Yum Brands

Yum Brands

Yum Brands
Yum Brands’ international expansion is an example of segmentation because international markets differ a great deal from domestic markets.   These markets are quickly growing, but consumer awareness is much lower than that of domestic consumers.   These countries offer new opportunities for the company.
Declining margins for Pepsi’s restaurants were the result of aging brands and intense competition in the fast food industry.
Pepsi’s strategy to combat stagnant growth was to create a new company.   The independent company managed KFC, Pizza Hut, and Taco Bell.   McDonald’s tried segmenting by diversifying their menu and offering larger, higher-priced hamburgers that increased value perceptions.
The new Yum Brands company allowed its franchisees more independence, resources, and technical support than they had before.   This had an immediate affect on morale and profitability.
Multi-branding is a way to manage Yum Brands segment portfolio.   Yum Brands includes KFC, Taco Bell, A&W, Pizza Hut, and Long John Silver’s.   By pairing these restaurants in each location, Yum can reach different segments of consumer taste.
McDonald’s and Hardee’s both introduced new menu items that were priced slightly higher than the other foods on their menu.   This increased prices and profitability for these restaurants.
Yum Brands restaurants are all fast food focused.   The growth of dinner restaurants would lead to another slip in sales for the fast food company.   People who are looking for a nice, sit-down meal in a comfortable setting would not go to the Yum Brands restaurants.
Cultural trends have been somewhat disruptive for the fast food industry.   Baby Boomers, the largest consumer group in the U.S., have become more interested in trading up from fast food restaurants to nicer, more expensive restaurants.   Immigration has led to a surge in the popularity of ethnic foods.
These changes could lead to changes in segmentation.   Different segments...