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KFC market analysis

By Tarık-Gözeller Nov 23, 2013 3228 Words

KENTUCKY FRIED CHICKEN

INTERNATIONAL MARKETING MANAGEMENT
Course Project Report
CONTENTS
I.Abstract............................................................................................................... 3 II.Introduction....................................................................................................... 4 III.Profile of KFC...................................................................................................4 IV.Industry Analysis...............................................................................................4 V.Marketing Strategies of Pakistan and the Philippines……………………….4 VI.Comparison between Pakistan and the Philippines ......................................11 VII.Conclusions ......................................................................................................13 VIII.References…………………………………………………………………...14

Abstract
When begining the analysis of marketing strategies of countries,we analyzed the market situation and strategies such as promotion,product features,distribution channels,locations,sales promotions,advertising,public relations etc…Then we use this results for comparing two countries based on some factors.These factors are internal,economical,cultural,social and technological. After collecting all situations,we summarize and write a conclusion about this report according to references. Introduction

Aim of this report is marketing differences between two countries and what companies do for adopting new market and reach to more customer.First of all we find 4P’s then compare differences and similarities and lastly we add suggestion and conclusion part. Kfc Profile

KFC (Kentucky Fried Chicken) is a fast food restaurant chain headquartered in Kentucky, United States, which specializes in fried chicken. KFC has over 18.000 outlets in 120 countries and it is the world’s second largest restaurant chain after McDonald’s. The company is one of the subsidiaries of Yum! Brands which also owns Pizza Hutand Taco Bell. KFC was founded by Harland Sanders, who began selling fried chicken from his roadside restaurant in Kentucky during the Great Depression. Sanders identified the potential of the restaurant franchising concept, and the first "Kentucky Fried Chicken" franchise opened in Utah in 1952. KFC was one of the first fast food chains to expand internationally. KFC primarily sells fried chicken pieces and variations such as chicken fillet burgers and wraps, salads and side dishes such as French fries, desserts and soft drinks, often supplied by PepsiCo. Its most famous product is pressure fried chicken pieces, seasoned with Sanders' "Original Recipe" of 11 herbs and spices. The exact nature of these ingredients is unknown, and represents a notable trade secret. KFC is known for the slogan "finger lickin' good", which has since been replaced by "Nobody does chicken like KFC" and "So good".

Industry Analysis
The fast food industry, also known as Quick Service Restaurants (QSR), has been offered delicious and practical foods for their customers. The fast food franchising began in 1930s during Great Depression. The industry recorded a huge growth from 1970 to nowadays, and the revenue has grown from 6 billion $ to 160 billion $, an 8.6% annualized rate. The restaurants are expanded in over 100 countries. Also, there are over 200.000 restaurant locations only in United States. Fast food franchises focus on high volume, low cost and high speed product. Most fast-food restaurants specialize in a few main dishes. Restaurants include national and regional chains, franchises, and independent operators.

Pakistan
International Product Strategies
Support Services
KFC Pakistan website has talk to us part.Talk to us include 3 stages such as comments,contact us and frequently ask questions.Customer choose one of them and contact them. Package
KFC use standard packages for all countries.They use disposable packages and paper material to avoid pollution and for health.All packaging material used in KFC Pakistan is supplied regionally.For drinks,Pepsi use their packages and logo. Quality

Pakistan KFC has a quality assurance which provide the best food and dining experience in the quick service restaurant business and also they produce new product according to customer feedbacks. Design

KFC Pakistan use same logo same color but their restaurant design is different from original.They focus on basic,simple and comfortable design for customer. Brand Name
KFC Pakistan use same brand name but their slogan is different.Their brand name is K(Kentucky)F(Fried)C(Chicken)and logo features Clonel Harland Sanders.For instance;their slogan is ‘excite the senses’ in KFC Pakistan. Label

KFC Pakistan has a nutritional label such as calories,total fat,CHO,protein etc.. They offer 100% halal and veggi foods to the customers.

Product Features
They offer three product category which are chicken burgers,chicken menus and snacks.

Chicken burger category
1.Mighty Zinger
2.Chicken Burger
3.Spicy Sub
4.Chicken Mania
Chicken Menus
1.WOW Meals
2.Panini Menu
3.Family Feast
4.Big Filler
Snacks
1.Arabic Rice
2.Rice Spice
3.Corn on the cob
4.Salads
Pakistan food culture based on rice,aromatic spices,less oil and egg.According to this culture,KFC use spicy and rice in their menu such as arabic rice , rice spice.Moreover Pakistan food culture don’t use to chicken but KFC change this habits and they offer tradional taste to customer.Food size is up to customer.They choose which size they want. For kids,They have another menu which calls chicky meal.To attrack childen,they give toy who choose chicky menu. Nowadays KFC Pakistan offer new meal to their customers.It calls Champion’s meal.

International Pricing Strategies
Pakistan economy isnt enough for people and their income is low so many people don’t want to spend extra money.Consequently,KFC Pakistan regulate their price according to this situation.Price is economic and include all customer such as employees,students,family and KFC Pakistan have discount packages for customers. Providing quality product occurs high price but kfc change this and they give a quality product for low price KFC Pakistan don’t follow market skimming because it causes high price and target only upper class so they follow penetration price strategy.They charge a low price also they change price according to ratio of the raw materials and policies of goverment. Price Competiveness

If one company changes its prices in any products the other company has follow it to protect its position.Also people would go similar product selling for lower prices than buying an expensive one.For KFC Pakistan,Mc Donald’s is a very powerful competitors and if kfc open a new branch,mc donald’s follow and open new branch too. Price Promotions

There is no discount in KFC Pakistan.Their prices are stable all around to Pakistan. Cash is popular and more used method of payment in Pakistan but credit cards aren’t popular.Day by day many KFC Pakistan accept credit cards.

International Distribution Strategies
Intensive Strategies
KFC Pakistan focus on intensive strategies which distribute low priced or motive purchase products such as soft drinks. KFC does intensive distribution on its outlets. (All and everything on every outlet). KFC Pakistan strategies is related to diversification.KFC enter new market with new product. Distribution Channels

KFC Pakistan only use one distribution channels it is called direct where the goods are transferred to the consumer directly.KFC Pakistan has no middlemen. KFC Pakistan does distribution of consumer goods directly to the consumer. It also does distribution of services to the consumer like parking, sitting, home delivery, etc. Moreover they use mobile outles to reach more customer and offer fast food anytime,anywhere. KFC Pakistan has a delivery service.Call centre based home delivery and they say ‘one call does it all’.Their delivery time is 35 minutes and available at all stories in Pakistan. Corporate meeting,seminars,workshops(minimum group size-15 persons),lunch/dinner for employees/customers and their families can arrange at selected KFC restaurants in Pakistan.

Coverage
In Pakistan,product differentiation play a role.KFC Pakistan has differentiate its product to many special recipe in the form of chicken meals.They offer seasonable discount(Ramadan Menus),sales promotions,birthday parties and chicky are(for children) all of them are ways of differentiating what they offer. Locations

KFC has 43 restaurant all over Pakistan and is currently present in cities namely Karachi,Multan,Sialkot.They locate in outlets,gas station.KFC has open its shop in Pakistan where middle and higher class family,students will come and enjoy the food. International Promotion Strategies

Sales Promotions
KFC Pakistan offer to their customer special menu set which calls champion’s menu is cheaper than normal and also brings to customer prepaid coupons of different meal combo options. For companies they print branded coupons (minimum quantity 500 coupons) which use any KFC restaurant nation wide or restaurant. Advertising

KFC Pakistan usually use print media,bilboards,by phone,internet and mostly doing televised marketing to promote it products. In Pakistan,they adopt different advertisement way which calls floating trucks.Floating trucks travel along the city where they have KFC stores so customer will know about their new products and discounts.

Public Relations
Their customer interaction is good because they accept worldwide rule B2C type of business and they follow customer is king strategy and also in restaurants they use comment cards to receive customer feedbacks.Their website has comment part.

The Philippines
Support Services
KFC Philippines has a contact us part.Customer choose this part and ask a question to contact them. Package
KFC has a standarts package all around the world but KFC Philippines offer food to their customer with plate.According to their food culture,they have many sauces so kfc prepare small pot for sauces.Also they deal with coca cola company and they use their packages. In Philippines KFC,they have a party treats so they offer customer party package.Customer choose party package from inside catalog. Design

KFC Philippines design is very elegant and comfortable for customer.They use kfc’s standart color and design but they regulate for the philipines ‘s life style. Brand Name
KFC Philippines use same brand name and same logo.
Product Features
KFC Philipines has 7 food category in their restaurants.Some examples of their food variety; Chicken meals
1.Chicken&Rice
2.Chicken Chop
3.Chicken&Spaghetti Combo
Bowls
1.Kung Pao Chicken
2.KFC Pasta Bowl
Snacks
1.Mac&Cheese
2.KFC Spaghetti
Krushers
Mini krushers,Fruit krushers

According to Philippines eating habits,they usually eat pasta,white rice.KFC Philippines offer their food usually with rice and sauces.Philippines use garlic in their foods so many chicken menu they use garlic. For kids they don’t have any special menu or food.

Moreover there is a upsize selection in KFC Philippiness.If customers wnat to upsize their drink or food,they have to pay extra money each food or drink. International Pricing Strategies
KFC Philippines target area is middle and high income such as families,students,employees,companies.Also kfc regulate prices according to this situations. Prices are subject to change without prior notice in Philippiness Kfc.Prices may vary in selected stores and areas.10% charge applies for delivery transactions. Market Penetration

Moreover, for most people in Philippines eating out is a luxury and if that comes with a high price then it is obviously targeted at the higher income groups. This is also a sensitive part of Kfc's marketing orientation and they had the objective to penetrate the market and also meet their financial objectives so Kfc Philippines uses Penetration pricing which offer a low price to attract customers. Price Competitiveness

If the competitors provide the same product at a lower price then Kfc Philippines usually lowers the price of its product too.In Philippines is its main selling point and control a pricing over the Philippines fast food market.It prices its menu,drinks with related to its competitors. Price Promotions

Kfc Philippines has no extra discount for their prices.It organize some special discount for special day for instance nowadays in Philippiness they celebrate Mother’s day so they offer their customer price promotions for this day from May 7 To June 24. Also they don’t accept card payments in Philippines.

Elastic or inelastic
Elastic demand is related to low price if the price of chicken menu or snacks is low price,most people buy this products and it will be high demand. Inelastic demand is related to loyal customer.People will buy this products no matter what the price is.Also these are call loyal customer. According to this situation Kfc Philippines has both elastic and inelastic demand.

International Distribution Strategies
Intensive Strategies
Kfc Philippines base on intensive strategies which offer low price to find all outlets. Channels(Direct or Indirect)
Kfc Philippines use one channels strategy which is directly to consumer and there is no intermediary. There is a delivery hotline to be delivered to customers place and they call or text a message also deliver anywhere,anytime. Coverage

Kfc Philippines focus on differentiate products to reach more customer such as chicken chop,super mom. Locations
Kfc has about 90 stores in Philippines.Some store has 24-hour store,smart party store and a.m store.These stores near potential customer such as students,families,business people who want to come and enjoy in this store. International Promotion Strategies

Sales Promotions
In Philippines,there is a customer card.Customers use this card for delivery websites.If customers use this cards for ten times,they can take free meals all around store in Philippines. Nowadays,Philippines celebrate Mother’s day so they offer their customer price promotions for this day from May 7 To June 24. Advertising

Kfc Philippines usually use internet,tv commercial,bilboards,by telephone also it use social media to reach more customer to spread new product or discount promotions. Moreover,Kfc use celebration for their commercial in Philippines. Public Relations

For Kfc Philippines,customer relations is so important for this reason in their website they have a customer care part.Customers contact them to commnets,feedbacks or suggestions.

Comparison between Philippines and Pakistan

Product
As a food company, KFC has to adopt itself to different cultures’ local tastes and expectations. We can observe a lot of differences between Pakistan’s and Philippines’ local cuisines. Pakistan cuisine can be defined as the blend of different regional cooking traditions of South Asia. Dishes are known for having aromatic and sometimes spicy flavors. Black pepper, cinnamon and chili are popular spices in Pakistan. But Filipino cuisine is famous for its bold combination of sweet, sour and salty flavours. Vinegar is a common ingredient. They combine sweet and salty flavours almost every meal. KFC’s wide range of sauces and different options can assist to satisfy these different local preferences. KFC not only adopt the culture but also religion. In Pakistan, they offer Halal foods to the customers which is the symbol that they adopted Islamic religion. And also, Pakistan is the one of the major consumer of rice and KFC offers some options includes rice such as ‘Arabic Rice’ Moreover,Kfc Pakistan deal with Pepsi-co on the other hand Kfc Philippines deal with Coca-Cola. Price

KFC follows both optional pricing and mixed bundling pricing in both countries. A consumer can buy dishes from the basic menu and can go for add-ons on it. Pricing decisions are determined by the target market. In Pakistan, price is stable, economic and target market of the company is all customers such as employees, students, families. In Philippines, the target market is middle and high income. A ‘Hot Shot Menu’s price in Pakistan is equal to $3 but in Philippines it is equal to $9. Promotion

KFC pursues generally similar promotion strategies in both markets. It does some promotional activities by offering add-ons to the existing menu, some gift coupons, kids menus etc. On the other hand, Kfc Pakistan has an extra promotion strategies which calls floating trucks.Floating trucks travel along the city where they have KFC stores so customer will know about their new products and discounts. Place

For both country, KFC uses one channel strategy which is directly to consumer and there is no intermediary. KFC has 43 restaurant all over Pakistan and about 90 stores in Philippines.Both country focus on outlets for this reason students,families,employees come to their restaurant easily.Moreover,some Kfc stores have a parking lot and kids party area.This Goverment Policies

KFC is a foreign company but has to obey the policies of the governments where they run their business activities. KFC obeys the policies of the governments as prescribe by them. Both Pakistan and Philippines are the members of World Trade Organization which aims to promote free trade in a most favoured nation basis. The WTO is playing a positive role in promoting trade among the member countries. So, it can be said that there is no government restriction against KFC to do business both in Pakistan and Philippines. The USA is one of the main trade partners of these two countries. Political Stability

Political stability is another important factor for KFC if it wants to become a leader in fast food business in a country. For Phillipines, this might not be a problem but Pakistan is politically really unstable country and it is also an important political factor that KFC can face in Pakistan. Economy

The economy of Pakistan is the 27th largest in the world in terms of purchasing power parity (PPP), and 44th largest in terms of nominal GDP. It is a semi-industrialized economy. The economy of the Philippiness is the 40th largest in the world, and it is also one of the emerging markets in the world. The Philippines is considered as a newly industrialized country. Income

Income is an another important economic factor of the fast food industries. Income decides which class they are going to target. In the early time of KFC, the target market of the company was upper class but they introduce some meal through which we can say that they target the middle and upper level as well. Technology

Both country have a lack of technological issues.For example;their websites are not useful for customer.They should redesign and fix some problems.Also they should use wireless internet technology and increase the usage of credit cards. Suggestions

1.They should start some activities to attrack more customer such as music activities 2.For Philippines Kfc,They should make extra promotions to reach more customer. 3.Both country should use more technological things such as credit card payments,wireless,new machine 4.Both country should develop their websites more useful,technological 5.They should focus on more vegetarian food

6.They must focus on poor people and make some cheaper product for those. 7.For Pakistan,they should add their menu more product such as pasta,dessert,drinks Conclusion
In this study, we tried to analyse Kentucky Fried Chicken Company’s adaptation strategies while doing a business in two different locations- Pakistan and the Philippines. The most challenging decision that a company may face in doing business is the degree of standardization or adaption in its operations. The question of standardization or adaption effects all the bussiness operations of the company, such as R&D, finance, production, organizational structure, procurement, and 4P. After comparing and presenting the business strategies of KFC in these two country, a conclusion can be drawn that Kentucky Fried Chicken has reached a balance between standardization and adaption in both countries. It keeps some of their American style but also needs to make some changes to adopt itself to different cultures at the same time to survive and achieve prosperity in these markets. It can be said that KFC showed respect to different aspects of the customer’s cultures and made some changes on their products and services considering their own tastes, values, dining habits and religion. This strategy is one of the main reasons that makes KFC successful and effective in many countries.

References
http://en.wikipedia.org/wiki/KFC
http://www.kfc.com/
http://colonelsanders.com/
http://www.kfcpakistan.com/
http://www.kfc.com.ph/
http://en.wikipedia.org/wiki/Philippines
http://tr.wikipedia.org/wiki/Pakistan
http://www.yum.com
http://vmsd.com/content/kentucky-fried-chicken-0

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