Professional Documents
Culture Documents
MARKETING STRATERGIES
WITH REFERENCE TO
KENTUCKY FRIED CHICKEN
Submitted by-
Rohit Ahuja
0791491708
BBA (gen) SEM 3
CERTIFICATE
PARAMVEER
ACKNOWLEDGEMENT
ROHIT AHUJA
Introduction of
Company
KFC Corporation, based in Louisville, Kentucky, is the world’s most
popular chicken restaurant chain, specializing in Original Recipe ®, Extra
TM
Crispy , 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
KFC
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 says,
KFC
Pricing Issues
PRICING POLICY FOR PRODUCT OF TWISTER
Goals of KFC
services.
changes.
KFC History
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.
Company 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 colonel’s “finger lickin’ good” chicken dinners are served
annually. And not just in America. The colonel’s 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
15-year-old streetcar conductor in New Albany, Ind., and then as a 16-year-
old private, soldiering for six months in Cuba. After that he was a railroad
fireman, studied law by correspondence, practiced in justice 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 travelers who stopped at his service station in Corbin, KY. He didn’t
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 India
KFC is the world’s No.1 Chicken QSR and has industry leading
stature across many countries like UK, Australia, South Africa,
China,USA, Malaysia and many more.
Values of KFC
Focus all our resources to our restaurants operation because that is
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
Encourage new and innovative ideas because these are the key to our
competitive growth.
organization.
Work as a team.
PHILOSOPHY OF KFC
The CHAMPS Program
Champs stands for our belief that the most important thing each of us
provide the best food and best experience for the best value.
THE CHAMPS
These are:
Cleanliness
Hospitality
Accuracy
Maintenance of Facilities
Product Quality
Speed of Service
customers.
Situational Analysis
Current Products
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.
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,KFC’s 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
Unlike what one would expect, KFC has little rivalry with similar fast-food chains in
India. 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, 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. 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.
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.
KFC Outlets in Delhi
KFC in Central Delhi
KFC in Noida
A-12, Inner Circle,
CP, Delhi-110001 Sector 18,
Store Timing:8:30am to 11pm Noida -201301
Store Timing:11am to 11pm
Segmentation
KFC has divided the market of India into distinct groups of customers with
different demands, tastes and behavior who require separate products or
marketing mix.
In India the niche marketing is being used for particular classes of people.
They have made segments of the market on the following bases.
Demographical
Behavior
Geographical
DEMOGRAPHICAL BASIS
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
GEOGRAPHICAL BASIS
On the basis of the geographical factor we have divided our market in three
main segments.
Urban areas
Product usage
People are educated and they want variety in their diet.
Normally people of rural areas don’t take fast food. On the other hand people of
Income of the people of urban areas is normally high and they can afford to
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
Competitive analysis
Competitors
You cannot enjoy the business without competitors. No organization can afford to ignore
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 Donald
COMPETITIVE ADVANTAGE
KFC McDonalds
considered, as all these components have a direct or indirect impact on KFC’s success.
Changes in the below described components over the last couple of years have led to big
changes in people’s 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
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
Micro environment
environment:
Consumers
Because the fast food market in India is highly competitive, KFC faces a wide number of
direct and indirect competitors. KFC’s main competitors are fast food chains such as
McDonald’s and Domino’s, which are already well established throughout India.
‘healthy food’ conscious Indians. 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
CUSTOMERS
KFC’s customer market consists solely of the consumer market (Kotler et al 2003).
KFC’s 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
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%. India 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
from just $5.5 billion a year earlier. There is a continuous growth in per
capita income; India’s 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 Indian consumers. So taking into
considerations the economic factors of India KFC is safe. The only danger to
it will be if there is a terrorist attack in India and the victim is KFC.
Socio cultural:
India is the second most populous nation in the world with an approximate
population of over 1.1billion people. This population is divided in the
following age structure: 0-14 years – 31.8%, 15-64 years – 63.1% and 65
years and above – 5.1%.
There has also been a continuous increase in the consumption of fast food in
India. The social trend toward fast good consumption is changing and India
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 India.
Technological:
The Indian fast food Industry is heating up with a lot of foreign players
entering the Indian market. The technological knowhow and expertise will
also enter the Indian 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 Domino’s 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 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 cow’s 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 procedures
that 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.
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 outlet has been certified. The legal requirement is
important because the offenders will be fined or have their business
prohibited from operating which can be disastrous.
KFCIndia - BCGMatrix
Crispy
Boneless
Chicken
Krushers
?
Chicken
Bucket
Veg
Thali
DOG:
KFC’s Veg Thali comes under this category. Although company had launched this
product much earlier, it has still failed to become a success. As KFC is known more for
its non-veg food, this also results in low demand for this item. It has a low market share
and although low on expenditure (as company does not spend on its promotion), it does
not bring in much revenue as demand is low. The product is mostly CASH NEUTRAL.
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. It has good demand
in the market and brings in huge sales revenue. The development and other
expenses are also low and thus this product is a CASH SIRPLUS for the
company.
STAR:
The star product of the company is its crispy Boneless Chicken. It has a high
market share and brings in high revenue. But it also has high developmental
expenditure involved. The profit therefore is generally not very high brought
in by this product. This product is CASH NEUTRAL for the firm. The
company is trying make this product a cow as well, by reducing the
expenditure
Summary of current situation
SWOT analysis mean strength, weakness, opportunities
and threats and the SWOT analysis of KFC are:
STRENGTHS
WEAKNESSES
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.
India is still mostly a vegetarian dominated cultured
society. South India is especially very much so. This may reduce
the market share of the company.
KFC has not yet invested much on R&D, and innovating new
products for Indian Markets. This may lead to failure of their products as
they are not in line with the Indian mind set, peoples taste and
preferences and their likes and dislikes. This may prove fatal for the
company.
OPPURTUNITIES
New Markets: Globalisation has opened doors for new markets for
the company. As the developed markets are mostly saturated, the
developing countries like India and China promises a good market and
generation of demand in the future. With more than 70% of the
markets in india being unexplored and un organised, KFC has a good
scope of expanding its operations in the country.
New variety: Company can also come up with new variety in the
menu like Pizzas, garlic breads to attract more customers.
THREATS
Competition: Competitor companies like McDonalds are
fast catching up with the market.McDonald’s with sales of more
than 19 billion in 1999, accounted for 15 percent of the sales of
the nation’s top 100 restaurant chains.
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 organisations, questioning the way
KFC’s suppliers are threatening the chicken, before they got
slaughtered. Anti-KFC campaigns, such as the one from PETA are
affecting KFC’s brand image in a negative way and result in direct
dollar losses, as less people are consuming KFC chicken
Saturated US Market: Now KFC cannot rely on just its
home market to generate sales. As the US markets are already
saturated and leave no or little scope for growth, company
necessarily needs to look at offshore foreign markets to generate sales
and keep up the profits.
MARKETING STRATEGIES OF KFC
techniques.
by opening branches
1. PRODUCTION
2. PRICING
3. PROMOTION
4. PLACEMENT
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:
BRAND:
There are three brands of the KFC:
1) Taco bell
2) Pizza Hut
3) Long john silvers
1.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.
=1.135 / (1-.25)
= 1.135 / 0.75
= $1.51
3. Promotion:
Promotion is one of the necessary plates in any form of business or in
other words you can say that promotion is the key of success. If you
promote your product at the right time. KFC also known the
importance and significance of promotion so they uses the bill boards
the major source of advertisement 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.
4.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 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.
Product Issues
General description:
Features:
Quality Control Over Ingredients
K & N’s state-of-the-art Quality Assurance Lab monitors the entire integration process
Safety System) and enjoy the unique privilege of being the first and only HACCP
certified company is India producing chicken and chicken products. Free from diseases
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 maximise
performance against these three criteria.
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 India. 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.
Promotion Issues
Sales promotion
For the sales pormotion KFC introduced their goods like watches , keychain,
e.t.c to the customers.
Advertisment
The advert titled Pool was done by OGILVY & MATHER, New Delhi advertising
agency for KFC ZINGER BURGER (KFC company) in INDIA. It was released in the
June 2009. Business sector is Fast food outlets & restaurants.
Thank You
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 non-veg food, 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 homedelivery services.
We also inquired “How close is the nearest KFC outlet from your house?
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