ACKNOWLEDGEMENT:

All the praise and gratitude are due to Almighty Allah alone, the creature of the universe who
created the man in his own image and enjoined upon him to travel on the earth and enter into a
profound and analytical study of the universe for spiritual appreciation of Allah’s unity and His
attributes as well as for harnessing the material manifestation of the world to the mankind’s
profitable utilization. In the first place, therefore we express our utmost thanks to Allah, the
Omnipotent and the Omniscient Greater, who has endorsed us with brain and body to partake of
His knowledge and accomplish our work in the form of this project.

A project of this nature cannot be completed without active support from different sources. We
have been lucky in this respect & received advice and assistance from many directions.
Among our contemporary benefactors, we would like to pay our deepest gratitude and heartiest
tribute to our instructor Mr. Jasim Tariq, for his successful guidance and very friendly conduct to
complete this work. His kind and friendly behavior can’t be forgotten at all.

We want to pay our foremost gratitude to my family for their moral and financial support and
also in the regard of their prayers. God bless them to more progress in future and may Allah give
us chance to serve them better.

Finally, we are thankful to our friends for their support and encouragement,

1|Page
EXECUTIVE SUMMARY:
This project is based on analysis of marketing strategies of “KFC”.
This project responds to the recommendation of honorable teacher “Mr. Umar Mushtaq”
who is our instructor for “Principles of Marketing”. We are thankful to him for the guidance he
provided us all the way in preparation of this report.
For the preparation of this project we interviewed marketing manager of KFC who
provide ample information about KFC strategies. We also interviewed some customer to know
their perception about KFC. We also looked for their ads & web site so we also used our
personal observation as a source. We consulted different books & journals for the purpose of our
analysis.
KFC fast-food chains are currently under the restaurant division of PepsiCo Incorporated.
PepsiCo is a corporation with three divisions including beverages, snack foods, and restaurants.
PepsiCo is acquired by Yum! Brand Inc, so KFC is part of Yum! Brands, Inc., which is the
world's largest restaurant system with over 32,500 KFC, A&W All-American Food™,Taco Bell,
Long John Silver's and Pizza Hut restaurants in more than 100 countries and territories.
Yum! Brand Inc has franchised KFC in different countries for being global. In Pakistan
Kapola (Pak) ltd. is the franchisee of KFC. First KFC branch in Pakistan is in Karachi Gulshan.
Our project covers all the marketing strategies used by KFC regarding to price, product,
promotion, positioning, market and public relation and finally we analyze the consumer
perception about KFC.Major competitor of KFC in Pakistan is McDonalds other competitors
include Pizza Hut, Café Zouke, Salt’n Paper and cooper and Kettle.
Market strategies deal with the perspective of market to be served. KFC has first in entry
strategy regarding market entry strategy, multi market strategy regarding to market scope
strategy, international market strategy regarding to market geographic strategy. As far as the
level of commitment to the market is concerned they use different approaches in different
perspectives like they are highly committed to customer satisfaction.

2|Page
 For positioning strategy KFC has positioned their products as high quality and high price
products. Regarding product scope strategy they have multiple products. As for as design
strategy is concerned KFC has standardized products. It has differentiated its products from
others by different and unique taste, packaging and labeling and pricing.
Pricing strategy of KFC is market-skimming pricing because its products enter in the
market with high prices. KFC is the market leader in its original chicken recipe hot and crispy.
Promotional strategy of KFC includes personal selling, advertising and sales promotion. They
give compensation incentives to their employees to improve selling.
As for as advertising strategy is concerned KFC uses print media such as newspapers,
magazines, web pages and outdoor advertising such as billboards etc its vehicle for advertising.
With respect to sales promotion it has made public relation as a tool for promotion. Special
events; birthdays of children are celebrated and are provided with special gifts.
As a matter of customers KFC is rated higher for the attributes: Taste and Cleanliness
than their competitors. One thing is very delighting for KFC, its satisfaction level and in meeting
expectations of customers is rated higher. Whereas for the attributes Friendly Service, Prices and
Atmosphere KFC is as their competitors.
From the strategic analysis of KFC we conclude that KFC, s competitive situation is not
that much intense. It has established an image in customers minds that works as a protection
against competitors. According to its marketing manager 90% of their customers are loyal
customers, so they are doing well to retain & sustain their customers. According to marketing
manager their competent employees are the way to success. They are doing well to sustain their
competent employees in order to get customer satisfaction through employee satisfaction

3|Page
HISTORY of KFC:

KFC was founded in 1955 and has grown to one of the largest quick-service restaurant
chains in the world.
KFC has more than 11,000 restaurants in more than 80 countries and territories around the
world. And in quite a few U.S. cities, KFC is teaming up with sister restaurants, A&W, All-
American Food™, Long John Silver's, Taco Bell and Pizza Hut, selling products from the
popular chains in one convenient location.
Over fifty years ago, Colonel Sanders invented what is now called "home meal replacement" --
selling complete meals to busy, time-strapped families. He called it, "Sunday Dinner, Seven
Days a Week."
Today, the Colonel's spirit and heritage are reflected in KFC's brand identity -- the logo features
Colonel Harland Sanders, one of the most-recognized icons in the world.
KFC is part of Yum! Brands, Inc., which is the world's largest restaurant system with over
32,500 KFC, A&W All-American Food™, Taco Bell, Long John Silver's and Pizza Hut
restaurants in more than 100 countries and territories.

KFC IN PAKISTAN

KFC launched its operation in Pakistan in January 1997. They opened their first outlet in
Gulshan Karachi. Until 2004 they have 29 branches in 9 cities of Pakistan. The details of these
cities & branches are:
In Sind total branches of KFC are 19 out of which, there are 18 branches in different areas of
Karachi & 1 in Hyderabad.
In Karachi these are located at:
1. KFC Gulshan
2. KFC Boat Basin
3. KFC 26th Street (Defence)
4. KFC S.M.C.H.S

4|Page
 5. KFC North Nazimabad
6. KFC Korangi
7. KFC I.I. Chundragar
8. KFC M.A.C.H.S
9. KFC S.I.T.E
10. KFC 3 Talwar
11. KFC Sea View
12. KFC P.I.D.C
13. KFC P.I.D.C
14. KFC Millenium Mall
15. KFC Nursery
16. KFC Xpress
17. KFC Tariq Road
18. KFC Dolmen Mall
In Lahore there are 10 branches. These are located at:
1. Garden Town
2. Cavalry ground
3. Defence phase 1
4. M.M.Alam road.
5. Jail Road.
6. Mall road
7. Johar town
8. Thokar naiz baig
9. Gt road
10. Y block defence
11. Shadman
12. Mughal pura near UET

5|Page
 KFC has just inaugurated its new branch in Defence Y-Block on August15,
2005 and it is working for opening new branch in Mugal pura near UET.It has also its branches
in Rawalpindi, Islamabad, FaisalAbad, Sialkot, Multan & Peshawar and Hyderabad etc.

BUSINESS OBJECTIVES
This can be subdivided into three major components:

1. Mission.
2. Vision
3. Objectives

MISSION
The corporate mission of KFC is to extend its image of excellence and uniqueness of

product quality and service all over the globe with an obvious intention of attaining a goal of

maximizing profit.

VISION
The vision of the company is to foresee that real future prospects of long term growth and
adjust itself to the specific cultures of each country they are operating in.
OBJECTIVES
Going in proximity, with the pure goal of an entrepreneur, the ultimate objective is to
maximize the return on investments and thus profit maximization

6|Page
MARKETING OBJECTIVE
The marketing objective can be subdivided into following sub-objectives.

 To compete effectively in the market by dominating which cannot be achieved by;

 Effectively meeting consumers’ expectations and demands.
 To increase substantially the market share.
 To retain and enhance the goodwill and image of the organization this adds to its loyalty.
 The famous 4 p’s decision…. Which will further be discussed in detail in the later part of
the report under relevant topics.
 Building awareness and credibility among the consumers is another major marketing
objective of the KFC in a totally new market.

SWOT ANALYSIS OF KFC

7|Page
 S-Strengths W-weaknesses

 Employees Limited Resources

 Conducive Environment
 Tasty good Food
 Loyal customers

O-Opportunities T-Threats

 Growing fast food market  New entrants

 Prejudice against multinationals
 International political scenario

We analyze internal strengths, weaknesses & external opportunities and threats of KFC.we

conclude from this analysis that KFC has enough strengths & opportunities to compete in

growing fast food market. It is also true that KFC is bounded by many weaknesses & threats as

mentioned in above table. Recently IRAQ war was major threat for KFC which played a vital

role in decreasing the sale of KFC.

STRENGTH AND WEAKNESSES OF KFC

8|Page
 The major strength possessed by KFC’s competitors is their considerably lower prices as
compared to the anticipated and expected skyrocketing prices. Despite of this, they have been
existing in the local market for years, therefore, knowing people’s tastes and whims.
Taking of weaknesses, KFC enjoys an unmatched image recognized worldwide. Since it’s a
franchise, quality consistency is ensured. They are over-confident about their customers being
loyal to them. KFC has its branches only in major cities so it should increase its area network
and should open new branches in other cities of Pakistan.

THE MARKETING ENVIRONMENT:

Macro Environment

Demographic:

Kfc is mainly concentrating on the youth, gender, occupation, income and education of the
population. They are most concerned about that how many people are in the age of teen as well
as less then 35. Because kfc is a fast food chain,In Pakistan people who are doing jobs,who are
students, and it is convenient for them.So, the demographic study is very important for Kfc.
Since the population of Pakistan is increasing widely and income and education in the cities are
increasing rapidly. So the demography is effecting kfc and most importantly it is not controlled
of organization.

Political Forces:

Since Pakistan is by its nature politically unstable country. There was dictatorship more than
democracy and constitution was changed and amendment several times which made it difficult
for the organization like kfc to grow rapidly and take roots in the society. Since Pakistan is a
very religious country, and the people are closely bounded with the people of other Muslim
countries. When kfc heavily interested in illegal entity of Israel, most of the Arab and Muslim
countries boycotted kfc and Pepsi and other local brands got the chance to take the lead.

Natural Forces:

9|Page
Overall natural conditions of country are not favorable like weather of Pakistan helped kfc very
much, so the products of kfc are suitable for every one in every seasons. Some natural forces like
lack of rain, change in labor lows, fluctuation in the price of fuel. Fluctuation in the utility
expanses deficiency of energy (electricity and gas) and unlikely change weather due to global
warming are also affecting.

Technological Forces:

This is the age of science and technology, and the latest technology is inevitable in order to
grow, sustained and control the production and labor cost. Highly technological advantage is
required over the competitors. kfc is having stiff competition with their rival even though coke
possess best technology but due to the rapid change in mechanical and electrical devices. And,
innovation in the fields of robotics engineering and electronics making it hard to compete with
the rivals.

Economic Forces:

The income of the people living in the cities jumped when tremendously but at the same time
due to inflation and changed in the buying habits due to the increase in their income.
Internationally and nationally economics situation is worse than ever. Pakistan has economical
crises dollar is at the lowest point against Euro and Pound. European Union is officially in
recession. These economic forces are putting very bad impact on kfc.

Cultural Forces:

The culture of Pakistan is now been changed. Kfc never tried to adjust itself in Pakistan culture.
Instead they tried to change the culture of Pakistan and shaped it to the kfc culture. Which is
more Pro West now our culture is not completely Islamic and not even completely Western. This
setup is helping coco cola to exploit the population through its mass marketing strategy. The
generation which was used to have lussi and milk, desi ghee parathas, etc and now these people
their children are crazy about carbonated drinks, juices and only fast foods.

10 | P a g e
 MARKET SEGMENT PROFILE

Let’s have a complete view of how KFC segments its market using all the different
variables.
KFC is interested in attracting diners (segmenting variable: user status) who like eating
out as recreation, as a habit, don’t like home cooked food or they don’t have any one to cook at
home (segmentation variable: attitude). Among those who eat out as a recreation people with
higher income and can afford to dine out frequently (segmentation variable: income). So over all
KFC decides to get people with a high income, positive attitude towards life, and they like to eat
out frequently as a source of recreation. This could be one segment of KFC’s market.
KFC, s management believes 7 Ps rather than 4, product, price, promotion, place, people
(customers), physical evidence (environment) & public of the organization. For them product
promotion & their customers & physical environment are more important & rest of strategies are
to support these core strategies

MARKET SEGMENTATION

Major segments are basically those areas where the demands is higher then the other areas. There
are so many people who take this meal weekly and those who take less often are always there as
well. KFC has not segmented a lot here in Pakistan. Most of their products are for youth and
affordable for most of the population.

11 | P a g e
MARKET TARGETING
KFC commercials basically based on young generations, So, the young generation is the target
market of KFC because they want to represent KFC with the youth and energy but they also
consider about the old people they take then as a co-target market.

MARKET POSITIONING
Fortunately KFC position in the people's mind in Pakistan is not up to its standard. People are
often used to say in ignorance that they are having Mc Donald’s.
That has to be change in order to get the same reputation which it posses in the world.

PRODUCT
Product is any thing that is offered in the market for sale the product KFC is offering is it
special chicken. Kentucky Fried Chicken is famous for its chicken, which is a blend of 11 herbs
and speices, which gives it the flavor every one is crazy about it.

PRODUCT POSITIONING STRATEGY

Positioning is the act of designing the company’s offer so that it occupies a distinct and valued
poisoned in the target consumer’s need.
Positioning shouldn’t be just a part of your strategy. It should be backbone of your business plan.
Positioning has got its fair share of press in the past few years. But if you actually tried to
achieve a position in the market place; you know that the gulf between theory and practice can
be distressingly wide. In service industry you are not just positioning your products rather your
organization. Beauty is in the eye of beholder and in the case of marketing the beholder is the
customer so the customer is the ultimate judge of what you are presenting.
Six approaches to positioning may be distinguished
1. Positioning by attributes
2. Positioning by price/ quality

12 | P a g e
 3. Positioning with respect to use and application
4. Positioning by the product user
5. Positioning with respect to product class
6. Positioning with respect to competitors

KFC’S POSITIONING STRATEGIES

KFC promotes a “high quality poison” for its products. It produces high quality products,
charges a high price, distributes through high-class dealers and advertises in English newspapers
with a high circulation. Kentucky Fried Chicken is communicating through physical signs and
ques that people use to judge quality.
For KFC management the image their customers carry in their mind is the most important
factor. That is why for them the product quality, which is almost standardized all of the world
except little differences because of local requirements & the promotion are very critical factors.
They people which are their customer and the physical evidence, the environment customers get
in KFC are the forces that built KFC,s image in the customer mind that is why they are always
trying to bring positive changes in the environment so that every time their customer enter the
KFC, can feel the difference. They think that trough continuous efforts they have developed such
a brand image in their customer’s minds that their customers have become brand loyal. In other
words they have got brand equity.

13 | P a g e
PRODUCT SCOPE STRATEGY
Product scope strategy deals with the perspective of the product mix of a company (i.e., the
number of product lines and items in each line). KFC has the following product line and number
of products in each line,

PRODUCT LINE
CHICKEN
 1 Piece
 5 Pieces
 10 Pieces

BURGERS

 Mighty Zinger
 Zinger Xtreme
 Fish Zinger
 Zinger Burger
 Twister
 Col. Chkn. Burger
 Spicy Sub

SNACKS & SIDE ORDERS

 Nuggets 6 pcs.
 Nuggets 15 pcs.
 Regular Fries
 Large Fries
 Corn on the Cob
 Arabian Rice
 Dinner Roll
 Hot shots
 Cheese

14 | P a g e
DESSERTS & BEVERAGES

 Regular Drink
 Scoop of walls
 Large Drink
 Mineral Water Reg.
 Mineral Water Lg.
 Coffee
 Tea

MEAL DEALS

     

         

   

   

         

15 | P a g e
     

         

     

         

     

         

     

         

     

         
     

16 | P a g e
         

     

PRODUCT DESIGN STRATEGY

There are three types of product design strategies.

1. Customized product
2. Standard product
3.Standard product with modifications
A business unit may offer a standard or customized design product for each individual customer.

Basic products of KFC are standardized throughout the world. To have a standardized product
the ingredients have to be the same in all the outlets, which is a very difficult job but KFC is
successful in doing so. The ingredients basically consist of healthy chicken, 11 different herbs
and species, cheese, mayonnaise, salad, buns, potatoes for fries etc. Basic secret recipe comes
from the head office in U.S, the rest of the things are obtained from the local market.

PRODUCT LEVELS AT KFC

CORE PRODUCTS

17 | P a g e
KFC is providing chicken that is “Finger Licken’Good”, along with a fun a place for the whole
family, to enjoy a thoroughly satisfying eating experience.KFC promises high quality food at a
high quality place, at a relatively high price.
The core product at KFC is an amalgamation of the following points
 Hot great tasting chicken meals
 Great value for the consumers money
 Efficiency and quality
 Clean and comfortable restaurant
 Service in a friendly and courteous manner
 All product served in the KFC outlets in the Pakistan are “Halal”
 High quality control measures
 CHAMPS, which stands for

C leanliness
H ospitality
A mbience
M aintance
P leasure
S ervice

ACTUAL PRODUCT

Kenchky Fried Chicken is famous for its original recipe, which is a blend of 11 herbs and
spices, which gives it flavor everyone is crazy about.
The Colonel’s original recipe was served in his first resturant in the 50’s and is still
unique to KFC to this day. To prepare the prigonal recipe succulent whole portion of chicken are
taken and delicately seasoned with Colonel’s secret recipe of eleven herbs and species and is
cooked under pressure. The pressure-cooking results in tender, juicy and irresistible fried
chicken.

18 | P a g e
 The developer of this recipe, the Colonel was always adding one thing or the other to this
recipe, so he came up with the new famous hot and crispy chicken, which was cooked under
pressure to seal in the chicken’s original taste and flavor. crispy on the outside, juicy n’ tender
inside’ the hot and crispy chicken is marinated in especial seasoning and is double breaded to
give it golden brown crunchy crust.

AUGMENTED PRODUCT

KFC has augmented its products by adding take away services, birthday party arrangement for
the children, and special kid’s fun and play area at their outlets.

PRODUCT DIFFERENTIATION STRATEGY

A production can be differentiated due to its features, performance conformance, durability, style

etc.

FEATURES

generate more customer satisfaction per rupees of cost than KFC is likely to retain it.
Features are characteristics that supplement the products basic functioning. Most products can be
used with varying features. Each feature at KFC has an additional chance of capturing the fancy
of additional buyers. For each potential feature, KFC calculate the customers value verses its
cost.

PERFORMANCE

Performance refers to the level at which the products primary characteristics operate. Buyers of

KFC products normally compare the performance characteristics of different food bands. They

19 | P a g e
will pay more for better performance as long as the higher price does not exceed the higher

perceived value.

PERSONNAL DIFFERENCIATION

KFC is trying to gain popularity and competitive advantage through hiring and training better
people than their competitors do.
The employees have a special degree of competence, employees of KFC are very courteous.

They are friendly, respectfull and considerate. They are trust worthy and posses a higher

credibility. The floor employees have an essencial training for 14 days and the employees at a

higher level are given training for 20 to 30 days. They are given training to respond quiqly to

customer’s requests and problems. The KFC management makes sure that the floor employees

are given ample training to understand the customer and communicte clearly. The employees

wear a uniform consisting of black trousers, blue shirts and a name plate.

SERVICE DIFFERENTIATION

Sevice is a very important factor for KFC as its actual product consists of not only quality
chicken but also satisfactory service. KFC is providing excellent product sport services but the
range of services is not complete, as it is a self-service restaurant. KFC trains its employees to
give quick and efficient service to the consumers who are standing queues to take their order.
KFC management tries to answer the inquiries and solve the problems of all its consumer. KFC
trains its employees to give satisfied and productive service.
IMAGE DIFFERENCIATION

20 | P a g e
KFC promotes a very strong image for their brand, which it has developed over the period of

time through creativity and hard work. This image is communicated through symbols, media,

message, events, atmosphere and personnel.

SYMBOL
The KFC brand logo is designed for instant recognition. KFC has built its brand around the
creator of the KFC recipe, the colonel. KFC promotes a red colored logo “KFC”, as an
abbreviation of Kentucky Fried Chicken.

ATMOSPHERE

The physical space in which KFC delivers its product is a very important image generator for it.

For instant recognition, KFC builds a standard red and yellow

building with the colonel’s stature out side the building.. it has a specific interior design, layout,

color, materials used and furnishing all over the world.

NEW PRODUCT STRATEGY

KFC is trying to increase its market by expanding through discovering and promoting new uses

of the product. The Colonel’s sub is consumed at odd hours and an increasing number of people

are trying it.

BRAND
A brand name consist of words, letters etc. that’s can be pocalized, for Kantucky Fried Chicken

it is KFC. The brand mark is that part of the brand that appears in the form of the symbol, design

21 | P a g e
or distinctive color or lettering. The brand mark of KFC is written in red color, which is

recognized instantly. The brand mix is easy to identify goods and services. The KFC brand not

only helps the consumer to recognize it instantly, but is also a source of insurance of standard

food and service. The KFC brand name has helped it to reduce price comparison the consumer

do with other chicken burger available, as it is one of the only the chicken fillet burger available

in Pakistan.

ATTRIBUTES

The positioning strategy of KFC associates itself with the product class and the product attribute.
KFC has two kind of recipe, one is the original recipe and one is the new recipe in which the
chicken is deep fried with the chicken skin on the chicken fillet.

BRAND EQUITY

KFC recognizes that the brand it owns may be more valuable than the physical assets it has, such
as building and equipment. This is its brand equity. It is the value the KFC brand adds to its
product. In the minds of many customers just having the brand name, KFC adds value to the
product. KFC brand adds value to its product through its name awareness.
Substantial brand equity provides many benefits. The KFC brand has become a differentiated
advantage, influencing customers to buy its food products. This brand eqity of KFC gives it an
edge over other firms entering the food industry, as building brand equity is time consuming and
expensive. It creates barrier for the firm, which want to enter the market with the similar product.
It also helps KFC to expand its product mix and especially to expand its product line. The brand
equity of KFC conveys a favorable impression of the product and increases the likelihood that at
least the consumer is going to try it.

22 | P a g e
PACKAGING
Even after a product is developed and branded there is a product feature that is critical for a
product, one such product feature is packaging. Packaging consists of all the activities of
designing and producing the container or the wrapper of the product.

KFC container for its burger is a very attractive black thin card box with KFC logo and the name
of the product written on it in white color This square box like container is easy to operate. The
potato chips are available in a glass cum box, made from cardboard. The soft drinks are available
in plastic glasses, which can be covered in case of take away order. The children Chicky Meal is
served in a small children lunch box, made from cardboard with a carrying handle and a lot of
cartoon characters are illustrated on it. The packaging not only keeps the KFC products hot and
in a hygienic state after they are bought, but also is an excellent source of promotion. The
packaging helps to keep the product cleaner and there are less chances of losses from spilling and
spoilage.

KFC packaging helps the consumers to identify their product and thus may prevent substitution
by competitive to identify their products. The packaging of KFC serves as a silent sales person. It
serves as a mean of communicating with the consumers. KFC’s packaging has become its
differentiated advantage, or at least a significant part of it.KFC uses family packaging, which has
similar packages for all products, or packages with a common and clearly noticeable feature.

LABELING
Labeling is a part of packaging and consist of printed information that describe the product
appearing on with the peckage. The KFC logo used on every packaging, promotion, and
advertinsing material used by Kentucky Fried Chicken, that helps promoting its prioduct to the

23 | P a g e
consumer. KFC is three alphabet word that appears on every promotional and advertinsing
material along with a very attractive graphing on the Colonel. Whenever there is the Colonel
picture or his statue, it is considered a symbol of quality in the chicken product category of the
international food industry. The Pakistani people considered product of KFC as the best products
available in the market due to its brand name, quality and famous labeling.

PRODUCT SUPPORT SERVICES

The services that augment the product are the product sport services. Although KFC is not
providing full range of services as it is a self-service restaurant but still it is providing more
product sport services than any of its competitors to its customers.
KFC is providing its consumer with take away services, in which the packing is done
accordingly. The soft drinks are packed in plastic glasses with cover, the fried are packed in a
thin cardboard box, the chicken pieces are packed in paper bags and the burgers have their
traditional packing.
KFC is offering the special package for the kids who want to have their birthday party at KFC.

KFC promises a fun filed birthday party for all the friend of the birthday kid. There would be lots

of Yummy chicken and other goodies, music and a specialty decorated exiting kids fun area,

party games and prices, goody bag for every body, special birthday cake, special birthday gift,

special chicky appearance, special birthday boy/girl photograph.

Prices of products:

CHICKEN
 1 Piece Rs. 100
 5 Pieces Rs.425
 10 Pieces Rs.850
24 | P a g e
BURGERS

 Mighty Zinger Rs.270

 Zinger Xtreme Rs.220
 Fish Zinger Rs.200
 Zinger Burger Rs.200
 Twister Rs.170
 Col. Chkn. Burger Rs.150
 Spicy Sub Rs.110

SNACKS & SIDE ORDERS

 Nuggets 6 pcs. Rs.160

 Nuggets 15 pcs. Rs.330
 Regular Fries Rs.65
 Large Fries Rs.80
 Corn on the Cob Rs.75
 Arabian Rice Rs.80
 Dinner Roll Rs.15
 Hot shots Rs.175
 Cheese Rs.20

DESSERTS & BEVERAGES

 Regular Drink Rs.50

 Scoop of walls Rs.60
 Large Drink Rs.60
 Mineral Water Reg. Rs.50
 Mineral Water Lg. Rs.60
 Coffee Rs.30
 Tea Rs.30
25 | P a g e
PRICING
Determining what people are willing to pay for something is a very complex business. And
complexity increases when we also have to consider our need to our cost and maximize our
earning. Businesses with an internal perspective typically utilize a variety of cost based pricing,
such as experienced curve pricing, cost absorption pricing ,or other mark up methodology. But a
business that is either market or customer driven will in contrast either look to value in use of the
product to the customers or to the comparative value offered to customers relative to the
competition in setting a market price.
Cost plus pricing advocates wander even further failed when they do not adequately account for
cost. Understanding the role of fixed and variable costs on the average and marginal cost of
production allows at least a rational approach to cost based – pricing.

The pricing objective the KFC management has selected is compatible with the over all goals set
by the company.

INTERNAL FACTORS EFFECTING PRICING AT KFC

 Pricing objectives
 Costs

a) PRICING OBJECTIVES

26 | P a g e
 The pricing objectives selected by the KFC management is compatible with the overall goals
set by them.
KFC has two pricing objectives
1. Profit-oriented
2. Sales-oriented
PROFIT-ORIENTED GOAL

In order to attain the profit oriented goal KFC has set, it has to achieve a target return. KFC
has set a target to be achieved in every month of the year, which is different for each year
depending on the external and internal factors. KFC uses a target return on the sales as a
pricing objective for short period of one month. They then add an amount to the cost of the
product, called a mark up, to cover the anticipated operating expenses and provide a desired
profit for the period.

SALES ORIENDTED-GOAL

KFC is not only trying to retain its market share buy is also trying to increase it. With the
entry of McDonalds in the food mar5ket of Pakistan, the competition for KFC has become
very tough, with the response international food chains are receiving, it is evident that other
major food chains are definitely going to enter this lucrative market. In such a situation it is
very important for KFC to retain its market share. KFC is also trying to increase its market
share in order to enjoy the scales of economies and better profits.

b) COSTS

KFC uses “Full Cost Recovery Pricing” according to their marketing manager they price
their packages on the following formula all cost + Govt taxes + profit margins. So their price
strategy is based on internal perspective rather than market customer or competitor oriented
KFC is not affected by competitor’s prices they set their prices independently based on costs
and profit targets.

27 | P a g e
EXTERNAL FACTORS AFFECTING THE PRICING AT KFC

a. Market demand
b. Economic conditions and the role of government

a) MARKET DEMAND

costs set the lower limit of the prices and the market demand set its upper limit. There is a huge
market for junk food, like burgers, deep fried chicken etc. in Pakistan. KFC has targeted it self
towards the higher income level and the high middle income level of the of urban areas
population of Pakistan. As being an international food chain, it has huge brand equity and is
already very popular among people.

b. ECONOMIC CONDITIOINS AND THE ROLE OF GOVERNMENT

The economic conditions of Pakistan are not very stable at this particular point of time, but the

government is still encouraging the foreign investors to invest in Pakistan. The economy of the

country is in recession; there is a shortage of goods and high inflation prevails. Pakistan’s rating

as a region for investment has fallen from BB (positive) to CCC (negative) which means that its

status has fallen from a fa9irly safe region to invest to a highly unsafe region to invest. This

situation has offended many investors.

PRICING APPROACH

In its introduction stage, KFC spent substantial money in seeking consumer acceptance of the
product. For KFC there is very little direct competition, thus the promotional program was
designed to stimulate demand for its products.

28 | P a g e
PRICING ABOVE COMPETITION

KFC set their prices above the prevailing market level. It is using the pricing above the
competition level strategy because it has a distinctive product and the kfc name has a prestige in
the minds of the people.

EXPECTED PRICE

KFC has priced its products according to the expectations of the consumers. KFC realizes this

fact that the consumers value KFC, consciously or unconsciously as a luxury item, so they have

priced their products accordingly.

MARKET SKIMMING PRICING

KFC’s initial prices for its products were high as compared to the target market’s range of

expected prices. The prices at KFC were set at the high3est possible level that the most interested

consumer would pay for the KFC products.

KFC uses market-skimming prices due to a lot of reasons:

KFC products have distinctive features, which are strongly desired by its consumers
By using this strategy it gets protection from the competitors.

QUANTITY DISCOUNTS

Quantity discounts are a specialty of KFC. The colonel\s value combos are an example of it. This
strategy is adopted in order to motivate the consumer to buy in large quantities. These
combination meals consisting of several items that collectively cost less than if bought separately
are gaining popularity due to their higher value and less price.

29 | P a g e
 PLACEMENT
Distribution strategies are concerned with the channels a firm may employ to make its goods and
services available to customers. For KFC, the most important activity is to arrange for the sale of
its products. Other activities undertaken in this section of the marketing mix of KFC is storing of
the ingredients, taking them form one place to another, finding right spots for opening new
outlets for KFC etc.
KFC launched its operation in Pakistan in January 1997. They opened their first outlet in gulshan
Karachi. Until 2004 they have 25 branches in 9 cities of Pakistan. The details of these cities &
branches are :
In Sind total branches of KFC are 13 out of which, there are 12 branches in different areas of
Karachi & 1 in Hyderabad.
In Lahore there are 5 branches. These are located at
1.Garden Town 2. Cavalry 3. Defence 4. M.M.Alam road. 5. Jail Road.
It has also its branches in Rawalpindi, Islamabad, FaisalAbad, Sialkot, Multan & Peshawar.

DISTRIBUT8ION CHANNEL
A distribution channel consists of set of people and firms involved in the transfer of title to a
product, as the product moves from producer to ultimate consumer. The type of distribution
channel KFC uses is called middleman involved in it.
PRODUCER----------- RETAILER-------------------CONSUMER
KFC is using the service-firm-sponsored retailer franchise system. This franchise buys all the
ingredients it uses and fulfils all other requirements of the franchiser. This practice is adopted to
have the product upto the standards of the international KFC chain.

30 | P a g e
FRANCHISE SYSTEM

Franchise system involves a continuing relationship in which the franchiser that is the parent
company provides the right to use its trademark and management assistance in return for
payments from a franchisee. Which is the owner of an individual business unit. This combination
of franchiser and franchisee is called a franchisee, which is the Artal restaurants international
(Pvt.) Ltd. In Pakistan, a proven method of operating a business, management assistance,
marketing expertise etc. and in turn receives payments and conformance to policies and
standards from the franchisee. The KFC franchiser provides the merchandises, raw materials etc.
as well.
The KFC franchiser provides management assistance prior as well as after opening of the
restaurant including site selection, restaurant lay out guidance, technical and management
training, promotional programs and inventory control systems.
Artal plans to work with the local poultry industry, to introduce know how and to establish
international standards. The Artal group of Belgium has brought KFC to Pakistan in
collaboration with Pepsi Co. and it plans to open 26 more till year 2001.

MARKETING LOGISTICS

The marketing logistics involve planning, implementing and controlling physical flow of the
finished goods. The major logistic functions include order processing, warehousing, inventory
management and transportation.

ORDER PROCESSING

The orders at KFC are taken from customers in person, who are standing in a queue. These

orders go to the kitchen where it takes hardly 30.45 seconds to deliver it. The amount to be paid

by the consumer as the bull of his order is charged before the order is delivered. Whenever a

31 | P a g e
KFC outlet is short of its secret recipe, it orders the KFC Karachi head office about it. Every

KFC outlet has to give an approximate estimate about quantity of the secret recipe it would need

in the coming year. This order is processed and then necessary action is taken to fulfill these

orders.

PROMOTION

Promotion is an elements in the marketing mix of an organization that serves to inform, remind
and persuade the market of a product and/ or the organization selling it, in hope of influencing
the recipients feelings, beliefs and behavior.
Two main promotion strategies are examined

1. Promotions mix strategy.

2. Promotion expenditure strategy

PROMOTION MIX STRATEGY

There are three types of promotion strategies

1. Personal selling
2. Advertising
3. Sales promotion.
4. KFC uses advertising and sales promotion and personal spellings its tools of promotion.

1 PERSONAL SELLING

Personal selling strategies examined are selling strategy and sales motivation and supervision
strategy.

32 | P a g e
 KFC uses sales motivation and supervision strategy because they give compensation and non
financial incentives to their employees to improve selling.

2 ADVERTISING

Media may be defined as those channels through which messages concerning a product or
service are transmitted to the target.

MEDIA SELECTION

KFC uses print media such as newspapers, web pages and outdoors advertising such as
billboards etc its vehicle for advertising.

KFC has chosen the print media advertising for the purpose of its promotion. It advertises on the
front and back page of the famous and well-read newspapers of the country. It only advertises in
English newspapers with a very high circulation such as THE NEWS, DAWN, etc. the
advertisement usually covers a quarter of the page of the newspaper. The advertisement uses an
amalgamation of very bright colors, usually billboards to promote itself.
KFC uses published web pages in which it presents it product for online sale and give
advertisement of its product.

ADVERTISEMENT COPY STRATEGY

Copy refers to the content of an advertisement. In the advertisement industry the term is
sometime used in the broad sense to include the words, pictures, symbols, color, layout, and
other ingredients of an ad.

The KFC brand logo is designed for instant recognition. KFC has built its brand around the

creator of the KFC recipe, the colonel. KFC promotes a red colored logo “ ”, as an
abbreviation of Kentucky Fried Chicken.
The wording of its messages is like there is fast food then there is KFC.
33 | P a g e
SALES PROMOTION

Many tools can be used to accomplish sales promotion objectives.

PREMIUMS

Premiums are goods offered either free or at low cost as an incentive to buy a product. In KFC,
premiums are used ranging from pencil case ,kit bags, mobile stands, foot balls, jey chains, T
shirts file cover, mobile case, ludo board game, tissue boxes.

ADVERTISING SPECIALITY

Advertising specialties are useful articles imprinted with an advertiser’s name given as gifts to
consumers. in KFC, plates , bottles, mugs, clocks, T shirts, tissue boxes, footballs, kit bags and
other items are imprinted with its logo and company name. Such items are very effective
reminders. Consumers recall the ‘KFC’ name whenever they use these items.

BUSINESS PROMOTION TOOLS

Companies spend billions of dollars each year on promotion to industrial customers. These
business promotions are used to generate business leads, stimulate purchases, reward customers,
and motivate sales people.

PUBLIC RELATION TOOLS

Public Relations is another promotion tool- building good relations with the company’s various

publics by obtaining favorable publicity, building up a good corporate image, and handling or

heading off unfavorable rumors, stories and events. Public relations can have a strong impact on

public awareness.

34 | P a g e
MAJOR PUBLIC RELATION TOOLS USED BY KFC
A common PR tool used by KFC is special events; birthdays of children are celebrated and are
provided with special gifts. In summer season summer camps are arranged for children. They
also arrange musical programs for children. These events build the company image.

Public relations people of KFC also prepare written materials to reach & influence the
consumers. These materials include brochures & magazines.

After the boycott of multinational products by some groups in the country after the US-IRAQ
war. Magazines are used to change the perception of the consumers about KFC. There was also a
rumor about its chicken. It was said that the chicken is not cut according to the principle of
Islam. This negative image is also rectified through magazines.

35 | P a g e
Uniforms are also a tool. All employees of KFC are provided with uniform. This uniform is also
a public relation tool.

CONCLUSION
Analysis we have conducted for KFC, s marketing strategies we have come to the following
conclusions,

 KFC, s competitive situation is not that much intense.

 It has established an image in customers minds that works as a protection against

competitors.

 3- According to its marketing manager 90% of their customers are loyal customers, so
they are doing well to retain & sustain their customers

36 | P a g e
  They have largest market share of fast food industry in Pakistan but in Lahore their
market share is lower as compare to Mc Donald, as Lahore is a big market for fast food
restaurants, there is need to capitalize on this potential. According to their marketing
manager they are planning to open some new branches.

 The real strength of the KFC in view point of its management & according to customer
perception lies in its physical environment as its marketing manager stated, “we want that
our customers can feel a good positive change every time when they enter the restaurant”

 As KFC, s ultimate goal is customer satisfaction. According to marketing manager their

competent employees are the way to success.

 They are doing well to sustain their competent employees in order to get customer
satisfaction through employee satisfaction.

 KFC is a market-oriented organization as it considers both customer needs & competitor

moves. At the same time its approach is proactive rather reactive.

 The greatest threat that not only KFC rather all multinationals are facing is of anti
multinational phenomenon right after Iraq war.

37 | P a g e
CONSUMER QUESTIONAIRE
The purpose of this questionnaire is to explore the consumers’ perceptions about KFC. Please fill
each point along with your personal information. Your personal information will not be disclosed
to anyone.

Gender:  M  F Age: yrs Residential Area:

Income Level (Rs. per month):  less than 20,000  20,000 to 50,000
 50,000 to 80,000  more than 80,000

How many times in a month you, usually, go to any fast food restaurant
 Once  Twice  Three Times  More than three times

How do you rate KFC in the following areas?

1 2 3 4 5

Convenient Inconvenient
KFC:     
Locations Locations

Wide Range Small Range

KFC:     
of Meals of Meals

Excellent Poor
KFC:     
Taste Taste

Very Fast Very Slow

KFC:     
Service Service

Friendly Not Friendly

KFC:     
Service Service

Reasonable Un-Reasonable
KFC:     
Prices Prices

38 | P a g e
 Not
Clean KFC:     
Clean

Pleasant Un-Pleasant
KFC:     
Atmosphere Atmosphere

Your overall satisfaction level:

KFC:     
Satisfied 1 2 3 4 5 Satisfied Not

To which level do you think that (KFC ‘n’ McD.) meet your expectations:

KFC:     
1 2 3 4 5 Excellent Poor

39 | P a g e
40 | P a g e
41 | P a g e