New Product Development at KFC A marketing project on KFC KFC Multan KFC Pakistan Kentucky Fried Chicken
Yum! Brands Pepsi Cola Developing and Marketing a new product in KFC EXECUTIVE SUMMARY Restaurant business is one of the oldest known to man and to a large extent is still an art and will remain so in future. System and practices make the job of managing a hotel or restaurant much similar, but the human element is difficult to systemize. The field of restaurant business is interdisciplinary. It draws up economics, psychology, management, food food technol technology ogy,, archit architect ecture ure and market marketing ing clust clustere ered d togeth together. er. It is a busine business ss of hospitality. Multan is one of the oldest cities of Pakistan and is expanding everyday. The trend of the people people of Multan Multan is drifti drifting ng extens extensive ively ly toward towardss modern modern means means of social socializi izing ng and relaxation. People are getting more involved in fast food. Therefore, we have worked on the marketing management of KFC to see how it’s affecting the lifestyle of people in this locality.
KFC, the name requires no explanation. It is a chain of restaurants operating in more than 80 countries with over 1000 outlets around the world – from Shanghai to Sao Polo; from the sand of Saudi Arabia to the side walks of New York and now in Pakistan. It is part of the T ricon restaurants internationals which is one of the most leading multinational organizations in the world. Said to be the second most famous and largest fast food franchise in the World, No. 1 brand in Asia with the market leader ship in Japan, China, Malaysia, Indonesia, and Korea. In this report, we have discussed the history of KFC; Its evolution and expansion in Pakistan, KFC’s sales and promotion techniques, operational activities and unique style. This organization’s internal and external analysis, its strengths, weaknesses, opportunities and threats are discussed in this report. We have have prop propos osed ed a new new prod product uct,, Choc Chocol olat atee Brown Brownie ies, s, which which sati satisf sfie iess the the KFC KFC customers who seek dessert in the restaurant but find none. We have discussed its market marketing ing strate strategie giess and pricin pricing g policy policy.. If this this product product is actual actually ly introd introduce uced, d, more more customers and more value will be attracted towards KFC.
KENTUCKY FRIED CHICKEN Food, fun & Festivity, this is what KFC is all leading the market since its inception, KFC provides the ultimate chicken meals for a chicken loving nation. Be it colonel sanders secret original recipe chicken or the hot & spicy version, every bite brings a yum on our face. At KFC we can proudly say, “We do chicken right”. Perfecting its secret recipe of 11 herbs and spices in 1939, KFC has come a long way. With over 10,000 outlets in the world, KFC has maintained its title, for the last 60 years, of being the chicken Experts. Opening the first KFC outlet in Gulshan-e- Iqbal in 1997. KFC wore the title of being the market leader in its industry. 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. Presently KFC is branched out in nine nine majo majorr cities cities of Pakis Pakistan tan (Karac (Karachi, hi, Lahor Lahore, e, Gujran Gujranwal wala, a, Sukkur & Muree) with more than 45 outlets nation-wide. KFC, based in Louisville, Kentucky, is the world's most popular chicken restaurant chain specializing in Original Recipe®, Extra Crispy™ and Colone Colonel' l's s Cr Crisp ispy y Strip Strips® s® chicke chicken n with with homehome-sty style le sides sides and freshl freshly y made made chicke chicken n sandw sandwich iches. es. Since Since its foundi founding ng by Colone Colonell Harlan Harland d Sanders Sanders in 1952, 1952, KFC has been serving deliciou delicious, s, alreadyalready-prep prepared ared complete family meals at affordable prices. KFC has more than 11,000 outlets in 85 countries and territories territories around the world, serving some 8 million customers each day. KFC KFC fast fast-f -foo ood d chai chains ns are are curr curren entl tly y unde underr the the rest restau aura rant nt divi divisi sion on of Peps Pepsii Co Incorporated. Pepsi Co. is a corporation with three divisions including beverages, snack foods, and restaurants. The restaurant division of Pepsi Co. is named as YUM! Brands Inc. Yum! Restaurants International (YRI) is the division of Yum! Brands that operates all restaurants outside the U.S.A. YRI is Pepsi Co.’s fastest growing and most profitable division. In fact, KFC makes more profit outside the U.S.A. than in the U.S.A. In 2002, the YRI system opened a record 1,051 traditional restaurants with over 6,000 KFC outlets o utlets and over 4,000 Pizza Huts.
The financial position of PepsiCo is very good. The corporation compares well with industry averages. Operationally, they have improved the health environment of their employees and customers by enforcing a smoke-free policy. Also, they have increased employee training for better service and cleaner restaurants. THE HISTORY Colonel Harland Sanders, born September 9, 1890, actively began franchising his chicken business at the age of 65. now, the Kentucky Fried Chicken (R) business he started has grown to be one of the largest retail food service systems in the world. And colonel sanders, a quick service restaurant pioneer, have become a symbol of entrepreneurial spirit. More than two billion of the colonel’s “finger lickin’ good”, chicken dinners are served annually. And not just in North America. The colonel’s cooking is available in more than 82 countries around the world. He sold his interest in the US 1980 to 1984. The Colonel remained a public spokesman for the company. In 1976, an independent survey ranked the Colonel as the world’s second most recognized celebrity. Under the new owners, Kentucky Fried Chicken Corporation grew rapidly. It went public on March 17, 1966, and was listed on the New York Stock Exchange on January 16, 1969. More than 3,500 franchised and company-owned restaurants were in worldwide operation when Heublein Inc. acquired KFC Corporation on July 8, 1971, for $285 million.
KFC’s Original Recipe Kentucky Fried Chicken became a subsidiary of R.J. Reynolds Industries, Inc. (now RJR Nabisco, Inc.), when Reynolds acquired Heublein Inc. in 1982. KFC was acquired in October 1986 from RJR Nabisco, Inc. by PepsiCo, Inc., for approximately $840 million. In January 1997, PepsiCo, Inc. announced the spin-off of its quick service restaurants -KFC, Taco Bell and Pizza Hut -- into an independent restaurant company, Tricon Global Restaurants, Inc. In May 2002, the company announced it received shareholders' approval to change its corporation name to Yum! Brands, Inc. The company, which owns A&W All-American Food Restaurants, KFC, Long John Silvers, Pizza Hut and Taco Bell restaurants, is the world's largest restaurant company in terms of system units with nearly 32,500 in more than 100 countries and territories. Until he was fatally stricken with leukemia in 1980 at the age of 90, the Colonel traveled 250,000 miles a year visiting the KFC restaurants around the world. And it all began with a 65-year-old gentleman who used his $105 Social Security check to start a business.
KFC MILESTONES IN CORPORATE HISTORY •
1964 John Y, Brown and Jack Massey purchased Kentucky Fried Chicken for US $ 2 million.
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1969, Corporation listed on the New York Stock Exchange, Colonel buys the first 100 shares.
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1986 Kentucky Fried Chicken purchased by Pepsi Co.
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1991 New logo is introduced, replacing Kentucky Fried Chicken with KFC.
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1992, In Japan, KFC opens its 1000 restaurant.
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1994 KFC opens its 9000 restaurant in the world in Shanghai China.
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1997, Tricon Global restaurant and Tricon Restaurants International (TRI) founded on October 7th. The restAurant where colonel started his business and worked
THE TRICON FAMILY •
KFC is the part of Tricon, the world’s largest restaurant group with restaurants in nearly 100 countries around the world.
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Combined with Pizza Hut and Taco Bell, there are nearly 30,000 restaurants worldwide.
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Our brands each lead their categories, generating annual retail sales over US $ 20 billion.
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We feed more than 18 million people every day. KFC TODAY
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Today, KFC is the world’s largest and most well known chicken restaurant chain, with more than 10,000 locations worldwide, in 78 countries. KFC and its franchisees employ more than 200,000 people worldwide.
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KFC serves more than 4.5 billion pieces of chicken annually, to approximately 7 million customers a day, worldwide.
MISSION STATEMENT “To establish in Pakistan our position as the leading WQSR (Western Quick Service Restaurant) chain, serving good value, innovative chicken-based products. Consistently providing a pleasant dining experience, with fast friendly service, in a clean and convenient location. At all times, we must be dedicated to providing excellent service and delighting customers.” GOALS •
Build an organization dedicated to excellence.
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Consistently deliver superior quality, and value in our products and services.
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Maintain a commitment to innovation for continuous improvement and growth, striving always to be the leader the market place changes.
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Generate consistently superior financial returns and benefit our owners and employees. VALUES
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Focus all our resources to our restaurant operations because that is where we serve our customers.
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Reward and respect the contributions of each individual at KFC.
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Expand and update training with time and be the best we can be and more.
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Be open, honest and direct in our dealings with one another.
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Commit ourselves to the highest standards of personal and professional integrity at all times.
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Encourage new and innovative ideas because these are the key to our competitive growth.
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Reward results and not simple efforts.
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Dedicate ourselves to continuous growth in sales, profit and size of organization.
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Work as a team. THE CHAMPS PROGRAM
Champs stands for the belief that the most important thing each of us can do is to focus on the customer. It stands for KFC’s commitment to provide the best food and best experience for the best value. Champs stands for the six universal areas of customer expectation common to all cultures and all restaurant concepts. They are: •
Cleanliness
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Hospitality
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Accuracy
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Maintenance of Facilities
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Product Quality
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Speed of Service Champs is a philosophy to ensure that the customer has a consistent quality experience in every restaurant, every day, on every occasion and you will be playing a key role in delivering Champs to our customers. EMPLOYEE CONDUCT RULES As an employee at the KFC restaurant, there are certain rules and regulations that the company expects you to observe you to observe and respect. Such rules are necessary to ensure that the rights and interests of the company and its assets are protected and a proper learning environment is maintained. KFC IN PAKISTAN
Apart from fulfilling our commitment of serving delicious, fresh and hygienic food and at the same time providing our customer with the ultimate entertainment; KFC also plays in the economics development of our country. •
Presently KFC has provided to over 1200 Pakistanis, which adds up to 6000 individuals directly dependent in
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KFC Pakistan.
The Government of Pakistan receives over Rs.10 million per month from KFC Pakistan as direct taxes.
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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.
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Each new outlet developed by KFC Pakistan costs approximately Rs.40 million, which is a huge amount for our construction industry.
Franchising is a relatively new phenomenon in Pakistan, but this concept has gained tremendous acceptance in this market as can be seen from the recent growth trends in the market. Most of the growth in the past few years has taken place in the food business, where the present market size for internationally franchised outlets is estimated in excess of Pak Rupees 1.2 billion (USD approximately 24 million) in terms of annual sales. US food outlets such as Pizza Hut, Kentucky Fried Chicken (KFC), McDonalds, TGI Friday’s, Subway, Taco Maker, and Nacho Nana’s are already present in Karachi. Pizza Hut, McDonalds and KFC are also present in Lahore. The non-food sectors such as retailing, convenience stores, hotels and motels, courier service, security services, and educational training centers are going to be the growth areas of the future. US companies dominate the franchise market in Pakistan in large part due to the fact that US firms were the pioneers in this sector and the first to set up their outlets in Pakistan. In addition, the US firms entered the market with a long term commitment and provided full support to their local partners. Also, U.S firms and their products are internationally known for their quality products and superior service. Many US products such as McDonalds and Kentucky Fried Chicken were well-known and recognized in the urban areas of Pakistan even before starting their operations in the country. There are no local firms offering indigenous franchise opportunities, although several Pakistani entrepreneurs have acquired master franchise for this region with the objective to re-sell the franchise to interested parties in the country. The government of Pakistan does not impose any restrictions on investors who wish to establish a franchise in the country, but foreign investors are required to inform the board of investment and the state bank of Pakistan, primarily for the purpose of repatriation of franchise fee or any profits accrued.
MARKETING TARGET MARKET OF KFC in PAKISTAN
Kentucky Fried Chicken has been franchising all over the world for years. They have about 30,000 franchises all over the world. Ever since Pepsi co. has bought into the restaurants chain the have started an expansion program, which has focused not on the increasing number of the outlets but on the increasing number of branches all over the world operating in full order. KFC has been in Asia for considerable amount of while and as it has the policy of novelty and pioneering in branching into foreign markets it opened its first branch in Lahore on June 20, 1997. It was opened in the most interactive area of Lahore, Barkat Market. Before opening here the KFC people conducted a research which was known as the “Barkat Market Analysis”. The chain has been in the expansion mode for a few years and they branched into Pakistan after researching the market of Pakistan especially Lahore.
The reason behind targeting the Lahore market is that they have a very mobile food culture. The Lahore culture is a ready market for any new fast food franchises as the success of KFC proved, and was followed by the opening of McDonalds’s Pizza Hut in the foreign market and many other local successful fast food outlets. Pakistan supports a very well versed and varied palate and a colored culture that strongly supports the system. They have targeted the market armed with spicy variations of chicken i.e., hot & crispy, and hot wings that are not there in the international market, but are specially designed for the pakistan palate. Its branch in lahore is one of the best in asia. In lahore they targeted the most mobile culture first; students of lahore. They focused all the areas well surrounded by educational institutes, as where their first branch is the center of all student activity. Not only is it near institutes like pu and ilm but also near a lot of the business complexes, thus catering to companies as well. So kfc targeted its market very well in pakistan and has been spreading with quite a speed since then. It has continued its aim in pioneering most of the affluent cities of the country. place Some important strengths of KFC’s marketing strategy include a number of changes they have implemented in the past few years to increase customer access. KFC has answered the fast-food consumer’s demand for availability in non-traditional locations by opening restaurants in shopping malls, airports, stadiums, amusement parks, office buildings, and mobile units (Krug, 1996).
As an additional outreach to their customers, KFC has initiated a home delivery service in 14 states (KFC 1997). As of February 27, 1997, KFC has more than 9,800 outlets located in 77 countries (KFC 1997).
IN MULTAN The area selected for the building is the most affluent and trafficked area of Multan city, Cantt. It was selected due to its visibility and easy accessibility. The Cantt area is amongst the largest shopping area of the city and the affluent shoppers frequent this area. Its centralized location has added to the success of the restaurant. The restaurant building of Multan is the largest outlet in Pakistan. This outlet is catering to the city as well as the surrounding area that includes Khanewal, Muzaffargarh and the similar small localities. Chicky Fun Area
Railway Services Club, Bahawalpur Road Opp. Multan High Court, Multan. Ph: 111-532-532
TARGETED CUSTOMERs In Multan the most affluent class that frequent KFC is the business and landlord class. In the general customers as before the people of KFC have targeted the families and the students who are on the outlook for a quick bit. Another factor is that following in the foot steps of the trend setters, Lahore and Karachi food trends are diverting more and more towards fast food every day. So most of the young generation here was craving for a quality fast food outlet. Now that KFC has pioneered the fast food culture development Pizza Hut and McDonald’s will follow. Most of the people here are businessmen and their affluent families are vigilant trend followers as they are the most influential people so previously they spent their fortune in fast foods outside the city and now they can do it in Multan KFC. Since the progress in the job sector the number of the working women is steadily increasing in the city and so is the trend to frequent the fast foods. Focusing on the family outing culture in Multan KFC has specially developed a kids playing pen that allows the families to have a quality time in the restaurant. The atmosphere here is exactly what families are looking for, so they have been more successful in attracting their target market then their predecessors. Another weakness of the Multanis that they have targeted is the tendency towards the chicken consumption. Since the people here are less vege-oriented they have an edge to their product. They have successfully attained their target market by only introducing HOT & CRISPY that in keeping with the people’s tastes here that are inclined towards spicy foods. They have also introduced a special combo 4 to cater the masses in the city.
They population here is very price sensitive which has been dealt with KFC by maintaining a regular price range all over Pakistan. They have successfully targeted the opinion leaders, the business in the city that set the trends followed by most of the people here.
PRODUCTS In 1992, KFC expand their menu to include a greater variety of foods that are lower in fat than fried chicken, such as Oriental Wings, Popcorn Chicken, and Honey BBQ Chicken. They also introduced a dessert menu, which provided a selection of pies and cookies. By the end of 1992, KFC held 49 percent of the $7.0 billion US chicken segment of the market (Krug, 1996). In 1993, KFC offered a new rotisserie Chicken menu item. They also offered a lunch a dinner buffet in at least 27 states (Krug, 1996). In 1995, two new products were introduced: Chunky Chicken Pot Pie and the Colonel’s Crispy Strips. In 1996, KFC introduced their Tender Roast Chicken, with projected sales of $500 million during the first 12 months (“Like”1997). KFC uses traditional taste testing methods implemented by the Colonel approximately 40 years ago. To ensure only the highest quality and best tasting products for KFC, a team of six franchisees and operators and two “chefs” comprise the KFC Chefs Council” who develop, taste, rate and evaluate new product ideas (like 1997). The Chefs Council members are from various parts of the country, representing regional taste preferences of their customers. Once a new product has passed inspection by the Chefs Council, KFC’s market research department conducts additional tests. Each week 100 people, who represent customers, taste the newest products. If the products receive a good taste rating, they are then tested in three or four cities. The Colonel’s quote still stands for KFC “If it doesn’t taste good, don’t serve it to the customer. (Like, 1997). Products that KFC offer are almost same throughout Pakistan, but slightly differ from other countries but not too much. The secret of KFC's world-wide success is due mainly to three key benefits - quality, taste and convenience. KFC now offers a diverse and interesting menu which includes:
Arabian rice Cheese Col. Chicken burger Col. Fillet burger Corn on the cob Dinner rolls Fries
Cappuccino Espresso Frothe Hot shots Machos Milo Mineral water
Hot and crispy soup Hot wings Macho’s burger Nuggets
Moccacino Soft Drink Zinger burger
A typical KFC meal consists of chicken, coleslaw and potato & gravy. All of the ingredients are of the highest quality and freshness. To ensure this, the company sets rigorous standards for product uniformity and quality, which must be met by all suppliers. Snapshots of KFC Products with Prices
BCG Matrix of KFC INTRODUCING chocolate BROWNIES
• • • •
Right now there is no dessert in KFC’s menu. Therefore we plan to introduce Chocolate Brownies for chocolate lovers. We expect to catch the interest of a regular loyal customer base with its vast selection of brownies, including not-so-traditional flavors. We will focus on… Providing the highest quality product. Competitive pricing. New ideas and flavors. Local markets, with a special focus on coffee shop and bakery customers. We will sell chocolate brownies coupled with exceptional customer service in a warm atmosphere. Customers can dine-in and enjoy a warm or cold beverage to complement their brownie. Toppings will also be available when customers dine in for children, as well as the young at heart. We will also offer carry-out so customers can enjoy the treats at their own convenience.
Market Segmentation Our market is divided into four different psychographics: Comfort Creatures, Celebrators and Soccer Moms. They represent groups of people sharing similar behavior patterns and reasons for frequenting KFC to get the brownies delight.
Comfort Creatures are mainly the more successful of workers who are driven by status and prestige yet miss homemade comfort foods of their childhood. They may stop in on their own or bring clients in for a brownie experience. Celebrators fit into the vast category of people celebrating special occasions. Birthday, anniversary, graduation, valentine's day, etc., families and loved ones will gather at KFC and will enjoy our chocolate brownies for a fun, tasty, and festive atmosphere. Soccer Moms is the title given to the moms who remain busy in usual home work and find little time for fun. KFC is a gathering place where families are welcome and feel comfortable. "Moms" can come in for after school treats with their children and. Or they can meet up with friends for a fun day out - a little civilized time stolen in the midst of a busy day.
Target Market Segment Strategy We have specifically targeted segments of people with an appreciation for delicious desserts and a need for comfort and relaxation. KFC is a haven for the busy & successful who want to treat themselves to something soothing and a little sinful! It doesn't take a lot of time, yet is so rewarding. These people will value the high quality product presented. Our customers will also appreciate the fun and fast service - whether celebrating a birthday or stopping in for a break between shopping.
Competition and Buying Patterns Although we are opening up a new product, there is no doubt that we are competing with a variety of similar businesses. We need to compete against the ideas that dessert is something that only follows a special dinner and needn't be any better than a frozen cake. We want every day to be a reason to celebrate. And being able to have a vast array of options for your favorite chocolaty treat is an idea that appeals to everyone. The comfort factor plays an important role in consumer decisions about sweets. Both the atmosphere and staff of KFC excels at warm & friendly. At the same time, the menu will reflect familiar favorites such as chocolate chunk or turtles, while there will be flavors for the more
adventurous as well, such as pistachio brownies. We will use the highest quality product; sometimes paring the ordinary with the exotic, but we will always present our brownies in a stylish and aesthically pleasing, but still unintimidating manner.
Marketing Strategy Our marketing strategy will be education of the consumer and subsequent word of mouth. Customers will be reached through neighborhood advertising, special promotions, and most importantly, word of mouth. Famous celebrity Jerry Seinfeld eating chocolate brownies
Location also plays a crucial role in marketing and promotion. KFC is located in high-traffic retail area. This area offers many incentives to business operating there because of the high-end reputation and affluent residents nearby. Also, the area is popular amongst tourists who come to see Multan’s cantonment area, cantonment garden and lake which is not so far, which will be most beneficial. We will target progressive and generally well-educated and affluent consumers who are interested in high quality brownies experience and are dissatisfied with the limited selection and lack of personal service found in grocery store bakeries and neighborhood cafes and coffee shops.
PRICING OF OUR BROWNIES Manufacturing Cost 5% Marketing Cost Total Cost 15% G.S.T +15% RETAIL MARGIN Total retail Price
Rs. Rs. Rs. Rs. Rs.
75 4 79 20 99
We are sure that our delicious chocolate brownies will attract the ultimate chocolate lovers and fulfill their choco-delight. Our affordable price makes it possible for children and youngsters to enjoy aesthically pleasing brownies with high satisfaction and fun.
PROMOTION In 1991, the Kentucky Fried Chicken logo was changed to KFC in an effort to decrease emphasis on the “Fried” element of their chicken (Krug, 1996). In 1993, KFC implemented new “Neighborhood Program” targeting company owned restaurants in designated areas to offer ethnic menu items relative to the demographics of those specific areas. Houston, Dallas, Los Angeles, St. Louis, New York, Chicago, Philadephia, and Washington, D.C., offered side dishes to appeal exclusively to the black communities in this promotional effort. They also promoted the “Neighborhood Program” at these locations by wearing African inspired uniforms (Krug, 1996). In Miami, KFC tested 13 Hispanic-oriented restaurants by offering side dishes consisting of Mexican food items. These promotional efforts increased sales from 5-30 percent in the testing areas (Krug, 1996). In June 1996, KFC decided to bring back the “Bucket”. The bucket had been removed from their outlets in efforts to reduce costs. The cost of bringing back the bucket is approximately $2 million. However, the projected sales are approximately 30 million buckets through June 1997. A 1988 study by Arizona State University revealed the following “the Colonel’s mug (or face) and the KFC bucket were two of the three most-recognized symbols in the United States” (“Birth” 1997). In December 1996, KFC promoted their KFC Mix & Match bucket using the dog “Moose” from the Frazier television show. This particular advertisement was aimed at football fans during the bowl season, and continued to air through Super Bowl Sunday. KFC’s latest promotional efforts are centered on their honey BBQ Tender Roast Chicken. Celebrities included in their efforts were based on a survey of 1,815 randomly selected people, age 18 and over (KFC 1997).
ADVERTISEMENT STRATEGY
Floating Trucks: KFC Pakistan adopts a very interesting way of advertisement as for as their business as concerned that is Floating Truck. When KFC Pakistan’s Restaurant Support Center introduces a new product in Pakistan they adopt this way and there Floating Trucks travel through out the city at where they have KFC stores. Generally it is a very effective way of advertisement through which maximum of their customers are able to know about their new products that they introduced. In House Publicity: KFC Pakistan has another way to advertise their business is in house publicity in which they use banners, electronic boards, broachers, etc to tell their customers about
packages, prices, product’s detail, new products and all other information that customers want. By Phone: KFC Pakistan stays in Touch with their potential customers by using their database. They informed their potential customers about the new products and packages by phone because they have their phone numbers in there database. Print & Electronic Media: Internationally KFC advertise their products through electronic media also they use world’s famous T.V channels, news papers, magazines, etc. Internet: All most all the KFC’s well developed franchises have their own websites through which they advertise their business very well, but they also use other websites for advertising purposes like hotmail, yahoo, google, etc. E-mail marketing techniques are used by KFC to promote their business. They use their own database to send e-mails to their value added customers to informed them about new products, packages, discounts, etc and uses third parties to promote their business through e-mail marketing. Media Coverage: KFC Pakistan also uses common ways for advertising like news papers, cable TV networks, a big road side boards, etc. In focus: In focus is a single page monthly news paper published by KFC Pakistan which has one side in English and other in Urdu and available in KFC lobbies. It is for advertising and information purposes.
Price: “Prices of KFC products all over the world are almost same but slight difference in currency exchange rates,” manager Sameer Gohar said. In Pakistan although average people are not afford KFC prices, the potential customers of KFC gave a satisfied sale at all KFC stores.
COMPETITORS Worldwide KFC’s major competitors McDonalds, but there are no direct competitors of KFC in Multan but there are some indirect competitors like Lasani Fried Chicken (LFC).
K&N’s VALUE CHICKEN PLANT
The main suppliers company is K&N’s. Their slogan is The Chicken praised at KFC is raised at K&N’s.
When the chicken business for the KFC people became overloaded and they wanted to maintain the quality of their chicken so the Artal group set up a plant producing quality chicken called. K & N value chicken in Raiwand by the name of Artal International plant. Since they have been producing good chicken catering to the demands of all the best quality restaurants in Pakistan. FOOD SAFETY KFC French fries Composition Potatoes, Tran’s fat free oil dextrose.
Seasonings Original Recipe: Salt, herbs and spices, garlic powder.
Milk and Egg: Non fat milk, dried whey and dried egg whites. Hot and Spicy: COM starch, sodium bicarbonate, sodium, aluminum phosphate, Dextrose, modified cornstarch, extractives of turmeric. SHORTENING: Pure vegetable oil (soybean). CHICKEN AND ITS PRODUCTS Locally produced and processed chicken, Supplied in frozen form. 100% Halal. KFC NUTRITIONAL INFORMATION Serving Total Calories Cholesteerol size fat
Origiona l RecipeWing Origiona l RecipeBreast Original RecipeDrumstic k Original Recipe-
CHO
Protein
47(g)
145(g)
9(g)
60(mg)
5(g)
11(g)
161(g)
370(g
19(g)
145(mg)
11(g)
40(g)
59(g)
140(g)
8(g)
75(mg)
4(g)
14(g)
126(g)
360(g)
25(g)
165(g)
12(g)
22(g)
Thigh Hot & SpicyWing Hot & SpicyBreast Hot & SpicyDrumstic k Hot & SpicyThigh Original RecipeFillet Zinger Burger Hot Wings Corn on the Cob 3" French Fries
53(g)
180(g)
11(g)
60(g)
9(g)
11(g)
179(g)
450(g)
27(g)
130(mg)
20(g)
33(g)
60(g)
140(g)
9(g)
65(mg)
4(g)
13(g)
128(g)
390(g)
28(g)
125(mg)
14(g)
22(g)
206(g)
450(g)
27(g)
60(mg)
22(g)
29(g)
246(g)
640(g)
40(g)
405(mg)
38(g)
32(g)
144(g)
460(g)
30(g)
125(mg)
22(g)
25(g)
82(g)
90(g)
0.5(g)
0(mg)
19(g)
2(g)
100(g) 136(g) 3.7(g)
1(mg)
23.3(g) 2.3(g)
DELIVERY METHODS
Self Service KFC stores offer self service to sell their products means customers go at counter and purchase products pay for it, no involvement of waiters and if customers want to eat at KFC store they sit at lobbies one for common people other for only families otherwise.
Home delivery
It is a way of buying KFC products without going at KFC stores. All KFC stores in Pakistan offer Free Home Delivery service within just 30 minutes. Orders are received at KFC stores only through telephone. They want only address at which their team members supply that order and he received a payment for that product.
Take away Take away process means customer buy KFC products from counter pay for it and go away, it means he didn’t want to sit in KFC lobby to eat. It is possible that customers who use Take Away method of buying KFC products are enjoying KFC products at other places like home or picnic spots.
At store Most of the KFC buyers want to eat KFC products in lobbies of KFC stores because a very entertaining atmosphere is provided by the KFC management in lobbies especially for children.
Drive Thru Drive Thru is the method of buying products used at almost all KFC stores in Pakistan. In it when customer is in vehicle like cars, jeep, bike, etc go at KFC store and purchase without coming out of his vehicle, he drive up to drive thru counter pay for product and at next counter collect his product and go away. It is the facility in which customer is able to buy product without spending too much time at store. Catering
Catering is a process in which KFC team cook and serve their products at a place where u want like at house, office, etc. for example some people wants to give to eat to their guest a KFC products at his marriage or birthday function he can do this very well by using a special facility offered by all KFC stores in Pakistan.
PAYMENT METHODS
Cash
It is the most popular and widely used method of payment when we are going to sell or buy something, Irrespective of its some drawbacks such as security risks, its bulky volume, and time consuming counting process. At all KFC stores in Pakistan Cash is the main and normally used method of payment when customers buying products at KFC stores.
Credit Cards Almost all the stores of KFC Pakistan accept almost all types of credit cards such as Master, Visa, etc. as for as KFC Multan as concerned they start accepting Credit Cards within 2 or 3 weeks, “Restaurant Manager” said.
Debit cards All the stores of KFC Pakistan accept debit cards and they made quick transaction by their access machine which is directly linked with respective banks such as Muslim Commercial Bank, United Bank Limited, Habib Bank Limited, Meezan Bank, ABN AMRO Bank, etc.
Customer Interaction All the KFC stores have very good customer interaction with their customers because they know the worldwide accepted rule of B2C type of business that is “Customer is the King”
So that’s why they regularly get a feedback from the customer and remain be in touch with their potential customers also. All KFC stores are very efficient in sense of getting feedback from the customers they use Comment Cards to get feedback about their product and services and also an information about the customers that they use later to be in touch with their potential customers. By using Comment Cards all the KFC stores collect information about the customers and maintain a database using all the information. They compile that Comment Cards very carefully and collect the information about the good and bad sides of their stores, point out them and send that information to Head Office Karachi and higher management take
decisions on the behalf of that information collected by using Comment Cards for the betterment of KFC Pakistan.
PEST ANALYSIS Political Factors
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Due to political stability in Pakistan, these days all businesses are flourishing and same is the case with KFC. As there are huger chances of investment these days, so KFC is following GROWTH STRATEGY all over the country and targeting 50 outlets in Pakistan, also searching place for another KFC outlet in Multan. But some areas like Peshawar has political unrest due to MMA and their policies are affecting KFC being an American organization.
Economical Factors
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Socio-economic trends are mostly encouraging with increases in disposable income, more working women, increase in hoteling and increases in tourism all positive signs for the catering market. There are also catering sectors, such as restaurants and takeaway food, which are now a part of the regular eating habits of a majority of adults. The increasing purchasing power of people is affecting KFC sales positively. Taxes are regularly paid In summer KFC has more sales than in other season because KFC provides a good chilled environment and Zenzibar like restaurants charge for air conditioners.
Social Factors
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In Pakistan KFC is playing a very active role for education sector. It has invested much for inauguration of schools in different areas of Pakistan e.g in Karachi it as made a school for disabled children. Also throughout Pakistan it is funding for libraries. Donating much to NGO’s for less fortunate people. At the start of KFC in Multan a mega function with meal was given to SOS kids. Chicky Fund Raising i.e getting second handed books etc. from different schools and distributing them among less fortunate students is also done through different campaigns. For the most recent incident of Tsunami KFC arranged concerts in Karachi in which singers like Ali Zafar, Hadiqa, Haroon etc. were invited and all the amount collected from such type of concerts was donated to Tsunami victims. Major events are special focus of KFC e.g Mother’s day, Father’s day,Valentines’s day, Eid days etc. and they offer different packages too. Self Service:
Cupola Cares Foundation Cupola Cares Foundation is a non-profit, registered organization and a charitable wing of Cupola. We aim to help the underprivileged children by giving them quality education thereby making an attempt to raise the literacy rate of Pakistan which is externally low by world standards characterized by low enrolment in primary and secondary school, high drop out rates and an over all poor quality of education. Cupola realizes the need for education and intends to build this need at the grass root level. Our vision is supported by prominent personality of the country who are also amongst the board of directors of the foundation: •
Prof. Danishmand, Dean & Director IBA
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Mr. Saifuddin Zoomkawala, Chairman EFU Mr. Tariq Kirmani, Chairman PIA Syed Salahuddin Hyder, C.E.O. Century 21 Mr. Waqar H Siddique, Executive Director Abraaj capital Mr. Rafiq Rangoonwala, C.E.O. Cupola Pakistan These are individuals belonging to different corporate sectors and are already engaged in various forms of community support services and welfare activities.
Technological Factors
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KFC is going to adopt the delivery system of Pizza Hut. Buying new equipments. The latest tech acquired is always get approved by government. KFC new UAN no. is 111-532-532 Each and every equipment is licensed. KFC Tri-state Management uses Linux. KFC Pakistan plan to become online, because the usage of internet and credit cards increases. So people using internet can buy KFC products online, because it is a very cheap and effective way of buy products Department of information technology of KFC Pakistan is working on it and in future hopefully KFC stores become online.
Internal Communication Internally all the KFC Pakistan stores communicate regularly for the betterment of organization. KFC Pakistan has a Paper Less environment in the organization. They use Telephone and E-mail facilities to remain in contact with their Head Office Karachi to plan strategies, share ideas and get instruction to maintain and improve the business because these two ways of communication are very fast an very cheap as for as e-mail as concerned, they have no traditional way to communicate like time consuming traditional mail system. PoS system:
POS (point of sale) is the physical location at which goods are sold to customers. A point-of-sale (POS) software terminal is a computer replacement for a cash register. More sophisticated than traditional cash registers, a POS (point of sale) software system includes the ability to track customer orders, process credit cards, an d manage inventory. At all KFC stores in Pakistan PAR Technology Corporation’s Point of Sale system is used including both software and hardware. PAR provide the tools that KFC Pakistan need to increase order accuracy, improve speed-of-service and raise customer satisfaction levels with software solutions that can span the entire enterprise - from the front counter to the back office and beyond to integrate the total organization. PAR uses reliable Dell® hardware to run its Back Office Computer to unleash the
power of business. Transaction Record
KFC Pakistan uses a complete package of Point of Sale system to keep record of every transaction occur. All KFC Pakistan stores nationwide use PoS and at the closing time of the store they send a complete transactional record of that day by using PoS through internet. Because of this head office maintain their accounts very well and take quick decision on the behalf of these records.
SWOT ANALYSIS
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Quality of products. Leader in almost every market. Finger licking taste as the other international fast food restaurants in Pakistan doesn’t have that kind of speciality in Fried Chickens.
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There is some weakness in the field of KFC menu as it serves only chicken related products but its competitors like pizza hut and Mc Donald’s offer vegetable and cow meat based food also. Due to huge expansion by growth strategy there is much pressure on management department in terms of HRM etc.
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KFC plays an important role in increasing employment rate of a country as it hires persons from local place to fill its staff. So this gains public attention and generates good will of the organization. Financially KFC is going very stable and sound organization so still it has much opportunity of opening new outlets in different areas of Pakistan and the rest of the world by reinvesting its profits.
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Prosperity of KFC with in a given region depends upon its economic condition of the country so if some thing bad happens to it, it can be troublesome for KFC. KFC recipe is still a secret, and if some one gets this secret then this can play havoc with this organization. American invasion into tribal areas of Pakistan is also a threat for KFC, due to arousal of anti-American sentiments it can lead towards rejection of KFC.
CONCLUSION On the whole KFC is the name of trust for the customers because there is no compromise on the quality of the food. KFC fully concentrate on the quality of food that’s why it is the hall mark of excellence among the customers. The supplier of KFC is K&N’s Foods (Pvt) Ltd. They have good and fully furnished places for Chicks to grow and finally to provide there valued customers. By following such practices, KFC is providing a just and equitable environment for work and through its diversity programs, giving back to the community at various levels. Doing business internationally means taking stock of the local population and molding your menus and work practices to suit local tastes, laws and regulations.
The best maxim here is: Think Globally, Act Locally.
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The HR department of KFC is definitely doing its job well as according to Kufahl & Agoglia (2003), the company has the lowest turnover rate in the fast food industry. However, when a company reaches the pinnacle of success with regards to any aspect, it has to try even harder to stay there and maintain its position. Hence, KFC should try to keep up the good work and maintain the level of commendable workforce development practices. KFC is American firm so it can face sensitivity in this case. Because of rude American attitude towards Muslims countries, people “can” reject them. They should start some activities that help them in turning their antiIslamic image in the minds of their target customers. The website of KFC is not well developed so sophisticated information and well designed data is not available on the net, as mentioned above the I.T. department of KFC Pakistan has a close look on this area so it is good sign for the internet users to buy online and get information they need. Music selection is good but usually they keep music volume so high that it starts interrupting entertainment. They also do not change music on customer choice.
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Counter service system is acceptable in USA but not in Europe and Asia. In Multan, KFC stand as trend setter (due to no competition) so this factor does not do any harm to their profit but it is disliked by 5% people. Their pricing strategy is out of vision. They charge Rs.105, Rs.135 etc figures. It is a blunder from the side of marketer that if customer is willing to pay or can pay more and marketer is charging them less. So they are blowing high % of revenue in air just because of fake pricing strategy. As KFC stands in STAR position in portfolio matrix so they should adopt stability strategy at least for some period of time but still they are adopting further growth strategy and increasing their level of operations so the same case can happen with KFC which happened to MC Donald’s.
REFERENCES
Shirley Lievers - Customer Relationship Executive, KFC, Multan
Web Links: www.kfc.com www.kfcpakistan.com www.yum.com www.marketingmaniacs.com www.google.com www.yahoo.com www.pepsiworld.com www.enquirer.com/editions/2002/08/21/tem_kfc_great_american.html findarticles.com/p/articles/mi_m3190/is_n8_v25/ai_10403447 www.buzzle.com/editorials/4-30-2005-69337.asp vmsd.com/content/kentucky-fried-chicken-0 www.roadsideamerica.com/story/7021 www.kfc.co.uk/our-menu/toasted-twister/toasted-salsa-twister/ www.webmd.com/diet/news/20061030/kfc-to-fry-chicken-without-transfats
web.archive.org/web/20061224114447/http://www.kfc.com/about/pres sreleases/111406.asp www.foxnews.com/story/0,2933,229308,00.html www.kfc.co.uk/about-kfc
news.bbc.co.uk/mobile/bbc_news/england/nwyl/north/north_yorkshire/6 64/66418/story6641819.shtml?l www.cnn.com/2003/BUSINESS/10/17/anderson.kfc/index.html www.kentuckyfriedcruelty.com/u-undercover.asp www.guardian.co.uk/news/2005/oct/28/food.lifeandhealth
