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Part 1 1. Price setting is often regarded as a complex multi step approach that takes into account various elements such as the external environment, demand for the product, competitors as well as internal elements like operating costs. As such, this paper seeks to evaluate the price mechanism that is used by Kentucky Fried Chicken (KFC), an international fast food restaurant that operates in more than 80 countries.
In this case, it can be seen that the fast food industry is comprised of competition where players such as McDonalds also compete with KFC. It can be noted that KFC is a price taker since it cannot set its own prices that are above those charged on different product lines. Mohr (2008) posits to the effect that in a market that is characterised by perfect competition, price discrimination is possible where the same product can be sold at different prices. Essentially, the price marketing employed by KFC is market oriented since it is influenced by different market forces that obtain in the environment in which the organization operates. This point is supported by the “Chairman of the local Kentucky Fred Chicken (KFC) business who believes that poultry pricing should be left to market mechanisms,” (Poultry News, 2009). 2. The main challenges that are faced by KFC in its pricing mechanism are related to the aspect of competition and currency fluctuations in different global markets. According to Hu & xie (2013), the aspect of pricing plays a pivotal role on the performance of KFC in its operations. ...
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