46334640 KFC Report Marketing

Principles Of Marketing

PROJECT ON MARKETING OF SERVICE

VARIETY BEYOND YOUR IMAGINATIONS

Prepared by:

Raghav AroraPGDRM12

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Principles Of Marketing

PREFACE

This report is based on KFC india, a successful and popular chain restaurant

brand of Yum Inc. it focuses on the different aspects relating to marketing of

KFC in the indian market. The reasons of choosing KFC as the object of our

report are it’s’ successful marketing strategies and increasing growth rate in

the india fast food industry.

This report provides an insight on the marketing strategies, targeting, and

product development function used by KFC with all information gathered from

reliable sources.

This report includes a brief introduction of KFC and its executive summary as

well as an interview with the franchise manager of KFC. We have concluded

our report with our own personal suggestions and recommendations for the

improvement of our selected brand, based on our marketing knowledge and

assessments.

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ACKNOWLEDGMENT

In the completion of my work, I am greatly indebted to the following people without

whose help and co-operation it would not have been possible for to do the same. It

was a great opportunity to do this project .

We are especially thankful to Prof. Sham Sharma, Faculty for the subject Marketing

Of Service .His help has been a wonderful asset and contribution to my work.

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KFC (KENTUCKY FRIED CHICKEN)

Food, fun & Festivity, this is what KFC is all leading the market since its inception; KFC provides the ultimate chicken meals for a chicken loving nation. Be it colonel sanders secret original recipe chicken or the hot & spicy version, every bite brings a yum on our face. At KFC we can proudly say, “We do chicken right”.

Perfecting its secret recipe of 11 herbs and spices in 1939, KFC has come a long way. With over 11,000 outlets in the world, KFC has maintained its title, for the last 60 years, of being the chicken Experts. Opening the first KFC outlet in Gulshan-e- Iqbal in 1997. KFC wore the title of being the market leader in its industry. Serving delicious and hygienic food in a relaxing environment made KFC everyone’s favorite. Since then, KFC has been constantly introducing new products and opening new restaurants for its customers. Presently KFC is branched out in nine major cities of Pakistan (Karachi, Multan, Lahore, Gujranwala, Sukkur & Muree) with more than 45 outlets nation-wide.

KFC, based in Louisville, Kentucky, is the world's most popular chicken restaurant chain specializing in Original Recipe, Extra Crispy and Colonel's Crispy Strips chicken with home-style sides and freshly made chicken sandwiches. Since its founding by Colonel Harland Sanders in 1952, KFC has been serving delicious, already-prepared complete family meals at affordable prices. KFC has more than 11,000 outlets in 85 countries and territories around the world, serving some 10 million customers each day.

THE HISTORYColonel Harland Sanders, born September 9, 1890, actively began franchising

his chicken business at the age of 65. Now, the Kentucky Fried Chicken business he started has grown to be one of the largest retail food service systems in the world and colonel sanders, a quick service restaurant pioneer, have become a symbol of entrepreneurial spirit. More than two billion of the colonel’s “finger lickin good”, chicken dinners are served annually. And not just in North America. The colonel’s cooking is available in more than 85 countries around the world.

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He sold his interest in the US 1980 to 1984. The Colonel remained a public spokesman for the company. In 1976, an independent survey ranked the Colonel as the world’s second most recognized celebrity. Under the new owners, Kentucky Fried Chicken Corporation grew rapidly. It went public on March 17, 1966, and was listed on the New York Stock Exchange on January 16, 1969. More than 3,500 franchised and company-owned restaurants were in worldwide operation when Heublein Inc. acquired KFC Corporation on July 8, 1971, for $285 million.

Kentucky Fried Chicken became a subsidiary of R.J. Reynolds Industries, Inc. (now RJR Nabisco, Inc.), when Reynolds acquired Heublein Inc. in 1982. KFC was acquired in October 1986 from RJR Nabisco, Inc. by PepsiCo, Inc., for approximately $840 million.

In January 1997, PepsiCo, Inc. announced the spin-off of its quick service restaurants KFC, Taco Bell and Pizza Hut into an independent restaurant company, Tricon Global Restaurants, Inc. In May 2002, the company announced it received shareholders' approval to change its corporation name to Yum! Brands, Inc. The company, which owns A&W All-American Food Restaurants, KFC, Long John Silvers, Pizza Hut and Taco Bell restaurants, is the world's largest restaurant company in terms of system units with nearly 32,500 in more than 100 countries and territories.

Until he was fatally stricken with leukemia in 1980 at the age of 90, the Colonel traveled 250,000 miles a year visiting the KFC restaurants around the world.

And it all began with a 65-year-old gentleman who used his $105 Social Security check to start a business.

MISSION STATEMENT

“To establish in India our position as the leading WQSR (Western Quick Service Restaurant) chain, serving good value, innovative chicken-based products. Consistently providing a pleasant dining experience, with fast friendly service, in a clean and convenient location. At all times, we must be dedicated to providing excellent service and delighting customers.”

GOALS

Build an organization dedicated to excellence. Consistently deliver superior quality, and value in our products and services. Maintain a commitment to innovation for continuous improvement and growth,

striving always to be the leader the market place changes. Generate consistently superior financial returns and benefit our owners and

employees.

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VALUES

KFC’s commitment to provide the best food and best experience for the best value the universal areas of customer expectation common to all cultures and all restaurant concepts.

Cleanliness Hospitality Accuracy Maintenance of Facilities Product Quality Speed of Service

MARKETING STRATEGIES

KFC TARGET MARKET:

KFC targets the young generation, as here in this country the young generation is more towards eating out and is more energetic. It targets the early single segment that is the upper class.

AGGREGATION STRATEGY:

KFC does not need aggressive marketing or advertising because Brand is strong enough.

MARKET SEGMENTATION:

Previously they were focusing on single segment that was through Niche Marketing by offering “Combo Deals”. Now they are focusing more on other classes as well. They are dealing in masses by introducing value deals; most recently introduced “Zinger Junior”.

BENEFITS:

Colonel’s value combo meals introduced previously were expensive and so there were less sales but through their recent offers, they have increased the sales by offering low prices.

PURPOSE:

Inflation highly affects the purchasing power of the customers. And here the purchasing power of many customers is low. To cover this major segment, they have introduced affordable meals, so that it is in reach of the masses.

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WANT SPECIFICATION:

The people here need a friendly and family restaurant, which must be affordable for them.

CUSTOMER MARKET SEGMENTATION

GEOGRAPHIC

We take Karachi city’s where KFC has number of outlets here are few outlets are discussed.

I.I chundrigar road

It is situated among many corporate offices and banks.

Clifton

It branch is located at food street of boat basin area where upper class potential customers come.

PIDC

It is the major location for kfc because there are number of banks, offices and most important there are two five stars hotel Sheraton and Pearl Continental where Pakistanis as well as foreigners come and stay there, so it is best opportunity to cater these customers.

DHA Phase 5

The defence branch focuses the upper class’s potential customer of defence.

DEMOGRAPHICS

Age: There is no age limit. It focuses on people lying under every age groupGender: Focuses both gendersFamily life cycle: It focuses on whole family Social class: Upper class, upper middle and lower middle class

PSYCHOGRAPHICS

Personality: Ambitious, self-confident and extrovert

BEHAVIORAL

Benefits desired: Taste and value for money. (Satisfaction>expectations)

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MARKETING MIX

The marketing mix is generally accepted as the use and specification of the ‘four Ps’ describing the strategic position of a product in the market place.

Product (goods and service) Price (value of the product) Promotion (aware the people for product) Place (distribution of product)

PRODUCT

A product is anything that can be offered to a market that might satisfy a want or need.

KFC PRODUCT PLANNING

KFC product is classified as consumer product as it has no intermediates.

KFC offers specialty goods.

The stock turn over of KFC is high.

Price and quality of the product is always compared.

KFC’s product includes

Goods (Burgers, Chicken Meals etc)

Services (cleanliness, quick service, parties)

A typical KFC meal consists of chicken, coleslaw and potato & gravy. All of the ingredients are of the highest quality and freshness. To ensure this, the company sets rigorous standards for product uniformity and quality, which must be met by all suppliers.

KFC PRODUCT LINE

KFC product line includes all chicken based products.

Chicken:

1 piece 2 pieces 5 pieces

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10 pieces

Burgers:

Zinger Burger Colonel’s Chicken Burger Colonel’s Fillet Burger Zinger Jr.

Combos:

Chicken Meals Sandwich Meals Family Meals

Desserts & Beverages:

Fruit Salad Regular & Large Drink Regular & Large Mineral Water Tea Scoop of Walls Ice cream Coffee

Snacks & Side Orders:

Arabian Rice 5 & 10 Pieces Hot wings Dinner Roll Regular & Large Fries Hot Shots Corn on the Cob Hot & Crispy Soup

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KFC PRODUCTS WITH PRICE

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PRODUCT MIX STRATEGY

The product mix strategies are in relation to:

Competitors:

KFC has a head-on competition with McDonald & Subway. Wherever they place their products; KFC goes there as well. Locally in india . Attributes:

The brand of KFC is so strong that it is the attribute itself.

PRODUCT MIX EXPANSION

Line Extension:

Through introducing new meals offers.

Alteration of existing products:

Quality Assurance department does it. The department decides which product should be sold and when (seasonal products as rice and soups offered in winters).

PRICE

Price is the any amount of money that customers have to pay while purchasing the product. More broadly, price is the sum of all the values that consumers exchange for benefits of having or using the product or services

PRICE STRATEGIES OF KFC

In introduction stage KFC entered the market using market-skimming strategy. Their products were high price and targeted only upper class. Gradually they trickle down focusing on the middle class to penetrate the market. Also KFC follows one price strategy. Price is determined according to the rates of the raw materials and policies of the Govt. The political and legal forces often affect the policies of KFC and eventually results in change of prices that is due to imposing of taxes.

PRICE COMPETITION

We can compare the price of KFC products with McDonald, Subway, Dominoes and Pizza Hut. If the competitor provides the same product at a lower price then the organization usually lowers the price of its product too. In the case of KFC, Fried Chicken is its main selling point and controls a monopoly over the India fast food market. It-prices its burgers, French fries and soft drinks.

PRODUCT LINE PRICING

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KFC has a unique pricing strategy that falls solely on their many product lines. Their Value Meals fall into the category of Product Line Pricing. “Where there is a range of product or services the pricing reflect the benefits of parts of the range.” For example, you can order a Two Cheeseburger Value meal that comes with a medium drink and fries. You can Super Size this meal to get a large drink and large fries for a little more money or you can go with another value meal that might include different items for different price.

PLACE

this refers to how the product gets to the customer; for example, point-of-sale placement or retailing. This third P has also sometimes been called Placement, referring to the channel by which a product or service is sold (e.g. online vs. retail), which geographic region or industry, to which segment (young adults, families, business people), etc. also referring to how the environment in which the product is sold in can affect sales.

KFC DISTRIBUTION

KFC has only one channel of distribution i.e. direct where the goods are transferred to the consumer directly. KFC has no middlemen.

DISTRIBUTION OF GOODS AND SERVICES

KFC does distribution of consumer goods directly to the consumer.

KFC also does distribution of services to the consumer like parking, sitting, home delivery, etc.

TARGET AREAS

Free home Delivery” strategy – They provide free home delivery to offices & homes at all Pakistan.

Accessibility – Resulting in several outlets to cater to the needs of people in & around the city.

Hectic lifestyle – Due to the hectic lifestyle of office goings individuals the fast food concept saves time of preparing food and gives the customer a full meal quickly.Hectic lifestyle of individuals – giving them more time at work and less stress about waiting for food.Mid-sector people are always looking for change which KFC provides in their range of fast food.Quality conscious – people in urban areas are more conscious about the quality of food than rural areas.Urban areas are more populated therefore they help with attracting higher revenues.

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PLACEMENT OF OUTLETS

Due to KFC placing itself close to schools, colleges, cinemas and markets which are mostly populated by the young and those who are in a hurry, KFC enjoys a large number of footfalls everyday. In addition, they also have outlets close.

CHANNEL PROCESS

KFC works on the flow of good operation techniques i.e.“Good Operating Manager→ leads to “Good TeamSelection →Good Services → Good Targets → Good

Revenues through the following internal strategies:

Training Recognition for good work Performance based bonus Employee benefits to keep them motivated Promotion

PROMOTION

Promotion is the method used to inform and educate the chosen target audience about the organization and its products. Using all the resources of promotion

KFC PROMOTION STRATEGY

The logo features Colonel Harland Sanders that is one of the best logo in the world has created its name as a standard in the market. The logo of the smiling Colonel is probably one of the most recognized faces in the world and instantly brings the image of fried chicken to one’s mind. Today the Colonel’s Spirit and heritage are reflected in KFC’s brand identity.

KFC PROMOTION SOURCES

AdvertisingSales PromotionPublic RelationsEvents and ExperiencesCoupons, Discounts and Bundled packages

An organization finds most of its meanings and survival through promotion.At KFC, Promotion is the main tool to bring all fast food lovers attention towards its delicious one-of-a-kind.

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SALES PROMOTION

For sales promotion KFC has introduced different strategies such Ramadan Package, Birthday Package, Midnight Package and many other. Also they have introduced goods like watches, keychain, coffe cup, T-shirt, toys e.t.c to the customers.

ADVERTISEMENT   STRATEGY

KFC by its advertisements derives the desire in the customer to come and enjoy healthy food in their favorite restaurant. They spend 2% of its profits on advertisement

TRANSIT ADVERTISEMENT:

KFC India adopts a very interesting way of advertisement as for as their business as concerned that is transit advertising. When KFC India Restaurant Support Center introduces a new product in India they adopt this way and there Floating Trucks travel through out the city other than Mumbai & Chandigarh at where they have KFC stores. Generally it is a very effective way of advertisement through which maximum of their customers are able to know about their new products that they introduced.

IN HOUSE PUBLICITY:

KFC India has another way to advertise their business is in house publicity in which they use banners, bill boards, especially broachers which KFC send to the home of its customer with the news paper only in selected areas to tell their customers about packages, prices, product’s detail, new products and all other information that customers want.

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INTERNET

All most all the KFC’s well developed franchises have their own websites through which they advertise their business very well, but they also use other websites for advertising purposes like hotmail, yahoo, google, etc.E-mail marketing techniques are used by KFC to promote their business. They use their own database to send e-mails to their value added customers to informed them about new products, packages, discounts, etc and uses third parties to promote their business through e-mail marketing.

ANALYZING THE SATISFACTION LEVEL OF CUSTOMERS

KFC offers comments card to its customers to take the feedback of its customers either they are satisfied by its food quality, restaurant decoration, speed of service, courtesy, cleanliness, overall experience. These comment cards are collected on daily bases by the KFC`s head office from its all franchises and at the end of the every month the KFC`s expert analyze these cards and make decision according to the its customers feedback in which segment we are outstanding and in which we want improvement

FOOD SAFETY

KFC French fries Composition which are directly imported from America:  Potatoes, Tran’s fat free oil dextrose. SeasoningsOriginal Recipe: Salt, herbs and spices, garlic powder.Milk and Egg: Non fat milk, dried whey and dried egg whites.

DELIVERY METHODS

SELF SERVICE

KFC stores offer self service to sell their products means customers go at counter and purchase products pay for it, no involvement of waiters and if customers want to eat at KFC store they sit at lobbies one for common people other for only families otherwise.

HOME DELIVERY

It is a way of buying KFC products without going at KFC stores. All KFC stores in India offer Free Home Delivery service within just 30 minutes. Orders are received at KFC stores only through telephone. They want only address at which their team members supply that order and he received a payment for that product.

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AT STORE

Most of the KFC buyers want to eat KFC products in lobbies of KFC stores because a very entertaining atmosphere is provided by the KFC management in lobbies especially for children.

DRIVE THRU

Drive Thru is the method of buying products used at almost all KFC stores in India. In it when customer is in vehicle like cars, jeep, bike, etc go at KFC store and purchase without coming out of his vehicle, he drive up to drive thru counter pay for product and at next counter collect his product and go away. It is the facility in which customer is able to buy product without spending too much time at store.

PAYMENT METHODSCASH

It is the most popular and widely used method of payment when we are going to sell or buy something, Irrespective of its some drawbacks such as security risks, its bulky volume, and time consuming counting process at all KFC stores in India Cash is the main and normally used method of payment when customers buying products at KFC stores.

CREDIT CARDS

Almost all the stores of KFC India accept almost all types of credit cards such as Master, Visa, etc. as for as KFC India as concerned they start accepting Credit Cards within 2 or 3 weeks, “Restaurant Manager” said.

DEBIT CARDS

All the stores of KFC India accept debit cards and they made quick transaction by their access machine which is directly linked with respective banks such as.

CUSTOMER INTERACTION

All the KFC stores have very good customer interaction with their customers because they know the worldwide accepted rule of B2C type of business that is

“Customer is the King”

So that’s why they regularly get a feedback from the customer and remain be in touch with their potential customers also.

All KFC stores are very efficient in sense of getting feedback from the customers they use Comment Cards to get feedback about their product and services and also an information about the customers that they use later to be in touch with their

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potential customers. By using Comment Cards all the KFC stores collect information about the customers and maintain a database using all the information. They compile that Comment Cards very carefully and collect the information about the good and bad sides of their stores, point out them and send that information to Head Office India and higher management take decisions on the behalf of that information collected by using Comment Cards for the betterment of KFC India.

PEST ANALYSISPOLITICAL FACTORS

Due to political stability in India, these days all businesses are flourishing well and same is the case with KFC. As there are huger chances of investment these days, so KFC is following

GROWTH STRATEGY all over the country and targeting outlets in India, also 3 outlets in pipe line to searching place for another places in India

ECONOMICAL FACTORS Socio-economic trends are mostly encouraging with increases in disposable

income, more working women, increase in hoteling and increases in tourism all positive signs for the catering market.

There are also catering sectors, such as restaurants and takeaway food, which are now a part of the regular eating habits of a majority of adults.

The increasing purchasing power of people is affecting KFC sales positively. Taxes are regularly paid In summer KFC has more sales than in other season because KFC provides

a good chilled environment.

SOCIAL FACTORS In India KFC is playing a very active role for education sector. It has invested

much for inauguration of schools in different areas of India. Chicky Fund Raising i.e getting second handed books etc. from different

schools and distributing them among less fortunate students is also done through different campaigns.

TECHNOLOGICAL FACTORS KFC is going to adopt the delivery system of Pizza Hut. Buying new equipments. The latest tech acquired is always get approved by government. KFC new UAN no. is 111-KFC-KFC Each and every equipment is licensed.

SWOT ANALYSISSTRENGHTS

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Quality of products. Leader in almost every market. Finger licking taste as the other international fast food restaurants in India

doesn’t have that kind of specialty in Fried Chickens.

WEAKNESSES

There is some weakness in the field of KFC menu as it serves only chicken related products but its competitors like pizza hut and Mc Donald’s offer vegetable and cow meat based food also.

Due to huge expansion by growth strategy there is much pressure on management department in terms of HRM etc.

OPPORTUNITIES

KFC plays an important role in increasing employment rate of a country as it hires persons from local place to fill its staff. So this gains public attention and generates good will of the organization.

Financially KFC is going very stable and sound organization so still it has much opportunity of opening new outlets in different areas of Pakistan and the rest of the world by reinvesting its profits.

THREATS

Prosperity of KFC with in a given region depends upon its economic condition of the country so if some thing bad happens to it, it can be troublesome for KFC.

KFC recipe is still a secret, and if some one gets this secret then this can play havoc with this organization.

American invasion into tribal areas of Pakistan is also a threat for KFC, due to arousal of anti-American sentiments it can lead towards rejection of KFC.

CONCLUSION

On the whole KFC is the name of trust for the customers because there is no compromise on the quality of the food. KFC fully concentrate on the quality of food that’s why it is the hall mark of excellence among the customers. The supplier of

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KFC is K&N’s Foods (Pvt) Ltd. They have good and fully furnished places for Chicks to grow and finally to provide there valued customers. By following such practices, KFC is providing a just and equitable environment for work and through its diversity programs, giving back to the community at various levels. Doing business internationally means taking stock of the local population and molding your menus and work practices to suit local tastes, laws and regulations.

THINK GLOBALLY, ACT LOCALLY

RECOMMENDATIONS

KFC is American firm so it can face sensitivity in this case. Because of rude American attitude towards Muslims countries, people “can” reject them.

They should start some activities that help them in turning their anti-Islamic image in the minds of their target customers.

The website of KFC Pakistan is not well developed so sophisticated information and well designed data is not available on the net, as mentioned above the I.T. department of KFC Pakistan has a close look on this area so it is good sign for the internet users to buy online and get information they need.

Music selection is good but usually they keep music volume so high that it starts interrupting entertainment. They also do not change music on customer choice.

As KFC stands in STAR position in portfolio matrix so they should adopt stability strategy at least for some period of time but still they are adopting further growth strategy and increasing their level of operations so the same case can happen with KFC which happened to MC Donald’s.

Optimizing marketing spend: The system allows KFC to evaluate the effectiveness of marketing campaigns, enabling immediate adjustment of these campaigns to target them more effectively.

Enabling strategic restaurant planning: By analyzing sales and demand, KFC can conduct more effective strategic planning to open the right restaurant at the right location at the right time.

Enhancing customer service: The system analyzes delivery punctuality, and correlates it with parameters such as restaurant and rider, allowing management to make decisions to fine-tune operations, and improve customer service.

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