MARKETING REPORT ON KFC

TABLE OF CONTENTS

Executive Summary

Vission
Mission
Goals
Current marketing Situations
SWOT Analysis
Objective and Issues
Marketing Strategy
Action Program
Budget
Reference
Executive Summary

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 phew more restaurants around the
country to provide a better service/faster service/better customer service to
beat competitors.

Mission and Vision Statements

Vision Statement:

To be the leading integrated food services group in the ASEAN region

delivering consistent quality products and excellent customer-focused service.

Mission Statement:

To sell food in a fast, friendly environment that appeals to pride conscious,

health minded consumers

Key Success Factors

The critical success factors of KFC are:

Location.
Speed of service.
Adaption of localization.
Quality of food.
Environment.
Menu Selection and Pricing.
Company Summary

Type Subsidiary

Industry Restaurant

Genre Fast food

Sanders Court &Caf: March 20, 1930 in North

Corbin, Kentucky
Founded
First franchise: September 24, 1952 in Salt Lake
City, Utah

Founder Harland Sanders

Headquarters 1441 Lane, Louisville, United States

Number of
18,875
locations

David C. Novak (Yum! Brands Chairman andCEO)

Key people Muktesh Pant (KFC CEO)

Roger Eaton (Yum! COO and KFC President)

 Fried chicken Soft drinks

Chicken sandwiches Salads

Products
Wraps Desserts

French fries Breakfast

Revenue US$23 billion

Parent Yum! Brands

Slogan Finger Lickin' Good

Website www.kfc.com

KFC IN PAKISTAN

KFC offers the Healthy and delicious chicken meals for a chicken loving
people.

KFC open its first outlet in Gulshan-e- Iqbal in 1997.

KFC gets the title of being the market head in its industry.

KFC serving the delicious and healthy food in a relaxing environment in

order to made KFC everyones favorite.

After its successful start KFC has been regularly introducing new
restaurants and new products for its consumers.

KFC has been launched in eighteen major cities of Pakistan (Karachi,

Multan, Sialkot, Lahore, Islamabad and Muree) with more than 60 outlets
country-wide.
 Now, KFC has provided to over 1200 Pakistanis, which adds up to 6000
individuals directly reliant in KFC Pakistan.

Direct taxes of Rs 1 crore are collected by Government from KFC Pakistan

monthly.

KFC Pakistan purchased 95% of all food and packing material localy, used
in KFC which totals to a purchase of over Rs.3 Crore 50 Lakhs per month.

KFC Pakistan costs approximately Rs.4 crores, for the opening of its new
outlet which is a large amount for our production industry.

Competitive Comparison
KFC has many competitors is Multan. It has many similarities as well as differentiations
from its competitors.
Similarities:
Fast Food.
Catering.
Home Delivery.
Play area for children.
KFC have many advantages over its leading competitors:
Its secret recipe.
Global presence.
Friendly staff.
Strong brand image.
 Suppliers as they are also renowned ones.
And all its key resources and value propositions are also considered as
advantages.

Competative Anaalysis

KFC have some key resources by which they have competitive edge over their
competitors that are briefly described as follows:

Perceived Value:

What customers perceive about KFC products and services is the major
resource of them.
It is because the value perceived by customers is positive and they think
they are getting maximum return of what they are paying.

Channels:

The distribution channels of KFC are their key resource.

Reason is KFC is adopting direct distribution channel and has control over
its channels.
More control over its channels means it can satisfy their customers more
well which will ultimately generate profit for them.

Suppliers:

KFC has very well renowned companies as their suppliers which are K&Ns
Pepsi co, Hilal and Nescafe.
These companies itself have image in market so they will be considered as
key resource of KFC.

Trained Staff:
 KFC has very well trained staff as employees.
Each and every employee from the top level to the lower level is trained.
Special training programs are organized for this purpose.
As a result of trained staff they are able to gain more value from
customers.

High Technology:

Technology is the very important factor for the success of any

organization in todays world.
KFC possess advanced technology in their cooking utensils, making of
packaging material, services and for their office work even.
This advancement in technology is getting them to lead in market every
time so it is considered as a key resource.

Swot Analysis of KFC

Strength

For the current Pakistani 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 Pakistan or
even make a significant amount of profit. While there are enough people in
urban Pakistan for any restaurant to survive, KFC holds the first-mover
advantage into the 'non-veg 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 theyve never heard of. The brand name is
already established. Also, there is already a large variety in the numerous
western-style dining places in Pakistan, such as McDonalds, Pizza Hut,
Domino's and Subway, and any new fast -food entrants would just be
presenting something very similar to whats already there. While
small Neighborhood restaurants generally have low barriers to ent ry, these
are the barriers to entry for similar restaurant businesses to enter the fast-food
chain market.

Weakness

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 tolower its price because the cost of losing one
customer is not very great. The supplierslike the buyers, have very little
bargaining power.In terms of food, KFC, upon its move into Pakistan, urged
many of its U.S. suppliers to alsoe x t e n d b r a n c h e s i n t o P a k i s t a n . K F C a l s o
b e g a n h e l p i n g l o c a l s u p p l i e r s b y g i v i n g t h e m technological support to
improve their products. This is a brilliant strategy because thesupplies that KFC
would otherwise need to import from theU.S. can now be obtained
domestically, and if the U.S. supplier s decide to raise their prices,KFC can
easily switch to the local suppli ers. This gives us a brilliant s trategy.With
this strategy, KFC created competition among its suppliers, lowering the
supplier bargaining power. In terms of human resources, labor 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 pr ices and expenditures.

Oppurtunities

As mentioned above, there are a few major competitors in the fast-food industry
in Pakistan for KFC, namely McDonalds, Pizza Hut, Domino's and Subway. The
substitute p r o d u c t s , in this case, would be burgers, pizza, and
sandwiches. Though they are competitors, their primary products
d i f f e r g r e a t l y f r o m e a c h o t h e r , i n t h a t t h e y s e l l , chicken, burgers and
fries, pizzas, and sandwiches, respectively. Traditional Pakistani dining, home-
cooked meals, and grocery stores with r eady-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, KFCs price rises as well, a n d t h e s a m e c a n b e s a i d o f t h e q u a n t i t y
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.

Weakness

Unlike what one would expect,KFC has little rivalry with similar fast-food chains
in Pakistan. The primary reason is that their core products are different, as in
they sell differentkinds of fast foods with very different tastes and styles. For
example, if KFC raised its price for chicken by a small amount, Pakistani chicken
lovers who may not be as acceptingto pizzas (many Pakistani 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, theserestaurants have such
different target customers that the fluctuation of price for onerestaurant is not
going to affect the others. For example, a full meal at KFC ranges about Rs.
400, whereas a full meal at Pizza Hut can cost over Rs. 1000. The drastic
difference in price assures no price competition between these restaurants.
Marketing Strategy

Our marketing strategy will be education of the consumer and subsequent

word of mouth.
Customers will be reached through neighborhood advertising, special
promotions, and most importantly, word of mouth.
Location also plays a crucial role in marketing and promotion.
KFC is located in high-traffic retail area.
This area offers many incentives to business operating there because of
the high-end reputation and affluent residents nearby.
Also, the area is popular amongst tourists who come to see Multans
cantonment area, cantonment garden and lake which is not so far, which
will be most beneficial.
We will target progressive and generally well-educated and affluent
consumers who are interested in high quality brownies experience and are
dissatisfied with the limited selection and lack of personal service found in
grocery store bakeries and neighborhood cafes and coffee shops.

Market Positioning

Positioning is arranging for a product to occupy a clear, distinctive and

desirable place relative to competing products in the minds of target
consumers.
After a company has decided which market segments to enter, it must
decide how it will differentiate its market offering for each targeted
segment and what positions it wants to occupy in those segments.
A product position is the place the product occupies relative to
competitors products in consumers minds.
 Marketer wants to develop unique market positions for their products. If a
product is perceived to be exactly like others on the market consumers
would have no reason to buy it.
KFC promotes a high quality poison for its products. It produces high
quality products, chargers a high price, distributes through high class
dealers and advertises in English newspapers with a high circulation.
KFC is communicating through physical size and ques that people use to
judge quality.
For KFC management the image their customers carry in their mind is the
most important factor. That is why for them the product quality, which is
almost, standardizes the entire world except little differences because of
local requirements & the promotions are very critical factor.
The people which are their customer and the physical evidence, the
environment customers get in the KFC are the focus that built KFCs
image in the customer mind that is why they are always trying to bring
positive changes in the environment so that every time their customer
enter the KFC, can feel the difference.
They think that trough continuous efforts they have developed such a
brand image in their customers minds that their customers have become
brand loyal.
I order words they have got brand equity.

Products Pricing Strategies

KFC globally enters the market using market skimming.

Their products are priced high and target the middle to upper class
people.
Gradually they trickle down the prices focusing on the middle to lower
class people to penetrate both sides of the market. We can compare the
 price of their products with Macdonalds, American Burger, Burger King
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 fast food market (only with fried chicken).
It prices its burgers, French fries and soft beverages with relation to its
competitors.
KFC price 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.

KFC offer different products at different list prices.

KFC provide special discounts to only employees and special c ustomers.

Payment period, customer pays when the services are delivered to them.
Allowances are provided to employees.

Promotion

They used advertisement for promotion that is any paid form of non -
personal presentation and promotion of ideas, goods, or ser vices by an
identified sponsor.
KFC introduce the new products to the customers using many kind of
advertising. They inform the customers about the new products, what
kind of product, the price, its availability etc.
 With the advertisement, KFC persuade their customers to buy the
products. In order to do that, KFC will make a good and attractive
advertisement. So, their customer will attract to buy the products.
Using the good advertising will make the customers remember about the
products. And certainly, they will come again to buy the products.

There are some Media Types that KFC use for their advertising:

Newspaper
Radio
Magazine
Internet
Outdoor

Floating Trucks:

KFC Pakistan adopts a very interesting way of advertisement as for as

their business as concerned that is Floating Truck.
When KFC Pakistans Restaurant Support Center introduces a new product
in Pakistan they adopt this way and there Floating Trucks trav el
throughout the city at where they have KFC stores.
Generally it is a very effective way of advertisement through which
maximum of their customers are able to know about their new products
that they introduced.

In House Publicity:

KFC Pakistan has another way to advertise their business is in house

publicity in which they use banners, electronic boards, broachers, etc to
tell their customers about packages, prices, products detail, new products
and all other information that customers want.
By Phone:

KFC Pakistan stays in Touch with their potential customers by using their
database.
They informed their potential customers about the new products and
packages by phone because they have their phone numbers in there
database.

Print & Electronic Media:

Internationally KFC advertise their products through electronic media also

they use worlds famous T.V channels, newspapers, magazines, etc.

Internet:

All most all the KFCs well developed franchises have their own websites
through which they advertise their business very well, but they also use
other websites for advertising purposes like hotmail, yahoo, google, etc.
E-mail marketing techniques are used by KFC to promote their business.
They use their own database to send e-mails to their value added
customers to informed them about new products, packages, discounts, etc
and uses third parties to promote their business through e -mail
marketing.

Media Coverage:

KFC Pakistan also uses common ways for advertising like newspapers,
cable TV networks, a big road side boards, etc.

Action Programs
Sales 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 -
advertising, sales promotion, public relations, events and experiences, coupons,
discount and bundled packages and organization finds most of its meanings and
survival through promotion.

KFC uses the following tools to further enhance its sales.

Premiums
Exhibits
Coupons
Entertainment
All KFC outlets offer its customers with various forms of incentives to buy
its Chicken.
Using coupons that one can acquire after spending a particular amount
over a period of fixed time, customers can enjoy the benefits of free
meals or free add-ons.
Additionally they provide meal vouchers and exciting offers in their print
ads, which the customer must cut and bring along.
For sales promotion KFC has introduced different strategies such Ramadan
Package, Birthday Package, Midnight Package and many other.
Also they have introduced goods like watches, keychain, coffee cup, T -
shirt, toys etc. to the customers.
Public Relations

KFC also building a good relation with the companys various publics by
obtaining favorable publicity, building up a good corporate image, and
handling or heading off unfavorable rumors, stories, and events.
Public Relations Tools are:
o News
o Speeches
o Internet

Budget Statements
Sales Forecast
We forecasted sales by using Trend analysis:
2011 2012 2013 2014 2015 2016 2017
Sales

Sales Programs

Strategic Alliances
1. Yum Brands has been involved in several mergers and acquisitions over the past
three years. The majority of Yums activities have revolved around acquiring either
branded restaurants (such as acquiring 68 KFC restaurants) or acquiring separate
entities, such as Long John Silvers, A&W All-American Food Restaurants and Little
Sheep Group Ltd. These acquisitions resulted in a consolidation of competitors. Some of
this consolidation has been successful; however Long John Silvers and A&W All-
American Food Restaurants were not. These were not successful because Yum overpaid
for these brands and they did not properly align with Yums strategy of operating global
brands. The failure of A&W and Long John Silvers was a result of poor strategy and
failure to grow in the domestic market, as those brands did not achieve the projected
growth numbers.
Yum Brands has entered several strategic alliances in the past three years.
One in particular that stands out is its alliance with Sinopec (China Petroleum and
Chemical Corporation). Sinopec is the largest firm in China by revenue, and operates
over 30,000 gas stations in China. The agreement was to open Pizza Hut and KFC
restaurants in Sinopec gas stations, providing very big growth opportunities for both
firms. Yum brands chose to get into this alliance because it provided a significant
impact on the development and strategic growth of their business. As quoted from their
strategic alliance announcement, Through the complementary advantages of both
companies, the combination of the strength will offer better service for customers,
promote both brands, generate more economic returns, and improve their capabilities
for sustainable development. Yums success in China made the alliance with Sinopec a
good fit, and its well-established supply chain would enable it to reach the multiple
locations in inland China.
Reference
Reference will be furnished on demand.