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Contents

ACKNOWLEDGEMENT ................................................................ 2

INTRODUCTION .......................................................................... 3

KFC IN PAKISTAN ...................................................................... 3

KFC BRAND PORTFOLIO…………………………………….....................4

KFC MARKETING STRATEGY ........................................................ 5

GRILLED CHICKEN AS A CATEGORY EXTENSION .......................... 7

MARKET ANALYSIS ...................................................................... 8

3C’S OF MARRKETING ENVIROMENT ....................................... 8

MARKETING MIX ....................................................................... 10

ASSESSMENT OF CONCLUSION ................................................. 11

RECOMMENDATIONS…………………………………………………………12

Questionnaire………………………………………………………………………13

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ACKNOWLEDGEMENT

24TH April, 2015.

Mam Duria Hassan,

Brand Management (MKT-607),

Institute of Business and Technology-IBT

Respected Mam,

The success and final outcome of this project required a lot of guidance and assistance from

many people and we are extremely fortunate to have got this all along the completion of our

project work. Whatever we have done is only due to such guidance and assistance and we

would not forget to thank them.

We respect and thanks Mam , for giving us an opportunity to work on Research “ Impact of

Brand extension on Parent Brand Image “ and providing us all support and guidance which

made complete the research on time. We are extremely grateful to her for providing such a

nice support and guidance.

We heartily thank our external project guide and suggestions during this project work.

We hope that we have fulfilled your requirements and require a great appreciation.

Thanking you,

Sincerely,

Tahseen Raza

Ashfaque Ali

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INTRODUCTION

Colonel Harland Sanders identified the

potential of the restaurant franchising

concept, and the first "Kentucky Fried

Chicken" (KFC) franchise opened in Utah

(western United States) in 1952. KFC

popularized chicken in the fast food

industry. He did not have a restaurant

yet. It was then that he invented what's

called “home meal replacement” –

selling complete meals to busy, time-

strapped families. He called it, “Sunday

Dinner, Seven Days a Week.”

Kentucky was listed on the New York Stock Exchange in 1969 and eventually was acquired by

PepsiCo, Inc. in 1986. KFC is one of the most loved and fastest growing retail chains in the world

with over 18,800 restaurants globally. The KFC system serves more than 12 million customers

each day in more than 115 countries and territories around the world. KFC's parent company is

Yum! Brands, Inc., the world's largest restaurant company in terms of system restaurants.

KFC IN PAKISTAN

KFC came to Pakistan in 1996 with the first branch opened in Karachi and later in Lahore. The

Franchise was a Pakistani owned and operated, Dubai-based Company the Cupola Group, which

owns licenses and its own restaurant throughout Pakistan and the middle-east. Serving

delicious and hygienic food in a relaxing environment, Presently KFC is branched out in eighteen

major cities of Pakistan (Karachi, Lahore, Gujranwala, Sukkur & Muree) with more than 60

outlets nation-wide.

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KFC BRAND PORTFOLIO

There are different products divided into sections according to the differentiation in them.

1. Chicken

2. Burger

3. Beverages & Desserts

KFC PRODUCTS AND DEALS IN PAKISTAN MARKET

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KFC MARKETING STRATEGY

Marketing Segmentation

KFC used the Demographic Segmentation, Geographic segmentation, Psychographic

segmentation & Behavioral segmentation.

Demographic Segmentation

KFC divides the market on demographic basis in this way:

All Age

Gender is both males and female

Income is Rs 10,000 and above

Geographic Segmentation

KFC has outlets internationally and sells its products according to geographic needs of the

customer. In Pakistan KFC focuses how geographically its customers demand different products.

Psychographic

KFC serves on the basis of needs of customers. It actually serves:

Social class: Upper and Middle class

Behavioral Segmentation

In behavioral aspect they segmented the market on the basis of quality, taste and price.

Following are the different possible segments in this regard: taste conscious, quality conscious,

class conscious, and combination of price and quality.

Targeting

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.

Due to KFC placing itself close to Shopping Centers, Commercial Areas, Cinemas and

markets which are mostly populated by the young and those who are in a hurry

Given the competitive nature of fast food joints, KFC uses the “Push Strategy” to help

them create awareness, be different, and sound attractive.

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Positioning

Products

KFC is specially dealing in the chicken products; Basically, KFC has the special recipe for chicken

products that is why, KFC is known as a chicken specialist all over the globe. KFC target the Asia

and East side because people like chicken product so they enter in the market due to the

demand of their chicken products.

Channel

KFC believes in first level channels in the order given: manufactures, retailers, and consumers.

KFC works on the flow of good operation techniques i.e.

“Good Operating Manager→ leads to “Good Team Selection →Good Services → Good Targets

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

KFC jingle “Finger Lickin’ Good” is a frequent announcement on television, billboards, flyers and

radio & it is just a wake-up call to the consumer to remind them how good they felt the last

time they ate KFC chicken.

Services

KFC offered free home delivery service at specific branches in specifics cities. They take at 30

min for delivery and the minimum delivery order should Rs.200. Recently KFC also provide

services of mobile unit of KFC.

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BRAND EXTENSION RECOMMENDATION Many companies adopt brand extension as strategy with the aim of benefiting from the brand Knowledge achieved in the current markets. When a company launch a new product and market under the umbrella a well-known brand name, failure rates and marketing costs are reduced. More than 80 per cent of firms resort to brand extensions as a way of marketing goods and services. Competition forces firms to adopt strategies that create a competitive advantage for the firm. Creating a brand name with well -established associations is one way of achieving this aim. Brand extension as a marketing strategy has become even more attractive in today’s environment where developing a new product costs a lot of money and can be time consuming.

This is where an existing brand introduces a new product category to the market under existing brand name. Advantages of Brand extension are:

Acceptance of new product category by loyal customer of the brand,

Brand reputation/brand awareness can be increased.

Disadvantages of the brand extension are:

Failure in poor products can harm the reputation of entire brand,

Certain product can fail as not all products are suitable to be introduced under certain

brand names.

GRILLED CHICKEN AS A CATEGORY EXTENSION

The introduction of grilled chicken was an unprecedented sensation. KFC wants to use

Grilled Chicken as an entirely new platform with potential for adding flavored variation and

other product innovation. One of such innovation is Fiery Grilled Wings, a hot wing version of

KFC Hot wings in fried category.

This has come as a result of changing orientation of customer towards health conscious

food items. Over the last two decades consumers have become more concerned with their

health and more sensitive about the negative effects of this type of fast food.

Diversification strategy gives KFC an opportunity to widen their consumer base and

create an entry barrier to any new firm looking to enter this new segment of Grilled Chicken

and create an anti-Fried chicken promotion. So this strategy can be seen as KFC looking ahead

to tap new customers, and fend off any competitors that can harm the parent brand. As a new

brand diversification it can caters those customers who think about dry chicken, so it can be as

substitute and it can remove the concepts of health harm.

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MARKET ANALYSIS

3C’S OF MARKETING 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 customer. Three major components

influence KFC’s microenvironment:

1. Customer

KFC’s customer market consists solely of the consumer market. KFC’s products are bought by

individuals. Therefore, the product range of KFC offers appeals to as many people within this

consumer market as possible, to ensure that the maximum amount of products can be sold. By

introducing Grilled chicken in KFC it is easy for customers to have it from any outlet of KFC in

Karachi.

2. Competition

KFC follows the competitive pricing strategy. KFC compare the price of their products with

competitor. If the competitor provides the same product at a lower price, KFC 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 (only with fried chicken). Prices of burgers, French

fries and soft beverages with relation to its competitors. The competition of Grilled chicken in

market is tough as our competitors are highly well known such as Nandos, Rowtisserie etc, can

compete with them with our product quality.

3. Corporation

KFC Corporation is the world's most popular chicken restaurant chain. KFC is truly a global

brand with a local heart. KFC is a leader in emerging markets. KFC is an iconic global brand and

believe that the best customers in the world, KFC strives to make each experience with brand a

memorable one. KFC provides the quality goods (food), serve customer quickly but efficient and

effective. The packaging of the food also attractive and the surrounding of environment also

clean and comfort for customer to having meal.

PEST ANALYSIS

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 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.

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Economical

Income is an important key factor for KFC. This factor decides which class is to be targeted. In

the early rise of KFC they focused on the upper class but slowly are introducing economy meals

that attract the lower to middle classes.

Social

The Social/Cultural Factors includes the Social Class, KFC target all the class including the upper

class, upper middle and lower middle class etc. Although the culture of KFC from where they

come is entirely different but they have adopted the Pakistani culture as they had to serve the

people living in Pakistan having entirely different culture from other areas. And it has not only

adopted the Pakistani culture but also the Religion as well. They offer Halal foods to the

customers, which is the symbol that they adopted the Muslim religion strategies as they had to

serve in the Muslim country, to the Muslim customers.

Technological

The technological factors include the Pace of change at a fast level. Pace of change mean rate of

change Research & Development is also an important factor in the Technological factor. KFC

always support the work of research & development in order to introduce the new technology.

KFC has a stock of machinery in order to run its business activities. In other words KFC has a

good amount of Capital Formation.

STP

SEGMENTATION

Demographic Segmentation

Demographic segmentation of grilled chicken is on the basis of Income and age. Our best

demographical segments are male and female, all ages (10 to 65) years are included and for this

normal income.

Geographic segmentation

In Pakistan KFC focuses how geographically its customers demand different products. As a

demand of chicken increases, grilled chicken will be used in whole market of Pakistan where

outlets of KFC are located.

Psychographic segmentation

Grilled chicken will be used by both upper and middle class. Due to affordable prices, it can

create a difference as compare to the competitors.

Behavior segmentation

In behavioral aspect Grilled chicken segment the market on the basis of quality, taste and price.

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TARGETING

For grilled chicken KFC should follow the mass (undifferentiated) strategy. This product can be

used by whole market of Pakistan. Market share for chicken is very high in Pakistan market so

demand of this product exists in the market, those customers who avoid junk or fast food due

to oil in food can be attract because of nature of grilled chicken is free from oil.

POSITIONING

Positioning of grilled chicken is described in Products itself, its channel and the promotional

activities.

Product

KFC is a chicken Specialist so Grilled Chicken is the new product for it. It will target the region of

Pakistan initially to see the demand of Market and customers requirement. Pakistan market is

well known about chicken so this product captures the market.

Channel

As a new product, its nature is very fresh so KFC should choose the direct channel for its

customer. In direct channel outlets should be used for communication with consumers. Flow of

this product‘s flow if from outlet to final customer or consumer.

Promotion

For this delicious product, promotional campaign can attract the customers. Main purpose is to

inform current product and its price to the customers. In which various tools should be use:

Billboards

TV advertising

Sales promotion

Radio

Social media

MARKETING MIX KFC primarily sells chicken in form of pieces, wraps, salads and twister. While it’s primary focus

is fried chicken.

Following are the 7Ps marketing strategically process of KFC;

Product

KFC’s Specialty is fried chicken served in various forms. One of the new forms that we are

introducing is “Grilled Chicken”. Grilled chicken will be served both types of customers one

who are used to eat oily products and one who are health conscious and go for hot menu and

avoid oil.

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Price

KFC in the country tried to enhance quality of fast food restaurants to change attitude of people

that they think KFC is junk food. Price of our new grilled chicken will be reasonable & affordable

as compare to the other products of KFC as we are giving Full grilled chicken at the price of:

Rs:950

Place

As a new brand places are same. KFC outlets are all at the best possible places, so with our new

product it will be easy to target the new customer with new product. Most KFC restaurants are

located in the source communities such as shopping malls, cinema house and food court area.

Promotion

The promotion of KFC for Grilled Chicken will be same, such as TV commercials, social

networking, billboards , print media etc. For Grilled chicken promotional campaign will make

difference in market sale. Initially for 1stmonth, on Full of grilled chicken 1 Pepsi of 1 liter will be

given to customer.

People

People are the employees of KFC. Employees play very important role to promote a product.

They should be well informed about products and company offerings. Employees will be

communicated well as new category is introduced by 1 day of training, regarding price and

offers on purchasing in a bulk quantity. Employees, who are well dressed with good manner,

can create an image for company.

Process

The food manufacturing process at KFC is completely transparent i.e. the whole process is

visible to the customers. In fact, the fast food joint allows its customers to view and judge the

hygienic standards at KFC by allowing them to enter the area where the process takes place.

The customers are invited to check the ingredients used in food.

Physical Evidence

KFC focuses on clean and hygienic interiors of is outlets and at the same time the interiors are

attractive and the fast food joint maintains a proper decorum at its joints.

As a new brand introduce, it will be promoted in interior side of outlets so customer can easily

get information about it.

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ASSESSMENT OF CONCLUSION

After analysis of detailed report we have concluded that Brand extension of KFC make

sale after effective promotional campaigns and advertisement. KFC as a market leader in

a food chain can be utilize effective segmentation for this new brand.

Those customers who are health conscious and they cannot serve by oily products can

be attracted easily to hot menu like Grilled Chicken.

Local sellers of grilled chicken in the market are huge in number but like KFC others have

not such kind of the strength to compete.

As a new brand, it is expected to make sale as compare to competitors. Only effective

distribution channels and advertisement is required to gain the market share.

RECOMMENDATIONS

KFC is a market leader in providing Fried chicken. As KFC, so it is competing with the

prominent market signs like pizza hut, McDonalds. New items should be introduced by

varying the taste.

KFC should also try the local desi taste addressing the desi food lovers, thus it will help

to increase their market share.

The prices of KFC are reasonable as compared with other fast food restaurants. But as

price is always a primary concern for the customer, therefore, they should adopt certain

strategy to attract new customers.

It could be by introducing some discount packages for families, employees, students or

regular customers.

KFC needs to have more outlets, at commercial areas. It will help to target the actual as

well as the potential customers.

KFC should organize and run the proper advertisement campaign. It would definitely be

an incremental factor for their sales.

They can also use the brand promotions. They can set up the promotional campaigns.

All they need is an effective marketing department to facilities the promotional

activities.

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Questionnaire KFC Brand Extension

Personal Information

Gender Male Female

Name_____________________________________________

Age ____________

Profession ___________________________

Brand Knowledge

1- Are you familiar with brand name KFC Restaurant? Yes / No

2- Did you know what the product of the KFC taste is like? Yes / No

3- Can you Recognize KFC Brand among other competitor brands? Yes / No

4- Is KFC Brand is appealing to you? Yes / No

5- Is the product of the KFC with brand extension doing satisfy your need? Yes / No

Brand Extension effects

1. If KFC will bring a new brand the name grilled chicken then will you like this? Yes / No

2. Are you agree with that extension of brand make your choice easy? Yes / No

3. Are you Agree this type of brand extension not effect on your health? Yes / No

4. Are you agree KFC will provide better grilled chicken from others? Yes/ No

If any suggestion regarding KFC new extension grilled chicken, write in box.