Marketing Final Paper Essay

Yum Brands is the beingnesss all overlargest eating place confederacy with over 38,000 eating places in over 110 countries and territories and much than 1 zillion associates. Yum Brands is as easily a draw within the Quick portion Restaurants (QSR) industry in chinaware, with over 3,500 eaterys in the region (i.e., Taiwan, Mainland China, and Thailand), more than 1,800 of which argon located in Mainland China.Yum Brands ope place in the Food serve swell Industry, which forget neer be replaced or outdated due to increasing technology or increased competition. Consumers bequeath always need to consume from the Food helping Industry. Growth and consumption is guaranteed with increase of the world population and amplification to supernumerary countries world wide.In 2010, the follow increased its dismiss income by 10% from $824 million in 2009 to $1.16 cardinal in 2010. Yum Brands continues to show strong gross sales, profits, and process.Yum Brands is the u niversal leader in multi rating, which broadens consumers more choice and stratagem at wizard eating house status from a combination of KFC, Taco Bell, pizza Hut, A&W or foresighted whoremaster Silvers brands.Yum Brands similarly shows prominent Corporate Social responsibility in the industry. Yum Ranked 337 out of 500 on Newsweeks 2010 Green Rankings U.S. list 62 on Corporate Social Responsibility Magazines 100 outflank Corporate Citizens List of 2010, 33 in 2009.Yum Brands has cemented their products with unique taste speciality by making their chains the leaders in the industry. A&W is Root Beer and KFC is fried yellow-bellied. Yum Brands has demonstrated a strong business intention and corporate goals for competing in the global market place.IntroductionYum Brands holds a strong piazza as the number 2 alliance in the Food Service Industry. The food Service Industry is a necessary industry that leave non see great change due to innovation or a new competitor entering the market. The market is strong and conformable based off consumer inevitably. The fast food industry is cheap and comprise effective, providing excellent services to consumers at the lowest possible legal injurys.Yum Brands is the worlds largest eatery play along with over 38,000 restaurants in more than 110 countries and territories and over 1 million employees. This shows the size of Yum Brands, a global presence that will continue to increaseYum Brands has also displayed global business and marketing strategies. * cook leading brands across China in e truly signifi send wordt devolveowship * Drive aggressive international expansion and build strong brands everyplace * Dramatically improve U.S. brand positions, consistency and returns * Drive industry-leading, long-term sh areholder and franchisee valueDavid C Novak has been chief executive officer of Yum Brands (YUM) for 6 categorys. Mr. Novak has been with the company for20 familys. The 53 twelvemonth old executive ranks 1 within Forbes rankings of highest paid restaurant CEOs.While almost consumers are unaware of the parent corpo dimensionn, Yum Brands is silently pickings a more positive carry on of the global food industry. Its well-known brands include pizza Hut, KFC, Taco-Bell, broad fundament Silvers and A&W Restaurants.Yum Brands continue to show increase that will put it on par with the leader in the Food Service Industry, McDonalds? Despite having more locations than McDonalds, McDonalds yearbook revenue of $23.1 Billion dwarf Yum Brands at $11.3 BillionOverview of Yum BrandsYum was created on October 7, 1997, as Tricon Global Restaurants, Inc. an independent company, as a result of a spin-outfrom PepsiCo, which owned and franchised the KFC, pizza Hut, and Taco Bell brands worldwide. Because of the companys former relationship with Pepsi, Yum Brands has a lifetime iron out with PepsiCo, with notable exceptions being the contract of A&W Restaurants with Dr Pepper Sn apple Group to be the exclusive restaurant provider of A&W Root Beer.Yum Brands is the worlds largest restaurant company with over 37,000 restaurants in more than 110 countries and territories. There is in all probability a Yum restaurant near you. Its well-known brands include Pizza Hut, KFC, Taco-Bell, Long John Silvers and A&W Restaurants. There are 14,001 stores internationally including 3,664 locations in China. Yum has 17,476 stores in the U.S. A good of 77% are owned by franchisees. The company implements practices and procedures to maintain a high transfer of service including Customer Mania Training and CHAMPS (which measures ope proportionalitynal basics corresponding Cleanliness, Hospitality, Accuracy, Maintenance, Product Quality and Speed). A&W Restaurants, Inc., based in Louisville, Ky., is the bimestrial running quick service franchise chain in America. Since 1919, A&W All-American Food has been serving a jot frosty sanction root beer float and All-American pu re-beef hamburgers and hot dogs.There are over 600 A&W All American Food outlets in 13 countries and territories close to the world and nearly 600 points of distri only whenion at Yum Brands multibrand restaurants. There are nigh 344 A&W All-American Food restaurants in the U.S. and more than 290 in 11 different countries. KFC Corporation, based in Louisville, Ky., is the worlds most best-selling(predicate) yellow-bellied restaurant chain specializing in Original Recipe, Extra laconic and Colonels Crispy Strips with home-style sides, Honey BBQ Wings, and freshly made chicken sandwiches. Since its founding by Colonel Harland Sanders in 1952, KFC has been serving customers delicious, already-prepared complete family meals at low-priced prices.There are over 12,000 KFC outlets in more than 102 countries and territories around the world serving some eight million customers each day. Long John Silvers, Inc. based in Louisville, Ky., is the worlds largest quick-service seafood cha in, specializing in batter-dipped fish, chicken, fish and hushpuppies. Inspired by Robert Louis Stevensons classic Treasure Island, Long John Silvers was founded in 1969. Today, in that respect are more than 1,000 Long John Silvers, Inc. restaurants worldwide, and over 350 additional points of dispersal in multibrand restaurants.Pizza Hut Inc., based in Dallas, Texas, is the worlds largest pizza restaurant company specializing in Pan Pizza, Thin N Crispy pizza, Hand-Tossed modality Pizza and Stuffed Crust Pizza. There are more than 6,100 restaurants in the joined States and more than 4,900 restaurants in over 92 countries and territories around the world. The company is the recognize leader in the pizza category. Taco Bell Corp. is the nations leading Mexican-style quick service restaurant chain serving tacos, burritos, signature Quesadillas, nachos and other specialty items. Taco Bell serves more than 35 million consumers each week in more than 5,100 restaurants in the U.S.Mar keting outlineProductYum Brand is in the food service industry but they also look to market their restaurant chains, as individuals own 80% of Yum Brands restaurant chains. Yum Brands is the largest restaurant supplier of chicken, tacos, fish, and pizza to the consumer market and they sell very recognizable products. In their marketing of products, Yum Brands focuses less on individual products and more on the brand as a whole. After conducting comprehensible market research, Yum Brands found that the majority of people purchasing from one of their restaurants are not looking for a specific product. Yum Brands found that the majority of consumers choose Yum Brands because of their snug locations, low prices, and the quality of food is high.KFC sells the most recognizable brand of chicken in the world, although they have more competitors, none of their competitors have as legion(predicate) locations or as much brand recognition as KFC. However, on that point have been some large selling Items, which Yum Brands has chosen to market individually, much(prenominal) as the KFC 12 piece bucket and Taco Bells Crunch Wrap Supreme. With large ticket items, Yum Brands has designed custom meal deals focused around these items. Instead of simply offering chips and a drinking or a biscuit, Yum Brands has focused on supersized meals and the marketing strategy of getting the most for your money. They do this by supersizing the meals consumers purchase at a price increase that is both favorable to the consumer and beneficial to costs.PriceThe goal of Yum Brands is to compete at the lowest price possible and they do this by owning distribution centers around the world and attendling the process that food comes into one of their restaurants, from the arise to the customer. Because Yum Brands is the largest supplier of chicken, tacos, fish, and pizza to the market they have a competitive reinforcement over their competitors simply because they can move more product, t hus they can provide lower prices. This industrys customers are characterized as extremely price sensitive so they can easily switch to a product that is like in quality and service but offered at a lower price. Also, switching costs are quite low. Customers do not have to incur any cost for not purchasing from a firm.PlaceYum Brands has more physical locations than any other restaurant in the world. Yum Brands operates over 38,000 restaurants in 110 countries. Yum Brands has focused on convenience for all consumers in the structure of their restaurant chains. With large physical location presence in the market, Yum Brands can ensure stability as well as growth. Recent expansion into China has also proved to be a booming market for more physical locations and sales growth. Yum Brands continues to wallow in revenue and market share with each additional restaurant opened in expanding markets such as China.PromotionUnlike competitors such as McDonalds who attempt to brand their prod ucts like the Big Mac, Yum Brands focuses on controlling the entire market. KFC chicken is an American cornerstone of culture. KFC dominates the chicken market because of the great reputation and wide brand recognition of Colonel Sanders. There are trigger-happy advertising battles among the large restaurant chains McDonalds, KFC, Pizza Hut, Subway, Taco Bell. Because brand recognition and price so greatly affect consumers, marketers want to brighten customers aware of deals occurring at their chains. The Food Industry is one of the most firmly marketing industries in the world. In 2010, the fast food industry washed-out $4.2 Billion in advertising.AnalysisYum Brands has shown hearty, logical, large fiscal growth in the last year. (YUM) has a market cap of $23.99 billion with a price-to- compensation ratio of 20.75. The transmission line has traded in a 52-week range between $45.94 and $57.75. The stock is presently trading around $52. On July 14th, the company reported seco nd twenty-five share revenues of $2.82 billion, compared to revenues of $2.57 billion in the second quarter of 2010. Second quarter assoil income was $$1.16 billion compared to net income of $824 million in the second quarter of 2010. Yum Brands has shown significant financial growth over the past year, and projects continued growth and expansion through 2012. One of YUMs competitors is McDonalds Corporation (MCD). McDonalds is soon trading around $90 with a market cap of $90.14 billion and a price-to-earnings ratio of 17.68. McDonalds pays a dividend that yields 2.8% versus YUM, whose dividend yields 2.2%.YUM is one of the largest food service companys in the world. In 2010, the company increased its net income by 10% from $824 million in 2009 to $1.16 billion in 2010. YUM is an international company that is rapidly increasing its overseas earnings. In 2010, YUM took in $755 million from China man taking in $700 million in the United States. On September 15th Jim Cramer endors ed YUM. YUM has a policy of paying out 35 to 40% of its profits in dividends. Over the last five years, the company has done well and has increased its dividend by 34.7%. I believe that YUM will continue to increase earnings, and that the dividend and the stock price will follow.This ratio shows us the percentage of total assets made up by goodwill and other intangibles is called the Intangible Asset Ratio. Heiserman, creater of the ratio, says he views anything over 20% as worrisome, because focussing might be overpaying for the encyclopedism or acquisitions that gave rise to the goodwill. Yum Brands has an intangible assets ratio of 11%. This is below Heisermans threshold, and a sign that any growth you see with the company is healthy (Moore).The strengths of Yum Brands is in their global reach and consistent financial growth. Also Yum Brands operates several large chains in a strategic move to diversify their assets and sales. However, their largest competitor McDonalds, has al so shown significant financial growth and expansion. In 2010 McDonalds adage a global sales growth of 5.0% and earnings per share growth of 11%. Although, McDonalds is also showing large profits and increased growth, Yum Brands is increasing at a faster rate. Yum Brands saw a 10% growth in sales in honourable the third quarter of 2010. Yum Brands is a low cost leader in the food industry with unique taste differentiation. The wide availability and unbeatable values of Yum Brand chains make it convenient and affordable for customers to secure from Yum Brands.Yum Brands has cemented their products with unique taste differentiation by making their chains the leaders in the industry. A&W is Root Beer and KFC is fried chicken. Yum Brands has shown an excellent display of Focus Strategies by not trying to compete with McDonalds. Yum Brands does not offer hamburgers, instead they have focused on cornering the market in Tacos, fry Chicken, Pizza, Fish, and fountain beverages. This stra tegy is key to their continued growth. By letting McDonalds control burgers and fries, Yum Brands can slowly take control of all other consumer needs in the fast food industry. This strategy will lead to Yum Brands exceptional(a) McDonalds because Yum Brands is showing much greater growth. However, McDonalds revenues are still much greater than Yum Brands. In 2010 McDonalds brought in $23.1Billion to Yum Brands $11.3 Billion.Yum Brands has great Corporate Social Responsibility and leads many initiatives around the globe. In Australia, KFC has been working on a Closed closed circuit recycling project for the past three years. This program has attracted never sooner seen government funding and is a world leading QSR recycling initiative. No other QSR in Australia (nor have we found elsewhere in world) is doing anything on this scale and impact. KFC has been awarded $400K from the Australian Packaging Covenant and state governments to go towards the root word of the new Split Bin t o support this initiative. In addition, 100 percent of waste oil is recycled.Yum Ranked 337 out of 500 on Newsweeks 2010 Green Rankings U.S. list 62 on Corporate Social Responsibility Magazines 100 Best Corporate Citizens List of 2010, 33 in 2009 The company is expected to enjoy a number of tailwinds in 2012 including lower interest expense due to favorable debt issuance over the past couple of years and retirement of the April 2011 bonds as well as around 20 million currency translation benefits in China. Although Yums market is exposed to risks, such as changes in interest rates such as food cost pressure, wage inflation in China, competition, unexpected margin pressure, inability to execute its growth plan, and food safety. unlike currency exchange rate risks exist as international in operation(p) profit constitutes around 50% of the companys operating profit. chance on variable factors affecting the U.S. results include consumer spending, gasoline prices, housing market condit ions, consumer credit, and stock market volatility. Taco Bell, which accounts for more than 60% of the total U.S. earnings, is presently the most important domestic brand. The recent Taco Bell lawfulnesssuit colligate to the content and quality of its beef products has negatively impacted the sales. Although, on April 18, Alabama-based Beasley Allen law firm voluntarily withdrew the allegation, YUM expects the negative impact to continue in 2012.KFC and Pizza Hut are the primary concepts, accounting for nearly 96% of total YUM restaurants within the YUM Restaurants International (YRI) division. Each concept offers sit-in as well as take-home options for customers. YUM has over 38,000 restaurants in over 110 countries. YUM is also a leader within the Quick Service Restaurants (QSR) industry in China, with over 3,500 restaurants in the region (i.e., Taiwan, Mainland China, and Thailand), more than 1,800 of which are located in Mainland China.Yum Brands is the worldwide leader in mul ti branding, which offers consumers more choice and convenience at one restaurant location from a combination of KFC, Taco Bell, Pizza Hut, A&W or Long John Silvers brands.Yum Brands has seen substantial annual growth for the past 2 fiscal years.Yum has seen awing growth in china with over 50% of Yums income approach path from outside of the United States.Yum is putting all its chips in China, and growth there was strong. Same store sales grew 19% in the quarter, compared with a 6% increase a year ago. Margins, though, eased and fell to 21.3%, from 25.2% a year ago. Operating profits surged 13% to $301 million. Store sales in the U.S. fell 3%, compared with a 1% gain a year ago, while operating profits hit $143 million, down 16% from a year ago. Internationally, the company earned $163 million (up 15%) and saw system sales growth increase by 13% (Fontevecchia).In May of 2011, Yum concur to purchase Chinese hotpot chain Little Sheep for HK$4.56 billion. The deal spent more than 4 months in anti-trust review by the Chinese Ministry of Commerce, to gibe whether or not the transaction would result in a noncompetitive positioning of Yum in the countrys restaurant industry. The Chinese Ministry scarce approved the deal in November of 2011, according to Little Sheep representatives. This new acquisition should continue to increase growth in China.Yum recently raised its 2012 earnings per share work out to $2.85, excluding one-time items, meaning growth of at least 13 percent, despite what Chief Executive David Novak said were disappointing U.S. results. That compares to its previous forecast of a 12 percent gain. The forecast comes ahead of Yums annual investor day on November 30th and two months after the company desire to reassure Wall Street that business in China remained on track. With this reassurance, Yum will continue to expand, giving investors a strong reason to invest. The share price went up in response to this news (Reuters).In direct growth, Yu m Brands far exceeds any other competition in the industry including their largest competitor, McDonalds. If Yum Brands continues this net growth, they are on par to surpass McDonalds, becoming the global leader in the Food Service Industry.The corporate structure of Yum Brands is strong, the company is proceed to increase employment opportunities and expand their staff. David C Novak has been CEO of Yum Brands (YUM) for 6 years. Mr. Novak has been with the company for 20 years. The board of trustees overseas consistent growth of the company and the mettle values of Yum Brands have served them well thus far in the Industry.