WELCOME TO KENTUCKY FRIED CHICKEN

• Within the fast food industry, KFC has always been second to McDonald’s both in terms of the number of branches that it has in various countries and its total sales and profits.

• In the United States, the sales performance of McDonald’s summed up to over 20 billion US dollars in 2003, whereas KFC’s only total slightly over five billion1-2.

• KFC was started by Harland Sanders as a tiny restaurant – called “Sander’s Court and Café” .

INTRODUCTION

ANALYSIS OF ITS SUCCESS IN CHINA

• As early as 1985, KFC already had its eyes on this market. After a great deal of research, the first KFC restaurant opened in Beijing in 1987.

• Less than 10 years later, KFC managed to open 100 restaurants throughout China. By the end of 2004, KFC stores has reached 1200, double the number of its primary competitor, McDonald’s.

• KFC’s target customers are also different from those of traditional Chinese restaurants. They target the teenagers & give them numerous discounts to high school and college students, hoping to acquire such a group of young adults with a lot of money from their parents to spend as their primary customers.

• The acronym CHAMPS, which stands for “cleanliness,” “hospitality,” “accuracy,” “maintenance,” “product quality,” and speed,” are the goals that KFC aims to accomplish.

Porter’s Six-Forces Analysis

• Entry• Buyer/Supplier Bargaining Power• Substitutes and Complements• Rivalry• Customer Identification and Customer Base• Product range

Kentucky Fried Chicken

• Four P’s of Marketing mix.

Marketing Mix

• The marketing mix is generally accepted as the use and specification of the 'four Ps' describing the strategic position of a product in the marketplace.

• Product• Price• Place• Promotion

ProductAnything that can be offered to a market to satisfy a want or need.KFC's specialty is fried chicken served in various forms.

KFC's primary product is pressure-fried pieces of chicken made with the original recipe. The other

chicken offering, extra crispy, is made using a garlic marinade and double dipping the chicken in flour before deep frying in a standard industrial kitchen

type machine.

Segmentation

• Geographic segmentation :KFC has outlets internationally and sells its products according to geographic needs of the customer.

• Psychographic segmentationDividing a market into different groups based on social class, lifestyle, or personality characteristics is called psychographic segmentation.

SegmentationDemographic SegmentationIn demographic segmentation, the market is divided into groups based on an age, gender, family size, income, occupation, religion, race and nationality.

KFC divides the market on demographic basis in this way: • Age is between 6-65. • Gender is both males and females. • Family size is 1-2, 3-4, 5+ • Income is Rs 10,000 n above. • Family lifestyle is almost all.

Behavior Segmentation:• taste conscious• quality conscious • class• combination of product and quality

Price• Price is the any amount of money that

customers have to pay while purchasing the product. More broadly, price is the sum of all the values that consumers exchange for benefits of having or using the product or services

Demographic factors• 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.

• Household 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.

Price

Economic Factors• Income: Income is an important key

factor for KFC. This factor decides which class is to be targeted. In the early rise of KFC they focused on the upper class but slowly are introducing economy meals that attract the lower to middle classes.

• Consumption Behavior: It estimates the behavior of people, their liking and disliking towards the pricing of the products.

Price

Geographic location preference:

• urban• semi urban

Price

Pricing Strategy

• 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.

Price

Competition• 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 Indian fast food market (only with fried chicken). It prices its burgers, French fries and soft beverages with relation to its competitors.

Price

Cost Based• KFC price their product keeping

different points in view. They adopt the cost base price strategy. Pricing of the product includes the govt. tax and excise duty and then comes the final stage of determine the price of their product. The products are bit high priced according the market segment and it is also comparable to the standard of their product. In the cost based method we include the variable and fixed cost.

Price

PromotionPromotion is the method used to inform and educate the chosen

target audience about the organization and its products. Using all the resources of promotion:

• Advertising• Sales Promotion• Public Relations• Events and Experiences• Coupons, Discounts and Bundled packages• An organization finds most of its meanings and survival through

promotion.At KFC, Promotion is the main tool to bring all chicken lovers attention

towards its delicious one-of-a-kind product, the Fried Chicken.

Advertising The logo of the smiling Colonel is probably one of the most recognized

faces in the world and instantly brings the image of fried chicken to one’s mind.

• KFC and its new company jingle, “finger lcikin good” is a frequent announcement on televisions, billboards, flyers and radio. The concept of showing a normal customer deeply involved in devouring his piece of chicken usually turns on the drool factory in everybody’s mouth and makes them rush to the nearest KFC. In India where chicken lovers are plenty abound these ads featuring normal people connect instantly and create a rush at their outlets. Using the following methods KFC spreads its message of finger licking good chicken.

Promotion

Advertising• Using Reminder advertisements KFC

stimulates repeat purchases of its products. The company anthem “finger linkin good” is just a wake up call to the consumer to remind them how good they felt the last time they ate KFC chicken.

• Sponsorship is another tool to strengthen an organizations image. KFC is currently the sponsor of the Australian Cricket Team and the colonel logo can be seen on their uniforms throughout the matches.

Promotion

Sales Promotion• KFC uses the following tools to further

enhance its sales.• Premiums• Exhibits• Coupons• Entertainment

Promotion

Sales Promotion

• All KFC outlets offer its customers with various forms of incentives to buy its Chicken. Using coupons that one can acquire after spending a particular amount over a period of fixed time, customers can enjoy the benefits of free meals or free add-ons. Additionally they provide meal vouchers and exciting offers in their print ads, which the customer must cut and bring along.

Promotion

Internal Factors SW

• Strengths– Multibranding Strategy

– Name recognition and Reputation

– Employee Loyalty

– Global Expansion

– Targeting Non-Traditional Outlets

• Weaknesses– Conflicting Corporate

Cultures

– No defined target market

– Time it takes to market new products

External Factors OT

• Opportunities– International Appeal to

American products

– Economies of Scale and Scope

– The downturn of the US economy

• Threats– PETA

– Consumer health food trend

– Saturated fast food industry

Strategic Management

Market Development

KFC will introduce their present and new products and services into new geographic/demographic areas.

Product Development

Bring back rotisserie chicken

Concentric Diversification

Add more to KFC product & service variety to the patients

Implementations

• Market Research• Determine area’s demand to determine boundaries

• Expand menu• Healthier choices

• Meals will be sold at cost• Determine effects on budget

Yum! Brands, Inc. International Presence & Competition

*In Thousands

The International Portfolio of 5 leading U.S. Brands give Yum! a distinctive advantage over the single-brand competitors.

KFC Domestic & International

KFC Menu

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