kfc four ps

FC’s marketing mix K FC’s

Executive summary KFC is one of the most known fast food chains in the world started in the early 1930’s by kernel sanders. Food, fun and festivity, this is what KFC is all about. KFC has more then 11,000 restaurants in more than 80 countries and territories around the world. KFC first time came to Pakistan in 1997 and were the title of being the market leader in its industry. The marketing mix of KFC consists of 4Ps. It contains every thing KFC do it to influence the demand for their products. KFC was launched here as an innovative product. KFC has a head-on competition with McDonalds The brand of KFC is so strong that it is the attribute itself. KFC introduced itself, has grown and now it is at maturity stage for the last ten years in Pakistan . Their products have high price and targeted t argeted only upper class. Total KFC Chicken Pieces Sold Annually = 5.89 Billion Profit Margin is Or Mark Up = $225000000 KFC has only one channel of distribution (direct) KFC by its advertisements derives the desire in the customer to come and enjoy healthy food in their favorite restaurant. •

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CECOS university (IMIS)

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They spend 2% of its profits on advertisement. KFC has a good product as far as chicken items are concerned. •

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Kentucky fried chicken (KFC) - one of the most known fast food chains in the world started in the early 1930’s by kernel sanders in the southern USA as a small franchise operation. Colonel sanders have become a well-known personality through out thousands of KFC restaurants worldwide. Quality, service and cleanliness (QSC) represent the most critical success factors to KFC’s global success. Food, fun and festivity, this is what KFC is all about. Leading the market since its inception, KFC provides the ultimate chicken meal for the chicken loving nation. Be it colonel sanders secret original recipe chicken or the hot and spicy version, every bite bring a YUM on the face. At KFC we proudly say that: KFC has more then 11,000 restaurants in more than 80 countries and territories around the world. In 1971 Heublein Inc, acquired KFC, soon after, conflicts erupted












Procurement Procurement Issues All the raw materials like chicken are bought from value chicken, vegetables from Monsalwa and they t hey use caned fruit for salads. The machinery is all automated and is in conformance conformance to international standards. KFC officials often visit the outlets without giving prior notice in order to check the conformance conformance to quality standards and procedures Moreover, Food Inspection Teams from Health Ministry visits twice a year to ensure Hygienic Conditions at the Kitchen. KFC primarily sells chicken in form of pieces, wraps, wraps, salads and sandwiches. sandwiches. While its primary focus is fried chicken, chicken, KFC also offers a line of roasted chicken products, side dishes and desserts. desserts. Outside North America, America, KFC offers beef based products such as hamburgers or kebabs, pork based products such as ribs and other regional fare.

KFC in Pakistan KFC first time came to Pakistan in 1997 and were the title of being the market leader in its industry. i ndustry. Opening the first KFC outlet in Karachi Gulshan-e- Iqbal Serving delicious and hygienic food in a relaxing environment made KFC everyone’s favorite. Since then, KFC has been constantly introducing new products and opening new restaurants for its customers.












Hyderabad, Islam Abad, Peshawar, Multan, Rawalpinde, & Muree) with more than 60 outlets nation-wide. Presently KFC has provided jobs to over 1200 Pakistanis, which adds up to 6000 individuals directly dependent in KFC Pakistan. The Government of Pakistan receives over Rs.10 million per month from KFC Pakistan as direct taxes. 95% of all food and packing material used in KFC Pakistan is procured locally, which sums up to a purchase of over Rs.35 million per month. Each new outlet developed by KFC Pakistan costs approximately Rs.40 million, which is a huge amount for our construction industry. Now lets look to the marketing mix of KFC that how they implement the four Ps of marketing mix.

Marketing mix The marketing mix is generally accepted as the use and specification of the ‘four Ps’ describing the strategic position of a product in the market place. • • • •

Product (goods and service) Price (value of the product) Promotion (aware the people for product) Place (distribution of product)

Marketing mix at KFC The marketing mix of KFC consists of 4Ps. It contains












a product is anything that can be offered to a market that might satisfy a want or need.

KFC product planing KFC product is classified as consumer product as it has no intermediates.

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KFC offers specialty goods.

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The stock turn over of KFC is high.

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Price and quality of the product is always compared.

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KFC’s product includes

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Goods (Burgers, Chicken Meals etc)












Product strategy of KFC KFC was launched here as an innovative product. KFC has got one product line but later they later they introduced products in the same line to protect their market share. New product ideas are generated from: •

Customer services (comments cards)

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Gallops survey (mystery shoppers)

KFC have a Quality Assurance department that decides the new product innovation. Q.A. department prepares screening of new ideas and product’s feasibility report. This department does the technical evaluation (whether it is practical to produce the new product or not). KFC’s products are tested externally by offering trials to customers by giving them free samples. KFC adds a new product in its present assortment based on •

Their competitors

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Product’s adequate demand

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The satisfaction of key financial criteria

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Its compatibility with environmental standard














KFC product line includes all chicken based products.

Chicken: o

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1 piece 2 pieces 5 pieces 10 pieces

Burgers: o o

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Zinger Burger Colonel’s Chicken Burger Colonel’s Fillet Burger Zinger Jr.

Combos: o

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Chicken Meals Sandwich Meals Family Meals












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Arabian Rice 5 & 10 Pieces Hot wings Dinner Roll Regular & Large Fries Hot Shots Corn on the Cob Hot & Crispy Soup

Product mix strategy The product mix strategies are in relation to: •

Competitors:

KFC has a head-on competition with McDonalds Wherever they place their products; KFC goes there as well. Locally in Pakistan KFC face a close competition with the local brands like AFC (Al-Baik Fried Chicken), Fried Chicks, Chicks, Dixy Dixy Chicks Chicks etc they are












Product mix expansion Line Extension:

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Through introducing new meals offers.

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Alteration of existing products:

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Quality Assurance department does it. The department decides which product should be sold and when (seasonal products as rice and soups offered in winters).

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Functional modification:

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It is also decided by the Q.A. department to introduce new recipes.

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Quality modification:

KFC has moved to masses rather than the t he original recipe.












KFC products were first offered to upper socioeconomic group. Later, introducing discounted and lower price deals, they are now dealing in masses. So, KFC has traded down. In doing so KFC has used the same brand name and same high quality product.

Product management of KFC at initial stage Market entry was not a big problem for KFC as it is a well-known international brand. In that stage they did promoted through their own brand. Their promotion statement was “KFC in Pakistan”. Management in the rise stage had to make policy for heavy competition with McDonald’s. they open new branches branches improved improved and extend extend the product line by introducing new product items.

Brand of KFC 

Brand Name: KFC












KFC's brand identity -- the logo features Colonel Harland Sanders, one of the bestrecognized icons in the world. KFC is trade marked registered brand. It is distinctive, adaptable to addition to product line. It suggests something about product. It is legally protected and registered The brand equity is very high as the value added by brand to the product effects the product selling. KFC is marketing the entire output under o products own brand o

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Product packaging KFC makes its own disposable packaging. If they need promotion Pepsi contributes in improving the














KFC has made a separate brand image in Pakistan. 

KFC Pakistan does not serve the vegetarians. Product line is very vast.  They study the behaviors of the Pakistani  

customers. KFC has specific product features.  Offering delicious and quality product.   Specialization in fried chicken. Charging extra for side dishes.  Quality, cleanliness, and service.  Product quality assurance. 












Price strategies of KFC In introduction stage KFC entered the market using market-skimming market-skimming strategy. Their products were high price and targeted only upper class. Gradually they trickle down focusing on the middle class to penetrate the market. Also KFC follows one price strategy. Price is determined according to the rates of the raw materials and policies of the Govt. The political and legal forces often affect the policies of KFC and eventually results in change of prices that is due to imposing of taxes.

Price competition We can compare the price of KFC products with McDonald, Dominoes and Pizza Hut. If the












For example, you can order a Two Cheeseburger Value meal that comes with a medium drink and fries. You can Super Size this meal to get a large drink and large fries for a little more money or you can go with another value meal that might include different items for different price.

Penetration Pricing: When KFC first began to break into the coffee market, they ran a large marketing campaign in order to gain some market share in the industry. For a limited time time frame, you could could get a free small coffee coffee every morning morning from 4-7am. This was to to promote their new coffee partnership with Green Mountain Coffee and helped spread the word that KFC was now offering coffee.

Cost Based pricing












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 Profit Margin is Or Mark Up = $225000000(25% of Sales) per unit variable cost = $675000000 $675000000 /












Conclusion 

KFC charge high prices. Offers different coupons.  Concept of discount is lacking in KFC  Pakistan. KFC has targeted the upper class  people. Service charges are also high.  No clear policy for discount and  coupons.  The employees are trained not to suggest the discounts. KFC sells their experiences on high 














families, business people), etc. also referring to how the environment in which the product is sold in can affect sales.

KFC distribution KFC has only one channel of distribution i.e. direct where the goods are transferred to the consumer directly. KFC has no middlemen.

Distribution Distribution of goods and services












Accessibility – Resulting in several outlets to cater to the needs of people in & around the city. Hectic lifestyle – Due to the hectic lifestyle  of office goings individuals the fast food concept saves time of preparing food and gives the customer a full meal quickly.  Hectic lifestyle of individuals – giving them t hem more time at work and less stress about waiting for food. 












CHANNEL PROCESS KFC works on the flow of good operation techniques i.e. “Good Operating Manager→ leads to “Good Team Selection →Good Services → Good Targets → Good Revenues through the following internal strategies: Training o











FC’s marketing mix K FC’s 

Target only city areas.  Slow delivery system in some areas. KFC has well equipped sitting.  KFC has no intermediaries. intermediaries.  Well trained staff with expert supervisors. supervisors.  Seeking customer’s response for quality.   KFC has no entertainment in some franchises. Quality conscious people are the main target  of KFC.












KFC promotion sources o o o o

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Advertising Sales Promotion Public Relations Events and Experiences Coupons, Discounts and Bundled packages

An organization finds most of its meanings and













FC’s marketing mix K FC’s 

KFC does institutional advertising to stimulate demand. When KFC offers new products then it does product advertising.












World Call Internet services, Also KFC Proud Partners are Del Monte, Culligan, Shan and Peek Freans. KFC uses the following tools to further enhance its sales.












solution for a healthy lifestyle. Chicken & its Products are 

Locally produced and processed chicken.












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kfc four ps

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