived value and imagery. C ar markets are a prime example of this syndrome.Myth 3 More Features or add ons are valueBusinesses load a product or service with more features thus offering a higher value. While this may be engaging if the features are not backed by adequate supports the satisfaction may be less and value is reduced.We encounter this everyday. A customer buys a product with many features but not demonstrated compensate on or may not be serviced properly. Enquiries may not be handled efficaciously. Airlines offereing add ons like free overnite accomodation are still not favored if the function, like enquiry handling, reservations, and time schedules are poor. Cell phones companies may be offering plenty of add ons like national roaming or free incoming calls etc. However if the billing is poor and billing enquiries are not addressed properly the customer is disgruntled and leaves the service for another provider.1.1 Aims and Objectives of the project.In this research study, the aim is to i dentify and describe the attributes of superior customer value how its form an of the essence(p) basis in building competitive strategies in UK Fast fare diligence. normally these attributes of superior customer value are a complete combine of Product grapheme, service prize, and price (PQ,SQ,PR). From the view of consumers perspective, PQ,SQ,PR is better understood as superior customer value with the resulting checks about the various goods or service provided by the UK fast food companies. These values of PQ,SQ,PR confirm been embedded in the brand image, which has the electric effectiveness to affect the buying decision of the customer. It is often said that consumers are always looking for satisfaction in the form of PQ,SQ,PR attributes and brand image that drives them in their purchase making-decision. In UK, most of the fast food companies have their priority over their customers satisfaction in their organisations guidelines and having their success vision behind the concept of marketing. There are always implications that these UK fast food companies have to try to adopt the concept of marketing via these PQ,SQ,PR attributes, to formulate successful business strategies in order to outperform their competitors in this competent world of fast food industry in UK.1.2 Research MethodologyIn this earned run average of competitive world, creating a profitable value in the minds of the customers is tedious task and requires a lot of information. Among the wide variety of goods and services the customers perception of values potful be quite subjective varying with the brand equity. Common acquaintance of attributes and how these contribute values is not sufficient, rather all-important(prenominal) data moldinessinessiness be self-collected and analysed so as to provide copious information for the managers to make important marketing decisions.This research provides the required skill and intimacy for the managers helping them in solving va rious problems and facing various challenges in this competitive era of the fast food industry. This knowledge may also be used in formulating new business strategies. Literature result be collected from selected areas of research for the purpose of evaluation. The research must be able to evaluate and clarify this literary productions to provide a theoretical and methodological base for the research.Information is gathered from the two separate groups of respondent in order to analyse the respondents attitude from consumers and companys perspective respectively.The PQ,SQ,PR is analysed in the context of resulting control and branding from consumers perspective that fast food companies must design in order to formulate competitive strategies in the era of challenging landscape of fast food in UK. The objectives of the study shall also assist the fast food companies to understand better the branding, consumers experiences and preferences towards their products and services. The purpose of the research projects go away have the following area of interests.a) To determine what are the important attributes of superior customer values that the fast food company must develop to spiel the customers expectation.b) To describe how these customer values designed by the companies influence the customer buying decision in the context of customers resulting experience and the branding.c) To analyse if the UK fast food companies understand the importance of building strategic customer values through marketing concept i.e. understand marketing orientation approach of building strategies and work out them.The research design will be carefully planned and structured for easy understanding, care will be taken to check up on the accuracy of the findings since, the basic purpose is to provide information regarding detail hypothesis. Firstly, research will collect various data about the customer expectations, opinions and attitudes. Precautionary measures will be taken on the all the weak points in the method of approach. In the depression step of analysis, a elaborate summary of the various characteristics of the respondent will be notice and analysed carefully. Later, this statistical data will be used for the reasoning of the proposed hypothesis using the evidence found sample of population studied. This is mainly to ensure the accuracy of the proposed hypothesis.Specifically, the purpose of this research is not guarantee the success of Strategies formulated by UK fast-food companies using the gathered knowledge, but provided to decrease the uncertainty in decision making process and increase the opportunity of success. However this research will be carried in a organised analytical manner to reach out the above certainty. For this KFC is a selected organisation considered for this research. The findings of this research shall because lead to a better understanding of superior consumer value that act as a base in formulating competitive strategies in UK fast food industry1.3 UK fast food Industry A brief OutlookThere are varieties of elements in the UKs retail catering industry but fast food is perhaps the most prominent, most dynamic and the most rapidly ripening industry. Though there are number of variations in the specific methods adopted by various fast food operators a number of general defining characteristics bathroom be identified in common like drive thru service, meal deal packages, etc. Fast food restaurants offer a simple and fairly restricted menu within a carefully controlled operational system. Usually burgers, fried chicken, fries serve the main course. Typically ice creams and the drinks like milk shakes, effervescent drinks and tea and coffee are also included in the menu. Customers queue up to be served at a counter, the aim being to serve a large number of people with the minimum of wait time and most operators look to serve customers within three minutes of their entry onto the premise s. The food is interchange in disposable packaging without cutlery. Some operators offer facilities for customers to consume their food on the premises eyepatch others tend to cater more for the take-away make out.The fast food transmutation essentially began in the US during the 1950s and this style of catering grew immensely and spread to rest of the world in the decades since then.US companies compete major role in the development of fast food operations in the UK. Though McDonalds are now the market leaders and major player in this sector it was KFC (formerly Kentucky Fried Chicken) who were the pioneers in the field. KFCs first fast foodoutlet was launched in 1965 at Preston. Following KFCs introduction of the fast food concept into the UK in the mid(prenominal) 1960s it was tumesce up over a decade later before the fast food revolution began to take off. The first McDonalds restaurant in the UK was opened in Woolwich in South London in 1974 and a decade later the compa ny were trading from over 120 franchised restaurants and they had spread out from their initial base in and around Greater London to the Midlands and the North West of England. A number of other, then US based, companies including Burger King, Wendys and Pizza Hut followed McDonalds into the UK market in the late 1970s but none were initially able to keep pace with McDonalds rapid expansion. During this period a number of UK based companies including Wimpy, Casey Jones, Mr. Big, Spud-U-Like and Olivers also entered this growing new sector of the retail catering trade. During the 1980s and 1990s the larger more successful custody like McDonalds, Burger King and KFC continued to grow rapidly and to expand their geographical coverage to, and within, all urban and some rural districts while some smaller operators disappeared from the map.1.4 KFC organisational backgroundKFC is a division of Tricon Global Restaurants, which was later taken up by Yum brands Inc. This company has around 11,000 outlets in 80 different countries with over 290,000 employees selling around 2 billion meals annually to generate sales of $9 billion worldwide. Within the coupled Kingdom, KFC has around 500 outlets and among these 80% of them are being franchised. The KFC brand is lifetime achievement of a capital personality of now deceased founder Colonel Sanders who promoted the companys wide variety of chicken products via a range of advertizement methods like media, store advertising, etc. KFC claims to use only whole chicken other than the reformed or processed products. The chicken is cooked using the Colonel Sanders secret recipe of 11 herbs and spices and is prepared freshly in the store. The specific nature of the chicken product range has varied over time but the companys menu shortly includes Original Recipe Chicken, Extra Tasty Crispy Chicken, Chicken Burgers, Crispy Strips and Chicken Wraps. These products drop be ordered with fries and drinks as part of a standard or buc ket meal.2.0 literature follow-upAs suggested by Alan et al (2003), this literature review shall help me in the following manners1 To find what is already a know literature in connection to the research areas so as not to re-discover everything.2 Moreover existing literature researchers important findings can be crucially observed and analysed and if any mistakes are to be found can be tardily discarded.3 To gain appreciation into the various theoretical and methodological approaches to my research.4 To find various possible variables that might not other than have a possible application5 The detailed analysis my findings will be provided supported with wide reading of literature review.2. Superior Customer valueThe history of the customer value dates back to ancient times under the practices of trade and commerce known as barter system. wherein the buyers agrees to trade in , only if the sellers offer i.e. goods to be exchanged are of fair or better value and equal to the tradi ng goods or services. Thereby we can define value as satisfaction of the customer needs and requirements at lowest total cost of acquisition, ownership, and use. Value is the consumers overall assessment of the utility of a product based on perceptions of what is received and what is given. (Zeithaml 1988, p. 14) Value in business markets is the perceived worth in monetary units of the set of economic, technical, service and social benefits received by a customer firm in exchange for the price paid for a product, taking into consideration the available providers offerings and prices. (Anderson et al 1993, p. 5) Buyers perceptions of value confront a trade-off between the character reference or benefits they perceive in the product relative to the throw they perceive by pay- ing the price. (Monroe I990, p. 46) Customer value is market perceived quality ad hardlyed for the relative price of your product. (Gale 1994, p. xiv) .customer value heart the emotional bond established betw een a customer and a manufacturer after the customer has used a salient product or service produced by that supplier and found the product to provide an added value. (Butz and Goodstein 1996, p. 63)Superior customer value can be better understood as means of creating business experiences which snuff it customer expectations(Art William, 2004). jibe to him superior customer value means continually creating business experiences that exceed customer expectations scheming and delivering this value is the key to successful business outline in 21st century. As quoted by Philip Kotler (2000), total customer value is the package of benefits customers expect from a given product or services. Therefore, to understand the true meaning of superior customer values, the concentration must be on the various customer experiences over attributes of the product or services provided by the company. Colin fanny (2002) explained customer experience as If you take all of the different aspects of a commoditised world then everything is elegant similar similar products, similar people, similar technology, and similar pricing. The differences are in the brand, the perception, and the feel of a company, all of which are delivered through the customer experience. Its the customer experience that will differentiate a company. According to R.R. sweet fragrant bedstraw (1997) delivering this customer value raises many difficult questions such as(1) What exactly do customers value?(2) Of all the things customers value, on which ones should we focus to achieve advantage?(3) How well do customers think we deliver that value?(4) How will what customers value change in the future?Here comes the task of managers as how they deliver this value, using what processes and methods can this customer value be efficiently delivered.2.1 The Importance of Customer ValueAccording to art william (2004) Customer value is combination of four core components namely service, quality, image and price altogether an approach known as the S-Q-I-P approach. These are also known as customer value triads which provide a basis for competitive business strategies. Huber et al (2001) states that many marketing strategists and economists emphasize that creation of superior customer value plays an important role in ensuring company are success. A clear understanding of the concept of value becomes essential for the success of value-based strategies (Woodruff, 1997). Indeed, superior value of products/services delivered to customers leads to customer loyalty, the real driver of financial operation ( Reichheld et al., 2000)According to Azaddin (2004) loyalty and profits are strongly linked to value created for customers. Customers are loyal to a company as long as it offers them superior value compared to its competitors.According to Art William (2004) most of the firms today have positioned themselves under the S-Q-I-P approach with an objective of differentiating themselves from their c ompetitors also have given importance in group meeting acceptable threshold levels with respect to the products quality, services quality and pricing attribute. A said by him designing and delivering superior customer value propels organisations to market leadership positions in highly competitive global field.Philip Kotler (2000) verbalised that the firms that won the customer loyalty are perceived to offer highest customer delivered value. In this context, total customer value is a combination of benefits customers expect from a given products or services. According, Robert and Sue (2003) customer values are categorized in two ways i.e. effectiveness and efficiency. When the products services offered adjoin the needs of the customers then the value are said to be effectively delivered. The less is the cost more is the satisfaction of the customer that can be achieved efficiently.2.2 Customer value a source of competitive advantageAccording to woodruff (1997) in todays compet itive era, quality may no longer offer competitive advantage. It is customer value that gives a competitive advantage how this customer value can be delivered efficiently forms the crucial part. He stated that adopting a customer value delivery orientation requires organizations to learn extensively about their markets and engineer customers. Deciding how to compete on superior customer value delivery raises difficult questions, such as the following(1) What exactly do customers value?(2) Of all the things customers value, on which ones should we focus to achieve advantage?(3) How well do customers think we deliver that value?(4) How will what customers value change in the future?According to sharma (1994) many researchers have argued on fact that there are differences in what managers think customers value and what customers label they value these gaps can form the potential sources of mistakes for the organisations in delivering customer value. Customers tend to think differen tly when buying a product and using it which is well explained by Woodruff (1997) that Customers learn to think concretely about value in the form of preferred attributes, attribute performances, and conse- quences from using a product in a use situation. A customer forms a evaluative or predictive opinion during the value experience of a product i.e. customers may predict a received value, but during use they actually experience received value.2.3 Defining Value Proposition from Firm PerspectiveMichael J. Lanning, the chairman, the DPV Group, LLC stated that value proposition is a decision and commitment of resulting experiences, including price, to a group of target customers, profitably and better than competitors. Frederick Webster (1994) explained that value proposition is a verbal statement that matches up the firms distinctive competencies with the needs and preferences of a carefully designed set of potential customers. He also explained that the description of value proposi tion created by the firms needs to be clear, concise, and credible and trunk over time and has to be communicated and shared between the firm and its customers.Since the customers have a better hypothesise on the true value criteria, every firm must ensure that the value proposition is positioned effectively as the value proposition takes into consideration the interpretation of value of customers. Art William (2004) explained that this S-Q-I-P approach not only provides the basis of an organisations value proposition but also establishes a solid business philosophy for the organisation. It guides all strategic decisions, and ultimately affects business performance. The uniqueness of articulation of core and augmented value proposition gives a memorable message to be successful. As most of the firms compete based on their own identities and their potentials, value proposition ingredients needs to be carefully analysedDave Brock, the President of Partners In EXCELLENCE relates sup erior customer value with value proposition. To define and communicate value proposition, the firms must focus on the following issues. The customer must have a need and without any needs to buy a product or services, the customer values can never exist. Value is described as the difference between the perceived benefits and consequences of selecting a solution or needs. To differentiate, your value proposition must be perceived by the customer as superior to every alternative available in the market.Thus, it is imperative to understand that the value proposition is in the eyes of the customers not the product. It has to be customised to the specific needs of each customer.2.4 Quality AttributesQuality has been recognised by companies as a major ingredient in a customers choice of products and service and hence it is important to have a working definition of quality if the customer has to enjoy a consistent high standard of goods and services. The official definition of quality by A merican National Standards Institute and the American orderliness for quality Control is the totality of features and characteristics of a product or services that bears on its ability to satisfy given needs.2.41 Consumers Perspective about quality.It is important to understand how the customer defines quality that delivers the best values as customer has the perceptions of which firms are producing better quality than others, and they choose to purchase accordingly. According to W.Edwards Deming, the customer is the most important part of the production line. Quality should always be aimed at the present and the Future needs of the customer. Since the customers take in different quality level of product or service with different quality expectation, a normally definition of quality can be drawn. In other words quality is determined by what the customer wants and is willing to pay for.A desire to purchase an attractive product would disappear by poor service and support (Colin and graham, 1993). He also emphasised the importance of the need for decent combination of product and service quality. Sparks Legault (1993) incorporated Garvins eight dimension of quality and applied them to the firm business cycle.2.42 holding of Service QualityIn this competitive environment, the pursuit of service quality is considered by many organizations to be an essential element of their corporate strategy (Paradize-Tornow 1991). Service organizations are constantly searching for sources of competitive advantage, but as product quality rises and products become less distinguishable from one another, companies are seeking competitive advantage through the service elements of their product (Buttle 1999). Roberta Bernard (2003) stated that the proportion of service quality differs from product quality. Colin Graham (1993) mentioned that the definition of service quality is needed in managing of quality as quality would not sufficiently built superior customer values. In add ition he also redefined that the Garvin eight dimension of product quality would not sufficiently built superior customer values. . Art William (1999) cited that a user of services has a set of attributes or characteristics in mind when determining service quality. Service attributes are more directly link up to time, and the interaction between employees and the customer. Evans Lindsay (1996) identify the following dimensions of service quality.1. Time and Timeliness It is related to promptness of service. It is the time the customer is expected to wait for his turn to receive the service. To ensure customers needs are responded in time every firm must possesses dedicated employees to work extra mile.2. Completeness The service provider firm has to distinguish and understand the customers true needs rather than what is stated and constrained by the system and has to ensure that everything the customer requested is provided.3. Courtesy This refers to the kindness of service perso nnel and how employees treat customers.4. Consistency first moment of services has to be consistent. There must be a certain level of consistency in the services provided to each customer each time.5. Accessibility and convenience The service must be easily accessed and conveniently located. The conventional convenient time to receive service and location of operation has becoming change magnitude important.6. Accuracy and reliability It involves consistency of performance and dependability. Each firm must perform the service right the first time and keeping to their promises. Any rescheduling of meetings with customers must be made only when absolute necessary.Neil Botten magic (1999) have listed the following service elements in additional to the above service attributes1. Competence It means the knowledge of the Product and necessary skill to perform service and support tasks. In this way, customer confidence is enhance by experienced and knowledgeable staff especially the ope rational supported personnel.2. Credibility It involves in believability, trustworthiness and honesty of customer contact personnel that work towards the customers best interests. It contributes to credibility of company name and reputation.3. rationality the Customer It means attempting to know the customers need and making the customers feel in control. In this aspect, the firm must recognise the regular customer understand the customers specific requirements, rendering individualised attraction.4. Tangibles It includes physical evidence of the services. This includes the way and quality of facilities provided. For example, a conformable car showroom with friendly sales executives ready to serve the postponement customers.2.43 Managing Service QualityIt is a common assertion among management and marketing theorists that customer service quality is essential to business success (Kristensen et al., 1992). Firms providing this superior service quality, measured by customer satisfa ction also experience higher economic returns than those of competitors, even though they are not so service orient (Aaker and Jacobson, 1994 Bolton, 1998). Satis?ed customers are center to the longterm success of business, and the bondage between customer satisfaction and customer demeanour has been well documented in marketing literature.. In this study, there has been a broadened definition of service quality to derive the superior customer value that customers seek for. It is more complex to define quality for services than for products in view of its intangible and variable nature of service characteristics.Parasuraman (1990) and his colleagues explained that service quality is a comparing of what a consumer feels a service provider should offer against their perception of what the service provider actually can offer. They related service quality as a measure between service perceptions as well as expectations. Therefore, to provide superior customer service, the firm must e nsure that the service offered meets or exceed customers expectation.2.44 Strategic Implications of QualityWe have emphasized previously on the entire product and service characteristics that are considered to be an important customer value trait to built and deliver a superior customer value. These attributes of quality must be incorporated into the design of the product that results in the products and service consumers want and having quality they expect. Why is then so significant of quality in the formulation of strategy?John Beckford (1988, p.11) has highlighted from the extension of Jiang Zemin, President, Peoples Republic of China, 1996 focus on quality, not quantity. He further pointed that China is treating quality not just as an organisational issue but also as a national one though they are the worlds largest emerging economy consisting of 1.2 billion potential consumers. Such a position supplements a message that all organisations, which want to survive and succeed, mu st take quality seriously. Pursuit of quality must be considered as a winning strategy dimension tool. In the context of strategic management, firstly, the process for formulating strategy must display quality characteristics in that the business strategic planning itself must be correctly designed and implemented. Secondly, the impact of the choice to pursue quality fits with the generic strategy of differentiation. Thirdly, the pursuit of quality has an impact on strategic decisions because it may generate changes in consumer behaviour. This in turn may fulfil the changing expectations of customers by eliminating the need to establish additional facilities or new distribution channels. Roberta Bernard (2003) cited that firms in which quality drives their competitive strategy have certain common characteristics. They concentrate on customer satisfaction through quality by following a clear strategic goal, vision, or mission. For example, Motorolas company objective of Total Custom er mirth reflects their commitment to customer satisfaction and quality as par of their overall strategy and vision. On the other hand, quality must be inherent throughout the organisation in order for it to survive and commitment of employees and strong leadership are also the key to successfully integrating quality into a companys strategic plan.2.5 Price AttributeArt William (1999) quoted Price is what you pay. Value is what you get. (Warren Buffett, CEO, Berkshire Hathaway).2.51 Communicating Value through PricePrice varies substantially according to whose perspective we are taking from. To the firm, price is used to signal value for their products or services, to differentiate their offer from those of the competitors, and also shift consumer demand. To consumers, price generally reflecting how much they have to give up taking possession of the product or service. Price influences the perceived value. From the competitors point of view, price is used as benchmark to compete ( e.g. as entry barrier in price war). Philip Klotler (2000) pointed out that many firms see buyers perception of value, not the sell