22222665 kentucky friend chicken india questioonaire

8/8/2019 22222665 Kentucky Friend Chicken India Questioonaire

1/23


2/23

Table of Contents Executive Summary.............3

Management Team.......4

Market Analysis..................................................................................................................7

porters Five Forces Analysis.12

SWOT Analysis................................................................................................................14

PESTEL Analysis...16

BCG Matrix....18

Questionnaire....19

Data Analysis.....21

Data Interpretation...23

Market Analysis

2

S u b m i t t e d t o P r o f . N a v n e e t G e r a

Marketing Research Project

Abhinav - 1Harsh 19Jayant 20Mridul 30Mudit 32

F - 3


3/23

In the Indian fast food industry, every single major as well as minor

player follows the home delivery model. In India itself a lot of

consumers prefer eating n their homes. Therefore, the homedelivery model has been a definite success. For some reason not

known to consumers, KFC does not follow a home delivery service

model, even though it does so abroad. It is due to this reason we

believe that KFC has lost out of a big market share in India. The

basis of our questionnaire is to find out through primary data

3


4/23

collection that should KFC start a home delivery service, or in

other words, is there demand for such a service to invest into.

4


5/23

5


6/23

6


7/23

Market Analysis

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 need to satisfy their

needs through exchange (Graphic 1).

These needs make up the demand for

particular products and services.

Several components must be considered, as all these components have a

direct or indirect impact on KFCs success.

Changes in the below described components over the last couple of years

have led to big changes in peoples attitudes towards healthy food. It explains

7

Industry(a collection

of seller)

Market(a collection

of buyersMoney

Product / service

Information

Communication

Graphic 1


8/23

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

8

KFC

Company Competitors


9/23

which KFC has an impact. They directly affect KFCs ability to serve its

customers. (Kotler et al 2003). Three major components influence KFCs

micro environment:

9

Graphic 3 (Source: Kotler et al 2003) Micro Environment

Consumers


10/23

Competitors

Because the fast food market in India is highly competitive, KFC faces a wide

number of direct and indirect competitors. KFCs main competitors are fast

food chains such as McDonalds and Dominos, which are already well

established throughout India.

McDonaldss 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

KFCs customer market consists solely of the consumer market (Kotler et al

2003). KFCs 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 maximumamount of products can be sold. The characteristics of these individuals and a

segmentation of them are discussed later in this report.

10


11/23

Company

KFC is a multinational fast food chain company that has successfully

established itself in the Indian market. It has a long history, going back to

where Colonel Harland Sanders created its distinct recipes. The KFC brand is

well known in India, which makes it a powerful marketing tool to use against

competitors. (http://www.kfc.com).

Currently, KFC is under massive attacks from animal organizations,

questioning the way KFCs suppliers are threatening the chicken, before they

got slaughtered. Anti-KFC campaigns, are affecting KFCs brand image in a

negative way and result in direct dollar losses, as less people are consuming

KFC chicken.

Advertising11


12/23

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.

KFC Business Strategy

KFC fast-food chains are currently under the restaurant division of PepsiCoIncorporated. Some major threats include the changing attitudes of society

toward healthier eating habits, KFC has more than 9,800 outlets located in 77

countries. In marketing, KFC restaurants are not restricted from locating within

close proximity of other KFC restaurants. There are two alternative strategies

for KFC. The first strategy involves keeping PepsiCo beverage division and

snack foods division together, and a divestiture of PepsiCo restaurant

division; selling Taco Bell, Pizza Hut, and KFC.Present Situation

The organization is currently structured with two divisions under PepsiCo.

David Novak is president of KFC. John Hill is Chief Financial Officer and Colin

Moore is the head of Marketing. Peter Waller is head of franchising while

Olden Lee is head of Human Resources. KFC is part of the two PepsiCo

divisions, which are PepsiCo Worldwide Restaurants and PepsiCo

Restaurants International. Both of these divisions of PepsiCo are based inDallas.

Entry

For the current Indian market for fast food, it is not difficult for a fast foodrestaurant to enter the market. However, it would be extremely difficult to take

12
http://en.wikipedia.org/wiki/Black_metalhttp://en.wikipedia.org/wiki/Black_metalhttp://en.wikipedia.org/wiki/Black_metal


13/23

over already running major fast food chains' dominancy in India or even makea significant amount of profit. While there are enough people in urban Indiafor 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 theyve never heard of. The brand name is already established.Also, there is already a large variety in the numerous western-style diningplaces in India, such asMcDonalds, Pizza Hut, Domino's and Subway, and any new fast-foodentrants would just be presenting something very similar to whats alreadythere. While smallNeighborhood restaurants generally have low barriers to entry, these are thebarriers to entry for similar restaurant businesses to enter the fast-food chainmarket.

Buyer/Supplier Bargaining Power

The customers of KFC, especially as individual buyers, have almost nobargaining power because if only one customer threatens to no longer eat atKFC, the store is not going to lower its price because the cost of losing onecustomer is not very great. The suppliers, like the buyers, have very littlebargaining 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 localsuppliers by giving them technological support to improve their products. Thisis a brilliant strategy because the supplies that KFC would otherwise need toimport from theU.S. can now be obtained domestically, and if the U.S. suppliers decide toraise their prices, KFC can easily switch to the local suppliers. This gives us abrilliant strategy. With this strategy, KFC created competition among itssuppliers, lowering the supplier bargaining power. In terms of humanresources, labor cost is extremely low because the supply of non-skilledworkers 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 andexpenditures.

Substitutes and Complements

As mentioned above, there are a few major competitors in the fast-foodindustryin India for KFC, namely McDonalds, Pizza Hut, Domino's and Subway. Thesubstitute products, in this case, would be burgers, pizza, and sandwiches.Though they are competitors, their primary products differ greatly from eachother, in that they sell, chicken, burgers and fries, pizzas, and sandwiches,respectively. Traditional

13


14/23

Indian dining, home-cooked meals, and grocery stores with ready-to-eat foodsare also substitutes, as families could choose any one of these over fast foodfor a meal. These substitutes are definitely considered healthy as comparedto 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 ascomplements for fast foods as a whole. If the general price of fast foods goesup, KFCs 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 setsup stores located near popular tourist attractions, so tickets to these touristspots are also complementary goods because the more people tour theseattractions, the more customers KFC will get.

RivalryUnlike what one would expect, KFC has little rivalry with similar fast-foodchains 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, Indianchicken lovers who may not be as accepting to pizzas (many Indian peoplestrongly dislike the taste of cheese) are not going to switch to Pizza Hut justbecause the price for KFC increased. In addition to that, these restaurantshave such different target customers that the fluctuation of price for onerestaurant 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 betweenthese restaurants.

INTERNAL FACTORS STRENGTHS

Goodwill and reputation : The company certainly has earned a goodname and reputation by its previous products and services in the

14


15/23

market. It is even more recognised in other markets outside India,where the company is among the leading fast food giants. The brand isrecognised and trusted in India for its quality products, price, andcustomer service. It therefore has a good head start and enjoys a goodchance 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 theindustry.

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 andtake out segment of the Industry.

Ranks highest among all chicken restaurant chains for itsconvenience and menu variety. It generates $1B revenue eachyear.

WEAKNESSESKFC was losing market share as other Chicken chain increasedsales at a faster rate.KFC share of Chicken Segment sales fell from 71 percent 1999 , toless 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 marketshare of the company.KFC has not yet invested much on R&D, and innovating newproducts for Indian Markets. This may lead to failure of their products as they are not in line with the Indian mind set, peoplestaste and preferences and their likes and dislikes. This may provefatal for the company.

OPPURTUNITIES

New Markets : Globalisation has opened doors for new markets for thecompany. As the developed markets are mostly saturated, thedeveloping countries like India and China promises a good market andgeneration of demand in the future. With more than 70% of the marketsin india being unexplored and un organised, KFC has a good scope of

expanding its operations in the country.

15


16/23

Cross Culture : Generally there is a good acceptance of Americanculture of fast food in India. People are opening up to fast foods moreregularly in their daily lives and not just keeping it a once in a monthaffair. Thus Indian mindset is fast changing.Large Youth population : India has a very large share of youthpopulation a compared to other countries. More than 60% of thepopulation is under the age of 30yrs. As the young generation are moreopen to fast foods and demand it more, this is a good news for thecompany.New variety: Company can also come up with new variety in themenu like Pizzas, garlic breads to attract more customers.

THREATS

Competition: Competitor companies like McDonalds are fastcatching up with the market. McDonalds with sales of more than19 billion in 1999, accounted for 15 percent of the sales of thenations top 100 restaurant chains.Organisations like PETA People for Ethnic Treatment for Animalshave given a bad name to the company which may provedisastrous to the image of the firm. Currently, KFC is under massive attacks from animal organisations, questioning the wayKFCs suppliers are threatening the chicken, before they gotslaughtered. Anti-KFC campaigns, such as the one from PETA areaffecting KFCs brand image in a negative way and result in directdollar losses, as less people are consuming KFC chickenSaturated US Market : Now KFC cannot rely on just its homemarket to generate sales. As the US markets are already saturatedand leave no or little scope for growth, company necessarily needsto look at offshore foreign markets to generate sales and keep upthe profits.

h

Political :

16


17/23

The operations of KFC are affected by the government policies on theregulations of fast food operation. Currently government are controlling themarketing of fast food restaurant because of health concern such ascardiovascular and cholesterol issue and obesity among the young and

children in the country. Governments also control the license given for openthe fast food restaurant and other business regulation need to follow such asfor a franchise business. Good relationship with government in giving mutualbenefits such as employment and tax is a must for the company to succeed inany foreign market.

Economic:Though for last 1 year their was economic slowdown all across the globe butthe sales of KFC and other fast food chains did not slow down to that extentthat of other sectors in. The GDP (Purchasing Power Parity) is estimated at2.965 trillion U.S. dollars in the year 2010. The GDP- per Capita (PPP) was2700 U.S. dollars as estimated in 2008. The GDP- real growth rate in 2007was 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 investmentrose in the fiscal year ended March 31 2007 to about $16 billion from just $5.5billion a year earlier. There is a continuous growth in per capita income;Indias 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 inthe Hands of the Indian consumers. So taking into considerations theeconomic factors of India KFC is safe. The only danger to it will be if there is aterrorist attack in India and the victim is KFC.

Socio cultural:India is the second most populous nation in the world with an approximatepopulation of over 1.1billion people. This population is divided in the followingage structure: 0-14 years 31.8%, 15-64 years 63.1% and 65 years andabove 5.1%. There has also been a continuous increase in the consumptionof fast food in India. The social trend toward fast good consumption ischanging and India has seen an increase of 90% fast food consumption fromthe year 2002- 2007. This increase is far greater than the increase in theBRIC nations of Brazil (20 per cent), Russia (50 per cent) and China (almost60 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 playersentering the Indian market. The technological knowhow and expertise will alsoenter the Indian market with an increase in competition. With the lower ratesand increase technology the fast food counters are attracting youth by givingthem attractive deals. For e.g. KFC and Dominos pizza. For a fast foodrestaurant, technology does not give a very high impact on the company andit is not a significant macro environment variables. However KFC should belooking to competitors innovation and improve itself in term of integratingtechnology in managing its operation. For example in inventory system,supply chain management system to manage its supply, easy payment andordering systems for its customers and wireless internet technology.

17


18/23

Implementation of technology can make the management more effective andcost saving in the long term. This will also make customer happy if costsavings results in price reduction or promotional campaign discount which willbenefits them from time to time.

Environmental:As one of world largest consumer of beef, potatoes and chicken, KFC alwayshad been critics for world environmentalist. This is because high consumptionof beef causing the green house effect by methane gasses coming from thecows ranch. Large-scale plantation has effect the environment and lost of green forest opening for plantation activities. Vegetarian environmentalistcriticizes the fast-food giant for cruelty to animals and slaughtering. InAmerica, once KFC want to introduce whale burger causing uproar becausewhales are endangered species. Before using paper packaging, KFC oncehad been criticized for being insensitive to pollution because of using nebased packaging for its food products. Imagine millions of people purchasefrom fast food operator and how is the impact to world environment bythrowing away those hard to recycle packaging. Our world is getting concernon environment issue and business operating here should not just care for profit, but careful usage of world resources for sustainable development andcare for environment safety and health for our future generation. Critics andconcern from all public or activist should be review and support if necessary toensure we play our social responsibility better.

Legal factors:As a certified fast food operator, there are many regulations and proceduresthat KFC should follow. For example is the Halal certification that becomes aconcern to Muslim consumers. KFC should protect its integrity and consumer confidence by ensuring all materials and process are as claimed or mustfollowed.Other legal requirement that the business owner should follow as stipulated inlaws are such as operating hours, business registration, tax requirement,labor and employment laws and quality & environment certification (such asISO) in which the outlet has been certified. The legal requirement is importantbecause the offenders will be fined or have their business prohibited fromoperating which can be disastrous.

18


19/23

Boston Consultancy Group (BCG) Matrix

Question Mark :Currently KFC have launched a new product in the market. They have also tried tocome into the beverages market by launching its new brand of shakes calledKRUSHERS. As it is a fairly new product it comes in the category of the QuestionMark in the BCG Matrix. It has a low market share thus brings low revenue. KFC isadvertising 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 doesnot do well soon and start bringing in revenue.

DOG :KFCs 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 morefor its non-veg food, this also results in low demand for this item. It has a low marketshare 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 :KFCs Chicken Bucket is the most successful product of the company. It has thehighest market share amongst all the other products. It has good demand in the marketand brings in huge sales revenue. The development and other expenses are also lowand 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 marketshare and brings in high revenue. But it also has high developmental expenditureinvolved. 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

19

KFC India - BCG Matrix

CrispyBonelessChicken

Krushers

ChickenBucket

VegThali

?


20/23

20


21/23

1. Tick Your Choice ( )Perfect Above

Average

Average Below

Average

Poor

Food QualityFood TemperatureWaiting TimeMenu BoardSitting ArrangementRestaurant TemperatureMusicRestaurant CleanlinessOverall Experience

2. When will you be back?Next time I blink (very soon)May be sometime laterWhen I win a Nobel Prize (Never)

3. How many people were in your group?I was alone

Just me and someoneFor me, three is company4 or more

4 . Would you rather order than Dine in?

Yaa, I like to mostly order at homeSometimes, but I mostly like to dine inNo fun without Dine in

5. How close is your house to your nearest KFC outlet?Within 1 KmBetween 1 3 KmsBetween 3 5 KmsAbove 5 Kms

6. Do you want a KFC home delivery service?My dreams are coming true

That would helpDoesnt make much of a differenceNothanks

Thank You

The data we received is as follows:-

We did a survey on KFC on people with age group of mostly 20-25yrs. Mostlyall were open to non-veg food, and following were the results. As seen belowKFC has shown a good report on all the micro factors that we considered.

21


22/23

We also asked questions on whether they would like KFC to start home

delivery 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 -

22


23/23

It is clear from the above report that a high number of people actually like toorder from their home or workplace rather than coming. This may be due tomore convienence, time shortage or just not willing to come and dine.

Certainly the home delivery market is huge and KFC can take well advantageof the situation. Thus it would be in the best interest of the company to startthe service as soon as possible and capitalise on the opportunity. KFCexpects a rise in the orders by at least 20% by starting this service.

Therefore, to conclude we would say that KFC should definitely have ahome delivery service.

_____________________________________________________________________

23

22222665 kentucky friend chicken india questioonaire

Documents