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BUSINESS STUDY 2


Complied by:

Tan Wai Loong Ho Tai Chuan


Tham Soon Yew Chai Chun Yee
K
entuc
Frie y k
Chi d
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INTRODUCTION

 KFC Corporation and also known as Kentucky Fried
Chicken, is a chain of fast food restaurants
 KFC primarily sells chicken in form of pieces, wraps,
salads and sandwiches.
 KFC also offers a line of side dishes and desserts.
MARKET MIX
Product

 KFC's specialty is fried chicken served in
various forms. (consumer product)
 KFC's primary product is fried chicken made
with their original secret recipe.
 They also come out with varies taste and
favorite to fulfill customer form utility.
 Other fast food other than chicken. (product
differentiation)
Product Life Cycle

 KFC product Kentucky Fried Chicken about to reach
a decline stage because too many competitor ( brand
competitor, substitute competitor and international
competitor).
 But KFC use many ways to extending the product
life. Example they use reintroduction, they create
many new favorite and feature for their product.

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Segmentation

 Geographic segmentation :
The outlets of KFC are in posh area so cost are high
(rent, electric fee and water fee, employee salaries).
Segmentation
 Demographic Segmentation

The market is divided into groups based on an age, gender,
family size, income, occupation, religion, race and
nationality. 

KFC divides the market on demographic basis in this way: 


 
 Age = 6-65.
 Gender is both males and females.
 Family size is all.
 Income is RM 800 above.
Demographic factors

No age limit focus by the KFC. The target and
focus every individual in society.
BUT KFC finds its largest market for young of
any society.
Male and females are focused by KFC.
They target whole families rather than single
persons.
Segmentation
 Psychographic segmentation


Dividing a market into different groups based on
social class.

 Upper and Middle class.


Price
 Price is the amount of money that customers have to pay

while purchasing the product.
 Price is the sum of all the values that consumers
exchange for products or services.
Economic Factors

Income is an important key factor
for KFC to decides which class is
to be targeted. In the early rise of
KFC they focused on the upper
class but slowly they also focus to
middle classes.
It estimates the behavior of
people, their liking and disliking
towards the pricing of the
products.
Price
Geographic location
preference:
 urban

 semi urban
Price

Behavior segmentation

 taste conscious
 quality conscious 
 class
 combination of product and quality
Price

Pricing Strategy

 Market skimming: KFC globally enters the market
using market skimming. Their products are priced
high and target the middle to upper class people.
Gradually they trickle down the prices focusing on
the middle to lower class people to penetrate both
sides of the market.
Price
Competition
 We can compare the price of their

products with McDonald, 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 Indian fast
food market (only with fried chicken). It
prices its burgers, French fries and soft
beverages with relation to its competitors.
Price
Cost Based
KFC price their product keeping

different points in view. They
adopt the cost base price strategy.
Pricing of the product includes the
govt. tax and excise duty and then
comes the final stage of determine
the price of their product. The
products are bit high priced
according the market segment and
it is also comparable to the
standard of their product. In the
cost based method we include the
variable and fixed cost. 
Place
 TARGET AREAS


 “Free home Delivery” strategy – They provide
free home delivery to offices & homes (select
countries).
 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.
 Economically convenient – The pricing appeals
to the many classes of a society.
Place

TARGET MARKET

1. Location
 Hectic lifestyle of individuals – giving them more time at work
and less stress about waiting for food.
 Commercialization of urban and sub-urban markets leading to
more mid-sector people that find high-end eating joints very to
expensive.
 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.
Place

Target
2. Placement of outlets
Market

 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 to non-vegetarians (mostly
Muslim populated areas).
Place

STRATEGY

 Given the competitive nature of fast food joints, KFC
uses the “Push Strategy” to help them create:  
Awareness
Be different
Sound attractive
Place

CHANNELS
 in the order given
 KFC believes in first level channels
below:  
 Manufacturers
 Retailers
 Consumers
Place

CHANNEL PROCESS
KFC works on the flow of good
operation techniques i.e.  
“Good Operating Manager→ leads to “Good Team
Selection →Good Services → Good Targets → Good
Revenues through the following internal strategies:  
 Training
 Incentive based targets
 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:
 Advertising
 Sales Promotion
 Public Relations
 Events and Experiences
 Coupons, 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 chicken lovers
attention towards its delicious one-of-a-kind product, the Fried
Chicken.
Promotion
Advertising
   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.

 KFC and its new company jingle, “finger lcikin good” is a frequent
announcement on televisions, billboards, flyers and radio. The concept
of showing a normal customer deeply involved in devouring his piece
of chicken usually turns on the drool factory in everybody’s mouth
and makes them rush to the nearest KFC. In India where chicken
lovers are plenty abound these ads featuring normal people connect
instantly and create a rush at their outlets. Using the following
methods KFC spreads its message of finger licking good chicken.
Promotion
Advertising
Using Reminder advertisements KFC

stimulates repeat purchases of its
products. The company anthem “finger
linkin good” is just a wake up call to the
consumer to remind them how good they
felt the last time they ate KFC chicken.
Sponsorship is another tool to strengthen
an organizations image. KFC is currently
the sponsor of the Australian Cricket
Team and the colonel logo can be seen on
their uniforms throughout the matches.
Promotion

Sales Promotion
 KFC uses the following tools to further enhance its sales.
 Premiums 
 Exhibits
 Coupons
 Entertainment
Promotion

Sales Promotion

 All KFC outlets offer its customers
with various forms of incentives to
buy its Chicken. Using coupons that
one can acquire after spending a
particular amount over a period of
fixed time, customers can enjoy the
benefits of free meals or free add-
ons. Additionally they provide meal
vouchers and exciting offers in their
print ads, which the customer must
cut and bring along.
REFERENCE

 http://
www.scribd.com/doc/19080033/Kentucky-Fried-Ch
icken-KFC-Marketing-Mix-four-Ps
 KFC hot-line, 03-10263388 - Mr. Aziz Secretary for
KFC corporation Human Resources Department.

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