DEPARTMENT OF MANAGEMENT SCIENCES

A Report On

SUBMITTED TO:

Mr. ISHFAQ AHMED

SUBMITTED BY:

SAJEEL ZAMAN
CIIT/FA10-BS (BA)-007/ATK

DATE OF SUBMISSION:

11 January, 2012

_______________________________

INSTITUTE

M S A T S
OF

INFORMATION

TECHNOLOGY

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S. No.

Table of Contents Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 03

01

History of KFC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 04
KFC in Pakistan

02

Business Objectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 05 Mission Vision Objectives Marketing Objectives (06) Marketing Mix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 06 Product (06)

Product planning Product Strategy Product line

03

Price

(09)
Cost based pricing

Place

(10)
KFC distribution Distribution of Goods and Services

Promotion 04 05

(10)

Promotion sources

SWOT Analysis of KFC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

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Introduction
This report is based on analysis of marketing strategies of KFC. This report responds to the recommendation of honorable teacher Mr. Ishfaq Ahmed who is our instructor for Principles of Marketing. We are thankful to him for the guidance he provided us. KFC is the world largest and most well known chicken restaurant, with chains in more then 10 thousand locations and worldwide in 80 countries. KFC and its franchised employees are more than 200 thousand in all over the world. John Y Brown and Jerry Messy purchased KFC for USA for $2 million in 1964 that time KFC become a corporation. After five years, Colonel buys first 100shares of KFC. In 1986, Pepsi Company purchased KFC. Pepsi company changed the logo from Kentucky fried chicken to KFC in 1991. KFC is the part of Tricon global restaurant. Tricon global restaurant is the worldlargest restaurant group, with in nearly 100 countries around the world, which inturn was spun off in 1997, and has now been renamed to Yum! Brands. In 1997, KFC franchised with Gray Mecanza International and started work in Pakistan. We tried to provide standard, relevant and high quality data and information in our work. So suggestions and comments from worthy professors will always be welcomed.

SAJEEL ZAMAN

BS (BA) III

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HISTORY OF KFC
The Kentucky Fried Chicken was founded by Colonel Harland Sanders (born on September 9, 1890) at the age of sixty-five. KFC is currently one of the largest businesses of the global food service industry and is widely known around the world as the face of Colonel Sanders. Every year, over a billion KFC chicken dinners are served featuring the Colonels finger lickin good special recipe. The Colonel has spread his industry currently to more than eighty countries and territories globally. In the mid 1930s, Colonel Harland D Saunders bought a motel and caf in Corbin, Kentucky, USA, a town about 25 miles from the Tennessee border. Already in his forties, Harland Saunders had been in several lines of work before taking up the restaurant business from railroading to operating a steam-powered ferryboat across the Ohio River. With his special cooking techniques, Sanders station became famous and he was recognized for his amazing cuisine by the Governor at the time, Ruby Laffoon in 1935 when he was made a Kentucky Colonel; hence the name Colonel Sanders. With this new group of investors undertaking the Corporation, KFC expanded and matured quickly. The Corporation was listed on the New York Stock Exchange on January 16, 1969, only three years after it had gone public on March 17, 1966. Then, after the KFC Corporation was acquired by Heublein Inc. on July 8, 1971 for $285 million, the company grew to an enormous three thousand and five hundred franchised and company-owned restaurants world-wide. After that, in October of 1986, PepsiCo, Inc. made a purchase of $840 million from RJR Nabisco, Inc. However, in January of 1997, PepsiCo, Inc. revealed that it would be making KFC and its other small quick service restaurants Taco Bell and Pizza Hut into an independent restaurant company known as Tricon Global Restaurants, Inc. The company also stated that it would change the corporations name to Yum! Brands, Inc. in May of 2002. Sadly, after traveling two hundred fifty thousand miles every year visiting his restaurants around the globe, Colonel Sanders died of
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leukemia at the age of ninety in 1980. Interestingly enough, this enormous, global corporation all started with simply a sixtyfive-year-old gentleman and a chicken.

KFC IN PAKISTAN:
Presently KFC is branched out in nine major cities of Pakistan (Karachi, Lahore, Rawalpindi, Faisalabad, Multan, Peshawar, Sialkot, Hyderabad, and Islamabad) with 45 outlets nation-wide. Opening the first KFC outlet in Gulshan-e-Iqbal, Karachi in 1997, and KFC wore the title of being the market leader in its industry. Serving delicious and hygienic food in a relaxing environment made KFC everyones favorite. Since then, KFC has been constantly introducing new products and opening new restaurants for its customers. In Pakistan totally Chicken buy from Pakistani Poultry Forms, and also this Chicken is 100% Halal.

BUSINESS OBJECTIVES
This can be subdivided into three major components; Mission Vision Objectives

MISSION:
The corporate mission of KFC is to extend its image of excellence and uniqueness of product quality and service all over the globe with an obvious intention of attaining a goal of maximizing profit.

VISION:
The vision of the company is to foresee that real future prospects of long term growth and adjust itself to the specific cultures of each country they are operating in.

OBJECTIVES:
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Going in proximity, with the pure goal of an entrepreneur, the ultimate objective is to maximize the return on investments and thus profit maximization.

MARKETING OBJECTIVE:
The marketing objective can be subdivided into following subobjectives; To compete effectively in the market by dominating which cannot be achieved by.

Effectively meeting consumers expectations and demands. To increase substantially the market share. To retain and enhance the goodwill and image of the organization this adds to its loyalty. The famous 4 Ps decision. This will further be discussed in detail in the later part of the report under relevant topics.

Building awareness and credibility among the consumers is another major marketing objective of the KFC in a totally new market.

MARKETING MIX
Marketing mix consists of 4Ps. It contains everything a firm can do to influence the demand for its product. The 4 Ps are: PRODUCT PRICE PLACE PROMOTION

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PRODUCT
Product Planning:
1. Their product is classified as consumer product as it has no intermediates. 2. KFC offers specialty goods. 3. The stock turnover of KFC is high. 4. Price and quality of the product is always compared. 5. Their product includes.

Goods (Burgers, Chicken Meals, etc) quick service, parties, and

Services (cleanliness, meetings).

Product Strategy:
It was launched here as an innovative product. KFC has got one product line but later they introduced products in the same line to protect their market share. They have a Quality Assurance department that decides the new product innovation. Q.A. department prepares screening of new ideas and products feasibility report. This department does the technical evaluation (whether it is practical to produce the new product or not). The products are tested externally by offering trials to customers by giving them free samples. KFC uses telemarketing, print media, billboards and most recently televised marketing for promotion.

Product Line:
KFC form the day of its incorporation is increasing its product line along with the taste of its customers. KFC provides a wide range of nutritious food items for their beloved customers. Now a days KFC is dealing in 8 major Product Line: 1. Chicken Origional recipe Extra Crispy Strips
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 Pot Pie Wings Variety bucket Boneless variety bucket 2. Plated meals

1 pc. Breast Meal 2 pc. Breast And Wing Meal 8 Wings Meal 3 Colonels Strips Meal 2 pc. MEAL Half Chicken Meal 2 pc. Whole Wings Meal Flavors & snacks

3.

Bone-In Wings Boneless Wings Strips Mashed Potato Bowl Rice Bowl Chicken & Biscuit Bowl Honey BBQ KFC Snacker Tender Roast Double Crunch Crispy Twister Oven Roasted Twister Chocolate Chip Cake
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4.

KFC Famous Bowls

5.

Sandwiches

6. Desserts

Apple Pie Minis Little Bucket Parfaits Qwaker Chewy Smores Granola Bar Home Style Biscuits Mac & Cheese Cole Slaw Mashed Potato & Gravy Corn On The Cob BBQ Baked Beans Green Beans Seasoned Rice Potato Wedges Roasted Ceaser Salad Crispy Ceaser Salad Ceaser Side Salad House Side Salad Roasted BLT Salad Crispy BLT Salad

7. Sides

8. Salads

PRICE
In its introduction stage, KFC spent substantial money in seeking consumer acceptance of the product. For KFC there is very little direct competition, thus the promotional program was designed to stimulate demand for its products. KFC set their prices above the prevailing market level. It is using the pricing above the competition level strategy because it has a distinctive product and the KFC name has a prestige in the minds of the people.
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KFCs initial prices for its products were high as compared to the target markets range of expected prices. The prices at KFC were set at the highest possible level that the most interested consumer would pay for the KFC products. KFC uses market-skimming prices due to a lot of reasons. KFC products have distinctive features, which are strongly desired by its consumers. By using this strategy it gets protection from the competitors.

Cost Based Pricing:

1. KFC prices their product keeping different points in view. 2. They adopt the cost base price strategy. 3. Pricing of the product includes the govt. tax and excise duty and then comes the final stage of determine the price of their product. 4. The products are bit high priced according the market segment and it is also comparable to the standard of their product. 5. In the cost based method we include the variable and fixed cost.

PLACE
For KFC, the most important activity is to arrange for the sale of its products. Other activities undertaken in this section of the marketing mix of KFC is storing of the ingredients, taking them from one place to another, finding right spots for opening new outlets for KFC etc.

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:

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1. KFC does distribution of consumer goods directly to the consumer. 2. KFC also does distribution of services to the consumer like parking, sitting, home delivery, etc. KFC launched its first mobile unit. The mobile unit has been designed to provide to the needs of those who have little time to stop by at a restaurant. It also provides a unique convenience of enjoying the delicious KFC offering anytime, anywhere, thus making fast food truly fast and convenient.
3.

KFC intends to further develop its mobile network nationwide through more such units.
4.

PROMOTION
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. Today the Colonels Spirit and heritage are reflected in KFCs brand identity. KFC by its advertisements derives the desire in the customer to come and enjoy healthy food in their favorite restaurant. They spend 2% of its profits on advertisement. They 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 has put big hoardings on the busy areas of Pakistan and have an effective advertisement campaign on the media in order to MOTIVATE its customers. The colors used in advertising are Red, White and blue which itself is recognition for the brand.

KFC Promotion Sources:

1. Advertising 2. Sales Promotion 3. Public Relations 4. Events and Experiences
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5. Coupons, Discounts and Bundled packages KFC in its advertisements says;

Nobody does chicken like KFC We do chicken right

SWOT ANALYSIS OF KFC

STRENGTHS:

Oldest and finest in Business. High Goodwill.

KFC secret recipe of 11 herbs and species. Strong trademarks recipes.

Does not have any Core competitor in chicken serving. Large Number of Outlets at prime locations.

Faces numerous advantages of being a Multinational Organization e.g. economies of scale, government incentives etc.

WEAKNESSES:
Lack of knowledge about their customers. They only focus higher income level people.

KFC has its branches only in major cities.

Lack of relationship building with employees, customers and suppliers.

OPPORTUNITES:
They have the opportunity to expand their sweet products.

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 They can capture more customers by decreasing the price of their products. They can open temporary outlets in peak season in the hill stations like Naran, Kaghan, Swat, etc.

Cheap and easy availability of labor.

Increase consumption of fast food has increased the market size.

THREATS:
Increasing inflation rates directly affect menu prices.

Entrance of New competitors into the market. High political instability/uncertainty.

We conclude from this analysis that KFC has enough strengths & opportunities to compete in growing fast food market. It is also true that KFC is bounded by many weaknesses & threats as mentioned above.

CONCLUSION
KFC is a very strong chain of fast food restaurants with more than 10,000 restaurants all over the world. Being in Maturity Stage it has high opportunities of introducing its new products and deals. In Future it will be expanding its chain by introducing more outlets in Pakistan as well as in other countries. 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 McDonalds targeting by making a play land because children are the main source and important ones to push their parents to go to their favorite 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.
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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.

We Do Chicken Right

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