SUMMER TRAINING REPORT ON

STRATEGIES TO INCREASE REVENUE OF KFC

Submitted to department of management studies inPartial fulfillment of the requirements for the Award of Degree ofBachelor of Business Administration

UNDER THE SUPERVISION:

Ms. ZEBA YASMEEN(Asst. Professor)SUBMITTED BY: MD. ABRAR CLASS: BBA 5TH SEMROLL No. BBA/13/19

AL-FALAH SCHOOL OF ENGINEERING. & TECHNOLOGYDHAUJ, FARIDABADDATE OF SUBMISSION:2015

DECLARATION

I, the undersigned, hereby declare that the work presented herein is genuine work done originally by me and has not been published or submitted elsewhere for the requirement of a degree programme or award of any diploma. Any literature, data or works done by others and cited within this project report has been given due acknowledgement and listed in the reference section.

MD. ABRARFaculty guide

Date:

ACKNOWLEDGEMENT

I express my sincere gratitude to my industry guide Tania sinha, Management Supervisor, Ogilvy & Mather Pvt Ltd for his able guidance, continuous support and co-operation throughout my project, without which the present work would not have been possible.

I would also like to thank my entire team of colleagues at Ogilvy & Mather Pvt. Ltd, for the constant support and help in the successful completion of my project.

Also, I am thankful to my faculty guide Ms. Zeba Yasmeen of my institute for her continued guidance and invaluable encouragement.

Md, Abrar(STUDENT)

TABLE OF CONTENTs

1. EXECUTIVE SUMMARY 2. OBJECTIVE

3. METHODOLOGY

4. LITERATURE REVIEW

5. RESEARCH METHOLOGY

6. SWOT

7. ABOUT THE COMPANY

8. MARKETING STRATEGY

9. SWOT ANALYSIS

10. OTHER STRATEGIES

11. FINDINGS

12. CONCLUSION

13. bibliography

14. Questionnaire

15. RECOMMENDATIONS

16. SYNOPSIS

EXECUTIVE SUMMARY

The report basically presents the strategies to determine the opportunities for KFC in the fast food sector. The report gives an insight about the strategies and measures KFC needs to adopt for enhancing its revenue in food and beverage sector.KFC IS synonymous with chicken. It has to be because chicken is its flagship product.. 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, 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.Industry analysis is guide to know the profitability of the fast food industry by as assists us inIndustries are different from each other and to understand the working of industry it is necessary to first solve the complex economic issues. Industry analysis not only helps to assess a particular industry and its performance but also provides with important information about few industrys aspect. Moreover, the industrial analysis assists in identifying the core factors affecting performances in vertical trading relationships and horizontal competitive relationships. Here the horizontal competitive relationship refers to the set of distinct businesses the firms compete in. Industrial analysis facilitates the determination of how changes in the business environment affect the industrys performance. In addition to this, it identifies opportunities and threats in the business landscape.The investigation exhibits information on several spheres of GLOBAL FAST FOOD INDUSTRIES and has used the industrial analysis in order to have in depth knowledge of the industry. This report also contains factors that affect the profits of an industry. Market research is the format which enables KFC to identify this key information. Accurate research is essential in creating the right mix to win customers loyalty. In all its market KFC faces competition from other businesses. Additionally economic, legal and technological changes, social factors retail environment and many other elements affect KFC success in the market.Market research identifies these factors and anticipates how they will affect peoples willingness to buy. As the economy and social attitudes change, so do buying patterns. KFC needs to identify whether the number of target customers is growing or shrinking and whether their buying habits will change in the future.Market research considers everything that affect buying decisions. These buying decisions can often be affected by wider factors than just the products itself. Psychological factors are important, e.g. what image does the product give or how the consumer feels when purchasing it . There are a limited number of customers in the market. To build long-term business it is essential to retain people once they have become customers. For example a parent with two children might visit and visits KFC to give the children a treat. Children want to visits as it is fun place to eat. A business customer visits KFC during the work day as service is quick the food taste is great and can be eaten in the car without affecting a busy work schedule. These examples represent just a few of KFC's possible customers profile. Each has different reasons to come to kfcUsing this type of information KFC can tailor communication to the needs of specific groups. It is to the needs of specific group. It is their needs that determine the type of products and services offered, prices charged, promotionsCreated and where restaurants are located. To meet the needs of the key market it is important to analyses the internal marketing strengths the organization.Strengths and weaknesses must be identified, so that a marketing strategy which is right for the business can be decided upon.KFC learnt very early the high demand for vegetarian products in India..We respect the Indian law and our guidelines completely adhere to them. 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, is to manage a brand's market with the right degree of flexibility so as to be strong in different and varied product markets.

ObjectiveThe motive of this project is to generate the idea of sustainable competitive growth through which various plans of increasing food and beverage REVENUE which can be put into action by means of analysis of market potential.

Purpose of the studyPurpose of making project is to understand the basic fundamentals of foods and beverage industry and to understand the formulation and execution of strategies to sustain and maximize the profit of the restaurant and the strategy to increase the sale in food and beverage sector. Profit Maximization ensuring growth of company for long term benefit. Brand Building. Enhance Customer Experience. Establishing global standards of product quality and service excellence. Market Tapping. Maximizing promotion

Methodology

By collecting data through various sources:1. Concerned PR Agencies. Our organization (KFC) has hired OGILVY agency for arranging for media coverage, press reviews, etc.2. Marketing Team.3. Guest Feedback Forms. The restaurants marketing team keeps track of guest feedback and calls guests for their comments/suggestions if they seem disappointed in the comment cards.4. E-Marketing

Plans for increasing restaurant revenue can help a local restaurant make more profit and offer better servicesTo increase food and beverage revenue of an organization marketing has to be done which includes 4 tools or 4 Ps. These include:-

1. Product-includes quality, taste, brand of the product2. Place-place includes the channel of distribution like franchisees in case of restaurant like KFC3. Promotion-one of the key aspect of the modern marketing is promotion of the services brought about through sales promotion and advertising methods. The tools includes offers, discounts, direct promotions etc and the advertising of the product so that the potential customer has all the information about the product4. Price-the tools under pricing includes prices, discounts, terms of payments etc.

Literature Review Of Fast Food IndustryWith todays hectic lifestyles, timesaving products are increasingly in demand. Perhaps one of the most obvious examples is fast food. Today the demand for the, hectic lifestyles, timesaving products are increasing. Obliviously one of the example is Fast Food Industry. The rate of growth in consumer expenditures on fast food has led most other segments of the food-away-from home market for much of the last two decades. Since 1982, there is growth rate in consumer spending at fast food. The consumers spent at fast food outlets grew at an annually proportion of away-from-home food expenditures on fast food also increased.Everyone eats Fast Food even knowing that it is not healthy for them. Reasons are because of speed, convenience and price. However, fast food has many hidden costs, including the high price of bad health. Not to mention the fact that for such cheap food, you're actually being overcharged by a big amount. So the real reason is not price, but convenience. You can get much cheaper food by cooking for yourself, but you are not always at home to do the cooking, or you do not always feel like cooking. Now People want quick and convenient meals they do not want to spend a lot of time preparing meals, traveling to pick up meals or waiting for meals in restaurants. That result, consumers rely on fast food. Knowing this fast food providers are coming up with new ways to market their products that save time for consumers. The rapid rate at which the fast food industry continues to add outlets is as much a reflection of consumer demand for convenience as it is a reflection of demand for fast food itself. Industry Analysis of the Fast Food Industry:

1. A few of the chief economic and business characteristics of the global fast-food industry are as follows: In the market growth rate the expected food sales is predicted to increase by $208 billion by 2020 with us already being at $800 billion by 2001. Under entry barriers for the fast-food industry the main concerns would be the entry costs, location, capital cost, and licensing. For a business to have success they must have the right location. Under exit barriers there are land leasing, building leases, capital cost.2. Some of the driving forces include the quality of the food, price of the food, and the nutritional value. Some of the consumers that are playing an important role in fast food are women employed outside the home, two-earned households, higher income, and smaller size of the family. Increased food spending driven by population growth is just one way consumers will shape the future of the US food system.3. Five forces: a. Rivalry among competitors- in the fast-food industry it's who can get the food out the fastest.b. New entrants- the competition is increasing due to not having many entry barriers.c. Substitute products- there are many choices in the fast food industry leaving consumers with so many different choices. Therefore each individual fast-food restaurants needs to differentiate their product so people will want to come back for their product. For example what is it about Popeye's chicken vs. KFC's? d. Suppliers and buyers- in the fast-food industry if the buyers aren't satisfied with the suppliers than they can easily switch their suppliers leaving the suppliers with a disadvantage. Also if suppliers cannot offer something unique that only restaurants can get form them, then they have no power to keep that restaurant's business.4. A few factors that are critical to success in the fast-food industry, they are timeliness of the food, quality of the food, quantity of the food, and the price of the food .

RESEARCH METHODOLOGYThe information required for conducting the study would be based on questionnaire. The questions are designed to know the customer perception about KFC. The analysis would be based on primary data collected through questionnaires and information obtained through internet and journals regarding the revival marketing strategy adopted by KFC in India.

RESEARCH DESIGN- DESCRIPTIVEThe research design would be descriptive in nature as I have to find out the underlying perceptions and behavior of consumers.RESEARCH APPROACH- QUESTIONNAIREThe questionnaire asked from respondents is basically of objective type. It is supported by both open and close ended questions. The questionnaire method is used to know the consumer behavior and perception. The questions are intended to know the underlying factors that affect perception towards KFC in India.RESEARCH METHODOLOGY- SURVEY METHODFor achieving the objectives of study, survey was conducted. For conducting the survey a questionnaire was made. The respondents were duly asked to fill questionnaires regarding their perception, likings, and preferences regarding KFC.Method of Data Collection:Primary Data: The primary data for the project is collected through questionnaire filled by the respondents.Secondary Data: The secondary data used in the project has been collected from Marketing and advertising agency for KFC-Ogilvy, articles, websites & Books.

SAMPLING TECHNIQUE RANDOM SAMPLINGSample size- 60Statistical tools- MS-excel

FAST FOOD INDUSTRYIntroductionFast food is the term given to food that can be prepared and served very quickly. While any meal with low preparation time can be considered to be fast food, typically the term refers to food sold in a restaurant or store with low quality preparation and served to the customer in a packaged form for take-out/take-away. Outlets may be stands or kiosks, which may provide no shelter or seating, or fast food restaurants (also known as quick service restaurants). Franchise operations which are part of restaurant chains have standardized foodstuffs shipped to each restaurant from central locations. The capital requirements involved in opening up a fast food restaurant are relatively low. Restaurants with much higher sit-in ratios, where customers tend to sit and have their orders brought to them in a seemingly more upscale atmosphere may be known in some areas as fast casual restaurants.HistoryThe concept of ready-cooked food for sale is closely connected with urban development. In Ancient Rome cities had street stands that sold bread and wine. A fixture of East Asian cities is the noodle shop. Flatbread and falafel are today ubiquitous in the Middle East. Popular Indian fast food dishes include vada pav, panipuri and dahi vada. In the French-speaking nations of West Africa, roadside stands in and around the larger cities continue to sellas they have done for generationsa range of ready-to-eat, char-grilled meat sticks known locally as brochettes.

The Start of Fast Food CultureThe concept of fast food pops up during 1920s.The 1950s first witnessed their rapid proliferation. Several factors that contributed to this explosive growth in 50s were: (1) Americas love affair with the automobiles. (2) The construction of a major new highway system. (3) The development of sub-urban communities. (4) The baby boom subsequent to world war second. Fast-food chains initially catered to automobile owners in suburbia. On the goFast food outlets are take-away or take-out providers, often with a "drive-through" service which allows customers to order and pick up food from their cars; but most also have a seating area in which customers can eat the food on the premises. People eat there more than five times a week and often, one or more of those five times is at a fast food restaurant.Nearly from its inception, fast food has been designed to be eaten "on the go", often does not require traditional cutlery, and is eaten as a finger food. Common menu items at fast food outlets include fish and chips, sandwiches, pitas, hamburgers, fried chicken, French fries, chicken nuggets, tacos, pizza, hot dogs, and ice cream, although many fast food restaurants offer "slower" foods like chili, mashed potatoes, and salads.VariantsAlthough fast food often brings to mind traditional American fast food such as hamburgers and fries, there are many other forms of fast food that enjoy widespread popularity in the West.Chinese takeaways/takeout restaurants are particularly popular. They normally offer a wide variety of Asian food which has normally been fried. Most options are some form of noodles, rice, or meat.Sushi has seen rapidly rising popularity in recent times. A form of fast food created in Japan. sushi is normally cold sticky rice served with raw fish.Pizza is a common fast food category in the United States, with chains such as Domino's Pizza, Sbarro and Pizza Hut. Menus are more limited and standardized than in traditional pizzerias, and pizza delivery, often with a time commitment, is offered.Fish and chip shops are a form of fast food popular in the United Kingdom, Australia and New Zealand. Fish is battered and then deep fried.The Dutch have their own types of fast food. A Dutch fast food meal often consists of a portion of French fries .BusinessIn the United States alone, consumers spent about US$110 billion on fast food in 2000 (which increased from US$6 billion in 1970). The National Restaurant Association forecasted that fast food restaurants in the U.S. would reach US$142 billion in sales in 2006, a 5% increase over 2005. In comparison, the full-service restaurant segment of the food industry is expected to generate $173 billion in sales. Jobs and labor issuesToday, more than 10 million workers are employed in the areas of food preparation and food servicing including fast food in the world.Employees are the backbone of the fast food industry. Proper training is crucial to the orderly and quick service customers expect. Yet, employee turnover can be as high as 200% per year. With such a turnover, owner-operators of franchise and non-franchise restaurants have the daunting task of constantly training an entirely new workforce. Policies and procedures need to be explained to each new employee. GlobalizationIn 2009 the global fast food market grew by 4.8% and reached a value of 102.4 billion and a volume of 80.3 billion transactions. In India alone the fast food industry is growing by 40% a year. McDonald's is located in 120 countries and on 6 continents and operates over 31,000 restaurants worldwide.KFC is located in 85 countries. Subway has 29,186 restaurants located in 86 countries, Pizza Hut is located in 26 countries, Taco Bell has 278 restaurants located in 12 countries besides the United States. Health issue Trans fats which are commonly found in fast food have been shown in many tests to have a negative health effect on the body. The fast food consumption has been shown to increase calorie intake, promote weight gain, and elevate risk for diabetes. The Centers for Disease Control and Prevention ranked obesity as the number one health threat for Americans in 2009. It is the second leading cause of preventable death in the United States and results in 400,000 deaths each year.FAST FOOD INDUSTRY IN INDIAINDIA EMERGING MARKET FOR GLOBAL PLAYERS The percentage share held by foodservice of total consumer expenditure on food has increased from a very low base to stand at 2.6% in 2001. Eating at home remains very much ingrained in Indian culture and changes in eating habits are very slow moving with barriers to eating out entrenched in certain sectors of Indian society.. The growth in nuclear families, particularly in urban India, exposure to global media and Western cuisine and an increasing number of women joining the workforce have had an impact on eating out trends. FACTS AND FIGURES Fast food is one of the worlds largest growing food type. Indias fast food industry is growing by 40% a year and is expected to generate a billion dollars in sales by 2010.The multinational segment of Indian fast food industry is up to Rs. 6 billion, a figure expected to zoom to Rs.1OO billion by 2010 By 2005, the value of Indian dairy products is expected to be Rs.1, 00,000 million. In last 6 years, foreign investment in this sector stood at Rs. 3600 million which is about one-fourth of total investment made in this sector. Because of the availability of raw material for fast food, Global chains are flooding into the country.

MARKET SIZE & MAJOR PLAYERS a) Dominated by McDonalds having as many as 150 outlets.b) Dominos pizza is present in around 100 locations. c) Pizza hut is also catching up and it has planned to establish 125 outlets at the end of d) Subways have established around 40 outlets.e) Nirulas is established at Delhi and Noida only. However, it claims to cater 50,000 guests every day.

Major players in fast food are: MCDONALDS KFC PIZZA HUT DOMINOS PIZZA. COFFEE DAY BARISTA.The main reason behind the success of the multinational chains is their expertise in product development, sourcing practices, quality standards, service levels and standardized operating procedures in their restaurants, a strength that they have developed over years of experience around the world. The home grown chains have in the past few years of competition with the MNCs, learnt a few things but there is still a lot of scope for improvement.

REASON FOR EMERGENCE

Gender Roles: gender roles are now changing. Females have started working outside. So, they have no time for their home and cooking food. Fast food is an easy way out because these can be prepared easily. Customer Sophistication and Confidence: consumers are becoming more sophisticated now. They do not want to prepare food and spend their time and energy in house hold works. They are building their confidence more on ready to eat and easy to serve kind of foods Paucity of Time: people have no time for cooking. Because of emergence of working women and also number of other entertainment items. Most of the time either people work or want to enjoy with their family. Double Income Group: emergence of double income group leads to increase in disposable income. Now people have more disposable income so they can spend easily in fast food and other activities. Working Women: working women have no time for cooking, and if they have then also they dont want to cook. Because they want to come out of the traditionally defined gender roles. They do not want to confine themselves to household work and upbringing of childrens. Large population: India being a second largest country in terms of population possesses large potential market for all the products/services. This results into entry of large number of fast food players in the country. Relaxation in rules and regulations: with the economic liberalization of 1991, most of the tariff and non tariff barriers from the Indian boundaries are either removed or minimized. This helped significantly the MNCs to enter in the country. Menu diversification: increase in consumption of pizzas, burgers and other type of fast foods.

CHALLENGES FOR THE INDUSTRY Social and cultural implications of Indians switching to western breakfast food: Generally, Hindus avoid all foods that are believed to inhibit physical and spiritual development. Eating meat is not explicitly prohibited, but many Hindus are vegetarian because they adhere to the concept of ahimsa. Those seeking spiritual unity may avoid garlic and onions. The concept of purity influences Hindu food practices. Products from cows (e.g., milk, yogurt, ghee-clarified butter) are considered pure. Pure foods can improve the purity of impure foods when they are prepared together. Some foods, such as beef or alcohol, are innately polluted and can never be made pure. But now, Indians are switching to fast food that contain all those things that are considered impure or against there beliefs. Some traditional and fundamentalist are against this transformation of food habit and number of times they provoke their counterparts to revolt against such foods. And that is what happened when McDonalds decided to enter the complexity of Indian business landscape, counting only on its fast food global formula, without any apparent previous cultural training. Emphasis on the usage of bio-degradable products: Glasses, silverware, plates and cloth napkins are never provided with fast food. Instead, paper plates and napkins, polyurethane containers, plastic cups and tableware, drinking cartons or PET (polyethylene terephthalate) bottles are used, and these are all disposable. Many of these items are tossed in the garbage instead of being recycled, or even worse, merely thrown on the ground. This burdens nature unnecessarily and squanders raw materials. In order to reduce soil and water pollution, government now emphasis more on the usage of bio-degradable products. Retrenchment of employees: Most of new industries will be capital intensive and may drive local competitors, which have more workers, out of business. Profit repatriation: Repatriation of profits is another area of concern for Indian economy. As when multinational enters the any countries, people and government hope that it will increase the employment rate and result in economic growth. However, with the multinational operation, host country experiences these benefits for a short time period. In long run neither employment increases (because of capital intensive nature of MNCs) nor it increases the GDP or GNP because whatever MNCs earn they repatriate that profit back to their home country.

PROBLEMS OF INDUSTRY Environmental friendly products cost high: government is legislating laws in order to keep check on the fast food industry and it is emphasizing more on the usage of bio-degradable and environment friendly products. But associated with this issue is the problem that fast food player faces - the cost associated with the environment friendly product. They cost much higher than the normal products that companies uses for packaging or wrapping their products. Balance between societal expectation and companies economic objectives: To balance a societys expectation regarding environment with the economic burden of protecting the environment. Thus, one can see that one side pushes for higher standards and other side tries to beat the standard back, thereby making it a arm wrestling and mind boggling exercise.

Health related issues: obesity: I. Studies have shown that a typical fast food has very high density and food with high density causes people to eat more then they usually need. \II. Low calories food: Emphasis is now more on low calorie food. In this line McDonald has a plan to introduce all white meat chicken Mcnuugget with less fat and fewer calories. TRENDS IN INDIAN MARKET Marketing to children's: fast food outlets in India target childrens as their major customers. They introduce varieties of things that will attract the childrens attention and by targeting childrens they automatically target their parents because Childrens are always accompanied by their parents. Low level customer commitment: Because of the large number of food retail outlets and also because of the tendency of customer to switch from one product to other, this industry faces low level customer commitment.

Value added technology services: There is continuous improvement in the technology as far as fast food market in India is considered. The reason behind that is food is a perishable item and in order to ensure that it remain fresh for a longer period of time. Earlier, Indian people prefer eating at home but now with the change in trend there is also need for improvement and up gradation of technology in food sector.

Attracting different segments of the market: Fast food outlets are introducing varieties of products in order to cater the demands of each and every segment of the market. They are introducing all categories of product so that people of all age, sex, class, income group etc can come and become a customer of their food line. The success of fast foods arose from the changes in our living conditions: 1. Many women or both parents now work 2. There are increased numbers of single-parent households 3. Long distances to school and work are common 4. Usually, lunch times are short 5. There's often not enough time or opportunity to shop carefully for groceries, or to cook and eat with one's family. Especially on weekdays, fast food outside the home is the only solution. Kentucky Fried Chicken (KFC)About the CompanyKFC 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" of Yum! Brands since 1997 when that company was spun off from PepsiCo as Tricon Global Restaurants Inc. The restaurants are known as Poulet Frit Kentucky or PFK in the province of Quebec in Canada. In France, however, the chain is known as KFC. 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. Outside North America, KFC offers beef based products such as hamburgers or kebabs, pork based products such as ribs and other regional fare.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. 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 newer and remodeled 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.ProductsThe famous paper bucket that KFC uses for its larger sized orders of chicken and has come to signify the company was originally created by Wendy's restaurants founder Dave Thomas. Thomas was originally a franchisee of the original Kentucky Fried Chicken and operated several outlets in the Columbus, Ohio area. His reasoning behind using the paper packaging was that it helped keep the chicken crispy by wicking away excess moisture. Thomas was also responsible for the creation of the famous rotating bucket sign that came to be used at most KFC locations in the US. Menu itemsKFC's specialty is fried chicken served in various forms. KFC's primary product is pressure-fried pieces of chicken made with 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.Kentucky Grilled Chicken - This marinated grilled chicken is targeted towards health-conscious customers. It features marinated breasts, thighs, drumsticks, and wings that are coated with the Original Recipe seasonings before being grilled. It has less fat, calories, and sodium than the Original Recipe fried chicken. Introduced in April 2009.Discontinued productsThe Colonel's Rotisserie Gold This product was introduced in the 1990s as a response to the Boston Market chain's roasted chicken products, and a healthier mindset of the general public avoiding fried food. Purportedly made from a "lost" Col. Sanders recipe, it was sold as a whole roaster or a half bird.[28] Tender Roast Chicken This product was an off-shoot of 'The Colonel's Rotisserie Gold'. Instead of whole and half birds, customers were given quarter roasted chicken pieces. For a time, customers could request chicken "original", "Extra Tasty Crispy", or "Tender Roast".Smokey Chipotle Introduced in April 2008. The chicken was dipped in chipotle sauce then doubled breaded and fried. It has been discontinued since August 2008.Nutritional valueKFC formerly used partially hydrogenated oil in its fried foods. This oil contains relatively high levels of trans fat, which increases the risk of heart disease. The Center for Science in the Public Interest (CSPI) filed a court case against KFC, with the aim of making it use other types of oils or make sure customers know about Trans fat content immediately before they buy food.In October 2006, KFC announced that it would begin frying its chicken in trans fat-free oil. This would also apply to their potato wedges and other fried foods, however, the biscuits.

AdvertisingOne 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 PepsiCo Incorporated. Some major threats include the changing attitudes of society toward healthier eating habits, KFC has more than 11000 outlets located in 80 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 SituationThe 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 in Dallas.StrengthsStrengths can be found internally in a company and can be used to the companys advantage. The strengths identified are as follows:1. KFC's secret recipe. The secret recipe has long been a source of advertising, and allowed KFC to set itself apart. Also, KFC was the first chain to enter the fast-food industry, just before McDonald's, which opened its first store a year later, and the "secret recipe" was the initial home replacement strategy.2. Name recognition and reputation. KFC's early entrance into the fast-food industry in 1954 allowed KFC to develop strong brand name recognition and a strong foothold in the industry. The Colonel is KFC's original owner and a very recognizable figure, both in the U.S. and internationally, in their new logo. In fact, in the fourth annual Logo Value Survey, done by The Schechter Group, the KFC logo was the only one which significantly enhance the brand's image .3. PepsiCo's success with the management of fast food chains. PepsiCo acquired Pizza Hut in 1977, and Taco Bell in 1978. PepsiCo used many of the same promotional strategies that it has used to market soft drinks and snack food. By the time PepsiCo bought KFC in 1986, the company already dominated two of the four largest and fastest-growing segments of the fast food industry.4. Traditional employee loyalty. "KFC's culture was built largely on Colonel Sanders' laid back approach to management" (Wright, p.433). Before the acquisition of KFC by PepsiCo, employees at KFC enjoyed good benefits, a pension, and could receive help with other non-income needs. This kind of "personal" human resources management makes for a loyal workforce.5. Improving operating efficiencies by reducing overhead and other operating costs can directly affect operating profit. Due to the strong competition in the US, the fast-food chains are reluctant to raise prices to increase profit. Many of the chains are turning to operating efficiencies to increase profit. For many companies, operating efficiencies are achieved through improvements in customer service, cleaner restaurants, faster and friendlier service, and continued high-quality products.WeaknessesWeaknesses are also found internally like strengths. Weaknesses, however, can limit a companys potential. The weaknesses for KFC are identified as follows:1. The many sales of KFC lead to a confusing corporate direction. Between 1971 and 1986, KFC was sold three times. The first two sales, to Heublein, Inc and to R.J. Reynolds, left the company largely autonomous. It wasn't until the sale to PepsiCo in 1986 that changes in top management started to take place. These changes happened almost immediately after the sale.2. KFC has a long time to market with new products. Because of the nature of the chicken segment of the fast food industry, innovation was never a primary strategy for KFC. However, during the late 1980's, other fast food chains, such as McDonald's, began to offer chicken as a Menu option. During this time, McDonald's had already introduced the McChicken while KFC was still testing its own chicken sandwich. This delay significantly increased the cost of developing consumer awareness for the KFC sandwich.

3. Conflicting cultures of KFC and Pepsi Co. While KFC's culture was largely based on the Colonel's laid back approach to management, while PepsiCo's culture is more of a "fast track" attitude. Employees do not have the same level of job security that they enjoyed before the PepsiCo acquisition

ProblemsThrough an analysis of the strengths, weaknesses, opportunities, and threats of KFC, the following potential problem areas were identified:1. No defined target market. The advertising campaign of KFC does not specifically appeal to any segment. It does not appear to have a consistent long-term approach. The U.S. has enormous changes in its demographics. Single-person households have increased from 12% in 1970 to 25% in 1995. With this kind of dramatic change, KFC does not have a proper approach to its target market.2. Health Conscious Consumers. There has been a trend toward an increasingly healthy diet in America. This put KFC at an extreme disadvantage due to its fried product offering.3. Increased Start Up Costs. Prime locations have increased in cost due to limited room for expansion. New technology has increased efficiencies, but resulted in greater increased start up costs. Restaurant and equipment packages range from $500,000 to $1,000,000.Achievements:KFC is one of the most renowned world gastronomic brand names. Kentucky Fried Chicken products are currently offered in 80 countries worldwide and in more than 11,000 restaurants which are visited on a daily basis by almost 8 million customers. Globally, KFC employs approximately 290,000 people, Worldwide, a new KFC restaurant is opened almost every day.In 2004 the KFC Excellent range - three types of salad (Caesar, Garden and Mandarin) obtained the prize for Worldwide Best Practice Award 2004 in the category of best product and best marketing campaign and its implementation in the restaurants. This prize is distributed each year by YUM Restaurants International. According to the ratings for Most expensive world brands 2004 conducted by the American weekly Business Week, KFC was positioned 54th place; currently valued at 5.1 billion USD

COMPANY PROFILEKFC Corporation, based in Louisville, Kentucky, is the world's most popular chicken restaurant chain, specializing in Original Recipe, Extra Crispy, Twister and Colonel's Crispy Strips chicken with home-style sides.Every day, nearly eight million customers are served around the world. KFC's menu includes Original Recipe chicken -- made with the same great taste Colonel Harland Sanders created more than a half-century ago. Customers around the globe also enjoy more than 300 other products -- from a Chunky Chicken Pot Pie in the United States to a salmon sandwich in Japan.KFC has more than 11,000 restaurants in more than 80 countries and territories around the world. And in quite a few U.S. cities, KFC is teaming up with sister restaurants, A&W, All-American Food, Long John Silver's, Taco Bell and Pizza Hut, selling products from the popular chains in one convenient location.KFC is part of Yum! Brands, Inc., which is the world's largest restaurant system with over 32,500 KFC, A&W All-American Food, Taco Bell, Long John Silver's and Pizza Hut restaurants in more than 100 countries and territories.

KFC HISTORY-AT-A-GLANCE

9/9/1890Harland Sanders is born just outside Henryville, Indiana.1900-1924Harland 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.1930In 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."1936Kentucky Governor Ruby Laffoon makes Harland Sanders an honorary Kentucky Colonel in recognition of his contributions to the state's cuisine.1937The Sanders Court & Caf adds a motel and expands the restaurant to 142 seats.1939The Sanders Court & Caf is first listed in Duncan Hines' "Adventures in Good Eating." 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. 1940Birthdate of the Original Recipe1949Sanders marries Claudia Price.1952The Colonel begins actively franchising his chicken business by traveling from town to town and cooking 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.1955An 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.1957Kentucky Fried Chicken first sold in buckets1960The 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 Canada1964Kentucky Fried Chicken has more than 600 franchised outlets in the United States, Canada and the first overseas outlet, in England. 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.1965Colonel Sanders receives the Horatio Alger Award from the American Schools and Colleges Association.1966The Kentucky Fried Chicken Corporation goes public.1969The Kentucky Fried Chicken Corporation is listed on the New York Stock Exchange.1971More than 3,500 franchised and company-owned restaurants are in worldwide operation when Heublein Inc. acquires KFC Corporation.1976An independent survey ranks the Colonel as the world's second most recognizable celebrity.1977Colonel Sanders speaks before a U.S. Congressional Committee on Aging.1979KFC 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.1982Kentucky Fried Chicken becomes a subsidiary of R.J. Reynolds Industries, Inc. (now RJR Nabisco, Inc.) when Heublein, Inc. is acquired by Reynolds.1986PepsiCo, Inc. acquires KFC from RJR Nabisco, Inc.1997PepsiCo, Inc. announces the spin-off of its quick service restaurants - KFC, Taco Bell and Pizza Hut - into Tricon Global Restaurants, Inc. 2002Tricon 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.2006More 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.

OUR COMPANYS VISION , MISSION AND GOAL

OUR MISSIONTo put a yum !!! On a billion of faces..

OUR VISIONTo be the number one restaurant company in the subcontinent

OUR GOALDouble our business over the next three years

GROWTHNumber one restaurant company profitable in 2010Foundation 420 stores by 2010Accelerate 1000 stores by 2015

2009 KEY PRIORITES Build awarenessDelight customersBroaden menuDrive value

PROFITABILITYUrgently drive marginsProfitable salesDrive effeciencesCost savings

DEVELOPMENTBrand building assetsBuild stores

CAPABILITYCareer development Skill developmentGrow with right partners

OUR PASSION

Put a YUM!! On peoples faces around the world that special eating experience that makes you smile and creates life- long customers.

OUR FOUNDING TRUTHS

PEOPLES CAPABILITY FIRSTSatisfied customers and profitability follow

RESPOND TO THE VOICE OF THE CUSTOMERNot just listen

THE RGM IS OUR NUMBER 1 LEADERNot senior management

RUN EACH RESTAURANT LIKE ITS OUR ONLY ONEAvoid the trap of averages

RECOGNITION SHOWS YOU CAREPeople leave when you dont

GREAT OPERATIONS AND MARKETING INNOVATION DRIVE SALES.No finger pointing

OPERATION DISCIPLINE THROUGH PROCESS AND STANDARDSConsistency- not program of the month

FRANCHISES ARE VITAL ASSETSOperate as one system not two.

KFC IN INDIA

Foreign fast food companies were allowed to enter India during the early 1990s, thanks to the economic liberalization policy of the Government of India .One of the first fast food multinationals to set foot in India was Kentucky Fried Chicken (KFC), owned by PepsiCo. KFC received permission to open 30 new outlets across the country. It chose Bangalore as its launch pad because the city had a substantial upper middle class population, with a trend of families eating out. Also, it was considered Indias fast growing metropolis in the 1990.The Bangalore outlet was opened in June 1995. Apart from Bangalore, PepsiCo planned to open 60 KFC outlets in the country over the next seven years. However, KFC became embroiled in various controversies even before it started full-fledged business in India.

Kfc, India MenuNon Vegetarian HOT AND CRISPY -

BONELESS CHICKEN

BUCKET BUCKET variety bucket

GAME BOX GAME BOX

TOASTED TWISTER ZINGER BURGER

VEG OPTIONS VEGGIE FEAST VEG THALI

KRUSHERS

DESERTS SOFT TWIRL

SUNDAES

BROWNIE SUNDAY

KFC is 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 .

Marketing Strategy

KFC as a Brand

KFC is one of the best-known brands worldwide Doing Integrated assignment we study how KFC continually aims to build its brand by listening to its customer's also identifies the various stages in the marketing process.

Branding develops a personality for an organization, product or service. Brand Image represents how consumers view the organization.

Branding only works when behaves and presents itself in a consistent way, Marketing communication methods, such as advertising and promotion, are used to created colors, design and image which gives a recognizable face .At KFC this is represented by its familiar logo-Colonel Harland Sanders is shedding his white suit jacket for a red cook.

Marketing involves identifying customer's needs and requirements and meeting these needs in better way then its competitors. In this way a company creates loyal customers.

The stating point is to find out who are potential customers are-not everyone will want what KFC has to offer. The people KFC identifies as likely customers are known as key audiences.

Having identified its key audiences a company has to ensure a marketing mix that created that appeals specifically to those people. The marketing mix is a term used to describe the four main marketing tools(4P's):1.Product2.Price3.Place4.PromotionUsing that detailed information about its customers. KFC's marketing department can determine:1. What products are well received?2. What prices consumer willing to pay?3. What T.V. Programs, newspapers and advertising consumer read or view?

4. What restaurants are visited?

Market research is the format which enables KFC to identify this key information. Accurate research is essential in creating the right mix to win customers loyalty.

In all its market KFC faces competition from other businesses. Additionally economic, legal and technological changes, social factors retail environment and many other elements affect KFC success in the market.Market research identifies these factors and anticipates how they will affect peoples willingness to buy. As the economy and social attitudes change, so do buying patterns. KFC needs to identify whether the number of target customers is growing or shrinking and whether their buying habits will change in the future.

Market research considers everything that affect buying decisions. These buying decisions can often be affected by wider factors than just the products itself. Psychological factors are important, e.g. what image does the product give or how the consumer feels when purchasing it .

Meeting the needs of Key audience

There are a limited number of customers in the market. To build long-term business it is essential to retain people once they have become customers. For example a parent with two children might visit and visits KFC to give the children a treat. Children want to visits as it is fun place to eat. A business customer visits KFC during the work day as service is quick the food taste is great and can be eaten in the car without affecting a busy work schedule. These examples represent just a few of KFC's possible customers profile. Each has different reasons to come KFC.Using this type of information KFC can tailor communication to the needs of specific groups. It is to the needs of specific group. It is their needs that determine the type of products and services offered, prices charged, promotionsCreated and where restaurants are located. To meet the needs of the key market it is important to analyses the internal marketing strengths the organization.

Strengths and weaknesses must be identified, so that a marketing strategy which is right for the business can be decided upon.

The analysis will include the:

1. Companys products and how appropriate they are for the future

2. Quality of employees and how well trained they are to these additional psychological factors are significantly offer the best service to important to the customer. They can be even more customers important than the products physical benefits.

3. Systems and how well they function in providing customer satisfaction e.g. marketing databases and restaurant systems.

4. Financial resources available for marketing.

The business can then determine what it needs to do in identify different types of customers. For example:

A parent with two children might visit Visits KFC to give the children treat.A children wants to visit KFC As it is a fun place to eatA business customer

Visits KFC during the work day as service is quick,the food taste is great can be eaten in the car without affecting busy work schedule.Teenager visits KFC The Rupee saver menu is affordable and there is Internet access in some restaurant. These examples represent just a few of KFC possible customer profiles each has different reasons to come KFC. Using this type of information KFC can tailor communication to the needs of specific groups. It is their needs that determine the type of products and services offered, prices charged, promotions created and where restaurants are located. To meet the needs of the key market it is important to analyze the internal marketing strengths and weaknesses must be identified, so that a marketing strategy which is right for the business can be decided upon. The analysis will include the:

Companys products and how appropriate they are for the future Quality of employees and how well trained they are to these additional psychological factors are significantly offer the best service to important to the customer. They can be even more customers important than the products physical benefits.

Systems and how well they function in providing customer satisfaction example marketing database

Financial resources available for marketing Once the strengths and weaknesses are determined, they are combined with the opportunities and threats in the market place. This is known as SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats). The business can then determine what it needs to do in order to increase its chances of marketing successfully.

SWOT Analysis

Strengths(Internal)The brand detailed market research to create the right marketing mix. Goodwill and reputation: The company certainly has earned a good name and reputation by its previous products and services in the market. It is even more recognised in other markets outside India, where the company is among the leading fast food giants. The brand is recognised and trusted in India for its quality products, price, and customer service. It therefore has a good head start and enjoys a good chance 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 the industry.

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 and take out segment of the Industry.

Ranks highest among all chicken restaurant chains for its convenience and menu variety. It generates $1B revenue each year.Weaknesses (Internal)KFC has been for around long time therefore they have to keep innovating. KFC was losing market share as other Chicken chain increased sales at a faster rate. KFC share of Chicken Segment sales fell from 71 percent 1999 to less 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 market share of the company. KFC has not yet invested much on R&D, and innovating new products for Indian Markets. This may lead to failure of their products as they are not in line with the Indian mind set, people taste and preferences and their likes and dislikes. This may prove fatal for the company.OPPORTUNITIES

Growth of 18-24 age demographic

Should start with breakfast menu

More drive through stores.

Strong home delivery medium.

Build up a customer base

Increase in U.S. median income

International beef scare from mad-cow Home Meal Replacement Market willexceed an estimated $577 billion by2020 Targeting to growing ethnic markets Asian American and Hispanic

New Leadership Domestic markets Updating restaurants Balanced menu Customer focus Increase delivery service

THREATS

Increasing number of retail chains

Rated 83 out of 100 in terms of competitiveness

Increasing wage rates directly affect menu prices

85% annual employee turnover for fast food market

Health Trend away from fried foods

Changing customer demands What is Marketing?

Marketing as a Managerial FunctionMarketing as a managerial activity involves analyzing the market opportunities, planning the marketing activities, implementing marketing plans and setting control mechanisms in such a way that organizational objectives are accomplished at the minimum cost.

In other words, marketing is:a) Understanding consumer needsb) Environment scanning and market opportunity analysisc) Development of a competitive marketing plan and strategy that an organization is able to satisfy not only the consumers needs but also achieve its own objectivesd) Implementation of the marketing plan and development of tactical plans to overcome problems at the market placee) Development of control mechanisms

This perspective implies that in order to achieve competitive advantage, a firm needs to scan its external environment to spot market opportunities. Its marketing mix needs to fit the local market dynamics. Further, in order to ensure a high rate of customer acquisition and retention, firms marketing mix has to be customer centric. Marketing management, therefore, is a critical function especially in highly competitive markets. It can provide the much needed competitive advantage to an enterprise, irrespective of its size and product marketing.

Marketing tools

The marketers task is to build a marketing program or plan to achieve the companys desired objectives. The marketing program consists of numerous decisions on the mix of marketing tools to use. The marketing mix is the set of marketing tools the firm uses to pursue its marketing objectives in the target market. These tools are classified into four broad groups that are called the four Ps of marketing: product, price, place, and promotion.

The particular marketing variables under each P are shown in the figure. marketing-mix decisions must be made for influencing the trade channels as well as the final consumers. The following figure shows the company preparing an offering mix of products, services, and prices, and utilizing a promotion mix of sales promotion, advertising, sales force, public relations, direct mail, telemarketing, and Internet to reach the trade channels and the target customers.

4P's of Marketing

At this point the marketing mix is put together:1. 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. It is important thing to remember when offering menu items to customers is that they have a choice, they have a huge number of ways of spending their money and places to spend it.Therefore, KFC's places considerable emphasis on developing a menu which customers want. Market research establishes exactly what this is. However customers requirements change over time. What is fashionable and attractive today may be discarded tomorrow. Marketing continuously monitors customers preferences. In order to meet these changes KFC has introduced and phased out old ones. And will continue to do so. Care is taken not to adversely affect the sale of one choice by introducing another choice which will cannibalize the sale from the existing one ( trade off).KFC knows that items on its menu will vary in popularity. Their ability to generate profits will vary at different points in their life cycle. Products go through a life cycle which is illustrated below: The type of marketing taken and amount invested will be different, depending upon the stage product is reached. For example launching a new product involves automatically television and other advertising support. At any time company will have a portfolio of products each is in different stage of its life cycle. Some of KFC's option growing tremendously but some Halal products is in its maturity stage.SegmentationGeographic segmentation:KFC has outlets internationally and sells its products according to geographic needs of the customer. In India KFC focuses how geographically its customers demand different products. In north India Chicken is the main selling product, while in the south the Veg. items sell more than the chicken.Demographic 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. Psychographic segmentationDividing 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 authoritarian2. PricePrice 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 forbenefits of having or using the product or services. The customers perception of value is an important determinant of the price charged. Customers draw their own mental picture of what a product is worth. A product is more than a physical item, it also has psychological connotations for the customer.The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised. It is important when deciding on price to be fully aware of the brands and integrity. A further consequence of price reduction is that competitors match prices resulting in no extra demand . This means the profit margin has been reduced without increasing sales. Demographic FactorsAge: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.

Economic FactorIncome: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.

Pricing StrategyMarket 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. CompetitionWe 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.

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.

The firm can change its price, sales force size, and advertising expenditures in the short run. It can develop new products and modify its distribution channels only in the long run. Thus the firm typically makes fewer period-to-period marketing-mix changes in the short run than the number of marketing-mix decision variables might suggest.

Note that the four Ps represent the sellers view of the marketing tools available for influencing buyers. From a buyers point of view, each marketing tool is designed to deliver a customer benefit. Also the sellers four Ps correspond to the customers four Cs.

Four Ps Four Cs Product Customer solution Price Customer cost Place Convenience

Promotion CommunicationPromotion means communicating with Individuals, groups, or organizations to directly or indirectly facilitate exchanges by informing and persuading one or more audiences to accept an organizations products. A variety of organizations spend considerable resources on promotion. Marketers indirectly facilitate exchanges by focusing information about company activities and products on interest groups (such as environmental and consumer groups), current and potential investors, regulatory agencies, and society in general. Some marketers use cause-related marketing, which links purchase of their products to philanthropic efforts for a particular cause favored by their target market. Marketers also sponsor special events, often leading to news coverage and positive promotion of an organization and its brands.

From this wider perspective, promotion plays a comprehensive communication role. Some promotional activities help a company justify its existence and maintain positive healthy relationships between itself and various groups. Although companies can direct a single type of communicationsuch as an advertisementtoward numerous audiences, marketers often design a communication precisely for a specific target market. A firm frequently communicates several different messages concurrently, each to a different group.

For maximum benefit from promotional efforts, marketers strive to properly plan, implement, coordinate, and control communications. Effectively promotional activities are based on information about customers and the marketing environment, often obtained from an organizations marketing information system. How successfully marketers use promotions to maintain positive relationships demand largely on the quantity and quality of information an organization receives. Because promotions basic role is communication, we should analyze what communication is and how the communication process work

Promotion and the Communication Process Communication can be viewed as the transmission of information. For communication to take place, both the sender and receiver of information must share some common ground. They must share a common understanding of the symbols, words, and pictures used to transmit information. Thus communication is defined as a sharing of meaning. Implicit in this definition is the notion of transmission of information because sharing necessitates transmission. As the figure below shows, communication begins with a source. A source is a person, group, or organization with a meaning it intends and attempts to share with an audience. A source could be a salesperson wishing to communicate a sales message or an organization wanting to send a message to thousands of customers through an advertisement. A receiver is the individual, group, or organization that decodes a coded message, and an audience is two or more receivers.

To transmit meaning, a source must convert the meaning into a series of signs representing ideas or concepts. This is called the coding process, or encoding. When coding meaning into a message, a source must consider certain characteristics of the receiver or audience. To share meaning, the source should use signs that are familiar to the receiver or audience. Marketers who understand this realize how important it is to know their target market and to make sure that an advertisement, for example, uses a language that the target market understands.

To share a coded meaning with the receiver or audience, a source selects and uses a medium of transmission. A medium of transmission carries the coded message from the source to the receiver or audience. When a source chooses an inappropriate medium of transmission, several problems may arise. A coded message may reach some receivers, but not the right ones. Coded messages may also reach intended receivers in incomplete form because the intensity of the transmission is weak.

In decoding process, signs are covered into concepts and ideas. Seldom does a receiver decode exactly the same meaning that a source coded. When the result of decoding is different from what was coded, noise exists. Noise is anything that reduces the clarity and accuracy of the communication; it has many sources and may affect any or all parts of the communication process. Noise sometimes arises within the medium of transmission itself. Noise also occurs when a source uses signs that are unfamiliar to the receiver or that have a different meaning from the one intended. Noise also may originate in the receiver. A receiver may be unaware of a coded message when perceptual processes block it out.

The receivers response to a message is feedback to the source. The source usually expects and normally receives feedback, although perhaps not immediately. During feedback, the receiver or audience is the source of a message directed toward the original source, which then becomes a receiver. Feedback is coded, sent through a medium of transmission, and decoded by the receiver, the source of the original communication. Thus communication is a circular process.

During face-to-face communication, such as a personal selling situation or product sampling, verbal and nonverbal feedback can be immediate. Instant feedback lets communicators adjust messages quickly to improve the effectiveness of their communication. For example, when a salesperson realizes through the feedback that a consumer does not understand a sales presentation, the salesperson adapts the presentation to make it more meaningful to the customer. When mass communication such as advertising is used, feedback is often slow and difficult to recognize. Advertisers obtain feedback in the form of changes in sales volume or in consumers attitudes and awareness levels.

FLOW CHART OF HOW TO GO ABOUT DECIDING & EVALUATING PROMOTIONAL MIX

Research StageStrategic StageProduct Life-Cycle StagePromotional tools vary in cost effectiveness at different stages of the product life cycle- In the Introduction/Infancy stage, advertising and publicity have the highest cost effectiveness, followed by personal selling to gain distribution coverage and sales promotion to induce trial.- In the Growth stage, all the tools can be toned down because demand has its own momentum through word of mouth.- In the Maturity stage, sales promotion, advertising and personal selling all grow more important in that order.- In the Decline stage, sales promotion continues strong, advertising and publicity are reduced and sales people give the product only minimal attention.As we can see, Sales Promotion in specific is very important over the various stages of the Product Life Cycle.Promotional objectives differ considerably from one organization to another and within organizations over time. Large organizations with multiple promotional programs operating simultaneously may have quite varied promotional objectives. Lets have detailed look at some of the promotional objectives:Create awarenessA considerable amount of promotion is directed at creating awareness. For an organization introducing a new product, new brand, or brand extension, making customers aware is crucial to initiating the product adoption process. A marketer that has invested heavily in product development strives to create product awareness quickly in order to generate revenues to offset the high costs of product development and introduction.

Stimulate DemandWhen an organization is the first to introduce an innovative product, it tries to stimulate primary demanddemand for a product category rather than for a specific brand of productthrough pioneer promotion. Pioneer promotion informs potential customers about the product: what it is, what it does, how it can be used, and where it can be purchased. Because pioneer promotion is used in the introductory stage of the product life cycle, which means that there no competing brands, it neither emphasizes brand names nor compares brand. Primary demand stimulation is not just for new products. At times an industry trade association, rather than a single firm, uses promotional efforts to stimulate primary demand.

To build selective demand, which is demand for a specific brand, a marketer employs promotional efforts on the strengths and benefits of a specific brand. Building selective demand requires promotional efforts that single out attributes important to potential buyers and the specific attributes of the brand. Promotional techniques are sometimes used to stimulate selective demand by differentiating the product from competing brand in the minds of potential buyers. Stimulating selective demand by increasing the number of product uses is sometimes accomplishes through advertising campaigns, as well as through free samples, coupons, and consumer contests and sweepstakes. Promotion for large package sizes or multiple-product packages are directed at increasing consumption, which in turn can stimulate demand.

Encourage Product TrialWhen attempting to move customers through the product adoption process, marketer may be successful at creating awareness and interest, but then a significant proportion of customers stall during the evaluation stage. Thus certain types of promotion, such as free samples, coupons, test drive or limited free-use offers, contests, and games, are employed to encourage product trial.

Identify ProspectsCertain types of promotional efforts are directed at identifying customers who are interested in the firms product and are most likely to buy. A marketer may utilize a magazine advertisement with a direct response information form, requesting the reader to complete and mail the form to receive additional information. Customers who fill out information blanks or call the organization usually have higher interest in the product, which makes them possible sales prospects.

Retain Loyal customersClearly, maintaining long-term customer relationships is a major goal of most marketers, because such relationships are quite valuable. Promotional efforts directed at customer retention can help an organization control its costs because the costs of retaining customers are usually considerably lower than those of acquiring new ones. Frequent user programs, such as relied on by airlines, hotels, aim at rewarding loyal customers and encouraging them to remain loyal.

Combat Competitive Promotional EffortsAt times a marketers objective in using promotion is to offset or lessen the effect of a competitors promotional program. This type of promotional activity does not necessarily increase the organizations sales or market share, but it may prevent a sales or market share loss. A combative promotional objective is used most often by firms in extremely competitive consumer products markets, such as fast-food industry.

For example, a local departmental store may mail out coupons, redeemable only on Tuesdays and Wednesdays, to residents living within a two-mile radius of the store for the purchase of common items such as milk, bread, or eggs. To offset the effects of these coupons, a competing store could advertise in the newspaper that it will accept any stores coupons on any day of the week.

Reduce Sales FluctuationsDemand for many products varies from one month to another because of factors such as climate, holidays, and seasons. A business, however, cant operate at peak efficiency when sales fluctuate rapidly. When promotional techniques reduce fluctuations, a manager can use the firms resources more efficiently. Promotional techniques are often designed to stimulate sale during sales slumps. For example, advertisements promoting price reduction of lawn care equipment can increase sales during fall and winter months. During peak season periods, a marketer may refrain from advertising to prevent over-stimulating sales to the point that the firm cannot handle all the demand. A pizza outlet might distribute coupons that are valid only Monday through Thursday because Friday though Sunday the restaurant is extremely busy.3. 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.

The promotions aspect of the marketing mix covers all marketing communications. The methods include advertising, sometimes known as above the line activity. Advertisements conducted on T.V., Radio, news paper, on website, etc.

What distinguishes advertising from other marketing communications is that media owners are paid before the advertiser can take space in the medium. Other promotional methods include sales promotions, telemarketing, exhibitions, seminars, loyalty schemes door drops, demonstrations, etc. The skill in marketing communications is to develop a campaign which uses several of these methods in a way that provides the most effective results.For example, TV advertising makes people aware of a food item and press advertising provides more detail. This may be supported by in store promotions to get people to try the product and a collect able promotional device to encourage them to keep buying the item support each otherand do not confuse customers. A thorough understanding of what the brand represents is the key to a consistent message the purpose of most marketing communications is to move the target audience to some type of action. This may be to buy the product, visit a restaurant, and recommend the choice to a friend or increase, purchase of the menu item. Key Objective of advertisement is to make people aware of an item feel positive about it and remember it. The more KFC knows about the people it is serving the more it is able to communicate messages which appeal to them. Messages should gain customers attention and keep their interest. The next stage is to get them to want what is offered. Showing the benefits which they will obtain by taking action are usually sufficient, the right message must be targeted to the right audience.

For example, to reach a single professional woman with income above a certain level, it may be better to take an advertisement in Cosmopolitan than Woman Era. To advertise to mothers with children, it may be more effective to take advertising space in cinemas during Disney films. The right media depends on who the viewers, readers or listeners are and how closely they resemble the target audience.

TARGET MARKETThe process of evaluating each market segment its attractiveness and selecting two or more segments. 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 PositioningFor 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 .KFC uses its attributes to Position its Product(Fried Chicken)

AdvertisingThe 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 ones mind. KFC and its new company jingle, finger lickin good is a frequent announcement on televisions, billboards, flyers and radio .employees wearing casual dresses shows a very casual n free kind of an enviornment, and tee-shirts says that I m a student of lickonomics which means finger lickin good. The concept of showing a normal customer deeply involved in devouring his piece of chicken usually turns on the drool factory in everybodys 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.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. Sales Promotion KFC uses the following tools to further enhance its sales. Premiums Exhibits Coupons EntertainmentAll 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.

SALES PROMOTIONThe various sales promotion technique essential are Word of mouth publicityWe have understood that customers obtain lot of their information from personal or informal sources. In the view of this , those who have already experienced the services have an important role to play in the future promotion of the services. Customer satisfaction and word of mouth publicity go hand in hand. One satisfied customer relates the good experience to three to four acquaintances while an unsatisfied customer usually tells six to seven customers about it. Thus, the goodwill is difficult to earn and relatively easy to lose.4. PlacePlace in the marketing mix, is not just about the physical location or distribution points for products. It encompasses the management of range of processes involved in bringing products to the end consumer.In Delhi KFC has open its shop where middle and higher class family, teenagers will come and enjoy the food.TARGET AREAS Free home Delivery strategy They provide free home delivery to offices & homes (selected stores)Accessibility Resulting in several outlets to cater to the needs of people in & around the city.Hectic lifestyle Due to the hectic lifestyle of office goings individuals the fast food concept saves time of preparing food and gives the customer a full meal quickly.Economically convenient The pricing appeals to the many classes of a society.1.TARGET MARKET1. Location Hectic lifestyle of individuals giving them more time at work and less stress about waiting for food.Commercialization of urban and sub-urban markets leading to more mid-sector people that find high-end eating joints very to expensive.Mid-sector people are always looking for change which KFC provides in their range of fast food.Quality conscious people in urban areas are more conscious about the quality of food than rural areas.Urban areas are more populated therefore they help with attracting higher revenues2. Placement of outletsDue to KFC placing itself close to schools, colleges, cinemas and markets which are mostly populated by the young and those who are in a hurry, KFC enjoys a large number of footfalls every day.3 Channels KFC believes in first level channels in the order given below: Manufacturers Retailers Consumers

CHANNEL PROCESSKFC works on the flow of good operation techniques i.e.Good Operating Manager leads to

Good Team Selection Good Targets Good Services Good Revenues through the following internal strategies: Training Incentive based targets Recognition for good work Performance based bonus Employee benefits to keep them motivated Promotion

For the current Indian market for fast food, it is not difficult for a fast food restaurant to enter the market. However, it would be extremely difficult to take over already running major fast food chains' dominancy in India or even make a significant amount of profit. While there are enough people in urban India for 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 dining places in India, such as McDonalds, Pizza Hut, Domino's and Subway, and any new fast-food entrants would just be presenting something very similar to whats already there. While small Neighborhood restaurants generally have low barriers to entry, these are the barriers to entry for similar restaurant businesses to enter the fast-food chain market.

Buyer/Supplier Bargaining Power The customers of KFC, especially as individual buyers, have almost no bargaining power because if only one customer threatens to no longer eat at KFC, the store is not going to lower its price because the cost of losing one customer is not very great. The suppliers, like the buyers, have very little bargaining 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 local suppliers by giving them technological support to improve their products. This is a brilliant strategy because the supplies that KFC would otherwise need to import from the U.S. can now be obtained domestically, and if the U.S. suppliers decide to raise their prices, KFC can easily switch to the local suppliers. This gives us a brilliant strategy. With this strategy, KFC created competition among its suppliers, lowering the supplier bargaining power. In terms of human resources, labor cost is extremely low because the supply of non-skilled workers 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 and expenditures.

Substitutes and Complements As mentioned above, there are a few major competitors in the fast-food industry in India for KFC, namely McDonalds, Pizza Hut, Domino's and Subway. The substitute products, in this case, would be burgers, pizza, and sandwiches. Though they are competitors, their primary products differ greatly from each other, in that they sell, chicken, burgers and fries, pizzas, and sandwiches, respectively. Traditional Indian dining, home-cooked meals, and grocery stores with ready-to-eat foods are also substitutes, as families could choose any one of these over fast food for a meal. These substitutes are definitely considered healthy as compared to the fast food cha