RETAIL MARKETING

FINAL PROJECT

SUBMITTED TO
MR. HANEEF

SUBMITTED BY
MR. NAVEED IQBAL
MR. WAQAS AHMAD
MR. YASIR SALAMAT
&
MR. FAHIM ROSHAN SIYAL

CLASS
BBA 5 SEMESTER
TH

MORNING

SUBMITTED ON
FRIDAY, MAY 04, 2007
 National University of Modern
Languages

We dedicate this report to our Parents and

respectable Teachers
 ACKNOWLEDGEMENT:

First of all, we would like to offer our eternal thanks to the Almighty
Allah who blessed us with the perseverance and the sprit of hard work
to complete this project. We are also grateful to our parents for their
patience and belief in us. We offer our respectful gratitude to our Retail
Marketing course supervisor Mr. Haneef for his guidance &
encouragement. We would like to thank all of those people specially
the Marketing Manager of KFC Mr. Sheikh Sohaib who helped us
through our entire Retail Marketing project.

KFC Group Members

May 04TH,
2007
National
University of Modern Languages
 TABLE OF CONTENTS:

Topics covered in this report:

 Company’s Profile……………………………………..…………………
………………………..02
 EXECUTIVE SUMMARY

KFC Corporation, based in Louisville, Kentucky, is the world’s

most popular chicken restaurant chain, specializing in
TM
Original Recipe ®, Extra Crispy , and Colonel’s Crispy
Strips® chicken with home style sides and five new freshly
made sandwiches. Every day, nearly eight million customers
are served around the world. KFC’s menu everywhere
includes Original Recipe® chicken—made with the same
great taste Colonel Harland Sanders created more than a
half-century ago. Customers around the globe also enjoy
more than 300 other products—from a Chunky Chicken Pot
Pie in the United States to a salmon sandwich in Japan.

KFC continues reaching out to customers with home delivery

in more than 300 restaurants in the United States and
several other countries. And in quite a few U.S. cities, KFC is
teaming up with other restaurants, Taco Bell and Pizza Hut,
selling nearly fifty years ago; Colonel Sanders invented what
is now called “home meal replacement” – selling complete
meals to harried, time-strapped families. He called it,
“Sunday Dinner, Seven Days a Week.”

Today, the Colonel’s spirit and heritage are reflected in KFC’s

brand identity – the logo features Colonel Harland Sanders,
one of the best-recognized icons in the world.

KFC is part of Tricon Global Restaurants, Inc., which is the

world’s largest restaurant system with nearly 30,000 KFC,
Taco Bell and Pizza Hut restaurants in more than 100
countries and territories.

Mission statement:

KFC is an internationally renowned fast food industry in the world. They

have the main ambition to increase & maintain the quality in fast food
industry. Their aim is to capture the fast food market. Basically they
want to provide their products to anyone that is why they expending
their branches in all over the world.

They want to increase their profit through giving maximum satisfaction

& other better facilities to people that they want. Now after catching
such a marvelous position in the International Market, KFC is
introducing a new item “Boneless Fried Chicken”, with even more
attractive and charming taste.

Company overview:
Colonel Harland sanders, born September 9, 1890,
actively began franchising his chicken business at the
age of 65. Now, the Kentucky fried chicken business
he started has grown to be one of the largest retail
food service systems in the world. And colonel
sanders, a quick service restaurant pioneer, have become a symbol of
entrepreneurial spirit. More than two billion of the colonel’s “finger
lickin’ good” chicken dinners are served annually. And not just in
America. The colonel’s cooking is available in more then 82 countries
around the world.

When the colonel was six, his father died. His mother was forced to go
to work, and young Harland had to take care of his three year old
brother and baby sister. This meant doing much of the family cooking.
By the age of seven, he was a master of a score of regional dishes. Ate
age 10, his first job working on a nearby farm for $2 a month. When he
was 12, his mother remarried and he left his home near Henryville,
Ind., for a job on a farm in Greenwood, Ind. He held a series of jobs
over the next few years, first as a 15-year-old streetcar conductor in
New Albany, Ind., and then as a 16-year-old private, soldiering for six
months in Cuba. After that he was a railroad fireman, studied law by
correspondence, practiced in justice of the peace court, sold insurance,
operated an Ohio River steamboat ferry, sold tires, and Operated
service station. When he was 40, the colonel began cooking for hungry
travelers who stopped at his service station in Corbin, KY. He didn’t
have a restaurant then, but served folks on his own dining table in the
living quarters of his service station. As more people started coming
just for food, he moved across the street to a motel and restaurant that
seated 142 people. Over the next nine year, he perfected his secret
blend of 11 herbs and spices and the basic cooking technique that is
still used today.

Operations in Pakistan:
KFC (Kentucky Fried Chicken) was introduced in the Pakistani market by
the Artal Group of Belgium and although a late entrant, it managed to
establish several outlets in Karachi, Lahore and several more areas.
After a through survey and analysis KFC opened its first branch in
Garden town Lahore five years back. Since then there was no looking
back for KFC as it started to earn profits and grow to other different
cities. KFC in Pakistan has been shoeing a steady growth and
profitability. Some profits were used for team making, uplift of the
restaurants etc. KFC believes in providing “value for money” to its
customers. They have high quality standard and they are in
concurrence to those prevailing in other countries. They have an
international brand name to protect so there is strict implementation of
quality standards.

Procurement Issues:
 All the raw materials like chicken are bought from value chicken,
vegetables from Monsalwa and they use caned fruit for salads. The
machinery is all automated and is in conformance to international
standards. KFC officials often visit the outlets without giving prior
notice in order to check the conformance to quality standards and
procedures. Moreover, Food Inspection Teams from Health Ministry
visits twice a year to ensure Hygienic Conditions at the Kitchen.

Performance Overview:
KFC has taken advantage of all these excellent investment
opportunities that Pakistan offers for franchising and has expanded and
penetrated the market a lot. KFC has adapted to the legal and political
environment and conditions of Pakistan. The Pakistani culture has also
molded the operations of KFC in Pakistan. All the outlets of KFC in
Pakistan present Pakistani food culture. KFC has displayed banners that
it servers Halal food all over its outlets which represents Pakistani
culture. They also offer families’ deals as the people are very close to
their families and like to have food with
General Manager them. KFC has also brought some
(GM) changes in the culture of Pakistan. The
Manager
most significant is the way it has
changed the eating habits of the local
Assistant Manager (I) Assistant Manager (II)
population. People now are aware of
Shift In-charge
unhygienic conditions that prevail in
some of local restaurants. And KFC has
Counter workers also brought the idea of self-service in
Pakistan.
Kitchen workers

Guards Organizational Structure:

The KFC adopted traditional structure for their outlets
that other food chains are following. There is one
General Manager for Pakistan. The outlet is leaded
by the Manager, assisted by two assistant managers,
and one shift in-charge for each shift, that supervises
the performance of counter workers and kitchen
workers.

Competition:
KFC does not consider Mc Donald’s are its direct competitors. As Mc
Donald’s has a limited menu and cater to different segments of society
e.g. Mc Donald is catering to lower middle society of Pakistan. Though
KFC has faced a little competition from local restaurants but their
breakeven in terms of revenue has been done and they are planning to
expand further to other cities like Islamabad and Peshawar.

SWOT Analysis:-

Strengths:-

Weaknesses:-

Opportunities:-

Threats:-

MARKETING
Since 1982, KFC’s “All-American salute to Mothers” national card
contest has been KFC’s way of honoring moms and their families for
making mother’s Day KFC’s biggest sales day of the year. The contest
encourages children to creatively express their feelings for their moms
by making a homemade card and give them chance to compete for
more than $10,000 in cash and prizes. Educational packets, including
language, history and art exercises highlighting Mother’s Day, were
sent to thousands of schools nationwide.

There are 4 P’s of Marketing:

1. PRODUCTION
2. PRICING
3. PROMOTION
4. PLACEMENT

1. Production:
Basically the product is anything that be offered to a market for
attention, acquisition, use, or consumption that might satisfy a want or
need. KFC is specially dealing in the chicken products; Basically, KFC
has the special raspy for chicken products that is why, KFC known as a
chicken specialist allover the glob. KFC target the Asia and east side
because they observe that they people are like the chicken products,
so they enter in the market due to the demand of their chicken
products. KFC product variety of product in the chicken, those products
are:

PRODUCTS:

• Original recipe® chicken

• Extra Tasty CrispyTM chicken
• Hot WingsTM pieces
• Tender Roast® chicken
• Chunky Chicken pot pie
• Kentucky Nuggest®
• Colonel’s Crispy Strips®
• Honey BBQ sandwich
• Original Recipe® Sandwich
• Tender Roast® Sandwich
• Triple Crunch® Sandwich
• Triple Crunch ®Zinger® Sandwich
BRAND:

There are three brands of the KFC:

1) Taco bell
2) Pizza Hut
3) Long john silvers

2. Pricing:
KFC during pricing their products keep the different points in the mind
like they adopt the cost base price strategy. Pricing of the product
includes the Government taxes and excise duties and then they come
at final stage of determine the price of their products. KFC prices of
products are a bit high according to the market segment and it is also
compatible to the stander of their products.

Calculation of the price under Cost Based Pricing Strategy:

Total Pounds of Chicken Served in KFC Restaurant Annually =

1.914 Billion

Total KFC Chicken Pieces Sold Annually = 5.89 Billion

Total Retail Sales = $8.9 Billion

Sales Price of per Chicken Piece = Total Retail Sales / Chicken
Pieces sold
= $8.9 Billion / $5.89 Billion
=$1.51

We assume that Fixed Cost is = $6000000000

Variable Cost = $675000000
Profit Margin is Or Mark Up = $225000000(25% of Sales)
Per Unit Variable Cost = $675000000 / 5890000000
= $ 0.115

Unit Cost = Variable Cost + Fixed Cost / Chicken pieces Sold

= 0.115 + 6000000000 / 5890000000
= 0.115 + 1.02
= $1.135
Now suppose manufacturer wants to earn 25% mark up on sale. The
manufacturer mark up price is calculated:

Mark Up Price = Unit Cost / (1 – Desired Return on Sales)

 =1.135 / (1-.25)
= 1.135 / 0.75
= $1.51

3. Promotion:
Promotion is one of the necessary plates in any form of business or in
other words you can say that promotion is the key of success. If you
promote your product at the right time. KFC also known the importance
and significance of promotion so they uses the bill boards the major
source of advertisement and one of the most important thing that they
uses media especially the newspapers to promote their products. They
are also creating awareness among the masses about their existing
product range as well they tell us about the future product.

Marketing efforts to be taken by the restaurant:

 Paste delivery posters at petrol pumps, flats, colleges, plazas, and

departmental stores.
 Distribution of delivery flyers in residential areas, markets, plazas
and institutions (as per the plan)
 Visit offices and business places.

4. Placement:
In the case of the KFC the placement of the product is not important
but the placement of the restaurant is important. The products of the
KFC is cooked at the sport and then served after that. KFC Cavalry
branch opened in June 1998, in the main commercial zone of Cavalry
Grounds near the Jinnah Flyover. The restaurant is a three-story
building including the basement (where the chicky play area is
located). It is ideally located in the center of a main commercial and
residential area of Lahore. The area that KFC Cavalry caters for is the
residential and office area of Cavalry Grounds and Cantt, as the main
target market. Another branch the KFC opened in the Lahore is in
Garden Town (opposite to Barkat Market). KFC also target the
Faisalabad and open its branch in D ground. Now we can easily judge
that the KFC target the place for their restaurant, which is well known
and is in the Porsche area where the income level of the people is high
then the middle class level. Because the prices of the KFC products is
high with comparison to the local products manufacturer who are
dealing in the same kind of product in which KFC is dealing but the
prices of the KFC is high due to special taste, high quality, and due to
international brand, it is the world recognized fast food restaurant all
around the world. So, for the placing strategy, KFC chose the well
income class area for their restaurants.

CONCLUSION
After my research of KFC, I come to conclusion that KFC has a good product as far as
chicken items are concerned. But they have to increase other varieties to attract the
customers. And they must targets the children, as McDonald’s targeting by making a play
land because children are the main source and important ones to push their parents to go
to their favorite restaurants. And one more aspect for KFC is that it must also reduce their
prices to compete their competitors like McDonald, Crisps Pins and Pizza Hut.