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EXECUTIVE SUMMARY

For our International Marketing Management module we are asked to audit on a company that
operates internationally. We have to mainly Iocus on how environmental Iactors, buying
behaviour, market segmentation, demographic trends, target market, positioning strategies,
marketing mix, market planning & brands are relevant to their particular product.

The major Iindings oI KFC are as under KFC competing the competitors & maintaining strong
relationship with customers by taking under consideration its Macro & Micro environment very
eIIiciently. KFC has segmented its market on the basis oI segmentation variables like
demographic, psychographic, geographic & behavioural. KFC is showing certain buying
behaviour. KFC is Iollowing oI market penetration; market development & product development
Ior increase its customers. IT is Iollowing production, marketing & social marketing strategies
Ior increasing its market share and growth.

















THE INTERNATIONAL MARKETING ENVIRONMENT

Kentucky Fried Chicken aka KFC Corporation is the world's most popular chicken restaurant
chain based on Louisville, Kentucky. Every day, more than 12 million customers are served at
KFC restaurants in 109 countries and territories around the world. It is a multinational company
that has chain oI Iast Iood restaurants all over the world. KFC have three main product lines, the
burgers, chicken meals and the snacks. Food, Fun & Festivity, this is what KFC is all about.
Leading the market since its inception, KFC provides the ultimate chicken meals Ior the Chicken
Loving Nation. KFC is growing rapidly, by having their strong relationship with their customers
and the trust, which they have developed, in the past years, employees are the main assets oI the
company, and so they are very much concerned. The company has very organized check and
balance system, which is used Ior the evaluation oI the employee and the individual outlet as
well.

KFC Corporation plays a signiIicant role in international marketing and there are Iew reasons
why they move beyond domestic markets into international markets.

O !otential demand in Ioreign market
O $aturation oI domestic markets
O Follow domestic customers that go abroad
O andwagon eIIect
O Comparative advantage

There are certain Iorces, inside and outside an organization that aIIect marketing management`s
ability to build and maintain successIul relationships with target customers. Like all other public
companies, KFC also has such Iorces around it. KFC Marketing environment is made up oI
Micro environment and Macro environment.




THE MICRO ENVIRONMENTAL FORCES

The Micro environment includes the Iactors that are close to the company and are controllable by
the organization. These Iactors are: Company, $uppliers, Customers, Competitors, !ublics, and
Marketing Intermediaries.

Suppliers

As KFC cannot compromise on the quality oI Iood they provide, so reliable suppliers are very
much important to them. There are two categories oI supplies. The Dry food supply and the
Frozen food supply. For the dry Iood, like a burger buns-they have established their own
warehouses and dry-stores Ior the $outh region. Whereas Ior the North region, they get dry
material Irom the vendors like Dawn read`. For the Frozen Iood chicken` they have
agreement with the K&N Chicken, Ior supplying chicken and Iish is supplied by Thailand and
spices are supplied by Dubai to all over restaurants in !akistan.

Customers

It includes Iive categories.
O Consumer Markets

KFC has large chain oI consumers. According to KFC, 'We are growing only with our ustomer.
KFC has great environment Ior their consumers and Iamilies. They are concerned about the
comIort and satisIaction oI their customers. That is why 40 million on a single outlet. Midnight
deals are there Ior the consumers with 50 discount, which is being appreciated by the
individuals.
O usiness Market
usiness markets buy good and services Ior Iurther processing or Ior use in their production
process. In case oI KFC there is no such business market.
O #esellers
KFC is dealing in Iast Iood, and so they don`t have any resellers as such.
O overnment Customers
As such no govt. customer exist so Iar. KFC is not expecting any govt. Customer as such.
O International Customers
KFC is multinational company. They have outlets, almost in every country. $o they have
international customers all over the world.
Competitors
They are classiIied into direct and indirect competitors.
O Direct Competitors
It includes:
4 Mc Donald`s
4 AFC
4 $ubway
4 FC
With the long history and high proIit, Kentucky Fried Chicken (KFC) and McDonald`s are the
two biggest Iast Iood companies in U$A. KFC Corporation, based in Louisville, Kentucky, is the
world`s most popular chicken restaurant chain. Every day, nearly eight million customers are
served around the world. KFCs menu includes original recipe chicken which was made more
than a halI-century ago.
Customers around the globe also enjoy more than 300 other products. $imilarly, McDonald's is
the leading global Ioodservice retailer serving more than 58 million people in 118 countries each
day. More than 75 oI McDonald's restaurants worldwide are owned and operated
independently by local people. They serve the world some oI its Iavorite Ioods - World Famous
Fries, ig Mac, Quarter !ounder, Chicken McNuggets and Egg McMuIIin.
O Indirect Competitors
It includes all other restaurants. Like $alt & !epper, Kabana, Village, undu Khan Etc.
!ublics
Its main types are:
O Financial !ublic
KFC is an independent company. It has not any long-term bank loan. For short-term loan, it
relies on $tandard Chartered ank.
O Media !ublic
KFC spends 8 to 9 oI its revenue on advertisements. To have more advertisement, they are
oI the view to increase their advertisement.
O ovt. !ublic
Taxes are always imposed by the govt. public. KFC sales tax on each meal is 1.2 .
O Internal !ublics
The employees are greatly compensated by KFC. Employees get regular bonuses and other
beneIits which are based on their perIormances. Employees are assets and we reward them
greatly, KFC says. $pecial badges and pins are assigned to employees.
O eneral !ublic
KFC wants to know the attitude oI the public about its products. $o, it always gets Ieedback Irom
the customers whenever it`s going to launch a new product.
Marketing Intermediaries
It includes the Iirms that help the company to promote, sell and distribute its products and
services.
As in KFC, the goods are manuIactured according to needs and wants oI the customers and
immediately served to customers on their outlets. $o no marketing intermediaries are at KFC.
The Macro Environmental Forces
These are not controlled by the company and are environmental Iorces. It includes
Demographic Factor
KFC has designed its menu according to taste oI population. !eople oI each age like to visit
KFC. It has deals Ior Iamilies as well as deals Ior the children. They also visit their competitors
to have better idea about changing trends and taste oI people as well as their competitors. KFC
reconsider its menu and taste aIter every three months. KFC always encourages Ieedback and
suggestions Irom its customers.
Natural Factors
KFC always produces Iresh Iood. The supply houses are well prepared and well maintained Ior
changing Iactors oI weather. $o it is not aIIected by natural Iactors.
Technological Factor
Their machines and boilers are according to latest technology and standards. AIter every six
months, technical checkup is conducted and that equipment is replaced which becomes useless.
EIIicient billing system is implemented, to eliminate the redundancy and maintain the daily
ledger account.
!olitical Factors
It consists oI laws, govt. agencies and pressure groups that inIluence or limit various
organizations and individuals in a given society. ut KFC has its own strong links and politics, it
is not been inIluenced by any external Iactors. No pressure groups are there inside and outside
organization to pressurize in any aspect. Ethically there might be certain Iorces that have been
impact on the overall sale oI KFC, Ior that; it has also made certain strategies and road-maps to
Overcome them.
Cultural Factors
KFC is always concerned about the culture and ethical values oI the community. As, the
customer are Irom the same community that they are serving in, KFC takes care oI ethical and
moral values oI the society. As !akistan is an Islam based country, so KFC serves Halaal Iood.
KFC has a long tradition oI great Iood, a warm culture and some oI the best hospitality among
catering teams the world over.
KFC, $ri Lanka was launched in 1995 and since then opened 15 outlets island wide. Cargills has
successIully inIused an International brand with $ri Lankan tastes by developing a host oI new
dishes to suit local palates - like the uriyani and Kotthu - along with the signature KFC meals.













INTERNATIONAL MARKETING STRATEGY

The main products oI KFC are chicken with home style side dishes, wraps, salads and burgers.
While its primary Iocus is Iried chicken, KFC also oIIers roasted chicken products, side dishes
and desserts. Outside oI North America, KFC oIIers beeI based products, such as burgers or
kebabs, as well as pork based products, such as ribs and other regional Iare. Moreover, KFC and
!epsi-Cola have entered into a strategic alliance. Most KFC restaurants oIIer !epsi`s carbonated
drinks, except in some countries, such as apan and $outh Korea which are selling Coca-Cola
instead. At the same time, there is a most wide range items in the KFC U$A. In the Iast Iood
industry, KFC Iaces the Iierce competition with McDonald's and Wendy`s. However, KFC has
its own advantages, such as its slogan, 'we do chicken right.
For example KFC planned a standardized approach to its Ioray into the apanese market, but the
company soon realized it had to change its strategy to meet the needs oI apanese consumers and
customize its operations in apan. Consequently, KFC introduced smaller pieces oI Ioods to cater
to a apanese preIerence, and located restaurants in crowded areas along with other restaurants,
moving away Irom independent sites. As a result oI these changes, the Iast-Iood restaurant
experienced stronger demand in apan.
Another example in $ri Lanka, #ecently KFC introduces Home delivery service to their
consumers. In overall this is a great beneIit Ior the people who would like to enjoy their meals
Irom their home.

4 eneIit oI Home Delivery
4 For the Customers
Avoiding waiting time in KFC to buy Ioods,
Time save oI traveling
Flexibility
uying depend on their budget |!urchasing power|
Will quicker than going outlets




4 For the KFC
Targeting new customer group.
Cost beneIit
Avoiding too much crowed in KFC outlets
Manageable Customer roups
New value added services
Attract consumers to keep touch with KFC

!roduct Strategy
Law and politics, values and attitudes, religion and language are some important components oI
the national culture. The diIIerences between these elements make a national culture distinct
Irom others. For example Chinese culture as a high-context culture. In this kind oI countries,
most oI the inIormation is shared by members oI the society. Thus, in China, people oIten do the
same things as others did, especially as those around them. For most Iamilies in China, members
share the similar values with each other, and people have a high sense oI identity to the
traditional culture and Iood. KFC considered that the collectivism buyer behavior oI Chinese
market, so they put out the product like the bucket Ior the whole Iamily and win the praise oI the
customers.
From the perspective oI cross-culture, people in China are generally curious about new things. In
order to meet this curiosity to new products, KFC always launch new products quickly and thus
win a lot oI new customers in China. y wrapping the 'core oI Chinese traditional dining
culture with the 'appearance oI the western Iood, KFC has gained the success oI carrying out
the new product strategy in cross-culture marketing. KFC always launch new taste oI products in
diIIerent seasons to cater to the needs oI Chinese customers. The Chicken #oll oI Old eijing
which was mentioned by one oI the marketing managers in eijing and the beeI wrap, Ior
instance, demonstrate the innovation and creation oI products in KFC combined with the
characteristics oI Chinese culture providing more choices to the customers. KFC is always
looking Ior new tastes which Iit Chinese customers and we Iound that some local Iood is very
nice and Iavored by Chinese people. It would not be easy Ior KFC to succeed worldwide, iI it
only supplied the American tastes without giving any consideration to the diversiIied cultures
and customs oI local consumers in other countries. Obviously, the product strategies
implemented by KFC in Chinese market, including the season oI launching new products, the
tastes oI the Iood, the package style oI chicken wings, are all deeply inIluenced by the local
culture oI China.
!rice Strategy
!rice is the amount oI money a customer pays Ior the product. !ricing decisions in international
markets can be very complex. It is determined by a number oI Iactors, including market share,
competition, material costs, product identity and the customer`s perceived value oI the product
Especially, market Iactors like consumers perceptions, expectations and ability to pay, need Ior
product adaptation and market servicing, market structure, distribution channels, discounting
pressures, market growth, competition objectives, strategies and strength can also aIIect the
pricing strategy oI a company Thus, consumers buying behavior is one oI the Iactors to
inIluence the price strategy oI KFC Company. From the perspective oI cross-culture, many
people in China emphasize the relationship between the prices oI consumer products and the
personal status seriously. As mentioned by the marketing manager in $hanghai, KFC scarcely
reduces the price oI its products. $ometimes, KFC even raises the price oI its products in the
recent years. However, because oI the world wide Iinancial crisis which happened in the end oI
2008, many consumer products in China had a lower price Irom then on and KFC conIronted
with the same situation. Finally, KFC reduced the price oI some products and carried out some
promotion strategies to attract the customers. As a western Iast Iood, KFC takes the collectivism
buyer behavior oI Chinese market into the consideration. $ometimes, customers can get a lower
price iI two or more than two meals are bought at the same time.
Moreover, the young people in China oIten accept new things more quickly and easily, they are
also the important target group oI KFC. $tudents sometimes can get a lower price in some KFC
restaurants. It can also reIlect that the price strategy oI KFC in China is aIIected by the buying
behavior oI Chinese consumers.
!lace Strategy
To the Iast-Iood industry, place strategy means where to sell the products and services to
customers.
!olitical and legal implications facing the firm
$imilarly, place strategy can be inIluenced by both internal Iactors and external Iactors. $ocial
culture Iactors such as local law and government policy, religion, language, customer buying
behavior do aIIect this strategy obviously in diIIerent ways. $ince the Iirst KFC restaurant was
started in eijing in 1987, KFC has opened many restaurants in diIIerent cities oI China during
these decades. $ome inIormation was collected Irom the interview that the process oI choosing
place is really cautiously taken by KFC in every city. KFC has its own standard when choosing
the suitable place to open the restaurants. During this process, the political risk, the Iinancial
condition, the amount oI population and the speciIic culture oI some certain areas are all the
considerations to KFC. In addition, in the middle and south-west oI China, people oI some
minority nationalities oIten live together in certain areas. They share the same language or
speciIic dialect and the similar value and customs, eat the Iood with same taste and keep the
similar habits. To meet these people`s demands, KFC opens several restaurants in this kind oI
places. The menu oI products and decoration oI these restaurants are diIIerent Irom others.
ThereIore, we can see that the Chinese political risk and the Iinancial condition, the degree oI
concentration and the minority nationalities speciIic dialect and customs can inIluence the place
strategy oI KFC well and truly.
!romotion Strategy
!romotion represents all oI the communications that a marketer may use in the marketplace. It
oIten includes several distinct elements, such as advertising, public relations, word oI mouth and
point oI sale. KFC also implements some speciIic promotion strategies according to Chinese
culture in order to do the business well, including advertising, take-away service and the strategy
oI choosing cooperate partner in China.
!romotion options
4 Advertising
Advertising covers any communication that is paid Ior, Irom cinema commercials, radio and
Internet adverts through print media and billboards. It has been the most popular way to carry out
the promotion strategy in the recent years. Customer values oI a speciIic culture oIten play an
important role when the marketers try to make decisions, which help to enter a Ioreign market.
Customer values can inIluence the style and appearance oI the advertisement. !eople have a high
sense oI identity to the traditional culture and traditional Iood.
$ince the Iamily members share the similar value and most people consider that it is necessary to
keep on the wonderIul Iamily traditions, such as respecting, loving and supporting the elderly,
helping others, Iriendship between individuals and so on.
KFC chooses the localization oI advertisement by considering the language, value oI customers
careIully. Evidently, the advertisement strategy oI KFC is aIIected by the language, customer
values in cultural environment.
4 Services
!romotion contains the point oI sale, including both products and services. It is aIIected not only
by the language and customer behavior, but also by some other components oI culture, such as
people`s liIe style and attitudes. In $ri Lanka and most oI the countries in all over the world,
KFC restaurants supply take-away service so that the customers can get their Iood and take away
immediately. esides, some KFC restaurants operate Ior 24 hours a day. Thus, the 24-hour-
operated and take-away services which are carried out, also inIluenced by the local cultural
environment. !eople`s liIe styles and attitudes play the most important role in aIIecting this
strategy.
4 Choosing Cooperate !artner
Choosing some suitable cooperate partner to do the promotion activities together in a certain
Ioreign market is also an important strategy Ior transnational corporation. Customer values and
buying behaviors will aIIect this kind oI promotion activities obviously. KFC develops their
promotion activities by cooperating with some popular brand in worlds market. KFC did some
promotion activities in order to attract more young customers. They designed some interesting
on-line games together during student`s summer holiday by considering the interests oI young
people. II the young people buy some certain products, they may get some prizes to join and win
the game more easily than others. ThereIore, what can be seen Irom this is the young people`s
value, interest and buying behaviors inIluence this kind oI promotion activities.







SEGMENTATION
In KFC, we have considered Iour variables Ior market
$egmentation which are
eographic segmentation
Demographic segmentation
!sychographic segmentation
ehavioral segmentation

Geographic Segmentation
Dividing the market into diIIerent geographical units such as nations, states, regions, countries,
cities or neighborhood.
KFC has outlets internationally and sells its products according to geographic needs oI the
customer. In $ri Lanka, its geographic segmentation is:

World Region Asia
Country Sri Lanka
City Colombo primarily, while other
Cities partially
Density Urban
Climate Not specific

Demographic Segmentation
Dividing the market into groups based on an age, gender, Iamily size, income, education,
occupation, religion, race and nationality.







KFC divides the market on demographic basis in that way:

Age 8-65

Gender

Both Males and Females
Family Size

1-2, 3-4, 5+
Income

Rs. 10,000 above
Occupation

Not Specific
Education Not Specific
Religion

Not Specific
Generation

Not Specific
Nationality Not Specific
Family lifecycle Almost All

!sychographic Segmentation
Dividing a market into diIIerent groups based on social class, liIestyle or personality
characteristics.
KFC divides market on the basis oI psychographic variables as:

Social Class Middle class, Upper class and
Lower class
Life Style Not Specific
!ersonality Authoritarians, Gregarious and
Ambitious

Behavioral Segmentation
Dividing a market into groups based on consumer knowledge, attitude, use or response to a
product.
KFC divides the market on the basis oI psychographic variables as:
Occasion Regular Occasion
Benefits Quality, Convenience, Service And Speed
User Status

!otential status, ex-users, first time user and
regular users
Loyalty Status Medium and Strong
Readiness Status Aware, informed, interested, desirous
And intending to buy
Attitude towards
!roduct
Enthusiastic, !ositive and
Indifferent








EXTRA
TARGET MARKET
The process oI evaluating each market segment`s attractiveness and selecting two or more
segments. As the outlets oI KFC are in posh area and prices are too high, so KFC is targeting
upper class. Target market depends upon size and growth rate oI population, Company resources
and structural attractiveness oI market segment.
MARKET !OSITIONING
Arranging Ior a product to occupy a clear, distinctive and desirable place relative to competing
products in the minds oI target consumer. In KFC Ieedback is taken Irom the customer in order
to know the customer demands and then improvements are made in products.KFC Iocuses on
pure and Iresh Iood in order to crate a distinct and clear position in the minds oI customers KFC
has a strong brand name and they are leading the market in Iried chicken.
CONSUMER BUYING BEHAVIOR
The buying behavior oI Iinal consumers, individuals and households, who buy goods and
services Ior personal consumption.
Characteristics Affecting consumer behavior
As we know that, consumer`s behavior is strongly inIluenced by cultural, social, personal and
psychological characteristics. The description is given below.
Cultural factors:
Cultural Iactor have Iurther subdivision:
Culture:
Culture is the most basic cause oI a person's wants and behavior. eing in a culture oI !akistan,
KFC is concerned about the cultural shiIts oI the people. As being the market leader in the Fried
chicken, KFC was the Iirst, in making place in the market and attract people oI local culture
towards their diIIerent meals. ut, at the moment, KFC has spotted the recent cultural shiIt,
which is the people are most concerned about their health and Iitness. They are avoiding now
junk Iood, and relying on small snacks. In addition to that, the "Eat fresh" phenomenon oI the
$ubway, have highlighted the cultural shiIt, oI people Ior the healthier diet.
Subculture:
$ubculture is group oI people with shared value system based on common liIe experiences and
situations. As in !akistan, there are no any broadened subculture boundaries, so in case oI KFC;
subcultures don't have any signiIicant role.
$4cial class.
$ocial Iactors are also important to be addressed. $ocial Iactors include consumer's small groups,
Iamily and social role and status.
Pers4nal fact4rs.
A buyer`s decision is also inIluenced by personal characteristics such as, the buyer's age and liIe
cycle stage, occupation, economic situation and personality and selI-concept. Mostly, KFC is
concerned about serving the youth, but... they also have inIluence on the older people oI the
Iamilies as well.
Psych4l4ical fact4r.
!sychological Iactor are important to know, iI the company wants to know about the behavior oI
their customers. !sychological Iactor include Iurther Iour concepts.
The concept oI motivation is been eIIiciently Iocused by the KFC. Factors towards motivating
the consumers include many Iactors. The good customer service, provided at the restaurant, the
soothing environment oI the restaurant, the attractive discount deals, and at the top, the best Iood
provided are the main sources oI creating motivation Ior consumers.
Learning is one oI the sensitive Iactors. As the change in behavior occur at this stage. KFC is
most concerned, about their well and eIIective service to their customers. To provide the best
taste, the town and the worth remembering environment, at their outlets.
ANALYSIS & RECOMMENDATIONS
Analysis:
KFC is market leader in providing Fried Chicken. As KFC is addressing Fast Food, so it is
competing with the prominent market signs, like !izza Hut and McDonalds.
Pr4duct. KFC is doing well so Iar. It needs improvement in their Hot-Menu. They should make
their menu dynamic, by introducing new meals aIter certain period oI time. New items should be
introduced, by varying the taste. Like, pizza hut has come up with "Chapli Kabab !izza"
addressing the local taste; KFC should go Ior such innovation, in order to increase their market
share.
Price. oI KFC is reasonable, iI compared with other Iast Iood restaurants. ut as, price is always
the primary concern Ior consumers; so KFC should adopt certain strategy to attract the
consumers. Its not only by lowering their prices. It could be by, introducing discount packages,
Ior Iamilies, employees, students and regular customers. The membership cards can be used to,
provide certain extra value to the consumers.
Placement. is very important Iactor, Ior a company to increase its market share, by targeting the
right consumers. KFC need to have more outlets, at commercial areas. It will help in targeting
the actual customers and potential customers as well. Mobile outlets can be eIIective addition as
well.
Pr4m4ti4n. KFC has large customer equity, but being a market symbol, a company should strive
Ior having more actual customers. KFC should work Ior, having a solid marketing department.
They should organize and run advertisement campaigns. It would certainly be incremental Iactor
Ior their sale. DiIIerent modes oI advertisements can be used Ior, triggering the community. KFC
could use brand promoters. KFC can setup, promotional campaigns. All what is needed is a well
established marketing department, in order to Iacilitate eIIective, promotions.


Challenges Iacing the organization: What are the most important issues Iacing the
organization as it looks to the Iuture? Trade relations? E-Commerce? The Financial
Crisis? Costs oI Labor/#aw materials?
#ecommendations
Distribution
Internationalization aIIected the pricing oI a product