Assignment Presentation : Report On Segmenting Targeting and positioning of KFC

Executive Summary

Idea is the key of Business. Each business is established to accomplish something, KFC is not any exception. Starting from 1930 its journey from Colonel Harland Sander’s small kitchen in the small front room of a gas station in Corbin, Kentucky, U.S.; to 2012 it have been serving complete friends and family meals at affordable prices. There are over 15000 KFC outlets in 105 countries and territories around the world. It has several outlets in Bangladesh also.

KFC is an established brand image in our country, but in recent days various local competitors has been growing as threat to the KFC market share. So here is the solution with fresh new ideas to market and promote KFC and hold on to its profit share. Market is difficult to understand as it changes continuously in an un-definable mechanism. Changes in the market are so rapid that marketers have to keep up refreshing their network to get prepared in advance to beat the competition.

In this report we have chronologically divided market based on the marketing theories, and then we prepared a complete set of market plan. Plans are described both theoretically and mathematically, with budget diagram and financial projection. We defined our plan with description of detailed activities that we are going to take in order to keep pace with the changing fast food market in Bangladesh.

Table of Content

Title	Page No
Chapter 01
Introduction	07
Objective of the study	07
Scope of the report	08
Methodology	08-09
Chapter 02
Company Profile	10
KFC in Bangladesh	11
Current Market Situation Analysis	11
Customer Needs and Demand	11
Availability	12
Reasonable Price	12
Quality	13
Chapter 03
Current Product	14
Cayan Grill	14
KFC Twister	14
KFC Rice	15
Services of KFC	16
Distribution Channel Analysis	16-17
Competitive Analysis	17
Current Situation Analysis	18
Chapter 04
SWOT Analysis	19
Strengths	19
Weaknesses	20
Opportunities	20
Threats	21
Chapter 05
Mission	22
Financial objective	22
Strong Cash Flow	22
Solid Balance Sheet, Attractive Returns	23
Stable, Growing Market	23
Marketing objective	23
Chapter 06
Marketing Strategy	24
Market Segmentation	25
Demographic Segmentation	25-26
Geographic segmentation	27
Psychographic Segmentation	27
Behavioral Segmentation	27-28
Market Targeting	28
Market Positioning	28-29
Differentiation	29
Product and Branding Strategy	29
Products Pricing Strategies	30
Advertising, Sales Promotion, and Public Relations	30-31
Chapter 07
Marketing Mix	32-35
Chapter 08
Marketing Plan	36
Market surveys	36
Customer Feedback	37
Guerrilla Marketing	38
Seasonal offers	39
Discount offers	39-40
Participate in social activity, as part of social welfare	40
Chapter 9
Financial Projections	41
Marketing expense Budget	42
Sales forecast	42
Mark-up pricing	42-43
Breakeven Analysis	43
Chapter 10
Controls	44
Establishment of Standards	44
Types of KFC Standards	44
Measurement of Performance	45
Comparing Performance with the Standards	45
Taking Correct Action	45-46
Chapter 11
Conclusion and Recommendation	47
Chapter 12
Sources	48

Chapter- 01

Introduction

1.1 Introduction

KFC is the world largest and most well known chicken restaurant, with chains in more than 10 thousand locations and worldwide in 80 countries. KFC and its franchised employees are more than 200 thousand in all over the world.

John Y Brown and Jerry Messy purchased KFC for USA for $2 million in 1964 that time KFC become a corporation. After five years, Colonel buys first 100 shares of KFC. In 1986, Pepsi Company purchased KFC. Pepsi company changed the logo from Kentucky fried chicken to KFC in 1991 and then in 1992 KFC 1000th restaurant opened in Japan and in 1994 9000th restaurant in china.

KFC is the part of Tricon global restaurant. Tricon global restaurant is the world largest restaurant group, with in nearly 100 countries around the world, which in turn was spun off in 1997, and has now been renamed to Yum! Brands. In 1997, KFC franchised with Gray Mecanza International and started work in Pakistan. Rawalpindi branch started work in 1999 and in Islamabad in August 2002 and now in Pakistan; there are 45 outlets nation-wide.

1.2 Objective of the study

Followings are the objectives of the study:

Broad objective

We took try to gather huge practical and realistic knowledge about “Marketing management” of “KFC” and us familiar with this course.

Specific objective –

To know briefly about “KFC”
To find out target customer of “KFC”
To find out current market position of “KFC”
To find out target menu items of Bangladeshi people in major cities
To find out product variation, differentiation, innovation
To find out what attributes to position its product
To find out flow of good operation techniques
To ensure that consumer leave the store with a pleasant smile

1.3 Scope of the report

This report is about marketing plans of “KFC” .This report focus on consumer behaviour, social class, personality, hectic lifestyle and what consumer perception about “KFC”. We have group discussion, survey, asking different question from people, visiting different blog sites to collect information about consumer behaviour, personality, and hectic lifestyle. It also expresses to current market position and company growth opportunity of the market.

1.4 Methodology

We have used different types of method, to prepare this report. From our text book, survey, group discussion, asking different question from the people, journal, articles, visiting different website, interviewed some customer to collect information. Also use another method like – objective, swot analysis, situational analysis, marketing strategy, market segmentation, target market, positioning, differentiation, marketing mix, financial statement.

Sources of information-

We have used the concept of the course information of the term paper. The sources of data collection are primary, target population, secondary.

Primary data source-

Usually primary data collected from the survey. We divided our group into some parts and we went various places and gathered through informal interviews of the employee working over under “KFC” and gathered more information from group discussion and also used personal observation as resource.

Target population-

“KFC” target consumers are upper- middle class. The target is on each and every society. Both male and female customers are focused by “KFC”. Gender does not play any role here.

Secondary data source –

Secondary sources had also used to collect information. We collect information from our text book of “Marketing Management” by” Philip Kotller”, features and articles published in newspaper and other journal, visiting website of “KFC” to access their company background, services, marketing strategy and mix.

Analysis of information-

To prepare this report, we review the question generated before the information gathered. Then organize the information according to relevant information that has been collected.

Presentation of information-

All relevant information is presented on graphical forms. The results of KFC is concerned they use different approaches in different perspectives like they are highly committed to customer satisfaction.

Limitations of the study

This report has many limitations. When we prepared this report we face many problems. If no problem has seen the report would become more meaningful and well established. The limitations of our study are given below:

Time limitation
Lack of information
Unavailable resources
Less experience effort

Chapter - 02

2.1 Company Profile

KENTUCKY FRIED CHICKEN (KFC)

Type:	Wholly owned subsidiary
Industry:	Fast food
Genre:	Southern fried chicken
Founded:	1930 (original) (North Corbin, Kentucky) 1952 (franchise) (South Salt Lake, Utah)
Founder(s):	Harland Sanders
Headquarters:	Louisville, Kentucky, U.S.
Key people:	Roger Eaton, President Harvey R. Brownlea, COO James O'Reilly, VP for Marketing
Products:	Fried chicken, grilled chicken, related Southern foods
Revenue:	$520.3 million
Employees:	455000
Parent:	Yum! Brands
Website:	http://www.kfc.com

2.2 KFC in Bangladesh

Transcom Foods Limited, a concern of Transcom Group is the franchisee of KFC in Bangladesh.

The first ever KFC restaurant has been opened in 1997,September at Gulshan, Dhaka with a seating capacity of 178 persons.

KFC restaurant has been opened in 2009 at lalkhan Bazar circle, Chittagong with a seating capacity of 120 persons.

Till now there are 9 branches of KFC in Bangladesh,8 of them are in Dhaka.

In the coming days, KFC plans roll out more restaurants in Bangladesh

2.3 Current Market Situation Analysis

KFC is highly popular international fast food chain restaurant in Bangladesh. KFC stands for high quality fast food in a popular array of complete meals to enrich the consumer’s everyday life. KFC strives to serve great tasting, “finger licking good” chicken meals that enable the whole family to share a fun. Uninhibited and thoroughly satisfying eating experience, with same convenience and affordability of ordinary Quick Service Restaurants.

Transcom Foods Limited, a concern of Transcom Group is the franchisee of KFC in Bangladesh. The first ever KFC restaurant has been opened in September at Gulshan, Dhaka with a seating capacity of 178 persons. In the coming days, KFC plans roll out more restaurants in Banglades

2.4 Customer Needs and Demand

The customers of KFC, especially as individual buyers, family, students and kids.The customers can demand for low prices or demanding higher quality and more incentives. The following factors determine the bargaining power housed by the buyers and KFC seeks to fulfill the following needs that are important to consumers-

2.5 Availability

Consumers always purchase those restaurants which are available to them. So if KFC wants to increase the selling rate of their product, they must have to make their product available to the customers. In order to that they have to increase the number of outlet they have to develop an excellent channel of distribution.

There are total eight branches of KFC around Bangladesh whose are:

1.Corporate Office Gulshan Tower 11th Floor, Plot No. 31, Road No. 53, Gulshan North C/A, Dhaka-1212, Bangladesh.	2. Restaurant Support Center House No 10/A, Road 142, SE(H) 1 South Avenue, Gulshan, Dhaka-1212
3. Gulshan Outlet South Avenue, Gulshan - 1, Dhaka -1212 E-mail : kfc@tfl.transcombd.com	4. KFC Mirpur Plot - 14, Road No.3 (Main Road) Mirpur, Dhaka
5. KFC Banani Bulu Ocean Tower, Kemal Ataturk Avenue Banani, Dhaka	6. KFC Dhanmondi House-84, Road-7/A Sat Mosjid Road, Dhaka.
7. KFC Chittagong 5.CDA Avenue IspahaniMoar, Dampara Chittagong.	8. KFC Baily Road 10, NatokShoroni Gold Hunt Shopping Complex New baily Road, Dhaka..

2.6 Reasonable Price

The price is very sensitive issues; people would rather go for similar product selling for fewer prices than buying an expensive one. Also, there are lots of alternatives to within and outside the fast food industry as a whole.. Hence, price sensitivity gives a lot of power in the hands of the buyers

2.7 Quality

Consumers always want the best quality product and a justified price to that. KFC stands for high quality fast food in a popular array of complete meals to enrich the consumer’s everyday life. KFC strives to serve great tasting, “finger licking good” chicken meals that enable the whole family to share a fun. Uninhibited and thoroughly satisfying eating experience, with same convenience and affordability of ordinary Quick Service Restaurants.

Chapter- 03

Product & Service Analysis

3.1 Current Product

Product is anything is offering in the market for sale. KFC (Kentucky Fried Chicken) is the world's largest chain of fried chicken fast food restaurants which is offering its special product to their customer. Kentucky Fried Chicken is famous for its chicken, which is a blend of 11 herbs and species, which gives it the flavor everyone is crazy about it. KFC offering product are

3.2 Cayan Grill

Cayan might be derived from an earlier form of the word "cayanne." Regardless, Cayan Grill chicken is marinated overnight in "southern" spices (does "southern" in Australia, mean the same as "southern" here in the States?) and then grilled on a hot plate.

3.3 KFC Twister

Two freshly prepared, Extra Crispy white meat chicken strips with shredded iceberg lettuce, fresh tomatoes, and pepper mayo sauce - all wrapped together in a soft, warm tortilla.

3.4 KFC Rice

KFC’s first-ever rice meal, a delectable combination of crispy chicken fillet and fluffy white rice with Original Recipe sauce or spicy tomato sauce. To make it more refreshing, KFC Rice Meals come with regular NESTEA® Green Tea. These all new sensations will give everyone the energy to excel!

KFC also offer various items and meal box to their customers those are:

· Krushers

· Game Box

· Box master

· Chicken Bucket

· Fries

· Corn on the cob

· Zing Kong

· Snacker(chicken & veggie)

· Soft Drink

· Coleslaw

· Chicken Thali

· Veg Finger

· Snack Box

· Sundae

· Soft Twirl

· Brownie Sundae

3.5 Services of KFC

Service is a very important factor for KFC as its actual product consists of not only quality chicken but also satisfactory service. KFC is providing excellent product sport services but the range of services is not complete, as it is a self service restaurant. KFC trains its employees to give quick and efficient service to the consumers who are standing queues to take their order.

To provide good services they have a philosophy of CHAMPS Program. Champs stands for their belief that the most important thing each of them can do is to focus on the customer satisfaction. CHAMPS stand for the six universal areas of customer expectation common to all cultures and all restaurants concepts.

The CHAMPS these are:

· Cleanliness

· Hospitality

· Accuracy

· Maintenance of Facilities

· Product Quality

· Speed of Service

CHAMPS is the philosophy to ensure that the customer has the consistent quality experience in every restaurant, everyday, on every occasions and you will be playing role in delivering CHAMPS to our customers.

3.6 Distribution Channel Analysis

A distribution channel consists of set of people and firms involved in the transfer of title to a producer, as the product moves from producer to ultimate consumer. The type of distribution channel KFC uses is called middleman involved in it –

Figure: Distribution Channel

KFC is using the service firm sponsored supplier franchise system. This franchise buys all the ingredients it uses and fulfils all other requirements of the franchiser. This practice is adopted to have the product up to the standards of international KFC chain.

The Suppliers of KFC include K & Ns, Pepsi Co, Hilal, Nescafe and bread and bunsare produced internally. Marination is imported from California, India and Dubai. The suppliers within Bangladesh can compete in the industry by raising prices or reducing quality of produced goods or services.

KFC distribute their products among their customer in South Avenue, Gulshanfrom September 2006, in Dhanmondifrom November 2008, in Banani from December 2008, in Eskaton from February 2010, in Paltan in 2011,TFL has open another three new outlets in Uttara, Mirpur DOHS and sea beach city of Bangladesh “Cox ‟sbazar”.

3.7 Competitive Analysis

Unlike what one would expect, KFC has many competitor with similar fast-food chains in Bangladesh. The primary reason is that their core products. For example, if KFC raised its price for chicken by a small amount, Bangladesh chicken lovers may go in BFC, FFC, A&W and so on. If KFC rise their price of their regular item people of Bangladesh cannot go there..For example, a full meal at KFC ranges about TK 200, whereas a full meal at other fast food restaurants can cost over TK. 150. The drastic difference in price assures no price competition between these restaurants Many fast food restaurants exist in Bangladesh’s, which are continuously satisfying the countrywide demand. The most preferable brands are:

3.8 Current Situation Analysis

· Copyright

Transcom Foods Limited (TFL) started its journey in 2003 as a franchisee of Pizza Hut, the first International Chain Restaurant in Bangladesh, and went on to sign the contract to become the franchisee of Kentucky Fried Chicken (KFC) in the year 2006. Both Pizza Hut and KFC are subsidiaries of the world’s largest restaurant company Yum! Restaurants International. In a span of Nine years, TFL has opened 6 Pizza Hut and 11 KFC outlets so far throughout the country.

· Market Share

KFC has a very long history and has the most recognize able brand in chicken with over 50% of the market share. It becomes difficult for the companies like BFC, FFC, Nando’s, Chicken King or those who may want to enter in the market of fast food restaurants. Due to with over 50% of the market share in fast food industry KFC has recognition around the world and has been globally positioned for many years in Bangladesh and to capture the market share in Bangladesh adopts champs philosophy

· Economic

Though for last 1 year there was economic slowdown all across the globe butte sales of KFC and other fast food chains did not slow down to that extent that of other sectors in. The GDP (Purchasing Power Parity) is estimated at2.965 trillion U.S. dollars in the year 2010. The GDP- per Capita (PPP) was2700 U.S. dollars as estimated in 2008. The GDP- real growth rate in 2007was 6.7%. Bangladesh has the lowest GDP in terms of purchasing power parity just ahead Japan and behind U.S. and China. Foreign direct investment rose in the fiscal year ended March 31 2007 to about $16 billion from just $5.5 billion a year earlier. This will lead to higher buying power in the Hands of the Bangladeshi consumers. So taking into considerations the economic factors of Bangladesh KFC is safe. The only danger to it will be if there is a terrorist attack in Bangladesh and the victim is KFC.

Chapter- 04

Strengths and Weaknesses

4.1 SWOT Analysis

SWOT analysis is an overall evaluation of the company’s strengths(S), weakness(W), opportunities (O) and threats(T).The SWOT analysis begins by conducting an inventory of internal strengths and weaknesses of an organization and the external opportunities and threats that may affect the organization, based on market and the overall environment

KFC is the strongest brand in the fast food industry in the world. For knowing about situational market analysis and lacking, getting knowledge about future threats, and evaluating their overall market growth KFC always make a SWOT analysis.

4.2 Strengths

Strong franchises all over the world.

Taste and food quality are better than other food corner

They are successful in maintaining their loyal customers.

They serve variety of items under single menu.

Interactive relationship market.

It doesn’t have any core competition in chicken serving.

KFC outlets are available.

KFC secret recipe of herbs and species.

Large multi brand in the world

KFC is the market leader in providing different products of chicken

They are specialized in chickens

Existing in the local market for years, therefore , knowing people’s tastes and whims

They are ISO ( International Standard Organization) certified

4.3 Weaknesses

Its major weakness is the presence of multinational competitors in the market like Pizza hut.

Lack of relationship building with employees customers and suppliers.

They only focus higher income level people but in our country most of the people are middle class.

Lack knowledge about their customer.

Inflexibility of price making.

Lack of knowledge about their customer.

They has higher overhead costs, as a result of KFC higher prices must charge

They are over confident of loyal customer

4.4 OPPORTUNITIES

They can include new product in their menu.

KFC plays an important role in increasing employment in country.

KFC gives many facilities for part time jobs.

They can open temporary outlets in university.

Increased and efficient services specially home delivery and office orders.

They can open more outlets to get maximum market share.

They can advertising their product in media.

Maximum customer are student so they can sale their product in resalable price.

Give more focus on nutrition.

Focus on packaging, serving food.

4.5 Threats

Day by day change in food habits

Diseases like bird flu are the big threat for KFC.

Lake of promotional advertising.

High rate on prices as compared to the other brands selling same items may cause the customer’s shift,

People become health conscious day by day.

Changing customer demand.

The threats faced by KFC are the entering of many new competitors into the market that maybe local or international brand.

Less consciousness about packaging.

Chapter- 05

Marketing Objective and Issues

5.1 Mission

Established in 1939, this fast-food restaurant still makes its legendary fried chicken with the closely guarded blend of 11 herbs and spices originally created by founder Colonel Sanders. Modern additions to the menu include oven-roasted renditions of its chicken sandwiches, popcorn chicken, potato wedges and wraps. Classic sides include flaky, oversized biscuits, steaming-hot mashed potatoes and gravy, smoky-sweet baked beans and crisp, generously dressed coleslaw. Kids and adults love the "little bucket" parfaits of pudding desserts.

5.2 Financial objective

Every company has some financial objectives for every product. So our KFC has some financial objectives as well. They are given bellow-

-Their first objective is to increase their sales up to minimum 15% in next 5 years. So that they could gain more profit.

- To afford well trained and well skilled executives and sales people;

-Hired famous lobbyists for advertizing their product.

-Sometimes give some aggressive sales or advertize to increase their sales

In this certain process there are also some financial characteristics that enable it to accomplish these objectives. These characteristics include:

5.3 Strong Cash Flow

Because of strong margins on most products, stable markets and low capital investment requirements, KFC generates a strong cash flow from their operations.

5.4 Solid Balance Sheet, Attractive Returns

KFC has attractive business and strong financial management which resulted in a solid balance sheet. This gives KFC financial flexibility to fund its business needs while maintaining financial discipline and yielding attractive returns on assets and investments.

5.5 Stable Growing Market

KFC primary customer are - schools, restaurants, hotels and other office institutions - tends to be less sensitive to the economic cycles faced by many other businesses. Since KFC products fulfill basic hygiene needs, they are less susceptible to reduction in tough economic times. This provides KFC with a relatively stable market in which to do business.

5.6 Marketing objective

Marketing objective means the ‘goals’ that the business must achieve in order to meet its wider business objectives

- Clearer product differentiation

- Targeting their market consumer

- Increase their market share

- Long term brand value to customer

- Decrease customer acquisition costs 8% per year

- Creating and launching new products / services – ‘Innovation’

Chapter- 06

6.1 Marketing Strategy

Running a successful business is not like a field of dreams; you can build it but they might not come true. You have to let people know about the product or service you offer, and persuade them to buy or use it. And you have to let people know about your product or service repeatedly. For this, marketing strategy is very important. Your marketing strategy consists of: The "what" has to be done. Inform consumers about the product or service being offered. Inform consumers of differentiation factors.

So it helps the company to decides which customers it will serve (segmentation and targeting) and how (differentiation and positioning).It identifies the total market, then divides it into smaller segments, selects the most promising segments , and focuses on serving and satisfying the customers in these segments. And this marketing strategy provides the goals for your marketing plans.

Figure: Marketing Strategy

KFC has marketing strategy emphasis on the following facts:

· Market Segmentation

· Market targeting

· Differentiation

· Positioning

6.2 Market Segmentation

Dividing a market into distinct groups of buyers who have different needs, characteristics or behaviours and who might require separate products or marketing programs. KFC mainly focus on following market segments.

6.3 Demographic Segmentation

Demographic segmentation consists of dividing the market into groups based on variables such as age, gender, family size, income, occupation, education, religion, race and nationality. As one might expect, demographic segmentation variables are amongst the most popular bases for segmenting customer groups. Also, for practical reasons, there is often much more data available to help with the demographic segmentation process.

KFC give their concern in following demographic segmentation:-

Age:

One of the first variables of demographic segmentation is age. This is because consumer needs and wants change with their age.

In KFC 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.

Life cycle stage:

Closely connected to age, the life cycle stage of a consumer group defines what will be the need of that particular customer. For this KFC offer kids meal with toys and veggi burger for old age people. This demographic segment cannot be said as an “Age” segment because these customers are in specific phase of their “Life”.

Income:

Another popular basis for segmentation is income. A person’s income level combined with its accumulated wealth is the major determinant of the consumers’ willingness to purchase a product. Income is the main decisive factor that influences consumers purchasing power. Consumers with low incomes may not be able to purchase their desired products whereas consumer with higher incomes may not be satisfed with the existing product.

In KFC 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.

Social Class:

This plays a vital role in the demographic factor of the KFC. Generally they target upper class, upper middle class, middle class and middle lower class. Because the items KFC sell are very expensive.

6.4 Geographic segmentation

The market is segmented according to geographic criteria—nations, states, regions, countries, cities, neighbourhoods, or zip codes.. With respect to region, in rainy regions you can sell things like raincoats, umbrellas and gumboots. In hot regions you can sell summer wear. In cold regions you can sell warm clothes.

KFC in Bangladesh only focus following geographic segmentation. These are:-

City:

Because Bangladesh is a developing country and the fast food business highly profitable in only Dhaka and Chittagong city that’s why KFC only focus on this two city.

Key Spots:

Tourist spots
Commercial Areas
University Canteen

6.5 Psychographic Segmentation

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

KFC divides market on the basis of psychographic variables like:

Life Style (Lifestyle is not specific)
Personality (Personality is ambitious and authoritarian)

6.6 Behavioural Segmentation

In behavioural segmentation, consumers are divided into groups according to their knowledge of, attitude towards, use of or response to a product. It is actually based on the behavior of the consumer.

Occasions:

The first form of behavioral segmentation is selling product in different occasions. In Bangladesh KFC can permit their customer to celebrate various occasions. They also offer their customer on cricket match “KFC Popcorn Chicken”, on Valentine’s Day special couple discount offer.

Benefits:

Several products are targeted towards the benefits sought by the customer. For this KFC only focus some social class.

Loyalty Status:

There are two ways to grow a business. First is to acquire new customers and second is to retain your existing customers. The more loyal your customer is to you, the more your customer base will increase. That’s one more kind of behavior which marketers target. In case of KFC, they have some advantage because they are well known chain international fast food company.

6.7 Market Targeting

Market targeting is the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.

After a company has defined market segment it can enter one or many of these segments. A company should target segments in which it can profitably generate the greatest customer value and sustain it over time .A Company with limited recourses might decide to serve only one or a few special segments. A company with a great number of recourses might decide to serve two or more segments.

6.8 Market Positioning

Positioning is arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers.

After a company has decided which market segments to enter, it must decide how it will differentiate its market offering for each targeted segment and what positions it wants to occupy in those segments. A product position is the place the product occupies relative to competitors products in consumer’s minds. Marketer wants to develop unique market positions for their products. If a product is perceived to be exactly like others on the market consumers would have no reason to buy it.

KFC promotes a “high quality poison” for its products. It produces high quality products, chargers a high price, distributes through high class dealers and advertises in English newspapers with a high circulation. KFC is communicating through physical size and ques that people use to judge quality.

For KFC management the image their customers carry in their mind is the most important factor. That is why for them the product quality, which is almost, standardizes the entire world except little differences because of local requirements & the promotions are very critical factor. The people which are their customer and the physical evidence, the environment customers get in the KFC are the focus that built KFC’s image in the customer mind that is why they are always trying to bring positive changes in the environment so that every time their customer enter the KFC, can feel the difference. They think that trough continuous efforts they have developed such a brand image in their customer’s minds that their customers have become brand loyal. I order words they have got brand equity.

6.9 Differentiation

Differentiation is actually differentiating the market offering to create superior customer value.

Once KFC chosen a desired position it has taken strong steps to deliver and communicate our position to target consumers. KFC differentiated their market offering for each targeted segment and what positions it wants to occupy in those segments.

6.10 Product and Branding Strategy

Branding

Brand identity was defined as the customer impressions of four different KFC identity elements - properties, products, presentations, and publications. The people of our country also have much more positive impressions of KFC. Brand identity impressions were correlated with overall customer satisfaction and with future patronage intentions for both groups. These findings support a model where differences in cultural frames of reference lead consumers to actively localize the brand identity of this nominally globalized product.

Packaging

The packaging for KFC products is chosen according to performance against three criteria: heat retention, moisture removal, and grease absorption. The packaging material and carton design are all adapted to maximize performance against these three criteria.

Environmental concerns

Over and above ensuring our packaging is supplied via recycled or renewable resources; KFC are enthusiastically complying with the new environmental directives on recovery and recycling of packaging waste.

6.11 Products Pricing Strategies

KFC globally enters the market using market skimming. Their products are priced high and target the middle to upper class people. Gradually they trickle down the prices focusing on the middle to lower class people to penetrate both sides of the market. We can compare the price of their products with FFC, CFC, American Burger, Chicken King and Pizza Hut. If the competitor provides the same product at a lower price than the organization usually lowers the price of its product too. In the case of KFC, Fried Chicken is its main selling point and controls a monopoly over the fast food market (only with fried chicken). It prices its burgers, French fries and soft beverages with relation to its competitors. KFC price their product keeping different points in view. They adopt the cost base price strategy. Pricing of the product includes the govt. tax and excise duty and then comes the final stage of determine the price of their product. The products are bit high priced according the market segment and it is also comparable to the standard of their product. In the cost based method we include the variable and fixed cost.

6.12 Advertising, Sales Promotion, and Public Relations

Advertising

Any paid form of non personal presentation and promotion of ideas, goods, or services by an identified sponsor.

ü KFC introduce the new products to the customers using many kind of advertising. They inform the customers about the new products, what kind of product, the price, its availability etc.

ü With the advertisement, KFC persuade their customers to buy the products. In order to do that, KFC will make a good and attractive advertisement. So, their customer will attract to buy the products.

ü Using the good advertising will make the customers remember about the products. And certainly, they will come again to buy the products.

There are some Media Types that KFC use for their advertising:

· Newspaper

· Radio

· Magazine

· Internet

· Outdoor

Sales 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 - advertising, sales promotion, public relations, events and experiences, coupons, discount and bundled packages and organization finds most of its meanings and survival through promotion.

KFC uses the following tools to further enhance its sales.

Ø Premiums

Ø Exhibits

Ø Coupons

Ø 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.

Public Relations

KFC also building a good relation with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events.

Public Relations Tools are:

Ø News

Ø Speeches

Ø Internet

Chapter- 07

7.1 Marketing Mix

The marketing mix is a business tool used in marketing. The marketing mix is often crucial when determining a product or brand's offering, and is often synonymous with the four Ps:

Ø Product

Ø Price

Ø Place

Ø Promotion

Fig: Marketing mix

Ø Product

A product can be defined as anything that can be offered to a market for attention, actuation, use or consumption that might satisfy want or need.

KFC is specially dealing in the chicken products; Basically, KFC has the special recipe for chicken products that is why, KFC is known as a chicken specialist all over the globe. KFC target the Asia and east side because they observe that these people like the chicken products, so they enter in the market due to the demand of their chicken products. KFC is variety of product in the chicken, those products are

Ø Product Categories

There are different products divided into sections according to the differentiation in them.

1) Chicken

2) Burger

3) Desserts & Beverages

4) Snacks & side orders

KFC’s original recipe is fried chicken and French fries.

Burger: It includes the following burger items:

i) Mighty Zinger

ii) Zinger Extreme

iii) Fish Zinger

iv) Veggie Burger

v) Colonel Fillet Burger

Ø 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.

Pricing Strategy: KFC globally enters the market using market skimming. Their products are priced high and target the middle to upper class people. Gradually they trickle down the prices focusing on the middle to lower class people to penetrate both sides of the market. KFC pricing the products by keep the different pointsin the mind, adopt cost base price strategy.

Prices of Chicken PCs. and all the other products of KFC are set by the Head Office by adopting the proper method. According to Marketing Manager,Price of any product is equal to the cost plus desirable profit. The pricing strategies of organization are different in the different countries due to different exchange rate, inflation, and different tax policies in the different countries.

In Bangladesh, main concern of KFC is to sell in volume and maintain it on long term basis. They are charging a price which they think fair to customers.

KFC offer different products at different list prices.

· KFC provide special discounts to only employees and special customers.

· Payment period, customer pays when the services are delivered to them.

· Allowances are provided to employees.

Ø Place

Place includes company activities that make the product available to target consumers. High quality product, attractive pricing, huge promotional activities is of no use if the product is not available to the consumer.

In our country, there are 11 outlets of KFC. They are located in convenient place so that the customers can easily go and enjoy delicious foods.

The outlets are:

1. KFC Gulshan

2. KFC Banani

3. KFC Dhanmondi

4. KFC Dhanmondi

5. KFC Mirpur.

6. KFC Baily

7. KFC Paltan

8. KFC Uttar

Ø Promotion

Promotion means activities that communicate the merits of the products and persuade consumers to buy it. It is the method used to inform and educate the chosen target audience about the organization and its products. Using all the resources of promotion:

· Advertising

· Sales Promotion

· Public Relations

· Events and Experiences

· 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.

Ø 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 one’s mind. It also does the following activities as advertisements:

Ø Public Relations

It is a communication effort that is designed to favourably influence attitudes toward an organization, its products and policies. KFC is not just a quality food restaurant, but also a socially conscious corporate citizen. It has been equally involved in promoting and funding several community welfare projects through aggregate KFC revenue. To enhance public relation KFC does different types of seminars and employee training classes.

Ø Sales Promotion

Chapter- 08

8.1 Marketing Plan

As marketers of KFC our plan is communicate and promote our new and existing product and services to our target market, and capture maximum market share through increasing our sales. In addition we want to create and retain long term relationship with customers and prospects, and delight them by our continuous effort to serve package of tasty surprise.

Broad description to achieve our goal is described under ‘Action Program’, ‘Financial Budget and forecast’, and ‘Controls’ section.

8.2 Market surveys

For every business to success we need a strong market holing. So continuous research to understand the market will help us grow as an organization. With this motive staring from this year we will carry on different market survey and market research to get to know our customers, suppliers, competitors, weakness, opportunity, threat, competitive advantages, future assumption and forecast base to come up with the best possible market solution and keep pace with time.

The Top 5 Benefits of Market Surveys:

Wide Reach of Market Survey
Get Honest Answers
Cost Benefits- The survey may generate sales leads.
Find Out About Your Competitors
Customer Retention

8.3 Customer Feedback

We will arrange a feedback system from customers. It will help us to trace our performance. For this we have to develop a quantitative ranking along with qualitative description of the ranks to specify positive and negative sides of our product and service. Feedback collection can be done in our outlets or through campaign. A Feed Back form can be:

FEED US BACK: D

1. Tick Your choice (√)

	Perfect	Above Average	Average	Below Average	Poor
Food Quality
Food Temperature
Waiting Time
Menu Board
Sitting Arrangement
Restaurant Temperature
Music
Restaurant Cleanliness
Overall Experience

2. When will you be back?

_ Next time I blink (very soon)

_ May be sometime later

_ When I win a Nobel Prize (Never)

3. How many people were in your group?

_Just me

_Me and some one

_4 or more

4. Which restaurant you consider next after KFC?

_ABC

_XYZ

_Other

8.4 Guerrilla Marketing

Guerrilla marketing is an advertisement strategy, in which low-cost unconventional means (graffiti, sticker bombing, flash mobs) are utilized, often in a localized fashion or large network of individual cells, to convey or promote a product or an idea. The idea of guerrilla marketing was introduced as an unconventional system of promotions that relies on time, energy and imagination rather than a big marketing budget. Typically, guerrilla marketing campaigns are unexpected and unconventional, potentially interactive, and consumers are targeted in unexpected places. The objective of guerrilla marketing is to create a unique, engaging and thought-provoking concept to generate buzz, and consequently turn viral.

Guerilla marketing is a whole new concept in Bangladesh so it will be surprising for our customer if we successfully implement this promotional activity in proper manner.

We can also arrange Surprise Selling under this method. For example: In Rainy season we can take a lobby filling with Bucket of hot wings, take the car at a public place or amusement park and sell those hot wings in a limited offer within a limited time.

Or in the evening of cold winter we can go through public place with a tank full of KFC hot coffee and sell them in a special offer.

Some may consider these efforts humorous as KFC is not an infant brand that need to step up to the street to sell its offerings, but if we think from the contrary perspective then this may increase customer intimacy with KFC.

8.5 Seasonal offers

We will introduce seasonal offers concentrating on different season. For example: in Bangladesh we have three main seasons’ summer, winter, and rainy season. We can transform it into our marketing opportunity of seasonal offers. We will provide with variety of weather friendly offering to boost up the taste of season with KFC experience.

8.6 Discount offers

Like almost all competitive brands we will also provide occasional Discounts. For example: lunch box discount, Dinner offer, Breakfast offer etc. If we create this offer simple with logical pricing these offers can gain much popularity among our customers. This will also enhance our brand image.

Some rule of Discount offers:

Do not exaggerate the offer.
Create an honest offer.
Simplify the key benefit.
Communicate the offer according to local norms.
Do not underestimate or overestimate our customers, prospects, competitors, suppliers and business.
Present a simple offer attractively.
Set offers accord

8.7 Participate in social activity, as part of social welfare

Corporate social responsibility has been talked as a big issue among business and people. As a corporate member of Bangladesh KFC also care for its’ surrounding. We have already taken few steps about cleanliness and in future we plan to participate more into the social welfare activity.


Fig: KFC cleanliness program	Distributing food among children

WE do care for our surrounding, and we have act on our realization so far, but in next one year we have so many plans. We select some area in Dhaka city where we want to run a project of tree plantation. Under this project we will plant trees in the roadside island and also have a plan to organize a workshop of tree plantation in different schools to encourage new generation about it.

Chapter- 09

9.1 Financial Projections

Every plan has its cost of implementation, financial managers has to make all the calculation regarding cost analysis, projection, break even analysis, sales forecast, expense forecast, income statement analysis and overall cost-benefit analysis to determine which project should be chosen and implemented.

Basically, financial projection estimates of the future financial performance of a firm, and through creating prospective financial statements that present, given one or more hypothetical assumptions, an entity's expected financial position, results of operations, and changes in financial position

(Here we are representing simple form of company’s cost and profit evaluation. Our attempt is to give a model budget for KFC)

Assumptions:

We are considering all the forecast based on the Gulshan brunch that is the first ever KFC restaurant in Bangladesh.
Forecasts are done on yearly basis.
Annual Fixed Cost 180,00,000
Average selling price of KFC’s per unit product is 200tk.
Average variable cost per unit 60tk.
Contribution margin percentage calculation:

= 1 – (variable cost per unit/selling price per unit)

= .070

All the calculations are done in a simplified form.

9.2 Marketing expense budget

How much will it cost (Annually)?

Marketing Cost (2012)	Taka (oo,ooo)
Car rent	3
Space rent	4
Employee salary	5
Advertisement cost	4
Expense related to promotion	1
Social activities	1
Total =	18

9.3 Sales forecast

Year	Sales in units	Taka (oo,ooo)
2012	540,000	1080
2013	720,000	1440
2014	900,000	1800

Note:

1. Calculation of 2012 sales:

1500*30=45000*12=540000*200=1080

2. We expect our sales to grow positively with our promotional activity.

9.4 Mark-up pricing

Variable cost 60

Fixed cost 18000000

Expected unit sales 900000

Suppose KFC has the following cost and sales Expectations.

The manufacturer unit cost is given by:

Unit cost= Variable cost +

Now assume the KFC wants to earn 20% markup on sales. The KFC markup price is given by:

Markup price≔

Target–return Pricing: KFC has invested $ 1million & wants to set a price to earn 20% & expected unit sales 900000.

Target –return Price: Unit cost +

=$85 +

9.5 Breakeven Analysis

Breakeven analysis is a calculation of the approximate sales volume required to just cover costs, below which production would be unprofitable and above which it would be profitable. Break-even analysis focuses on the relationship between fixed cost, variable cost, and profit.

Break-even in sales volume:

= fixed cost/ (price-variable cost)

= 180, 00,000/ (200-60)

= 128572 units

Break-even in Taka:

= fixed cost/ Contribution margin percentage

= 180,00,000/0.70

= 257142.86 Lack

Chapter- 10

10.1 Controls

Controlling is measuring and correcting individuals and organizational performance to ensure that events conform to plans.KFC involves measuring performance against goal and plans, showing where deviations from standard exist, and helping to correct deviations from standards. In shortly, KFC controls the facility of the accomplishment of plans.

The essential elements of KFC control processes are:
• Establishment of Standards
• Measurement
• Comparing performance with the standards
• Taking corrective action

10.2 Establishment of Standards

Establishment of Standards is the first step in KFC control process. KFC standards represent criteria for performance. A standard acts as reference line or a basis of appraisal of actual performance. Standards should be set precisely and preferable in quantitative terms. KFC setting standard is closely linked and is an integral part of the planning process. Standards are used or bench marks by which performance is measured in the control operations at the planning stage, planning is the basis of KFC control.

10.3 Types of KFC Standards

Every objective, every goal of the many planning programs, every activity of these programs, every policy, every procedure, and every budget can become a standard against which actual or expected performance might be measured. KFC Standards tend to be of the following type

§ Physical standards

§ Cost standards

§ Capital standards

§ Revenue standards

§ Program standards

§ Intangible standards

§ goals as standards

§ strategic plans as control points for strategic control

10.4 Measurement of Performance

Measurement is not always practicable, the measurement of KFC performance against standards should ideally be done on a forward-looking basis on that deviations may be detected in advance of their occurrence and avoided by appropriate actions. KFC forward-looking manager can sometimes predict probable departures from standards .In the absence of such ability; however deviation should be disclosed as early as possible.

10.5 Comparing Performance with the Standards

The second step is to measure actual performance of various individuals, groups or units .The management of KFC should not depend upon the guess that standards are being met measurement of performance against standards should ideally be done on a forward looking basis so that deviations may be detected in advance of their occurrence and avoided by appropriate actions. KFC comparing the Performance with Standards Appraisal of performance or comparing actual performance with pre-determined standards is an important step in control process. Comparison is easy where the standards of KFC have been set in quantitative terms as in production and marketing. In other cases, where results are intangible and cannot be measured quantitatively direct personal observations, inspection and reports are few methods for comparing performance.

10.6 Taking Correct Action

The Standard of KFC reflects the various positions in its organization structure .If KFC performance is measured accordingly; it is easier to correct deviations. KFC applied the corrective measures in actual place .Another way KFC follow the correct through leading-fuller explanation of the job or more effective leadership techniques. In briefly, the total processes are given bellow-

· first, we should make an appropriate plan to establish our KFC

· Then we should recognize did we cope with our actual goal or not?

· If there are any faults, then try to define what the fault was in our planning of KFC.

· After identifying the fault point, we should work for removing the fault so that it may not hamper our next year performance.

· If there any fault in plan, then correct the fault. After correcting the fault, we should do work according to the correct plan.

· We should closely monitor our quality in order to make our consumers satisfaction.

We thing that, if KFC do the task according to the plan and provide quality product to satisfy the customers, it will enable to solve problem according to planning process.

Chapter- 11

11.1 Conclusion and Recommendation

KFC is the largest brand of Yum Restaurants, a company that owns other leading brands like Pizza Hut, Taco Bell, A&W and Long John Silver. Transcom foods limited have brought KFC franchise in Bangladesh for the first time In Gulshan area, Dhaka. KFC has introduced many offerings for its growing customer base in Bangladesh while staying rooted in the taste legacy of Colonel Harland Sander’s secret recipe. Its signature dishes include the “crispy outside, juicy inside” Hot and Crispy Chicken, flavourful and juicy Original Recipe chicken, the spicy, juicy & crunchy Zinger Burger, Toasted Twister, Chicken Bucket and a host of beverages and desserts. For the vegetarians in India, KFC also has great tasting vegetarian offerings that include the Veggie Burger, Veggie and etc.

KFC builds on past concepts. One of the most important and oldest resources “The secret recipe” of 11 herbs is still used in meals, with modifications according to the taste of local market. Most of the new meals offered are based on the old product concept of providing quality chicken. KFC has the culture of team. Teams are blending of old and new employees but KFC more on old employees. The firm believes in learning of old employees rather thanrecruiting new employees. Moreover new products highly refresh the oldones as recipe is modified according to the culture

In recent survey it has been proved that most people in love to take home parcel rather than dining out, but unfortunately KFC do not have any home delivery service like McDonald or other food chain storestherefore, we would say that KFC should definitely have a home delivery service.

KFC is one of the few food brands that have been surviving for so long with an aristocratic brand image. Just because of its quality it has been holding a competitive position so far. We expect to grow its reputation and business in future and hope our marketing plan will contribute in reaping the root towards a successful food chain in its brighter future.

Chapter-12

12.1 Sources

Text Book:

Marketing Management, 13^th Edition

Philip Kotler

Kevin LaneKeller

Abraham Koshy

MithileshwarJha

Websites:

www.kfc.b.org

www.wekipedia.cpm

www.youtube.com