PROJECT REPORT

MARKETING STRATEGIESWITH REFERENCE TO

KENTUCKY FRIED CHICKEN

Submitted by

Rhythm ReliaB.Com(H) IIIrd YearRoll No.-02, Section C

CERTIFICATE

This is to certify that Rhythm Relia, Roll No.

02 student of Shaheed Bhagat Singh College ,

University Of Delhi (South Campus) has

completed his research work titled “Marketing

Strategies With Reference to Kentucky Fried

Chicken” under my guidance and supervision

.The work submitted is genuine and authentic.

Date:

Prof. O.M. Aggarwal

(project mentor)

ACKNOWLEDGEMENT

With deep sense of gratitude I acknowledge theencouragement received from my mentor Prof.O.M. Aggarwal, for his valuable guidance and theconfidence he instilled in me, that helped mein the successful completion of this projectreport.

His professional guidance was indeed ofimmense help to me.

Also, this acknowledgement would remainincomplete without thanking the staff ofKFC(Faridabad) ,Haryana for their whole-heartedand kind co-operation.

RHYTHM RELIA

Introduction ofCompany

KFC Corporation, based in Louisville, Kentucky, is the

world’s most popular chicken restaurant chain, specializing

in Original Recipe ®, Extra Crispy TM, and Colonel’s

Crispy Strips® chicken with home style sides and five new

freshly made sandwiches. Every day, nearly eight

million customers are served around the world. KFC’s

menu everywhere includes Original Recipe® chicken—

made with the same great taste Colonel Harland Sanders

created more than a half-century ago. Customers around the

globe also enjoy more than 300 other products—from a

Chunky Chicken Pot Pie in the United States to a salmon

sandwich in Japan.

KFC continues reaching out to customers with homedelivery in more than 300 restaurants in the United Statesand several other countries. And in quite a few U.S. cities,KFC is teaming up with other restaurants, Taco Bell andPizza Hut, selling nearly fifty years ago; Colonel Sandersinvented what is now called “home meal replacement” –selling complete meals to harried, time-strapped families.He called it, “Sunday Dinner, Seven Days a Week.”

Today, the Colonel’s spirit and heritage are reflectedin KFC’s brand identity – the logo features ColonelHarland Sanders, one of the best- recognized icons inthe world.

KFC History

The Kentucky Fried Chicken® was founded by ColonelHarland Sanders (born on September 9, 1890) at the age ofsixty-five. KFC® is currently one of the largest businessesof the global food service industry and is widely knownaround the world as the face of Colonel Sanders.

Every year, over a billion KFC® chicken dinners are servedfeaturing the Colonel’s “finger lickin’ good” special recipe.The Colonel has spread his industry currently to more thaneighty countries and territories globally.

At the age of forty, Colonel Sanders began cooking fortravellers in his service station located in Corbin, KY.However, rather than coming in for service for their cars,hundreds of people began coming to the Colonel’s stationspecifically for his food. So he expanded his new up-and-coming business by moving across the street to a hotel andrestaurant that seated one hundred and forty-two people.While cooking here, Colonel Sanders perfected his secretblend of eleven herbs and spices for his special recipe that isstill used today.

With his special cooking techniques, Sanders’ stationbecame famous and he was recognized for his amazingcuisine by the Governor at the time, Ruby Laffoon in 1935when he was made a Kentucky Colonel; hence the name

Colonel Sanders. In 1939, Colonel Sanders’ restaurant wonthe top spot on Duncan Hines’ “Adventures in Good Eating.”

After his amazing start-up in 1952, the Colonel devotedhimself for the rest of his life to his chicken franchisingbusiness. To spread his famous recipe, he spanned thecountry in his car from his small business in Kentucky tocook his chicken for restaurant owners and their employees.If his subjects loved it like his other customers had, theColonel made a deal with the establishment, saying that theywould pay him a nickel for each chicken they sold in theirrestaurant. So many restaurants agreed that by 1964, theColonel had over six hundred franchised outlets in theUnited States and Canada for his chicken. Also in 1964,Colonel Sanders decided to sell his interest in the UnitedStates Company for small change (only $2 million) to asmall faction of investors, such as John Y. Brown Jr., thegovernor of Kentucky from 1980 to 1984. However,Colonel Sanders continued to be the public spokesman forKFC® and in 1976, he was named the world’s second-mostidentifiable celebrity by an independent survey.

With this new group of investors undertaking theCorporation, KFC® expanded and matured quickly. TheCorporation was listed on the New York Stock Exchange onJanuary 16, 1969, only three years after it had gone public onMarch 17, 1966. Then, after the KFC Corporation® wasacquired by Heublein Inc. on July 8, 1971 for $285 million,the company grew to an enormous three thousand and fivehundred franchised and company-owned restaurants world-wide.

Subsequently, Heublein Inc. was next acquired by R.J.Reynolds Industries, Inc. (currently RJR Nabisco, Inc.) in

1982, making Kentucky Fried Chicken® a subsidiary ofReynolds. 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 itwould be making KFC® and its other small quick servicerestaurants – Taco Bell and Pizza Hut – into an independentrestaurant company known as Tricon Global Restaurants,Inc. The company also stated that it would change thecorporation’s name to Yum! Brands, Inc. in May of 2002.This corporation, which currently owns A&W All-AmericanFood Restaurants, KFC, Long John Silvers, Pizza Hut andTaco Bell restaurants, is the world's principal restaurantcorporation in terms of system units, having a stifling thirty-two thousand and five hundred units in over one hundredcountries and territories.

Sadly, after travelling two hundred fifty thousand milesevery year visiting his restaurants around the globe, ColonelSanders died of leukaemia at the age of ninety in 1980.

Interestingly enough, this enormous, global corporation allstarted with simply a sixty-five-year-old gentleman and achicken.

KFCIndia

KFC is the world’s No.1 Chicken QSR and has industry leadingstature across many countries like UK, Australia, South Africa,China, USA, Malaysia and many more.

KFC is the largest brand of Yum Restaurants, a company that ownsother leading brands like Pizza Hut, Taco Bell, A&W and Long JohnSilver. Renowned worldwide for it’s finger licking goodFood, KFC offers its signature products in India too! KFC hasintroduced many offerings for its growing customer base in Indiawhile staying rooted in the taste legacy of Colonel Harland Sander’ssecret recipe. Its signature dishes include the “crispy outside, juicyinside” Hot and Crispy Chicken, flavorful and juicy

Original Recipe chicken, the spicy, juicy & crunchy Zinger Burger,Toasted Twister, Chicken Bucket and a host of beverages and desserts.For the vegetarians in India, KFC also has great tasting vegetarianofferings that include the Veggie Burger, Veggie Snacker and Veg Ricemeals.Putting behind violent protests against its entry in the mid-1990s,American restaurant chain Kentucky Fried Chicken, better known asKFC, has thrived on the growing fascination for fast food among theIndian middle class to chart a major expansion plan in the countrythrough small-town penetration and innovative products.

Like its other American peers like Dominoes, Pizza Hut andMcDonalds, this Louisville, Kentucky-based chain has also startedtweaking its classical chicken recipes and introducing new ones likefiery grilled chicken and vegetarian dishes to suit Indian food habits.

KFC, which operates in 109 countries and claims to have more than15,000 outlets around the world, expects to ramp up its restaurants in

India to 500 by 2015, riding on eager and aspirational customers in itssmaller cities.

"We are growing at a CAGR (compound annual growth rate) of 70percent. We already have 150-plus restaurants in 30-plus cities and areconfident of reaching our target of 500 by 2015," Dhruv Kaul, KFCIndia's marketing director, told media on the expansion process thatstarted in 2005.

"We'll mainly expand within the metros, but also in cities likeDurgapur, Calicut, Kochi and other tier-two towns. The reception weare receiving in new towns is very, very encouraging," Kaul said.

There has been a series of launches this year that included popcornchicken, cappuccino, crushers and vegetarian and chicken rissoles,apart from the fiery grilled chicken.

Speaking about the new product, he said it was developed entirelywithin the country and was six months in the making.

"It went through six months of rigorous testing and the feedback wereceived was extremely encouraging as the flavour was well liked. Ithas done extremely well in the 10 days since its launch," Kaul said.

"It's a fiery product based on the Indian palate," he added.

Made with juicy chicken pieces, fiery grilled chicken is marinated andseasoned with a blend of herbs and spices, and then grilled to perfectionvia a unique 'steam roast' process, developed specially for KFC.

Asked if the new product would find its way to other KFC restaurantsin the South Asian region, Kaul did not rule this out.

"I can only speak for India but we have a robust exchange of ideas and

products. We are inspired by the market and so I wouldn't be surprisedif this product even moves outside the region," he said.

KFC had a rather shaky start in India, seeing violent protests fromnationalists, farmers, health activists as well as animal rights activiststhat saw the vandalisation of its first outlet in Bangalore. The companyhas now put that behind and moved on.

KFC's Entry in India

Foreign fast food companies were allowed to enter India during the early1990s due to the economic liberalization policy of the IndianGovernment. KFC was among the first fast food multinationals to enterIndia.

On receiving permission to open 30new outlets across the country, KFCopened its first fast-food outlet inBangalore in June 1995. Bangalorewas chosen as the launch pad becauseit had a substantial upper middle classpopulation, with a trend of familieseating out. It was considered India'sfastest growing metropolis in the1990s. Apart from Bangalore,PepsiCo planned to open 60 KFC andPizza Hut outlets in the country in thenext seven years. However, KFC gotembroiled in various controversieseven before it started full- fledgedbusiness in India. When the issue of

granting permission to multinationalfood giants to set up business in thecountry came up for discussion in theIndian parliament, some membersfrom the opposition parties werevocal in their displeasure...

Problems for KFC

From the very first day of opening its restaurant, KFC faced problems inthe form of protests by angry farmers led by the Karnataka Rajya RyotaSangha (KRRS).

The farmers leader, Nanjundaswamy,who led these protests, vehementlycondemned KFC's entry into India,saying that it was unethical topromote highly processed 'junk food'in a poor country like India withsevere malnutrition problems.Nanjundaswamy expressed concernthat the growing number of foreignfast food chains would deplete India'slivestock, which would adverselyaffect its agriculture and theenvironment. He argued that non-vegetarian fast-food restaurants likeKFC would encourage Indian farmersto shift from production of basiccrops to more lucrative varieties likeanimal feed and meat, leaving poorersections of society with no affordablefood. KRRS held a convention on

November 01, 1995 to protest theentry of fast food multinationals andthe Westernization of localagriculture...

The Aftermath

By late 2003, PETA further intensified its campaign against the crueltreatment meted out to chickens by KFC through protests at regularintervals. Celebrities like Anoushka Shankar, daughter of the legendarysitar maestro Ravi Shankar, directly supported the cause of PETA.

Anoushka, a sitarist herself, wrote aletter to the top management ofPepsiCo condemning the continuedcruelty of KFC in spite of repeatedrequests of PETA. The organizationalso had the support of othercelebrities like the famous cricketplayer Anil Kumble (based inBangalore), popular Indian modelslike Aditi Govitrikar, the late NafisaJoseph and John Abraham, whopromoted vegetarianism. Filmactresses like Raveena Tandon andAmeesha Patel also took up the causeof animal abuse. Undeterred by thecontinued protests, KFC added threemore outlets to its existing one atBangalore. KFC also announced amajor expansion programme for2005. Sharanita Keswani (Keswani),KFC's Marketing Director, said thatas the retail business was poised for aboom in India, they considered it the

right time for expansion... Feelingpositive about the flourishing malls inall big cities, Keswani revealed thatthis time KFC planned to have apresence in prime locations or in amall where turnout would be assured.

The company aimed at targetingcosmopolitan cities like Chandigarh,Pune, Kolkata, Chennai andHyderabad, where mall culture wasfast developing.

PepsiCo also decided to concentrateon the expansion of KFC since itsother brand, "Pizza Hut", hadsuccessfully established a strongfoothold in India.

Vegetarianism was predominant andwas a way of life in India. Manypeople ate non-vegetarian food onlyoccasionally and avoided it duringfestivals or religious occasions...

Mission Statement

“To sell food in a fast, friendlyenvironment that appeals to prideconscious, health minded consumers”

Goals of KFC

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 grow,

striving always to be the leader in the

market place changes.

Generate consistently superior

financial returns and benefits our

owner and employees.

To establish in India our position as leading

WQSR (Western Quick Service Restaurant)

chain, serving good value. Innovative chicken-

based products. Consistently, providing a

pleasant dining experience, with fast friendly,

in a Clean and convenient location. At all

times we must be dedicated to providing

excellent and delighting customers.

KFC specialized in chicken and they says,

“No body’s cooking like KFC today and we arethe chicken experts”

“There is no competitor for spicy chicken whichis made by KFC”

Values of KFC

Focus all our resources to our restaurants operation

because that is where we serve our customers.

Reward and respect the contributions of eachindividual at KFC.

Expand and update training with time and be thebest we can be and more.

Be open, honest and direct in our dealings with oneand other.

Commit ourselves to the highest standard to the personal

and professional integrity at all times.

Encourage new and innovative ideas because these are the key to

our competitive growth.

Reward result and not simple efforts.

Dedicate ourselves to continuous growth in sales, profit and

size of organization.

Work as a team.

Porter’s Five-Forces Analysis

Entry

For the current Indian market for fast food, it is not difficult for afast food restaurant to enter the market. However, it would beextremely difficult to take over already running major fast foodchains' dominancy in India or even make a significant amount ofprofit. While there are enough people in urban India for anyrestaurant to survive, KFC holds the first-mover advantage into the'non-veg food specialty food segment' that gives them freereputation. Customers, especially children who are used to going toKFC as a treat or reward from their parents or grandparents, are notgoing to want to go to other restaurants they’ve never heard of. Thebrand name is already established. Also, there is already a largevariety in the numerous western-style dining places in India, such asMcDonald’s, Pizza Hut, Domino's and Subway, and any new fast-food entrants would just be presenting something very similar towhat’s already there. While small Neighbourhood restaurantsgenerally have low barriers to entry, these are the barriers to entryfor similar restaurant businesses to enter the fast-food chain market.

Buyer/SupplierBargainingPower

The customers of KFC, especially as individual buyers, have almostno bargaining power because if only one customer threatens to nolonger eat at KFC, the store is not going to lower its price becausethe cost of losing one customer is not very great. The suppliers, likethe buyers, have very little bargaining power.

In terms of food, KFC, upon its move into India, urgedmany of its U.S. suppliers to also extend branches intoIndia. KFC also began helping localsuppliers by giving them technological support to improvetheir 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.suppliers decide to raise their prices, KFC can easilyswitch to the local suppliers. This gives us a brilliantstrategy. With this strategy, KFC created competitionamong its suppliers, lowering the supplier

bargaining power. In terms of human resources, labor costis extremely low because the supply of non-skilled workersgreat exceeds the demand for them. With so little buyerand supplier bargaining powers, KFC is able to have avery tight control over its prices and expenditures.

SubstitutesandComplements

As mentioned above, there are a few major competitorsin the fast-food industryin India for KFC, namely McDonald’s, Pizza Hut, Domino'sand Subway. The substitute products, in this case, would beburgers, pizza, and sandwiches. Though theyare competitors, their primary products differ greatly fromeach other, in that they sell, chicken, burgers and fries,pizzas, and sandwiches, respectively. TraditionalIndian dining, home-cooked meals, and grocery stores with

ready-to-eat foods are also substitutes, as families couldchoose any one of these over fast food for a meal. Thesesubstitutes are definitely considered healthy as compared tothe fast food chains. Even foods from street vendors count assubstitute goods.

While other fast foods serve as substitute to KFC, they canalso serve as complements for fast foods as a whole. If thegeneral price of fast foods goes up, KFC’s price rises as well,and the same can be said of the quantity sold of theseproducts, which make them complements to each other.

KFC also sets up stores located nearpopular tourist attractions, so tickets to these tourist spotsare also complementary goods because the more people tourthese attractions, the more customers KFC will get.

Rivalry

Unlike what one would expect, KFC has little rivalry withsimilar fast-food chains in India. The primary reason is thattheir core products are different, as in they sell different kindsof fast foods with very different tastes and styles. Forexample, if KFC raised its price for chicken by a smallamount, Indian chicken lovers who may not be as accepting topizzas (many Indian people strongly dislike the taste ofcheese) are not going to switch to Pizza Hut just because theprice for KFC increased. In addition to that,these restaurants have such different target customers that thefluctuation of price for one restaurant is not going to affect theothers. For example, a full meal at KFC ranges about Rs. 100,whereas a full meal at Pizza Hut can cost over Rs. 300. Thedrastic difference in price assures no price competitionbetween these restaurants.

Environmental factors and opportunities

Political :

The operations of KFC are affected by the governmentpolicies on the regulations of fast food operation. Currentlygovernment are controlling the marketing of fast foodrestaurant because of health concern such as cardiovascularand cholesterol issue and obesity among the young andchildren in the country. Governments also control thelicense given for open the fast food restaurant and otherbusiness regulation need to follow such as for a franchisebusiness. Good relationship with government in givingmutual benefits such as employment and tax is a must forthe company to succeed in any foreign market.

Economic:

Though for last 1 year their was economic slowdown allacross the globe but the sales of KFC and other fast foodchains did not slow down to that extent that of other sectorsin. The GDP (Purchasing Power Parity) is estimated at2.965 trillion U.S. dollars in the year 2010. The GDP- perCapita (PPP) was2700 U.S. dollars as estimated in 2008. The GDP- realgrowth rate in 2007 was 8.7%. India has the third highestGDP in terms of purchasing power parity just ahead Japanand behind U.S. and China. Foreign direct investment rosein the fiscal year ended March 31 2007 to about $16 billionfrom just $5.5 billion a year earlier. There is a continuousgrowth in per capita income; India’s per capita income is

expected to reach 1000 dollars by the end of 2007-08 from797 dollars in 2006-07. This will lead to higher buyingpower in the Hands of the Indian consumers. So takingintoA consideration the economic factors of India KFC are safe.The only danger to it will be if there is a terrorist attack inIndia and the victim is KFC.

Socio cultural:

India is the second most populous nation in the world withan approximate population of over 1.1billion people. Thispopulation is divided in the following age structure: 0-14years – 31.8%, 15-64 years – 63.1% and 65 years andabove – 5.1%.

There has also been a continuous increase in theconsumption of fast food in India. The social trend towardfast good consumption is changing and India has seen anincrease of 90% fast food consumption from the year 2002-2007. This increase is far greater than the increase in theBRIC nations of Brazil (20 per cent), Russia (50 percent) and China (almost 60 per cent). Thus this shows apositive trend for fast food industries in India.

Technological:

The Indian fast food Industry is heating up with a lot offoreign players entering the Indian market. Thetechnological knowhow and expertise will also enter the

Indian market with an increase in competition. With thelower rates and increase technology the fast food countersare attracting youth by giving them attractive deals. For e.g.KFC and Domino’s pizza. For a fast food restaurant,technology does not give a very high impact on thecompany and it is not a significant macro environmentvariables. HoweverKFC should be looking to competitors innovation andimprove itself in term of integrating technology inmanaging its operation. For example in inventory system,supply chain management system to manage its supply,easy payment and ordering systems for its customers andwireless internet technology. Implementation of technologycan make the management more effective and cost savingin the long term. This will also make customer happy ifcost savings results in price reduction or promotionalcampaign discount which will benefits them from time totime.

Environmental:As one of world largest consumer of beef, potatoes andchicken, KFC always had been critics for worldenvironmentalist. This is because high consumption of beefcausing the green house effect by methane gasses comingfrom the cow’s ranch. Large-scale plantation has effect theenvironment and lost of green forest opening for plantationactivities. Vegetarian environmentalist criticizes the fast-food giant for cruelty to animals and slaughtering. InAmerica, once KFC want to introduce whale burger causinguproar because whales are endangered species. Beforeusing paper packaging, KFC once had been criticized forbeing insensitive to pollution because of using ne basedpackaging for its food products. Imagine millions of peoplepurchase from fast food operator and how is the impact to

world environment by throwing away those hard to recyclepackaging.Our world is getting concern on environment issue andbusiness operating here should not just care for profit, butcareful usage of world resources for sustainabledevelopment and care for environment safety and healthfor our future generation. Critics and concern from allpublic or activist should be review and support ifnecessary to ensure we play our social responsibilitybetter.

Summary of current situation

SWOT analysis mean strength, weakness, opportunitiesand threats and the SWOT analysis of KFC are:

STRENGTHS

Goodwill and reputation: The company certainly hasearned a good name and reputation by its previousproducts and services in themarket. It is even more recognised in other marketsoutside India, where the company is among theleading fast food giants. The brand is recognised and

trusted in India for its quality products, price, andcustomer service. It therefore has a good head start andenjoys a good chance of becoming a leader in Indianfast food industry.

Employee Loyalty: Employee Loyalty is one of themajor strengths of KFC. The turnover rate in thecompany is amongst the lowest in the industry.

Customer Loyalty: Despite gain by BostonMarket and Chick-fill A, KFC customer baseremained loyal to the KFC brand because of itsunique taste. KFC has continued to dominate thedinner and take out segment of the Industry.

Ranks highest among all chickenrestaurant chains for its convenience and menuvariety. It generates $1B revenue each year.

WEAKNESSES

KFC was losing market share as otherChicken chain increased sales at a faster rate.

KFC share of Chicken Segment sales fellfrom 71 percent 1999 , to less than 56 percent in2009 , a 10 -years drop of 15 percent.

Huge competition in thissegment.

India is still mostly a vegetariandominated cultured society. South India isespecially very much so. This may reduce themarket share of the company.

KFC has not yet invested much on R&D, andinnovating new products for Indian Markets. This maylead to failure of their products as they are not in linewith the Indian mind set, people preferences andtheir likes and dislikes. This may prove fatal for thecompany.

OPPURTUNITIES

New Markets: Globalisation has opened doors fornew markets for the company. As the developedmarkets are mostly saturated, the developingcountries like India and China promises a good marketand generation of demand in the future. With morethan 70% of the markets in India being unexploredand un organised, KFC has a good scope of expandingits operations in the country.

Cross Culture: Generally there is a goodacceptance of American culture of fast food in India.People are opening up to fast foods more regularly intheir daily lives and not just keeping it a once in amonth affair. Thus Indian mindset is fast changing.

Large Youth population: India has a very large

share of youth population as compared to othercountries. More than 60% of the population is underthe age of 30yrs. As the young generation are moreopen to fast foods and demand it more, this is goodnews for the company.

New variety: Company can also come up withnew variety in the menu like Pizzas, garlic breads toattract more customers.

THREATS

Competition: Competitor companies likeMcDonalds are fast catching up with the market.McDonald’s with sales of more than 19 billion in1999, accounted for 15 percent of the sales of thenation’s top 100 restaurant chains.

Organisations like PETA People for EthnicTreatment for Animals have given a bad name tothe company which may prove disastrous to theimage of the firm. Currently, KFC is under massiveattacks from animal organisations, questioning theway KFC’s suppliers are threatening the chicken,before they got slaughtered. Anti-KFC campaigns,such as the one from PETA are affecting KFC’sbrand image in a negative way and result in directdollar losses, as less people are consuming KFCchicken

Saturated US Market: Now KFC cannotrely on just its home market to generate sales. Asthe US markets are already saturated and leave no or

little scope for growth, company necessarily needsto look at offshore foreign markets to generatesales and keep up the profits.

MARKETING STRATEGIES OF KFC

There are different strategies adopted by KFC for differentevents. They market their products on different events andin different activities as they are helping SOS village.According to KFC, kids become the future permanentscustomers and we know very well that without anymarketing strategy no marketing

program and no product is successfulbecause we depend upon customers, customer not dependon us.

KFC is following Niche Marketing and Societal

Marketing techniques.

KFC possess a western culture because some of the

Indian people are also following that culture.

KFC are moving from Divisional Level to the

District level by opening branches

KFC also offer free home delivery.

KFC open their outlets on reachable places.

KFC menu consists of more than 30 products.

KFC gives more priority to Family.

MARKETING

Since 1982, KFC’s “All-American salute toMothers” national card contest has been KFC’sway of honouring moms and their families formaking mother’s Day KFC’s biggest saleday of the year. The contest encourageschildren to creatively express their feelingsfor their moms by making a homemade cardand give them chance to compete for more than$10,000 in cash and prizes. Educationalpackets, including language,history andartexercises highlighting Mother’s Day, were sentto thousands of schools nationwide.

There are 4 P’s ofMarketing:

1. PRODUCTION2. PRICING3. PROMOTION4. PLACEMENT

1. Production:

Basically the product is anything that beoffered to a market for attention, acquisition,use, or consumption that might satisfy a wantor need. KFC is specially dealing in thechicken products; Basically, KFC has thespecial raspy for chicken products that is why,KFC known as a chicken specialist all over theglobe. KFC target the Asia and east sidebecause they observe that they people arelike the chicken products, so they enter inthe market due to the demand of theirchicken products. KFC product variety ofproduct in the chicken, those products are:

Original recipe®chicken ExtraTasty CrispyTMchicken HotWingsTM piecesTender Roast®chicken ChunkyChicken pot pieKentuckyNuggets®Colonel’s CrispyStrips® HoneyBBQ sandwichOriginal Recipe®Sandwich Tender

Roast® SandwichTriple Crunch®SandwichTriple Crunch ®Zinger® Sandwich

2.Pricing:

KFC during pricing their products keep thedifferent points in the mind like they adopt thecost base price strategy. Pricing of theproduct includes the Government taxes andexcise duties and then they come at final stageof determine the price of their products. KFCprices of products are a bit high according tothe market segment and it is also compatibleto the standard of their products.

Calculation of the price under CostBased Pricing Strategy:

Total Pounds of Chicken Served in KFCRestaurant Annually =1.914Billion

Total KFC Chicken Pieces SoldAnnually = 5.89 Billion

Total Retail Sales =$8.9 BillionSales Price of per Chicken Piece = TotalRetail Sales / ChickenPiecessold

= $8.9 Billion / $5.89 Billion=$1.51

We assume that Fixed Cost is = $6000000000Variable Cost = $675000000Profit Margin is Or Mark Up =$225000000(25% of Sales) Per UnitVariable Cost = $675000000 /5890000000

= $0.115

Unit Cost = Variable Cost + Fixed Cost /Chicken pieces Sold

= 0.115 + 6000000000 / 5890000000= 0.115 + 1.02= $1.135

Now suppose manufacturer wants to earn 25%mark up on sale. The manufacturer mark upprice is calculated:

Mark Up Price = Unit Cost / (1 – DesiredReturn on Sales)

=1.135 / (1-.25)= 1.135 / 0.75= $1.51

3. Promotion:

Promotion is one of the necessary plates inany form of business or in other words you cansay that promotion is the key of success. Ifyou promote your product at the righttime. KFC also known the importance andsignificance of promotion so they uses the billboards the major source of advertisement andone of the most important thing that they usesmedia especially the newspapers topromote their products. They are also creatingawareness among the masses about theirexisting product range as well they tell usabout the future product.

Marketing efforts to be taken bythe restaurant:

Paste delivery posters at petrol pumps, flats,colleges, plazas, and departmental stores.Distribution of delivery flyers in residentialareas, markets, plazas and institutions (asper the plan)Visit offices and

business places.

4.Placement:

In the case of the KFC the placement of theproduct is not important but the placement ofthe restaurant is important. The products ofthe KFC is cooked at the sport and thenserved after that. KFC Cavalry branch opened

in June 1998, in the main commercial zone ofCavalry Grounds near the Jinnah Flyover.The restaurant is a three-story buildingincluding the basement (where the chickyplay area is located). It is ideally located inthe center of a main commercial andresidential area of Lahore. The area that KFCCavalry caters for is the residential and officearea of Cavalry Grounds and Cantt, as themain target market. Another branch the KFCopened in the Lahore is in Garden Town

(opposite toBarkat Market). KFCalsotarget the Faisalabad and open its branch

in D ground. Now we can easily judge that theKFC target the place for their restaurant, whichis well known and is in the Porsche area wherethe income level of the people is high then themiddle class level. Because the prices of theKFC products is high with comparison to thelocal products manufacturer who are dealingin the same kind of product in which KFC isdealing but the prices of the KFC is high dueto special taste, high quality, and due tointernational brand, it is the world recognizedfast food restaurant all around the world. So,for the placing strategy, KFC chose the wellincome class area for their restaurants.

QualityControlOverIngredients

EveryChickenTested

K & N’s state-of-the-art Quality Assurance Lab monitors

the entire integration process from livestock to feed and

on to preparation of ready-to-cook and cooked products.

EveryChickenCertified

HACCP – K & N’s ensures food safety by implementing

the international HACP (Food Safety System) and enjoy

the unique privilege of being the first and only HACCP

certified company is India producing chicken and chicken

products. Free from diseases and bacteria, drug residues

and other contaminants.

QualityAssuranceCertificate

Director General ( Research ) has issued quality assurance

certificate for the chicken used by KFC.

Packaging

We are asked as many questions on our packaging as ourproducts by our customers. The packaging for KFCproducts is chosen according to performance against keycriteria:

Heat RetentionMoistureremovalGreaseabsorption

The packaging material and carton design are alladapted to maximise performance against these threecriteria.

Recycled Paper

All our clamshells and chicken boxes contain as muchrecycled material as it is legally allowed. By law we arerequired to have virgin fibre board in any part of thepackaging that is in contact with food. Any virgin fibrecomes from board suppliers who use pulp bought frommanaged forest in Scandinavia. This ensures that any woodcut for paper production is replaced with new plantings.

Environmental concerns

Over and above ensuring our packaging is suppliedvia recycled or renewable resources; KFC areenthusiastically complying with the newenvironmental directives on recovery and recycling

of packaging waste.

Litter

We at KFC UKI are aware of our responsibilities to theManagement of Litter and all our packaging carries the‘Keep your Country Tidy’ signs

Branding

This research measured and compared the brand identity ofKentucky Fried Chicken (KFC) in India. Brand identity wasdefined as the customer impressions of four different KFCidentity elements - properties, products, presentations, andpublications. A survey of young consumers in the countries(n = 795), showed that the respondents were more apt to eatwithin KFC restaurants, and spend more time doing so, thanthe Americans. The Chinese also had much more positiveimpressions of KFC. Brand identity impressions werecorrelated with overall customer satisfaction and with futurepatronage intentions for both groups. These findings supporta model where differences in cultural frames of referencelead consumers to actively localize the brand identity of thisnominally globalized product.

AdvertismentThe advert titled Pool was done by OGILVY &MATHER, New Delhi advertising agency for KFCZINGER BURGER (KFC company) in INDIA. It wasreleased in the June 2009. Business sector is Fast foodoutlets & restaurants.

One of KFC's latest advertisements is a commercial

advertising its "wicked crunch box meal". The

commercial features a fictional black metal band called

"Hellvetica" performing live, the lead singer then swallows

fire. The commercial then shows the lead singer at a KFC

eating the "wicked crunch box meal" and saying "Oh man

that is hot".

In 2007, the original, non-acronymic Kentucky Fried

Chicken name was resurrected and began to reappear on

company marketing literature and food packaging, as well

as some restaurant signage.

Data AnalysisThe data we received is as follows:-

We also asked questions on whether they would like KFC to start homedelivery services.

We also inquired “How close is the nearest KFC outlet from your house?

Would you like to order at home or Dine in?

CONCLUSION

DATAINTERPRETATION

It is clear from the above report that a highnumber of people actually like to order fromtheir home or workplace rather than coming.This may be due to more convienence, timeshortage or just not willing to come and dine.Certainly the home delivery market is huge andKFC can take well advantage of the situation.Thus it would be in the best interest of thecompany to start the service as soon aspossible and capitalise on the opportunity. KFCexpects a rise in the orders by at least 20% bystarting this service.

Therefore, to conclude we would say thatKFC should definitely have a homedelivery service.