KFC Historical Background

KFC is an internationally renowned fast food industry in the world. They have the main
ambition to increase & maintain the quality in fast food industry. Their aim is to capture the
fast food market. Basically they want to provide their products to anyone that is why they
expanding their branches in all over the world. They want to increase their profit
through giving maximum satisfaction & other better facilities to people that they want. Now
after catching such a marvelous position in the International Market, KFC is introducing a
new item Boneless Fried Chicken and chicken cracker, with even more attractive and
charming taste.

Market Analysis:

KFC has put a great deal of focus into international expansion, particularly in Pakistan where
the market is currently home to more than 1,200 locations.

In order to keep pressure on their competition and cater to their customers changing needs,
the Pakistan is making some additions to their menu. For the more health conscious customers they
have introduced a line of grilled chicken sandwiches and KFC may be offering a breakfast menu in
the future at all their locations.

KFC is the leader in the fast food chicken market with a 45% share. They have had positive
sales growth for the last 7 years, but most of that success has been international.

In the U.S. KFC has been the weak link in sales for YUM! Brands. The company actually
suffered a 4 percent sales loss in the U.S. offsetting what would have been a 4 percent increase for
YUM! Brands.

Lower priced value menus are a great opportunity for KFC to gain back profits since some
people have recently said that they have been pricing themselves out of the market.

In the past, KFC has been all about their fried chicken roots with campaign slogans like
finger-lickin good and always having Colonel Sanders as their trademark. Lately, the company has
tried to create a new culture by pushing their new Kentucky Grilled Chicken products and the fact
that their chicken now has 0 grams of trans. fat.

In addition, they have tried to revamp their brand image to target younger consumers by
replacing the traditional Colonel Sanders with an animated character and the chains locations now
have bolder colors and updated graphics. Plus, the company has taken the constantly in your face
approach with a market leading 52 week a year TV advertising schedule.

The biggest thing that KFC has going for them and what they need to push the most is the
convenience that comes with their offerings.

They have made great strides in trying to diversify and differentiate their brand by hanging
onto the trademark recipes that have made them famous, while also catering to a new customer base
with their healthier grilled options.

It offers an additional alternative to your standard burger joints which are overly abundant.

Typical customers are adults ages 25-54 who are in occupations ranging from white collar
office jobs to blue collar construction jobs. The biggest part of their customer base makes between
$50,000 and $60,000 dollars a year and are married with children.

These customers are living fast-paced lives in which they have to balance the heavy demands
of work and life. As a result of this, lunch and dinner occasions are becoming shorter and the thing
that has the greatest impact on their choice of food and drink purposes is convenience.

KFC faces competition from a number of fast food companies which include
MC DONALDS, AFC, SUBWAY, DIXY CHICKS, FRIED CHICKS, PIZZA HUT.
Chicken Competitors: fry chicks, Chik-fil-A, and Churchs Chicken.

Major Competitors: McDonalds, Subway, and Burger King.

Environment analysis Global Business Environment

1) Demographical Factors:

Following factors included in the demographical

factors of the pest analysis of KFC:-

a) Age:
 Generally there is no age limit which is focus by the KFC. They
target & focus on each and every age of the society. But for somehow in
our opinion they target heavily on the youngster as compared to the
middle & old age.

b) Gender:

In this case they generally focus on the both Males & Females of
the society & similarly target them.

c) Household Size:

Household size plays a vital role in the demographical

factor of KFC. Generally they target the whole family not a single family
members. Thats why he introduced many family packages meals.

d) Population:

Population also plays a vital role in the demographical factor

of KFC. In the light of this population they can make their strategy.

2) Political Factors:

Following are the factor involve in the political factors

of the KFC:-

a) Government Policies:

Although KFC is a foreign company, but they have

to obey the policies of the Government where he run its business
activities. KFC has handle this situation very tactfully and obey the
policies of the Government as prescribe by the government in order to run
this kind of business.

b) Price Policies:

Price policies is also an important factor. KFC maintain &

design its price policies keeping in view the income & income distribution
of the people living in the country. Thats why all the classes are the target
market of KFC.

c) Political Stability:

Political stability is very important if KFC want to

become the leader in fast food business in Pakistan. So this is also an
important political factor.

3) Legal Factors:

Following are the important factors which is

included in the ethical/legal factor of the KFC:-

a) Business Law:

Just like the Government Policies the business units which

is working in Pakistan also regulate the law regarding the nature of
business. KFC also fulfills this factor.

b) Social Responsibilities & Ethics:

 Social Responsibilities & Ethics are the
important factor. KFC tries his level best to this factor.

4) Social/Cultural Factors:

Social/Cultural Factors includes the following

things:-

a) Social Class:

As we discuss earlier that KFC target all the class including

the upper class, upper middle and lower middle class etc.

b) Culture:

Though the culture of KFC from where they come is different but
they adopt the Pakistani culture also.

c) Religion:

KFC not only adopt the Pakistani culture but also the
Religion as well. They offer Halal foods to the customers, which is the
symbol that they adopted the Muslim religion.

5)Competition:
Direct Competition

It includes

MC DONALDS
AFC
SUBWAY
 DIXY CHICKS
FRIED CHICKS,
PIZZA HUT
PAPASALLIS
Indirect Competition

It includes all other restaurants. Like Salt & Pepper, Kabana,

Village, Bundu Khan Etc.

KFC has a head-on competition with McDonalds so wherever they place

their products; KFC goes there as well.

KFC SWOT ANALYSIS

STRENGTHS

Brand Equity
2nd Only to McDonalds in Foreign Sales $550M
Strong Cash Flows
Generate $1B each year
Very strong Internationally
UK, Middle East, Thailand, China, Japan, Korea, Mexico
Strong Franchise and License Fee revenues for cash flow.
Interactive relationship marketing
Strong trademarks recipes
Ranks highest among all chicken restaurant chains for its convenience
and menu variety.
Largest multibranded restaurant in the world 100 KFC and Pizza Hut
combos 600 KFC and Taco Bell combos
WEAKNESSES

Recent drop in sales for KFC

Failed to rank in top 20 in growth in 2000.
Same Store sales declined
Lack of point of scale scanning system
Admitted inability to provide quality service
Lack of knowledge about their customers
Lack of relationship building with employees, customers and
suppliers i.e. Chick-fil-a
Question of over franchising leads to loss of control and quality
Lack of focus on R&D

OPPORTUNITIES

Growth of 18-24 age demographic

Increase in U.S. median income
International beef scare from mad-cow and hoof and mouth disease
Home Meal Replacement Market will exceed an estimated $577
billion by 2020
Targeting to growing ethnic markets Asian American and Hispanic
New Leadership
Domestic markets
Updating restaurants
Balanced menu
Customer focus
Increase delivery service

THREATS
 Rated 83 out of 100 in terms of competitiveness
Increasing wage rates directly affect menu prices
85% annual employee turnover for fast food market
Supermarkets and new competitors threaten HMR market
International Exchange Rates
Health Trend away from fried foods
Changing customer demands
Quality of Service Focus

Marketing Focus:

Product line
Burgers:
Zinger Burger
Colonels Chicken Burger
Colonels Fillet Burger
SUB60
Zinger Jr.
Chicken:
1 piece
2 pieces
5 pieces
10 pieces
Combos:
Chicken Meals
Sandwich Meals
Family Meals
Snacks & Side Orders:
5 & 20 Pieces Nuggets
Arabian Rice
5 & 10 Pieces Hot wings
 dinner Roll
Regular & Large Fries
Hot Shots
Corn on the Cob
Hot & Crispy Soup
Cole Slaw

PRICING STRATEGIES

In introduction stage KFC entered the market using market-skimming

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

PLACEMENT

Place includes company activities that make the product available to

target consumer.

CHANNEL

There are no market intermediaries (reseller, wholesaler). They provide

product directly to the customer.

COVERAGE
Pakistan has been divided in to two regions:
1. In the north, KFC is serving Karachi and Hyderabad with 10
restaurants
2. In the south they have large chain of 30 restaurants.

ASSORTMENT

KFC provides two types of meals in respect to size:

1. Family meal.
2. Individual meal.

LOCATION

They have certain outlets per market area.

INVENTORY
Warehouses for ingredients are in Lahore.

TRANSPORTATION

Supplier uses their own vehicles for supplying chicken and breads.

PROMOTION:

In Pakistan KFC not advertise their products too much due to its reputation
in other countries. They promote their products through special packages
like Ramadan packages, mid night package.

1. SALES PROMOTION
For sales promotion KFC has introduced different strategies such as
Ramadan package, Birthday package, Midnight package, and many more.
Also they have introduced goods like watches. Key chain, coffee cup, t-
shirt, toys to the customers.

2. ADVERTISING

PRESS ADVERTISING

Jang (Karachi, Lahore & Rawalpind).

The news (Karachi, Lahore & Rawalpindi)
Dawn (Karachi, Lahore, Rawalpindi)
Magazines.

CONCLUSION

KFC is a very strong chain of fast food restaurants with more than 10,000
restaurants all over the world. Being in Maturity Stage it has high
opportunities of introducing its new products and deals. In Future it will be
expanding its chain by introducing more outlets in Pakistan as well as in
other countries
KFC is providing employment to 1200 Pakistanis which adds up to 6000
Pakistanis directly dependant on KFC.
KFC paying Rs.10 million to Govt. of Pakistan as direct taxes. 95% of its
food and packing material is used in KFC Pakistan is produced locally
which sums up to purchase of 35 million per month.
Each new outlet developed by KFC Pakistan spends 40 million rupees
thats a massive amount for this industry.

KFC and PakistanGrowing Together

Preceptions:

Believe in value creation.

Provide ultimate choice of quick service restaurants for consumers.
Won the hearts of millions of Pakistanis.