KFC Marketing Strategies

Applied Marketing

ACKNOWLEDGEMENT

Our profound gratitude goes to God Almighty, most gracious, most merciful, who gives us wisdom, knowledge and understanding to live our lives as human being. We would like to thank our Teacher; Ms. Fareeha Nisar who makes it possible for us to finish our project in a best way. And finally, we would like to thank our family members and friends for always be there for us. And we would like to thank from bottom of heart to Mr. Muhammad Nouman (Executive Marketing Services Corporate) of KFC.

MISSION STATEMENT COMSATS Institute Of Information technology, Sahiwal

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KFC Management feels so strongly about recognition that it's near the top of their corporate mission statement. "Recognition: we find reasons to celebrate the achievements of others and have fun doing it," is right up there with "Customer Focus" and "Belief in People."

Vision

COMSATS Institute Of Information technology, Sahiwal

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KFC’s vision is to bring people of all ages, races and backgrounds together to enjoy’ Soul Food’ – ‘proper food at reasonable prices’ – within bright and fun interiors. KFC is designed to be perceived as a fun and inclusive brand.


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DEDICATION:

“I dedicate my project efforts to our respectable teachers who taught and hold our hands on several occasions to complete such complicated and interesting project”.

TABLE OF CONTENTS


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ACKNOWLEDGEMENT.................................................................1 .......................................................................................................3 TABLE OF CONTENTS........................................................4 4-INTRODUCTION:.......................................................................................................8 .........................................................................................................................................8 Type Fast Food Chain................................................................8 Founded 1929 (North Corbin Kentucky).........................................8 Founder Harland Sanders..............................................................8 Headquarter Louisville, Kentucky........................................................8 Industry Fast Food........................................................................8 Revenues $ 520.3 million (2007)....................................................8 Employees 24000 (2007).................................................................8 Parents Yum! Brands.................................................................8 Web Site www.kfc.com ...............................................................9 Operation in Pakistan:......................................................................................................9 Organizational Structure:.................................................................................................9 Current Position.............................................................................................................10 KFC is serving 18 big cities of Pakistan in different region in the country. It has 62 outlets around the country providing different menu items for different cities.............10 First KFC:......................................................................................................................10 5-Market Share:.............................................................................................................12 6-PRODUCTS:..............................................................................................................14 QUALITY ASSURANCE CERTIFICATE:.................................................................18 7-STRATIGIC PLANNING:.........................................................................................19 The process of developing and maintaining a strategic fit between the organizational goals, capabilities and its changing marketing opportunities............................................19 8-MAJOR COMPETITORS:.........................................................................................20 9-RESEARCH PRACTICES:.......................................................................................21 Current Research practices:...........................................................................................22 10-BASIC INFORMATION REGARDING MARKETING STRETEGIES:..............23 A-SEGMENTTATION:................................................................................................23 B-CURRENT TARGET MARKET:.............................................................................25 C-FACTORS EFFECTING SALES:............................................................................26 D) PEST ANALYSIS:...................................................................................................27 POLITICAL FECTORS: ..............................................................................................27 ECONOMICAL FECTORS:.........................................................................................28 SOCIAL FACTORS:.....................................................................................................28 TECHNOLOGICAL FECTORS: .................................................................................29 E-CUSTOMER RELATIONSHIP MANAGEMENT STRATIGY:............................30 F-PRODUCT CLASSIFICATION WITH PRODUCT LIFE CYCLE:........................32 G-PRICING STRATIGIES:..........................................................................................33 COMSATS Institute Of Information technology, Sahiwal

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H-CHANNEL MANAGEMENT:.................................................................................35 I-PROMOTION STRATIGIES:...............................................................37 J-TARGETS THAT WOULD LIKE TO ACHIEVE:...................................................40 K-EXPENDING TARGET MARKET:........................................................................41 L-EXPECTATIONS FOR THE COMING YEAR:......................................................41 11-SWOT ANALYSIS:.................................................................................................41 12 –CONCLUSION:............................................................44 13 –RECOMMENDATIONS:.......................................................................................44 14 -RESOURSE PERSON: ..........................................................................................45 Bibliography:.................................................................................................................45


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4-INTRODUCTION: It American based fast food chain all over the world. It is a subsidiary of YUM international. KFC is part of Yum! Brands, Inc., which is the world's largest restaurant system with over 32,500 KFC, A&W All-American Food™,Taco Bell, Long John Silver's and Pizza Hut restaurants in more than 100 countries and territories.

Type

Fast Food Chain

Founded

1929 (North Corbin Kentucky)

Founder

Harland Sanders

Headquarter

Louisville, Kentucky

Industry

Fast Food

Revenues

$ 520.3 million (2007)

Employees

24000 (2007)

Parents

Yum! Brands


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Web Site

www.kfc.com

Operation in Pakistan: KFC came to Pakistan in 1996 with the first branch opening in Karachi and later in Lahore. The Franchisee was a Pakistani owned and operated, Dubai-based Company the Cupola Group, which owns licenses and its own restaurant throughout Pakistan and the middle-east. The company's creative have been changed significantly over the years to promote a Pakistani image rather than an American one, after the invasion of Afghanistan and Iraq, which resulted in loss of significant business. Procurement Issues All the raw materials like chicken are bought from value chicken, vegetables from Monsalwa and they use caned fruit for salads. The machinery is all automated and is in conformance to international standards. KFC officials often visit the outlets without giving prior notice in order to check the conformance to quality standards and procedures. Moreover, Food Inspection Teams from Health Ministry visits twice a year to ensure Hygienic Conditions at the Kitchen. Performance Overview KFC has taken advantage of all these excellent investment opportunities that Pakistan offers for franchising and has expanded and penetrated the market a lot. KFC has adapted to the legal and political environment and conditions of Pakistan. The Pakistani culture has also molded the operations of KFC in Pakistan. All the outlets of KFC in Pakistan present Pakistani food culture. KFC has displayed banners that it servers Halal food all over its outlets which represents Pakistani culture. They also offer families’ deals as the people are very close to their families and like to have food with them. KFC has also brought some changes in the culture of Pakistan. The most significant is the way it has changed the eating habits of the local population. People now are aware of unhygienic conditions that prevail in some of local restaurants. And KFC has also brought the idea of self-service in Pakistan. General Manager (GM)

Organizational Structure:

Manager Assistant Manager (I)

Assistant Manager (II)

The KFC adopted traditional structure for their outlets that

Shift In-charge Counter workers

COMSATS Institute Of Information technology, Sahiwal Kitchen workers Guards

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other food chains are following. There is one General for Pakistan.

Manager

The outlet is leaded by the Manager, assisted by two assistant managers, and one shift in-charge for each shift, that supervises the performance of counter workers and kitchen workers.

Current Position KFC is serving 18 big cities of Pakistan in different region in the country. It has 62 outlets around the country providing different menu items for different cities.

First KFC: The restaurant in North Corbin, Kentucky where Colonel Sanders developed Kentucky Fried Chicken.

World's first KFC in South Salt Lake, Utah, since replaced by a new KFC on the same site. Born and raised in Henryville, Indiana, Sanders passed through several professions in his lifetime. Sanders first served his fried chicken in 1930 in the midst of the Great Depression at a gas station he owned in North Corbin, Kentucky. The dining area was named "Sanders Court & Café" and was so successful that in 1936 Kentucky Governor Ruby Laffoon granted Sanders the title of honorary Kentucky Colonel in recognition of his contribution to the state's cuisine. The following year Sanders expanded his restaurant to 142 seats, and added a motel he bought across the street. When Sanders prepared his chicken in his original restaurant in North Corbin, he prepared the chicken in an iron skillet, which took about 30 minutes to do, too long for a restaurant operation. COMSATS Institute Of Information technology, Sahiwal

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In 1939, Sanders altered the cooking process for his fried chicken to use a pressure fryer, resulting in a greatly reduced cooking time comparable to that of deep frying. In 1940 Sanders devised what came to be known as his Original Recipe. The Sanders Court & Café generally served travelers, often those headed to Florida, so when the route planned in the 1950s for what would become Interstate 75 bypassed Corbin; he sold his properties and traveled the U. S. to sell his chicken to restaurant owners. The first to take him up on the offer was Pete Harman in South Salt Lake, Utah; together, they opened the first "Kentucky Fried Chicken" outlet in 1952. By the early 1960s Kentucky Fried Chicken was sold in over 600 franchised outlets in both the United States and Canada. One of the longest-lived franchisees of the older Col. Sanders' chicken concept, as opposed to the KFC chain, was the Kenny Kings chain. The company owned many Northern Ohio diner-style restaurants, the last of which closed in 2004. Sanders sold the entire KFC franchising operation in 1964 for $2 million USD Since that time, the chain has been sold three more times, most recently to PepsiCo, which made it part of its Tricon Global Restaurants division, which in turn was spun off in 1997, and has now been renamed to Yum! Brands. Additionally, Colonel Sanders' nephew, Lee Cummings, took his own Kentucky Fried Chicken franchises (and a chicken recipe of his own) and converted them to his own "spin-off" restaurant chain, Lee's Famous Recipe Chicken. Today, some of the older KFC restaurants have become famous in their own right. One such restaurant is located in Marietta, Georgia. This store is notable for a 56-foot (17 m) tall sign that looks like a chicken. The sign, known locally as the Big Chicken, was built for an earlier fast-food restaurant on the site called Johnny Reb's Chick, Chuck and Shake. It is often used as a travel reference point in the Atlanta area by locals and pilots.


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The original handwritten recipe is kept locked away at the KFC corporate headquarters in Louisville, Kentucky as a closely-guarded secret. Only two members within the Yum! Corporation knows the recipe in its entirety.

5-Market Share: We can divide it into two parts 1) Around the World 2) Around the Pakistan 1) Around the World 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. (A&W) are located in the same fast- food industry, the referent standard is the industry growth rate measured against the SBUs’ growth rate. The underlying theory for examining market growth rate is the industry life cycle. The BCG assumes that growth rates (life cycle stages) affect a firm’s finances.


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Asia

Europe

? USA

America

Placing products in the BCG matrix results in 4 categories in a portfolio of a company: 1. Stars (=high growth, high market share) • Use large amounts of cash and are leaders in the business so they should also generate large amounts of cash. • Frequently roughly in balance on net cash flow. However if needed any attempt should be made to hold share, because the rewards will be a cash cow if market share is kept. So, KFC Malaysia is under Star position.


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2. Cash Cows (=low growth, high market share) •

Profits and cash generation should be high, and because of the low growth, investments needed should be low. Keep profits high.

3. Dogs (=low growth, low market share) • Avoid and minimize the number of dogs in a company. • Beware of expensive ‘turn around plans’. 4. Question Marks (= high growth, low market share) 2) Around the Pakistan It has covered 80% 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.

6-PRODUCTS: 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:

Product Categories There are different products divided into sections according to the differentiation in them. 1) Chicken 2) Burger 3) Desserts & Beverages COMSATS Institute Of Information technology, Sahiwal

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4) Snacks & Side Orders 1) Chicken

KFC's Original Recipe fried chicken and French fries 1. KFC's specialty is fried chicken served in various forms. KFC's primary product is pressure-fried pieces of chicken made with original recipe. The other chicken offering, extra crispy, is made using a garlic marinade and double dipping the chicken in flour before deep frying in a standard industrial kitchen type machine. •

Kentucky Grilled Chicken - This marinated grilled chicken is targeted towards health-conscious customers. It features marinated breasts, thighs, drumsticks, and wings that are coated with the Original Recipe seasonings before being grilled. It has less fat, calories, and sodium than the Original Recipe fried chicken. Introduced in April 2009.

•

KFC has two lines of sandwiches: its "regular" chicken sandwiches and its Snackers line. The regular sandwiches are served on either a sesame seed or corn dusted roll and are made from either whole breast fillets (fried or roasted), chopped chicken in a sauce or fried chicken strips. The Snackers line are value priced items that consist of chicken strips and various toppings. In the UK, Australia and New Zealand, sandwiches are referred to as "burgers"; there is the chicken fillet burger (a chicken breast fillet coated in an original-recipe coating


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with salad garnish and mayonnaise) and a Zinger Burger (as with the former but with a spicier coating and salsa). Both of these are available as "tower" variants, which include a slice of cheese and a hash brown.

•

A variety of smaller finger food products are available at KFC including chicken strips, wings, nuggets and popcorn chicken. These products can be ordered plain or with various sauces, including several types of barbecue sauces and buffalo sauce. They also offer potato wedges.

•

The KFC Twister is a wrap that consists of either chicken strips or roasted chicken, tomato, lettuce and (pepper) mayonnaise wrapped in a tortilla. In Europe, the Twister is sold in two varieties: 1) the Grilled Twister (chicked strips), and 2) the Grilled Mexican twister/Spicy Toasted Twister (UK) (chicken breast supplemented by tortilla chips and salsa, UK: adds only salsa to pepper mayonnaise),

•

KFC Fillers are a 9" (22cm) sub, available in four varieties over the summer period in Australia.

Shish kebab - in several markets KFC sells kebabs.

2) Burgers It includes the following burgers items Mighty Zinger

Zinger Extreme INCLUDEPICTURE "http://media5.picsearch.com/is?dfwealbLww8K5q36OHJzc1XaV8mU6NuXeEhPUnp74PA" \ Fish Zinger


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Zinger burger Twister Col.Chicken Burger Sub 60 3) Desserts & Beverages Scoop of Walls Fruit Salad Large Drink Mineral water regular Mineral water large Coffee Tea 4) Snacks & Side Orders Nuggets Regular Fries Large Fries Corn on the Cob Arabian Rice Dinner Roll Hot Shots Cheese

Other than fried chicken, many KFC restaurants serve side dishes like coleslaw, various potato-based items (including potato wedges, french fries and mashed potatoes with gravy), biscuits, baked beans, macaroni and cheese, rice, steamed vegetables and corn on the cob.


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QUALITY ASSURANCE CERTIFICATE: Director General (Research) has issued quality assurance certificate for the chicken used

KFC

by KFC.


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7-STRATIGIC PLANNING: The process of developing and maintaining a strategic fit between the organizational goals, capabilities and its changing marketing opportunities. Strategic planning sets the stage for the rest of the planning in the firm. KFC is looking that how much its current strategies are beneficial for them. Although these are good and profitable but dynamic changes in environment are requiring identifying the attractive opportunities. That is the reason that they are expending there market size by focusing on sub urban areas and targeting middle class people by providing them differentiated products at a fair price. They are opening their new mobile outlets in there potent ional markets. KFC is also going to increase its sweet dishes to avail the opportunity available for them.


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8-MAJOR COMPETITORS: •

AFC Enterprises

•

Chick-Fil-A

•

Popeye’s

•

Boston Market

•

Kenny Rogers

•

McDonald’s

•

Domino’s

•

Wendy’s


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•

Burger King

•

Checker’s

•

Sonic

9-RESEARCH PRACTICES: It is divided into two sections 1) Internal 2) External 1) In internal research Practices Company’s own R & D is involved in shorts research practices that are easily solvable by R & D.

2) It includes the external practices that are time consuming for the organization like opening of outlet in any new city around the country.

KFC has a research and development department about particular problems. R&D department conducts their research for the solution of problems. If they are going to open a new outlet in a new city. First of all they send their mobile container in that particular city and conduct the research practices and analyze the market. They also conduct research practices for their target market. Now they are entering in sub urban areas where the customers are not very high income and not to much quality COMSATS Institute Of Information technology, Sahiwal

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conscious that’s why KFC is providing them low price products according to their taste and wants. Company’s internal R&D is not only doing research but they are also conducting research through external sources. In which the most common are Aftab associates. They are counting their research in Sahiwal for the sack of new branch/outlet. Factors involved in research practices: There are following factors which are not ignorable by the research conductors 1) 2) 3) 4)

Purchasing Power of the people Household income Per capita income Competitors in the segment

Current Research practices: Outlet in Sahiwal KFC is going to open its new branch/outlet in Sahiwal before this it will conduct a research whether this outlet will success or not. They will examine their competitors in Sahiwal that is AFC basically and others are local brands that are not difficult to compete. Although the market of Sahiwal is not very wide but they think that will successful in Sahiwal due to their differentiated products, taste and quality. New product launching


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KFC is launching the new product (Hot Wing) in the existing cities of the Pakistan. For this purpose KFC conducted the launching test of the product in the more attractive cities of the country.

10-BASIC INFORMATION REGARDING MARKETING STRETEGIES: A-SEGMENTTATION: 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.

KFC

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.


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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 two main segments.  Urban areas  Sub urban areas PROFILE CRITERIA:

KFC

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 their products is above 7. 4. Occupation: By profession also everyone can use this product means businessmen, students, workers and other peoples. 5. Education: It has no need more education that why the person who know something can easily enjoy with their products. 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.


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9. Purchasing decision: Often KFC changes the purchasing decision of customers because of its good attributes. 10. Geographic region: Geographically KFC is used in every part of the country as well

KFC

as all over the world.

KFC

B-CURRENT TARGET MARKET: KFC will be using differentiated market coverage strategy. It means that different marketing mix will be used for different age groups. After evaluation of various segments, KFC has decided to target the market of urban and Sub-urban Areas of Pakistan.  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 numbers of customers are more in Urban Areas.


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C-FACTORS EFFECTING SALES: There are so many factors that are effect the sales of KFC. These includes over all world economic crises, terrorism, political instability of Pakistan, bird flu disease, etc. There are following factors that can influence the sale as increase or decrease. Global Economic Crisis: Now in these days all global has economic crisis all round the world that has bad impact on the KFC sale. Due to gradually decrease in per capita income of Pakistan’s economy also decreasing the annual sale of KFC Fast Food Chain all around the country as well as world.

It is a graph that shows the sale of KFC high point indicates the before Economic crisis and low point indicates the after Economic crisis. Bird Flu Disease: It is also a great danger for the KFC because they are chicken specialist in the world and perfect in taste. If there is any bird flu disease in any part of the world it automatically has impact on Pakistan’ KFC fast food chain in the country. The demand of the chicken decreases the sale of the KFC also decreases in the business process.

Terrorism: It is a big problem for Pakistan’s economy as well as KFC. Last two years the terrorism increases that has bad impact on the KFC annual sale and the assets loss in COMSATS Institute Of Information technology, Sahiwal

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different cities in the country. In Karachi, Peshawar, Quetta and other big cities in which KFC is serving its services has huge loss, assets are insured but the daily sale is decrease due to breakdown in daily operations that are not carried out by the Franchises. These factors have reduced the sales of KFC but they are competing with these factors by offering better quality, healthy products and by offering affordable prices.

D) PEST ANALYSIS: Pest analysis includes how political, economical, social and technological factors are effecting the organization. Every organization faces these factors for running the business process in the world. Organization can not neglect these factors. These factors are not controllable by the organization.

POLITICAL FECTORS: Marketing and business decisions are strongly affected by the changing in political environment. There are different factors such as laws on business employment; pollution and taxation apply on the organization which it has to follow regarding the rules. Benzir Bhutto Death: The political instability of Pakistan is affecting the progress of KFC. Some of their outlets have burned in Karachi at the death of Benzir Bhoto. Now a day so side bombers are also a big danger for KFC. Govt. also has increased the sales tax from 15 % to 21%that has raised the prices of their products. Some of their products are banded by the government because these are not Halal from Islam point of view. Instability of Government:


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Instability of the government in the country is also big danger for the organization because due to change in the Govt; policies of the country also changes specially in Pakistan. Peshawar & Swat Issues: In last months war between American forces and Taliban’s forces in Peshawar and Swat has impact on KFC’s operation in these cities in which it has more than 90 % share like Peshawar. It is an American base company therefore people think

ECONOMICAL FECTORS: It includes the following sub factors which has impact on the organization business process in the Pakistan. Purchasing Power: It also has great impact of the business process in any areas of the world like Pakistan because if there is high purchasing power then KFC can earn more profits and there is low purchasing power then it might be loss for the firm. If there is economic growth in the country and per capita income is increasing due to increase in GDP. Purchasing power of the people will also increase so they will spend more on purchasing. But there is a down fall in the economy of Pakistan. Growing inflation has reduced the purchasing power of people. Unemployment also has increased that has reduced the purchasing power of people. These economic crises are a danger for KFC.

SOCIAL FACTORS: Culture element includes the attitudes, values, norms, beliefs, behaviors and associated demographic trends that are features of a given geographic area. COMSATS Institute Of Information technology, Sahiwal

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Multinational company faces the challenge to understand about the culture of that country where they work. To solve these problems KFC hire all employees of local area and now it is easy for them to understand about the culture of Pakistan. Hilal Food: KFC management knows about that Pakistan is a Muslim country; therefore they use 100% Halal (Zibiha) chicken. KFC start their branches in those cities which are famous for food eating. Pakistani people like spicy foods, therefore KFC also provide spicy foods in Pakistan. Family Fast Food: KFC open its branches in advance cities of Pakistan like Lahore, Karachi, and Islamabad/Rawalpindi etc. In these cities mostly come out with their family because KFC mainly focus family.

TECHNOLOGICAL FECTORS: Technology is very important for the success of any organization. Because without modern technology no organization can compete in the market. KFC is using modern technology for cooking and modern cooking recopies to get the competitive advantage. New Baking System: KFC is the first who introduce the baking system in front of customer to satisfy the customer. It means that all the cocking, baking and all other work that is involved in the preparation of the fast food. COMSATS Institute Of Information technology, Sahiwal

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They are also maintaining customer data base management system and modern marketing techniques for long lasting relations with their customers.

E-CUSTOMER RELATIONSHIP MANAGEMENT STRATIGY: Managing detailed information about individual customers and carefully managing customer touch points in order to maximize customer loyalty. KFC is managing its customer relations by providing them valuable and differentiated chicken products. They are providing home delivery services. They also creates customer data base and keep the records of their regular customers. They also fill the questioners from their customers in order to provide them better quality according to their tastes. KFC also has developed its website. Customers can visit the website to know their operations and about their products. Feedback: It is also an effective tool for customer relationship management, for this purpose every KFC’s outlet has drop box for complaint and suggestion for a particular problem or issue, because in this tool customer can direct contact therefore it is an effective tool.


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Forum: It is also a direct contact tool for the customer relationship management. In which customer can put his/her complain and suggestion in the company’s web site for a particular branch in the country. Mobile Vane: If any customer has any problem or suggestion regarding to the any branch/person he/she can contact the mobile vane supervisor because mobile vane can reach at your door step for delivery in the particular areas.


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In Peshawar KFC is providing its services for 24 hours and each and every product is available at any time. While its competitors are not providing services at night. So this is the reason that it to much successful in that city and in this way it creating customer relation management with citizens.

F-PRODUCT CLASSIFICATION WITH PRODUCT LIFE CYCLE: Product Life Cycle: Every product has its life cycle whether it is successful or not in the market. This cycle has four stages given below in the diagram.

Now discuss the KFC product line according to their life cycle Introduction: In this stage following product are included according to their life cycle Hot Wings: COMSATS Institute Of Information technology, Sahiwal

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Growth: Hot Shots Maturity: Zinger: Chicken Mania: Chicken Burger: Rice n Spice:

Decline: Twister

G-PRICING STRATIGIES: Price is a money reward in return of some value given by the producer to its customer. It is important for any stage of product life cycle whether it is introduction or maturity. Price decision is a vital role to capture the market share. There are following pricing strategies for the product regarding its life cycle in the marketing conducted by the KFC. A + Profile: It is another name of Skimming price in which high price is charged by the KFC. When KFC launch new products in the market the high price will charge by the KFC. For example there is new product will launch in the market it is charged A + Profile pricing. New Product Hot Wings: It is a new product will launch in the existing cities in the country the Skimming price will charge to the customer because the cost is high. When with the passage of the time it decreases the sale the low price is charged by the KFC. COMSATS Institute Of Information technology, Sahiwal

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A Profile: It is comparatively low price as compare to the Skimming price. It is charged when the sale of the product is decrease or the cost of the product line is achieved by the KFC. B Profile: It also called as market penetration price in which low price is charge to capture the market share in low income areas.

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 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 COMSATS Institute Of Information technology, Sahiwal

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= 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 KFC also uses cost based price for old and new products in the market.

H-CHANNEL MANAGEMENT: It is a link between consumer and producer. If the channel management system is strong it is helpful to satisfy the customers by delivering the quick service. It has two types. 1- Indirect channel management system. 2- Direct channel management system. KFC is using Direct Channel Management System for satisfying the customers by providing them superior value by their own Experience. There is no compromise on customer satisfaction and quality. For this purpose KFC adopts the franchising system which is beneficial for both (KFC and customers). In the case of the KFC the placement of the product is not important but the placement of the restaurant is important. KFC has following method for channel management system. 1) franchising COMSATS Institute Of Information technology, Sahiwal

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All the franchises are controlled by Cupola (Yum international). There are six brands Lies under the Yum  KFC  Indulge  Lal Qila  Taco Bell  Pizza Hut  All American Food (AM)  Pepsi Cola ( It was also a part of YUM till 2004)  The products of the KFC are cooked at the spot.  KFC is providing products and services to consumer market as well as business market.  KFC chose the well income class area for their restaurants. Franchises KFC opens its franchises in most populated and well income area such as in Lahore there are nine outlets in highly income based areas like o Barket Market ( New Garden Town ) o MM Alam Road o Y Block o Shadman Town o Thokar Niaz Baig o Defence o Cavalry gound o Mall Road COMSATS Institute Of Information technology, Sahiwal

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Applied Marketing

o G T Road

I-PROMOTION STRATIGIES: 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, business places, Schools, colleges and universities also.


37 Group # 8

Applied Marketing

For sales promotion KFC has introduced different strategies such Ramadan Package, Birthday Package, Midnight Package and they are also celebrating many occasions like Mother’s day, Basant etc. Also they have introduced goods like watches, keychain, coffee cup, T-shirt, toys etc to the customers.KFC also offers many lucky draw schemes to attract their customers. Advertisement: It includes the following Print media:  Jang (Karachi, Lahore & Rawalpindi).  The news (Karachi, Lahore & Rawalpindi).  Dawn (Karachi, Lahore, Rawalpindi).  Magazine. Online media: Personal web site: KFC also making promotion through its own web sites of all branches in the country like Islamabad, Lahore, Muree, Multan and other city in which it is dealing. Tagged: It is world famous chating, friendship and community site in which promotion is made by the KFC for the seasonal and new product campaign. In which most young are surfing the internet. Apniisp: It is most famous Pakistan’s music site KFC also targets this site for their promotion. Other Communities sites:


38 Group # 8

Applied Marketing

KFC also make advertisement in other sites and communities in which most of the public are surfing these sites.

Electronic media: It includes the following TV Commercials: Advertising on different Cable channels like Geo, ARY World, Ten Sports, Music channels, etc and also advertising on world call Cable advertising. Radio Commercials: KFC also makes promotion through FM radio services in different cities like in Lahore (FM 100) and in Karachi (FM 101) Transaction media: It includes the following Mobile vane: For the delivery of the order is very quick service for this purpose KFC has a mobile vane that makes it possible within 30 minutes. It is also a source of advertisement.

Trucks: For seasonal campaign and festival there are road shows were conducted by KFC. It also contributes its part of promotion.


39 Group # 8

Applied Marketing

Co Branding: KFC also has co branding with Pepsi and Walls.

J-TARGETS THAT WOULD LIKE TO ACHIEVE: Every organization and company has some certain goals laid down by them to achieve to make it renown and have value added services to satisfy customers.  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. COMSATS Institute Of Information technology, Sahiwal

40 Group # 8

Applied Marketing

To establish a position in Pakistan as a leading WQSR (Western Quick Service Restaurant) chain, serving good value added services and Innovative chicken based products. KFC is consistently providing a pleasant dining experience, with fast friendly, in a clean and convenient location. Every moment dedicated to providing excellent and delighting customers.

K-EXPENDING TARGET MARKET: KFC started its business from the big cities in Pakistan. Their business has been extended in almost all big cities. Now they are going to target the small cities. Where a middle class family are living but due to rapid change in their living standard and qualification has provided the opportunities to businessmen of fast foods to expand their target market. The people in those cities are also wants to eat in restaurants. So KFC is availing the opportunity and expending the target market from big cities to sub urban areas. KFC will provide fair price products in those cities.

L-EXPECTATIONS FOR THE COMING YEAR: Now a day KFC has 62 outlets all around the country. But their current expectation is to open 100 outlets all around the country in Pakistan up to 2010. There main target areas Kagan, Naran and other visiting places where people comes from abroad and also from the different cities of Pakistan for visit. They are also going to target Blochistan.

11-SWOT ANALYSIS: SWOT analysis mean strength, weakness, opportunities and threats and the SWOT analysis of KFC are: COMSATS Institute Of Information technology, Sahiwal

41 Group # 8

Applied Marketing

STRNGTHES:  KFC secret recipe of 11 herbs and species has made it the leader in chicken for the last 50 years. KFC sells three recipe, original recipe, extra crispy, tender roast  KFC adopted very different market concept then other companies that help KFC to be strong in market

 Due to its chicken products KFC has no competitors in the market  KFC has a hold at the market and through customer satisfaction they have higher profits rates  KFC has good approach to media  They have different strategies to handle different problems  They always choose a very good location in the busy area of city  They have well educated staff and they all are very skilled and handle all the situation very well and satisfy there customers  Each and every deal is available at every time as well as the time of closing.  As we know KFC is the multinational company and they have reserves of finance and pay many taxes to government

WEAKNESS:  KFC sweet dishes portion is not as better as should be  They only focus higher income level people  They have much higher price as compare to the other fast food restaurants

OPPORTUNITIES:  They have the opportunity to expand their sweet products  They can open more branches to get maximum market share COMSATS Institute Of Information technology, Sahiwal

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KFC

 KFC is the only best fast food restaurant in Pakistan with great recipes

Applied Marketing

 They can open branches in northern areas of Pakistan.  They can open temporary outlets in peak season in the hill stations like Murree, Naran, and Kagan etc.  They can capture more customer by decreasing the price of their products  To market their products they have to do more social projects for the country and due to that they attract more customers

THREATS:

 Web site of KFC currently become the big threat for KFC market  Some international events badly affected the market of KFC in Pakistan like Iraq and Afghan war and we know KFC is American based. Therefore, it creates a great impact on the performance of KFC. During the war the sale of sale KFC

 Current political situation is a big threat for KFC

KFC

decrease more then 25%

 Some uncertain situation like bomb blasts is also the big threat for KFC  Diseases like bird flu is the big threat for KFC  People wrong perception created by some our religious people or Molvies that the chicken products of KFC are not Hilal that effect the KFC market very much.


43 Group # 8

Applied Marketing

12 –CONCLUSION:

After our research on KFC, we come to conclude that KFC has good products as far as chicken items are concerned. There products are very valuable and according to the perceived values of customers. That is the only reason that customers like to eat from KFC. They are market leaders and also increasing their sales by providing good products and services. There customers are increasing every day. They are also going to increase their target market all over the world as well as in Pakistan.

13 –RECOMMENDATIONS: KFC has to increase other varieties of products to attract the customers. And they must target low income people and children also because children push their parents to go to their favorite restaurants. And one more aspect for KFC is that it must also reduce their prices to compete their competitors like McDonald, Crisps Pins and Pizza Hut. KFC is a American Based Fast Food restaurant. There is a contradiction between Pakistani Culture and American culture .KFC should adopt the Pakistani culture. KFC also work for social aspects. COMSATS Institute Of Information technology, Sahiwal

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Applied Marketing

14 -RESOURSE PERSON:

Bibliography:


45 Group # 8

Applied Marketing


46 Group # 8

Applied Marketing


47 Group # 8

KFC Marketing Strategies

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