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Term paper on: Service strategy of KFC Subject code: MKT 412 Section: 01

PREPARED FOR: SSM Sadrul Huda (SH) Assistant Professor Department of Business Administration East West University.

PREPARED BY: Md. Taijul Islam ----------------------------------------------------Id: 2009-2-10-217 SHADIN -01917277300 Fariha Faroque Mitu ------------------------------------------------Id: 2009-3-13-024 Khaleda Akter -----------------------------------------------------Id: 2009-3-13-046 Taskina Jahan ---------------------------------------------------Id: 2009-2-10-132

Date of Submission: 01 August, 2013

Letter of Transmittal August 15, 2012 SSM Sadrul Huda Faculty of Business Administration East West University Subject: Submission of a term paper on service strategy of KFC. Dear Sir, We consider it as a great pleasure to prepare an assignment on service strategy of KFC. In making this assignment we offered our best to present positive and well-scanned efforts to afford necessary and relevant materials for preparing a comprehensive presentation on service strategy of KFC. Finally, we acknowledge the special gratitude to you for providing us the golden opportunity to work on the topic. It is a thrilling experience for us which will enrich our practical knowledge. We are hopeful that our theoretical assessment, relevant information detailed analysis and real-life example will achieve your appreciation. Sincerely Md. Taijul Islam Fariha Faroque Mitu Khaleda Akter Taskina Jahan Id: 2009-2-10-217 Id: 2009-3-13-024 Id: 2009-3-13-046 Id: 2009-2-10-132

TABLE OF CONTENT DESCRIPTION PAGE NO.

Introduction: Excellent customer service is the process by which organization delivers its services or products in a way that allows the customer to access them in the most efficient, fair, cost effective, and humanly satisfying and pleasurable manner possible. A customer service strategy is an important part of any business plan. Since business relies on customer satisfaction, any good business should develop a strategy that not only draws in customers, but keeps them happy so they are not tempted to try out a competitor. Customer service is the provision of service to customers before, during and after a purchase. Customer service is a series of activities designed to enhance the level of customer satisfaction that is, the feeling that a product or service has met the customer expectation." The importance of customer service may vary by product or service, industry and customer. The perception of success of such interactions will be dependent on employees "who can adjust themselves to the personality of the guest. From the point of view of an overall sales process engineering effort, customer service plays an important role in an organization's ability to generate income and revenue. From that perspective, customer service should be included as part of an overall approach to systematic improvement. A customer service experience can change the entire perception a customer has of the organization. 4 Main activities of Service Strategy

Define market
It is important to be careful about how a market is defined. The following key marketing processes rely on a relevant market definition: - Measuring market share - Measuring market size and growth - Specifying target customers - Identifying relevant competitors - Formulating a marketing strategy A market can be defined as follows: A market is the set of all actual and potential buyers of a product or service. This definition suggests that a market is the total value and/or volume of products that satisfy the same customer need. For example, if the customer need is eat breakfast, then the relevant market could be defined as the Breakfast Food Market. Many products would be relevant to measuring and analysing such a market: - Breakfast Cereals - Nutrition Bars - Porridge / Oats

- Speciality Breads (e.g. croissants) - Fast-food Outlets serving breakfast In defining a market, it is important not to focus only on products/services that currently meet the customer need. For example, the button manufacturer who believed that their market was the button market would have made some poor marketing decisions unless he had seen the arrival of products such as Velcro and zips which also satisfy the same need to fasten clothes. Thinking about customer needs first and then identifying the products that meet those needs is the best way to define a market.

Define offerings
service Offerings are the starting point for configuring Service Portfolio Management. Service Offerings are used to create refined levels of service for existing Business Services through the use of Service Commitments. For example, an organization may offer two levels of Desktop Support in your organization: a Standard offering of upgrades and virus protection and an Executive offering with the standard commitments plus some type of availability guarantee, such as 98% availability from 8-5 on weekdays.

Develop strategic assets


The strategic assets are that set of goods, tangible or intangible, which the company has been generating and which have become essential to develop a competitive advantage in their market. We would be speaking of real estate patrimony, machinery, patents, marks, know-how, data bases of information of clients, etc.

Prepare for execution


After defining market, define offerings; develop strategic assets the firmsneeds to prepare for execution.

Company Profile:
KFC Corporation, based in Louisville, Kentucky, is the worlds most popular chicken restaurant chain, specializing in Original Recipe , Extra Crispy
TM

, and Colonels Crispy

Strips chicken with home style sides and five new freshly made sandwiches. Every day, nearly eight million customers are served around the world. KFCs menu everywhere includes Original Recipe chickenmade with the same great taste Colonel Harland Sanders created more than a half-century ago. Customers around the globe also enjoy more than 300 other productsfrom a Chunky Chicken Pot Pie in the United States to a salmon sandwich in Japan.

KFC continues reaching out to customers with home delivery in more than 300 restaurants in the United States and several other countries. And in quite a few U.S. cities, KFC is teaming up with other restaurants, Taco Bell and Pizza Hut, selling nearly fifty years ago; Colonel Sanders invented what is now called home meal replacement selling complete meals to harried, time-strapped families. He called it, Sunday Dinner, Seven Days a Week. Today, the Colonels spirit and heritage are reflected in KFCs brand identity the logo features Colonel Harland Sanders, one of the best-recognized icons in the world. KFC specialized in chicken and they says, No bodys cooking like KFC today and we are the chicken experts There is no competitor for spicy chicken which is made by KFC Mission statement To be the leader in western style quick service restaurants through friendly service, good quality food and clean atmosphere

Goals of KFC Build an organization dedicated to excellence. Consistently deliver superior quality and value in our products and services. Maintain a commitment to innovation for continuous improvement and grow, striving always to be the leader in the market place changes. Generate consistently superior financial returns and benefits our owner and employees.

To establish in India our position as leading WQSR (Western Quick Service Restaurant) chain, serving good value. Innovative chicken-based products. Consistently, providing a pleasant dining experience, with fast friendly, in a clean and convenient location. At all times we must be dedicated to providing excellent and delighting customers.

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 colonels finger lickin good chicken dinners are served annually. And not just in America. The colonels cooking is available in more then 82 countries around the world. When the colonel was six, his father died. His mother was forced to go to work, and young Harland had to take care of his three year old brother and baby sister. This meant doing much of the family cooking. By the age of seven, he was a master of a score of regional dishes. Ate age 10, his first job working on a nearby farm for $2 a month. When he was 12, his mother remarried and he left his home near Henryville, Ind., for a job on a farm in Greenwood, Ind. He held a series of jobs over the next few years, first as a 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 didnt have a restaurant then, but served folks on his own dining table in the living quarters of his service station. As more people started coming just for food, he moved across the street to a motel and restaurant that seated 142 people. Over the next nine year, he perfected his secret blend of 11 herbs and spices and the basic cooking technique that is still used today.

KFC in Bangladesh
Transcom Foods Limited (TFL) started its journey in 2003 as a franchisee of Pizza Hut, the first International Chain Restaurant in Bangladesh, and went on to sign the contract to become the franchisee of Kentucky Fried Chicken (KFC) in the year 2006. Both Pizza Hut and KFC are subsidiaries of the worlds largest restaurant company Yum! Restaurants International. In a span of seven years, TFL has opened 4 Pizza Hut and 7 KFC outlets so far throughout the country.

Menu items
This is a list of menu items sold at KFC. Chicken KFC's specialty is fried chicken served in various forms. KFC's primary product is pressurefried 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. Kentucky Grilled Chicken This marinated grilled chicken is targeted towards healthconscious customers. It features marinated breasts, thighs, drumsticks, and wings that are coated with seasonings before being grilled. It has less fat, calories, and sodium than the Original Recipe fried chicken.[27] Introduced in April 2009. KFC has two lines of sandwiches: its "regular" chicken sandwiches and its Snackers line. The regular sandwiches are served on either a sesame seed or corn dusted roll and are made from either whole breast fillets (fried or roasted), chopped chicken in a sauce or fried chicken strips. The Snackers line are value priced items that consist of chicken strips and various toppings. In the UK, Australia and New Zealand, sandwiches are referred to as "burgers"; there is the chicken fillet burger (a chicken breast fillet coated in an original-recipe coating with salad garnish and mayonnaise) and a Zinger Burger (as with the former but with a spicier coating and salsa). Both of these are available as "tower" variants, which include a slice of cheese and a hash brown. KFC considers its Double Down product a sandwich in spite of containing no bread. A variety of smaller finger food products are available at KFC including chicken strips, wings, nuggets and popcorn chicken. These products can be ordered plain or with various sauces, including several types of barbecue sauces and buffalo sauce. They also offer potato wedges. Several pies have been made available from KFC. The Pot Pie is a savory pie made with chicken, gravy and vegetables. In the second quarter of 2006, KFC introduced its variation on Shepherd's pie called the Famous Bowl. Served in a plastic bowl, it is layered with mashed

potatoes or rice, gravy, corn, popcorn chicken, and cheese, and is served with a biscuit. The bowl had been available at KFC's special test market store in Louisville since the third quarter of 2005.

Service offer:
Face to face / self service:
If the customer want to take service from KFC outlet by face to face contract then they have to at first they have to reach appetizer counter then salad counter. When the customer go KFC at first they select food items from menu. Then give order according their desire to the cash counter. Whatever they want to eat place order to cash counter and provide payment. After paying payments then take food from the food delivery counter.

Online service:
Besides self service in outlet KFC provide online delivery service.at first receive order from telephone, e-mail or web site. After receiving order they select food items according to receive order. Then select food from individual food container. Place food in the container then package tit base on their packaging criteria. Then deliver food items with their own transport. Collect payment from the customer.

Delivery process:

How communicate:
The primary role of service firm`s communication strategy is to inform, persuade and remind consumers about the service being offered. Information, Persuasion and Reminding- three of these key factors can be addressed separately or can be addressed in an interrelated manner. In a service firm three of these key factors are deal with comprehensive format. In different stage of consumer awareness, different strategies are needed to address them. In the basic level the primary objective is to create consumer awareness. Then further encouragement is needed to initialize buying decision. Finally, people need reminder.

Inform

Persuad e
Figure: Communication Strategy Insights

Remind

While developing any communication mix components each of these factors should be kept in mind that what organization is going to do and how it is going to address different levels.

Communication Objectives

The objective of a firm`s communication mix often relate directly to the service offering`s stage within the product life cycle.

Introduction:
Involves informational content like introduce the service offering, create brand awareness, prepare the way of personal selling efforts and encourage trials.

Growth and maturity:


Involves informational and persuasive communication content like create positive attitude relative to competitive offerings, provoke an immediate buying action, enhance the firms image.

Maturity and decline:


Involves persuasive and reminder communication content like encourage repeat purchase, provide ongoing contact, express gratitude to existing customer base, confirm past purchase decisions.

Target market
Targeting Non- users Word of mouth marketing is the most effective form in service marketing. Current customers are playing a vital role in this aspect. Newspaper advertisement regarding new customer gaining is another means of communication KFC is using to reach to prospective customers. Prospective customers can also get information through KFC website.

Targeting Users Regular customers may get price discount or coupon.

Communication with current customers can be done through

website

Webmail Advertisement

Communication Mix
In service marketing personal sources are more effective than non personal sources. Media- Print media (newspaper). Visual media- Website Mode of communication- Most effective is developing word of mouth communication network. External communication- Communication outside the campus is being made through Prospectus, Newspaper advertisement, Events- KFC organize different promote=oinal events in the different universities.

Physical evidence:
Clean and attractive Ambience The servicescape of all KFC outlets will be improved in order to be attractive and enjoyable environment for the customers, clearly defined menus with clear information will be placed every table, poster words welcome and have nice days will be placed every corner with aim of connecting the customers emotionally. (Kotler, et al, 2007) Since services are intangible in nature most service providers strive to incorporate certain tangible elements into their offering to enhance customer experience. Thus, there are hair salons that have well designed waiting areas often with magazines and plush sofas for patrons to read and relax while they await their turn. Similarly, restaurants invest heavily in their interior design and decorations to offer a tangible and unique experience to their guests. Physical evidence: Physical evidence A service encounter does not take place in a vacuum A service transaction generally involves the interaction of the service provider with the customer in a service environment. The service environment along with the tangible cues is termed as physical evidence . There are 2 perspective to physical environment: Process of operation perspective Marketing perspective. Physical facilities .. Like building, furniture, equipments, stationery, brochures. it reinforces the proposed image of the service organisation. The elements of physical evidence are: Essential Evidence Peripheral Evidence Essential EvidenceConstitutes a dominant part of the service facility. Technical facilities based on which service takes place. Cannot be passed on to consumer, except may be on temporary basis (eg: hotel building, aircraft in airlines, office and furniture in consultancy firm). Peripheral EvidenceNot very visible in relation to dominant physical evidence. They definitely have an impact on the consumer perception about the qwlty of the service These include business cards,

stationery, brochures, etc These evidences are passed over to customers in the course of transaction the service is provides without these items yet can be used to enhance corporate image Physical Environment the physical setting or the service environment within which the service takes place. The service space Includes_ the exterior attributes (the parking area, front elivation of the building, landscape) the interior attributes (the design, ambiance, layout, etc)The important elements of physical settings are as follows: Ambiance Dcor and Artifacts Spatial Layout and Functionality Physical evidence is about where the service is being delivered from. It is particularly relevant to retailers operating out of shops. This element of the marketing mix will distinguish a company from its competitors. Physical evidence can be used to charge a premium price for a service and establish a positive experience. For example all hotels provide a bed to sleep on but one of the things affecting the price charged, is the condition of the room (physical evidence) holding the bed. Customers will make judgments about the organisation based on the physical evidence. For example if you walk into a restaurant you expect a clean and friendly environment, if the restaurant is smelly or dirty, customers are likely to walk out. This is before they have even received the service. There are many examples of physical evidence, including some of the following:

The building itself (such as prestigious offices or scenic headquarters). This includes the design of the building itself, signage around the building, and parking at the building, how the building is landscaped and the environment that surrounds the building. This is part of what is known as the servicescape. The interior of any service environment is important. This includes the interior design of the facility, how well it is equipped, internal signage, how well the internal environment is laid out, and aspects such as temperature and air conditioning. This is also part of the servicescape. Packaging. Internet/web pages. Paperwork (such as invoices, tickets and dispatch notes). Brochures. Furnishings. Signage (such as those on aircraft and vehicles). Uniforms and employee dress. Business cards. Mailboxes. Many others . . .

People (personnel):
People are a defining factor in a service delivery process, since a service is inseparable from the person providing it. Thus, a restaurant is known as much for its food as for the service provided by its staff. The same is true of banks and department stores. Consequently, customer service training for staff has become a top priority for many organizations today. People in Service In service, the personnel come in contact with the process of production and consumption of services. The service marketing mix applies not only to personnel but also recognises the role of participants. In service business , the service personnel reflects the organisational realities, it is through the interaction with the staff, the customers forms an opinion of the organisation. People are an essential ingredient in service provision; recruiting and training the right staff is required to create a competitive advantage. Customers make judgments about service provision and delivery based on the people representing your

organisation. This is because people are one of the few elements of the service that customers can see and interact with. The praise received by the volunteers (games makers) for the London 2012 Olympics and Paralympics demonstrates the powerful effect people can create during service delivery.
Staff require appropriate interpersonal skills, aptititude, and service knowledge in order to deliver a quality service. In the UK many organisations apply for the "Investors in People" Accreditation to demonstrate that they train their staff to prescribed standards and best practices. People or human

capital can be competitive advantage in the service sector if they are trained well . KFC will have the following elaborate plan to achieve that success. Recruitment and Training KFC will recruit employees with prior experience in the fast food industry and enroll them in house training for one month courses leading to training in health and safety measures, hygiene and food regulation. They will also be trained in customer handling practices, customer behavior, expectations and characteristics. ( Aeker, 2007). Motivation and teamwork Employees of all KFC outlets will be a warded 20% salary increment from January 2011. This translates to RM1440 per month from the current RM 1200 per month. They will be awarded bonuses for working during the holidays. Teamwork will be encouraged all the time in order to achieve organization objective.

Customer:
KFCs customer market consists solely of the consumer market (Kotler et al 2003). KFCs products are bought by individuals (males, females, singles, and families). Therefore, the product range KFC offer should appeal to as many people within this consumer market as possible, to ensure that the maximum amount of products can be sold. The characteristics of these individuals and a segmentation of them are discussed later in this report. Employees should always be alert and attentive when taking customers orders to reduce wastages and increase customer involvement as part of the service delivery in order to increase the customer confidence. The other option will be arranging customers in separate line for the take a ways and those having their meals in the outlets for convenience.

The initial target market was kids and young urban adults but has since evolved into family oriented food chain and restaurants. In order to satisfy the changing taste and preferences KFC have come up with 3 segments: kids, teens and family. Kids: Chicky meal is a menu targeting young kids Teens: X-meal is another menu targeting the teens which consist of hot rods, burger and Pepsi drinks. Family: KFC provides special menu targeting the family known as family feast.

Customer frame work____

Conclusion:
KFC has to invest continuous product development in competitive industry like the fast food industry to remain market leader. This can be done by carrying out research concerning change of customer needs and preferences all the time. The fact that differences between the competitors is narrowing day by day the only way to survive is creating difference in terms of products, people, service delivery and quality. It is clear from the above report that a high number of people actually like to order from their home or workplace rather than coming. This may be due to more convenience, time shortage or just not willing to come and dine. Certainly the home delivery market is huge and KFC can take well advantage of the situation. Thus it would be in the best interest of the company to start the service as soon as possible and capitalize on the opportunity. KFC expects a rise in the orders by at least 20% by starting this service. Therefore, to conclude we would say that KFC should definitely have a home delivery service. KFC is a very strong chain of fast food restaurants with more than 10,000 restaurants all over the world. Being in Maturity Stage it has high opportunities of introducing its new products and deals. In Future it will be expanding its chain by introducing more outlets in Pakistan as well as in other countries.

Reference: Yum! Brands, Inc. http://www.yum.com KFC http://www.kfc.com

http://www.kfcholdings.com.my/English/Flashsite/BusinessUnits/Restaurants_KFC.asp http://www.kfcholdings.com.my/English/Flashsite/AboutCompany/OurGoals.asp http://www.malaysiamission.com/team.php?id=25 http://www.indexmundi.com/malaysia/demographics_profile.html http://www.allbusiness.com/food-beverage/restaurants-food-service-restaurantsfast/6988065-1.html http://www.indexmundi.com/malaysia/gdp_real_growth_rate.html http://www.kfcholdings.com.my/English/Flashsite/BusinessUnits/BizU_Poultry_Integration.a sp http://www.kfc.com.my/about-halal.html