New Product Development at KFC

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New Product Development at KFC

A marketing project on KFC A marketing project on KFC KFC Multan KFC Multan KFC Pakistan KFC Pakistan

Kentucky Fried Chicken Kentucky Fried Chicken

Yum! Brands Yum! Brands Pepsi Cola Pepsi Cola

Developing and Marketing a new product in KFC Developing and Marketing a new product in KFC EXECUTIVE SUMMARY

EXECUTIVE SUMMARY

Restaurant business is one of the oldest known to man and to a large extent is still an art Restaurant business is one of the oldest known to man and to a large extent is still an art and will remain so in future. System and practices make the job of managing a hotel or and will remain so in future. System and practices make the job of managing a hotel or restaurant much similar, but the human element is difficult to systemize. The field of restaurant much similar, but the human element is difficult to systemize. The field of restaurant business is interdisciplinary. It draws up economics, psychology, management, restaurant business is interdisciplinary. It draws up economics, psychology, management, foo

food d tectechnolhnologyogy, , arcarchithitectecture ure and and marmarketketing ing clucluststereered d togtogethether. er. It It is is a a busbusineiness ss of of hospitality.

hospitality.

Multan is one of the oldest cities of Pakistan and is expanding everyday. The trend of the Multan is one of the oldest cities of Pakistan and is expanding everyday. The trend of the peo

people ple of of MulMultan tan is is dridriftifting ng extextensensiveively ly towtowardards s modmodern ern meameans ns of of socsocialializiizing ng andand relaxation.

relaxation.

People are getting more involved in fast food.

Therefore, we haveTherefore, we have worked on the marketing management of KFC to see how it’s affecting the lifestyle of worked on the marketing management of KFC to see how it’s affecting the lifestyle of people in this locality.

people in this locality.

KFC, the name requires no explanation. It is a chain of restaurants

operating in more than 80 countries with over 1000 outlets around the

world – from Shanghai to Sao Polo; from the sand of Saudi Arabia to

the side walks of New York and now in Pakistan. It is part of the T

riconricon restaurants internationals which is one of the most leading multinational organizations in restaurants internationals which is one of the most leading multinational organizations in the world. Said to be the second most famous and largest fast food franchise in the the world. Said to be the second most famous and largest fast food franchise in the World, No. 1 brand in Asia with the market leader ship in Japan, China, Malaysia, World, No. 1 brand in Asia with the market leader ship in Japan, China, Malaysia, Indonesia, and Korea.

Indonesia, and Korea.

In this report, we have discussed the history of KFC; Its evolution and expansion in In this report, we have discussed the history of KFC; Its evolution and expansion in Pakistan, KFC’s sales and promotion techniques, operational activities and unique style. Pakistan, KFC’s sales and promotion techniques, operational activities and unique style. This organization’s internal and external

This organization’s internal and external analysis, its strengths, weaknesses, opportunitiesanalysis, its strengths, weaknesses, opportunities and threats are discussed in this report.

and threats are discussed in this report. We

We hahave ve prpropopososed ed a a nenew w prprodoductuct, , ChChococololatate e BrBrownownieies, s, whiwhich ch sasatitisfsfieies s ththe e KFKFCC customers who seek dessert in the restaurant but find none. We have discussed its customers who seek dessert in the restaurant but find none. We have discussed its mar

marketketing ing strstrateategiegies s and and pripricincing g polpolicyicy. . If If thithis s proproduct duct is is actactualually ly intintrodroduceuced, d, mormoree customers and more value will be

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KENTUCKY FRIED CHICKEN

Food, fun & Festivity, this is what KFC is

Food, fun & Festivity, this is what KFC is all leading the market since its

all leading the market since its

inception, KFC provides the ultimate chicken meals for

inception, KFC provides the ultimate chicken meals for a chicken loving

a chicken loving

nation. Be it colonel sanders secret original recipe chicken or the hot &

spicy version, every bite brings a yum on our face. At KFC we can

proudly say, “We do chicken right”.

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.

Opening the first KFC outlet in Gulshan-e- Iqbal in 1997. KFC wore the

title of being the market leader in its industry. Serving delicious and

hygienic food in

hygienic food in a relaxing environment made KFC everyone’s favorite.

a relaxing environment made KFC everyone’s favorite.

Since then, KFC has been constantly introducing new products and

opening new restaurants for its customers. Presently KFC is branched

out

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Sukkur & Muree) with more than

Sukkur & Muree) with more than 45 outlets nation-wide.

45 outlets nation-wide.

KFC, based in Louisville, Kentucky, is the world's most popular chicken

restaurant chain specializing in Original Recipe®, Extra Crispy™ and

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complete family meals at affordable prices. KFC has more than 11,000

outlets in 85 countries and

outlets in 85 countries and territori

territories around the world, serving some 8

es around the world, serving some 8

million customers each day.

KF

KFC C fafastst-f-fooood d chchaiains ns arare e cucurrrrenentltly y unundeder r ththe e rereststauaurarant nt didivivisision on of of PePepspsi i CoCo Incorporated. Pepsi Co. is a corporation with three divisions including beverages, snack Incorporated. Pepsi Co. is a corporation with three divisions including beverages, snack foods, and restaurants. The restaurant division of Pepsi Co. is named as YUM! Brands foods, and restaurants. The restaurant division of Pepsi Co. is named as YUM! Brands Inc. Yum! Restaurants International (YRI) is the division of Yum! Brands that operates Inc. Yum! Restaurants International (YRI) is the division of Yum! Brands that operates all restaurants outside the U.S.A. YRI is Pepsi Co.’s fastest growing and most profitable all restaurants outside the U.S.A. YRI is Pepsi Co.’s fastest growing and most profitable division. In fact, KFC makes more profit outside the U.S.A. than in the U.S.A. In 2002, division. In fact, KFC makes more profit outside the U.S.A. than in the U.S.A. In 2002, the YRI system opened a record

the YRI system opened a record 1,051 traditional restaurants with over 6,000 KFC o1,051 traditional restaurants with over 6,000 KFC outletsutlets and over 4,000 Pizza Huts.

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The financial position of PepsiCo is very good. The corporation compares well with industry averages. Operationally, they have improved the health environment of their employees and customers by enforcing a smoke-free policy. Also, they have increased employee training for better service and cleaner restaurants.

THE HISTORY

Colonel Harland Sanders, born September 9, 1890, actively began franchising his chicken business at the age of 65. now, the Kentucky Fried Chicken (R) 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 North America. The colonel’s cooking is available in more than 82 countries around the world.

He sold his interest in the US 1980 to 1984. The Colonel remained a public spokesman for the company. In 1976, an independent survey ranked the Colonel as the world’s second most recognized celebrity.

Under the new owners, Kentucky Fried Chicken Corporation grew rapidly. It went public on March 17, 1966, and was listed on the New York Stock Exchange on January 16, 1969. More than 3,500 franchised and company-owned restaurants were in worldwide operation when Heublein Inc. acquired KFC Corporation on July 8, 1971, for $285 million.

KFC’s Original

Recipe

Kentucky Fried Chicken became a subsidiary of R.J. Reynolds

Industries, Inc. (now RJR Nabisco, Inc.), when Reynolds acquired

Heublein Inc. in 1982. KFC was acquired in October 1986 from RJR

Nabisco, Inc. by PepsiCo, Inc., for approximately $840 million.

In January 1997, PepsiCo, Inc. announced the spin-off of its quick service restaurants --KFC, Taco Bell and Pizza Hut -- into an independent restaurant company, Tricon Global Restaurants, Inc. In May 2002, the company announced it received shareholders' approval to change its corporation name to Yum! Brands, Inc. The company, which owns A&W All-American Food Restaurants, KFC, Long John Silvers, Pizza Hut and Taco Bell restaurants, is the world's largest restaurant company in terms of system units with nearly 32,500 in more than 100 countries and territories.

Until he was fatally stricken with leukemia in 1980 at the age of 90, the Colonel traveled 250,000 miles a year visiting the KFC restaurants around the world.

And it all began with a 65-year-old gentleman who used his $105 Social Security check to start a business.

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KFC MILESTONES IN CORPORATE HISTORY

•

1964 John Y, Brown and Jack Massey purchased Kentucky Fried

Chicken for US $ 2 million.

•

1969, Corporation listed on the New York Stock Exchange, Colonel

buys the first 100 shares.

•

1986 Kentucky Fried Chicken purchased by Pepsi Co.

•

1991 New logo is introduced, replacing Kentucky Fried Chicken with

KFC.

•

1992, In Japan, KFC opens its 1000 restaurant.

•

1994 KFC opens its 9000 restaurant in the world in Shanghai China.

•

1997, Tricon Global restaurant and Tricon Restaurants International

(TRI) founded on October 7

th

_.

The restAurant where colonel started his business and worked THE TRICON FAMILY

•

KFC is the part of Tricon, the world’s largest restaurant group with

restaurants in nearly 100 countries around the world.

•

Combined with Pizza Hut and Taco Bell, there are nearly 30,000

restaurants worldwide.

•

Our brands each lead their categories, generating annual retail sales

over US $ 20 billion.

•

We feed more than 18 million people every day.

KFC TODAY

•

Today, KFC is the world’s largest and most well known chicken

restaurant chain, with more than 10,000 locations worldwide, in 78

countries. KFC and its franchisees employ more than 200,000 people

worldwide.

•

KFC serves more than 4.5 billion pieces of chicken annually, to

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MISSION STATEMENT

“To establish in Pakistan our position as the leading WQSR (Western Quick Service Restaurant) chain, serving good value, innovative chicken-based products. Consistently providing a pleasant dining experience, with fast friendly service, in a clean and convenient location. At all times, we must be dedicated to providing excellent service and delighting customers.”

GOALS

•

Build an organization dedicated to excellence.

•

Consistently deliver superior quality, and value in our products and

services.

•

Maintain a commitment to innovation for continuous improvement and

growth, striving always to be the leader the market place changes.

•

Generate consistently superior financial returns and benefit our

owners and employees.

VALUES

•

Focus all our resources to our restaurant operations because that is

where we serve our customers.

•

Reward and respect the contributions of each individual at KFC.

•

Expand and update training with time and be the best we can be and

more.

•

Be open, honest and direct in our dealings with one another.

•

Commit ourselves to the highest standards of personal and

professional integrity at all times.

•

Encourage new and innovative ideas because these are the key to our

competitive growth.

•

Reward results and not simple efforts.

•

Dedicate ourselves to continuous growth in sales, profit and size of

organization.

•

Work as a team.

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Champs stands for the belief that the most important thing each of us can do is to focus on the customer. It stands for KFC’s commitment to provide the best food and best experience for the best value.

Champs stands for the six universal areas of customer expectation common to all cultures and all restaurant concepts. They are:

•

Cleanliness

•

Hospitality

•

Accuracy

•

Maintenance of Facilities

•

Product Quality

•

Speed of Service

Champs is a philosophy to ensure that the customer has a consistent quality experience in every restaurant, every day, on every occasion and you will be playing a key role in delivering Champs to our customers.

EMPLOYEE CONDUCT RULES

As an employee at the KFC restaurant, there are certain rules and regulations that the company expects you to observe you to observe and respect. Such rules are necessary to ensure that the rights and interests of the company and its assets are protected and a proper learning environment is maintained.

KFC IN PAKISTAN

Apart from fulfilling our commitment of serving delicious, fresh and

hygienic food and at the same time providing our customer with the

ultimate entertainment; KFC also plays in the economics development

of our country.

•

Presently KFC has provided to over 1200 Pakistanis, which adds

up to 6000 individuals directly dependent in

KFC Pakistan

_.

•

The Government of Pakistan receives over Rs.10 million per

month from KFC Pakistan as direct taxes.

•

95% of all food and packing material used in

KFC Pakistan

is

procured locally, which sums up to a purchase of over Rs.35

million per month.

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•

Each new outlet developed by KFC Pakistan costs approximately

Rs.40 million, which is a huge amount for our construction

industry.

Franchising is a relatively new phenomenon in Pakistan, but this concept has gained tremendous acceptance in this market as can be seen from the recent growth trends in the market. Most of the growth in the past few years has taken place in the food business, where the present market size for internationally franchised outlets is estimated in excess of Pak Rupees 1.2 billion (USD approximately 24 million) in terms of annual sales. US food outlets such as Pizza Hut, Kentucky Fried Chicken (KFC), McDonalds, TGI Friday’s, Subway, Taco Maker, and Nacho Nana’s are already present in Karachi. Pizza Hut, McDonalds and KFC are also present in Lahore.

The non-food sectors such as retailing, convenience stores, hotels and motels, courier service, security services, and educational training centers are going to be the growth areas of the future. US companies dominate the franchise market in Pakistan in large part due to the fact that US firms were the pioneers in this sector and the first to set up their outlets in Pakistan. In addition, the US firms entered the market with a long term commitment and provided full support to their local partners. Also, U.S firms and their products are internationally known for their quality products and superior service. Many

US products such as McDonalds and Kentucky Fried Chicken were well-known and recognized in the urban areas of Pakistan even before starting their operations in the country.

There are no local firms offering indigenous franchise opportunities, although several Pakistani entrepreneurs have acquired master franchise for this region with the objective to re-sell the franchise to interested parties in the country. The government of Pakistan does not impose any restrictions on investors who wish to establish a franchise in the country, but foreign investors are required to inform the board of investment and the state bank of Pakistan, primarily for the purpose of repatriation of franchise fee or any profits

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MARKETING

TARGET MARKET OF KFC in PAKISTAN

Kentucky Fried Chicken has been franchising all over the world for

years. They have about 30,000 franchises all over the world. Ever since

Pepsi co. has bought into the restaurants chain the have started an

expansion program, which has focused not on the increasing number

of the outlets but on the increasing number of branches all over the

world operating in full order. KFC has been in Asia for considerable

amount of

while and as it has the policy of novelty and pioneering in branching into foreign markets it opened its first branch in Lahore on June 20, 1997. It was opened in the most interactive area of Lahore, Barkat Market. Before opening here the KFC people conducted a research which was known as the “Barkat Market Analysis”. The chain has been in the expansion mode for a few years and they branched into Pakistan after

researching the market of Pakistan especially Lahore.

The reason behind targeting the Lahore market is that they have a

very mobile food culture. The Lahore culture is a ready market for any

new fast food franchises as the success of KFC proved, and was

followed by the opening of McDonalds’s Pizza Hut in the foreign market

and many other local successful fast food outlets.

Pakistan supports a very well versed and varied palate and a colored

culture that strongly supports the system. They have targeted the

market armed with spicy variations of chicken i.e., hot & crispy, and

hot wings that are not there in the international market, but are

specially designed for the pakistan palate. Its branch in lahore is one of

the best in asia. In lahore they targeted the most mobile culture first;

students of lahore. They focused all the areas well surrounded by

educational institutes, as where their first branch is the center of all

student activity. Not only is it near institutes like pu and ilm but also

near a lot of the business complexes, thus catering to companies as

well. So kfc targeted its market very well in pakistan and has been

spreading with quite a speed since then. It has continued its aim in

pioneering most of the affluent cities of the country.

place

Some important strengths of KFC’s marketing strategy include a number of changes they have implemented in the past few years to increase customer access. KFC has answered the fast-food consumer’s demand for availability in non-traditional locations by opening restaurants in shopping malls, airports, stadiums, amusement parks, office buildings, and mobile units (Krug, 1996).

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As an additional outreach to their customers, KFC has initiated a home delivery service in 14 states (KFC 1997). As of February 27, 1997, KFC has more than 9,800 outlets located in 77 countries (KFC 1997).

IN MULTAN

The area selected for the building is the most affluent and trafficked area of Multan city, Cantt. It was selected due to its visibility and easy accessibility. The Cantt area is amongst the largest shopping area of the city and the affluent shoppers frequent this area. Its centralized location has added to the success of the restaurant.

The restaurant building of Multan is the largest outlet in Pakistan. This outlet is catering to the city as well as the surrounding area that includes Khanewal, Muzaffargarh and the similar small localities.

Chicky Fun Area

Railway Services Club,

Bahawalpur Road

Opp. Multan High Court,

Multan.

Ph: 111-532-532

TARGETED CUSTOMERs

In Multan the most affluent class that frequent KFC is the business and landlord class. In the general customers as before the people of KFC have targeted the families and the students who are on the outlook for a quick bit. Another factor is that following in the foot steps of the trend setters, Lahore and Karachi food trends are diverting more and more towards fast food every day. So most of the young generation here was craving for a quality fast food outlet. Now that KFC has pioneered the fast food culture development Pizza Hut and McDonald’s will follow. Most of the people here are businessmen and their affluent families are vigilant trend followers as they are the most influential people so previously they spent their fortune in fast foods outside the city and now they can do it in Multan KFC. Since the progress in the job sector the number of the working women is steadily increasing in the city and so is the trend to frequent the fast foods.

Focusing on the family outing culture in Multan KFC has specially developed a kids playing pen that allows the families to have a quality time in the restaurant. The

atmosphere here is exactly what families are looking for, so they have been more successful in attracting their target market then their predecessors. Another weakness of the Multanis that they have targeted is the tendency towards the chicken consumption. Since the people here are less vege-oriented they have an edge to their product. They have successfully attained their target market by only introducing HOT & CRISPY that in keeping with the people’s tastes here that are inclined towards spicy foods.

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They population here is very price sensitive which has been dealt with

KFC by maintaining a regular price range all over Pakistan. They have

successfully targeted the opinion leaders, the business in the city that

set the trends followed by most of the people here.

PRODUCTS

In 1992, KFC expand their menu to include a greater variety of foods that are lower in fat than fried chicken, such as Oriental Wings, Popcorn Chicken, and Honey BBQ Chicken. They also introduced a dessert menu, which provided a selection of pies and cookies. By the end of 1992, KFC held 49 percent of the $7.0 billion US chicken segment of the market (Krug, 1996).

In 1993, KFC offered a new rotisserie Chicken menu item. They also offered a lunch a dinner buffet in at least 27 states (Krug, 1996). In 1995, two new products were introduced: Chunky Chicken Pot Pie and the Colonel’s Crispy Strips. In 1996, KFC introduced their Tender Roast Chicken, with projected sales of $500 million during the first 12 months (“Like”1997).

KFC uses traditional taste testing methods implemented by the Colonel approximately 40 years ago. To ensure only the highest quality and best tasting products for KFC, a team of six franchisees and operators and two “chefs” comprise the KFC Chefs Council” who develop, taste, rate and evaluate new product ideas (like 1997). The Chefs Council members are from various parts of the country, representing regional taste preferences of their customers. Once a new product has passed inspection by the Chefs Council, KFC’s market research department conducts additional tests. Each week 100 people, who represent customers, taste the newest products. If the products receive a good taste rating, they are then tested in three or four cities. The Colonel’s quote still stands for KFC “If it doesn’t taste good, don’t serve it to the customer. (Like, 1997).

Products that KFC offer are almost same throughout Pakistan, but slightly differ from other countries but not too much.

The secret of KFC's world-wide success is due mainly to three key benefits - quality, taste and convenience.

KFC now offers a diverse and interesting menu which includes: 

Arabian rice



Cheese



Col. Chicken burger



Col. Fillet burger



Corn on the cob



Dinner rolls



Fries

Cappuccino

Espresso

Frothe

Hot shots

Machos

Milo

Mineral water

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

Hot and crispy soup



Hot wings



Macho’s burger



Nuggets

Moccacino

Soft Drink

Zinger burger

A typical KFC meal consists of chicken, coleslaw and potato & gravy. All of the ingredients are of the highest quality and freshness. To ensure this, the company sets rigorous standards for product uniformity and quality, which must be met by all suppliers.

Snapshots of KFC Products with Prices

BCG Matrix of KFC

INTRODUCING chocolate BROWNIES

Right now there is no dessert in KFC’s menu. Therefore we plan to

introduce Chocolate Brownies for chocolate lovers. We expect to catch

the interest of a regular loyal customer base with its vast selection of

brownies, including not-so-traditional flavors.

We will focus on…

•

Providing the highest quality product.

•

Competitive pricing.

•

New ideas and flavors.

•

Local markets, with a special focus on coffee shop and bakery

customers.

We will sell chocolate brownies coupled with exceptional customer

service in a warm atmosphere. Customers can dine-in and enjoy a

warm or cold beverage to complement their brownie. Toppings will also

be available when customers dine in for children, as well as the young

at heart. We will also offer carry-out so customers can enjoy the treats

at their own convenience.

Market Segmentation

Our market is divided into four different psychographics: Comfort

Creatures, Celebrators and Soccer Moms. They represent groups of

people sharing similar behavior patterns and reasons for frequenting

KFC to get the brownies delight.

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Comfort Creatures are mainly the more successful of workers who are

driven by status and prestige yet miss homemade comfort foods of

their childhood. They may stop in on their own or bring clients in for a

brownie experience.

Celebrators fit into the vast category of people celebrating special

occasions. Birthday, anniversary, graduation, valentine's day, etc.,

families and loved ones will gather at KFC and will enjoy our chocolate

brownies for a fun, tasty, and festive atmosphere.

Soccer Moms is the title given to the moms who remain busy in usual

home work and find little time for fun. KFC is a gathering place where

families are welcome and feel comfortable. "Moms" can come in for

after school treats with their children and. Or they can meet up with

friends for a fun day out - a little civilized time stolen in the midst of a

busy day.

Target Market Segment Strategy

We have specifically targeted segments of people with an appreciation

for delicious desserts and a need for comfort and relaxation. KFC is a

haven for the busy & successful who want to treat themselves to

something soothing and a little sinful! It doesn't take a lot of time, yet

is so rewarding.

These people will value the high quality product presented. Our

customers will also appreciate the fun and fast service - whether

celebrating a birthday or stopping in for a break between shopping.

Competition and Buying Patterns

Although we are opening up a new product, there is no doubt that we

are competing with a variety of similar businesses. We need to

compete against the ideas that dessert is something that only follows a

special dinner and needn't be any better than a frozen cake. We want

every day to be a reason to celebrate. And being able to have a vast

array of options for your favorite chocolaty treat is an idea that appeals

to everyone.

The comfort factor plays an important role in consumer decisions

about sweets. Both the atmosphere and staff of KFC excels at warm &

friendly. At the same time, the menu will reflect familiar favorites such

as chocolate chunk or turtles, while there will be flavors for the more

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adventurous as well, such as pistachio brownies. We will use the

highest quality product; sometimes paring the ordinary with the exotic,

but we will always present our brownies in a stylish and aesthically

pleasing, but still unintimidating manner.

Marketing Strategy

Our marketing strategy will be education of the consumer and

subsequent word of mouth. Customers will be reached through

neighborhood advertising, special promotions, and most importantly,

word of mouth.

Famous celebrity Jerry Seinfeld eating chocolate brownies

Location also plays a crucial role in marketing and promotion. KFC is

located in high-traffic retail area. This area offers many incentives to

business operating there because of the high-end reputation and

affluent residents nearby. Also, the area is popular amongst tourists

who come to see Multan’s cantonment area, cantonment garden and

lake which is not so far, which will be most beneficial.

We will target progressive and generally well-educated and affluent

consumers who are interested in high quality brownies experience and

are dissatisfied with the limited selection and lack of personal service

found in grocery store bakeries and neighborhood cafes and coffee

shops.

PRICING OF OUR BROWNIES

Manufacturing Cost

Rs. 75

5% Marketing Cost

Rs. 4

Total Cost

Rs. 79

15% G.S.T +15% RETAIL MARGIN

Rs. 20

Total retail Price

Rs.

99 We are sure that our delicious chocolate brownies will attract the

ultimate chocolate lovers and fulfill their choco-delight. Our affordable

price makes it possible for children and youngsters to enjoy aesthically

pleasing brownies with high satisfaction and fun.

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PROMOTION

In 1991, the Kentucky Fried Chicken logo was changed to KFC in an effort to decrease emphasis on the “Fried” element of their chicken (Krug, 1996).

In 1993, KFC implemented new “Neighborhood Program” targeting company owned restaurants in designated areas to offer ethnic menu items relative to the demographics of those specific areas. Houston, Dallas, Los Angeles, St. Louis, New York, Chicago, Philadephia, and Washington, D.C., offered side dishes to appeal exclusively to the black communities in this promotional effort. They also promoted the “Neighborhood Program” at these locations by wearing African inspired uniforms (Krug, 1996). In Miami, KFC tested 13 Hispanic-oriented restaurants by offering side dishes consisting of Mexican food items. These promotional efforts increased sales from 5-30 percent in the testing areas (Krug, 1996).

In June 1996, KFC decided to bring back the “Bucket”. The bucket had been removed from their outlets in efforts to reduce costs. The cost of bringing back the bucket is approximately $2 million.

However, the projected sales are approximately 30 million buckets through June 1997. A 1988 study by Arizona State University revealed the following “the Colonel’s mug (or face) and the KFC bucket were two of the three most-recognized symbols in the United States” (“Birth” 1997).

In December 1996, KFC promoted their KFC Mix & Match bucket using the dog “Moose” from the Frazier television show. This particular advertisement was aimed at football fans during the bowl season, and continued to air through Super Bowl Sunday. KFC’s latest promotional efforts are centered on their honey BBQ Tender Roast Chicken. Celebrities included in their efforts were based on a survey of 1,815 randomly selected people, age 18 and over (KFC 1997).

COMPETITORS

Worldwide KFC’s major competitors McDonalds, but there are no direct competitors of KFC in Multan but there are some indirect competitors like Lasani Fried Chicken (LFC).

K&N’

s

VALUE CHICKEN PLANT

The main suppliers company is

K&N’s

. Their slogan is The Chicken

praised at KFC is raised at

K&N’s

.

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When the chicken business for the KFC people became overloaded and they wanted to maintain the quality of their chicken so the Artal group set up a plant producing quality chicken called. K & N value chicken in Raiwand by the name of Artal International plant. Since they have been producing good chicken catering to the demands of all the best quality restaurants in Pakistan.

FOOD SAFETY

KFC French fries Composition

Potatoes, Tran’s fat free oil dextrose.

Seasonings

Original Recipe:

Salt, herbs and spices, garlic powder.

Milk and Egg:

Non fat milk, dried whey and dried egg whites.

Hot and Spicy:

COM starch, sodium bicarbonate, sodium, aluminum phosphate,

Dextrose, modified cornstarch, extractives of turmeric.

SHORTENING:

Pure vegetable oil (soybean).

CHICKEN AND ITS PRODUCTS

Locally produced and processed chicken, Supplied in frozen form.

100% Halal.

KFC NUTRITIONAL INFORMATION

Serving

size Calories

Total

fat Cholesteerol CHO Protein

Origiona l Recipe-Wing 47(g) 145(g) 9(g) 60(mg) 5(g) 11(g) Origiona l Recipe-Breast 161(g) 370(g 19(g) 145(mg) 11(g) 40(g) Original Recipe-Drumstic k 59(g) 140(g) 8(g) 75(mg) 4(g) 14(g) Original Recipe-126(g) 360(g) 25(g) 165(g) 12(g) 22(g)

(17)

Thigh Hot & Spicy-Wing 53(g) 180(g) 11(g) 60(g) 9(g) 11(g) Hot & Spicy-Breast 179(g) 450(g) 27(g) 130(mg) 20(g) 33(g) Hot & Spicy-Drumstic k 60(g) 140(g) 9(g) 65(mg) 4(g) 13(g) Hot & Spicy-Thigh 128(g) 390(g) 28(g) 125(mg) 14(g) 22(g) Original Recipe-Fillet 206(g) 450(g) 27(g) 60(mg) 22(g) 29(g) Zinger Burger 246(g) 640(g) 40(g) 405(mg) 38(g) 32(g) Hot Wings 144(g) 460(g) 30(g) 125(mg) 22(g) 25(g) Corn on the Cob 3" 82(g) 90(g) 0.5(g) 0(mg) 19(g) 2(g) French Fries

100(g) 136(g) 3.7(g)

1(mg)

23.3(g) 2.3(g)

DELIVERY METHODS

Self Service

KFC stores offer self service to sell their products means customers go at counter and purchase products pay for it, no involvement of waiters and if customers want to eat at KFC store they sit at lobbies one for common people other for only families otherwise.

(18)

It is a way of buying KFC products without going at KFC stores. All KFC stores in Pakistan offer Free Home Delivery service within just 30 minutes. Orders are received at KFC stores only through telephone. They want only address at which their team members supply that order and he received a payment for that product.

Take away

Take away process means customer buy KFC products from counter pay for it and go away, it means he didn’t want to sit in KFC lobby to eat. It is possible that customers who use Take Away method of buying KFC products are enjoying KFC products at other places like home or picnic spots.

At store

Most of the KFC buyers want to eat KFC products in lobbies of KFC stores because a very entertaining atmosphere is provided by the KFC management in lobbies

especially for children.

Drive Thru

Drive Thru is the method of buying products used at almost all KFC stores in Pakistan. In it when customer is in vehicle like cars, jeep, bike, etc go at KFC store and purchase without coming out of his vehicle, he drive up to drive thru counter pay for product and at next counter collect his product and go away. It is the facility in which

customer is able to buy product without spending too much time at store.

Catering

Catering is a process in which KFC team cook and serve their products at a place where u want like at house, office, etc. for example some people wants to give to eat to their guest a KFC products at his marriage or birthday function he can do this very well by using a special facility offered by all KFC stores in Pakistan.

PAYMENT METHODS

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It is the most popular and widely used method of payment when we are going to sell or buy something, Irrespective of its some drawbacks such as security risks, its bulky volume, and time consuming counting process.

At all KFC stores in Pakistan Cash is the main and normally used method of payment when customers buying products at KFC stores.

Credit Cards

Almost all the stores of KFC Pakistan accept almost all types of credit cards such as Master, Visa, etc. as for as KFC Multan as concerned they start accepting Credit Cards within 2 or 3 weeks, “Restaurant Manager” said.

Debit cards

All the stores of KFC Pakistan accept debit cards and they made quick transaction by their access machine which is directly linked with respective banks such as Muslim Commercial Bank, United Bank Limited, Habib Bank Limited, Meezan Bank, ABN AMRO Bank, etc.

Customer Interaction

All the KFC stores have very good customer interaction with their customers because they know the worldwide accepted rule of B2C type of business that is

“Customer is the King”

So that’s why they regularly get a feedback from the customer and

remain be in touch with their potential customers also.

All KFC stores are very efficient in sense of getting feedback from the

customers they use Comment Cards to get feedback about their

product and services and also an information about the customers that

they use later to be in touch with their potential customers. By using

Comment Cards all the KFC stores collect information about the

customers and maintain a database using all the information. They

compile that Comment Cards very carefully and collect the information

about the good and bad sides of their stores, point out them and send

that information to Head Office Karachi and higher management take

(20)

decisions on the behalf of that information collected by using Comment

Cards for the betterment of KFC Pakistan.

(21)

PEST ANALYSIS

Political Factors

•

Due to political stability in Pakistan, these days all businesses are

flourishing and same is the case with KFC.

•

As there are huger chances of investment these days, so KFC is

following GROWTH STRATEGY all over the country and targeting

50 outlets in Pakistan, also searching place for another KFC

outlet in Multan.

•

But some areas like Peshawar has political unrest due to MMA

and their policies are affecting KFC being an American

organization.

Economical Factors

•

Socio-economic trends are mostly encouraging with increases in

disposable income, more working women, increase in hoteling

and increases in tourism all positive signs for the catering

market.

•

There are also catering sectors, such as restaurants and

takeaway food, which are now a part of the regular eating habits

of a majority of adults.

•

The increasing purchasing power of people is affecting KFC sales

positively.

•

Taxes are regularly paid

•

In summer KFC has more sales than in other season because KFC

provides a good chilled environment and Zenzibar like

restaurants charge for air conditioners.

(22)

Social Factors

•

In Pakistan KFC is playing a very active role for education sector.

It has invested much for inauguration of schools in different

areas of Pakistan e.g in Karachi it as made a school for disabled

children.

•

Also throughout Pakistan it is funding for libraries.

•

Donating much to NGO’s for less fortunate people.

•

At the start of KFC in Multan a mega function with meal was

given to SOS kids.

•

Chicky Fund Raising i.e getting second handed books etc. from

different schools and distributing them among less fortunate

students is also done through different campaigns.

•

For the most recent incident of Tsunami KFC arranged concerts

in Karachi in which singers like Ali Zafar, Hadiqa, Haroon etc.

were invited and all the amount collected from such type of

concerts was donated to Tsunami victims.

•

Major events are special focus of KFC e.g Mother’s day, Father’s

day,Valentines’s day, Eid days etc. and they offer different

packages too.

•

Self Service:

Cupola Cares Foundation

Cupola Cares Foundation is a non-profit, registered organization and a charitable wing of Cupola. We aim to help the underprivileged children by giving them quality education thereby making an attempt to raise the literacy rate of Pakistan which is externally low by world standards characterized by low enrolment in primary and secondary school, high drop out rates and an over all poor quality of education. Cupola realizes the need for education and intends to build this need at the grass root level. Our vision is supported by prominent personality of the country who are also amongst the board of directors of the

foundation:

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•

Mr. Saifuddin Zoomkawala, Chairman EFU

•

Mr. Tariq Kirmani, Chairman PIA

•

Syed Salahuddin Hyder, C.E.O. Century 21

•

Mr. Waqar H Siddique, Executive Director Abraaj capital

•

Mr. Rafiq Rangoonwala, C.E.O. Cupola Pakistan

These are individuals belonging to different corporate sectors and are

already engaged in various forms of community support services and

welfare activities.

Technological Factors

•

KFC is going to adopt the delivery system of Pizza Hut.

•

Buying new equipments.

•

The latest tech acquired is always get approved by government.

•

KFC new UAN no. is 111-532-532

•

Each and every equipment is licensed.

•

KFC Tri-state Management uses Linux.

•

KFC Pakistan plan to become online, because the usage of

internet and credit cards increases. So people using internet can

buy KFC products online, because it is a very cheap and effective

way of buy products Department of information technology of

KFC Pakistan is working on it and in future hopefully KFC stores

become online.

Internal Communication

Internally all the KFC Pakistan stores communicate regularly for the betterment of organization. KFC Pakistan has a Paper Less environment in the organization. They use Telephone and E-mail facilities to remain in contact with their Head Office Karachi to plan strategies, share ideas and get instruction to maintain and improve the business because these two ways of communication are very fast an very cheap as for as e-mail as

concerned, they have no traditional way to communicate like time consuming traditional mail system.

(24)

POS (point of sale) is the physical location at which goods are sold to customers. A point-of-sale (POS) software terminal is a computer replacement for a cash register. More sophisticated than traditional cash registers, a POS (point of sale) software system includes the ability to track customer orders, process credit cards, an d manage inventory.

At all KFC stores in Pakistan PAR Technology Corporation’s Point of Sale system is used including both software and hardware.

PAR provide the tools that KFC Pakistan need to increase order accuracy, improve speed-of-service and raise customer satisfaction levels with software solutions that can span the entire enterprise - from the front counter to the back office and beyond to integrate the total organization.

PAR uses reliable Dell® hardware to run its Back Office Computer

to unleash the

power of business.

Transaction Record

KFC Pakistan uses a complete package of Point of Sale system to keep

record of every transaction occur. All KFC Pakistan stores nationwide

use PoS and at the closing time of the store they send a complete

transactional record of that day by using PoS through internet.

Because of this head office maintain their accounts very well and take

quick decision on the behalf of these records.

(25)

SWOT ANALYSIS

STRENGHTS

•

Quality of products.

•

Leader in almost every market.

•

Finger licking taste as the other international fast food restaurants in

Pakistan doesn’t have that kind of speciality in Fried Chickens.

WEAKNESSES

•

There is some weakness in the field of KFC menu as it serves only

chicken related products but its competitors like pizza hut and Mc

Donald’s offer vegetable and cow meat based food also.

•

Due to huge expansion by growth strategy there is much pressure on

management department in terms of HRM etc.

OPPORTUNITIES

•

KFC plays an important role in increasing employment rate of a

country as it hires persons from local place to fill its staff. So this gains

public attention and generates good will of the organization.

•

Financially KFC is going very stable and sound organization so still it

has much opportunity of opening new outlets in different areas of

Pakistan and the rest of the world by reinvesting its profits.

THREATS

•

Prosperity of KFC with in a given region depends upon its economic

condition of the country so if some thing bad happens to it, it can be

troublesome for KFC.

•

KFC recipe is still a secret, and if some one gets this secret then this

can play havoc with this organization.

•

American invasion into tribal areas of Pakistan is also a threat for KFC,

due to arousal of anti-American sentiments it can lead towards

rejection of KFC.

(26)

CONCLUSION

On the whole KFC is the name of trust for the customers because there is no compromise on the quality of the food. KFC fully concentrate on the quality of food that’s why it is the hall mark of excellence among the customers. The supplier of KFC is K&N’s Foods (Pvt) Ltd. They have good and fully furnished places for Chicks to grow and finally to provide there valued customers.

By following such practices, KFC is providing a just and equitable environment for work and through its diversity programs, giving back to the community at various levels. Doing business internationally means taking stock of the local population and molding your menus and work practices to suit local tastes, laws and regulations.

The best maxim here is:

Think Globally, Act Locally.

RECOMMENDATIONS

•

The HR department of KFC is definitely doing its job well as according

to Kufahl & Agoglia (2003), the company has the lowest turnover rate

in the fast food industry. However, when a company reaches the

pinnacle of success with regards to any aspect, it has to try even

harder to stay there and maintain its position. Hence, KFC should try to

keep up the good work and maintain the level of commendable

workforce development practices.

•

KFC is American firm so it can face sensitivity in this case. Because of

rude American attitude towards Muslims countries, people “can” reject

them.

•

They should start some activities that help them in turning their

anti-Islamic image in the minds of their target customers.

•

The website of KFC is not well developed so sophisticated information

and well designed data is not available on the net, as mentioned above

the I.T. department of KFC Pakistan has a close look on this area so it is

good sign for the internet users to buy online and get information they

need.

•

Music selection is good but usually they keep music volume so high

that it starts interrupting entertainment. They also do not change

music on customer choice.

(27)

•

Counter service system is acceptable in USA but not in Europe and

Asia. In Multan, KFC stand as trend setter (due to no competition) so

this factor does not do any harm to their profit but it is disliked by 5%

people.

•

Their pricing strategy is out of vision. They charge Rs.105, Rs.135 etc

figures. It is a blunder from the side of marketer that if customer is

willing to pay or can pay more and marketer is charging them less. So

they are blowing high % of revenue in air just because of fake pricing

strategy.

•

As KFC stands in STAR position in portfolio matrix so they should adopt

stability strategy at least for some period of time but still they are

adopting further growth strategy and increasing their level of

operations so the same case can happen with KFC which happened to

MC Donald’s.

(28)

REFERENCES

 Shirley Lievers

- Customer Relationship Executive, KFC, Multan

Web Links:  www.kfc.com  www.kfcpakistan.com 

www.yum.com



www.marketingmaniacs.com



www.google.com



www.yahoo.com



www.pepsiworld.com



www.enquirer.com/editions/2002/08/21/tem_kfc_great_american.html



findarticles.com/p/articles/mi_m3190/is_n8_v25/ai_10403447



www.buzzle.com/editorials/4-30-2005-69337.asp



vmsd.com/content/kentucky-fried-chicken-0



www.roadsideamerica.com/story/7021



www.kfc.co.uk/our-menu/toasted-twister/toasted-salsa-twister/



www.webmd.com/diet/news/20061030/kfc-to-fry-chicken-without-trans-fats



web.archive.org/web/20061224114447/http://www.kfc.com/about/pres

sreleases/111406.asp



www.foxnews.com/story/0,2933,229308,00.html



www.kfc.co.uk/about-kfc



news.bbc.co.uk/mobile/bbc_news/england/nwyl/north/north_yorkshire/6

64/66418/story6641819.shtml?l



www.cnn.com/2003/BUSINESS/10/17/anderson.kfc/index.html



www.kentuckyfriedcruelty.com/u-undercover.asp

