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UNIVERSITY OF MUMBAI

A PROJECT REPORT ON

Comparative Study between KFC and McD

BACHELOR OF MANAGEMENT STUDIES

BY

Abdul Qadir Bootwala

{ROLL NO- 7}

BURHANI COLLEGE OF COMMERCE AND ARTS

(AFFILIATED TO UNIVERSITY OF MUMBAI)

MAZGOAN, MUMBAI-400010.

1
UNIVERSITY OF MUMBAI

A PROJECT REPORT ON

Comparative Study between KFC and McD

BACHELOR OF MANAGEMENT STUDIES

SEMESTER V

SUBMITTED

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS

FOR THE AWARD OF DEGREE OF

BACHELOR OF MANAGEMENT STUDIES

BY

Abdul Qadir Bootwala

ROLL NO- 7

Research Guide: N. S. Kazi

BURHANI COLLEGE OF COMMERCE AND ARTS

MAZGOAN, MUMBAI-400010.

Comparative Study between KFC and McD 2


DECLARATION

I, ABDUL QADIR BOOTWALA the student of T.Y.B.M.S. Semester V (2016-


2017) hereby

declare that I have completed the project on FAST FOOD FRANCHISING IN


INDIA.

The information submitted is true and original to the best of my knowledge.

(Signature of Student)

ABDUL QADIR BOOTWALA

{ROLL NO- 7}

BURHANI COLLEGE OF COMMERCE AND ARTS;

MAZGOAN, MUMBAI-400010.

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ACKNOWLEDGEMENT

I am grateful to BCCAs Institute of Management Studies (Affiliated to


University of Mumbai) for giving me an opportunity to pursue BMS. I
wish to thank I/c Principal, Dr. Haider-EKarrar, who has been a perpetual
source of inspiration and offered valuable suggestions to improve my
Research work.

I am thankful to my Research Guide Professor N S kazi, for abundant


guidance, support, and encouragement throughout my study.

I would like to express my thanks to my family, friends and colleagues


for their unfailing support.

Place: Mumbai

Date:

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Executive Summery

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 18thcentury, 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

Comparative Study between KFC and McD 5


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.

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Objective of the study-

1) To conduct a comparative analysis on the marketing parameters of


McD and KFC

2) To conduct survey analysis on the consumers preference of food joint


amongst McD and KFC

3) To know, which is better?

Hypotheses

1) People usually prefer McD rather than KFC

Scope of study

Scope of study is limited within the political boundaries of Mumbai.

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Research Methodology
Research Methodology is a way to find out the result of a given problem on a specific matter or
problem that is also referred as research problem. In Methodology, researcher uses different criteria
for solving/searching the given research problem. Different sources use different type of methods
for solving the problem. If we think about the word Methodology, it is the way of searching or
solving the research problem.

Research design

A. Problem defining

It was difficult to know which fast food service is better amongst McD and KFC. Therefore I
conducted this research to address the answer to the question which is better and in which ways?.
My focus was on consumers preference between McD and KFC.

B. Literature survey

I have used websites, newspaper and magazines related to McD and KFC

C. 1) Data sources

Primary data- I have used questionnaire for collection of primary data for this study
Secondary data- I have collected data from websites and magazines
2) Sampling

A Sampling is a part of the total population. It can be an individual element or a group of elements
selected from the population. Although it is a subset, it is representative of the population and
suitable for research in terms of cost, convenience, and time. The sample group can be selected
based on a probability or a non-probability approach. A sample usually consists of various units of
the population.

3) Tools

I have used column chart, bar graph, doughnut and pie diagram.

4) Sampling size

It represents how many candidates youve chosen to fill up the questionnaire or candidates upon
which u can study. I have chosen sample of 50 candidates.

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INDEX

Sr.No Particulars Pg.No


1 Chapter
1(McDonalds)
1.1 Introduction 1
1.2 History 2
1.3 Facts and Figures 4
1.4 Products 5
1.5 Global operations 6
1.6 Types of restuarants 8
1.7 McDonalds in India 9
1.8 Marketing Strategies 10
1.9 Business Model 14
1.10 Advertising 16
1.11 Customer perception 17
and customer
expectation
2 Chapter 2(KFC)
2.1 Introduction 18
2.2 History 20
2.3 Global operations 23
2.4 Products 26
2.5 Marketing Strategies 29
2.6 Advertising 32
3 Chapter 3
3.1 Comparison between 34
McD and KFC

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3.2 SWOT analysis 37
4 Chapter 4
4.1 Data analysis 39
4.2 Conclusion 49
4.3 Findings 50
4.4 Annexure 51
4.5 Bibliography 53

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McDonalds

Introduction

The McDonald's Corporation is the world's largest chain of hamburger fast food
restaurants, serving around 68 million customers daily in 119 countries across
35,000 outlets. Headquartered in the United States, the company began in 1940 as a
barbecue restaurant operated by Richard and Maurice McDonald. In 1948, they
reorganized their business as a hamburger stand using production line principles.
Businessman Ray Kroc joined the company as a franchise agent in 1955. He
subsequently purchased the chain from the McDonald brothers and oversaw its
worldwide growth.

A McDonald's restaurant is operated by either a franchisee, an affiliate, or the actual


corporation itself. The McDonald's Corporation revenues come from the rent,
royalties, and fees paid by the franchisees, as well as sales in company-operated
restaurants. In 2012, the company had annual revenues of $27.5 billion and profits of
$5.5 billion. According to a 2012 BBC report, McDonald's is the world's second
largest private employerbehind Walmartwith 1.9 million employees, 1.5 million of
whom work for franchises.

McDonald's primarily sells hamburgers, cheeseburgers, chicken, french


fries, breakfast items, soft drinks, milkshakes, and desserts. In response to changing
consumer tastes, the company has expanded its menu to
include salads, fish, wraps, smoothies, fruit, and seasoned fries.

Headquarters

The McDonald's headquarters complex, McDonald's Plaza, is located in Oak Brook,


Illinois. It sits on the site of the former headquarters and stabling area of Paul Butler,
the founder of Oak Brook. McDonald's moved into the Oak Brook facility from an
office within the Chicago Loop in 1971.

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History

The business began in 1940, with a restaurant opened by brothers Richard and
Maurice McDonald at 1398 North E Street at West 14th Street in San Bernardino,
California (at34.1255N 117.2946W). Their introduction of the "Speedee Service
System" in 1948 furthered the principles of the modern fast-food restaurant that
the White Castle hamburger chain had already put into practice more than two
decades earlier. The original mascot of McDonald's was a man with a chef's hat on
top of a hamburger-shaped head whose name was "Speedee". By 1967, Speedee
was eventually replaced with Ronald McDonald when the company first filed a U.S.
trademark on a clown-shaped man having puffed-out costume legs.

On May 4, 1961, McDonald's first filed for a U.S. trademark on the name
"McDonald's" with the description "Drive-In Restaurant Services", which continues to
be renewed through the end of December 2009. On September 13 that same year,
the company filed a logo trademark on an overlapping, double-arched "M" symbol.
By September 6, 1962, this M-symbol was temporarily disfavored, when a trademark
was filed for a single arch, shaped over many of the early McDonald's restaurants in
the early years. Although the "Golden Arches" logo appeared in various forms, the
present version as a letter "M" did not appear until November 18, 1968, when the
company applied for a U.S. trademark.

The present corporation dates its founding to the opening of a franchised restaurant
by Czech American businessman Ray Kroc in Des Plaines, Illinois on April 15, 1955,
the ninth McDonald's restaurant overall; this location was demolished in 1984 after
many remodels. Kroc later purchased the McDonald brothers' equity in the company
and led its worldwide expansion, and the company became listed on the public stock
markets ten years later. Kroc was also noted for aggressive business practices,
compelling the McDonald brothers to leave the fast-food industry. Kroc and the
McDonald brothers all feuded over control of the business, as documented in both
Kroc's autobiography and in the McDonald brothers' autobiography. The San
Bernardino restaurant was demolished in 1976 (1971, according to Juan Pollo) and
the site was sold to the Juan Pollo restaurant chain. This area now serves as

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headquarters for the Juan Pollo chain, as well as a McDonald's and Route 66
museum.[13] With the expansion of McDonald's into many international markets, the
company has become a symbol of globalization and the spread of the American way
of life. Its prominence has also made it a frequent topic of public debates
about obesity, corporate ethics and consumer responsibility.

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Facts and figures

By 1993, McDonald's had sold more than 100 billion hamburgers. The once
widespread restaurant signs that boasted the number of sales, such as this one
in Harlem, were left at "99 billion" because there was only space for two digits.

The McDonald's in Northport, Alabama commemorates U.S. President Ronald


Reagan's visit

McDonald's restaurants are found in 118 countries and territories around the world
and serve 68 million customers each day. McDonald's operates over 35,000
restaurants worldwide, employing more than 1.7 million people. The company also
operates other restaurant brands, such as Piles Caf.

Focusing on its core brand, McDonald's began divesting itself of other chains it had
acquired during the 1990s. The company owned a majority stake in Chipotle
Mexican Grill until October 2006, when McDonald's fully divested from Chipotle
through a stock exchange. Until December 2003, it also owned Donatos Pizza. On
August 27, 2007, McDonald's sold Boston Market to Sun Capital Partners.

Notably, McDonald's has increased shareholder dividends for 25 consecutive


years, making it one of the S&P 500 Dividend Aristocrats. In October 2012, its
monthly sales fell for the first time in nine years. In 2014, its quarterly sales fell for
the first time in seventeen years, when its sales dropped for the entirety of 1997.

McDonald's plans to close 184 restaurants in the United States in 2015, which is 59
more than it plans to open. This is the first time McDonald's will have a net decrease
in the number of locations in the United States since 1970.

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Products

McDonald's predominantly sells hamburgers, various types of chicken, chicken


sandwiches, French fries, soft drinks, breakfast items, and desserts.

In most markets, McDonald's offers salads and vegetarian items, wraps and other
localized fare. On a seasonal basis, McDonald's offers the McRib sandwich. Some
speculate the seasonality of the McRib adds to its appeal.

Products are offered as either "eat-in" (where the customer opts to eat in the
restaurant) or "take-out" (where the customer opts to take the food for consumption
off the premesis). "Eat-in" meals are provided on a plastic tray with a paper insert on
the floor of the tray. "Take-out" meals are usually delivered with the contents
enclosed in a distinctive McDonald's-branded brown paper bag. In both cases, the
individual items are wrapped or boxed as appropriate.

Restaurants in several countries, particularly in Asia, serve soup. 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,
or Ebi (prawn) Burger in Singapore and Japan).

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Global operations

McDonald's has become emblematic of globalization, sometimes referred to as the


"McDonaldization" of society. The Economist newspaper uses the "Big Mac Index":
the comparison of a Big Mac's cost in various world currencies can be used to
informally judge these currencies' purchasing power parity. Switzerland has the most
expensive Big Mac in the world as of July 2015, while the country with the least
expensive Big Mac isIndia (albeit for a Maharaja Macthe next cheapest Big Mac
is Hong Kong).

Thomas Friedman once said that no country with a McDonald's had gone to war with
another. However, the "Golden Arches Theory of Conflict Prevention" is not strictly
true. Exceptions are the 1989 United States invasion of Panama, NATO's bombing
of Serbia in 1999, the 2006 Lebanon War, and the 2008 South Ossetia war.
McDonald's suspended operations in its corporate-owned stores in Crimea after
Russia annexed the region in 2014. On August 20, 2014, as tensions between the
United States and Russia strained over events in Ukraine, and the resultant U.S.
sanctions, the Russian government temporarily shut down four McDonald's outlets in
Moscow, citing sanitary concerns. The company has operated in Russia since 1990
and at August 2014 had 438 stores across the country. On August 23, 2014,
Russian Deputy Prime Minister Arkady Dvorkovich ruled out any government move
to ban McDonald's and dismissed the notion that the temporary closures had
anything to do with the sanctions.

McDonald's, Old Mahabalipuram Road, Chennai, India

Some observers have suggested that the company should be given credit for
increasing the standard of service in markets that it enters. A group of
anthropologists in a study entitled Golden Arches East looked at the impact
McDonald's had onEast Asia, and Hong Kong in particular. When it opened in Hong
Kong in 1975, McDonald's was the first restaurant to consistently offer clean
restrooms, driving customers to demand the same of other restaurants and

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institutions. McDonald's has taken to partnering up with Sinopec, the second largest
oil company in the People's Republic of China, as it takes advantage of the country's
growing use of personal vehicles by opening numerous drive-thru
restaurants. McDonald's has opened a McDonald's restaurant and McCaf on the
underground premises of the French fine arts museum, The Louvre.

The company stated it would open vegetarian-only restaurants in India by mid-


2013. Foreign restaurants are banned in Bermuda, with the exception of KFC, which
was present before the current law was passed. Therefore, there are no McDonald's
in Bermuda.

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Types of restaurants

Most standalone McDonald's restaurants offer both counter service and drive-
through service, with indoor and sometimes outdoor seating. Drive-Thru, Auto-Mac,
Pay and Drive, or "McDrive" as it is known in many countries, often has separate
stations for placing, paying for, and picking up orders, though the latter two steps are
frequently combined; it was first introduced in Arizona in 1975, following the lead of
other fast-food chains. The first such restaurant in Britain opened
atFallowfield, Manchester in 1986.

McDrive

In some countries, "McDrive" locations near highways offer no counter service or


seating. In contrast, locations in high-density city neighborhoods often omit drive-
through service. There are also a few locations, located mostly in downtown districts,
that offer a "Walk-Thru" service in place of Drive-Thru.

McCafe

To accommodate the current trend for high quality coffee and the popularity of coffee
shops in general, McDonald's introduced McCaf, a caf-style accompaniment to
McDonald's restaurants in the style of Starbucks. McCaf is a concept created by
McDonald's Australia (colloquially known as "Maccas"), starting with Melbourne in
1993. Today, most McDonald's in Australia have McCafs located within the existing
McDonald's restaurant. In Tasmania, there are McCafs in every store, with the rest
of the states quickly following suit. After upgrading to the new McCaf look and feel,
some Australian stores have noticed up to a 60% increase in sales. At the end of
2003 there were over 600 McCafs worldwide.

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McDonalds in India

McDonalds entered India in 1996. McDonalds India has a joint venture with
ConnaughtPlaza Restaurants and Hard Castle Restaurants. Connaught Plaza Resta
urants managesoperations in North India whereas Hard Castle Restaurants operates
restaurants in Western India. Apart from opening outlets in the major metros, the
company is now expanding to Tier 2 cities like Pune and Jaipur.
Challenges in Entering Indian Markets

Regiocentricism: Re-engineering the menu -

McDonalds has continually adapted to the customers tastes, value systems,


lifestyle, language and perception. Globally McDonalds was known for its
hamburgers, beef and pork burgers. Most Indians are barred by religion not to
consume beef or pork. To survive, the company had to be responsive to the Indian
sensitivities. So McDonalds came up with chicken, lamb and fish burgers to suite the
Indian palate.

The vegetarian customer

India has a huge population of vegetarians. To cater


tothis customer segment, the company came up with a completely new line of vegeta
rian items like McVeggie burger and McAlooTikki. The separation of vegetarian and
non-vegetarian sections is maintained throughout the various stages. Segmentation,
Targeting and Positioning McDonalds uses demographic segmentation strategy with
age as the parameter. The main target segments are children, youth and the young
urban family

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Marketing Strategies

After segmenting the market, finding the target segment and positioning itself, each
company needs to come up with an offer. The 5 Ps used by McDonalds are:

Product
Place
Price
Promotion
People

Product

How should the company design, manufacture the product so that it enhances the
customer experience?

Product is the physical product or service offered to the consumer. Product includes
certain aspects such as packaging, guarantee, looks etc. This includes both the
tangible and the non-tangible aspects of the product and service. McDonalds has
intentionally kept its product depth and product width limited. McDonalds studied the
behavior of the Indian customer and provided a totally different menu as compared
to its International offering. It dropped ham, beef and mutton burgers from the menu.
India is the only country where McDonalds serve vegetarian menu. Even the sauces
and cheese used in India are 100% vegetarian. McDonalds continuously innovates
its products accordingly to the changing preferences and tastes of its customers. The
recent example is the introduction of the Chicken Maharaja Mac. McDonalds bring
with it globally reputed brand, world class food quality and excellent customer
specific product features.

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Place:

Where should be the product be available and the role of distribution channels?

The place mainly consists of the distribution channels. It is important so that the
product is available to the customer at the right place, at the Right time and in the
right quantity. Nearly 50% of U.S.A is within a 3 minute drive from a McDonalds
outlet

There is a certain degree of fun and happiness that a customer feels each time he
dines at McDonalds. There are certain value propositions that McDonalds offer to its
customers based on their needs. McDonalds offers hygienic environment, good
ambience and great service. Now McDonalds have also started giving internet facility
at their centers and they have been playing music through radio dedicated areas for
children where they can play while their parents can have some quality time
together.

Price:

What should be the pricing strategy?

Pricing includes the list price, the discount functions available, the financing optionsa
vailable etc. It should also take into the consideration the probable reaction from the
competitor to the pricing strategy. This is the most important part of the marketing
mix as this is the only part which generates revenue. All the other three are
expenses incurred. The price must take into consideration the appropriate demand-
supply equation. McDonalds came up with a very catchy punch line Aap ke zamane
mein ,baap ke zamaneke daam. This was to attract the middle and lower class
consumers and the effect can clearly be seen in the consumer base McDonalds has
now. McDonalds has certain value pricing and bundling strategies such as happy
meal, combo meal, family meal etc to increase overall sales volumes.

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Promotion:

What is the suitable strategy and channels for promotion of the product?

The various promotion channels being used by McDonalds to effectively


communicate the product information are given above. A clear understanding of the
customer value helps decide whether the cost of promotion is worth spending. There
are three main objectives of advertising for McDonalds are to make people aware
of an item, feel positive about it and remember it. The right message has to be
communicated to the right audience through the right media. McDonalds does its
promotion through television, hoardings and bus shelters. They use print ads and the
television programmes are also an important marketing medium for promotion. Some
of the most famous marketing campaigns of McDonalds are:

You Deserve a break today, so get up and get away- To McDonalds


Aap ke zamane mein ,baap ke zamane ke daam.
Food, Folks, and Fun
Im loving it

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People:

How to converge the benefits of internal and external marketing?

McDonalds understands the value of both its employees and its customers. It
understands the fact that a happy employee can serve well and result in a happy
customer. McDonald continuously does Internal Marketing. This is important as it
must precede external marketing. This includes hiring, training and motivating able
employees. This way they serve customers well and the final result is a happy
customer.

The level of importance has changed to be in the following order (the more important
peopleare at the top):

Customers
Front line employees
Middle level managers
Front line managers

The punch line Im loving it is an attempt to show that the employees are loving
their work at McDonalds and will love to serve the customers.

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Business Model

McDonald's Corporation earns revenue as an investor in properties, a franchiser of


restaurants, and an operator of restaurants. Approximately 15% of McDonald's
restaurants are owned and operated by McDonald's Corporation directly. The
remainder are operated by others through a variety of franchise agreements and
joint ventures.

The McDonald's Corporation's business model is slightly different from that of most
other fast-food chains. In addition to ordinary franchise fees and marketing fees,
which are calculated as a percentage of sales, McDonald's may also collect rent,
which may also be calculated on the basis of sales. As a condition of many franchise
agreements, which vary by contract, age, country, and location, the Corporation may
own or lease the properties on which McDonald's franchises are located. In most, if
not all cases, the franchisee does not own the location of its restaurants.

The United Kingdom and Ireland business model is different from the U.S, 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.

In other countries, McDonald's restaurants are operated by joint ventures of


McDonald's Corporation and other, local entities or governments.

As a matter of policy, McDonald's does not make direct sales of food or materials to
franchisees, instead organizing the supply of food and materials to restaurants
through approved third party logistics operators.

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. Employees are
encouraged by McDonald's Corp. to maintain their health by singing along to their
favorite songs in order to relieve stress, attending church services in order to have a
lower blood pressure, and taking two vacations annually in order to reduce risk
for myocardial infarction.

Fast Food Nation 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,

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potatoes, and apples. The selection of meats McDonald's uses varies to some extent
based on the culture of the host country.

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Advertising

McDonald's began operations in India in 1996. It retained Leo Burnett (India) to


provide authentic Indian insights in years of study and planning to meet local
conditions with special concern regarding local favorite items, religious-based food
taboos and India's strong vegetarian tradition. Its hamburgers are made of lamb or
chicken, not beef. It adapted local favorites into items such as McAloo Tikki, a
breaded potato pancake on a bun. It divided its kitchens in the vegetarian and non
vegetarian zones making sure that food did not cross the line. Its advertising told
Indians that its bright, inviting restaurants did not mean high prices. Its strategy was
profits through high volume and low prices. Locally it sponsored sports programs and
donations to visible charities.

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 and signage, sponsors sporting events ranging
from Little League to the FIFA World Cup and Olympic Games. McDonald's makes
coolers of orange drink with its logo available for local events of all kinds.
Nonetheless, television has always played a central role in the company's
advertising strategy.

To date, McDonald's has used 23 different slogans in United States advertising, as


well as a few other slogans for select countries and regions. At times, it has run into
trouble with its campaigns.

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Customer Perception and Customer Expectation

Customer perception is a key factor affecting a products success. Many potentiallyre


volutionary products have failed simply because
of their inability to build a healthy perception about themselves in the customers
minds. McDonalds being an internationally renowned brand brings with it certain
expectations for the customers. Customers expect it to be an ambient, hygienic and
a little sophisticated brand that respects their values.

The customers expect the brand to enhance their self-


image. Customer responses obtained at the
Vile Parle, Mumbai outlet confirmed the fact that they connect strongly with the
brand. However, fulfilling some of the customer expectations like a broader product
variety provide McDonalds a great scope for improvement.

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KFC

Introduction:

KFC (the name was originally an initialism for Kentucky Fried Chicken) is a fast food
restaurant chain that specializes in fried chicken and is headquartered
in Louisville, Kentucky, in the United States. It is the world's second largest
restaurant chain (as measured by sales) after McDonald's, with 18,875 outlets in 118
countries and territories as of December 2013. The company is a subsidiary of Yum!
Brands, a restaurant company that also owns the Pizza Hut and Taco Bell chains.

KFC was founded by Harland Sanders, an entrepreneur who began selling fried
chicken from his roadside restaurant in Corbin, Kentucky, during the Great
Depression. Sanders identified the potential of the restaurant franchising concept,
and the first "Kentucky Fried Chicken" franchise opened in Utah in 1952. KFC
popularized chicken in the fast food industry, diversifying the market by challenging
the established dominance of the hamburger. By branding himself as "Colonel
Sanders," Harland became a prominent figure of American cultural history, and his
image remains widely used in KFC advertising. However, the company's rapid
expansion saw it overwhelm the ageing Sanders, and in 1964 he sold the company
to a group of investors led by John Y. Brown, Jr. and Jack C. Massey.

KFC was one of the first fast food chains to expand internationally, opening outlets in
Canada, the United Kingdom, Mexico, and Jamaica by the mid-1960s. Throughout
the 1970s and 1980s, KFC experienced mixed fortunes domestically, as it went
through a series of changes in corporate ownership with little or no experience in the
restaurant business. In the early 1970s, KFC was sold to
the spirits distributor Heublein, who were taken over by the R.J. Reynolds food
and tobacco conglomerate, who sold the chain to PepsiCo. The chain continued to
expand overseas however, and in 1987 KFC became the first Western restaurant
chain to open in China. The chain has since expanded rapidly in China, which is now
the company's single largest market. PepsiCo spun off its restaurants division
as Tricon Global Restaurants, which later changed its name to Yum! Brands.

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KFC's original product is pressure fried chicken pieces, seasoned with Sanders'
recipe of 11 herbs and spices. The constituents of the recipe represent a
notable trade secret. Larger portions of fried chicken are served in a cardboard
"bucket," which has become a well known feature of the chain since it was first
introduced by franchisee Pete Harman in 1957. Since the early 1990s, KFC has
expanded its menu to offer other chicken products such as chicken fillet
burgers and wraps, as well as salads and side dishes, such as French
fries and coleslaw, desserts, and soft drinks, the latter often supplied by PepsiCo.
KFC is known for the slogan "finger lickin' good," which has since been replaced by
"Nobody does chicken like KFC" and "So good."

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History

Harland Sanders was born in 1890 and raised on a farm outside Henryville,
Indiana (near Louisville, Kentucky). When Harland was five years old, his father died,
forcing his mother to work at a canning plant. This left Harland, as the eldest son, to
care for his two younger siblings. After he reached seven years of age, his mother
taught him how to cook. After leaving the family home at the age of 13, Sanders
passed through several professions, with mixed success. In 1930, he took over
a Shell filling station on US Route 25 just outside North Corbin, Kentucky, a small
town on the edge of the Appalachian Mountains. It was here that he first served to
travelers the recipes that he had learned as a child: fried chicken and other dishes
such as steaks and country ham. After four years of serving from his own dining
room table, Sanders purchased the larger filling station on the other side of the road
and expanded to six tables. By 1936, this had proven successful enough for Sanders
to be given the honorary title of Kentucky colonel by Governor Ruby Laffoon. In 1937
he expanded his restaurant to 142 seats, and added a motel he purchased across
the street, naming it Sanders Court & Caf.

Sanders was unhappy with the 35 minutes it took to prepare his chicken in an iron
frying pan, but he refused to deep fry the chicken, which he believed lowered the
quality of the product. If he pre-cooked the chicken in advance of orders, there was
sometimes wastage at day's end. In 1939, the first commercial pressure
cookers were released onto the market, mostly designed for steaming
vegetables.[13] Sanders bought one, and modified it into a pressure fryer, which he
then used to fry chicken.[14] The new method reduced production time to be
comparable with deep frying, while, in the opinion of Sanders, retaining the quality of
pan-fried chicken.

In July 1940, Sanders finalised what came to be known as his "Original Recipe" of
11 herbs and spices. Although he never publicly revealed the recipe, he admitted to
the use of salt and pepper, and claimed that the ingredients "stand on everybody's
shelf." After being recommissioned as a Kentucky colonel in 1950 by
Governor Lawrence Wetherby, Sanders began to dress the part, growing

Comparative Study between KFC and McD 20


a goatee and wearing a black frock coat (later switched to a white suit), a string tie,
and referring to himself as "Colonel." His associates went along with the title change,
"jokingly at first and then in earnest," according to biographer Josh Ozersky.

Harland Sanders in character as "The Colonel"

The Sanders Court & Caf generally served travelers, so when the route planned in
1955 for Interstate 75 bypassed Corbin, Sanders sold his properties and traveled the
US to franchise his chicken recipe to restaurant owners. Independent restaurants
would pay four (later five) centson each chicken as a franchise fee, in exchange for
Sanders' "secret blend of herbs and spices" and the right to feature his recipe on
their menus and use his name and likeness for promotional purposes. In 1952 he
had already successfully franchised his recipe to his friend Pete Harman ofSouth
Salt Lake, Utah, the operator of one of the city's largest restaurants.

Don Anderson, a sign painter hired by Harman, coined the name "Kentucky Fried
Chicken." For Harman, the addition of KFC was a way of differentiating his
restaurant from competitors; a product from Kentucky was exotic, and evoked
imagery of Southern hospitality. Harman trademarked the phrase "It's finger lickin'
good," which eventually become the company-wide slogan. He also introduced the
"bucket meal" in 1957 (14 pieces of chicken, five bread rolls and a pint of gravy in a
cardboard bucket). Serving their signature meal in a paper bucket was to become an
iconic feature of the company.

By 1963 there were 600 KFC restaurants, making the company the largest fast food
operation in the United States. KFC popularized chicken in the fast food industry,
diversifying the market by challenging the established dominance of the hamburger.

In 1964, Sanders sold the company to a group of investors led by John Y. Brown
Jr. and Jack C. Massey for US$2 million (around US$15 million in 2013). The
contract included a lifetime salary for Sanders and the agreement that he would be
the company's quality controller and trademark. The chain had reached 3,000 outlets
in 48 different countries by 1970. In July 1971, Brown sold the company to
the Connecticut-based Heublein, a packaged food and drinks corporation, for
US$285 million (around US$1.6 billion in 2013). Sanders died in 1980, his
promotional work making him a prominent figure in American cultural history. By the

Comparative Study between KFC and McD 21


time of his death, there were an estimated 6,000 KFC outlets in 48 different countries
worldwide, with $2 billion of sales annually.

In 1982, Heublein was acquired by R. J. Reynolds, the tobacco giant. In July 1986,
Reynolds sold KFC to PepsiCo for $850 million (around US$1.8 billion in
2013). PepsiCo made the chain a part of its restaurants division alongside Pizza
Hut and Taco Bell. The Chinese market was entered in November 1987, with an
outlet in Beijing.

In 1991, the KFC name was officially adopted, although it was already widely known
by that initialism. Kyle Craig, president of KFC US, admitted the change was an
attempt to distance the chain from the unhealthy connotations of "fried". The early
1990s saw a number of successful major products launched throughout the chain,
including spicy "Hot Wings" (launched in 1990), popcorn chicken (1992), and
internationally, the "Zinger", a spicy chicken fillet burger (1993). By 1994, KFC had
5,149 outlets in the US, and 9,407 overall, with over 100,000 employees. In August
1997, PepsiCo spun off its restaurants division as a public company valued at
US$4.5 billion (around US$6.5 billion in 2013). The new company was named Tricon
Global Restaurants, and at the time had 30,000 outlets and annual sales of US$10
billion (around US$14 billion in 2013), making it second in the world only to
McDonald's. Tricon was renamed Yum! Brands in May 2002.

Comparative Study between KFC and McD 22


Global operations

KFC is a subsidiary of Yum! Brands, one of the largest restaurant companies in the
world. KFC had sales of $23 billion in 2013. KFC has its headquarters at 1441
Gardiner Lane, Louisville, Kentucky, in a three-story colonial style building known
colloquially as the "White House" due to its resemblance to the US president's
home. The headquarters contain executive offices and the company's research and
development facilities. KFC is incorporated at 1209 North Orange
St,Wilmington, Delaware.

By December 2013, there were 18,875 KFC outlets in 118 countries and territories
around the world. There are 4,563 outlets in China, 4,491 in the United States, and
9,821 across the rest of the world. Outlets are owned by franchisees or directly by
the company. Eleven percent of outlets are company owned, with the rest operated
by franchise holders. Althoughcapital intensive, company ownership allows for faster
expansion of the chain.

Most restaurants are furnished with images of the company founder, Colonel
Harland Sanders. As well as dine-in and take-out, many stand-alone KFC outlets
offer a drive-through option. KFC offers a limited delivery service in a small number
of markets.[44] Units include express concessions and kiosks which feature a limited
menu and operated in non-traditional locations such as filling stations, convenience
stores, stadia, theme parks and colleges, where a full scale outlet would not be
practical. Average annual sales per unit was $1.2 million in 2013. Worldwide, the
daily average number of food orders at an outlet is 250, with most occurring within a
two-hour peak-period.

As chairman and CEO of Yum!, David C. Novak ultimately has foremost


responsibility for KFC operations. Sam Su is chairman and CEO of Yum!'s Chinese
operations, and Muktesh Pant is the CEO of KFC. Richard T. Carucci is president of
Yum!, and Roger Eaton is the COO of Yum! and the president of KFC.

Comparative Study between KFC and McD 23


India:

In December 2013, there were 361 KFC outlets in India. As well as the standard
KFC offerings, the chain sells a chickpeaburger, a paneer burger, hot wings with
chilli lemon sprinkles and other country-specific products. A major franchise holder is
QSR Brands (M) Holdings, which operated 26 outlets as of 2012.

The first Indian KFC was a two-storey outlet on the fashionable Brigade
Road in Bangalore in June 1995. According to journalist Michael White, the company
could not have chosen a "more difficult venue for its maiden entre into the
country". Bangalore housed the headquarters of the Karnataka Rajya Raitha
Sangha, one of the most influential, vocal and anti-foreign investment farmers'
associations in the country. The first outlet suffered protests from left wing, anti-
globalisation and environmental campaigners, as well as local farmers, who objected
to the chain bypassing local producers. Man] Indians were concerned about the
onslaught of consumerism, the loss of national self-sufficiency, and the disruption of
indigenous traditions. The protests came to a head in August 1995, when the
Bangalore outlet was repeatedly ransacked. The KFC outlet in Bangalore
demanded, and received, a police van permanently parked outside for a year. The
outlet was closed on September 13, 1995 by local authorities, who claimed the
company used illegally high amounts of monosodium glutamate (MSG) in its
food. The outlet re-opened a few hours later as the result of an appeal by KFC to
the Karnataka High Court. The company stated the recipe was no different than that
used in any other KFC store.Rural activist M. D. Nanjundaswamy claimed KFC
would adversely affect the health of the impoverished, by diverting grain from poor
people to make the more profitable animal feed. Former environment
minister Maneka Gandhi joined the anti-KFC movement. A second outlet opened
in Delhi, but was closed by the authorities throughout November, purportedly for
health reasons, but more likely to avoid a repetition of the Bangalore incident. The
Delhi outlet soon closed permanently.

KFC began to expand outside of Bangalore in 2004, with a localized menu that was
the most extensive meat-free menu across the chain's worldwide operations. It
introduced a vegetarian menu that included rice meals, wraps and side dishes and,
like McDonald's, served eggless mayonnaise and sauces. Unnat Varma, marketing
director of KFC India, states "The vegetarian offerings have made the brand more
Comparative Study between KFC and McD 24
relevant to a larger section of consumers and that is necessary for KFC's growth."
KFC also began using Indian spices and cooking techniques to localize its chicken
dishes. By 200809, KFC operated 34 outlets in India. In 2014, KFC launched the
"So Veg, So Good" menu as part of an India-specific promotional strategy focused
on enhancing their vegetarian range. Dhruv Kaul, marketing director of KFC India,
stated, "The So Veg, So Good menu launch does not mean that we are moving
away from our core chicken offerings. It enhances and strengthens our existing
vegetarian range and helps broaden the brand's relevance in a diverse country such
as India." However, most of the vegetarian offerings were discontinued in 2015 with
the introduction of the "OMG Burger" which contains an egg omelet, mayonnaise
and golden-brown potato. Vegetarian items including the Veg Crisper and Roller
were stopped and replaced with the Potato Crisper which uses the same golden-
brown potato from the OMG burger inside the roll. The "Rice Bowls" choices were
also removed and the same golden-brown potato Rice Bowl was introduced as the
only choice.

Asia

KFC continues to grow in Asia. In Malaysia, the first KFC restaurant was opened in
1973 on Jalan Tunku Abdul Rahman. There are 579 outlets as of December 2013. In
1995, Projek Penyayang KFC was founded in an effort to provide food to more than
150 orphanage every quarter.

In Sri Lanka, KFC was launched in 1995 at Majestic City. There were 25 KFC
restaurants in Sri Lanka as of December 2014.

In Singapore, the first KFC franchise was opened in Somerset Road. In 1993, KFC
Singapore was the first KFC in Asia to develop and launch the Zinger burger. In
2002, KFC Singapore was acquired by KFC (Malaysia) Holdings Bhd.

In Bangladesh, the first KFC outlet was opened at Gulshan.

In Cambodia, KFC first opened on Monivong Boulevard in Phnom Penh.

In Myanmar, the first KFC outlet was officially opened on Bogyoke Aung San
Road in Yangon.

Comparative Study between KFC and McD 25


Products
KFC's core product offering is pressure fried, on-the-bone chicken pieces seasoned
with Colonel Harland Sanders' "Original Recipe" of 11 herbs and spices. The product
is typically available in either two or three piece individual servings, or in a family size
cardboard bucket, typically holding between 6 and 16 chicken pieces. Poultry is
divided into 9 different cuts (2drumsticks, 2 thighs, 2 wings, 1 keel, and
a backbone based breast cut divided into 2 pieces). The product is hand-breaded at
individual KFC outlets with wheat flour mixed with seasoning in a two- to four-minute
process. It is then pressure fried for between seven and ten minutes (the timing
differs between countries) in oil at 185 degrees Celsius. Following this, the chicken is
left to stand for 5 minutes in order for it to sufficiently cool before it is placed in the
warming oven. It is KFC policy to discard chicken if it has not been sold within 90
minutes, in order to ensure freshness. The frying oil varies regionally, and versions
used include sunflower, soybean, rapeseed and palm oil. A KFC executive stated
that the taste of the chicken will vary between regions depending on the oil variety
used, and whether the chicken has been corn-fed or wheat-fed.

As well as its core chicken on the bone offering, KFC's major products include
chicken burgers (including the Zinger and the Tower burgers); wraps ("Twisters" and
"Boxmasters"); and a variety of finger foods, including crispy chicken strips and hot
wings. Popcorn Chicken is one of the most widely available KFC products, and
consists of small pieces of fried chicken. In some locations, chicken nuggets are also
sold.

KFC adapts its menu internationally to suit regional tastes, and there are over three
hundred KFC menu items worldwide. Some locations, such as the UK and the US,
sell grilled chicken. In predominantly Islamic countries, the chicken served is halal. In
Asia there is a preference for spicy foods, such as the Zinger chicken burger. Some
locations in the US sell fried chicken livers and gizzards. A small number of US
outlets offer an all-you-can-eat buffet option with a limited menu.

A number of territories, such as Japan, Jamaica, Trinidad, Barbados, Ecuador and


Singapore sell fried seafood products under the "Colonel's Catch" banner. In
Jamaica, what was originally a seasonal offering for the Lent period was expanded
to a year-round offering from 2010.

Comparative Study between KFC and McD 26


KFC Hot Wings fried chicken in Malaysia.

Value menu items are sold under the "Streetwise" name in locations such as
Canada. Side dishes often include French fries, coleslaw, barbecue baked
beans, corn on the cob, mashed potato, bread rolls and American biscuits. Salads
include the bean salad, the Caesar salad and the garden salad. In a number of
territories, KFC sell onion rings. In Asia, rice based side dishes such as congee are
often sold. In Malaysia, chicken meatball soup is sold. In the US and Greece, potato
wedges are sold instead of French fries.

McCormick & Company is KFC's largest supplier of sauces, seasonings and


marinades, and is a long-term partner in new product development.

Due to the company's previous relationship with PepsiCo, most territories supply
PepsiCo products, but exceptional territories include South Africa, the Philippines,
Turkey, Romania, Greece and Barbados, which stock drinks supplied by The Coca-
Cola Company, and Aruba, which stocks RC Cola from the Cott Corporation. In
Peru, the locally popular Inca Kola is sold. In a number of Eastern European
locations and Portugal, beer is offered, in addition to soft drinks.

Launched in 2009, the Krusher/Krushem range of frozen beverages containing "real


bits" such as Kit Kat, Oreo and strawberry shortcake, is available in over 2,000
outlets. Egg custard tart is a popular dessert worldwide, but other items include ice
cream sundaes and tres leches cake in Peru.

In 2012, the "KFC am" breakfast menu began to be rolled out internationally,
including such items as pancakes, waffles and porridge, as well as fried chicken.

11 herbs and spices

Sanders' Original Recipe of "11 herbs and spices" is one of the most famous trade
secrets in the catering industry. The recipe is not patented, because patents
eventually expire, whereas trade secrets can remain the intellectual property of their
holders in perpetuity.

A copy of the recipe, signed by Sanders, is held inside a safe inside a vault in KFC's
Louisville headquarters, along with eleven vials containing the herbs and spices. To

Comparative Study between KFC and McD 27


maintain the secrecy of the recipe, half of it is produced by Griffith Laboratories
before it is given to McCormick, who add the second half.

Comparative Study between KFC and McD 28


Marketing strategies
There are different strategies adopted by KFC for different events. They market their
products on different events and in different activities as they are helping SOS
village. According to KFC, kids become the future permanent customers and we
know very well that without any marketing strategy no marketing program and no
product is successful because we depend upon customers, customer not depend on
us.KFC is following Niche Marketing and Societal Marketingtechniques.KFC possess
a western culture because some of the Indian people are also following that
culture.KFC are moving from Divisional Level to the District level by opening
branches.KFC also offer free home delivery.KFC open their outlets on reachable
places.KFC menu consists of more than 30 products.KFC gives more priority to
Family.

Product:

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.

Price:

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.

Comparative Study between KFC and McD 29


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 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.

Comparative Study between KFC and McD 30


Place:

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, asthe 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 Dground. 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 highthen the middleclass 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, highquality, and due to
international brand, it is the world recognized fast food restaurant all around the
world. So, forthe placing strategy, KFC chose the well income class areafor their
restaurants.

Comparative Study between KFC and McD 31


ADVERTISING

Colonel sanders

Colonel Sanders was a key component of KFC advertising until his death in 1980.
He made several appearances in various B movies and television programs of the
period, such as What's My Line? and I've Got a Secret. Jack Massey described him
as "the greatest PR man I have ever known". Franchisee Dave Thomas credited
Sanders' appeal to the fact that he "stood for values that people understood and
liked".

Since his death Sanders has remained as a key symbol of the company; an
"international symbol of hospitality".

In 1994, KFC hired actor Henderson Forsythe to portray the Colonel in a television
campaign entitled "The Colonel's Way". The $18.4 million campaign from Young &
Rubicam used black and white visuals. The campaign was deemed unsuccessful
and was ended.

From May 1998, an animated version of the Colonel, "boisterously" voiced by Randy
Quaid, was used for television advertisements. KFC chief concept officer Jeff Moody
said they "provide a fresh way to communicate our relevance for today's
consumers". The animated Colonel was dropped in 2001 in the US, and in 2002 in
the UK. In 2012, a UK advertisement entitled "4000 cooks" featured an actor made
up to resemble Sanders. Beginning in May 2015, Darrell Hammond began playing a
live-action Colonel Sanders in KFC commercials, later being replaced by Norm
Macdonald.

The ubiquity of Sanders has not prevented KFC from introducing a mascot aimed at
children. "Chicky", a young animated chicken, was first introduced in Thailand in the
1990s, and has since been rolled out across a number of markets worldwide, mostly
in Asia and South America.

Logos

The first KFC logo was introduced in 1952 and featured a "Kentucky Fried Chicken"
typeface and a logo of the Colonel. It was designed by the Lippincott &

Comparative Study between KFC and McD 32


Margulies corporate identity agency. Lippincott & Margulies were hired to redesign it
in 1978, and used a similar typeface and a slightly different Sanders logo.

Promotional tie-ins and corporate sponsorship

In 2013, WPP's BrandZ valued the brand at US$10 billion.

Between November 1998 and January 2000, KFC US teamed with Nintendo, Game
Freak and 4 Kids Entertainment in a Pokmon tie-in. Pokmon themed promotional
days were held, Pokmon Beanie Babies were sold, and Pokmon toys were given
away free with children's meals. In 1999, PepsiCo signed a $2 billion agreement
with Lucasfilm in order to market Star Wars themed meals in its KFC and Pizza Hut
chains.

Since 2010, KFC has sponsored the KFC Yum! Center in Louisville. In Australia,
KFC has sponsored the Big Bash League Twenty20 cricket tournament and
Twenty20 international matches since 2003.

Comparative Study between KFC and McD 33


Comparison between KFC and McD

McDonalds and KFC regard each other as a strong competitor in the fast food
industry. When starting from the moment of entering the Indian market, they have
been vying for the market leadership in India. Both of them are surprisingly similar in
many areas which including the service, standardization, organizations mission and
restaurant atmosphere. However, according to the results of the analysis in chapter
4, we can see the business performance of KFC is better than the McDonalds in
India, why is that? The differences in organizational performance are due to the
differences in their strategies and competitiveness aspects. In India, KFC is better
than the McDonalds in the development strategies. (Zhidao 2006) A dozen years of
development in China, their continuous integration and effective use of limited
resources and capacity in the Indian market. And they also formed a kind of unique
abilities which are hard to copy from each other in business. These abilities are their
core competitiveness. Both of them have one or more businesses that can achieve
first-class level, in addition, they have clear advantages in the field of competition.
They are all the foundation of competitive advantage for McDonalds and KFC in the
long-term. (Wenku 2011a) No matter how large an enterprise is, they will be
influenced by its resource and capacity. Resources are divided into physical, human,
financial, operational and intangible resources; capacities are the characteristics
shared by competitors of the same industries, which are usually developed by the
intern-enterprise, or outside of the enterprise. McDonalds cultivate their core
competitiveness by the continued integration of unique resources and effective
capacities. Concrete expression is as follows: The integration of intangible
resources: As the website named Social Brand Value stated, the 2010-top 100 most
valuable brands in the world showed that McDonald's has become one of the world's
most valuable restaurants brand. It was ranking No. 6 of the 2010-top 100. With a
high internet penetration and a fast information transfer, McDonald's in China relies
on its brand strength of its parent company, even though people who havent been to
McDonald's still know its reputation, McDonald's has an excellent brand recognized
24 degree; Basically, the brand of McDonalds recognized for excellence. (Social
Brand Value 2010) The integration of human resources: McDonald's managers

Comparative Study between KFC and McD 34


have special incentive training at the University of Hamburg, which are McDonalds
unique capabilities compared with KFC. (McDonalds 2012) Through the information
from KFC annual report, its core competence is integration of operational resources.
Their franchising model can be described as good one with strong Indian
characteristics. KFCs unique method of is not starting from scratch won the
interests of Chinese investors to join them. At the first time, KFC has been
determined to do the domestic products for Indian customers, and made a 100 per
cent localization of raw materials.

Comparative Study between KFC and McD 35


Comparison of McDonalds and KFC operation strategy---Growth strategy

McDonald's and KFC's growth as characterized is presented by some quantitative


indicators in the previous chapter, such as growth of sales revenue, number of
restaurants and the number of employment, which can be seen as both of them want
to expand the organization's scale. The strategy of McDonald's and Kentucky Fried
chicken is basically growth strategy in India. Growth strategy can be achieved
through direct growth, vertical integration, and horizontal integration to achieve.
Specific strategic development includes mergers, acquisitions, partnerships,
franchising, strategic alliances, and so on. (Strat. Mgmt. J.) KFC and McDonald's
have taken a direct expansion of growth, but the first McDonald's children's clothing
stores called McKids opening in Shanghai, India in 2004 marked the adjustment of
McDonald's business strategy, it means that the company is seeking effective growth
through diversification. In addition, there are also differentiations on drive-through
restaurants.

Comparison of McDonalds and KFC chain-store operations model

Both KFC and McDonalds implement regular sales and franchising sales on the
management mode to achieve profitable growth. Using the direct sales, the company
may be control shares absolutely, or there may also be a partnership with others.
Under this mode of operation, the company will pay the high up-front costs in relation
to the latter income part, and also the cost will be expended at one time. The
longtime gap will have an impact for the capital chain of the entire company;
however, using the franchising sales, although it increases the costs of control and
management to the company's stores, the upfront initial fee to supplement the cash
flows of the company will make the cash flow of the company smoothly as a whole.

Comparative Study between KFC and McD 36


SWOT analysis of McD and KFC

Strenght:-

McD:

Strong Brand

Customer Intimacy

Product Innovation

Supplier Integration

KFC:

Fast service
Variety of choices
The product made directly in front of customers
Strategic places

Weakness:-

McD:

Low depth of products


Width of products

KFC:

Low consumers loyalty


Lack of offers and promotions
No description on menu

Comparative Study between KFC and McD 37


Opportunities:-

McD:

Expand into tier 2 and tier 3 cities


Entry into breakfast category

KFC:

New direction of fast food industries


New snack for special occasions

Threats:-

McD:

Changing customer life style and taste


Increased competition from local fast food outlets

KFC:

Economic crises make people go to cheaper price


Customer will decrease because it is not a healthy food

Comparative Study between KFC and McD 38


Data Analysis

1) Are you a vegetarian or non vegetarian?


Vegetarian
Non vegetarian

Sales

Vegetarian

Non vegetarian

Interpretation:

Out of 50 correspondences, there are 71% of correspondence which are non


vegetarian.

Comparative Study between KFC and McD 39


2) How often you visit McD/KFC?
Once week
Twice a week
Once a month
Occasionally

Visits

50
45
40
35
30
25 48
20 36
15
10
12
5 4
0
Once a week Twice a week Once a month Occasionally

Interpretation:

There are 48 % of correspondences who visit KFC and McD occasionally whereas
36% of correspondence goes once in a month.

Comparative Study between KFC and McD 40


3) How much money do you spend in McD/KFC?
Below 30
30-70
70-100
Above 100

Money
90

80

70

60

50
84
40

30

20

10 14
0 2
0
Below 30 30-70 70-100 Above 100

Interpretation:

84% of the total correspondence spends above Rs 100 in their every visit.

Comparative Study between KFC and McD 41


4) Which is better in taste?
Burger
French fries
Chicken Nuggets
Coke-Float
Mc Caf
Crusher
Chicken Popcorns

Products
40

35

30

25

20

15

10

0
Burger French fries Chicken Coke-Float Mc Caf Crusher Chicken
Nuggets Popcrons

Interpretation:

Out of 50 correspondences mostly prefer burger followed by chicken popcorns and


french fries.

Comparative Study between KFC and McD 42


5) Which one is more hygienic?
KFC
McD
Both
None of the above

Hygienic

None of the above 10

Both 32

McD 40

KFC 18

0 5 10 15 20 25 30 35 40 45

Interpretation:

According to most of the correspondence McD is quite more hygienic than KFC.

Comparative Study between KFC and McD 43


6) Whose discounting offers are more attractive according to you?
KFC
McD
Both
None of the above

Offers

52

18 18
12

KFC McD Both None of the above

Interpretation:

According to most of the correspondence McD provides with more offers than KFC.

Comparative Study between KFC and McD 44


7) Who according to you provides better services?
KFC
McD
Both
None of the above

Services

None of the above 4

Both 20

McD 52

KFC 24

0 10 20 30 40 50 60

Interpretation:

According to most of the correspondence McD provides much better services than
KFC.

Comparative Study between KFC and McD 45


8) Which outlet would you like to prefer for a family outing?
KFC
McD
Both
None of the above

50
45
40
35
30
50
25
20
15 26
10
5 9
3
0
KFC McD Both None of the above

Interpretation:

Most of the correspondence prefers McD for a family outing rather than KFC.

Comparative Study between KFC and McD 46


9) Which brand according to you is reasonable in price?
KFC
McD
Both
None of the above

Price

8% 6%

16%
KFC
McD
Both
None of the above

70%

Interpretation:

70% of the correspondence says that McD is more reasonable in price than KFC.

Comparative Study between KFC and McD 47


10) Which one you like the most?
KFC
McD

Sales

KFC, 38

McD, 62

Interpretation:

Maximum members of correspondence out of 50 likes MCD.

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Conclusion

By making this project I conclude that Yes, McD is more preferable than KFC, due to
some factors like price, McD provides cheaper products which attracts most of the
people who cannot afford for KFCs meal. As KFC includes huge amount of taxes.
Another major factor is Rumors. Rumors about KFC have changed the mind set of
many people regarding the fast food they provide. With the help of the data analysis I
proved my hypothesis that 62% of people prefer McD rather than KFC.

Comparative Study between KFC and McD 49


Findings

I came to know that even KFC provides Veg meals


McD has a larger market share than KFC
I came to know that the products provided by McD are more hygienic than
KFC.

Comparative Study between KFC and McD 50


Annexure
McD v/s KFC

Questionnaire:

1) Are you a vegetarian or a non vegetarian?


o Vegetarian
o Non vegetarian

2) How often you visit McD /KFC?


o Once a week
o Twice a week
o Once a month
o Occasionally

3) How much money do you spend in McD/KFC?


o Below 30
o 30-70
o 70-100
o Above 100

4) Which is better in taste?


o Burger
o French-fries
o Chicken Nuggets
o Coke-float
o Mc Cafe
o Crusher
o Chicken Popcorns

5) Which one is more hygienic?


o KFC

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o McD
o Both
o None of the above
6) Whose discounting offers are more attractive according to you?
o KFC
o McD
o Both
o None of the above
7) Who according to you provides better services?
o KFC
o McD
o Both
o None of the above

8) Which outlet would you like to prefer for a family outing?


o KFC
o McD
o Both
o None of the above

9) Which brand according to you is reasonable in price?


o KFC
o McD
o Both
o None of the above

10) Which one you like the most?


o KFC
o McD

Comparative Study between KFC and McD 52


Bibliography

http://en.wikipedia.org/wiki/methodology

http://en.wikipedia.org/wiki/McDonald%27s

http://en.wikipedia.org/wiki/KFC

http://en.slideshare.net/ramtinreza/kfc-vs-mcdonald

http://www.cribd.com/doc/23291169/kfc-vs-McD#scribd

Comparative Study between KFC and McD 53