Final-Term Project

MBA-II (sec E)

Topic: KFC Consumer Profile

Submitted by:
Rao Zahid Mubarak Atif Waheed Khushnood Hussnain Muhammad Bilal Idrees Muhammad Waseem (Leader) MBP-11015 MBP-11009 MBP-11016 MBP-11017 MBP-11088

Submitted to:
Mr. Salman Mangol Consumer Behavior

Department of Management Sciences SUPERIOR UNIVERSITY, LAHORE

Kentucky Fried Chicken

Table of Contents
1. Title

2. Introduction of KFC 2.1. Background 2.2. Competitors 2.3. Industry Analysis 3. Marketing Mix 3.1. Product 3.2. Price 3.3. Place 3.4. Promotion 4. Consumer Profile 4.1. Target Market 4.2. Segmentation (Demographic) 4.3. Psychography & Life Style 4.4. Vals & Maslows Hierarchy of Needs 5. Conclusion 6. Appendices 7. Questionnaire 8. Data Sheet

Introduction
Kentucky Fried Chicken (KFC) - one of the most known fast food chains in the world started in the early 1930's by Kernel Sanders in the Southern USA as a small franchise operation. Colonel

Sanders has become a well known personality throughout thousands of KFC restaurants Worldwide. Quality, service and cleanliness (QSC) represents the most critical success factors to KFC's global success. Food, Fun & Festivity, this is what KFC is all about. Leading the market since its inception, KFC provides the ultimate chicken meals for the Chicken Loving Nation. Be it Colonel Sanders secret Original Recipe Chicken or the Hot & Spicy version, every bite brings a YUM on the face. At KFC we proudly say: KFC has more than 11,000 restaurants in more than 80 countries and territories around the World. In 1971, Heublein, Inc. acquired KFC, soon after, conflicts erupted between the Colonel (which was working as a public relations and goodwill ambassador) and Heublein management over quality control issues and restaurant KFC is part of Yum! Brands, Inc., however in the case of Pakistan KFC builds the relation of Quality Service and cleanliness for Customer. KFC was acquired by PepsiCo in 1986, it had grown to approximately 6,600 units in 55 countries and territories. Due to strategic reasons, in 1997 PepsiCo spun off its restaurant businesses (Pizza Hut, Taco Bell and 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. Kentucky Fried Chicken has become KFC. Does anybody know why? We thought the real reason was because of the "FRIED" food issue. It's not. The reason why they call it KFC is because they cannot use the word chicken anymore. Why? KFC does not use real chickens. They actually use genetically manipulated organisms. These so called "chickens" are kept alive by tubes inserted into their bodies to pump blood and nutrients throughout their structure. They have no beaks, no feathers, and no feet. Their bone structure is dramatically shrunk to get more meat out of them. This is great for KFC because they do not have to pay so much for their production costs. There is no more plucking of the feathers or the removal of the beaks and feet.

KFC in Pakistan Presently KFC is branched out in nine major cities of Pakistan (Karachi, Lahore, Rawalpindi, Faisalabad, Multan, Peshawar, Sialkot, Hyderabad, and Islamabad) with 45 outlets nation-wide. Opening the first KFC outlet in Gulshan-e-Iqbal, Karachi in 1997, and 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. In Pakistan totally Chicken buy from Pakistani Poultry Forms, and also this Chicken is 100% Halal. About Cupola Cupola is a Dubai based multinational company involved in several business including, oil gas exploration, plastic cards, retail markets and food franchising. Cupola holds the master franchise rights to operate KFC in Pakistan since 1999. That was a major difference that when Cupola takes complete Operate in Pakistan that was only 05 Outlets in allover Pakistan, and then now the major difference that Cupola takes 45 Outlets in Pakistan. Apart from fulfilling the commitment of serving delicious, fresh and hygienic food and at the same time providing the customers with the ultimate entertainment; KFC also plays part in the economic development of our country. 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 to 11 million per month from KFC Pakistan as direct taxes. 95% of all food and packaging material used in KFC Pakistan is procured 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. Annual turnover in Pakistan 2.5 billion. KFC doesnt buy its supplies from Pakistan.

KFC and PakistanGrowing Together

Business Definition
Performance Overview

Key Products KFC product line includes all chicken based products. Burgers: Zinger Burger Colonels Chicken Burger Colonels Fillet Burger SUB60 Zinger Jr. Chicken: 1 piece 2 pieces 5 pieces 10 pieces

Combos: Chicken Meals Sandwich Meals Family Meals Desserts & Beverages: Fruit Salad Regular & Large Drink Regular & Large Mineral Water Tea Scoop of Walls Ice cream Coffee Snacks & Side Orders: 5 & 20 Pieces Nuggets Arabian Rice 5 & 10 Pieces Hot wings Dinner Roll Regular & Large Fries Hot Shots Corn on the Cob

Key Services KFC offered free home delivery service at specific branches in specifics cities. They take at 30 min for delivery and the minimum delivery order should Rs.200.They also provided services to celebrate the birthdays of kids at there home or in KFC restaurants. Now recently KFC also provides services for KFC mobile unit.

Customer Segments Age: There is no age limit. It focuses on people lying under every age group. Gender: KFC focuses on both genders. Family life cycle: It focuses on the whole family. Social Class: Upper class, upper middle and lower middle classes are focused. Personality: Ambitious, self-confident and extrovert. Benefits Desired: Taste and value for money. (Satisfaction > Expectation) Geographic Karachi, Lahore, Rawalpindi, Faisalabad, Multan, Peshawar, Sialkot, Hyderabad and Islamabad. Lahore: Gulberg: The main Gulberg branch is situated on M.M Alam Road, which covers a wide area and serves a large number of customers. This restaurant faces competition with many top Fast Food restaurants located on the same road. Defence: Their Defence Branch in H-Block focuses the potential customers of Defence. Barket Market: This branch covers the area of Model Town, Johar Town, Muslim Town, Garden Town and Faisal Town. It is situated among many offices and banks.

 Cavalry Ground: This branch is located in the main commercial zone of Cavalry ground and mainly serves a large number of customers of cavalry ground and Cantt. Shadman: The Shadman branch is located on Jail Road and serves potential customers. Thokar Niaz Baig: This restaurant branch serves latent customers. Mall Road: It serves a large commercial and business area of Mall Road.

Situation Analysis SWOT Analysis

Strengths Oldest and finest in Business High Goodwill Does not have any Core competitor In chicken serving Large Number of Outlets at prime locations Serves variety of items under single menu Loyal customers Faces numerous advantages of being a Multinational Organization e.g. economies of scale, government incentives etc. Weaknesses Presence of Multinational competitors in the market e.g. McDonalds(specialized not in chicken serving but in burgers) Imported raw material rise their prime cost

Opportunities Cheap and easy availability of labor Increase consumption of fast food has increased the market size Consumer prefer All under one roof in order to increase their sales turnover they can increase or add the served items Threats Entrance of New competitors into the market High political instability/uncertainty Demand and Key Trends Consumer expenditures on meals outside the home have been increasing for several decades. Between 1960 and 1994, the proportion of total food expenditures spent on food away from home increased from just over 26 percent to nearly 50 percent. Over much of this period, fast food has been the most rapidly growing segment of the food away from home industry. Between 1970 and 1992, inflation adjusted fast food sales grew at a compound annual rate of about 5.8 percent, more than double the rate of growth of the next largest segment of the industry, table service restaurants. Currently, fast food accounts for nearly 50 percent of all expenditures on meals prepared outside the home. Despite its growing prominence in the diet, few academic studies have focused on the forces behind the growth of the fast food industry. Most conclusions regarding this industry are drawn from research that focuses on the broader category of all food away from home. In most of these studies, changes in consumption over time are attributed to changing demographics, tastes and preferences, and opportunity costs of time. Consumer demand for convenience makes physical proximity and ease of access critically important. This simple fact has escaped recognition in previous work. It incorporates convenience through a measure of the availability of fast food within particular markets. Greater availability decreases the transportation costs incurred by consumers to purchase meals from fast food outlets. Along with availability, per capita consumption is estimated as a function of transportation costs, prices of fast food and its substitutes, income, and various demographic characteristics. Product Lifecycle KFC introduced itself, has grown and now it is at maturity stage for the last ten years in Pakistan.

Competition Analysis and Basis for Competition KFC has a head-on competition with McDonalds so wherever they place their products; KFC goes there as well. Locally in Pakistan KFC face a close competition with the local brands like AFC (Al-Baik Fried Chicken), Fried Chicks, Dixy Chicks etc which are producing more or less the same product as KFC. Competitive Competition Popeyes, Chick-fil-A and Cajun Operating Companys Churchs Chicken are the only other fast food restaurants in this intensely competitive field that offer chicken as their primary food at comparable prices making them the immediate competition to KFC. While other restaurants like McDonalds and Arbys may offer chicken sandwiches and strips and other things of that nature, they push a variety of other items more heavily, which generally causes consumers to view them in an entirely different category from restaurants like KFC. o KFC needs to focus on their top three competitors if they hope to maintain their dominant share of the fast food chicken market.

Competitive Advertising Popeyes has positioned themselves as the Louisiana style chicken which promotes their pride in their Cajun roots. In addition to Chick-fil-As humorous Eat Mor Chikin campaign which you frequently see on highway billboards and TV commercials, they have tried to segment themselves from the rest of the fast food chicken restaurants by stressing how important customer service is to them. Churchs Chicken radio, TV and print ads have made them known as the fast food chicken that ultimately makes your life better with their slogan Full Flavor. Full Pockets. Full Life.

Social/Legal Influence KFC suppliers cram birds into huge waste-filled factories, breed and drug them to grow so large that they cant even walk, and often break their wings and legs. At slaughter, the birds throats are slit and they are dropped into tanks of scalding-hot water often while they are still conscious o KentuckyFriedCruelty.com

Critical Success Factors Quality Service

 Cleanliness Ambience Database Retailing

Marketing Objectives

Consistently deliver superior quality and value in our products and services. Maintain a commitment to innovation for continuous improvement and grow, striving always to be the leader in the market place changes. Generate consistently superior financial returns and benefits for our owner and employees

Marketing strategies Position strategy KFC has been trying to position itself as a best fast food restaurant which provides healthy chicken products with a wide range. KFC offers new deals n new products to show the commitment to meet their customer's ever-changing needs with lower calories and fat. Product/service strategy Product Planning Their product is classified as consumer product as it has no intermediates KFC offers specialty goods. The stock turn over of KFC is high Price and quality of the product is always compared. Their product includes Goods (Burgers, Chicky Meals etc) Services (cleanliness, quick service, parties, and meetings). Product strategy It was launched here as an innovative product. KFC has got one product line but later they introduced products in the same line to protect their market share. New product ideas are generated from: Customer services (comments cards) Gallops survey (mystery shoppers) They have a Quality Assurance department that decides the new product innovation. Q.A. department prepares screening of new ideas and products feasibility report. This department does the technical evaluation (whether it is practical to produce the new product or not). The products are tested externally by offering trials to customers by giving them free samples. KFC uses telemarketing, print media, billboards and most recently televised marketing for promotion. KFC adds a new product in its present assortment based on

Their competitors Products adequate demand The satisfaction of key financial criteria Its compatibility with environmental standards.

Product Mix Strategies The product mix strategies are in relation to: Attributes: The brand KFC is so strong that it is the attribute itself. Place and Quantity: KFC products are based on high quality and prices. Line Extension: Through introducing new meals offers. Alteration of existing products: Quality Assurance department does it. The department decides which product should be sold and when (seasonal products as rice and soups offered in winters). Functional modification: It is also decided by the Q.A. department to introduce new recipes. Quality modification: KFC has moved to masses rather than the original recipe. When the new deals or offers are not sold as expected, Q.A. department contracts the previous offers and introduces new offers.

Service KFC emphasizes on customer service and long-term relationships with their customers. To meet these objectives KFC suggests their employees to take the order, repeat it back to them, suggestive sell if possible, and have the order packed or pack it yourself. Always thank them and wish them a great day. Order should be take no longer then 3 minutes to execute for maximum efficiency.

Price Strategy In introduction stage KFC entered the market using market-skimming strategy. Their products were high price and targeted only upper class. Gradually they trickle down focusing on the middle class to penetrate the market. Also KFC follows one price strategy. Price is determined according to the rates of the raw materials and policies of the Govt. The political and legal forces often affect the policies of KFC and eventually results in change of prices that is due to imposing of taxes.

PLACE
Distribution channel KFC has only one channel of distribution i.e. direct where the goods are transferred to the consumer directly. KFC has no middlemen. Distribution of consumer goods & services KFC does distribution of consumer goods directly to the consumer. KFC also does distribution of services to the consumer like parking, sitting, home delivery, etc. KFC gets Wheels! KFC launched its first mobile unit, which took the streets of Karachi by storm. The mobile unit has been designed to cater to the needs of those who are on the go, and have little time to stop by at a restaurant. It also provides a unique convenience of enjoying the delicious KFC offering anytime, anywhere, thus making fast food truly fast and convenient. KFC intends to further develop its mobile network nationwide through more such Units Intensity of distribution KFC does intensive distribution on its outlets. (All and everything on every outlet). Vertical marketing system KFC has corporate vertical marketing system because it is centrally owned by its subsidiary Yum Brands. KFC is affected by the geographic distribution (they have few outlets then its competitor McDonalds). The unit value of the items is comparatively lower then McDonalds. KFC has a well-equipped sitting area for the customers and a Chicky play area for the kids.

PROMOTION
The logo features Colonel Harland Sanders that is one of the best logo in the world has created its name as a standard in the market. Today the Colonels Spirit and heritage are reflected in KFCs brand identity. KFC by its advertisements derives the desire in the customer to come and enjoy healthy food in their favorite restaurant. They spend 2% of its profits on advertisement. They use print media and most recently doing televised marketing to promote it products. Their advertising media involve: Newspapers, Pamphlets, Billboards and Television.

KFC does both the primary demand advertising (Become a Chicken Fanatic) and the selective demand advertising (e.g. Zinger Meal). In its advertising it give informative messages like Faryad: Keep the city Clean. KFC does institutional advertising to stimulate demand. When KFC offers new products then it does product advertising. KFCs ads act as counteracts which means to drive the customer to KFC i.e. it uses pull advertising strategy. KFC has put big hoardings on the busy areas of Pakistan and have an effective advertisement campaign on the media in order to MOTIVATE its customers. The colors used in advertising are Red, White and Blue which itself is recognition for the brand. KFC have joint sale promotions with different companies like HP, Philips, Value Meals, Pepsi-Cola. And most recently with ARY Gold digital and WorldCall Internet services. Also KFC Proud Partners are Del Monte, Culligan, Shan and Peek Freans (EBM). PSO had made a scheme in which PSO had given the coupons of KFC having 10% off. (1 coupon was given after each purchase of 10 liters of petrol) KFC in its advertisements says; Nobody does chicken like KFC We do chicken right Hence, focuses on product advertising. KFC does mass selling in order to reach its target market (as it has trickle down). KFC in its ads try to convert people to people who eat boring bland fast food over to KFC. In one of its commercial in America, Jason (who is a Chicken Fanatic)

young skateboarder, softball team and group of construction workers to "put down their gray and tasteless burgers" in favor of KFC's hot and juicy Original Recipe Chicken. Jason will appear in future KFC commercials as he continues his quest to tell America that they no longer have to compromise taste and quality for fast food convenience. Become a fanatic yourself and head over to your nearest KFC restaurant to enjoy some tender, juicy, freshly prepared Original Recipe Chicken! The message conveyed in the ads is recognition for the brand. KFC does competitive advertisement with its head on competition with McDonalds. Regarding this KFC uses Pricing below competition strategy. KFC sponsors many NGOs and other social welfare organizations like Regular sponsorship to SOS village. Sponsorships to FARYAD a plant and life association. FARYAD: Keep The City Clean. They also offer different deals according to the season and occasions. KFC publicity in Guinness book of world record With the caption Biggest Birthday Party. The event took place on Louisville, Kentucky, USA, on Sept.8, 1979, to celebrate the 89th birthday of Kentucky Fried Chicken founder Col.Harland Sanders. Quality assurance KFC takes great pride and care to provide the best food and dinning experience in the quick service restaurant business. They believe eating sensibly, combined with appropriate exercise, is the best solution for a healthy lifestyle.

Food safety
Chicken & its Products: Locally produced and processed chicken. Supplied in frozen form 100% Halal

People Strategy KFC promotes and encourages all of its employees. They evaluate individual contributions and reward them accordingly. They also offer exceptional training and qualifications to help them achieve the best career. They try to motivate their employees through offering work-life balance. So that employees can enjoy the life with their families. KFC offers special discounts on

products to its employees. They give a staff discount card detailing the discounts employees can enjoy when they join the KFC. From the day employees join KFC, they recognize every day that employees spend with them. The rewards vary from badges to acknowledge their service. KFC provides a friendly environment for their employees which help them to work efficiently. All these factors motivate the employees and they prefer to work with KFC as long-term. Incentives of employees Health insurance Leave fare assistance Bonuses Good remuneration Extra incentives Mobile phone plus bill Fuel and petrol allowance Laptop and car with maintenance Medical allowance KFC manages diversity in their workforce through Promotes differences in background, ethnic cultures and values. Team oriented environment Promotes unity in workplace Focuses on building relationships and creating commitment within the company and amongst employees and customers.

Customer Relationship Management

KFC has CRM (Customer Relationship Management) and considers it the most important factor of sustainable competitive advantage. KFC has the customer database through which they analyze that on which timings and on which dates of the month, customers visit their outlet more frequently or less frequently. And they use this database to analyze that which products are

demanded most and on which days of the month. KFC offers new products and different deals to satisfy the customers so that it can build customer loyalty and retain them in the long run.

Physical evidence Strategy

KFC selects site for its retail outlet which is suitable for their target customers. They emphasis the distance and traffic count of the area. They analyze the competition situation in that area. As KFC barkat market branch is situated at an ideal location because there are several educational institutes and organization in surrounding area, where the youngsters and office employees can grab a zinger and other chicken products during their lunch break.

Process strategies
Database Retailing KFC has the customer database through which they analyze that on which timings and on which dates of the month, customers visit their outlet more frequently or less frequently. And they use this database to analyze that which products are demanded most and on which days of the month. It helps them to manage their raw material supplies. Shop Lifting KFC has developed a format where a customer has to pay against order at the counter before the placement of order. So there is a least chance of shop lifting.

Brand Name: KFC Color: Red, white Symbol: Colonel Harland Sanders picture and KFC written with it. Master Brand: The brand itself is so dominant, that it immediately comes in mind. KFC Brand KFC's brand identity -- the logo features Colonel Harland Sanders, one of the bestrecognized icons in the world.

KFC is trademarked registered brand. It is distinctive, adaptable to addition to product line. It suggests something about product. It is legally protected and registered.

Brand equity The brand equity is very high as the value added by brand to the product effects the product selling. Branding strategies KFC is marketing the entire output under products own brand. Complimentary branding Pepsi & Nescafe. Packaging Strategies KFC makes its own disposable packaging. If they need promotion Pepsi contributes in improving the packaging quality. KFC does family packaging. They use paper material for packaging to avoid health hazards and environmental pollution. Labeling KFC does brand labeling. Some of its products also have informational labels such as Halal, Veggi Burgers and Chicky Meals.

Solution KFCs requirements clearly pointed to the need for a local partner who could address both these areas simultaneously, at the same time ensuring round-the-clock support. Arwen Tech (Pvt.) Ltd., with its focused business lines of Consulting, Outsourcing and Technology, became KFCs partner of choice after a mutual agreement was reached in 2003. Arwen Techs solution provides KFC with: Call center facility and infrastructure Order Delivery software Comprehensive reporting solution 100% maintenance of hardware, software and network

Arwen Techs approach involved connecting KFCs outlets in Karachi via a DSL connection and also linking them to the head office. Customers calling KFC have their calls directed to the call center at Arwen Techs premises. This facility is powered by technology from Avaya. 20 Customer Service Representatives (CSRs) are available to receive calls. CSRs take the order and coordinate electronically with the respective outlet, at the same time recording the order in the database through the call centers Order Delivery software. KFCs Karachi head office receives a daily update of their CSR performance and call reports. Additionally, they can retrieve sales and financial reports as and when needed.

KFC barkat market branch is an ideal location as they can serve their targeted customers because there are several educational institutes and organizations in surrounding area. KFC branch in this area provides a great opportunity for students and office employees to arrange get together meetings and spend their lunch breaks by consuming healthy chicken products of the KFC. KFC barkat market branch has much cleanliness inside outlet. They are providing enough space for families and friends to hang out. Quality, customer service and cleanliness in KFC barkat market branch represent the most critical success factors. We will suggest to improve the parking space and cleanliness in front of the outlet. They need to improve the atmosphere conditions inside the outlet by providing better ventilation facilities and according to the weather.