Project Report On

Kentucky Fried Chicken

From

Supervised by : Prof.Dr.Zain Yousafzai

Submitted by : Siawoosh Wared ( BBA Hons )
Registration # 1711-306055 ( BBA 11 )
th

Preston University Peshawar

Session 2006 2010

Project Report
Marketing Strategies With Reference To
Kentucky Fried Chicken

A Project report submitted to the Preston University in

partial fulfillment of the requirement for the Degree of
Bachelor of Business Administration.
Supervised by : Prof.Dr.Zain Yousafzai
Submitted by : Siawoosh Wared ( BBA Hons )
Registration # 1711 306055 ( BBA 11 )
th

Preston University Peshawar

II

Session : 2006 2010

Project Report
On

CD Page

III

Approval Sheet

Vice Chancellor :

______________________
Prof.Dr.Anwar Hassan

IV

Internal Supervisor :

______________________
Prof.Dr.Zain Yousafzai

External Supervisor

__________________

Department of Business Administration

Preston University
Peshawar

Preface
This report focus on KFC marketing strategies, its marketing
environment , demographic factor ,marketing factors.
I designed a report to provide a brief description about its marketing
mix & its major competitors in Pakistan. We also discuss four Ps of
marketing & their marketing tools.
In addition to it, this report includes a research base survey on KFC.
We all have tried our level best to fulfill all the requirements
V

mentioned to us. Now its depend upon the reader to read it carefully
and understand what we want to communicate. This report provides a
brief knowledge about KFC in Pakistan.

_____________________________________________________

Acknowledgement
VI

With profound sense of gratitude and regard, I express my

sincere thanks to my guide and mentor Prof.Dr.Zain for his
valuable guidance and the confidence he instilled in me, that
helped me in the successful completion of this project report.
Without his help, this project would have been a distant
affair.
His thorough understanding of the subject and professional
guidance was indeed of immense help to me. Also, this
acknowledgement would remain incomplete
without thanking the staff of KFC Islamabad and Peshawar
for their whole-hearted and kind co-operation. I am also
greatly thankful to the faculty members of our institute who
co-operated with me and gave me their valuable time.

Siawoosh Wared
________________________________________________

Table of Contents
Chapter 1st

Introduction

.
VII

1.

Introduction of company . . . . . . . . . . . . . . . . . . . . . . .
11
Introducing New Product . . . . . . . . . . . . . . . . . . . . . .
12
Pricing Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13

2.
3.

Chapter 2nd
.
1.
2.
3.
4.

Situation

Analysis

KFC History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Companys Overview . . . . . . . . . . . . . . . . . . . . . . . .
KFC Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Values of KFC . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 3rd
.
1.
2.
3.

Company

and

15
15
16
17

Branches

Situation Analysis ( Current Products ) . . . . . . . . . .

KFCs Original Recipe . . . . . . . . . . . . . . . . . . . . . .
KFCs Outlets In Pak . . . . . . . . . . . . . . . . . . . . . .

Chapter 4th

KFCs

Mission

and

19
20
21

Philosophy

.
1.
2.

Philosophy of KFC The CHAMPS Program . . . . . . 24

The CHAMPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
Mission of statement . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goal of KFC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25

3.
4.

Chapter 5th

Product

25

Issue

.
1.
1.1

Quality Control Over ingredients . . . . . . . . . . . . . . . . . .

27
Every
chicken tasted . . . . . . . . . . . . . . . . . . . . . . . . . . .
27

1.2

Every
chicken certified . . . . . . . . . . . . . . . . . . . . . . .
27
Quality assurance certificate . . . . . . . . . . . . . . . . . . . . .

1.3
27
2.

Packaging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27

2.1

Recycled Paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28
VIII

2.2
2.3

Environment Concerns . . . . . . . . . . . . . . . . . . . . . . . .
Litter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28

3.

28

Branding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28

Table of Content . . . .
Chapter 5th

Product

Issue

.
4.
4.1
4.2
4.3
4.4

Four Forces Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buys / Supplies Bargaining Power . . . . . . . . . . . . . . . . . .
Substitute and Complements . . . . . . . . . . . . . . . . . . . . . . .
Rivalry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 6th

Current

Target

30
30
30
31
31

Market

.
1.

Promotions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33

2.
2.1
2.2
2.3

Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Demographical Basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Behavior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Geographical Basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33
33
33
34

3.
4.
5.

Profile criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Market Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
Market for fast food . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

6.
6.1

Economic Analysis of Market . . . . . . . . . . . . . . . . . . .

Macro Environment . . . . . . . . . . . . . . .. . . . . . . . . . . .
35
Micro Environment . . . . . . . . . . . . . . . . . . . . . . . . . . .
35
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35
Costumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.2
6.3
6.4

IX

35

35

7.
8.

Strength and Weakness of Competitors . . . . . . . . . . . . .

Current Sale Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.
9.1
9.2

Environmental Factors and Opportunities . . . . . . . . . . .

36
Political . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Economical . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37
Socio Cultural . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Technological . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Environmental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Legal Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

9.3
9.4
9.5
9.6
10.
10.1
10.2
10.3
10.4

35
36

Summary of Current Situation . . . . . . . . . . . . . . . . . . . . . . .

38
Strengths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39
Weaknesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39
Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39
Threats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41

Table of Contents . . . .
Chapter 7th
1.
2.
3.
4.
5.
6.
7.
8.

Marketing Strategies of KFC

Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4-Ps of Marketing . . . . . . . . . . . . . . . . . . . . . . . .
Competitive Analysis . . . . . . . . . . . . . . . . . . . .
Promotion Issues . . . . . . . . . . . . . . . . . . . . . . . .
Advertisements . . . . . . . . . . . . . . . . . . . . . . . . . .
Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Questionnaire . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Table of Graphs
X

.
41
43
45
46
47
49
51
52

1.
2.
3.
4.
5.
6.

Macro
Enviromnet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Competiive Advantages . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Project Report
On

XI

Chapter No # 1st
Introduction

Department of Business Administration

Preston University
Peshawar

Introduction of
Company
KFC Corporation, based in Louisville, Kentucky, is the
worlds most popular chicken restaurant chain, specializing
XII

in Original Recipe , Extra Crispy TM, and Colonels Crispy

Strips chicken with home style sides and five new freshly
made sandwiches. Every day, nearly eight million customers
are served around the world. KFCs menu everywhere
includes Original Recipe chickenmade with the same
great taste Colonel Harland Sanders created more than a
half-century ago. Customers around the globe also enjoy
more than 300 other productsfrom a Chunky Chicken Pot
Pie in the United States to a salmon sandwich in Japan.
KFC continues reaching out to customers with home
delivery in more than 300 restaurants in the United States
and several other countries. And in quite a few U.S. cities,
KFC is teaming up with other restaurants, Taco Bell and
Pizza Hut, selling nearly fifty years ago; Colonel Sanders
invented what is now called home meal replacement
selling complete meals to harried, time-strapped families. He
called it, Sunday Dinner, Seven Days a Week.
Today, the Colonels spirit and heritage are reflected in
KFCs brand identity the logo features Colonel Harland
Sanders, one of the best recognized icons in the world.

KFC
KFC specialized in chicken and they says,
No bodys cooking like KFC today and we are
the chicken experts
There is no competitor for spicy chicken which
is
XIII

made by KFC
Introducing New Product
Now enjoy T2O Cricket festivity with KFC's exciting new offer;
Get a complete T20 Meal Box which includes;
1 Zinger Burger, 3 pcs. Hot Wings, 1 regular Drink, 1 Fries and 1 Dinner
Roll ! in only
Rs 320/- only

Pricing Issues
XIV

Pricing Policy for Zinger Burger new product from

KFC
Manufacturing cost

RS.180/-

5% marketing cost ( Per.Unit )

RS. 50/-

Total cost

RS.230/-

15% G.S.T +15% RETAIL MARGIN

Total retail Price

RS.90/RS.320/-

Pricing Strategy for Deal 6 From KFC

Manufacturing cost

RS. 140/-

5% marketing cost ( Per.Unit )

RS. 25/-

Total cost

RS.165/-

15% G.S.T +15% RETAIL MARGIN

RS.45/-

Total retail Price

RS.210/-

Project Report
XV

On

Chapter No # 2nd
Situation Analysis

Department of Business Administration

Preston University
Peshawar

KFC History
XVI

KFC is an internationally renowned fast food industry in the

world. They have the
main ambition to increase & maintain the
quality in fast food industry. Their aim is to capture the fast food
market. Basically they want to provide their products to anyone that
is why they expanding their branches in all over the world.

They want to increase their profit through giving maximum

satisfaction & other
better facilities to people that they want.
Now after catching such a marvelous
position in the International
Market, KFC is introducing a new item Boneless Fried
Chicken,
with even more attractive and charming taste.

Companys Overview

Colonel 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 colonels
finger lickin good
chicken dinners are served annually. And not
just in America. The colonels cooking is
available in more then
82 countries around the world.

When the colonel was six, his father died. His mother was
forced to go to work, and
young Harland had to take care of his
three year old brother and
baby sister. This meant doing much of the family cooking. By the
age of seven, he was
a master of a score of regional dishes. Ate
age 10, his first job working on a nearby
farm for $2 a month.
When he was 12, his mother remarried and he left his home near
Henryville, Ind., for a job on a farm in Greenwood, Ind.

He held a series of jobs over the next few years, first as a 15year-old streetcar conductor in New Albany, Ind., and then as a 16yearold private, soldiering for six months in Cuba.
XVII

After that he was a railroad fireman, studied law by

correspondence, practiced in ustice of the peace court, sold
insurance, operated an Ohio River steamboat ferry,
sold tires, and
Operated service station. When he was 40, the colonel began cooking
for hungry ravelers who stopped at his service station in Corbin,
KY. He didnt have a
restaurant then, but served folks on his own
dining table in the living quarters of his service station.
As more people started coming just for food, he moved across the
street to a motel
and restaurant that seated 142 people.Over the
next nine year, he perfected his secret blend of 11 herbs and spices
and the basic cooking technique that is still used today.

KFC Pakistan
KFC is the worlds No.1 Chicken QSR and has industry

leading stature across many countries like UK, Australia,

South Africa, China,USA, Malaysia and many more.

KFC is the largest brand of Yum Restaurants, a company

that owns other leading brands like Pizza Hut, Taco Bell,
A&W and Long John Silver.
Renowned worldwide for its
finger licking good food, KFC offers its signature products in
Pakistan too! KFC has introduced many offerings for its
growing customer base in Pakistan while staying rooted in
the taste
legacy of Colonel Harland
Sanders secret recipe.
Its signature dishes include the crispy outside, juicy
inside Hot and Crispy Chicken, flavorful and juicy Original
Recipe chicken, the spicy, juicy
& crunchy Zinger Burger,
Toasted Twister, Chicken Bucket and a host of beverages
XVIII

and desserts. KFC also has great tasting vegetarian offerings

that
include the Veggie Burger, Veggie Snacker and Veg
Rice meals. In
Pakistan, KFC is growing rapidly and today
has presence in 10 cities with close to 60 restaurants.

Values of KFC
Focus all our resources to our restaurants operation
because that is where we serve our customers.
Reward and respect the contributions of each individual
at KFC.
Expand and update training with time and be the best
we can be and more.
Be open, honest and direct in our dealings with one and
other.
Commit ourselves to the highest standard to the
personal and
professional integrity at all times.
Encourage new and innovative ideas because these are
the key to our competitive growth.
XIX

Reward result and not simple efforts.

Dedicate ourselves to continuous growth in sales, profit
and size of organization.
Work as a team.

Project Report
On

Chapter No # 3rd
Company & Branches

XX

Department of Business Administration

Preston University
Peshawar

Situational Analysis
Current Products
Kentucky fried chicken
Zinger burger
Krushers
GameBox
Twister
Boxmaster
Chicken Bucket
Hot wings
Fries
Corn on the cob
Zing Kong
Snacker(chicken & veggie)
Veggie Feast
Soft Drink
Coleslaw
XXI

 Chicken Thali
Veg Finger
Snack Box
Sundae
Soft Twirl
Brownie Sundae

KFC Original Recipe

6 cups Crisco Shortening
1 eggs well beaten
2 cups Milk
2 cups Flour
2 teaspoons ground pepper
3 tablespoons salt
1 teaspoon MSG
1/8 teaspoon Garlic Powder
1 dash paprika
2 Frying Chickens cut into 6 pieces
Place shortening into the pressure cooker and heat over
medium heat to the shortening reaches 400F. In a small bowl,
combine the egg and milk. In a separate bowl, combine the
remaining six dry ingredients. Dip each piece of chicken into
the milk until fully moistened. Roll the moistened chicken in
the flour mixture until well coated. In groups of four or five,
drop the covered chicken pieces into the shortening and lock
the lid. When pressure builds
up cook for 10 minutes.

XXII

KFC Outlets in Pakistan

Islamabad
.
11 - United Bakery
Building, F-6/2, Super
Market, Islamabad.
For Delivery:
Ph: 111-532-532
Chicky Fun Area

Karachi

SA-2, See Breeze Centre,

F1-17, Block - 5,
Kh-e-Roomi, Clifton,
Karachi.
For Delivery:
Ph: 111-KFC-KFC
(111-532-532)
Chicky Fun Area

Peshawar
.

University Road,
Burjaman Plaza
Near Shadman Chowk,
XXIII

Peshawar.
For Delivery:
Ph: 111-532-532
Chicky Fun Area

Lahore

160/2, Block 2,
Phase-1 LCCHS,
Lahore
For Delivery:
Ph: 111-532-532
Chicky Fun Area

Hyderabad
.
Unit No. 1,
Shah Latifabad,
Thandi Sarak, Hayderabad.
For Delivery:
Ph: 111-532-532
Chicky Fun Area

Project Report
On

XXIV

Chapter No # 4th
KFCs Mession & Philosophy

Department of Business Administration

Preston University
Peshawar

Philosophy of KFC the CHAMPS program

Champs stands for our belief that the most important thing
each of us can do is to focus on the customer. It stands for
our commitment to provide the best food and best experience
for the best value.
CHAMPS stand for the six universal areas of customer
expectation
common to all cultures and all restaurants concepts.
The CHAMPS
These are:
XXV

Cleanliness
Hospitality
Accuracy
Maintenance of Facilities
Product Quality
Speed of Service
CHAMPS is the philosophy to ensure that the customer has
the consistent quality experience in every restaurant,
everyday, on every occasions and you will be playing role in
delivering CHAMPS to our customers.

Mission of Statement
To be the leader in western style
restaurants through friendly service, good
quality food and clean atmosphere

XXVI

Goals of KFC
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 grow, striving always to be the leader in the market place
changes.
Generate consistently superior financial returns and benefits our
owner and employees.
To establish in Pakistan our position as leading WQSR (Western
Quick Service Restaurant) chain, serving good value. Innovative
chicken-based products.
Consistently, providing a pleasant dining experience, with fast
friendly, in a clean and convenient location. At all times we must
be dedicated to
providing excellent and delighting customers.

Project Report
On

XXVII

Chapter No # 5th
Product Issues

Department of Business Administration

Preston University
Peshawar

Product Issues
General description:
XXVIII

Features:
Quality Control Over Ingredients
Every Chicken Tested
K & Ns state-of-the-art Quality Assurance Lab monitors the entire
integration process
from livestock to feed and on to preparation of ready-to-cook and
cooked products.

Every Chicken Certified

HACCP K & Ns ensures food safety by implementing the
international HACP (Food
Safety System) and enjoy the unique privilege of being the first and
only HACCP
certified company is Pakistan producing chicken and chicken
products. Free from diseases
and bacteria, drug residues and other contaminants.

Quality Assurance Certificate

Director General ( Research ) has issued quality assurance certificate
for the chicken used
by KFC.

Packaging

We are asked as many questions on our packaging as our

products by our customers.
The packaging for KFC products is
chosen according to performance against three
key criteria:
Heat Retention
Moisture removal
Grease absorption
The packaging material and carton design are all adapted to
maximize performance against these three criteria.

XXIX

Recycled Paper
All our clamshells and chicken boxes contain as much recycled
material as it is legally allowed. By law we are required to have
virgin fibre board in any part of the packaging
that is in contact
with food. Any virgin fibre comes from board suppliers who use pulp
bought from managed forest in Scandinavia. This ensures that any
wood cut for paper production is replaced with new plantings.
Environmental Concerns
Over and above ensuring our packaging is supplied via recycled
or renewable resources; KFC are enthusiastically complying with the
new environmental directives on recovery and recycling of packaging
waste.
Litter
We at KFC UKI are aware of our responsibilities to the
Management of Litter and all our packaging carries the Keep your
Country Tidy signs.

Branding
This research measured and compared the brand identity of
Kentucky Fried Chicken (KFC) in Pakistan. Brand identity was
defined as the customer impressions of four
different KFC
identity elements - properties, products, presentations, and
publications.
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.
XXX

Four Forces-Analysis
Entry
For the current Pakistan market for fast food, it is not difficult for a
fast food restaurant to
enter the market. However, it would be
extremely difficult to take over already running major fast food chains'
dominancy in Pakistan or even make a significant amount of profit.
While there are enough people in urban Pakistan for any restaurant to
survive, KFC holds
the first-mover advantage into the 'non-veg food
specialty food segment' that gives them
free
reputation.
Customers,
especially children who are used to going to KFC as a treat or
reward
from their parents or grandparents, are not going to want to go to other
restaurants
theyve never heard of. The brand name is already
established. Also, there is already a large variety
in
the
numerous
western-style dining places in Pakistan , such as McDonalds, Pizza
Hut,
Domino's and Subway, and any new fast-food entrants would just be
presenting
something very similar to whats already there. While small
Neighborhood restaurants generally have low barriers to entry, these are
the barriers to entry for similar restaurant businesses to enter the fast-food
chain market.

Buyer/Supplier Bargaining Power

The customers of KFC, especially as individual buyers, have almost no
bargaining power
because if only one customer threatens to no longer
eat at KFC, the store is not going to lower its price because the cost of
losing one customer is not very great. The suppliers, like
the
buyers,
have very little bargaining power.

XXXI

In terms of food, KFC, upon its move into Pakistan, urged many of its
U.S. suppliers to also extend branches into Pakistan. KFC also began
helping local suppliers by giving them
technological
support
to
improve their products. This is a brilliant strategy because the supplies
that KFC would otherwise need to import from the U.S. can now be
obtained domestically, and if the U.S. suppliers decide to raise their
prices, KFC can easily switch to the local suppliers. This gives us a brilliant
strategy.
With this strategy, KFC created competition among its suppliers,
lowering the supplier
bargaining power. In terms of human resources,
labor cost is extremely low because the
supply of non-skilled workers
great exceeds the demand for them. With so little buyer and
supplier
bargaining powers, KFC is able to have a very tight control over its prices
and expenditures.

Substitutes and Complements

As mentioned above, there are a few major competitors in the fastfood industry in Pakistan for KFC, namely McDonalds, Pizza Hut,
Domino's and Subway. The substitute products, in
this case, would be
burgers, pizza, and sandwiches. Though they are competitors, their
primary products differ greatly from each other, in that they sell,
chicken, burgers and fries,
pizzas, and sandwiches, respectively.
Traditional Pakistan dining, home-cooked meals, and grocery stores with
ready-to-eat foods are also substitutes, as families could choose any one
of these over fast food for a meal. These substitutes are definitely
considered healthy as
compared to the fast food chains. Even foods
from street vendors count as substitute goods.
While other fast foods serve as substitute to KFC, they can also serve
as complements for fast foods as a whole. If the general price of fast foods
goes up,KFCs price rises as well, and
the same can be said of the
quantity sold of these products, which make them complements to each
other. KFC also sets up stores located near popular tourist attractions, so
tickets to these tourist spots are also complementary goods because the
more people tour these
attractions, the more customers KFC will get.

Rivalry
XXXII

Unlike what one would expect, KFC has little rivalry with similar fastfood chains in Pakistan. The primary reason is that their core products
are different, as in they sell different kinds of fast foods with very different
tastes and styles. For example, if KFC raised its price for chicken by a
small amount, Pakistan chicken lovers who may not be as accepting to
pizzas (many Pakistani people strongly dislike the taste of cheese) are
not going to switch to
Pizza Hut just because the price for KFC
increased. In addition to that, these restaurants have such different target
customers that the fluctuation of price for one restaurant is not going to
affect the others. For example, a full meal at KFC ranges about Rs. 100,
whereas a full meal at Pizza Hut can cost over Rs. 300. The drastic
difference in price assures no price competition between these
restaurants.

Project Report
On

XXXIII

Chapter No # 6th
Current Target Market

Department of Business Administration

Preston University
Peshawar

Current Target Market

Promotions
In Pakistan KFC not advertise there products too much because
people KFC
due to its reputation in other countries. They promote their products
through
special packages. They promote there products through billboard,
pamphlets
and through other promotion strategies.

Segmentation
XXXIV

KFC has divided the market of Pakistan into distinct groups of

customers with
different demands, tastes and behavior who require separate
products or
marketing mix.
In Pakistan 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 Basis
In demographics their first segment is consisted of the income
factor i.e.
high income, average income and low income.

Behavior
In 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 quality
XXXV

Geographical Basis
On the basis of the geographical factor we have divided our
market in three
main segments.
Urban areas
Sub urban areas

Profile criteria:
1.Gender: KFC is for each gender both male and female.
2.Income: Everyone can use the KFC service upper and middle class .
3.Age: age limitation for using this product above 15
4.Occupation: By profession also everyone can use this product means
businessman
student workers and other peoples.
5. Education: It has no need more education that why the person who
know something can easily enjoy with this product.
6. Family life cycle: KFC is suitable in every stage of life like single
married couple and also
those who have children can use this product.
7. Lifestyle: This product is used in every level of social class like
upper, middle class.
8. Attitude : When the customers once buy this product after that they
can use the
product continuously.
9. Purchasing decision: Often KFC changes the purchasing decision of
customers
because of its good attributes.
10. Geographic region: Geographically KFC is used in every part of
the country as well as all over the world.

Product positioning
XXXVI

Customer perceive this product as a unique product that other are not
giving .

Attitudes
The attitudes of the public is very good people like our this new product like
others.

Purchasing process:
Many people come from home to eat this , and some make impulse decision
as they saw
it .

Market Coverage Strategy

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

Target Market For Fast Food

After evaluation of various segments, KFC has decided to target the market
of Urban
and Sub-urban Areas of Pakistan.

Product usage
People are educated and they want variety in their diet.
Normally people of rural areas dont 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.
XXXVII

Population density is higher in Urban Areas as compared to Rural

Areas, so the number of customers are more in Urban Areas.

Economic Analysis of Market

A market in this context refers to a number of all actual and potential
buyers of a product
(Kotler et al 2003). These buyers have a need to satisfy their needs
through exchange . These needs make up the demand for particular
products and services. Several components must
be considered, as all
these components have a direct or indirect impact on KFCs success.
Changes in the below described components over the last couple of
years have led to big
changes in peoples attitudes towards healthy food. It explains why
Australians today
want to eat healthy and nutritious-rich food in order to keep
themselves healthy and that
KFC must adjust their range of product and their company image to
appeal to these new
expectations, people have .

Macro environment
KFC operates in a larger macro environment of forces that creates
opportunities, but also
threats. (Kotler et al 2003). A company such as KFC usually cannot
influence trends in
the macro environment, as they affect people and organisations on a
larger scale.
However, KFC has to carefully examine macro environmental trends
and must create
competitive responses to such trends. There are six major macro
environmental forces
KFC has to take into account.
XXXVIII

Micro environment
on
its

The microenvironment consists of all forces that are close to KFC, and
which KFC has an impact. They directly affect KFCs ability to serve

customers. (Kotler et al 2003). Three major components influence

KFCs micro
environment:

Competitors
Because the fast food market in India is highly competitive, KFC faces
a wide number of
direct and indirect competitors. KFCs main
competitors are fast food chains such as
McDonalds and Dominos,
which are already well established throughout Pakistan .
McDonaldss in particular is a direct competitor, as they have already
successfully
introduced their Salads plus line , which directly targets healthy food
conscious Pakistanis. But, there are a number of other competitors that is
also focusing on chicken types products. All this competition makes it
quite difficult for KFC to maintain or even broaden
their customer base.
However, with the introduction of a new and healthy product range, KFC
can differentiate itself from most competitors and will gain a competitive
advantage.
XXXIX

Customers
KFCs customer market consists solely of the consumer market (Kotler
et al 2003).
KFCs products are bought by individuals (males, females, singles,
and families).
Therefore, the product range KFC offer should appeal to as many
people within this
consumer market as possible, to ensure that the maximum amount of
products can be sold.
The characteristics of these individuals and a
segmentation of them are discussed later in this report.

Strengths and weakness of competitor

Strengths: 38 products, Attractive Outlets, Huge

Marketing,
Budget, More entertainment for kids

Weaknesses: Same type of Menu, No Home Delivery

How they compete their competitors ?
It is found that KFC compete its competitors by five ways:
KFC compete its competitors through marketing strategy
They offered different packages at different events like ramdan
offer,
midnight offer etc.
KFC compete there competitors by providing good services
They must hired the hard selling persons to market their
product in the
market and motivate their employees for the sake of
organizations and
employees do well and they compete there competitors
KFC has quality products and through these quality products
they
compete their competitors

Current Sales Analysis

Market Share
KFC has a very long history and has the most recognize able
brand in chicken with
over 50% of the market share. It becomes
XL

difficult for the companies like Sub way,

Mc Donalds, Chicken
planet, Dixie or those who may want to enter in the market of
fast
food restaurants.
Due to with over 50% of the market share in fast food industry
KFC has recognition
around the world and has been globally
positioned for many years in Pakistan and to capture the market
share in Pakistan adopts champs philosophy

Environmental Factors and Opportunities

Political :
The operations of KFC are affected by the government policies
on the regulations of
fast food operation. Currently government
are controlling the marketing of fast food
restaurant because of
health concern such as cardiovascular and cholesterol issue and
obesity among the young and children in the country.
Governments also control the license given for open the fast food
restaurant and
other business regulation need to follow such as
for a franchise business. Good
relationship with government in
giving mutual benefits such as employment and tax is a must for the
company to succeed in any foreign market.

Economic:
Though for last 1 year their was economic slowdown all across
the globe but
the sales of KFC and other fast food chains did not slow down to
that extent
that of other sectors in. The GDP (Purchasing Power Parity) is
estimated at
2.965 trillion U.S. dollars in the year 2010. The GDP- per Capita
(PPP) was
2700 U.S. dollars as estimated in 2008. The GDP- real growth
rate in 2007
was 8.7%. Pakistan has the third highest GDP in terms of
purchasing power
parity just ahead Japan and behind U.S. and China. Foreign
direct
investment rose in the fiscal year ended March 31 2007 to about
$16 billion
XLI

from just $5.5 billion a year earlier. There is a continuous growth

in per
capita income; Pakistans per capita income is expected to reach
1000 dollars
by the end of 2007-08 from 797 dollars in 2006-07. This will lead
to higher
buying power in the Hands of the Pakistani consumers. So taking
into
considerations the economic factors of Pakistan KFC is safe. The
only danger to
it will be if there is a terrorist attack in Pakistan and the victim is
KFC.

Socio cultural:
Pakistans population is divided in the following age structure: 014 years 31.8%, 1564 years 63.1% and 65 years and above
5.1%.
There has also been a continuous increase in the consumption of
fast food in
Pakistan. The social trend toward fast good
consumption is changing and Pakistan has
seen an increase of 90%
fast food consumption from the year 2002- 2007. This increase is far
greater than the increase in the BRIC nations of Brazil (20 per cent),
Russia (50 per cent) and China (almost 60 per cent). Thus this
shows a positive trend for fast food industries in Pakistan.

Technological:
The Pakistani fast food Industry is heating up with a lot of
foreign players entering the Pak market. The technological know how
and expertise will also enter the Pak
market with an increase in
competition. With the lower rates and increase technology the fast
food counters are attracting youth by giving them attractive deals. For
e.g. KFC and Dominos pizza. For a fast food restaurant, technology
does not give a very
high impact on the company and it is not a
significant macro environment variables.
However KFC should be looking to competitors innovation and
improve itself in
term of integrating technology in managing its
operation. For example in inventory
system, supply chain
management system to manage its supply, easy payment and
XLII

ordering systems for its customers and wireless internet

technology. Implementation of technology can make the
management more effective and cost saving in the long
term.
This will also make customer happy if cost savings results in price
reduction or promotional campaign discount which will benefits
them from time to time.

Environmental:
As one of world largest consumer of beef, potatoes and chicken,
KFC always had
been critics for world environmentalist. This is
because high consumption of beef causing the green house effect by
methane gasses coming from the cows ranch.
Large-scale
plantation has effect the environment and lost of green forest opening
for plantation activities.
Vegetarian environmentalist criticizes the fast-food giant for
cruelty to animals and
slaughtering.
In America, once KFC want to introduce whale burger causing
uproar because whales are endangered species. Before using paper
packaging, KFC once had been criticized
for being insensitive to
pollution because of using ne based packaging for its food products.
Imagine millions of people purchase from fast food operator and how
is the
impact to world environment by throwing away those hard
to recycle packaging.

Our world is getting concern on environment issue and business

operating here
should not just care for profit, but careful usage
of world resources for sustainable development and care for
environment safety and health for our future generation.
Critics
and concern from all public or activist should be review and support if
necessary to ensure we play our social responsibility better.

Legal factors:
As a certified fast food operator, there are many regulations and
proceduresthat KFC
should follow. For example is the Halal
certification that becomes a concern to Muslim consumers. KFC
should protect its integrity and consumer confidence by
ensuring
all materials and process are as claimed or must followed.
XLIII

Other legal requirement that the business owner should follow as

stipulated in laws are such as operating hours, business
registration, tax requirement, labor and
employment laws and
quality & environment certification (such as ISO) in which the
outlethas been certified. The legal requirement is important
because the offenders will
be fined or have their business
prohibited from operating which can be disastrous.

Summary of current situation

SWOT analysis mean strength, weakness, opportunities and

threats and the SWOT analysis of KFC are:

Strengths
Goodwill 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 Pakistan, where the company is among the leading fast
food giants. The brand is recognized and trusted in Pakistan 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 Pakistan 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 Chickfill 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.

Weaknesses
XLIV

KFC 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.
KFC has not yet invested much on R&D, and innovating new
products for Pakistan Markets. This may lead to failure of their
products as they are not in line with the Pakistan mind set,
peoples taste and preferences and their likes and dislikes. This
may prove fatal for the company.

Opportunities
New Markets: Globalization has opened doors for new markets
for the company. As the developed markets are mostly saturated,
the developing countries like Pakistan and China promises a
good market and generation of demand in the future. With more
than 70% of the markets in Pakistan being unexplored and un
organized, 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 Pakistan. 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 Pakistan mindset is fast
changing.
Large Youth population: Pakistan 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.

XLV

Threats
Competition: Competitor companies like McDonalds are fast
catching up with the market.McDonalds with sales of more than
19 billion in 1999, accounted for 15 percent of the sales of the
nations top 100 restaurant chains.
Organisations 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 organizations, questioning the way
KFCs suppliers are threatening the chicken, before they got
slaughtered. Anti-KFC campaigns, such as the one from PETA are
affecting KFCs 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.

XLVI

Project Report
On

Chapter No # 7th
Marketing Strategies of KFC

XLVII

Department of Business Administration

Preston University
Peshawar

Marketing Strategies Of KFC

There 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 Pakistanis people are also
following 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.
XLVIII

KFC gives more priority to Family.

Marketing
Since 1982, KFCs All-American salute to Mothers
national card contest has been KFCs way of honoring moms
and their families for making mothers Day KFCs 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 Mothers Day, were sent to thousands of schools
nationwide.

There are 4 Ps of Marketing:

1.
2.
3.
4.

Production
Pricing
Promotion
Placement

1st. 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 is specially 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 products are:
Products:
Original recipe chicken
XLIX

Extra Tasty CrispyTM chicken

Hot WingsTM pieces
Tender Roast chicken
Chunky Chicken pot pie
Kentucky Nuggest
Colonels 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:
1) Taco bell
2) Pizza Hut
3) Long john silvers

2nd. 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
L

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 25% mark up on sale. The manufacturer mark up
price is calculated:
Mark Up Price = Unit Cost / (1 Desired Return on Sales) =1.135 / (1-.25)
= 1.135 / 0.75 = $1.51

3rd . 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 and one of the most important thing that they uses
media
especially the newspapers to promote their products. They are
also creating awareness
among the masses about their existing product
range as well they tell us about the future product.

Marketing efforts to be taken by the restaurant:

Paste delivery posters at petrol pumps, flats, colleges, plazas, and
departmental stores.
Distribution of delivery flyers in residential areas, markets, plazas and
institutions (as per the plan)
Visit offices and business places.

4th .Placement:
In the case of the KFC the placement of the product is not important
but the placement of the restaurant is important. The products of the KFC
LI

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 middle class 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.

Competitive analysis
Competitors
You cannot enjoy the business without competitors. No organization can
afford to ignore
LII

there competitors. It is very important for a marketing managers to monitor

the activities
of there competitors, what they are doing? KFC adopted such sort of
strategy that there is
no competitor for spicy chicken, which is made by KFC.
KFC beats its competitors through the revising marketing strategy at every
movement but
the main competitor of KFC are Mc Donalds

Competitive Advantage
KFC

Mc Donalds

Spicy Product
Pakistani People like spicy food
rather than boiled food

French Fries and Burgers

Arabian Rice and Zinger Burger

Big Mac

Free Delivery

Chargers on Home Delivery

Chicken is eaten in very

community

Beef is banned is some community

Local stuff and highly qualified

because local stuff can better deal
with customers

Its stuff is consists of simple

graduates and give them training

KFC uses Top to Bottom and

Bottom to Top approach in their
Management

Mc Donalds use Top to Bottom

approach in their Management

Promotion Issues
Sales promotion
LIII

For the sales pormotion KFC introduced their goods like watches
, keychain,
e.t.c to the customers.

LIV

Advertisement
I do not normally think that advertising stunts are particularly
interesting or creative, but I
thought this one by KFC waswell
inspired.
KFC, the fried chicken franchise , is offering itself as a corporate
sponsor for pothole repair. An actor dress as KFC founder Colonel Sanders
and a road repair group got started this
week in the franchises
hometown of Louisville, Ky. Filling up hundreds of holes.
Many of the repairs are decorated with a while stencil saying the spot
wasRe-freshed by
KFC A play on KFCs ad campaign stressing the
freshness of their chicken . KFC
spokesman Russell Dayer said that
crew is using Regular asphalt, not day old biscuits .

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 "Hellvetica"
LV

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 food
packaging, as well as some
restaurant signage.

Data Analysis
The data we received is as follows:We did a survey on KFC on people with age group of mostly 20-25yrs. Mostly all
were open to KFCs recipe , and following were the results. As seen below KFC
has shown a good report on all the micro factors that we considered.

We also asked questions on whether they would like KFC to start home
delivery services.

LVI

We also inquired How close is the nearest KFC outlet from your
house?

Would you like to order at home or Dine in?

LVII

Questionnaire about KFC in Peshawar

1. Age

7. In terms of location, why do you come to KFC?

2. Your occupation

a. It lies on a main road

3. When did you know about KFC?.......................

c. It looks out of 2 roads

4. Why do you choose KFS but other restaurants?

d. Others.

(You can tick more than 1 option)

b. It lies next to a supermarket

8. Would you prefer order at home or dine in the

KFC ?

5. By what way did you know about KFC?

a. Advertisement on newspaper/magazine

a. Dine In

b. Internet

b. Order at home

c. Family/friends/ colleagues

c. Really doesnt matter

d. Banner

9. What factors of location affect your decision?

e. People working for KFC

a. Near your house

f.

b. On the way to work or school

Leaflets

g. Others

c. Near shopping centre

6. Do you think KFC should start Home Delivery

Service ?

d. Near the red light so that its easy to be

recognized

a. Yes

e. Others.

b. No
c. If Yes ( Why )

LVIII

Toronto Alum06 peace and Conflict

studies , International Relations
+001-647-2845838 (
an_wared@hotmail.com ) (
http://arashwared.blogspot.com/ )

10. What do you think about the parking area at

KFC?
a. Good
b. Normal
c. Bad
(Please, specify your reasons)

Corporate Office ( Karachi )

Cupola Pakistan Ltd. 5th Floor , Park
Tower , Sharah-e-Firdousi
Clifton , Karachi
Tel : 92-21-5877976 (
http://www.facebook.com/pages/KFCpakistan )

11. How does the KFCs prestige affect your

decision
a. Very much
b. Normal
c. Very little
12. Does the logo attract you?
Yes..No.

Akhtar Munir
NBP , University Town Branch ,
Peshawar
Tel:+92-333-9157958

(if yes, please specify your reasons)

13. How often do you come to KFC

a. Every 3 days

http://www.coursework4you.co.uk/essay
s-and-dissertations/analysis-ofcompanies/kentucky-fried-chickenkfc/kentuckyfriedchickenkfc.php

b. Once a week
c. Once a month
d. Other options.
14. What do you think about the price here?
a. Very expensive

http://www.scribd.com/doc/6546600/Qu
estionnaire

b. Expensive but still payable

c. Reasonable

http://foodcourt.pk/index.php?
option=com_wrapper&Itemid=113

d. Cheap
15. How do you feel about KFC's food?
a. Delicious

http://www.kfc.com/contact/

b. Good

http://www.pueblo.gsa.gov/

c. Normal
d. Not Good

http://www.kfcpakistan.com/

17. What are your suggestions for improving KFC's

service quality? (If any)

Thank you very much for your

cooperation!

Reference
Arash.N.Wared
LIX

Conclusion
It is clear from the above report that a high number of
people actually like to order from their home or workplace
rather than coming. This may be due to more convenience,
time shortage or just not willing to come and dine. Certainly
the home delivery market is huge and KFC can take well
advantage of the situation.
Thus it would be in the best interest of the company to start
the service as soon as possible and capitalize on the
opportunity. KFC expects a
rise in the orders by at least 20% by starting this service.
Therefore, to conclude we would say that KFC should
definitely have a home delivery service.

_____________________________________________________________________