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Executive Summary Introduction

a. Objectives

4 5 6 31 33 34

3 4 5 6 7

Company Profile Survey Analysis Conclusions and Recommendations Bibliography Annexure

The international market is flooded with various sectors and industries that involve products of daily as well as occasional use for the consumers. The use of the products can vary from industrial purpose to private consumption. One such thriving industry in the modern world is the food and beverage industry. Food and beverage industry combined with the hospitality sector makes up one of the most attractive target sectors for multi-national corporations. The concept evolved from the very first diners in the late 18th century, when the world realized the concept of paid dining experience. Now, the world cannot live without the taste of a McAloo Tikki or the zing of a Zinger. The bottom line being that the order-to-eat MNCs have taken over the market like ants on a corpse, gobbling up every ounce of it. This sector has slowly covered all income groups of consumers and has targeted to achieve a market share of the highest percentage and the ever increasing competition is resulting in more profitable options for the consumers. The consumers are being served with a range of food and beverages to relish on catering every style of taste and preferences. With growing competition the food giants have take their services to a higher level with better decreased serving time, value for money prices and changing specialties in their products. The following report is a comparative analysis of the operational parameters of McDonalds and Kentucky Fried Chicken (KFC) and projects an overview of various factors that differentiate the services of the two food giants. It covers factors like the product variety, customer reach, pricing strategies, hospitality management, customer relationship management, supply chain management and employee satisfaction programmes. The survey was based on the consumers response on their choice between KFC and McDonalds and the basis of their choice was differentiated into various factors.


McDonalds vs KFC McDonalds and KFC are everybodys favorite food trip destinations. When you like hamburgers, McDonalds is always the top option. When you like fried chicken, KFC is always the first thing that comes to everyones mind. The reason for this is these companies claim of particular products that have became their trademark until now. The difference between McDonalds and KFC is mainly the cuisine. McDonalds 1940 is the birth year of McDonalds and they have started everything. Their Speedier Service System that was introduced in their very first restaurant is being followed until now in modern day fast food chains. Their very first mascot was a man with a head of a hamburger that is wearing a chefs hat. It was replaced by McDonalds ever popular clown man. McDonalds is recorded to currently serving 58 million customers each day in 119 countries. Their restaurants differ from their settings, some offer bypassers with their drive thru service, some have playgrounds for kids but are just counter service alone. Some of their restaurants have outer seats as well. McDonalds signature colors are red and yellow. Their well-supported products are their famous hamburgers, breakfast offers, desserts, chicken sandwiches and French fries. For vegetarian customers, McDonalds have offerings that are suitable for them. When it comes to regional branches, McDonalds are known for being fond of offering these countries food taboos for them to have some sort of relationship with people around. For example, Portugal McDonalds are the only ones who have soup in the menu. Another example would be Indonesia for McRice. KFC On the other hand, KFC or Kentucky Fried Chicken started during the Great Depression, which was in the year 1930. It was first named as Sanders Court and Cafe, following the name of Harland Sanders, the original creator from Kentucky. Their current and most popular logo is the cartooned image of Sanders with their acronym, KFC. They are popular for their trade secret, their secret recipe made from 11 herbs and spices that is known to create the finger lickin good flavor of their chickens. Their

basic products are fried chickens, chicken wraps, sandwiches, salads and some roasted and grilled chicken cuisines and desserts, too. Be it McDonalds or KFC, youll surely have a great treat of a meal. Differentiating both will help us recognize as to what wed really love to consume. McDonalds main offer is hamburgers while KFC offers various kinds of chicken dishes.

1. To conduct a comparative analysis on the marketing parameters of McDonalds and KFC 2. To study the various aspects of supply chain management, employee satisfaction and hospitality management of both companies. 3. To conduct survey analysis on the consumers preference of food joint amongst McDonalds and KFC.



Ray Kroc opens his first restaurant in Des Plaines, Illinois and the McDonald's Corporation is created.


Quality, Service, Cleanliness and Value (QSC& V) becomes the company motto.


The 100th McDonald's opens in Chicago.


Hamburger University opens in Elk Grove, near Chicago.


One billion hamburgers sold. Ronald McDonald makes his debut.


Filet-O-Fish sandwich is introduced.


McDonald's Corporation goes public.


The first restaurants outside of the USA open in Canada and Puerto Rico.


The Big Mac is introduced. The 1,000th restaurant opens in Des Plaines, Illinois.


A new McDonald's restaurant opens every day.

The Quarter Pounder is introduced.


Egg McMuffin is introduced.


The first Ronald McDonald House opens in Philadelphia. The Happy Meal is launched.


Chicken McNuggets is introduced. New Hamburger University campus opens in Oak Brook, Illinois. Set in 80 wooded acres. Training is provided for every level of McDonald's management worldwide.

50 billionth hamburgers sold. 1984 Ronald McDonald Children's Charities is founded in Ray Krocs memory to raise funds in support of child welfare.


McDonald's is listed on the Frankfurt, Munich, Paris and Tokyo stock exchanges.


McDonald's opens in Pushkin Square and Gorky Street, Moscow.


The first McDonald's at sea opens aboard the Silja Europa, the world's largest ferry sailing between Stockholm and Helsinki.


Restaurants open in Bahrain, Bulgaria, Egypt, Kuwait, Latvia, Oman, New Caledonia, Trinidad and United Arab Emirates, bringing the total to over 15,000 in 79 countries on 6 continents.


McDonald's opens in India the 95th country.

McDonalds is a leader in convenient foods and beverages, with revenues of about $23 billion and over 1.6 million employees serving the customers worldwide. The company consists of the snack business of Beverages and Foods. PepsiCo brands are available in nearly 115 countries having more than 24,500 restaurants in the world providing 24 hour service having about 1 billon customers to be served all over the world. McDonaldss success is the result of superior products, high standards of performance, distinctive competitive strategies and the high integrity of our people. McDonalds is continuing to expand and introduce new alternative beverages in the market. Approximately 85% of McDonalds restaurant businesses world-wide are owned and operated by franchisees .All franchisees are independent, full-time operators. McDonalds was named Entrepreneurs Number-one franchise for 1997. Mc Donald's in India McDonalds entered India in 1996. McDonalds India has a joint venture with Connaught Plaza Restaurants and Hard Castle Restaurants. Connaught Plaza Restaurants manages operations in North India whereas Hard Castle Restaurants operates restaurants in Western India. Today it has around 211 Restaurants across India. Presently, it has around 57 outlets in the National capital region. McDonalds has developed a menu especially for India with vegetarian selections to suit Indian tastes and preferences. Keeping in line with this, McDonald's does not offer any beef or pork items in India. In the last decade it has introduced some vegetarian and non-vegetarian products with local flavours that have appealed to the Indian palate. There have been continuous efforts to enhance variety in the menu by developing more such products.

McDonald's has also re-engineered its operations repeatedly in its 11 years in India to address the special requirements of a vegetarian menu. Vegetable products are 100% vegetarian, i.e.

They are prepared separately, using dedicated equipment and utensils.

Only pure vegetarian oil is used as a cooking medium. Cheese and sauces are completely vegetarian and egg less. Separation of vegetarian and non-vegetarian food products is maintained throughout the various stages of procurement, cooking and serving. Business model The McDonald's Corporation's business model is slightly different from that of most other fast-food chains. In addition to ordinary franchise fees, supplies, and percentage of sales, McDonald's also collects rent, partially linked to sales. As a condition of the franchise agreement, the Corporation owns the properties on which most McDonald's franchises are located. The UK business model is different, in that fewer than 30% of restaurants are franchised, with the majority under the ownership of the company. McDonald's trains its franchisees and others at Hamburger University in Oak Brook, Illinois. According to Fast Food Nation by Eric Schlosser (2001), nearly one in eight workers in the U.S. have at some time been employed by McDonald's. (According to news piece on Fox News this figure is one in ten). The book also states that McDonald's is the largest private operator of playgrounds in the U.S., as well as the single largest purchaser of beef, pork, potatoes, and apples. The selection of meats McDonald's uses varies with the culture of the host country. McDonalds corp. is currently one of the most successful consumer products company in the world with annual revenues exceeding $23 million and has more than 1.6 million employees. McDonalds

products are recognized and are most respected all around the globe. Currently, its divisions operate in all over the world in beverages, snack foods, and restaurants. The corporations increasing success has been based on high standards of performance, marketing strategies, competitiveness, determination, commitment, and the personal and professional integrity of their people, products and business practices. Products McDonald's predominantly sells hamburgers, various types of chicken sandwiches and products, French fries, soft drinks, breakfast items, and desserts. In most markets, McDonald's offers salads and vegetarian items, wraps and other localized fare. This local deviation from the standard menu is a characteristic for which the chain is particularly known, and one which is employed either to abide by


regional food taboos (such as the religious prohibition of beef consumption in India) or to make available foods with which the regional market is more familiar (such as the sale of McRice in Indonesia). Pricing Strategy Value Ladder strategy:b) Started offering value meals in a range of prices. c) Ensure affordability and attract widest section of customers. d) Brought the customer and provided arrange of entry-level products. e) Try those new items and graduate to higher-rungs. f) E.g. - if a customer starts with McAloo Tikki, he will finally graduate to McVeggie and so in Non veg. 80-20 Menu Board 80% visual. 20% descriptive. Easier for customers to understand what 29, 39, 49, 59, 89, 99 rupee options are. Pricing range, quick service, no-tips environment attracted middle class and students. Package deal The most common strategy in fast food industry. The most preferred style for customers of McDonalds. Plays on Psychological factor of the customer. Consumers appreciate the resulting simplification of the purchase decision.


Advertising Over the years, McDonald's has developed TV advertising campaigns that have become, like McDonald's, a part of our lives and culture. McDonald's commercials have focused not only on product, but rather on the overall McDonald's experience, portraying warmth and a real slice of everyday life. This "image" or "reputation" advertising has become a trademark of the company and created many memorable television moments and themes, including

McDonald's is Your Kind of Place (1967) You Deserve a Break Today (1971) We Do it All for You (1975) Twoallbeefpattiesspecialsaucelettucecheesepicklesonionsonasesameseedbun (1975) You, You're The One (1976) Nobody Can Do It Like McDonald's Can (1979) Renewed: You Deserve a Break Today (1980 & 1981) Nobody Makes Your Day Like McDonald's Can (1981) McDonald's and You (1983) It's a Good Time for the Great Taste of McDonald's (1984) Good Time, Great Taste, That's Why This is My Place (1988) Food, Folks and Fun (1990) McDonald's Today (1991) What You Want is What You Get (1992) Have you Had your Break Today? (1995) My McDonald's (1997) Did Somebody Say McDonald's (1997) We Love to See You Smile (2000) There's a little McDonald's in Everyone (2001) - Canada Only Im lovin' it (2003) McDonald's has for decades maintained an extensive advertising campaign. In addition to the usual media (television, radio, and newspaper), the company makes significant use of billboards(outdoors, on which large advertisements or notices are posted.) and signage, sponsors sporting events from ranging


from Little League to the Olympic Games, and makes coolers of orange drink with their logo available for local events of all kinds. Nonetheless, television has always played a central role in the company's advertising strategy. The taglines were always centralized towards the concept of overall dining experience and complete service satisfaction. Employee benefit plans The Companys Profit Sharing and Savings Plan for U.S.-based employees includes a 401(k) feature, a leveraged employee stock ownership (ESOP) feature, and a discretionary employer profit sharing match. The 401(k) feature allows participants to make pre-tax contributions that are partly matched from shares released under the ESOP. The Profit Sharing and Savings Plan also provides for a discretionary employer profit sharing match at the end of the year for those eligible participants who have contributed to the 401(k) feature. All contributions and related earnings can be invested in several investment alternatives as well as McDonalds common stock in accordance with each participants elections. Participants contributions to the 401(k) feature and the discretionary employer match are limited to 20% investment in McDonalds common stock. The Company also maintains certain supplemental benefit t plans that allow participants to (i) make tax-deferred contributions and (ii) receive Companyprovided allocations that cannot be made under the Profit Sharing and Savings Plan because of Internal Revenue Service limitations. The investment alternatives and returns are based on certain market-rate investment alternatives under the Profit Sharing and Savings Plan.

Training February 24, 1961, Hamburger Universities first class of 14 students graduated


Today, more than 5,000 students attend HAMBURGER UNIVERSITY each year Since 1961, more than 80,000 restaurant managers, mid-managers and owner/operators have graduated from this facility McDonalds invests more than $1 billion annually in training Best Place to Work Fortune Magazine 2005 One out of 5 Best Places to Work in Latin American Finance Department McDonalds Finance Department has two key areas of responsibility: financial reporting and management accounting. Although each of these functions has different priorities, working together ensures the best financial position for the company now and for the future. McDonalds has two sources of profit: Sales made by company-owned restaurants Rental and royalty income from franchised restaurants. Restaurant sales McDonalds retains all of the profit earned by company-owned restaurants. In addition to variable costs, which increase or decrease depending on the level of sales, McDonalds also incurs costs that are largely fixed, for example utilities and advertising, which need to be paid for even before the restaurant makes any sales. Increasing sales and controlling costs are fundamental to ensuring the profit of each restaurant is either maintained or increased. Supply chain management at McDonalds (India) The seed of McDonald's success was sown in 1990 - six years before it started its actual operations. About two decades ago, the QSR (Quick service restaurants) wouldn't have meant much to the Indian F&B segment. Today, the acronym has been seamlessly absorbed in the industry lingo. McDonald's,


arguably, one of the first brands that left a strong imprint on the Indian QSR history, has much to do with this. And its success is credited to its well-established supply management chain. According to Vikram Bakshi, managing director and joint venture partner of McDonald's India (North & East), the company invested about Rs 400 crore even before its first restaurant commenced operations in October 1996. "We had to ensure that we had the back-end linked up to the farm level for delivery commitment." The company also deployed the latest state-of-the-art food processing technology for having a sound supply chain. The transition towards the latest technology, which has been subsequently noticed in other QSRs as well, changed the Indian fast food scenario to match international standards. Tracing its success path McDonald's had been working critically on its supply chain part. Considering, an international brand trying to make inroads into the Indian consciousness, its Indian supplier partners were developed in such a manner that made them stay with the company from the beginning. Bakshi explains, "The success of McDonald's India is a result of its commitment to sourcing almost all its products from within the country. For this purpose, it has developed local Indian businesses, which can supply them the highest quality products required for their Indian operations." As per today's standings, McDonald's India works with as many as 38 Indian suppliers on a long-term basis, besides several others standalone restaurants working with it, for various requirements. McDonald's entered its first distribution partnership agreement with Radha Krishna Foodland, a part of the Radha Krishna Group engaged in food-related service businesses. As distribution centre, the company was responsible for procurement, the quality inspection programme, storage, inventory management, deliveries to the restaurants and data collection, recording and reporting. Value-added services like shredding of lettuce, re-packing of promotional items continued since then at the centers playing a vital role in maintaining the integrity of the products throughout the entire 'cold chain'. The operations and accounting is totally transparent and is subject to regular audits. "McDonald's had worked aggressively to attain the right suppliers and systems that ensured that 90 per cent of yield was indigenous before the doors were opened to consumers. The only products that we


used to import were oil and fries, for which we have had made arrangements to manufacture the oil in India. We ensured that the products developed locally abide by global McDonald's standards," informs Bakshi. Over the last 10 years, the company has gained experience and adopted procedures that helped in maintaining a continuous supply of food products irrespective of the climatic conditions. Bakshi proclaims, "Our logistics and warehousing system is robust that prepares us to deliver products at the same temperature throughout, without a single break in the cold chain." McDonald's Challenges in SCM

Full Supply Chain responsibility Multi Temp. Products - Over 65 % temperature controlled Stores as far as 500 1000 kms Drops per month - Over 1000 Movement mainly by road Regular movement of perishables by air Routing Challenges No margin for error Operations critical client No Stock Outs at store On time delivery record above 97 % Clean delivery record above 99 % Unfailing inbound supply chain The McDonalds Experience Marketing in a services industry is becoming an increasingly complex challenge. The paradigms of service marketing demand a passionate understanding of customer expectations and perceptions, and linking them to product design & delivery as well as operational planning. This is where McDonalds has excelled due to its ability to successfully integrate the customers perspective in its products and operations in a comprehensive manner. The revamped menu in India is an example of McDonalds strategy of integrating the customers perspective in its products. The ultimate aim of Service Marketing is not just to become a Service Leader but to create a Service Brand. The Service Delivery Process is the key to achieving this aim of Service Marketing.


McDonald's has been able to create a great experience for its customers by understanding the nature of the entire Service Delivery Process and the various stages in the process that are exposed to the customers. Transparency in the processes at its outlet has helped McDonalds bring the back office in its outlet at the front so that the customer is able to know the operations and provide feedback on service design improvements. McDonalds focus on its People and their service delivery methods therefore plays a very important role in creating a successful Service Brand. The quality and the consistency of the service delivered by McDonalds have been greatly enhanced by the combination of the factors mentioned above. This has helped McDonalds become Service Leader and a successful Service Brand. This is evident from the fact that very few of its customers opt for take-home parcels or home deliveries while most of them prefer to eat at the outlet and enjoy the McDonalds experience. SWOT Analysis



KFC Corporation, or KFC, founded and also known as Kentucky Fried Chicken is a chain of fast food restaurants based in Louisville, Kentucky. KFC is a brand and operating segment, called a "concept" of Yum! Brands since 1997, when that company was spun off from PepsiCo. KFC primarily sells chicken in form of pieces, wraps, salads and sandwiches. While its primary focus is fried chicken, KFC also offers a line of roasted chicken products, side dishes and desserts. Perfecting its secret recipe of 11 herbs and spices in 1939, KFC has come a long way. With over 10,000 outlets in the world, KFC has maintained its title, for the last 60 years, of being the chicken Experts. KFC wore the title of being the market leader in its industry. Serving delicious and hygienic food in a relaxing environment made KFC everyones favorite. Since then, KFC has been constantly introducing new products and opening new restaurants for its customers. KFC entered India in 1995. But because of KFC not adhering with the Prevention of Food Adulteration Act, 1954 and certain other mistakes it had to leave India.In 2003 it again came back with revised strategies and willingness to improve its earlier mistakes. Since then KFC has a strong presence in 11 cities of India with around 50 stores, it presently has 21 outlets in NCR. History of KFC Timeline 9/9/1890 - Harland Sanders is born just outside Henryville, Indiana. 1900-1924 - Harland Sanders holds a variety of jobs including: farm hand, streetcar conductor, army private in Cuba, blacksmith's helper, rail-yard fireman, insurance salesman, tire salesman and service station operator for Standard Oil. 1930 - In the midst of the depression, Harland Sanders opens his first restaurant in the small front room of a gas station in Corbin, Kentucky. Sanders served as station operator, chief cook and cashier and names the dining area "Sanders Court & Caf." 1936 - Kentucky Governor Ruby Laffoon makes Harland Sanders an honorary Kentucky Colonel in recognition of his contributions to the state's cuisine. 1937 - The Sanders Court & Caf adds a motel and expands the restaurant to 142 seats. 1939 - The Sanders Court & Caf is first listed in Duncan Hines' "Adventures in Good Eating."


Fire destroys The Sanders Court & Caf, but it is rebuilt and reopened. The pressure cooker is introduced. Soon thereafter Colonel Sanders begins using it to fry his chicken to give customers fresh chicken, faster. 1940 - Birth of the Original Recipe 1952 - The Colonel begins actively franchising his chicken business by traveling from town to town and cooking batches of chicken for restaurant owners and employees. The Colonel awards Pete Harman of Salt Lake City with the first KFC franchise. A handshake agreement stipulates a payment of a nickel to Sanders for each chicken sold. 1957 - Kentucky Fried Chicken first sold in buckets 1960 - The Colonel's hard work on the road begins to pay off and there are 190 KFC franchisees and 400 franchise units in the U.S. and Canada. 1964 - Kentucky Fried Chicken has more than 600 franchised outlets in the United States, Canada and the first overseas outlet, in England. 1966 - The Kentucky Fried Chicken Corporation goes public. 1969 - The Kentucky Fried Chicken Corporation is listed on the New York Stock Exchange. 1971 - More than 3,500 franchised and company-owned restaurants are in worldwide operation when Heublein Inc. acquires KFC Corporation. 1979 - KFC cooks up 2.7 billion pieces of chicken. There are approximately 6,000 KFC restaurants worldwide with sales of more than $2 billion. 12/16/1980 - Colonel Harland Sanders, who came to symbolize quality in the food industry, dies after being stricken with leukemia. Flags on all Kentucky state buildings fly at half-staff for four days. 1982 - Kentucky Fried Chicken becomes a subsidiary of R.J. Reynolds Industries, Inc. (now RJR Nabisco, Inc.) when Heublein, Inc. is acquired by Reynolds. 1986 - PepsiCo, Inc. acquires KFC from RJR Nabisco, Inc.


1997 - PepsiCo, Inc. announces the spin-off of its quick service restaurants - KFC, Taco Bell and Pizza Hut - into Tricon Global Restaurants, Inc. 2002 - Tricon Global Restaurants, Inc., the world's largest restaurant company, changes its corporate name to YUM! Brands, Inc. In addition to KFC, the company owns A&W All-American Food Restaurants, Long John Silvers, Pizza Hut and Taco Bell restaurants. 2006 - More than a billion of the Colonel's "finger lickin' good" chicken dinners are served annually in more than 80 countries and territories around the world. 2007 - KFC proudly introduces a new recipe that keeps the Colonel's 11 herbs and spices and finger lickin' flavor, but contains Zero Grams of Trans Fat per serving thanks to new cooking oil.

Kentucky Fried Chicken in India KFC is known to be 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 India too! KFC has introduced many offerings for its growing customer base in India 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 and desserts. For the vegetarians in India, KFC also has great tasting vegetarian offerings that include the Veggie Burger, Veggie Snacker and Veg Rice meals. In India, KFC is growing rapidly and today has presence in 11 cities with close to 70 restaurants. KFCs Main Products in India KFC's specialty is fried chicken served in various forms. KFC's primary product is pressure-fried pieces of chicken made with the original recipe. The other chicken offering, extra crispy, is made using a garlic


marinade and double dipping the chicken in flour before deep frying in a standard industrial kitchen type machine. Market Positioning For a product to occupy a clear, distinctive and desirable place relative to Competing products in the minds of target consumer. In KFC feedback is taken from the customer in order to know the customer demands and then improvements are made in products. KFC focuses on pure and fresh food in order to create a distinct and clear position in the minds of customers KFC has a strong brand name and they are leading the market in fried chicken. For a product to occupy a clear, distinctive and desirable place relative to Competing products in the minds of target consumer. In KFC feedback is taken from the customer in order to know the customer demands and then improvements are made in products. KFC focuses on pure and fresh food in order to create a distinct and clear position in the minds of customers KFC has a strong brand name and they are leading the market in fried chicken. Marketing Model KFC is synonymous with chicken. It has to be because chicken is its flagship product. The latest they have on offer is the marinated hot and crispy chicken that is "crisp and crunchy on the outside, and soft and juicy on the inside". It gives you a regular Pepsi with this at nothing more than just Rs. 39. But make no mistake, while this is a rage across the world, KFC has made sure one other thing: it doesn't want to alienate the vegetarian community "that gave birth to the vegetarian menu". It means you can be vegetarian and yet be at KFC. KFC offers a wide range of vegetarian products such as the tangy, lip-smacking paneer tikka wrap 'n' roll, the vegetarian de-lite burger, and the vegetarian crispy burger. There are munchies such as the crisp golden vegetarian fingers and crunchy golden fries served with tangy sauces. If you are vegetarian and looking for a meal, you can combine the veg fingers with steaming, peppery rice and a spice curry. The mayonnaise and sauces don't have egg in them. Sharanita Keswani, Director, KFC Marketing, says the vegetarian menu in India came about when KFC found the country had about 35 per cent vegetarians, and in metros such as Delhi and Mumbai, almost 50 per cent. The non-vegetarian is the obvious target customer because, as Ms. Sharanita points out, that in most of south India over 70 per


cent people are non-vegetarians. But she also observes that chicken is KFC's strength. KFC's vegetarian menu is almost exclusive to India and is the most extensive. Most countries either do not have a vegetarian menu, and some which do, have a burger at the most. "Contrary to affecting chicken sales, the presence of a vegetarian menu has made the brand more relevant to a wider cross-section of the consumer society. This is essential as we grow the brand across the country," says Ms. Sharanita. While the vegetarian menu has a significant presence in India owing to the country's distinct tastes, and therefore the need to localize, KFC's chicken products that are standardized are also modified in certain regards to suit local tastes. KFC officials say the zinger burger in any part of the world or original recipe chicken tastes the same as the chicken products are based on standard recipes. While this brand standard chicken may taste the same in New York or Bangalore, the sauce or topping is changed. The chicken strips are served with a local sauce or the sauce of the wrap is changed to local tastes. And as far as India is concerned Ms. Sharanita says: "Making it relevant to local palates, KFC launched the wrap as chicken and paneer tikka roll in India." The KFC menu strategy is to "balance standardization and localization". The localization works in two ways: to modify a standard chicken product with a different topping or sauce; and to have a vegetarian menu, where necessary, along with the flagship product, chicken. The localization exercise is undertaken in every country. "The U.S. and European markets have a traditional KFC menu based on chicken burgers and wraps, while Asian markets like India have been more experimental and adventurous. Here, they have rice meals, wraps, and sides. The change is imperative as Asian tastes can be very different from Western ones," Ms. Sharanita observes, adding that KFC learnt very early the high demand for vegetarian products in India. KFC has taken care to maintain safeguards on the production of its non-vegetarian products in response to observations by People for Ethical Treatment of Animals that chicken were not being treated humanely by suppliers. The debate has been on for years now and animal rights activists have prompted companies to adopt stringent measures. Pankaj Batra, Director, Marketing, Indian Sub-Continent, Yum! Restaurants International, observes: "KFC is committed to the well being and humane treatment of chickens. We require all our suppliers to follow welfare guidelines developed by Yum! Restaurants International, U.S.A., with leading experts on their Animal Welfare Advisory Council. In India, we source chicken from Venkateshwara Hatcheries Limited (Venky's), which is one of the leading and respected organised players in the poultry farming


business. They also supply chicken to several reputed hotel and restaurant chains in the country. We respect the Indian law and our guidelines completely adhere to them." Ms. Sharanita points out that while KFC's brand standard products are their strength throughout the world, KFC works around the core and gives consumers products with a familiar taste, especially "important in a country like India that is home to such distinct and different food habits". KFC's challenge as Ms. Sharanita puts it, is to manage a brand's market with the right degree of flexibility so as to be strong in different and varied product markets. Advertising The logo of the smiling Colonel is probably one of the most recognized faces in the world and instantly brings the image of fried chicken to ones mind. KFC and its new company jingle, finger lickin good is a frequent announcement on televisions, billboards, flyers and radio. The concept of showing a normal customer deeply involved in devouring his piece of chicken usually turns on the drool factory in everybodys mouth and makes them rush to the nearest KFC. In India where chicken lovers are plenty abound these ads featuring normal people connect instantly and create a rush at their outlets. Using the following methods KFC spreads Using Reminder advertisements KFC stimulates repeat purchases of its products. The company anthem finger lickin good is just a wakeup call to the consumer to remind them how good they felt the last time they ate KFC chicken. Sponsorship is another tool to strengthen an organizations image. KFC has been the sponsor of the Australian Cricket Team for a long time before the obesity experts contradicted the concept. Packaging The famous paper bucket that KFC uses for its larger sized orders of chicken and has come to signify the company was originally created by Wendy's restaurants founder Dave Thomas. Thomas was originally a franchisee of the original Kentucky Fried Chicken and operated several outlets in the Columbus, Ohio area. His reasoning behind using the paper packaging was that it helped keep the chicken crispy by wicking away excess moisture. Thomas was also responsible for the creation of the famous rotating bucket sign that came to be used at most KFC locations in the US.


Branded Prepaid Coupons KFC brings to prepaid coupons of different meal combo options, which act as great distributor trade or customer incentives. These exciting incentives are guaranteed to give a boost to your sales and can make your incentives stand out from the order run of the mill incentives. In order to act as true partners, KFC will print branded coupons (minimum quantity 500 coupons) of your own company or product, which can be redeemed at any of the KFC restaurant nationwide or restaurants of your choice. Corporate meeting, seminars & workshops at KFC, Meeting with trade people or customers can also be arranged at KFC. KFC can arrange all related facilities for the meeting. This facility is available at select outlets. Lunch/Dinner for Employees/Dealers/Customers and their Families at KFC Companies can arrange lunch/dinner for their employees/dealers/customers at selected KFC restaurants. Outdoor Catering: KFC can bring complete hassle-free meals and serve at your specified premises. o Promotional Discounted Coupons for Corporate Customers o Discounted Promotional Meals on Seasonal Products o Discounted Promotional Meals for Increasing the Sales Figures o AYC (All you can Eat) specially offer for Ramazan ul Mubarak o Free Meal Vouchers for Corporate Clients o 20% VIP Discount Card for Corporate Clients on all Regular Meals except the Promotional Deals o Free Chicky Premium on Chicky Meals o LSM (Local Store Marketing) special Discounted Deals or Gift for Specific out let o Free Meal area and Serving in case of any party and Birthday o Free Gift for Birthday Child and Different Games for Kids Pricing Strategy Market skimming: KFC globally enters the market using market skimming. Their products are priced high and target the middle to upper class people. Gradually they trickle down the prices focusing on the middle to lower class people to penetrate both sides of the market.


We can compare the price of their products with McDonald, Dominoes and Pizza Hut. If the competitor provides the same product at a lower price, then the organization usually lowers the price of its product too.

In the case of KFC, Fried Chicken is its main selling point and controls a monopoly over the Indian fast food market (only with fried chicken). It prices its burgers, French fries and soft beverages with relation to its competitors.

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

Channels KFC believes in first level channels in the order given below: Manufacturers Retailers Consumers

KFC works on the flow of good operation techniques i.e. Good Operating Manager leads to Good Team Selection Good Services Good Targets Good Revenues through the following internal strategies: Training Incentive based targets Recognition for good work Performance based bonus Employee benefits to keep them motivated Promotion

HUMAN RESOURCE POLICY IN KFC Hiring and retaining the right employees is critical to the success of a restaurant's operation. KFC believes in an integrated approach of perfect distribution of responsibilities of its employees.


Area Manager Area Managers are accountable for providing coaching, leadership and operational support to 8-10 KFC Restaurants within a defined Area.

Restaurant General Managers The Restaurant General Manager is accountable for creating and running an energetic and valuable work environment, which is committed to serving the best chicken at the fastest speed and with a smile. The Restaurant General Manager reports directly to an Area Manager and is accountable for successfully implementing and maintaining all Company policies and procedures in relation to operations, customer service, cash handling, marketing, purchasing, human resources, health & safety, administration, training and development.

Assistant Managers The Assistant Manager is responsible for assisting the Restaurant General Manager (RGM) in creating an energetic and valuable work environment, which is committed to serving the best chicken at the fastest speed and with a smile. Assistant Managers are also responsible for ensuring all Company policies and procedures are followed in relation to operations, customer service, cash handling, marketing, purchasing, human resources, health & safety, administration, training and development.

Trainee Managers Trainee Managers help with day-to-day running of the restaurant, and need to ensure that all operations, customer service, cash handling, marketing, purchasing, human resources, administration and training & development policies are followed.

Customer Service Team Members Responsible for working the service areas and ensuring quality product, service and cleanliness is delivered to all customers at top speed and with a smile.


Food Service Team Members Responsible for putting the crunch in the coating and the zing in the Zingerthe cooks main task is to prepare and cook the irresistible KFC products! The cook must also maintain the cleanliness of the cooking area as well as the quality of product and speed of preparation.

Recruitment and Selection at KFC Part of KFCs recruitment strategy is to offer employees high-quality options such as potential for advancement, company reputation, benefits package and salary scale. When KFC was looking for senior executives who could run a business, for two years it scoured the management teams across various industries and offered senior executives of companies like Coca Cola attractive benefits and a better salary scale to get them on the team. These executives were promised quick advancement on their jobs, and apparently given such incentives to join that most of the people offered jobs joined KFC even though they were told beforehand that at immediate present, no senior position was vacant. Hence, KFCs attractive salary and benefits package is an effective lure for potential employees (Rigdon, 1991). For example, among the benefits package that KFC offers, is a medical coverage and prescription benefits, dental coverage, vision/hearing coverage, life and disability insurance, a 410k plan (which helps employees save for their future), stock options, a management incentive plan (under which everyone from assistant manager to senior executive is rewarded for remarkable performance), adoption assistance, tuition reimbursement plan, college-planning assistance, employee discount, paid vacation and a group legal plan. KFC also believes in promoting from within, as it encourages employees to perform well on their jobs, telling them that they in fact can go from being just a team member to the restaurant manager and later area or region coach (KFC Official site). As far as selection is concerned, KFC management strongly believes that hiring young people and later training them is the way to a successful organization. Hence, the age factor is definitely an issue of concern for recruiters at KFC. The company also strongly believes in diversification. According to Kyle Craig, president of Kentucky Fried Chicken's U.S. operations, We want to bring in the best people but if there are two equally qualified people, we'd clearly like to have diversity. From this, we can safely assert that KFC believes in eliminating the glass ceiling, and hiring and keeping female and minority-group executives. This seems to be working for the company and is an effective policy: where in 1989, not even one of the company's 17 senior U.S. managers were minority or female, the situation has improved today, with there being numerous managers either female or part of a


minority group. KFC admits that it actively tries to recruit and promote women and minority members in middle and top management ranks. KFCS SUPPLY CHAIN MANAGEMENT Improved reporting of business processes leads inevitably to a more streamlined production process. With better information on the production process comes the ability to improve the management of the supply chain, including everything from the sourcing of materials to the manufacturing and distribution of the finished product.

Quick Reflexes

As a corollary to improved supply chain management comes an improved ability to react to changes in the market. Better MIS systems enable an enterprise to react more quickly to their environment, enabling them to push out ahead of the competition and produce a better service and a larger piece of the pie. These factors help KFC to work smoothly and efficiently as we already known that they are the only fast food chain which is selling fried chicken in which they are specialized.

MIS systems let the KFC management: To capture information and store it, whenever they are making bills it helps them to count sales per day, per week and per month because a copy of the bill is stored in the computer. Access stored information easily and manipulate it for the needs of their clients while billing or taking order they just enter the code of the product requested at that time. Every market leading enterprise will have at least one core competency that is, a function they perform better than their competition. By building an exceptional management information system into the enterprise it is possible to push out ahead of the competition. MIS systems provide the tools necessary to gain a better understanding of the market as well as a better understanding of the enterprise itself.


PLANNING TOOLS& TECHNIQUES: KFC managers are mostly indulged in planning technique of forecasting on quantitative grounds thats the responsibility of Regional managers to plan with contingency thinking and most of times regional managers do nothing except firing employees of their jobs to retain profits and revenue which was generated or to deal with economic issues.


Disciplines are maintained in KFC as this is their core strategy to have disciplined employees is a key to their success. All this employment discipline is maintained by managers.


KFC has one financial department that sees all the financial activities in the organization. Branch finances are looked after by the Unit Business Managers. UBM has to report all the financial activities required to be done or done to the finance department directly.


Purchasing depends on the restaurant branches. Four types of Purchasing is done In house Ware house Direct Indirect Requests are sent to the respective persons for the purchases (procurement department). In house purchasing is for the use of in-house keeping and it includes purchasing of furniture goods and storage goods. Warehouse purchasing is requested by the store supervisor for purchasing goods needs for the warehouse. Direct purchasing is done by Managers again for the Branch use things are bought from the certain amount that is given to the manager by the finance department. Indirect purchasing is done by requesting the department for goods needed.



Inventory is done several times a week one final time a month and at the end of the year. Inventory controls are looked after by UBM and AUBM and they check inventory for three times a day to be accurate regarding their costs and what can be saved.



SWOT Analysis


The report has been designed to study the consumer behavior with respect to McDonalds and KFC. A questionnaire was designed in order to understand the reasons of the consumer perception towards the two food giants. Our method of going about the study at hand involved the basic survey method, whereby we put forward questions to individuals who were divided into the basic segments provided by and aimed at as either the source or target service provider. This was carried out by a survey comprising of two questionnaires, one aimed at the customers at either of the two food joints and the other for the employees employed at the food joints. Our questions were designed to capture the market trends, the grounds behind such a trend, the peripherals related to the functioning of the food joint, key marketing strategies adopted and finally aimed at drawing the inferences and conclusions for the same. Question 1 Which age group do you belong to? The first question was essentially designed to throw light on the age group of people visiting/dining at the food joints. This gave us an idea of the preference of a particular food brand among a given age group if any. For e.g. the HAPPY MEAL available at McDonald's attracted the major portion of the younger crowd. As a matter of fact as shown in the following questions, this particular strategy drained almost the entire young consumer segment. Of the individuals surveyed a majority of the individuals belonged to the 18-25 yr age group both for McDonald's as well as KFC. Question 2 What is your profession? This question was essential in calculating the trend of the customers who visit these food joints i.e. the working class of the people visiting the respective places. The survey revealed that the majority of people visiting both the places i.e. 46% for KFC and 55% for McDonald's were students. This thus lays direct stress on the strategies adopted by both the joints resulting in a heavy demand among the student group. Question 3 Are you a vegetarian/non-vegetarian? This was essentially designed to demarcate the groups according to whether they were vegetarians or otherwise. It was a preconceived idea that the vegetarians preferred McDonald's of the two while KFC proved to be a non-vegetarian paradise. This thus showed a balanced market for McDonald's whereas a strong shift for KFC towards the nonvegetarian section.


Question 4 What is your saying on the pricing of the joint? In KFC 31% found the food priced nominally and an equal amount of people surveyed i.e. 31% found it expensive. Hence it was concluded that it dropped down to the individual in the case of KFC and there was no clear market trend. In McDonald's 46% found it nominally priced as well as value for money while just 8% found it expensive. Hence in terms of comparative study it was concluded that McDonalds was optimally priced although KFC wasn't overpriced either. Question 5 How much do spend on an average per visit? This question again was concerned with the pricing as well as spending capability of the people. The results indicated that a major section, i.e. around 52% for KFC and 42% for McDonald's, of people spent between Rs.100-500 thus advocating the fact that the places are priced moderately. Question 6 Do you get drawn in by the television commercials of the food items? This question was designed to get an idea about the publicity/advertising strategy of the food brands. Both the brands under consideration are big brands and hence have the capability to allocate adequate budgets towards all sections of marketing. Whether they choose to or not to, is the question at hand. This particular question analyzes the potency of the advertising strategies used by the food brands in attracting or influencing the customers.

The significant questions from the survey and their respective response have been mentioned in the Annexure.


In India fast food market is strongly dominated by these 2 brands. But when it comes to comparing these two brands the following study brings us to a conclusion that as far as market presence and brand value is concerned McDonald's has definitely proved a point for themselves. But KFC who reentered in 2003 has shown a rapid progress and no wonder if in the coming years KFC overtakes McDonalds in the Indian market share. Both the food-giants have given each other immense competition in terms of customer satisfaction and promotional strategies. The range of products and offers offered by each is remarkable in every context. Although McDonalds has an upper hand with the vegetarian crowd because of its exclusive products, KFC is slowly catching up to the challenge. KFC provides vegetarian alternatives with an added advantage of a complete meal including rice and desert. Where McDonalds fall into the snack option KFC had covered the meal area. Thus it is not quite evident which one can be termed as better than the other.

KFC needs to re-vamp its vegetarian menu and add more options to it. The fried chicken category already has more options and varieties as compared to the vegetarian section. McDonalds could try to enter the meals category into its menu Both companies need to work on their logistics and inventory management (as discussed with Branch managers) Need to train their staff better in handling of the cooked food.


Eric Scholloser : Fast Food Nation, 2001 Jae K. Shim, Joel G. Siegel : Operations Management, 1999 Michael Armstrong : Strategic Human Resources Management, 2006 Philip Kotler, Kevin Lane Keller : Marketing Management, 2008

WebPages J Lu - International Communication Gazette, 2010 - Sage Journals online