A

RESEARCH REPORT

ON

“MARKETING STRATERGIES

WITH REFERENCE TO

KENTUCKY FRIED CHICKEN”

A Research Project report submitted in Partial Fulfillment of award of PGDM Degree

(2011-13)

SUBMITTED BY:- SUBMITTED TO:-

Arvind Kumar Dubey Prof. AK. Tyagi

Roll No-1113036(6th Trimester)

LLOYD BUSINESS SCHOOLGREATER NOIDA

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ACKNOWLEDGEMENT

With profound sense of gratitude and regard, I express my sincere thanks to

my guide and mentor Prof. AK. Tyagi, for his valuable guidance and the

confidence he instilled in me, that helped me in the successful completion of

this project report. Without his help, this project would have been a distant

affair.

His thorough understanding of the subject and professional guidance was

indeed of immense help to me.

Also, this acknowledgement would remain incomplete without thanking the

staff of KFC (RAJOURI GARDEN), New Delhi for their whole-hearted and

kind co-operation.

I am also greatly thankful to the faculty members of our institute who co-

operated with me and gave me their valuable time.

Arvind Kumar Dubey

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DECLARATION

I, Arvind Kumar Dubey, do hereby declare that the summer internship project report submitted by me for the partial fulfillment of requirement for the PGDM of Lloyd Business School Greater Noida. This has not been submitted to any other university/ institution for the reward of any degree/ diploma certificate.

Arvind Kumar Dubey

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Industry Profile:-

The service sector consists of the "soft" parts of the economy, i.e. activities where people offer their knowledge and time to improve productivity, performance, potential, and sustainability. The basic characteristic of this sector is the production of services instead of end products. Services (also known as "intangible goods") include attention, advice, access, experience, and discussion. The production of information is generally also regarded as a service, but some economists now attribute it to a fourth sector, the quaternary sector.

The tertiary sector of industry involves the provision of services to other businesses as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to a consumer, as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment. The goods may be transformed in the process of providing the service, as happens in the restaurant industry. However, the focus is on people interacting with people and serving the customer rather than transforming physical goods.

For the last 100 years, there has been a substantial shift from the primary and secondary sectors to the tertiary sector in industrialized countries. This shift is called tertiarisation.[1] The tertiary sector is now the largest sector of the economy in the Western world, and is also the fastest-growing sector.

In examining the growth of the service sector in the early Nineties, the globalist Kenichi Ohmae noted that:

"In the United States 70 percent of the workforce works in the service sector; in

Japan, 60 percent, and in Taiwan, 50 percent. These are not necessarily busboys

and live-in maids. Many of them are in the professional category. They are

earning as much as manufacturing workers, and often more

An industry made up of companies that

primarily earn revenue through providing intangible products and services.

Service industry companies are involved in retail, transport, distribution, food services, as

well as other service-dominated businesses. Also called service sector, tertiary sector of

industry. See also primary industry, secondary industry

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Introduction of Company

KFC Corporation, based in Louisville, Kentucky, is the world’s most

popular chicken restaurant chain, specializing in Original Recipe ®, Extra

Crispy TM, and Colonel’s Crispy Strips® chicken with home style sides and

five new freshly made sandwiches. Every day, nearly eight million

customers are served around the world. KFC’s menu everywhere 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 continues reaching out to customers with home delivery in more than

300 restaurants in the United States and several other countries. And in quite

a few U.S. cities, KFC is teaming up with other restaurants, Taco Bell and

Pizza Hut, selling nearly fifty years ago; Colonel Sanders invented what is

now called “home meal replacement” – selling complete meals to harried,

time-strapped families. He called it, “Sunday Dinner, Seven Days a Week.”

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K

FC

KF

C

Today, the Colonel’s spirit and heritage are reflected in KFC’s brand

identity – the logo features Colonel Harland Sanders, one of the best-

recognized icons in the world.

KFC specialized in chicken and they says,

“No body’s cooking like KFC today and we are the chicken experts”

“There is no competitor for spicy chicken which is made by KFC”

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K

FC

KF

C

Introducing New Product

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RESEARCH METHODOLOGY

Research Objectives:

1. To study consumer preferences with respect to sales promotion in service sector.

2. To examine tradeoffs, relative importance of different attributes while responding to a sales promotion offer.

3. To study the effect of sales promotions in service sector esp.

4. To study consumer behavior in purchase of non-veg item.

Research Design

Research design selected for this project is Descriptive.

Data collection Method:

(a) Primary Data Collection Method:

Survey method was used for primary data collection.

We used questionnaire as an instrument for survey method.

Structured questionnaire.

Type of questionnaire: Open ended and closed ended.

(b) Secondary Data Collection method:

Reference books.

Internet

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Pricing Issues

PRICING POLICY FOR PRODUCT OF TWISTER

Manufacturing cost RS. 100/-

5% marketing cost (PER UNIT) RS. 5/-

Total cost RS.105/-

15% G.S.T +15% RETAIL MARGIN RS.25/-

Total retail Price RS.140/-

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PRICING STRATEGY FOR DEAL 6

Manufacturing cost RS. 140/-

5% marketing cost (PER UNIT) RS. 25/-

Total cost RS.165/-

15% G.S.T +15% RETAIL MARGIN RS.55/-

Total retail Price RS.220/-

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Mission statement

“To be the leader in western style quick service restaurants

through friendly service, good quality food and clean atmosphere”

Goals of KFC

Build an organization dedicated to excellence.

Consistently deliver superior quality and value in our products and

services.

Maintain a commitment to innovation for continuous improvement

and grow, striving always to be the leader in the market place

changes.

Generate consistently superior financial returns and benefits our

owner and employees.

To establish in India our position as leading WQSR (Western Quick Service

Restaurant) chain, serving good value. Innovative chicken-based products.

Consistently, providing a pleasant dining experience, with fast friendly, in a

clean and convenient location. At all times we must be dedicated to

providing excellent and delighting customers.

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KFC History

KFC is an internationally renowned fast

food industry in the world. They have the

main ambition to increase & maintain the

quality in fast food industry. Their aim is to capture the fast food market.

Basically they want to provide their products to anyone that is why they

expanding their branches in all over the world. They want to increase their

profit

through giving maximum satisfaction & other better facilities to people that

they want. Now after catching such a marvelous position in the International

Market, KFC is introducing a new item “Boneless Fried Chicken”, with

even more attractive and charming taste.

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Company overview:

Colonel Harland sanders, born September 9, 1890, actively began

franchising his chicken business at the age of 65. Now, the Kentucky fried

chicken business he started has grown to be one of the largest retail food

service systems in the world. And colonel sanders, a quick service restaurant

pioneer, have become a symbol of entrepreneurial spirit. More than two

billion of the colonel’s “finger lickin’ good” chicken dinners are served

annually. And not just in America. The colonel’s cooking is available in

more then 82 countries around the world.

When the colonel was six, his father died. His mother was forced to go to

work, and young Harland had to take care of his three year old brother and

baby sister. This meant doing much of the family cooking. By the age of

seven, he was a master of a score of regional dishes. Ate age 10, his first job

working on a nearby farm for $2 a month. When he was 12, his mother

remarried and he left his home near Henryville, Ind., for a job on a farm in

Greenwood, Ind. He held a series of jobs over the next few years, first as a

15-year-old streetcar conductor in New Albany, Ind., and then as a 16-year-

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old private, soldiering for six months in Cuba. After that he was a railroad

fireman, studied law by correspondence, practiced in justice of the peace

court, sold insurance, operated an Ohio River steamboat ferry, sold tires, and

Operated service station. When he was 40, the colonel began cooking for

hungry travelers who stopped at his service station in Corbin, KY. He didn’t

have a restaurant then, but served folks on his own dining table in the living

quarters of his service station. As more people started coming just for food,

he moved across the street to a motel and restaurant that seated 142 people.

Over the next nine year, he perfected his secret blend of 11 herbs and spices

and the basic cooking technique that is still used today.

Sampling Detail

1. Target population: The population for this research study consists of

the residence of Greater Noida.

2. Sampling unit: In this study the sampling unit is individual

consumer.

3. Sample size: 100 consumers 100 retailers.

4. Sampling method: The sample is selected by using convenience-

sampling method.

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KFC India

KFC is the world’s 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 it’s 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 Sander’s secret recipe. Its signature dishes include the

“crispy outside, juicy inside” Hot and Crispy Chicken, flavorful and juicy

Original Recipe chicken, the spicy, juicy & crunchy Zinger Burger, Toasted

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

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

include the Veggie Burger, Veggie Snacker and Veg Rice meals. In India,

KFC is growing rapidly and today has presence in 11 cities with close to 50

restaurants.

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Values of KFC

Focus all our resources to our restaurants operation because that is

where we serve our customers.

Reward and respect the contributions of each individual at KFC.

Expand and update training with time and be the best we can be and

more.

Be open, honest and direct in our dealings with one and other.

Commit ourselves to the highest standard to the personal and

professional integrity at all times.

Encourage new and innovative ideas because these are the key to our

competitive growth.

Reward result and not simple efforts.

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Dedicate ourselves to continuous growth in sales, profit and size of

organization.

Work as a team.

PHILOSOPHY OF KFC

The CHAMPS Program

Champs stands for our belief that the most important thing each of us can do

is to focus on the customer. It stands for our commitment to provide the best

food and best experience for the best value.

CHAMPS stand for the six universal areas of customer expectation common

to all cultures and all restaurants concepts.

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THE CHAMPS

These are:

Cleanliness

Hospitality

Accuracy

Maintenance of Facilities

Product Quality

Speed of Service

CHAMPS is the philosophy to ensure that the customer has the consistent

quality experience in every restaurant, everyday, on every occasions and you

will be playing role in delivering CHAMPS to our customers.

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Situational Analysis

Current Products

Kentucky fried chicken

Zinger burger

Krushers

GameBox

Twister

Boxmaster

Chicken Bucket

Hot wings

Fries

Corn on the cob

Zing Kong

Snacker(chicken & veggie)

Veggie Feast

Soft Drink

Coleslaw

Chicken Thali

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Veg Finger

Snack Box

Sundae

Soft Twirl

Brownie Sundae

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Entry

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 they’ve 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

McDonald’s, Pizza Hut, Domino's and Subway, and any new fast-food

entrants would just be presenting something very similar to what’s 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.

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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.

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Substitutes and Complements

As mentioned above, there are a few major competitors in the fast-food

industry

in India for KFC, namely McDonald’s, 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 chains. Even foods from street vendors count as

substitute goods.

While other fast foods serve as substitute to KFC, they can also serve as

complements for fast foods as a whole. If the general price of fast foods

goes up,KFC’s price rises as well, and the same can be said of the quantity

sold of these products, which make them complements to each other. KFC

also sets up stores located near popular tourist attractions, so tickets to these

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tourist spots are also complementary goods because the more people tour

these attractions, the more customers KFC will get.

Rivalry

Unlike what one would expect, KFC has little rivalry with similar fast-food

chains in India. The primary reason is that their core products are different,

as in they sell different kinds of fast foods with very different tastes and

styles. For example, if KFC raised its price for chicken by a small amount,

Indian chicken lovers who may not be as accepting to pizzas (many Indian

people strongly dislike the taste of cheese) are not going to switch to Pizza

Hut just because the price for KFC increased. In addition to that, these

restaurants have such different target customers that the fluctuation of price

for one restaurant is not going to affect the others. For example, a full meal

at KFC ranges about Rs. 100, whereas a full meal at Pizza Hut can cost over

Rs. 300. The drastic difference in price assures no price competition

between these restaurants.

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KFC Original Recipe

6 cups Crisco Shortening

1 eggs well beaten

2 cups Milk

2 cups Flour

2 teaspoons ground pepper

3 tablespoons salt

1 teaspoon MSG

1/8 teaspoon Garlic Powder

1 dash paprika

2 Frying Chickens cut into 6 pieces

Place shortening into the pressure cooker and heat over medium heat to the

shortening reaches 400F. In a small bowl, combine the egg and milk. In a

separate bowl, combine the remaining six dry ingredients. Dip each piece of

chicken into the milk until fully moistened. Roll the moistened chicken in

the flour mixture until well coated. In groups of four or five, drop the

covered chicken pieces into the shortening and lock the lid. When pressure

builds up cook for 10 minutes.

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KFC Outlets in Delhi

KFC in Central Delhi

A-12, Inner Circle,

CP, Delhi-110001

Store Timing:8:30am to 11pm

KFC in Noida

Sector 18,

Noida -201301

Store Timing:11am to 11pm

Great India Place,

Noida-201301

Store Timing:11am to 11pm

KFC in South Delhi

Back Wing,

Select Citywalk Mall,

Saket, Delhi-110017

KFC in West Delhi

City Square Mall,

Rajouri Garden,

Delhi-10027

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Store Timing:11am to 11pm

Vasant Square Mall,

Vasant Kunj-110070

Store Timing:11a.m. to 11 p.m.

Store Timing:11am to 11pm

Vikas Surya Plaza,

Sector 4, Dwarka,

Delhi-110075

Store Timing:11 am to 11 pm

Below Netaji Subhash Place Metro

Station,

Pitampura, Delhi-110034

Store Timing:11am to 11pm

KFC in East Delhi

Shipra Mall,

Indirapuram, Delhi-201012

Store Timing:11am to 11pm

V3S Mall,

Laxmi Nagar, Delhi-110092

KFC in Gurgaon

JMD Regent Mall,

Mall Road,

Gurgaon-

Store Timing:11 am to 11 pm

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Store Timing:11am to 11pm

Ambience Mall,

Gurgaon-122001

Store Timing:11am to 11pm

Promotions

In India KFC not advertise there products too much because people KFC

due to its reputation in other countries. They promote their products through

special packages.They promote there products through billboard, pamphlets

and through other promotion strategies

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Current target market

Segmentation

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

different demands, tastes and behavior who require separate products or

marketing mix.

In India the niche marketing is being used for particular classes of people.

They have made segments of the market on the following bases.

Demographical

Behavior

Geographical

By using these three bases they segmented the market as under.

DEMOGRAPHICAL BASIS

In demographics their first segment is consisted of the income factor i.e.

high income, average income and low income.

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BEHAVIOR

In behavioral aspect they segmented the market on the basis of quality, taste

and price. Following are the different possible segments in this regard.

Taste conscious

Quality conscious

Class conscious

Combination of price and quality

GEOGRAPHICAL BASIS

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

main segments.

Urban areas

Sub urban areas

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Profile criteria:

1. Gender: KFC is for each gender both male and female.

2. Income: Everyone can use the KFCservice upper and middle class .

3. Age: age limitation for using this product above 15

4. Occupation: By profession also everyone can use this product means

businessman student workers and other peoples.

5. Education: It has no need more education that why the person who know

something can easily enjoy with this product.

6. Family life cycle: KFC is suitable in every stage of life like single

married couple and also those who have children can use this product.

7. Lifestyle: This product is used in every level of social class like upper,

middle class.

8. Attitude : When the customers once buy this product after that they can

use the product continuously.

9. Purchasing decision: Often KFC changes the purchasing decision of

customers because of its good attributes.

10.Geographic region: Geographically KFC is used in every part of the

country as well as all over the world.

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Product positioning

Customer perceive this product as a unique product that other are not giving

.

Attitudes

The attitudes of the public is very good people like our this new product like

others.

Purchasing process:

Many people come from home to eat this , and some make impulse decision

as they saw it .

Market Coverage Strategy

KFC will be using differentiated market coverage strategy. It means that

different marketing mix will be used for different age groups.

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TARGET MARKET FOR FAST FOOD

After evaluation of various segments, KFC has decided to target the

market of Urban and Sub-urban Areas of Pakistan.

Product usage

People are educated and they want variety in their diet.

Normally people of rural areas don’t take fast food. On the other hand

people of urban areas take fast food.

Income of the people of urban areas is normally high and they can

afford to purchase such products, which are slightly higher in price as

compared to prevailing prices of local food in the market.

People of Urban Areas are more quality conscious than the people of

Rural Areas.

In Urban Area there lived people from every walk of life and profit

generation is easier than in Rural Areas.

Population density is higher in Urban Areas as compared to Rural

Areas, so the number of customers are more in Urban Areas.

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Competitive analysis

Competitors

You cannot enjoy the business without competitors. No organization can

afford to ignore there competitors. It is very important for a marketing

managers to monitor the activities of there competitors, what they are doing?

KFC adopted such sort of strategy that there is no competitor for spicy

chicken, which is made by KFC.

KFC beats its competitors through the revising marketing strategy at every

movement but the main competitor of KFC are

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Mc Donald

COMPETITIVE ADVANTAGE

KFC McDonalds

Spicy Products

Indian people like spicy products

instead of boiled food

Burger and French Fries

Arabian Rice and Zinger Burger Big Mac

Free Delivery Charges for home delivery

Chicken is eaten by every

community

Beef is banned in some community

Local Staff and Highly Qualified

because local staff can better deal

with the customers

Its Staff consist of simple Graduates

and give them training

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KFC uses Top to Bottom and

Bottom to Top Approach in

Management.

McDonalds Uses Top To Bottom

Approach.

KFC is Co branding with WallsNo such Case.

Economic Analysis of Market

A market in this context refers to a number of all actual and potential buyers

of a product (Kotler et al 2003).

These buyers have a need to satisfy

their needs through exchange

(Graphic 1). These needs make up

the demand for particular products and services. Several components must

be considered, as all these components have a direct or indirect impact on

KFC’s success.

Changes in the below described components over the last couple of years

have led to big changes in people’s attitudes towards healthy food. It

explains why Australians today want to eat healthy and nutritious-rich food

in order to keep themselves healthy and that KFC must adjust their range of

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Industry(a collection

of seller)

Market(a collection

of buyersMoney

Product / service

Information

Communication

Graphic 1

product and their company image to appeal to these new expectations,

people have. (http://www.marketresearch.com).

Macro environment

KFC operates in a larger macro environment of forces that creates

opportunities, but also threats. (Kotler et al 2003). A company such as KFC

usually cannot influence trends in the macro environment, as they affect

people and organisations on a larger scale.

However, KFC has to carefully examine macro environmental trends and

must create competitive responses to such trends. There are six major macro

environmental forces KFC has to take into account.

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Micro environment

The microenvironment consists of

all forces that are close to KFC, and

on which KFC has an impact. They

directly affect KFC’s ability to

serve its customers. (Kotler et al

2003). Three major components

influence KFC’s micro

environment:

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KFC

Graphic 3 (Source: Kotler et al 2003) Micro Environment

Company Competitors

Consumers

COMPETITORSCOMPETITORS

Because the fast food market in India is highly competitive, KFC faces a

wide number of direct and indirect competitors. KFC’s main competitors are

fast food chains such as McDonald’s and Domino’s, which are already well

established throughout India.

McDonalds’s in particular is a direct competitor, as they have already

successfully introduced their Salads plus line (http://www.theage.co.in),

which directly targets ‘healthy food’ conscious Indians. But, there are a

number of other competitors that is also focusing on ‘chicken’ types

products. All this competition makes it quite difficult for KFC to maintain or

even broaden their customer base. However, with the introduction of a new

and healthy product range, KFC can differentiate itself from most

competitors and will gain a competitive advantage.

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CUSTOMERSCUSTOMERS

KFC’s customer market consists solely of the consumer market (Kotler et al

2003). KFC’s products are bought by individuals (males, females, singles,

and families). Therefore, the product range KFC offer should appeal to as

many people within this consumer market as possible, to ensure that the

maximum amount of products can be sold. The characteristics of these

individuals and a segmentation of them are discussed later in this report.

Strengths and weakness of competitor

S trengths: 38 products, Attractive Outlets, Huge Marketing, Budget, More

entertainment for kids

W eaknesses: Same type of Menu, No Home Delivery

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How they compete their competitors?

It is found that KFC compete its competitors by five ways:

KFC compete its competitors through marketing strategy

They offered different packages at different events like ramdan offer,

midnight offer etc.

KFC compete there competitors by providing good services

They must hired the hard selling persons to market their product in the

market and motivate their employees for the sake of organizations and

employees do well and they compete there competitors

KFC has quality products and through these quality products they

compete their competitors

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Current Sales Analysis

Market ShareMarket Share

KFC has a very long history and has the most recognize able brand in

chicken with over 50% of the market share. It becomes difficult for the

companies like Sub way, Mc Donald’s, Chicken planet, Dixie or those who

may want to enter in the market of fast food restaurants.

Due to with over 50% of the market share in fast food industry KFC has

recognition around the world and has been globally positioned for many

years in India and to capture the market share in India adopts champs

philosophy

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Environmental factors and opportunities

Political :

The operations of KFC are affected by the government policies on the

regulations of fast food operation. Currently government are controlling the

marketing of fast food restaurant because of health concern such as

cardiovascular and cholesterol issue and obesity among the young and

children in the country. Governments also control the license given for open

the fast food restaurant and other business regulation need to follow such as

for a franchise business. Good relationship with government in giving

mutual benefits such as employment and tax is a must for the company to

succeed in any foreign market.

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Economic:

Though for last 1 year their was economic slowdown all across the globe but

the sales of KFC and other fast food chains did not slow down to that extent

that of other sectors in. The GDP (Purchasing Power Parity) is estimated at

2.965 trillion U.S. dollars in the year 2010. The GDP- per Capita (PPP) was

2700 U.S. dollars as estimated in 2008. The GDP- real growth rate in 2007

was 8.7%. India has the third highest GDP in terms of purchasing power

parity just ahead Japan and behind U.S. and China. Foreign direct

investment rose in the fiscal year ended March 31 2007 to about $16 billion

from just $5.5 billion a year earlier. There is a continuous growth in per

capita income; India’s per capita income is expected to reach 1000 dollars

by the end of 2007-08 from 797 dollars in 2006-07. This will lead to higher

buying power in the Hands of the Indian consumers. So taking into

considerations the economic factors of India KFC is safe. The only danger to

it will be if there is a terrorist attack in India and the victim is KFC.

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Socio cultural:

India is the second most populous nation in the world with an approximate

population of over 1.1billion people. This population is divided in the

following age structure: 0-14 years – 31.8%, 15-64 years – 63.1% and 65

years and above – 5.1%.

There has also been a continuous increase in the consumption of fast food in

India. The social trend toward fast good consumption is changing and India

has seen an increase of 90% fast food consumption from the year 2002-

2007. This increase is far greater than the increase in the BRIC nations of

Brazil (20 per cent), Russia (50 per cent) and China (almost 60 per cent).

Thus this shows a positive trend for fast food industries in India.

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Technological:

The Indian fast food Industry is heating up with a lot of foreign players

entering the Indian market. The technological knowhow and expertise will

also enter the Indian market with an increase in competition. With the lower

rates and increase technology the fast food counters are attracting youth by

giving them attractive deals. For e.g. KFC and Domino’s pizza. For a fast

food restaurant, technology does not give a very high impact on the

company and it is not a significant macro environment variables. However

KFC should be looking to competitors innovation and improve itself in term

of integrating technology in managing its operation. For example in

inventory system, supply chain management system to manage its supply,

easy payment and ordering systems for its customers and wireless internet

technology. Implementation of technology can make the management more

effective and cost saving in the long term. This will also make customer

happy if cost savings results in price reduction or promotional campaign

discount which will benefits them from time to time.

47

Environmental:

As one of world largest consumer of beef, potatoes and chicken, KFC

always had been critics for world environmentalist. This is because high

consumption of beef causing the green house effect by methane gasses

coming from the cow’s ranch. Large-scale plantation has effect the

environment and lost of green forest opening for plantation activities.

Vegetarian environmentalist criticizes the fast-food giant for cruelty to

animals and slaughtering. In America, once KFC want to introduce whale

burger causing uproar because whales are endangered species. Before using

paper packaging, KFC once had been criticized for being insensitive to

pollution because of using ne based packaging for its food products. Imagine

millions of people purchase from fast food operator and how is the impact to

world environment by throwing away those hard to recycle packaging.

Our world is getting concern on environment issue and business operating

here should not just care for profit, but careful usage of world resources for

sustainable development and care for environment safety and health for our

future generation. Critics and concern from all public or activist should be

review and support if necessary to ensure we play our social responsibility

better.

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Legal factors:

As a certified fast food operator, there are many regulations and procedures

that KFC should follow. For example is the Halal certification that becomes

a concern to Muslim consumers. KFC should protect its integrity and

consumer confidence by ensuring all materials and process are as claimed or

must followed.

Other legal requirement that the business owner should follow as stipulated

in laws are such as operating hours, business registration, tax requirement,

labor and employment laws and quality & environment certification (such as

ISO) in which the outlet has been certified. The legal requirement is

important because the offenders will be fined or have their business

prohibited from operating which can be disastrous.

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KFC India - BCG Matrix

Crispy Boneless Chicken

Krushers

Chicken Bucket

VegThali

?

Boston Consultancy Group (BCG) Matrix

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Question Mark:

Currently KFC have launched a new product in the market. They have also

tried to come into the beverages market by launching its new brand of

shakes called KRUSHERS. As it is a fairly new product it comes in the

category of the Question Mark in the BCG Matrix. It has a low market share

thus brings low revenue. KFC is advertising a lot to popularize this product

so there is a lot of expenditure on it. This product is individually not

bringing any profits and is a cash drain for the company. Company may

decide to completely remove this product from the market if it does not do

well soon and start bringing in revenue.

DOG:

KFC’s Veg Thali comes under this category. Although company had

launched this product much earlier, it has still failed to become a success. As

KFC is known more for its non-veg food, this also results in low demand for

this item. It has a low market share and although low on expenditure (as

company does not spend on its promotion), it does not bring in much

revenue as demand is low. The product is mostly CASH NEUTRAL.

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CASH COW:

KFC’s Chicken Bucket is the most successful product of the company. It has

the highest market share amongst all the other products. It has good demand

in the market and brings in huge sales revenue. The development and other

expenses are also low and thus this product is a CASH SIRPLUS for the

company.

STAR:

The star product of the company is its crispy Boneless Chicken. It has a high

market share and brings in high revenue. But it also has high developmental

expenditure involved. The profit therefore is generally not very high brought

in by this product. This product is CASH NEUTRAL for the firm. The

company is trying make this product a cow as well, by reducing the

expenditure

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Summary of current situation

SWOT analysis mean strength, weakness, opportunities and threats and the

SWOT analysis of KFC are:

STRENGTHS

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

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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.

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WEAKNESSES

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, peoples

taste and preferences and their likes and dislikes. This may prove

fatal for the company.

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OPPURTUNITIES

New Markets: Globalisation has opened doors for new markets for

the company. As the developed markets are mostly saturated, the

developing countries like India and China promises a good market and

generation of demand in the future. With more than 70% of the

markets in india being unexplored and un organised, KFC has a good

scope of expanding its operations in the country.

Cross Culture: Generally there is a good acceptance of American

culture of fast food in India. People are opening up to fast foods more

regularly in their daily lives and not just keeping it a once in a month

affair. Thus Indian mindset is fast changing.

Large Youth population: India has a very large share of youth

population a compared to other countries. More than 60% of the

population is under the age of 30yrs. As the young generation are

more open to fast foods and demand it more, this is a good news for

the company.

New variety: Company can also come up with new variety in the

menu like Pizzas, garlic breads to attract more customers.

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THREATS

Competition: Competitor companies like McDonalds are fast

catching up with the market.McDonald’s with sales of more than

19 billion in 1999, accounted for 15 percent of the sales of the

nation’s top 100 restaurant chains.

Organisations like PETA People for Ethnic Treatment for Animals have

given a bad name to the company which may prove disastrous to the

image of the firm. Currently, KFC is under massive attacks from animal

organisations, questioning the way KFC’s suppliers are threatening the

chicken, before they got slaughtered. Anti-KFC campaigns, such as the

one from PETA are affecting KFC’s brand image in a negative way and

result in direct dollar losses, as less people are consuming KFC chicken

Saturated US Market: Now KFC cannot rely on just its home

market to generate sales. As the US markets are already saturated

and leave no or little scope for growth, company necessarily needs

to look at offshore foreign markets to generate sales and keep up

the profits.

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MARKETING STRATEGIES OF KFC

There are different strategies adopted by KFC for different events. They

market their products on different events and in different activities as they

are helping SOS village.

According to KFC, kids become the future permanents customers and we

know very well that without any marketing strategy no marketing program

and no product is successful because we depend upon customers, customer

not depend on us.

KFC is following Niche Marketing and Societal Marketing

techniques.

KFC possess a western culture because some of the Indian people are

also following that culture.

KFC are moving from Divisional Level to the District level by

opening branches

KFC also offer free home delivery.

KFC open their outlets on reachable places.

KFC menu consists of more than 30 products.

KFC gives more priority to Family.

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MARKETING

Since 1982, KFC’s “All-American salute to Mothers” national card contest

has been KFC’s way of honoring moms and their families for making

mother’s Day KFC’s biggest sales day of the year. The contest encourages

children to creatively express their feelings for their moms by making a

homemade card and give them chance to compete for more than $10,000 in

cash and prizes. Educational packets, including language, history and art

exercises highlighting Mother’s Day, were sent to thousands of schools

nationwide.

There are 4 P’s of Marketing:

1. PRODUCTION

2. PRICING

3. PROMOTION

4. PLACEMENT

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Production:

Basically the product is anything that be offered to a market for attention,

acquisition, use, or consumption that might satisfy a want or need. KFC is

specially dealing in the chicken products; Basically, KFC has the special

raspy for chicken products that is why, KFC known as a chicken specialist

allover the glob. KFC target the Asia and east side because they observe that

they people are like the chicken products, so they enter in the market due to

the demand of their chicken products. KFC product variety of product in the

chicken, those products are:

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PRODUCTS:

Original recipe® chicken

Extra Tasty CrispyTM chicken

Hot WingsTM pieces

Tender Roast® chicken

Chunky Chicken pot pie

Kentucky Nuggest®

Colonel’s Crispy Strips®

Honey BBQ sandwich

Original Recipe® Sandwich

Tender Roast® Sandwich

Triple Crunch® Sandwich

Triple Crunch ®Zinger® Sandwich

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BRAND:

There are three brands of the KFC:

1) Taco bell

2) Pizza Hut

3) Long john silvers

Pricing:

KFC during pricing their products keep the different points in the mind like

they adopt the cost base price strategy. Pricing of the product includes the

Government taxes and excise duties and then they come at final stage of

determine the price of their products. KFC prices of products are a bit high

according to the market segment and it is also compatible to the stander of

their products.

Calculation of the price under Cost Based Pricing Strategy:

Total Pounds of Chicken Served in KFC Restaurant Annually = 1.914

Billion

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Total KFC Chicken Pieces Sold Annually = 5.89 Billion

Total Retail Sales = $8.9 Billion

Sales Price of per Chicken Piece = Total Retail Sales / Chicken Pieces

sold

= $8.9 Billion / $5.89 Billion

=$1.51

We assume that Fixed Cost is = $6000000000

Variable Cost = $675000000

Profit Margin is Or Mark Up = $225000000(25% of Sales)

Per Unit Variable Cost = $675000000 / 5890000000

= $ 0.115

Unit Cost = Variable Cost + Fixed Cost / Chicken pieces Sold

= 0.115 + 6000000000 / 5890000000

= 0.115 + 1.02

= $1.135

Now suppose manufacturer wants to earn 25% mark up on sale. The

manufacturer mark up price is calculated:

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Mark Up Price = Unit Cost / (1 – Desired Return on Sales)

=1.135 / (1-.25)

= 1.135 / 0.75

= $1.51

Promotion:

Promotion is one of the necessary plates in any form of business or in other

words you can say that promotion is the key of success. If you promote your

product at the right time. KFC also known the importance and significance

of promotion so they uses the bill boards the major source of advertisement

and one of the most important thing that they uses media especially the

newspapers to promote their products. They are also creating awareness

among the masses about their existing product range as well they tell us

about the future product.

Marketing efforts to be taken by the restaurant:

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Paste delivery posters at petrol pumps, flats, colleges, plazas, and

departmental stores.

Distribution of delivery flyers in residential areas, markets, plazas and

institutions (as per the plan)

Visit offices and business places.

Placement:

In the case of the KFC the placement of the product is not important but the

placement of the restaurant is important. The products of the KFC is cooked

at the sport and then served after that. KFC Cavalry branch opened in June

1998, in the main commercial zone of Cavalry Grounds near the Jinnah

Flyover. The restaurant is a three-story building including the basement

(where the chicky play area is located). It is ideally located in the center of a

main commercial and residential area of Lahore. The area that KFC Cavalry

caters for is the residential and office area of Cavalry Grounds and Cantt, as

the main target market. Another branch the KFC opened in the Lahore is in

Garden Town (opposite to Barkat Market). KFC also target the Faisalabad

and open its branch in D ground. Now we can easily judge that the KFC

target the place for their restaurant, which is well known and is in the

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Porsche area where the income level of the people is high then the middle

class level. Because the prices of the KFC products is high with comparison

to the local products manufacturer who are dealing in the same kind of

product in which KFC is dealing but the prices of the KFC is high due to

special taste, high quality, and due to international brand, it is the world

recognized fast food restaurant all around the world. So, for the placing

strategy, KFC chose the well income class area for their restaurants.

Product Issues

General description:

Features:

Quality Control Over Ingredients

Every Chicken Tested

K & N’s state-of-the-art Quality Assurance Lab monitors the entire

integration process from livestock to feed and on to preparation of ready-to-

cook and cooked products.

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Every Chicken Certified

HACCP – K & N’s ensures food safety by implementing the international

HACP (Food Safety System) and enjoy the unique privilege of being the

first and only HACCP certified company is India producing chicken and

chicken products. Free from diseases and bacteria, drug residues and other

contaminants.

Quality Assurance Certificate

Director General ( Research ) has issued quality assurance certificate for the

chicken used by KFC.

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Packaging

We are asked as many questions on our packaging as our products by our

customers. The

packaging for KFC products is chosen according to performance against

three key criteria:

Heat Retention

Moisture removal

Grease absorption

The packaging material and carton design are all adapted to maximise

performance against these three criteria.

Recycled Paper

All our clamshells and chicken boxes contain as much recycled material as it

is legally

allowed. By law we are required to have virgin fibre board in any part of the

packaging that is in contact with food. Any virgin fibre comes from board

suppliers who use pulp bought from managed forest in Scandinavia. This

ensures that any wood cut for paper production is replaced with new

plantings.

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Environmental concerns

Over and above ensuring our packaging is supplied via recycled or

renewable resources;

KFC are enthusiastically complying with the new environmental directives

on recovery and recycling of packaging waste.

Litter

We at KFC UKI are aware of our responsibilities to the Management of

Litter and all our packaging carries the ‘Keep your Country Tidy’ signs

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Branding

This research measured and compared the brand identity of Kentucky Fried

Chicken (KFC) in India. Brand identity was defined as the customer

impressions of four different KFC identity elements - properties, products,

presentations, and publications. A survey of young consumers in the

countries (n = 795), showed that the respondents were more apt to eat within

KFC restaurants, and spend more time doing so, than the Americans. The

Chinese also had much more positive impressions of KFC. Brand identity

impressions were correlated with overall customer satisfaction and with

future patronage intentions for both groups. These findings support a model

where differences in cultural frames of reference lead consumers to actively

localize the brand identity of this nominally globalized product.

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Promotion Issues

Sales promotion

For the sales pormotion KFC introduced their goods like watches ,

keychain, e.t.c to the customers.

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Advertisement

The advert titled Pool was done by OGILVY & MATHER, New Delhi

advertising agency for KFC ZINGER BURGER (KFC company) in INDIA.

It was released in the June 2009. Business sector is Fast food outlets &

restaurants.

One 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".

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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.

FEED US BACK

1. Tick Your Choice ()

Perfec

t

Above

Averag

e

Averag

e

Below

Averag

e

Poor

Food Quality

Food Temperature

Waiting Time

Menu Board

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Sitting Arrangement

Restaurant Temperature

Music

Restaurant Cleanliness

Overall Experience

2. When will you be back?

Next time I blink (very soon)

May be sometime later

When I win a Nobel Prize (Never)

3. How many people were in your group?

I was alone

Just me and someone

For me, three is company

4 or more

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4. Would you rather order than Dine in?

Yaa, I like to mostly order at home

Sometimes, but I mostly like to dine in

No fun without Dine in

5. How close is your house to your nearest KFC outlet?

Within 1 Km

Between 1 – 3 Kms

Between 3 – 5 Kms

Above 5 Kms

6. Do you want a KFC home delivery service?

My dreams are coming true

That would help

Doesn’t make much of a difference

No thanks

Thank You

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The data we received is as follows:

We did a survey on KFC on people with age group of mostly 20-25yrs.

Mostly all were open to non-veg food, and following were the results. As

seen below KFC has shown a good report on all the micro factors that we

considered.

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We also asked questions on whether they would like KFC to start

homedelivery services.

We also inquired “How close is the nearest KFC outlet from your house?

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Would you like to order at home or Dine in?

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DATA INTERPRETATION -

It is clear from the above report that a high number of people actually like to

order from their home or workplace rather than coming. This may be due to

more convienence, time shortage or just not willing to come and dine.

Certainly the home delivery market is huge and KFC can take well

advantage of the situation. Thus it would be in the best interest of the

company to start the service as soon as possible and capitalise on the

opportunity. KFC expects a rise in the orders by at least 20% by starting this

service.

Therefore, to conclude we would say that KFC should definitely have a

home delivery service.

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