Chapter 1: Introduction

1.1 Company

1.1.1 Company Background

Kentucky Fried Chicken (KFC) is a fast food brand specializing in chicken.

KFC’s organizer is Colonel Harland Sanders. KFC was established in 1930 during the
Great Depression. KFC is the world’s second largest eatery network after McDonald,
and the world’s most prominent chicken brand.

The first KFC was opened in Salt Lake City, Utah in 1952 by Pete Harman.
Pete Harman presented the “BucketO’Chicken” in 1957. He also credited the slogan
“It’s finger-lickin good”.

KFC Corp. is situated in Louisville, Kentucky. It is also a supplementary of

Yum! Brands, which also owns Pizza Hut and Taco Bell. Yum! Brands has around
42,000 restaurants in more than 125 countries and domains, making it one of the
world’s largest eatery organizations. Throughout the years, KFC franchisees have had
the choice to co-mark with Taco Bell or Pizza Hut.

As indicated by company figures, the KFC system serves in excess of 12

million customers daily. Most purchases are take out or to-go, in spite of the fact that
the stores also offer in-store dining. Yum! Brands declared that KFC would start
deliveries by 2016 in 2015. KFC participates in brand showcasing to keep the brand
in consumers’ minds: KFC commercial at least once a week. KFC is also a pioneer in
the use of social media to attract and connect with customers.

KFC franchisees get continuous help through The Yum! Value Network,
which offers projects and support that include brand acknowledgement, customer
attraction, competitive advantage, franchise value system, multi-unit development,
economic stability, offering back to the community, improvement mastery, access to
financing, strong business support, quality on-boarding and training, a dependable
supply chain, and return of return.

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1.1.2 Different Products marketed by KFC
There are many types of products that are marketed by KFC such as breakfast, all-
time favourites, burger & wraps, crispy tenders & nuggets, add-ons, and desserts &
beverages. These are few types of examples of the products that are marketed by
KFC.
Category Product name Image
Breakfast Zinger Porridge

All-time favourite Family Feast

Burger& wraps Cheezy Twister

Crispy tenders& nuggets 6pc Crispy Tenders

Add-ons Coleslaw
 Dessert & Beverages Vanilla Pudding Mango
Peach

Chapter 2: Analysis of marketing strategy (4 P’s)

2.1.1 Product Classification

Kentucky Fried Chicken Company is categorised under consumer products as

consumers buy KFC for personal consumption. Consumer product are products and
services bought by final consumers for personal consumption.

Under the category of consumer products, Kentucky Fried Chicken Company is

classified under Shopping Product. Shopping product are a consumer product that the
consumer usually will compares a plan on attributes such as suitability, quality, price
and style in the process of selecting and purchasing. Shopping products are usually
lesser frequently purchase as consumer will spend more time on comparing.

Besides that, Consumer is willing to gather information of shopping products. As

you can see, Shopping product tend to be higher prices compare to more convenience
products.Types of consumer products that fall in the category of shopping products
are furniture, appliances, clothing, used cars, airline services, fast food etc.

Other than that, Shopping product exclusive distribution in fewer locations such
as IKEA, KLCC, AEON, Mid Valley etc. The company targeted more on different
price and stages of consumer by its product in order to help customers in comparison
effort.

2.1.2 Product & Service Decisions

Product Attributes

Product attribute is a combination of quality, features, style and design. KFC

has totally different types of food product on their menu. They principally sell fried
chicken. In the aspect of product quality, they follow constant direction to take care of
the standard of the food product altogether the restaurants. KFC catchword that is “it’s
finger lickin’ good!” KFC offers customers freshly made foods that they'll eat where
they need at constant quality.
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Besides that, the aspect of product features of KFC is that the fried chicken of KFC.
Their chicken is crisply arranged in each eatery, prepared with a mystery mix of their
formula which is 11 herbs and spices. Besides that, KFC fried chicken are also hand
breaded throughout the day by a certified cook.
In the aspect of product design, KFC is well known in their design of packaging. KFC
fried chicken bucket loaded up with a wide range of illustrations and swooshes and
advancements and hash tags. The design is so convenience, it supplanted the dishes
and shopper benevolent.
Branding

A brand is a combination of a name, term, sign, symbol, or design that identifies the
maker of seller of a product or services. Kentucky Fried Chicken’s logo its brand
name, symbol and also design. The KFC logo involves an image of Colonel himself
grinning with a splendid red gourmet specialist cook's garment and a red background.
Additionally, there are thick lines used to characterize his facial highlights to make
him look as though he's flying out at you, which at first draws an individuals'
attention. The Splendid red colour utilized in the logos conveys a feeling of warmth to
the Colonels confront which is welcoming to consumers.

Packaging

A packaging includes designing and producing the holder or wrapper for a

product.KFC packaging has change from cardboard clamshells to paper wrappers.
The new packaging is produced using 100% inexhaustible sources from European

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backwoods, which are 100% recyclable and biodegradable. It features the natural
advantages of the change while keeping up KFC's signboard look and feel. For your
information, all KFC's paper sacks and in-store napkins are 100% reused content,30%
of each KFC Basin Cover is made out of reused content and more than 90% of their
paperboard packaging has Sustainable Forestry Initiative (SFI) certified.

Labelling

Labelling involves to visual labels, symbolic or textual information about a

product for product identification and recognize. KFC does label some of it products
but not all. They also have informational labels such as Halal, veggies burgers and
chicky meals which is convenient for Islam and vegetarian. Hence, they also provided
all of the nutrition facts of all their food on the menu on their website for the
knowledge of their consumers.

Product support services

Kentucky fried chicken provided delivery service of their food through online
https://kfc.com.my/ or their delivery hotline which is 1300-222-888 to enhance
customer satisfaction and safeguard against their competitor.Therefore, KFC also
allow consumer to do an online survey program to gather direct feedback from
customers. Customers can rate and comment on the cleanliness, staff
friendliness,speed of service, order accuracy, food taste and overall satisfaction.It is
intended to guarantee consistence and constant change of the company.

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2.1.3 Major Brand Strategy decision
Brand positioning
Kentucky Fried Chicken company is position on beliefs and values because of their
slogan which is "its finger lickin' good!" KFC position themself as a brand who can
be delighted in as a family or in a domain of party. They emphasize at making great
memory and positive emotions towards their items.Whenever you think of KFC you
have to think of somebody. It tends to be your family, companions, friends and family
or another person, someone to share the enjoyment of eating and to share the taste.
Therefore, their specials recipe gains the taste and experiences connect to the eating of
consumer.

Brand Name Selection

The brand name of “Kentucky fried chicken” was founded by Colonel Harland
Sanders, which is an entrepreneur who began selling fried chicken from his roadside
restaurant in Corbin, Kentucky during the Great Depression. Kentucky Fried Chicken
which is also known as KFC which is easily to pronounce and recognize. It is easy to
be recognize as a company which is selling fried chicken or fast food just by the name
which included fried chicken. Besides that, this brand name is surely capable of
registration and under legal protection. KFC slogan “it's finger lickin' good without a
doubt had also been legal protection by KFC.

Brand Sponsorship

Kentucky Fried Chicken is a manufacturer’s brand and also Co-branding. This is

because the company is created, used and owned by the manufacturer. Therefore. The
company sell their product and food under their own manufacturer names. Their
ultimate owner is PepsiCo, which incorporate them into the company Tricon Global
Restaurants division, now known as Yum! Brands, Inc.

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Brand development

Kentucky Fried Chicken develops its brand with line extension and brand extension.
For the aspect of line extension, KFC extends existing brand names to new flavour of
their fried chicken. For example, their fried chicken comes with original recipe, extra
crispy, Kentucky grilled chicken, extra crispy tenders, hot wings, hot &spicy and also
smoked mountain BBQ fried chicken.

For the aspect of brand extension, KFC extend a current brand to a new category. For
example,the new ‘Pulled’ chicken range took KFC from fried and fast to slow and
pulled.The range of ‘pulled’ chicken range include burger, twister and wrap etc.

2.2 Pricing Strategy

2.2.1 Factors Affecting Price Decision - Market Demands (Types of Market)

The Kentucky Fried Chicken company is classified under monopolistic competition

market. Monopolistic competition is a market structure where many buyers and sellers
occur in the market. And the price between the competitors are almost same. Besides,
this type of market also has few barriers to enter and exit. High competition, product
differentiation and cost is the factors that will affect this market’s pricing
decisions.The first factor is high competition in the market, since fast food restaurant
consist many businesses, Kentucky Fried Chicken company is the one of it, they also

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face many competitor who sell similar type of the product such as Mcdonalds
company, Pizza hut company and others. So, to beat the competitors, Our company
needs to adjust its product’s prices to offer better value or prices than its competitors
to attract more customers.

Second factor is product differentiation, in the monopolistic competition market most

of the companies would have differentiated products and differentiated products can
carry slight benefits. Different type of products and be sold in different prices. For
example, Kentucky Fried Chicken company set snacker box’s price at RM8.40 for 1
piece of chicken, cheezy wedges, fries and drinks while twister box is RM12.85 for 1
piece of chicken, wrap, fries and drinks. Thus, with differentiated products, it can
affects its pricing decisions.

Last but not least, the most important factor that affecting the pricing decisions is cost.
This is because a company will usually decide its product’s price by taking cost into
account as they need to cover the cost of production and the cost of raw materials by
selling at a reasonable price. Kentucky Fried Chicken company is not exception as
well, as their products are mainly fast food products, they need to make their
product’s prices not too expensive for the customers, or not too cheap where as they
cannot gain much profits. And that is why, product cost is a factor that will affect
pricing decisions.

2.2.2 New Product Pricing Strategies

The new product pricing strategies used by Kentucky Fried Chicken company is
skimming pricing. This strategy is a plan used by a company to skim revenues layer
by layer from the market by set a high price for its new product. To put it simply, the
product’s quality or image must be support its higher price so that the customers will
buy the products. Kentucky Fried Chicken company using this market skimming.
Their products are high price and they also target the middle to upper class people.
Gradually, they trickle down the prices focusing on the middle to lower class people
to penetrate both sides of the market. For example, Kentucky Fried Chicken Bucket A
Combo’s price at RM26.90 for 5 pieces of chicken, 2 regular drinks, 1 large cheezy

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wedges and 1 regular whipped potato. The image of this example is enough to support
its high price.

2.2.3 Product Mix Pricing Strategies

The Kentucky Fried Chicken also used the product mix pricing strategies which is
product bundle pricing when setting its products prices. Kentucky Fried Chicken
always combine several of their products and offer the bundle at a reduced price. For
instances, Kentucky Fried Chicken bundle 1 pieces of chicken, cheezy wedges, fresh
fries, and drinks at snacker box for meal box. And the Kentucky Fried Chicken bundle
this all with a meal price because price bundling can encourage more consumer and
might not otherwise buy but the combined price must be low enough to get them to
buy the bundle.

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2.2.4 Price Adjustment Strategies

Kentucky Fried Chicken used discount and allowance pricing strategy. Discount and
allowance pricing refers to the price adjustment of the basic price of a product to
reward customer for certain responses such as early payment of bills, purchasing in
bulk and off-season buying. Kentucky Fried Chicken is used volume strategy
purchases. Below table show the price of snaker box for one person meal and wow
bucket B for family meal.

RM 8.40 per box RM 48.70 per box

1 piece of chicken, cheezy wedges, fresh 9 pieces of chicken, crunchy cheezy
fries, drink wedges, whipped potato, drink

Kentucky Fried Chicken is a company that give benefits to consumers when they buy
in a bulk. An example based on the above table.

Kentucky Fried Chicken company is selling snacker box that consists 1 piece of
chicken, cheezy wedges, fresh fries, and drink at the price of RM 8.40 per box, and
sells a box of wow bucket B that consists 9 pieces of chicken, crunchy cheezy
wedges, whipped potato, and drink at the price of RM 48.70 per box. Ali and his 8
members family is a loyal consumer of Kentucky Fried Chicken, he always bring his
family to eat Kentucky Fried Chicken every weekend. And Abu decided to purchase a
box of wow bucket B that costs him RM 48.70 for himself and his family. If Abu
were to purchase a box of snacker box for himself and his family members for 9
times, it will cost him RM 75.60, by purchasing a box of wow bucket B, Abu saved
RM 26.90.
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2.3 Place Strategy

2.3.1 Marketing Channels/Distribution Channels

Distribution channel is the terrace of all the distribution system. This is a group of
the interdependent organized system that relate making products or services
accessible to consumers or businesses. Distribution channels involve at least
producers and customers.

Distribution channel are two of foremost type:(Direct Channel and Indirect Chanel).
The direct Channel (also called conform channel) is the distribution channel in which
KFC apply them retain employees and physical assets (eg. Warehouses, company-
owned restaurant delivery vehicles) to allocate their product straightly to their end
users.

Day by day corporations understand their customers contentment is impossible

without efficient and effective distribution. In sequence to establish the irrigation
ditch effectively, this leads to the system called Vertical Marketing System (VMS).
There are three type of vertical marketing system: administrate, corporative and
contractual system. KFC make a choice to apply the contractual channel system-this
is a vertical marketing system in which relationship between channel members
formalized according to a in written form agreement.

In the process of contractual channel system, KFC make use of the Franchise
system. This is an official agreement that vinculum franchiser to franchisees. The
franchiser maintains the goods trademark and licenses its to franchises. They commit
royalty expenses and undertake to do to be in line with to criterion and orientation
build out in the contractual contract. This in peacetime lay over such problems, if the
expenses indispensable, rights and responsibilities of both associations, transmit of the
franchise, and justification regarding abrogation.

In case the franchise system is set up, the next step is to restrict distribution strength.
This consults to the figure of positions way of which a corporation offer for sales its
goods in a specific bazaar region. The three stamps of distribution strength are
intensive distribution and exclusive distribution and selective distribution. KFC apply
the selective distribution, this touch upon of some outlets per business region.
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The sticking point administrant distribution channel is strategically manage channel

medium. The

materials can produce good products to their customers.

prerequisites incorporate
interdependence, have confidence in and hold out. All of these lead to objective
cording and map outing.

2.3.2 Retailing/Wholesaling

The producer of KFC is QSR Brands (M) Holdings Bhd. Their producers are
responsible for giving them the retailer through the materials they want to sell. For
example, chicken, potatoesand breads. They also provide delivery by land

The retailer of KFC is KFC restaurant. Their retailer is responsible for selling KFC's
products to their customers. For example, fried chicken, cheesy wedges and zinger
burger. When they are selling their products, they also need to provide good service to
their customers. They also have to organize some events and promotions. This method
can attract their customers.

Customer is the person that purchase KFC products. For example, fried chicken, cheesy
wedges and zinger burger. Customers are very important to KFC, because they will
produce their productsaccording to the requirements of customers to satisfy their
customers. Customer feedback is alsoimportant to them so they know their products
are good.

Type of Retailers

1)Specialty Stores-KFC carry narrow product lines with deep assortments within
those lines.
of

transportation (such as, lorry and van)to send materials to the retailer.Good quality of
2)Supermarkets-Large, low cost and margin, high volume, self-service store that

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carries a wide variety of food.

-KFC has their outlets at supermarket. Such as, Tesco, Jusco and Giant

KFC’s outlets at Tesco

The Outlets of KFC Malaysia-Retailers (KFC Restaurant)

State Retailers (KFC Restaurant)

Selangor Eg: AEON Bukit Tinggi Klang, AEON Mahkota Ceras, and more
Kedah Eg: Alor Star Mall, Baling, Bandar Serdang and more
Perlis Eg: Kangar, Kuala Perlis, Arau Perlis
Kuala Lumpur Eg: Ampang Park, Berjaya Time Square, Bukit Bintang and more
Terengganu Eg: Giant Kuala Terenganu, Kemaman, Kuala Bearang and more
Penang Eg: AEON Seberang Prai, Alma Bukit Mertajam, Bandar Band
more
Pahang Eg: Bentong, East Coast Mall, Kuala Lipis and more
Perak Eg: Stiawan, Kampar, Ipoh Garden and more
Negeri Sembilan Eg: Bahau, Gemas, Giant Senawang and more
Melaka Eg: AEON Melaka, Alor Gajah, Ayer Keroh and more
Johor Eg: AEON Bukit Indah JB, Angsana JB, BatuPahat Mall and
more
Putrajaya Alamanda Putrajaya
Sabah Eg: Bandaran Berjaya, Bandar Sri Perdana, Beaufort and more
Sarawak Eg: Boulevard Mall, Delta Mall, Imperial Mall and more
Brunei Eg: Brunei HQ, Berakas, Sengkurong and more
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2.4 Promotion Strategy

The advertisement for KFC fried chicken

Chapter 3: Critiques of the strategies and recommendations

a) Product strategy
Critique:The CTV and Globe and Mail study found that, KFC
company fried their chicken at a boiling oil around 15 minutes. The oil was
totally absorbed by the chicken, so the consumer was not only taken in the fat
of chicken but also a lot of cooking oil. KFC’s deep-fried chicken pieces had
the highest levels of trans fats at a whopping 18.6 grams. This was a level that
if eaten KFC’s deep-fried chicken daily, it may boost your risk of heart disease
by nearly 100%. There is nothing good for the consumer that comes from this
substance.

Recommendation: KFC company should produce some healthy

product, such as steam chicken and boiled chicken. Steam chicken and boiled
chicken was good for consumer health because it cooked without any cooking
oil. The small amount of fat from the chicken will not affect consumer health.
The steam chicken might have a lighter taste but boiled chicken will not. KFC
company can put their delicious ingredient when cooking the boiled chicken.

b) Price strategy

Critique: The KFC’s fried chicken price was affordable by most

consumer. But when it compared with a normal fried chicken, KFC’s fried
chicken was at a high price. A normal fried chicken was around RM3 per
piece but the KFC’s fried chicken was RM5 per piece. RM5 was enough for a
person to have a meal but consumer can only get a piece of fried chicken when
having their meal at KFC with RM5. The price will also increase when KFC
company produce some new flavour fried chicken.

Recommendation: KFC company should lower the price of their

product. Because still have some low-income worker cannot afford the high
price of KFC’s product. KFC company should lower the price but not making
any loses for example RM3.50 to RM4.00 per piece of fried chicken. It may
have small profits but quick turnover.

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c) Place strategy

Critique: The KFC branches will always operate beside or near the
Pizza huts branches but Pizza huts was not a competitor of KFC. This is
because KFC and Pizza huts were own by YUM brand. Although they were
under a same brand, but this action may affect the KFC’s company profit.
KFC will have a large amount of customer at dining time, while customer was
waiting in line, they might change their mind to have their meal at Pizza hut.

Recommendation: KFC branches should operate at a place that far or

have a little distance with other company. This will increase the company
sales because once the consumer que up for order their meal, they might be
not easy to change their idea due to a distance from other company.

d) Promotion strategy

Critique: KFC have a long run promotion when consumer having their
lunch and dinner. The promotion period was lunch at 12pm to 3pm, and dinner
at 6pm to 9pm. KFC will only have a large amount of consumer during lunch
hour and dinner hour. KFC only have a little consumer having their breakfast
at their branches. This will cause KFC company earn less profit.

Recommendation: KFC should provide breakfast promotion in order to

attract consumer. For example, breakfast hour 7am to 10am. The customer
will attract by the new promotion, because they can have their breakfast in
KFC at a lower price. KFC can also compete with other company which have
provide breakfast promotion.

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