PROJECT REPORT
MARKETING STRATERGIES WITH REFERENCE TO KENTUCKY FRIED CHICKEN
Submitted byRohit Ahuja 0791491708 BBA (gen) SEM 3
CERTIFICATE This is to certify that Rohit Ahuja student of MSI of course BBA Batch (2008-2011), has completed her research work titled “Marketing Strategies of PVR Cinemas” under my guidance and supervision .The work submitted is genuine and authentic. Certificate
PARAMVEER
ACKNOWLEDGEMENT
With profound sense of gratitude and regard, I express my sincere thanks to my guide and mentor Mr.PARAMVEER, for his valuable guidance and the confidence he instilled in me, that helped me in the successful completion of this project report. Without his help, this project would have been a distant affair. His thorough understanding of the subject and professional guidance was indeed of immense help to me. Also, this acknowledgement would remain incomplete without thanking the staff of KFC(RAJOURI GARDEN), New Delhi for their whole-hearted and kind co-operation. I am also greatly thankful to the faculty members of our institute who co-operated with me and gave me their valuable time. Acknowledgement
ROHIT AHUJA
Introduction of Company KFC Corporation, based in Louisville, Kentucky, is the world’s most popular chicken restaurant chain, specializing in Original Recipe ®, Extra Crispy
TM
, and Colonel’s Crispy Strips® chicken with home style sides and
five new freshly made sandwiches. Every day, nearly eight million customers are served around the world. KFC’s menu everywhere includes Original Recipe® chicken—made with the same great taste Colonel Harland Sanders created more than a half-century ago. Customers around the globe also enjoy more than 300 other products—from a Chunky Chicken Pot Pie in the United States to a salmon sandwich in Japan.
300 restaurants in the United States and several other countries. And in quite a few U.S. cities, KFC is teaming up with other restaurants, Taco Bell and Pizza Hut, selling nearly fifty years ago; Colonel Sanders invented what is now called “home meal replacement” – selling complete meals to harried, time-strapped families. He called it, “Sunday Dinner, Seven Days a Week.” Today, the Colonel’s spirit and heritage are reflected in KFC’s brand identity – the logo features Colonel Harland Sanders, one of the bestrecognized icons in the world.
KFC
KFC continues reaching out to customers with home delivery in more than
KFC specialized in chicken and they says, “No body’s cooking like KFC today and we are the chicken experts” “There is no competitor for spicy chicken which is made by KFC”
KFC
Introducing New Product
Pricing Issues PRICING POLICY FOR PRODUCT OF TWISTER Manufacturing cost
RS. 100/-
5% marketing cost (PER UNIT)
RS. 5/-
Total cost
RS.105/-
15% G.S.T +15% RETAIL MARGIN
RS.25/-
Total retail Price
RS.140/-
PRICING STRATEGY FOR DEAL 6 Manufacturing cost
RS. 140/-
5% marketing cost (PER UNIT)
RS. 25/-
Total cost
RS.165/-
15% G.S.T +15% RETAIL MARGIN
RS.55/-
Total retail Price
RS.220/-
M issio n sta te m en t
“ T o b e t h e l e a d e r i n w e s t e r n s t y l e sqeur ivcikc e r e s ta u r a n ts th r o u g h fr ie n d ly se r v ic e , g o o d q u a lity f o o d a n d c l e a n a t m o s p” h e r e Goals of KFC Build an organization dedicated to excellence. Consistently deliver superior quality and value in our products and services. Maintain a commitment to innovation for continuous improvement and grow, striving always to be the leader in the market place changes. Generate consistently superior financial returns and benefits our owner and employees. To establish in India our position as leading WQSR (Western Quick Service Restaurant) chain, serving good value. Innovative chicken-based products. Consistently, providing a pleasant dining experience, with fast friendly, in a
clean and convenient location. At all times we must be dedicated to providing excellent and delighting customers.
KFC History KFC is an internationally renowned fast food industry in the world. They have the main ambition to increase & maintain the quality in fast food industry. Their aim is to capture the fast food market. Basically they want to provide their products to anyone that is why they expanding their branches in all over the world. They want to increase their profit through giving maximum satisfaction & other better facilities to people that they want. Now after catching such a marvelous position in the International Market, KFC is introducing a new item “Boneless Fried Chicken”, with even more attractive and charming taste.
Company overview: Colonel Harland sanders, born September 9, 1890, actively began franchising his chicken business at the age of 65. Now, the Kentucky fried chicken 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 America. The colonel’s cooking is available in more then 82 countries around the world. When the colonel was six, his father died. His mother was forced to go to work, and young Harland had to take care of his three year old brother and
baby sister. This meant doing much of the family cooking. By the age of seven, he was a master of a score of regional dishes. Ate age 10, his first job working on a nearby farm for $2 a month. When he was 12, his mother remarried and he left his home near Henryville, Ind., for a job on a farm in Greenwood, Ind. He held a series of jobs over the next few years, first as a 15-year-old streetcar conductor in New Albany, Ind., and then as a 16-yearold private, soldiering for six months in Cuba. After that he was a railroad fireman, studied law by correspondence, practiced in justice of the peace court, sold insurance, operated an Ohio River steamboat ferry, sold tires, and Operated service station. When he was 40, the colonel began cooking for hungry travelers who stopped at his service station in Corbin, KY. He didn’t have a restaurant then, but served folks on his own dining table in the living quarters of his service station. As more people started coming just for food, he moved across the street to a motel and restaurant that seated 142 people. Over the next nine year, he perfected his secret blend of 11 herbs and spices and the basic cooking technique that is still used today.
KFC India KFC is the world’s No.1 Chicken QSR and has industry leading stature across many countries like UK, Australia, South Africa, China,USA, Malaysia and many more. KFC is the largest brand of Yum Restaurants, a company that owns other leading brands like Pizza Hut, Taco Bell, A&W and Long John Silver. Renowned worldwide for it’s finger licking good food, KFC offers its signature products in India too! KFC has introduced many offerings for its growing customer base in India while staying rooted in the taste legacy of Colonel Harland Sander’s secret recipe. Its signature dishes include the “crispy outside, juicy inside” Hot and Crispy Chicken, flavorful and juicy Original Recipe chicken, the spicy, juicy & crunchy Zinger Burger, Toasted Twister, Chicken Bucket and a host of beverages and desserts. For the vegetarians in India, KFC also has great tasting vegetarian offerings that include the Veggie Burger, Veggie
Snacker and Veg Rice meals. In India, KFC is growing rapidly and today has presence in 11 cities with close to 50 restaurants.
Values of KFC Focus all our resources to our restaurants operation because that is where we serve our customers. Reward and respect the contributions of each individual at KFC. Expand and update training with time and be the best we can be and more. Be open, honest and direct in our dealings with one and other.
Commit ourselves to the highest standard to the personal and professional integrity at all times. Encourage new and innovative ideas because these are the key to our competitive growth. Reward result and not simple efforts.
Dedicate ourselves to continuous growth in sales, profit and size of organization. Work as a team.
PHILOSOPHY OF KFC The CHAMPS Program
Champs stands for our belief that the most important thing each of us can do is to focus on the customer. It stands for our commitment to provide the best food and best experience for the best value. CHAMPS stand for the six universal areas of customer expectation common to all cultures and all restaurants concepts.
THE CHAMPS These are: Cleanliness Hospitality Accuracy Maintenance of Facilities
Product Quality Speed of Service CHAMPS is the philosophy to ensure that the customer has the consistent quality experience in every restaurant, everyday, on every occasions and you will be playing role in delivering CHAMPS to our customers.
Situational Analysis Current Products Kentucky fried chicken
• • • • • •
• • • • •
• • •
• •
• • • •
Zinger burger Krushers GameBox Twister Boxmaster Chicken Bucket Hot wings Fries Corn on the cob Zing Kong Snacker(chicken & veggie) Veggie Feast Soft Drink Coleslaw Chicken Thali Veg Finger Snack Box Sundae Soft Twirl Brownie Sundae
Entry For the current Indian market for fast food, it is not difficult for a fast food restaurant to enter the market. However, it would be extremely difficult to take over already running major fast food chains' dominancy in India or even make a significant amount of profit. While there are enough people in urban India for any restaurant to survive, KFC holds the first-mover advantage into the 'non-veg food specialty food segment' that gives them free reputation. Customers, especially children who are used to going to KFC as a treat or reward from their parents or grandparents, are not going to want to go to other restaurants they’ve never heard of. The brand name is already established. Also, there is already a large variety in the numerous western-style dining places in India, such as McDonald’s, Pizza Hut, Domino's and Subway, and any new fast-food entrants would just be presenting something very similar to what’s already there. While small Neighborhood restaurants generally have low barriers to entry, these are the barriers to entry for similar restaurant businesses to enter the fast-food chain market.
Buyer/Supplier Bargaining Power The customers of KFC, especially as individual buyers, have almost no bargaining power because if only one customer threatens to no longer eat at KFC, the store is not going to lower its price because the cost of losing one customer is not very great. The suppliers, like the buyers, have very little bargaining power. In terms of food, KFC, upon its move into India, urged many of its U.S. suppliers to also extend branches into India. KFC also began helping local suppliers by giving them technological support to improve their products. This is a brilliant strategy because the supplies that KFC would otherwise need to import from the U.S. can now be obtained domestically, and if the U.S. suppliers decide to raise their prices, KFC can easily switch to the local suppliers. This gives us a brilliant strategy. With this strategy, KFC created competition among its suppliers, lowering the supplier
bargaining power. In terms of human resources, labor cost is extremely low because the supply of non-skilled workers great exceeds the demand for them. With so little buyer and supplier bargaining powers, KFC is able to have a very tight control over its prices and expenditures.
Substitutes and Complements
As mentioned above, there are a few major competitors in the fast-food industry in India for KFC, namely McDonald’s, Pizza Hut, Domino's and Subway. The substitute products, in this case, would be burgers, pizza, and sandwiches. Though they are competitors, their primary products differ greatly from each other, in that they sell, chicken, burgers and fries, pizzas, and sandwiches, respectively. Traditional Indian dining, home-cooked meals, and grocery stores with ready-to-eat foods are also substitutes, as families could choose any one of these over fast food for a meal. These substitutes are definitely considered healthy as compared to the fast food chains. Even foods from street vendors count as substitute goods. While other fast foods serve as substitute to KFC, they can also serve as complements for fast foods as a whole. If the general price of fast foods goes up,KFC’s price rises as well, and the same can be said of the quantity sold of these products, which make them complements to each other. KFC also sets up stores located near popular tourist attractions, so tickets to these tourist spots are also complementary goods because the more people tour these attractions, the more customers KFC will get.
Rivalry Unlike what one would expect, KFC has little rivalry with similar fast-food chains in India. The primary reason is that their core products are different, as in they sell different kinds of fast foods with very different tastes and styles. For example, if KFC raised its price for chicken by a small amount, Indian chicken lovers who may not be as accepting to pizzas (many Indian people strongly dislike the taste of cheese) are not going to switch to Pizza Hut just because the price for KFC increased. In addition to that, these restaurants have such different target customers that the fluctuation of price for one restaurant is not going to affect the others. For example, a full meal at KFC ranges about Rs. 100, whereas a full meal at Pizza Hut can cost over Rs. 300. The drastic difference in price assures no price competition between these restaurants.
KFC Original Recipe
6 cups Crisco Shortening 1 eggs well beaten 2 cups Milk 2 cups Flour 2 teaspoons ground pepper 3 tablespoons salt 1 teaspoon MSG 1/8 teaspoon Garlic Powder 1 dash paprika 2 Frying Chickens cut into 6 pieces Place shortening into the pressure cooker and heat over medium heat to the shortening reaches 400F. In a small bowl, combine the egg and milk. In a separate bowl, combine the remaining six dry ingredients. Dip each piece of chicken into the milk until fully moistened. Roll the moistened chicken in the flour mixture until well coated. In groups of four or five, drop the covered chicken pieces into the shortening and lock the lid. When pressure builds up cook for 10 minutes.
KFC Outlets in Delhi KFC in Central Delhi KFC in Noida A-12, Inner Circle, CP, Delhi-110001 Store Timing:8:30am to 11pm
Sector 18, Noida -201301 Store Timing:11am to 11pm Great India Place, Noida-201301 Store Timing:11am to 11pm
KFC in West Delhi KFC in South Delhi Back Wing, Select Citywalk Mall, Saket, Delhi-110017 Store Timing:11am to 11pm Vasant Square Mall, Vasant Kunj-110070 Store Timing:11a.m. to 11 p.m.
City Square Mall, Rajouri Garden, Delhi-10027 Store Timing:11am to 11pm Vikas Surya Plaza, Sector 4, Dwarka, Delhi-110075 Store Timing:11 am to 11 pm Below Netaji Subhash Place Metro Station, Pitampura, Delhi-110034 Store Timing:11am to 11pm
KFC in East Delhi
KFC in Gurgaon
Shipra Mall, Indirapuram, Delhi-201012 Store Timing:11am to 11pm V3S Mall,
JMD Regent Mall, Mall Road, GurgaonStore Timing:11 am to 11 pm
Laxmi Nagar, Delhi-110092 Store Timing:11am to 11pm
Ambience Mall, Gurgaon-122001 Store Timing:11am to 11pm
Promotions In India KFC not advertise there products too much because people KFC due to its reputation in other countries. They promote their products through special packages.They promote there products through billboard, pamphlets and through other promotion strategies
Current target market Segmentation KFC has divided the market of India into distinct groups of customers with different demands, tastes and behavior who require separate products or marketing mix. In India the niche marketing is being used for particular classes of people. They have made segments of the market on the following bases. Demographical Behavior Geographical By using these three bases they segmented the market as under. DEMOGRAPHICAL BASIS
In demographics their first segment is consisted of the income factor i.e. high income, average income and low income.
BEHAVIOR
In behavioral aspect they segmented the market on the basis of quality, taste and price. Following are the different possible segments in this regard. Taste conscious Quality conscious Class conscious Combination of price and quality
GEOGRAPHICAL BASIS On the basis of the geographical factor we have divided our market in three main segments. Urban areas Sub urban areas
Profile criteria: 1. Gender: KFC is for each gender both male and female. 2. Income: Everyone can use the KFCservice upper and middle class . 3. Age: age limitation for using this product above 15 4. Occupation: By profession also everyone can use this product means businessman student workers and other peoples. 5. Education: It has no need more education that why the person who know something can easily enjoy with this product. 6. Family life cycle: KFC is suitable in every stage of life like single married couple and also those who have children can use this product. 7. Lifestyle: This product is used in every level of social class like upper, middle class. 8. Attitude: When the customers once buy this product after that they can use the product continuously. 9. Purchasing decision: Often KFC changes the purchasing decision of customers because of its good attributes. 10. Geographic region: Geographically KFC is used in every part of the country as well as all over the world.
Product positioning Customer perceive this product as a unique product that other are not giving .
Attitudes The attitudes of the public is very good people like our this new product like others.
Purchasing process: Many people come from home to eat this , and some make impulse decision as they saw it .
Market Coverage Strategy KFC will be using differentiated market coverage strategy. It means that different marketing mix will be used for different age groups.
TARGET MARKET FOR FAST FOOD After evaluation of various segments, KFC has decided to target the market of Urban and Sub-urban Areas of Pakistan.
Product usage People are educated and they want variety in their diet. Normally people of rural areas don’t take fast food. On the other hand people of urban areas take fast food. Income of the people of urban areas is normally high and they can afford to purchase such products, which are slightly higher in price as compared to prevailing prices of local food in the market. People of Urban Areas are more quality conscious than the people of Rural Areas. In Urban Area there lived people from every walk of life and profit generation is easier than in Rural Areas.
Population density is higher in Urban Areas as compared to Rural Areas, so the number of customers are more in Urban Areas.
Competitive analysis Competitors You cannot enjoy the business without competitors. No organization can afford to ignore there competitors. It is very important for a marketing managers to monitor the activities of there competitors, what they are doing? KFC adopted such sort of strategy that there is no competitor for spicy chicken, which is made by KFC. KFC beats its competitors through the revising marketing strategy at every movement but the main competitor of KFC are Mc Donald
COMPETITIVE ADVANTAGE KFC
McDonalds
Spicy Products Indian people like spicy products instead of boiled food
Burger and French Fries
Arabian Rice and Zinger Burger
Big Mac
Free Delivery
Charges for home delivery
Chicken is eaten by every community
Beef is banned in some community Its Staff consist of simple Graduates and Local Staff and Highly Qualified because give them training local staff can better deal with the customers McDonalds Uses Top To Bottom KFC uses Top to Bottom and Bottom to Approach. Top Approach in Management.
KFC is Co branding with Walls
No such Case.
Economic Analysis of Market A market in this context refers to a number of all actual and potential buyers of a product (Kotler et al 2003). These buyers have a
Communication
need to satisfy their needs through exchange (Graphic 1). These needs make
Industry (a collection of seller)
up the demand for particular products and services. Several components must be
Product / service Money
Market (a collection of buyers
Information Graphic 1
considered, as all these components have a direct or indirect impact on KFC’s success. Changes in the below described components over the last couple of years have led to big changes in people’s attitudes towards healthy food. It explains why Australians today want to eat healthy and nutritious-rich food in order to keep themselves healthy and that KFC must adjust their range of product and their company image to appeal to these new expectations, people have. (http://www.marketresearch.com).
Macro environment KFC operates in a larger macro environment of forces that creates opportunities, but also threats. (Kotler et al 2003). A company such as KFC usually cannot influence trends in the macro environment, as they affect people and organisations on a larger scale.
However, KFC has to carefully examine macro environmental trends and must create competitive responses to such trends. There are six major macro environmental forces KFC has to take into account.
Micro environment The microenvironment consists of all forces that are close to KFC, and on
Company
Competitors
which KFC has an impact. They directly affect
KFC’s
ability
to
serve
its
customers. (Kotler et al 2003). Three
KFC
major components influence KFC’s micro environment:
Consumers
Graphic 3 (Source: Kotler et al 2003)
Micro Environment
COMPETITORS Because the fast food market in India is highly competitive, KFC faces a wide number of direct and indirect competitors. KFC’s main competitors are fast food chains such as McDonald’s and Domino’s, which are already well established throughout India. McDonalds’s in particular is a direct competitor, as they have already successfully introduced their Salads plus line (http://www.theage.co.in), which directly targets ‘healthy food’ conscious Indians. But, there are a number of other competitors that is also focusing on ‘chicken’ types products. All this competition makes it quite difficult for KFC to maintain or even broaden their customer base. However, with the introduction of a new and healthy product range, KFC can differentiate itself from most competitors and will gain a competitive advantage.
CUSTOMERS KFC’s customer market consists solely of the consumer market (Kotler et al 2003). KFC’s products are bought by individuals (males, females, singles, and families). Therefore, the product range KFC offer should appeal to as many people within this consumer market as possible, to ensure that the maximum amount of products can be sold. The characteristics of these individuals and a segmentation of them are discussed later in this report.
Strengths and weakness of competitor S
trengths: 38 products, Attractive Outlets, Huge Marketing, Budget, More entertainment for kids
W eaknesses: Same type of Menu, No Home Delivery How they compete their competitors ? It is found that KFC compete its competitors by five ways: • KFC compete its competitors through marketing strategy • They offered different packages at different events like ramdan offer, midnight offer etc. • KFC compete there competitors by providing good services • They must hired the hard selling persons to market their product in the market and motivate their employees for the sake of organizations and employees do well and they compete there competitors KFC has quality products and through these quality products they compete their competitors
Current Sales Analysis
Market Share KFC has a very long history and has the most recognize able brand in chicken with over 50% of the market share. It becomes difficult for the companies like Sub way, Mc Donald’s, Chicken planet, Dixie or those who may want to enter in the market of fast food restaurants. Due to with over 50% of the market share in fast food industry KFC has recognition around the world and has been globally positioned for many years in India and to capture the market share in India adopts champs philosophy
Environmental factors and opportunities Political : The operations of KFC are affected by the government policies on the regulations of fast food operation. Currently government are controlling the marketing of fast food restaurant because of health concern such as cardiovascular and cholesterol issue and obesity among the young and children in the country. Governments also control the license given for open the fast food restaurant and other business regulation need to follow such as for a franchise business. Good relationship with government in giving mutual benefits such as employment and tax is a must for the company to succeed in any foreign market.
Economic: Though for last 1 year their was economic slowdown all across the globe but the sales of KFC and other fast food chains did not slow down to that extent that of other sectors in. The GDP (Purchasing Power Parity) is estimated at 2.965 trillion U.S. dollars in the year 2010. The GDP- per Capita (PPP) was 2700 U.S. dollars as estimated in 2008. The GDP- real growth rate in 2007 was 8.7%. India has the third highest GDP in terms of purchasing power parity just ahead Japan and behind U.S. and China. Foreign direct investment rose in the fiscal year ended March 31 2007 to about $16 billion from just $5.5 billion a year earlier. There is a continuous growth in per capita income; India’s per capita income is expected to reach 1000 dollars by the end of 2007-08 from 797 dollars in 2006-07. This will lead to higher buying power in the Hands of the Indian consumers. So taking into considerations the economic factors of India KFC is safe. The only danger to it will be if there is a terrorist attack in India and the victim is KFC.
Socio cultural: India is the second most populous nation in the world with an approximate population of over 1.1billion people. This population is divided in the following age structure: 0-14 years – 31.8%, 15-64 years – 63.1% and 65 years and above – 5.1%. There has also been a continuous increase in the consumption of fast food in India. The social trend toward fast good consumption is changing and India has seen an increase of 90% fast food consumption from the year 20022007. This increase is far greater than the increase in the BRIC nations of Brazil (20 per cent), Russia (50 per cent) and China (almost 60 per cent). Thus this shows a positive trend for fast food industries in India.
Technological: The Indian fast food Industry is heating up with a lot of foreign players entering the Indian market. The technological knowhow and expertise will also enter the Indian market with an increase in competition. With the lower rates and increase technology the fast food counters are attracting youth by giving them attractive deals. For e.g. KFC and Domino’s pizza. For a fast food restaurant, technology does not give a very high impact on the company and it is not a significant macro environment variables. However KFC should be looking to competitors innovation and improve itself in term of integrating technology in managing its operation. For example in inventory system, supply chain management system to manage its supply, easy payment and ordering systems for its customers and wireless internet technology. Implementation of technology can make the management more effective and cost saving in the long term. This will also make customer happy if cost savings results in price reduction or promotional campaign discount which will benefits them from time to time.
Environmental: As one of world largest consumer of beef, potatoes and chicken, KFC always had been critics for world environmentalist. This is because high consumption of beef causing the green house effect by methane gasses coming from the cow’s ranch. Large-scale plantation has effect the environment and lost of green forest opening for plantation activities. Vegetarian environmentalist criticizes the fast-food giant for cruelty to animals and slaughtering. In America, once KFC want to introduce whale burger causing uproar because whales are endangered species. Before using paper packaging, KFC once had been criticized for being insensitive to pollution because of using ne based packaging for its food products. Imagine millions of people purchase from fast food operator and how is the impact to world environment by throwing away those hard to recycle packaging. Our world is getting concern on environment issue and business operating here should not just care for profit, but careful usage of world resources for sustainable development and care for environment safety and health for our future generation. Critics and concern from all public or activist should be review and support if necessary to ensure we play our social responsibility better.
Legal factors:
As a certified fast food operator, there are many regulations and procedures that KFC should follow. For example is the Halal certification that becomes a concern to Muslim consumers. KFC should protect its integrity and consumer confidence by ensuring all materials and process are as claimed or must followed. Other legal requirement that the business owner should follow as stipulated in laws are such as operating hours, business registration, tax requirement, labor and employment laws and quality & environment certification (such as ISO) in which the outlet has been certified. The legal requirement is important because the offenders will be fined or have their business prohibited from operating which can be disastrous.
KFCIndia
Crispy Boneless Chicken
- BCGMatrix
Krushers
?
Chicken Bucket Veg Thali
Boston Consultancy Group (BCG) Matrix
Question Mark: Currently KFC have launched a new product in the market. They have also tried to come into the beverages market by launching its new brand of shakes called KRUSHERS. As it is a fairly new product it comes in the category of the Question Mark in the BCG Matrix. It has a low market share thus brings low revenue. KFC is advertising a lot to popularize this product so there is a lot of expenditure on it. This product is individually not bringing any profits and is a cash drain for the company. Company may decide to completely remove this product from the market if it does not do well soon and start bringing in revenue.
DOG: KFC’s Veg Thali comes under this category. Although company had launched this product much earlier, it has still failed to become a success. As KFC is known more for its non-veg food, this also results in low demand for this item. It has a low market share and although low on expenditure (as company does not spend on its promotion), it does not bring in much revenue as demand is low. The product is mostly CASH NEUTRAL.
CASH COW: KFC’s Chicken Bucket is the most successful product of the company. It has the highest market share amongst all the other products. It has good demand in the market and brings in huge sales revenue. The development and other expenses are also low and thus this product is a CASH SIRPLUS for the company.
STAR: The star product of the company is its crispy Boneless Chicken. It has a high market share and brings in high revenue. But it also has high developmental expenditure involved. The profit therefore is generally not very high brought in by this product. This product is CASH NEUTRAL for the firm. The company is trying make this product a cow as well, by reducing the expenditure
Summary of current situation SWOT analysis mean strength, weakness, opportunities and threats and the SWOT analysis of KFC are:
STRENGTHS
Goodwill and reputation: The company certainly has earned a good name and reputation by its previous products and services in the
market. It is even more recognised in other markets outside India, where the company is among the leading fast food giants. The brand is recognised and trusted in India for its quality products, price, and customer service. It therefore has a good head start and enjoys a good chance of becoming a leader in Indian fast food industry.
Employee Loyalty: Employee Loyalty is one of the major strengths of KFC. The turnover rate in the company is amongst the lowest in the industry.
Customer Loyalty: Despite gain by Boston Market and Chick-fill A, KFC customer base remained loyal to the KFC brand because of its unique taste. KFC has continued to dominate the dinner and take out segment of the Industry.
Ranks highest among all chicken restaurant chains for its convenience and menu variety. It generates $1B revenue each year.
WEAKNESSES KFC was losing market share as other Chicken chain increased sales at a faster rate. KFC share of Chicken Segment sales fell from 71 percent 1999 , to less than 56 percent in 2009 , a 10 -years drop of 15 percent. Huge competition in this segment. India is still mostly a vegetarian dominated cultured society. South India is especially very much so. This may reduce the market share of the company. KFC has not yet invested much on R&D, and innovating new products for Indian Markets. This may lead to failure of their products as they are not in line with the Indian mind set, peoples taste and
preferences and their likes and dislikes. This may prove fatal for the company.
OPPURTUNITIES
New Markets: Globalisation has opened doors for new markets for the company. As the developed markets are mostly saturated, the developing countries like India and China promises a good market and generation of demand in the future. With more than 70% of the markets in india being unexplored and un organised, KFC has a good scope of expanding its operations in the country.
Cross Culture: Generally there is a good acceptance of American culture of fast food in India. People are opening up to fast foods more regularly in their daily lives and not just keeping it a once in a month affair. Thus Indian mindset is fast changing.
Large Youth population: India has a very large share of youth population a compared to other countries. More than 60% of the population is under the age of 30yrs. As the young generation are more open to fast foods and demand it more, this is a good news for the company.
New variety: Company can also come up with new variety in the menu like Pizzas, garlic breads to attract more customers.
THREATS
Competition: Competitor companies like McDonalds are fast catching up with the market.McDonald’s with sales of more than 19 billion in 1999, accounted for 15 percent of the sales of the nation’s top 100 restaurant chains. Organisations like PETA People for Ethnic Treatment for Animals have given a bad name to the company which may prove disastrous to the image of the firm. Currently, KFC is under massive attacks from animal organisations, questioning the way KFC’s suppliers are threatening the chicken, before they got slaughtered. Anti-KFC campaigns, such as the one from PETA are affecting KFC’s brand image in a negative way and result in direct dollar losses, as less people are consuming KFC chicken Saturated US Market: Now KFC cannot rely on just its home market to generate sales. As the US markets are already saturated and leave no or little scope for growth, company necessarily needs to look at offshore foreign markets to generate sales
and keep up the profits.
MARKETING STRATEGIES OF KFC
There are different strategies adopted by KFC for different events. They market their products on different events and in different activities as they are helping SOS village. According to KFC, kids become the future permanents customers and we know very well that without any marketing strategy no marketing program and no product is successful because we depend upon customers, customer not depend on us.
KFC is following Niche Marketing and Societal Marketing techniques.
KFC possess a western culture because some of the Indian people are also following that culture.
KFC are moving from Divisional Level to the District level by opening branches KFC also offer free home delivery. KFC open their outlets on reachable places. KFC menu consists of more than 30 products.
KFC gives more priority to Family.
MARKETING Since 1982, KFC’s “All-American salute to Mothers” national card contest has been KFC’s way of honoring moms and their families for making mother’s Day KFC’s biggest sales day of the year. The contest encourages children to creatively express their feelings for their moms by making a homemade card and give them chance to compete for more than $10,000 in cash and prizes. Educational packets, including language, history and art exercises highlighting Mother’s Day, were sent to thousands of schools nationwide. There are 4 P’s of Marketing: 1. PRODUCTION 2. PRICING 3. PROMOTION 4. PLACEMENT
Production: Basically the product is anything that be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. KFC is specially dealing in the chicken products; Basically, KFC has the special raspy for chicken products that is why, KFC known as a chicken specialist allover the glob. KFC target the Asia and east side because they observe that they people are like the chicken products, so they enter in the market due to the demand of their chicken products. KFC product variety of product in the chicken, those products are: PRODUCTS: • • • • • • • • • • • •
Original recipe® chicken Extra Tasty CrispyTM chicken Hot WingsTM pieces Tender Roast® chicken Chunky Chicken pot pie Kentucky Nuggest® Colonel’s Crispy Strips® Honey BBQ sandwich Original Recipe® Sandwich Tender Roast® Sandwich Triple Crunch® Sandwich Triple Crunch ®Zinger® Sandwich
BRAND:
There are three brands of the KFC: 1) Taco bell 2) Pizza Hut 3) Long john silvers
1.Pricing: KFC during pricing their products keep the different points in the mind like they adopt the cost base price strategy. Pricing of the product includes the Government taxes and excise duties and then they come at final stage of determine the price of their products. KFC prices of products are a bit high according to the market segment and it is also compatible to the stander of their products. Calculation of the price under Cost Based Pricing Strategy: Total Pounds of Chicken Served in KFC Restaurant Annually = 1.914 Billion Total KFC Chicken Pieces Sold Annually = 5.89 Billion Total Retail Sales = $8.9 Billion Sales Price of per Chicken Piece = Total Retail Sales / Chicken Pieces sold = $8.9 Billion / $5.89 Billion =$1.51 We assume that Fixed Cost is = $6000000000 Variable Cost = $675000000 Profit Margin is Or Mark Up = $225000000(25% of Sales) Per Unit Variable Cost = $675000000 / 5890000000 = $ 0.115
Unit Cost = Variable Cost + Fixed Cost / Chicken pieces Sold = 0.115 + 6000000000 / 5890000000 = 0.115 + 1.02 = $1.135 Now suppose manufacturer wants to earn 25% mark up on sale. The manufacturer mark up price is calculated: Mark Up Price = Unit Cost / (1 – Desired Return on Sales) =1.135 / (1-.25) = 1.135 / 0.75 = $1.51
3. Promotion: Promotion is one of the necessary plates in any form of business or in other words you can say that promotion is the key of success. If you promote your product at the right time. KFC also known the importance and significance of promotion so they uses the bill boards the major source of advertisement and one of the most important thing that they uses media especially the newspapers to promote their products. They are also creating awareness among the masses about their existing product range as well they tell us about the future product. Marketing efforts to be taken by the restaurant:
Paste delivery posters at petrol pumps, flats, colleges, plazas, and departmental stores. Distribution of delivery flyers in residential areas, markets, plazas and institutions (as per the plan) Visit offices and business places.
4.Placement: In the case of the KFC the placement of the product is not important but the placement of the restaurant is important. The products of the KFC is cooked at the sport and then served after that. KFC Cavalry branch opened in June 1998, in the main commercial zone of Cavalry
Grounds near the Jinnah Flyover. The restaurant is a three-story building including the basement (where the chicky play area is located). It is ideally located in the center of a main commercial and residential area of Lahore. The area that KFC Cavalry caters for is the residential and office area of Cavalry Grounds and Cantt, as the main target market. Another branch the KFC opened in the Lahore is in Garden Town (opposite to Barkat Market). KFC also target the Faisalabad and open its branch in D ground. Now we can easily judge that the KFC target the place for their restaurant, which is well known and is in the Porsche area where the income level of the people is high then the middle class level. Because the prices of the KFC products is high with comparison to the local products manufacturer who are dealing in the same kind of product in which KFC is dealing but the prices of the KFC is high due to special taste, high quality, and due to international brand, it is the world recognized fast food restaurant all around the world. So, for the placing strategy, KFC chose the well income class area for their restaurants.
Product Issues General description: Features: Quality Control Over Ingredients
Every Chicken Tested K & N’s state-of-the-art Quality Assurance Lab monitors the entire integration process from livestock to feed and on to preparation of ready-to-cook and cooked products.
Every Chicken Certified
HACCP – K & N’s ensures food safety by implementing the international HACP (Food Safety System) and enjoy the unique privilege of being the first and only HACCP certified company is India producing chicken and chicken products. Free from diseases and bacteria, drug residues and other contaminants.
Quality Assurance Certificate Director General ( Research ) has issued quality assurance certificate for the chicken used by KFC.
Packaging We are asked as many questions on our packaging as our products by our customers. The packaging for KFC products is chosen according to performance against three key criteria:
Heat Retention Moisture removal Grease absorption The packaging material and carton design are all adapted to maximise performance against these three criteria. Recycled Paper All our clamshells and chicken boxes contain as much recycled material as it is legally allowed. By law we are required to have virgin fibre board in any part of the packaging that is in contact with food. Any virgin fibre comes from board suppliers who use pulp bought from managed forest in Scandinavia. This ensures that any wood cut for paper production is replaced with new plantings. Environmental concerns Over and above ensuring our packaging is supplied via recycled or renewable resources; KFC are enthusiastically complying with the new environmental directives on recovery and recycling of packaging waste. Litter We at KFC UKI are aware of our responsibilities to the Management of Litter and all our packaging carries the ‘Keep your Country Tidy’ signs
Branding
This research measured and compared the brand identity of Kentucky Fried Chicken (KFC) in India. Brand identity was defined as the customer impressions of four different KFC identity elements - properties, products, presentations, and publications. A survey of young consumers in the countries (n = 795), showed that the respondents were more apt to eat within KFC restaurants, and spend more time doing so, than the Americans. The Chinese also had much more positive impressions of KFC. Brand identity impressions were correlated with overall customer satisfaction and with future patronage intentions for both groups. These findings support a model where differences in cultural frames of reference lead consumers to actively localize the brand identity of this nominally globalized product.
Promotion Issues
Sales promotion For the sales pormotion KFC introduced their goods like watches , keychain, e.t.c to the customers.
Advertisment The advert titled Pool was done by OGILVY & MATHER, New Delhi advertising agency for KFC ZINGER BURGER (KFC company) in INDIA. It was released in the June 2009. Business sector is Fast food outlets & restaurants.
One of KFC's latest advertisements is a commercial advertising its "wicked crunch box meal". The commercial features a fictional black metal band called "Hellvetica" performing live, the lead singer then swallows fire. The commercial then shows the lead singer at a KFC eating the "wicked crunch box meal" and saying "Oh man that is hot". In 2007, the original, non-acronymic Kentucky Fried Chicken name was resurrected and began to reappear on company marketing literature and food packaging, as well as some restaurant signage.
FEED US BACK 1. Tick Your Choice (√) Perfect
Above
Average
Average
Food Quality Food Temperature Waiting Time Menu Board Sitting Arrangement Restaurant Temperature Music Restaurant Cleanliness Overall Experience 2. When will you be back?
Next time I blink (very soon) May be sometime later When I win a Nobel Prize (Never)
3. How many people were in your group?
I was alone Just me and someone For me, three is company 4 or more
4. Would you rather order than Dine in?
Yaa, I like to mostly order at home Sometimes, but I mostly like to dine in No fun without Dine in
5. How close is your house to your nearest KFC outlet?
Within 1 Km Between 1 – 3 Kms Between 3 – 5 Kms Above 5 Kms
Below Average
Poor
6. Do you want a KFC home delivery service? My dreams are coming true That would help Doesn’t make much of a difference No thanks
Thank You
The data we received is as follows:We did a survey on KFC on people with age group of mostly 20-25yrs. Mostly all were open to non-veg food, and following were the results. As seen below KFC has shown a good report on all the micro factors that we considered.
We also asked questions on whether they would like KFC to start homedelivery services.
We also inquired “How close is the nearest KFC outlet from your house?
Would you like to order at home or Dine in?
DATA INTERPRETATION It is clear from the above report that a high number of people actually like to order from their home or workplace rather than coming. This may be due to more convienence, time shortage or just not willing to come and dine. Certainly the home delivery market is huge and KFC can take well advantage of the situation. Thus it would be in the best interest of the company to start the service as soon as possible and capitalise on the opportunity. KFC expects a rise in the orders by at least 20% by starting this service. Therefore, to conclude we would say that KFC should definitely have a home delivery service.
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