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INTRODUCTION
KFC Malaysia is the famous fast food restaurant in Malaysia; products it sells include chicken,
burger, nugget, sandwich, wedges, drinks, fries, coleslaw and many more. It has captured 44%
of market shares in Malaysia. Its first restaurant was opened in 1973 on Jalan Tunku Abdul
Rahman, now it has more than 539 restaurants throughout Malaysia and growing.
Among all, their secret recipe chicken is the KFC most famous dish, it has great taste and truly
enjoyed by Malaysian ever since. Kentucky Nuggets was conceived in Malaysia, and found its
way to KFC worldwide today. Meals on Wheels, was also developed in Malaysia, creating and
bringing opportunity for people to taste where KFC might not available. KFC Kids Chicky Club
was also developed to suite for kids. Chicky and Friends, the character in the KFC, bring
pleasure and fun to all children, a good example would be television program sponsored, The
Chicky Hour, which broadcast on every Saturday morning at TV3.
Some other activities developed by KFC Malaysia include Projek Penyayang KFC, Tabung
Penyayang KFC, Tabung Penyayang KFC Collection Boxes, and 4 of KFC restaurant are
operated by speech and hearing-impaired staffs. These 4 restaurants are located in Peninsular
and East Malaysia. First in Sentul Raya, Kuala Lumpur, second is at Saujana, Sarawak, third is
at Tanjung Aru, Sabah and fourth is at Johor.








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BACKGROUND OF COMPANY
Operation
In 2011, KFC Malaysia revenue jumped to RM1,655.3 million, 10.6% up on the RM1,496.9
million recorded the year before. The Malaysian team achieved this success with a combination
of compelling marketing and promotional campaigns and irresistible new products to draw
customers into the outlets. Simultaneously, a range of service enhancements and facilities
upgrades improved comfort and efficiency, whether customers are eating in, taking away or
driving through.
The division initiated three projects during the year to increase operational efficiency. A new
Kitchen Display System (KDS) had its trial run at Wisma KFC. The KDS is effectively a packing
monitor, and its use has resulted in much improved service time, especially during lunch and
dinner time. Having packers at each cash counter during peak periods have meant shorter
queues and higher transaction counts. In early 2012, the KDS will be rolled out to our high sales
volume restaurants in Malaysia.
KFC also installed a Self-Order Service Kiosk on a trial basis at Wisma KFC, which further cuts
queue time by allowing customers to use the kiosk to place their orders, then collect their food
and pay at the counter. Initial results have been encouraging. The Groups third quality initiative
was the development of two customer service squads. This concept clarified managerial roles
in the restaurants by establishing the Customer Mania Squad, involving cashiers and dining
staff and the Product Champion Squad for the cooks and backup staff. Each manager is
accountable for recruiting, training, engaging and energizing his or her squad to deliver the most
effective service. The goal is to achieve higher training levels and a better working environment
in the restaurants.
To keep the menu vibrant, eight new items were introduced throughout the year, each product
launch celebrated with a well-advertised promotion. Offerings such as the Fish Donut, Chicken
Chop with Mushroom Gravy, Quarter Chicken with Black Pepper Sauce, Ol Pocketful, Tom
Yum Crunch, Double Zinger Burger and Krushers with new flavours enticed customers eager for
variety.
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The Group implemented a comprehensive marketing programmed in 2011. The large number of
promotions throughout the year meant that customers could always find something exciting
happening at KFC, and via several channels, customers were informed of the latest events. The
year kicked off with a celebration to mark the opening of KFCs 500
th
restaurant. As an
expression of gratitude to loyal customers, KFC Malaysia offered a Celebration Combo, which
came with a limited edition 24-karat gold-inscribed Celebration Mug.
Chinese New Year followed soon after, and the outlets introduced the Fish Donut, either a la
carte or in a combo meal with two pieces of chicken. This was a very successful limited time
offer, accounting for about 10% of the total sales for the promotional period.
In April 2011, the spotlight shone on the new So Good tagline. But this is not just a tagline
the objective is for customers to be so delighted with KFCs food and service that they cannot
help but exclaim that it is So Good! The marketing team pitched a 5-star campaign to spread
the word, and a new Chicken Chop with Mushroom Gravy was the anchor product.
The Group also focused its attention on breakfast, offering customers a different experience
during the morning hours by providing a Breakfast Corner with free coffee refills, daily
newspaper and radio playing in the background. The breakfast menu was rejuvenated by the
introduction of the new a.m. Cheezy Egg Bun Combo, an improved a.m. Chicken Porridge
Combo, and an a.m. Riser Combo.
KFC Malaysia honored the fasting month of Ramadan and the Hari Raya holidays in July and
August 2011 by offering a delectable Quarter Chicken with Black Pepper Sauce.
In November, the team kicked off a season of kids marketing efforts and got into the spirit of the
Happy Feet 2 movie release. As parents and children flocked to the cinemas, they also
celebrated the beginning of the school holidays by feasting on the KFC Happy Feet 2 Combo. In
mid-December, promotional offers continued to entice parents and children with the Ben 10 and
Power Puff Girls Chicky Meals. Both of these offerings included movie-themed buckets and
collectible figurines.
Reflecting the commitment to provide customers a fresh and inviting dining ambience, the
Group renovated 18 restaurants during the year. 24 new outlets expanded the networks reach
further, and KFC aimed to better accommodate the needs of busy customers by increasing the
number of outlets offering drive-thru service.
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With 539 restaurants in total 455 in Peninsular Malaysia and 84 in East Malaysia the Group
retained its market dominance. KFC remains Malaysias largest restaurant chain. Another 15
new restaurants are planned in 2012.
Marketing
KFC Marketing Sdn Bhd (KFC Marketing) was incorporated in 2001 as sales, marketing and
trading arm for KFC Holdings (Malaysia) Bhd (KFCH) and external markets, both domestically
and internationally. With a vision to be the preferred distributor of superior quality halal brands,
the subsidiary performed exceptionally well in 2011, with sales growing by 23.3% to reach
RM273.1 million. Sales to the domestic open market increased once again, and open market
export sales also jumped to RM15.9 million in 2011. In addition to the Groups own products,
KFC Marketing distributes third-party international brands such as Simplot, Divella, Mission,
Kewpie and Leggos. Datuk Redzuawan bin Ismail, better known as Chef Wan, now acts as
brand ambassador for KFC Marketing, further strengthening the companys position.
Ayamazz Roti Impit
Ayamazz Sdn Bhd was established in 2009 as a wholly owned subsidiary of KFCH. It began by
selling quick, affordable chicken dishes from push-carts in Malaysias college, university and
polytechnic campuses. Each push-cart is independently operated, and the Ministry of Higher
Education has recognized the Ayamazz Roti Impit business model as a successful means of
nurturing young entrepreneurs.
Usahawan Bistari Ayamas
Usahawan Bistari Ayamas Sdn Bhd (UBASB) is a wholly-owned subsidiary of KFC Marketing,
and is a key element in the Groups CSR commitment to assist that in need. UBASB was
established in 2009 to bring the Ayamas brand to the lower-income market sector. UBASBs
business model engages housewives, single mothers and other lower income individuals who
are interested in business to become Sudut Ayamas operators. Parallel objectives are to
provide an opportunity for the operators to generate extra income and to inculcate
entrepreneurship among their children and family members. The Sudut Ayamas operators are
the front-line stocking and sales agents for the UBASB products. Although they are packaged
differently and sold at lower prices, the products all maintain Ayamas hygiene, quality and halal
certification.
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Feed mill Division
The Feed mill operations made good progress in the past year. Revenue for 2011 rose 8.6% to
RM208 million. Increased broiler production to meet the Groups chicken requirements
translated to 137,000 metric tons of feed milled an increase of 1,000 metric tons over the
previous years production. Estimates of broiler requirements for 2012 are higher still, and feed
volume is also expected to grow.
Breeder Farms & Hatchery
In 2011, the revenue achieved by the Breeder Farms and Hatchery division rose to RM93.8
million. Meanwhile, the division considerably boosted its production by investing in additional
facilities.
Sauce Manufacturing
Region Food Industries Sdn Bhd (RFI), which manufactures sauces both for the Group and for
external markets under the brand name Life, reported an impressive sales growth of 12.5%
from RM89.9 million to RM101.1 million in 2011.
Bakery
In 2011, the Bakery division recorded sales of RM31.2 million. It also achieved a 7.7% increase
in bun production and introduced the Butter Scotch Bun to the KFC product line. The
rectangular Butter Scotch Bun has a rich butter caramel and milk flavor and is already proving a
popular addition to the KFC menu. Meanwhile, new pizza dough line 700 square meter facility
providing dough for 42 PHD outlets to date began operations in February 2011.
Tepak Marketing
Tepak Marketing Sdn Bhd (Tepak), a wholly owned subsidiary of KFCH produces, markets, and
sells beverages and nutritional drinks for the domestic and export markets. In addition to various
tea products sold in packets, pot bags and sachets, Tepak also manufactures carbonated drinks
in PET bottles (Bottles made of Polyethylene terephthalate) and aluminum cans.

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ISSUES
1) Products Strategies
The current strategy for KFC Malaysia of the product strategy varies; they have used many
strategies in order to perform well in the market. Below are some of their current strategies.
Value
Their current value added of their product is collaboration with Hotlink, that when customer
receives a SMS from hotlink, they can go redeem the product of discounted food from KFC
Malaysia outlet. Another value added of their products is free gifts, drinks upgrade to bigger
portion.
Design
As for the design strategy, their current method is customizing standardization. They are using
scope of product that is multiple in customized designs, but they have standardized the
procedure of producing, which is the design customization.
New Product Development
KFC Malaysia will come out with new product once in a while; some of their promotional
products that were introduced were Twister and Waikiki Burger. Developing a new product and
eliminate it after some times will help them to gain numerous market shares, as people will try
the product before it vanish again.





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2) Pricing Strategies
Pricing for existing products maintain
Pricing is an important marketing factor for KFC because it brings impacts to the firms profit.
Getting the right price will bring sufficient profit for the firm. In terms of KFCs existing products,
they are maintaining their product pricing.
Segmented pricing for customers
Customer
KFC has come out with segmented pricing strategy for the customers. Membership cards
(Chicky Club) for kids has been used for a long time. Childrens can enjoy special discount while
purchasing KFCs products especially kids products. And children who are registered as
members also have some special surprise presents.
Time
Currently KFC offer different time pricing. For instance, KFC now has snacks time in the
afternoon from Monday to Friday with a cheaper price. This actually encourage customers to
have a tea time culture in Malaysia.








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3) Communication Strategies
Advertising
Currently, KFC is advertising in television, newspaper and radio. For television, KFC advertise
mainly of its new meal or promotion during the commercial break. Furthermore, the
advertisement also broadcast in its own website: www.kfc.com.my. For instance, the latest ad
showed 2 Malay couples promoting the new KFC meal, Combo Ria with satay sauce by using a
hilarious and comedy chit-chat. For the newspaper, KFC advertises the new meals and
promotion which sometime provide free voucher to get discount. For radio, KFC normally
advertise by persuading and reminding customers to dine in KFC restaurants.
Sales Promotion
KFC always utilize the sales promotion in order to promote its new meals. By providing free
voucher cutting from newspaper to get discount for new foods is always practiced by KFC.
Besides free voucher for discount, KFC also has free vouchers in newspaper for free gift
redeem such as soft drink etc. Moreover, KFC also collaborate with Maxis Hotlink to give Maxis
prepaid users who hold KFC promotional SMS could get special meal when dine in KFC.
Public Relation
KFC has on-going of sponsoring television program just for kids such as Chicky Hour on every
Saturday morning at TV3 has been going strong for more than 5 years. KFCss Chicky Hour
showed fantastic cartoon program which enabled KFC to successfully capture the market of
children successfully. In addition to that, KFC also practiced numerous corporate social
responsibilities such as having a KFC Charity Collection Box in every outlet which could get
customers to contribute for charity of orphanages. Moreover, KFC also has 4 restaurants
employing staffs which are speech and hearing-impaired to help they build up the confidence
and self esteem in their life.



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RECOMMENDED STRATEGIES
1) Products Strategies
Value
The strategy that would recommend for KFC Malaysia is the value added for their product. KFC
should further enhance this value added to contribute more toward their growth rate, as their
recommended goal now is to regain the growth rate and market share. The group
recommended that they can give voucher for customer when they purchase their products,
stating next purchase will have certain discounts. Another ways of doing would be that they
establish a KFC cards, just like what Bonus Link doing, they can collect points every time they
buy products from KFC Malaysia. By doing this their customer loyalty can also be improved.
Product Design
Moreover, is the product design, KFC Malaysia should use the customization strategy for their
products. The morale behind this is that people will choose what ingredient they wanted for their
products, they will do it themselves, and pay only when they proceed to the counter. Just like
what the Deli is doing. By doing this, the company can reduce their cost, because not much
people is needed in preparing the food at the back when they get order, all they need to do is to
prepare the food earlier, put in on places and people will do it themselves, the next thing they
will do is to calculate how much to be charged. Not only this, customer will be more satisfied if
they can choose what they want to eat, and health conscious customer can have more choices
in dining, because they are not restrained from eating things that they do not want.
New Product Development
Thirdly, new product development is also proposed to have new product like Dumpling and
Satay. Both of the products are traditional dishes for Malaysias two main races, Chinese and
Malay. In touching peoples heart, people will like KFC more than any other fast food
restaurants. Market share thus will be further increased.


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2) Pricing Strategies
Pricing for existing products maintain
Suggested recommendation for KFC would be continue maintaining the current price of existing
products. Changes in prices will not benefit KFC because charging the products with lower
prices might lead to customers perceptions that the food quality will decrease while charging
prices for the products too high might cause the customers to switch their preferences to
competitors fast food company like Mc Donald.
Segmented pricing for customers
Customer
Apart for only focus on childrens welfare, KFC can also offered older citizen in Malaysia with
membership card. Since a new customer segment which is health conscious customer has
been add in into new strategy of KFC, older customer age 40 and above will actually come to
KFC and enjoy meal. Hereby KFC can offer a special price and discount for the registered old
customers. From the membership forms they fill in, information regarding their personal details
and their preferences can be obtained (information will remain confidential within the
organization). The customers will receive birthday cards and special discounts for food that they
ordered.
Time
Currently KFC also offer 24 open hours in west Malaysia but the price is normal like usual. It is
recommended that special discounted price can be offer in the midnight from 12am to 8am
everyday to encourage more customers to come to KFC in the middle of the night.




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3) Communication Strategies
Advertising
Suggested recommendation for KFC would be continue maintaining advertising on the
television, newspaper, radio and internet. Moreover, KFC is highly recommended to promote
their new product advertising in public transport such as the bus walls in order to increase the
customers awareness about their launching new product.
Sales Promotion
KFC should organize more events such as sweepstakes, lucky draw etc. As customers tend to
be attracted with free lucky draws and sweepstakes, KFC should behold the opportunity to
attract more customers to dine in or take away in KFC restaurants in order to participate in the
particular lucky draw or sweepstakes. Moreover, KFC could organize event like drawing
competition in restaurants. This could be done by giving a drawing paper to the children to draw
and fill colour after customers purchased meal, and the list of winners would be informed after
the due date. This could attract more children to participate as children are tending to like
drawing and filling colour.
Public Relation
KFC should endorse famous singer or celebrity to promote KFC meals through advertisement. It
also could be done through the singing concert that would be sung by the famous singers. KFC
could search opportunity by collaborating among the rising-famous singers in Malaysia and it
would help boost the sales of KFC. This could be done by giving half price concert ticket when
customers purchase particular meal in KFC restaurants. Furthermore, customers behaviors
would tend to like discount and half price incentives and it would assure KFC could successfully
capture the markets.



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CONCLUSION
As a conclusion, KFCH guarantees full halal compliance in all of the Groups markets. Every
aspect of the food manufacturing processes, including raw materials procurement, preparation,
packaging, storage and utensils follow strict controls. The Group pays keen attention to any
products acquired from foreign suppliers, requiring that they be halal certified within the source
country and accepts only certificates recognized by the Department of Islamic Development
Malaysia (JAKIM).
Esteemed scholars from Islamic institutions comprise the KFCH Shariah Advisory Council,
which inspects every stage of the food production chain. The Council examines equipment,
ingredients, and preparation methods, touring all of the Groups facilities, restaurants and
factories. Once the internal Council is satisfied, JAKIM is requested to repeat the entire
inspection process. After that, all of the Groups products bear the official JAKIM stamp
indicating full halal compliance.
KFCHs internal Shariah and Halal Department reports directly to the Shariah Advisory Council.
The department plays a vital role in the Groups halal commitment, creating a deeper
understanding of halal principles for all stakeholders both within KFCH and beyond via training
exercises and media campaigns. The department strives to develop mutually beneficial
relationships with relevant NGOs, and it acts as the first response unit for the Groups Shariah
Advisory Council.