Principles Of Marketing

PROJECT ON MARKETING OF SERVICE

VARIETY BEYOND YOUR IMAGINATIONS

Prepared by:

Raghav Arora
PGDRM12

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PREFACE

This report is based on KFC india, a successful and popular chain restaurant

brand of Yum Inc. it focuses on the different aspects relating to marketing of

KFC in the indian market. The reasons of choosing KFC as the object of our

report are it’s’ successful marketing strategies and increasing growth rate in

the india fast food industry.

This report provides an insight on the marketing strategies, targeting, and

product development function used by KFC with all information gathered from

reliable sources.

This report includes a brief introduction of KFC and its executive summary as

well as an interview with the franchise manager of KFC. We have concluded

our report with our own personal suggestions and recommendations for the

improvement of our selected brand, based on our marketing knowledge and

assessments.

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ACKNOWLEDGMENT

In the completion of my work, I am greatly indebted to the following people without

whose help and co-operation it would not have been possible for to do the same. It
was a great opportunity to do this project .
We are especially thankful to Prof. Sham Sharma, Faculty for the subject Marketing
Of Service .His help has been a wonderful asset and contribution to my work.

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KFC (KENTUCKY FRIED CHICKEN)

Food, fun & Festivity, this is what KFC is all leading the market since its inception;
KFC provides the ultimate chicken meals for a chicken loving nation. Be it colonel
sanders secret original recipe chicken or the hot & spicy version, every bite brings a
yum on our face. At KFC we can proudly say, “We do chicken right”.

Perfecting its secret recipe of 11 herbs and spices in 1939, KFC has come a long
way. With over 11,000 outlets in the world, KFC has maintained its title, for the last 60
years, of being the chicken Experts. Opening the first KFC outlet in Gulshan-e- Iqbal
in 1997. KFC wore the title of being the market leader in its industry. Serving
delicious and hygienic food in a relaxing environment made KFC everyone’s favorite.
Since then, KFC has been constantly introducing new products and opening new
restaurants for its customers. Presently KFC is branched out in nine major cities of
Pakistan (Karachi, Multan, Lahore, Gujranwala, Sukkur & Muree) with more than 45
outlets nation-wide.

KFC, based in Louisville, Kentucky, is the world's most popular chicken restaurant
chain specializing in Original Recipe, Extra Crispy and Colonel's Crispy Strips
chicken with home-style sides and freshly made chicken sandwiches. Since its
founding by Colonel Harland Sanders in 1952, KFC has been serving delicious,
already-prepared complete family meals at affordable prices. KFC has more than
11,000 outlets in 85 countries and territories around the world, serving some 10
million customers each day.

THE HISTORY
Colonel Harland Sanders, born September 9, 1890, actively began franchising
his chicken business at the age of 65. Now, the Kentucky Fried Chicken business he
started has grown to be one of the largest retail food service systems in the world and
colonel sanders, a quick service restaurant pioneer, have become a symbol of
entrepreneurial spirit. More than two billion of the colonel’s “finger lickin good”,
chicken dinners are served annually. And not just in North America. The colonel’s
cooking is available in more than 85 countries around the world.

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He sold his interest in the US 1980 to 1984. The Colonel remained a public
spokesman for the company. In 1976, an independent survey ranked the Colonel as
the world’s second most recognized celebrity. Under the new owners, Kentucky Fried
Chicken Corporation grew rapidly. It went public on March 17, 1966, and was listed
on the New York Stock Exchange on January 16, 1969. More than 3,500 franchised
and company-owned restaurants were in worldwide operation when Heublein Inc.
acquired KFC Corporation on July 8, 1971, for $285 million.

Kentucky Fried Chicken became a subsidiary of R.J. Reynolds Industries, Inc. (now
RJR Nabisco, Inc.), when Reynolds acquired Heublein Inc. in 1982. KFC was
acquired in October 1986 from RJR Nabisco, Inc. by PepsiCo, Inc., for approximately
$840 million.

In January 1997, PepsiCo, Inc. announced the spin-off of its quick service restaurants
KFC, Taco Bell and Pizza Hut into an independent restaurant company, Tricon
Global Restaurants, Inc. In May 2002, the company announced it received
shareholders' approval to change its corporation name to Yum! Brands, Inc. The
company, which owns A&W All-American Food Restaurants, KFC, Long John Silvers,
Pizza Hut and Taco Bell restaurants, is the world's largest restaurant company in
terms of system units with nearly 32,500 in more than 100 countries and territories.

Until he was fatally stricken with leukemia in 1980 at the age of 90, the Colonel
traveled 250,000 miles a year visiting the KFC restaurants around the world.

And it all began with a 65-year-old gentleman who used his $105 Social Security
check to start a business.

MISSION STATEMENT

“To establish in India our position as the leading WQSR (Western Quick
Service Restaurant) chain, serving good value, innovative chicken-based products.
Consistently providing a pleasant dining experience, with fast friendly service, in a
clean and convenient location. At all times, we must be dedicated to providing
excellent service and delighting customers.”

GOALS

 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 growth,
striving always to be the leader the market place changes.
 Generate consistently superior financial returns and benefit our owners and
employees.

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VALUES

KFC’s commitment to provide the best food and best experience for the best
value the universal areas of customer expectation common to all cultures and all
restaurant concepts.

 Cleanliness
 Hospitality
 Accuracy
 Maintenance of Facilities
 Product Quality
 Speed of Service

MARKETING STRATEGIES

KFC TARGET MARKET:

KFC targets the young generation, as here in this country the young
generation is more towards eating out and is more energetic. It targets the early
single segment that is the upper class.

AGGREGATION STRATEGY:

KFC does not need aggressive marketing or advertising because Brand is

strong enough.

MARKET SEGMENTATION:

Previously they were focusing on single segment that was through Niche
Marketing by offering “Combo Deals”. Now they are focusing more on other classes
as well. They are dealing in masses by introducing value deals; most recently
introduced “Zinger Junior”.

BENEFITS:

Colonel’s value combo meals introduced previously were expensive and so

there were less sales but through their recent offers, they have increased the sales
by offering low prices.

PURPOSE:

Inflation highly affects the purchasing power of the customers. And here the
purchasing power of many customers is low. To cover this major segment, they have
introduced affordable meals, so that it is in reach of the masses.

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WANT SPECIFICATION:

The people here need a friendly and family restaurant, which must be
affordable for them.

CUSTOMER MARKET SEGMENTATION

GEOGRAPHIC

We take Karachi city’s where KFC has number of outlets here are few outlets
are discussed.

I.I chundrigar road

It is situated among many corporate offices and banks.

Clifton

It branch is located at food street of boat basin area where upper class
potential customers come.

PIDC

It is the major location for kfc because there are number of banks, offices and
most important there are two five stars hotel Sheraton and Pearl Continental where
Pakistanis as well as foreigners come and stay there, so it is best opportunity to cater
these customers.

DHA Phase 5

The defence branch focuses the upper class’s potential customer of defence.

DEMOGRAPHICS

Age: There is no age limit. It focuses on people lying under every age group
Gender: Focuses both genders
Family life cycle: It focuses on whole family
Social class: Upper class, upper middle and lower middle class

PSYCHOGRAPHICS

Personality: Ambitious, self-confident and extrovert

BEHAVIORAL

Benefits desired: Taste and value for money.

(Satisfaction>expectations)

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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)

PRODUCT

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

KFC PRODUCT PLANNING

 KFC product is classified as consumer product as it has no intermediates.

 KFC offers specialty goods.

 The stock turn over 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)

A typical KFC meal consists of chicken, coleslaw and potato & gravy. All of the
ingredients are of the highest quality and freshness. To ensure this, the company
sets rigorous standards for product uniformity and quality, which must be met by all
suppliers.

KFC PRODUCT LINE

KFC product line includes all chicken based products.

Chicken:

 1 piece
 2 pieces
 5 pieces

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 10 pieces

Burgers:

 Zinger Burger
 Colonel’s Chicken Burger
 Colonel’s Fillet Burger
 Zinger Jr.

Combos:

 Chicken Meals
 Sandwich Meals
 Family Meals

Desserts & Beverages:

 Fruit Salad
 Regular & Large Drink
 Regular & Large Mineral Water
 Tea
 Scoop of Walls Ice cream
 Coffee

Snacks & Side Orders:

 Arabian Rice
 5 & 10 Pieces Hot wings
 Dinner Roll
 Regular & Large Fries
 Hot Shots
 Corn on the Cob
 Hot & Crispy Soup

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KFC PRODUCTS WITH PRICE

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PRODUCT MIX STRATEGY

The product mix strategies are in relation to:

 Competitors:

KFC has a head-on competition with McDonald & Subway. Wherever they place their
products; KFC goes there as well. Locally in india .
 Attributes:

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

PRODUCT MIX EXPANSION

Line Extension:

 Through introducing new meals offers.

Alteration of existing products:

 Quality Assurance department does it. The department decides which product
should be sold and when (seasonal products as rice and soups offered in
winters).

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, Subway, Dominoes and
Pizza Hut. If the competitor provides the same product at a lower price then 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 India fast food
market. It-prices its burgers, French fries and soft drinks.

PRODUCT LINE PRICING

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KFC has a unique pricing strategy that falls solely on their many product lines.
Their Value Meals fall into the category of Product Line Pricing. “Where there is a
range of product or services the pricing reflect the benefits of parts of the range.” For
example, you can order a Two Cheeseburger Value meal that comes with a medium
drink and fries. You can Super Size this meal to get a large drink and large fries for a
little more money or you can go with another value meal that might include different
items for different price.

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.

 KFC also does distribution of services to the consumer like parking, sitting, home
delivery, etc.

TARGET AREAS

Free home Delivery” strategy – They provide free home delivery to offices & homes
at all Pakistan.

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.
Hectic lifestyle of individuals – giving them more time at work and less stress about
waiting for food.
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.

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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 everyday. In addition, they also have outlets close.

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
 Recognition for good work
 Performance based bonus
 Employee benefits to keep them motivated
 Promotion

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 fast food lovers attention towards its
delicious one-of-a-kind.

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SALES PROMOTION

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, coffe cup, T-shirt, toys e.t.c to the
customers.

ADVERTISEMENT STRATEGY

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

TRANSIT ADVERTISEMENT:

KFC India adopts a very interesting way of advertisement as for as their

business as concerned that is transit advertising. When KFC India Restaurant
Support Center introduces a new product in India they adopt this way and there
Floating Trucks travel through out the city other than Mumbai & Chandigarh 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 India has another way to advertise their business is in house publicity in
which they use banners, bill boards, especially broachers which KFC send to the
home of its customer with the news paper only in selected areas to tell their
customers about packages, prices, product’s detail, new products and all other
information that customers want.

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INTERNET

All most all the KFC’s 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.

ANALYZING THE SATISFACTION LEVEL OF CUSTOMERS

KFC offers comments card to its customers to take the feedback of its
customers either they are satisfied by its food quality, restaurant decoration, speed of
service, courtesy, cleanliness, overall experience. These comment cards are
collected on daily bases by the KFC`s head office from its all franchises and at the
end of the every month the KFC`s expert analyze these cards and make decision
according to the its customers feedback in which segment we are outstanding and in
which we want improvement

FOOD SAFETY

KFC French fries Composition which are directly imported from America: Potatoes,
Tran’s fat free oil dextrose.
Seasonings
Original Recipe: Salt, herbs and spices, garlic powder.
Milk and Egg: Non fat milk, dried whey and dried egg whites.

DELIVERY METHODS

SELF SERVICE

KFC stores offer self service to sell their products means customers go at
counter and purchase products pay for it, no involvement of waiters and if customers
want to eat at KFC store they sit at lobbies one for common people other for only
families otherwise.

HOME DELIVERY

It is a way of buying KFC products without going at KFC stores. All KFC stores
in India offer Free Home Delivery service within just 30 minutes. Orders are received
at KFC stores only through telephone. They want only address at which their team
members supply that order and he received a payment for that product.

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AT STORE

Most of the KFC buyers want to eat KFC products in lobbies of KFC stores
because a very entertaining atmosphere is provided by the KFC management in
lobbies especially for children.

DRIVE THRU

Drive Thru is the method of buying products used at almost all KFC stores in
India. In it when customer is in vehicle like cars, jeep, bike, etc go at KFC store and
purchase without coming out of his vehicle, he drive up to drive thru counter pay for
product and at next counter collect his product and go away. It is the facility in which
customer is able to buy product without spending too much time at store.

PAYMENT METHODS
CASH

It is the most popular and widely used method of payment when we are going
to sell or buy something, Irrespective of its some drawbacks such as security risks, its
bulky volume, and time consuming counting process at all KFC stores in India Cash
is the main and normally used method of payment when customers buying products
at KFC stores.

CREDIT CARDS

Almost all the stores of KFC India accept almost all types of credit cards such
as Master, Visa, etc. as for as KFC India as concerned they start accepting Credit
Cards within 2 or 3 weeks, “Restaurant Manager” said.

DEBIT CARDS

All the stores of KFC India accept debit cards and they made quick transaction
by their access machine which is directly linked with respective banks such as.

CUSTOMER INTERACTION

All the KFC stores have very good customer interaction with their customers
because they know the worldwide accepted rule of B2C type of business that is

“Customer is the King”

So that’s why they regularly get a feedback from the customer and remain be in touch
with their potential customers also.

All KFC stores are very efficient in sense of getting feedback from the customers they
use Comment Cards to get feedback about their product and services and also an
information about the customers that they use later to be in touch with their potential
customers. By using Comment Cards all the KFC stores collect information about the

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customers and maintain a database using all the information. They compile that
Comment Cards very carefully and collect the information about the good and bad
sides of their stores, point out them and send that information to Head Office India
and higher management take decisions on the behalf of that information collected by
using Comment Cards for the betterment of KFC India.

PEST ANALYSIS
POLITICAL FACTORS

Due to political stability in India, these days all businesses are flourishing well and
same is the case with KFC.

• As there are huger chances of investment these days, so KFC is following

GROWTH STRATEGY all over the country and targeting outlets in India, also
3 outlets in pipe line to searching place for another places in India

ECONOMICAL FACTORS

• Socio-economic trends are mostly encouraging with increases in disposable

income, more working women, increase in hoteling and increases in tourism all
positive signs for the catering market.
• There are also catering sectors, such as restaurants and takeaway food, which
are now a part of the regular eating habits of a majority of adults.
• The increasing purchasing power of people is affecting KFC sales positively.
• Taxes are regularly paid
• In summer KFC has more sales than in other season because KFC provides a
good chilled environment.

SOCIAL FACTORS

• In India KFC is playing a very active role for education sector. It has invested
much for inauguration of schools in different areas of India.
• Chicky Fund Raising i.e getting second handed books etc. from different
schools and distributing them among less fortunate students is also done
through different campaigns.

TECHNOLOGICAL FACTORS

• KFC is going to adopt the delivery system of Pizza Hut.

• Buying new equipments.
• The latest tech acquired is always get approved by government.
• KFC new UAN no. is 111-KFC-KFC
• Each and every equipment is licensed.

SWOT ANALYSIS

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STRENGHTS

• Quality of products.
• Leader in almost every market.
• Finger licking taste as the other international fast food restaurants in India
doesn’t have that kind of specialty in Fried Chickens.

WEAKNESSES

• There is some weakness in the field of KFC menu as it serves only chicken
related products but its competitors like pizza hut and Mc Donald’s offer
vegetable and cow meat based food also.

• Due to huge expansion by growth strategy there is much pressure on

management department in terms of HRM etc.

OPPORTUNITIES

• KFC plays an important role in increasing employment rate of a country as it

hires persons from local place to fill its staff. So this gains public attention and
generates good will of the organization.

• Financially KFC is going very stable and sound organization so still it has
much opportunity of opening new outlets in different areas of Pakistan and the
rest of the world by reinvesting its profits.

THREATS

• Prosperity of KFC with in a given region depends upon its economic condition
of the country so if some thing bad happens to it, it can be troublesome for
KFC.
• KFC recipe is still a secret, and if some one gets this secret then this can play
havoc with this organization.
• American invasion into tribal areas of Pakistan is also a threat for KFC, due to
arousal of anti-American sentiments it can lead towards rejection of KFC.

CONCLUSION

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On the whole KFC is the name of trust for the customers because there is no
compromise on the quality of the food. KFC fully concentrate on the quality of food
that’s why it is the hall mark of excellence among the customers. The supplier of KFC
is K&N’s Foods (Pvt) Ltd. They have good and fully furnished places for Chicks to
grow and finally to provide there valued customers. By following such practices, KFC
is providing a just and equitable environment for work and through its diversity
programs, giving back to the community at various levels. Doing business
internationally means taking stock of the local population and molding your menus
and work practices to suit local tastes, laws and regulations.

THINK GLOBALLY, ACT LOCALLY

RECOMMENDATIONS

 KFC is American firm so it can face sensitivity in this case. Because of rude
American attitude towards Muslims countries, people “can” reject them.

 They should start some activities that help them in turning their anti-Islamic
image in the minds of their target customers.

 The website of KFC Pakistan is not well developed so sophisticated

information and well designed data is not available on the net, as mentioned
above the I.T. department of KFC Pakistan has a close look on this area so it
is good sign for the internet users to buy online and get information they need.

 Music selection is good but usually they keep music volume so high that it
starts interrupting entertainment. They also do not change music on customer
choice.

 As KFC stands in STAR position in portfolio matrix so they should adopt

stability strategy at least for some period of time but still they are adopting
further growth strategy and increasing their level of operations so the same
case can happen with KFC which happened to MC Donald’s.

 Optimizing marketing spend: The system allows KFC to evaluate the

effectiveness of marketing campaigns, enabling immediate adjustment of
these campaigns to target them more effectively.

 Enabling strategic restaurant planning: By analyzing sales and demand, KFC

can conduct more effective strategic planning to open the right restaurant at
the right location at the right time.

 Enhancing customer service: The system analyzes delivery punctuality, and

correlates it with parameters such as restaurant and rider, allowing
management to make decisions to fine-tune operations, and improve customer
service.

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