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.”

KFC
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
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”

 INTRODUCING NEW PRODUCTS:

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/-

PRICING STRATEGY FOR DEAL

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/-

History

The restaurant in North Corbin, Kentucky The first KFC restaurant, situated in South
where Colonel Sanders developed Salt Lake, Utah and since replaced by a
Kentucky Fried Chicken new KFC on the same site

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.

Born and raised in Henryville, Indiana, Sanders passed through several professions in his
lifetime. Sanders first served his fried chicken in 1930 in the midst of the Great Depression at a
gas station he owned in North Corbin, Kentucky. The dining area was named "Sanders Court &
Café" and was so successful that in 1936 Kentucky Governor Ruby Laffoon granted Sanders the
title of honorary Kentucky Colonel in recognition of his contribution to the state's cuisine. The
following year Sanders expanded his restaurant to 142 seats, and added a motel he bought across
the street. When Sanders prepared his chicken in his original restaurant in North Corbin, he
prepared the chicken in an iron skillet, which took about 30 minutes to do, too long for a
restaurant operation. In 1939, Sanders altered the cooking process for his fried chicken to use a
pressure fryer, resulting in a greatly reduced cooking time comparable to that of deep frying. In
1940 Sanders devised what came to be known as his Original Recipe.

The Sanders Court & Café generally served travelers, often those headed to Florida, so when the
route planned in the 1950s for what would become Interstate 75 bypassed Corbin, he sold his
properties and traveled the U.S. to sell his chicken to restaurant owners. The first to take him up
on the offer was Pete Harman in South Salt Lake, Utah; together, they opened the first
"Kentucky Fried Chicken" outlet in 1952. By the early 1960s, Kentucky Fried Chicken was sold
in over 600 franchised outlets in both the United States and Canada. One of the longest-lived
franchisees of the older Col. Sanders' chicken concept, as opposed to the KFC chain, was the
Kenny Kings chain. The company owned many Northern Ohio diner-style restaurants, the last of
which closed in 2004.
Sanders sold the entire KFC franchising operation in 1964 for $2 million USDSince that time,
the chain has been sold three more times: to Heublein in 1971, to R.J. Reynolds in 1982 and
most recently to PepsiCo in 1986, which made it part of its Tricon Global Restaurants division,
which in turn was spun off in 1997, and has now been renamed to Yum! Brands. Additionally,
Colonel Sanders' nephew, Lee Cummings, took his own Kentucky Fried Chicken franchises (and
a chicken recipe of his own) and converted them to his own "spin-off" restaurant chain, Lee's
Famous Recipe Chicken.

Today, some of the older KFC restaurants have become famous in their own right. One such
restaurant is located in Marietta, Georgia. This store is notable for a 56-foot (17 m) tall sign that
looks like a chicken. The sign, known locally as the Big Chicken, was built for an earlier fast-
food restaurant on the site called Johnny Reb's Chick, Chuck and Shake. It is often used as a
travel reference point in the Atlanta area by locals and pilots.

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.

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.

 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.

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.

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
• Veg Finger
 • Snack Box
• Sundae
• Soft Twirl
• Brownie Sundae

KFC outlets in Chennai:

KFC Restaurant in AnnaNagar KFC Restaurant in Citi Centre
Second Avenue, Chennai CitiCentre,
Anna Nagar, RK Salai, Chennai-600004
Chennai-600040

KFC Restaurant in Numgambakkam KFC Restaurant in Anna Salai

KFC, Swastik Complex 81, S-117, Planet Yumm Food court,
Palimar Restaurants, Ground Flr & First Flr, 2nd floor, Spencer plaza phase 3,
Nungambakkam High Road, 769, Anna Salai,
Chennai-600034 Chennai - 600002

KFC Restaurant in Spencer Plaza KFC Restaurant in Poonamallee High Road

Spencer Plaza- Ph 1, AMPA Center One,
Chennai-600002 Unit # 1, Ground Floor,
#1, Nelson Manickam Road,
Ponamalee High Road Junction,
Chennai-29

KFC Restaurant in Porur KFC Restaurant in Adyar

Site # 1/445, Ground Floor, Site # 21, Ground & First Floor,
Mount Poonamallee Road, 3rd Cross Street,
Chennai Kasturibai Nagar, Adyar,
Chennai – 600020

KFC Restaurant in Taramani

Ascendas IT Park,
Taramani, Chennai -600113

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
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.
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

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
Mc Donald

COMPETITIVE ADVANTAGE

KFC McDonalds

Spicy Products Burger and French Fries

Indian people like spicy products instead of
boiled food

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

Its Staff consist of simple Graduates and give
Local Staff and Highly Qualified because them training
local staff can better deal with
the customers
McDonalds Uses Top To Bottom Approach.
KFC uses Top to Bottom and Bottom to Top
Approach in Management.
No such Case.
KFC is Co branding with Walls

Competitors
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.

Customers

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.

Current Sales Analysis

Market 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
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.

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.

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.

Technological:
The Indian fast food Industry is heating up with a lot of foreign players entering
the Indian market. The technological know how 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

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.

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.
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

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:

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

=1.135 / (1-.25)
 = 1.135 / 0.75
= $1.51

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.

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.
Data analysis:
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.
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?

Would you like to order at home or Dine in?