PROJECT REPORT

ON

Kentucky Fried Chicken (KFC)

(Product Mix, Promotional Mix, Distribution Strategy, Pricing Strategy, Competitive Clustering, BCG Matrix, Product Life Cycle)

Subject Marketing Management 2

Submitted to Dr. M.A. Sanjeev

Submitted by Nitish Bhardwaj (14609048)Neha Goomber (14609044) Anirudh Jain (14609008)Kritika Agarwal (14609037)Akash Nelson (14609006)

ACKNOWLEDGEMENT

We would sincerely like to express our profound gratitude towards professor M A Sanjeev for his exemplary guidance and encouragement throughout the course. The guidance and knowledge shared by him shall carry us long way in the journey of life.

THANK YOU SIR

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1 About Kentucky Fried Chicken (KFC)

1.1 Mission statement:To sell food in a fast, friendly environment that appeals to pride conscious, health minded consumers

1.2 Vision statementOur passion, as a restaurant company, is to put a YUM on people's faces aroundthe world, satisfying customers every time they eat our food and doing it better than any other restaurant company

1.3 KFC(the name was originally aninitialsforKentucky Fried Chicken) is afast food restaurantchain that specializes infried chickenand is headquartered inLouisville,Kentucky, in the United States. It is the world's second largest restaurant chain (as measured by sales) afterMcDonald's, with 18,875 outlets in 118 countries and territories as of December 2013. The company is a subsidiary ofYum! Brands, a restaurant company that also owns thePizza Hutand Tacochains.KFC's original product ispressure friedchicken pieces, seasoned with Sanders' recipe of 11 herbs and spices. The constituents of the recipe represent a notabletrade secret. Larger portions of fried chicken are served in a cardboard "bucket," which has become a well-known feature of the chain since it was first introduced by franchiseePete Harmanin 1957. Since the early 1990s, KFC has expanded its menu to offer other chicken products such aschicken fillet burgersandwraps, as well assaladsandside dishes, such asFrench friesandcoleslaw, desserts, andsoft drinks, the latter often supplied byPepsiCo. KFC is known for theslogan"finger licking' good," which has since been replaced by "Nobody does chicken like KFC" and "So good."1.4 Operations in India: In December 2013, there were 361 KFC outlets in India. As well as the standard KFC offerings, the chain sells achickpeaburger, apaneerburger, hot wings with chilli lemon sprinkles and other country-specific production in IndiaIn 2014, KFC launched the "So Veg, So Good" menu as part of an India-specific promotional strategy focused on enhancing their vegetarian range. Dhruv Kaul, marketing director of KFC India, stated, "The So Veg, So Good menu launch does not mean that we are moving away from our core chicken offerings. It enhances and strengthens our existing vegetarian range and helps broaden the brand's relevance in a diverse country such as IndiaKFC was founded byHarland Sanders, an entrepreneur who began selling fried chicken from his roadside restaurant inCorbin, Kentucky, during theGreat Depression.Colonel Sanders was a key component of KFC advertising until his death in 1980. Despite his death, Sanders remains a key symbol of the company; an "international symbol of hospitalityKFC's major competitors include Subway, McDonald's and Burger King.

2 Product Mix of KFC (Product line, width & depth)2.1 Burgers2.1.1 Snacker2.1.1.1 Chicken Snacker

A delicious chunk of chicken served in a soft sesame bun, with salad and Thousand Island sauce.2.1.2 Rockin2.1.2.1 Veg Rockin' Burger

Crunchy, veg patty, topped with delicious thousand island sauce and iceberg lettuce, served in a soft warm bun.2.1.2.2 Chicken Rockin' Burger

Juicy, crispy chicken fillet, topped with spicy, creamy 3 pepper mayo and iceberg lettuce, served in a soft warm bun.2.1.3 Krisper2.1.3.1 Potato Krisper

A Crispy potato patty, topped with tangy sauce and served up in a soft, warm bun.2.1.4 Zinger2.1.4.1 Chicken Zinger

Juicy, crispy chicken fillet, topped with iceberg lettuce & delicious mayo, served in a soft sesame bun.2.1.4.2 Paneer Zinger

A unique double layered Paneer patty with a spicy creamy sauce, covered with fresh lettuce in a soft warm bun.

2.2 CHICKEN2.2.1 (2 pc) Hot 'N' Crispy

Treat your taste buds to spicy, crunchy, juicy chicken that sets your taste buds alight.2.2.2 (4 pc) Hot 'N' Crispy

Treat your taste buds to spicy, crunchy, juicy chicken that sets your taste buds alight.2.2.3 (2 pc) Fiery Grilled

Marinated and seasoned with a blend of herbs and spices, and then grilled to perfection.2.2.4 (4 pc) Fiery Grilled

Marinated and seasoned with a blend of herbs and spices, and then grilled to perfection.2.2.5 (8 pc) Hot 'N' Crispy

Treat your taste buds to spicy, crunchy, juicy chicken that sets your taste buds alight.2.2.6 (8 Pc) Fiery Grilled

Marinated and seasoned with a blend of herbs and spices, and then grilled to perfection.2.2.7 Dips Bucket

12 crispy chicken strips with 4 tasty dips.2.2.8 Flaming Crunch

Crispy juicy chicken with a blazing hot sprinkle

3.1 Beverages (Krushers)3.1.1 Kold Koffee

An exquisite blend of rich coffee, dairy and a hint of chocolate.

3.1.2 KFC Krushers Lime Soda

The all-time favorite thirst quencher.3.1.3Virgin Mojito

Juicy lemon wedges will tease you. Fresh mint leaves will tempt you.3.1.4 Green Mango Jelly

This perfect summer companion is loaded with green mango syrup.3.1.5 Choco Lash

It's crushed. It's a liquid, well almost. And its an overload for a snack!3.1.6 Choco peanut Bolt

Chocolate cookies and peanut butter topped with sinful chocolate syrup blended.3.1.7 Mango Burst

It's mango. And it's much more because it has creamy yogurt and icy dairy slush too.3.1.8 Strawberry Smoothie

Crunchy strawberries with creamy yogurt and icy dairy slush.3.1.9 Iced Kappucino

Indulgent and thick, the Iced Kappucino is a strong cold coffee topped with delicious.

4.1 TOASTED WRAPS4.1.1 Chicken Twister

Chicken rocks in a hot new role! Taste the freshness of tomatoes, lettuce and pepper mayo.4.1.2Veg Twister

Crispy Veggies covered in a creamy sauce and crunchy onions, wrapped in a warm toasted tortilla.5.1 Snacks5.1.1 Chicken Snacks5.1.1.1 Hot Wings 2 pc

KFC's No. 1 fully masaaledar snack! Chicken wings smeared with a lip smacking lemon chilli flavor5.1.1.2 Hot Wings 5 pc

KFC's No. 1 fully masaaledar snack! Chicken wings smeared with a lip smacking lemon chilli flavor.5.1.1.3 Popcorn Chicken

Tender, juicy pieces of Hot and Crispy Chicken with extreme sprinkle, that you can pop non-stop.5.1.1.4 Boneless Strips 3 pc

Tender, crispy and juicy boneless strips of Chicken. A unique treat!5.1.1.5 Veg Strips 6 pc

6 pcs of golden, crispy mixed veg fingers.5.1.1.6 Hot & Saucy Chicken

Two/Four pieces of juicy, crispy chicken in a yummy chilli garlic sauce with chilli flakes and bits of garlic and parsley! Its chicken snacking with a twist.

5.1.2 French Fries5.1.2.1 Large Fries

Crispy, golden fries.5.1.2.1 Medium Fries

Crispy, golden fries.5.1.2.3 Regular Fries

Crispy, golden fries.

6.1 Meals6.1.1 Box Meals6.1.1.1 KFC Rock Box Veg

Crunchy, veg patty, topped with delicious thousand island sauce and iceberg lettuce, served in a soft warm bun with Veg Strips, Fries & Pepsi.6.1.1.2 KFC Rock Box Chicken

Juicy, crispy chicken fillet, topped with spicy, creamy 3 pepper mayo and iceberg lettuce, served in a soft warm bun with a piece of Chicken, Fries & Pepsi.6.1.2 Group Meal

An amazing meal put together for your friends and family. Dig into tender, juicy Boneless strips and the famous Hot & Crispy Chicken with fries to munch on and Pepsi to quench all your thirst.

7.1 RICE BOWLZ 7.1.1 KFC Rice Bowlz Chicken

A complete meal in a bowl, loaded with KFC's exotic rice, flavorful gravy, with a topping of Chicken Popcorn.7.1.2 KFC Rice Bowlz Veg

A complete meal in a bowl, loaded with KFC's exotic rice, flavorful gravy, with a topping of Veg. Strips.

8.1 DESERTS8.1.1 Brownie Sundae

Treat your senses to a delicious hot brownie, topped with vanilla ice-cream and chocolate sauce.8.1.2 (2 Pc) Soft Serves

Dig into exquisite vanilla ice cream served in a crisp cone. Enjoy 2 Soft Serves with a special someone.8.1.3 Kream Ball Strawberry

A fabulous dessert that looks good and tastes even better. Kreamball is a delightful combination.

8.1.4 Kream Ball Mango

A fabulous dessert that 8.1.4looks good and tastes even better. Kreamball is a delightful combination.8.1.5 Kream Ball Chocolate

A fabulous dessert that looks good and tastes even better. Kreamball is a delightful combination.

Thus the product mix of the KFC constitutes the product width that segregates it into various range of products like Burgers Veg & Chicken, Snacks, Meals, Desserts & beverages. These product categories individually subdivided in to various product that constitute the product line for e.g. the product category of burgers of product mix of KFC constitute various kinds of burgers like zinger, rockin burgers which are further categorised into veg and chicken. Thus the above represents the combination of product width and the product line that product mix of KFC constitutes.

3 Pricing Strategy used by KFC3.1 Price StrategiesThe price strategies used by KFC was price skimming. Price skimming means put their products prices above the market price. The main objective of doing this is to maximize profit rather than market share and to cover the cost of production. They use the strategy of pricing above; they believe that their products are quality than other competitor so they push up their price, because in people assumption, they feel that the higher the price of the product, the quality of the product will higher3.2 Price CompetitionThe competition of KFC obviously is various fast food restaurants like MacDonald. KFC and MacDonald offers almost the same types of fast food like fried chicken, burger, soft drink, French fries and else. Normally competitor will reduce their price when other competitor did the same thing. The main product of KFC is fried chicken. Because KFC got its own secret receipt in frying the chicken, thus it can put higher price to the chicken. The price of other product is more or less same as McDonald.3.3 Cost base pricingKFC places their product price in different view. They adopt the cost base price strategy. The price of their product already included government taxes, service taxes, and exercise duties. So, they product will be set higher price which suit the target market and the standard of their product and to cover their cost such as variable cost

KFC during pricing their products keep thedifferent 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 comeat final stage of determine the priceof 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.

4 BCG Matrix analysis for KFC Products High Market Share Low

High

Market Growth

Prioritize (Star)(Zinger Paneer & Chicken)

Divest (??????)(Rice Bowl Veg & Chicken)

Invest (Cash cow) (Chicken Bucket)Kill (Dog)(Snacker Patty & Chicken)

Low

4.1 Cash Cow Here Cash cow for the KFC is its one of its oldest product the chicken bucket. As it is yielding KFC the maximum profits and the required low cost in investments. Thus the company tends to invest more in this. The future scope for the chicken bucket is low as it is one of the oldest and unique product of the KFC.The Strategy to harvest the Chicken bucket more as it is one of the core product of KFC.4.2 Star As per the BCG Matrix here Paneer & Chicken Zinger Burger represented as the star as it is one of the product that has high future prospective and currently have very high sales. Thus KFC tend to invest more in this despite the cost is high. The Strategy used by KFC is to grow and invest more in the KFC Zinger. 4.3 Question Mark The rice bowls of the KFC is considered as to be the question mark because despite being the recent product the profits earned through the product is low and the cost incurred is high. Thus it depends upon the KFC to divest from the rice bowls or to bring new changes in the product to avoid or prevent it being the dog. The Strategy used by KFC for Rice Bowls depends upon how it is performing, if it is not working well then it will divest from it otherwise if performing well then will invest in it.4.4 Dog Snacker being the one of the starting product of KFC in India is now not much consumed and thus making KFC bear the losses and incurring high cost. The sales for the product is almost nil. Thus snacker fall in the category of Dog thus it is appropriate for the KFC to kill the product. The strategy used by KFC to avest or close the production of Snacker.

5 Competitive Clustering of KFCLow PriceModerate PriceHigh Price

DessertsKream ball (KFC)Soft Serve (McDonalds)Vanilla soft serve (Burger King)2 Soft serves (KFC)Mc Swirls (McDonalds)Fudge Sundae (Burger King)Brownie Sundae (KFC)Mc Flurry (McDonalds)Dutch Apple Pie (Burger King)

Combo MealsBox Meals(KFC)Happy Meals (McDonalds)Kids & Value Meals (Burger King)Group Meal(KFC)Extra Value Meals (McDonalds)Make it Meals (Burger King)

BeveragesKrushers Mojito (KFC)Ice Tea (McDonalds)Snapple & Ice Tea (Subway)Mello Yello & Frozen Coke (Burger King)

Krushers Cold coffee (KFC)Caf Mocha (McDonalds)Cold Coffee (subway)Smooth Roast Coffee (Burger King)

Chicken bucket

Hot N Crispy (KFC)Fiery Grills (KFC)

Non spicy veg burgersPotato crisper (KFC)McAloo Tikki (McDonalds)Aloo Patty Sub (Subway)Morning Star Veggie (Burger King)Veg Rockin (KFC)McVeggie (McDonalds)Veggie Delight & Veggie Patty Sub (Subway)Crispy Veg (Burger King)

Non spicy Chicken burgersChicken snacker (KFC)Chicken McGrills (McDonalds)Chicken Roasted Sub (Subway)Original Chicken (Burger King)Chicken Rockin (KFC)McChicken (McDonalds)Chicken Ham Sub (Subway)Crispy Chicken (Burger King)

Spicy Chicken burgersChicken Zinger (KFC)McSpicy chicken (McDonalds) Chicken Tikka & Tandoori Subs (Subway)Chicken & Mutton Whopper (Burger King)

Spicy veg burgers

Paneer Zinger (KFC)McSpicy Paneer (McDonalds)Veggie Paneer Tikka Sub (Subway)Veg Whopper (Burger King)

Veg WrapsVeg Pizza McPuff (McDonalds)Chicken Twister (KFC)BigSpicy Paneer (McDonalds)

Chicken wrapsVeg Twister (KFC)BigSpicy Chicken (McDonalds)

Veg SnacksFrench fries (KFC)McFries (McDonalds)French fries (Burger King)Veg Rice bowlz (KFC)Onion Rings & Hash Browns (Burger King)

Chicken SnacksHot wings (KFC)McMuffins (McDonalds)Chicken Strips (Burger King)Chicken rice bowlz (KFC)Boneless strips (KFC)Chicken McNuggets (McDonalds)Chicken Nuggets (Burger King)

Low PriceModerate PriceHigh Price

5.1 Competitive Analysis of KFC & identification of Direct CompetitorThe conclusion that is drawn out of the competitive cluster of the KFC with respect to various competitors in different product categories are: Subway is giving competition to KFC only in the category of all kind of burgers in every price range. Whereas Burger King & McDonalds giving stiff competition to KFC in almost every product category in every price range only except the chicken bucket category which is untouched by both Burger King & McDonalds & also Burger King does not give competition to the KFC in the category of Veg & Chicken wraps. Thus it can be concluded from the competitive cluster analysis that both McDonalds & Burger King can be considered as Direct Competitors of KFC among which McDonalds has higher degree of directness to KFC in terms of competition in every product and price range.

6 Product Life Cycle of KFC

The period of time over which an item s developed , brought to market and eventually removed from market. First the idea goes through R&D stage. If the idea is feasible it is produced, marketed and rolled out. Assuming the product becomes a success its production will grow until product becomes widely available. Eventually, demand for the product will decline and it will become obsolete. Every product has its life cycle whether it is successful or not inthe market. This cycle has four stages given below in thediagram.Now discussing the KFC product line (keeping in mind BCG matrix) accordingto their life cycle:

6.1 Introduction:Hot Wings (chicken)Rice bowl (veg or chicken)

6.2 Growth:Fiery Grills (chicken bucket)Zinger (veg & chicken)

6.3 Maturity:Hot N Spice (chicken bucket)Twister (veg & chicken)KrushersRockin (veg & chicken)

6.4 Decline:Potato Crisper (veg)Snacker(veg & chicken)

7 Promotion Mix of KFC

In 2014, KFC launched the "So Veg, So Good" menu as part of an India-specific promotional strategy focused on enhancing their vegetarian range. Dhruv Kaul, marketing director of KFC India, stated, "The So Veg, So Good menu launch does not mean that we are moving away from our core chicken offerings. It enhances and strengthens our existing vegetarian range and helps broaden the brand's relevance in a diverse country such as India7.1 AdvertisingKFC will advertise their new product in radio, television, billboards, flyers, and sponsorship, voucher and contest. KFC regularly advertised Colonel Sanders licking his fingers and talking to the viewer about his secret recipe in 1960. Although Sanders death in 1980, KFC still continue and used him in branding and advertising. Reminder advertising is also used by KFC. In any way related to KFC we often can saw a phase, that is finger licking good. This phase functions is to wake up KFC lover and reminded them their feeling and tasty at their eating last time. Thus, this can attract them to come consume in KFC again. 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.7.2 Sales PromotionKFC also offer voucher which voucher holder will receive a certain amount percentage of discount in certain products. Example, KFC Jom Jimat Afternoon Cravers have a 10% off on 3 layer tea or Fizzberry Freeze. In certain time, our house will receive some catalog which is from KFC. The catalog always listed the price of new product, the information of that product, venue available, and something else.7.3 SponsorshipSponsorship is another tool to strengthen image and well known of organization. KFC had become the sponsor of the Australian Cricket Team and the colonel logo can be seen on their uniforms throughout the matches. Once people see the logo, they will think about KFC.7.4 ContestKFC is currently organizing the Colonels Doublicious Double Contest. All participant need to do is creating a likeness to Colonels Sanders. Thus, KFC is slowly promote their product because once they creating Colonels Sanders, they will automatically think about fried chicken of KFC.

8 Distribution Channels of KFCA large part of the KFC value-chain is distribution (1) Efficiently getting the product (2) in good condition to where (3) it is convenient for the consumer to buy it (4) in a setting that is consistent with the brands image.Distribution (also known as the place variable in the marketing mix, or the 4 Ps) involves getting the product from the manufacturer to the ultimate consumer. Distribution is often a much underestimated factor in marketing. Many marketers fall for the trap that if you make a better product, consumers will buy it. The problem is that retailers may not be willing to devote shelf-space to new products. Retailers would often rather use that shelf-space for existing products have that proven records of selling.Although many firms advertise that they save the consumer money by selling direct and eliminating the middleman, this is a dubious claim. The truth is that intermediaries, such as retailers and wholesalers, tend to add efficiency because they can do specialized tasks better than the consumer or the manufacturer. Because wholesalers and retailers exist, the consumer can buy one pen at a time in a store located conveniently rather than having to order it from a distant factory. Thus, distributors add efficiency by: Breaking bulkthe consumer can buy small quantities at a time. Consumers can buy a dozen eggs and a quart of milk at one time. Channels move large quantities of foods from farmers, processors, and manufacturers, taking advantages of economies of scale. Distributing. The consumers can buy at a neighbourhood store, which in turn can buy from a regional warehouse. Carrying inventory Financing

Channel structures vary somewhat by the nature of the product. A large restaurant chain might buy ketchup directly from the manufacturer. The simplest structure is the farmer selling directly to consumers. It is, however, usually inconvenient for the consumer to travel to the farm and for the farmer to sell small quantities to each of many buyers, but occasionally farmers like to supplement their sales by selling at farmers markets. Consumers may benefit from fresher products and possibly lower prices, but most of the value here is probably entertainment. Large buyers might be able to buy directly from the farmere.g., McDonalds could buy cows directly in very large quantities and then sell burgers to retail customers.

In most cases, however, a wholesaler is involved. This wholesaler buys things from several different manufacturers and delivers those to retailers. A wholesaler may, for example, serve many different retail stores with many brands of cereal, spices, and other food ingredients. The retailer than can buy many different products from the same source, increasing convenience. The wholesaler can buy thousands of cases of Morton salt from the manufacturer and just a few cases at a time to each retailer. The wholesaler will add a margin for this service, but this margin is usually less than what the manufacturer and/or retailer would have to spend in dealing directly with each other.

Manufacturers of different kinds of products have different interests with respect to the availability of their products. For convenience products such as soft drinks, it is essential that your product be available widely. Chances are that if a store does not have a consumers preferred brand of soft drinks, the consumer will settle for another brand rather than taking the trouble to go to another store. Occasionally, however, manufacturers will prefer selective distribution since they prefer to have their products available only in upscale stores.Parallel distribution structures refer to the fact that products may reach consumers in different ways. Most products flow through the traditional manufacturer --> retailer --> consumer channel. Certain large chains may, however, demand to buy directly from the manufacturer since they believe they can provide the distribution services at a lower cost themselves. In turn, of course, they want lower prices, which may anger the traditional retailers who feel that this represents unfair competition.

9 References

http://www.kfc.co.in/menuwow.php

http://www.mcdonaldsindia.com/menu.html

http://www.bk.com/menu

http://www.subway.co.in/page_menu_index.html

http://www.ukessays.com/essays/business/kfc-vision-mission-and-principles-worldwide-business-essay.php