8.

2 Alternative strategies Product development

8.2.1

A successful product development strategy is dependent upon timing, planning, and realistic expectations. To achieve measurable product development results, KFCH will need successfully address the pressure to bring innovative new products to market faster and more cost effectively. Through the intensive product developments by introducing four to five new products every year to give customers a new tasting experience combined with diversified product range, KFC managed to position its products better than its closest rival, McDonald. McDonald that has teenagers as their target market is now shifting towards family-type consumers, while KFC is trying to attract more teenagers through its product developments. For instance, in 2009, Toasted Pocketful was introduced that is mainly focused on teens.

8.2.1.1 Advantages

Product development provides more variety of products to the customers. Hence this will become as one of the advantages for the KFC to attract more customers to buy their products and at the same time can compete with their competitors such as McDonalds and Burger King.

A successful combination of market and product strategies can establish KFC as the market leader in Malaysia foods industry. It expands the consumer exposure and makes the company and product names recognizable in the marketplace. This gives KFC an advantage in marketing their brand and products. When consumers recognize the brand as an industry leader, it will enhance the rest of marketing efforts.

8.2.1.2 Disadvantages

As a first-time mover into a new market, KFC can gain an advantage over the competition by getting their products in front of customers first. But that advantage can quickly become a disadvantage when the competition releases products that compensate for the shortcomings of KFC first release. First to market also means the first to be exposed to the issues uncovered when a product gets put into real-world applications for the first time. Competitor can come in with solutions to the problems that the product created and diminish the benefit of being first to market.

Besides, product development strategies incurred lot of cost especially for the external resources. KFC can control internal resources with product and marketing strategies, but those strategies also need to include external resources such as shipping companies and materials vendors. The external resources are much more difficult for company to control and a vendor that sends incorrect manufacturing materials can put entire product and market development plans behind schedule and over budget.

8.2.2

Market Penetration -

Market Penetration is a growth strategy that involves selling more of current products or services to the current target market. Although there is no radical change to the company's corporate strategy, it often provides a significant opportunity to increase both revenues and profit. In case of the KFC Holding Malaysia Bhd, market penetration strategy involved the investment on IT infrastructure and facility through providing Kitchen Display System ( KDS), more parking lot and drive thru facilities at KFC outlets in Malaysia.

8.2.2.1 Advantages

Good infrastructures and facilities will build positive feelings from the customer sides. This is as one strategy to gain customer loyalty toward KFC. By encourage more purchase and usage from existing customer, this help KFC to maintain or increase its share of the current market with current products. In 2011, Johor Corporation has a 57.18% equity interest in Kulim (Malaysia) Berhad, which holds 56.83% of shares in QSR, which in turn owns 51.07% stake in KFCH. Market penetration strategies affect positive result of the shareholders equity from year to year. KFCH show the increasing share in 2009 untills 2011 from 792 million to 1074 million.

8.2.2.2 Disadvantages

In order to implement market penetration strategies, besides improve the infrastructure and facilities, this strategies also involved aggressive marketing activities and incurred a lot of cost. Unsuccessful strategic management and marketing effort for market penetration will affect the sales revenue and profit of the KFCH.