YUM Restaurant

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YUM Restaurant

• Brian Mason
• Cassandra Simmons
• Group 2 Feb, 6 2009
• International Marketing

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Overview of article
Yum Restaurants ups budget for store expansion,
marketing

• Yum Restaurants International (YRI) Thailand
• Plan to invest Bt1.8 billion (51M USD) in store
  expansion and marketing (KFC Pizza Hut)
• Create an estimated jobs between 3K-4K
• Adding 90 KFCs and 20 Pizza Huts
• New economic model which reduces Investment
  cost for each restaurant by 30

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YUM Overview

• YRI
• US/Russia/UK/Australia/China (Thailand Taiwan)
• KFC Pizza Hut
• Only restaurants outside the U.S.
• Opening Taco Bell Internationally soon
• International Competitors
• McDonalds
• Burger King
• Domestic Restaurants
• All competitors
• McDonalds
• Burger King
• Wendy's
• Papa Johns
• Domino Pizza
• Popeye's

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YUM Restaurants
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Expected Growth
YUM Financials, 2007
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Menu
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Commercial Environment of the Kingdom

• Constitutional Monarchy
• Legal System
• Based on Civil Law
• Population 65,493,296
• Male to Female ratio 11
• Median Age
• Male 32 years
• Female 33 years
• Average life span 73 years
• Language
• Thai
• Religions
• Buddhist 94.6
• Muslim 4.6

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General Info

• One of East Asias best performers from 2002-2004
• Avg. more than 6 annual GDP growth
• GDP has fallen sharply from 2005-2007
• Avg. is now 4.8
• Political Problems
• Stalled infrastructure projects
• Eroded investor and consumer confidence
• Damaged the countrys international image
• Industries
• Tourism
• Textiles and garments
• Agricultural processing
• Light manufacturing (electric appliances,
  circuits, plastics)

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Culture

• Cuisine
• Blends five fundamental tastes
• Sweet, Spicy, Sour, Bitter, Salty
• Rice is the staple food, usually some variety of
  jasmine rice.
• Most fast food restaurants have changed their
  menu to use less beef and more chicken and fish.
  This is due to local preferences.

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Investment

• 51 Million USD investment
• Why is this potentially a good idea?
• Advantage over competitors menu.
• Thai prefer chicken over beef
• Popular with teenagers
• Thai teens feel its fashionable
• If they can build a strong customer base with
  teens, they may have customers for life.

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Bad Idea

• Why is this potentially a bad idea?
• Thai economy is already slipping, current world
  economy slow down will only have more negative
  effects.
• When the economy is bad, people typically eat at
  home, rather than at restaurants.

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Analysis

• After weighing the pros and cons of this
  aggressive expansion, we feel that this is a good
  move for long term growth.
• Yum will take losses in the short term, but once
  the economy picks back up, this will secure their
  future in Thailand.

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• Any Questions?