EXECUTIVE DIPLOMA IN INDUSTRIAL BUSINESS MANAGEMENT ASSIGNMENT

MODULE SUBMITTED BY CLASS LECTURER SUBMISSION DATE MARK : INDUSTRIAL MARKETING STRATEGY : 15 : EDIBM 11 : ENCIK HASNUDEN HASHIM : 27 APRIL 2012 :

TABLE OF CONTENT

CHAPTER

DETAILS

PAGE NO.
2

CONTENT

1.0

INTRODUCTION DEFINITION OF STRATEGIC MARKETING AND SUMMARIZATION OF THE RELEVANT THEORIES DISCUSSED EXTERNAL AND INTERNAL ANALYSIS CONDUCTED, FACTORS BEING LOOKED AT : PRODUCT, PRICE, PLACE AND PROMOTION OTHER CONSIDERATIONS (SEGMENTATION ETC.)

3-8

2.0

9-10

3.0

12-18

4.0

19-20

5.0

SUMMARY & CONCLUSION

21

6.0

REFERENCE

22

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CHAPTER 1 : INTRODUCTION
COMPANY PROFILE

KFC Corporation, or KFC, founded and also known as Kentucky Fried Chicken, is a chain of fast food restaurants based in Louisville, Kentucky. KFC is a brand and operating segment, called a "concept" of Yum! Brands since 1997 when that company was spun off from PepsiCo. KFC primarily sells chicken in form of 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.

KFC VISION STATEMENT Food, Fun & Festival, this is what KFC is all about. Leading the market since its inception, KFC provides the ultimate chicken meals for a Chicken Loving Nation. Be it Colonel Sanders secret original Recipe Chicken or the Hot & Spicy Version, every bite brings a YUM on our face. At KFC we can proudly say, We Do Chicken right .

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KFC MISSION STATEMENT

(i)

We are committed to customer satisfaction through offering high quality with excellent services and good value.

(ii) (iii)

We take great pride in serving each other, our customer and our communities. We seek continuous improvement in all that we do.

MARKETING ENVIRONMENT

There are certain forces, inside and outside an organization that affect marketing managements ability to build and maintain successful relationships with target customers. Like all other companies, KFC also has such forces around it; marketing environment is made up of Micro environment and Macro environment.

(i)

The Micro environmental Forces

This environment includes the factors that are close to the company and are contollable by the organization. These factors are:-

Company KFC is the multinational company that has chain of fast food restaurants all over the world. In Pakistan it has 40 outlets out of which, 22 are based in Lahore, 19

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are in Karachi and the remaining 8 are located in the other cities of Pakistan. KFC is growing rapidly, by having their strong relationship with their customers and the trust , which they have developed, in the past years, employees are the main assets of the company, and so they are very much concerned. The company has very organized check and balance system, which is used for the evaluation of the employee and the individual outlet as well.

Suppliers

As KFC cannot compromise on the quality of food they provide, so reliable suppliers are very much important to them. There are two categories of supplies. The Dry food supply and the Frozen food supply. For the dry food , like a burger buns- they have established their own warehouses and dry-stores for the South region. Where as for the North region, they get dry material from the vendors like Dawn Bread . For the Frozen food chicken they have agreement with the K&N Chicken , for supplying chicken and fish is supplied by Thiland and spices are supplied by Dubai to all over restaurants in Pakistan.

Consumers It includes five categories as follows:a. Consumer Markets KFC has large chain of consumers. According to KFC, We are growing only with our customer. KFC has great environment for their consumers

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and families. They are concerned about the comfort and satisfaction of their customers. That is why 40 million on a single outlet.

Midnight deals are there for the consumers with 50 % discount, which is being appreciated by the individuals.

b.

Business Market Business markets buy good and services for further processing or for use in their production process. In case of KFC there is no such business market.

c.

Resellers KFC is dealing in fast food, and so they dont have any resellers as such.

d.

Government Customers As such no govt. customer exist so far. KFC is not expecting any govt. customer as such.

e.

International Customers KFC is multinational company. They have outlets, almost in every country. So they have international customers all over the world.

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Competitors They are classified into direct and indirect competitors. a. b. Direct Competitors (McDonald, Subway) Indirect Competitors (Like Salt & Pepper, Kabana, Village, Bundu)

(ii)

The Macro Environmental Forces

These are not controlled by the company and are environmental forces. It includes Demographic Factor.

KFC has designed its menu according to taste of population. People of each age like to visit KFC. It has deals for families as well as deals for the children. They also visit their competitors to have better idea about changing trends and taste of people as well as their competitors. KFC reconsider its menu and taste after every three months. KFC always encourages feedback and suggestions from its customers.

Natural Factors KFC always produces fresh food. The supply houses are well prepared and well maintained for changing factors of weather. So it is not affected by natural factors.

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Technological Factor Their machines and boilers are according to latest technology and standards. After every six months, technical checkup is conducted and that equipment is replaced which becomes useless. Efficient billing system is implemented, to eliminate the redundancy and maintain the daily ledger account. Political Factors

It consists of laws, govt. agencies and pressure groups that influence or limit various organizations and individuals in a given society. But KFC has its own strong links and politics, it is not been influenced by any external factors. No pressure groups are there inside and outside organization to pressurize in any aspect.

Ethically there might be certain forces that have been impact on the overall sale of KFC, for that; it has also made certain strategies and road-maps to overcome them. Cultural Factors

KFC is always concerned about the culture and ethical values of the community. As, the customer are from the same community that they are serving in, KFC takes care of ethical and moral values of the society. As Pakistan is an Islam based country, so KFC serves Halaal food here.

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CHAPTER 2 : DEFINITION OF STRATEGIC MARKETING AND SUMMARIZATION OF THE RELEVANT THEORIES DISCUSSED

There are five alternatives concept under which organizations design and carry out their marketing strategies which are: Production concept Product concept Selling concept Marketing concept Societal concept

Production concept: "The idea that consumers will favor the product that are available and highly affordable" As for as KFC is concerned it is not following the production concept as the outlets of KFC are in posh areas only, they are targeting the upper class and hence their prices are also high.

Product concept: "The idea that consumers will favor products that offers most in quality, performance, and features" KFC is following product concept as it is making improvements in products Features.

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Selling Concept: "The idea that consumers will not buy enough of the firm's products unless it undertakes a large scale selling and promotion effort". Mostly the firms practice the selling concept when they face overcapacity. As KFC provides fresh foods according to the needs of customers and earn profit through customer satisfaction, so it does not follow selling concept.

Marketing Concept: "The marketing management philosophy that holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than the competitors". KFC is following market concept as it is focusing on the customer and making improvements in the menus according to the need and wants of the customer. It has added in its menus as fish zinger, salad, Arabian rice etc according to the demands of the customer.

Societal Marketing Concept: "A principle of enlightened marketing that holds that a company should make good marketing decisions by considering consumers wants the company's requirements, consumer's long-run interest, and society long-run interest". Like KFC Mall Road Branch is giving employment to disables only, so its based on societal marketing concept.

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CHAPTER 3 :

EXTERNAL

AND

INTERNAL

ANALYSIS

CONDUCTED, FACTORS BEING LOOKED AT : PRODUCT, PRICE, PLACE AND PROMOTION

KFC is market leader in providing Fried Chicken. As KFC is addressing Fast Food, so it is competing with the prominent market signs, like Pizza Hut and McDonalds.

Product of KFC is doing well so far. It needs improvement in their Hot-Menu. They should make their menu dynamic, by introducing new meals after certain period of time. New items should be introduced, by varying the taste. Like, pizza hut has come up with "Chapli Kabab Pizza"addressing the local taste; KFC should go for such innovation, in order to increase their market share.

Price of KFC is reasonable, if compared with other fast food restaurants. But as, price is always the primary concern for consumers; so KFC should adopt certain strategy to attract the consumers. Its not only by lowering their prices. It could be by, introducing discount packages, for families, employees, students and regular customers. The membership cards can be used to, provide certain extra value to the consumers.

Placement is very important factor, for a company to increase its market share, by targeting the right consumers. KFC need to have more outlets, at commercial areas. It will help in targeting the actual customers and potential customers as well. Mobile outlets can be effective addition as well.

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Promotion of KFC has a large customer equity, but being a market symbol, a company should strive for having more actual customers. KFC should work for, having a solid marketing department. They should organize and run advertisement campaigns. It would certainly be, incremental factor for their sale. Different modes of advertisements can be used for, triggering the community. KFC could use brand promoters. KFC can setup, promotional campaigns. All what is needed is a well established marketing department, in order to facilitate effective, promotions.

The marketing mix is generally accepted as the use and specification of the 'four Ps' (4P) describing the strategic position of a product in the marketplace. 3.1 3.2 3.3 3.4 Product Price Place Promotion

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3.1

Product Anything that can be offered to a market to satisfy a want or need. KFC's specialty is fried chicken served in various forms. KFC's primary product is pressure-fried pieces of chicken made with the original recipe. The other chicken offering, extra crispy, is made using a garlic marinade and double dipping the chicken in flour before deep frying in a standard industrial kitchen type machine. The menu of KFC provide as follows:-

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3.2

Price

Price is the any amount of money that customers have to pay while purchasing the product. More broadly, price is the sum of all the values that consumers exchange for benefits of having or using the product or services.

The factors below also include in the Price factor:(a) Demographic factors:(i) Age: Generally there is no age limit focus by the KFC. The target and focus is on each and every individual in a society. KFC finds its largest demographic in the young of any society. (ii) Gender: Both male and females are focused by KFC, gender does not play any role here. (iii) Household Size: This plays a vital role in the demographic factor of the KFC. Generally they target whole families rather than single persons. This being the reason for their Family Meals which are basically bundled items served at a nominally cheaper rate.

(b)

Economic factors:(i) Income: Income is an important key factor for KFC. This factor decides which class is to be targeted. In the early rise of KFC they focused on the upper class but slowly are introducing economy meals that attract the lower to middle classes.

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(ii)

Consumption Behavior: It estimates the behavior of people, their liking and disliking towards the pricing of the products.

3.3

Place

TARGET AREAS Free home Delivery strategy They provide free home delivery to offices & homes (select countries). Accessibility Resulting in several outlets to cater to the needs of people in & around the city. Hectic lifestyle Due to the hectic lifestyle of office goings individuals the fast food concept saves time of preparing food and gives the customer a full meal quickly. Economically convenient The pricing appeals to the many classes of a society.

3.4

Promotion

Promotion is the method used to inform and educate the chosen target audience about the organization and its products. Using all the resources of promotion: 3.4.1 3.4.2 3.4.3 3.4.4 Advertising Sales Promotion Public Relations Events and Experiences

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3.4.5 3.4.6

Coupons, Discounts and Bundled packages An organization finds most of its meanings and survival through promotion.

At KFC, Promotion is the main tool to bring all chicken lovers attention towards its delicious one-of-a-kind product, the Fried Chicken.

3.4.1 Advertising

The logo of the smiling Colonel is probably one of the most recognized faces in the world and instantly brings the image of fried chicken to ones mind.

KFC and its new company jingle, finger licking good is a frequent announcement on televisions, billboards, flyers and radio. The concept of showing a normal customer deeply involved in devouring his piece of chicken usually turns on the drool factory in everybodys mouth and makes them rush to the nearest KFC. In India where chicken lovers are plenty abound these ads featuring normal people connect instantly and create a rush at their outlets. Using the following methods KFC spreads its message of finger licking good chicken.

Using Reminder advertisements KFC stimulates repeat purchases of its products. The company anthem finger licking good is just a wake up call to the consumer to remind them how good they felt the last time they ate KFC chicken.

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Sponsorship is another tool to strengthen an organizations image. KFC is currently the sponsor of the Australian Cricket Team and the colonel logo can be seen on their uniforms throughout the matches.

3.4.2 Sales Promotion KFC uses the following tools to further enhance its sales. Premiums Exhibits Coupons Entertainment

All KFC outlets offer its customers with various forms of incentives to buy its Chicken. Using coupons that one can acquire after spending a particular amount over a period of fixed time, customers can enjoy the benefits of free meals or free add-ons. Additionally they provide meal vouchers and exciting offers in their print ads, which the customer must cut and bring along.

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CHAPTER 4 : OTHER CONSIDERATIONS (SEGMENTATION ETC.)

4.1

Geographic segmentation KFC has outlets internationally and sells its products according to geographic needs of the customer. In India KFC focuses how geographically its customers demand different products. In north India Chicken is the main selling product, while in the south the Veg. items sell more than the chicken.

4.2

Demographic Segmentation In demographic segmentation, the market is divided into groups based on an age, gender, family size, income, occupation, religion, race and nationality. KFC divides the market on demographic basis in this way:(i) (ii) (iii) (iv) (v) Age is between 6-65. Gender is both males and females. Family size is 1-2, 3-4, 5+ Income is Rs 10,000 n above. Family lifestyle is almost all.

4.3

Psychographic segmentation Dividing a market into different groups based on social class, lifestyle, or personality characteristics is called psychographic segmentation.

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KFC divides market on the basis of psychographic variables like (i) (ii) (iii) Social class- Upper and Middle class. Lifestyle is not specific. Personality is ambitious and authoritarian

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CHAPTER 5 : THE NEEDS OF MONITORING AND REVIEW, SUMMARY & CONCLUSION

KFC is providing employment to 1200 Pakistanis which adds up to 6000 Pakistanis directly dependant on KFC. KFC paying Rs.10 million to Govt. of Pakistan as direct taxes. 95% of its food and packing material is used in KFC Pakistan is produced locally which sums up to purchase of 35 million per month. Each new outlet developed by KFC Pakistan spends 40 million rupees thats a massive amount for this industry. From above analysis, its clear that KFC and Pakistan are growing together. So KFC is doing well at Pakistan. KFC is also following marketing strategies, segmenting the market to segmentation variables and increasing their market share. KFC is leading in Fried Chicken. It gives quality, variety and fresh meal as of its competitors.

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CHAPTER 6 : REFERENCE

Google Search:(i) (ii) (iii) (iv) WWW.KFC.COM WWW.KFCPAKISTAN.COM NAVEED IQBAL, BUSINESS UNIT MANAGER, KFC, MALL ROAD, LAHORE. PRINCIPLES OF MARKETING by PHILIP KOTTLER & GREY ARMSTRONG

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