INTERNATIONAL BUSINESS

Report Title: International Business Strategy (KFC)

Submitted to:
Sadat Saeed (Lecturer)
Submitted by:
Zubair Rashid (CIIT/FA09-MBA-036/SWL)
Imran Babar (CIIT/FA09-MBA-064/SWL)
Farhan Saeed (CIIT/FA09-MBA-062/SWL)
Syed Mubashir (CIIT/FA09-MBA-060/SWL)
Fozia Mumtaz (CIIT/FA09-MBA-088/SWL)

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY

SAHIWAL

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 KENTUCKY FRIED CHICKEN (KFC)

PREFACE

Our institute COMSATT Institute of information technology has given us an

opportunity to show our intellectual ability through an integrated project and allow us
to decide the service sector on which we want to make our project.
For this we have chosen the KFC food chain. KFC is the growing brand in the world
for food industry. KFC basically deals in chicken recipes whose main focus in crispy
and deep fried chickens.
To know the market response of KFC we visited various chains of KFC and we also
had survey on the public (who are the basic consumers of the KFC).
We found that they are totally satisfied by the human resource strategies of KFC. By
people we concluded that they are also satisfied by the service provided by KFC, and
the product what they provide are up to the mark. They find KFC food a best quality
food. But then also KFC have to work hard to earn the goodwill in market in
comparison to other fast food chains.

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 ACKNOWLEDGEMENT

To complete this project, there have been many people who graciously gave their
time. Their experience and direction has significantly helps us to complete this
project. We would like to thank the following.

1. Sadat Saeed (Lecturer)

All the faculty members and all of our fellow mates who help us to complete the task.
Several people have been of tremendous assistance in the fine-tuning of this project

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 Table of Contents

ACKNOWLEDGEMENT 3

KFC’S SUCCESS STORY 7

CULTURAL FACTORS AFFECTS ON KFC’S “SUCCESS” 7

CULTURAL FACTORS IN INDIA THAT GO AGAINST KFC’S ORIGINAL

RECIPE 8

FINANCE STRATEGY IN INDIA 9

HUMAN RESOURCE STRATEGY IN INDIA 12

OPERATIONS STRATEGY IN INDIA 15

MARKETING STRATEGY IN INDIA 19

Swot Analysis--------------------------------------------------------------------------------------------------22

P's of Marketing-----------------------------------------------------------------------------------------------22

MANAGEMENT INFORMATION SYSTEMS STRATEGY IN INDIA 25

Management by Objectives --------------------------------------------------------------------------------26

BIBLIOGRAPHY 29

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INTRODUCTION

KFC Corporation, based in Louisville, Kentucky, is the world's most popular chicken
restaurant chain, specializing in Original Recipe, Extra Crispy, Twister and Colonel's
Crispy Strips chicken with homestyle 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's and Pizza Hut restaurants in more than 100
countries and territory.Founded by Harland Sanders in 1950s when fast moving
franchising was still in its infancy. Colonel Sanders was able to tap a talent hunt.

• Secret recipe of chicken with eleven herbs and spices.

• His foreseeing seemed to be true which is less than 13 years the chain had
crossed the 300 mark.
• His growing age promoted colonel sanders to sell off the business for
$2million in 1964 to Jack Massey and John Brown Jr-two Louisville
businessman.
In 1970 KFC merged with Heublien Inc, a producer of alcoholic beverages
with little restaurant experience.
• In 1986 KFC was sold to PepsiCo.
• Next KFC turned their attention towards tapping into international markets
and by around 1980s it had entered Japan, Australia, Mexico and places in the
Caribbean and UK.
• In the 1990s it could foresee the virgin markets if INDIA and CHINA.

KFC HISTORY

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9/9/1890
Harland Sanders is born just outside Henryville, Indiana.
1957
Kentucky Fried Chicken first sold in buckets
1960
The Colonel's hard work on the road begins to pay off and there are 190 KFC
franchisees and 400 franchise units in the U.S. and Canada.
1965
Colonel Sanders receives the Horatio Alger Award from the American Schools and
Colleges Association.
1966
The Kentucky Fried Chicken Corporation goes public.
1969
The Kentucky Fried Chicken Corporation is listed on the New York Stock Exchange.
1971
More than 3,500 franchised and company-owned restaurants are in worldwide
operation when Heublien Inc. acquires KFC Corporation.
1976
An independent survey ranks the Colonel as the world's second most recognizable
celebrity.
1977
Colonel Sanders speaks before a U.S. Congressional Committee on Aging.
1979
KFC cooks up 2.7 billion pieces of chicken. There are approximately 6,000 KFC
restaurants worldwide with sales of more than $2 billion.
1986
PepsiCo, Inc. acquires KFC from RJR Nabisco, Inc.
1997
PepsiCo, Inc. announces the spin-off of its quick service restaurants - KFC, Taco Bell
and Pizza Hut - into Tricon Global Restaurants, Inc

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 KFC’S SUCCESS STORY

• Colonel sanders commitment to quality and hygiene.

• PepsiCo taking over KFC proved to be a turning point in its life cycle.
• Being a leader in its field PepsiCo provided that extra edge to KFC whereby the
soft drinks were made available at KFC outlets along with their menu.
• Coordinated through national advertising.
• Consumers were able to relate the soft drinks with the snack foods.
• Was able to foresee a huge untapped market in the Asian Countries.
• “Think like a local …………..not like an American Company”. KFC gelled with
the people as the operations were in their hands.
• Mellowed down their Fried chicken image by changing their name to KFC in
1991.
• Were able to provide a wider variety to the customers to chosen from, thus
strengthens their market positions.
• Customization in different countries. Different culture and customers preferences
were taken into account to attain GCTC [GETTING CLOSE TO THE
CUSTOMERS].

CULTURAL FACTORS AFFECTS ON KFC’s “SUCCESS”

• Reducing the psychic distance by handling over of operations to local people so

that customers could relate to them more easily.
• Able to adapt to cultural differences, tastes and preferences. For example keeping
in mind the Indian tastes buds KFC launched a fierier “ZINGER BURGER”.
• Got an edge since chicken is a staple dish and is taken more frequently in Asian
countries.

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• More accustomed to take out food over the counter.
• The target customer of KFC [upper, middle and above] are health conscious and
hence to cater to their interest Kentucky fried Chicken changed its name to KFC.
• Price sensitivity of the two economies drove KFC to introduce menus that were
easy on the consumer’s pocket.

CULTURAL FACTORS IN INDIA THAT GO AGAINST KFC’s

ORIGINAL RECIPE

• KFC is perceived as a restaurant serving only chicken-Indian families obviously

wanted more varieties.
• Believed to be expensive …….. No value for money.
• Wanted to position itself as a “family restaurant”, not as a “teenage hangout”
• Ambience was missing.
• Perceived differences in eating habits.
• Tried to target the vegetarian segment. However this backfired as in India having
veg food cooked in a non veg kitchen doesn’t come out well with the vegetarian
segment.

ETHICAL FACTORS:

The regulatory authorities found that KFC’s chicken did not adhere to the prevention
of FOOD ADULTRATION ACT, 1954. Chickens contained nearly three times more
monosodium glutamate (popularly known as MSG, a flavor enhancing ingredients) as
followed by the act. Since the late 1990’s, KFC faced severe protests by people for
Ethical Treatment of Animals (PETA), an animal rights protection organization.
PETA accused KFC of cruelty towards chickens and released a video tape showing
the ill-treatment of birds in KFC’s poultry farms.

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 FINANCE STRATEGY IN INDIA

Factors Average Demand (per day per branch)

During regular period 150-200
During peak period (promotion schemes) 350-450
During festivals 450-650

COMPARISION OF FINANCIAL STATEMENT

1 Short Term Solvency Ratio
Current Ratio: Ideal is 2:1
= Current Assets/Current Liabilities
=Stock + debtors + cash + loans & advances/current liabilities

Conclusion
Short term solvency of KFC - its current asset ratio is closer to ideal ratio of 2:1 or we
can say that its current assets can be more readily converted into cash to meet the
current liabilities
.
2 Long Term Solvency Ratio

2. Debt Equity Ratio = Acceptable ratio=2:1

(Although now days lending institutions prefer 1:1)

= Debt (Long term loan) / Equity (Shareholder fund)

= Secured loan +unsecured loan/Equity + Reserve surplus

Debt equity ratio 0.61

Conclusion

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Higher ratio indicates a risky financial position while a lower ratio indicates safe
financial position. Also it indicates the amount of capital supplied to the company by
its proprietors and of asset cover availability to its creditors on liquidation.

3 Interest Coverage Ratio

Interest Coverage Ratio =NPBIT/Interest on fixed(long term) loans or

debenture
Interest cover 9.12

Conclusion
This ratio indicates how many times the profit covers fixed interest. It measures
margin of safety to lenders. The higher the numbers more secure the lender in respect
of his periodical interest income.

4 Fixed Asset Ratio

Fixed Asset Ratio = Shareholder fund + long term loan / Net fixed asset

= Equity share+ Reserve+ secured loan+ unsecured loan/ Net block Investment

Fixed asset ratio 1.14

Conclusion
If ratio < 1, firm has adopted imprudent policy of using short term funds for acquiring
fixes assets.
If ratio > 1, indicates that long term funds are being used for short term purpose i.e
for financing working capital. It is not good from the firms point of view as it’s
usually more difficult to raise long term funds.

5 Proprietary Ratio

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Proprietary Ratio =Proprietary fund /Total asset
=Equity share+ Reserve and surplus / Net fixed asset+ Current asset
Proprietary Ratio 0.76

Conclusion
This ratio is of particular importance for creditors. A higher ratio shows safety for
creditors. Ratio below 50% may be alarming for creditors since they may have to
loose heavily in the event of company’s liquidation on account of heavy looses.

6 ACTIVITY RATIO

Capital Turnover Ratio =Net sales / Fixed asset + Networking capital

Capital Turnover Ratio 0.29

Conclusion
This ratio indicates how efficiently capital employed is being used. High turnover
means efficient utilization and improves liquidity and profitability of business.
However too high ratio may indicate over trading resulting in paucity of funds.

7 PROFITABILITY RATIO

Operating Profit Ratio =Operating profit*100 / Net Sales

OPM (%) 43.58
Conclusion
This ratio measures profitability and soundness of business. Higher the ratio better it
is.

Key financials

Year end Mar 07(in crores)

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Net sales 413.78
Operating profit 180.33
Net profit 91.50
EPS (Rs) 38.67
ROE (%) 26.87
Sales/net assets 0.29

HUMAN RESOURCE STRATEGY IN INDIA

HUMAN RESOURCE POLICY IN KFC

Hiring and retaining the right employees is critical to the success of your restaurant's
operation. Here you'll find news and research on getting the most from your human
resources processes.

Area Manager:
Area Managers are accountable for providing coaching, leadership and operational
support to 8-10 KFC Restaurants within a defined Area.

Restaurant General Managers:

The Restaurant General Manager is accountable for creating and running an energetic
and valuable work environment, which is committed to serving the best chicken at the
fastest speed and with a smile.
The Restaurant General Manager reports directly to an Area Manager and is
accountable for successfully implementing and maintaining all Company policies and
procedures in relation to operations, customer service, cash handling, marketing,
purchasing, human resources, health & safety, administration, training and
development.

Assistant Managers:

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The Assistant Manager is responsible for assisting the Restaurant General Manager
(RGM) in creating an energetic and valuable work environment, which is committed
to serving the best chicken at the fastest speed and with a smile.
Assistant Managers are also responsible for ensuring all Company policies and
procedures are followed in relation to operations, customer service, cash handling,
marketing, purchasing, human resources, health & safety, administration, training and
development.

Trainee Managers:
Responsible for assisting the Restaurant General Manager and Assistant Managers in
creating an energetic and valuable work environment, which is committed to serving
the best chicken at the fastest speed and with a smile.
Trainee Managers help with day-to-day running of the restaurant, and need to ensure
that all operations, customer service, cash handling, marketing, purchasing, human
resources, administration and training & development policies are followed.

Customer Service Team Members:

Responsible for working the service areas and ensuring quality product, service and
cleanliness is delivered to all customers at top speed and with a smile!

Food Service Team Members:

Responsible for putting the crunch in the coating and the zing in the Zinger…the
cook’s main task is to prepare and cook the irresistible KFC products! The cook must
also maintain the cleanliness of the cooking area as well as the quality of product and
speed of preparation.

Recruitment and Selection at KFC:

Part of KFC’s recruitment strategy is to offer employees high-quality options such as
potential for advancement, company reputation, benefits package and salary scale.
When KFC was looking for senior executives who could run a business, for two years
it scoured the management teams across various industries and offered senior

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executives of companies like Coca Cola attractive benefits and a better salary scale to
get them on the team. These executives were promised quick advancement on their
jobs, and apparently given such incentives to join that most of the people offered jobs
joined KFC even though they were told before hand that at immediate present, no
senior position was vacant. Hence, KFC’s attractive salary and benefits package is an
effective lure for potential employees (Rigdon, 1991).

Recommendations
The recommendations that I would offer KFC is to maintain its current low turnover
rates and incorporate even more practices in its culture which provide recognition to
employees and make them feel valued. As for selection and recruitment practices, age
should not be a bias factor and the principle of promotion from within should be
adhered to. This is because for companies like KFC, it is very important to promote a
certain employee culture; hence, it is better to promote older employees rather than
hiring people from external sources.

Training and Development are Priority!

On the path from Team Member to Restaurant General Manager, extensive training
and development is a priority. Nationally Recognized Training Programs are
available to employees*.
• Certificate II in Retail Operations
• Certificate III in Retail Supervision
• Certificate IV in Retail Management

What do you need to become part of our team?

Good interpersonal skills, strong work ethic, commonsense and great customer
service skills. You must be prepared to work shiftwork, including nights and
weekends.
Availability varies by area*

Corporate Culture

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"Reward and Recognition" "Promotion from within" "Belief in People"
Our Restaurant General Managers are No. 1, and they are rewarded for their
achievements through competitive salary packages, incentive scheme and share
ownership programs for company employees.
We are an Employer of Choice
• Equal Opportunity Employment Policy
• Executive Trainee Program
• Family Friendly Policies
• World Class Training Systems
• Education Assistance Program
• Product Discount Program
• Performance based salary increases and
• Employee franchising

OPERATIONS STRATEGY IN INDIA

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

Issues Faced by KFC In INDIA:-

The case highlights the ethical issues involved in Kentucky Fried Chicken's (KFC)
business operations in India. KFC entered India in 1995 and has been in midst of

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controversies since then. The regulatory authorities found that KFC's chickens did not
adhere to the Prevention of Food Adulteration Act, 1954. Chickens contained nearly
three times more monosodium glutamate (popularly known as MSG, a flavor
enhancing ingredient) as allowed by the Act. Indian people condemned KFC's entry
into India, saying that it was unethical to promote highly processed 'junk food' in a
poor country like India with severe malnutrition problems. Since the late 1990s, KFC
faced severe protests by People for Ethical Treatment of Animals (PETA), an animal
rights protection organization. PETA accused KFC of cruelty towards chickens and
released a video tape showing the ill-treatment of birds in KFC's poultry farms.
However, undeterred by the protests by PETA and other animal rights organizations,
KFC planned a massive expansion program in India.

• KFC did not appreciate the need for protecting animal rights in¬ developed
and developing countries like India.
• They did not understand¬ the importance of ethics in doing business.
• They did not examine the¬ reasons for protests of PETA
• KFC did not add the flavours and spices in¬ their menu which Indians
favoured.
Major reason was KFC was targeting¬ higher income group in India in order
to compete with the local chicken dhaba wala’s.

KFC Re-entry into Indian Market

KFC entered India in 1995, but a controversy surrounding the levels of MSG in its
preparations and subsequent protests from farmers' groups and animal rights activists
spelt trouble for the company. Ultimately, the company had to shut all but one outlet
in the country. Only recently in 2003 it made a quiet re-entry into the Indian market.
Then it came up with the strategies and menu that was desirable by the Indian
consumers. And since 2003 it is expanding successfully its business in India.
At the same time it provided menu items which can be afforded by the middle income
group level like KFC’s Mini Burger for Rs. 25, Hot Crispy Chicken which contained
Indian spices that were liked by Indian’s. Now they are adhering to the rules of Food

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Corporation of India and PETA, helping them to expand business successfully. The
company aimed at targeting cosmopolitan cities like Chandigarh, Pune, Kolkata,
Chennai and Hyderabad, where mall culture is fast developing. PepsiCo also decided
to concentrate on the expansion of KFC since its other brand, "Pizza Hut", had
successfully established a strong foothold in India. The expansion drive would take
Pizza Hut across 33 cities; KFC will set foot in Kolkata and Hyderabad after having
forayed into Pune recently.
Ms Sharanita Keswani, Director, KFC Marketing, says that KFC also operates on the
franchisee model. "We expect to scale up to 12-13 restaurants by the end of this year,
from six at present. KFC is looking at extending its presence across India to create a
national footprint." Both Pizza Hut and KFC have made various alterations to their
menus in India to attract more footfalls. It has developed a range of pure vegetarian
food. All the vegetarian products are stored, cooked and served separately, by a
separate crew distinctly identified by their colour-coded uniform, says Ms Keswani.
KFC has around 10,286 units worldwide, followed by Taco Bell with 7,111 restaurant
units world over. Long John Silver's is America's largest quick-service seafood chain
with more than 1,200 units worldwide. KFC caters to nearly 7 million customers in
more than 78 countries through 11,338 outlets. The company believes that India,
owing to its size and growing aspirations of an upwardly mobile middle class, is a
critical market in its overall scheme of things. Yum! is a fortune 500 corporation that
operates or licenses Taco Bell, KFC, Pizza Hut, and Long John Silver’s restaurants
worldwide.
YUM! Brands, Inc. is committed to conducting its business in an ethical, legal and
socially responsible manner. To encourage compliance with all legal requirements
and ethical business practices, Yum has established this Supplier Code of Conduct for
Yum's U.S. suppliers.
Yum! has adopted best operational practices to ensure high customer orientation,
which is demonstrated through C.H.A.M.P.S. This is the umbrella operation
programme for training, measuring and rewarding an employee's performance against
customer standards. C.H.A.M.P.S stands for: cleanliness, hospitality, accuracy,
maintenance, product quality and speed. KFC’s challenge here is to make sure to

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meet our quality standards in terms of food, facilities, people and the overall
experience. KFC want to ensure that the customers experience in India is no different
from a Pizza Hut outlet anywhere else in the world.
KFC caters to nearly 7 million customers in more than 78 countries through 11,338
outlets. The company believes that India, owing to its size and growing aspirations of
an upwardly mobile middle class, is a critical market in its overall scheme of things.
Stringent cleaning standards ensure that all tables, chairs, highchairs and trays are
sanitised several times each hour. Such meticulous attention to cleanliness extends
beyond the lobby and kitchen to even the pavement and immediate areas outside the
restaurant.
Did you know that every year, Rs. 50,000 crore worth of food produce is wasted in
India? This is mainly because of the lack of proper infrastructure for storage and
transportation under controlled conditions. KFC is committed to providing quality
products while supporting other Indian businesses. And so, KFC spent a few years
setting up a unique Supply Chain, even before they opened their first restaurant in
India.

KFC’s Supply Chain

A Supply Chain is a network of facilities including - material flow from suppliers
and their "upstream" suppliers at all levels, transformation of materials into semi-
finished and finished products, and distribution of products to customers and their
"downstream" customers at all levels. So, raw material flows as follows: supplier -
manufacturer – distributor – retailer – consumer. Information and money flows in the
reverse direction. The balance between these 3 flows is what a Supply Chain is all
about.
When there is a balance in the finished product ordering, the Supply Chain operates at
its best. Any major fluctuation in the product ordering pattern causes excess /
fluctuating inventories, shortages/stock outs, longer lead times, higher transportation
and manufacturing costs, and mistrust between supply chain partners. This is called
the Bullwhip Effect. Depending on the situation, the Supply Chain may include major
product elements, various suppliers, geographically dispersed activities, and both

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upstream and downstream activities. It is critical to go beyond one’s immediate
suppliers and customers to encompass the entire chain, since hidden value often
emerges once the entire chain is visualized. For example, a diesel engine
manufacturer may be able to integrate a GPS locator system into its engine control
system. Its immediate customer, a heavy truck manufacturer, may see no need for this
functionality. However, the downstream customer, a trucking company with a large
fleet, may be very interested in a locator system. Understanding the value to the
downstream customer is part of the supply chain management process.

Cold Chain
The Cold Chain is necessary to maintain the integrity of food products and retain their
freshness and nutritional value. The Cold Chain is an integral part of the Supply
Chain. Setting up the Cold Chain involves the transfer of state-of-the-art food
processing technology by KFC and its international suppliers to pioneering Indian
entrepreneurs, who have now become an integral part of the Cold Chain.
The term Cold Chain describes the network for the procurement, warehousing,
transportation and retailing of food products under controlled temperatures. KFC’s
outlets store products to be used on a daily basis, within a temperature range of –18ºC
to 4ºC. About 52% of the food products need to be stored under these conditions
before they are used.

MARKETING STRATEGY IN INDIA

KFC as a Brand

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KFC is one of the best-known brands worldwide Doing Integrated assignment we
study how KFC continually aims to build its brand by listening to its customer's also
identifies the various stages in the marketing process. Branding develops a
personality for an organization, product or service. Brand Image represents how
consumers view the organization. Branding only works when behaves and presents
itself in a consistent way, Marketing communication methods, such as advertising and
promotion, are used to created colors, design and image which gives a recognizable
face .At KFC this is represented by its familiar logo-Colonel Harland Sanders is
shedding his white suit jacket for a red cook. Marketing involves identifying
customer's needs and requirements and meeting these needs in better way then its
competitors. In this way a company creates loyal customers. The stating point is to
find out who are potential customers are-not everyone will want what KFC has to
offer. The people KFC identifies as likely customers are known as key audiences

The Marketing Mix and Marketing Research.

Having identified its key audiences a company has to ensure a marketing mix that
created that appeal specifically to those people. The marketing mix is a term used to
describe the four main marketing tools (4P's):

• Product
• Price
• Place
• Promotion

Using that detailed information about its customers. KFC's marketing department can
determine:

What products are well received?

What prices consumer willing to pay?
What T.V. Programmes, newspapers and advertising consumer read or view

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What restaurants are visited?

Market research is the format which enables KFC to identify this key information.
Accurate research is essential in creating the right mix to win customers loyalty.
In all its market KFC faces competition from other businesses. Additionally
economic, legal and technological changes, social factors retail environment and
many other elements affect KFC success in the market. Market research identifies
these factors and anticipates how they will affect people’s willingness to buy. As the
economy and social attitudes change, so do buying patterns. KFC needs to identify
whether the number of target customers is growing or shrinking and whether their
buying habits will change in the future.

Market research considers everything that affect buying decisions. These buying
decisions can often be affected by wider factors than just the products itself. Lf
psychological factors are important, e.g. what image does the product give or how the
consumer feels when purchasing it? Through marketing, McDonald’s establishes a
prominent position in the minds of customers. This is known as Branding.
Strengths and weaknesses must be identified, so that a marketing strategy which is
right for the business can be decided upon.

The analysis will include the:

• Company’s products and how appropriate they are for the future.
• Quality of employees and how well trained they are to these additional
psychological factors are significantly offer the best service to important to the
customer. They can be even more customers important than the products’ physical
benefits.
• Systems and how well they function in providing customer satisfaction e.g.
marketing databases and restaurant systems.
• Financial resources available for marketing

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

Swot Analysis

Strengths (Internal)
• The brand detailed market research to create the right marketing mix.

Weaknesses (Internal)
• Kfc has been for around long time. Therefore they have to keep innovating.

Opportunities (External)
• Increasing number of customers looking for food that is served in quick and
friendly way.

Threats (External)
• New competitors changing lifestyles.
• More people day by day becoming Vegetarian day by day.

P's of Marketing
At this point the marketing mix is put together:
• Product

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 It is important thing to remember when offering menu items to customers are that
they have a choice, they have a huge number of ways of spending their money and
places to spend it.
Therefore, KFC's places considerable emphasis on developing a menu which
customers want. Market research establishes exactly what this is.
However customer’s requirements change over time. What is fashionable and
attractive today may be discarded tomorrow. Marketing continuously monitors
customer’s preferences. In order to meet these changes KFC has introduced and
phased out old ones. And will continue to do so.
Care is taken not to adversely affect the sale of one choice by introducing another
choice which will cannibalize the sale from the existing one (trade off).KFC knows
that items on its menu will vary in popularity. Their ability to generate profits will
vary at different points in their life cycle.

Products go through a life cycle which is illustrated below:

The type of marketing taken and amount invested will be different; depending upon
the stage product is reached. For example launching a new product involves
automatically television and other advertising support. At any time company will
have a portfolio of products each is in different stage of its life cycle. Some of KFC's
option growing tremendously but some Halal products is in its maturity stage.
• Price
The customer’s perception of value is an important determinant of the price charged.
Customers draw their own mental picture of what a product is worth. A product is
more than a physical item; it also has psychological connotations for the customer.
The danger of using low price as a marketing tool is that the customer may feel that
quality is being compromised. It is important when deciding on price to be fully
aware of the brands and integrity. A further consequence of price reduction is that
competitors match prices resulting in no extra demand. This means the profit margin
has been reduced without increasing sales.
• Promotion

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The promotions aspect of the marketing mix covers all marketing communications.
The methods include advertising, sometimes known as ‘above the line’ activity.
Advertisements conducted on T.V., Radio, news paper, on website, etc.
What distinguishes advertising from other marketing communications is that media
owners are paid before the advertiser can take space in the medium. Other
promotional methods include sales promotions, telemarketing, exhibitions, seminars,
loyalty schemes door drops, demonstrations, etc. The skill in marketing
communications is to develop a campaign which uses several of these methods in a
way that provides the most effective results.
For example, TV advertising makes people aware of a food item and press advertising
provides more detail. This may be supported by in store promotions to get people to
try the product and a collect able promotional device to encourage them to keep
buying the item support each other and do not confuse customers.
A thorough understanding of what the brand represents is the key to a consistent
message the purpose of most marketing communications is to move the target
audience to some type of action. This may be to buy the product, visit a restaurant,
and recommend the choice to a friend or increase, purchase of the menu item. Key
Objective of advertisement is to make people aware of an item feel positive about it
and remember it.
The more KFC knows about the people it is serving the more it is able to
communicate messages which appeal to them. Messages should gain customers’
attention and keep their interest. The next stage is to get them to want what is offered.
Showing the benefits which they will obtain by taking action are usually sufficient,
the right message must be targeted to the right audience.
For example, to reach a single professional woman with income above a certain level,
it may be better to take an advertisement in Cosmopolitan than Woman Era. To
advertise to mothers with children, it may be more effective to take advertising space
in cinemas during Disney films.
The right media depends on who the viewers, readers or listeners are and how closely
they resemble the target audience.

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• Place
Place in the marketing mix, is not just about the physical location or distribution
points for products. It encompasses the management of range of processes involved in
bringing products to the end consumer.
In Delhi KFC has open its shop where middle and higher class family, teenagers will
come and enjoy the food.

MANAGEMENT INFORMATION SYSTEMS STRATEGY IN

INDIA

Management Information Systems (MIS) is the term given to the discipline focused
on the integration of computer systems with the aims and objectives on an
organization.
Each KFC outlet use MIS in accounting, knowing production, and very useful in
formulating HR policies which helps them to rate their employees.
The development and management of information technology tools assists executives
and the general workforce in performing any tasks related to the processing of
information. MIS and business systems are especially useful in the collation of
business data and the production of reports to be used as tools for decision making.
With computers being as ubiquitous as they are today, there's hardly any large
business that does not rely extensively on their IT systems. However, there are
several specific fields in which MIS has become invaluable.
MIS systems can be used to transform data into information useful for decision
making. Computers can provide financial statements and performance reports to
assist in the planning, monitoring and implementation of strategy.
MIS systems provide a valuable function in that they can collate into coherent reports
unmanageable volumes of data that would otherwise be broadly useless to decision
makers. By studying these reports decision-makers can identify patterns and trends
that would have remained unseen if the raw data were consulted manually.

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MIS systems can also use these raw data to run simulations – hypothetical scenarios
that answer a range of ‘what if’ questions regarding alterations in strategy. For
instance, MIS systems can provide predictions about the effect on sales that an
alteration in price would have on a product which is very useful for KFC future
development. These Decision Support Systems (DSS) enable more informed decision
making within an enterprise than would be possible without MIS systems.
Not only do MIS systems allow for the collation of vast amounts of business data, but
they also provide a valuable time saving benefit to the workforce. Where in the past
business information had to be manually processed for filing and analysis it can now
be entered quickly and easily onto a computer by a data processor, allowing for faster
decision making and quicker reflexes for the enterprise as a whole.

Management by Objectives

While MIS systems are extremely useful in generating statistical reports and data
analysis they can also be of use as a Management by Objectives (MBO) tool.
MBO is a management process by which managers and subordinates agree upon a
series of objectives for the subordinate to attempt to achieve within a set time frame.
Objectives are set using the SMART ratio: that is, objectives should be Specific,
Measurable, Agreed, Realistic and Time-Specific.
The aim of these objectives is to provide a set of key performance indicators by
which an enterprise can judge the performance of an employee or project.

Benefits of MIS
The field of MIS can deliver a great many benefits to enterprises in every industry.
Expert organizations such as the Institute of MIS along with peer reviewed journals
such as MIS Quarterly continue to find and report new ways to use MIS to achieve
business objectives.

KFC‘s Core Competencies

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Every market leading enterprise will have at least one core competency – that is, a
function they perform better than their competition. By building an exceptional
management information system into the enterprise it is possible to push out ahead of
the competition. MIS systems provide the tools necessary to gain a better
understanding of the market as well as a better understanding of the enterprise itself.

Enhance Supply Chain Management

Improved reporting of business processes leads inevitably to a more streamlined

production process. With better information on the production process comes the
ability to improve the management of the supply chain, including everything from the
sourcing of materials to the manufacturing and distribution of the finished product.

MIS systems let the KFC management:

• To capture information and store it, whenever they are making bills it helps them to
count sales per day, per week and per month because a copy of the bill is stored in the
computer.
• Access stored information easily and manipulate it for the needs of their clients’
while billing or taking order they just enter the code of the product requested at that
time and the quantity demanded.

Product code Product name Product price (in Rs.)

01 Small Coke 20
02 Medium coke 35
03 Large coke 45
04 Small coke+ Lollipop Chicken 65
05 Fried Chicken tub(small) 105
06 Small French Fries 25
07 Large Fries 45

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08 Chicken Burger 25
09 Fried Chicken tub(large) 145
10 Veg. Burger 20

In KFC the above mentioned kind of information is stored in each computer that they
use to maintain is SAP-sale module .They given codes to their 45 products just by
entering the code the product name comes out with cost on the screen.
NOTE: This is a hypothetical table and the prices mentioned may differ the actual
prices.
• Control flow of information into, around and out of the systems.
• Work within legislation such as the Data protection Act.
• Manage resources this is a very important function as every day inventory is
recorded and therefore resources could be managed.
• Produce reports for themselves so that they can compare their own performances
with their own and other.
• Maintain records needed for quality control so that the success story of all the
employees can be appraised.
• Respond confidently to the demands of the Common Inspection Framework MIS
help them because they now easily check when the last stocking was done.
• Manage and track employee records of work, achievement and progression for
promotions.
• Record and track outcomes.
• Manage marketing information to further improve sales.

If Management Information Systems are flexible, and relate to the needs of the
organization, the clients and the curriculum that they are delivering, then they work
well and effectively. One has to be sure that, whatever systems you use, they suit your
purposes and can be customized to do so, are easy to use and allow rapid data entry
with rapid and flexible access for reporting purposes.

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 BIBLIOGRAPHY
KFC is the Service sector company which we have chosen for our integrated assignment.
We got all the information about KFC group from various resources like:

We visited KFC website Welcome to KFC.com¬ (http://www.kfc.com).

We used search engines of Google, yahoo and¬ rediff for getting more knowledge about
KFC, its products, outlets and global information.

We visited www.scribd.com to search the information of KFC

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