Fast Food Value Proposition Analysis

This assignment requires a critical analysis of customer value propositions within the Malaysian fast food industry. The focus is on two prominent brands: KFC and Texas Chicken. Students are expected to explore how these brands deliver value to their customers and compare their strategies in terms of product, price, promotion, and place. The analysis should consider factors like customer perception, competitive landscape, and market trends.

Running Head: MARKETING MANAGEMENT 1
Marketing Management

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Table of Contents
1. Introduction..............................................................................................................................3
2. The Customer’s Perceived Value in fast food industry............................................................3
3. Evaluation of Texas Chicken’s existing value proposition in comparison to its competitor
KFC..................................................................................................................................................8
Value proposition of Texas Chicken............................................................................................8
Value proposition of KFC............................................................................................................8
4. Texas Chicken’s new value proposition...................................................................................8
5. Implementation Plan...............................................................................................................10
6. Conclusion..............................................................................................................................11
7. References..............................................................................................................................12

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1. Introduction
In today’s competitive business environment, each and every organization intends to enhance the
value of its products and services among customers. Generally, it is said that customers are the
king of market and increasing customer satisfaction has become one of the major objectives of
marketing organizations. In the process of customer satisfaction maximization, value is an
important factor, which requires to be focused on. Moreover, customer perceived value plays a
major role in the process of organizational decision making (Bowie, Buttle, Brookes, and
Mariussen, 2016). In an industry, the products and services, which endures the highest customer
value is likely to entice the people and attain more competitive advantage over against its
competitors. Due to increase in international market competition, the organizations are seeking
for new and innovative ways for enhancing their value among target audiences.
The below report examines the customer perceived value towards fast food industry. To analyze
the customer perceived value of fast food restaurant, Monroe Model has been used in the
discussion. Moreover, this model is used for evaluating Texas Chicken’s value proposition in
comparison to its leading competitor, i.e. KFC. After this evaluation, a new value proposition is
discussed and it includes a new implementation plan for Texas Chicken in Malaysia, so that it
can enhance its perceived value among its target audiences.
2. The Customer’s Perceived Value in fast food industry 1000
Customer perceived value is an important factor for analyzing the effectiveness of the product
and service delivery. It is an evaluated value, which a customer perceives to get by purchasing
any product or service (Buttle, 2012). Customer perceived value denotes the difference between
the advantages obtained as per the perception of customers and costs, which customers had to
pay for that. The value that is perceived by the customers, determines the prices, which he/she
wants to pay for a particular product and service. By the use of Monroe Model, customer
perceived value of fast food industry in Malaysia is discussed in the below table;
Advantages of visiting fast food Outlets Customers’ sacrifices of visiting fast food
restaurants
Monetary Benefits Monetary
 Customers are looking for affordable  Higher prices for fast food products

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food offerings.
 Discount and cash back offers on online
payment.
 Profitable vouchers
 Travelling cost to reach the fast food
outlet
 Higher delivery charges (Wirtz, and
Lovelock, 2016)
Ease of Use Health fallouts
 Customers are looking for the food
products according to their food taste
and cuisines
 A number of outlets for convenience
 Customers have different demands,
which belong to different groups and
with demographic characteristics.
 24*7 food availability
 Online food delivery service
 Fast delivery service has reduced the
waiting time
 They seek for both take out and dine-in
choices
 Fast food products are not good for
health as they contain higher calories
 Fast food products may be detrimental
for the health of customers
 It may cause obesity, overweight and
other chronic diseases (Abdullah,
Mokhtar, Bakar and Al-Kubaisy, 2017).
 Long term outcomes of eating outside
are negative for customers
Quality Additional Efforts
 People prefer to buy the food products
from the stores, which comply with the
all the quality and food safety standards
and policies (Sheehan, and Bruni-
Bossio, 2015)
 Quality of service delivery is good that
is reducing the waiting time for dine-in
customers
 Standardized quality of food products
and ingredients
 Time spending on selecting most
convenient and affordable restaurants
 It is time consuming to visit the
restaurants
 In online food delivery, the customers
need to wait for their food items
 Travelling expenses
Social benefits Social fallouts

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 There are different types food menus,
which belong to different countries
from all over the world
 Fast food products from different food
cuisines and cultural customs
 Well trained staff and waiters, so that
they can deal with international
customers.
 Better alternative for social gathering
and family get together.
 Health hazards due to over eating
 The restaurants in the country do not
have a well-maintained brand image
 Non-compliance with health and safety
standards
 The customers are unable to find
standardized food menu and food items
all over the world (Hanaysha, 2016).
The above table indicates tradeoff between customers’ perceived benefits and sacrifices, which
are made by customers to visit the restaurants. It indicates what the customers are looking for
and seeking from fast food industry and current players. These benefits are like; convenience,
monetary benefits, quality and social benefits. In context of convenience, they are looking for a
variety of food menus and items, which appeal to their different and changing taste and
preferences. They prefer to approach the restaurants, which are located in strategic and
convenient locations and they are seeking for 24*7 food facilities. It improves the value
proposition of the companies in the fast food industry (Covin, Garrett, Kuratko, and Shepherd,
2015).
There are some economic and monetary benefits, which customers perceive from this industry,
like; affordable prices, cash back offers and discount, discount on first visits and loyalty offers
for regular customers. With the changes in the economic environment, the buying behavior of
customers has changed drastically and enhanced the value for money. However, the customers
need to bear some additional costs, like; travelling costs. Furthermore, social benefits are the
benefits, which are attained from the services, related to social status. In this way, the customer
perceived social status of restaurant might be the first preference, while selecting the place for
eating outside. From the above assessment, it can be said the customer perceived value of fast
food outlets is very high and indicates that benefits are more than sacrifices, which are made by
target customers (Graf, and Maas, 2008).

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Apart from Monroe Model, Hobrook’s value proposition framework can be adopted for further
discussions. The below-table shows extrinsic and intrinsic values, which are perceived by
customers regarding the services of Texas Chicken;
Extrinsic Value Intrinsic Value
Internal Analysis Active Effectiveness and
efficiency
 Variety of food
products and
different cuisines
 24*7 availability
 Strategic and
convenient
locations
 Easy to find on
internet and order
by the use of
mobile phone
application
 Offering home
delivery services
Fun and leisure
activities
 Offers fun and
leisure
activities in the
restaurants
 Special space
for children to
play
 Unique and
attractive
ambience
(Hassan, 2012)
Reactive Quality
 Fast food outlets
are offering the
food items, which
are allowed by
Malaysia food
and safety
standards
(Mickey, 2009)
 Better brand
Store attraction
 Strategic location
and layout of fast
food restaurants
 Attractive
ambience
 Unique theme
restaurants
 Effective
hospitality service

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image
 Use of fresh and
healthy
ingredients
delivery
External Analysis Active Social Status
 Self-esteem,
while selecting
the restaurants
for visiting and
eating outside
Ethics and Values
 Food from
different cultures
and tastes
 Support schemes
for society and
customers
 Complied with all
laws and
regulations of
Malaysia food acts.
Reactive Self-esteem
 Self-image,
which is related
to the brand
name of fast
food
organization.
Loyalty
 Repeat intention
to visit the
restaurants
 Finding the tastes
and food products
of their choice
In the above table, both extrinsic and intrinsic values are the values, which are offered by Texas
Chicken and other restaurants of Malaysia to the customers. When, the customers go outside for
eating, they can make the above perception and mindset regarding their food services (Gallarza,
Arteaga, Del Chiappa, Gil-Saura and Holbrook, 2017).

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3. Evaluation of Texas Chicken’s existing value proposition in
comparison to its competitor KFC
For the evaluation of Texas Chicken’s existing value proposition, the outcomes from above
tables can be used (Hu, & Xie, 2013). Value proposition is a commitment, which an organization
delivers a value package to differentiate the decision process of customers to select them over its
competitor. The value proposition for both Texas Chicken and KFC is stated below;
Value proposition of Texas Chicken
Formerly, Texas Chicken is the part of Church’s Chicken, which is based in America and
specialized in fried chicken. It is also operating its business outside home country with the name
of Texas Chicken. Now, the organization has covered over 1700 locations in more than 25
nations. Currently, it is the third largest chicken restaurant after Popeyes Louisiana Kitchen and
KFC. The value proposition of the company includes that it delivers products within 20 to 30
minutes, which depend on the location that have been ordered. In this case, the organization
provides free coupon if the product delivery is late. At Texas, the staff is well trained and neatly
dressed. It provides a facility to return back the products, if customer feels that their product is
not in shape (Texas Chicken, 2017). This organization is using various promotional and digital
media strategies to approach the customers all over the world. It has strong image and expanding
business globally. The company has created a strong brand image by offering fried and spicy
chicken products. Now, the company is planning to modify its food menu by looking at the
people’s eating habits and changing trends. However, the prices of its products are higher than
KFC, but it is providing comfortable and clean ambience for customers.
Value proposition of KFC
Since 1991, KFC, which is known as Kentucky Fried Chicken is an America Based fast food
organization, which has specialization in fried chicken. The organization is second largest fast
food chain, i.e. headquartered in Louisville. This fast food chain is the subsidiary of a Yum
Brands that owns Tao Bell Chains and Pizza Hut. To attract more customers, KFC is
implementing an effective and unique value proposition. Value proposition of KFC and Texas
Chicken is different in some specific areas, but they are similar in other ways. Both of the
organizations are operating their business in fast food industry and using some identical
strategies to attain competitive advantage. The mission statement of KFC is to provide the food
items, which are tasty, affordable and healthy than Texas Chicken.

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According to the Texas Chicken, its products are more expensive than KFC’s fast food products.
The value proposition of KFC organization relies on how better the products can entice the
people by affecting their emotions. Moreover, the company is using an effective business
strategy, which leads the organization to offer quality food products on affordable price.
Although KFC is offering tasty chicken products, it does not have rich spicy taste like Texas
Chicken (KFC, 2017). The people love to eat the spicy and crispy chicken at Texas Chicken.
Furthermore, KFC has maintained a strong position in fast food restaurant industry and operating
its business in international market. Currently, the company has its business operations in more
than 105 countries. KFC is offering various products than Chicken, like; burgers, beverages and
others.
After conducting a comparative study of both fast food restaurants, i.e. KFC and Texas Chicken,
it can be stated that both of the organization have various similarities in their value proposition.
The major reason behind these similarities is their product and service offerings, because both
companies are specialized in fried and crispy chicken (Hollensen, 2015). The companies are
offering quality fast foods services on affordable prices with fast delivery services. The
organization have expanded their business operations in various countries, like; Malaysia,
Indonesia etc. Apart from these similarities, the comparison between both companies’ value
proposition can be done by considering some specific factors, like; pricing strategies, side orders
and products, restaurant environment and serving size and presentation. In context of pricing
strategy, it can be said that Texas Fried Chicken is more expensive than KFC. Both organizations
offer their own side orders, like; Cheesy Wedges from KFC and Mashed Potato from Texas
Chicken. In addition to this, they are offering beverages also. In terms of environment, Texas
Chicken won in comparison to KFC, because Texas’s ambience is comfortable, spacious and
clean than KFC. Both of them are the winners in area of serving size and presentation, means the
way of presentation is similar at both organizations (Covin, Garrett, Kuratko, and Shepherd,
2015). Furthermore, the companies are using their patented recipes to develop a difference to the
customers. Thus, it can be analyzed that KFC and Texas Chicken are working to differentiate
their value proposition from one another. The companies are using effective strategies and tactics
to develop the value proposition. This analysis indicates that Texas Chicken is using an effective
value proposition, but still the company needs to make some changes and improvements in its
service offerings.

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4. Texas Chicken’s new value proposition
The value proposition of Texas Chicken is created on the basis of high quality food and speedy
service delivery with a great consistency. However, the value offered by Texas Chicken is good
in terms of service delivery, but there is still a scope of improvement. From the above sections, it
can be stated that Texas Chicken is not only a popular fast food restaurant in the country, but it is
also well-known for its pricing and promotion strategies (Hollensen, 2015). For promoting its
services, the organization offers the opportunity to make a membership card, where customers
can store points on every purchase. After collecting enough points, the customers can get
discount on their next purchase. Affordable pricing strategies of the company have played a
major role in gaining competitive advantage. Texas Chicken can gain more competitive position
and advantage in Malaysia fast food industry by making some specific changes in its value
proposition and strategies (Litvin, Goldsmith, and Pan, 2017).
Fast delivery of food items
affordable prices
discounts and offers
To offer tempting chicken
products for satisfying
customers hunger
In international market,
including stores in Malaysia
To become one of the leading fast
food restaurant in Malaysia
Freshly fried and cooked chicken
Mission Positioning
Success
Factors
Key Values

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The above diagram indicates the new value proposition for Texas Chicken, which includes
organizational mission, key values, success factors and competitive positioning. Under
competitive positioning, this organization is ensuring that it is maintaining a leading position in
Malaysia fast food restaurant industry. It is seeking to expand its business in international
market. It will assist the organization in increasing its customer base and generating significant
revenues and profits (Nenycz-Thiel, & Romaniuk, 2012). When it is about the critical success
factors, quality products and affordable prices are the major factors, which will increase the
value of its food products and services. These are the major reasons behind the success of this
company, as it is offering quality chicken products on more affordable prices than its
competitors.
This new value proposition will assist Texas Chicken to match the value criteria of customers
and gain more competitive advantage over its competitors (Osterwalder, Pigneur, Bernarda, and
Smith, 2014). The organization can use various internal and external strategies to achieve this
new value proposition of Texas Chicken. Under internal strategies, the organization will
diversify its product range by including more food products and menus. In this process, market
research can assist the organization in collecting the information about the competitors and
market trends. Moreover, it is open new food outlets, so that more customers can reach to
company’s products (Payne, Frow, and Eggert, 2017).
5. Implementation Plan
After developing this new value proposition, the organization will create an action plan, so that it
can execute this in the practice. The company will use both internal and external strategies for
implementing this value proposition. Under internal strategies, the organization will add some
new products in its food menu and diversify its product range (Rashid, Rani, Yusuf, and Shaari,
2015). For ensuring a successful implementation of the products, Texas Chicken will conduct
marketing research for understanding the Malaysian market and changing market trends. It will
assist the organization to entice a large population. Apart from this, the company will also
implement the external strategies, like; communication strategy, effective IMC plan and
promotion strategies. It will adopt various digital and traditional media strategies, which will
assist the organization in reinforcing the brand image among target customers (Schrempf, 2014).

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The implementation plan includes all the activities that are needed to achieve business goals;
Act Starting date End Date Responsible
Person
Related
Department
Establishing
new mission
31/1/2018 - Top level
managers and
Board
Top management
Developing a
new value
proposition
2/3/2018 - Management and
Board of
Directors
Senior level
management
Formulation of
internal and
external
strategies
2/4/2018 - Innovative
people of the
organization
All related
departments
Implementation
of internal and
external
strategies
2/6/2018 - Marketing
Executives
Marketing
department
Evaluation and
monitoring of
value
proposition
2/7/2018 - Advertising
managers and
marketing
executives
Promotion and
Marketing
department
6. Conclusion
In the limelight of above report, it can be concluded that value proposition is one of the most
significant factors, which assist an organization in gaining competitive advantage. Texas
Chicken is a leading fast food restaurant, which is developing its value proposition on the basis
of quality food and pricing strategy. In this analysis, it has been founded that KFC is one of the
most leading competitors, which have similar strategies as Texas Chicken. The value proposition
of both companies is different from each other. They differ in terms of pricing, environment,

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presentation and side orders. The product range at KFC is diversified, but Texas Chicken has
limited products for its customers. This is the major reason that KFC has covered as large market
in fast food restaurant industry. Thus, the company needs some improvement in its pricing
strategies and value proposition.
Texas Chicken is making efforts for improving its value proposition and developing new
strategies for implementation of new proposition. This new proposition will enhance the position
of company in the fast food industry. In this way, it can be stated that current strategies and value
proposition is one of the critical success factors. The company has attained a leading position in
the fast food industry and now gaining more competitive advantage over its competing brands.
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