kfc (final project)

7/31/2019 KFC (Final Project)

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COMPETITOR ANALYSIS

The company we have selected for competitor analysis is KFC. The competitiveanalysis will give a snapshot of competitor position in the market. After

competitor analysis a company can evaluate itself among the competitors andthen make a strategy to compete.

KFC Profile

KFC, also known as Kentucky Fried Chicken, KFC Corporation, basedin Louisville, Kentucky, is the world's most popular chicken restaurant chain,specializing in Original Recipe, Extra Crispy, and Colonel's Crispy Strips chickenwith home style sides.

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'sand Pizza Hut restaurants in more than 100 countries and territories.

KFC has more than 11,000 restaurants in more than 80 countries and territoriesaround the world. And in quite a few U.S. cities, KFC is teaming up with sisterrestaurants, A&W, All-American Food, Long John Silver's, Taco Bell and PizzaHut, selling products from the popular chains in one convenient location.

KFC Strength and Weakness Analysis:

Strength:

Good reputation in market

Strong brand name

Having Maximum outlets in the market

Strong financial position

Joint venture with the international firms like Pepsi cola and Yem

international

Using modern technology to interlink their resources

Having strong distribution channel

Weakness:

Company did not come up with new products as compared to McDonald.

Limited menu and sticked with their original recipe.

Having less sales as compared to McDonald


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KFCs Customers

KFCs customers generally choose the restaurant they will eat at based onquality, rapidity, and variety of items. KFCs customers are also really pricesensitive and will go elsewhere if they find that the value is not worth the price.

They can also be characterized by being people that want to be served fast andbe out of the restaurant in no time.

Competitors of KFC

In the fast food industry there are three major competitor of KFC. McDonald isone of the biggest competitors that has capture maximum market share. The

AFC is one of the major competitors of KFC and now a new and potentialcompetitor is Subway, no doubt it is new entrant but due to its world wide

renowned brand name having potential to capture huge market share. KFC is themarket leader in the fast food industry and majority of the customer prefer to dineout at KFC that represents not only their brand loyalty but also availability of KFCoutlet at convenient location as compared to rest of fast food restaurants.


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Number of Outlets

KFC

McDonald

AFC

Subway

Comparison of KFC & its competitor outlets:

Number of Outlets

KFC 34McDonald 20

AFC 21

Subway 12

Competitors Sales data:

Average Daily Sales by oneoutlet

Daily Sales by the alloutlets

Sales PerMonth

Rs. Rs. Rs.

KFC 125000 4,250,000 127,500,000

McDonald 145000 2,900,000 87,000,000

AFC 80000 1,680,000 50,400,000


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Average Daily Sales Comparison

0

50000

100000

150000

200000

250000

300000

KFC McDonald AFC

Rupees

Sales Per Month comparison

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

KFC McDonald AFC

Ru

pees

Competitor Analysis Work Sheet

In the chicken Burger chain segment, the main competitors of KFC are McDonald

and AFC. In Pakistan KFC is the market leader because it is the first international

chain that opened its out let in country and also having huge number of outlet as

compared to rest of the competitors.


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KFC Mc Donald AFC

Market

Market dimensionSingle market (junk food) (junk food) (junk food)Multi market

Total Market

Regional Market

National Market

International market

Market Entry

First in Strategy

Follow the leader strategy Last in Strategy

Market Commitment

Major commitment

Average commitment

Limited commitment

Market Demand

Prune market whendemand slackens

Concentrate on keymarkets when demand

increases

Harvest profits when sales

plateau

Market Diversification

Added new businesses or

added another stage of

production or distribution.

Diversified into unrelatedbusiness.

KFC Mc Donald AFC

Product


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Positioning

Positioning a single brand Positioning a multiple brand

Repositioning older products

Product Life CyclePromoting more frequent usage Finding new users Finding more uses for product

Finding new uses for productsbasic materials

Product Competition

Competing Brand Private label

Generic Product

Product Mix

Single product

Multiple Products Product Systems

Product design

Standard Products

Customized products Standard product, modified

New Products

Innovation Modification Line extension Diversification

Remerchandising existing

products

Extending Market for existing

products

KFC Mc Donald AFC

Pricing

New Products

Skim (high) Pricing Penetration (low) pricing Psychological (odd/even) pricing


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Follow the leader pricing Cost plus pricing

Established Products

Slide down (gradual reduction) pricing

Segment pricing Flexible pricing

Preemptive pricing Loss leader pricing

Promotion

Advertising

Support personal selling

Inform target audience about

availability of product

Persuade prospects to by directly

from advertising

KFC McDonald AFC

Distribution

Channel StructureDirect distribution to enduser

Indirect distributionthrough intermediaries(Distributors, dealers)

Multiple ChannelComplementaryChannels

Competitive Channels

Channel control

Adding a wholesalingfunction.

Adding a retailingfunction.

Controlling more of themanufacturing process

Adding franchises

Combining with other


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Competitor 2

AFC

The time was mid 90's. Fast food companies were booming in

Pakistan. Quality fast food in Pakistan was outrageously

expensive and on a handful of families could afford to go there.

No middle class family could think of taking their children to such big food chains.

This was the time when AFC (Al-Najam Fried Chicken) opened its first restaurant

at Saman Abad, Main Market in Lahore. AFC make the quality fast food available

to all those people who liked the fast food but couldn't dare to afford.

At present time, AFC has more then twenty branches Nationwide including MallRoad, Railway Station, Allama Iqbal Town, Twonship, Mughalpura, Defence,

Thokar Niaz Baig, G.T. Road and Wapda Town. It has also opened in Faisalabad

and Gujrat, Abbotabad, SGD, Gujranwala, Rawalpindi and Karachi.

Segmentation: As compared to McDonald the AFC segmenting the price

sensitive customers so majority of their customer belong to the middle class.

Price Strategy: The products of the AFC are less costly as compared to KFC,McDonald and Subway and acceptable to their segmenting customers.

Product Strategy: AFC provides quality food in reasonable price to the middle

class segment and they follow the competitor strategy by keeping in mind their

target segment. They follow the strategy to extend the market for the existing

products.

Promotion Strategy: AFC extensively use the outdoor media i.e. billboards and

banners and they are not investing in indoor media for their promotion and

advertisement.

Place: AFC is operating in eight major cities of Pakistan with the network of 21

outlets. Only in Lahore there are 13 outlets of AFC are operating. Direct

distribution strategy is being focused by the company.


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Summary of competitor analysis

In Pakistan, KFC have an advantage of its high number of outlets all over the

country in spite of that McDonald have high daily sales. Both companies are

multinational and operating in international market. KFC and McDonald both

follow the leader strategy. The both are attracting the customer due to their

internally renowned brand name and as well as their quality of product and

services. AFC is targeting low price income segment and also follow the leader

strategies.

All of the competitors providing standard products to their customers and

attempt to get large market share they often gives different packages to their

customers. KFC and McDonald Inform target audience about availability of

product through different media. AFC tend to use follow-the-leader pricing

strategy when launching new products and to use preemptive pricing.

Sales force of all the competitors are very efficient and also

facilitate their customers by giving home free delivery with in no time. KFC did

not come up with new products as compared to McDonald. They have a limited

menu and have sticked to their original recipe chicken that made their success

since the beginning.


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Zinger Burger

TWISTER

CORN ON CUB

FAMILY FEAST
http://images.google.com.pk/imgres?imgurl=http://pakistangiftsemporium.com/bmz_cache/e/e8dd9fdd1f91f0a21257678ee9a7a4bf.image.150x112.jpg&imgrefurl=http://pakistangiftsemporium.com/index.php%3Fmain_page%3Dproduct_info%26products_id%3D60&h=112&w=150&sz=5&hl=en&start=15&tbnid=tDmUWPNSeyCpEM:&tbnh=72&tbnw=96&prev=/images%3Fq%3Dzinger%2Bburger%26gbv%3D2%26hl%3Denhttp://images.google.com.pk/imgres?imgurl=http://pakistangiftsemporium.com/bmz_cache/e/e8dd9fdd1f91f0a21257678ee9a7a4bf.image.150x112.jpg&imgrefurl=http://pakistangiftsemporium.com/index.php%3Fmain_page%3Dproduct_info%26products_id%3D60&h=112&w=150&sz=5&hl=en&start=15&tbnid=tDmUWPNSeyCpEM:&tbnh=72&tbnw=96&prev=/images%3Fq%3Dzinger%2Bburger%26gbv%3D2%26hl%3Den


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STRENGTHS &WEAKNESSES ANALYSIS OF SPA

It is used to evaluate how SPA measures up to a competitors organization. The

strength & weakness evaluation is intended to determine where SPA is weak or

where it is strong as compared with the competition.

SWOT Analysis

Strengths: (Internal)

Good reputation in market

Strong brand name

Strong financial position

Joint venture and collaboration with international and forighen

universities.

Using modern technology to interlink their resources

Weaknesses: (Internal)

Poor coordination amongst departments

Politics faced by the organization

Having less sales as compared to McDonald.

Opportunities: (External)

Increasing demand for professional degrees

An unfulfilled customer needs.

Growing Market

Potential to capture additional market share

Threats: (External)

High inflation rate.

New HEC regulations

Political & social instability.

Internal Factor Analysis IFE


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FACTOR WEIGHT RATE (1-4) TOTAL

(How important it isfor my product)

(Company Rates itsability)

STRENGTHS

Strong Financialposition

0.1 4 0.4

Strong brand name. 0.2 3 0.6

Good reputation amongcustomer.

0.1 2 0.2

Maximum number ofoutlets in the market

0.07 2 0.14

Favorable access todistribution networks.

0.1 4 0.4

Firm using modern

technology

0.03 2 0.06

Joint ventures with bigfirms of the world(Pepsi, YemInternational)

0.1 2 0.2

WEAKNESS

Sticked with the originalrecipe

0.2 3 0.6

Employee satisfaction is

low.

0.1 4 0.4

TOTAL 1 3


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External Factor Analysis EFE

FACTOR WEIGHT RATE (1-4) TOTAL

(How important it is for my

product)

(Company Rates

its ability)

Opportunities

An unfulfilledcustomer needs.

0.1 4 0.4

Arrival of newtechnology

0.05 2 0.1

Growing market 0.1 3 0.3

Potential to captureadditional market

share

0.1 2 0.2

Very few brands inFast Food industry(Brand building)

0.2 4 0.8

Threats

Shift in consumertastes, away from thefirm product.

0.05 3 0.15

Emergence ofsubstitute product.

0.12 4 0.48

New governmentregulations

0.03 1 0.03

high infation rate 0.05 3 0.15

political and socialinstability

0.2 3 0.6

TOTAL 1 3.21


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GE Matrix

4

3

Market

Attractiveness

(EFE) 2

1

4 3 2 1

Business Strength (IFE)

Market attractiveness is shown on the vertical axis and Business strength is

shown on the horizontal axis, we have examined the companies SWOT

(strengths, weaknesses, opportunities and threat) and plotting the external and

internal factors on the GE matrix. KFC falls on the 1st and 2nd

quadrant that

shows there is excellent market environment and KFC is in good position. And

Investtogrowstrategymust be followed by the company.


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TOWS Matrix

Strength

1. Good reputation in market2. Strong brand name

3. Having Maximum outlets inthe market4. Strong financial position5. Joint venture with theinternational firms.6. Using modern technology tointerlink their resources7. Having strong distributionchannel

Weakness

1. Company did not comeup with new products as

compared to McDonald.2. Limited menu andsticked with their originalrecipe.3. Having less sales ascompared to McDonald4. employees areunsatisfied

Opportunity

1. An unfulfilled

customer needs.2. Growing Market3. Arrival of new

technology (tomaintain the qualityand crispiness of thefried chicken product.)

4. Potential to captureadditional marketshare

5. Very few brands inFast Food Industry

(Brand building).

SO

1. S1, S2, S3,S4

2. S4,S5

3. S6

4. S7

5. S3

WO

1. W1, W2

4. W3

Threats

1. Shift in consumertastes, away fromthe firm product.

2. High inflation rate.3. Emergence of

substitute product.4. New government

regulations5. Political & social

instability.

ST

1. S1,S2

2. S6

WT

1. W1, W2

GAP

Segments of KFC


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In this portion of project we will discuss that how many segments KFC is serving

for its products and what strategy they are using for these segments.

Market segmentation

The commonly used basis for segmenting the consumer market may be grouped

in following categories, which are selected by the KFC for its products and

services.

1) Geographic Segmentation

KFC major target segment and consumption is associated with the geographic as

well as economic conditions of a place. As the target segment of the KFC is

upper5 and middle class so the main outlet are in the urban area specially in the

big cities like Lahore, Karachi, Faisalabad, Islamabad and Peshawar.

2) Demographic Segmentation

Age: People from all age groups (Focus Kids 6-12

years)

Sex: Both Male & Female

Occupation: People from all walks of life

Income: Rs. 15,000/- and above

Religion: Muslims & Non Muslims

3) Psychographics Segmentation

The social class, which is included in the target group of KFC, is consumer from

upper class and middle class. They enjoy getting the services of KFC due to the

status and time constraint. The consumer has wide range of personalities from

dynamic to interesting. From self confident to extra vested, from adventuresome


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to social able. The personality of a person makes a lot of difference in buying

power.

The lifestyle of consumer varies from flashy, liberal modern to dull conservative

and backward. It is a very important factor which very much influences the buyingpattern of the consumer. People will be mostly influenced by high quality,

healthful richness and branding of product.

4) Behavioral Segmentation

The customer expects high quality in product and services offered. KFC is known

for its brand name and quality which creates loyalty and consumers normally

dont want to shift from this outlet to other. Due to internationally brand

recognition and the quality of service offered, consumer expectation is high and

KFC also wants to provide high level of services to their customers. KFC provide

different type of packages and deals to sort down the consumer wants.

5) Benefit Segmentation

Specially the businessman, students and those person how have not much time

to dine out with their family in traditional restaurants due to time constraint. So

this segment prefer to fast food restaurants for dine out alone or with family to

enjoy quality food with minimum time wastage.

6) Target Market

A target market is defined as a group of customers (people or organization) at

whom seller specifically intends to aim its marketing efforts. For this purpose

company must analyze three components:

Consumer

Buying Power Social and psychological factors influencing buying patterns

With the increase in literacy rate and high disposable income people awareness

about health and expectation about services increased. This means Fast Food


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Industry has market in each age group of society. Due to increased

industrialization the income and the life standards are improving. But the new

generation is becoming modern and their life style is totally changed and they like

Fast food rather than traditional food items.

Marketing Plan --- Xtreme Value Meal

The segment which KFC targeted for their new product

Xtreme Value Meal is upper and middle class, People

from all age groups belong to all walks of life. Due to

internationally brand recognition and the quality of

service offered, consumer expectation is high and KFC

also wants to provide high level of services with huge

assortments to their customers. The target segment for

this product is same that the KFC was earlier targeted. The main purpose of

launching this product is to increase product line and to capture more potential

customers.

Marketing Mix

Product:

Name

KFC is launching its new product named as Xtreme Value Meal which is Pizza

based deals.

Product line

Meal for 1 ( one 7 pizza + 1 Regular Drink)

Meal for 2 ( one 10 pizza + 2 RegularDrink+ Salad)

Meal for 4 ( Two 10 pizza + 4 Regular Drink + two salad)

Price Strategy:

The pricing strategy is to be set by keeping in mind our target audience ,

competitors price and the total cost during the manufacturing of product.


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Below table shows the approximate or average total cost and price

Xtreme ValuePizzaItems 7" 10" 13"

Flour 1.80 3.60 5.99

Egg 0.23 0.47 0.78

Chicken 20.00 35.00 60.00

Spices 3.00 5.00 7.00

Onion 2.00 3.50 6.00

Pizza Sause 4.14 8.29 11.05

Tomato 4.00 6.50 9.00

Cheese 28.00 52.50 77.00

Oil 1.90 5.70 12.67

Packing 7.00 10.00 12.00

Total 72.08 130.56 201.49

Proposed Price To be charged 130 250 310

Chicken Tikka Pizza has chicken tikka cubes, green chilies, spicies, onions,

cheese. Cost all these and other ingredient in it are been covered and the total

cost for 7 is Rs. 72.08, 10 is Rs. 130.56 and for 13 is Rs. 201.49.

Xtreme Value Meal Price:

Meal for 1 ( one 7 pizza + 1 Regular Drink)

Meal for 2 ( one 10 pizza + 2 Regular Drink+ Salad)

Meal for 4 ( Two 10 pizza + 4 Regular Drink + two salad)

Xtreme Value Meal Deal Price (Rs.)

Meal for 1 160

Meal for 2 320

Meal for 4 650

Promotion:


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Print Media:

Advertisement in newspaper and Magazine specially in leading news

paper Dawn, The News, Jang and Nawaiwaqt.

X stand flex sign on the entrance gate

Front lit flex sign on the billboard on different lactations.

Broachers and pamphlets to introduce their new product to their

customers.

Electronic media:

TV Channels: Before launching the productXtreme Value Meal will be

displayed TVC teasers on different Television channels. Some of the famous

television channels are

GEO

Star Plus

AAG

ARY

HUM

Radio: there is huge trend of youngsters to dine out in fast food restaurants and

a huge number of youngsters listen music on radio especially FM channels are

too popular in the youngsters so FM and AM radio channels can be a effective

medium to permute our new product.

Promotion on the point of purchase:

When a customer will buy Xtreme Value Meal KFC we will give him or her

discounted coupon. And the benefit of this coupon to the customer will be that

whenever the customer will come to buy Xtreme Value Meal he or she will

get discount. This coupon will be for some specific period of time, like this

coupon will be valid for one week or 10 days.


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Placement Strategy:

As KFC have 34 outlet in allover the Pakistan and majority of their outlet are in

Lahore. In the Beginning, our new product Xtreme Value Mealintroduced in the

KFC outlet of Lahore to certain period of time. But after some time this product

introduced at every outlets all over the Pakistan.

KFC is charging ten rupees for home delivery of their products

but in the case of new product Xtreame Value Meal totally free home delivery

provided to the customers to encourage the usage and for the promotion of the

Product.

Packaging Strategy:

To give value addition to the customers

KFC offers packing of Pizza according to

the horoscopes star (like LEO, Libra,

Aquarius) of a customer has. Also offer

packing of different shapes on different

cultural and religious occasions like in

valentine day the packing shape is like

heart. This packing strategy not only

gives pleasant effect to the product but

also give a attractiveness to the product.


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Market Plan for Three Year

This product of KFC Xtreame Value Meal expected to launch in December

2008. The campaign stars before two month of launching the product in the form

of teasers in print media and in electronic media. In first year, the main objectiveto create awareness about this new product among the potential customers and

attain maximum sales of the product.

In second year spread this product all over the Pakistan KFC

outlets. To sustain and get the competitive advantage we increase the product

line in the Xtreame value meal.

In third year the main objective of KFC is to create maximum

awareness about the product and increase the sales and revenue. Secondly find

out the new segment and usages for their product to increase the profitability of

the company.


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References

Mr. Kashif Imran 0334-9705010

Assistant Business ManagerKFC Joher town Branch

Mr. Umar Saleemi 0322-4689639

Account officer

AFC Wapda Town/ PIA Branch

www.kfc.com

www.statpak.gov.pk

www.afc.com.pk

www.mcdonald.com

www.commerce.gov.pk

www.epb.com.pk

http://lahoremall.com/kfc.php

Pakistan economic survey
http://www.kfc.com/http://www.kfc.com/http://www.statpak.gov.pk/http://www.statpak.gov.pk/http://www.afc.com.pk/http://www.afc.com.pk/http://www.mcdonald.com/http://www.mcdonald.com/http://www.commerce.gov.pk/http://www.commerce.gov.pk/http://www.epb.com.pk/http://www.epb.com.pk/http://lahoremall.com/kfc.phphttp://lahoremall.com/kfc.phphttp://lahoremall.com/kfc.phphttp://www.epb.com.pk/http://www.commerce.gov.pk/http://www.mcdonald.com/http://www.afc.com.pk/http://www.statpak.gov.pk/http://www.kfc.com/

kfc (final project)

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