Service Marketing

Group Assignment
Group B
1

Crew Members
Names

Student No

Tuan Kitchilan (Team Leader)

HDM / 2014 / 014

M. Marwan

HDM / 2014 / 017

P.I.J. George

HDM / 2014 / 030

Dinusha Lakmal

HDM / 2014 / 022

Srikara Abayagunawardhana

HDM / 2014 / 006

Hafeez Afzal Nazim

HDM / 2014 / 041

M. Shafraz

HDM / 2014 / 016

Content
Company Introduction & SWOT analysis
Environment and Market Analysis
Problem Behavior and Integration to Service Concepts
Recommendations and Solutions for Service Marketing Problems at
KFC
Conclusion

Company Profile
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, etc

Revenue:

$520.3 million

Employees:

455000

Parent:

Yum! Brands

Website:

http://www.kfc.com

Introduction to
KFC is an international fast food chain
Few countries operated as under franchise agreements
Reputed for unmatchable tasty food, Best in class service and
hygienically certified fast food
KFC serves more than 12 million customers every day
Geographically well spread & KFC serves in 115 countries
Well penetrated & It operates more than 17,000 restaurants
Ranked as 201, One of the Fortune 500 companies in the world, with a
annual revenue exceeding $13 billion
Africa 70 Outlets

Malaysia 579 Outlets

Sri Lanka 26 Outlets

China - 4,563 Outlets

India 361 Outlets

Indonesia 466 Outlets

Japan 1200 Outlets

United Kingdom 784 Outlets

Australia 600 Outlets

New Zealand 100 Outlets

Environment and Market Analysis

Segmentation Approaches and Needs by Segment
KFC is currently catering to few clearly identified segments. Following is an analysis of the each
segment and their needs.

Kids
Teens
Youth
Family
Young Executives
6

SWOT Analysis
- Strengths Worldwide recognized brand
Trusted quality, known as one of the best in the world
Repeat purchases are above the industry standards
Can delight customers who loves to eat chicken
(Product depth)
Weakness
No direct competition on the core product withes
the same taste
Successful distribution of outlets
Strategically selected locations
Threats
Opportunit
Successful brand, Possibility
of cross selling with the support of patent
ies
company. (KFC, Pepsi Cola and Lays)

SWOT Analysis
- Strengths Financial strength and stability
Successfully managed value chain. i.e. Long term contract with suppliers
Strong bond with suppliers
Weakness
es
Capable of diversifying into new segments of food products within a very
Well trained, well managed employees
short period
Well designed services:
Threats
Opportunit
Pre purchase stage
ies
Service encounter stage (Moment of truth)
Post encounter stage
8

SWOT Analysis
- Weaknesses No island wide coverage / limited island wide delivery radius
Poor market penetration strategies Middle class
Poor adaptability on customer changingWeakness
needs (Local trend)
es
Mainly related for chicken related products / narrow product width
Mainly dependent only on one core product
Threats
Opportunit
Need more sales revenue to reach the break-even point
ies
Poor communication flow with in the organization

SWOT Analysis
- Weaknesses Poor Human Resources Management / High employee turnover
Poor pay management system
Few options available for health concernWeakness
customers
es
Raw materials for the core products to be depend on third party suppliers
Can not change the enhancing elements according to the geographical
Threats
Opportunit
locations. i.e. Using the air conditioner in Nuwara-eliya
ies
Maintain the consistency on taste (Dining & take away)

10

SWOT Analysis
- Opportunity Economic growth may help the future business expansion
Opportunity on low cost labour by using part time employees
Ability of expansion with fast food counters.
Universities, institutes, cricket
Weakness
matches, etc

es

Ability for cross selling. Using the customer base of Franchisee partner.
Threats
Opportunit
Eg: Can open up mini outlet in Cargills food city
ies
Expansion in distribution. i.e. Increasing the number of drive-through
Introduction of new product varieties for kids. i.e. high calorie foods
11

SWOT Analysis
- Opportunity Can use cost effective advertising methods for the target group by TTL
Product development - Offer high calorie nutrition foods
Outdoor catering. i.e.: Kids Birthday Parties,
etc
Weakness
Growing trends for fast food

es

Social and cultural changes favoring for hygienically certified fast foods
Threats
Opportunit
Expediting a TTL strategies for effective communication, SMS alert when
ies
passing a KFC outlet. i.e. developing a mobile app (Android, IOS)

12

SWOT Analysis
- Threats Changing the food habits may influence the customers to deviate from KFC
offerings
Diseases like bird flu, viral diseases are the big threat for KFC
Difficult to convince customers on perceivedWeakness
pricing strategies as competitors can
offer similar products for low price

es

(Net value = perceived benefits to customer all perceived outlays)

Growing trend for health conscious food. i.e: Oil free food, Low sugar
Growing head on competition with major players
in the market. i.e. Introduction of
Threats
Opportunit
Mc Chicken and Crispy Chicken
ies Burger by McDonalds
Intensive competition among existing players
Viral marketing can destroy the brand image
13

Environment and Market Analysis

PESTEL Analysis
Political
Impact - Moderate

Economic
Impact - High

Social
Impact - High
14

Technological
Impact - High

Cost effective communication methods on digital marketing platform

Efficiency & productivity is key component on selecting the technology
Used to preserved the food values

Ecology
Impact - Moderate

Legal
Impact - High

HACCP Certification Hazard analysis for critical control point

FSSC Food safety security certification
Food authority approval
Medical screening Test. Eg: Communicable diseases,
Business registration
ISO 22000 Food safety management system
Factory Ordinance Working hours, leave entitlement, safety and
security, over time payments, etc..
Food Grade Certificate Supplier should certify for adding ingredients
15

Michael Porters 5 Force Theory Analysis

Force

Impact

Bargaining
power of
suppliers

Substitutes

High

Moderate

Have to depend on imported raw materials

Availability Alternatives products for the competitive

price range

Intensive distribution for substitute products

Customized options are available with competitors
Any competitor can substitute the products in a very
short period of time
No patent rights
Tax free concession for local entrepreneurship
Availability of New innovative ways enter to the market

Threat Of New
Very High
Entry

Remarks
Very few formal suppliers, informal suppliers are plenty
as the company adhere to international standards
company purchases only from formal suppliers whom
could meet the international standards

16

Michael Porters 5 Force Theory Analysis

Force

Barging Power
of Customers

Competitor
Rivalry
(Industry)

Impact

Low

Remarks

Customer expects on perceived value

Availability of wide variety of food items

Difficult to change the customers cultural attitudes

Financial strength and stability

Very High Competition among the Internationally reputed brands

Wide range of product availability with a better value for

money

17

Environment and Market Analysis

- Analysis of Current and Potential Competitors -

PRODUCT SPACES
MARKET SCOPE

18

Service Design
- Pre purchase stage Value chain management
International proven technology and processors for food manufacturing
ISO adoption and other required certifications under the legal compliances
Successful service blueprinting

Weakness
Well trained employees on hard skills and softes
skills
Internationally recognized and accepted physical evidences
Uniform communicates the uniqueness and the team spirit among them
Threats
Opportunit
ies

19

Service Design
- Service encounter stage
Moment of truth

Soft skills of employees

Using the aroma for mouth watering

Weakness
International recognized display standards es
Moment of truth is well managed (Customer touch points)
Threats
Opportunit
Food is served in a way
it could preserve the
freshness
ies
On job training

20

Service Design
- Post encounter stage
Evaluation of service performance

Staff recondition card system

Suggestion box
Instance customer feedback by
using the corporate website

Threats

21

Strategies to overcome Weaknesses to

Strengths
Island wide coverage / cost effective way of delivery in remote areas
New product lines to suite the needs of middle class
New product line for local cultural needs (Vegetarian foods)
Availability of wide product range with varieties (Product Length / product
width / product depth)
Introduction of read meat and sea food

22

Strategies to overcome Weaknesses to

Strengths
Cost effective operations through centralized back office
(Intensive distribution)

23

Strategies to overcome Weaknesses to

Strengths
Solutions for poor HR management - proper job designing, clear job
description, proper pay management system, using the correct job
designing technique (Job rotation), KPIs for each and every job category,
clear carrier path, identification of performance gap, designing of a proper
T & D according to the performance gap.
Signing up a long term contract with third part suppliers
Standardized service designing according to the geographical locations.
i.e. Using heaters in Nuwara-eliya
Cabins to be installed to preserve the food quality in transportation i.e.
hot cabins on delivery bikes
Ensuring effective communication methods. i.e. - top down and bottom
up
24

Strategies to overcome Threats to

Opportunities
Adaptation of out- in approach in designing recipe and menus. i.e.:- Customer
observation, questionnaires , focused group discussions , social and cultural
changes to be considered.
Designing of service & product pricing according to the competition without
compromising the quality standards & brand image
Introduction of healthy food varieties. i.e.- Fat free / sugar free
Branding with local values
Associating the brand with opinion leaders
and opinion formers to enhance the credibility
of the brand

Adaptation
to Local
Culture
25

Method used for service quality

measurement
To provide good services they have a philosophy of CHAMPS Program.
CHAMPS stand for the six universal areas of customer expectation
common to all cultures and all restaurants concepts.

Cleanliness

Hospitality

Accuracy

Maintenance of Facilities

Product Quality

Speed of Service

26

Introduced SERVQUAL attribute related survey

questionnaire to obtain customer satisfaction.
Tangibles:
KFC has up to date equipment and technology.
The physical representation KFC has appealing facilities.
or images of our service
KFC uses visually appealing materials e.g. Uniform.
Communication channels make you find information
easily.
Reliability:
Our ability to perform the
promised service
dependably and accurately

When KFC promises to do something by a certain time, it

does so.
KFC shows a sincere interest in solving customer
complaints
KFC performs the service right the first time.
KFC insists on error free records.
Responsiveness:
The staff of the KFC tells you exactly when services will
Our willingness to help you be performed
and to provide prompt
The staff of the KFC gives you prompt service.
service
The staff of the KFC is always willing to help you.
The staff of the KFC is not too busy to respond to your
questions
Assurance:
The staff of the KFC instills confidence in customers.
The knowledge and courtesy Customers have comfortable interactions with
of staff, their ability to
employees.
inspire trust and confidence. Staff of the KFC is courteous with you.
27
Staff of the KFC Have the knowledge to answer your

How KFC Has Tangibilised The Intangibles

CRITERIA
Visualization

THE ACTION
In store Images, menu card presentation, Physical atmosphere

Food manufacturing technology, experience and technological knowAssociation how of the franchisee partner, brand logo represent the founder &
symbolizes of the original recipe - metaphor (Colonel Harland Sanders)
Physical Appearance of employees, Uniforms, internal seating
Physical
arrangement, cleanliness, music, pleasant environment, Service
Representation
standards in all aspects
FSSC Food safety security Certification
Medical screening Test. i.e: Communicable diseases, etc..
ISO 22000 Food Safety Management System
Factory Ordinance Working hours, leave entitlement, safety and
security, over time payments, etc..
Documentation ISO 14001 Environnemental management system
HACCP Certification Hazard analysis for critical control point
Food Authority Approval
Business Registration
Food Grade Certificate Supplier should certify for adding ingredients
28
ISO 50001 Energy management system

Tangibility the Intangibles

CRITERIA

THE ACTION

Continuous training & development, based on performance gap

analysis, distribution home delivery, soft skills of employees,
People Involvement
instance customer feedback system, suggestion box, staff
recognition card, etc

Place Advantage

Branding

Use of Technology

26 branches island wide mainly covering cities with the support of

delivery members
Association of Premium Branding, sensory branding, aroma,
colour associated with red and white (Red strong, Aggressive
and ruggedness)
Use of internationally recognized and reputed technology for
highest safety standards for food processing
29

Recommendations and conclusion for service

marketing problems at KFC
Positioning promise: Premium Quality, Localization and positioned as a
credible brand
Value Proposition: More for More

Introduced SERVQUAL attribute related survey questionnaire to

obtain customer satisfaction.

30

Recommendations and conclusion for service

marketing problems at KFC
- ADOPTED STRATEGIES FOR MARKETING MIX
Product Strategy : New product lines to suite the needs of middle Social
Class, Vegetarian food, Availability of wide product range with varieties i.e.Fat free / sugar free. high calorie foods for kids.
Price Strategy: Cost effective operations through centralized back office
operation, Designing of service & product pricing according to the
competition without compromising the quality standards & brand image
(Competitor Based Pricing)
Place Distribution Strategy: Intensive distribution developing island wide
networks
Promotion Strategy: ATL and TTL Advertising methods for effective
communication, SMS alert when passing a KFC outlet. i.e. developing a
mobile app (Android, IOS)
31

Recommendations and conclusion for service

marketing problems at KFC
People Strategy: Uplifting the standards of HR management - proper job
designing, clear job description, proper pay management system, using
the correct job designing technique (Job rotation), KPIs for each and
every job category, clear carrier path, identification of performance gap,
designing of a proper T & D according to the performance gap.
Strategies Aligned to Service Process Development:
SERVICE BLUEPRINTING (Visualization of service delivery, identifying
points where failures are most likely to occur) Service process , points if
contact and evidence of service from the customers point of view.
32

Recommendations and conclusion for service

marketing problems at KFC
MANAGE THE SERVICE ENCOUNTER - front-line staff need to be
motivated with hard skill and soft skills
FAIL SAFE METHODS
Eliminate the error Identify potential fail points; take preventive measures;
prepare contingency
1. Treatment errorshuman failures during contact with customer eg.
ensuring effective communication methods
2.

Tangible errorsfailures in physical elements of service eg . Cabins be

installed to preserve the quality of food

Strategies aligned to Physical Evidence

Standardized service designing according to the geographical locations.
33
i.e. Using heaters in Nuwara-eliya.

Questions

Thank You