KFC PROJECT

KENTUCKY FRIED CHICKEN



Presented to:
Mr. Karamat ullah Hussainy



Presented by:

Alim uddin malik 2265

M. Jehangir Jawaid 2321

Sidra Khalid 2262



Presented on: Dec 1, 2009



Dec 1,2009

To: Mr. Karamat ullah Hussainy
KASBIT

From: Alim Uddin Malik, Mohammed Jehangir and Sidra Khalid
MBA III - Morning

Subject : Final project report on Kentucky Fried Chicken [KFC]
Dear Sir,

As we were given a task to prepare a project report over a topic, on any company in Pakistan and describing its marketing mix strategies, SWOT and PEST analysis and its leading strategies. We gone through different web sites, books, and other resources which also include our visits to the head office of the KFC to gather information regarding this topic, we hope that this work will attract your attention.

We divided our presentation in three categories, prefatory section, introduction & conclusion, and body; we have done all the work with mutual understanding and consensus and divide these categories among our group members so that working on individual categories give effectiveness to our presentation. Six weeks of effort was devoted for collection and designing of data which enable us to produce this report.

The main motive behind our report is to provide guide lines to the audience about the marketing mix and different strategies followed by KFC in our country and detail of those guide lines are precisely stated in executive summary, consensus also appeared for the three criteria we used for evaluating our report e.g. effectiveness, information and fairness.

We hope that you will encourage our effort, We are grateful to your guidance, stimulating suggestions and encouragement which has helped us all the time of research for and writing of this report. And we hope that we will be awarded a fair amount of appreciation from you.

Yours Sincerely,

Aleem Uddin Malik ID 2265
Muhammad Jehangir Jawaid ID 2321
Sidra Khalid ID 2262

ABOUT KFC:

Introduction
Kentucky Fried Chicken (KFC)- one of the most known fast food chains in the world started in the early 1930's by Kernel Sanders in the Southern USA as a small franchise operation. Colonel Sanders has become a well known personality throughout thousands of KFC restaurants World wide. Quality, service and cleanliness (QSC) represents the most critical success factors to KFC's global success.
Food, Fun & Festivity, this is what KFC is all about. Leading the market since its inception, KFC provides the ultimate chicken meals for the Chicken Loving Nation. Be it Colonel Sanders secret Original Recipe Chicken or the Hot & Spicy version, every bite brings a YUM on the face. At KFC we proudly say:
KFC has more than 11,000 restaurants in more than 80 countries and territories around the World. In 1971, Heublein, Inc. acquired KFC, soon after; conflicts erupted between the Colonel (which was working as a public relations and goodwill ambassador) and Heublein management over quality control issues and restaurant
KFC is part of Yum! Brands, Inc., however in the case of Pakistan KFC builds the relation of Quality Service and cleanliness for Customer.
KFC was acquired by PepsiCo in 1986; it had grown to approximately 6,600 units in 55 countries and territories. Due to strategic reasons, in 1997 PepsiCo spun off its restaurant businesses (Pizza Hut, Taco Bell and KFC)
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”.

KFC in Pakistan:
Presently KFC is branched out in thirteen cities of Pakistan (Karachi, Lahore, Rawalpindi, Faisalabad, Multan, Peshawar, Sialkot, Hyderabad, Islamabad, Gujranwala, jehlum, sukkur and Murree) with 45 outlets nation-wide. Opening the first KFC outlet in Gulshan-e-Iqbal, Karachi in 1997, and 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.
In Pakistan totally Chicken buy from Pakistani Poultry Forms, and also this Chicken is 100% Halal.

Marketing Mix:
Marketing mix consists of 4P’s. It contains everything a firm can do to influence the demand for its product. The 4P’s are:
PRODUCT
PRICE
PLACE
PROMOTION
These marketing mixes are described in detail as under.

PRODUCT:
Product planning:
Their product is classified as consumer product as it has no intermediates. It also offers specialty goods. The stock turn over of KFC is relatively high. The prices and quality of the product is always compared. Their product includes Goods (Burgers, Chicky Meals etc) and Services (cleanliness, quick service, parties, and meetings).

Product Strategy:
It was launched here as an innovative product. KFC has got one product line but later they introduced products in the same line to protect their market share. New product ideas are generated from:
Customer services (comments cards)
Gallops survey (mystery shoppers)
They have a Quality Assurance department that decides the new product innovation. Q.A. department prepares screening of new ideas and product’s feasibility report. This department does the technical evaluation (whether it is practical to produce the new product or not). The products are tested externally by offering trials to customers by giving them free samples. KFC uses telemarketing, print media, billboards and most recently televised marketing for promotion.
KFC adds a new product in its present assortment based on their competitors, product’s adequate demand, the satisfaction of key financial criteria and its compatibility with environmental standards.

Product Line:
KFC product line includes all chicken based products.
Burgers:
The burger category includes the Zinger Burger, Colonel’s Chicken Burger, Colonel’s Fillet Burger, SUB60 and 80, and Zinger Jr. They have also introduces a Fish zinger burger.
Chicken Pieces:
The chicken involved the product line with different number of chicken pieces like 1 piece, 2 pieces, 5 pieces and 10 pieces chicken.

Combos:
The combo includes the different meal as Chicken Meals, Sandwich Meals and Family Meals.
Desserts & Beverages:
The desserts and beverages offered by KFC are Fruit Salad, Regular & Large Drink, Regular & Large Mineral Water, Tea, Scoop of Walls Ice cream and Coffee.
Snacks & Side Orders:
The snacks and side orders served by the KFC are Arabian Rice, 5 & 10 Pieces Hot wings, Dinner Roll, Regular & Large Fries, Hot Shots, and Corn on the Cob, Hot & Crispy Soup and the Cole Slaw.

Product Mix strategies:
The product mix strategies are in relation to:
Competitors:
KFC has a head-on competition with McDonalds so wherever they place their products; KFC goes there as well. Locally in Pakistan KFC face a close competition with the local brands like AFC (Al-Baik Fried Chicken), Fried Chicks, Dixy Chicks etc which are producing more or less the same product as KFC.
Attributes:
The brand KFC is so strong that it is the attribute itself.
Quality:
KFC products are based on high quality and prices.

Product Mix Expansion and Contraction:
KFC keeps on modifying their product through line extension and other methodologies. Line Extension is being done through introducing new meals offers. The alteration of existing products is also done and this function is performed by the Quality Assurance department. The department decides which product should be sold and when (seasonal products as rice and soups offered in winters). Functional modification is also done by the Q.A. department to introduce new recipes. Other than expansion contraction is also being dealt with as when the new deals or offers are not sold as expected, Q.A. department contracts the previous offers and introduces new offers.

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


Product Branding, Packaging and Labeling:
Brand Name: KFC
Color: Red, white
Symbol: Colonel Harland Sander’s picture and KFC written with it.
Master Brand: The brand itself is so dominant, that it immediately comes in mind.

KFC Brand:
KFC's brand identity is the logo featuring Colonel Harland Sanders, one of the best-recognized icons in the world. It is trade marked registered brand and is distinctive, adaptable to addition to product line. It suggests something about product. It is legally protected and registered.
Brand Equity and Strategy:
The brand equity is very high as the value added by brand to the product effects the product selling. And the Brand strategy followed is that the KFC is marketing the entire output under products own brand. Pepsi and Nescafe are the complementary brands associated with KFC.
Packaging Strategy:
KFC makes its own disposable packaging. If they need promotion Pepsi contributes in improving the packaging quality. KFC does family packaging. They use paper material for packaging to avoid health hazards and environmental pollution.
Labeling:
KFC does brand labeling. Some of its products also have informational labels such as Halal, Veggie Burgers and Chicky Meals.

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

PLACE:
Distribution Channel:
KFC has only one channel of distribution i.e. direct where the goods are transferred to the consumer directly. KFC has no middlemen.
Distribution of Consumer Goods and Services:
KFC does distribution of consumer goods directly to the consumer. It also does distribution of services to the consumer like parking, sitting, home delivery, etc. KFC does intensive distribution on its outlets. (All and everything on every outlet).
KFC gets Wheels!
KFC launched its first mobile unit, which took the streets of Karachi by storm. The mobile unit has been designed to cater to the needs of those who are on the go, and have little time to stop by at a restaurant. It also provides a unique convenience of enjoying the delicious KFC offering anytime, anywhere, thus making fast food truly fast and convenient.
It intends to further develop its mobile network nationwide through more such units.

PROMOTION:
The logo features Colonel Harland Sanders that is one of the best logo in the world has created its name as a standard in the market. Today the Colonel’s Spirit and heritage are reflected in KFC’s brand identity.
KFC by its advertisements derives the desire in the customer to come and enjoy healthy food in their favorite restaurant. They spend 2% of its profits on advertisement. They use print media and most recently doing televised marketing to promote it products. Their advertising media involve: Newspapers, Pamphlets, Billboards and Television. KFC does both the primary demand advertising (“Become a Chicken Fanatic”) and the selective demand advertising (e.g. “Zinger Meal”). In its advertising it give informative messages like “Keep the city Clean”. KFC does institutional advertising to stimulate demand. When KFC offers new products then it does product advertising. KFC’s ad’s act as counteracts which means to drive the customer to KFC i.e. it uses pull advertising strategy. They also provide wit the key chains, watches, bags, tee-shirts etc. to its customers with the purchase of different meals as a part of their promotional activities. They also provide with certain midnight packages, birthday packages and lot more.
KFC has put big hoardings on the busy areas of Pakistan and have an effective advertisement campaign on the media in order to motivate its customers. The colors used in advertising are Red, White and blue which itself is recognition for the brand.
KFC have joint sale promotions with different companies like HP, Philips, Value Meals, Pepsi-Cola. And most recently with ARY Gold digital and World Call Internet services. Also KFC Proud Partners are Del Monte, Culligan, Shan and Peek Freans (EBM).
PSO had made a scheme in which PSO had given the coupons of KFC having 10% off. (1 coupon was given after each purchase of 10 liters of petrol)


KFC in its advertisements says;
“Nobody does chicken like KFC”
“We do chicken right”
Hence, focuses on product advertising. KFC does mass selling in order to reach its target market (as it has trickle down). KFC in its ads try to convert people to people who eat boring bland fast food over to KFC.
The message conveyed in the ads is recognition for the brand. KFC does competitive advertisement with its head on competition with McDonalds. Regarding this KFC uses Pricing below competition strategy.
KFC sponsor’s many NGO’s and other social welfare organizations. They also offer different deals according to the season and occasions.

KFC as a market leader:
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.
Strategic Planning is the process of developing and maintaining a strategic fit between the organizational goals, capabilities and its changing marketing opportunities and is done by KFC in a well defined manner.
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 expanding 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.
KFC in a Growing Market:
The market of KFC is increasing day by day. Being a food market it is always considered in a growing market because it increases continually with the population. Their growth is continuously increasing and if they want to be a leader, they has to develop a strategy which is predominantly a market expansion strategy and in this way they will not loose their leadership. It has greatly increased their market share in Pakistan by following different strategies that may be regarding their products, prices, placement or promotions. They have been following the strategies for market expansion by targeting the new users of the product, describing the new uses of the product and by showing them more usage of the product.
Describing the New Uses:
In this method, the new uses of the product are being described. As the motto of “KFC says we do chicken right”, here they claims that they are the best in using the chicken correctly. In the early days the chicken was simply used in a simple way for cooking, but KFC has introduced it in a number of ways and described it to the people by launching it as a meal as well as in the snacks form. They prove them with the best cooked chicken with a great taste. Instead of the chicken pieces, they also serve chicken nuggets, burgers, hot shots, twisters etc. many new innovative products are being introduced by KFC that is greatly helpful in attracting the customers and increasing its market share.
More Usage:
In the advertisement of KFC mostly seen on the bill boards, they have shown in the new scheme of zinger deal of Rs.290 + 10 and u get zinger + another chicken burger. And in Ramadan, they launches the deal of Rs. 500 and it says that all you can eat, it gives the unlimited zinger burgers and chicken pieces. In this way they have greatly increased their usage of their products.
New Users:
The people who do not eat KFC should be attracted, that may be by attracting the non users of the product, non users of the brand or the non believers. They are done in the following ways.
Non users:
The people who do not eat the fast food, they should be attracted like KFC has been attracting their customers by providing deals with Ufone. If the person is an Ufone user and he is not a KFC customer, they simply receive a message on their hand set and they jus have to show it on the KFC and counter and get a free meal. It’s a strategy to attract the non users. In a similar way, distributing deal coupon on specific purchases, in shopping malls may also be very effective.
Non Users of the Brand:
The non users of KFC can be attracted by describing them the quality features of the product that they think of trying the product once. In this case promotional activities play an important role. If the promotions are done in an effective manner, people would definitely try the product and also lowering the prices may be very effective that people may switch from other brands to KFC.
Non Believers:
KFC is quite successful in attracting the non users of the product and the brand as well, so it is not really necessary to hit the non believers. This is because they are the most difficult people as it is very hard to break their social, religious and cultural believes.




SWOT ANALYSIS:
The swot analysis includes the strengths, weaknesses, opportunities and threats faced by KFC in Pakistan. These all are described in detail as under:
Strengths:
It is the oldest and finest in Business having a high Goodwill. It does not have any Core competitor in chicken serving. They have a large Number of Outlets at prime locations in Pakistan. They serves variety of items under single menu. They are successful in maintaining their loyal customers. It has an incentive of being a Multinational Organization e.g. economies of scale, government incentives etc.

Weaknesses:
Its major weakness id the presence of Multinational competitors in the market e.g. McDonalds(specialized not in chicken serving but in burgers) and the other weakness faced by KFC is the imported raw material which usually rise their prime cost.
Opportunities:
The opportunities are the cheap and easy availability of labor. The increase consumption of fast food has increased the market size of KFC. As the consumer usually prefer “All under one roof”, therefore, in order to increase their sales turnover they can increase or add the served items.
Threats:
The threats faced by KFC are the entrance of many new competitors into the market that may be local or international brands. And being in Pakistan, there is high political instability/uncertainty involved.

PEST ANALYSIS:
The Pest Analysis includes the political, economical, socio-culture and technological factors. These are described in detail as under:

Political Factors:
The political factors includes the government policies as KFC being a foreign company, but they have to obey the policies of the Government laid by the government of Pakistan, the country where the business activities are being carried out. KFC has handled this situation very tactfully and has obeyed the policies of the Government as prescribe by the government in order to run this kind of business. The other major factor is the pricing policies. KFC maintain & design its price policies keeping in view the income & income distribution of the people living in the country. That’s why all the classes are the target market of KFC. And the most important factor is the political instability. As in Pakistan, there are political crises faced by the government, these greatly affect the business of KFC.

Economical Factors:
The economic factors includes the income of the people, KFC is going to target. Income is an important economical factor of the KFC. This factor decides which class KFC is going to target. In the early time of KFC, they were focusing on the upper class but they after some time changed their strategies and started to target the mass market by introducing some different kinds of meals and offers through which we can say that they target the middle & the upper level as well. The consumption behavior of the people plays an important role. KFC also estimated the consumption behavior of the people, their liking and disliking and make decision accordingly. Payment method is an important factor in the economical factor of the KFC. They check the behavior of the regarding the payment methods of the people. They check whether the gives money in the form of cash or plastic money.

Socio-culture Factors:
The Social/Cultural Factors includes the Social Class, as it is discussed earlier that KFC target all the class including the upper class, upper middle and lower middle class etc. Although the culture of KFC from where they come is entirely different but they have adopted the Pakistani culture as they had to serve the people living in Pakistan having entirely different culture from other areas. And it has not only adopted the Pakistani culture but also the Religion as well. They offer Halal foods to the customers, which is the symbol that they adopted the Muslim religion strategies as they had to serve in the Muslim country, to the Muslim customers.

Technological Factors:
The technological factors include the Pace of change at a fast level.
Pace of change mean rate of change. KFC has strategy to introduce new technology whenever they think that it is a time to introduce new technology. Research & Development is also an important factor in the Technological factor. KFC always support the work of research & development in order to introduce the new technology. Capital formation means stock of machinery. KFC has a stock of machinery in order to run its business activities. In other words KFC has a good amount of Capital Formation.




Recommendations:
KFC is a market leader in providing Fried chicken. As KFC, so it is competing with the prominent market signs like pizza hut, McDonalds. N its product category, it is doing really well but they need improvements in their hot menu. They should also make their menu dynamic, by introducing new meals after certain period of time. New items should be introduced by varying the taste. They should also try the local desi taste addressing the desi food lovers, thus it will help to increase their market share.
The prices of KFC are reasonable as compared with other fast food restaurants. But as price is always a primary concern for the customer, therefore, they should adopt certain strategy to attract the customers. And it can only be done by lowering the prices. It could be by introducing some discount packages for families, employees, students or regular customers. The membership card can be used to provide certain extra value to the customer.
AS far as placement of the products is concerned, it is an important factor, for a company to increase its market share, by targeting the right customer. KFC needs to have more outlets, at commercial areas. It will help to target the actual as well as the potential customers. Mobile outlets may be an effective addition as well.
KFC has large customer equity, but being a market symbol, a company should strive for having more actual customers. KFC should work for having more solid marketing departments. They should organize and run the proper advertisement campaign. It would definitely be an incremental factor for their sales. They can also use the brand promotions. They can set up the promotional campaigns. All they need is an effective marketing department to facilitate t he promotional activities.

Conclusion:
KFC is a very strong chain of fast food restaurants with more than 10,000 restaurants all over the world. KFC is providing employment to 1200 Pakistanis an around 6000 Pakistanis dependent on KFC. They are paying Rs. 10 million to government of Pakistan as direct taxes. 95% of its food and packaging material used in KFC produced in Pakistan locally which sums up to the purchase of 35 million per month. Each new outlet developed by KFC in Pakistan spends 40 million rupees, that’s a massive amount for this industry.
From all of the above detailed discussion about KFC in Pakistan, it is really clear that KFC and Pakistan are growing together. KFC is doing well in Pakistan and keeps following its marketing strategies as a market leader and segmenting the market into different variables and increasing their market share. KFC is leading in Fried Chicken. It gives quality, variety and fresh meals as of its competitors.