assignment kfc

Kentucky Fried Chicken

On

Kentucky Fried Chicken (KFC)“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 specialized)

Submitted to

MBA-IV (Eve)Batch 2009-10

DIHE-DADABHOY INSTITUTE OF HIGHER EDUCATION

Submitted toMr. Mairaj Jaffari

A s s i g n m e

Submitted by

Muhammad AmjadSyeda Saba Abbas

Waqas Ahmed Shaikh


Executive Summary:

The KFC (Kentucky Fried Chicken) as a major Quick Service Restaurant (QSR)

operator in Pakistan, which has been established for just over 10 years. It serves

mainly chicken related items and also offers add ups to its consumers as well. More

and more Pakistanis have been opting for a healthier eating diet as a large number of

them have become more health conscious. This has opened the door for KFC’s main

competitors, such as McDonald’s, to come out with a new range of healthier

products, allowing them to mount a greater challenge on KFC’s position as Pakistan’s

leading fast food operator. As a response to the advancement made by KFC’s

competitors in providing healthier fast food, KFC to introduce a new set of healthier

products that would be mainly targeted at health conscious people. Its target market

would largely be based on segmentation of age, where it would be focused on

customers in the age group of between 4 to 40 years old. The pricing and promotion

strategies would also be looked into as KFC prepares to battle with its rivals.

Introduction:

KFC is the world largest and most well known chicken restaurant, with chains in

more then 10 thousand locations and worldwide in 80 countries. KFC and its

franchised employees are more than 200 thousand in all over the world.

John Y Brown and Jerry Messy purchased KFC for USA for $2 million in 1964 that

time KFC become a corporation. After five years, Colonel buys first 100 shares of

KFC. In 1986, Pepsi Company purchased KFC. Pepsi company changed the logo

from Kentucky fried chicken to KFC in 1991 and then in 1992 KFC 1000 th restaurant

opened in Japan and in 1994 9000th restaurant in china.



KFC is the part of Tricon global restaurant. Tricon global restaurant is the world

largest restaurant group, with in nearly 100 countries around the world, which in turn

was spun off in 1997, and has now been renamed to Yum! Brands. In 1997, KFC

franchised with Gray Mecanza International and started work in Pakistan. Rawalpindi

branch started work in 1999 and in Islamabad in August 2002 and now in Pakistan;

there are 45 outlets nation-wide.

Objective:

Every organization and company has some certain goals laid down by them to

achieve to make it renown and have value added services to satisfy

customers.

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 a position in Pakistan as a leading WQSR (Western Quick Service

Restaurant) chain, serving good value added services and Innovative chicken based

products. KFC is consistently providing a pleasant dining experience, with fast

friendly, in a clean and convenient location. Every moment dedicated to providing

excellent and delighting customers.

Philosophy of KFC

Philosophy of KFC stands on “the Champs Program” whereas the philosophy of

McDonald is on “People”.

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. These are:

C leanlinessH ospitality A ccuracyM aintenance of FacilitiesP roduct QualityS peed 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.

Supply chain management in KFC :

The main three consideration in any supply chain management are :

Managing Product

Information flow

Funds flow

1. Managing product :

Raw material : Chicken, vegetables, cheese, etc

Raw material suppliers: Reliance and More (vegetables), Chicken(Venky’s)

Distribution channel (logistics partners) : KFC has no any logistics partner as all the

distribution of materials are done by individual suppliers and KFC head office also

has its own distribution channel all over pakistan.

2. Information flow :

Communication channels : KFC uses email and telecommunication channel for

communicating with KFC head office and suppliers like Reliance, More, and Venky’s.

3. Funds flow :

Funds Flows i.e. the money payment to suppliers and other debtors are done through

a bank account. Each and every KFC outlet has its own bank account and the



payments of each outlet is done by Head office through these bank account on a

monthly bases.

Drivers of Supply chain management in KFC

1. Facilities : (Production/storage)

As KFC follow a centralized system for all its raw material or ingredients are stored

and produced at the individual KFC stores. The storage of some items are done for

monthly bases and few for weakly bases.

2. Responsive V/S Efficiency :

KFC follows the Efficiency method of distribution of materials in all over pakistan.

With help of this distribution method it is able to reduce the time involved in

movement of goods from one channel to other channel member and then reaching

the customer, able to reduce the carriage cost and holding cost involved in

responsive method of distribution.

With the help of simple diagram the concept of Efficiency distribution method followed

by KFC is more transparent

3. Inventory : (Raw Material, Work In Process, Finished goods)

Raw material like chicken, vegetables, etc are supplied from the local market of Pune

like Reliance, More, Venky’s, etc all these are maintained on weakly bases and work

in process items and finished goods are maintained on daily bases and are stored in

KFC outlet only.

4. Sourcing : (Outsourcing)

KFC has not outsourced any of its processes to any other company, all the operations

and processes are managed by KFC Head Office (Pakistan) and other by individual

KFC outlet itself.

5. Inventory Cycle :



6. Type of review followed by KFC :

KFC follows a periodic review method for all its process like inventory maintenance

except the ingredients supplied by KFC Karachi (HO) which is maintained on

monthly bases. Periodic review involves :

• Monitoring at periodic intervals.

• Quantity set as the amount consumed during this interval.

• Time between the orders is fixed.

Marketing Strategy:

Segmentation:

KFC has divided the market of Pakistan into distinct groups of customers with

different demands, tastes and behavior who require separate products or marketing

mix. In Pakistan 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

DEMOGRAPHICAL BASISIn demographics their first segment is consisted of the income factor i.e. high income,

average income and low income.

BEHAVIORIn 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

In the basis of the geographical factor we have divided our market in three main

segments.

Urban areas



Sub urban areas

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.

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

numbers of customers are more in Urban Areas.

4P’s Of Marketing:

Product Their all products are different from every product and the packaging and other

products feature are different form other they change there products by introducing

new products but their main product the Kentucky fried chicken is the same

PriceThe price is not affordable by all persons in Pakistan. Due to its large setup the price

selecting are very challenging for the new product of KFC

PlaceThey open their outlets in those places in the cities where people can buy products

easily and without difficulties. They also introduce mobile units for delivery of their

products.



PromotionsIn Pakistan KFC not advertise there products too much because people KFC due to

its reputation in other countries. They promote their products through special

packages like Ramadan packages, mid night package. They promote there products

through billboard, pamphlets and through other promotion strategies.

KFC SWOT Analysis:

StrengthsBrand Equity

KFC secret recipe of 11 herbs and species

Very strong internationally

Strong Franchises all over the world

Interactive relationship marketing

Strong trademarks recipes

Ranks highest among all chicken restaurants

Chains for its convenience and menu variety

Largest multi-branded restaurant in the world

Weaknesses

Lack of knowledge abut their customers

Lack of relationship building with employees, customers and suppliers

Lack of focus on Research &Development

KFC desserts portion is not as better as should be

They only focus higher income level people

OpportunitiesThey have the opportunity to expand their sweet products

They can open more outlets to get maximum market share

They can open temporary outlets in peak season in the hill stations like naran,

kaghan, swat etc.

They can capture more customers by decreasing the price of their products

Updating their restaurants, Balanced menu, customer focus and Increase delivery

service

ThreatsRated 83 out of 100 in terms of competitiveness

Increasing inflation rates directly affect menu prices



Supermarkets and new competitors

Health Trend away from fried foods

Changing customer demands

Some international events badly affected the market of KFC in Pakistan like IRAQ

and AFGHAN war and we know KFC is American based. Therefore, it creates a

great impact on the performance of KFC. During the war the sale of sale KFC

decrease more then 25%

Current political situation is a big threat for KFC

Diseases like bird flu is the big threat for KFC

Advertisment:

Press advertising

Jang (Karachi, Lahore & Rawalpindi): 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.

Commercials

Advertising on different Cable channels like Geo, Ary World, Ten Sports,

Music channels, etc and also advertising on world call Cable advertising.

Competitive Analysis:

Any Organization 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 is Mc Donald’s.



KFC McDonalds

Spicy ProductsPakistani people like spicy products instead of boiled food

Burger and French Fries

Arabian Rice and Zinger Burger Big Mac

Free Delivery Free delivery

Chicken is eaten by every community Beef is banned in some community

Local Staff and Highly Qualified because local staff can better deal with the customers

Its Staff consist of simple Graduates and give them training

KFC uses Top to Bottom and Bottom to Top Approach in Management.

McDonalds Uses Top To Bottom Approach.

KFC is Co branding with WallsNo such Case.

Current Products Review:

Mighty Zinger Arabian spiceZinger burger Chicken maniaFish zinger burger Dinner rolls Col. Fillet burger Crispy chicken chunksSalsa twister Hot and crispy soupMacho’s burger Soft DrinkChicken burger Cola slawCheese Scope of wallSub 60 Fruit saladtwister Mineral /water Nuggets EspressoHot wings Cappuccino Fries MiloCorn on the cob Frothe



KFC Menu:

Issues and Challanges:



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 Pakistan producing chicken and chicken products. Free

from diseases and bacteria, drug residues and other contaminants.

Services:

KFC offered free home delivery service at specific branches in specifics cities. They

take at 30 min for delivery and the minimum delivery order should Rs.250.

They also provided services to celebrate the birthdays of kids at there home or in

KFC restaurants. Now recently KFC also provide services of mobile unit of KFC.

Environmental factors:



Socio-Cultural Element

Culture element includes the attitudes, values, norms, beliefs, behaviors and

associated demographic trends that are features of a given geographic area.

Multinational company faces the challenge to understand about the culture of that

country where they work. To solve these problems KFC hire all employees of local

area and now it is easy for them to understand about the culture of Pakistan. KFC

management knows about that Pakistan is a Muslim country; therefore they use

100% Halaal (Zibiha) chicken.

KFC start their branches in those cities which are famous for food eating. Pakistani

people like spicy foods, therefore KFC also provide spicy foods in Pakistan. KFC

open its branches in advance cities of Pakistan like Lahore, Karachi, and

Islamabad/Rawalpindi etc. In these cities mostly come out with their family because

KFC mainly focus family.

Technological Elements

New techniques affect the quality of products and services in better way. Technology

is very important in order to compete with the competitors. Organizations have an

eye on their competitors and also new techniques which their competitors used.

Today the world going fast and market is globalize, new techniques comes in

production and services departments.

Although KFC and McDonald’s has same cooking machinery but KFC has efficient

delivery system; they provide home delivery so quickly. KFC purchase machinery

from Hanney Penny company, they are main suppliers of machinery through out the

world.

Economic Elements

In Pakistan there is a mixed economy so private organization easily perform their

tasks within any given economic system of course, organization are influenced by a

variety of economic features over which they have little independent control, such as

inflation, interest rates and recession

Another important input to the enterprise is the nature of government fiscal and

policies. KFC paid tax properly.



SalesPromotion

For sales promotion KFC has introduced different strategies such Ramadan

Package, Birthday Package, Midnight Package and many other. Also they have

introduced goods like watches, keychain, coffe cup, T-shirt, toys e.t.c to the

customers

CONCLUSION :

In overall study of Supply chain management ,it has been observed that KFC in all

over pakistan follows a similar pattern of Supply chain, that enables it to reduce time

involved to reach end customers and reduce expenses in supply chain.Ultimately it is

able to reach and fulfill its end customers needs and wants at a reasonable or

customer acceptable rates all over pakistan.

In short we can say the Supply chain management of KFC has a positive impact on

profit maximization by considering following points :

1. KFC (HQ) supplies ingredients to all its outlet by its own transportation network

all over pakistan.

2. KFC has no logistics partners they are self sufficient and efficient to all logistic

operation involved in reaching the customers.

KFC follows a periodic review system to keep track on all its inventory and market

demand.


assignment kfc

Documents