Marketing Strategies of Kfc

MARKETING STRATEGIES OF KFCThere are different strategies adopted by KFC for different events. They market their products on different events and in different activities as they are helping SOS village.According to KFC, kids become the future permanents customers and we know very well that without any marketing strategy no marketing program and no product is successful because we depend upon customers, customer not depend on us.

KFC is following Niche Marketing and Societal Marketing techniques.

KFC possess a western culture because some of the Indian people are alsofollowing that culture.

KFC are moving from Divisional Level to the District level by opening branches.

KFC also offer free home delivery.

KFC open their outlets on reachable places.

KFC menu consists of more than 30 products.

KFC gives more priority to Family.

Marketing

Since 1982, KFC’s “All-American salute to Mothers” national card contest has been KFC’s way of honoring moms and their families for making mother’s Day KFC’s biggest sales day of the year. The contest encourages children to creatively express their feelings for their moms by making a homemade card and give them chance to compete for more than $10,000 in cash and prizes. Educational packets, including language, history and art exercises highlighting Mother’s Day, were sent to thousands of schools nationwide.

There are 4 P’s of Marketing:1. PRODUCTION2. PRICING3. PROMOTION4. PLACEMENT

1. Production:Basically the product is anything that be offered to a market for attention,acquisition, use, or consumption that might satisfy a want or need. KFC isspecially dealing in the chicken products; Basically, KFC has the special raspy for chicken products that is why, KFC known as a chicken specialist allover the glob. KFC target the Asia and east side because they observe that they people are like the chicken products, so they enter in the market due to the demand of their chicken products. KFC product variety of product in the chicken, those productsare:

PRODUCTS:

Original recipe ® chicken

Extra Tasty CrispyTM chicken

Hot WingsTM pieces

Tender Roast® chicken

Chunky Chicken pot pie

Kentucky Nuggest®

Colonel’s Crispy Strips®

Honey BBQ sandwich

Original Recipe® Sandwich

Tender Roast® Sandwich

Triple Crunch® Sandwich

Triple Crunch ®Zinger® Sandwich

BRAND:There are three brands of the KFC:

Taco bell

Pizza Hut

Long john silvers

2. Pricing:KFC during pricing their products keep the different points in the mind like they adopt the cost base price strategy. Pricing of the product includes the Government taxes and excise duties and then they come at final stage of determine the price of their products. KFC prices of products are a bit high according to the market segment and it is also compatible to the stander of their products.

Calculation of the price under Cost Based Pricing Strategy:

Total Pounds of Chicken Served in KFC Restaurant Annually = 1.914 Billion

Total KFC Chicken Pieces Sold Annually = 5.89 Billion

Total Retail Sales = $8.9 Billion

Sales Price of per Chicken Piece = Total Retail Sales / Chicken Pieces sold= $8.9 Billion / $5.89 Billion=$1.51

We assume that Fixed Cost is = $6000000000

Variable Cost = $675000000

Profit Margin is Or Mark Up = $225000000(25% of Sales)

Per Unit Variable Cost = $675000000 / 5890000000= $ 0.115

Unit Cost = Variable Cost + Fixed Cost / Chicken pieces Sold= 0.115+ 6000000000 / 5890000000= 0.115 + 1.02= $1.135

Now suppose manufacturer wants to earn 2525% mark up on sale. The manufacturermark up price is calculated:

Mark Up Price = Unit Cost / (1 – Desired Return on Sales)=1.135 / (1-.25)= 1.135 / 0.75= $1.51

3. Promotion:Promotion is one of the necessary plates in any form of business or in other words you can say that promotion is the key of success. If you promote your product at the right time . KFC also known the importance and significance of promotion so they uses the bill boards the major source of advertisement A survey of young consumers in the countries (n = 795), showed that the respondents were more apt to eat within KFC restaurants, and spend more time doing so,

than the Americans. The Chinese also had much more positive impressions of KFC. Brand identity impressions were correlated with overall customer satisfaction and with future patronage intentions for both groups. These findings support a model where differences in cultural frames of reference lead consumers to actively localize the brand identity of this nominally globalized product.

4. Placement:In the case of the KFC the placement of the product is not important but theplacement of the restaurant is important. The products of the KFC is cooked at the sport and then served after that. KFC Cavalry branch opened in June 1998, in the main commercial zone of Cavalry Grounds near the Jinnah Flyover. The restaurant is a three-story building including the basement (where the chicky play area is located). It is ideally located in the center of a main commercial and residential area of Lahore. The area that KFC Cavalry caters for is the residential and office area of Cavalry Grounds and Cantt, as the main target market. Another branch the KFC opened in the Lahore is in Garden Town (opposite to Barkat Market). KFC also target the Faisalabad and open its branch in D ground. Now we can easily judge that the KFC target the place for their restaurant, which is well known and is in the Porsche area where the income level of the people is high then the middleclass level. Because the prices of the KFC products is high with comparison to the local products manufacturer who are dealing in the same kind of product in which KFC is dealing but the prices of the KFC is high due to special taste, high quality, and due to international brand, it is the world recognized fast food restaurant all around the world. So, for the placing strategy, KFC chose the well income class area for their restaurants.

Purchasing process:

Many people come from home to eat this, and some make impulse decision as theysaw it .

Market mix StrategyKFC will be using differentiated market coverage strategy. It means that different marketing mix will be used for different age groups.

TARGET MARKET FOR FAST FOODAfter evaluation of various segments, KFC has decided to target the market of Urban and Sub-urban Areas of india.

Product usagePeople are educated and they want variety in their diet. Normally people of rural areas don’t take fast food. On the other hand people of urban areas take fast food. Income of the people of urban areas is normally high and they can afford to purchase such products, which are slightly higher in price as compared to prevailing prices of local food in the market. People of Urban Areas are more quality conscious than the people of Rural Areas.In Urban Area there lived people from every walk of life and profit generation is easier than in Rural Areas.Population density is higher in Urban Areas as compared to Rural Areas, so the numbers of customers are more in Urban Areas.

Current target marketSegmentationKFC has divided the market of India into distinct groups of customers withdifferent demands, tastes and behavior who require separate products or marketing mix.

In India the niche marketing is being used for particular classes of people.They have made segments of the market on the following bases.

Demographical

Behavior

Geographical

By using these three bases they segmented the market as under.

DEMOGRAPHICAL BASISIn demographics their first segment is consisted of the income factor i.e. high income, average income and low income.

BEHAVIORIn behavioral aspect they segmented the market on the basis of quality, taste and price. Following are the different possible segments in this regard.

Taste conscious

Quality conscious

Class conscious

Combination of price and qualityGEOGRAPHICAL BASISOn the basis of the geographical factor we have divided our market in three main segments.

Urban areasSub urban areas

SWOT ANALYSISSWOT analysis mean strength, weakness, opportunities and threats and the SWOT

analysis of KFC are:

STRENGTHSGoodwill and reputation: The company certainly has earned a good name and reputation by its previous products and services in the market. It is even more recognized in other markets outside India, where the company is among the leading fast food giants. The brand is recognized and trusted in India for its quality products, price, and customer service. It therefore has a good head start and enjoys a good chance of becoming a leader in Indian fast food industry. Employee Loyalty: Employee Loyalty is one of the major strengths of KFC. The turnover rate in the company is amongst the lowest in the industry. Customer Loyalty: Despite gain by Boston Market and Chick-fill A, KFC customer base remained loyal to the KFC brand because of its unique taste. KFC has continued to dominate the dinner and take out segment of the Industry. Ranks highest among all chicken restaurant chains for its convenience and menu variety . It generates $1B revenue each year.

WEAKNESSESKFC was losing market share as other Chicken chain increased sales at a faster rate. KFC share of Chicken Segment sales fell from 71 percent 1999, to less than 56 percent in 2009, a 10-years drop of 15 percent. Huge competition in this segment. India is still mostly a vegetarian dominated cultured society. South India is especially very much so. This may reduce the market share of the company. KFC has not yet invested much on R&D, and innovating new products for Indian Markets. This may lead to failure of their products as they are not in line with the Indian mind set, peoples taste and preferences and their likes and dislikes. This may prove fatal for the company.OPPURTUNITIES

New Markets: Globalisation has opened doors for new markets for the company. As the developed markets are

mostly saturated, the developing countries like India and China promises a good market and generation of demand in the future. With more than 70% of the markets in india being unexplored and un organised, KFC has a good scope of expanding its operations in the country. Cross Culture: Generally there is a good acceptance of American culture of fast food in India. People are opening up to fast foods more regularly in their daily lives and not just keeping it a once in a month affair. Thus Indian mindset is fast changing. Large Youth population: India has a very large share of youth population a compared to other countries. More than 60% of the population is under the age of 30yrs. As the young generation are more open to fast foods and demand it more, this is a good news for the company. New variety: Company can also come up with new variety in the menu like Pizzas, garlic breads to attract more customers.

THREATSCompetition: Competitor companies like McDonalds are fast catching up with the market. McDonald’s with sales of more than 19 billion in 1999, accounted for 15 percent of the sales of the nation’s top 100 restaurant chains. Organizations’ like PETA People for Ethnic Treatment for Animals have given a bad name to the company which may prove disastrous to the image of the firm. Currently, KFC is under massive attacks from animal organisations, questioning the way KFC’s suppliers are threatening the chicken, before they got slaughtered. Anti-KFC campaigns, such as the one from PETA are affecting KFC’s brand image in a negative way and result in direct dollar losses, as less people are consuming KFC chicken.

Saturated US Market: Now KFC cannot rely on just its home market to generate sales. As the US markets are already saturated and leave no or little scope for growth, company necessarily needs to look at offshore foreign markets to generate sales and keep up the profits.

PromotionsIn India KFC not advertise their products too much because people KFC due to itsreputation in other countries. They promote their products through special packages. They promote their products through billboard, pamphlets and through other promotion strategies

Sales promotionFor the sales promotion KFC introduced their goods like watches , keychain, etc to the customers.

AdvertisementThe advert titled Pool was done by OGILVY & MATHER, New Delhi advertising agency for KFC ZINGER BURGER (KFC Company) in INDIA. It was released in the June 2009. Business sector is Fast food outlets & restaurants.

One of KFC's latest advertisements is a commercial advertising its "wicked crunch box meal". The commercial features a fictional black metal band called "Helvetica" performing live, the lead singer then swallows fire. The commercial then shows the lead singer at a KFC eating the "wicked crunch box meal" and saying "Oh man that is hot".

In 2007, the original, non-acronymic Kentucky Fried Chicken name was resurrected and began to reappear on company marketing literature and foodpackaging, as well as some restaurant signage.