ADARSHA CAMPUS (TRIBHUWAN UNIVERSITY)

2010
A PROJECT REPORT ON KFC
(FROM MARKETING PERSPECTIVES) SUBMITTED BY
ASTHA PANDEY BBS 3RD YEAR SYMBOL NO: . T.U REGD NO: .

Submitted To: Adarsha Campus

Faculty of Management, T.U

In the partial fulfillment for the degree of Bachelor in Business Studies (BBS)

On 30th August, 2010

ACKNOWLEDGEMENT
I would like to express my hearty gratitude to all the people, who extended their help by providing their invaluable views and opinions, which formed an integral part of this study. First of all, I take this opportunity to express my sincere thanks to my teachers for helping me to get through this report. It would not have been possible for me to complete this project without his unflagging supervision, advices and directions. So, mine great debt of gratitude to him. It is my immense pleasure to submit research report on KFC to Adarsha Campus. It enabled me to learn more about marketing, which helped in gratitude study for imparting practical knowledge to the bachelors students which is a useful resource in stepping towards the practical world.

TABLE OF CONTENTS
TOPIC 1. INTRODUCTION a. BACKGROUND b. OBJECTIVES c. LIMITATIONS 2. LITERATURE REVIEWS 3. METHODOLOGY a. INTRODUCTION b. DATA COLLECTION METHOD 4. FINDINGS 5. RECOMMENDATION 6. BIBLIOGRAPHY ANNEX 16 16 17 22 24 5 6 7 8 PAGE.NO.

INTRODUCTION
a. BACKGROUND:
KFC Corporation (KFC, founded and also known as Kentucky Fried Chicken) is a chain of fast food restaurants based in Louisville, Kentucky in the United States. KFC has been a brand and operating segment, termed a concept of Yum! Brands since 1997 when that company was spun off from PepsiCo as Tricon Global Restaurants Inc. KFC primarily sells chicken pieces, wraps, salads and sandwiches. While its primary focus is fried chicken, KFC also offers a line of roasted chicken products, side dishes and desserts. Outside North America, KFC offers beef based products such as hamburgers or kebabs, pork based products such as ribs and other regional fare. The company was founded as Kentucky Fried Chicken by Colonel Harland Sanders in 1952, though the idea of KFC's fried chicken actually goes back to 1930. The company adopted the abbreviated form of its name in 1991. Starting in April 2007, the company began using its original name, Kentucky Fried Chicken, for its signage, packaging and advertisements in the U.S. as part of a new corporate re-branding program; newer and remodeled restaurants will have the new logo and name while older stores will continue to use the 1980s signage.

b.

OBJECTIVES:

1. 2. 3.

To assess the KFC itself and the present status and condition about it. To add the knowledge of marketing by supporting some theories. To enable and to enhance knowledge about how changing environment effects marketing in an organization.

4.

To provide link between academic training and the world of work, thereby enhancing the future employability.

5.

To improve the presentation skills, communication skills, research skills, Managerial & marketing skill.

6.

To enable us in understanding how theoretical knowledge differs from practical life thus enabling us to understand the complexity and unforeseen nature of problem and opportunity that exist in the organization.

c.

LIMITATIONS:
As this study intends to put the theoretical knowledge into real life situation as a small research work, it has been completed with the following limitations: 1. It was to be completed in a very short period of time. Therefore, it could not take into account all the environmental factors which are equally responsible in affecting the organization. 2. Study based on management aspect only , doesnt contain study of financial aspects

3. Due to time and budget constraints, the reliability and validity of the interview have not been confirmed. 4. As the research model applied was not standardized; the findings of the study cannot be generalized set of the organization in the study. 5. Due to single respondent or qualitative approach of research, no analysis has been made with advance statistical tool.

LITERATURE REVIEWS
Marketing?
Marketing is the process by which companies determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It is an integrated process through which companies create value for customers and build strong customer relationships in order to capture value from customers in return. The term marketing has changed and evolved over a period of time, today marketing is based around providing continual benefits to the customer, these benefits will be provided and a transactional exchange will take place. The Chartered Institute of Marketing defines marketing as 'The management process responsible for identifying, anticipating and satisfying customer requirements profitably'. Philip Kotler defines marketing as 'satisfying needs and wants through an exchange process'. Marketing is used to identify the customer, to keep the customer, and to satisfy the customer. With the customer as the focus of its activities, it can be concluded that marketing management is one of the major components of business management. The evolution of marketing was caused due to mature markets and overcapacities in the last 2-3 centuries. Companies then shifted the focus from production to the customer in order to stay profitable. The term marketing concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions. It proposes that in order to satisfy its organizational objectives, an organization should anticipate the needs and wants of consumers and satisfy these more effectively than competitors

Evolution of marketing:
Earlier approaches: The marketing orientation evolved from earlier orientations namely the production orientation, the product orientation and the selling orientation.

Orientation Production

Product

Selling

Marketing

Western Description European timeframe Production until the A firm focusing on a production orientation methods 1950s specializes in producing as much as possible of a given product or service. Thus, this signifies a firm exploiting economies of scale, until the minimum efficient scale is reached. A production orientation may be deployed when a high demand for a product or service exists, coupled with a good certainty that consumer tastes do not rapidly alter. Quality of until the A firm employing a product orientation is the 1960s chiefly concerned with the quality of its own product product. A firm would also assume that as long as its product was of a high standard, people would buy and consume the product. Selling 1950s and A firm using a sales orientation focuses methods 1960s primarily on the selling/promotion of a particular product, and not determining new consumer desires as such. Consequently, this entails simply selling an already existing product, and using promotion techniques to attain the highest sales possible. Needs and 1970 to The 'marketing orientation' is perhaps the wants of present most common orientation used in customers day contemporary marketing. It involves a firm essentially basing its marketing plans around the marketing concept, and thus supplying products to suit new consumer tastes. As an example, a firm would employ market research to gauge consumer desires, use R&D to develop a product attuned to the revealed information, and then utilize promotion techniques to ensure persons know the product exists.

Profit driver

Contemporary approaches: Recent approaches in marketing is the relationship marketing with focus on the customer, the business marketing or industrial marketing with focus on an organization or institution and the social marketing with focus on benefits to the society. New forms of marketing also uses the internet and are therefore called internet marketing or more generally e-marketing, online marketing, search engine marketing, desktop advertising or affiliate marketing. It tries to perfect the segmentation strategy used in traditional marketing. It targets its audience more precisely, and is sometimes called personalized marketing or one-to-one marketing. Western Description European timeframe Relationship Building and 1960s to Emphasis is placed on the whole marketing / keeping good present relationship between suppliers and Relationship customer day customers. The aim is to give the best management relations possible attention, customer services and therefore build customer loyalty. Business Building and 1980s to In this context marketing takes place marketing / keeping present between businesses or organizations. The Industrial relationships day product focus lies on industrial goods or marketing between capital goods than consumer products or organizations end products. A different form of marketing activities like promotion, advertising and communication to the customer is used. Social Benefit to 1990s to Similar characteristics as marketing marketing society present orientation but with the added proviso that day there will be a curtailment on any harmful activities to society, in product, production, or selling methods. Orientation Profit driver

Micro Environmental Factors:

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These are internal factors close to the company that have a direct impact on the organizations strategy. These factors include: Customers: Organizations survive on the basis of meeting the needs, wants and providing benefits for their customers. Failure to do so will result in a failed business strategy. Employees: Employing the correct staff and keeping these staff motivated is an essential part of the strategic planning process of an organization. Training and development plays an essential role particular in service sector marketing in-order to gain a competitive edge. This is clearly apparent in the airline industry. Suppliers: Increase in raw material prices will have a knock on affect on the marketing mix strategy of an organization. Prices may be forced up as a result. Closer supplier relationships are one way of ensuring competitive and quality products for an organization. Shareholders: As organization requires greater inward investment for growth they face increasing pressure to move from private ownership to public. However this movement unleashes the forces of shareholder pressure on the strategy of organizations. Satisfying shareholder needs may result in a change in tactics employed by an organization. Many internet companies who share prices rocketed in 1999 and early 2000 have seen the share price tumble as they face pressures from shareholders to turn in a profit. In a market which has very quickly become overcrowded many have failed. Media: Positive or adverse media attention on an organizations product or service can in some cases make or break an organization. Consumer programs with a wider and more direct audience can also have a very powerful and positive impact, forcing organizations to change their tactics. Competitors: The name of the game in marketing is: differentiation. What benefit can the organization offer which is better than their competitors? Can they sustain this differentiation over a period of time from their competitors? Competitor analysis and monitoring is crucial if an organization is to maintain its position within the market.
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Micro Environmental Factor

PEST analysis:

A PEST analysis is used to identify the external forces affecting an organization .This is a simple analysis of an organizations Political, Economical, Social and Technological environment. Political and legal: The first element of a PEST analysis is a study of political factors. Political factors influence organizations in many ways. Political factors can create advantages and opportunities for organizations. Conversely they can place obligations and duties on organizations. Political factors include the following types of instrument: - Legislation such as the minimum wage or anti discrimination laws. -Voluntary codes and practices
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- Market regulations - Trade agreements, tariffs or restrictions - Tax levies and tax breaks - Type of government regime e.g. communist, democratic, dictatorship Non conformance with legislative obligations can lead to sanctions such as fines, adverse publicity and imprisonment. Ineffective voluntary codes and practices will often lead to governments introducing legislation to regulate the activities covered by the codes and practices. Economical: The second element of a PEST analysis involves a study of economic factors. All businesses are affected by national and global economic factors. National and global interest rate and fiscal policy will be set around economic conditions. The climate of the economy dictates how consumers, suppliers and other organizational stakeholders such as suppliers and creditors behave within society. An economy undergoing recession will have high unemployment, low spending power and low stakeholder confidence. Conversely a booming or growing economy will have low unemployment, high spending power and high stakeholder confidence. A successful organization will respond to economic conditions and stakeholder behavior. Furthermore organizations will need to review the impact economic conditions are having on their competitors and respond accordingly. A truly global player has to be aware of economic conditions across all borders and needs to ensure that it employs strategies that protect and promote its business through economic conditions throughout the world such as: - GDP or per capita income - Inflation rate - Importance of tariffs and quota - Economic growth Social: The third aspect of PEST focuses its attention on forces within society such as family, friends, colleagues, neighbors and the media. Social forces affect our attitudes,
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interest s and opinions. These forces shape who we are as people, the way we behave and ultimately what we purchase. Population changes also have a direct impact on organizations. Changes in the structure of a population will affect the supply and demand of goods and services within an economy. Falling birth rates will result in decreased demand and greater competition as the number of consumers fall. Conversely an increase in the global population and world food shortage predictions are currently leading to calls for greater investment in food production. In summary organizations must be able to offer products and services that aim to complement and benefit peoples lifestyle, gender, age, education, ethnicity and religion, role of family, materialisms and behavior. If organizations do not respond to changes in society they will lose market share and demand for their product or service. Technological: Unsurprisingly the fourth element of PEST is technology, as you are probably aware technological advances have greatly changed the manner in which businesses operate. Organizations use technology in many ways, they have 1. Technology infrastructure such as the internet and other information exchange systems including telephone 2. Technology systems incorporating a multitude of software which help them manage their business. 3. Technology hardware such as mobile phones, Blackberries, laptops, desktops, Bluetooth devices, photocopiers and fax machines which transmit and record information. Technology has created a society which expects instant results. This technological revolution has increased the rate at which information is exchanged betmyen stakeholders. A faster exchange of information can benefit businesses as they are able to react quickly to changes within their operating environment. However an ability to react quickly also creates extra pressure as businesses are expected to deliver on their promises within ever decreasing timescales.

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For example the Internet is having a profound impact on the marketing mix strategy of organizations. Consumers can now shop 24 hours a day from their homes, work, and Internet cafs and via 3G phones and 3G cards. Some employees have instant access to e-mails through Blackberries but this can be a double edged sword, as studies have shown that this access can cause work to encroach on their personal time outside work. The pace of technological change is so fast that the average life of a computer chip is approximately 6 months. Technology is utilized by all age groups, children are exposed to technology from birth and a new generation of technology savvy pensioners known as silver surfers has emerged. Technology will continue to evolve and impact on consumer habits and expectations, organizations that ignore this fact face extinction.

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METHODOLOGY
a. INTRODUCTION:

Research methodology is the way to solve systematically about research problem. (Kothari, 1990, pg.39) research methodology describes the method and process applied in the entire study. It sequentially refers to the various steps to be adopted by a researcher.

b. DATA COLLECTION METHOD:

Primary data collection: Under this method, the researcher directly received the necessary information with the help of questionnaire and its response. Moreover a brief face to face interview was done with Mr. Roshan Adiga, General Manager of Devyani international (Nepal) Limited, with a view to explain more knowledge regarding marketing in the organization as myll as about the KFC .

Secondary data collection: Secondary data are those data which are pre - collected by other researcher or which are secondhand data. So, process of collecting these types of data are secondary data collection so, I collected different research projects, and collected different data from books, other reports, web sites and etc. Being a secondary data I did not find it to be as liable as primary data.

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FINDINGS
Devyani International, under the umbrella of Ravi Kant Jaipurias RJ Corp, here introduced Pizza Hut & KFC restaurants, marking the first multinational chain of restaurants in Nepal. Worlds famous fast food chain KFC started serving Nepalese people with their lip smacking menu of Hot & Crispy chicken, Twister roll and Zinger burger around October 2009 right from Annapurna Complex, Durbar Marg. The opening of these two outlets would give Nepali consumers the first local experience of an international food chain. They have promised an upcoming rush of announcements and product that will make this an exciting time for consumers. - Plus 3 new stores in the next 6 months. Proposed locations @ Jawalakhel, New Baneshwor & Maharajganj - Chicken served in recipes is imported all the way from Brazil. - Daily Chicken consumption @ KFC 800 kg - Number of Crew hired 100 - Operating Hours: 11 am to 11 pm/7 days

Mr. Roshan Adiga is the General Manager in KFC. He has completed his Bachelors and is 36 years old now. He has working experience for more than 10 years. His main activities/ responsibilities is overall operation including training, inventory management, hiring e.t.c . He follows a special formula called CHAMPS as main objective of KFC which refers to Cleanliness, Hospitality, and Accuracy, Maintenances, Product quality and Speed of service. During the survey he laid down his experiences, knowledge, ideas, views, opinions in the questionnaire provided to him.

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Some of the general findings are as follows: 1. KFC Restaurant is a fast food restaurant which is popularly known as Quick Service Restaurant (QSR) these days. [QSR is a specific type of restaurant characterized by fast food cuisine, self service and by minimal table service]. 2. There are 125 covers (chairs) in KFC 3. It has not taken into consideration the exact method to check the occupancy rate. However, it inspects the number of bills on transaction basis to check the customer flow. Weekly calculation of bills turns out to be around 700 bills and it is calculated as 1 bill = 3 people approx where Daily Sales Exceeds Rs. 7 Lakhs + 4. KFC is a fresh brand in Nepal. It has just been six months since KFC started it business in Nepal. So, it is difficult to analyze the occupancy rate seasonally, although it was comparatively found increasing in February & March due to number of increasing tourist. 5. Since KFC is an international brand the brand itself has been running the restaurant so far in terms of popularity, because of which KFC has not introduced any kind of customized items. So far the name itself has been enough to attract customers. 6. Basically family, teenagers, corporates come to the restaurant and talking about the people in terms of nationality, people from various countries step in to the restaurant but the flow has been highly dominated by the domestic customers. Since KFC is new to Nepalese people but quite popular to others comparatively because KFC has its business running in many parts of the world. So it seemed to us that though tourists did visit KFC but it is highly popular among the local people. 7. There is no system/ facility of bookings or reservations in KFC.

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8. No particular promotion technique is applied except for few hoarding boards and few posters behind the Pepsi cola vehicle as direct market advertising and publicity. 9. KFC brings chicken from Brazil, the variable and other costs are too high for the KFC so no such thing as discount is provided in KFC. 10. Hot wings, Bucket hot and crispy, crushers, Burgers are highly popular food in KFC apart from Cold drink (Pepsi) and deserts. 11. In an average a customer stays in KFC for about 15 -20 min where food is delivered within a min.

Conceptual Findings:

1. What are your basic functions of Marketing? The brand itself has promoted the KFC so there is no much more to do regarding the marketing where as concerned with the basic functions is to assure the people are getting the quality service, fast service, clean and hygienic food, unique taste, smooth running of the restaurant, hiring and Training. 2. What type of methods is followed for hiring High level peoples? Generally consists of 4 levels i.e. written exam, interview, role play, and final interview. But on the recommendations also my hire the employee (when my need people my first tell staff if any of them know the person qualified and interested for the job). Apart from this many people have dropped their C.V. in our office and when my need my call them and go through our four levels. 3. Has the office conducted the regular training programs to employees? Yes, the office regularly carries out the training programs. Initially all the staff has been to India for training before I had started. Now I provide the training for

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lower level and my also learn frequently from the higher level. And I have also frequent visit from India who provides and guides. 4. How does the pay scale increases? The pay scale increases as per the company rule but I think our staffs are happy with their salary. 5. Does the organization give pay on leave holidays? Employees have to work as per companys 6 Month provision period n then leaves are provided as per governmental rules. 6. What is the major promotion methods used (based on company expenditure)? My have not done any promotion now. When I were first launching in Nepal my had a tool on the Pepsis vehicle and Iy have informed people through net and media about the opening date 7. How do you know (evaluate) about the customers satisfaction? On the opening day I have conducted the survey by giving written questions and options about the quality, service and price of KFC. After that I have not done any survey but the smiling and happy face leaving the KFC tells us about the customer satisfaction. 8. What are the qualities to be competitive in market? Well, I believe in quality, hygienic and cleanliness, maintenance (AC, tables and chairs conditions), consistency, hospitality (feel good environment) and there are so on.which I believe are necessary to be competent in the market. 9. Do you know about PEST analysis? Taking about PEST analysis (Political, Technological, Economical, Social); it does play an important role in business. For better business: Political It must be stable Technology One needs to be faster, to cope up with the technology is must. Economical It must also be stable so that living standards are maintained and

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tourists will spend more and all. Social - One should also remember its responsibilities towards the society. 10. Lastly, what do you suggest us to become tomorrows marketing manager or be success in this field? First of all education is needed which is a permit or license to become the manager to any other higher post. Then it depends on your hard work, labor, creativity, desire and passion for work. You should have basic qualities such as willingness to learn, hard working, team working, friendliness, disciplined, quick , and so on. Dont hesitate, try to learn everything, ask questions, or no one will bother, be at your best!! And most importantly you have to start from the root level because every level is important, it gives an idea about the every field and all levels and desire and hunger to learn.

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RECOMMENDATION
KFC restaurant is the first multinational chain of restaurants in Nepal and is one of the best restaurants in Nepal. Since, there is always a place for improvement; my have given some recommendations that should be fulfilled seriously to remain best. 1. The turnover rate of employees has been zero. This type of tendency is regarded good for the upliftment of the organization. But the KFC is suggested to adopt the techniques of motivation that can maintain the present turnover of employees. 2. Rate of varieties of the restaurant seems to be higher in comparisons to other restaurant. The restaurant is still in the stage of infancy. So, I recommend the restaurant to lower its cost and provide discount during off- season and discount to the local or internal tourists as to be more competitive in near future. 3. KFC has lots of varieties of food items. But also, they should be attentive towards tourist from which country they belong to and they should be serving with lots of varieties of food to satisfy them with good quality. So different types of food of different cuisines should be added in menu to satisfy different type of tourist. 4. There should be better communication channels or medium between and among the employees and customers to reduce conflict and carry out work efficiently. For e.g. employees must be aware of the cross culture communication to reduce misunderstanding, be more cultural and respectful to the feelings of customers. 5. Adequate number of staffs should be recruited to handle the respective activities in more effective and efficient way.

This is an environment of strict competition even in tourism and hotel sectors. In this context, the KFC is suggested to formulate and implement some sound and efficient
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marketing strategies to meet the required level of profitability as well as social responsibility. Thus, organization should have subsequent consultation and participation in better problem solving to reduce the effect of different trends that affects marketing.

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BIBLIOGRAPHY
Kothari, C.R. Research Methodology: methods and techniques , Tata Mc Graw Hill Publishing Company Ltd, New Delhi, 1990. http://en.wikipedia.org/wiki/KFC http://www.learnmarketing.net/ http://www.ktm2day.com/2009/04/26/kfc-pizza-hut-opening-stores-in-nepal/

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