Zzz Final Report

8/9/2019 Zzz Final Report

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Kentucky Fried Chicken

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ACKNOWLEDGEMENTS

We would like to thank Mr. Javaid Ahmad for providing us the opportunity to work on

this report to improve our understanding of the Marketing Management Course. The

course of making this report has enlightened us with the various realities of Marketing

Practices.

We would also like to thank Mr. Humayun Siddiqui, Marketing Manager, Cupola

Pakistan, for giving his valuable time in helping us providing valuable support and

sharing with us the information which helped in the creation of the report.

We would like to extend our special thanks to Mr. Rangoonwalla who allowed us a field

visit to one of their farms which helped us in understanding their concept of value

delivery chain.

I would also like to thank the respondents who shared their comments about KFC and

gave their opinions on various questions which were helpful in making a consumer

insight about KFC.

Yours obediently,

Rizwan Ahmad (7847) - Group Leader

Haider Ali Siddiki (3713)

Rizwan Siddiqui (5957)

Palwasha Bashir (6893)Shakir Balagam (3590)

Syed Numair Ali Jafri (3942)

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Executive Summary

KFC Pakistans current focus is on urban markets. It is serving with 45 outlets in 11

major cities (Karachi, Hyderabad, Lahore, Rawalpindi, Islamabad, Faisalabad, Multan,

Sialkot, Peshawar, Jhelum and Gujranwala) across Pakistan. But the population structure

is fast changing with increased standard of living, booming middle class, and varying

lifestyles. The people are seeking convenience and the culture of eating out is fast

creeping in.

Keeping in view the changing structure of the industry, KFC Pakistan has targeted to

double its no of outlets by 2012, making themselves more accessible to the consumers.

They will not only be targeting urban areas but the sub-urban areas as well. One form of

expansion is the satellite outlet which tends to be smaller in size, with little or no

seating capacity, requires less investment and is often in nontraditional locations, such as

office buildings, department stores, airports, and gasoline stations; locations chosen

specifically to maximize convenience and consumer accessibility.

Needs

KFC Pakistan is catering to the basic need of hunger satisfaction accompanied with

Quality, Cleanliness, Service, Ambiance, Convenience Affordability and Fun.

Customer Focus

KFC has divided its customers in six categories: Kids; Teen-agers; Couples; Young

Adults; Families (upper class and middle class); and Fun loving groups of friends.

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The customers who are most attracted towards KFC are the kids. With a play place and a

gift in every chicky meal kids love it. During lunch hours mostly teen-agers, young

business executives and students visit KFC whereas in dinner timings all KFC outlets

packed with families and Fun loving groups of friends.

Added Value

KFC not only provides fast food but the ambiance as well. They have set their core

values called CHAMPS and they try to provide them to the maximum extent. It stands

for:

Cleanliness: committed to cleanliness

Hospitality: Knowledgeable, sensible.

Accuracy: Carry out orders to detail.

Maintenance: responsible for the atmosphere

Products: Product quality and consistency.

Service: speed quick service. On time, every time.

ConsiderationsThe considerations for KFC Pakistan involve the scenario of the competition prevailing

in the fast food industry. There are few international players with numerous local players

competing. The major international players include: Pizza Hut, McDonalds, Dunkin

Donuts, Nandos, Mr. Burger, etc. Some other international players like Al-Baik have

just started their operations. The local players have less accessibility to customers with

fewer restaurants. The prominent local players are: Bundo Khan, Karachi Broast, etc.

Future Scope

The target is to make KFC accessible to more and more customers by developing the

market beyond urban areas to sub-urban areas. The other task is to develop new products

for present customers and bringing variety in the menu which is being long criticized.

These products will be developed within the distinctive competency of KFC. According

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to Mr. Rangoonwala, they will limit themselves to chicken and fish and bring variety in

them and wont go for any other type of meet. The other daunting task is to maintain

market leadership in the fast food category which is being challenged by the competitors

by their moves.

About KFC

Perfecting its secret recipe of 11 herbs and spices in 1939, KFC has come a long way.

With over 10,000 outlets in the world, KFC has maintained its title, for the last 60 years,

of being the chicken Experts. Opening the first KFC outlet in Gulshan-e- Iqbal in 1997.

KFC wore the title of being the market leader in its industry. Serving delicious and

hygienic food in a relaxing environment made KFC everyones favorite. Since then, KFC

has been constantly introducing new products and opening new restaurants for its

customers.

Presently KFC is branched out in nine major cities of Pakistan (Karachi, Lahore,

Gujranwala, Sukkur & Muree) with more than 45 outlets nation-wide.

Facts:(Source : www.kfcpakistan.com)

Apart from fulfilling their commitment of serving delicious, fresh and hygienic food and

at the same time providing their customers with the ultimate entertainment; KFC also

plays part in the economic development of our country. As

Presently KFC has provided employment to over 1200 Pakistanis, which adds up

to 6000 individuals directly dependent on KFC Pakistan.

The government of Pakistan receives over RS 10 million per month from KFC

Pakistan as direct taxes.

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95% of all food and Packaging material used in KFC Pakistan is produced

locally, which sums up to a purchase of over RS 35 million per month.

Each new outlet developed by KFC Pakistan costs approximately RS 40 million,

which is a huge amount for our Construction Industry.

KFC in Pakistan is being run by Cupola, a Dubai based multinational which holds the

master franchise rights to operate KFC in Pakistan.

Cupola Pakistan

Cupola is a Dubai based multinational company involved in several businesses including

oil gas exploration, plastic cards, retail markets and food franchising. Cupola holds the

master franchise rights to operate KFC in Pakistan.

Vision

Cupola creates value through change, challenging existing paradigms and by applying

vision innovation and skilled execution. They seek opportunities for investments where

others do not look and they examine these opportunities with open mindedness, through

ness and hardheaded practicalities.

Mission

Cupola mission is to harness and to reap the potential of the rapidly developing markets

of the Arabian Peninsula and South Asia. In the mature capital markets of Europe and the

United States, they are well regarded as innovative and creative niche investors. They

believe in the minimization of risks: through the depth of their senior management and

the quality of their professional staff; through exhaustive and through an emphasis on

pre-feaasilibility. What everyone in Cupola shares is an almost obsessive drive for quality

and active consciousness of the team approach and a commitment to their collective

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success? They strive continually to improve the tangible and intangible returns for all

their stakeholders.

INDUSTRY BACKGROUND

KFC Pakistan comes in franchised fast food category. The fast food industry is very big

and has both formal and informal segment. Under the formal segment there are franchise

restaurants and single-outlet brands. The informal sector is also showing its significance

and we see outlets at each corner of the street.

The formal sector is gaining momentum and more and more international franchisers are

coming in Pakistan. It dates back to 1994, when Pizza Hut (a big fast food chain) opened

its operation in Pakistan. Then in 1997, KFC inaugurated its first outlet in Gulshan-e-

Iqbal Karachi. Then there have been lot of restaurants opening up around in Pakistan that

include international franchises like McDonalds, Dunkin Donuts, Nandos, etc. Some

other international franchises are planning to come to Pakistan in the near future. These

international franchises are termed as QSR (Quick Service Restaurants). They havecertain standards which they strictly follow to maintain the quality and taste.

Perfecting its secret recipe of 11 herbs and spices in 1939, KFC has come a long way. Its

history dates back to 1952 when its first outlet was opened in South Salt Lake, Utah,

USA. The entire KFC franchising operation was sold by its owner, Sanders, in 1964 for

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$2 million. Since then it has been sold three more times, most recently to PepsiCo. In

1997, it spun-off of its quick service restaurants - KFC, Taco Bell and Pizza Hut - into

Tricon Global Restaurants, Inc. Then, in 2002, it changed its name to YUM! Brands, Inc.

It now owns KFC, A&W, All-American Food, Long John Silvers, Pizza Hut

and Taco Bell restaurants.

YUM! Brands, Inc. is the worlds largest QSR Company is terms of system unit. It has

over 20,000 outlets around the world in 100 countries out of which 12,000 are KFC

outlets. It had global system sales of over $56 Billion in year 2006.

Cupola has the master franchising rights to operate KFC in Pakistan. It is a Dubai based

multinational company, established in 1994, involved in several business including oil &

gas exploration, plastic cards, retail markets, and food franchising. Cupola is an Asian

Development Capital and Operating Group. The group has offices in UAE, U.S,

Switzerland and Pakistan, with head office in Dubai. Its business activities are conducted

through four clearly defined business groups: Capital Group; Industrial Group; Consumer

Group; and Information Group. It has turn over of $400 million with operating staff of4500.

KFC is all about food, fun and festivity, and is what leading the market since its

inception. It provides the ultimate chicken meals for a chicken loving nation. Apart from

fulfilling their commitment to serve fresh and hygienic food and providing customers

with fun and entertainment, it also plays a part in economic development of our country.

Presently, it provides employment to over 1200 Pakistanis, which adds up to 6000

individuals directly dependent on KFC Pakistan. It pays over Rs. 10 million per month as

direct taxes.

Market Analysis

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Market Size and Growth Rate:

The market size of Western Quick Service Restaurants (the international fast food chains)

is Rs.5bn and the market is growing by about 10%.

Stage in life cycle:

The fast food industry is in growth stage. This can be depicted from the fact that the

number of restaurants is increasing; local outlets and international franchises are coming

to Pakistan.

Industry Product Life Cycle

KFC

Pizza Hut

McDonalds

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GROWTH MATURITY DECLINE

SALES/PROFITS

INTRO


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Inference

Within 10 years KFC has surpassed Pizza Hut in terms of restaurants

Both KFC and McDonalds have gained market share from Pizza Hut

Pizza Hut has not been able to gain advantage of first mover

Product Characteristics:

The food products from international food franchising are standardized. The quality and

taste do not differ among outlets. They are considered to be hygienic, delicious, healthy,

fresh, but expensive.

Entry/Exit barriers:

In the fast food industry there are not any entry and exit barriers in terms local informal

sector. But, for the international food franchising there are barriers to entry and exit. An

international food chain has to invest huge amount of capital to establish a strong

distribution network. KFC Pakistan has invested in 44 outlets in 11 major cities. Each

2006

KFC

51%

Pizza Hu

26%

McDonalds

23%

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1998

KFC

38%

Pizza Hut

54%

McDonalds

8%


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new outlet developed costs them approximately Rs. 40 million, which is a huge amount

for our construction company.

There is a culture and perception barrier which hinders the sales in the industry. That is,

people do not consider fast food as quick service. It is still considered a planned trip to

visit a fast food outlet.

SWOT ANALYSIS

Strengths:

1. Established brand name.

2. Efficient distribution network. KFC has the maximum number of outlets all over

Pakistan. It is the largest food chain restaurant in Pakistan.

3. It maintains a unique taste which is similar through out the world because of their

secret recipes.

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4. It has capital in abundance.

5. KFC maintains strongly tied relations with its suppliers. Not only the relations are

strong but the suppliers are best in their own category. Like KFC gets it chicken

from K&Ns and soft drinks from Pepsi Co.

6. Since the parent company i.e. Tricon is in operations for several decades and has

the experience of running big names other than KFC like Pizza Hut and Taco Bell

it has gained operational efficiencies which a new company will only have after

years of operations.

Weaknesses:

1. It has a limited menu.

2. Children are most crude form of target market and currently KFC has not much

attractive features available for them. For children, they only have chicky meal

which does not have anything special for children as compared to McDonalds

which give colorful toys to the children.

3. They dont have any of their special sauces.4. They have failed to match their products with Pakistani tastes. Like Pakistanis are

fond of spicy foods and their products are low in spices.

5. Not very aggressive marketing.

6. In adverse situations like bird flu they do not start awareness campaigns due to

which their profit declines.

Opportunities:

1. Developing fast food culture in Pakistan

2. Large segment of market is untapped like provinces like NWFP and Balouchistan.

3. Being relatively low priced from its competitors allows KFC to expand more

rapidly then its McDonalds, Pizza Hut, and Nandos etc.

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4. KFC, being the market leader can diversify by introducing new products such as

recent Fish Zinger

5. High growth rate of market.

6. KFC can further franchise to superstores, petrol pumps etc like Dunkin Donuts

7. KFC can introduce coffee, tea, lemonade etc to its menu

8. KFC can enter into strategic partnership with other firms like it recently did with

some mobile phone companies. It can even consider entering into some kind of

alliance with its competitors

9. To reduce its cost to further levels, KFC can also consider backward integration

by acquiring major suppliers of its process and then revamping the entire value

chain to bring down the cost to the minimum possible level

Threats:

1. Being a foreign brand, KFC is made to suffer for whatever unwanted and

unfortunate situation occurs in global scenario.

2. New entrants are a major threat as several global fast food brands are alsoconsidering to enter Pakistani fast food market and they are likely to come into

operation in next 3 years

3. Local competition is also a becoming a threat as we can see a fast food restaurant

opening up in every street.

4. KFC brand name has been tried to copy. Interior Punjab has some competitors

with names similar to that of KFC like DFC, AFC etc, with one competitor in

Peshawar actually started to operate with the name KFC and then the company

had to send a legal letter to request condemnation of such activity.

5. KFCs patent product Zinger Burger has become a name that almost every

small local competitor is using. It is almost impossible to stop the activity on such

wide scale.

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6. Bird flu is also a threat to KFCs business. Although it is evident one cannot get

bird flue from fried chicken cooked at more then 100 degree centigrade. But

whenever there is bird flue hype, the business of KFC goes down significantly.

7. Fierce competition in the industry has forced KFC to reduce its price to very low

levels. Increase in competition will trigger up the price cut war and may affect the

profitability of the company

8. Due to the vary nature of the KFC products which mostly comprise of chicken are

not spicy if viewed in terms of Pakistani taste preference. There is a possibility

that consumes might get bored of KFCs products with the introduction of new

competitors. KFC should act fast in this regard

9. Relatively unstable political environment of Pakistan is also a threat as if the

government changes, then there is no anticipation of what kind of policies will

they implement. Will it be favorable or unfavorable and what effects will it place

on the industry.

Recommendations

Strengths - Oppurtunities Strategies:

1. Established brand name permits KFC to operate in cities which they couldnt

previously think about like Peshawar.

2. Since the growth rate of market is high and they have adequate capital available

for them with an established brand name they can capture new markets.

3. KFC can further franchise to superstores, petrol pumps etc like Dunkin Donuts

Weakness - Oppurtunities Strategies:1. KFC can introduce coffee, tea, lemonade etc to its menu.

2. Introduce sauces and salads.

3. Offer gifts to children with their chicky meals and make chicky meals more

attractive to children, which they did few years back but these offers should not

be seasonal.

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4. Introduce more products like Zinger Extreme for customers that are fond of

spices.

Strenghts - Threats Strategies:

1. It should make itself part of Pakistani culture and act as local company and its

established bran name and good reputation will support this in doing so.

2. Although having a unique secret recipe for around 50 years. It is now required to

temper with the recipe to make it more country responsive as it is the case with

Pakistan where the taste of KFC is largely perceived as low spicy.

Weakness - Threats Strategies:

1. Having plenty of capital, KFC can start aggressive marketing in collaboration

with government to create awareness about bird flu and KFCs steps to make its

chicken free from any infections.

2. With a limited menu they are unable to compete even with local competitors.They must enhance their menu while adhering to their core business of being the

chicken experts.

Value Delivery Chain

To bring the cost down, KFC has placed especial attention to revamp the value chain.

They have their own quality standards that are given to them by KFC Global. Their job is

to follow those standards while keeping the cost low.

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The suppliers of KFC are large organizations like K&N, Unilevers, Dalda, Pepsi, and

Hafeez Printers. For their raw material that is raw chicken they buy it from the farms of

K&N according to specific specification on which K&N produces the chicken for them.

They usually have a contract for a particular time period in which they setup an agreed

price on which KFC buys chicken from them.

The standards for food and services are given to KFC by their headquarters in order to

ensure that the consistency of food and service are displayed. Consumers view KFCs

food to be hygienic, clean and delicious. KFC remains as the consumers top preference

due to the delicious food it provides. The concerns over quality of KFCs food arise to

some extend when the bird flue disease rises in the country. However consumers are now

viewing KFCs food as being of high quality.

Quality checks on the chicken are a compulsion on the part of K&N. They are required to

conform to all the quality standards as per specified to them by KFC. KFC also has

occasional checks on the farms of K&N to monitor the quality of the chicken being

provided. They discard any piece of the chicken which is not as per their prescribedrequirement.

Bargaining power comes with bulk buying. In this industry the bargaining power resides

with those who purchase in huge amounts. KFC are purchasing large amounts from their

buyer which gives them the edge over their suppliers in negotiations, the small fast food

outlets do not enjoy the same privilege. They do not have much negotiating power with

their supplier so they ended up buying with relatively high cost compared to their huge

competitors.

KFC has bargaining power over its suppliers. It has a good negotiation and understanding

with them. It helps them determining their product cost on scientific grounds which help

them reduce their cost to a minimum level and pass on the benefit. So it becomes a win-

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win situation for both the parties. Most of the time, they have two suppliers for every

thing and whoever has better pricing, KFC buys from them.

Previously, KFC used to educate local vendors about costing of the products that from

where they can reduce waste and bring efficiency in costs. But, it was difficult to

convince them. So, KFC used to import lot of raw materials from abroad. Now, the local

industry has quite developed and producing quality products according to the

international standards.

95% of all food and packaging materials used in KFC are produced locally, which sums

up to a purchase of over Rs. 35 million per month. This provides KFC the bargaining

power with its suppliers and they are able to minimize their cost while keeping up with

their standards.

To cater to the fluctuation in prices of raw materials especially chicken, they have set a

fixed price for customers, and absorb the variability in prices. With the vendors, they

have a formula set on average prices of chicken. The pricing strategy is set on annualbasis. If the prices of chicken reduces, they get benefited otherwise they absorb it.

Usually, the prices of chicken go down in winter and go up in summer. KFC has specific

standards for accepting chicken from the suppliers like it must be certain days old, having

this much weight and size, etc. They do not accept variation among chicken. This helps

them maintaining their standards.

The backward integration in the fast food industry depends on the sales of the outlets. It

is only feasible when there is high sales volume which can come from large number of

outlets considering the hygiene factor and cost involved with that. KFC Pakistan has

plans to have chicken from its own poultry farms. Currently, it buys chicken from K&N

only.

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Recommendations

KFC plans to have its own farms to reduce the cost of its raw materials but we suggest

that KFC should stick to its core business which is the retailing of high quality food and

to focus more on giving more value to the customer. This is because K&N and other

poultry farm has already specialized the poultry business and now use technologically

advanced measures to manage their business so its best to just outsource the purchase of

raw materials. And since the poultry business, in the past few years have been affected by

the dilemma of Bird Flu which has resulted in major losses, its best KFC stays away

from having to manage its own farms.

However, what we recommend is that since KFC since its inception have been buying its

main raw material from K&N only it would be wise to also bring in another big supplier

such as Value Chicken which would increase the level of competition between them and

the price war between them will make KFC benefit in terms of low cost and better

service.

Based on the costing that we received on packaging that KFC is spending on its products

we believe there should be immediate costs. Now in packaging there are a number of

items which are common to a lot of Fast Food restaurants (Mc Donalds, Pizza Hut) like

tissues, shopping bags & parcel bags. So we suggest that KFC can in alliance with other

major Fast Food restaurants give contracts to its suppliers which will give them more

bargaining power and benefit all the fast food chains.

There are still, few items which are being imported from abroad due to non-availability

of those particular items in Pakistan which always results in high cost. We suggest that

research and investment be made to be able to produce or acquire those items locally.

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CONSUMER BEHAVIOR MODEL

The consumer buying behavior would most logically match the Variety seekingmodel.

Consumers eating out at restaurants are usually more than willing to try out new food

items. KFC takes such behavior into consideration and accordingly introduces new items

to the variety-seeking consumer.

The degree of involvement would be proportional to the level of stakes involved. When

concerned with eating out, one would logically rank them as low. At the same time, there

is also a vast segment of people who are very particular about the places they go to eat.

Many such people are unwilling to try out new places, and are very sensitive to all

sources that would convey to them information on a restaurant. It is for these very people

that there are restaurant reviews.

KFC consumers find significant differences in brands due to which KFC has a high brand

equity and loyalty. After initially establishing itself, KFC is providing high quality and

service because of which it is catering to the growing market.

Recommendations

Mostly the consumers go for the taste of the food that they are purchasing, however for

certain consumers the decision making attribute may vary. No matter how much a

consumer likes something but in our society, price of the product places an important

effect on the buying decision of any consumer. Mostly families like to have fun with their

kids so they prefer the restaurants that can give some entertainment to the kids. Hence we

recommend KFC to invest more in establishing a connection with the kids by offering

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them new varieties of entertainment such as gaming facilities in the restaurant rather then

just another play area.

Another consideration at times is the quick delivery of the order. And since KFC is still

not taken as a FAST FOOD restaurant we recommend to have drive through present in

every restaurant which gives KFC the advantage of increasing sales because of quick

delivery.

Young consumers who go out with their friends want a place to hang out and have a

laugh with their pals so they prefer a rather informal environment where they feel more

comfortable. Hence we recommend a change in the seating plan of having a particular

section of the restaurant with more comfortable seating rather than the actual rigid seating

of KFC.

Taste and Price are the attributes that a person would see on an individual level before

making the decision. However, we cannot eliminate the overall experience the restaurant

delivers to an individual which determines the buying behavior of an individual. Hence,

we recommend that special care should be taken that the food which is served should bevery fresh and of high quality and instead of just having value deals, special promotional

deals should be present (like the ones they do in Sehri during the Ramadan) to attract

people who might not have been to KFC for sometime and would probably be tempted to

because of lower price.

One more factor which is very important in the behavior decision model is the prime

location of the restaurant which is easily accessible to the consumers. There are

traditional locations like a main street. There are non-traditional locations as well such as

office buildings, department stores, airports, and gasoline stations, chosen specifically to

maximize convenience and consumer accessibility. We believe KFC has done well in

selecting attractive locations. We recommend that they open up an outlet at the Railway

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Station and Airport which have a very high turnover of passengers going out and coming

in the city.

Segmentation

KFC has defined segmentation levels. The basis of segmentation conforms to the

companys organizational objectives as a whole.

Geographic:

Cities: Karachi, Lahore, Rawalpindi, Faislabad, Multan, Peshawar, Sailkot, Hyderabad,

and Islamabad

Demographic:

Age: 8 and above

Family Size: 4-5 or more members in a family.

Family Life Cycle: Young, single, young married with no children, young married with

children, older married, under 18, teenagers.

Gender: Male, Female

Income: Rs.30,000 Rs.400, 000

Occupation: Professional and technical; managers, official, and proprietors, clerical sales;

retired, students.

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Religion: Muslims, Parsis, Christians.

Psycho graphic:

Lifestyle:Outdoors oriented

Behavioral:

Occasions: Regular Occasions, Special Occasions like Birthdays, Parties, Mothers Day,

Fathers Day, Valentines Day, Eid Etc.

Benefits: Food, Quality, Service, and Economy

User Status: Regular Users

Usage Rate: Medium Users and Heavy Users

Loyalty Status: Strong

Attitude towards Products: Enthusiastic, Positive

RECOMMENDATIONS:

KFC should target the mass population of Pakistan also and that is lower middle but at

the same time keeping its good image in upper uppers. Because doing this can badlyaffect the image of KFC in the upper upper segment's mind, which is its original target

population.

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The segments created by the restaurant are wide, they should be narrower and KFC

should provide different facilities to different segments so as to create different value to

different target audience.

Besides its standardized culture and environment of the restaurant it should also give a

regional touch in its environment. Karachi as its a mixed culture environment its should

present a blended culture to please the masses of the city.

The income bracket as mentioned above varies from Rs. 30000 to Rs.400000 but the

main focus is on the population having the income of Rs.30000 to Rs. 200000. KFC

should concentrate a bit more on the segment which is not targeted properly. To cater this

segment KFC can introduce expensive items and deals but with greater value to attract

the upper segment of the target.

KFC should also try target the kids segment more as a research shows that a lot of kids

prefer going to KFC because of the fun activities available for them

KFC should have a school drive program where they should set up occasional stalls atvarious schools and sell their food at low cost and give the children free goodies which

would in turn make them ask their parents to take them to KFC. This way KFC will end

up making more sales.

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Positioning

KFC is using all differentiation variables. Their main weapons are product, service and

image

PRODUCT DIFFERENTIATION

KFC differentiates its product through its unique recipe of chicken and they also say that

the food, quality and service they are going to provide will be 100%

SERVICE DIFFERENTIATION

Value added services are key to success. Self-service counters have eased the ordering

process and KFCs free home delivery, which is faster, then consumer perceives,

minimizes waiting time ads preference and builds impressive reputation. KFC has also

introduced drive thru which is located at Park Towers due to which it has become really

convenient for the consumers to pay a regular visit to KFC.

IMAGE DIFFERENTIATION

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The Colonel Alfred.F.Kentucky who represents the logo of KFC signifies that he is the

pioneer of the restaurant. The logo shows uniformity of taste and quality in every outlet

of KFC through out the world. The logo also gives an image of an old heritage due to

which the customers can completely trust KFC.

Excite the Sensesis the new tag line of KFC, which tells that it is a taste oriented

restaurant and everybody is welcomed. The space and outlook of KFC restaurants creates

the unique environment and sends a message on its own.

RECOMMENDATIONS:

As KFC is one of those corporate giants, which is affected by America war on Iraq

(especially in Muslim countries), it can launch social campaigns for the welfare of society

to compensate for decline in their image.

It can ask customers on their web sites for suggestions about which features are worth

adding and analyze cost with value can pay dividends for the company and offer somerewards to those Customers whose suggestions assist them in meeting their ends.

It can train its personnel to improve their communication skills in different languages

(French, Arabic, Chinese) as many foreigners visit KFC outlets in Pakistan.

The user positioning strategy can be very effective. The restaurant can be

positioned against those who are fond of chicken and also who lead an

enthusiastic and energetic life.

KFC should come out with different types of sauces, which can be used with

burgers, chicken and other meals e.g. the sauces of Nandos.

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KFC should introduce new flavored corn on the cobs like Bar-B-Que, Lemon,

Cheese and etc.

New attractive variety of desserts should be introduced.

KFC should come up with a new scheme called KFC on Wheels

As new restaurants are paying a lot of attention on interior so KFC should also

start focusing on its interior decoration.

As also mentioned above the main course of KFC is FRIED crispy chicken which

some times gives customers a negative impression. KFC should add a new product in

their category with crispy chicken but not fried. That will target the people who are

health conscious and because of this reason do not eat out in KFC.

KFC's product differentiation is very well done but the need to focus on their service

sector as they are only offering what other restaurants like Mc Donalds and pizza hut

do, they should provide their customers with some extra service to create a

differentiated image. to do that they can add 1 employee each outlet which will only

go and visit every table and ask whether the customer like the service and the product

and if any of the customer having any problem he/she can solve the problem there

and then. out side every outlet their is a guard but he is never helps in parking a car or

in finding car parking. The guard should be trained to help each and every car to give

satisfaction to the customer.

The image of KFC in the minds of the target audience is as of a family restaurant,

which adds value to the brand as families, and also girls can go their any time. But

this image is also portrayed by Mc Donalds when in their advertisement a little girl

with her father says dad "I m lovin it ". So KFC need to bring some thing different to

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add in their image besides labeling their restaurants as a family restaurant. They

should do some thing extra to enforce this image in the customer's mind. This can be

done by adding value for all its customers by ways mentioned above in our

recommendations.

KFC: Product Lines

KFC carries eight-product line in Pakistan comprising of Fried Chicken, Burgers, French

Fries, Rice, Hot Wings, Nuggets, Dessert and Beverages.The width being eight, KFC has

also extended each line but introducing a variety of items within each line. The Product

line widths and lengths are summarized below:

Product Lines- Width: Fried Chicken, Burgers, French Fries, Rice, Hot Wings,Nuggets, Dessert, Beverages, Soup, Fruit salad and Corn on the cob

Product Lines- Depth:

Burger

Zinger Burger

Colonels Chicken Burger

Colonels Fillet Burger

Machos Burger

Chicken

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1 piece

2 pieces

5 pieces

1 pieces

15 pieces

20 pieces

Rice

Rice n Spices

Arabian Rice

Nuggets

5 pieces

20 pieces

Hot Wings

5 pieces

10 pieces

French Fries

Regular Fries

Large Fries

Soups

Hot and crispy soup

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Desserts

Ice cream in cup and cone

Apple Pie

Apple Pie Alamode

Beverages

Pepsi

7 up

Mountain Dew

Miranda

Tea

Coffee

RECOMMENDATIONS:

Widen the product lines by introducing new categories. E.g. Sandwiches, noodles

with hot and crispy chicken, etc

Lengthen existing product lines by introducing new items targeted to new and

existing segments. This is done by line filling, e.g. flavored chicken pieces according

to the taste of the consumers like extra hot, mild, lemon and herbs, and garlic. They

can introduce ice tea. green tea, cold coffee and cocktails in the beverages line.

Deepen the lines by adding variations in serving sizes for those items without a depth

element e.g. soup, corn on the cob.

KFC can be very profitable if it decided to prune unsuccessful items in its mix. Like

Arabian rice and fruit salad. Instead of investing in these unsuccessful items KFC can

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focus more on their existing and successful items so as to completely satisfy the

consumers.

The Company can also use line modernization to encourage customers to move to

higher valued, higher priced items.

A down market stretch can also be considered if the management wishes to increase

market share by targeting a lower income segment. E.g. introducing new low priced

burgers, which would range around Rs.50.

Branding

According to a survey, the reputation and image in consumers mind of KFC and its top

Page No. 31

Healthy Food

Serves food quickly

Expensive

Light food

Place to have fun

Less variety in menu

Noisy

Special meals for kids

Gifts for kids

Party Hall

Playing area

Serves tasty food

Serves fast food

Special meals/deals

Affordable

Fresh food

QSR DescriptorsQSR Descriptors Brands AssociationBrands Association


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competitors are:

KFC is the market leader in the fast food category, which as around 45 outlets in 11

major cities of Pakistan employing over 1200 individuals. The founder wanted his

restaurant to be known by his own name that is why he named it Kentucky Fried Chicken

as they deal in fried chicken. To make it even shorter an attractive they abbreviated to

KFC.

KFC brand identity- is the promise to deliver a specific set of attributes (i-e tasty,

delicious etc), value (i-e satisfaction) and services consistently to the buyer. KFC

promises is customers t give food, which is Finger Likin Good. KFC uses its name and

Colonel as its symbol as its brand identification.

KFCs brand image on the other hand has worked really hard on the consumer experience

to make sure that the customers get what they think and see. The KFC name instantly

projects an efficient and a high quality culture. Brand equity for KFC is very high

according to research.

This has benefited the company in a number ways:

BRAND AWARENESS:

The Company enjoys lower marketing costs because of consumer awareness and

loyalty, as its a well-known franchise.

BRAND PREFERENCE:

The Company charges a higher price than its competitors.

BRAND ACCEPTABILITY:

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The company can more easily launch extensions because of high brand name

and credibility as it has already launched Hot and Spicy Rice.

KFC has used both the line extension and the brand extension brand strategies.

E.g.: Macho and Hot and Spicy Burger are all new addition to the existing product

line.

RECOMMENDATIONS:

KFC should go for extensive brand marketing research so that the brand managers can

have a proper understanding of their brand assets, secondly they can identify

opportunities for building and leveraging the brand equity and lastly they can easily

pinpoint the areas where brand building investment will achieve significant returns.

To discover brand essence, it can conduct qualitative brand identity research (focus

groups and/or individual interviews) with brand users and non-users. The projective

techniques (e.g., associations, representation, etc.) sharpen distinctions among brands and

provide insights into the unique character of each. This initial exploratory work also

provides guidance for the comparative brand image and performance survey. KFC

should conduct survey and research in order to find out consumer perception about their

brand so as o how can they improve their brand image. They should pay closer attention

to create brand awareness in the minds of the consumers.

KFC should conduct brand image and performance assessment in order to identify the

tangible points of differentiation so that they can cater to the unmet customer needs.

Through this assessment KFC can highlight their strengths, asses their deficiencies, and

can also pinpoint their opportunities.

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If KFC wants to capture a greater market share, rebound against its competitors, add

value to its products and lastly gain assess in its distribution channel they should carry

out a proper research regarding their brand equity.

As the food industry is growing rapidly, KFC should have a brand health tracking

program so that the can identify their issues, establish a relationship between the actions

and the market research, monitor the performance of their brand,

measure the impact of brand-building initiatives, and also measure competitive threats.

It is important that the key drivers of brand equity be identified and understood as part of

the measurement process. Most often this is accomplished by directly incorporating a

detailed brand image and performance assessment into accompanying research.

The brand name can be positioned on other levels e.g. user, personality etc.

KFC should try to increase brand equity, thus increasing brand loyalty and reducing

chances of brand switching.

KFC should have a persistent tag line to reduce customer confusion as they keep on

changing their tag line with every new arrival of their meal.

KFC can increase its brand equity by concentrating on the customers who have a habit of

changing brands, these are the customers who are satisfied but still willing to incur costs

by changing the brands, those customers who value to brand and consider its as a friend

and those customers who are devoted towards the brand.

Brand awareness and acceptability of KFC is good amongst the masses of the world and

the city, to be more precise, but KFC should improve its brand preference and brand

loyalty. Increasing brand loyalty for a fast food restaurant is very difficult as its not an

easy task to differentiate the brand from others but KFC need to do that to increase its

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brand equity to increase its brand awareness KFC can also sponsor different family

events in different colleges and universities. it is advised to sponsor family events like

mother's day and other because the image of KFC is a family restaurant.

KFC does multi branding when it introduces combos and zingers but it should be done

aggressively as different brands target different target population.

Research Findings:

A research was conducted to find the most preferred brand for particular occasions. The

results are as follows:

Brand Most Preferred for this Occasion (%)

From or

at work

With

Family

With

friends

Kids

birthday

parties

Other

Occasions

and

celebrations

KFC 66 50 45 47 46

McDonalds 16 25 28 39 29

Pizza Hut 10 19 16 8 14

Others 8 6 11 6 11

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Total 100 100 100 100 100

Source: All Respondent 720

Interpretation:

The most preferred brand among all occasions is KFC

Area for improvement for KFC is young generation which prefers KFC only 45%,

the lowest among other occasions. It should introduce such products which appeal

youngsters in their friends gathering.

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66

16

10

8

90%

100%


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Competitive Profile Matrix (CPM)

CRITICAL

SUCCESS

FACTORS

WeightKFC Pizza Hut McDonalds Nandos

Local

Restaurants

Rating Score Rating Score Rating Score Rating Score Rating Score

Brand name 0.1 4 0.4 4 0.4 4 0.4 3 0.3 3 0.3

Product

quality0.15 4 0.6 4 0.6 3 0.45 3 0.45 2 0.3

Food

variety0.2 1 0.2 3 0.6 3 0.6 3 0.6 4 0.8

Taste 0.2 3 0.6 3 0.6 3 0.6 2 0.4 2 0.4

Ambiance 0.1 3 0.3 3 0.3 3 0.3 2 0.2 1 0.1

Marketing 0.1 2 0.2 2 0.2 2 0.2 1 0.1 1 0.1

Distribution

network0.1 4 0.4 3 0.3 3 0.3 1 0.1 1 0.1

Financial

position0.05 3 0.15 2 0.1 2 0.1 2 0.1 2 0.1

Total 1 2.85 3.1 2.95 2.25 2.2

Interpretation:

In this CPM, taste and food variety are the most important critical success factors as

indicated by a weight of 0.20 followed by product quality at 0.15.

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Now according to this analysis, Pizza Hut stands at the strongest position followed by

McDonalds, KFC, Nandos and local restaurants. Basically, the reasons for KFC to have

a moderate position are:

It has a limited menu.

It has failed to match its products with Pakistani tastes. Like Pakistanis are fond

of spicy foods and its products are low in spices.

KFCs Global re-imaging

There are some brand equities of KFC. Among those equities the logo and colors of KFC

are the most important one. KFC Global is planning to change the look of its logo,

Colonel Sanders. The research by KFC Global in some countries states that consumers

look at the brand of KFC as being a very mature and some extend old brand. So they

have planned to change the logo. Currently the KFCs logo is Colonel Sanders wearing

an old white suit.

They are planning to put Colonel in white apron to make him look more lively, fresh and

vibrant. The impact will be deepening by keeping the color white and red intact.

According to the CEO, it is a very positive change to make KFC in accordance with the

environment.

KFC is not changing its strategy with this re imaging. With time they have to change

certain elements of brand for ex. Coca Cola changed its bottle several time but the brand

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logo remained there. So does the KFC is doing to make the brand more vibrant but the

brand logo i.e. Colonel will remain intact. There will be very light changes in the brand

logo by change in Colonels cosmetics. The main reason for this change is to make KFC

relevant with time. In the words of Mr. Rangoonwala, CEO Cupola Pakistan, If we dont

change with time, then the time will change us.

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Kentucky Fried ChickenServices

Service Blueprint:

arkingCustomers enterthe restaurant

Customers wait in que fortheir turn to come

Customer person greetsthe customer

Customer givesthe order

Bill iscleared out

Give the

food to the

customers

EatSit Le

Order is tr ansfe rred to the kitchen Food is given to the counte r per son

Chef starts preparing food Food is prepared

Raw material

received from KFC

warehouse

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Gap Analysis

Gap 1:

First gap occurs when staff perceives some thing else that the customer must be needing

some thing else but actually customers expects service other than the staffs perceived

one. if this gap is filled the other gaps are minimized automatically.

The first gap in KFC service occurs when the staffs perceives that the customers are finewhen they them selves in parking their cars. On the other hand the customers expects a

guard who will help them in parking their car or at least in finding a nice secure place for

them to park the car.

Recommendation:

This gap can be over come by making their guards help the people in finding a secure

place where they can park their car but also help them in doing so. They can also train

their guard to take the keys from the customers and park their cars and take also take car.

This will definitely delight the customers as in this era its not enough to satisfy the

customers but to delight them.

Gap 2:

This gap occurs when the management perceives some thing else but translate it in

something else.

This further increases the gap as in the first place the management perceives some thing

wrong and also when translates it goes more away from the expected service.

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While entering the outlet the customers expects that they will find some one well come

them as it is done in pizza hut. They also expects that the employees will also ask how

many persons are there and will make the customers sit but it is also not their. This

further disappoints customers.

The management perceives that the customers are only in search of good food and

nothing else and when they translate it and write them in their memos they create a gap

there also. They write that for example the customers are interested in good food and

friendly environment.

Recommendations:

This gap can be filled by understanding correctly what the customer need and then

translating it rightly in to their memos. This gaps deals with the expected interaction of

the employees with the customers. The management should prepare a new blue print

explaining what the employees should do to delight the customers.

The management can also try to make efforts to change the expectations of the

customers.

The management should train their employees to well come the customers.

Gap 3:

When the management has written some thing else and the employees deliver the service

not on the bases of that service blue print and odes not interact in the same way asprescribed by the management. This creates the third gap in the service.

Their employees are trained and directed by the management that the employees should

take the order from the customers with a smile on their face. The customers were even

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offered a drink if they were not entertained with a smile, but it happened many times

when their employees were not doing what was directed.

the customers also perceives that they will find a nice cleaned table but this does not

happens every time.

Recommendations:

The service blue print should not show the services, which is in the current situation

impossible to do. the employees at the time of hiring should be provided with the service

blue print so that they from the first day of service try to do what id desired.

KFC can hire a person who visits every table and asks people if they are comfortable and

also they can look after these petty things, which create a negative image in the customers

mind.

KFC should give incentives to the employees who perform according to the prescribed

service to encourage others to do so.

Gap 4:

this gap is created when the service delivered is not the same as it is shown in the

advertisements and in differs from the external communication.

KFC shows a KFC guy helping a little kid in taking its order from the counter to his table

but this is not what happens in the out let. This ad increases expectations of the customers

from the employees and when they visit the place the get dissatisfied instead of getting

delighted.

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Recommendations:

KFC should stop advertising what is not correct because this create a negative image and

also increases the customers expectation which when are not full filled creates

dissatisfaction.

Either the management should start performing up to the level, which is shown in the ads,

or they should stop giving these kinds of ads.

Gap 5:

the last gap is between the perceived service which is the service given to the customers

from the customers' view and in the expected service. When the customer enters KFC

he/she is expecting some service from the employees and when the customer is served

that service if different from the expected one creates the last gap.

The customers when coming to the outlet expects that they will first be entertained by the

guard, then an employee will well come them and make them sit, they will go and placetheir order them self but the employee on the counter will take their order with a smile on

his face and finally they will be getting their order in 5 minutes. if the customers does not

get what they expects this creates the gap and dissatisfaction or the negative image of the

brand in the customers mind.

The customers also expect a standardized service from all the customers.

The service perceived by the employees is that the guard does not entertain them nor anyone seats them.

Recommendations:

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A trained staff will help the management in minimizing the gaps as the gaps can never be

filled completely.

Expected service is influenced by the external communication, which should also be

changed and should portray what the customers will receive after coming in KFC.

Pricing

KFC uses a six-step procedure when setting prices for its products.

The process begins with the

Page No. 45

Selection of pricing

Determining

Estimating cost

Analyzing competitorscost, prices and offers

Selecting a pricingmethod


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PRICING OBJECTIVE

KFCs pricing objective is to cover its cost as well as to make some profit but they also

dont want to give an impression of a higher price to its customers.

DETERMINING DEMAND

According to our research the demand for KFC is inelastic because the number of fried

chicken restaurants is few and small fried chicken restaurants do not

provide quality food. Therefore the management believes that a significant

rise in price will not affect the quantity demanded in a greater proportion.

The unique value provided by KFC keeps the consumers stick to their first

choice amongst fried chicken restaurants.

KFC estimates its own costs as well as its competitors costs and prices and then sets its

prices.

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Selecting a final


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PRICING METHODS

Subsequently, the pricing method is selected. KFC has used the perceived value pricing

approach. Here buyers perception of value is looked at and not the sellers cost..

Customers get value for their money at the KFC.

The pricing quality strategy that is used by KFC is premium strategy as they are charging

a higher price for a higher quality. Although the prices charged by KFC are high,

customers still demand for KFC.

Promotional Pricing is also one of the pricing strategies used by KFC.It uses the special

event pricing by introducing promotional schemes for a specified period of time e.g. in

Ramadan customers get family meals at discounted prices. Another promotional

technique used is psychological discounting.

Price setting logic is modified for items in the product mix. KFC uses the three following

pricing approaches:

Product Line Pricing: KFC charges a premium price for both 6 and 9 pieces of nuggets.

Similarly other product lines charge different prices but they too are premium.

Optional feature pricing:KFC charges a minimum extra charge for extra cheese or an

upsize meal.

Product bundle pricing: Product bundle pricing is applied to personal meal deals, whichincludes a zinger burger, fries, drink, pieces of chicken and a bun etc.

BURGERS MEALS Rs

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Zinger Burger 150

Colonels Chicken Burger 95

Colonels Fillet Burger 130Macho Burger 110

CHICKEN Rs

1 Piece 90

2 Piece 140

5 Piece 265

10 Piece 495

15 Piece 710

20 Piece 880

Topping 10

Assorted fruits 20

Nescafe coffee 20

Espresso 40

Cappuccino 40

Milo 40

Frothe 40

Moccacinno 55

SANCKS AND SIDE

ORDERS Rs

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DESERTS AND BEVERAGES RS

Fruit salad 35

Regular drink 35

Large drink 45

Mineral water 45

Tea 20

Apple pie 60

Apple pie ala moe 85

Ice cream-single scoop 30Ice cream-double scoop 50


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5 pc nuggets 80

20 pc nuggets 290

Arabian rice 50Hot wings 5 pc 75

Hot wings 10 pc 135

Dinner roll 10

Regular fries 45

Large fries 55

Corn on the cob 45

Hot and crispy soup 45

RECOMMENDATIONS:

Companies handle pricing in a variety of ways. KFC has been very successful in its

strategies but these suggestions can be considered as to improve the pricing of the

marketing mix.

KFC could pursue the maximum market share-pricing objective. It can also lower itsprices so that it can cater to the lower income segment yet keeping quality standards high.

KFC should have an objective of maximizing its current profit. They should keep the

prices in such a way that the profits are high but they should keep in mind the demand

and the cost of its product.

A different pricing method can be taken on also which is target return pricing as target-

return pricing calls for a percentage return on investment.

When setting the final price, psychological pricing can be used. Instead of charging 400

rupees, the price can be set at 399. Odd ending tactic has proved to be very effective

since it conveys the notion of a bargain.

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Discriminatory pricing can also be used by going for the time pricing approach. Lowerprices can be charged in off peak hours in an effort to stimulate activity.

In order to increase profits, higher prices could be charged for captive products. For

example beverages can be sold at a higher price since all customers order sodas with their

food or even they can charge a higher price for zinger burgers as it is the specialty of

KFC and most of the people would like to order it at even a higher price

KFC should also concentrate on the nine price-quality strategies to price its different

products.

KFC should offer lower rates on religious and social occasions like eid and as this will

bring a sense in the customers that the authorities are concerned about the people and the

days they celebrate and also the customers who are not regular ones will prefer KFC on

these occasions.

KFC should also use different pricing methods for different targets foe example KFC can

use perceived value pricing for the upper segment of the target population, value pricing

for the middle portion of the target population and psychological pricing for the rest of

the segments.

Distribution

KFC deals directly with their customers. KFC has its presence in the following cities :

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Karachi, Hyderabad, Lahore, Islamabad, Rawalpindi,Sialkot,Multan, Peshawar,

Faisalabad,Gujranwala,Jehlum, Sukkur, Murree.

If we look at the branches in Karachi, its branches are in Boat Basin, Tariq Road,

Teen Talwar, North Nazimabad, SITE, Kh-e-Ittehad, Nursery, PIDC, Sea View,

Millenium Mall, Express, I.I. Chundrigar Road, 26th Street, Delco Korangi, M.A.C.H.S.,

Bahadurabad and Gulshan Disco Bakery.

Distribution Process

RECOMMENDATIONS:

Page No. 51

K&N Farms

KFC Outlets

Customers
http://www.kfcpakistan.com/hyderabad.asphttp://www.kfcpakistan.com/lahore.asphttp://www.kfcpakistan.com/islamabad.asphttp://www.kfcpakistan.com/rawalpindi.asphttp://www.kfcpakistan.com/sialkot.asphttp://www.kfcpakistan.com/multan.asphttp://www.kfcpakistan.com/peshawar.asphttp://www.kfcpakistan.com/faisalabad.asphttp://www.kfcpakistan.com/gujranwala.asphttp://www.kfcpakistan.com/jehlum.asphttp://www.kfcpakistan.com/sukkur.asphttp://www.kfcpakistan.com/murree.asphttp://www.kfcpakistan.com/hyderabad.asphttp://www.kfcpakistan.com/lahore.asphttp://www.kfcpakistan.com/islamabad.asphttp://www.kfcpakistan.com/rawalpindi.asphttp://www.kfcpakistan.com/sialkot.asphttp://www.kfcpakistan.com/multan.asphttp://www.kfcpakistan.com/peshawar.asphttp://www.kfcpakistan.com/faisalabad.asphttp://www.kfcpakistan.com/gujranwala.asphttp://www.kfcpakistan.com/jehlum.asphttp://www.kfcpakistan.com/sukkur.asphttp://www.kfcpakistan.com/murree.asp


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Despite of KFC having a ZERO level of distribution channel, there are some suggestions,

which can help the managers to improve its marketing channels.

Faster delivery at take away counters can lessen the average time customers wait for

receiving their orders from take away counters.

KFC can improve its home delivery service by adding more value to its product. They

can do this by delivering the food in hot oven bags.

KFC should try involving a retailer in its distribution channel (one level distribution

channel) so that they can sell their original frozen marinated chicken fillets in retail shops

and departmental stores.

KFC should pay a regular visit to schools and universities in order to increase their sales.

Looking at the technological advancements, KFC can start online ordering in Pakistan for

the ease of the customers.

KFC should try introducing a new scheme for the home delivery service in which if the

order is not delivered to the customer on the promised time, they will get a 30% discount

on the total bill.

KFC on the other hand could enter in to contract with that distributor so that to avoid

conflicts with the chain of distribution.

Integrated Marketing Communications

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The need of the new millennium is to develop a good product, price it attractively, make

it accessible and communicate it to the customer.

The main sources of advertising for KFC are newspapers and magazines hoardings,

commercials on TV and radio but not on PTV because it is not a local brand, leaflets,

posters, and print media. They use Dawn, Jung and The News for 15 to20 ads annually

and Magazines such as Herald, News line, Good Food, Eating Out, Teenager, Womens

Own, She & Diva are also used for advertising. The billboards bear the message of

contact information for delivery and takeaway, new deals are also announced on these

billboards. . Leaflets are handed out particularly during the holiday season and Ramadan.

Also pole hoardings can be seen in places but are done on a small scale.

Another communication platform that is being used is sales promotion. Sales promotion

technique is used to keep the customers involved or they are even used whenever there is

a new deal introduced or on special occasions. Every month new discounted deals are

offered.

KFC also promotes the franchise in fairs and trade shows. Exhibitions are also backed by

KFC sporadically.

KFC also uses the public relation tool as it calls up its member customers every month

and tells them about the new deals and arrivals. KFC also gives discount coupons to the

students of its member schools.

The promotional tools that are being used in Pakistan are similar to those that are being

used overseas. However there are some prominent differences. Electronic media

particularly television advertisements are seen as a very effective promotional tool.

The chief expenses for KFC are billboards and hoardings. Newspaper and magazine

publications too form a sizeable disbursement for the company. Other tools for promotion

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such as Banners, Fliers, and Sponsorships are small yet effective communication

platforms. But the company needs to increase its marketing budget as ads on electronic

media cost a lot of money.

KFC has very ingeniously coordinated the entire communication process, which has led

to implausible success forthe company.

RECOMMENDATIONS:

The marketing communication mix consists of five major models of communication:

advertising, sales promotion, public relations and publicity, personal selling and direct

marketing. Presently KFC is using advertising, sales promotion and public relations tools

for promoting the franchise in Pakistan. Few suggestions can be taken into consideration

if KFC wants to improve its IMC process.

The Company could attempt to increase the number of billboards since the number of

billboards is very limited and should also try to make it more attractive. This step can

have a very positive affect on sales for KFC.

It can advertise in Urdu newspaper exclusively if they decide to cater to the lower income

segments.

Contests can be organized at the outlets like on purchase of more than Rs.500, lucky

draw coupons will be given to customers and at the end day valuable prices will be given

respectively.

KFC should introduce discount cards for the outlets, which are not doing well.

Like PSO Loyalty card, KFC can come up with KFC Loyalty Card. Such sales

promotion tools can have strong effects and draw quicker buyer response.

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Events like cricket can be sponsored by KFC, as it can be a very successful tool for

drawing a nations attention.

Competitions like painting, drawing etc should be organized regularly for kids and adults

by KFC.

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KFC Sales Force

Compensation and protection:

Maintaining a competitive position in the market, KFC provides equitable compensation

package for all its employees. For contractual employees equal hourly rate is fixed

depending on the category of work and on the positions i.e. 1 Star, 2 Star and 3 Star. At

corporate end employees are provided with fringe benefits (medical, leave and etc) and

incentives (vacations) along with their salary.

It also protects its employees from occupational hazards. They have special labor laws

health and safety laws. They also have first aid training. Through health and safety laws

KFC not only provides a safe working environment but also assures the employees

compliance with such laws.

Training at KFC

KFC provides training to all employees. They incur a high cost in providing it to every

one in the organization. They believe trained employees, better employees. They provide

each employee with a form named Training Needs Assessment (TNA) which is filled

by everyone in the organization. This form tells the human resource department what

lacks in an employee and then they provide training to the employees on the basis of it.

Training programs usually starts in July for the contractual employees. Employees are

sent for training regularly. They have contracts with TCS training center where they sent

their employees for training and development. They also have contracts with Pakistan

Institution of Management Sciences (PIMS), Management Association of Pakistan

(MAP) and SENSEI, which is a training institution.

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The human resource department evaluates the training session by asking the employees to

provide the same training and present what they have learnt from the training session. In

this way, all employees in the organization share the information.

Training methods:

KFC uses various training methods for the training and the development of the

employees. On-job training is the key training program at KFC. At the restaurant level,

employees are usually provided with the motivational lectures. They also have guest

speaker sessions with CEOs and the top management of different organizations. Last

time, EFUs CEO came for a guest speaker session

Employee relations and assessment at KFC

Maintaining an effective workforce requires more than just a pay, benefits, and safe

working conditions. Employees need to be motivated and satisfied with their jobs. KFC

in order to improve relations with its employees at the restaurant level demands that

employees from corporate level should go to the restaurants and interact with the all theemployees working there. They have Crew incentive programs, conventions, CHAMPS

(Cleanliness, Hospitality, Accuracy, Maintenance, Product Quality and Speed of service)

challenges, motivational sessions, one to one sessions and etc in order to increase

employee motivation.

Another important thing effecting employee relation is the way of communication in

order to keep them updates and informed. KFC does is by send e-mails, having get

together, memos, Crew Incentive programs. At first managers are informed through

emails or memos and then they pass on the information to their assistants, which in turn

provide information to their CR who then passes on the information to the supervisors of

different shifts.

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Recommendations

The following are the recommendations KFC can take in order to further improve

them selves. They are:

1. There is lack of communication between the HR department of south and HR

department of North. Since they are out-stationed, they need frequent interactive

sessions and programs for better communication. The head of the HR department

and other Human resource managers should have frequent visits in all the

branches of KFCs to build rapport with the employees and to get to know the

employee better. Frequent meetings would also remove the problem of hesitation

of employees with the senior management.

2. Its difficult to access the employee in the remote locations. Apart from KFC

operating in big cities, there are few other branches that are not personallyaccessible by the HR manager, which is causing a hindrance in the efficient

working. Hence, they should design a system that would easily connect the

employees from the remote locations and the employees can get themselves to the

human resource department directly.

3. Attitude of people is a serious problem that KFC is facing. Corporate employees

and restaurant employees belong to two different worlds. Restaurant employees

feel they have more physical stress, where as corporate ones feel they have more

mental stress. They should be making them realize the value of both departments.

Changing attitude or thinking of a person, takes a long time. It is essential that

KFC should high light the importance of an individuals contribution in the big

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picture and arranges proper meetings and get-togethers for them to develop

understanding among them.

4. They should have seniority base performance appraisal system too. Those

employees that have served the organization for a very long time and have

worked hard all their life, they need special recognition.

5. They should have retirement plans so that an employee knows that after

retirement he would still be earning something and is motivated to work with the

same organization throughout their life. In this way, their future would be secured

even after retirement. This would also increase the sense of belonging and loyalty

of employees towards their organization.

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Final Action Plan for KFC

1. There must be diversification in the menu to focus on a broader range of

customers that include health conscious customers and customers with changing

taste preferences. However it should only focus on its core i.e. chicken business

and must bring innovative new products in the same category to retain existing

customers and attract new customers.

2. KFC is planning to double its number of restaurants by 2011. They should focus

more on sub-urban and developing areas to tap the growing opportunity and

keeping ahead of the competition.

3. Since KFC and Pizza hut belong to same parent company they can form an

alliance for joint marketing campaigns to reduce the cost.

4. KFC is still perceived in the mind of customers as Kentucky Fried Chicken.

Expending itself to the fish category to compete with McDonalds is not feasible

since the customers are not able to make connection of KFC with Fish. Instead of

deviating form their core they should keep the flywheel running in one direction.

5. The CEO of copula Mr. Rafiq Rangoonwala should concentrate on building a

successor who can look after the business in his absence and also take charge after

him.

6. KFC to put its focus to introduce token system like that of banks to deal with the

problem of large queues and serving time.

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7. KFC should introduce more outlet options such as malls, airports, universities,

amusement parks, stadiums etc to increase their market share in quickly growing

markets.

8. Other option for the management is to opt for non-traditional service such as carry

out and supermarket kiosks can be setup.

9. The quality of the product should be the major concern of the management.

Special care should be given to make sure that the quality of the product in late

night offers remains consistent.

10. There is a need to design a system that would easily connect the employees from

the remote locations and the employees can get themselves to the human resource

department directly

11. It is essential that KFC should highlight the importance of an individuals

contribution in the big picture and arrange proper meetings and get-togethers forthem to develop understanding among them. This would greatly help to build and

maintain the moral and motivation of the employees.

12. The strategies should be made on at least quarterly basis if not monthly. The

budgets and targets should be revised confronting the brutal facts of the market.

13. There must be both top down and bottom up approaches followed in strategy

making exercise. This will not only give real time information about the market so

that the company is abreast with the latest happenings in the market and devise

aggressive and proactive strategies. This will also enhance the motivation level of

the employees as they feel proud to contribute to the strategy making of the

organization.

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14. KFC Pakistan should follow the principle of Disciplined People, Disciplined

Thought, and Disciplined Action. The people who are not disciplined and

hurting the organizational culture must be shown the door. It has to be rigorous

but not tyrant in terms of discipline. It is the discipline which makes the company

good to great.

15. KFC Pakistan should empower its employees (especially branch managers and

waiters) to take prompt action to please customers. It is the satisfaction of

customer which brings him back.

16. HR policy needs fine tuning. KFC should consider employee turnover rate as one

of KPI (Key Performance Indicator). It must adopt rigorous recruitment and

selection process and take those people who comply with the KFCs culture.

17. KFC must strive to retain the best people in the organization and they must work

on best opportunities and not on problems.

18. KFC must open a subsidiary for in-house training and development of personnel

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Documents

Zzz Final Report