Strategic Marketing Managment on KFC PAKISTAN

Strategic marketing managmenton KFC

Presented by:Ashfaq ahmadTo

Sir shahzad khanID:5161

CITY UNIVERSITY PESHAWAR

INTRODUCTION

• KFC Corporation, or KFC, founded and also known as Kentucky Fried Chicken, is a chain of fast food restaurants based in Louisville, Kentucky.

• KFC is a brand and operating segment, called a "concept" of Yum! Brands since 1997 when that company was spun off from PepsiCo.

CONT...• KFC primarily sells chicken in form of pieces, wraps ,salads and sandwiches. While its primary focus is fried chicken, KFC also offers a line of roasted chicken products, side dishes and desserts.

History

1930 KFC started by Harland Sanders

1952The first franchise was opened in South Salt Lake, Utah

1997 Yum! Brand the parent to KFC was started in October 7, 1997

2007KFC’s revenue was $520.3million

KFC'S  LOGO

1952 1978 19911991 1997 today

CONT...

• Presently KFC is branched out in nine major cities of Pakistan (Karachi, Lahore, Rawalpindi, Faisalabad, Multan, Peshawar, Sialkot, Hyderabad, and Islamabad)

• with 45 outlets nation-wide.• Opening the first KFC outlet in Gulshan -

e- Iqbal , Karachi in 1997.

Cont...

• Presently KFC has provided employment to over 1200 Pakistanis, which adds up to 6000 individuals directly dependent on KFC Pakistan.

• The Government of Pakistan receives over Rs.10 to 11 million per month from KFC Pakistan as direct taxes

Changing name to KFC

• The reason they changed from Kentucky fried chicken to KFC was that people got conscious when they read the word ‘’FRIED’’ which gave them an impression that its not healthy because it contains fat, so Kentucky fried chicken had to change their trade name from KENTUCKY fried chicken to KFC. JUST TO avoid the fatty impression.

Strength

• Good taste• Brand equity• Global experience• Operations• Trademark recipes• Strong customer focus

Weaknesses

• High prices• Image of ‘’Fried’’• Only chicken related recipe• Most of product having close substitute in market

• Inconsistent quality of service in many outlets• Lack of control in join venture agreements

Opportunities

• Increase outlets • Underdeveloped market abroad• Increase trends to take meal out of home• Earn bigs profits as population increase• Availability no of franchises to other cities

Threats

• New entrants/better quality brands• Health conscious eating habits• Animal care activists• No support from govt agencies• Intensive competition

Proposed Strategies

• Product Development• Market Development• Market penetration

Financial StrengthReturn on Investment   +5

Increase in EPS  +3

Leverage  +4

Working Capital   +5

Increase in Cash Flow  +5

Average financial strength +4.4

SPACE MATRIX

Industrial strengthGrowth Potential +5

Profit Potential +5

Ease of entry +2

Technological changes +3

Average +3.75

Competitive advantageCustomer loyalty -2

Market share -1

Products quality -1

Product Life Cycle (Growth) -3

Control over suppliers and distributers -2

Technological Know How -2

Average competitive advantage -1.83

Environmental stabilityTechnological Changes -3

Inflation Rate  -4

Ease of exist from market -5

Demand Variability -4

Competitive Pressure -3

Average  -3.8

Total of  X-axis 4.4 – 3.8  =0.6

Total of Y-axis 3.75 – 1.83 =1.92

SPACE Analysis

SPACE MatrixFS

+6

+1

+5+4+3

+2

-6

-5

-4

-3

-2

-1-6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6

ES

CA IS

Conservative Aggressive

Defensive Competitive

(1.92, 0.2)

55

25

15

5

Market share

kfcmcdonaldsK&N'SBurger king

Ch 6 -27

BCG Matrix

DogsCash Cows

Question MarksStars

Relative Market Share PositionHigh1.0

Medium.50

Low0.0

Indu

stry

Sal

es G

row

th R

ate

High+20

Low-20

Medium0

High Market ShareHigh Growth rateProfit potential

Strategy

• Market development• Product development• Market penetration 

Reason :  High market share and High growth      Opportunity

Key External Factors Weight Product Development

Market Development

Productpenetration

Economy 4 4 4 4Political/Legal 4 2 2 2Technological 4 4 4 2Social 4 4 4 3Competitive 4 4 4 3Key Internal FactorsBrand equity 4 4 4 3Customer Loyalty  4 3 3 3Financial Position 4 3 4 3Strong trade mark recipes 4 3 4 2Quality product and services 4 4 4 2Total 40 35 37 27

QS

PM

Decision 

• Propose Strategy: Market Development.  

• Alternative strategy:  Product Development