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International business of KFC


TYBBI

Submitted to
Prof.Nirav Parekh
Presented by
Jinal Bhatt-03
Sneha Bhorawat-04
Payal Mehta-22
Aamir Patel-30
Sumit Rohira-37

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Introduction of
Company
KFC Corporation, based in Louisville, Kentucky, is the world’s most popular
chicken restaurant chain, specializing in Original Recipe ®, Extra Crispy TM, and
Colonel’s Crispy Strips® chicken with home style sides and five new freshly made
sandwiches. Every day, nearly eight million customers are served around the
world. KFC’s menu everywhere includes Original Recipe® chicken—made with
the same great taste Colonel Harland Sanders created more than a half-century ago.
Customers around the globe also enjoy more than 300 other products—from a
Chunky Chicken Pot Pie in the United States to a salmon sandwich in Japan.

KFC continues reaching out to customers with home delivery in more than 300
restaurants in the United States and several other countries. And in quite a few U.S.
cities, KFC is teaming up with other restaurants, Taco Bell and Pizza Hut, selling
nearly fifty years ago; Colonel Sanders invented what is now called “home meal
replacement” – selling complete meals to harried, time-strapped families. He called

KFC
it, “Sunday Dinner, Seven Days a Week.”

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.

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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”

KFC

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M is s io n s ta te m e n t

“ T o b e t h e l e a d e r i n w e s t e r n s t y l e sqeur ivcikc e
r e s ta u r a n ts th r o u g h fr ie n d ly se r v ic e , g o o d q u a lity f
a n d c l e a n a t m o s p h” e r e

Goals of KFC

 Build an organization dedicated to excellence.


 Consistently deliver superior quality and value in our products and services.
 Maintain a commitment to innovation for continuous improvement and
grow, striving always to be the leader in the market place changes.
 Generate consistently superior financial returns and benefits our owner and
employees.
To establish in India our position as leading WQSR (Western Quick Service
Restaurant) chain, serving good value. Innovative chicken-based products.
Consistently, providing a pleasant dining experience, with fast friendly, in a clean
and convenient location. At all times we must be dedicated to providing excellent
and delighting customers.

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Promotion Issues
Sales promotion
For the sales promotion KFC introduced their goods like watches , keychain, e.t.c
to the customers.

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Advertisement
The advert titled Pool was done by OGILVY & MATHER, New Delhi advertising agency for
KFC ZINGER BURGER (KFC company) in INDIA. It was released in the June 2009. Business
sector is Fast food outlets & restaurants.

One of KFC's latest advertisements is a commercial advertising its "wicked


crunch box meal". The commercial features a fictional black metal band
called "Hellvetica" performing live, the lead singer then swallows fire. The
commercial then shows the lead singer at a KFC eating the "wicked crunch
box meal" and saying "Oh man that is hot".

In 2007, the original, non-acronymic Kentucky Fried Chicken name was


resurrected and began to reappear on company marketing literature and
food packaging, as well as some restaurant signage.

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KFC India
KFC is the world’s No.1 Chicken QSR and has industry leading stature across
many countries like UK, Australia, South Africa, China,USA, Malaysia and many
more.

KFC is the largest brand of Yum Restaurants, a company that owns other leading
brands like Pizza Hut, Taco Bell, A&W and Long John Silver. Renowned
worldwide for it’s finger licking good food, KFC offers its signature products in
India too! KFC has introduced many offerings for its growing customer base in
India while staying rooted in the taste legacy of Colonel Harland Sander’s secret
recipe. Its signature dishes include the “crispy outside, juicy inside” Hot and
Crispy Chicken, flavorful and juicy Original Recipe chicken, the spicy, juicy &
crunchy Zinger Burger, Toasted Twister, Chicken Bucket and a host of beverages
and desserts. For the vegetarians in India, KFC also has great tasting vegetarian
offerings that include the Veggie Burger, Veggie Snacker and Veg Rice meals. In
India, KFC is growing rapidly and today has presence in 11 cities with close to 50
restaurants.

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Entry
For the current Indian market for fast food, it is not difficult for a fast food
restaurant to enter the market. However, it would be extremely difficult to take
over already running major fast food chains' dominancy in India or even make a
significant amount of profit. While there are enough people in urban India for any
restaurant to survive, KFC holds the first-mover advantage into the 'non-veg food
specialty food segment' that gives them free reputation. Customers, especially
children who are used to going to KFC as a treat or reward from their parents or
grandparents, are not going to want to go to other restaurants they’ve never heard
of. The brand name is already established. Also, there is already a large variety in
the numerous western-style dining places in India, such as
McDonald’s, Pizza Hut, Domino's and Subway, and any new fast-food entrants
would just be presenting something very similar to what’s already there. While
small
Neighborhood restaurants generally have low barriers to entry, these are the
barriers to entry for similar restaurant businesses to enter the fast-food chain
market.

Major players of fast food


of india
 McDonalds 132 outlets
 KFC 72 outlets
 Pizza hut 147 outlets
 Dominos Pizza 274 outlets
 Café Coffee Day 833 outlets

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 Barista 200 outlets

MARKETING STRATEGIES OF
KFC
 KFC is following Niche Marketing and Societal Marketing techniques.
 KFC possess a western culture because some of the Indian people are also
following that culture.
 KFC are moving from Divisional Level to the District level by opening
branches
 KFC also offer free home delivery.
 KFC open their outlets on reachable places.
 KFC menu consists of more than 30 products.
 KFC gives more priority to Family

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Marketing mix
There are 4 P’s of Marketing:

1. PRODUCTION
2. PRICING
3. PROMOTION
4. PLACEMENT

Production:

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


acquisition, use, or consumption that might satisfy a want or need. KFC is
specially dealing in the chicken products; Basically, KFC has the special raspy for
chicken products that is why, KFC known as a chicken specialist allover the glob.
KFC target the Asia and east side because they observe that they people are like
the chicken products, so they enter in the market due to the demand of their
chicken products. KFC product variety of product in the chicken, those products
are:
PRODUCTS:
• Original recipe® chicken
• Extra Tasty CrispyTM chicken
• Hot WingsTM pieces
• Tender Roast® chicken
• Chunky Chicken pot pie

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• Kentucky Nuggest®
• Colonel’s Crispy Strips®
• Honey BBQ sandwich
• Original Recipe® Sandwich
• Tender Roast® Sandwich
• Triple Crunch® Sandwich
• Triple Crunch ®Zinger® Sandwich

1. 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

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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
3. Promotion:

Promotion is one of the necessary plates in any form of business or in other words
you can say that promotion is the key of success. If you promote your product at
the right time. KFC also known the importance and significance of promotion so
they uses the bill boards the major source of advertisement and one of the most
important thing that they uses media especially the newspapers to promote their
products. They are also creating awareness among the masses about their existing
product range as well they tell us about the future product.

Marketing efforts to be taken by the restaurant:

 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.

4. Placement:

In the case of the KFC the placement of the product is not important but the
placement of the restaurant is important. The products of the KFC is cooked at the
sport and then served after that. KFC Cavalry branch opened in June 1998, in the
main commercial zone of Cavalry Grounds near the Jinnah Flyover. The restaurant
is a three-story building including the basement (where the chicky play area is
located). It is ideally located in the center of a main commercial and residential

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area of Lahore. The area that KFC Cavalry caters for is the residential and office
area of Cavalry Grounds and Cantt, as the main target market. Another branch the
KFC opened in the Lahore is in Garden Town (opposite to Barkat Market). KFC
also target the Faisalabad and open its branch in D ground. Now we can easily
judge that the KFC target the place for their restaurant, which is well known and is
in the Porsche area where the income level of the people is high then the middle
class level. Because the prices of the KFC products is high with comparison to the
local products manufacturer who are dealing in the same kind of product in which
KFC is dealing but the prices of the KFC is high due to special taste, high quality,
and due to international brand, it is the world recognized fast food restaurant all
around the world. So, for the placing strategy, KFC chose the well income class
area for their restaurants.

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Competitive analysis
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.
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.

KFC beats its competitors through the revising marketing strategy at every
movement but the main competitor of KFC is Mc Donald

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

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Strengths and weakness of competitor

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

entertainment for kids

W eaknesses: Same type of Menu.


How they compete their competitors?
It is found that KFC compete its competitors by five ways:

• KFC compete its competitors through marketing strategy


• They offered different packages at different events like ramdan offer,
midnight offer etc.
• KFC compete there competitors by providing good services
• They must hired the hard selling persons to market their product in the
market and motivate their employees for the sake of organizations and
employees do well and they compete there competitors

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KFC has quality products and through these quality products they compete
their competitors

Summary of current situation


SWOT analysis mean strength, weakness, opportunities and threats and the
SWOT analysis of KFC are:

STRENGTHS
 Goodwill and reputation: The Company certainly has earned a good name
and reputation by its previous products and services in the market. It is even
more recognised in other markets outside India, where the company is
among the leading fast food giants. The brand is recognised and trusted in
India for its quality products, price, and customer service. It therefore has a
good head start and enjoys a good chance of becoming a leader in Indian fast
food industry.

 Employee Loyalty: Employee Loyalty is one of the major strengths of KFC.


The turnover rate in the company is amongst the lowest in the industry.

 Customer Loyalty: Despite gain by Boston Market and Chick-fill


A, KFC customer base remained loyal to the KFC brand because of its

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unique taste. KFC has continued to dominate the dinner and take out
segment of the Industry.

 Ranks highest among all chicken restaurant chains for its


convenience and menu variety. It generates $1B revenue each year.

WEAKNESSES
 KFC was losing market share as other Chicken chain increased
sales at a faster rate.
 KFC share of Chicken Segment sales fell from 71 percent 1999 ,
to less than 56 percent in 2009 , a 10 -years drop of 15 percent.
 Huge competition in this segment.
 India is still mostly a vegetarian dominated cultured society.
South India is especially very much so. This may reduce the market
share of the company.
 KFC has not yet invested much on R&D, and innovating new products
for Indian Markets. This may lead to failure of their products as they are not in
line with the Indian mind set, peoples taste and preferences and their likes and
dislikes. This may prove fatal for the company.

OPPURTUNITIES
 New Markets: Globalisation has opened doors for new markets for the
company. As the developed markets are mostly saturated, the developing
countries like India and China promises a good market and generation of
demand in the future. With more than 70% of the markets in india being
unexplored and un organised, KFC has a good scope of expanding its
operations in the country.

 Cross Culture: Generally there is a good acceptance of American culture of


fast food in India. People are opening up to fast foods more regularly in their
daily lives and not just keeping it a once in a month affair. Thus Indian
mindset is fast changing.

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 Large Youth population: India has a very large share of youth population a
compared to other countries. More than 60% of the population is under the
age of 30yrs. As the young generation are more open to fast foods and
demand it more, this is good news for the company.

New variety: Company can also come up with new variety in the menu
like Pizzas, garlic breads to attract more customers.

THREATS
 Competition: Competitor companies like McDonalds are fast
catching up with the market. McDonald’s with sales of more than 19
billion in 1999, accounted for 15 percent of the sales of the nation’s top
100 restaurant chains.

 Organisations like PETA People for Ethnic Treatment for Animals
have given a bad name to the company which may prove disastrous to
the image of the firm. Currently, KFC is under massive attacks from
animal organisations, questioning the way KFC’s suppliers are
threatening the chicken, before they got slaughtered. Anti-KFC
campaigns, such as the one from PETA are affecting KFC’s brand image
in a negative way and result in direct dollar losses, as less people are
consuming KFC chicken

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


market to generate sales. As the US markets are already saturated and
leave no or little scope for growth, company necessarily needs to look at
offshore foreign markets to generate sales and keep up the profits.

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KFC PAKISTAN
Presently KFC is branched out in nine major cities of Pakistan (Karachi, Lahore,
Rawalpindi, Faisalabad, Multan, Peshawar, Sialkot, Hyderabad, and Islamabad)
with 45 outlets nation-wide. Opening the first KFC outlet in Gulshan-e-Iqbal,
Karachi in 1997, and KFC wore the title of being the market leader in its industry.
Serving delicious and hygienic food in a relaxing environment made KFC
everyone’s favorite. Since then, KFC has been constantly introducing new
products and opening new restaurants for its customers.
In Pakistan totally Chicken buy from Pakistani Poultry Forms, and also this
Chicken is 100% Halal

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Entry
CUPOLA:
Cupola is a Dubai based multinational company involved in several business
including, oil gas exploration, plastic cards, retail markets and food franchising.
CUPOLA PAKISTAN:
Cupola holds the master franchise rights to operate KFC in Pakistan since 1999.
That was a major difference that when Cupola takes complete Operate in Pakistan
that was only 05 Outlets in allover Pakistan, and then now the major difference that
Cupola takes 60 Outlets in Pakistan.

1. Rivalry among competitors:

KFC has some sort of rivalry with Mc Donald’s as where eve KFC has and
outlet at any hot spot McDonald’s starts its operations there KFC has no direct
Share

loss or Customer loss with that as both the companies earning on their own
unique product range taste and their customers may vary according to the taste
preferences. But they do try to attain by giving different deals at different
occasions times.

This Analysis has made us conclude that KFC is not well prepared for a strong
competitor though currently bargain power of customers, suppliers doesn’t bother
KFC much. Rivalry among competitor of KFC is not affecting it any way this we
can say is the Opportunity for KFC as before its rivals or new entrants comes and
threatens, it’s the time KFC may apply strategic Leadership for this purpose and to
fully understand and work in accordance with the opportunity.

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Marketing mix at KFC

Product

a product is anything that can be offered to a market that might satisfy a want or
need.

KFC product planing

 KFC product is classified as consumer product as it has no intermediates.

 KFC offers specialty goods.

 The stock turn over of KFC is high.

 Price and quality of the product is always compared.

 KFC’s product includes

 Goods (Burgers, Chicken Meals etc)

 Services (cleanliness, quick service, parties)

Product mix strategy

The product mix strategies are in relation to:

Competitors:

KFC has a head-on competition with McDonalds


Wherever they place their products; KFC goes there as well.

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Locally in Pakistan KFC face a close competition with the local brands like
AFC (Al-Baik Fried Chicken), Fried Chicks, Dixy Chicks etc they are
producing the same product as KFC.

Attributes:

The brand of KFC is so strong that it is the attribute itself.

Place and Quantity:

KFC products are based on high quality and prices.


 KFC has made a separate brand image in Pakistan.
 KFC Pakistan does not serve the vegetarians.
 Product line is very vast.
 They study the behaviors of the Pakistani customers.
 KFC has specific product features.
 Offering delicious and quality product.
 Specialization in fried chicken.
 Charging extra for side dishes.
 Quality, cleanliness, and service.
 Product quality assurance.

Price

Price competition

We can compare the price of KFC products with McDonald, Dominoes and
Pizza Hut. If the competitor provides the same product at a lower price then the
organization usually lowers the price of its product too. In the case of KFC,
Fried Chicken is its main selling point and controls a monopoly over the
Pakistan fast food market. It-prices its burgers, French fries and soft drinks.

Penetration Pricing:

When KFC first began to break into the coffee market, they ran a large
marketing campaign in order to gain some market share in the industry. For a

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limited time frame, you could get a free small coffee every morning from 4-
7am. This was to promote their new coffee partnership with Green Mountain
Coffee and helped spread the word that KFC was now offering coffee.

 KFC charge high prices.


 Offers different coupons.
 Concept of discount is lacking in KFC Pakistan.
 KFC has targeted the upper class people.
 Service charges are also high.
 No clear policy for discount and coupons.
 The employees are trained not to suggest the discounts.
 KFC sells their experiences on high rates.
 High revenue due to best strategies.

Place

KFC distribution

KFC has only one channel of distribution i.e. direct where the goods are
transferred to the consumer directly. KFC has no middlemen.

Distribution of goods and services

 KFC does distribution of consumer goods directly to the consumer.


 KFC also does distribution of services to the consumer like parking,
sitting, home delivery, etc.
 KFC gets Wheels! KFC launched its first mobile unit, which took the
streets of Karachi by storm. The mobile unit has been designed to cater to the
needs of those who are on the go, and have little time to stop by at a restaurant.
It also provides a unique convenience of enjoying the delicious KFC offering
anytime, anywhere, thus making fast food truly fast and convenient.
 KFC intends to further develop its mobile network nationwide through
more such units

Placement of outlets

Due to KFC placing itself close to schools, colleges, cinemas and markets
which are mostly populated by the young and those who are in a hurry, KFC

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enjoys a large number of footfalls everyday. In addition, they also have outlets
close to non-vegetarians (mostly Muslim populated areas).
 KFC deals in internal market.
 Less number of outlets in over all Pakistan.
 Target only city areas.
 Slow delivery system in some areas.
 KFC has well equipped sitting.
 KFC has no intermediaries.
 Well trained staff with expert supervisors.
 Seeking customer’s response for quality.
 KFC has no entertainment in some franchises.
 Quality conscious people are the main target of KFC.

Promotion

KFC promotion sources

o Advertising
o Sales Promotion
o Public Relations
o Events and Experiences
o Coupons, Discounts and Bundled packages

Sponsorship

Sponsorship is another tool to strengthen an organizations image. KFC sponsor’s


many NGO’s and other social welfare organizations like Regular sponsorship to
SOS village. Sponsorships to FARYAD a plant and life association FARYAD:
Keep the City Clean”.

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How they compete
KFC has strategic planning to increase its market worth value of the market and its
market share. They work on a well defined strategic planning for this. They are
working efficiently on operational plans for example they only open up the branch
were they can easily earn up to more than desired or planned revenue even like
KFC has open up its wheels for less cost and market penetrating in areas like
Thokar Niaz Baig and Bahria Town this is part of their operational plans once they
will think they have made the spot then they would open up its new branch.
Operational plans also include launching of a new product to change or innovate its
product line for the customers.

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SWOT ANALYSIS
STRENGTHS:
• Oldest and finest in Business
• Loyal customers
• Faces numerous advantages of being a Multinational Organization e.g.
economies of scale, government incentives etc and its good will in entire
world.
• KFC holds strong CSR and provide customers with Quality Products.
• KFC holds total quality management assuring complete product safety and
great response to customers.

• KFC has Competitive advantage in fast food industry because of its quality
and variety of products of chicken.

• Employees are its strength who stands strong with its organization.

• Product is their strength customers come here for our product ignoring the
environment.

• Hospitality standards are our strength, standards are very high they don’t
bear ignorance regarding product.

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• They don’t do much advertisement as awareness is there & they don’t find a
need for advertisement.

WEAKNESS:
• Presence of Multinational competitors in the market e.g. McDonalds
(specialized not in chicken serving but in burgers).
• It has compressed hierarchy causing employees to stress and restlessness
caused by no proper work division and less people working more.

• It takes more work from same people if worker is not trained for that job.

• Over confidence on own product (not prepared for competition).

OPPORTUNITIES:
• Cheap and easy availability of labor.
• Increase consumption of fast food has increased the market size.
• Consumer prefers “All under one roof” in order to increase their sales
turnover they can increase or add the served items.
• People can easily lend KFC land to operate franchises because of their
goodwill and good market value.

• Loyal customers are its opportunity because of them no virus marketing


affected KFC yet.

THREATS:
• Entrance of New competitors into the market.
• High political instability/uncertainty.
• Animal diseases like bird flu are a major threat.

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• Compressed hierarchy can collapse the whole system of the management
efficiency.

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

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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.

RECOMENDATIONS
We there for, conclude that KFC should work on the management
issue to build good atmosphere for their employees to work in. They also
make sure that they offer quality food and excellent service.
Today’s generations, most of the people are becoming health conscious
especially the people in the United States. They are prone to hypertension,
which is caused by bad cholesterol not only Americans but all people around
the world, most especially this 21st century.
Nowadays, at early age, younger people are prone to hypertension.
According to the latest data, the youngest person who died was at the age of
16. Due to the fact that most of the foods right now are ready-to-eat, most
are processed foods.

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What if KFC will offer and/or add fresh produced products such as
fruits and vegetables in their menu. In this case, they can increase their sales.
Even vegetarians can enter to their establishments.
They must also provide training to their employees and generate
goods that are in a low price.

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