• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Marketing Report - By taking advantage of the acquisition benefits, product differentiation and successful marketing mix, Little Sheep is generally recognized as a leader in the hot-pot industry in China.

Extracts from this document...

Introduction

MKTG 4070B Marketing in China A report on the Little Sheep's business Group Members: . Cheung Ho Yee 1009632092 Chow Tiffany Cheuk Ting 1155003729 Lam Tat Weng 1009608023 Pak She Yu 1008604123 Tso Shuk Fan 1155003823 Wong Tsz Kuen 1155002814 Ying Yuen Mei 1155000177 INTRODUCTION By looking at the factors of success and the challenges of Little Sheep is facing currently, the report is written to find out the reasons why Little Sheep has been so successful in the hot-pot industry in China and to give some recommendations for overcoming its shortcomings while doing business. By taking advantage of the acquisition benefits, product differentiation and successful marketing mix, Little Sheep is generally recognized as a leader in the hot-pot industry in China. By studying this company, clues to succeed in the Chinese market can be found. COMPANY OVERVIEW Inner Mongolia Little Sheep Catering Chain Co. Ltd. (???????????) is a private company found in Baotou, Inner Mongolia in China in 1999 by Mr. Zhang Gang (??) and Mr. Chen Hongkai (???). It currently holds 525 chain restaurants in China including Hong Kong, Macau and Taiwan, Japan, South Korea, United States, and Canada, having over 60,000 employees over the world. The company is renowned in operating its hot pot restaurants (both in franchise and wholly owned business), condiment processing (wholesale and retail) and meat processing business (wholesale). Their hot-pot business serves dinner in a variety of thinly sliced meats such as pork, mutton and beef. In 2012, Little Sheep was sold to Yum! Brands Inc, a US based fast food franchise conglomerate for $587 million, to facilitate its future international expansion after the approval of the Chinese Ministry of Commerce. Yum! Brands Inc, on the contrary, can diversify itself into a full-service Chinese restaurant segment. Being the first Chinese catering business that listed in Hong Kong Stock Exchange, The Little Sheep Co has delisted in Hong Kong in February 2012 as Yum! ...read more.

Middle

Customers are also less price sensitive and they have higher purchasing powers compared to Chinese citizens, making a high-price strategy more profitable. As Little Sheep owns its production and logistic facilities, the company is able to maintain a stable source of supply, hence lowering the production and maintenance costs. The target consumers of the Little Sheep are supposed to be the middle-class people. But due to the decreasing production cost and taking advantage of the economy of scale, the price of the Little Sheep is less expensive at about HKD$80 that becomes more affordable by most of the citizens nowadays. Currently, the Little Sheep remains a popular choice of dining places among Chinese citizens. BENEFITS OF ACQUISITION Little Sheep has become a listed company in HK Stock Exchange since 2008. However, in Feb 2012, they were acquired by Yum! Brand Inc. (????????) and delisted from the HK Stock Exchange. Yum! is a US-based company, which is the world's largest fast food restaurant company in terms of system units. Yum! is very successful worldwide, they entered China since 1987. Their brands include KFC, Pizza Hut and East Dawning (????, which is a Chinese-style fast food restaurant) and so on. After the acquisition, Yum! will manage the entire operation of Little Sheep. They aim to improve Little Sheep's operation mode, in order to increase the leading role of Little Sheep and provide a high quality food and beverage service to Chinese customers. [1] There are several advantages for Little Sheep. First of all, since Yum! has a very successful business in China, it would help Little Sheep to establish a better brand image. Second, they can enjoy economies of scale through brand synergy. For example, Little Sheep could have a co-advertising campaign with other Yum!'s brand like Pizza Hut. This may save costs due to the larger size of the promotion campaign. Little Sheep can also share the same site with KFC and Pizza Hut so that they can save rent. ...read more.

Conclusion

In order to enter the international market smoothly, we propose a few strategies here. First of all a better-organized English website needs to be set up as the Internet is an important channel for western customers to search for information of restaurants. Apart from offering traditional Chinese hot pot, products with some variations to cater for localities should be considered to cater for different customers, e,g, cheese hotpot. At last, brand image must be improved and promoted in the overseas market as westerners always regard Chinese food as unhygienic and dirty. Efforts must be paid to make them feel that Little Sheep is not the same as other Chinese brands. 3. IMPROVING THE HYGIENE CONDITIONS OF THE RESTAURANTS The Unhygienic kitchen conditions leads to the occurrence of mice. To cope with the hygiene problems, the Little Sheep restaurants are suggested to set up regulation all workers in the kitchen should use plastic gloves, upgrade the washing machine with the function of UV sterilization and managers should inspect and supervise the hygiene conditions frequently. In the long haul, the Little Sheep should set up a hygienic supervising taskforce. The taskforce regulates the rules regarding to the basic food and personal hygiene, and conducts regular inspections on the hygiene conditions. Moreover, 'The Secret Customers' Program is encouraged to be conducted to evaluate the hygiene environment of the restaurants by the consumers. Furthermore, the company should put more resources on staff training courses about food and personal hygiene before official appointment. CONCLUSION The case of Little Sheep provides an insight of the keys to success while running hot-pot fast chain restaurants in China. Although it is facing different threats and weaknesses, our three recommendations can help overcome its shortcomings and continue to expand and lead a dominant position in the hot-pot market. Along with the mission of the company "basing on quality to maximize customers' value" in mind, Little Sheep is believed to stay as a strong tycoon in the industry. APPENDIX * Survey result from my3q.com * Sources: -Little Sheep Official Website http://www.littlesheep.com/ -Little Lamb Official Website http://www.nmxwy.com/ -Youtube ?? ?? ?? ?? 3 16 ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree Marketing section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree Marketing essays

  1. Renault Marketing Project

    Line extensions are usually new flavors, sizes, models, applications, strengths, etc. Sometimes the distinction is made between near line extensions (very little difference) and distant line extensions (almost completely new entries). Of course Renault produces new models of its current cars.Every year new models are launched to the market.By doing

  2. Critical successful factors of Walt Disney

    Thus setting up more information centres in China could facilitate customers in buying the tickets before going to HK and avoid the sold out problem in peak seasons. Besides, in HK, picking up tickets from convenience store was also a distribution channel that adapted to local culture.

  1. the marketing mix report

    For the Barbie doll the packaging and the accessories that come with it may be the unique selling point, whereas the unique selling point for the washing machine would be the performance and the design. It all depends on the market segment.

  2. Introduction to marketing - Burberry

    the company should place itself in the multiple products with elite cost, and because of this, the Burberry Company uses diversification strategy. Marketing strategy for growth Many businesses operate in or intend to move into markets where business growth is both desirable and possible.

  1. Chapter Notes on Marketing Management by Philip Kotler 10th Edition

    Adoption: Decides to make full and regular use of the innovation Factors influencing the adoption process Following are the characteristics of the adoption process: 1) differences in individual readiness to try new products 2) effect of personal influence 3) differing rates of adoption 4)

  2. Evaluate the present marketing mix for T-Mobile, making recommendations for future marketing success in ...

    Market research may be carried out to help develop the product. Advertisement must be used as product is largely unknown. Growth This is the second stage of the product life cycle. Here is where sales are growing at their quickest.

  1. Marketing Plan for Vitaminwater in Hong Kong

    we would use our marketing effort to let our products reach customers. A. Redesigning the bottle In today's market, packing has become a major competitive force that used by companies to differentiate their products from rival firms in the struggle for markets.

  2. Heineken Final Report. What marketing strategy should Heineken undertake to standardize its brand ...

    The target audience is a critical influence on the communicator's decisions on what to say, how to say it, when to say it, where to say it, and whom to say it. B. Determine the Communication Objectives Heineken should seek a cognitive, affective, or behavioral response.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work