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Specific Tactics for creating Service Atmospheres

MKT412

Kentucky Fried Chicken: Background KFC, founded and also known as Kentucky Fried Chicken, is a chain of fast food restaurants based in Louisville, Kentucky, in the United States. KFC has been a brand and operating segment, termed a concept of Yum! Brands since 1997 when that company was spun off from PepsiCo as Tricon Global Restaurants Inc. KFC primarily sells chicken pieces, wraps, salads and sandwiches. While its primary focus is fried chicken, KFC also offers a line of grilled and roasted chicken products, side dishes and desserts. Outside the USA, KFC offers beef based products such as hamburgers or kebabs, poutine, pork based products such as ribs and other regional fare. 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. Although Sanders died in 1980, he remains an important part of the company's branding and advertisements, and "Colonel Sanders" or "The Colonel" is a metonym for the company itself. The company adopted KFC, an abbreviated form of its name, in 1991. Newer and remodeled restaurants will adopt 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.

Specific Tactics for creating Service Atmospheres

MKT412

Type Industry Founded

Wholly owned subsidiary Restaurants 1930 (original)(North Corbin, Kentucky) 1952 (franchise)(South Salt Lake, Utah) Harland Sanders

Founder(s)

Headquarters Louisville, Kentucky, U.S. Key people Roger Eaton, President Harvey R. Brownlea, COO James O'Reilly, VP for Marketing Fried chicken, grilled chicken, related Southern foods $520.3 million USD (2007)[1] 24,000 (2007)[1] Yum! Brands KFC.com

Products

Revenue Employees Parent Website

Specific Tactics for creating Service Atmospheres

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Question 1: Who is the firms target market? Answer: Target marketing tailors a marketing mix for one or more segments identified by market segmentation. Target marketing contrasts with mass marketing, which offers a single product to the entire market. Two important factors to consider when selecting a target market segment are the attractiveness of the segment and the fit between the segment and the firm's objectives, resources, and capabilities. Target Market Selection The target customers of KFC are mixed. It basically target higher class as well as middle class people. There are different types of customers like economic customers who make purchase decision based primary on the price, personalized customer consumers who desire to be pampered and attended to and who are much less price sensitive, apathetic customers consumer who seek convenience over price and personal attention. Attractiveness of a Market Segment The following are some examples of aspects that should be considered when evaluating the attractiveness of a market segment: Size of the segment (number of customers and/or number of units) Growth rate of the segment Competition in the segment Brand loyalty of existing customers in the segment Attainable market share given promotional budget and competitors' expenditures

Specific Tactics for creating Service Atmospheres

MKT412

Required market share to break even Sales potential for the firm in the segment Expected profit margins in the segment Market research and analysis is instrumental in obtaining this information. For example, buyer intentions, sales force estimates, test marketing, and statistical demand analysis are useful for determining sales potential. The impact of applicable micro-environmental and macro environmental variables on the market segment should be considered. Note that larger segments are not necessarily the most profitable to target since they likely will have more competition. It may be more profitable to serve one or more smaller segments that have little competition. On the other hand, if the firm can develop a competitive advantage, for example, via patent protection, it may find it profitable to pursue a larger market segment.

Suitability of Market Segments to the Firm Market segments also should be evaluated according to how they fit the firm's objectives, resources, and capabilities. Some aspects of fit include: Whether the firm can offer superior value to the customers in the segment The impact of serving the segment on the firm's image Access to distribution channels required to serve the segment The firm's resources vs. capital investment required to serve the segment The better the firm's fit to a market segment, and the more attractive the market segment, the greater the profit potential to the firm. Target Market Strategies There are several different target-market strategies that may be followed. Targeting strategies usually can be categorized as one of the following:

Specific Tactics for creating Service Atmospheres

MKT412

Single-segment strategy - also known as a concentrated strategy. One market segment (not the entire market) is served with one marketing mix. A single-segment approach often is the strategy of choice for smaller companies with limited resources. Selective specialization- this is a multiple-segment strategy, also known as a differentiated strategy. Different marketing mixes are offered to different segments. The product itself may or may not be different - in many cases only the promotional message or distribution channels vary. Product specialization- the firm specializes in a particular product and tailors it to different market segments. Market specialization- the firm specializes in serving a particular market segment and offers that segment an array of different products. Full market coverage - the firm attempts to serve the entire market. This coverage can be achieved by means of either a mass market strategy in which a single undifferentiated marketing mix is offered to the entire market, or by a differentiated strategy in which a separate marketing mix is offered to each segment. A firm that is seeking to enter a market and grow should first target the most attractive segment that matches its capabilities. Once it gains a foothold, it can expand by pursuing a product specialization strategy, tailoring the product for different segments, or by pursuing a market specialization strategy and offering new products to its existing market segment. Another strategy whose use is increasing is individual marketing, in which the marketing mix is tailored on an individual consumer basis. While in the past impractical, individual marketing is becoming more viable thanks to advances in technology.

Specific Tactics for creating Service Atmospheres

MKT412

The comparison of KFC in the worldwide units

Yum! Brand the parent to KFC was started in October 7, 1997

Specific Tactics for creating Service Atmospheres

MKT412

Question 2: What does the target market seek from the service experience? Answer: The target market seeks several things from the service experience. If those are fulfilled customers feel satisfied if not customer dissatisfaction occur. The target customer of KFC expects the following things from the service experience. 1. Knowledgeable and available staff: While a customer is making the buying decision, they want knowledgeable assistance, available when they want it. Customers place a high value on accurate information and want to be served by employees who know the product inside and out. 2. Friendly people: Customers not only want product-savvy sales people, they want them to be friendly and courteous. Your staff should value each customer more than any individual sale. 3. Good value: This is where price factors in. But customers surveyed see price as only one component of the bigger picture of value that includes the service, information and follow-up they also receive. 4. Convenience: The service rule here is simple: make it easy! Says Gross, Customers want merchandise that is well organized, attractively displayed and easy to find. Thats how todays customers define convenience, and the easier you can make the shopping, the more money you will be lugging to the bank. 5. A fast finish: This final item is where too many businesses fall flat, right at the finish line. While customers are in the process of deciding to buy or not, they are proceeding on your time. They want thoughtful help making the right decisions. But once the buying decision is made, get out of their way because now you are working on their time, and they want to complete the transaction and be on their way as quickly as possible. At the cash register, there is no time for making additional suggestions.

Specific Tactics for creating Service Atmospheres

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If these are effectively fulfilled, customers show a desire to stay or further explore the service otherwise they will avoid it. Service Environment Facility exterior is the physical exterior of the service facility that includes the exterior design, signage, parking, landscaping and the surrounding environment.

Facility interior is the physical interior of the service facility that includes the interior design, equipment used to serve customers, signage, layout, air quality and temperature.

Specific Tactics for creating Service Atmospheres

MKT412

Question 3: What atmospheric elements can reinforce the beliefs and emotional reactions that buyers seek? Answer: Due to the intangibility of services, service quality is difficult for consumers to objectively evaluate. As a result, consumers often rely on the tangible evidence that surrounds the service to help them form their evaluations. The role of physical evidence in the marketing of intangibles is multifaceted. Physical evidence can fall into three broad categories: a. Facility exterior, b. Facility interior, c. Other tangibles. Facility exterior is the physical exterior of the service facility that includes the exterior design, signage, parking, landscaping and the surrounding environment.

Specific Tactics for creating Service Atmospheres

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Facility interior is the physical interior of the service facility that includes the interior design, equipment used to serve customers, signage, layout, air quality and temperature. Other tangibles are the part of firms other physical evidence such as business cards, stationary, billing statements, reports, employee appearance, uniforms and brochures. The use of physical evidence to create service environments and its influence on the perception and behaviors of individuals is referred to as environmental psychology. The StimulusOrganism-Response (SOR) model was developed by environmental psychologists to help explain the effects of the service environment on consumer behavior. The SOR model consists of three components: a. A set of stimuli, b. An organism component and c. A set of responses or outcomes. In a service context, the different elements of the firms physical evidence, such as the exterior, interior design, lighting and so on that compose the set of stimuli. The organism component which describes the recipients of the set of stimuli within the service encounter includes employees and customers. The responses of employees and customers to set of stimuli and influenced by three basic emotional states: a. Pleasure - displeasure, b. Arousal - nonarousal, c. Dominance - submissiveness. The pleasure - displeasure emotional state reflects the degree to which consumers and employees feel satisfied with the service experience. The arousal - nonarousal emotional state reflects the degree to which consumers and employees feel excited and stimulated .

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Specific Tactics for creating Service Atmospheres

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The dominance - submissiveness emotional state reflects the degree to which consumers and employees feel in control and able to act freely within the service environment. Ideally, service firms should utilize physical evidence to build environment that appeal to pleasure and arousal states and creating atmosphere that create submissiveness. Theory asserts that customers and employees are exposed to the set of stimuli that make up the firms perceived Servicescape and the responses to these stimuli are moderated by emotional states. Customers and employees internally respond to the firms environment at different levels cognitively, emotionally and physiologically. Cognitive responses are the thought of individuals and according to the model include beliefs, categorization and symbolic meaning. Beliefs that states consumers opinions about the providers ability to perform the service. Categorization that states consumer assessment of the physical evidence and a quick mental assignment of a firm to a known group of styles or types. Symbolic meaning that inferred from the firms use of physical evidence. Emotional responses to the firms physical environment on an emotional level instead of an intellectual or social level. Positive emotions that create atmospheres in which employees love to work and customers want to spend their time and money. Physiological responses are often described in terms of physical pleasure or discomfort. Typical physiological responses involve pain and comfort. Like, environments in which music is played very loudly that create discomfort for the customer; the lack of a nonsmoking section may cause some customers in breathing and further discomfort. Instead of being arousing, environments that are brightly lit may cause eye discomfort. All these responses determine whether a customer will approach and explore the firms offering or avoid and leave the premises to minimize the amount of physiological discomfort. Ultimately, individuals base their perceptions of a firms facilities on their interpretation of sensory cues. The following section discusses how firms can utilize the senses of sight, sound, touch and taste in creating sensory appeal that enhances customer and employee attraction responses. Sight Appeals:
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Specific Tactics for creating Service Atmospheres

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Sight appeals can be defined as the process of interpreting stimuli that appeal to consumers are size, shape and colors. Consumers interpret visual stimuli in terms of visual relationships, consisting of perceptions of harmony, contrast and clash. Harmony refers to visual agreement and is associated with quieter, plusher and more formal business settings. In comparison, contrast and clash are associated with exciting, cheerful and informal business settings. Size perceptions are the actual size of the firms facility, signs and departments conveys different meaning to different markets. In general, the larger the size of the firm and its corresponding physical evidence, the more consumers associates the firm with importance, power, success, security and stability. For many consumers, the larger the firm, the lower the perceived risk associated with the service purchase. Such consumers believe that larger firms are more competent and more likely to engage in service recovery efforts when problems do arise. Color perceptions are the color of the firms physical evidence often makes the first impression, whether seen in the firms brochure, the business cards of its personnel or the exterior or interior of the facility itself. The psychological impact of color upon individuals is the result of three properties: hue, value and intensity. Hue refers to the actual color such as red, blue, yellow or green. Value refers the lightness and darkness of the colors. Darker values are called shades and lighter values are called tints. Intensity refers the brightness or dullness of the hue. KFC focus on red color basically because it is the symbol of appetite.

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Specific Tactics for creating Service Atmospheres

MKT412

The location of the Firm which is dependent upon the amount of customer involvement necessary to produce the service. While low customers contact services should consider locating in remote sites that are less expensive and closer to sources of supply, transportation and labor, high customer contact services have other concerns. The Firms Architecture that states the architecture of the firms physical facility is often a three way trade off among the type of design that will attract the firms intended target market, the type of design that maximizes the efficiency of the service production process and the type of design that is affordable. The firms architecture conveys a number of impressions as well as communicates information to its customers such as the nature of the firms business. The Firms Sign has two major purposes: to identify the firm and to attract attention. The firms sign is often the first mark of the firm that customer notices. All logos on the firms remaining physical evidence such as letterhead, business cards and note cards should be consistent with the firms sign to reinforce the firms image. The Firms Entrance and foyer areas can dramatically influence customer perceptions about the firms activities. Worn carpet, scuffed walls, unprofessional network, torn and outdated reading
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Specific Tactics for creating Service Atmospheres

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materials and unskilled and unkempt personnel form one impression. In contrast, neatly appointed reception areas, the creative use of colors, distinctive furnishings and friendly and professional staff create a much different and more positive impression. Sound Appeals: Sound appeals have three major roles: mood setter, attention grabber and informer. Proactive methods for purposely inserting sound into the service encounter can be accomplished through music and announcements. Music helps set the mood of the consumers experience while announcements can be used to grab consumers attention or to inform them of the firms offerings. Sound can also be a distraction to the consumers experience; consequently, sound avoidance tactics should also be considered. Music in which studies have shown that background music affects sales in at least two ways. First, background music enhances the customers perception of the stores atmosphere, which in turn influences the consumers mood. Second, music often influences the amount of time spent in stores. In one study, firms that played background music in their facilities were thought to care more about their customers. Studies have shown that in addition to creating a positive attitude, music directly influences consumer buying behavior. Playing faster tempo of the music increases the pace of consumer transactions. Slowly down the tempo of the music encourages customers to stay longer. Still other studies indicate that consumers find music distracting when considering high involvement purchases, yet found that low involvement purchases made the choice process easier. Sound Avoidance which plans the firms facilities, it is as important to understand the avoidance of undesirable sounds as it is to understand the creation of desirable ones. Desirable sounds attract customers and undesirable sounds distract from the firms overall atmosphere. Other tactics for eliminating unwanted noise include installing durable hallway carpets to eliminate the distracting sounds of clicking heels, strategically placing loud central air conditioning units in areas away from those where the firm conducts the majority of its business and also installing lower ceilings and sound absorbing partitions so that unwanted sounds can be reduced even further. Scent Appeals:
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Specific Tactics for creating Service Atmospheres

MKT412

Sense of smell is our most accurate level of recall. So, scent appeal is an important factor to consider. What we smell is significantly more influential on our moods and emotions than any other sense. Our sense of smell is the strongest of all human senses and the closest sense linked to memory and emotion. Research has shown that people remember 35% of what they smell, compared with only 5% of what they see, 2% of what they hear and 1% of what they touch. This Research clearly shows that scent enhances consumer product memories.KFC which provides pleasurable scents often induce customer to make more purchases and can affect the perception of products that dont naturally have their own scent. KFC provides pleasurable scents for making a friendly environment for the employees to work effectively and for the customers KFC provides pleasurable scents that attract themselves to come more in KFC.

Taste Appeals: Taste appeal the final sensory cue, are the equivalent of providing the customer with samples. Within the service sector, the usefulness of the taste appeals when developing the service atmospheres is depend upon the tangibility of the service. Service firm such as carwash, dry cleaners and restaurants may use taste appeals to initially attract customers. While sampling firms the firms services, the customer will have opportunity to observe the firms physical evidence and form perception regarding the firm and its performance capabilities. Consequently,
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Specific Tactics for creating Service Atmospheres

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firms that use samplers should view this process as an opportunity rather than as catering to a bunch of people who want something for free.

Question 4: How do these same atmospheric elements affect employee satisfaction and the firms operations? Answer: Cognitive Responses:

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Specific Tactics for creating Service Atmospheres

MKT412

Cognitive Responses are the thought processes of individuals and, according to the model, include beliefs, categorization, and symbolic meaning. In the formation of beliefs, the firms environment acts as a form of non-verbal communication and influences a customer believe about the providers ability to perform the service. Through the physical evidence, employees form beliefs about the firm based on the overall perceived servicescape. Beliefs that states consumers opinions about the providers ability to perform the service. Categorization that states consumer assessment of the physical evidence and a quick mental assignment of a firm to a known group of styles or types. Symbolic meaning that inferred from the firms use of physical evidence. Emotional Responses: Emotional Responses do not involve thinking; they simply happen, often inexplicably and suddenly. Specific songs, for example, may make individuals feel happy, feel sad, or recreate other past feelings that were associated with the particular piece of music. Scents have similar effects on individuals. Obviously, the goal of effective physical evidence management is to stimulate positive emotions that create atmospheres in which employees love to work and customers want to spend their time and money. Physiological Responses: Physiological Responses are often described in term of physical pleasure or discomfort. Typical physiological responses involve pain and comfort. Environments in which music is played very loudly may lead to employee discomfort and movement away from the source of the noise. The lack of a nonsmoking section may cause some employees dificulty in breathing and further discomfort. Instead of being arousing, environments that are brightly lit may cause eye discomfort. In contrast, a dimly lit restaurant may cause eye strain as employees struggle to serve customers menus. All these responses determine whether a employee will approach and explore the firms offering or avoid and leave the premises to minimize the amount of physiological discomfort. Because of the duration of time spent in the firms facility, employees might find the physical environment particularly harmful appropriate ambient conditions such as temperature and air quality are direct related to employees willingness to continue to work, their productivity while at work, their job satisfaction, and their positive interaction with co-worker.
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Specific Tactics for creating Service Atmospheres

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Ambient conditions Temperature, air quality, noise, music, odor

Space/Function Layout, equipment, furnishings

Signs, symbols, and artifacts Signage, personal artifacts, style of decor

Sound appeals mood setter, attention grabber, informer music, announcements, and sound avoidance

Scent appeals pleasurable scents vs foul odors

Taste appeals the equivalent of providing the customer with free samples

Question 5: Does the suggested atmosphere development plan compete effectively with competitors atmospheres? Answer:

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Specific Tactics for creating Service Atmospheres

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The effective management of physical evidence is particularly important to KFC. Due to the intangibility of services, consumers lack objectives sources of information when forming evaluations. As a result, customers often look to the physical evidence that surrounds the service when forming evaluation. A firms physical evidence includes, but is not limited to, facility exterior design elements such as the architecture of the building, the firms sign, parking, landscaping, and the surrounding environment of the firms location, interior design elements such as size, shape, and colors, the firm entrance and foyer areas, equipment utilized to operate the business, interior signage, layout, air quality and temperature, and other physical evidence that forms customer perception, including business cards, stationary, billing statements, reports, the appearance of personnel, and the firms brochures. From a strategic perspective the importance of managing the firms physical evidence steams from the firms ability to: (1)package the service, (2)facilitate the flow of the service delivery process, (3)socialize the customers and employees alike in terms of their respective roles, behaviors, and relationship, and(4) differentiate the firm from its competitors. From a theoretical perspective, the firms environment influences the behavior of consumers and employees alike due to the inseparability of many services. When designing the firms facilities, consideration needs to be given to weather the firm is a remote service, an interpersonal service, or a self service. The subsequent design should reflect the needs of the parties who are dominating the service production process.Decession about facility location , layout, product design, and process design in particular may re3sult in different outcomes, depending on weather the customer is actively involved in the production process.. Finally, numerous tactical decisions must be made by KFC when designing the firms environment. Individuals base perception of the firms services on sensory cues that exist in the firms environment. Specific tactical decision must be made by KFC about the creation and sometimes the avoidance of the scent appeals, sight appeals, sound appeals, touch appeals, and

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Specific Tactics for creating Service Atmospheres

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taste appeals. The design and management of the KFC sensory cues are critical to the firms long-term success.

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