MARKTING PROJCT

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SUBMITTED TO: SUBMITTED BY:

Mr. AMIT THUKRAL VINITA JOSHI

LECTURER (MBA DEPTT.) MBA 2nd B

ACKNOWLEDGEMENT


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I am extremely grateful and remain indebted to my project guide Mr. Amit

Thukral, Lecturer (MBA Deptt.) under whose guidance I was able to

complete my project.

I cordially thank him for being an inspiration and for his constant support in

the design, implementation and evaluation of the project. I am thankful for

his constant support and invaluable suggestions, which benefited me while

working on the project on Promotional mix and strategies of KFC. He has

been a constant source of inspiration and motivation for hard work and has

been very co-operative throughout this project work. Through this column, it

would be my utmost pleasure to express my warm thanks to him for his

encouragement, co-operation and consent without which I might not be able

to accomplish this project.

I also express my gratitude to my institute and all the faculty members who

directly or indirectly help me in carrying out this project.


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INTRODUCTION

Major companies such as KFC and Mc Donald's use a bulk of their budget on promotion

and getting their brand "out there." In as much as the businesses might have good productsand a wide product range, or sold at attractive prices. The company's at hand would still

have to generate sales and profits the benefits would have to be communicated to the

consumer through promotion.

The promotional mix consists of a blend of personal selling, sales promotion and

advertising, public relation tools. The core element in the marketing mix is the companys

product because this provides the functional requirements sought by customers.One of the

traditionally used marketing tools by the firms to achieve its marketing objectives is the

Marketing Mix. The marketing mix plays a vital role in the growth and survival of an

organization. A proper and carefully evaluated mix of these elements enables the marketer

in achieving a consensus between the expectations of the target customers and the

organizational objectives.

Elements of Marketing mix:

The elements of the marketing mix are the 4Ps namely

Product

Place

Price and

Promotion.


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COMPANYS PROFILE

Kentucky Fried Chicken

Mission

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

consumers.

Stated Objectives

Product development

Increase variety on menuIntroduce desert menu

Introduce buffet to restaurants

Introduction on the Neighborhood Program with following:

Menu items target African Americans in major cities with the following items:

Greens

Macaroni and cheese

Peach cobbler

Red beans & rice

Menu items targeting Hispanics in major cities with the following items:

Fried plantains

Flan

Tres Leches

Implementation on non-traditional units including the following:

Shopping mall food courts

Universities

Hospitals


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Airports

Stadiums

Amusement Parks

Office Buildings

Mobile Units

Increase profitability of KFC through the following:

Reduced overhead costs

Increased efficiencies

Improved customer service

Cleaner restaurants

Faster and friendlier service

Continued high quality products

Resolve franchise problems in the United States.

Implied Objectives

Expansion of international operations to provide the following:

Increased percentage of overall sales growth

Increased percentage of profit growth

Increased expansion of franchises into Mexico

Expansion of franchise operation beyond Central America

Continued promotion of healthier image through removal of the word "fried" from the

name

Improve menu selection of rotisserie


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History of KFC

Since its inception, KFC has evolved through several different organizational changes.

These changes were brought about due to the changes of ownership that followed since

Colonel Sanders first sold KFC in 1964. In 1964, KFC was sold to a small group of

investors that eventually took it public. Heublein, Inc, purchased KFC in 1971 and was

highly involved in the day to day operations. R.J. Reynolds then acquired Heublein in

1982. R.J. took a more laid back approach and allowed business as usual at KFC. Finally,

in 1986, KFC was acquired by PepsiCo, which was trying to grow its quick serve

restaurant segment. PepsiCo presently runs Taco Bell, Pizza Hut, and KFC. The PepsiCo

management style and corporate culture was significantly different from that of KFC.

PepsiCo has a consumer product orientation. PepsiCo found that the marketing of fast food

was very similar to the marketing of its soft drinks and snack foods. PepsiCo reorganized

itself in 1985. It divested non-compatible units and organized along three lines: soft drinks,

snack foods and restaurants. PepsiCo Worldwide Restaurants was created to create

synergism between its restaurant companies.

By the end of 1994, KFC was operating 4,258 restaurants in 68 foreign countries. KFC isthe largest chicken restaurant and the third largest quick service chain in the world. Due to

market saturation in the United States, international expansion will be critical to increased

profitability and growth.

Present Situation

The organization is currently structured with two divisions under PepsiCo. David Novak is

president of KFC. John Hill is Chief Financial Officer and Colin Moore is the head of

Marketing. Peter Waller is head of franchising while Olden Lee is head of Human

Resources. KFC is part of the two PepsiCo divisions, which are PepsiCo Worldwide

Restaurants and PepsiCo Restaurants International. Both of these divisions of PepsiCo are

based in Dallas.


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Structuring

Another strategy of KFC is currently working with is to improve operating efficiencies.

This in turn can directly impact the operating profit of the firm. In 1989, KFC centered on

elimination of overhead costs and increased efficiency. This reorganization was in the U.S.

operations and included a revision of KFCs crew training programs and operating

standards. They emphasized customer service, cleaner restaurants, faster and friendlier

service, and continued high-quality products.

In 1992, KFC continued with another reorganization in its middle management ranks. They

eliminated 250 of the 1500 management positions at corporate and gave the responsibilities

to restaurant franchises and marketing managers.

Strengths

Strengths can be found internally in a company and can be used to the companys

advantage. The strengths identified are as follows:

1. KFC's secret recipe.

The secret recipe has long been a source of advertising, and allowed KFC to set itself apart.

Also, KFC was the first chain to enter the fast-food industry, just before McDonald's,

which opened its first store a year later, and the "secret recipe" was the initial home

replacement strategy.

2. Name recognition and reputation.

KFC's early entrance into the fast-food industry in 1954 allowed KFC to develop strong

brand name recognition and a strong foothold in the industry. The Colonel is KFC's

original owner and a very recognizable figure, both in the U.S. and internationally, in their

new logo. In fact, in the fourth annual LogoValue Survey, done by The Schecter Group, the

KFC logo was the only one which significantly enhance the brand's image.


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3. PepsiCo's success with the management of fast food chains. PepsiCo acquired Pizza Hut

in 1977, and Taco Bell in 1978. PepsiCo used many of the same promotional strategies that

it has used to market soft drinks and snack food. By the time PepsiCo bought KFC in 1986,

the company already dominated two of the four largest and fastest-growing segments of the

fast food industry.

4. Traditional employee loyalty.

"KFC's culture was built largely on Colonel Sanders' laid back approach to management".

Before the acquisition of KFC by PepsiCo, employees at KFC enjoyed good benefits, a

pension, and could receive help with other non-income needs. This kind of "personal"

human resources management makes for a loyal workforce

5. Improving operating efficiencies by reducing overhead and other operating costs can

directly affect operating profit. Due to the strong competition in the US, the fast-food

chains are reluctant to raise prices to increase profit. Many of the chains are turning to

operating efficiencies to increase profit. For many companies, operating efficiencies are

achieved through improvements in customer service, cleaner restaurants, faster and

friendlier service, and continued high-quality products.


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PROMOTIONAL MIX OF KFC

The promotional mix consists of a blend of personal selling, sales promotion and

advertising, public relation tools.

Promotion Element Advantages Disadvantages

Sales Promotion

good for building awareness with the consumer

effective at reaching a wide audience market

repetition of main brand and product positioning helps build consumer trust and

loyalty

impersonal

as the business cannot answer all customer queries

hard to get the customer to make up their mind on making a final buy

Personal Selling

Lots of communication between the buyer and the seller

Easier to communicate all pros and cons with consumers giving detailed features

and product information

When closing the sale, the seller can develop a long time relationship with the

consumer as it involves a member of staff

It can be costly to run a sales team

If there are many buyers involved, it might not be a viable option

Sales Promotion

good as a short term method of communication

if targeting the right promotional incentives on certain products, sales promotion

can quickly increase sales


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customers may get used to the effect of the incentives if used in the long term

the brand image might be damaged to due too much promotion as it gets too

repetitive

Public Relations

the company's image might seem more credible as it is seen through a third party

such as the TV, magazines, internet etc.

if a company uses the right media, it could reach out to a wide audience

when third parties for instance give reviews, it would be hard for the business to

control what is being said about them.

Product

Streetwise: Veg Snacker, Chicken Snacker, Snack Box, Rizo Rice, Rizo Gravy, Mini

Krusher,

Snacks: Popcorn Chicken, Hit Wings, Boneless chicken strips

Veggie Selection: Veg Snacker, Veg Zinger, Veg Strip with Salsa

Toasted Wraps

Burger: Veg Zinger, Chicken Zinger, Tower Zinger

Box Meal

Chicken Delight: Fiery Grilled, Hot and Crispy, Original Recipe

Bucket Chicken

Signature sides: Corn on the cob, Coleslaw, Fries

Krusher: Frappe, Iced Mochaccino, Iced Cappuccino

Desserts: Soft wirl, Choamor, Brownie Sundae

Price

KFC follows both optionalpricing and mixedbundlingpricing. A consumer can buy dishes

from the basic menu and go for add-ons (Optional pricing) and there are combo offers

which comprise a mix of items. The pricing of products ranges approximately from 25 Rs.

to 675 Rs. KFC has variety of options in each category, For e.g.: In Bucket, there are
http://www.marketing91.com/pricing/http://www.marketing91.com/bundling/http://www.marketing91.com/bundling/http://www.marketing91.com/bundling/http://www.marketing91.com/pricing/http://www.marketing91.com/bundling/


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menus with 8pcs, 12pcs and also 12pcs variety bucket(Hot & Crispy Original Recipe and

Chicken Strips).

Place

KFC initially opened its outlets in metros and Tier I cities, now it has gradually moved to

Tier II cities where the buying power is one the rise due to rapid urbanization. KFC has its

outlets in all major cities and has overtaken Pizza Hut in Quick service restaurants. By the

year 2015, KFC is expected to have 500 outlets in India.

Promotion

KFC does promotional activities by offering add-ons to the existing menu, gift coupons, T-

shirts, Kids meal etc. KFC promotes its products through LCD displays kept inside its

outlets which promotes their products and kindles desires among consumer. India being the

country with largest youth population has favored the growth of KFC and it has become the

fastest growing fast food chain in India pushing aside McDonalds and Pizza Hut.

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 marketplace.

Product

Price

Place

Promotion

Product

Anything that can be offered to a market to satisfy a want or need. KFC's specialty is fried

chicken served in various forms. KFC's primary product is pressure-fried pieces of chicken

made with the original recipe. The other chicken offering, extra crispy, is made using a


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garlic marinade and double dipping the chicken in flour before deep frying in a standard

industrial kitchen type machine.

MARKETING MIX OF KFC

Marketing mix of KFC:

Kentucky Fried Chicken Corporation, popularly known as the KFC Corporation is the

worlds most leading and popular chicken restaurant chain. The firm is based in Louisville

in Kentucky. The firm is part of the Yum! Brands, the largest system restaurant company in

the world with presence in more 36,000 locations around the world.

Product of KFC:

The main product of KFC is the fried chicken in its various varieties like flavors & snacks,

plated meals, sandwiches and sides. Along with this they provide variety of salads and

desserts. KFC specialize in Original Recipe, Extra Crispy, Kentucky Grilled Chicken

and Original Recipe Strips with home-style sides, Honey BBQ Wings, and freshly made

chicken sandwiches. The product of KFC is unique and is widely famous among the

consumers for its Original Recipe fried chicken that was prepared with its exclusive and

secret blend of 11 herbs and spices in the same way as prepared by Colonel Harland

Sanders who founded KFC. The products of KFC are customized to suit the tastes of the

people in the nation in which it is operating. There are over 300 products of KFC all over

the world ranging from the salmon sandwich in Japan made from the commonly available

salmon fish to the Kentucky Grilled Chicken in the United States.

Place element of KFC:

The channel of distribution of KFC is a single level distribution system wherein KFC

distributes its products to the customers directly without any intermediaries. Upon targeting

the urban, youth population and the family sector, the outlets of KFC are conveniently


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placed in malls, and near colleges, shops, theatres, thereby enabling increased footfall to

the outlets. In some selected countries, KFC offers free home delivery to offices and

homes.

Price of KFC products:

The most common pricing strategy followed by KFC in most of its operating markets is the

skimming strategy. The products of KFC are priced high initially and are targeted to the

upper middle class population. Upon establishing a foothold in the market, the prices are

gradually reduced to attract the middle income group. This strategy helps them in achieving

better coverage of the market.

Promotion at KFC:

Of the various tools of promotions, KFC widely uses the advertising and sales promotions

to promote its products. The advertisement of KFC featuring its tagline finger licking

good is most inducing and is frequently broadcasted on television, radios, flyers and

billboards. The advertisement shows how a person get himself lost in the taste of the KFC

chicken and induces the viewer to taste one. The recurring broadcast of the advertisement

not only attracts a new customer but also acts as a reminder call of the previous experience

of KFC, thereby increasing the repeat purchase. And also the logo of KFC the smiling

face of colonel is one of the worlds most recognized logo in the world and has an

immediate reminding effect in the consumer. They also promote their brand and position

themselves as a responsible firm through various programs in the field of education,

diversity and animal welfare. It also uses various sales promotion tools like coupons,

discounts and gift certificates. The customers are provided with various forms of incentives

in various outlets of KFC. Benefits like free meals and free add-ons are given to the

customers through the coupons. They also provide customers meal vouchers and coupons

in the print advertisements which the customer can redeem at any of the KFC outlet.


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Geographic segmentation

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

customer. In India, KFC focuses how geographically its customers demand different

products. In north India Chicken is the main selling product, while in the south the Veg.

items sell more than the chicken.

Demographic Segmentation

In demographic segmentation, the market is divided into groups based on an age, gender,

family size, income, occupation, religion, race and nationality.

KFC divides the market on demographic basis in this way:

Age is between 6-65.

Gender is both males and females.

Family size is 1-2, 3-4, 5+

Income is Rs 10,000 n above.

Family lifestyle is almost all.


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Marketing strategy of KFC

Fast food retail chain KFC said it was gearing up to tap the country's college going crowd

by offering products at a more affordable price range, as it looked to take on rival

McDonald's.

We are aiming at the college goers with our new menu called ''Streetwise''. With this, we

are targeting the youth to project ourselves as a youthful brand," KFC India director

(marketing) Dhruv Kaul said. The company said the new menu will be priced between Rs

25 and Rs 100 and will be available across all the 108 stores in the country.

"With 'Streetwise,' we are offering a range of signature KFC products at affordable prices,"

he added. At present, KFC offered its products with prices ranging between Rs 65 and Rs

500. According to industry experts, KFC's Streetwise will be competing against

McDonald's, which had been heavily promoted as an affordable youth brand offering

products with prices starting from Rs 20.

KFC said it had also launched a new television commercial as part of the promotional

activities for the new offering. Besides, the chain, which was the official restaurant partner

of the ICC, was also gearing up to launch a special range for the World Cup.


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RECOMMENDATION & CONCLUSION

Following are the recommendations to KFC:

Short Term

Introduce new recipes suited to local taste.

Introduce cheaper items in the menu.

Introduce healthier recipe.

Differentiate through good service.

Work on the image of a healthy fast food chain through Advertising.

Long Term

Change the image of KFC from fried to healthy.

Open up new outlets in Urban locations.

Engage is CSR activities related to animals & Environment.

Develop a strong culture of good service.

KFCs competitive situation is not that much intense. It has established an image in

customers minds that works as a protection against competitors. The real strength of KFC

in view of its management & according to its customers perception lies in its physical

environment.the customer should feel good as he enters the restaurant. Their ultimate goalis their customer satisfaction. Their competent employees are the key to success.


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TABLE OF CONTENTS

1. INTRODUCTION

2. COMPANYS PROFILE

3. HISTORY OF KFC

4. PROMOTIONAL MIX OF KFC

5. MARKETING MIX OF KFC

6. MARKET SEGMENTATION

7. STRATEGIES APPLIED

8. RECOMMENDATION & CONCLUSION

Documents

MARKTING PROJCT