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Project Report On Kentucky Fried Chicken From Supervised by : Prof.Dr.Zain
Yousafzai Submitted by : Siawoosh Wared( BBA Hons ) Registration # 1711-306055(
BBA 11th ) Preston University Peshawar Session 2006 ² 2010
II Project Report Marketing Strategies With Reference To Kentucky Fried Chicken
A Project report submitted to the Preston University in partial fulfillment of
the requirement for the Degree of Bachelor of Business Administration.
Supervised by : Prof.Dr.Zain Yousafzai Submitted by : Siawoosh Wared( BBA Hons )
Registration # 1711 ² 306055( BBA 11th ) Preston University Peshawar Session :
2006 ² 2010
III Project Report On CD Page
IV Approval Sheet Vice Chancellor : ______________________ Prof.Dr.Anwar Hassan
Internal Supervisor : ______________________ Prof.Dr.Zain Yousafzai External
Supervisor: __________________ Department of Business Administration
Preston University
Peshawar
 V Preface This report focus on KFC marketing strategies, its marketing
environment , demographic factor ,marketing factors. I designed a report to
provide a brief description about its marketing mix & its major competitors in
Pakistan. We also discuss four P·s of marketing & their marketing tools. In
addition to it, this report includes a research base survey on KFC. We all have
tried our level best to fulfill all the requirements mentioned to us. Now its
depend upon the reader to read it carefully and understand what we want to
communicate. This report provides a brief knowledge about KFC in Pakistan.
_____________________________________________________
VI Acknowledgement With profound sense of gratitude and regard, I express my
sincere thanks to my guide and mentor Prof.Dr.Zain for his valuable guidance and
the confidence he instilled in me, that helped me in the successful completion
of this project report. Without his help, this project would have been a distant
affair. His thorough understanding of the subject and professional guidance was
indeed
of immense help to me. Also, this acknowledgement would remain incomplete
without thanking the staff of KFC Islamabad and Peshawar for their whole-
hearted and kind co-operation. I am also greatly thankful to the faculty members
of our institute who co-operated with me and gave me their valuable time.
Siawoosh Wared ________________________________________________
VII Table of Contents Chapter 1st Introduction . 1. Introduction of company. ..
.. ... .. .. ... .. .. .. .. 11 2. Introducing New Product. . . . . . . . . . .
. . . . . . . . . . . 12 3. Pricing Issue. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 13 Chapter 2nd Situation Analysis . 1. KFC History..
.. .. .. ... .. .. ... .. .. ... .. .. .. . 15 2. Company·s Overview. . . . . .
. . . . . . . . . . . . . . . . . . 15 3. KFC Pakistan. . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . 16 4. Values of KFC. . . . . . . . . . . . . .
. . . . . . . . . . . . . . . 17 Chapter 3rd Company and Branches . 1. Situation
Analysis ( Current Products ). . . . . . . . . . 19 2. KFC·s Original Recipe. .
. . . . . . . . . . . . . . . . . . . . 20 3. KFC·s Outlets In Pak. . . . . . .
. . . . . . . . . . . . . . . 21 Chapter 4th KFC·sMission and Philosophy . 1.
Philosophy of KFC The ´CHAMPSµ Program. .. ... 24 2. The CHAMPS. . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . 24 3. Mission of statement. . . .
. . . . . . . . . . . . . . . . . . . . . . . 25 4. Goal of KFC. . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . 25 Chapter 5th Product Issue .
1. Quality Control Over ingredients. . . . . . . . . . . . . . . . . . 27 1.1
Every chicken tasted. . . . . . . . . . . . . . . . . . . . . . . . . . . 27 1.2

Every chicken certified ................. ...... 27 1.3 Quality assurance

certificate ......... ............ 27 2. Packaging. . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . 27 2.1 Recycled Paper. ... .. .. .. ...
.. .. ... .. .. ... .. .. 28 2.2 Environment Concerns. . . . . . . . . . . . . .
. . . . . . . . . . 28 2.3 Litter. ... .. .. ... .. .. .. ... .. .. ... .. ..
... .. .. . 28 3. Branding. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . 28
VIII Table of Content. . . . Chapter 5th Product Issue . 4. Four Forces
Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 4.1 Entry.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 30 4.2 Buys / Supplies Bargaining Power. .. ... .. .. ... ... .. 30 4.3
Substitute and Complements. . . . . . . . . . . . . . . . . . . . . . . 31 4.4
Rivalry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 31 Chapter 6th Current TargetMarket . 1. Promotions ...
................................. 33 2. Segmentation. .. .. ... .. .. ... .. ..
... .. .. .. ... .. .. 33 2.1 Demographical Basis. . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 33 2.2 Behavior. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . 33 2.3 Geographical Basis. . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . 34 3. Profile criteria. . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 4. Market Coverage. .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34 5. Market for
fast food. ... .. .. ... .. .. ... .. .. .. ... . .. 35 6. Economic Analysis
ofMarket. . . . . . . . . . . . . . . . . . . 35 6.1 Macro Environment . . . . .
. . . . . . . . . .. . . . . . . . . . . . 35 6.2 Micro Environment. . . . . . .
. . . . . . . . . . . . . . . . . . . . 35 6.3 Competition. . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . 35 6.4 Costumer.. .. .. ... .. .. ..
... .. .. ... .. .. ... .. .. . 35 7. Strength and Weakness of Competitors. . .
. . . . . . . . . . 35 8. Current Sale Analysis. . . . . . . . . . . . . . . . .
. . . . . . . . . . . 36 9. Environmental Factors and Opportunities. . . . . . .
. . . . 36 9.1 Political. . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . 37 9.2 Economical. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . 37 9.3 Socio Cultural. . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . 37 9.4 Technological. . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 9.5 Environmental.
.. .. .. ... .. .. ... .. .. .. ... .. .. .. .. 37 9.6 Legal Factors. . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 10. Summary of
Current Situation. ... .. .. .. ... .. .. .. . .. . 38 10.1 Strengths. . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 10.2
Weaknesses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 39 10.3 Opportunities. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . 39 10.4 Threats. .. ... .. .. ... .. .. .. ... .. .. ... ..
.. ... .. .. .. . 41
IX Table of Contents. . . . Chapter 7th Marketing Strategies of KFC . 1.
Marketing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 2. 4-Ps
ofMarketing. . . . . . . . . . . . . . . . . . . . . . . . 43 3. Competitive
Analysis ......... ........... 45 4. Promotion Issues. . . . . . . . . . . . . .
. . . . . . . . . . 46 5. Advertisements. . . . . . . . . . . . . . . . . . . .
. . . . . . 47 6. Data Analysis. . . . . . . . . . . . . . . . . . . . . . . . .
. . . 49 7. Questionnaire. .. ... .. .. .. ... .. .. ... .. .. .. 51 8.
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Table
of Graphs 1. Macro Enviromnet. .. ... .. .. ... .. .. .. ... .. .. ... . 34 2.
Competiive Advantages. . . . . . . . . . . . . . . . . . . . . . . . . . . 45 3.
Data Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 49 4. Data Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . 49 5. Data Analysis. . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . .50 6. Data Analysis. . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . 50
X Project Report On Chapter No # 1st Introduction Department of Business
Administration
Preston University
Peshawar
XI 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® chicken³
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
products³from 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 replacementµ ² selling complete meals to harried, time-strapped
families. He called it, ´Sunday Dinner, Seven Days a Week.µ
Today, the Colonel·s spirit and heritage are reflected in KFC·s brand
identity ² the logo features Colonel Harland Sanders, one of the best recognized
icons in the world.
XII KFC KFC specialized in chicken and they says, ´No body·s cooking like KFC
today and we are
the chicken expertsµ
´There is no competitor for spicy chicken which is
made by KFCµ
Introducing New Product Now enjoy T2O Cricket festivity with KFC's exciting new
offer;
Get a complete T20Meal Box which includes;
1 Zinger Burger, 3 pcs. Hot Wings, 1 regular Drink, 1 Fries and 1 Dinner Roll !
in only
Rs 320/-o n ly
XIII Pricing Issues Pricing Policy for ´Zinger Burgerµ new product from KFC
Manufacturing cost RS.180/- 5% marketing cost ( Per.Unit ) RS. 50/- Total cost
RS.230/- 15% G.S.T +15% RETAILMARGIN RS.90/- Total retail Price RS.320/- Pricing

Strategy for ´Deal 6µ From KFC Manufacturing cost RS. 140/- 5% marketing cost (
Per.Unit ) RS. 25/- Total cost RS.165/- 15% G.S.T +15% RETAILMARGIN RS.45/-
Total retail Price RS.210/- XIV Project Report On Chapter No # 2nd Situation
Analysis Department of Business Administration
Preston University
Peshawar
XV KFC History 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 InternationalMarket, KFC is introducing a new item ´Boneless
Fried
Chickenµ, with even more attractive and charming taste.
Company·s Overview Colonel Harland sanders, born September 9, 1890, actively
began franchising his chicken business at the age of 65. Now, the Kentucky fried
chicken business he
started has grown to be one of the largest retail food service systems in the
world.
And colonel sanders, a quick service restaurant pioneer, have become a symbol of
entrepreneurial spirit.More than two billion of the colonel·s ´finger lickin·
goodµ
chicken dinners are served annually. And not just in America. The colonel·s
cooking is
available in more then 82 countries around the world.
When the colonel was six, his father died. His mother was forced to go to work,
and young Harland had to take care of his three year old brother and
baby sister. This meant doing much of the family cooking. By the age of seven,
he was
a master of a score of regional dishes. Ate age 10, his first job working on a
nearby
farm for $2 a month. When he was 12, his mother remarried and he left his home
near Henryville, Ind., for a job on a farm in Greenwood, Ind.
He held a series of jobs over the next few years, first as a 15-year-old
streetcar conductor in New Albany, Ind., and then as a 16-yearold private,
soldiering for six months in Cuba. XVI After that he was a railroad fireman,
studied law by correspondence, practiced in
ustice of the peace court, sold insurance, operated an Ohio River steamboat
ferry,
sold tires, and Operated service station. When he was 40, the colonel began
cooking
for hungry ravelers who stopped at his service station in Corbin, KY. He didn·t
have a
restaurant then, but served folks on his own dining table in the living quarters
of his
service station.
As more people started coming just for food, he moved across the street to a
motel and restaurant that seated 142 people.Over the next nine year, he
perfected his secret blend of 11 herbs and spices and the basic cooking
technique that is still used today. KFC Pakistan 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 inPakistan too! KFC has introduced many offerings
for its growing customer base in Pakistan while staying rooted in the taste
legacy of Colonel Harland
Sander·s secret recipe.
Its signature dishes include the ´crispy outside, juicy insideµ 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. KFC also has great tasting vegetarian offerings that
include the Veggie Burger, Veggie Snacker and Veg Rice meals. In
Pakistan, KFC is growing rapidly and today has presence in 10 cities with
close to 60 restaurants.
XVII 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. XVIII Project Report On Chapter No # 3rd Company
& Branches Department of Business Administration
Preston University
Peshawar
XIX Situational Analysis Current Products Kentucky fried chicken · Zinger
burger
· Kru shers
· GameBox
· Twist er
· Boxmast er · Chicken Bucket · Hot wings
· Fries
· Corn on the cob
· Zing Kong
· Snacker(chicken & veggie) · Veggie Feast · Soft Drink · C oleslaw · Chicken
Thali · Veg Finger · Snack Box
· Su nd ae
· Soft Twirl
· Brownie Sundae
XX KFC Original Recipe 6 cups Crisco Shortening
1 eggs well beaten
2 cupsMilk
2 cups Flour
2 teaspoons ground pepper
3 tablespoons salt
1 teaspoonMSG
1/8 teaspoon Garlic Powder
1 dash paprika
2 Frying Chickens cut into 6 pieces
Place shortening into the pressure cooker and heat over medium heat to the
shortening reaches 400F. In a small bowl, combine the egg and milk. In a
separate bowl, combine the remaining six dry ingredients. Dip each piece of
chicken into the milk until fully moistened. Roll the moistened chicken in the
flour mixture until well coated. In groups of four or five, drop the covered
chicken pieces into the shortening and lock the lid. When pressure builds
up cook for 10 minutes.
XXI KFC Outlets in Pakistan Islamabad . 11 - United Bakery Building, F-6/2,
Super Market, Islamabad. For Delivery: Ph: 111-532-532 Chicky Fun Area Karachi «
SA-2, See Breeze Centre,
F1-17, Block - 5,
Kh-e-Roomi, Clifton,
Karachi.
For Delivery: Ph: 111-KFC-KFC
(111-532-532)
Chicky Fun Area
Peshawar . University Road,
Burjaman Plaza
Near Shadman Chowk,
Peshawar.
For Delivery: Ph: 111-532-532 Chicky Fun Area Lahore «««««««««««««««««««« 160/2,
Block 2,
Phase-1 LCCHS,
Lahore
For Delivery:
Ph: 111-532-532
Chicky Fun Area
Hyderabad . Unit No. 1,
Shah Latifabad,
Thandi Sarak, Hayderabad.
For Delivery: Ph: 111-532-532 Chicky Fun Area
XXII Project Report On Chapter No # 4th KFC·sMession & Philosophy Department of
Business Administration
Preston University
Peshawar
XXIII 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. TheCHAMPS 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.
XXIV Mission of Statement ´To be the leader in western style restaurants
through friendly service, good quality food and clean atmosphere´ 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 Pakistan 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.
XXV Project Report On Chapter No # 5th Product Issues Department of Business
Administration
Preston University
Peshawar
XXVI 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
² 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 Pakistan 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. Packaging We are asked as
many questions on our packaging as our products by our customers. The packaging
forKF C products is chosen according to performance against three key criteria:
Heat Retention Moisture removal Grease absorption The packaging material and
carton design are all adapted to maximize performance against these three
criteria.
XXVII Recycled Paper All our clamshells and chicken boxes contain as much
recycled material as it is legally
allowed. By law we are required to have virgin fibre board in any part of the
packaging
that is in contact with food. Any virgin fibre comes from board suppliers who
use
pulp bought from managed forest in Scandinavia. This ensures that any wood cut
for
paper production is replaced with new plantings.
Environmental Concerns Over and above ensuring our packaging is supplied via
recycled or renewable
resources; KFC are enthusiastically complying with the new environmental
directives
on recovery and recycling of packaging waste.
Litter We at KFC UKI are aware of our responsibilities to theManagement of
Litter and all our packaging carries the ¶Keep your Country Tidy· signs.
Branding This research measured and compared the brand identity of Kentucky
Fried Chicken
(KFC) in Pakistan. Brand identity was defined as the customer impressions of
four
different KFC identity elements - properties, products, presentations, and
publications.
A survey of young consumers in the countries (n = 795), showed that the
respondents were more apt to eat within KFC restaurants, and spend more time
doing
so, than the Americans. The Chinese also had much more positive impressions of
KFC. Brand identity impressions were correlated with overall customer
satisfaction
and with future patronage intentions for both groups. These findings support a
model
where differences in cultural frames of reference lead consumers to actively
localize
the brand identity of this nominally globalized product.
XXVIII Four Forces-Analysis Entry For the current Pakistan 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 Pakistan or even make a significant amount of profit.
While there are enough people in urban Pakistan 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 Pakistan , such asMcDonald·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.
Buyer/Supplier Bargaining Power The customers of KFC, especially as individual
buyers, have almost no bargaining power because if only one customer threatens
to no longer eat at KFC, the store is not going to lower its price because the
cost of losing one customer is not very great. The suppliers, like the buyers,
have very little bargaining power. In terms of food, KFC, upon its move into
Pakistan, urged many of its U.S. suppliers to also extend branches into
Pakistan. KFC also began helping local suppliers by giving them technological
support to improve their products. This is a brilliant strategy because the
supplies that KFC would otherwise need to import from the U.S. can now be
obtained domestically, and if the U.S. suppliers decide to raise their prices,
KFC can easily switch to the local suppliers. This gives us a brilliant
strategy. With this strategy, KFC created competition among its suppliers,
lowering the supplier bargaining power. In terms of human resources, labor cost
is extremely low because the supply of non-skilled workers great exceeds the
demand for them. With so little buyer and supplier bargaining powers, KFC is
able to have a very tight control over its prices and expenditures.
XXIX Substitutes and Complements As mentioned above, there are a few major
competitors in the fast-food industry in Pakistan
for KFC, namelyMcDonald·s, Pizza Hut, Domino's and Subway. The substitute
products, in
this case, would be burgers, pizza, and sandwiches. Though they are competitors,
their
primary products differ greatly from each other, in that they sell, chicken,
burgers and fries,
pizzas, and sandwiches, respectively. Traditional Pakistan dining, home-cooked
meals, and
grocery stores with ready-to-eat foods are also substitutes, as families could
choose any one
of these over fast food for a meal. These substitutes are definitely considered
healthy as
compared to the fast food chains. Even foods from street vendors count as
substitute goods.
While other fast foods serve as substitute to KFC, they can also serve as
complements for
fast foods as a whole. If the general price of fast foods goes up,KFC·s price
rises as well, and
the same can be said of the quantity sold of these products, which make them
complements
to each other. KFC also sets up stores located near popular tourist attractions,
so tickets to
these tourist spots are also complementary goods because the more people tour
these
attractions, the more customers KFC will get.
Rivalry Unlike what one would expect, KFC has little rivalry with similar
fast-food chains in
Pakistan. The primary reason is that their core products are different, as in
they sell different
kinds of fast foods with very different tastes and styles. For example, if KFC
raised its price
for chicken by a small amount, Pakistan chicken lovers who may not be as
accepting to
pizzas (many Pakistani people strongly dislike the taste of cheese) are not
going to switch to
Pizza Hut just because the price for KFC increased. In addition to that, these
restaurants
have such different target customers that the fluctuation of price for one
restaurant is not
going to affect the others. For example, a full meal at KFC ranges about Rs.
100, whereas a
full meal at Pizza Hut can cost over Rs. 300. The drastic difference in price
assures no price
competition between these restaurants.
XXX Project Report On Chapter No # 6th Current TargetMarket Department of
Business Administration
Preston University
Peshawar
XXXI Current TargetMarket Promotions In Pakistan 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.
Segmentation KFC has divided the market of Pakistan into distinct groups of
customers with
different demands, tastes and behavior who require separate products or
marketing mix.
In Pakistan 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.
XXXII 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 Profile criteria:
1.Gender: KFC is for each gender both male and female.
2.Income: Everyone can use the KFC service upper and middle class .
3.Age: age limitation for using this product above 15
4.Occupation: By profession also everyone can use this product means businessman
student workers and other peoples. 5.Edu cat io n : It has no need more
education that why the person who know something can easily enjoy with this
product. 6. Family life cycle: KFC is suitable in every stage of life like
single married couple and also those who have children can use this product.
7.Lifes t yl e: This product is used in every level of social class like upper,
middle class. 8. Attitude : When the customers once buy this product after that
they can use the product continuously. 9. Purchasing decision: Often KFC changes
the purchasing decision of customers because of its good attributes. 10.
Geographic region: Geographically KFC is used in every part of the country as
well as all over the world.
XXXIII Product positioning Customer perceive this product as a unique product
that other are not giving . Attitudes The attitudes of the public is very good
people like our this new product like others. Purchasing process: Many people
come from home to eat this , and some make impulse decision as they saw it .
Market Coverage Strategy KFC will be using differentiated market coverage
strategy. It means that different marketing mix will be used for different age
groups. TargetMarket For Fast Food After evaluation of various segments, KFC has
decided to target the market of Urban and Sub-urban Areas of Pakistan. Product
usage People are educated and they want variety in their diet. Normally people
of rural areas don·t take fast food. On the other hand people of urban areas
take fast food. Income of the people of urban areas is normally high and they
can afford to
purchase such products, which are slightly higher in price as compared to
prevailing prices of local food in the market.
People of Urban Areas are more quality conscious than the people of Rural Areas.
In Urban Area there lived people from every walk of life and profit generation
is easier than in Rural Areas. Population density is higher in Urban Areas as
compared to Rural Areas, so the number of customers are more in Urban Areas.
XXXIV Economic Analysis ofMarket A market in this context refers to a number of
all actual and potential buyers of a product
(Kotler et al 2003). These buyers have a need to satisfy their needs through
exchange . These
needs make up the demand for particular products and services. Several
components must
be considered, as all these components have a direct or indirect impact on KFC·s
success.
Changes in the below described components over the last couple of years have led
to big
changes in people·s attitudes towards healthy food. It explains why Australians
today
want to eat healthy and nutritious-rich food in order to keep themselves healthy
and that
KFC must adjust their range of product and their company image to appeal to
these new
expectations, people have .
Macro environment KFC operates in a larger macro environment of forces that
creates opportunities, but also
threats. (Kotler et al 2003). A company such as KFC usually cannot influence
trends in
the macro environment, as they affect people and organisations on a larger
scale.
However, KFC has to carefully examine macro environmental trends and must create
competitive responses to such trends. There are six major macro environmental
forces KFC has to take into account.
XXXV Micro environment The microenvironment consists of all forces that are
close to KFC, and on
which KFC has an impact. They directly affect KFC·s ability to serve its
customers. (Kotler et al 2003). Three major components influence KFC·s micro
environment:
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 Pakistan . McDonalds·s in particular is a direct
competitor, as they have already successfully introduced their Salads plus line
, which directly targets ¶healthy food· conscious Pakistanis.
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.
Strengths and weakness of competitor Strengths: 38 products, Attractive Outlets,
HugeMarketing, Budget,More entertainment for kids Weaknesses: Same type ofMenu,
No Home Delivery 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
KFC has quality products and through these quality products they
compete their competitors
XXXVI 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 Pakistan and
to
capture the market share in Pakistan 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%. Pakistan 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 endedMarch 31 2007 to about $16 billion
from just $5.5 billion a year earlier. There is a continuous growth in per
capita income; Pakistan·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 Pakistani consumers. So taking into
considerations the economic factors of Pakistan KFC is safe. The only danger to
it will be if there is a terrorist attack in Pakistan and the victim is KFC.
XXXVII Socio cultural: Pakistan·s population is divided in the following age
structure: 0-14 years ² 31.8%, 15- 64 years ² 63.1% and 65 years and above ²
5.1%. There has also been a continuous increase in the consumption of fast food
in
Pakistan. The social trend toward fast good consumption is changing and Pakistan
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 Pakistan.
Technological: The Pakistani fast food Industry is heating up with a lot of
foreign players entering
the Pak market. The technological know how and expertise will also enter the Pak
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. For
e.g.
KFC and Domino·s pizza. For a fast food restaurant, technology does not give a
very
high impact on the company and it is not a significant macro environment
variables.
However KFC should be looking to competitors innovation and improve itself in
term of integrating technology in managing its operation. For example in
inventory
system, supply chain management system to manage its supply, easy payment and
ordering systems for its customers and wireless internet technology.
Implementation
of technology can make the management more effective and cost saving in the long
term. This will also make customer happy if cost savings results in price
reduction or
promotional campaign discount which will benefits them from time to time.
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.
XXXVIII 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
proceduresthat 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
outlethas been certified. The legal requirement is important because the
offenders will
be fined or have their business prohibited from operating which can be
disastrous.
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
recognized in other markets outside Pakistan, where the company is among the
leading fast food giants. The brand is recognized and trusted in Pakistan 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 Pakistan 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 BostonMarket and Chick-fill A, KFC customer base
remained loyal to the KFC brand because of its unique taste. KFC has continued
to dominate the dinner and take out segment of the Industry. Ranks highest among
all chicken restaurantcha ins for its convenience and menu variety. It generates
$1B revenue each year.
XXXIX 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. Hugec
ompe tit ion in this segment. KFC has not yet invested much on R&D, and
innovating new products for Pakistan Markets. This may lead to failure of their
products as they are not in line with the Pakistan mind set, peoples taste and
preferences and their likes and dislikes. This may prove fatal for the company.
Opportunities New Markets:Globalization has opened doors for new markets for the
company. As the developed markets are mostly saturated, the developing countries
like Pakistan
and China promises a good market and generation of demand in the future. With
more than 70% of the markets in Pakistan being unexplored and un organized, 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 Pakistan. 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 Pakistan
mindset is fast changing. Large Youth population:Pakistan 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 a 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.
XL Threats Competition: Competitor companies likeMcDonalds 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 organizations, 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.
XLI Project Report On Chapter No # 7th Marketing Strategies of KFC Department
of Business Administration
Preston University
Peshawar
XLII Marketing Strategies Of KFC There are different strategies adopted by KFC
for different events. They
market their products on different events and in different activities as they
are helping SOS village.
According to KFC, kids become the future permanents customers and we know very
well that without any marketing strategy no marketing program and no product is
successful because we depend upon customers, customer not depend on us. KFC is
following NicheMarketing 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. KFC gives more priority to Family.
Marketing Since 1982, KFC·s ´All-American salute toMothersµ national card
contest
has been KFC·s way of honoring moms and their families for making
mother·s Day KFC·s 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 for more than $10,000
in cash and prizes. Educational packets, including language, history and art
exercises highlightingMother·s Day, were sent to thousands of schools
nationwide.
XLIII There are 4 P·s ofMarketing: 1. Production
2. Pricing
3. Promotion
4. Placement
1st. 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 CrispyTMch ic ken · Hot
WingsTMp ie ces ·Tender Roast® chicken
·Chunky Chicken pot pie
·Kentucky Nuggest®
·Co lo n el·s 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
XLIV 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 = 1.914 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 OrMark 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 ²
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 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.
XLV 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 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 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
BarkatMarket). 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.
XLVI 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 ofKF C are Mc Donalds Competitive Advantage KFC Mc Donald·s
Spicy Product Pakistani People like spicy food rather than boiled food French
Fries and Burgers Arabian Rice and Zinger Burger BigMac Free Delivery Chargers
on Home Delivery Chicken is eaten in very community Beef is banned is some
community Local stuff and highly qualified because local stuff can better deal
with customers Its stuff is consists of simple graduates and give them training
KFC uses Top to Bottom and Bottom to Top approach in theirManagement Mc Donald·s
use Top to Bottom approach in theirManagement
XLVII Promotion Issues Sales promotion For the sales pormotion KFC introduced
their goods like watches , keychain, e.t.c to the customers.
XLVIII Advertisement I do not normally think that advertising stunts are
particularly interesting or creative, but I thought this one by KFC
was«well«inspired. KFC, the fried chicken franchise , is offering itself as a
corporate sponsor for pothole repair.
An actor dress as KFC founder Colonel Sanders and a road repair group got
started this
week in the franchise·s hometown of Louisville, Ky. Filling up hundreds of
holes.
Many of the repairs are decorated with a while stencil saying the spot
wasµRe-freshed by KFCµ A play on KFC·s ad campaign stressing the freshness of
their chicken . KFC spokesman Russell Dayer said that crew is using ´ Regular
asphalt,µ not day ² old biscuits . 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.
XLIX 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 KFC·s recipe
, 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 home delivery services.
L We also inquired ´How close is the nearest KFC outlet from your house? Would
you like to order at home or Dine in?
LI Questionnaire about KFC in Peshawar 1. Age«««« 2. Your occupation
«««««««««««««
3. When did you know about KFC?.......................
4. Why do you choose KFS but other restaurants?
«««««««««««««««««««« «««««««««««««««««««« 5. By what way did you know about KFC?
a. Advertisement on newspaper/magazine b. Internet c. Family/friends/ colleagues
d. Banner e. People working for KFC f. Leaflets g. Others«««««« 6. Do you think
KFC should start Home Delivery Service ? a. Yes b. No c. If Yes ( Why ) 7. In
terms of location, why do you come to KFC?
a. It lies on a main road
b. It lies next to a supermarket
c. It looks out of 2 roads
d. Others«««««««««««. (You can tick more than 1 option) 8. Would you prefer
order at home or dine in the KFC ? a. Dine In b. Order at home c. Really doesn¶t
matter 9. What factors of location affect your decision? a. Near your house b.
On the way to work or school
c. Near shopping centre
d. Near the red light so that it¶s easy to be
recognized e. Others««««««««««. 10. What do you think about the parking area at
KFC? a. Good b. Normal c. Bad (Please, specify your reasons) «««««««««««««««««
11. How does the KFC¶s prestige affect your decision a. Very much b. Normal c.
Very little 12. Does the logo attract you? Yes««««..No«««««. (if yes, please
specify your reasons) «««««««««««««««««««« 13. How often do you come to KFC
a. Every 3 days
b. Once a week
c. Once a month
d. Other options«««««««. 14. What do you think about the price here? a. Very
expensive b. Expensive but still payable c. Reasonable d. Cheap 15. How do you
feel about KFC's food? a. Delicious b. Good c. Normal d. Not Good 17. What are
your suggestions for improving KFC's service quality? (If any)
«««««««««««««««««««««« Thank you very much for your cooperation!
52 Reference Arash.N.Wared TorontoAl um· 06 peace and Conflictstudies ,
International
Relations
+001-647-2845838 (an_wared@hotmail.com ) (
http://arashwared.blogspot.com/ ) Corporate Office ( Karachi )
Cupola Pakistan Ltd. 5th Floor , Park Tower , Sharah-e-
Firdousi
Clifton , Karachi
Tel : 92-21-5877976 (
http://www.facebook.com/pages/KFC-pakistan ) AkhtarMunir NBP , University Town
Branch, Peshawar Tel:+92-333-9157958 http://www.coursework4you.co.uk/essays-and-
dissertations/analysis-of-companies/kentucky-fried-chicken-
kfc/kentuckyfriedchickenkfc.php
http://www.scribd.com/doc/6546600/Questionnaire
http://foodcourt.pk/index.php?option=com_wrapper&Itemi d=113
http://www.kfc.com/contact/
http://www.pueblo.gsa.gov/
http://www.kfcpakistan.com/
Conclusion It is clear from the above report that a high number of people
actually like to
order from their home or workplace 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 a
rise 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.
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