A study of Marketing Strategy in KFC

Introduction
It American based fast food chain all over the world. It is a subsidiary of YUM
international. KFC is part of Yum! Brands, Inc., which is the world's largest restaurant
system with over 32,500 KFC, A&W All-American Food, Taco Bell, Long John
Silver's and Pizza Hut restaurants in more than 100 countries and territories.

Type Fast Food ChainFounded 1929 (North Corbin Kentucky)Founder Harland SandersH
eadquarter Louisville, KentuckyIndustry Fast FoodRevenues $ 520.3 million (2007)Empl
oyees 24000 (2007)Parents Yum! Brands.

Objectives

To understand the fast food market of Asia

To analyse KFCs growth strategies in various Asian countries

To discuss why KFC succeeded in some Asian countries while it failed in some
other.

To debate about KFCs future in Asia.

Hypothesis

A hypothesis is a formal tentative statement of the expected relationship between

two or more variables under study.
Definition: A hypothesis is an assumption statement about the relationship
between two or more variables that suggest an answer to the research question.

Research Methodology

Mall-intercept method, it is the most convenient due to the overwhelming

student population on campus.

Convenience sampling, because we dont want biased results and we will

get more of a variety students.

Our survey will consist of open ended, multiple choice, and Likert scale

questions.
We will try to achieve our goal of 50 completed surveys throughout
different campus buildings, and through friends and co-workers. These
surveys will take place through the next 2 weeks.

Data Analysis

 The scale and multiple choice questions will be tallied. The open ended questions will
be categorized into positive and negative responses with noted suggestions. Research
Reporting
We are hoping to gather information from the surveys to better understand why people
think KFC is an unhealthy fast food option. While at the same time maintaining the
convenience of the fast food industry. Time Frame
The survey will be conducted within one weeks time period. Limitations
We will have a very narrow age range (18-24).
Since we are only using convenience sampling we will only be able to survey people
located in Morgantown.
People sometimes rush through open-ended questions, or dont answer questions
truthfully.
People may not be familiar with all of the restaurant options on the survey.

Marketing Strategies Of KFC

There

are

different

strategies

adopted

by

KFC

fordifferent events. They market their products on differentevents and in different activiti
es as they are helping SOSvillage.According

to

KFC,

kids

become

the

future

permanentscustomers and we know very well that without anymarketing strategy no mar
keting program and no product issuccessful

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 Pakistanis 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.
Marketing
Since 1982, KFCs All-American salute to Mothers national card contest has
been KFCs way of honoring moms and their families for making mothers Day
KFCs 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
formore than $10,000 in cash and prizes. Educational packets,including language, history
and

art exercises

schools nationwide.

highlighting

Mothers

Day,

were

sent

to

thousands

of

Marketing Mix The marketing mix is a business tool used in marketing

products. The marketing mix is often crucial when determining a product or brand's
unique selling point (the unique quality that differentiates a product from its competitors),
and is often synonymous with the four Ps:

1. Price
2. Product
3. Promotion
4. Place.
1st Productions
.Tender Roast chicken Chunky Chicken pot pie Kentucky Nuggest Colonels Crispy
Strips Honey BBQ sandwich Original Recipe Sandwich Tender Roast Sandwich
Triple Crunch Sandwich Triple Crunch Zinger Sandwich Brand: There are three
brands of the KFC:
1) Taco bell
2) Pizza Hut
3) Long john silvers

2nd. 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 = 1.914Billion
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

Piecessold = $8.9 Billion / $5.89 Billion =$1.51 We assume that Fixed Cost is =$600000
0000
Variable Cost = $675000000L
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 supposemanufacturer wants to
earn 25% mark up on sale. The manufacturer mark upprice is calculated:
Mark Up Price = Unit Cost / (1 Desired Return on Sales) =1.135 /
(1-.25)= 1.135 / 0.75 = $1.51
3rd. 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 importanceand 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 arealso creating awareness among the masses about their existing productrange as
well they tell us about the future product. Marketing efforts to be taken by the restaurant:

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.

4th.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
LI 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 areathat KFC Cavalry caters for is the residential and
office area of CavalryGrounds and Cantt, as the main target market. Another branch the
KFCopened 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 Porsche
area where the income level of the people is high then the middle class level. Because
theprices of the KFC products is high with comparison to the local productsmanufacturer
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 foodrestaurant all around the world. So, for the placing strategy, K
FC chosethe well income class area for their restaurants.

Market Targeting
KFC commercials basically based on young generations, so, the young generation is the
target market of KFC because they want to represent KFC with youth and energy but they
also consider about the old people they take then as a co-target market.
Market Positioning
KFC position in the peoples mind in Pakistan is not up to its standard. People are
often used to say in ignorance that they are having Mc Donalds. That has to be change in
order to get the same reputation which it posses in the world.

Product Positioning Strategy

Positioning is the act of designing the companys offer so that it occupies a

distinct and valued poisoned in the target consumers need. Positioning shouldnt be just
a part of your strategy. It should be backbone of your business plan. Positioning has got
its fair share of press in the past few years. But if you actually tried to achieve a position
in the market place; you know that the gulf between theory and practice can be
distressingly wide. In service industry you are not just positioning your products rather
your organization. Beauty is in the eye of beholder and in the case of marketing the
beholder is the customer so the customer is the ultimate judge of what you are presenting.
Six approaches to positioning may be distinguished
1.
2.
3.
4.
5.
6.

Positioning by attributes.
Positioning by price / quality
Positioning with respect to use and application
Positioning by product user
Positioning with respect to product class
Positioning with respect to competitors.

Product Design Strategy

There are 3 types of product design strategies.1.Customized product2.Standard
product3.Standard product with modifications A business unit may offer a standard or
customized design product for each individual customer. Basic products of KFC

are standardized throughout the world. To have a standardized product the ingredients
have to be the same in all outlets, which is a very difficult job but KFC is successful in
doing so. The ingredients basically consist of healthy chicken, 11 different herbs and
species, cheese, mayonnaise, salad, buns, potatoes for fries etc. Basic secret recipe comes
from the head office in U.S, the rest of the things are obtained from the local market.
Distribution Channel
A distribution channel consists of a set of people and firms involved in the
transfer of a title to a product as a product moves from producer to the ultimate consumer.
The type of distribution channel KFC uses is called middleman involved in it.KFC is
using the firm sponsored retailer franchiser. This franchise buys all the ingredients it uses
and fulfils all other requirements of the franchiser. This practice is adopted to have
product upto the standards of the international KFC chain.KFC believes in first level
channels in the order given below:
Manufacturers
Retailers
Consumers
Franchise System
Franchise system involves a continuing relationship in which a parent is the
parent company provides the right o use its trademark and management assistance in
return for payments from affranchise. Which is the owner of an individual business unit?
This combination of franchiser and franchise is called franchisee. The KFC franchiser
provides merchandises, raw material.
Marketing logistics
Marketing logistics involve planning, implementing and controlling physical flow
of the finished goods. The, major logistic functions include order processing,
warehousing, inventory management and transportation.

Order Processing
The orders at KFC are taken from customers in person who are standing in queue.
These orders goto the kitchen where it takes hardly 30.45 secs to deliver it. The mount
paid by the consumer as the bull of his order is charged before the order is delivered.
Whenever a KFC outlet has to give approximate estimate about the quantity of the secret
recipe would need in the coming year. This order processed and then necessary action is
taken to fulfil these orders.

Findings
Competition:

Competitor companies like McDonalds are fast catching up with the market.
McDonalds with sales of more than 19 billion in 1999, accounted for 15 percent of the
sales of the nations 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
wayKFCs suppliers are threatening the chicken, before they gotslaughtered.

Anti-KFC

campaigns, such as the one from PETA area affecting KFCs 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.

Recommendation

Some recommendations for the KFC senior executives are as given below:

As KFC has a costlier brand, KFC may consider the price in terms of targeting

more consumers in India.

KFC can launch more outlets not only in Dhaka as well as the other mega cities in

India.
KFC can go for more promotional activities to attract more customers in India.
KFC should open the road street wheel based vehicle van restaurants in India.
If KFC expands their business, it will create more employment opportunities for

the local people in India.

KFC can arrange technical and effective assistant to the people who want to do
job in this fast foods industry.

Conclusion

It is clear from the above report that a high number of people actually like to order
from their home or work place rather than coming. This may be due to more convenience,
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 capitalize on the
opportunity. KFC expects arise 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.

Bibliography

1.

"Restaurant counts". Yum! Brands. RetrievedFebruary 11, 2016.

2.

"Yum! Brands: Senior Officers". Yum! Brands. Retrieved September

8, 2013.

3.

Iconic Global Brand (PDF). Louisville: Yum! Brands. 2014. p. 98.

4.

Whitworth, William (February 14, 1970)."Kentucky-Fried". New Yorker.

Retrieved February 23,2013.

5.

Klotter, James C. (2005). The Human Tradition in the New South.

Rowman & Littlefield. pp. 129136.ISBN 978-0-7425-4476-5. Retrieved June
29, 2013.

6.

Jump up^ Sanders, Harland (2012). The Autobiography of the Original

Celebrity Chef (PDF). Louisville: KFC. p. 15.

7.

Jump up^ Ozersky, Josh (2012). Colonel Sanders and the American
Dream. University of Texas Press. p. 21.ISBN 978-0-292-74285-7.

2. Stevenson, Richard W. (July 25, 1986). "Pepsico to Acquire Kentucky Fried: Deal
Worth $850 Million". The New York Times.
3. Brooks, Nancy Rivera (July 25, 1986). "Pepsico to Buy Kentucky Fried From
RJR Nabisco". Los Angeles Times. Retrieved June 30, 2012.
4. Koeppel, Dan (September 3, 1990). "The Feathers Are Really Flying At Kentucky
Fried". ADWEEK.
5. Giges,

Nancy (July 28,

PepsiCo". Advertising Age.

1986).

"Kentucky

Fried

Chicken

coup

for

Questionnaire: Marketing Strategy of KFC

1. Which age groups do you belongs to? * (Required, Multiple choice)
16 to 20
22 to 30
Over 30
2. Are you a male or female? * (Required, Multiple choice)
Male
Female
3. Do you like Fast Food? * (Required, Multiple choice)
Yes
No
4. How often do you go to KFC? * (Required, Multiple choice)
Never
Rarely
Sometimes
Often
How do you feel about KFCs food? * (Required, Multiple choice)
Delicious
Good

Normal
Not Good

What do you think about the price of KFC? * (Required, Multiple choice)
Very expensive
Expensive but still payable
Reasonable
Cheap
Dose the location of KFC affect your consumption? * (Required, Multiple choice)
Yes
No
What are your main reasons for going to KFC? * (Required, Checkboxes, Require
minimum 1 choices, , maximum 5 choices.)
The price is reasonable
Environment is comfortable
Food taste
Quality of service
Fast and convenient

Others
Which kind of places do you often see Ads for KFC? * (Required, Checkboxes,
Require minimum 1 choices, , maximum 5 choices.)
News Paper
TV
Internet
Magazine
Billboard
Who do you view as KFCs biggest competitor? * (Required, Checkboxes, Require
minimum 1 choices, , maximum 5 choices.)
McDonalds
Chik-fil-A
Popeyes
Subway
Burger King
Others
What do you think the biggest advantage of KFC? * (Required)

What are your suggestions for KFCs future development? * (Required)