ABSTRACT

Amity School of Communication has given me an opportunity to

show my intellectual ability through an integrated project and
allowing me to decide the service sector on which I want to
make my project.

For this I have chosen the KFC food chain. KFC is the growing
brand in the world for food industry. KFC basically deals in
chicken recipes whose main focus in crispy and deep fried
chickens.

To know the market response of KFC I visited various chains of

KFC and did a survey on the public (who are the basic
consumers of the KFC).
I visited KFC chain of Noida Sector18, Lajpat Nagar, GIP(Noida),
and Hyderabad. I concluded that according to the areas the
demand keeps on fluctuating, like there is more demand in
Sector 18 market chain of Noida in comparison to GIP mall and
have the maximum demand in Lajpat Nagar.
After the survey on chains I did a survey on the residents of
cities through a feedback form.

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INTRODUCTION
Fast food chains are amongst the most rapidly globalising businesses in
the world. Kentucky Fried Chicken popularly known as KFC started its
Indian operations in Bangalore, 1995. KFC at that time was on a worldwide
expansion spree, with India being its next market for setting up a string of
outlets.

This Project will broadly look into the entry of KFC in India and its success
and failures of their internationalization process. A booming Indian
economy and millions of the population hungry for consumerism meant
that KFC could expand rapidly into the market to beat their competitors to
the punch and capitalise on such a promising opportunity.

Research Focus
This research focuses on the marketing strategies of KFC and the
changing behaviour of consumers towards KFC. This research focuses on
the 4Ps of the marketing.

Rationale
The reason for choosing KFC as my topic is simply because it is one of the
biggest fast-food giants in the market today. KFC has become
synonymous to spicy and crunchy chicken. Everybody loves it and desires
for it.

Methodologies
Collection Method:
A) Primary Data
B) Secondary Data

C) Primary data
3.Interaction with people in day to day life.
4.Data collected on the basis of questionnaire.

D) Secondary data
5. Business Magazines
6. Newspapers
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 7. Relevant information form website of KFC
8. Other Websites

Objectives
• To study the evolution of KFC and its introduction into India

• To find out the marketing strategy of KFC

• The service quality prevailing in KFC

• To find out the service quality of KFC in various other areas and find
out the deficiency.

• To understand the behaviour and attitudes of consumers of KFC

Biases and Prejudices

• KFC is an international brand and hence it is expensive

• KFC is considered as junk food and unhealthy

• PETA issues affecting costumers

Limitations
• Some retail owners (Branch owner) refuse to give information

• Illiteracy among some customers is reflected as far as filling

questionnaire is concerned

• Less cooperation from the customers due to busy modern life

• Since the survey is conducted only on 25 customers, therefore

analysis cannot be made accurately

Significance of the Research

Research on KFC has helped me understand the fast food industry that’s
been dominating over the years. KFC has been in India for a long time
now and this research helped me know the reasons for its survival.

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Although there are lot of fast food restaurants in India like McDonalds,
Subway, Dominos, Pizza hut, etc. KFC has its own large consumer group.

MAIN RESEARCH CONTENT

OVERVIEW OF THE COMPANY

KFC Corporation, based in Louisville, Kentucky, is the world’s most

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

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

Today, the Colonel’s spirit and heritage are reflected in KFC’s brand
Identity– the logo features Colonel Harland Sanders, one of the best
recognized icons in the world.

KFC specialized in chicken and they say,

“No body’s cooking like KFC today and we are the chicken experts”

“There is no competitor for spicy chicken which is made by KFC”

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KFC History

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 flavour his chicken which
travellers 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 travelled the United States by car, cooking
chicken for restaurant owners and their employees. If the reaction was
favourable 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!

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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.

KFC IN INDIA
Foreign fast food companies were allowed to enter India during the early
1990s due to the economic liberalization policy of the Indian Government.
KFC was among the first fast food multinationals to enter India.

On receiving permission to open 30 new outlets across the country, KFC

opened its first fast-food outlet in Bangalore in June 1995. Bangalore was
chosen as the launch pad because it had a substantial upper middle class
population, with a trend of families eating out. It was considered India's
fastest growing metropolis in the 1990

KFC is the world’s No.1 Chicken QSR and has industry leading stature
across many countries like UK, Australia, South Africa, China, USA,
Malaysia and many more. KFC is the largest brand of Yum Restaurants, a
company that owns other leading brands like Pizza Hut, Taco Bell, A&W
and Long John Silver. Renowned worldwide for it’s finger licking good food,
KFC offers its signature products in India too! KFC has introduced many
offerings for its growing customer base in India while staying rooted in the
taste legacy of Colonel Harland Sander’s secret recipe. Its signature
dishes include the “crispy outside, juicy inside” Hot and Crispy Chicken,
flavourful 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
13 cities with close to 72 restaurants.

Mission Statement
“Recognition: we find reasons to celebrate the achievement of others and
have fun doing it, “is right up there with “Customer Focus” and “Belief in
People”. Recognition is everybody’s responsibility,” says Chicago
restaurant manager Adonis Chapel. He explains since KFC started

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encouraging informal recognition, things have really changed. “You keep
employees longer, they are happier, they work better for you.”

Vision Statement
"The Association of Kentucky Fried Chicken Franchisees, Inc. is united to protect,
promote and advance the mutual interests of all member franchisees and the
Kentucky Fried Chicken system."

Aims and Objectives

• Build an organization dedicated to excellence.
• Consistently deliver superior quality and value in our products and
services.
• Maintain a commitment to innovation for continuous improvement
and grow, striving always to be the leader in the market place
changes.
• Generate consistently superior financial returns and benefits our
owner and employees.

To establish in India KFC’s position as leading WQSR (Western Quick

Service Restaurant) chain, serving good value by providing innovative
chicken-based products and consistently, providing a pleasant dining
experience, with fast friendly, in a clean and convenient location. At all
times we must be dedicated to providing excellent and delighting
customers.

The aims and objectives of KFC are not only to sell chicken to make
money and make a profit, they are to expand as a business whether that’s
to be a worldwide business or just to open up a few more restaurants
around the country to provide a better service/faster service/better
customer service to beat competitors/rivals such as McDonalds, Burger
King, etc.

Values of KFC
• Focus all our resources to our restaurants operation because that is
where we serve our customers.
• Reward and respect the contributions of each individual at KFC.
• Expand and update training with time and be the best we can be
and more.
• Be open, honest and direct in our dealings with one and other.

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 • Commit ourselves to the highest standard to the personal and
professional integrity at all times.
• Encourage new and innovative ideas because these are the key to
our competitive growth.
• Reward result and not simple efforts.
• Dedicate ourselves to continuous growth in sales, profit and size of
organization.
• Work as a team.

PHILOSOPHY OF KFC

The CHAMPS Program

CHAMPS stands for our belief that the most important thing each of us can
do is to focus on the customer. It stands for our commitment to provide
the best food and best experience for the best value. CHAMPS stand for
the six universal areas of customer expectation common to all cultures
and all restaurants concepts.

THE CHAMPS

These are:

Cleanliness
Hospitality
Accuracy
Maintenance of Facilities
Product Quality
Speed of Service

CHAMPS is the philosophy to ensure that the customer has the consistent
quality experience in every restaurant, everyday, on every occasions and
you will be playing role in delivering CHAMPS to our customers.

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Situational Analysis

PORTER’S FIVE –FORCES ANALYSIS OF KFC

Entry of New Competitors

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

Buyer/Supplier Bargaining Power

The customers of KFC, especially as individual buyers, have almost no

bargaining power because if only one customer threatens to no longer eat
at KFC, the store is not going to lower its price because the cost of losing
one customer is not very great. The suppliers, like the buyers, have very
little bargaining power.

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In terms of food, KFC, upon its move into India, urged many of its U.S.
suppliers to also extend branches into India. KFC also began helping local
suppliers by giving them technological support to improve their products.
This is a brilliant strategy because the supplies that KFC would otherwise
need to import from the U.S. can now be obtained domestically, and if the
U.S. suppliers decide to raise their prices, KFC can easily switch to the
local suppliers. This gives us a brilliant strategy. With this strategy, KFC
created competition among its suppliers, lowering the supplier bargaining
power. In terms of human resources, labour cost is extremely low because
the supply of non-skilled workers great exceeds the demand for them.
With so little buyer and supplier bargaining powers, KFC is able to have a
very tight control over its prices and expenditures.

Substitutes and Complements

As mentioned above, there are a few major competitors in the fast-food

industry in India for KFC, namely McDonald’s, Pizza Hut, Domino's and
Subway. The substitute products, in this case, would be burgers, pizza,
and sandwiches. Though they are competitors, their primary products
differ greatly from each other, in that they sell, chicken, burgers and fries,
pizzas, and sandwiches, respectively. Traditional Indian dining, home-
cooked meals, and grocery stores with ready-to-eat foods are also
substitutes, as families could choose any one of these over fast food for a
meal. These substitutes are definitely considered healthy as compared to
the fast food chains. Even foods from street vendors count as substitute
goods.
While other fast foods serve as substitute to KFC, they can also serve as
complements for fast foods as a whole. If the general price of fast foods
goes up. KFC’s price rises as well, and the same can be said of the
quantity sold of these products, which make them complements to each
other. KFC also sets up stores located near popular tourist attractions, so
tickets to these tourist spots are also complementary goods because the
more people tour these attractions, the more customers KFC will get.

Rivalry

Unlike what one would expect, KFC has little rivalry with similar fast-food
chains in
India. The primary reason is that their core products are different, as in
they sell different kinds of fast foods with very different tastes and styles.
For example, if KFC raised its price for chicken by a small amount, Indian
chicken lovers who may not be as accepting to pizzas (many Indian
people strongly dislike the taste of cheese) are not going to switch to
Pizza Hut just because the price for KFC increased. In addition to that,
these restaurants have such different target customers that the
fluctuation of price for one restaurant is not going to affect the others. For
example, a full meal at KFC ranges about Rs. 100, whereas a full meal at
Pizza Hut can cost over Rs. 300. The drastic difference in price assures no
price competition between these restaurants.
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TARGET MARKET

Segmentation
KFC has divided the market of India into distinct groups of customers with
different demands, tastes and behaviour who require separate products or
marketing mix.
In India the niche marketing is being used for particular classes of people.
They have made segments of the market on the following bases.
• Demographical
• Behaviour
• Geographical
By using these three bases they segmented the market as under.

DEMOGRAPHICAL BASIS
In demographics their first segment is consisted of the income factor i.e.
high income, average income and low income.
• Upper middle class
• Middle
• Family – Full nest

BEHAVIOUR
In behavioural aspect they segmented the market on the basis of quality,
taste and price. Following are the different possible segments in this
regard.
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 • Taste conscious
• Quality conscious
• Class conscious
• Combination of price and quality

GEOGRAPHICAL BASIS
On the basis of the geographical factor we have divided our market in
three main segments.
• Urban areas
• Sub urban areas

Profile criteria:
1. Gender: KFC is for each gender both male and female.
2. Income: Everyone can use the KFC service both upper and middle
class.
3. Age: age limitation for using this product is above 15
4. Occupation: By profession also everyone can use this product means
businessmen, students, workers and others.
5. Education: It needs no education and needs only taste buds to easily
enjoy this product.
6. Family life cycle: KFC is suitable in every stage of life like single,
married couple and also those who have children can use this product.
7. Lifestyle: This product is used in every level of social class like upper,
middle class.
8. Attitude: When the customers once buy this product after that they
can use the product continuously.
9. Purchasing decision: Often KFC changes the purchasing decision of
customers because of its good attributes.
10. Geographic region: Geographically KFC is used in every part of the
country as well as all over the world.

TARGET MARKET FOR FAST FOOD

After evaluation of various segments, KFC has decided to target the
market of Urban
and Sub-urban Areas of India.

Product usage
• People are educated and they want variety in their diet.
• Normally people of rural areas don’t take fast food. On the other
hand people of
• Urban areas take fast food.
• Income of the people of urban areas is normally high and they can
afford to purchase such products, which are slightly higher in price
as compared to prevailing prices of local food in the market.
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 • People of Urban Areas are more quality conscious than the people of
Rural Areas.
• In Urban Area there lived people from every walk of life and profit
generation is easier than in Rural Areas.
• Population density is higher in Urban Areas as compared to Rural
Areas, so the
• Customers are more in Urban Areas.

Product positioning
Customer perceives this product as a unique product.

Attitudes
The attitude of the public is very good people like our this new product
like others.

Purchasing process:
Many people come from home to eat this, and some make impulse
decision as they see it.

Competitive analysis
Competitors
You cannot enjoy the business without competitors. No organization can
afford to ignore their competitors. It is very important for a marketing
manager to monitor the activities of their competitors, what they are
doing? KFC adopted such sort of strategy that there is no competitor for
spicy chicken, which is made by KFC.
KFC beats its competitors through the revising marketing strategy at
every movement but the main competitor of KFC is McDonalds

COMPETITIVE ADVANTAGE

KFC McDonalds

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Spicy Products Burgers and French Fries
Indians like spicy products instead of
boiled food

Chicken Thali and Zinger Big Mac

Chicken is eaten by most Beef is banned in India

communities

Local Staff and Highly Qualified Its Staff consist of simple Graduates
because local staff can better deal and
with the customers give them training

KFC uses Top to Bottom and Bottom McDonalds Uses Top To Bottom
to Approach.
Top Approach in Management.

Economic Analysis of Market

A market in this context refers to a number of all actual and potential
buyers of a product. These buyers have a need to satisfy their needs
through exchange. These needs make up the demand for particular
products and services. Several components must be considered, as all
these components have a direct or indirect impact on KFC’s success.
Changes in the below described components over the last couple of years
have led to big changes in people’s attitudes towards healthy food. It
explains why Australians today want to eat healthy and nutritious-rich
food in order to keep themselves healthy and that KFC must adjust their
range of product and their company image to appeal to these new
expectations, people have.

Macro environment

KFC operates in a larger macro environment of forces that creates

opportunities, but also threats. (Kotler et al 2003). A company such as KFC
usually cannot influence trends in the macro environment, as they affect
people and organisations on a larger scale. However, KFC has to carefully
14
examine macro environmental trends and must create competitive
responses to such trends. There are six major macro environmental forces
KFC has to take into account.

Figure 1 – Macro Environment

Micro environment
The microenvironment consists of all forces that are close to KFC, and on
which KFC has an impact. They directly affect KFC’s ability to serve its
customers. Three major components influence KFC’s micro environment:

Figure 2 – Micro Environment

Competitors
Because the fast food market in India is highly competitive, KFC faces a
wide number of direct and indirect competitors. KFC’s main competitors

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are fast food chains such as McDonald’s and Domino’s, which are already
well established throughout India.
McDonalds’s in particular is a direct competitor, as they have already
successfully introduced their Salads plus line, which directly targets
‘healthy food’ conscious Indians. But, there are a number of other
competitors that is also focusing on ‘chicken’ types products. All this
competition makes it quite difficult for KFC to maintain or even broaden
their customer base. However, with the introduction of a new and healthy
product range, KFC can differentiate itself from most competitors and will
gain a competitive advantage.

Customers
KFC’s customer market consists solely of the consumer market. KFC’s
products are bought by individuals (males, females, singles, and families).
Therefore, the product range KFC offer should appeal to as many people
within this consumer market as possible, to ensure that the maximum
amount of products can be sold. The characteristics of these individuals
and a
segmentation of them are discussed later in this report.

Factors affecting KFC

Political:
The operations of KFC are affected by the government policies on the
regulations of fast food operation. Currently government are controlling
the marketing of fast food restaurant because of health concern such as
cardiovascular and cholesterol issue and obesity among the young and
children in the country. Governments also control the license given for
open the fast food restaurant and other business regulation need to follow
such as for a franchise business. Good relationship with government in
giving mutual benefits such as employment and tax is a must for the
company to succeed in any foreign market.

Economic:
Though for last 1 year there was economic slowdown all across the globe
but the sales of KFC and other fast food chains did not slow down to that
extent that of other sectors in. The GDP (Purchasing Power Parity) is
estimated at 2.965 trillion U.S. dollars in the year 2010. The GDP- per
Capita (PPP) was 2700 U.S. dollars as estimated in 2008. The GDP- real
growth rate in 2007 was 8.7%. India has the third highest GDP in terms of
purchasing power parity just ahead Japan and behind U.S. and China.
Foreign direct investment rose in the fiscal year ended March 31 2007 to
about $16 billion from just $5.5 billion a year earlier. There is a continuous
growth in per capita income; India’s per capita income is expected to
reach 1000 dollars by the end of 2007-08 from 797 dollars in 2006-07.

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This will lead to higher buying power in the Hands of the Indian
consumers. So taking into considerations the economic factors of India
KFC is safe. The only danger to it will be if there is a terrorist attack in
India and the victim is KFC.

Socio cultural:
India is the second most populous nation in the world with an approximate
population of over 1.1billion people. This population is divided in the
following age structure: 0-14 years – 31.8%, 15-64 years – 63.1% and 65
years and above – 5.1%. There has also been a continuous increase in the
consumption of fast food in India. The social trend toward fast good
consumption is changing and India has seen an increase of 90% fast food
consumption from the year 2002- 2007. This increase is far greater than
the increase in the BRIC nations of Brazil (20 per cent), Russia (50 per
cent) and China (almost 60 per cent). Thus this shows a positive trend for
fast food industries in India.

Technological:
The Indian fast food Industry is heating up with a lot of foreign players
entering the Indian market. The technological knowhow and expertise will
also enter the Indian market with an increase in competition. With the
lower rates and increase technology the fast food counters are attracting
youth by giving them attractive deals. For e.g. KFC and Domino’s pizza.
For a fast food restaurant, technology does not give a very high impact on
the company and it is not a significant macro environment variables.
However KFC should be looking to competitors innovation and improve
itself in term of integrating technology in managing its operation. For
example in inventory system, supply chain management system to
manage its supply, easy payment and ordering systems for its customers
and wireless internet technology. Implementation of technology can make
the management more effective and cost saving in the long term. This will
also make customer happy if cost savings results in price reduction or
promotional campaign discount which will benefits them from time to
time.

Environmental:
As one of world largest consumer of beef, potatoes and chicken, KFC
always had been critics for world environmentalist. This is because high
consumption of beef causing the green house effect by methane gasses
coming from the cow’s ranch. Large-scale plantation has effect the
environment and lots of green forest opening for plantation activities.
Vegetarian environmentalist criticizes the fast-food giant for cruelty to
animals and slaughtering. In America, once KFC want to introduce whale
burger causing uproar because whales are endangered species. Before
using paper packaging, KFC once had been criticized for being insensitive
to pollution because of using ne based packaging for its food products.
Imagine millions of people purchase from fast food operator and how is
17
the impact to world environment by throwing away those hard to recycle
packaging. Our world is getting concern on environment issue and
business operating here should not just care for profit, but careful usage
of world resources for sustainable development and care for environment
safety and health for our future generation. Critics and concern from all
public or activist should be review and support if necessary to ensure we
play our social responsibility better.

Boston Consultancy Group (BCG) Matrix

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Figure 3- BCG Matrix

QUESTION MARK:
Currently KFC have launched a new product in the market. They have also
tried to come into the beverages market by launching its new brand of
shakes called KRUSHERS. As it is a fairly new product it comes in the
category of the Question Mark in the BCG Matrix. It has a low market
share thus brings low revenue. KFC is advertising a lot to popularize this
product so there is a lot of expenditure on it. This product is individually
not bringing any profits and is a cash drain for the company. Company
may decide to completely remove this product from the market if it does
not do well soon and start bringing in revenue.

DOG:
KFC’s Veg Thali comes under this category. Although company had
launched this product much earlier, it has still failed to become a success.
As KFC is known more for its non-vegetarian food, this also results in low
demand for this item. It has a low market share and although low on
expenditure (as company does not spend on its promotion), it does not
bring in much revenue as demand is low. The product is mostly CASH
NEUTRAL.

CASH COW:
KFC’s Chicken Bucket is the most successful product of the company. It
has the highest market share amongst all the other products. It has good
demand in the market and brings in huge sales revenue. The
development and other expenses are also low and thus this product is a
CASH SIRPLUS for the company.

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STAR:
The star product of the company is its crispy Boneless Chicken. It has a
high market share and brings in high revenue. But it also has high
developmental expenditure involved. The profit therefore is generally not
very high brought in by this product. This product is CASH NEUTRAL for
the firm. The company is trying to make this product a cow as well, by
reducing the expenditure

Summary of current situation

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

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

Employee Loyalty: Employee Loyalty is one of the major strengths of

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

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

KFC customer base remained loyal to the KFC brand because of its unique
taste. KFC has continued to dominate the dinner and take out segment of
the Industry.

Ranks highest among all chicken restaurant chains for its convenience
and menu variety. It generates $1B revenue each year.

WEAKNESSES

• KFC was losing market share as other Chicken chain increased

sales at a faster rate.
• KFC share of Chicken Segment sales fell from 71 percent in1999, to
less than 56 percent in 2009, a 10 years drop of 15 percent.
• There is huge competition in this segment.
• India is still mostly a vegetarian dominated cultured society.
South India is especially very much so. This may reduce the market
share of the company.
• KFC has not yet invested much on R&D, and innovating new
products for Indian Markets. This may lead to failure of their
products as they are not in line with the Indian mind set, peoples
taste and preferences and their likes and dislikes. This may prove
fatal for the company.

OPPURTUNITIES

New Markets: Globalisation has opened doors for new markets for the
company. As the developed markets are mostly saturated, the developing
countries like India and China promises a good market and generation of
demand in the future. With more than 70% of the markets in India being
21
unexplored and un organised, KFC has a good scope of expanding its
operations in the country.

Cross Culture: Generally there is a good acceptance of American

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

Large Youth population: India has a very large share of youth

population a compared to other countries. More than 60% of the
population is under the age of 30yrs. As the young generation are more
open to fast foods and demand it more, this is good news for the
company.

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

THREATS

Competition: Competitor companies like McDonalds are fast

catching up with the market. McDonald’s with sales of more than 19
billion in 1999, accounted for 15 percent of the sales of the nation’s top
100 restaurant chains.

Organisations like PETA People for Ethnic Treatment for animals

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

Saturated US Market: Now KFC cannot rely on just its home market
to generate sales. As the US markets are already saturated and leave no
or little scope for growth, company necessarily needs to look at offshore
foreign markets to generate sales and keep up the profits.

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MARKETING STRATEGIES OF KFC

There are different strategies adopted by KFC for different events. They
market their products on different events and in different activities as
they are helping SOS village.
According to KFC, kids become the future permanents customers and we
know very well that without any marketing strategy no marketing
program and no product is successful because we depend upon
customers, customer not depend on us.
• KFC is following Niche Marketing and Societal Marketing techniques.
• KFC possess a western culture because some of the Indian people
are also following that culture.
• KFC are moving from Divisional Level to the District level by opening
branches
• KFC open their outlets on reachable places.
• KFC menu consists of more than 30 products.
• KFC gives more priority to Family.

MARKETING Mix

The marketing mix is generally accepted as the use and specification of

the ‘four Ps’ describing the strategic position of a product in the market
place.

• Product (goods and service)

• Price (value of the product)
• Promotion (aware the people for product)
• Place (distribution of product)

Marketing mix at KFC

The marketing mix of KFC consists of 4Ps. It contains everything KFC do it

to influence the demand for their products.

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

KFC product planning

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 • KFC product is classified as consumer product as it has no
intermediates.
• KFC offers specialty goods.
• The stock turnover of KFC is high.
• Price and quality of the product is always compared.
• KFC’s product includes
• Goods (Burgers, Chicken Meals etc)
• Services (cleanliness, quick service, parties)

KFC product line

Veg Zinger
Veggie Snacker
Veg Rice and Strips
Veg Strips with Salsa
Corn on the cob
Coleslaw
Krushers
Game Box
Toasted
Zing Kong Box
Boneless Chicken Meal
Chicken Zinger burger
Chicken Delights
Bucket Chicken
Chicken Rice Meal
Chicken Snacker
Hot wings
Desserts
Original Recipe
Chicken Thali
Soft Drinks

BRAND:
There are three brands of the KFC:
1) Taco bell
2) Pizza Hut
3) Long john silvers

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KFC has introduced a new product “Veg Zinger”. It is new in the market
and hasn’t been launched in all the outlets. Their tagline for this new
product is “Living on the Veg”. KFC is trying so hard to convince people
that it is not 100% non-veg; but also 100% veg.

Figure 4 – Veg Zinger

Product mix strategy

The product mix strategies are in relation to:

Competitors:
KFC has a head-on competition with McDonalds.
Wherever they place their products; KFC goes there as
well.

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

Place and Quantity:

KFC products are based on high quality and prices.

Brand of KFC

Brand Name: KFC

Colour: Red and white
Symbol: Colonel Harland Sander’s picture and KFC written with it.
Master Brand: The brand itself is so dominant, that it immediately
comes in mind.

• KFC's brand identity -- the logo features Colonel Harland Sanders,

one of the best recognized icons in the world.
• KFC is trademarked registered brand.
• It is distinctive, adaptable to addition to product line.
• It suggests something about product.
• It is legally protected and registered
• The brand equity is very high as the value added by brand to the
product effects the product selling.
• KFC is marketing the entire output under products own brand

PACKAGING
The packaging for KFC products is chosen according to performance
against three key criteria:

Heat Retention
Moisture removal
Grease absorption

The packaging material and carton design are all adapted to maximise
performance against these three criteria.

Recycled Paper
KFC’s clamshells and chicken boxes contain as much recycled material as
it is legally allowed. By law they are required to have virgin fibre board in
any part of the packaging that is in contact with food. Any virgin fibre
comes from board suppliers who use pulp bought from managed forest in

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Scandinavia. This ensures that any wood cut for paper production is
replaced with new plantings.

Environmental concerns
Over and above ensuring KFC’s packaging is supplied via recycled or
renewable resources; KFC are enthusiastically complying with the new
environmental directives on recovery and recycling of packaging waste.

Conclusion
• KFC has made a separate brand image in India.
• KFC Pakistan does serve the vegetarians.
• Product line is very vast.
• They study the behaviour of the Indian customers.
• KFC has specific product features.
• Offers delicious and quality product.
• Specialization in fried chicken.
• Charging extra for side dishes.
• Quality, cleanliness, and service.
• Product quality assurance.

PRICE
Price is the any amount of money that customers have to pay while
purchasing the product. More broadly, price is the sum of all the values
that consumers exchange for benefits of having or using the product or
services

Price strategies of KFC

In introduction stage KFC entered the market using market-skimming
strategy. Their products were high price and targeted only upper class.
Gradually they trickle down focusing on the middle class to penetrate the
market. Also KFC follows one price strategy. Price is determined according
to the rates of the raw materials and policies of the Govt. The political and
legal forces often affect the policies of KFC and eventually results in
change of prices that is due to imposing of taxes.

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

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Cost Based pricing
• KFC prices their product keeping different points in view.
• They adopt the cost base price strategy.
• Pricing of the product includes the govt. tax and excise duty and
then comes the final stage of determine the price of their product.
• The products are bit high priced according the market segment and
it is also comparable to the standard of their product.
• In the cost based method we include the variable and fixed cost.

Calculation of the price under Cost Based Pricing Strategy

Total Pounds of Chicken Served in KFC Restaurant Annually =

1.914 Billion

Total KFC Chicken Pieces Sold Annually = 5.89 Billion

Total Retail Sales = $8.9 Billion

Sales Price of per Chicken Piece = Total Retail Sales / chicken Pieces
sold = $8.9 Billion / $5.89
Billion =$1.51 we assume that Fixed Cost is = $6000000000

Variable Cost = $675000000

Profit Margin is Or Mark Up = $225000000(25% of Sales) per unit

variable cost = $675000000 / 5890000000 = $0.115

Unit Cost = Variable Cost + Fixed Cost / Chicken pieces Sold

= 0.115 + 6000000000 / 5890000000
= 0.115 + 1.02
= $1.135
Now suppose manufacturer wants to earn 25% mark up on sale. The
manufacturer mark up price is calculated:

Mark Up Price = Unit Cost / (1 – Desired Return on Sales)

=1.135 / (1-.25)
= 1.135 / 0.75
= $1.51

• KFC charge high prices.

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

PLACE
This refers to how the product gets to the customer; for example, point-of-
sale placement or retailing. This third P has also sometimes been called
Placement, referring to the channel by which a product or service is sold
(e.g. online vs. retail), which geographic region or industry, to which
segment (young adults, families, business people), etc. also referring to
how the environment in which the product is sold in can affect sales.

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

Distribution of goods and services

KFC does distribution of consumer goods directly to the consumer.

Target areas
Accessibility – Resulting in several outlets to cater to the needs of people
in & around the city.
Hectic lifestyle – Due to the hectic lifestyle of office goings individuals the
fast food concept saves time of preparing food and gives the customer a
full meal quickly.
Commercialization of urban and sub-urban markets leading to more mid-
sector people that find high-end eating joints too expensive. Mid-sector
people are always looking for change which KFC provides in their range of
fast food.
Quality conscious – people in urban areas are more conscious about the
quality of food than rural areas.
Urban areas are more populated therefore they help with attracting higher
revenues.

Placement of outlets
Due to KFC placing itself close to schools, colleges, cinemas and markets
which are mostly populated by the young and those who are in a hurry,
KFC enjoys a large number of footfalls every day.

CHANNEL PROCESS
KFC works on the flow of good operation techniques i.e. “Good Operating
Manager→ leads to “Good Team Selection →Good Services → Good Targets
→ Good Revenues through the following internal strategies:
• Training
• Incentive based targets
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 • Recognition for good work
• Performance based bonus
• Employee benefits to keep them motivated
• Promotion

Vertical marketing system

KFC has corporate vertical marketing system because it is centrally owned
by its subsidiary Yum Brands. KFC is affected by the geographic
distribution (they have few outlets then its competitor McDonald’s). The
unit value of the items is comparatively lower then McDonald’s. KFC has a
well-equipped sitting area for the customers and a Chicky play area for
the kids.

Conclusion
• KFC deals in internal market.
• Target only city areas
• KFC has well equipped sitting.
• KFC has no intermediaries.
• Well trained staff with expert supervisors.
• Seeking customer’s response for quality.
• KFC has no entertainment in some franchises.
• Quality conscious people are the main target of KFC.

Promotion:
Promotion is the method used to inform and educate the chosen target
audience about the organization and its products. Using all the resources
of promotion

KFC promotion strategy

The logo features Colonel Harland Sanders that is one of the best logo in
the world has created its name as a standard in the market. The logo of
the smiling Colonel is probably one of the most recognized faces in the
world and instantly brings the image of fried chicken to one’s mind. Today
the Colonel’s Spirit and heritage are reflected in KFC’s brand identity.

KFC promotion sources

• Advertising
• Sales Promotion
• Public Relations
• Events and Experiences
• Coupons, Discounts and Bundled packages
An organization finds most of its meanings and survival through
promotion. At KFC, Promotion is the main tool to bring all chicken lovers
attention towards its delicious one of- a-kind.

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Advertising
• KFC by its advertisements derives the desire in the customer to
come and enjoy healthy food in their favourite restaurant.
• They spend 2% of its profits on advertisement and use print media
and most recently doing televised marketing to promote it products.
• Their advertising media involve: Newspapers, Pamphlets, Billboards
and Television. KFC does both the primary demand advertising
(“Become a Chicken Fanatic”) and the selective
• Demand advertising (e.g. “Zinger Meal”).
• KFC does institutional advertising to stimulate demand. When KFC
offers new products then it does product advertising.
• KFC’s ad’s act as counteracts which means to drive the customer to
KFC i.e. it uses pull advertising strategy.
• KFC has put big hoardings on the busy areas of India and have an
effective advertisement campaign on the media in order to
MOTIVATE its customers.
• The colours used in advertising are Red, White and blue which
itself is recognition for the brand.

Figure 5 – Print Ad

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Sales promotion
For the sales promotion KFC introduced their goods like watches, keychain
and so on to the customers.

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Figure 6 - Merchandise

Data Analysis
The data we received is as follows:-
I did a survey on KFC on people with age group of mostly 20-25yrs.Mostly
all were open to non-veg food, and following were the results. As seen
below KFC has shown a good report on all the micro factors that we
considered.

Figure 7 – graph 1

I also asked questions on whether they would like KFC to start home
delivery services.

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Figure 8 – graph 2

I also inquired “How close is the nearest KFC outlet from your
house?

Figure 9 – Graph 3

Would you like to order at home or Dine in?

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Figure 10 – Graph 4

Data interpretation -
It is clear from the above report that a high number of people actually like
to order from their home or workplace rather than coming. This may be
due to more convenience, time shortage or just not willing to come and
dine. Certainly the home delivery market is huge and KFC can take well
advantage of the situation. Thus it would be in the best interest of the
company to start the service as soon as possible and capitalise on the
opportunity. KFC expects a rise in the orders by at least 20% by starting
this service.

Therefore, to conclude we would say that KFC should definitely

have a home delivery service.

Conclusion
After my research of KFC, I come to conclusion that KFC has a good
product as far as chicken items are concerned. But they have to increase
other varieties to attract the customers. And they must targets the
children, as McDonald’s targeting by making a play land because children
are the main source and important ones to push their parents to go to
their favourite restaurants. And one more aspect for KFC is that it must
also reduce their prices to compete their competitors like McDonald,
Crisps Pins and Pizza Hut. The largest threat KFC is faced with is the
restaurant industry as a whole. The consumer continues to have many
choices when it comes to fast food restaurants. KFC struggles are much
do to the inability to bring new products to the market quickly and its
innovation of new products. KFC fell behind the market in new products
and was copying other fast food chains to stay competitive.

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SUMMARY
KFC is one of the most known fast food chains in the world started in the
early 1930’s by kernel sanders.
· Food, fun and festivity, this is what KFC is all about.
· KFC has more than 11,000 restaurants in more than 80 countries and
territories around the world.
· KFC first time came to Pakistan in 1997 and was the title of being the
market leader in its industry.
· The marketing mix of KFC consists of 4Ps. It contains everything KFC do
it to influence the demand for their products.
· KFC was launched here as an innovative product.
· KFC has a head-on competition with McDonalds
· The brand of KFC is so strong that it is the attribute itself.
· KFC introduced itself, has grown and now it is at maturity stage for the
last ten years in India.
· Their products have high price and targeted only upper class.
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· Total KFC Chicken Pieces Sold Annually = 5.89 Billion
· Profit Margin is Or Mark Up = $225000000
· KFC has only one channel of distribution (direct)
· KFC by its advertisements derives the desire in the customer to come
and enjoy healthy food in their favourite restaurant.
· They spend 2% of its profits on advertisement.
· KFC has a good product as far as chicken items are concerned.

APPENDIX

FEED US BACK
1. Tick Your Choice (Ö)
Perfect Above Avg Average
Below Avg Poor

Food Quality

Food Temperature

Waiting Time

Menu Board
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Seating
Arrangement

Restaurant
Temperature

Restaurant
Cleanliness

Music

Overall Experience

2. When will you be back?

 Next time I blink (very soon)
 May be sometime later
 When I win a Nobel Prize (Never)

3. How many people were in your group?

 I was alone
 Just me and someone
 For me, three is company
 4 or more

4. Would you rather order than Dine in?

 Yaa, I like to mostly order at home
 Sometimes, but I mostly like to dine in
 No fun without Dine in

5. How close is your house to your nearest KFC outlet?

 Within 1 Km
 Between 1 – 3 Kms
 Between 3 – 5 Kms
 Above 5 Kms

6. Do you want a KFC home delivery service?

 My dreams are coming true
 That would help
 Doesn’t make much of a difference
 No thanks

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Thank You

BIBLIOGRAPHY
Websites

www.kfc.com

www.marketingpractice.blogspot.com

www.hindu.com

Book references

• 4Ps magazines

• Advertising Express

• Marketing Management by Philip Kotler & Armstrong

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