Project Report On

Kentucky Fried Chicken

From

Supervised by : Prof.Dr.Zain Yousafzai

Submitted by : Siawoosh Wared ( BBA Hons )

Registration # 1711-306055 ( BBA 11 )
th

Preston University Peshawar

Session 2006 – 2010
 Project Report
Marketing Strategies With Reference To

Kentucky Fried Chicken

A Project report submitted to the Preston University in partial fulfillment of

the requirement for the Degree of Bachelor of Business Administration.

Supervised by : Prof.Dr.Zain Yousafzai

Submitted by : Siawoosh Wared ( BBA Hons )

Registration # 1711 – 306055 ( BBA 11 )
th

Preston University Peshawar

Session : 2006 – 2010

II
Project Report
On

CD Page

III
 Approval Sheet

Vice Chancellor : ______________________

Prof.Dr.Anwar Hassan

Internal Supervisor : ______________________

Prof.Dr.Zain Yousafzai

External Supervisor : __________________

Department of Business Administration

IV
 Preston University
Peshawar

Preface

This report focus on KFC marketing strategies, its marketing environment , demographic
factor ,marketing factors.

I designed a report to provide a brief description about its marketing mix & its major
competitors in Pakistan. We also discuss four P’s of marketing & their marketing tools.

In addition to it, this report includes a research base survey on KFC. We all have tried
our level best to fulfill all the requirements mentioned to us. Now its depend upon the
reader to read it carefully and understand what we want to communicate. This report
provides a brief knowledge about KFC in Pakistan.

_____________________________________________________

V
 Acknowledgement
With profound sense of gratitude and regard, I express my sincere thanks to
my guide and mentor Prof.Dr.Zain for his valuable guidance and the
confidence he instilled in me, that helped me in the successful completion of
this project report.

Without his help, this project would have been a distant affair.

His thorough understanding of the subject and professional guidance was

indeed of immense help to me. Also, this acknowledgement would remain
incomplete
without thanking the staff of KFC Islamabad and Peshawar for their whole-
hearted and kind co-operation. I am also greatly thankful to the faculty
members of our institute who co-operated with me and gave me their valuable
time.

Siawoosh Wared
________________________________________________

VI
 Table of Contents

Chapter 1st Introduction .

1. Introduction of company . . . . . . . . . . . . . . . . . . . . . . . 11
2. Introducing New Product . . . . . . . . . . . . . . . . . . . . . . 12
3. Pricing Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Chapter 2nd Situation Analysis .

1. KFC History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2. Company’s Overview . . . . . . . . . . . . . . . . . . . . . . . . 15
3. KFC Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4. Values of KFC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Chapter 3rd Company and Branches .

1. Situation Analysis ( Current Products ) . . . . . . . . . . 19

2. KFC’s Original Recipe . . . . . . . . . . . . . . . . . . . . . . 20
3. KFC’s Outlets In Pak . . . . . . . . . . . . . . . . . . . . . . 21

Chapter 4th KFC’s Mission and Philosophy .

1. Philosophy of KFC The “CHAMPS” Program . . . . . . 24

2. The CHAMPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3. Mission of statement . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4. Goal of KFC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Chapter 5th Product Issue .

1. Quality Control Over ingredients . . . . . . . . . . . . . . . . . . 27

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1.1 Every chicken tasted . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
1.2 Every chicken certified . . . . . . . . . . . . . . . . . . . . . . . 27
1.3 Quality assurance certificate . . . . . . . . . . . . . . . . . . . . . 27

2. Packaging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.1 Recycled Paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.2 Environment Concerns . . . . . . . . . . . . . . . . . . . . . . . . 28
2.3 Litter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

3. Branding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Table of Content . . . .

Chapter 5th Product Issue .

4. Four Forces Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

4.1 Entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.2 Buys / Supplies Bargaining Power . . . . . . . . . . . . . . . . . . 30
4.3 Substitute and Complements . . . . . . . . . . . . . . . . . . . . . . . 31
4.4 Rivalry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Chapter 6th Current Target Market .

1. Promotions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

2. Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.1 Demographical Basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.2 Behavior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.3 Geographical Basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

3. Profile criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4. Market Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
5. Market for fast food . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

6. Economic Analysis of Market . . . . . . . . . . . . . . . . . . . 35

6.1 Macro Environment . . . . . . . . . . . . . . .. . . . . . . . . . . . 35
6.2 Micro Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.3 Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.4 Costumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

7. Strength and Weakness of Competitors . . . . . . . . . . . . . 35

8. Current Sale Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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 9. Environmental Factors and Opportunities . . . . . . . . . . . 36
9.1 Political . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.2 Economical . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.3 Socio Cultural . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.4 Technological . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.5 Environmental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.6 Legal Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

10. Summary of Current Situation . . . . . . . . . . . . . . . . . . . . . . . 38

10.1 Strengths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.2 Weaknesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.3 Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.4 Threats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Table of Contents . . . .

Chapter 7th Marketing Strategies of KFC .

1. Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2. 4-Ps of Marketing . . . . . . . . . . . . . . . . . . . . . . . . 43
3. Competitive Analysis . . . . . . . . . . . . . . . . . . . . 45
4. Promotion Issues . . . . . . . . . . . . . . . . . . . . . . . . 46
5. Advertisements . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6. Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
7. Questionnaire . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
8. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Table of Graphs

1. Macro Enviromnet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2. Competiive Advantages . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3. Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4. Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5. Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
6. Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

IX
 Project Report

On

Chapter No # 1st

Introduction

X
 Department of Business Administration
Preston University
Peshawar

Introduction of
Company

KFC Corporation, based in Louisville, Kentucky, is the world’s most

popular chicken restaurant chain, specializing in Original Recipe ®, Extra
Crispy TM, and Colonel’s Crispy Strips® chicken with home style sides and
five new freshly made sandwiches. Every day, nearly eight million customers
are served around the world. KFC’s menu everywhere includes Original
Recipe® chicken—made with the same great taste Colonel Harland Sanders
created more than a half-century ago. Customers around the globe also enjoy
more than 300 other products—from a Chunky Chicken Pot Pie in the United
States to a salmon sandwich in Japan.

XI
 KFC continues reaching out to customers with home delivery in more
than 300 restaurants in the United States and several other countries. And in
quite a few U.S. cities, KFC is teaming up with other restaurants, Taco Bell
and Pizza Hut, selling nearly fifty years ago; Colonel Sanders invented what is
now called “home meal replacement” – selling complete meals to harried,
time-strapped families. He called it, “Sunday Dinner, Seven Days a Week.”

Today, the Colonel’s spirit and heritage are reflected in KFC’s brand
identity – the logo features Colonel Harland Sanders, one of the best
recognized icons in the world.

KFC
KFC specialized in chicken and they says,

“No body’s cooking like KFC today and we are

the chicken experts”
“There is no competitor for spicy chicken which is
made by KFC”

Introducing New Product

Now enjoy T2O Cricket festivity with KFC's exciting new offer;
Get a complete T20 Meal Box which includes;
1 Zinger Burger, 3 pcs. Hot Wings, 1 regular Drink, 1 Fries and 1 Dinner Roll ! in only
Rs 320/- only

XII
Pricing Issues

Pricing Policy for “Zinger Burger” new product from KFC

Manufacturing cost RS.180/-

5% marketing cost ( Per.Unit ) RS. 50/-

Total cost RS.230/-

15% G.S.T +15% RETAIL MARGIN RS.90/-

Total retail Price RS.320/-

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Pricing Strategy for “Deal 6” From KFC

Manufacturing cost RS. 140/-

5% marketing cost ( Per.Unit ) RS. 25/-

Total cost RS.165/-

15% G.S.T +15% RETAIL MARGIN RS.45/-

Total retail Price RS.210/-

Project Report

On

XIV
 Chapter No # 2nd
Situation Analysis

Department of Business Administration

Preston University
Peshawar

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’s Overview

XV
 Colonel Harland sanders, born September 9, 1890, actively began franchising his
chicken business at the age of 65. Now, the Kentucky fried chicken business he
started has grown to be one of the largest retail food service systems in the world.
And colonel sanders, a quick service restaurant pioneer, have become a symbol of
entrepreneurial spirit. More than two billion of the colonel’s “finger lickin’ good”
chicken dinners are served annually. And not just in America. The colonel’s
cooking is available in more then 82 countries around the world.

When the colonel was six, his father died. His mother was forced to go to work,
and young Harland had to take care of his three year old brother and
baby sister. This meant doing much of the family cooking. By the age of seven, he
was a master of a score of regional dishes. Ate age 10, his first job working on a nearby
farm for $2 a month. When he was 12, his mother remarried and he left his home
near Henryville, Ind., for a job on a farm in Greenwood, Ind.

He held a series of jobs over the next few years, first as a 15-year-old streetcar
conductor in New Albany, Ind., and then as a 16-yearold private, soldiering for six
months in Cuba.

After that he was a railroad fireman, studied law by correspondence, practiced in

ustice 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 ravelers who stopped at his service station in Corbin, KY. He
didn’t have a restaurant then, but served folks on his own dining table in the living
quarters of his service station.

As more people started coming just for food, he moved across the street to a motel
and restaurant that seated 142 people.Over the next nine year, he perfected his
secret blend of 11 herbs and spices and the basic cooking technique that is still
used today.

KFC Pakistan

XVI
 KFC is the world’s No.1 Chicken QSR and has industry leading stature
across many countries like UK, Australia, South Africa, China,USA,
Malaysia and many more.

KFC is the largest brand of Yum Restaurants, a company that owns

other leading brands like Pizza Hut, Taco Bell, A&W and Long John
Silver. Renowned worldwide for it’s finger licking good food, KFC offers
its signature products in Pakistan too! KFC has introduced many offerings
for its growing customer base in Pakistan while staying rooted in the
taste legacy of Colonel Harland
Sander’s secret recipe.

Its signature dishes include the “crispy outside, juicy inside” Hot and
Crispy Chicken, flavorful and juicy Original Recipe chicken, the spicy,
juicy & crunchy Zinger Burger, Toasted Twister, Chicken Bucket and a
host of beverages and desserts. KFC also has great tasting vegetarian
offerings that include the Veggie Burger, Veggie Snacker and Veg Rice
meals. In Pakistan, KFC is growing rapidly and today has presence in 10
cities with close to 60 restaurants.

Values of KFC

Focus all our resources to our restaurants operation because that is where
we serve our customers.

Reward and respect the contributions of each individual at KFC.

Expand and update training with time and be the best we can be and
more.
XVII
Be open, honest and direct in our dealings with one and other.

Commit ourselves to the highest standard to the personal and

professional integrity at all times.

Encourage new and innovative ideas because these are the key to our
competitive growth.

Reward result and not simple efforts.

Dedicate ourselves to continuous growth in sales, profit and size of

organization.

Work as a team.

Project Report

On

XVIII
 Chapter No # 3rd
Company & Branches

Department of Business Administration

Preston University
Peshawar

Situational Analysis
Current Products
XIX
Kentucky fried chicken
· Zinger burger
· Krushers
· GameBox
· Twister
· Boxmaster
· Chicken Bucket
· Hot wings
· Fries
· Corn on the cob
· Zing Kong
· Snacker(chicken & veggie)
· Veggie Feast
· Soft Drink
· Coleslaw
· Chicken Thali
· Veg Finger
· Snack Box
· Sundae
· Soft Twirl
· Brownie Sundae

KFC Original Recipe

6 cups Crisco Shortening

1 eggs well beaten
2 cups Milk
2 cups Flour
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2 teaspoons ground pepper
3 tablespoons salt
1 teaspoon MSG
1/8 teaspoon Garlic Powder
1 dash paprika
2 Frying Chickens cut into 6 pieces
Place shortening into the pressure cooker and heat over medium heat to the
shortening reaches 400F. In a small bowl, combine the egg and milk. In a
separate bowl, combine the remaining six dry ingredients. Dip each piece of
chicken into the milk until fully moistened. Roll the moistened chicken in the
flour mixture until well coated. In groups of four or five, drop the covered
chicken pieces into the shortening and lock the lid. When pressure builds
up cook for 10 minutes.

KFC Outlets in Pakistan

Islamabad .
11 - United Bakery
Building, F-6/2, Super
Market, Islamabad.
For Delivery:

XXI
Ph: 111-532-532
Chicky Fun Area

Karachi …
SA-2, See Breeze Centre,
F1-17, Block - 5,
Kh-e-Roomi, Clifton,
Karachi.
For Delivery:
Ph: 111-KFC-KFC
(111-532-532)
Chicky Fun Area

Peshawar .
University Road,
Burjaman Plaza
Near Shadman Chowk,
Peshawar.
For Delivery:
Ph: 111-532-532
Chicky Fun Area

Lahore ……………………………………………………
160/2, Block 2,
Phase-1 LCCHS,
Lahore
For Delivery:
Ph: 111-532-532
Chicky Fun Area

Hyderabad .
Unit No. 1,
Shah Latifabad,
Thandi Sarak, Hayderabad.
For Delivery:
Ph: 111-532-532
Chicky Fun Area

Project Report

On

XXII
 Chapter No # 4th
KFC’s Mession & Philosophy

Department of Business Administration

Preston University
Peshawar

Philosophy of KFC the CHAMPS program

XXIII
Champs stands for our belief that the most important thing each of us can do
is to focus on the customer. It stands for our commitment to provide the best
food and best experience for the best value.

CHAMPS stand for the six universal areas of customer expectation

common to all cultures and all restaurants concepts.

The CHAMPS

These are:

Cleanliness
Hospitality
Accuracy
Maintenance of Facilities
Product Quality
Speed of Service

CHAMPS is the philosophy to ensure that the customer has the consistent
quality experience in every restaurant, everyday, on every occasions and you
will be playing role in delivering CHAMPS to our customers.

Mission of Statement

XXIV
“ To be the leader in western style 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 Pakistan 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.

Project Report
XXV
 On

Chapter No # 5th
Product Issues

Department of Business Administration

Preston University
Peshawar

XXVI
 Product Issues
General description:
Features:

Quality Control Over Ingredients

Every Chicken Tested

K & N’s state-of-the-art Quality Assurance Lab monitors the entire integration process
from livestock to feed and on to preparation of ready-to-cook and cooked products.

Every Chicken Certified

HACCP – K & N’s ensures food safety by implementing the international HACP (Food
Safety System) and enjoy the unique privilege of being the first and only HACCP
certified company is Pakistan producing chicken and chicken products. Free from
diseases
and bacteria, drug residues and other contaminants.

Quality Assurance Certificate

Director General ( Research ) has issued quality assurance certificate for the chicken used
by KFC.

Packaging
We are asked as many questions on our packaging as our products by our
customers. The packaging for KFC products is chosen according to performance
against three key criteria:

Heat Retention
Moisture removal
Grease absorption

The packaging material and carton design are all adapted to maximize performance
against these three criteria.

XXVII
 Recycled Paper
All our clamshells and chicken boxes contain as much recycled material as it is
legally allowed. By law we are required to have virgin fibre board in any part of the
packaging that is in contact with food. Any virgin fibre comes from board suppliers
who use pulp bought from managed forest in Scandinavia. This ensures that any
wood cut for paper production is replaced with new plantings.

Environmental Concerns
Over and above ensuring our packaging is supplied via recycled or renewable
resources; KFC are enthusiastically complying with the new environmental
directives on recovery and recycling of packaging waste.

Litter
We at KFC UKI are aware of our responsibilities to the Management of Litter and
all our packaging carries the ‘Keep your Country Tidy’ signs.

Branding

This research measured and compared the brand identity of Kentucky Fried
Chicken (KFC) in Pakistan. Brand identity was defined as the customer impressions
of four different KFC identity elements - properties, products, presentations,
and publications.

A survey of young consumers in the countries (n = 795), showed that the

respondents were more apt to eat within KFC restaurants, and spend more time
doing so, than the Americans. The Chinese also had much more positive impressions of
KFC. Brand identity impressions were correlated with overall customer
satisfaction and with future patronage intentions for both groups. These findings support
a model where differences in cultural frames of reference lead consumers to actively
localize the brand identity of this nominally globalized product.

XXVIII
 Four Forces-Analysis
Entry

For the current Pakistan market for fast food, it is not difficult for a fast food restaurant to
enter the market. However, it would be extremely difficult to take over already running
major fast food chains' dominancy in Pakistan or even make a significant amount of
profit.

While there are enough people in urban Pakistan for any restaurant to survive, KFC holds
the first-mover advantage into the 'non-veg food specialty food segment' that gives them
free reputation. Customers, especially children who are used to going to KFC as a treat or
reward from their parents or grandparents, are not going to want to go to other restaurants
they’ve never heard of. The brand name is already established. Also, there is already a
large variety in the numerous western-style dining places in Pakistan , such as McDonald’s,
Pizza Hut, Domino's and Subway, and any new fast-food entrants would just be presenting
something very similar to what’s already there. While small Neighborhood restaurants
generally have low barriers to entry, these are the barriers to entry for similar restaurant
businesses to enter the fast-food chain market.

Buyer/Supplier Bargaining Power

The customers of KFC, especially as individual buyers, have almost no bargaining power
because if only one customer threatens to no longer eat at KFC, the store is not going to
lower its price because the cost of losing one customer is not very great. The suppliers,
like the buyers, have very little bargaining power.

In terms of food, KFC, upon its move into Pakistan, urged many of its U.S. suppliers to
also extend branches into Pakistan. KFC also began helping local suppliers by giving them
technological support to improve their products. This is a brilliant strategy because the
supplies that KFC would otherwise need to import from the U.S. can now be obtained
domestically, and if the U.S. suppliers decide to raise their prices, KFC can easily switch
to the local suppliers. This gives us a brilliant strategy.

With this strategy, KFC created competition among its suppliers, lowering the supplier
bargaining power. In terms of human resources, labor cost is extremely low because the
supply of non-skilled workers great exceeds the demand for them. With so little buyer
and supplier bargaining powers, KFC is able to have a very tight control over its prices and
expenditures.

XXIX
 Substitutes and Complements

As mentioned above, there are a few major competitors in the fast-food industry in
Pakistan for KFC, namely McDonald’s, Pizza Hut, Domino's and Subway. The substitute
products, in this case, would be burgers, pizza, and sandwiches. Though they are competitors,
their primary products differ greatly from each other, in that they sell, chicken, burgers and
fries, pizzas, and sandwiches, respectively. Traditional Pakistan dining, home-cooked meals,
and grocery stores with ready-to-eat foods are also substitutes, as families could choose any
one of these over fast food for a meal. These substitutes are definitely considered healthy as
compared to the fast food chains. Even foods from street vendors count as substitute
goods.

While other fast foods serve as substitute to KFC, they can also serve as complements for
fast foods as a whole. If the general price of fast foods goes up,KFC’s price rises as well,
and the same can be said of the quantity sold of these products, which make them
complements to each other. KFC also sets up stores located near popular tourist
attractions, so tickets to these tourist spots are also complementary goods because the more
people tour these attractions, the more customers KFC will get.

Rivalry

Unlike what one would expect, KFC has little rivalry with similar fast-food chains in
Pakistan. The primary reason is that their core products are different, as in they sell
different kinds of fast foods with very different tastes and styles. For example, if KFC
raised its price for chicken by a small amount, Pakistan chicken lovers who may not be as
accepting to pizzas (many Pakistani people strongly dislike the taste of cheese) are not going to
switch to Pizza Hut just because the price for KFC increased. In addition to that, these
restaurants have such different target customers that the fluctuation of price for one restaurant
is not going to affect the others. For example, a full meal at KFC ranges about Rs. 100, whereas
a full meal at Pizza Hut can cost over Rs. 300. The drastic difference in price assures no
price competition between these restaurants.

XXX
 Project Report

On

Chapter No # 6th
Current Target Market

Department of Business Administration

Preston University
Peshawar

XXXI
 Current Target Market
Promotions
In Pakistan KFC not advertise there products too much because people KFC
due to its reputation in other countries. They promote their products through
special packages. They promote there products through billboard, pamphlets
and through other promotion strategies.

Segmentation

KFC has divided the market of Pakistan into distinct groups of customers with
different demands, tastes and behavior who require separate products or
marketing mix.
In Pakistan the niche marketing is being used for particular classes of people.
They have made segments of the market on the following bases.

Demographical

Behavior

Geographical

By using these three bases they segmented the market as under.

Demographical Basis
In demographics their first segment is consisted of the income factor i.e.
high income, average income and low income.

XXXII
 Behavior
In behavioral aspect they segmented the market on the basis of quality, taste
and price. Following are the different possible segments in this regard.

Taste conscious
Quality conscious
Class conscious
Combination of price and quality

Geographical Basis
On the basis of the geographical factor we have divided our market in three
main segments.

Urban areas
Sub urban areas

Profile criteria:

1.Gender: KFC is for each gender both male and female.

2.Income: Everyone can use the KFC service upper and middle class .

3.Age: age limitation for using this product above 15

4.Occupation: By profession also everyone can use this product means businessman
student workers and other peoples.

5. Education: It has no need more education that why the person who know something
can easily enjoy with this product.

6. Family life cycle: KFC is suitable in every stage of life like single married couple and
also those who have children can use this product.

7. Lifestyle: This product is used in every level of social class like upper, middle class.

8. Attitude : When the customers once buy this product after that they can use the
product continuously.

9. Purchasing decision: Often KFC changes the purchasing decision of customers

because of its good attributes.
XXXIII
 10. Geographic region: Geographically KFC is used in every part of the country as well
as all over the world.

Product positioning
Customer perceive this product as a unique product that other are not giving .
Attitudes
The attitudes of the public is very good people like our this new product like others.
Purchasing process:
Many people come from home to eat this , and some make impulse decision as they saw
it .

Market Coverage Strategy

KFC will be using differentiated market coverage strategy. It means that different
marketing mix will be used for different age groups.

Target Market For Fast Food

After evaluation of various segments, KFC has decided to target the market of Urban
and Sub-urban Areas of Pakistan.

Product usage
People are educated and they want variety in their diet.

Normally people of rural areas don’t take fast food. On the other hand people of urban
areas take fast food.

Income of the people of urban areas is normally high and they can afford to
purchase such products, which are slightly higher in price as compared to
prevailing prices of local food in the market.

People of Urban Areas are more quality conscious than the people of Rural Areas.

In Urban Area there lived people from every walk of life and profit generation is easier
than in Rural Areas.

Population density is higher in Urban Areas as compared to Rural Areas, so the number
of customers are more in Urban Areas.
XXXIV
 Economic Analysis of Market
A market in this context refers to a number of all actual and potential buyers of a product
(Kotler et al 2003). These buyers have a need to satisfy their needs through exchange .
These needs make up the demand for particular products and services. Several components must
be considered, as all these components have a direct or indirect impact on KFC’s success.

Changes in the below described components over the last couple of years have led to big
changes in people’s attitudes towards healthy food. It explains why Australians today
want to eat healthy and nutritious-rich food in order to keep themselves healthy and that
KFC must adjust their range of product and their company image to appeal to these new
expectations, people have .

Macro environment
KFC operates in a larger macro environment of forces that creates opportunities, but also
threats. (Kotler et al 2003). A company such as KFC usually cannot influence trends in
the macro environment, as they affect people and organisations on a larger scale.

However, KFC has to carefully examine macro environmental trends and must create
competitive responses to such trends. There are six major macro environmental forces
KFC has to take into account.

XXXV
 Micro environment
The microenvironment consists of all forces that are close to KFC, and on
which KFC has an impact. They directly affect KFC’s ability to serve its
customers. (Kotler et al 2003). Three major components influence KFC’s micro
environment:

Competitors
Because the fast food market in India is highly competitive, KFC faces a wide number of
direct and indirect competitors. KFC’s main competitors are fast food chains such as
McDonald’s and Domino’s, which are already well established throughout Pakistan .
McDonalds’s in particular is a direct competitor, as they have already successfully
introduced their Salads plus line , which directly targets ‘healthy food’ conscious
Pakistanis. But, there are a number of other competitors that is also focusing on ‘chicken’
types products. All this competition makes it quite difficult for KFC to maintain or even
broaden their customer base. However, with the introduction of a new and healthy product
range, KFC can differentiate itself from most competitors and will gain a competitive
advantage.

Customers
KFC’s customer market consists solely of the consumer market (Kotler et al 2003).
KFC’s products are bought by individuals (males, females, singles, and families).
Therefore, the product range KFC offer should appeal to as many people within this
consumer market as possible, to ensure that the maximum amount of products can be
sold. The characteristics of these individuals and a segmentation of them are discussed later in
this report.

Strengths and weakness of competitor

Strengths: 38 products, Attractive Outlets, Huge Marketing,
Budget, More entertainment for kids

Weaknesses: Same type of Menu, No Home Delivery

How they compete their competitors ?

It is found that KFC compete its competitors by five ways:
· KFC compete its competitors through marketing strategy
· They offered different packages at different events like ramdan offer,
XXXVI
 midnight offer etc.
· KFC compete there competitors by providing good services
· They must hired the hard selling persons to market their product in the
market and motivate their employees for the sake of organizations and
employees do well and they compete there competitors
KFC has quality products and through these quality products they
compete their competitors

Current Sales Analysis

Market Share
KFC has a very long history and has the most recognize able brand in chicken with
over 50% of the market share. It becomes difficult for the companies like Sub way,
Mc Donald’s, Chicken planet, Dixie or those who may want to enter in the market
of fast food restaurants.
Due to with over 50% of the market share in fast food industry KFC has
recognition around the world and has been globally positioned for many years in
Pakistan and to capture the market share in Pakistan adopts champs philosophy

Environmental Factors and Opportunities

Political :
The operations of KFC are affected by the government policies on the regulations
of fast food operation. Currently government are controlling the marketing of fast
food restaurant because of health concern such as cardiovascular and cholesterol issue
and obesity among the young and children in the country.

Governments also control the license given for open the fast food restaurant and
other business regulation need to follow such as for a franchise business. Good
relationship with government in giving mutual benefits such as employment and
tax is a must for the company to succeed in any foreign market.

Economic:
Though for last 1 year their was economic slowdown all across the globe but
the sales of KFC and other fast food chains did not slow down to that extent
that of other sectors in. The GDP (Purchasing Power Parity) is estimated at
2.965 trillion U.S. dollars in the year 2010. The GDP- per Capita (PPP) was
2700 U.S. dollars as estimated in 2008. The GDP- real growth rate in 2007
was 8.7%. Pakistan has the third highest GDP in terms of purchasing power
parity just ahead Japan and behind U.S. and China. Foreign direct
XXXVII
 investment rose in the fiscal year ended March 31 2007 to about $16 billion
from just $5.5 billion a year earlier. There is a continuous growth in per
capita income; Pakistan’s per capita income is expected to reach 1000 dollars
by the end of 2007-08 from 797 dollars in 2006-07. This will lead to higher
buying power in the Hands of the Pakistani consumers. So taking into
considerations the economic factors of Pakistan KFC is safe. The only danger to
it will be if there is a terrorist attack in Pakistan and the victim is KFC.

Socio cultural:
Pakistan’s population is divided in the following age structure: 0-14 years – 31.8%,
15- 64 years – 63.1% and 65 years and above – 5.1%.

There has also been a continuous increase in the consumption of fast food in
Pakistan. The social trend toward fast good consumption is changing and Pakistan
has seen an increase of 90% fast food consumption from the year 2002- 2007. This
increase is far greater than the increase in the BRIC nations of Brazil (20 per cent),
Russia (50 per cent) and China (almost 60 per cent). Thus this shows a positive
trend for fast food industries in Pakistan.

Technological:
The Pakistani fast food Industry is heating up with a lot of foreign players entering
the Pak market. The technological know how and expertise will also enter the Pak
market with an increase in competition. With the lower rates and increase
technology the fast food counters are attracting youth by giving them attractive deals.
For e.g. KFC and Domino’s pizza. For a fast food restaurant, technology does not
give a very high impact on the company and it is not a significant macro environment
variables.

However KFC should be looking to competitors innovation and improve itself in

term of integrating technology in managing its operation. For example in inventory
system, supply chain management system to manage its supply, easy payment and
ordering systems for its customers and wireless internet technology.
Implementation of technology can make the management more effective and cost
saving in the long term. This will also make customer happy if cost savings results in
price reduction or promotional campaign discount which will benefits them from time to
time.

Environmental:
As one of world largest consumer of beef, potatoes and chicken, KFC always had
been critics for world environmentalist. This is because high consumption of beef
causing the green house effect by methane gasses coming from the cow’s ranch.
XXXVIII
 Large-scale plantation has effect the environment and lost of green forest opening
for plantation activities.
Vegetarian environmentalist criticizes the fast-food giant for cruelty to animals and
slaughtering.

In America, once KFC want to introduce whale burger causing uproar because
whales are endangered species. Before using paper packaging, KFC once had been
criticized for being insensitive to pollution because of using ne based packaging for its
food products. Imagine millions of people purchase from fast food operator and how is
the impact to world environment by throwing away those hard to recycle packaging.

Our world is getting concern on environment issue and business operating here
should not just care for profit, but careful usage of world resources for sustainable
development and care for environment safety and health for our future generation.
Critics and concern from all public or activist should be review and support if
necessary to ensure we play our social responsibility better.

Legal factors:
As a certified fast food operator, there are many regulations and proceduresthat
KFC should follow. For example is the Halal certification that becomes a concern to
Muslim consumers. KFC should protect its integrity and consumer confidence by
ensuring all materials and process are as claimed or must followed.

Other legal requirement that the business owner should follow as stipulated in laws
are such as operating hours, business registration, tax requirement, labor and
employment laws and quality & environment certification (such as ISO) in which
the outlethas been certified. The legal requirement is important because the offenders
will be fined or have their business prohibited from operating which can be disastrous.

Summary of current situation

SWOT analysis mean strength, weakness, opportunities and threats and the
SWOT analysis of KFC are:

Strengths
Goodwill and reputation: The company certainly has earned a good name and
reputation by its previous products and services in the market. It is even more
recognized in other markets outside Pakistan, where the company is among the
leading fast food giants. The brand is recognized and trusted in Pakistan for its

XXXIX
quality products, price, and customer service. It therefore has a good head start and
enjoys a good chance of becoming a leader in Pakistan fast food industry.

Employee Loyalty: Employee Loyalty is one of the major strengths of KFC. The
turnover rate in the company is amongst the lowest in the industry.

Customer Loyalty: Despite gain by Boston Market and Chick-fill A, KFC

customer base remained loyal to the KFC brand because of its unique taste. KFC
has continued to dominate the dinner and take out segment of the Industry.

Ranks highest among all chicken restaurant chains for its convenience and
menu variety. It generates $1B revenue each year.

Weaknesses

KFC was losing market share as other Chicken chain increased sales at a faster
rate.

KFC share of Chicken Segment sales fell from 71 percent 1999 , to less than 56
percent in 2009 , a 10 -years drop of 15 percent.

Huge competition in this segment.

KFC has not yet invested much on R&D, and innovating new products for Pakistan
Markets. This may lead to failure of their products as they are not in line with the
Pakistan mind set, peoples taste and preferences and their likes and dislikes. This
may prove fatal for the company.

Opportunities

New Markets: Globalization has opened doors for new markets for the company.
As the developed markets are mostly saturated, the developing countries like
Pakistan and China promises a good market and generation of demand in the
future. With more than 70% of the markets in Pakistan being unexplored and un
organized, KFC has a good scope of expanding its operations in the country.

Cross Culture: Generally there is a good acceptance of American culture of fast

food in Pakistan. People are opening up to fast foods more regularly in their daily

XL
lives and not just keeping it a once in a month affair. Thus Pakistan mindset is fast
changing.

Large Youth population: Pakistan has a very large share of youth population a
compared to other countries. More than 60% of the population is under the age of
30yrs. As the young generation are more open to fast foods and demand it more,
this is a good news for the company.

New variety: Company can also come up with new variety in the menu like
Pizzas, garlic breads to attract more customers.

Threats

Competition: Competitor companies like McDonalds are fast catching up with the
market.McDonald’s with sales of more than 19 billion in 1999, accounted for 15
percent of the sales of the nation’s top 100 restaurant chains.

Organisations like PETA People for Ethnic Treatment for Animals have given a
bad name to the company which may prove disastrous to the image of the firm.
Currently, KFC is under massive attacks from animal organizations, questioning
the way KFC’s suppliers are threatening the chicken, before they got slaughtered.
Anti-KFC campaigns, such as the one from PETA are affecting KFC’s brand
image in a negative way and result in direct dollar losses, as less people are
consuming KFC chicken

Saturated US Market: Now KFC cannot rely on just its home market to generate
sales. As the US markets are already saturated and leave no or little scope for growth,
company necessarily needs to look at offshore foreign markets to generate sales and keep
up the profits.

XLI
Project Report

On

XLII
 Chapter No # 7th
Marketing Strategies of KFC

Department of Business Administration

Preston University
Peshawar

Marketing Strategies Of KFC

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 permanents customers and

we know very well that without any marketing strategy no marketing
program and no product is successful because we depend upon customers,
customer not depend on us. KFC is following Niche Marketing and Societal
Marketing techniques. KFC possess a western culture because some of
the Pakistanis 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.

XLIII
 KFC open their outlets on reachable places.

KFC menu consists of more than 30 products.

KFC gives more priority to Family.

Marketing

Since 1982, KFC’s “All-American salute to Mothers” national card

contest has been KFC’s way of honoring moms and their families for
making mother’s Day KFC’s biggest sales day of the year. The contest
encourages children to creatively express their feelings for their moms by
making a homemade card and give them chance to compete for more than
$10,000 in cash and prizes. Educational packets, including language,
history and art exercises highlighting Mother’s Day, were sent to thousands
of schools nationwide.

There are 4 P’s of Marketing:

1. Production
2. Pricing
3. Promotion
4. Placement

1st. Production:
Basically the product is anything that be offered to a market for attention,
acquisition, use, or consumption that might satisfy a want or need. KFC is specially
dealing in the chicken products; Basically, KFC has the special raspy for chicken
products that is why, KFC known as a chicken specialist allover the glob. KFC target
the Asia and east side because they observe that they people are like the chicken
products, so they enter in the market due to the demand of their chicken products. KFC
product variety of product in the chicken, those products are:

Products:

XLIV
 · Original recipe® chicken
· Extra Tasty CrispyTM chicken
· Hot WingsTM pieces
· Tender Roast® chicken
· Chunky Chicken pot pie
· Kentucky Nuggest®
· Colonel’s Crispy Strips®
· Honey BBQ sandwich
· Original Recipe® Sandwich
· Tender Roast® Sandwich
· Triple Crunch® Sandwich
· Triple Crunch ®Zinger® Sandwich

Brand:
There are three brands of the KFC:

1) Taco bell
2) Pizza Hut
3) Long john silvers

2nd. Pricing:
KFC during pricing their products keep the different points in the mind like they adopt
the cost base price strategy. Pricing of the product includes the Government taxes and excise
duties and then they come at final stage of determine the price of their products. KFC
prices of products are a bit high according to the market segment and it is also compatible to the
stander of their products.
Calculation of the price under Cost Based Pricing Strategy:

Total Pounds of Chicken Served in KFC Restaurant Annually = 1.914 Billion

Total KFC Chicken Pieces Sold Annually = 5.89 Billion

Total Retail Sales = $8.9 Billion

Sales Price of per Chicken Piece = Total Retail Sales / Chicken Pieces sold = $8.9 Billion /
$5.89 Billion =$1.51 We assume that Fixed Cost is = $6000000000

Variable Cost = $675000000

XLV
 Profit Margin is Or Mark Up = $225000000(25% of Sales) Per Unit Variable Cost =
$675000000 / 5890000000 = $ 0.115

Unit Cost = Variable Cost + Fixed Cost / Chicken pieces Sold = 0.115 + 6000000000 /
5890000000 = 0.115 + 1.02 = $1.135 Now suppose manufacturer wants to earn 25% mark up on
sale. The manufacturer mark up price is calculated:

Mark Up Price = Unit Cost / (1 – Desired Return on Sales) =1.135 / (1-.25) = 1.135 / 0.75 =
$1.51

3rd . Promotion:
Promotion is one of the necessary plates in any form of business or in other words you
can say that promotion is the key of success. If you promote your product at the right time.
KFC also known the importance and significance of promotion so they uses the bill boards the
major source of advertisement and one of the most important thing that they uses media
especially the newspapers to promote their products. They are also creating awareness
among the masses about their existing product range as well they tell us about the future
product.

Marketing efforts to be taken by the restaurant:

Paste delivery posters at petrol pumps, flats, colleges, plazas, and departmental stores.

Distribution of delivery flyers in residential areas, markets, plazas and institutions (as per
the plan)

Visit offices and business places.

4th .Placement:
In the case of the KFC the placement of the product is not important but the placement of
the restaurant is important. The products of the KFC is cooked at the sport and then
served after that. KFC Cavalry branch opened in June 1998, in the main commercial zone
of Cavalry Grounds near the Jinnah Flyover. The restaurant is a three-story building
including the basement (where the chicky play area is located). It is ideally located in the
center of a main commercial and residential area of Lahore. The area that KFC Cavalry caters
for is the residential and office area of Cavalry Grounds and Cantt, as the main target

XLVI
market. Another branch the KFC opened in the Lahore is in Garden Town (opposite to
Barkat Market). KFC also target the Faisalabad and open its branch in D ground.

Now we can easily judge that the KFC target the place for their restaurant, which is well
known and is in the Porsche area where the income level of the people is high then the
middle class level. Because the prices of the KFC products is high with comparison to the
local products manufacturer who are dealing in the same kind of product in which KFC is
dealing but the prices of the KFC is high due to special taste, high quality, and due to
international brand, it is the world recognized fast food restaurant all around the world.
So, for the placing strategy, KFC chose the well income class area for their restaurants.

Competitive analysis
Competitors
You cannot enjoy the business without competitors. No organization can afford to ignore
there competitors. It is very important for a marketing managers to monitor the activities
of there competitors, what they are doing? KFC adopted such sort of strategy that there is
no competitor for spicy chicken, which is made by KFC.

KFC beats its competitors through the revising marketing strategy at every movement but
the main competitor of KFC are Mc Donalds

Competitive Advantage

XLVII
 KFC Mc Donald’s
Spicy Product

Pakistani People like spicy food rather than French Fries and Burgers
boiled food

Arabian Rice and Zinger Burger Big Mac

Free Delivery Chargers on Home Delivery

Chicken is eaten in very community Beef is banned is some community

Local stuff and highly qualified because Its stuff is consists of simple graduates and
local stuff can better deal with customers give them training

KFC uses Top to Bottom and Bottom to Mc Donald’s use Top to Bottom approach in
Top approach in their Management their Management

Promotion Issues

Sales promotion
For the sales pormotion KFC introduced their goods like watches , keychain,
e.t.c to the customers.

XLVIII
 Advertisement
I do not normally think that advertising stunts are particularly interesting or creative, but I
thought this one by KFC was…well…inspired.

KFC, the fried chicken franchise , is offering itself as a corporate sponsor for pothole
repair. An actor dress as KFC founder Colonel Sanders and a road repair group got
started this week in the franchise’s hometown of Louisville, Ky. Filling up hundreds of holes.

Many of the repairs are decorated with a while stencil saying the spot was”Re-freshed by
KFC” A play on KFC’s ad campaign stressing the freshness of their chicken . KFC
spokesman Russell Dayer said that crew is using “ Regular asphalt,” not day – old
biscuits .

XLIX
 Business sector is Fast food outlets & restaurants. One of KFC's latest advertisements is a
commercial advertising its "wicked crunch box meal". The commercial features a
fictional black metal band called "Hellvetica" performing live, the lead singer then
swallows fire. The commercial then shows the lead singer at a KFC eating the "wicked crunch
box meal" and saying "Oh man that is hot". In 2007, the original, non-acronymic Kentucky
Fried Chicken name was resurrected and began to reappear on company marketing
literature and food packaging, as well as some restaurant signage.

Data Analysis
The data we received is as follows:-

We did a survey on KFC on people with age group of mostly 20-25yrs. Mostly all were open to KFC’s
recipe , and following were the results. As seen below KFC has shown a good report on all the micro
factors that we considered.

L
We also asked questions on whether they would like KFC to start home delivery services.

We also inquired “How close is the nearest KFC outlet from your house?

LI
Would you like to order at home or Dine in?

Questionnaire about KFC in Peshawar

LII
1. Age………… c. Bad
2. Your occupation (Please, specify your reasons)
………………………………… ……………………………………………
3. When did you know about KFC?....................... 11. How does the KFC’s prestige affect your
4. Why do you choose KFS but other restaurants? decision
…………………………………………………… a. Very much
…………………………………………………… b. Normal
5. By what way did you know about KFC? c. Very little
a. Advertisement on newspaper/magazine 12. Does the logo attract you?
b. Internet Yes…………..No…………….
c. Family/friends/ colleagues (if yes, please specify your reasons)
……………………………………………………
d. Banner
13. How often do you come to KFC
e. People working for KFC
a. Every 3 days
f. Leaflets
b. Once a week
g. Others………………
c. Once a month
6. Do you think KFC should start Home Delivery
Service ? d. Other options………………….
a. Yes 14. What do you think about the price here?
b. No a. Very expensive
c. If Yes ( Why ) b. Expensive but still payable
7. In terms of location, why do you come to KFC? c. Reasonable
a. It lies on a main road d. Cheap
b. It lies next to a supermarket 15. How do you feel about KFC's food?
c. It looks out of 2 roads a. Delicious
d. Others……………………………. b. Good
(You can tick more than 1 option) c. Normal
8. Would you prefer order at home or dine in the d. Not Good
KFC ? 17. What are your suggestions for improving KFC's
a. Dine In service quality? (If any)
b. Order at home …………………………………………………………
c. Really doesn’t matter
9. What factors of location affect your decision? Thank you very much for your
a. Near your house cooperation! 
b. On the way to work or school
c. Near shopping centre
d. Near the red light so that it’s easy to be
recognized
Reference
e. Others………………………….
Arash.N.Wared
10. What do you think about the parking area at Toronto Alum’06 peace and Conflict studies ,
KFC? International Relations
a. Good +001-647-2845838 ( an_wared@hotmail.com ) (
http://arashwared.blogspot.com/ )
b. Normal
53
Corporate Office ( Karachi )
Cupola Pakistan Ltd. 5th Floor , Park Tower ,
Sharah-e-Firdousi
Clifton , Karachi
Tel : 92-21-5877976 (
http://www.facebook.com/pages/KFC-pakistan )

Akhtar Munir
NBP , University Town Branch , Peshawar
Tel:+92-333-9157958

http://www.coursework4you.co.uk/essays-and-
dissertations/analysis-of-companies/kentucky-
fried-chicken-kfc/kentuckyfriedchickenkfc.php

http://www.scribd.com/doc/6546600/Questionnair
e

http://foodcourt.pk/index.php?
option=com_wrapper&Itemid=113

http://www.kfc.com/contact/

http://www.pueblo.gsa.gov/

http://www.kfcpakistan.com/

54
 Conclusion
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.

_____________________________________________________________________