You are on page 1of 17

1.0.1 COMPANY BACKGROUND KFC HOLDINGS is part of QSR Brands Bhd (QSR Brands) .

It is a leading, fullyintegrated quick-service restaurant enterprise and the local franchisee and operator of the KFC and Pizza Hut restaurants. QSR Brands is in turn a subsidiary of Kulim (Malaysia) Berhad, a conglomerate focusing mainly on palm oil operations, oleochemicals, biodiesel production and quick service restaurants. KFC restaurant is the famous fast food restaurant in Malaysia. Original Kentucky Fried Chicken, also known as KFC, was created, or rather begun by a person, whose name was Colonel Harland Sanders, in America in the year 1939. He reached celebrity status in 1952, when he decided to franchise his famous Kentucky Fried Chicken recipe blends of 11 herbs and spices to the rest of America.. It took less than 20 years for it to become famous, and this special recipe managed to reach Malaysia in the year 1973. Malaysias first restaurant was opened in 1973 on Jalan Tunku Abdul Rahman, now it has more than 390 restaurants throughout Malaysia and growing. Kentucky Nuggets was conceived in Malaysia, and found its way to KFC worldwide today. Products it sells include chicken, burger, nugget, sandwich, wedges, drinks, fries, coleslaw and many more. It has captured 44% of market shares in Malaysia. Among all, their secret recipe chicken is the KFC most famous dish, it has great taste and truly enjoyed by Malaysian ever since.


The company was founded by Colonel Harland Sanders in 1952, with the abbreviated form of its name adopted in 1991. The colonel has always been a part of the KFC logo. In the early years, we can see him to have a more serious face but over time, you can see that his face has become more friendly. Also, the red color in the logo has given the logo a more bold and lively look. In April 2007, KFC unveiled their current logo in which the Colonel shed his white suit jacket for a red cook's apron. The new logo includes bolder colours and a more well-defined visage of the late Kentucky Fried Chicken founder, who will keep his classic black bow tie, glasses and goatee. The logo is changing for only the fourth time in 50 years, and for the first time in nearly a decade. The smiling Colonel is featured against a red background that matches his red apron, with the KFC brand name in black thick lettering under his chin.

2.0 2.1


KFC has been popular as one of the successful fast food restaurant in the world. KFC product can be categorized as a shopping product. Shopping product is usually more expensive than a convenient product. Repositioning is first adjustment that we done to KFC. Repositioning involves changing consumers perception of brand. We use product repositioning because we are eager in convincing our customer that our product contain healthy elements although KFC is well known as one of the famous fast food product available around the world. Repositioning is a good product strategy chooses by KFC as we can convince our customer that our products are healthy to consume, for example KFC use zero trans fat oil. When our customer especially health conscious customer change their perception towards KFC, revenue of KFC will increase. By repositioning also we can fulfill the demand and satisfaction by customer.


Product / service extension

Product and service extension is quite important to attract new customer and maintain the customers loyalty towards KFC. A product line extension occurs when a companys management adds products or services to an existing product line or services in order to compete more broadly in the industry. We focus to both product and service extension because we really want our customer to satisfy with our product and service. KFC is international label that are popular among all ages no matter where and when. So, we would like to maintain the good image and relationship with all of our customers. 2.2.1 Service extension We want to make an extension to our service which is we would like to introduce KFC Se Dplace which means moving KFC. We are the first to introduce meals on wheels. We will be travelling around Malaysia and sell our product from a transport that more or less look like a bus that we can cook and sell our product from inside it. We want to lesser the gap that exists between KFC and our customers especially in rural area. So, this KFC Se Dplace will

be visiting all rural areas around Malaysia. In addition, we also want to perform our Corporate Social Responsibility towards the society. Our KFC Se Dplace will be visiting different place every month. We are operated this KFC Se Dplace in Malaysia region only because we want this KFC Se Dplace to be successful before applying it to other country. As our aim of introducing this KFC Se Dplace is more to CSR purpose, so the quantity of our product that will be provided during our tour will be less compare to our product in KFC outlet. We want to provide all products in this KFC Se Dplace at a low cost to our customers so that, all customers will be affordable to buy our product. 2.2.2 Product extension Next is product extension. We are introducing Nasi Tomato which is our latest product that highly potential of receiving high demand. Our Nasi Tomato comes in set that consist of Nasi Tomato, 2 pieces of kentucky fried chicken and we will provide special chili sauce that we made ourselves. We are so confident that this set will get high demand from our customers as rice is Malaysian main dish. Our second product is Crab Chicky Ball which is of course made from nice fill of crab that is well mixed with flour and other ingredients. This Crab Chicky Ball will potentially attract little children to try our new product. We will provide 6 Crab Balls together with fries in a set plus Pepsi drink.


Packaging and labeling

Packaging has the purpose of protecting the product inside. Packaging must consider all elements including the types of product; liquid, solid and many more. As for our new product we will make new design of packaging that is better and more compatible. We want our product to be easier kept by our customers. We will change the design, shapes and material of existing packaging to be more suitable with our new product. We choose to use paper container and plastic container because we consider about the environment. Paper container can be recycled while plastic container can be reuse by the consumers. Labeling generally takes one of two forms: persuasive or informational. Persuasive labeling focuses on a promotional theme or logo, and consumer information is secondary. Information labeling is designated to help consumers make proper product selections and lower their cognitive dissonance after the purchase. As for labeling, we are combining both type of labeling to our product. We will provide nutritional information, list of ingredient and HALAL logo on the box of our product. We want to acknowledge our customers of what contain inside our product and we also want them to know that our product is an approve product by Jabatan Agama Islam Malaysia (JAKIM) and are safe to eat.



Currently, Kentucky Fried Chicken Holding (KFCH) has implemented indirect channel in distributing the fast foods. KFCH is a part of QSR Brands Corporation. It is means that KFCH is the franchisee of QSR Brand Corporation (franchisor). Moreover, the other franchisee of QSR Brand Corporation including Pizza Hut, Ayamas Breeder, Life sauce factory and others. 3.1 Channel strategy Suppliers QSR Brands Retailers KFC Restaurant Diagram 1 Diagram 1 above shows the channel structure that being used by KFCH. KFC restaurants as a retailer will using QSR Brands as a supplier to supply all the materials needed such as vegetables, sauce, chicken meats and others. KFC restaurants are only used retailer channel as a channel for consumer products because they want to maintain their own secret recipe of chicken as a famous dish of KFC. In addition, through this channel structure, KFC restaurants can sell their products and interact directly to the customers to get feedback about their products and customers service provided. Besides that, the channel strategy decisions that will be used by KFCH can be divided by two and it is the factors affecting channel choice and level of distribution intensity. Firstly, KFCH will focus on geographic location under market factors. It is recommended that there is potential for KFC in penetrating to suburb or even to rural area. The important to suburb area is due to the density of population live around the suburb would be a great opportunity to exploit. KFC will launch KFC Se Dplace on coaches to sell KFC foods to rural places. It is because these places have many children who like fried chicken but couldnt go to town area to enjoy the foods. However, to reduce the cost of distribution, KFC will conduct full scale market research towards the place of distribution before actually setup a restaurant. With the good market research results, it could prevent losses from setting up a restaurant in unprofitable location. Secondly, KFC will also focus on product price under product Customers

factors. KFC will provide reasonable price that is meaning the price of the new products is not too high and too low. So, customers will affordable to buy the products. 3.2 Level of distribution

However, level of distribution intensity used by KFC is selective intensity level. Selective intensity level is a form of distribution achieved by screening dealers to eliminate all but a few in any single area. It is because these restaurants are limited to a certain amounts in each region. This is to minimize the stiff competition between each other in a same region. KFC Restaurants did well in the past 30 years for gaining market share with over 390 restaurants in Malaysia, Brunei and Singapore.



Promotion is the act or method of communications by which business organization inform, persuade and influence customer and potential customer to buy product or services. To attract the customer, we have to promote our product to the customer to inform them about the details description. We decided to use advertising, sales promotion and public relation. 4.1 Advertising

Advertising is non-personal sales presentation communicated through media or nonmedia forms to influence a large number of customers to promote our product. It is a common method to promote the product and services. Although advertising generally more expensive than other method, it can attract many customers since it is an impersonal paid communication in which our company is identified. We will use both traditional and new advertising media. The form of advertising that our business would like to use is television, newspaper, radio, billboard, internet and viral marketing. 4.1.1 Television Television is the most influence media as it is the close media to the potential customer. Every house must at least have one television and everyone will watch television. We only advertise of our new meal or promotion during the commercial break. We choose to promote our product at TV3 and 8TV. As we know, TV3 is the most popular channel among the people while 8TV quite popular channel among Chinese and well educated people. Our product will be show at 11.45 a.m and 6.15 p.m every Sunday for three months. Our promotion will be on air starting from 1April 2011. 4.1.2 Newspaper To promote our product we also promote at newspaper through Harian Metro and News Strait Times. Commonly the village area does not have internet line and the villagers do not read magazines epically old citizens, so they will know about our product in the newspaper. We will advertise the new meals, new product and promotion which sometime provide free voucher to get discount. Through all this newspaper, the potential customer may aware of our new

products and want to try it. Our promotion will be publishing in the newspaper every Sunday for three months starting on 1 April 2011. 4.1.3 Radio We also want to attract our customer through radio channel which every people who are like to listen. Radio also is one of the best media to spread news because nowadays many people like to listen to the radio to release tension, get news and share information. There are many radio channels according to the listener. Among the radio channel we have chosen to promote our product is Hot FM and Fly FM. We choose Hot FM to promote our product because most of the teenagers and adult like to listen to this channel and its get the highest ranking of listener choices and Fly FM because we want to promote our product in other language which is English that our local people like to listen English channel radio. Our promotion will be on air every Sunday for 1 minutes starting from 1 April 2011for three month. 4.1.4 Internet The internet has become popular way for firm to promote their product and service. It is a form of non-personal communication that can create presentation and persuade the customer. The Internet ads experiment with a success than traditional method of advertising. We promote our product on the search engine such as and In addition, we also promote our product on other websites that are commercially viewed by people trough viral marketing who may purchase our product. With this way, we can attract potential customers who visit the website. Our website can be viewed at 4.1.5 Billboard To create customers awareness about our new product, we also will advertise it trough billboard. Since billboard is big, it will attract potential customers attraction while they were driving since it is located at the side road. The billboard will be located at the side of the main road and certain highways. The billboard will be located for first months each quarter starting from 1 April 2011.


Sales promotion There are many types of sales

Sales promotion is a short term incentive to encourage and influence our potential customers to purchase our companys product. promotion and we decided to choose the free voucher and collaboration with other company in order to make our sales and profits keep increasing and our products will be well known in many countries. This sales promotion method is so effective way to attract the attention of our potential customers. 4.2.1 Free voucher Free voucher are provided in the newspaper in order to courage our potential customers to buy our products. It is use to attract them and make them interested on our new products. The voucher are package in interesting colour and the expired date is long last for one month so that the customers does not have to be in hurry to use the voucher. We will provide two types of voucher which is discount voucher and free redeem gift voucher. For the introduction, the discount voucher will be 20% while for free gift redeem voucher, we will provided soft drink, toys and etc. We decided to make at least 50 vouchers in a month. 4.3 Public Relation

It is a marketing function that evaluates public attitudes, identifies areas within the organization the public may be interested in and executes a program of action to earn public understanding and acceptance. Among the public relation tools that we will use is new-product publicity, websites, and sponsorship. 4.3.1 New-product publicity This type of publicity can help consumers differentiate or identify the difference of the new product from free new stories or positive word of mouth about it. We will paid advertising afford to write press release and develop videos in an effort to generate news about new product. We also will expose our product at major events, on popular television or in the hands of influential people. For example, we will produce a video and view it in our website, television and others for consumers to watch it.

4.3.2 Websites Nowadays, many companies are using the Internet in their public relations strategies, including us. Through websites, we will introduce our new product, promote existing product, obtain consumers feedback, post news releases, interact with customers and potential customers, performs many more marketing activities and more. Besides that, we also will use blogs which is corporate blog as a tool to manage public images. Since many people are looking to bloggers for their news sources, this is a good way to get our messages out. Our website can be viewed at Consumers can find or know more about KFC by view our websites, besides, they also can give comment or feedback directly to us. 4.3.3 Sponsorship We will use this type of strategy to support an issue, cause, or event that is consistent with corporate objectives, to improve brand awareness and enhancing corporate image. Among the issue that we support most is education, health care, and social. We usually will donate a percentage of sales or profits to a worthy cause favoured by our target market. Through this sponsorship, our product is promoted, and money is donated to non-profit organization. Our product will be in consumer mind for a long time. For example, we will continue our Project Penyayang KFC which benefits many homes through the donation that we get and give it to them.



Target market is a subgroup of people or organization sharing one or more characteristics that cost them to have similar product needs. There are five category of target market which is geographic, demographic, psychographic, benefit and usage-rate but we only use of them. 6.1 Demographic

Demographic segmentation segmenting market by age, gender, income, ethnic, background and family lifestyle. Marketers often segment market on the basis of demographic information because it is widely available and often related to consumers buying and consuming behaviour. 6.1.1 Age and gender segmentation Children

We targets children boys and girls with age 12 below who love to eat fried chicken. At the same time also targets children who love to get free toys with meals. Thus we has Chicky Meal with free toy. Teen & Young adult

We also targets teens and young adult with age 12 to age 25 who love of its fried chicken. Normally, we target boys and girls who like to eat both fried chicken and burger at for an affordable mean. Thus we has X Meal which emphasizes extra choice and extra variety with lower price. Family

We targets family which both parents and 2 less or more kids dining together in KFC restaurants or take away. We also have children playground that normally parents would bring their children to play at there, while they could peacefully eat their meals. Thus we has Mini Bucket Combo and Variety Bucket to cater for bigger numbers of people to eat with favorable price.

Budget customers

We has concerned of budget customers appetite with basically age 12 to 55. Thus we also has ala carte menu and real savers menu which emphasize in 1 set with lower price and side orders as well such as potato wedges. 6.1.2 Income Income is a popular demographic variable for segmenting market because income level influence consumers wants determines their buying power. We segment our target market based on this segmentation because we want our product to be affordable by all level of income. Consumer from low, moderate and high-level income can try our product. For example, people with lower income such as RM 800 and below also can buy our product.



KFC have several competitors in this fast food industries which is Pizza Hut, McDonalds and Burger King. Each of them has their own strength and weaknesses. First competitor is Pizza Hut which is an international franchise and restaurant chain having presence in many countries and is originally based in Texas, USA. The strength of the company is they specializes in the American-style pizza that until now no other pizza restaurant has been able to compete. The restaurants offer a large variety and types of pizzas under one roof and is known for its innovative pizzas. The company also offer many other food items and side dishes like breadsticks, wings, garlic bread and others. Second strength is they provides home delivery services and also has kiosks in more than hundred countries. The marketing strategy of the company is another strength of the company. They have many media partners and use television advertising that attracts people of various ages. The company has a huge market share; more customers mean higher percentage in sales that leads to greater profits. However, Pizza Hut also has weaknesses which is their loyal customers feel that there is a decline in satisfaction and other pizza chains and restaurants are offering much more. Second, there are some internal conflicts within the company as there processes are computerized and centralized. This has lead to high turnover as well as de-motivation of staff. Besides that, the competition in the Pizza industry is increasing, as customers now prefer and look for availability and affordability.The rising prices of special ingredients like cheese, used in pizzas. The local restaurants that provide pizzas offer food item at more affordable prices as well as know the taste of the local people better. Many of its competitors are trying to capture the market share of the Pizza hut by introducing similar kind of pizzas and food items. Second competitor is McDonalds. The greatest strength of McDonalds was they creating an image in the minds of the people and introducing them to the fast food culture. Delivery speed, customer care and cleanliness are the core strengths on which these restaurant expanded. They created a corporate symbol and their advertisement campaigns were highly successful in establishing the brand image and logo in the minds of the customers. McDonald's product value is also their greatest strengths. Customers know what to expect when they walk into a McDonalds store. It

gives great emphasis to human resources by satisfying both the customer and the employees. Third strength is the innovation aspect where new products line is introduce to catch up with the new trends and tastes of the people. Its diversity into other new business ventures can also be considered as its strengths. Their weaknesses are McDonalds has to deal with the prospect of looming market saturation, which could make it difficult to add new outlets because the food industry is really saturated. In Malaysia, McDonalds outlets still less compare with KFC. There is also an increasing price competition driven by too many competitors, which reduces the companys ability to increase revenue. Nevertheless, the swift of the companys focus from a value menu to a more diverse one has recently limited the negative effect of the intense price competition that was traditionally taking place among the industry leaders. Lack of product innovation is another weakness of McDonalds. Only a certain time they will introduce new product. The third competitor is Burger King. The first strength is about their geographic diversification. Burger King has over 11,500 fast food restaurants located in over 70 countries. 7,207 of its restaurants are located in the United States (62%) and another 4,358 are established in international locations (389%) such as Asia, the Middle East, Africa and Canada. Secondly, they become globally recognized brand. Burger King is able to boast a brand that is widely recognized thanks to its flagship slogan have it your way, the whopper sandwich and most recently enhanced by its mascot known as the King. The company was recently ranked 7th in brand awareness. Thirdly, they have superior growth plan. Approximately 90% of Burger King Restaurants are owned and operated by independent franchisees, many of them family-owned units that have been in business for decades. The company is able to grow while minimizing large capital expenditure, meanwhile it collects fees and royalties from each franchise added. Like others competitors, Burger King also have weaknesses. First, the vulnerability to labor and regulatory influences. Although the company operates in many international venues, the majority of restaurants are in the United States. This concentration of operations in one geographic area increases company's exposure to local factors such as labor strikes and the influence of regulatory changes. Second, they reliance on so-called Super Customers .There is some indication that Burger King may have been slow to transition to leaner and healthier restaurant fare in favor of pleasing its long term customers who are fans of the big

larger portion sandwiches. The last weakness is till now there are only 20 outlets of Burger King in Malaysia which is to little compare to KFC outlets.

McDaniel.C, Lamb.C.W and Hair.J.F, Introduction To Marketing,