final project on study of purchase inluencing factor for fast food & beverages

8/6/2019 Final Project on Study of Purchase Inluencing Factor for Fast Food & Beverages

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STUDY OF

PURCHASEINFLUENCING

FACTOR FOR FAST

FOOD &

BEVERAGES

SUBMITTED BY: AFROJ

SEC-G

ROLL NO-05

MM-4


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ACKNOWLEDGEMENT

We would like to express our sincere gratitude and appreciation to Abha Grover Mam who

helped and inspired us to complete this project. We felt motivated and encouraged every time we

discussed this important topic in our classroom as well as doing surveys. This project gave us an

opportunity to participate and learn about the role of women in entrepreneurship.

Finally, we are thankful to God, our parents and friends who have supported us in our project for

their support, encouragement and guidance. Without help of anyone mentioned above, we would

face many difficulties while doing this project.

Declaration

Except where duly acknowledged, we certify that this project is our own work under the

supervision ofAbha Grover Mam .


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History of McDonalds

McDonald's has come a long way ever since its beginning in 1955. Here area few milestones of

the McDonald's journey ...

In 1954, a fifty-two-year-old milk-shake machine salesman saw a hamburger stand in San

Bernardino, California, and envisioned a massive new industry: fast food. In what should have

been his golden years, Raymond Kroc, the founder and builder of McDonald's Corporation,

proved himself an industrial pioneer no less capable than Henry Ford. He revolutionized the

American restaurant industry by imposing discipline on the production of hamburgers, French

fries, and milk shakes. By developing a sophisticated operating and delivery system, he insured

that the French fries customers bought in Topeka would be the same as the ones purchased in

New York City. Such consistency made McDonald's the brand name that defined American fast

food.


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1972

A new McDonald's restaurant opens every day The Quarter Pounder is introduced.

1973

Egg McMuffin is introduced.

1974

The first Ronald McDonald House opens in Philadelphia. The Happy Meal is launched.

1983

Chicken McNuggets is introduced. New Hamburger University campus opens in Oak Brook,

Illinois. Set in 80 wooded acres. Training is provided for every level of McDonald's management

worldwide

.

1984

50 billionth hamburger sold. Ronald McDonald Children's Charities is founded in Ray Krocs

memory to raise funds in support of child welfare.

1989

McDonald's is listed on the Frankfurt, Munich, Paris and Tokyo stock exchanges.

1990

McDonald's opens in Pushkin Square and Gorky Street, Moscow.

1993

The first McDonald's at sea opens aboard the Silja Europa, the world's largest ferry sailing

between Stockholm and Helsinki.

1994


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Restaurants open in Bahrain,Bulgaria, Egypt, Kuwait, Latvia,Oman, New Caledonia, Trinidad

and United Arab Emirates, bringing the total to over 15,000 in 79 countries

on 6 continents.

1996

McDonald's opens in India the 95th

country.

Overview

McDonald's - A Global Phenomenon.

McDonald's opened its doors in India in October 1996. Ever since then, our family restaurants in

Mumbai, Delhi, Pune, Ahmedabad, Vadodara, Ludhiana, Jaipur, Noida Faridabad, Doraha,

Manesar and Gurgaon have proceeded to demonstrate, much to the delight of all our customers,

what the McDonald's experience is all about. Our first restaurant opened on 15th April 1955 in

Des Plaines, Illinois, U.S.A. Almost 50 years down the line, we are the world's largest food

service system with more than 30,000 restaurants in 100 countries, serving more than 46 million

customers every day

Mc Donalds India Partnership

McDonald's India is a joint-venture company managed by Indians. McDonalds India, a

ubsidiary of McDonalds USA, has expanded its presence in India via 2 joint venture companies

Connaught Plaza restaurants and Hard castle restaurants. McDonalds (India) has a 50 per cent

equity stake each in both joint venture companies.

Connaught Plaza restaurants manages operations and expansions across North India (Delhi,

Jaipur and Punjab) led by Vikram Bakshi and Hardcastle restaurants, which is headed by


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Amit Jatia, manages operations and expansions across Western India (Mumbai, Pune, and

Gujarat).

Around the world, McDonald's traditionally operates with local partners or local

management. In India too, McDonald's purchases form local suppliers. McDonald's constructs its

restaurants using local architects, contractors, labour and - where possible

local materials. McDonald's hires local personnel for all positions within the restaurants and

contributes a portion of its success to communities in the form of municipal taxes and

reinvestment.

Six years prior to the opening of the first McDonald's restaurant in India, McDonald's and

its international supplier partners worked together with local Indian Companies to develop

products that meet McDonald's rigorous quality standards. Part of this development involves the

transfer of state-of-the-art food processing technology, which has enabled Indian businesses to

grow by improving their ability to compete in todays international markets.

McDonalds worldwide is well known for the high degree of respect to the local culture.

McDonald's has developed a menu especially for India with vegetarian selections to suit Indian

tasted and culture. Keeping in line with this McDonald's does not offer any beef and pork items

in India. McDonald's has also re-engineered its operations to address the special requirements of

a vegetarian menu. The cheese and cold sauces used in India is 100% vegetarian. Vegetable

products are prepared separately, using dedicated equipment and utensils. Also in India, only

vegetable oil is used as a cooking medium. This separation of vegetarian and non-vegetarian

food products is maintained throughout the various stages of procurement, cooking and serving.

The McDonald's philosophy of Quality, Service, Cleanliness and Value (QSC&V) is the

guiding force behind its service to the customers. McDonalds India serves only the highest

quality products. All McDonalds suppliers adhere to Indian Government regulations on food,

health and hygiene while continuously maintaining their own recognized standards. All

McDonalds products are prepared using the most current state-of-the-art cooking equipment to

ensure quality and safety. At McDonalds, the customer always comes first. McDonalds India


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provides fast friendly service- the hallmark of McDonalds that sets its restaurants apart from

others. McDonalds restaurants provide a clean, comfortable environment especially suited for

families. This is achieved through McDonalds stringent cleaning standards, carefully adhered to.

McDonalds menu is priced at a value that the largest segment of the Indian consumers can

afford. McDonalds does not sacrifice quality for value rather McDonalds leverages

economies to minimize costs while maximizing value to customers.

The company has invested Rs 450 crore so far in its India operations out of its total planned

investment of Rs 850 crore till 2007.

McDonalds India Pvt. Ltd. has moved an application to the government seeking

permission for payment and remittance of the initial franchise fee and royalty to Mc Donalds

Corporation. The permission has been sought on two grounds: McDonalds India would pay an

initial franchise fee of $45,000 on each of the McDonalds restaurants already franchised

or to be franchised, in the future, in India; and a royalty equal to 5 per cent of the gross sales

from the operations of all its Indian restaurants on a monthly basis to McDonalds International.

The company hopes to break even in 2008. They currently serve around 5 million

customers a day and hope to grow at the rate of 50% to 70% a year.

Respect for local culture.

McDonald's India has developed a special menu with vegetarian selections to suit Indian tastes

and preferences. McDonald's does not offer any beef or pork items in India. Only the freshest

chicken, fish and vegetable products find their way into our Indian restaurants.

In addition, we've re-formulated some of our products using spices favoured by Indians. Among

these are McVeggie burger, McAloo Tikki burger, Veg. Pizza


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McPuff and Chicken McGrill burger. We've also created eggless sandwich sauces for our

vegetarian customers. Even our soft serves and McShakes are egg-less, offering a larger

variety to our vegetarian consumers.


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McVeggie burger and McAlooTikki. The separation of vegetarian and non-vegetarian sections is

maintained throughout the various stages.

Segmentation, Targeting and Positioning

McDonalds uses demographic segmentation strategy with age as the parameter. The main

target segments are children, youth and the young urban family.

Perc

enta

ge of

kids

who

influ

ence

wha

t

FM

CG

brand their family buys

As shown above, kids reign supreme in FMCG purchase related to food products. So to attractchildren McDonalds has Happy Meal with which toys ranging from hot wheels to

various Walt Disney characters are given (the latest in this range is the toys of the movie

Madagascar). For this, they have a tie-up with Walt Disney. At several outlets, it also provides

special facilities like Play Place where children can play arcade games, air hockey, etc. This

strategy is aimed at making McDonalds a fun place to eat. This also helps McDonalds to


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attract the young urban families wanting to spend some quality time while their children have

fun at the outlet. To target the teenagers, McDonalds has priced several products aggressively,

keeping in mind the price sensitivity of this target customer. In addition, facilities like Wi-Fi are

also provided to attract students to the outlets like the one at Vile

Parle in Mumbai.

Mc Donalds mein hai kuch baat projects McDonalds as a place for the whole family to

enjoy. When McDonalds entered in India it was mainly perceived as targeting the urban

upper class people. Today it positions itself as an affordable place to eat without compromising

on the quality of food, service and hygiene. The outlet ambience and mild

background music highlight the comfort that McDonalds promises in slogans like You

deserve a Break Today & Feed your inner child. This commitment of quality of food and

service in a clean, hygienic and relaxing atmosphere has ensured that McDonalds maintains a

positive relationship with the customers.

Customer Perception and Customer Expectation

Customer perception is a key factor affecting a products success. Many potentially

revolutionary products have failed simply because of their inability to build a healthy perception

about themselves in the customers minds. McDonalds being an internationally

renowned brand brings with it certain expectations for the customers.

Customers expect it to be an ambient, hygienic and a little sophisticated brand that respects

their values. The customers expect the brand to enhance their self-image. Customer responses

obtained at the Vile Parle, Mumbai outlet confirmed the fact that they connect

strongly with the brand. However, fulfilling some of the customer expectations like a broader

product variety provide McDonalds a great scope for improvement.


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Marketing Model

McDonalds Marketing Mix (Ps)5

After segmenting the market, finding the target segment and positioning itself, each company

needs to come up with an offer. The 5 Ps used by McDonalds are:

1. Product

2. Place

3. Price

4. Promotion

5. People

Product:

How should the company design, manufacture the product so that it

enhances the customer experience?

Product is the physical product or service offered

to the consumer. Product includes certain

aspects such as packaging, guarantee, looks etc.

This includes both the tangible and the

nontangible

aspects of the product and service.

McDonalds has intentionally kept its product


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depth and product width limited. McDonalds studied the behaviour of the Indian customer and

provided a totally different menu ascompared to its International offering. It dropped ham, beef

and mutton burgers from the

menu. India is the only country where McDonalds serve vegetarian menu. Even the sauces

and cheese used in India are 100% vegetarian. McDonalds continuously innovates its products

according to the changing preferences and tastes of its customers. The recent example is the

introduction of the Chicken Maharaja Mac.

McDonalds bring with it a globally reputed brand, world class food quality and excellent

customer specific product features.

Place

Where should be the product be available and the role of distribution channels?

The place mainly consists of the distribution channels. It is important so that the product is

available to the customer at the right place, at the right time and in the right quantity. Nearly 50%

of U.S.A is within a 3 minute drive from a McDonalds outlet.

There is a certain degree of fun and happiness that a customer feels each time he dines at

McDonalds. There are certain value propositions that McDonalds offer to its customers based on

their needs. McDonalds offers hygienic environment, good ambience and great service. Now

McDonalds have also started giving internet facility at their centres and they have been playing

music through radio instead of the normal music. There are certain dedicated areas for children

where they can play while their parents can have some quality time together.


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Price

What should be the pricing strategy?

Pricing includes the list price, the discount functions available, the financing options available

etc. It should also take into the consideration the probable reaction from the competitor to the

pricing strategy. This is the most important part of the marketing mix as this

is the only part which generates revenue. All the other three are expenses incurred. The price

must take into consideration the appropriate demand-supply equation.

McDonalds came up with a very catchy punch line Aap ke zamane mein ,baap ke zamane ke

daam. This was to attract the middle and lower class consumers and the effect can clearly be

seen in the consumer base McDonalds has now.

McDonalds has certain value pricing and bundling strategies such as happy meal, combo meal,

family meal etc to increase overall sales volumes.


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Promotion

What is the suitable strategy and channels for promotion of the product?

The various promotion channels being used by McDonalds to effectively communicate the

product information are given above. A clear understanding of the customer value helps decide

whether the cost of promotion is worth spending.

There are three main objectives of advertising for McDonalds are to make people aware of an

item, feel positive about it and remember it. The right message has to be communicated to the

right audience through the right media. McDonalds does its promotion through television,

hoardings and bus shelters. They use print ads and the television programmes are also an

important marketing medium for promotion.

Some of the most famous marketing campaigns of McDonalds are:

You Deserve a break today, so get up and get away- To McDonalds

Aap ke zamane mein ,baap ke zamane ke daam.

Food, Folks, and Fun

Im loving it.


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People

How to converge the benefits of internal and external marketing?

McDonalds understands the value of both its employees and its customers. It understands the

fact that a happy employee can serve well and result in a happy customer. McDonald

continuously does Internal Marketing. This is important as it must precede external marketing.

This includes hiring, training and motivating able employees. This way they serve customers

well and the final result is a happy customer.

The level of importance has changed to be in the following order (the more important people are

at the top):

1. Customers

2. Front line employees

3. Middle level managers

4. Front line managers

The punch line Im loving it is an attempt to show that the employees are loving their work at

McDonalds and will love to serve the customers.


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The McDonalds Experience

Marketing in a services industry is becoming an increasingly complex challenge. The paradigms

of service marketing demand a passionate understanding of customer expectations and

perceptions, and linking them to product design & delivery as well as operational planning. This

is where McDonalds has excelled due to its ability to successfully integrate

the customers perspective in its products and operations in a comprehensive manner. The

revamped menu in India is an example of McDonalds strategy of integrating the customers

perspective in its products. And, the operational integration is evident from McDonalds

emphasis on its suppliers as its customers as well as its treatment of its consumers as co-

producers

of services.

The ultimate aim of Service Marketing is not just to become a Service Leader but to create a

Service Brand. The Service Delivery Process is the key to achieving this aim of Service

Marketing.

During the Service Delivery Process, each moment of interaction between the firm and the

customer, called Moments of Truth, helps understand the opportunities that a firm has to win

or lose the customer. For example, these moments of truth are created for McDonalds very

time the guard at the McDonalds outlet meets the customer, every time an attendant

takes down the order from the customer waiting in the queue, every time the cashier interacts

with the customer, every time the attendant helps the customer guided the customer towards

the table, every time the attendant cleans the table, etc.

Managing these moments of truth is a great challenge in Service Marketing especially due

to customers involvement as a co-producer of services (e.g. McDonalds self-service concept

wherein the customer not only collects the order but also cleans the table after consuming thefood). However, McDonald's has been able to create a great experience for its customers by

understanding the nature of the entire Service Delivery Process and the various stages in the

process that are exposed to the customers. Transparency in the processes at its outlet has

helped McDonalds bring the back office in its outlet at the front so that the customer is able

to know the operations and provide feedback on service design improvements.


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Internal Customer Focus is equally important as External Customer Orientation in order to

win these moments of truth. McDonalds focus on its People and their service delivery

methods therefore plays a very important role in creating a successful Service Brand. The

quality and the consistency of the service delivered by McDonalds have been greatly

enhanced by the combination of the factors mentioned above. This has helped McDonalds

become Service Leader and a successful Service Brand. This is evident from the fact that

very few of its customers opt for take-home parcels or home deliveries while most of them

prefer to eat at the outlet and enjoy the McDonalds experience.

McDonaldizing the Suppliers

McDonalds has changed the nature of not only the food service industry but also the food

processing industry as well. McDonalds realized that the battle between fast food chains

would increasingly be one of efficiency of supply, lower cost production and greater desire to

innovate. It pioneered with innovative and sophisticated food distribution and packaging

systems when the traditional food processors were unwilling or unable to supply food items

that McDonalds demanded. They achieved amazing consistency by devoting more attention

than anyone else to field service and training at store level. Production was concentrated in

huge plants devoted exclusively to McDonalds. McDonalds also started with tiny suppliers

and grew with them displaying great loyalty.

Nowhere is the supplier loyalty more evident than in development of new, improved products.

Some of McDonalds classic food items like Filet-o-Fish, French Fries, Chicken

Nuggets etc. are results of supplier innovation. Interestingly, it took KFC more than three

years before in finally introduced its own version of chicken nuggets. Thus supplier

technological expertise had given McDonalds a product which was not a mere marketing

innovation but a technical one. McDonalds attempted to squeeze labour out of the stores bymoving more preparation back into the processing plant, creating the opportunity to develop

unique products based on suppliers processing skills. For the first time, McDonalds suppliers

became the focal point of new product development. This converted the fastfood

industrys most fragmented distributed system into more efficient one which helped McDonalds

reduce its inventory and manage costs effectively.


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A perfect example of revitalising a product in decline phase

The French Fries have been an important part of the McDonalds menu worldwide. But now

it was in the stage of decline and was actually not generating proper return. In an attempt to

revitalize it, a new variant was introduced namely Shake Shake Fries. This is being served

with chatpata spice mix which has resulted in increase in the sales of French Fries and has

elevated it from to the decline stage. This is used to delay the decline of a well established

product which has the potential of generating further revenue.


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SWOT Analysis

Exhibits

McDonalds Indian Menu


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Vegetarian Menu


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Analysis Of Mc Donalds

Thus a Majority Believe that the favourite delicacy of Mc Donalds is Mc Veggie Burger


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A majority of People feel that Mc Donalds is flawless and deem no change necessary in it


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About KFC History

Marketing

Pricing

Demographic Factors

Economic Factors

Geographic analysis

Performance of Existing Products

Target Market

Str ategy

Promotion

Advertising


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ABOUT

Let us throw light upon the basic history of Kentucky Fried Chicken and trace its roots

internationally and in India as well. KFC is one of the brands owned under a collective

group called yum Brands.

Way back in 1930s Colonel Harland Sanders got some distinguished Kentucky folks lickin

their fingers. Its been in fashion since then!

Colonel Harland Sanders, founder of the original Kentucky Fried Chicken, was born on

September 9, 1890.When he was six, his father died and his mother was forced to go to work

while young Sanders took care of his three year old sibling. This meant he had to do much of the

family cooking. By the time he was seven, Harland Sanders was a master of a range of regional

dishes.

After a series of jobs, in the mid 1930s at the age of forty, Colonel Sanders bought a service

station, motel and cafe at Corbin, a town in Kentucky about 25 miles from the Tennessee border.

It is here that Sanders began experimenting with different seasonings to flavor his chicken which

travelers loved and for which he soon became famous.

During the next nine years he developed his secret recipe of 11 herbs and spices and the basic

cooking technique which is still used today. Sander's fame grew. He sold his chicken on the

highway! But when the highway was removed, he sold up and traveled the United States by car,

cooking chicken for restaurant owners and their employees. If the reaction was favorable Sanders

entered into a handshake agreement on a deal which stipulated a payment to him of a nickel for

each chicken the restaurant sold.

By 1964, from that humble beginning, Colonel Harland Sanders had 600 franchise outlets for hischicken across the United States and Canada. Later that year, Colonel Sanders sold his interest in

the United States operations for $2 million. The 65-year-old gentleman had started a worldwide

empire using his $105 social security cheque. Sadly, Colonel Harland Sanders passed away on

December 16th, 1980 aged 90.


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His legacy lives on with KFC restaurants all over the world. KFC now stretches worldwide with

more than 13,000 restaurants in more than 80 countries and territories around the world serving

up the Colonels Original Recipe. It is a $13 billion brand based out of Kentucky and is the

leading QSR around the world which is based in Louisville, Kentucky. Yum! Brands own 5

brands, out of which KFC is the largest brand within the Yum! Portfolio, founded by Colonel

Harland Sanders in the year 1938.

Kentucky Fried Chicken In India

KFC is known to be the worlds No.1 Chicken QSR and has industry leading stature across many

countries like UK, Australia, South Africa, China, USA, Malaysia and many more. KFC is the

largest brand of Yum Restaurants, a company that owns other leading brands like Pizza Hut,

Taco Bell, A&W and Long John Silver. Renowned worldwide for its finger licking good food,

KFC offers its signature products in India too! KFC has introduced many offerings for its

growing customer base in India while staying rooted in the taste legacy of Colonel Harland

Sanders secret recipe. Its signature dishes include the crispy outside, juicy inside Hot and

Crispy Chicken, flavorful and juicy Original Recipe chicken, the spicy, juicy & crunchy Zinger

Burger, Toasted Twister, Chicken Bucket and a host of beverages and desserts. For the

vegetarians in India, KFC also has great tasting vegetarian offerings that include the Veggie

Burger, Veggie Snacker and Veg Rice meals. In India, KFC is growing rapidly and today has

presence in 11 cities with close to 50 restaurants.


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Five Brands of Yum :

y Pizza hut

y KFC

y Long john Silvers

y All American Food

y Taco Bell

Out of these the two main prominent in India re Pizza Hut and KFC. We shall concentrate our

analysis on KFC.

KFC Corporation, or KFC, founded and also known as Kentucky Fried Chicken, is a chain of

fast food restaurants based in Louisville, Kentucky. KFC is a brand and operating segment,

called a "concept",[2] of Yum! Brands since 1997 when that company was spun off from PepsiCo

as Tricon Global Restaurants Inc.

KFC primarily sells chicken in form of pieces, wraps, salads and sandwiches. While its primary

focus is fried chicken, KFC also offers a line of roasted chicken products, side dishes and

desserts. The company was founded as Kentucky Fried Chicken by Colonel Harland Sanders in

1952, though the idea of KFC's fried chicken actually goes back to 1930. The company adopted

the abbreviated form of its name in 1991.[3] Starting in April 2007, the company began using its

original name, Kentucky Fried Chicken, for its signage, packaging and advertisements in the

United States as part of a new corporate re-branding program;[4][5] newer and remodeled


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restaurants will have the new logo and name while older stores will continue to use the 1980s

signage. Additionally, Yum! continues to use the abbreviated name freely in its advertising.

Timeline

9/9/1890Harland Sanders is born just outside Henryville, Indiana.

1900-1924

Harland Sanders holds a variety of jobs including: farm hand, streetcar conductor, army private

in Cuba, blacksmith's helper, rail-yard fireman, insurance salesman, tire salesman and service

station operator for Standard Oil.

1930

In the midst of the depression, Harland Sanders opens his first restaurant in the small front room

of a gas station in Corbin, Kentucky. Sanders serves as station operator, chief cook and cashier

and names the dining area "Sanders Court & Caf."

1936

Kentucky Governor Ruby Laffoon makes Harland Sanders an honorary Kentucky Colonel in

recognition of his contributions to the state's cuisine.

1937

The Sanders Court & Caf adds a motel and expands the restaurant to 142 seats.

1939

The Sanders Court & Caf is first listed in Duncan Hines' "Adventures in Good Eating."


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Fire destroys The Sanders Court & Caf, but it is rebuilt and reopened.

The pressure cooker is introduced. Soon thereafter Colonel Sanders begins using it to fry his

chicken to give customers fresh chicken, faster.

1940

Birthdate of the Original Recipe

1949

Sanders marries Claudia Price.

1952

The Colonel begins actively franchising his chicken business by traveling from town to town andcooking batches of chicken for restaurant owners and employees.

The Colonel awards Pete Harman of Salt Lake City with the first KFC franchise. A handshake

agreement stipulates a payment of a nickel to Sanders for each chicken sold.

1955

An interstate highway is built to bypass Corbin, Kentucky. Sanders sells the service station on

the same day that he receives his first social security check for $105. After paying debts owed,he is virtually broke. He decides to go on the road to sell his Secret Recipe to restaurants.

1957

Kentucky Fried Chicken first sold in buckets

1960

The Colonel's hard work on the road begins to pay off and there are 190 KFC franchisees and

400 franchise units in the U.S. and Canada.

1964

Kentucky Fried Chicken has more than 600 franchised outlets in the United States, Canada and

the first overseas outlet, in England.


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Sanders sells his interest in the U.S. company for $2 million to a group of investors headed by

John Y. Brown Jr., future governor of Kentucky. The Colonel remains a public spokesman for

the company.

1965

Colonel Sanders receives the Horatio Alger Award from the American Schools and Colleges

Association.

1966

The Kentucky Fried Chicken Corporation goes public.

1969

The Kentucky Fried Chicken Corporation is listed on the New York Stock Exchange.

1971

More than 3,500 franchised and company-owned restaurants are in worldwide operation when

Heublein Inc. acquires KFC Corporation.

1976

An independent survey ranks the Colonel as the world's second most recognizable celebrity.

1977

Colonel Sanders speaks before a U.S. Congressional Committee on Aging.

1979

KFC cooks up 2.7 billion pieces of chicken. There are approximately 6,000 KFC restaurants

worldwide with sales of more than $2 billion.

12/16/1980Colonel Harland Sanders, who came to symbolize quality in the food industry, dies after being

stricken with leukemia. Flags on all Kentucky state buildings fly at half-staff for four days.


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1982

Kentucky Fried Chicken becomes a subsidiary of R.J. Reynolds Industries, Inc. (now RJR

Nabisco, Inc.) when Heublein, Inc. is acquired by Reynolds.

1986

PepsiCo, Inc. acquires KFC from RJR Nabisco, Inc.

1997

PepsiCo, Inc. announces the spin-off of its quick service restaurants - KFC, Taco Bell and Pizza

Hut - into Tricon Global Restaurants, Inc.

2002

Tricon Global Restaurants, Inc., the world's largest restaurant company, changes its corporate

name to YUM! Brands, Inc. In addition to KFC, the company owns A&W All-American

Food Restaurants, Long John Silvers, Pizza Hut and Taco Bell restaurants.

2006

More than a billion of the Colonel's "finger lickin' good" chicken dinners are served annually in

more than 80 countries and territories around the world.

2007

KFC proudly introduces a new recipe that keeps the Colonel's 11 herbs and spices and finger-

lickin' flavor, but contains Zero Grams of Trans Fat per serving thanks to new cooking oil.


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KFCs Social Responsibility

VenturesThere's more to KFC than great food. We promote education, diversity and animal welfare in a

number of positive ways. KFC has stepped foot in the social responsibility circle and has

launched some various schemes in this regard which are as follows:

The KFC Colonels Scholars Program is about you, your dreams

and aspirations, and the perseverance to succeed. This program is

offered to high school seniors planning to attend a public in-state

college or university.

Diversity is more than a philosophy at KFC, it is part of our

founding How We Work Together principles. Our global culture

is actively developing a workforce that is diverse in style and

background, where everyone can make a difference.


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Yum! Brands is committed to conducting business in an ethical

and responsible manner. To encourage compliance with all legal

requirements and ethical business practices, Yum has established

a Supplier Code of Conduct for it's U.S. suppliers.

Yum! Brands, parent company of KFC, is committed to the humane treatment of animals.


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Marketing

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.

y Product

y Price

y Place

y Promotion


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Product

What is a Product?

Anything that can be offered to a market to satisfy a want or need.

KFCs Main Products in India:

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.


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Segmentation

What is MarketSegmentation?Dividing a market into distinct groups of buyers on the basis of needs characteristics or

behaviour who might require separate product or marketing mixes.

Levels of Market Segmentation

Segment marketing

Individual marketing

Niche marketing

Local marketing

. Individual marketing Extreme marketing in which marketers focus on individual

customers.

Keep track of individual tastes & preferences of individual customers

Many companies are approaching individuals through e-mails to promote their

products.

Segment marketing Dividing the market into different segments on the basis of

homogenous need.

Segmented on basis of broad similarity with regard to some attributes


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Segmentation is also sometimes identifying, capturing & retaining potential new markets

Niche marketing Marketers effort to position their product or service in smaller markets

that have similar attributes and have been neglected by other marketer

Segment further divided into sub segments to cater unsatisfied needs of small group is

called as niche

Local marketing marketers offer customized products to suit the local markets.

KFC introduced Muslimized or Pakistani products such as Spicy Chicken, Hilal

Chicken, Zinger Extreme and more

Market

Segementation

Geographical

Regions, cities,

states, countries

Demographic

Age,gender,income,

occupation,religion,

social class,familysize

Psychographic

Life style,

personality,

values,

beliefs

Behavioral

Occasions,

Benefits,

Usage rate,

Loyalty status


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Demographic Segmentation

In 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.

Psychographic segmentation

Dividing a market into different groups based on social class, lifestyle, or personality

characteristics is called psychographic segmentation.

KFC divides market on the basis of psychographic variables like

Social class- Upper and Middle class.

Lifestyle is not specific.

Personality is ambitious and authoritarian


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Target Market

The process of evaluating each market segments attractiveness and selecting two or moresegments

As the outlets of KFC are in posh area and prices are too high (overhead expenses-rent, air-

conditioning, employees), so KFC targets upper and middle classes. Target market depends

upon size and growth rate of population, Company resources and structural attractiveness of

market segment.

Market Positioning

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

create 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.

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

create 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.


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A Conclusive Summary of

KFCKFC is synonymous with chicken. It has to be because chicken is its flagship product. The

latest they have on offer is the marinated hot and crispy chicken that is "crrrrisp and crunchy on

the outside, and soft and juicy on the inside". It gives you a regular Pepsi with this at nothing

more than just Rs. 39. But make no mistake, while this is a rage across the world, and in our very

own Bangalore, KFC has made sure one other thing: it doesn't want to alienate the vegetarian

community "that gave birth to the vegetarian menu". It means you can be veg and yet be at KFC.

KFC offers a wide range of vegetarian products such as the tangy, lip-smacking paneer tikka

wrap 'n' roll, the veg de-lite burger, and the veg crispy burger. There are munchies such as the

crisp golden veg fingers and crunchy golden fries served with tangy sauces. If you are veg and

looking for a meal, you can combine the veg fingers with steaming, peppery rice and a spice

curry.

The mayonnaise and sauces don't have egg in them. Sharanita Keswani, Director, KFC

Marketing, says the vegetarian menu in India came about when KFC found the country had

about 35 per cent vegetarians, and in metros such as Delhi and Mumbai, almost 50 per cent. The

non-vegetarian is the obvious target customer because, as Ms. Sharanita points out, Bangalore

and the rest of south India have over 70 per cent non-vegetarians. But she also observes that

chicken is KFC's strength. KFC's vegetarian menu is almost exclusive to India and is the most

extensive. Most countries either do not have a vegetarian menu, and some which do, have a

burger at the most. "Contrary to affecting chicken sales, the presence of a vegetarian menu has

made the brand more relevant to a wider cross-section of the consumer society.

This is essential as we grow the brand across the country," says Ms. Sharanita. While the

vegetarian menu has a significant presence in India owing to the country's distinct tastes, and

therefore the need to localise, KFC's chicken products that are standardised are also modified in

certain regards to suit local tastes. KFC officials say the zinger burger in any part of the world or


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original recipe chicken tastes the same as the chicken products are based on standard recipes.

While this brand standard chicken may taste the same in New York or Bangalore, the sauce or

topping is changed. The chicken strips are served with a local sauce or the sauce of the wrap is

changed to local tastes. And as far as India is concerned Ms. Sharanita says: "Making itself

relevant to local palates, KFC launched the wrap as chicken and paneer tikka roll in India." The

KFC menu strategy is to "balance standardisation and localisation". The localisation works in

two ways: to modify a standard chicken product with a different topping or sauce; and to have a

vegetarian menu, where necessary, along with the flagship product, chicken. The localisation

exercise is undertaken in every country. "The U.S. and European markets have a traditional KFC

menu based on chicken burgers and wraps, while Asian markets like India have been more

experimental and adventurous. Here, they have rice meals, wraps, and sides.

The change is imperative as Asian tastes can be very different from Western ones," Ms.

Sharanita observes, adding that KFC learnt very early the high demand for vegetarian products in

India. KFC has taken care to maintain safeguards on the production of its non-vegetarian

products in response to observations by People For Ethical Treatment of Animals that chicken

were not being treated humanely by suppliers. The debate has been on for years now and animal

rights activists have prompted companies to adopt stringent measures. Pankaj Batra, Director,

Marketing, Indian Sub-Continent, Yum! Restaurants International, observes: "KFC is committed

to the well being and humane treatment of chickens.

We require all our suppliers to follow welfare guidelines developed by Yum! Restaurants

International, U.S.A., with leading experts on their Animal Welfare Advisory Council. In India,

we source chicken from Venkateshwara Hatcheries Limited (Venky's), which is one of the

leading and respected organised players in the poultry farming business. They also supply

chicken to several reputed hotel and restaurant chains in the country. We respect the Indian law

and our guidelines completely adhere to them." Ms. Sharanita points out that while KFC's brand

standard products are their strength throughout the world, KFC works around the core and gives

consumers products with a familiar taste, especially "important in a country like India that is

home to such distinct and different food habits". KFC's challenge as Ms. Sharanita puts it, is to

manage a brand's market with the right degree of flexibility so as to be strong in different and

varied product markets.


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KFCs Expansion Plan in India

Chicken restaurant company KFC, which is owned by Yum! Brands, intends to

reach a target of 100 outlets in India by 2010.

Currently, KFC operates 34 restaurants across nine cities in the country. The company

said that growth will primarily be franchise-driven. Only 20% of the new outlets will be

company-owned. As far as menu is concerned, KFC said that it will expand the menu by

introducing 15 to 20 new items. The offerings will suit Indian tastes. A significant

vegetarian variety will also be offered, the company added. Times News Network

quoted Unnat Varma, KFC India marketing director, as saying: "We plan to close 2008

with a total of 50 stores. Our business model is primarily a franchise one and the

aggregate investment involved in this expansion will be INR2 to 3 billion."


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SURVEY ANALYSIS

International research into entrepreneurship is developing rapidly, but a large number of

questions concerning the marketing strategies adopted by the flourishing enterprises n their pros

and cons remain unanswered. The report calls for the study of the modus operandi adopted

whereby a new entrepreneur theory can be developed.

The establishment and development of new enterprises has attracted more and more attention as

regards commercial, research and educational policies. This is due to the assumption that the

setting up of new enterprises and innovative development of the existing ones is an important

prerequisite for creating the necessary dynamic in the commercial structure, and consequently a

basis for maintaining a country's international competitive power, economic development,

employment, and standard of living.

Our method of going about the study at hand involved the basic survey method, whereby we put

forward questions to individuals who were divided into the basic segments provided by and

aimed at as either the source or target service provider. This was carried out by a survey

comprising of two questionnaires, one aimed at the customers at either of the two food joints and

the other for the employees employed at the food joints. Our questions were designed to capture

the market trends, the grounds behind such a trend, the peripherals related to the functioning of

the food joint, key marketing strategies adopted and finally aimed at drawing the inferences and

conclusions for the same.

We now discuss each question and explore its conjecture with regards to the reasons for

including the question, its deductions and what light it throws in our study towards the

triumphant business model.


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QUESTION 1

Which age group do you belong to?

The first question was essentially designed to throw light on the age group of people

visiting/dining at the food joints. This gave us an idea of the preference of a particular food brand

among a given age group if any. For e.g. the HAPPY MEAL available at McDonald's attracted

the major portion of the younger crowd. As a matter of fact as shown in the following questions,

this particular strategy drained almost the entire young consumer segment.

Of the individuals surveyed a majority of the individuals belonged to the 18-25 yr age group both

for McDonald's as well as KFC. Those in KFC in the below 18 age group totaled to around 8%

which contrasted with 19% in the same age group in McDonald's.

In 18-25 year age group the trend was nearly comparable at 47% for KFC and 39% for

McDonald's.

Besides, for KFC the percentages were 32% in 25-35 year group, 10% in 35-50 year group.

These contrasted with the results for McDonald's at 32% for 25-35 yr age group, 6% in 35-50 yr

group. The percentages of above 50 age group were calculated to be 3% and 4% respectively

which was insignificant in view of the establishment of market trend.

A) Below 18

B) 18-25

C) 25-35

D) 35-50

E) Above 5

19%

39%

32%

6% 4%

MCDONALDS

A

B

C

D

E

8%

47%32%

10% 3%

KFC

A

B

C

D

E


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QUESTION 2

What is your profession?

This question was essential in calculating the trend of the customers who visit these food joints

i.e. the working class of the people visiting the respective places. The survey revealed that the

majority of people visiting both the places i.e. 46% for KFC and 55% for McDonald's were

students. This thus lays direct stress on the strategies adopted by both the joints resulting in a

heavy demand among the student group. Moreover the percentage of service class was 27% for

KFC while 20% for McDonald's.

These percentages were further comparable as for business class they were 9% and 14%

respectively while 18% and 11% constituted others respectively for KFC and McDonald's.

The trends of age group as well as profession indicated results arising from various factors such

as availability of vegetarian food at McDonald's and the ambiance provided at the respective

places.

A) StudentB) ServiceC)BusinessD) Others

55%

20%

14%

11%

McDONALDS

A

B

C

D

46%

27%

9%

18%

KFC

A

B

C

D


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QUESTION 3

Are you a vegetarian/non-vegetarian?

This was essentially designed to demarcate the groups according to whether they were

vegetarians or otherwise. It was a preconceived idea that the vegetarians preferred McDonald's of

the two while KFC proved to be a non-vegetarian paradise. And the survey results validated our

assumptions by indicating that of the people visiting KFC only 12% were vegetarians while 88%

were either non-vegetarians or occasionally non-vegetarians. This percentage was very different

for McDonald's where 52% of the visiting crowd were vegetarian while 46% were non-

vegetarian. This thus showed a balanced market for McDonald's whereas a strong shift for KFC

towards the non-vegetarian section.

A) VegetarianB)Non-VegetarianC) Occasionally Non-vegetarian

12%

78%

10%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

A B C

KFC

52%

46%

2%0%

10%

20%

30%

40%

50%

60%

A B C

McDONALDS


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QUESTION 4

How often do you visit here?

This question indicated the frequency of visits by the people surveyed.

The people visiting daily was few at 6% for KFC and 12% for McDonald's. Those visiting once

a week were comparable at 14% and 22% respectively. 39% visited KFC once a month while

41% visited at leisure. This percentage was 35% and31% for McDonald's hence showing that

though McDonalds scored in the daily visitors due to the optimally priced sections, KFC was

ahead in terms of people visiting at leisure or once a month.

A) DailyB) Once a weekC) Once a monthD)At leisure

12%

22%

35%

31%

McDONALDS

A

B

C

D

6%

14%

39%

41%

KFC

A

B

C

D


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QUESTION 5

Who generally accompanies you?

The results to this question showed trends that are not novel to the Indian markets. A majority of

people were accompanied by their family in both the joints. The percentages varied from 41% in

KFC to 45% for McDonald's.

In KFC 43% came in groups of friends while in McDonald's this number was 39%.

12% in KFC and 14% in McDonald's were of the view that it did not matter who they came with.

According to them what mattered was the food.

A)FamilyB)FriendsC)AloneD)Does it really matter?

45%

39%

2%14%

McDONALDS

A

B

C

D

41%

43%

4%

12%

KFC

A

B

C

D


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QUESTION 6

What is your saying on the pricing of the joint?

In KFC 31% found the food priced nominally and an equal amount of people surveyed i.e. 31%

found it expensive. Hence it was concluded that it dropped down to the individual in the case of

KFC and there was no clear market trend.

In McDonald's 46% found it nominally priced as well as value for money while just 8% found it

expensive.

Hence in terms of comparative study it was concluded that McDonalds was optimally priced

although KFC wasn't overpriced either.

A)NominalB)ExpensiveC) Value for Money

0%

20%

40%

60%

AB

C

46%

8%

4%

McDONALDS

0%

20%

40%

AB

C

31%31%

38%

KFC


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QUESTION 7

How much do spend on an average per visit?

This question again was concerned with the pricing as well as spending capability of the people.

The results indicated that a major section, i.e. around 52% for KFC and 42% for McDonald's, of

people spent between Rs.100-500 thus advocating the fact that the places are priced moderately.

It was also noted that 31% of people could manage a meal for under Rs. 100 in McDonald's

compared to 24% in KFC. The people who spent above Rs. 500 were 24% and 27% for

McDonald's and KFC respectively.

A) Below Rs 100B)Rs 100 to Rs 500C)Above Rs 500

31%

42%

27%

McDONALDS

A

B

C

24%

52%

24%

1.20%

KFC

A

B

C


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QUESTION 8

Do you get drawn in by the television commercials of the food items?

This question was designed to give an idea about the publicity/advertising strategy of the food

brands. Both the brands under consideration are big brands and hence have the capability to

allocate adequate budgets towards all sections of marketing. Whether they choose to or not to, is

the question at hand. This particular question analyzes the potency of the advertising strategies

used by the food brands in attracting or influencing the customers.

it was noticed that only 15% of the consumers surveyed in KFC were attracted by the television

commercials while other 85% were unaffected. This percentage when contrasted with

McDonald's was a 68-32% relationship.

A) YesB)No

68%

32%

MCDONALDS

A

B68%

32%

1.40%

1.20%

KFC

A

B


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QUESTION 9

Do you think the food is indigenous to the place?

The question pertained essentially with the originality of the food and services provided at the

respective places. The people surveyed opined that KFC was a favorite when it came to the

originality as it was observed that people visited the place since they could not find such food

anywhere else. The vast majority at McDonald's visited that place mainly because they found it

value for money. The percentages also showed a variation in terms of whether the one surveyed

was vegetarian or otherwise.

The various percentages were as described in the pi charts.

A) Yes, I cant find such food anywhereB)No, But I come here for the valueC)I come here for its Non Veg delicaciesD)For its Vegetarian preparations and its variety

12%

42%19%

27%

MCDONALDS

A

B

C

D

46%

21%

27%

6%

KFC

A

B

C

D


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QUESTION 10

What do you think about the hygiene of the place?

This was in relation to the maintenance of the respective places by the owners/managers and how

it affected the crowd the place attracted.

In KFC, 77% of the people surveyed found the systems satisfactory i.e. the issues of food

hygiene and public health were looked catered to adequately.

The others thought it needed attention.

While at McDonald's this figure was almost identical at 76% finding it satisfactory and 22% and

2% finding it attention worthy and poor respectively.

A) SatisfactoryB)Needs attentionC) Very poor Indeed

76%

22%

2%

MCDONALDS

A

B

C77%

22%

1%

KFC

A

B

C


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QUESTION 11

How do you find the staff?

This question informs us about the operational strategies of the food joints. This question may

also have individual implications as there may have been cases involving particular experiences

although our aim was to gather the general opinion. In KFC , 48 % of the people found the staff

friendly and cooperative whereas 46 % found them indifferent, with only 9 % find the staff rude

and annoying. A similar trend was observed among the customers at Mc Donald's where 46%

found the staff friendly and 47% found them indifferent. Only 7% found the staff rude.

A)FriendlyB)IndifferentC)Rude

46%

47%

7%

MCDONALDS

A

B

C

48%

43%

9%

KFC

A

B

C


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QUESTION 12

What do you think about the marketing strategy of the joint?

This question gives us an idea of how the food joints go about their marketing and publicity.

This, although, may not give an exact figure in terms of the budget or manpower spent, but tells

us about how important, from the customers point of view, is the publicity of their brand is for

the respective places.

A)Loud and widespreadB)Low profileC)Attended Adequately

54%

6%

40%

MCDONALDS

A

B

C

54%

6%

40%

KFC

A

B

C


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QUESTION 13

Given a preference which of these would you choose?

This was a very personal choice question to sense the general opinion of the customers who have

the purchasing power or the taste bud orientation. The answers were influenced by the location

of the person being surveyed.

A)Mc DonaldsB)KFCC) Gopals

70%

14%

3%

7% 6%

MCDONALDS

A

B

C

D

E

8%

76%

4%

10% 2%

KFC

A

B

C

D

E

final project on study of purchase inluencing factor for fast food & beverages

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