ACKNOWLEDGEMENT

We would like to express our sincere gratitude and appreciation to Dr.Hitesh Kapoor who helped
and inspired us to complete this project. We felt motivated and encouraged every time we
discussed this important topic in our classroom as well as doing surveys. This project gave us an
opportunity to participate and learn about the role of women in entrepreneurship.
Finally, we are thankful to God, our parents and friends who have supported us in our project for
their support, encouragement and guidance. Without help of anyone mentioned above, we would
face many difficulties while doing this project.
A COMPARITIVE
STUDY
Declaration
Except where duly acknowledged, we certify that this project is our own work under the
supervision of Dr. Hitesh Kapoor.
Submitted to
Dr. Hitesh Kapoor

Submitted by:
Kapileshwar Singh 071167
pec
Salil Chatrath 071195
Rajat Bhardwaj 071375
 History of McDonald’s

McDonald's has come a long way ever since it’s beginning in 1955. Here area few milestones of
the McDonald's journey ...
In 1954, a fifty-two-year-old milk-shake machine salesman saw a hamburger stand in San
Bernardino, California, and envisioned a massive new industry: fast food. In what should have
been his golden years, Raymond Kroc, the founder and builder of McDonald's Corporation,
proved himself an industrial pioneer no less capable than Henry Ford. He revolutionized the
American restaurant industry by imposing discipline on the production of hamburgers, French
fries, and milk shakes. By developing a sophisticated operating and delivery system, he insured
that the French fries customers bought in Topeka would be the same as the ones purchased in
New York City. Such consistency made McDonald's the brand name that defined American fast
food.
 Timeline

1955
Ray Kroc opens his first restaurant in Des Plaines, Illinois and the McDonald's Corporation is
created.

1957
Quality, Service, Cleanliness and Value (QSC& V) becomes the company motto.

1959
The 100th McDonald's opens in Chicago.

1961
Hamburger University opens in Elk Grove, near Chicago.

1963
One billion hamburgers sold. Ronald McDonald makes his debut.

1964
Filet-O-Fish sandwich is introduced.

1965
McDonald's Corporation goes public.

1967
The first restaurants outside of the USA open in Canada and Puerto Rico.

1968
The Big Mac is introduced. The 1,000th restaurant opens in Des Plaines, Illinois.
1972
A new McDonald's restaurant opens every day The Quarter Pounder is introduced.

1973
Egg McMuffin is introduced.

1974
The first Ronald McDonald House opens in Philadelphia. The Happy Meal is launched.

1983
Chicken McNuggets is introduced. New Hamburger University campus opens in Oak Brook,
Illinois. Set in 80 wooded acres. Training is provided for every level of McDonald's management
worldwide
.
1984
50 billionth hamburger sold. Ronald McDonald Children's Charities is founded in Ray Kroc’s
memory to raise funds in support of child welfare.

1989
McDonald's is listed on the Frankfurt, Munich, Paris and Tokyo stock exchanges.

1990
McDonald's opens in Pushkin Square and Gorky Street, Moscow.

1993
The first McDonald's at sea opens aboard the Silja Europa, the world's largest ferry sailing
between Stockholm and Helsinki.

1994
Restaurants open in Bahrain,Bulgaria, Egypt, Kuwait, Latvia,Oman, New Caledonia, Trinidad
and United Arab Emirates, bringing the total to over 15,000 in 79 countries
on 6 continents.

1996
McDonald's opens in India – the 95th country.

Overview
McDonald's - A Global Phenomenon.
McDonald's opened its doors in India in October 1996. Ever since then, our family restaurants in
Mumbai, Delhi, Pune, Ahmedabad, Vadodara, Ludhiana, Jaipur, Noida Faridabad, Doraha,
Manesar and Gurgaon have proceeded to demonstrate, much to the delight of all our customers,
what the McDonald's experience is all about. Our first restaurant opened on 15th April 1955 in
Des Plaines, Illinois, U.S.A. Almost 50 years down the line, we are the world's largest food
service system with more than 30,000 restaurants in 100 countries, serving more than 46 million
customers every day

Mc Donald’s India Partnership

McDonald's India is a joint-venture company managed by Indians. McDonald’s India, a
ubsidiary of McDonald’s USA, has expanded its presence in India via 2 joint venture companies
– Connaught Plaza restaurants and Hard castle restaurants. McDonald’s (India) has a 50 per cent
equity stake each in both joint venture companies.
Connaught Plaza restaurants manages operations and expansions across North India (Delhi,
Jaipur and Punjab) – led by Vikram Bakshi – and Hardcastle restaurants, which is headed by
Amit Jatia, manages operations and expansions across Western India (Mumbai, Pune, and
Gujarat).
 Around the world, McDonald's traditionally operates with local partners or local
management. In India too, McDonald's purchases form local suppliers. McDonald's constructs its
restaurants using local architects, contractors, labour and - where possible –
local materials. McDonald's hires local personnel for all positions within the restaurants and
contributes a portion of its success to communities in the form of municipal taxes and
reinvestment.

Six years prior to the opening of the first McDonald's restaurant in India, McDonald's and
its international supplier partners worked together with local Indian Companies to develop
products that meet McDonald's rigorous quality standards. Part of this development involves the
transfer of state-of-the-art food processing technology, which has enabled Indian businesses to
grow by improving their ability to compete in today’s international markets.

McDonald’s worldwide is well known for the high degree of respect to the local culture.
McDonald's has developed a menu especially for India with vegetarian selections to suit Indian
tasted and culture. Keeping in line with this McDonald's does not offer any beef and pork items
in India. McDonald's has also re-engineered its operations to address the special requirements of
a vegetarian menu. The cheese and cold sauces used in India is 100% vegetarian. Vegetable
products are prepared separately, using dedicated equipment and utensils. Also in India, only
vegetable oil is used as a cooking medium. This separation of vegetarian and non-vegetarian
food products is maintained throughout the various stages of procurement, cooking and serving.

The McDonald's philosophy of Quality, Service, Cleanliness and Value (QSC&V) is the
guiding force behind its service to the customers. McDonald’s India serves only the highest
quality products. All McDonald’s suppliers adhere to Indian Government regulations on food,
health and hygiene while continuously maintaining their own recognized standards. All
McDonald’s products are prepared using the most current state-of-the-art cooking equipment to
ensure quality and safety. At McDonald’s, the customer always comes first. McDonald’s India
provides fast friendly service- the hallmark of McDonald’s that sets its restaurants apart from
others. McDonald’s restaurants provide a clean, comfortable environment especially suited for
families. This is achieved through McDonald’s stringent cleaning standards, carefully adhered to.
McDonald’s menu is priced at a value that the largest segment of the Indian consumers can
afford. McDonald’s does not sacrifice quality for value – rather McDonald’s leverages
economies to minimize costs while maximizing value to customers.
The company has invested Rs 450 crore so far in its India operations out of its total planned
investment of Rs 850 crore till 2007.

McDonald’s India Pvt. Ltd. has moved an application to the government seeking
permission for payment and remittance of the initial franchise fee and royalty to Mc Donald’s
Corporation. The permission has been sought on two grounds: McDonald’s India would pay an
initial franchise fee of $45,000 on each of the McDonald’s restaurants already franchised
or to be franchised, in the future, in India; and a royalty equal to 5 per cent of the gross sales
from the operations of all its Indian restaurants on a monthly basis to McDonald’s International.

The company hopes to break even in 2008. They currently serve around 5 million
customers a day and hope to grow at the rate of 50% to 70% a year.

Respect for local culture.

McDonald's India has developed a special menu with vegetarian selections to suit Indian tastes
and preferences. McDonald's does not offer any beef or pork items in India. Only the freshest
chicken, fish and vegetable products find their way into our Indian restaurants.
In addition, we've re-formulated some of our products using spices favoured by Indians. Among
these are McVeggie™ burger, McAloo Tikki™ burger, Veg. Pizza

McPuff™ and Chicken McGrill™ burger. We've also created eggless sandwich sauces for our
vegetarian customers. Even our soft serves and McShakes™ are egg-less, offering a larger
variety to our vegetarian consumers.
 Business Model

 Franchise Model – Only 15% of the total number of restaurants are owned by the Company.
The remaining 85% is operated by franchises. The company follows a comprehensive framework
of training and monitoring of its franchises to ensure that they adhere to the Quality, Service,
Cleanliness and Value propositions offered by the company to its customers.
 Product Consistency – By developing a sophisticated supplier networked operation and
distribution system, the company has been able to achieve consistent product taste and quality
across geographies.

 Act like a retailer and think like a brand – McDonald’s focuses not only on delivering sales
for the immediate present, but also protecting its long term brand reputation. McDonald’s
entered India in 1996. McDonald’s India has a joint venture with Connaught Plaza Restaurants
and Hard Castle Restaurants. Connaught Plaza Restaurants manages operations in North India
whereas Hard Castle Restaurants operates restaurants in Western
India. Apart from opening outlets in the major metros, the company is now expanding to Tier
2 cities like Pune and Jaipur.

Challenges in Entering Indian Markets

 Regiocentricism: Re-engineering the menu - McDonald’s has continually adapted to the

customer’s tastes, value systems, lifestyle, language and perception. Globally McDonald’s was
known for its hamburgers, beef and pork burgers. Most Indians are barred by religion not to
consume beef or pork. To survive, the company had to be responsive to the Indian sensitivities.
So McDonald’s came up with chicken, lamb and fish burgers to suite the Indian palate.
 The vegetarian customer – India has a huge population of vegetarians. To cater to this
customer segment, the company came up with a completely new line of vegetarian items like
McVeggie burger and McAlooTikki. The separation of vegetarian and non-vegetarian sections is
maintained throughout the various stages.

Segmentation, Targeting and Positioning

McDonald’s uses demographic segmentation strategy with age as the parameter. The main
target segments are children, youth and the young urban family.
 Percentage of kids who influence what FMCG brand their family buys

As shown above, kids reign supreme in FMCG purchase related to food products. So to attract
children McDonalds has Happy Meal with which toys ranging from hot wheels to
various Walt Disney characters are given (the latest in this range is the toys of the movie
Madagascar). For this, they have a tie-up with Walt Disney. At several outlets, it also provides
special facilities like ‘Play Place’ where children can play arcade games, air hockey, etc. This
strategy is aimed at making McDonald’s a fun place to eat. This also helps McDonald’s to
attract the young urban families wanting to spend some quality time while their children have
fun at the outlet. To target the teenagers, McDonald’s has priced several products aggressively,
keeping in mind the price sensitivity of this target customer. In addition, facilities like Wi-Fi are
also provided to attract students to the outlets like the one at Vile
Parle in Mumbai.
“Mc Donald’s mein hai kuch baat” projects McDonald’s as a place for the whole family to
enjoy. When McDonald’s entered in India it was mainly perceived as targeting the urban
upper class people. Today it positions itself as an affordable place to eat without compromising
on the quality of food, service and hygiene. The outlet ambience and mild
background music highlight the comfort that McDonald’s promises in slogans like “You
deserve a Break Today” & “Feed your inner child”. This commitment of quality of food and
service in a clean, hygienic and relaxing atmosphere has ensured that McDonald’s maintains a
positive relationship with the customers.

Customer Perception and Customer Expectation

Customer perception is a key factor affecting a product’s success. Many potentially
revolutionary products have failed simply because of their inability to build a healthy perception
about themselves in the customers’ minds. McDonalds being an internationally
renowned brand brings with it certain expectations for the customers.
Customers expect it to be an ambient, hygienic and a little sophisticated brand that respects
their values. The customer’s expect the brand to enhance their self-image. Customer responses
obtained at the Vile Parle, Mumbai outlet confirmed the fact that they connect
strongly with the brand. However, fulfilling some of the customer expectations like a broader
product variety provide McDonald’s a great scope for improvement.

Marketing Model
McDonalds Marketing Mix (P’s)5
After segmenting the market, finding the target segment and positioning itself, each company
needs to come up with an offer. The 5 P’s used by McDonalds are:
1. Product
2. Place
3. Price
4. Promotion
5. People

Product:
How should the company design, manufacture the product so that it
enhances the customer experience?

Product is the physical product or service offered

to the consumer. Product includes certain
aspects such as packaging, guarantee, looks etc.
This includes both the tangible and the
nontangible
aspects of the product and service.
McDonalds has intentionally kept its product
depth and product width limited. McDonalds
studied the behaviour of the Indian customer and provided a totally different menu ascompared
to its International offering. It dropped ham, beef and mutton burgers from the
menu. India is the only country where McDonalds serve vegetarian menu. Even the sauces
and cheese used in India are 100% vegetarian. McDonalds continuously innovates its products
according to the changing preferences and tastes of its customers. The recent example is the
introduction of the Chicken Maharaja Mac.
McDonalds bring with it a globally reputed brand, world class food quality and excellent
customer specific product features.
 Place
Where should be the product be available and the role of distribution channels?
The place mainly consists of the distribution channels. It is important so that the product is
available to the customer at the right place, at the right time and in the right quantity. Nearly 50%
of U.S.A is within a 3 minute drive from a McDonald’s outlet.
There is a certain degree of fun and happiness that a customer feels each time he dines at
McDonalds. There are certain value propositions that McDonalds offer to its customers based on
their needs. McDonalds offers hygienic environment, good ambience and great service. Now
McDonalds have also started giving internet facility at their centres and they have been playing
music through radio instead of the normal music. There are certain dedicated areas for children
where they can play while their parents can have some quality time together.

Price

What should be the pricing strategy?

Pricing includes the list price, the discount functions available, the financing options available
etc. It should also take into the consideration the probable reaction from the competitor to the
pricing strategy. This is the most important part of the marketing mix as this
is the only part which generates revenue. All the other three are expenses incurred. The price
must take into consideration the appropriate demand-supply equation.
McDonald’s came up with a very catchy punch line “Aap ke zamane mein ,baap ke zamane ke
daam”. This was to attract the middle and lower class consumers and the effect can clearly be
seen in the consumer base McDonalds has now.
McDonalds has certain value pricing and bundling strategies such as happy meal, combo meal,
family meal etc to increase overall sales volumes.

Promotion
What is the suitable strategy and channels for promotion of the product?
The various promotion channels being used by McDonald’s to effectively communicate the
product information are given above. A clear understanding of the customer value helps decide
whether the cost of promotion is worth spending.
There are three main objectives of advertising for McDonald’s are to make people aware of an
item, feel positive about it and remember it. The right message has to be communicated to the
right audience through the right media. McDonald’s does its promotion through television,
hoardings and bus shelters. They use print ads and the television programmes are also an
important marketing medium for promotion.
Some of the most famous marketing campaigns of McDonald’s are:
· “You Deserve a break today, so get up and get away- To McDonald’s”
· “Aap ke zamane mein ,baap ke zamane ke daam”.
· “Food, Folks, and Fun”
· “I’m loving it”.

People
How to converge the benefits of internal and external marketing?
McDonald’s understands the value of both its employees and its customers. It understands the
fact that a happy employee can serve well and result in a happy customer. McDonald
continuously does Internal Marketing. This is important as it must precede external marketing.
This includes hiring, training and motivating able employees. This way they serve customers
well and the final result is a happy customer.

The level of importance has changed to be in the following order (the more important people are
at the top):
1. Customers
2. Front line employees
3. Middle level managers
4. Front line managers
The punch line “I’m loving it” is an attempt to show that the employees are loving their work at
McDonalds and will love to serve the customers.

The McDonald’s Experience

Marketing in a services industry is becoming an increasingly complex challenge. The paradigms
of service marketing demand a passionate understanding of customer expectations and
perceptions, and linking them to product design & delivery as well as operational planning. This
is where McDonald’s has excelled due to its ability to successfully integrate
the customer’s perspective in its products and operations in a comprehensive manner. The
revamped menu in India is an example of McDonald’s strategy of integrating the customer’s
perspective in its products. And, the operational integration is evident from McDonald’s
emphasis on its suppliers as its customers as well as its treatment of its consumers as co-
producers
of services.
The ultimate aim of Service Marketing is not just to become a Service Leader but to create a
Service Brand. The Service Delivery Process is the key to achieving this aim of Service
Marketing.

During the Service Delivery Process, each moment of interaction between the firm and the
customer, called “Moments of Truth”, helps understand the opportunities that a firm has to win
or lose the customer. For example, these “moments of truth” are created for McDonald’s very
time the guard at the McDonald’s outlet meets the customer, every time an attendant
takes down the order from the customer waiting in the queue, every time the cashier interacts
with the customer, every time the attendant helps the customer guided the customer towards
the table, every time the attendant cleans the table, etc.

Managing these “moments of truth” is a great challenge in Service Marketing especially due
to customer’s involvement as a co-producer of services (e.g. McDonald’s self-service concept
wherein the customer not only collects the order but also cleans the table after consuming the
food). However, McDonald's has been able to create a great experience for its customers by
understanding the nature of the entire Service Delivery Process and the various stages in the
process that are exposed to the customers. Transparency in the processes at its outlet has
helped McDonald’s bring the back office in its outlet at the front so that the customer is able
to know the operations and provide feedback on service design improvements.
Internal Customer Focus is equally important as External Customer Orientation in order to
win these “moments of truth”. McDonald’s focus on its People and their service delivery
methods therefore plays a very important role in creating a successful Service Brand. The
quality and the consistency of the service delivered by McDonald’s have been greatly
enhanced by the combination of the factors mentioned above. This has helped McDonald’s
become Service Leader and a successful Service Brand. This is evident from the fact that
very few of its customers opt for take-home parcels or home deliveries while most of them
prefer to eat at the outlet and enjoy the McDonald’s experience.

McDonaldizing the Suppliers

McDonald’s has changed the nature of not only the food service industry but also the food
processing industry as well. McDonald’s realized that the battle between fast food chains
would increasingly be one of efficiency of supply, lower cost production and greater desire to
innovate. It pioneered with innovative and sophisticated food distribution and packaging
systems when the traditional food processors were unwilling or unable to supply food items
that McDonald’s demanded. They achieved amazing consistency by devoting more attention
than anyone else to field service and training at store level. Production was concentrated in
huge plants devoted exclusively to McDonald’s. McDonald’s also started with tiny suppliers
and grew with them displaying great loyalty.
Nowhere is the supplier loyalty more evident than in development of new, improved products.
Some of McDonald’s classic food items like Filet-o-Fish, French Fries, Chicken
Nuggets etc. are results of supplier innovation. Interestingly, it took KFC more than three
years before in finally introduced its own version of chicken nuggets. Thus supplier
technological expertise had given McDonald’s a product which was not a mere marketing
innovation but a technical one. McDonald’s attempted to squeeze labour out of the stores by
moving more preparation back into the processing plant, creating the opportunity to develop
unique products based on suppliers’ processing skills. For the first time, McDonald’s suppliers
became the focal point of new product development. This converted the fastfood
industry’s most fragmented distributed system into more efficient one which helped McDonald’s
reduce its inventory and manage costs effectively.

Importance of PLC in McDonalds

The requirements of customers change over time and thus the product offering has to be
changed accordingly. What is the fashion today may be out of market within few weeks. Thus
continuous innovation is required.
To counter these changes McDonalds has continuously introduced new products and has
phased out the old ones which were at the decline stage of their PLC. The introduction is
timed such that the new product does not cannibalize the product already in the maturity or
growth stage. Thus the secret lies in getting profits with different products in the different
stages of the PLC.

A perfect example of revitalising a product in decline phase

The French Fries have been an important part of the McDonalds menu worldwide. But now
it was in the stage of decline and was actually not generating proper return. In an attempt to
revitalize it, a new variant was introduced namely Shake Shake Fries. This is being served
with chatpata spice mix which has resulted in increase in the sales of French Fries and has
elevated it from to the decline stage. This is used to delay the decline of a well established
product which has the potential of generating further revenue.

SWOT Analysis
 Exhibits

McDonald’s Indian Menu

Vegetarian Menu
 Analysis Of Mc Donald’s

Thus a Majority Believe that the favourite delicacy of Mc Donald’s is Mc Veggie Burger
 A majority of People feel that Mc Donald’s is flawless and deem no change necessary in it

A Section of people reckon that the food joint can even better the services if they increase the
product variety
The burger of Mc Donald’s has salivated many a tongue of customer and surprisingly the golden
arched “M” of Mc Donald’s one of the first things that a customer thinks about Mc Donalds

About KFC History

Marketing

Pricing

Demographic Factors

Economic Factors

Geographic analysis

Performance of Existing Products

Target Market

Str ategy

Promotion

Advertising

ABOUT
Let us throw light upon the basic history of Kentucky Fried Chicken and trace its roots
internationally and in India as well. KFC is one of the brands owned under a collective
group called yum Brands.

Way back in 1930’s Colonel Harland Sanders got some distinguished Kentucky folks lickin’
their fingers. It’s been in fashion since then!
Colonel Harland Sanders, founder of the original Kentucky Fried Chicken, was born on
September 9, 1890.When he was six, his father died and his mother was forced to go to work
while young Sanders took care of his three year old sibling. This meant he had to do much of the
family cooking. By the time he was seven, Harland Sanders was a master of a range of regional
dishes.
After a series of jobs, in the mid 1930s at the age of forty, Colonel Sanders bought a service
station, motel and cafe at Corbin, a town in Kentucky about 25 miles from the Tennessee border.
It is here that Sanders began experimenting with different seasonings to flavor his chicken which
travelers loved and for which he soon became famous.
During the next nine years he developed his secret recipe of 11 herbs and spices and the basic
cooking technique which is still used today. Sander's fame grew. He sold his chicken on the
highway! But when the highway was removed, he sold up and traveled the United States by car,
cooking chicken for restaurant owners and their employees. If the reaction was favorable Sanders
entered into a handshake agreement on a deal which stipulated a payment to him of a nickel for
each chicken the restaurant sold.
By 1964, from that humble beginning, Colonel Harland Sanders had 600 franchise outlets for his
chicken across the United States and Canada. Later that year, Colonel Sanders sold his interest in
the United States operations for $2 million. The 65-year-old gentleman had started a worldwide
empire using his $105 social security cheque. Sadly, Colonel Harland Sanders passed away on
December 16th, 1980 aged 90.
His legacy lives on with KFC restaurants all over the world. KFC now stretches worldwide with
more than 13,000 restaurants in more than 80 countries and territories around the world serving
up the Colonel’s Original Recipe. It is a $13 billion brand based out of Kentucky and is the
leading QSR around the world which is based in Louisville, Kentucky. Yum! Brands own 5
brands, out of which KFC is the largest brand within the Yum! Portfolio, founded by Colonel
Harland Sanders in the year 1938.

Kentucky Fried Chicken In India

KFC is known to be 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 its 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.

Five Brands of Yum ® :

 • Pizza hut
• KFC
• Long john Silvers
• All American Food
• Taco Bell

Out of these the two main prominent in India re Pizza Hut and KFC. We shall concentrate our
analysis on KFC.

KFC Corporation, or KFC, founded and also known as Kentucky Fried Chicken, is a chain of
fast food restaurants based in Louisville, Kentucky. KFC is a brand and operating segment,
called a "concept",[2] of Yum! Brands since 1997 when that company was spun off from PepsiCo
as Tricon Global Restaurants Inc.

KFC primarily sells chicken in form of pieces, wraps, salads and sandwiches. While its primary
focus is fried chicken, KFC also offers a line of roasted chicken products, side dishes and
desserts. The company was founded as Kentucky Fried Chicken by Colonel Harland Sanders in
1952, though the idea of KFC's fried chicken actually goes back to 1930. The company adopted
the abbreviated form of its name in 1991.[3] Starting in April 2007, the company began using its
original name, Kentucky Fried Chicken, for its signage, packaging and advertisements in the
United States as part of a new corporate re-branding program;[4][5] newer and remodeled
restaurants will have the new logo and name while older stores will continue to use the 1980s
signage. Additionally, Yum! continues to use the abbreviated name freely in its advertising.
Timeline
9/9/1890
Harland Sanders is born just outside Henryville, Indiana.

1900-1924
Harland Sanders holds a variety of jobs including: farm hand, streetcar conductor, army private
in Cuba, blacksmith's helper, rail-yard fireman, insurance salesman, tire salesman and service
station operator for Standard Oil.

1930
In the midst of the depression, Harland Sanders opens his first restaurant in the small front room
of a gas station in Corbin, Kentucky. Sanders serves as station operator, chief cook and cashier
and names the dining area "Sanders Court & Café."

1936
Kentucky Governor Ruby Laffoon makes Harland Sanders an honorary Kentucky Colonel in
recognition of his contributions to the state's cuisine.

1937
The Sanders Court & Café adds a motel and expands the restaurant to 142 seats.

1939
The Sanders Court & Café is first listed in Duncan Hines' "Adventures in Good Eating."

Fire destroys The Sanders Court & Café, but it is rebuilt and reopened.

The pressure cooker is introduced. Soon thereafter Colonel Sanders begins using it to fry his
chicken to give customers fresh chicken, faster.

1940
Birthdate of the Original Recipe

1949
Sanders marries Claudia Price.
1952
The Colonel begins actively franchising his chicken business by traveling from town to town and
cooking batches of chicken for restaurant owners and employees.

The Colonel awards Pete Harman of Salt Lake City with the first KFC franchise. A handshake
agreement stipulates a payment of a nickel to Sanders for each chicken sold.

1955
An interstate highway is built to bypass Corbin, Kentucky. Sanders sells the service station on
the same day that he receives his first social security check for $105. After paying debts owed,
he is virtually broke. He decides to go on the road to sell his Secret Recipe to restaurants.

1957
Kentucky Fried Chicken first sold in buckets

1960
The Colonel's hard work on the road begins to pay off and there are 190 KFC franchisees and
400 franchise units in the U.S. and Canada.

1964
Kentucky Fried Chicken has more than 600 franchised outlets in the United States, Canada and
the first overseas outlet, in England.

Sanders sells his interest in the U.S. company for $2 million to a group of investors headed by
John Y. Brown Jr., future governor of Kentucky. The Colonel remains a public spokesman for
the company.

1965
Colonel Sanders receives the Horatio Alger Award from the American Schools and Colleges
Association.

1966
The Kentucky Fried Chicken Corporation goes public.

1969
The Kentucky Fried Chicken Corporation is listed on the New York Stock Exchange.

1971
More than 3,500 franchised and company-owned restaurants are in worldwide operation when
Heublein Inc. acquires KFC Corporation.
1976
An independent survey ranks the Colonel as the world's second most recognizable celebrity.

1977
Colonel Sanders speaks before a U.S. Congressional Committee on Aging.

1979
KFC cooks up 2.7 billion pieces of chicken. There are approximately 6,000 KFC restaurants
worldwide with sales of more than $2 billion.

12/16/1980
Colonel Harland Sanders, who came to symbolize quality in the food industry, dies after being
stricken with leukemia. Flags on all Kentucky state buildings fly at half-staff for four days.

1982
Kentucky Fried Chicken becomes a subsidiary of R.J. Reynolds Industries, Inc. (now RJR
Nabisco, Inc.) when Heublein, Inc. is acquired by Reynolds.

1986
PepsiCo, Inc. acquires KFC from RJR Nabisco, Inc.

1997
PepsiCo, Inc. announces the spin-off of its quick service restaurants - KFC, Taco Bell and Pizza
Hut - into Tricon Global Restaurants, Inc.

2002
Tricon Global Restaurants, Inc., the world's largest restaurant company, changes its corporate
name to YUM! Brands, Inc. In addition to KFC, the company owns A&W® All-American
Food® Restaurants, Long John Silvers®, Pizza Hut® and Taco Bell® restaurants.

2006
More than a billion of the Colonel's "finger lickin' good" chicken dinners are served annually in
more than 80 countries and territories around the world.

2007
KFC proudly introduces a new recipe that keeps the Colonel's 11 herbs and spices and finger-
lickin' flavor, but contains Zero Grams of Trans Fat per serving thanks to new cooking oil.
 KFC’s Social Responsibility
Ventures
There's more to KFC than great food. We promote education, diversity and animal welfare in a
number of positive ways. KFC has stepped foot in the social responsibility circle and has
launched some various schemes in this regard which are as follows:

The KFC Colonel’s Scholars Program is about you, your dreams

and aspirations, and the perseverance to succeed. This program is
offered to high school seniors planning to attend a public in-state
college or university.

Diversity is more than a philosophy at KFC, it is part of our

founding How We Work Together principles. Our global culture
is actively developing a workforce that is diverse in style and
background, where everyone can make a difference.
 Yum! Brands is committed to conducting business in an ethical
and responsible manner. To encourage compliance with all legal
requirements and ethical business practices, Yum has established
a Supplier Code of Conduct for it's U.S. suppliers.

Yum! Brands, parent company of KFC, is committed to the humane treatment of animals.
 Marketing
The marketing mix is generally accepted as the use and specification of the 'four Ps'
describing the strategic position of a product in the marketplace.
• Product
• Price
• Place
 • Promotion

Product
What is a Product?

Anything that can be offered to a market to satisfy a want or need.

 KFC’s Main Products in India:
KFC's specialty is fried
chicken served in various
forms. KFC's primary product
is pressure-fried pieces of
chicken made with the original
recipe. The other chicken
offering, extra crispy, is made
using a garlic marinade and
double dipping the chicken in
flour before deep frying in a
standard industrial kitchen
type machine.

Segmentation
What is Market
Segmentation?
Dividing a market into distinct groups of buyers on the basis of needs
characteristics or behaviour who might require separate product or
marketing mixes.

Levels of Market Segmentation

 Segment marketing

 Individual marketing

 Niche marketing

 Local marketing

 . Individual marketing – Extreme marketing in which marketers focus on individual

customers.

 Keep track of individual tastes & preferences of individual customers

 Many companies are approaching individuals through e-mails to promote their

products.

 Segment marketing – Dividing the market into different segments on the basis of
homogenous need.

 Segmented on basis of broad similarity with regard to some attributes

 Segmentation is also sometimes identifying, capturing & retaining potential new markets

 Niche marketing – Marketers effort to position their product or service in smaller markets
that have similar attributes and have been neglected by other marketer
  Segment further divided into sub segments to cater unsatisfied needs of small group is
called as niche
Local marketing – marketers offer customized products to suit the local markets.

 KFC introduced “Muslimized” or “Pakistani” products such as Spicy Chicken, Hilal

Chicken, Zinger Extreme and more…

Geographic segmentation :
KFC has outlets internationally and sells its products according to geographic needs of the
customer. In India KFC focuses how geographically its customers demand different products. In
north India Chicken is the main selling product, while in the south the Veg. items sell more than
the chicken.

Demographic Segmentation
In demographic segmentation, the market is divided into groups based on an age, gender, family
size, income, occupation, religion, race and nationality.

KFC divides the market on demographic basis in this way:

• Age is between 6- 65.

• Gender is both males and females.

• Family size is 1-2, 3-4, 5+

• Income is Rs 10,000 n above.

• Family lifestyle is almost all.

Psychographic segmentation
Dividing a market into different groups based on social class, lifestyle, or personality
characteristics is called psychographic segmentation.

KFC divides market on the basis of psychographic variables like

• Social class- Upper and Middle class.

• Lifestyle is not specific.

• Personality is ambitious and authoritarian

Target Market
• “The process of evaluating each market segment’s attractiveness and selecting two or more
segments”

• As the outlets of KFC are in posh area and prices are too high (overhead expenses-rent, air-
conditioning, employees), so KFC targets upper and middle classes. Target market depends
upon size and growth rate of population, Company resources and structural attractiveness of
market segment.

Market Positioning
• For a product to occupy a clear, distinctive and desirable place relative to

“Competing products in the minds of target consumer.”

• In KFC feedback is taken from the customer in order to know the customer demands and
then improvements are made in products. KFC focuses on pure and fresh food in order to
create a distinct and clear position in the minds of customers KFC has a strong brand
name and they are leading the market in fried chicken.

• For a product to occupy a clear, distinctive and desirable place relative to

“Competing products in the minds of target consumer.”

• In KFC feedback is taken from the customer in order to know the customer demands and
then improvements are made in products. KFC focuses on pure and fresh food in order to
create a distinct and clear position in the minds of customers KFC has a strong brand
name and they are leading the market in fried chicken.
 A Conclusive Summary of
KFC
KFC is synonymous with chicken. It has to be because chicken is its flagship product. The
latest they have on offer is the marinated hot and crispy chicken that is "crrrrisp and crunchy on
the outside, and soft and juicy on the inside". It gives you a regular Pepsi with this at nothing
more than just Rs. 39. But make no mistake, while this is a rage across the world, and in our very
own Bangalore, KFC has made sure one other thing: it doesn't want to alienate the vegetarian
community "that gave birth to the vegetarian menu". It means you can be veg and yet be at KFC.
KFC offers a wide range of vegetarian products such as the tangy, lip-smacking paneer tikka
wrap 'n' roll, the veg de-lite burger, and the veg crispy burger. There are munchies such as the
crisp golden veg fingers and crunchy golden fries served with tangy sauces. If you are veg and
looking for a meal, you can combine the veg fingers with steaming, peppery rice and a spice
curry.
The mayonnaise and sauces don't have egg in them. Sharanita Keswani, Director, KFC
Marketing, says the vegetarian menu in India came about when KFC found the country had
about 35 per cent vegetarians, and in metros such as Delhi and Mumbai, almost 50 per cent. The
non-vegetarian is the obvious target customer because, as Ms. Sharanita points out, Bangalore
and the rest of south India have over 70 per cent non-vegetarians. But she also observes that
chicken is KFC's strength. KFC's vegetarian menu is almost exclusive to India and is the most
extensive. Most countries either do not have a vegetarian menu, and some which do, have a
burger at the most. "Contrary to affecting chicken sales, the presence of a vegetarian menu has
made the brand more relevant to a wider cross-section of the consumer society.

This is essential as we grow the brand across the country," says Ms. Sharanita. While the
vegetarian menu has a significant presence in India owing to the country's distinct tastes, and
therefore the need to localise, KFC's chicken products that are standardised are also modified in
certain regards to suit local tastes. KFC officials say the zinger burger in any part of the world or
original recipe chicken tastes the same as the chicken products are based on standard recipes.
While this brand standard chicken may taste the same in New York or Bangalore, the sauce or
topping is changed. The chicken strips are served with a local sauce or the sauce of the wrap is
changed to local tastes. And as far as India is concerned Ms. Sharanita says: "Making itself
relevant to local palates, KFC launched the wrap as chicken and paneer tikka roll in India." The
KFC menu strategy is to "balance standardisation and localisation". The localisation works in
two ways: to modify a standard chicken product with a different topping or sauce; and to have a
vegetarian menu, where necessary, along with the flagship product, chicken. The localisation
exercise is undertaken in every country. "The U.S. and European markets have a traditional KFC
menu based on chicken burgers and wraps, while Asian markets like India have been more
experimental and adventurous. Here, they have rice meals, wraps, and sides.

The change is imperative as Asian tastes can be very different from Western ones," Ms.
Sharanita observes, adding that KFC learnt very early the high demand for vegetarian products in
India. KFC has taken care to maintain safeguards on the production of its non-vegetarian
products in response to observations by People For Ethical Treatment of Animals that chicken
were not being treated humanely by suppliers. The debate has been on for years now and animal
rights activists have prompted companies to adopt stringent measures. Pankaj Batra, Director,
Marketing, Indian Sub-Continent, Yum! Restaurants International, observes: "KFC is committed
to the well being and humane treatment of chickens.

We require all our suppliers to follow welfare guidelines developed by Yum! Restaurants
International, U.S.A., with leading experts on their Animal Welfare Advisory Council. In India,
we source chicken from Venkateshwara Hatcheries Limited (Venky's), which is one of the
leading and respected organised players in the poultry farming business. They also supply
chicken to several reputed hotel and restaurant chains in the country. We respect the Indian law
and our guidelines completely adhere to them." Ms. Sharanita points out that while KFC's brand
standard products are their strength throughout the world, KFC works around the core and gives
consumers products with a familiar taste, especially "important in a country like India that is
home to such distinct and different food habits". KFC's challenge as Ms. Sharanita puts it, is to
manage a brand's market with the right degree of flexibility so as to be strong in different and
varied product markets.
KFC’s Expansion Plan in India

Chicken restaurant company KFC, which is owned by Yum! Brands, intends to

reach a target of 100 outlets in India by 2010.

Currently, KFC operates 34 restaurants across nine cities in the country. The company
said that growth will primarily be franchise-driven. Only 20% of the new outlets will be
company-owned. As far as menu is concerned, KFC said that it will expand the menu by
introducing 15 to 20 new items. The offerings will suit Indian tastes. A significant
vegetarian variety will also be offered, the company added. Times News Network
quoted Unnat Varma, KFC India marketing director, as saying: "We plan to close 2008
with a total of 50 stores. Our business model is primarily a franchise one and the
aggregate investment involved in this expansion will be INR2 to 3 billion."
SURVEY ANALYSIS
International research into entrepreneurship is developing rapidly, but a large number of
questions concerning the marketing strategies adopted by the flourishing enterprises n their pros
and cons remain unanswered. The report calls for the study of the modus operandi adopted
whereby a new entrepreneur theory can be developed.

The establishment and development of new enterprises has attracted more and more attention as
regards commercial, research and educational policies. This is due to the assumption that the
setting up of new enterprises and innovative development of the existing ones is an important
prerequisite for creating the necessary dynamic in the commercial structure, and consequently a
basis for maintaining a country's international competitive power, economic development,
employment, and standard of living.

Our method of going about the study at hand involved the basic survey method, whereby we put
forward questions to individuals who were divided into the basic segments provided by and
aimed at as either the source or target service provider. This was carried out by a survey
comprising of two questionnaires, one aimed at the customers at either of the two food joints and
the other for the employees employed at the food joints. Our questions were designed to capture
the market trends, the grounds behind such a trend, the peripherals related to the functioning of
the food joint, key marketing strategies adopted and finally aimed at drawing the inferences and
conclusions for the same.

We now discuss each question and explore its conjecture with regards to the reasons for
including the question, its deductions and what light it throws in our study towards the
triumphant business model.
QUESTION 1
Which age group do you belong to?

The first question was essentially designed to throw light on the age group of people
visiting/dining at the food joints. This gave us an idea of the preference of a particular food brand
among a given age group if any. For e.g. the HAPPY MEAL available at McDonald's attracted
the major portion of the younger crowd. As a matter of fact as shown in the following questions,
this particular strategy drained almost the entire young consumer segment.

Of the individuals surveyed a majority of the individuals belonged to the 18-25 yr age group both
for McDonald's as well as KFC. Those in KFC in the below 18 age group totaled to around 8%
which contrasted with 19% in the same age group in McDonald's.
In 18-25 year age group the trend was nearly comparable at 47% for KFC and 39% for
McDonald's.
Besides, for KFC the percentages were 32% in 25-35 year group, 10% in 35-50 year group.
These contrasted with the results for McDonald's at 32% for 25-35 yr age group, 6% in 35-50 yr
group. The percentages of above 50 age group were calculated to be 3% and 4% respectively
which was insignificant in view of the establishment of market trend.

A) Below 18
B) 18-25
C) 25-35
D) 35-50
E) Above 5
QUESTION 2
What is your profession?

This question was essential in calculating the trend of the customers who visit these food joints
i.e. the working class of the people visiting the respective places. The survey revealed that the
majority of people visiting both the places i.e. 46% for KFC and 55% for McDonald's were
students. This thus lays direct stress on the strategies adopted by both the joints resulting in a
heavy demand among the student group. Moreover the percentage of service class was 27% for
KFC while 20% for McDonald's.
These percentages were further comparable as for business class they were 9% and 14%
respectively while 18% and 11% constituted others respectively for KFC and McDonald's.
The trends of age group as well as profession indicated results arising from various factors such
as availability of vegetarian food at McDonald's and the ambiance provided at the respective
places.

A) Student
B) Service
C) Business
D) Others

QUESTION 3
Are you a vegetarian/non-vegetarian?

This was essentially designed to demarcate the groups according to whether they were
vegetarians or otherwise. It was a preconceived idea that the vegetarians preferred McDonald's of
the two while KFC proved to be a non-vegetarian paradise. And the survey results validated our
assumptions by indicating that of the people visiting KFC only 12% were vegetarians while 88%
were either non-vegetarians or occasionally non-vegetarians. This percentage was very different
for McDonald's where 52% of the visiting crowd were vegetarian while 46% were non-
vegetarian. This thus showed a balanced market for McDonald's whereas a strong shift for KFC
towards the non-vegetarian section.

A) Vegetarian
B) Non-Vegetarian
C) Occasionally Non-vegetarian

QUESTION 4
How often do you visit here?

This question indicated the frequency of visits by the people surveyed.

The people visiting daily was few at 6% for KFC and 12% for McDonald's. Those visiting once
a week were comparable at 14% and 22% respectively. 39% visited KFC once a month while
41% visited at leisure. This percentage was 35% and31% for McDonald's hence showing that
though McDonalds scored in the daily visitors due to the optimally priced sections, KFC was
ahead in terms of people visiting at leisure or once a month.

A) Daily
B) Once a week
C) Once a month
D) At leisure
QUESTION 5
Who generally accompanies you?

The results to this question showed trends that are not novel to the Indian markets. A majority of
people were accompanied by their family in both the joints. The percentages varied from 41% in
KFC to 45% for McDonald's.
In KFC 43% came in groups of friends while in McDonald's this number was 39%.
12% in KFC and 14% in McDonald's were of the view that it did not matter who they came with.
According to them what mattered was the food.

A) Family
B) Friends
C) Alone
D) Does it really matter?

QUESTION 6
What is your saying on the pricing of the joint?

In KFC 31% found the food priced nominally and an equal amount of people surveyed i.e. 31%
found it expensive. Hence it was concluded that it dropped down to the individual in the case of
KFC and there was no clear market trend.
In McDonald's 46% found it nominally priced as well as value for money while just 8% found it
expensive.
Hence in terms of comparative study it was concluded that McDonalds was optimally priced
although KFC wasn't overpriced either.

A) Nominal
B) Expensive
C) Value for Money

QUESTION 7
How much do spend on an average per visit?

This question again was concerned with the pricing as well as spending capability of the people.
The results indicated that a major section, i.e. around 52% for KFC and 42% for McDonald's, of
people spent between Rs.100-500 thus advocating the fact that the places are priced moderately.
It was also noted that 31% of people could manage a meal for under Rs. 100 in McDonald's
compared to 24% in KFC. The people who spent above Rs. 500 were 24% and 27% for
McDonald's and KFC respectively.
 A) Below Rs 100
B) Rs 100 to Rs 500
C) Above Rs 500

QUESTION 8
Do you get drawn in by the television commercials of the food items?

This question was designed to give an idea about the publicity/advertising strategy of the food
brands. Both the brands under consideration are big brands and hence have the capability to
allocate adequate budgets towards all sections of marketing. Whether they choose to or not to, is
the question at hand. This particular question analyzes the potency of the advertising strategies
used by the food brands in attracting or influencing the customers.
it was noticed that only 15% of the consumers surveyed in KFC were attracted by the television
commercials while other 85% were unaffected. This percentage when contrasted with
McDonald's was a 68-32% relationship.

A) Yes
B) No
QUESTION 9
Do you think the food is indigenous to the place?

The question pertained essentially with the originality of the food and services provided at the
respective places. The people surveyed opined that KFC was a favorite when it came to the
originality as it was observed that people visited the place since they could not find such food
anywhere else. The vast majority at McDonald's visited that place mainly because they found it
value for money. The percentages also showed a variation in terms of whether the one surveyed
was vegetarian or otherwise.
The various percentages were as described in the pi charts.

A) Yes, I can’t find such food anywhere

B) No, But I come here for the value
C) I come here for its Non Veg delicacies
D) For its Vegetarian preparations and its variety

QUESTION 10

What do you think about the hygiene of the place?

This was in relation to the maintenance of the respective places by the owners/managers and how
it affected the crowd the place attracted.
In KFC, 77% of the people surveyed found the systems satisfactory i.e. the issues of food
hygiene and public health were looked catered to adequately.
The others thought it needed attention.
While at McDonald's this figure was almost identical at 76% finding it satisfactory and 22% and
2% finding it attention worthy and poor respectively.

A) Satisfactory
B) Needs attention
C) Very poor Indeed

QUESTION 11

How do you find the staff?

This question informs us about the operational strategies of the food joints. This question may
also have individual implications as there may have been cases involving particular experiences
although our aim was to gather the general opinion. In KFC , 48 % of the people found the staff
friendly and cooperative whereas 46 % found them indifferent, with only 9 % find the staff rude
and annoying. A similar trend was observed among the customers at Mc Donald's where 46%
found the staff friendly and 47% found them indifferent. Only 7% found the staff rude.

A) Friendly
B) Indifferent
C) Rude
QUESTION 12

What do you think about the marketing strategy of the joint?

This question gives us an idea of how the food joints go about their marketing and publicity.
This, although, may not give an exact figure in terms of the budget or manpower spent, but tells
us about how important, from the customer’s point of view, is the publicity of their brand is for
the respective places.

A) Loud and widespread

B) Low profile
C) Attended Adequately
QUESTION 13

Given a preference which of these would you choose?

This was a very personal choice question to sense the general opinion of the customers who have
the purchasing power or the taste bud orientation. The answers were influenced by the location
of the person being surveyed.

A) Mc Donalds
B) KFC
C) Gopals
D) Subway
E) Other