This action might not be possible to undo. Are you sure you want to continue?
Amity School of Communication has given me an opportunity to show my intellectual ability through an integrated project and allowing me to decide the service sector on which I want to make my project. For this I have chosen the KFC food chain. KFC is the growing brand in the world for food industry. KFC basically deals in chicken recipes whose main focus in crispy and deep fried chickens. To know the market response of KFC I visited various chains of KFC and did a survey on the public (who are the basic consumers of the KFC). I visited KFC chain of Noida Sector18, Lajpat Nagar, GIP(Noida), and Hyderabad. I concluded that according to the areas the demand keeps on fluctuating, like there is more demand in Sector 18 market chain of Noida in comparison to GIP mall and have the maximum demand in Lajpat Nagar. After the survey on chains I did a survey on the residents of cities through a feedback form.
Fast food chains are amongst the most rapidly globalising businesses in the world. Kentucky Fried Chicken popularly known as KFC started its Indian operations in Bangalore, 1995. KFC at that time was on a worldwide expansion spree, with India being its next market for setting up a string of outlets. This Project will broadly look into the entry of KFC in India and its success and failures of their internationalization process. A booming Indian economy and millions of the population hungry for consumerism meant that KFC could expand rapidly into the market to beat their competitors to the punch and capitalise on such a promising opportunity.
This research focuses on the marketing strategies of KFC and the changing behaviour of consumers towards KFC. This research focuses on the 4Ps of the marketing.
The reason for choosing KFC as my topic is simply because it is one of the biggest fast-food giants in the market today. KFC has become synonymous to spicy and crunchy chicken. Everybody loves it and desires for it.
Collection Method: A) Primary Data B) Secondary Data C) Primary data 3.Interaction with people in day to day life. 4.Data collected on the basis of questionnaire. D) Secondary data 5. Business Magazines 6. Newspapers
7. Relevant information form website of KFC 8. Other Websites
• • • • • To study the evolution of KFC and its introduction into India To find out the marketing strategy of KFC The service quality prevailing in KFC To find out the service quality of KFC in various other areas and find out the deficiency. To understand the behaviour and attitudes of consumers of KFC
Biases and Prejudices
• • • KFC is an international brand and hence it is expensive KFC is considered as junk food and unhealthy PETA issues affecting costumers
• • • • Some retail owners (Branch owner) refuse to give information Illiteracy among some customers is reflected as far as filling questionnaire is concerned Less cooperation from the customers due to busy modern life Since the survey is conducted only on 25 customers, therefore analysis cannot be made accurately
Significance of the Research
Research on KFC has helped me understand the fast food industry that’s been dominating over the years. KFC has been in India for a long time now and this research helped me know the reasons for its survival.
Although there are lot of fast food restaurants in India like McDonalds, Subway, Dominos, Pizza hut, etc. KFC has its own large consumer group.
MAIN RESEARCH CONTENT
OVERVIEW OF THE COMPANY
KFC Corporation, based in Louisville, Kentucky, is the world’s most popular chicken restaurant chain, specializing in Original Recipe ®, Extra Crispy TM, and Colonel’s Crispy Strips® chicken with home style sides and five new freshly made sandwiches. Every day, nearly eight million customers are served around the world. KFC’s menu everywhere includes Original Recipe® chicken—made 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 products—from 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 Colonel’s spirit and heritage are reflected in KFC’s brand Identity– the logo features Colonel Harland Sanders, one of the best recognized icons in the world. KFC specialized in chicken and they say, “No body’s cooking like KFC today and we are the chicken experts” “There is no competitor for spicy chicken which is made by KFC”
It is a $13 billion brand based out of Kentucky and is the leading QSR around the world which is based in Louisville. was born on September 9.000 restaurants in more than 80 countries and territories around the world serving up the Colonel’s Original Recipe. 1980 aged 90. Harland Sanders was a master of a range of regional dishes. By the time he was seven. his father died and his mother was forced to go to work while young Sanders took care of his three year old sibling. Yum! 5 . 1890. Sadly.KFC History Way back in 1930’s Colonel Harland Sanders got some distinguished Kentucky folks lickin’ their fingers.When he was six. He sold his chicken on the highway! But when the highway was removed. motel and cafe at Corbin. founder of the original Kentucky Fried Chicken. in the mid 1930s at the age of forty. It is here that Sanders began experimenting with different seasonings to flavour his chicken which travellers loved and for which he soon became famous. Later that year. It’s been in fashion since then! Colonel Harland Sanders. KFC now stretches worldwide with more than 13. from that humble beginning. a town in Kentucky about 25 miles from the Tennessee border. Colonel Sanders bought a service station. This meant he had to do much of the family cooking. During the next nine years he developed his secret recipe of 11 herbs and spices and the basic cooking technique which is still used today. By 1964. The 65-year-old gentleman had started a worldwide empire using his $105 social security cheque. Kentucky. His legacy lives on with KFC restaurants all over the world. Colonel Sanders sold his interest in the United States operations for $2 million. Sander's fame grew. Colonel Harland Sanders had 600 franchise outlets for his chicken across the United States and Canada. he sold up and travelled the United States by car. cooking chicken for restaurant owners and their employees. After a series of jobs. If the reaction was favourable Sanders entered into a handshake agreement on a deal which stipulated a payment to him of a nickel for each chicken the restaurant sold. Colonel Harland Sanders passed away on December 16th.
For the vegetarians in India. a company that owns other leading brands like Pizza Hut. juicy inside” Hot and Crispy Chicken.” says Chicago restaurant manager Adonis Chapel. founded by Colonel Harland Sanders in the year 1938. Bangalore was chosen as the launch pad because it had a substantial upper middle class population. KFC opened its first fast-food outlet in Bangalore in June 1995. with a trend of families eating out. He explains since KFC started 6 . Chicken Bucket and a host of beverages and desserts. Toasted Twister. South Africa. the spicy. KFC is growing rapidly and today has presence in 13 cities with close to 72 restaurants.1 Chicken QSR and has industry leading stature across many countries like UK. Veggie Snacker and Veg Rice meals. KFC IN INDIA Foreign fast food companies were allowed to enter India during the early 1990s due to the economic liberalization policy of the Indian Government. In India. KFC also has great tasting vegetarian offerings that include the Veggie Burger. Mission Statement “Recognition: we find reasons to celebrate the achievement of others and have fun doing it. Taco Bell. “is right up there with “Customer Focus” and “Belief in People”. Australia. Recognition is everybody’s responsibility. On receiving permission to open 30 new outlets across the country. Renowned worldwide for it’s finger licking good food.Brands own 5 brands. It was considered India's fastest growing metropolis in the 1990 KFC is the world’s No. China. out of which KFC is the largest brand within the Yum! Portfolio. juicy & crunchy Zinger Burger. KFC was among the first fast food multinationals to enter India. Malaysia and many more. USA. flavourful and juicy Original Recipe chicken. KFC offers its signature products in India too! KFC has introduced many offerings for its growing customer base in India while staying rooted in the taste legacy of Colonel Harland Sander’s secret recipe. KFC is the largest brand of Yum Restaurants. Its signature dishes include the “crispy outside. A&W and Long John Silver.
providing a pleasant dining experience. is united to protect. in a clean and convenient location. 7 . etc. Be open. Reward and respect the contributions of each individual at KFC. honest and direct in our dealings with one and other. Burger King. serving good value by providing innovative chicken-based products and consistently. they are to expand as a business whether that’s to be a worldwide business or just to open up a few more restaurants around the country to provide a better service/faster service/better customer service to beat competitors/rivals such as McDonalds. To establish in India KFC’s position as leading WQSR (Western Quick Service Restaurant) chain. with fast friendly. Consistently deliver superior quality and value in our products and services. they work better for you. promote and advance the mutual interests of all member franchisees and the Kentucky Fried Chicken system. Expand and update training with time and be the best we can be and more. Inc. they are happier. Generate consistently superior financial returns and benefits our owner and employees.” Vision Statement "The Association of Kentucky Fried Chicken Franchisees.encouraging informal recognition. At all times we must be dedicated to providing excellent and delighting customers. Maintain a commitment to innovation for continuous improvement and grow. The aims and objectives of KFC are not only to sell chicken to make money and make a profit. Values of KFC • • • • Focus all our resources to our restaurants operation because that is where we serve our customers. things have really changed. “You keep employees longer. striving always to be the leader in the market place changes." Aims and Objectives • • • • Build an organization dedicated to excellence.
Reward result and not simple efforts. Work as a team.• • • • • Commit ourselves to the highest standard to the personal and professional integrity at all times. It stands for our commitment to provide the best food and best experience for the best value. on every occasions and you will be playing role in delivering CHAMPS to our customers. Encourage new and innovative ideas because these are the key to our competitive growth. Dedicate ourselves to continuous growth in sales. CHAMPS stand for the six universal areas of customer expectation common to all cultures and all restaurants concepts. THE CHAMPS These are: 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. profit and size of organization. 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. everyday. 8 .
While small Neighbourhood restaurants generally have low barriers to entry. have very little bargaining power. Customers. The brand name is already established. it would be extremely difficult to take over already running major fast food chains' dominancy in India or even make a significant amount of profit. especially as individual buyers.Situational Analysis PORTER’S FIVE –FORCES ANALYSIS OF KFC Entry of New Competitors For the current Indian market for fast food. especially children who are used to going to KFC as a treat or reward from their parents or grandparents. such as McDonald’s. Domino's and Subway. are not going to want to go to other restaurants they’ve never heard of. these are the barriers to entry for similar restaurant businesses to enter the fast-food chain market. the store is not going to lower its price because the cost of losing one customer is not very great. Also. However. Buyer/Supplier Bargaining Power The customers of KFC. The suppliers. 9 . have almost no bargaining power because if only one customer threatens to no longer eat at KFC. Pizza Hut. and any new fast-food entrants would just be presenting something very similar to what’s already there. While there are enough people in urban India for any restaurant to survive. like the buyers. it is not difficult for a fast food restaurant to enter the market. KFC holds the first-mover advantage into the 'non-vegetarian food specialty food segment' that gives them free reputation. there is already a large variety in the numerous western-style dining places in India.
KFC has little rivalry with similar fast-food chains in India. KFC’s price rises as well. With so little buyer and supplier bargaining powers. would be burgers. labour cost is extremely low because the supply of non-skilled workers great exceeds the demand for them. 100. upon its move into India. if KFC raised its price for chicken by a small amount. Traditional Indian dining. pizza. In addition to that. This gives us a brilliant strategy. whereas a full meal at Pizza Hut can cost over Rs.S. Rivalry Unlike what one would expect. KFC also sets up stores located near popular tourist attractions. While other fast foods serve as substitute to KFC. the more customers KFC will get. These substitutes are definitely considered healthy as compared to the fast food chains. Domino's and Subway. Even foods from street vendors count as substitute goods. The primary reason is that their core products are different. With this strategy. they can also serve as complements for fast foods as a whole. Though they are competitors. in this case. urged many of its U. In terms of human resources. and sandwiches. and grocery stores with ready-to-eat foods are also substitutes.In terms of food. 10 . KFC. which make them complements to each other. burgers and fries. The drastic difference in price assures no price competition between these restaurants. homecooked meals. suppliers decide to raise their prices.S. in that they sell. namely McDonald’s. Substitutes and Complements As mentioned above. these restaurants have such different target customers that the fluctuation of price for one restaurant is not going to affect the others. and sandwiches. KFC also began helping local suppliers by giving them technological support to improve their products. If the general price of fast foods goes up. and the same can be said of the quantity sold of these products. as families could choose any one of these over fast food for a meal. KFC created competition among its suppliers. For example.S. Indian chicken lovers who may not be as accepting to pizzas (many Indian people strongly dislike the taste of cheese) are not going to switch to Pizza Hut just because the price for KFC increased. chicken. as in they sell different kinds of fast foods with very different tastes and styles. Pizza Hut. a full meal at KFC ranges about Rs. 300. KFC can easily switch to the local suppliers. For example. suppliers to also extend branches into India. so tickets to these tourist spots are also complementary goods because the more people tour these attractions. This is a brilliant strategy because the supplies that KFC would otherwise need to import from the U. can now be obtained domestically. there are a few major competitors in the fast-food industry in India for KFC. and if the U. respectively. The substitute products. their primary products differ greatly from each other. pizzas. lowering the supplier bargaining power. KFC is able to have a very tight control over its prices and expenditures.
They have made segments of the market on the following bases. taste and price. Following are the different possible segments in this regard. average income and low income. tastes and behaviour who require separate products or marketing mix. high income. • Demographical • Behaviour • Geographical By using these three bases they segmented the market as under. 11 . DEMOGRAPHICAL BASIS In demographics their first segment is consisted of the income factor i. In India the niche marketing is being used for particular classes of people.TARGET MARKET Segmentation KFC has divided the market of India into distinct groups of customers with different demands. • Upper middle class • Middle • Family – Full nest BEHAVIOUR In behavioural aspect they segmented the market on the basis of quality.e.
8. 10. 6. 9. Income: Everyone can use the KFC service both upper and middle class. • Urban areas • Sub urban areas Profile criteria: 1. 5. Family life cycle: KFC is suitable in every stage of life like single. 3. middle class. TARGET MARKET FOR FAST FOOD After evaluation of various segments. Gender: KFC is for each gender both male and female.• • • • Taste conscious Quality conscious Class conscious Combination of price and quality GEOGRAPHICAL BASIS On the basis of the geographical factor we have divided our market in three main segments. Purchasing decision: Often KFC changes the purchasing decision of customers because of its good attributes. Age: age limitation for using this product is above 15 4. Education: It needs no education and needs only taste buds to easily enjoy this product. students. Product usage • • • • People are educated and they want variety in their diet. Occupation: By profession also everyone can use this product means businessmen. which are slightly higher in price as compared to prevailing prices of local food in the market. 7. Attitude: When the customers once buy this product after that they can use the product continuously. 2. KFC has decided to target the market of Urban and Sub-urban Areas of India. workers and others. 12 . On the other hand people of Urban areas take fast food. Normally people of rural areas don’t take fast food. married couple and also those who have children can use this product. Geographic region: Geographically KFC is used in every part of the country as well as all over the world. Income of the people of urban areas is normally high and they can afford to purchase such products. Lifestyle: This product is used in every level of social class like upper.
In Urban Area there lived people from every walk of life and profit generation is easier than in Rural Areas. No organization can afford to ignore their competitors. Product positioning Customer perceives this product as a unique product. so the Customers are more in Urban Areas. It is very important for a marketing manager to monitor the activities of their competitors. which is made by KFC. and some make impulse decision as they see it. Attitudes The attitude of the public is very good people like our this new product like others. what they are doing? KFC adopted such sort of strategy that there is no competitor for spicy chicken. Population density is higher in Urban Areas as compared to Rural Areas. Competitive analysis Competitors You cannot enjoy the business without competitors. KFC beats its competitors through the revising marketing strategy at every movement but the main competitor of KFC is McDonalds COMPETITIVE ADVANTAGE KFC McDonalds 13 . Purchasing process: Many people come from home to eat this.• • • • People of Urban Areas are more quality conscious than the people of Rural Areas.
but also threats. Several components must be considered.Spicy Products Burgers and French Fries Indians like spicy products instead of boiled food Chicken Thali and Zinger Big Mac Chicken is communities eaten by most Beef is banned in India Local Staff and Highly Qualified Its Staff consist of simple Graduates because local staff can better deal and with the customers give them training KFC uses Top to Bottom and Bottom McDonalds Uses Top To Bottom to Approach. 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. Changes in the below described components over the last couple of years have led to big changes in people’s attitudes towards healthy food. These buyers have a need to satisfy their needs through exchange. as all these components have a direct or indirect impact on KFC’s success. people have. (Kotler et al 2003). KFC has to carefully 14 . A company such as KFC usually cannot influence trends in the macro environment. Top Approach in Management. Macro environment KFC operates in a larger macro environment of forces that creates opportunities. Economic Analysis of Market A market in this context refers to a number of all actual and potential buyers of a product. However. as they affect people and organisations on a larger scale. These needs make up the demand for particular products and services.
and on which KFC has an impact. There are six major macro environmental forces KFC has to take into account. Three major components influence KFC’s micro environment: Figure 2 – Micro Environment Competitors Because the fast food market in India is highly competitive. Figure 1 – Macro Environment Micro environment The microenvironment consists of all forces that are close to KFC. KFC’s main competitors 15 . KFC faces a wide number of direct and indirect competitors.examine macro environmental trends and must create competitive responses to such trends. They directly affect KFC’s ability to serve its customers.
7%. which directly targets ‘healthy food’ conscious Indians. Customers KFC’s customer market consists solely of the consumer market. 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. Economic: Though for last 1 year there 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.965 trillion U. 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. and China. KFC can differentiate itself from most competitors and will gain a competitive advantage. McDonalds’s in particular is a direct competitor. The GDP.per Capita (PPP) was 2700 U.S. But. to ensure that the maximum amount of products can be sold. Therefore. with the introduction of a new and healthy product range. dollars in the year 2010. There is a continuous growth in per capita income. The GDP. 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. India’s per capita income is expected to reach 1000 dollars by the end of 2007-08 from 797 dollars in 2006-07. Foreign direct investment rose in the fiscal year ended March 31 2007 to about $16 billion from just $5. singles. females. Factors affecting KFC Political: The operations of KFC are affected by the government policies on the regulations of fast food operation. However. and families). which are already well established throughout India. The characteristics of these individuals and a segmentation of them are discussed later in this report. the product range KFC offer should appeal to as many people within this consumer market as possible.S. as they have already successfully introduced their Salads plus line. dollars as estimated in 2008. The GDP (Purchasing Power Parity) is estimated at 2.5 billion a year earlier.real growth rate in 2007 was 8. 16 . KFC’s products are bought by individuals (males.are fast food chains such as McDonald’s and Domino’s. 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. India has the third highest GDP in terms of purchasing power parity just ahead Japan and behind U.S.
Socio cultural: India is the second most populous nation in the world with an approximate population of over 1.1billion people.2007. There has also been a continuous increase in the consumption of fast food in India. KFC and Domino’s pizza. With the lower rates and increase technology the fast food counters are attracting youth by giving them attractive deals.8%. Russia (50 per cent) and China (almost 60 per cent).This will lead to higher buying power in the Hands of the Indian consumers. The only danger to it will be if there is a terrorist attack in India and the victim is KFC. For e. Imagine millions of people purchase from fast food operator and how is 17 . For example in inventory system. supply chain management system to manage its supply. Before using paper packaging. The technological knowhow and expertise will also enter the Indian market with an increase in competition. Technological: The Indian fast food Industry is heating up with a lot of foreign players entering the Indian market. Vegetarian environmentalist criticizes the fast-food giant for cruelty to animals and slaughtering. This increase is far greater than the increase in the BRIC nations of Brazil (20 per cent).1% and 65 years and above – 5. However KFC should be looking to competitors innovation and improve itself in term of integrating technology in managing its operation. Implementation of technology can make the management more effective and cost saving in the long term. KFC once had been criticized for being insensitive to pollution because of using ne based packaging for its food products. 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. once KFC want to introduce whale burger causing uproar because whales are endangered species. In America. Environmental: As one of world largest consumer of beef.g. So taking into considerations the economic factors of India KFC is safe. KFC always had been critics for world environmentalist. technology does not give a very high impact on the company and it is not a significant macro environment variables. potatoes and chicken. 15-64 years – 63.1%. This population is divided in the following age structure: 0-14 years – 31. Large-scale plantation has effect the environment and lots of green forest opening for plantation activities. The social trend toward fast good consumption is changing and India has seen an increase of 90% fast food consumption from the year 2002. For a fast food restaurant. easy payment and ordering systems for its customers and wireless internet technology. This is because high consumption of beef causing the green house effect by methane gasses coming from the cow’s ranch. Thus this shows a positive trend for fast food industries in India.
Critics and concern from all public or activist should be review and support if necessary to ensure we play our social responsibility better.the impact to world environment by throwing away those hard to recycle packaging. Boston Consultancy Group (BCG) Matrix 18 . 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.
Figure 3. Company may decide to completely remove this product from the market if it does not do well soon and start bringing in revenue. It has good demand in the market and brings in huge sales revenue. It has a low market share and although low on expenditure (as company does not spend on its promotion). They have also tried to come into the beverages market by launching its new brand of shakes called KRUSHERS.BCG Matrix QUESTION MARK: Currently KFC have launched a new product in the market. 19 . It has a low market share thus brings low revenue. As it is a fairly new product it comes in the category of the Question Mark in the BCG Matrix. DOG: KFC’s Veg Thali comes under this category. KFC is advertising a lot to popularize this product so there is a lot of expenditure on it. Although company had launched this product much earlier. it has still failed to become a success. The product is mostly CASH NEUTRAL. The development and other expenses are also low and thus this product is a CASH SIRPLUS for the company. it does not bring in much revenue as demand is low. this also results in low demand for this item. CASH COW: KFC’s Chicken Bucket is the most successful product of the company. It has the highest market share amongst all the other products. This product is individually not bringing any profits and is a cash drain for the company. As KFC is known more for its non-vegetarian food.
This product is CASH NEUTRAL for the firm. The profit therefore is generally not very high brought in by this product. But it also has high developmental expenditure involved. by reducing the expenditure Summary of current situation 20 . It has a high market share and brings in high revenue. The company is trying to make this product a cow as well.STAR: The star product of the company is its crispy Boneless Chicken.
KFC has continued to dominate the dinner and take out segment of the Industry. There is huge competition in this segment. Customer Loyalty: Despite gain by Boston Market and Chick-fill A. to less than 56 percent in 2009. The turnover rate in the company is amongst the lowest in the industry. price. This may lead to failure of their products as they are not in line with the Indian mind set. and innovating new products for Indian Markets. India is still mostly a vegetarian dominated cultured society. It therefore has a good head start and enjoys a good chance of becoming a leader in Indian fast food industry. WEAKNESSES • • • • • KFC was losing market share as other Chicken chain increased sales at a faster rate. and customer service. It generates $1B revenue each year. The brand is recognised and trusted in India for its quality products. KFC share of Chicken Segment sales fell from 71 percent in1999. weakness. As the developed markets are mostly saturated. a 10 years drop of 15 percent. KFC has not yet invested much on R&D. the developing countries like India and China promises a good market and generation of demand in the future. KFC customer base remained loyal to the KFC brand because of its unique taste. OPPURTUNITIES New Markets: Globalisation has opened doors for new markets for the company. With more than 70% of the markets in India being 21 . Ranks highest among all chicken restaurant chains for its convenience and menu variety. This may reduce the market share of the company. Goodwill and reputation: The Company certainly has earned a good Employee Loyalty: Employee Loyalty is one of the major strengths of KFC. opportunities and threats and the SWOT analysis of KFC are: STRENGTHS name and reputation by its previous products and services in the market. It is even more recognised in other markets outside India. South India is especially very much so. This may prove fatal for the company.SWOT analysis mean strength. peoples taste and preferences and their likes and dislikes. where the company is among the leading fast food giants.
garlic breads to attract more customers. Currently. KFC has a good scope of expanding its operations in the country. New variety: Company can also come up with new variety in the menu like Pizzas. McDonald’s with sales of more than 19 billion in 1999. Large Youth population: India has a very large share of youth population a compared to other countries.unexplored and un organised. such as the one from PETA are affecting KFC’s brand image in a negative way and result in direct dollar losses. 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. As the young generation are more open to fast foods and demand it more. Anti-KFC campaigns. KFC is under massive attacks from animal organisations. Thus Indian mindset is fast changing. 22 . THREATS Competition: Competitor companies like McDonalds are fast catching up with the market. People are opening up to fast foods more regularly in their daily lives and not just keeping it a once in a month affair. accounted for 15 percent of the sales of the nation’s top 100 restaurant chains. company necessarily needs to look at offshore foreign markets to generate sales and keep up the profits. Cross Culture: Generally there is a good acceptance of American culture of fast food in India. More than 60% of the population is under the age of 30yrs. questioning the way KFC’s suppliers are threatening the chicken. As the US markets are already saturated and leave no or little scope for growth. as less people are consuming KFC chicken Saturated US Market: Now KFC cannot rely on just its home market to generate sales. this is good news for the company. before they got slaughtered.
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. • KFC are moving from Divisional Level to the District level by opening branches • KFC open their outlets on reachable places. It contains everything KFC do it to influence the demand for their products. customer not depend on us. • KFC menu consists of more than 30 products. According to KFC. • KFC gives more priority to Family. • • • • Product (goods and service) Price (value of the product) Promotion (aware the people for product) Place (distribution of product) Marketing mix at KFC The marketing mix of KFC consists of 4Ps. 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. PRODUCT: A product is anything that can be offered to a market that might satisfy a want or need. KFC product planning 23 .MARKETING STRATEGIES OF KFC There are different strategies adopted by KFC for different events. • KFC possess a western culture because some of the Indian people are also following that culture. They market their products on different events and in different activities as they are helping SOS village. • KFC is following Niche Marketing and Societal Marketing techniques. 1.
parties) KFC product line Veg Zinger Veggie Snacker Veg Rice and Strips Veg Strips with Salsa Corn on the cob Coleslaw Krushers Game Box Toasted Zing Kong Box Boneless Chicken Meal Chicken Zinger burger Chicken Delights Bucket Chicken Chicken Rice Meal Chicken Snacker Hot wings Desserts Original Recipe Chicken Thali Soft Drinks BRAND: There are three brands of the KFC: 1) Taco bell 2) Pizza Hut 3) Long john silvers 24 . quick service.• • • • • • • KFC product is classified as consumer product as it has no intermediates. KFC offers specialty goods. Price and quality of the product is always compared. The stock turnover of KFC is high. KFC’s product includes Goods (Burgers. Chicken Meals etc) Services (cleanliness.
Their tagline for this new product is “Living on the Veg”. It is new in the market and hasn’t been launched in all the outlets. Figure 4 – Veg Zinger Product mix strategy The product mix strategies are in relation to: Competitors: KFC has a head-on competition with McDonalds. Wherever they place their products.KFC has introduced a new product “Veg Zinger”. KFC goes there as well. Attributes: 25 . but also 100% veg. KFC is trying so hard to convince people that it is not 100% non-veg.
that it immediately comes in mind. KFC is trademarked registered brand. • • • • • • • KFC's brand identity -. KFC is marketing the entire output under products own brand PACKAGING 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 maximise performance against these three criteria. Master Brand: The brand itself is so dominant. It is distinctive. Recycled Paper KFC’s clamshells and chicken boxes contain as much recycled material as it is legally allowed. Brand of KFC Brand Name: KFC Colour: Red and white Symbol: Colonel Harland Sander’s picture and KFC written with it. By law they are required to have virgin fibre board in any part of the packaging that is in contact with food.The brand of KFC is so strong that it is the attribute itself. It suggests something about product. It is legally protected and registered The brand equity is very high as the value added by brand to the product effects the product selling. adaptable to addition to product line.the logo features Colonel Harland Sanders. Place and Quantity: KFC products are based on high quality and prices. Any virgin fibre comes from board suppliers who use pulp bought from managed forest in 26 . one of the best recognized icons in the world.
Product line is very vast. Product quality assurance. They study the behaviour of the Indian customers. KFC Pakistan does serve the vegetarians. Fried Chicken is its main selling point and controls a monopoly over the Pakistan fast food market. French fries and soft drinks. KFC are enthusiastically complying with the new environmental directives on recovery and recycling of packaging waste. Gradually they trickle down focusing on the middle class to penetrate the market. More broadly. Price is determined according to the rates of the raw materials and policies of the Govt. cleanliness. Environmental concerns Over and above ensuring KFC’s packaging is supplied via recycled or renewable resources. This ensures that any wood cut for paper production is replaced with new plantings. Specialization in fried chicken. Quality. PRICE Price is the any amount of money that customers have to pay while purchasing the product. It-prices its burgers. If the competitor provides the same product at a lower price than the organization usually lowers the price of its product too. In the case of KFC. Their products were high price and targeted only upper class. 27 . Offers delicious and quality product. and service. Charging extra for side dishes. 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. 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. Also KFC follows one price strategy.Scandinavia. Dominoes and Pizza Hut. Price competition We can compare the price of KFC products with McDonald. KFC has specific product features. Conclusion • • • • • • • • • • KFC has made a separate brand image in India.
The products are bit high priced according the market segment and it is also comparable to the standard of their product.89 Billion =$1. Concept of discount is lacking in KFC India.135 Now suppose manufacturer wants to earn 25% mark up on sale.51 • • • • • • • • KFC charge high prices.135 / 0. The employees are trained not to suggest the discounts.9 Billion / $5. The manufacturer mark up price is calculated: Mark Up Price = Unit Cost / (1 – Desired Return on Sales) =1.9 Billion Sales Price of per Chicken Piece = Total Retail Sales / chicken Pieces sold = $8.75 = $1.115 Unit Cost = Variable Cost + Fixed Cost / Chicken pieces Sold = 0.89 Billion Total Retail Sales = $8.25) = 1.115 + 1. Service charges are also high. KFC sells their experiences on high rates. They adopt the cost base price strategy.Cost Based pricing • • • • • KFC prices their product keeping different points in view.02 = $1.135 / (1-. Pricing of the product includes the govt. No clear policy for discount and coupons.115 + 6000000000 / 5890000000 = 0. KFC has targeted the upper class people. tax and excise duty and then comes the final stage of determine the price of their product. 28 .914 Billion Total KFC Chicken Pieces Sold Annually = 5.51 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. In the cost based method we include the variable and fixed cost. Offers different coupons. Calculation of the price under Cost Based Pricing Strategy Total Pounds of Chicken Served in KFC Restaurant Annually = 1.
online vs. PLACE This refers to how the product gets to the customer. KFC enjoys a large number of footfalls every day. business people). etc. cinemas and markets which are mostly populated by the young and those who are in a hurry.• High revenue due to best strategies. also referring to how the environment in which the product is sold in can affect sales. referring to the channel by which a product or service is sold (e. point-ofsale placement or retailing. KFC has no middlemen. colleges. direct where the goods are transferred to the consumer directly. Placement of outlets Due to KFC placing itself close to schools. which geographic region or industry. to which segment (young adults. families. 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. Urban areas are more populated therefore they help with attracting higher revenues. CHANNEL PROCESS KFC works on the flow of good operation techniques i. “Good Operating Manager→ leads to “Good Team Selection →Good Services → Good Targets → Good Revenues through the following internal strategies: • Training • Incentive based targets 29 . KFC distribution KFC has only one channel of distribution i.e.e. This third P has also sometimes been called Placement. 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. Commercialization of urban and sub-urban markets leading to more midsector people that find high-end eating joints too expensive. Target areas Accessibility – Resulting in several outlets to cater to the needs of people in & around the city. Distribution of goods and services KFC does distribution of consumer goods directly to the consumer. retail). for example.g.
a-kind. The unit value of the items is comparatively lower then McDonald’s. Today the Colonel’s Spirit and heritage are reflected in KFC’s brand identity. KFC has a well-equipped sitting area for the customers and a Chicky play area for the kids. 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. Target only city areas KFC has well equipped sitting. KFC has no entertainment in some franchises. KFC is affected by the geographic distribution (they have few outlets then its competitor McDonald’s). Quality conscious people are the main target of KFC. At KFC. KFC promotion sources Advertising Sales Promotion Public Relations Events and Experiences Coupons.• • • • Recognition for good work Performance based bonus Employee benefits to keep them motivated Promotion Vertical marketing system KFC has corporate vertical marketing system because it is centrally owned by its subsidiary Yum Brands. Well trained staff with expert supervisors. Discounts and Bundled packages An organization finds most of its meanings and survival through promotion. 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. Seeking customer’s response for quality. • • • • • 30 . Promotion is the main tool to bring all chicken lovers attention towards its delicious one of. KFC has no intermediaries. Promotion: Promotion is the method used to inform and educate the chosen target audience about the organization and its products. Conclusion • • • • • • • • KFC deals in internal market.
Their advertising media involve: Newspapers. When KFC offers new products then it does product advertising. Figure 5 – Print Ad 31 . The colours used in advertising are Red.Advertising • • • • • • • • KFC by its advertisements derives the desire in the customer to come and enjoy healthy food in their favourite restaurant.g. KFC’s ad’s act as counteracts which means to drive the customer to KFC i. KFC does both the primary demand advertising (“Become a Chicken Fanatic”) and the selective Demand advertising (e. it uses pull advertising strategy. KFC has put big hoardings on the busy areas of India and have an effective advertisement campaign on the media in order to MOTIVATE its customers.e. They spend 2% of its profits on advertisement and use print media and most recently doing televised marketing to promote it products. Pamphlets. “Zinger Meal”). White and blue which itself is recognition for the brand. Billboards and Television. KFC does institutional advertising to stimulate demand.
Sales promotion For the sales promotion KFC introduced their goods like watches. 32 . keychain and so on to the customers.
Figure 7 – graph 1 I also asked questions on whether they would like KFC to start home delivery services. 33 .Figure 6 .Mostly all were open to non-veg food. As seen below KFC has shown a good report on all the micro factors that we considered. and following were the results.Merchandise Data Analysis The data we received is as follows:I did a survey on KFC on people with age group of mostly 20-25yrs.
Figure 8 – graph 2 I also inquired “How close is the nearest KFC outlet from your house? Figure 9 – Graph 3 Would you like to order at home or Dine in? 34 .
Figure 10 – Graph 4 Data interpretation 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. 35 . The largest threat KFC is faced with is the restaurant industry as a whole. KFC fell behind the market in new products and was copying other fast food chains to stay competitive. Therefore. Crisps Pins and Pizza Hut. Conclusion After my research of KFC. But they have to increase other varieties to attract the customers. KFC struggles are much do to the inability to bring new products to the market quickly and its innovation of new products. Certainly the home delivery market is huge and KFC can take well advantage of the situation. I come to conclusion that KFC has a good product as far as chicken items are concerned. to conclude we would say that KFC should definitely have a home delivery service. KFC expects a rise in the orders by at least 20% by starting this service. time shortage or just not willing to come and dine. And they must targets the children. Thus it would be in the best interest of the company to start the service as soon as possible and capitalise on the opportunity. The consumer continues to have many choices when it comes to fast food restaurants. And one more aspect for KFC is that it must also reduce their prices to compete their competitors like McDonald. This may be due to more convenience. as McDonald’s targeting by making a play land because children are the main source and important ones to push their parents to go to their favourite restaurants.
· KFC introduced itself.SUMMARY KFC is one of the most known fast food chains in the world started in the early 1930’s by kernel sanders. 36 . has grown and now it is at maturity stage for the last ten years in India. · Food. fun and festivity. · KFC was launched here as an innovative product.000 restaurants in more than 80 countries and territories around the world. · KFC has a head-on competition with McDonalds · The brand of KFC is so strong that it is the attribute itself. · Their products have high price and targeted only upper class. · KFC first time came to Pakistan in 1997 and was the title of being the market leader in its industry. · KFC has more than 11. this is what KFC is all about. · The marketing mix of KFC consists of 4Ps. It contains everything KFC do it to influence the demand for their products.
APPENDIX FEED US BACK 1. Tick Your Choice (Ö) Perfect Below Avg Food Quality Food Temperature Waiting Time Menu Board Poor Above Avg Average 37 .89 Billion · Profit Margin is Or Mark Up = $225000000 · KFC has only one channel of distribution (direct) · KFC by its advertisements derives the desire in the customer to come and enjoy healthy food in their favourite restaurant.· Total KFC Chicken Pieces Sold Annually = 5. · They spend 2% of its profits on advertisement. · KFC has a good product as far as chicken items are concerned.
How many people were in your group? I was alone Just me and someone For me. Do you want a KFC home delivery service? My dreams are coming true That would help Doesn’t make much of a difference No thanks 38 . three is company 4 or more 4. I like to mostly order at home Sometimes. but I mostly like to dine in No fun without Dine in 5. Would you rather order than Dine in? Yaa.Seating Arrangement Restaurant Temperature Restaurant Cleanliness Music Overall Experience 2. How close is your house to your nearest KFC outlet? Within 1 Km Between 1 – 3 Kms Between 3 – 5 Kms Above 5 Kms 6. When will you be back? Next time I blink (very soon) May be sometime later When I win a Nobel Prize (Never) 3.
com www.Thank You BIBLIOGRAPHY Websites www.com www.kfc.blogspot.hindu.marketingpractice.com Book references • • • 4Ps magazines Advertising Express Marketing Management by Philip Kotler & Armstrong 39 .
This action might not be possible to undo. Are you sure you want to continue?