22035953-Preface-This-Report-Focus-on-KFC-Marketing-Strategies-Its-Marketing (1)

8/7/2019 22035953-Preface-This-Report-Focus-on-KFC-Marketing-Strategies-Its-Marketing (1)

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Preface

This report focus on KFC marketing strategies, its marketing environment , demographic

factor ,marketing factors. We designed a report to provide a brief description about itsmarketing mix & its major competitors in Pakistan. We also discuss four Ps of

marketing & their marketing tools.

In addition to it, this report includes a research base survey on KFC. We all have triedour level best to fulfill all the requirements mentioned to us. Now its depend upon the

reader to read it carefully and understand what we want to communicate. This report

provides a brief knowledge about KFC in Pakistan.


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Acknowledgement

In the name of Allah, the most beneficent & the Merciful.

Firstly, we all likely to thank mighty Allah who provides us knowledge, energy & skillsto get opportunities & to increase our knowledge & experience by completing this

project.

Secondly, we especially thank to our instructor Ms. RAHEELA ZULFIQAR who guides

us at every step & every aspect of this report, so thats competed successfully.

Finally, thanking management of KFC, for providing us with helpful knowledge needed.

After that we are able to complete this report with hard working & cooperation.


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EXECUTIVE SUMMARY

In September 2007, Ms. RAHEELA ZULFIQAR assigned us a project. We are asked to

explain how our chosen product is being marketed, and how environmental factors,buying behavior, market segmentation, demographic trends, target market, positioning

strategies, marketing mix, market planning & brands are relevant to their particular

product. Following a massive report, recommendations were completed & submitted on5th of November, 2007.

The information used in the analysis of KFC came from variety of resources, includingthe internet & different KFCc outlets. The combination of these resources provides the

basic for a valid current analysis of KFC.

The major findings of KFC are as under

KFC competing the competitors & maintaining strong relationship with customers by

taking under consideration its Macro & Micro environment very efficiently.

KFC has segmented its market on the basis of segmentation variables like demographic,

psychographic, geographic & behavioral.

KFC is showing certain buying behavior. KFC is following of market penetration; market

development & product development for increase its customers. IT is followingproduction, marketing & social marketing strategies for increasing its market share and

growth.


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1) HISTORY

KFC (formerly known as Kentucky Fried Chicken) is the project of Gray

Mackenzie Restaurants International Ltd. Founded first by Col Harland Sanders;

KFC is known for its fried chicken.

More than 10,000 outlets in the world.

It was launched in 1997, Gulshan-E-Iqbal, Karachi.

Presently in Pakistan, it is been operated by Cupola, a Dubai based multinationalcompany involved in several business.

In Pakistan, currently it has 43 branches.


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2) KFC VISION STATEMENT

Food, Fun & Festival, this is what KFC is all about. 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 bitebrings a YUM on our face. At KFC we can proudly say, We Do Chicken right .


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3) KFC MISSION STATEMENT

We are committed to customer satisfaction through offering high quality with

excellent services and good value.

We take great pride in serving each other, our customer and our communities.

We seek continuous improvement in all that we do.


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4) KFCs PRODUCTS

a) Core Benefit

The core benefit is To Kill hunger.

b) Products of KFC

KFC have three main product lines. The burgers, chicken meals and thesnacks. The category of chicken is relatively static.

c) BurgersThe category of burgers is

1. Zinger

2. Chicken Burger3. Zinger Xtreme

4. Fish Zinger

5. SUB (60,80)6. *Col. Filled Burger

d) Snacks

Snack family has been various products.

1. Arabic Rice2. Fruit Salad

3. *Corn on the cob

4. *Scoop of Walls

5. Fries6. HOT SHOTS

7. Rice Spice

(*) These items are not available at a few restaurants.

e) Chicken Meals

Chicken meals include the different combinations of fried drum sticks.

Features

Different and better taste

Hot and Spicy version of chicken

Superior Quality

5) MARKETING ENVIRONMENT

There are certain forces, inside and outside an organization that affect marketing

managements ability to build and maintain successful relationships with target

customers. Like all other companies, KFC also has such forces around it; marketing

environment is made up of Micro environment and Macro environment.

a) The Micro environmental Forces


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Mc DonaldsAFC

Subway

JFC

Indirect CompetitorsIt includes all other restaurants. Like Salt & Pepper, Kabana, Village,

Bundu Khan etc.

Publics Its main types are

Financial Public

KFC is an independent company. It has not any long-term bank loan. For

short-term loan, it relies on Standard Chartered Bank.

Media Public

KFC spends 8 % to 9 % of its revenue on advertisements. To have moreadvertisement, they are of the view to increase their advertisement.

Govt. Public

Taxes are always imposed by the govt. public. KFC sales tax on each meal

is 1.2 %.

Internal PublicsThe employees are greatly compensated by KFC. Employees get regular

bonuses and other benefits which are based on their performances.Employees are assets and we reward them greatly, KFC says. Special

badges and pins are assigned to employees.

General PublicKFC wants to know the attitude of the public about its products. So, it

always gets feedback from the customers whenever its going to launch a

new product.

Marketing Intermediaries

It includes the firms that help the company to promote, sell and distributeits products and services.

As in KFC, the goods are manufactured according to needs and wants of

the customers and immediately served to customers on their outlets. So no marketing

intermediaries are at KFC.

b) The Macro Environmental Forces

These are not controlled by the company and are environmental forces. It

includesDemographic Factor

KFC has designed its menu according to taste of population. People of

each age like to visit KFC. It has deals for families as well as deals for the children.They also visit their competitors to have better idea about changing trends and taste

of people as well as their competitors. KFC reconsider its menu and taste after every

three months. KFC always encourages feedback and suggestions from its customers.Natural Factors

KFC always produces fresh food. The supply houses are well prepared

and well maintained for changing factors of weather. So it is not affected by naturalfactors.

Technological Factor

Their machines and boilers are according to latest technology and

standards. After every six months, technical checkup is conducted and that equipment


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is replaced which becomes useless. Efficient billing system is implemented, toeliminate the redundancy and maintain the daily ledger account.

Political Factors

It consists of laws, govt. agencies and pressure groups that influence or

limit various organizations and individuals in a given society. But KFC has its ownstrong links and politics, it is not been influenced by any external factors. No pressure

groups are there inside and outside organization to pressurize in any aspect.

Ethically there might be certain forces that have been impact on theoverall sale of KFC, for that; it has also made certain strategies and road-maps to

overcome them.

Cultural FactorsKFC is always concerned about the culture and ethical values of the

community. As, the customer are from the same community that they are serving in,

KFC takes care of ethical and moral values of the society. As Pakistan is an Islam

based country, so KFC serves Halaal food here.

7) TARGET MARKET

The process of evaluating each market segments attractiveness andselecting two or more segments

As the outlets of KFC are in posh area and prices are to high, so KFC is targeting upper

class.Target market depends upon size and growth rate of population, Company resources and

structural attractiveness of market segment.

8) MARKET POSITIONING

Arranging for a product to occupy a clear, distinctive and desirable place

relative to competing products in the minds of target consumer.

In KFC feedback is taken from the customer in order to know the customer demands andthen improvements are made in products.KFC focuses on pure and fresh food in order to

crate a distinct and clear position in the minds of customers KFC has a strong brand

name and they are leading the market in fried chicken.

IX-Marketing Mix:

"Marketing mix is the set of controllable tactical marketing tools, product,

price, place promotion that the firms blend to produce the response it wants

in the target market".

Product

-Variety

-Quality-Features

-Brand name

-Packages-Services

Price

-List price

-Discount-Allowance

-Payment

-Period-Credit

term


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Product:Product means goods and services combination that KFC offers to the target market.

Brand name:

Brand name is the, KFC (formerly know as, Kentucky Fried Chicken). KFC is a powerful brand name in the market Variety

KFC offers provide variety of products in case of size and taste. We cancategories the product as follows according to their size and taste.

1. Chicken

2. Burgers

3. Desserts and beverages

4. Snacks and side orders.Quality:

KFC believe in providing the, "Superior Quality" to the valued consumers.

. They use fresh ingredients and provide neat and clean environment.

Features:

KFC is providing Different and better taste with Hot & Spicy version ofChicken. Packaging: The packaging is used for the burgers and snacks. The pictorialview is given below.

Target Customer

Intended Position

Promotion

-Advertising

-Personal

Selling

-SalesPromotion

-Public

relation

Place

-Channels

-Coverage

-Assortment-Locations

-Inventory

-Transportation-Lo istics


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Services:

KFC is providing home delivery services. Also have some special dinningfacility for the business customers

Price:

Price is the amounts of money customers have to pay to obtain the product.

List Price:

KCF offer different products at different prices. The list of prices is added in theAppendix. Discounts:

They provide special discounts to only employees. Paymentperiod:

Customer pays when the services are delivered to them.Allowances and credit terms:

They provide no credit terms and allowances to customer.

Place:

Place includes company activities that make the product available to targetconsumer. Channel:

There are no market intermediaries (reseller, wholesalers).They provideproduct directly to the customer. Coverage:

Pakistan has been divided in to two regions1. hi the North, KFC is serving Karachi and Hyderabad with 10restaurants

2. hi the South, they have the large chain of 30 restaurants

Assortment:

KFC provides two types of meals in respect of size.1. Family meal.2. Individual meal.

Location:

They have certain outlets per market area.Inventory:


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The marketers always addressed the consumer interests, activities andopinions. How consumer spends their time and money is the primary concern.KFC have served the customers, by providing them soothing and comfortableenvironment. The primary concern is the Innovators, for the KFC. The lifestylealso includes the way of using the technology, the internet. KFC have placed awell designed and well maintained website, to capture the interest and attention ofthe consumers. Personality and self concept:

"The unique psychological characteristics that lead to relatively consistent and lastingresponses to one's own environment" KFC have addressed the concept of brand-personality very efficiently. The visual color, of their advertisements and franchise is

red. It out-flowing the concept of excitement. Particularly, for the youth the brandcolor is very much amusing. That's what the KFC have done to target the self-conceptof consumers. The "Zinger Burger", is also an effort to attract their valued customers.

Psychological factor

Psychological factor are important to know, if the company wants to know aboutthe behavior of their customers. Psychological factor include further four concepts.Motivation

The concept of motivation is been efficiently focused by the KFC. Factorstowards motivating the consumers include many factors. The good customerservice, provided at the restaurant, the soothing environment of the restaurant, theattractive discount deals, and at the top, the best food provided are the main sourcesof creating motivation for consumers

'' The process by which people select, organize, and interpret informationto form a meaningful picture of the world"

The perception is the next process. The perception is created fromenvironment, the interlinked factors, that are been described above. The bestcustomer service ensures, to leave good impact on the minds of the consumers.

The perception is been mainly manipulated by the advertisements, that are normallytriggered at different phases and conveying the feeling of Hot interactive deals.Learning

"Changes in an individual's behavior arising from experience"Learning is one of the sensitive factors. As the change in behavior

occur at this stage. KFC is most concerned, about their well and effective service totheir customers. To provide the best taste, the town and the worth rememberingenvironment, at their outlets.

XI-Types of Buying Behavior:

There are four types of buying behavior1. Complex buying behavior.

"Consumer buying behavior in situations characterized by high consumer

involvement in a purchase and significant perceived difference among

brands"

2. Dissonance- reducing buying behavior.

"Consumer buying behavior in situations characterized by high involvementbut few perceived difference among brands"

3. Habitual Buying behavior.


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"Consumer buying behavior in situations characterized by low consumerinvolvement in a purchase and few significant perceived brands difference"

4. Variety-seeking behavior:

"Consumer buying behavior in situations characterized by low consumerinvolvement in a purchase and significant perceived brands difference"

High Involvement Low Involvement

SignificantDiff. b/w

Brands

Few Diff.

B/w Brands

Decision Behavior Shown by KFC

The buying decision process is quite complex, in case of KFC___being a fastfood restaurant. The involvement could be high and low as well. But let take itgenerally, the behavior could be complex buying behavior and dissonance reducingbuying behavior.

Dissonance- reducing buying behavior

If we see KFC among the competitors, that provide fried chicken,Like Fri-Chick, then the behavior will be dissonance reducing.

Complex buying behavior

If, we take McDonald and Subway, then there is a clears difference

In the taste, as well as in the meals and deals. It could be complex behavior.

xn-Product or Market Expansion Grid:"A portfolio planning tool for identifying company growthopportunities through market penetration, market development,product development or diversification."

Market Penetration:

"A strategy for company growth by increasing sales of currentproducts to current market segments without changing the product."They are providing areas for birthday party celebrations to attract more

and more customers Market Development:"A strategy for company growth by identifying and developing newmarket segments for current company product."

KFC is following market development strategy as it is increasing itsoutlets in different cities. They are trying to cover major market segments in orderto get more market share. Product Development:

Complex BuyingBehavior

Variety-seeking

Behavior

Dissonance-reducing behavior

Habitual Buying

Behavior


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"A strategy for company growth by offering modified or newproducts to current market segment"KFC is following product development strategy as well. It has added different new.products in its menu.

Diversification:

"A strategy for company growth through starting up or acquiring businessesoutside the company's current products and markets" As KFC is sellingsimilar products with certain modification in menus only so it is not showingdiversification.

Existing Products

Existing markets

New Market

Product Development

Market development


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XIII-Growth Share Matrix

A portfolio analysis method that evaluates the companys strategic business

unitsin terms of its market share. SBU s are classified as star, cash cow, question

mark or dogs.

Using Boston Consulting Group (BCG) approach, a company classified its SBUs or products

According to growth share matrix.

Vertical axis: market growth rate provides a measure of market attractiveness.Horizontal axis: relative market share serves as a measure of company strength in the

Market.Products of KFC

We will like only those products of KFC which are their main products. These are

Zinger

Zinger Xtreme

Chicken BurgerFish Burger

Sub (60,80)

Chicken PiecesArabian RiceFruit Salad

HOT SHOTS

Rice Spice

Stars

Stars are high-growth. High share businesses or products

In KFC, stars are1. Zinger

2. Zinger Xtreme

3. Sub(60,80)


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KFC is investing high to finance their rapid growth. The products in star have lose their m

Question Mark

Question mark is high-growth but low share businesses or products.

1. Fish Burgers

2. Arabian Rice3. HOT SHOTS

Cash Cow

Cash Cows are low-growth, high-share businesses or products1. Chicken Burger

2. Chicken Pieces

Dog

Dogs are low-growth, low-share businesses or products

1. Fruit Salad

2. Rice Spice

From above, its clear that KFC has 3 stars, 3 question marks, 2 cash sow and 2 dog products in B

XIV-MARKETING STRATEGIES

There are five alternatives concept under which organizations design and carry out their marketing Production concept

Product concept Selling concept Marketing concept

Societal concept

Production concept:

"The idea that consumers will favor the product that are available and highly affordabl

As for as KFC is concerned it is not following the production concept as the outlets of KFC ar

hence their prices are also high.

Product concept:

"The idea that consumers will favor products that offers most in quality, performance, andimprovements in products Features

KFC is providing different and better taste. It is providing hot &Spicy version of Chicken and

Quality Level

Quality level plays a vital role is, in providing the satisfaction and giving the value to t

so, believe in providing the, Superior Quality to the valued consumers.

K F C F R E N C H F R IE S C O M P O S I T IO N

P o ta to e s , p a rtia l ly h y d ro g e n a te d s o y b e a n o i l , d e x tro se .

S E A S O N I N G S

O rig in a l R e c ip e :S a lt, h e rb s a n d s p ic e s , g a rl ic p o w de r.

M ilk a n d E g g :N o n fa t d ry m ilk , d ri e d w h e y a n d d ri e d e g g w h ite s .

H o t a n d S p ic y :C o rn s ta rc h , s o d iu m b ica rb o n a te , so diu m , a lu m in u m p h o sp h a te , D e x tro s e

M od i f ied co rn s ta rch , e x t ra c t i ve s o f t u rm e r i c .

S H O R T E N IN G :P u r e v e g e t a b l e o i l (s o y b e a n ) .

C H IC K E N A N D IT S P R O D U C T S


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L o c a l ly p ro d u ce d a n d p ro c e s s e d ch ic k e n . S u p p l ied in fr o z e n fo rm .

1 0 0%H a/a / .

Figure 7

Selling Concept;"The idea that consumers will not buy enough of the firm's products unlessit undertakes a large scale selling and promotion effort"

Mostly the firms practice the selling concept when they face overcapacity.As KFC provides fresh foods according to the needs of customers and earn profitthrough customer satisfaction, so it does not follow selling concept.

Marketing Concept;

"The marketing management philosophy that holds that achievingorganizational goals depends on knowing the needs and wants of targetmarkets and delivering the desired satisfactions better than the competitors"

KFC is following market concept as it is focusing on the customer and makingimprovements in the menus according to the need and wants of the customer. It hasadded in its menus as fish zinger, salad, Arabian rice etc according to the demands ofthe customer.

Societal Marketing Concept;

"A principle of enlightened marketing that holds that a company should make goodmarketing decisions by considering consumers wants the company's requirements,consumer's long-run interest, and society long-run interest"Like KFC Mall Road Branch is giving employment to disables only, so its based onsocietal marketing concept.

Society

Human welfare

Consumers Company

Want satisfactions Profits

Figure 8 Three considerations underlying the societal marketing concept

Societalmarketing

concept


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KFC is following societal marketing concept as it is considering company's

profits, consumer wants, and society's interests.

Consumers:

KFC is making their customer satisfied by providing them high qual

fresh food. Company:

KFC is earning profit as well through customer satisfactions. Its sales grew

10% in the current years and it has about 60% market share in local market in fr

chicken. Society:hi Pakistan KFC is working for the human welfare also. They are providi

funds to different schools and training institutes for the education of special children.Faryad is the environmental campaign started by KFC. The main Project of Faryad isplantation, creating awareness and cleaning the environment and traffic rules and reg

KFC Pakistan periodically visits the under privileged children along with chick to enthem. Free food and gifts are provided

KFC is also collecting donations to kill hunger for UNO at Pakistan


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Analysis & Recommendations

Analysis:

KFC is market leader in providing Fried Chicken. As KFC is addressing Fast Food, so itcompeting with the prominent market signs, like Pizza Hut and McDonalds.

Product: KFC is doing well so far. It needs improvement in their Hot-Menu. Theyshould make their menu dynamic, by introducing new meals_____after certain period oftime. New items should be introduced, by varying the taste. Like, pizza hut has come upwith "Chapli Kabab Pizza"_____addressing the local taste; KFC should go for suchinnovation, in order to increase their market share.

Price___of KFC is reasonable, if compared with other fast food restaurants. But as, pricis always the primary concern for consumers; so KFC should adopt certain strategy to attconsumers. Its not only by lowering their prices. It could be by, introducing discount pacfor families, employees, students and regular customers. The membership cards can be uprovide certain extra value to the consumers.

Placement is very important factor, for a company to increase its market share, by targeright consumers. KFC need to have more outlets, at commercial areas. It will help in targthe actual customers and potential customers as well. Mobile outlets can be effective addwell.

Promotion: KFC has a large customer equity, but being a market symbol, a company shstrive for having more actual customers. KFC should work for, having a solid marketing

department. They should organize and run advertisement campaigns. It would certainly bincremental factor for their sale. Different modes of advertisements can be used for, triggthe community. KFC could use brand promoters. KFC can setup, promotional campaignwhat is needed is a well established marketing department, in order to facilitate effective,promotions.


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Conclusion

KFC is providing employment to 1200 Pakistanis which adds up to 6000 Pakidirectly dependant on KFC.

KFC paying Rs.10 million to Govt. of Pakistan as direct taxes.

95% of its food and packing material is used in KFC Pakistan is produced locally sums up to purchase of 35 million per month.

Each new outlet developed by KFC Pakistan spends 40 million rupees thats a mamount for this industry.

From above analysis, its clear that KFC and Pakistan are growing together. So Kdoing well at Pakistan. KFC is also following marketing strategies, segmenting the mto segmentation variables and increasing their market share. KFC is leading inChicken. It gives quality, variety and fresh meal as of its competitors.


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References

1. WWW.KFC.COM2. WWW.KFCPAKISTAN.COM

3. NAVEED IQBAL, BUSINESS UNIT MANAGER, KFC, MALL ROAD, LAH

4. PRINCIPLES OF MARKETING by PHILIP KOTTLER & GREY ARMSTRO
http://www.kfc.com/http://www.kfc.com/http://www.kfcpakistan.com/http://www.kfcpakistan.com/http://www.kfc.com/http://www.kfcpakistan.com/


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Project of Marketing

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