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