Competitors
ACKNOWLEDGEMENTIn the name of Allah the most beneficent &
the Merciful. We all likely to thank mighty Allah who blessed us
knowledge, energy & skills to get opportunities. We have
increased our knowledge & experience by completing this
project. We are grateful to the management of KFC, for providing us
with helpful knowledge needed. After that we are able to complete
this report with hard working & cooperation.
TABLE OF CONTENTS3EXECUTIVE SUMMARY
4INTRODUCTION
7CHALLENGES
8COMPANY ANALYSIS
12COMPETITORS
16PEST ANALYSIS
19KFC SWOT ANALYSIS
21SEGMENTATION
30ALTERNATE MARKET STRATEGY
42CONCLUSION
EXECUTIVE SUMMARYKFC is one of the most known fast food chains
in the world started in the early 1930s by kernel sanders. Food,
fun and festivity, this is what KFC is all about.
KFC has more than 11,000 restaurants in more than 80 countries
and territories around the world.
KFC first time came to Pakistan in 1997 and were the title of
being the market leader in its industry.
The marketing mix of KFC consists of 4Ps. It contains everything
KFC do it to influence the demand for their products.
KFC was launched here as an innovative product. KFC has a
head-on competition with McDonalds
The brand of KFC is so strong that it is the attribute
itself.
KFC introduced itself, has grown and now it is at maturity stage
for the last ten years in Pakistan.
Their products have high price and targeted only upper class.
Total KFC Chicken Pieces Sold Annually = 5.89 Billion
Profit Margin is Or Mark Up = $225000000
KFC has only one channel of distribution (direct)
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.
KFC has a good product as far as chicken items are
concerned.INTRODUCTIONKentucky 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 Worldwide. 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 build the
relation of Quality Service and clealiness 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) We Do Chicken Right
Perfecting its secret recipe of 11 herbs and spices in 1939, KFC
has come a long way, with over 10,000 outlets in the world; KFC has
maintained its title, for the last 60 years, of being The Chicken
Experts.
Kentucky Fried Chicken has become KFC. Does anybody know why? We
thought the real reason was because of the "FRIED" food issue. It's
not. The reason why they call it KFC is because they can not use
the word chicken anymore. Why? KFC does not use real chickens. They
actually use genetically manipulated organisms.
These so called "chickens" are kept alive by tubes inserted into
their bodies to pump blood and nutrients throughout their
structure. They have no beaks, no feathers, and no feet.
Their bone structure is dramatically shrunk to get more meat out
of them. This is great for KFC because they do not have to pay so
much for their production costs. There is no more plucking of the
feathers or the removal of the beaks and feet.
Presently KFC is branched out in nine major cities of Pakistan
(Karachi, Lahore, Rawalpindi, Faisalabad, Multan, Peshawar,
Sialkot, Hyderabad, and Islamabad) 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 everyones 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.
Cupola is a Dubai based multinational company involved in
several business including, oil gas exploration, plastic cards,
retail markets and food franchising.
Cupola holds the master franchise rights to operate KFC in
Pakistan since 1999. That was a major difference that when Cupola
takes complete Operate in Pakistan that was only 05 Outlets in
allover Pakistan, and then Now the major difference that Cupola
takes 45 Outlets in Pakistan
KFC FACTS
Apart from fulfilling the commitment of serving delicious, fresh
and hygienic food and at the same time providing the customers with
the ultimate entertainment; KFC also plays part in the economic
development of our country.
Presently KFC has provided employment to over 1200 Pakistanis,
which adds up to 6000 individuals directly dependent on KFC
Pakistan.
The Government of Pakistan receives over Rs.10 to 11 million per
month from KFC Pakistan as direct taxes.
95% of all food and packaging material used in KFC Pakistan is
procured locally, which sums up to a purchase of over Rs.35 million
per month.
Each new outlet developed by KFC Pakistan costs approximately
Rs.40 million, which is a huge amount for our construction
industry.
Annual turnover in Pakistan 2.5 billion
KFC and PakistanGrowing TogetherCHALLENGESCompetition across the
board can be a threat to any company. New products and innovations
are likely to draw consumer attention, so it is imperative that
each company stay focused on developing and reinventing their
menus. KFC attempted to liven their menu with the addition of the
chicken sandwich, but it was not soon enough. McDonalds had already
penetrated and captured the market with the introduction of the Mc
Chicken sandwich. Now the top sellers of chicken sandwiches are
hamburger joints.
Over the years competition in the chicken chain category has
grown enormously. Companies like Boston Market and Chic-Fil-A
catered to those who preferred a healthier version of chicken. Even
though growth in this market has been rapid, it has not greatly
affected the sales of KFC. It appears as though customers flocking
to these newer restaurants were not originally patrons of KFC.
Brand loyalty and the unique taste of KFCS product combined with
ideal locations kept the customers returning for more.
The American market was becoming saturated with fast-food
establishments and real estate was difficult to locate and quite
costly, so the need to expand on an international level became a
necessity. By 2000, Tricon Global Restaurants, which consists of
KFC, Taco Bell, and Pizza Hut, had close to 30,000 international
locations.
COMPANY ANALYSISKentucky Fried Chicken was one of the first
fast-food chains to go international in the 1950s and has remained
a strong competitor in the industry. By 2000, KFC had become the
third largest chain in the world with 11,000 locations in 85
countries. Even though the ownership of the corporation has changed
hands many times over the past few decades, the values that Colonel
Sanders lived by are still alive and functioning today. Some of
these essential values are product quality, service, and restaurant
cleanliness. The strategies utilized by KFC and its management
appear to be quite effective. In 1999, KFC was ranked number six in
the top 50 fast-food restaurants in the United States with sales
exceeding 4.3 million dollars. They were number one in the chicken
chain category with a substantial market share of 55.2%. Their
sales grew at a steady rate of 4%. The competitors had growth rates
that doubled and almost tripled the rate of KFC, but these rates
were not sufficient to threaten KFCS vast holding in the market
which allows them to remain strong and stable for the time
being.
GOALS Build an organization dedicated to excellence.
Consistently deliver superior quality and value in our product and
service. Maintain a commitment to innovation for continuous
improvement and grow striving always to be leader in market place
change.
Generate consistently superior financial return and benefit our
owner and employees
VALUE Focus all our resources to our restaurant operation
because that is where we serve our customer
Reward and respect contribution 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 dealing with one another
Commit ourselves to the higher standard to the personal and
professional integrity at all the time
Encourage new and innovative idea because these are the key to
our competitive growth
Reward result and not simple effort
Dedicated ourselves to the continuous growth in sales, profit
and size of organization.
Work as a team
THE CHAMPS PHILOSPHY
These are ;Cleanliness
Hospitality
Accuracy
Maintenance of facilities
Product quality
Speed of service
CHAMPS is the philosophy to ensure the customer has the
consistent quality experience in every restaurant , everyday on
every occasion you will be play role in delivering CHAMPS to our
customer.
MARKET SHAREKFC 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 Mc Donalds, 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 Pakistan and to capture the market
share in Pakistan adopts champs philosophy
CUSTOMER ANALYSIS
The main customer of KFC is family, so we can see the menu of
the KFC usually sale in the set formTYPE OF CUSTOMER
KFC product are bought by individual (male, female, single and
families). Therefore the product range offer should appeal as many
people within these consumer markets is possible. To ensure that
the maximum amount of product can be sold.
CUSTOMER LOYALITYDespite gain by bostan market and Chickfill A.
KFC customer base remained loyal to the KFC brand because of its
unique taste. KFC continued to dominate the leader at segment of
the industry.
COMPETITORS
They are classified into direct and indirect competitors. Direct
Competitors
It includes MC DONALDS AFC SUBWAY DIXY CHICKS FRIED CHICKS,
PIZZA HUT PAPASALLIS Indirect Competitors
It includes all other restaurants. Like Salt & Pepper,
Kabana, Village, Bundu Khan Etc.
KFC has a head-on competition with McDonalds so wherever they
place their products; KFC goes there as well.
McDonalds The Company's principal activity is to franchises and
operates McDonald's restaurants in the food service industry. The
Company offers hamburgers and cheeseburgers, Big Mac, Quarter
Pounder with Cheese, Filet-O-Fish and several chicken sandwiches,
Chicken McNuggets, Chicken Selects, french fries, premium salads,
shakes, McFlurry desserts, sundaes, soft serve cones, pies,
cookies, soft drinks, coffee and other beverages. All restaurants
are operated either by the Company or by franchisees, including
conventional franchisees under franchise arrangements, and foreign
affiliated markets and developmental licensees under license
agreements. The company operates globally in over 100 countries.,
McDonald's started its operations in Pakistan in 1998 and is a
leading fast food service retailer for its valued customers. With a
strong believe in the phrase "when it's green it's growing",
McDonald's Pakistan is growing with the focus to provide friendly
and quick service experience to our customers. McDonald's Pakistan
is a part of Lakson Group of Companies, operating with a network of
restaurants in various cities with a vision leading us to reach our
customers for providing friendly services in all regions of the
country. We are operating, presently in 6 cities of Pakistan
Karachi, Hyderabad, Lahore, Faisalabad, Rawalpindi and Islamabad In
Future, very soon planning to expanz Comparison between McDonald's
and KFC Analysis
1. Organizational Goals Both McDonald's and KFC share the same
basic organizational goals of profitability, sales volume, fast and
courteous service, and cleanliness. There are minor variations to
these goals by both companies.
2. Organizational Structure When observing McDonald's and KFC,
the organizational structures of the two restaurants were very
similar. There appeared to be a crew leader who was a
non-managerial employee and, there was a manager who was present
behind the counter. The managers of the restaurants seemed to be in
control of every aspect of the entire food service process. He had
keys to the store, and registers, and also was the only one to take
phone calls. One might assume that because both restaurants are
chains, there is a hierarchy of command. There is perhaps a
regional manager, then a district manager, all the way up to a CEO
of McDonald's and KFC. The distinction between the management and
the staff was very clear and apparent by looking at their
uniforms.
3. Technology Both McDonald's and KFC are on the cutting edge of
technology. They both employ state of the art cash registers and
both have electric timers built into their cooking machines.
Although the cooking styles vary between KFC and McDonald's, the
method of production is the same. Large batches of food are cooked
at once then placed under heat lamps or put in the microwave when
an order is placed. Both stores have the same drive through
technology with a speaker and a well-lit menu to relay the message
to the cooks. Usually whoever takes the order is also the same
person to collect the money; however, a different person usually
puts the order together for the customer.
4. Employee Motivation The motivation of both stores for
employees to perform well is hard to ascertain from just observing,
but it appears somewhat obvious. The people working in these
establishments appear to have a lower social economic status, and
the fact that a paycheck is coming at the end of the week may be
the only motivation they have. The stores do have an "employee of
the month" plaque on the wall, but nd in many cities in Pakistan it
is doubtful that this is motivation to strive day in and day out
for. There is also the fear of potentially losing their jobs if
they perform sub standard.
5. Communication Both stores employed a very open communication
policy. Employees were talking, sometimes shouting at one another
to be heard. The management was openly involved in the employees
routines and the employees felt no barriers to prevent their
communication with the manager. Sometimes in both stores, there
would be a break down in communication somewhere along the line and
that would result in extended waiting times for customers and
sometimes, screwed up orders.
6. Environment The environment at McDonald's and KFC seems to be
a simple, yet unstable one. It is apparent that the majority of
people who work there, are not choosing their employment as a
career option. Therefore, the workforce is constantly changing and
adapting to new employees and new situations.
7. Job Design The design of the job in both McDonald's and KFC
ran smoothly at times. There was autonomy between the different
positions. For example, the fry person would just make fries. If he
ran into a problem, he could use his knowledge of the fry machine
to fix the problem without having to go to management. There was a
visual barrier between the different positions, however no position
seemed more glorified than another one.
8. Leadership Style There was similar leadership style employed
by the management at both stores. Task orientation was essential to
meeting the goal of fast food. Each person had to be focused on the
task at hand, because during certain hours of the day, both stores
were very busy. There seemed to be little flexibility from
management if it meant compromising their goals.
9. Policies/Procedures/Rules/Standards Standardization seemed to
be the key at both stores. One can walk into any McDonald's in the
country and find that a "Big Mac" is the same everywhere.
Similarly, a "Whopper" will taste the same at every location.
Therefore, the ingredients, and cooking methods must remain
constant throughout. There can be no variation. Rules and
procedures were posted on clear signs and made directly available
to the employee.
10. Organization Climate There seemed to be individual autonomy
for the most part at both stores. However, the reward system was
not easy to identify. They seemed expected to do their job
consistently and accurately, perhaps in fear of punishment. They
received diligently. cooperation from management as long as they
were working
Contrast between McDonalds and KFC Analysis:
1. Organizational Goals At first glance there are no posters on
the wall that state the goals that McDonalds are trying to each. A
customer can find a list of the McDonalds goals in what look to be
childrens flyers round the restaurant. The flyers stated that
McDonalds goal is 100% total customer satisfaction. Also if you
werent completely happy with your meal that the restaurant would do
whatever it took to make it right. This is not a very realistic
goal for a fast food restaurant because with the amount of food
that is served everyday there is no way that every customer will be
satisfied. When I got to KFC there were no pamphlets for the
customer to read. There was nothing that let the consumer know what
the company was all about. There was a large sign, which read the
slogan Workin for You. This was what appeared to be the
organization goal and it was interesting to see that the slogan was
in improper English. Although this goal is much more realistic than
the McDonalds counterpart.
2. Organizational Structure Although the structure of the two
organizations are basically the same there were two differences
that I noticed. One difference is in the specific tasks of the
employees working the front. In McDonalds there is one person who
takes your order and gets your food. Only one person is helped at a
time because the cashier has to wait for the food and then serve
you. In KFC there are two separate stations to order and then pick
up your food. At the beginning of the line the customer orders and
pays in exchange for a number. Then you move down the line to where
the customer picks up the food in accordance with the number. This
great management. At both restaurants there is one manager that
handles all the employees working at the time. In McDonalds the
manager was no where to be found but in KFC the manager was at the
front letting himself be seen and talking with the customers. He
also wore a different colored uniform to signify his position in
the organization.
3. Technology The production level of the two restaurants is the
main difference in their technology. McDonalds makes their food in
mass production. The burgers are already made and waiting under a
heat lamp for you when you order. They are separated into rows
depending on what type of burger you order. In KFC the burgers
arent already put together. The burger is cooking in the back but
the toppings arent added till the individual orders come. This
gives the customer a better chance of getting a fresh meal.
4. Communication There wasnt much communication going on in
McDonalds when we were there. The cashiers didnt smile and werent
that polite when taking my order. The communication between the
cashiers and the cooks consisted of the cashiers screaming into the
kitchen. The manager wasnt around so I wasnt able to see the
managers interactions with the staff. At KFC I was welcomed by a
smile. The cashiers were nice and even held a conversation with me.
The manager was out in front conversing with the staff and the
employees. The staff appeared to treat the manager as a friend
instead of a superior.
5. Environment McDonalds environment was neither customer nor
employee friendly. Everything in the restaurant is colored brown
which just isnt inviting to customers. The staff has pinstriped
uniforms that resemble prison uniforms. The restaurant was also
badly lighted which didnt help the color. In KFC there were windows
everywhere and the restaurant was extremely bright. The staff wore
bright colored uniforms and there was music playing which was
enjoyable for the customers as well as the staff. lines and reduces
the waiting time.
PEST ANALYSIS1) Demographical Factors: Following factors
included in the demographical factors of the pest analysis of
KFC:-
a) Age:
Generally there is no age limit which is focus by the KFC. They
target & focus on each and every age of the society. But for
somehow in our opinion they target heavily on the youngster as
compared to the middle & old age.
b) Gender:
In this case they generally focus on the both Males &
Females of the society & similarly target them.
c) Household Size:
Household size plays a vital role in the demographical factor of
KFC. Generally they target the whole family not a single family
members. Thats why he introduced many family packages meals.
d) Population:
Population also plays a vital role in the demographical factor
of KFC. In the light of this population they can make their
strategy.
2) Economical Factors:
Following factors are included in the economical factors of the
KFC:-
a) Income:
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 focusing on the upper class but they introduce some meal
through which we can say that they target the middle & the
upper level as well.
b) Consumption Behavior:
KFC also estimated the consumption behavior of the people, their
liking and disliking and make decision accordingly.
c) Payment Methods:
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.
3) Technological Factors: Following are the factors included in
the technological factor of the KFC:-
a) Pace of Change:
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.
b) Research & Development:
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.
c) Capital Formation:
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.
4) Political Factors: Following are the factor involve in the
political factors of the KFC:-
a) Government Policies:
Although KFC is a foreign company, but they have to obey the
policies of the Government where he run its business activities.
KFC has handle this situation very tactfully and obey the policies
of the Government as prescribe by the government in order to run
this kind of business.
b) Price Policies:
Price policies is also an important factor. KFC maintain &
design its price policies keeping in view the income & income
distribution of the people living in the country. Thats why all the
classes are the target market of KFC.
c) Political Stability:
Political stability is very important if KFC want to become the
leader in fast food business in Pakistan. So this is also an
important political factor.
5) Ethical/Legal Factors: Following are the important factors
which is included in the ethical/legal factor of the KFC:-
a) Business Law:
Just like the Government Policies the business units which is
working in Pakistan also regulate the law regarding the nature of
business. KFC also fulfills this factor.
b) Social Responsibilities & Ethics:
Social Responsibilities & Ethics are the important factor.
KFC tries his level best to this factor.
6) Social/Cultural Factors: Social/Cultural Factors includes the
following things:-
a) Social Class:
As we discuss earlier that KFC target all the class including
the upper class, upper middle and lower middle class etc.
b) Culture:
Though the culture of KFC from where they come is different but
they adopt the Pakistani culture also.
c) Religion:
KFC not only adopt 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.KFC SWOT ANALYSIS
STRENGTHS Brand Equity
2nd Only to McDonalds in Foreign Sales $550M
Strong Cash Flows
Generate $1B each year
Very strong Internationally
UK, Middle East, Thailand, China, Japan, Korea, Mexico
Strong Franchise and License Fee revenues for cash flow.
Interactive relationship marketing
Strong trademarks recipes
Ranks highest among all chicken restaurant chains for its
convenience and menu variety.
Largest multibranded restaurant in the world 100 KFC and Pizza
Hut combos 600 KFC and Taco Bell combos
WEAKNESSES Recent drop in sales for KFC
Failed to rank in top 20 in growth in 2000.
Same Store sales declined
Lack of point of scale scanning system
Admitted inability to provide quality service
Lack of knowledge about their customers
Lack of relationship building with employees, customers and
suppliers i.e. Chick-fil-a
Question of over franchising leads to loss of control and
quality
Lack of focus on R&D
OPPORTUNITIES Growth of 18-24 age demographic
Increase in U.S. median income International beef scare from
mad-cow and hoof and mouth disease Home Meal Replacement Market
will exceed an estimated $577 billion by 2020
Targeting to growing ethnic markets Asian American and
Hispanic
New Leadership
Domestic markets
Updating restaurants
Balanced menu
Customer focus
Increase delivery service
THREATS Rated 83 out of 100 in terms of competitiveness
Increasing wage rates directly affect menu prices
85% annual employee turnover for fast food market
Supermarkets and new competitors threaten HMR market
International Exchange Rates
Health Trend away from fried foods
Changing customer demands
Quality of Service Focus
SEGMENTATION
Dividing the market into distinct groups of buyers who have
distinct needs, characteristics or behavior or who have might
require separate products or marketing mix
In case of KFC, we have considered four variables for market
segmentation which are
Geographic segmentation
Demographic segmentation
GEOGRAPHIC SEGMENTATIONDividing the market into different
geographical units such as nations, states, regions, countries,
cities or neighborhood.
In Pakistan niche marketing is used for particular classes of
people.
KFC has outlets internationally and sells its products according
to geographic needs of the customer. On the basis of the
geographical factor KFC has divided the market in two main
segments, in Pakistan. Urban areas
Sub urban areas
In Pakistan, its geographic segmentation is
DEMOGRAPHIC SEGMENTATIONDividing the market into groups based on
an age, gender, family size, income, education, occupation,
religion, race and nationality.
KFC divides the market on demographic basis in that way
Age6-65
GenderBoth Males and Females
Family Size1-2, 3-4, 5+
IncomeRs. 10,000 above
OccupationNot Specific
EducationNot Specific
ReligionNot Specific
GenerationNot Specific
NationalityNot Specific
Family lifecycleAlmost All
Age:Generally there is no age limit focus by the KFC. The target
and focus is on each and every individual in a society. KFC finds
its largest demographic in the young of any society.
Gender:Both male and females are focused by KFC; gender does not
play any role here.
Family Size:This plays a vital role in the demographic factor of
the KFC. Generally they target whole families rather than single
persons. This being the reason for their Family Meals which are
basically bundled items served at a nominally cheaper rate.
Income: KFC targeted market is middle and upper class.
PECENTAGE OF SALES
GEOGRAPHIC SEGMENT
Delivery: 15%
Dinning: 58%
Take away: 27%
DEMOGRAPHIC SEGMENT
Delivery: 30%
Dinning: 60%
Take away: 10%
Sales of some major cities
KFC in Lahore earns approximately 30lacs/month.
KFC in Rawalpindi earns 37-39lacs/month.
KFC in Islamabad earns 32-33lacs/month.
Sadder restaurant of KFC earns on average 4lacs/day.
It is estimated that single outlet on average earns
2-3lacs/day.
POPULATION
One outlet of KFC has approximately 800 transactions/days in
Pakistan i.e. 800 customer visits KFC per day. On monthly basis KFC
has (800) (30) =24000 customers. This is the average monthly
population of single outlet of KFC in Pakistan.
NEEDS, WANTS AND DEMANDS OF GEOGRAPHIC AND DEMOGRAPHIC
SEGMENT
NEEDS
Need food (is a must), The core benefit is To Kill hunger.
WANTSWant Pizza, Burger, French fry's (translation of a need as per
our experience)
DEMANDS
Demand Burger (translation of a want as per our willingness and
ability to buy)
Neat and clean area and environment
Proper sitting arrangement for the customer who dine in KFC
Hygienic food
Loyalty
Hospitality
Customer satisfaction i-e KFC is making their customer satisfied
by providing them high quality fresh food. Fast service. As fast
food are always meant to provide quick service. The average speed
of service of KFC is 1minute of a normal order. Minimum Delivery
time.KFC delivery time is 30 minutes (after the order is taken) for
maximum 8 minutes drive. Quality conscious people in urban areas
are more conscious about the quality of food than rural areas
DESIRE
Desire Have a KFC Burger in high class restaurant
PRICE SENSITIVITY
GEOGRAPHIC SEGMENT
Geographically, KFC is focusing on posh areas (middle and upper
class). They are not affected by price variation. Their prices are
economical and affordable by them.
DEMOGRAPHIC SEGMENT
Age:
In age their main focus is kids because of 3 reasons as
following
Kids are influencers
Kids are loyal
KFC becomes permanent part of their life
Their actual want is to have meal with attractive packaging
along with gifts and toys. This encourages kids to force their
parents to visit KFC again and again. They are not affected by
change in prices.
Income:
KFC targets at people having salary above 10,000. These people
consider KFC deals reasonable as compare to their competitors and
mostly are not affected by price variation.
TARGETED MARKET OF KFC
As KFC targeted market is middle and upper class, especially
kids. Most of the KFC outlets are in posh area so there is
generally no effect of increase in prices on them. Whenever KFC
increases its price, they introduce discounted deal as well, at
lower prices. In short increase in price of one deal is minimized
by another deal at lower price. MARKET SKIMMING:
KFC globally enters the market using market skimming. Their
products are priced high and target the middle to upper class
people. Gradually they trickle down the prices focusing on the
middle to lower class people to penetrate both sides of the market.
But as, price is always the primary concern for consumers; so KFC
should adopt certain strategy to attract the consumers. Its not
only by lowering their prices. It could be by, introducing discount
packages, for families, employees, students and regular customers.
The membership cards can be used to, provide certain extra value to
the consumers. 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.
We can compare the price of their products with McDonald,
Dominoes and Pizza Hut. If the competitor provides the same product
at a lower price then the organization usually lowers the price of
its product too. In the case of KFC, Fried Chicken is its main
selling point and controls a monopoly over the fast food market
(only with fried chicken). It prices its burgers, French fries and
soft beverages with relation to its competitors.
HOW TO REACH THEM
GEOGRAPHIC SEGMENT & DEMOGRAPHIC SEGMENT
Target Areas
Urban areas
Free home Delivery strategy They provide free home delivery to
offices & homes.
Accessibility Resulting in several outlets to cater to the needs
of people in & around the city.
Hectic lifestyle Due to the hectic lifestyle of office goings
individuals the fast food concept saves time of preparing food and
gives the customer a full meal quickly. It gives them less stress
about waiting for food.
Economically convenient The pricing appeals to the many classes
of a society.
Urban areas are more populated therefore they help with
attracting higher revenues.
Placement of outlets -- Due to KFC placing itself close to
schools, colleges, cinemas and markets which are mostly populated
by the young and those who are in a hurry, so it is in reach of
urban people.
School caterings and visits (stalls).
Winter and summer celebrations-open invitation.
KFC visits many schools. They held game shows etc for them. Some
specific schools are Beconhouse, City, Roots, Educators,
Forabels.
In some areas they place their mobile container for take
away.
Additional picture
ALTERNATE MARKET STRATEGYMARKETING STRATEGYSEGMENTATION
Dividing the market into distinct groups of buyers who have
distinct needs, characteristics or behavior or who have might
require separate products or marketing mix
In Pakistan NICHE marketing is used for particular classes of
people.
In case of KFC, we have considered four variables for market
segmentation which are
Geographic segmentation
Demographic segmentation
Psychographic segmentation
Behavioral segmentation
1. Demographic Segmentation
Dividing the market into groups based on an age, gender, family
size, income, education, occupation, religion, race and
nationality.
KFC divides the market on demographic basis in that way
Age6-65
GenderBoth Males and Females
Family Size1-2, 3-4, 5+
IncomeRs. 10,000 above
OccupationNot Specific
EducationNot Specific
ReligionNot Specific
GenerationNot Specific
NationalityNot Specific
Family lifecycleAlmost All
PSYCHOGRAPHIC SEGMENTATION Dividing a market into different
groups based on social class, lifestyle or personality
characteristics.
KFC divides market on the basis of psychographic variables
as
Social ClassMiddle class, Upper class and Lower class
Life StyleNot Specific
PersonalityAuthoritarians, Gregarious and Ambitious
BEHAVIORAL SEGMENTATION Dividing a market into groups based on
consumer knowledge, attitude, use or response to a product
KFC divides the market on the basis of psychographic variables
as
OccasionRegular Occasion
BenefitsQuality, Convenience, Service
And Speed
User StatusPotential status, ex-users, first time user
and regular users
Loyalty Status Medium and Strong
Readiness StatusAware, informed, interested, desirous
And intending to buy
Attitude towards
ProductEnthusiastic, Positive and
Indifferent
GEOGRAPHIC SEGMENTATION
Dividing the market into different geographical units such as
nations, states, regions, countries, cities or neighborhood.
KFC has outlets internationally and sells its products according
to geographic needs of the customer. In Pakistan, its geographic
segmentation is
TARGET MARKET
The process of evaluating each market segments attractiveness
and selecting two or more segments
After evaluation of various segments KFC targeted urban n sub
urban areas.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.
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 and then 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.
4 PS:
PRODUCTWorld RegionAsia
Country
Pakistan
City
Karachi and Lahore primarily, while other cities partially
Density
Urban
Climate
Not specific
Product line
Burgers:
Zinger Burger Colonels Chicken Burger
Colonels Fillet Burger
SUB60
Zinger Jr.
Chicken:
1 piece
2 pieces
5 pieces
10 pieces
Combos:
Chicken Meals
Sandwich Meals
Family Meals
Snacks & Side Orders:
5 & 20 Pieces Nuggets
Arabian Rice
5 & 10 Pieces Hot wings
dinner Roll
Regular & Large Fries Hot Shots
Corn on the Cob
Hot & Crispy Soup
Cole Slaw
BRAND NAMEKFC Brand name is the, KFC (formerly known as,
Kentucky Fried Chicken). KFC is a powerful brand name in the market
QUALITYKFC believe in providing the, "Superior Quality" to the
valued consumers. They use fresh ingredients and provide neat and
clean environment.
COLOR Red, white
SYMBOL Colonel Harland Sanders picture and KFC written with
it.
Master Brand: The brand itself is so dominant, that it
immediately
Comes in mind.
KFC's brand identity -- the logo features Colonel Harland
Sanders,
One of the best-recognized icons in the world.
KFC is trademarked registered brand.
It is distinctive, adaptable to addition to product line.
It suggests something about product.
It is legally protected and registered.
BRAND EQUITY Is very high as the value added by brand to the
Product effects the product selling.
BRANDING STRATEGIESKFC is marketing the entire output under
products own brand.
COMPLEMENTRY BRANDINGPepsi & Nescafe.
PACKAGING STRATEGIESKFC 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.
LABELLINGKFC does brand labeling. Some of its products also have
informational labels such as
Halal, Veggi Burgers and Chicky Meals.
New deal:
Winter maza for only Rs 150 + Rs 10
PRICE
PRICING STRATEGIESIn 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.
KFC PUBLICITY IN GUINESE BOOK OF WORLD RECORD
With the caption Biggest Birthday Party. The event took place on
Louisville,
Kentucky, USA, on Sept.8, 1979, to celebrate the 89th birthday
of Kentucky Fried Chicken founder Col.Harland Sanders.
USAGE RATE
Heavy users.
PURCHASING PROCEDURESBuilding = Leased
Vendors = Monthly credit
------------------------------------------------------------------------------------------------------------------------------------
PLACEMENTPlace includes company activities that make the product
available to target consumer.
CHANNELThere are no market intermediaries (reseller,
wholesaler). They provide product directly to the customer.
COVERAGEPakistan has been divided in to two regions:
1. In the north, KFC is serving Karachi and Hyderabad with 10
restaurants
2. In the south they have large chain of 30 restaurants.
ASSORTMENTKFC provides two types of meals in respect to
size:
1. Family meal.
2. Individual meal.
LOCATIONThey have certain outlets per market area.
INVENTORYWarehouses for ingredients are in Dubai.
TRANSPORTATIONSupplier uses their own vehicles for supplying
chicken and breads.
PROMOTION:In Pakistan KFC not advertise their products too much
due to its reputation in other countries. They promote their
products through special packages like Ramadan packages, mid night
package.
1. SALES PROMOTIONFor sales promotion KFC has introduced
different strategies such as Ramadan package, Birthday package,
Midnight package, and many more. Also they have introduced goods
like watches. Key chain, coffee cup, t-shirt, toys to the
customers.
2. ADVERTISINGPRESS ADVERTISING Jang (Karachi, Lahore &
Rawalpind).
The news (Karachi, Lahore & Rawalpindi)
Dawn (Karachi, Lahore, Rawalpindi)
Magazines.
HOARDINGSIn addition to regular hoardings, temporary hoardings
for 2-3 months have also been taken.
COMMERCIALSAdvertising on different cable channels like Geo, Ary
world, ten sports, Music channels etc and also advertising on world
call cable advertising.
3. PERSONAL SELLINGKFC does not use any personal selling
criteria.
4. PUBLIC RELATIONSTo enhance public relations certain seminars
are conducted by their HR departments and employees are trained
from certain training classes.
CONCLUSIONKFC is a very strong chain of fast food restaurants
with more than 10,000 restaurants all over the world. Being in
Maturity Stage it has high opportunities of introducing its new
products and deals. In Future it will be expanding its chain by
introducing more outlets in Pakistan as well as in other
countriesKFC is providing employment to 1200 Pakistanis which adds
up to 6000 Pakistanis directly 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 which sums up to purchase of 35 million per
month.
Each new outlet developed by KFC Pakistan spends 40 million
rupees thats a massive amount for this industry.KFC and
PakistanGrowing Together
Believe in value creation.
Provide ultimate choice of quick service restaurants for
consumers.
Won the hearts of millions of Pakistanis.
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