1 [ P a g e

ACKNOWLEDGEMENT:
All the praise and gratitude are due to Almighty Allah alone, the creature oI the universe who
created the man in his own image and enjoined upon him to travel on the earth and enter into a
proIound and analytical study oI the universe Ior spiritual appreciation oI Allah`s unity and His
attributes as well as Ior harnessing the material maniIestation oI the world to the mankind`s
proIitable utilization. In the Iirst place, thereIore we express our utmost thanks to Allah, the
Omnipotent and the Omniscient Greater, who has endorsed us with brain and body to partake oI
His knowledge and accomplish our work in the Iorm oI this project.

A project oI this nature cannot be completed without active support Irom diIIerent sources. We
have been lucky in this respect & received advice and assistance Irom many directions.
Among our contemporary beneIactors, we would like to pay our deepest gratitude and heartiest
tribute to our instructor Mr. Jasim Tariq, Ior his successIul guidance and very Iriendly conduct to
complete this work. His kind and Iriendly behavior can`t be Iorgotten at all.

We want to pay our Ioremost gratitude to my Iamily Ior their moral and Iinancial support and
also in the regard oI their prayers. God bless them to more progress in Iuture and may Allah give
us chance to serve them better.

Finally, we are thankIul to our Iriends Ior their support and encouragement,


















2 [ P a g e



EXECUTIVE SUMMARY:

This project is based on analysis oI marketing strategies oI 'KFC.
This project responds to the recommendation oI honorable teacher 'Mr. Umar Mushtaq
who is our instructor Ior 'Principles oI Marketing. We are thankIul to him Ior the guidance he
provided us all the way in preparation oI this report.
For the preparation oI this project we interviewed marketing manager oI KFC who
provide ample inIormation about KFC strategies. We also interviewed some customer to know
their perception about KFC. We also looked Ior their ads & web site so we also used our
personal observation as a source. We consulted diIIerent books & journals Ior the purpose oI our
analysis.
KFC Iast-Iood chains are currently under the restaurant division oI PepsiCo Incorporated.
PepsiCo is a corporation with three divisions including beverages, snack Ioods, and restaurants.
PepsiCo is acquired by Yum! Brand Inc, so KFC is part oI Yum! Brands, Inc., which is the
world's largest restaurant system with over 32,500 KFC, A&W All-American Food,Taco Bell,
Long John Silver's and Pizza Hut restaurants in more than 100 countries and territories.
Yum! Brand Inc has Iranchised KFC in diIIerent countries Ior being global. In Pakistan
Kapola (Pak) ltd. is the Iranchisee oI KFC. First KFC branch in Pakistan is in Karachi Gulshan.
Our project covers all the marketing strategies used by KFC regarding to price, product,
promotion, positioning, market and public relation and Iinally we analyze the consumer
perception about KFC.Major competitor oI KFC in Pakistan is McDonalds other competitors
include Pizza Hut, CaIe Zouke, Salt`n Paper and cooper and Kettle.
Market strategies deal with the perspective oI market to be served. KFC has Iirst in entry
strategy regarding market entry strategy, multi market strategy regarding to market scope
strategy, international market strategy regarding to market geographic strategy. As Iar as the
level oI commitment to the market is concerned they use diIIerent approaches in diIIerent
perspectives like they are highly committed to customer satisIaction.


3 [ P a g e

For positioning strategy KFC has positioned their products as high quality and high price
products. Regarding product scope strategy they have multiple products. As Ior as design
strategy is concerned KFC has standardized products. It has diIIerentiated its products Irom
others by diIIerent and unique taste, packaging and labeling and pricing.
Pricing strategy oI KFC is market-skimming pricing because its products enter in the
market with high prices. KFC is the market leader in its original chicken recipe hot and crispy.
Promotional strategy oI KFC includes personal selling, advertising and sales promotion. They
give compensation incentives to their employees to improve selling.
As Ior as advertising strategy is concerned KFC uses print media such as newspapers,
magazines, web pages and outdoor advertising such as billboards etc its vehicle Ior advertising.
With respect to sales promotion it has made public relation as a tool Ior promotion. Special
events; birthdays oI children are celebrated and are provided with special giIts.
As a matter oI customers KFC is rated higher Ior the attributes: Taste and Cleanliness
than their competitors. One thing is very delighting Ior KFC, its satisIaction level and in meeting
expectations oI customers is rated higher. Whereas Ior the attributes Friendly Service, Prices and
Atmosphere KFC is as their competitors.
From the strategic analysis oI KFC we conclude that KFC, s competitive situation is not
that much intense. It has established an image in customers minds that works as a protection
against competitors. According to its marketing manager 90 oI their customers are loyal
customers, so they are doing well to retain & sustain their customers. According to marketing
manager their competent employees are the way to success. They are doing well to sustain their
competent employees in order to get customer satisIaction through employee satisIaction











4 [ P a g e

HISTORY of KFC:


KFC was Iounded in 1955 and has grown to one oI the largest quick-service restaurant
chains in the world.
KFC has more than 11,000 restaurants in more than 80 countries and territories around the
world. And in quite a Iew U.S. cities, KFC is teaming up with sister restaurants, A&W, All-
American Food, Long John Silver's, Taco Bell and Pizza Hut, selling products Irom the
popular chains in one convenient location.
Over IiIty years ago, Colonel Sanders invented what is now called "home meal replacement" --
selling complete meals to busy, time-strapped Iamilies. He called it, "Sunday Dinner, Seven
Days a Week."
Today, the Colonel's spirit and heritage are reIlected in KFC's brand identity -- the logo Ieatures
Colonel Harland Sanders, one oI the most-recognized icons in the world.
KFC is part oI Yum! Brands, Inc., which is the world's largest restaurant system with over
32,500 KFC, A&W All-American Food, Taco Bell, Long John Silver's and Pizza Hut
restaurants in more than 100 countries and territories.
KFC IN PAKISTAN

KFC launched its operation in Pakistan in January 1997. They opened their Iirst outlet in
Gulshan Karachi. Until 2004 they have 29 branches in 9 cities oI Pakistan. The details oI these
cities & branches are:
In Sind total branches oI KFC are 19 out oI which, there are 18 branches in diIIerent areas oI
Karachi & 1 in Hyderabad.
In Karachi these are located at:
1. KFC Gulshan
2. KFC Boat Basin
3. KFC 26
th
Street (DeIence)
4. KFC S.M.C.H.S

5 [ P a g e

5. KFC North Nazimabad
6. KFC Korangi
7. KFC I.I. Chundragar
8. KFC M.A.C.H.S
9. KFC S.I.T.E
10.KFC 3 Talwar
11.KFC Sea View
12.KFC P.I.D.C
13.KFC P.I.D.C
14.KFC Millenium Mall
15.KFC Nursery
16.KFC Xpress
17.KFC Tariq Road
18.KFC Dolmen Mall
In Lahore there are 10 branches. These are located at:
1. Garden Town
2. Cavalry ground
3. DeIence phase 1
4. M.M.Alam road.
5. Jail Road.
6. Mall road
7. Johar town
8. Thokar naiz baig
9. Gt road
10.Y block deIence
11.Shadman
12.Mughal pura near UET

6 [ P a g e

KFC has just inaugurated its new branch in DeIence Y-Block on August15,
2005 and it is working Ior opening new branch in Mugal pura near UET.It has also its branches
in Rawalpindi, Islamabad, FaisalAbad, Sialkot, Multan & Peshawar and Hyderabad etc.


BUSINESS OB1ECTIVES

This can be subdivided into three major components:

1. Mission.
2. Vision
3. Objectives

MISSION
The corporate mission oI KFC is to extend its image oI excellence and uniqueness oI
product quality and service all over the globe with an obvious intention oI attaining a goal oI
maximizing proIit.
VISION
The vision oI the company is to Ioresee that real Iuture prospects oI long term growth and
adjust itselI to the speciIic cultures oI each country they are operating in.
OB1ECTIVES
Going in proximity, with the pure goal oI an entrepreneur, the ultimate objective is to
maximize the return on investments and thus proIit maximization




7 [ P a g e




MARKETING OB1ECTIVE

The marketing objective can be subdivided into Iollowing sub-objectives.

To compete eIIectively in the market by dominating which cannot be achieved by;
EIIectively meeting consumers` expectations and demands.
To increase substantially the market share.
To retain and enhance the goodwill and image oI the organization this adds to its loyalty.
The Iamous 4 p`s decision.. Which will Iurther be discussed in detail in the later part oI
the report under relevant topics.
Building awareness and credibility among the consumers is another major marketing
objective oI the KFC in a totally new market.





















8 [ P a g e

SWOT ANALYSIS OF KFC


S-Strengths

Employees
Conducive Environment
Tasty good Food
Loyal customers

W-weaknesses

Limited Resources
O-Opportunities

Growing Iast Iood market

T-Threats

New entrants
Prejudice against multinationals
International political scenario

We analyze internal strengths, weaknesses & external opportunities and threats oI KFC.we
conclude Irom this analysis that KFC has enough strengths & opportunities to compete in
growing Iast Iood market. It is also true that KFC is bounded by many weaknesses & threats as
mentioned in above table. Recently IRAQ war was major threat Ior KFC which played a vital
role in decreasing the sale oI KFC.



9 [ P a g e



STRENGTH AND WEAKNESSES OF KFC


The major strength possessed by KFC`s competitors is their considerably lower prices as
compared to the anticipated and expected skyrocketing prices. Despite oI this, they have been
existing in the local market Ior years, thereIore, knowing people`s tastes and whims.
Taking oI weaknesses, KFC enjoys an unmatched image recognized worldwide. Since it`s a
Iranchise, quality consistency is ensured. They are over-conIident about their customers being
loyal to them. KFC has its branches only in major cities so it should increase its area network
and should open new branches in other cities oI Pakistan.



THE MARKETING ENVIRONMENT:


Macro Environment
Demographic:
KIc is mainly concentrating on the youth, gender, occupation, income and education oI the
population. They are most concerned about that how many people are in the age oI teen as well
as less then 35. Because kIc is a Iast Iood chain,In Pakistan people who are doing jobs,who are
students, and it is convenient Ior them.So, the demographic study is very important Ior KIc.
Since the population oI Pakistan is increasing widely and income and education in the cities are
increasing rapidly. So the demography is eIIecting kIc and most importantly it is not controlled
oI organization.
Political Forces:
Since Pakistan is by its nature politically unstable country. There was dictatorship more than
democracy and constitution was changed and amendment several times which made it diIIicult
Ior the organization like kIc to grow rapidly and take roots in the society. Since Pakistan is a
very religious country, and the people are closely bounded with the people oI other Muslim
countries. When kIc heavily interested in illegal entity oI Israel, most oI the Arab and Muslim
countries boycotted kIc and Pepsi and other local brands got the chance to take the lead.

10 [ P a g e

Natural Forces:
Overall natural conditions oI country are not Iavorable like weather oI Pakistan helped kIc very
much, so the products oI kIc are suitable Ior every one in every seasons. Some natural Iorces like
lack oI rain, change in labor lows, Iluctuation in the price oI Iuel. Fluctuation in the utility
expanses deIiciency oI energy (electricity and gas) and unlikely change weather due to global
warming are also aIIecting.
Technological Forces:
This is the age oI science and technology, and the latest technology is inevitable in order to
grow, sustained and control the production and labor cost. Highly technological advantage is
required over the competitors. kIc is having stiII competition with their rival even though coke
possess best technology but due to the rapid change in mechanical and electrical devices. And,
innovation in the Iields oI robotics engineering and electronics making it hard to compete with
the rivals.
Economic Forces:
The income oI the people living in the cities jumped when tremendously but at the same time
due to inIlation and changed in the buying habits due to the increase in their income.
Internationally and nationally economics situation is worse than ever. Pakistan has economical
crises dollar is at the lowest point against Euro and Pound. European Union is oIIicially in
recession. These economic Iorces are putting very bad impact on kIc.
Cultural Forces:
The culture oI Pakistan is now been changed. KIc never tried to adjust itselI in Pakistan culture.
Instead they tried to change the culture oI Pakistan and shaped it to the kIc culture. Which is
more Pro West now our culture is not completely Islamic and not even completely Western. This
setup is helping coco cola to exploit the population through its mass marketing strategy. The
generation which was used to have lussi and milk, desi ghee parathas, etc and now these people
their children are crazy about carbonated drinks, juices and only Iast Ioods.


11 [ P a g e



MARKET SEGMENT PROFILE

Let`s have a complete view oI how KFC segments its market using all the diIIerent
variables.
KFC is interested in attracting diners (segmenting variable: user status) who like eating
out as recreation, as a habit, don`t like home cooked Iood or they don`t have any one to cook at
home (segmentation variable: attitude). Among those who eat out as a recreation people with
higher income and can aIIord to dine out Irequently (segmentation variable: income). So over all
KFC decides to get people with a high income, positive attitude towards liIe, and they like to eat
out Irequently as a source oI recreation. This could be one segment oI KFC`s market.
KFC, s management believes 7 Ps rather than 4, product, price, promotion, place, people
(customers), physical evidence (environment) & public oI the organization. For them product
promotion & their customers & physical environment are more important & rest oI strategies are
to support these core strategies
MARKET SEGMENTATION
Major segments are basically those areas where the demands is higher then the other areas. There
are so many people who take this meal weekly and those who take less oIten are always there as
well. KFC has not segmented a lot here in Pakistan. Most oI their products are Ior youth and
aIIordable Ior most oI the population.




12 [ P a g e

MARKET TARGETING
KFC commercials basically based on young generations, So, the young generation is the target
market oI KFC because they want to represent KFC with the youth and energy but they also
consider about the old people they take then as a co-target market.

MARKET POSITIONING
Fortunately KFC position in the people's mind in Pakistan is not up to its standard. People are
oIten used to say in ignorance that they are having Mc Donald`s.
That has to be change in order to get the same reputation which it posses in the world.




PRODUCT

Product is any thing that is oIIered in the market Ior sale the product KFC is oIIering is it
special chicken. Kentucky Fried Chicken is Iamous Ior its chicken, which is a blend oI 11 herbs
and speices, which gives it the Ilavor every one is crazy about it.


PRODUCT POSITIONING STRATEGY

Positioning is the act oI designing the company`s oIIer so that it occupies a distinct and valued
poisoned in the target consumer`s need.
Positioning shouldn`t be just a part oI your strategy. It should be backbone oI your business plan.
Positioning has got its Iair share oI press in the past Iew years. But iI you actually tried to
achieve a position in the market place; you know that the gulI between theory and practice can
be distressingly wide. In service industry you are not just positioning your products rather your
organization. Beauty is in the eye oI beholder and in the case oI marketing the beholder is the
customer so the customer is the ultimate judge oI what you are presenting.
Six approaches to positioning may be distinguished
1. Positioning by attributes
2. Positioning by price/ quality

13 [ P a g e

3. Positioning with respect to use and application
4. Positioning by the product user
5. Positioning with respect to product class
6. Positioning with respect to competitors

KFC'S POSI1IOAIAC S1RA1ECIES

KFC promotes a 'high quality poison Ior its products. It produces high quality products,
charges a high price, distributes through high-class dealers and advertises in English newspapers
with a high circulation. Kentucky Fried Chicken is communicating through physical signs and
ques that people use to judge quality.
For KFC management the image their customers carry in their mind is the most important
Iactor. That is why Ior them the product quality, which is almost standardized all oI the world
except little diIIerences because oI local requirements & the promotion are very critical Iactors.
They people which are their customer and the physical evidence, the environment customers get
in KFC are the Iorces that built KFC,s image in the customer mind that is why they are always
trying to bring positive changes in the environment so that every time their customer enter the
KFC, can Ieel the diIIerence. They think that trough continuous eIIorts they have developed such
a brand image in their customer`s minds that their customers have become brand loyal. In other
words they have got brand equity.










14 [ P a g e

PRODUCT SCOPE STRATEGY
Product scope strategy deals with the perspective of the product mix of a company (i.e., the
number of product lines and items in each line). KFC has the following product line and number
of products in each line,

PRODUCT LINE
CHICKEN
O 1 Piece
O 5 Pieces
O 10 Pieces
BURGERS

O Mighty Zinger
O Zinger Xtreme
O Fish Zinger
O Zinger Burger
O Twister
O Col. Chkn. Burger
O Spicy Sub

SNACKS & SIDE ORDERS

O Nuggets 6 pcs.
O Nuggets 15 pcs.
O Regular Fries
O Large Fries
O Corn on the Cob
O Arabian Rice
O Dinner Roll
O Hot shots
O Cheese


15 [ P a g e

DESSERTS & BEVERAGES

O Regular Drink
O Scoop oI walls
O Large Drink
O Mineral Water Reg.
O Mineral Water Lg.
O CoIIee
O Tea

MEAL DEALS


















































16 [ P a g e


















































































17 [ P a g e





































PRODUCT DESIGN STRATEGY

There are three types oI product design strategies.
1. Customized product
2. Standard product
3.Standard product with modiIications
A business unit may oIIer a standard or customized design product Ior each individual customer.
asic products of KFC are standardi:ed throughout the world. To have a standardi:ed product
the ingredients have to be the same in all the outlets, which is a very difficult fob but KFC is
successful in doing so. The ingredients basically consist of healthy chicken, 11 different herbs
and species, cheese, mayonnaise, salad, buns, potatoes for fries etc. asic secret recipe comes
from the head office in U.S, the rest of the things are obtained from the local market.


18 [ P a g e


PRODUCT LEVELS AT KFC

CORE PRODUCTS

KFC is providing chicken that is 'Finger Licken`Good, along with a Iun a place Ior the whole
Iamily, to enjoy a thoroughly satisIying eating experience.KFC promises high quality Iood at a
high quality place, at a relatively high price.
The core product at KFC is an amalgamation oI the Iollowing points
O Hot great tasting chicken meals
O Great value Ior the consumers money
O EIIiciency and quality
O Clean and comIortable restaurant
O Service in a Iriendly and courteous manner
O All product served in the KFC outlets in the Pakistan are 'Halal
O High quality control measures
O CHAMPS, which stands Ior

C leanliness
H ospitality
A mbience
M aintance
P leasure
S ervice

ACTUAL PRODUCT

Kenchky Fried Chicken is Iamous Ior its original recipe, which is a blend oI 11 herbs and
spices, which gives it Ilavor everyone is crazy about.
The Colonel`s original recipe was served in his Iirst resturant in the 50`s and is still
unique to KFC to this day. To prepare the prigonal recipe succulent whole portion oI chicken are

19 [ P a g e

taken and delicately seasoned with Colonel`s secret recipe oI eleven herbs and species and is
cooked under pressure. The pressure-cooking results in tender, juicy and irresistible Iried
chicken.
The developer oI this recipe, the Colonel was always adding one thing or the other to this
recipe, so he came up with the new Iamous hot and crispy chicken, which was cooked under
pressure to seal in the chicken`s original taste and Ilavor. crispy on the outside, juicy n` tender
inside` the hot and crispy chicken is marinated in especial seasoning and is double breaded to
give it golden brown crunchy crust.



AUGMENTED PRODUCT

KFC has augmented its products by adding take away services, birthday party arrangement Ior
the children, and special kid`s Iun and play area at their outlets.

PRODUCT DIFFERENTIATION STRATEGY

A production can be diIIerentiated due to its Ieatures, perIormance conIormance, durability, style
etc.
FEATURES

generate more customer satisIaction per rupees oI cost than KFC is likely to retain it.
Features are characteristics that supplement the products basic Iunctioning. Most products can be
used with varying Ieatures. Each Ieature at KFC has an additional chance oI capturing the Iancy
oI additional buyers. For each potential Ieature, KFC calculate the customers value verses its
cost.


20 [ P a g e


PERFORMANCE

PerIormance reIers to the level at which the products primary characteristics operate. Buyers oI
KFC products normally compare the perIormance characteristics oI diIIerent Iood bands. They
will pay more Ior better perIormance as long as the higher price does not exceed the higher
perceived value.

PERSONNAL DIFFERENCIATION

KFC is trying to gain popularity and competitive advantage through hiring and training better
people than their competitors do.
The employees have a special degree oI competence, employees oI KFC are very courteous.
They are Iriendly, respectIull and considerate. They are trust worthy and posses a higher
credibility. The Iloor employees have an essencial training Ior 14 days and the employees at a
higher level are given training Ior 20 to 30 days. They are given training to respond quiqly to
customer`s requests and problems. The KFC management makes sure that the Iloor employees
are given ample training to understand the customer and communicte clearly. The employees
wear a uniIorm consisting oI black trousers, blue shirts and a name plate.

SERVICE DIFFERENTIATION

Sevice is a very important Iactor Ior KFC as its actual product consists oI not only quality
chicken but also satisIactory service. KFC is providing excellent product sport services but the
range oI services is not complete, as it is a selI-service restaurant. KFC trains its employees to
give quick and eIIicient service to the consumers who are standing queues to take their order.

21 [ P a g e

KFC management tries to answer the inquiries and solve the problems oI all its consumer. KFC
trains its employees to give satisIied and productive service.
IMAGE DIFFERENCIATION

KFC promotes a very strong image Ior their brand, which it has developed over the period oI
time through creativity and hard work. This image is communicated through symbols, media,
message, events, atmosphere and personnel.

SYMBOL
The KFC brand logo is designed for instant recognition. KFC has built its brand around the
creator of the KFC recipe, the colonel. KFC promotes a red colored logo 'KFC`, as an
abbreviation of Kentucky Fried Chicken.

ATMOSPHERE

The physical space in which KFC delivers its product is a very important image generator Ior it.
For instant recognition, KFC builds a standard red and yellow
building with the colonel`s stature out side the building.. it has a speciIic interior design, layout,
color, materials used and Iurnishing all over the world.

NEW PRODUCT STRATEGY

KFC is trying to increase its market by expanding through discovering and promoting new uses
oI the product. The Colonel`s sub is consumed at odd hours and an increasing number oI people
are trying it.

22 [ P a g e


BRAND

A brand name consist oI words, letters etc. that`s can be pocalized, Ior Kantucky Fried Chicken
it is KFC. The brand mark is that part oI the brand that appears in the Iorm oI the symbol, design
or distinctive color or lettering. The brand mark oI KFC is written in red color, which is
recognized instantly. The brand mix is easy to identiIy goods and services. The KFC brand not
only helps the consumer to recognize it instantly, but is also a source oI insurance oI standard
Iood and service. The KFC brand name has helped it to reduce price comparison the consumer
do with other chicken burger available, as it is one oI the only the chicken Iillet burger available
in Pakistan.

ATTRIBUTES

The positioning strategy oI KFC associates itselI with the product class and the product attribute.
KFC has two kind oI recipe, one is the original recipe and one is the new recipe in which the
chicken is deep Iried with the chicken skin on the chicken Iillet.

BRAND EQUITY

KFC recognizes that the brand it owns may be more valuable than the physical assets it has, such
as building and equipment. This is its brand equity. It is the value the KFC brand adds to its
product. In the minds oI many customers just having the brand name, KFC adds value to the
product. KFC brand adds value to its product through its name awareness.
Substantial brand equity provides many beneIits. The KFC brand has become a diIIerentiated
advantage, inIluencing customers to buy its Iood products. This brand eqity oI KFC gives it an
edge over other Iirms entering the Iood industry, as building brand equity is time consuming and
expensive. It creates barrier Ior the Iirm, which want to enter the market with the similar product.

23 [ P a g e

It also helps KFC to expand its product mix and especially to expand its product line. The brand
equity oI KFC conveys a Iavorable impression oI the product and increases the likelihood that at
least the consumer is going to try it.

PACKAGING

Even aIter a product is developed and branded there is a product Ieature that is critical Ior a
product, one such product Ieature is packaging. Packaging consists oI all the activities oI
designing and producing the container or the wrapper oI the product.

KFC container Ior its burger is a very attractive black thin card box with KFC logo and the name
oI the product written on it in white color This square box like container is easy to operate. The
potato chips are available in a glass cum box, made Irom cardboard. The soIt drinks are available
in plastic glasses, which can be covered in case oI take away order. The children Chicky Meal is
served in a small children lunch box, made Irom cardboard with a carrying handle and a lot oI
cartoon characters are illustrated on it. The packaging not only keeps the KFC products hot and
in a hygienic state aIter they are bought, but also is an excellent source oI promotion. The
packaging helps to keep the product cleaner and there are less chances oI losses Irom spilling and
spoilage.

KFC packaging helps the consumers to identiIy their product and thus may prevent substitution
by competitive to identiIy their products. The packaging oI KFC serves as a silent sales person. It
serves as a mean oI communicating with the consumers. KFC`s packaging has become its
diIIerentiated advantage, or at least a signiIicant part oI it.KFC uses Iamily packaging, which has
similar packages Ior all products, or packages with a common and clearly noticeable Ieature.


24 [ P a g e





LABELING

Labeling is a part oI packaging and consist oI printed inIormation that describe the product
appearing on with the peckage. The KFC logo used on every packaging, promotion, and
advertinsing material used by Kentucky Fried Chicken, that helps promoting its prioduct to the
consumer. KFC is three alphabet word that appears on every promotional and advertinsing
material along with a very attractive graphing on the Colonel. Whenever there is the Colonel
picture or his statue, it is considered a symbol oI quality in the chicken product category oI the
international Iood industry. The Pakistani people considered product oI KFC as the best products
available in the market due to its brand name, quality and Iamous labeling.

PRODUCT SUPPORT SERVICES

The services that augment the product are the product sport services. Although KFC is not
providing Iull range oI services as it is a selI-service restaurant but still it is providing more
product sport services than any oI its competitors to its customers.
KFC is providing its consumer with take away services, in which the packing is done
accordingly. The soIt drinks are packed in plastic glasses with cover, the Iried are packed in a
thin cardboard box, the chicken pieces are packed in paper bags and the burgers have their
traditional packing.
KFC is oIIering the special package Ior the kids who want to have their birthday party at KFC.
KFC promises a Iun Iiled birthday party Ior all the Iriend oI the birthday kid. There would be lots
oI Yummy chicken and other goodies, music and a specialty decorated exiting kids Iun area,
party games and prices, goody bag Ior every body, special birthday cake, special birthday giIt,
special chicky appearance, special birthday boy/girl photograph.

25 [ P a g e



Prices of products:


CHICKEN
O 1 Piece Rs. 100
O 5 Pieces Rs.425
O 10 Pieces Rs.850

BURGERS

O Mighty Zinger Rs.270
O Zinger Xtreme Rs.220
O Fish Zinger Rs.200
O Zinger Burger Rs.200
O Twister Rs.170
O Col. Chkn. Burger Rs.150
O Spicy Sub Rs.110

SNACKS & SIDE ORDERS

O Nuggets 6 pcs. Rs.160
O Nuggets 15 pcs. Rs.330
O Regular Fries Rs.65
O Large Fries Rs.80
O Corn on the Cob Rs.75
O Arabian Rice Rs.80
O Dinner Roll Rs.15
O Hot shots Rs.175
O Cheese Rs.20


26 [ P a g e



DESSERTS & BEVERAGES

O Regular Drink Rs.50
O Scoop oI walls Rs.60
O Large Drink Rs.60
O Mineral Water Reg. Rs.50
O Mineral Water Lg. Rs.60
O CoIIee Rs.30
O Tea Rs.30



PRICING

Determining what people are willing to pay Ior something is a very complex business. And
complexity increases when we also have to consider our need to our cost and maximize our
earning. Businesses with an internal perspective typically utilize a variety oI cost based pricing,
such as experienced curve pricing, cost absorption pricing ,or other mark up methodology. But a
business that is either market or customer driven will in contrast either look to value in use oI the
product to the customers or to the comparative value oIIered to customers relative to the
competition in setting a market price.
Cost plus pricing advocates wander even Iurther Iailed when they do not adequately account Ior
cost. Understanding the role oI Iixed and variable costs on the average and marginal cost oI
production allows at least a rational approach to cost based pricing.

The pricing objective the KFC management has selected is compatible with the over all goals set
by the company.



27 [ P a g e





INTERNAL FACTORS EFFECTING PRICING AT KFC

O Pricing objectives
O Costs

a) PRICING OB1ECTIVES

The pricing objectives selected by the KFC management is compatible with the overall goals
set by them.
KFC has two pricing objectives
1. ProIit-oriented
2. Sales-oriented
PROFIT-ORIENTED GOAL

In order to attain the proIit oriented goal KFC has set, it has to achieve a target return. KFC
has set a target to be achieved in every month oI the year, which is diIIerent Ior each year
depending on the external and internal Iactors. KFC uses a target return on the sales as a
pricing objective Ior short period oI one month. They then add an amount to the cost oI the
product, called a mark up, to cover the anticipated operating expenses and provide a desired
proIit Ior the period.

SALES ORIENDTED-GOAL

KFC is not only trying to retain its market share buy is also trying to increase it. With the
entry oI McDonalds in the Iood mar5ket oI Pakistan, the competition Ior KFC has become
very tough, with the response international Iood chains are receiving, it is evident that other
major Iood chains are deIinitely going to enter this lucrative market. In such a situation it is

28 [ P a g e

very important Ior KFC to retain its market share. KFC is also trying to increase its market
share in order to enjoy the scales oI economies and better proIits.

b) COSTS

KFC uses 'Full Cost Recovery Pricing according to their marketing manager they price
their packages on the Iollowing Iormula all cost Govt taxes proIit margins. So their price
strategy is based on internal perspective rather than market customer or competitor oriented
KFC is not aIIected by competitor`s prices they set their prices independently based on costs
and proIit targets.

EXTERNAL FACTORS AFFECTING THE PRICING AT KFC

a. Market demand
b. Economic conditions and the role oI government

a) MARKET DEMAND

costs set the lower limit oI the prices and the market demand set its upper limit. There is a huge
market Ior junk Iood, like burgers, deep Iried chicken etc. in Pakistan. KFC has targeted it selI
towards the higher income level and the high middle income level oI the oI urban areas
population oI Pakistan. As being an international Iood chain, it has huge brand equity and is
already very popular among people.

b. ECONOMIC CONDITIOINS AND THE ROLE OF GOVERNMENT

The economic conditions oI Pakistan are not very stable at this particular point oI time, but the
government is still encouraging the Ioreign investors to invest in Pakistan. The economy oI the
country is in recession; there is a shortage oI goods and high inIlation prevails. Pakistan`s rating
as a region Ior investment has Iallen Irom BB (positive) to CCC (negative) which means that its

29 [ P a g e

status has Iallen Irom a Ia9irly saIe region to invest to a highly unsaIe region to invest. This
situation has oIIended many investors.

PRICING APPROACH

In its introduction stage, KFC spent substantial money in seeking consumer acceptance oI the
product. For KFC there is very little direct competition, thus the promotional program was
designed to stimulate demand Ior its products.

PRICING ABOVE COMPETITION

KFC set their prices above the prevailing market level. It is using the pricing above the
competition level strategy because it has a distinctive product and the kIc name has a prestige in
the minds oI the people.

EXPECTED PRICE

KFC has priced its products according to the expectations oI the consumers. KFC realizes this
Iact that the consumers value KFC, consciously or unconsciously as a luxury item, so they have
priced their products accordingly.

MARKET SKIMMING PRICING

KFC`s initial prices Ior its products were high as compared to the target market`s range oI
expected prices. The prices at KFC were set at the high3est possible level that the most interested
consumer would pay Ior the KFC products.
KFC uses market-skimming prices due to a lot oI reasons:
KFC products have distinctive Ieatures, which are strongly desired by its consumers
By using this strategy it gets protection Irom the competitors.

30 [ P a g e


QUANTITY DISCOUNTS

Quantity discounts are a specialty oI KFC. The colonel\s value combos are an example oI it. This
strategy is adopted in order to motivate the consumer to buy in large quantities. These
combination meals consisting oI several items that collectively cost less than iI bought separately
are gaining popularity due to their higher value and less price.






PLACEMENT

Distribution strategies are concerned with the channels a Iirm may employ to make its goods and
services available to customers. For KFC, the most important activity is to arrange Ior the sale oI
its products. Other activities undertaken in this section oI the marketing mix oI KFC is storing oI
the ingredients, taking them Iorm one place to another, Iinding right spots Ior opening new
outlets Ior KFC etc.
KFC launched its operation in Pakistan in January 1997. They opened their Iirst outlet in gulshan
Karachi. Until 2004 they have 25 branches in 9 cities oI Pakistan. The details oI these cities &
branches are :
In Sind total branches oI KFC are 13 out oI which, there are 12 branches in diIIerent areas oI
Karachi & 1 in Hyderabad.
In Lahore there are 5 branches. These are located at
1.Garden Town 2. Cavalry 3. DeIence 4. M.M.Alam road. 5. Jail Road.
It has also its branches in Rawalpindi, Islamabad, FaisalAbad, Sialkot, Multan & Peshawar.


31 [ P a g e


DISTRIBUT8ION CHANNEL

A distribution channel consists oI set oI people and Iirms involved in the transIer oI title to a
product, as the product moves Irom producer to ultimate consumer. The type oI distribution
channel KFC uses is called middleman involved in it.
PRODUCER----------- RETAILER-------------------CONSUMER
KFC is using the service-Iirm-sponsored retailer Iranchise system. This Iranchise buys all the
ingredients it uses and IulIils all other requirements oI the Iranchiser. This practice is adopted to
have the product upto the standards oI the international KFC chain.

FRAACHISE SYS1EM

Franchise system involves a continuing relationship in which the Iranchiser that is the parent
company provides the right to use its trademark and management assistance in return Ior
payments Irom a Iranchisee. Which is the owner oI an individual business unit. This combination
oI Iranchiser and Iranchisee is called a Iranchisee, which is the Artal restaurants international
(Pvt.) Ltd. In Pakistan, a proven method oI operating a business, management assistance,
marketing expertise etc. and in turn receives payments and conIormance to policies and
standards Irom the Iranchisee. The KFC Iranchiser provides the merchandises, raw materials etc.
as well.
The KFC Iranchiser provides management assistance prior as well as aIter opening oI the
restaurant including site selection, restaurant lay out guidance, technical and management
training, promotional programs and inventory control systems.
Artal plans to work with the local poultry industry, to introduce know how and to establish
international standards. The Artal group oI Belgium has brought KFC to Pakistan in
collaboration with Pepsi Co. and it plans to open 26 more till year 2001.


32 [ P a g e

MARKE1IAC LOCIS1ICS

The marketing logistics involve planning, implementing and controlling physical Ilow oI the
Iinished goods. The major logistic Iunctions include order processing, warehousing, inventory
management and transportation.

ORDER PROCESSIAC

The orders at KFC are taken Irom customers in person, who are standing in a queue. These
orders go to the kitchen where it takes hardly 30.45 seconds to deliver it. The amount to be paid
by the consumer as the bull oI his order is charged beIore the order is delivered. Whenever a
KFC outlet is short oI its secret recipe, it orders the KFC Karachi head oIIice about it. Every
KFC outlet has to give an approximate estimate about quantity oI the secret recipe it would need
in the coming year. This order is processed and then necessary action is taken to IulIill these
orders.
PROMOTION

Promotion is an elements in the marketing mix oI an organization that serves to inIorm, remind
and persuade the market oI a product and/ or the organization selling it, in hope oI inIluencing
the recipients Ieelings, belieIs and behavior.
Two main promotion strategies are examined

1. Promotions mix strategy.
2. Promotion expenditure strategy


33 [ P a g e

PROMO1IOA MIX S1RA1ECY

There are three types oI promotion strategies
1. Personal selling
2. Advertising
3. Sales promotion.
4. KFC uses advertising and sales promotion and personal spellings its tools oI promotion.

1 PERSOAAL SELLIAC

Personal selling strategies examined are selling strategy and sales motivation and supervision
strategy.
KFC uses sales motivation and supervision strategy because they give compensation and non
Iinancial incentives to their employees to improve selling.

2 ADVERTISING

Media may be deIined as those channels through which messages concerning a product or
service are transmitted to the target.

MEDIA SELECTION

KFC uses print media such as newspapers, web pages and outdoors advertising such as
billboards etc its vehicle Ior advertising.

KFC has chosen the print media advertising Ior the purpose oI its promotion. It advertises on the
Iront and back page oI the Iamous and well-read newspapers oI the country. It only advertises in
English newspapers with a very high circulation such as THE NEWS, DAWN, etc. the
advertisement usually covers a quarter oI the page oI the newspaper. The advertisement uses an
amalgamation oI very bright colors, usually billboards to promote itselI.

34 [ P a g e

KFC uses published web pages in which it presents it product Ior online sale and give
advertisement oI its product.

ADVERTISEMENT COPY STRATEGY

Copy reIers to the content oI an advertisement. In the advertisement industry the term is
sometime used in the broad sense to include the words, pictures, symbols, color, layout, and
other ingredients oI an ad.

The KFC brand logo is designed Ior instant recognition. KFC has built its brand around the
creator oI the KFC recipe, the colonel. KFC promotes a red colored logo ' , as an
abbreviation oI Kentucky Fried Chicken.
The wording oI its messages is like there is Iast Iood then there is KFC.


SALES PROMOTION

Many tools can be used to accomplish sales promotion objectives.


PREMIUMS

Premiums are goods oIIered either Iree or at low cost as an incentive to buy a product. In KFC,
premiums are used ranging Irom pencil case ,kit bags, mobile stands, Ioot balls, jey chains, T
shirts Iile cover, mobile case, ludo board game, tissue boxes.


ADVERTISING SPECIALITY

Advertising specialties are useIul articles imprinted with an advertiser`s name given as giIts to
consumers. in KFC, plates , bottles, mugs, clocks, T shirts, tissue boxes, Iootballs, kit bags and
other items are imprinted with its logo and company name. Such items are very eIIective
reminders. Consumers recall the KFC` name whenever they use these items.

35 [ P a g e

BUSINESS PROMOTION TOOLS

Companies spend billions oI dollars each year on promotion to industrial customers. These
business promotions are used to generate business leads, stimulate purchases, reward customers,
and motivate sales people.

PUBLIC RELATION TOOLS

Public Relations is another promotion tool- building good relations with the company`s various
publics by obtaining Iavorable publicity, building up a good corporate image, and handling or
heading oII unIavorable rumors, stories and events. Public relations can have a strong impact on
public awareness.
















36 [ P a g e

MA1OR PUBLIC RELATION TOOLS USED BY KFC

A common PR tool used by KFC is special events; birthdays oI children are celebrated and are
provided with special giIts. In summer season summer camps are arranged Ior children. They
also arrange musical programs Ior children. These events build the company image.

Public relations people oI KFC also prepare written materials to reach & inIluence the
consumers. These materials include brochures & magazines.

AIter the boycott oI multinational products by some groups in the country aIter the US-IRAQ
war. Magazines are used to change the perception oI the consumers about KFC. There was also a
rumor about its chicken. It was said that the chicken is not cut according to the principle oI
Islam. This negative image is also rectiIied through magazines.

UniIorms are also a tool. All employees oI KFC are provided with uniIorm. This uniIorm is also
a public relation tool.




















37 [ P a g e

CONCLUSION

Analysis we have conducted Ior KFC, s marketing strategies we have come to the Iollowing
conclusions,

KFC, s competitive situation is not that much intense.

It has established an image in customers minds that works as a protection against
competitors.

3- According to its marketing manager 90 oI their customers are loyal customers, so
they are doing well to retain & sustain their customers

They have largest market share oI Iast Iood industry in Pakistan but in Lahore their
market share is lower as compare to Mc Donald, as Lahore is a big market Ior Iast Iood
restaurants, there is need to capitalize on this potential. According to their marketing
manager they are planning to open some new branches.

The real strength oI the KFC in view point oI its management & according to customer
perception lies in its physical environment as its marketing manager stated, 'we want that
our customers can Ieel a good positive change every time when they enter the restaurant

As KFC, s ultimate goal is customer satisIaction. According to marketing manager their
competent employees are the way to success.






38 [ P a g e





They are doing well to sustain their competent employees in order to get customer
satisIaction through employee satisIaction.


KFC is a market-oriented organization as it considers both customer needs & competitor
moves. At the same time its approach is proactive rather reactive.

The greatest threat that not only KFC rather all multinationals are Iacing is oI anti
multinational phenomenon right aIter Iraq war.





CONSUMER QUESTIONAIRE

The purpose oI this questionnaire is to explore the consumers` perceptions about KFC. Please Iill
each point along with your personal inIormation. Your personal inIormation will not be disclosed
to anyone.


Gender: M F Age: yrs Residential Area:

Income Level (Rs. per month): less than 20,000 20,000 to 50,000
50,000 to 80,000 more than 80,000

How many times in a month you, usually, go to any Iast Iood restaurant
Once Twice Three Times More than three times

How do you rate KFC in the Iollowing areas?


39 [ P a g e



Your overall satisIaction level:

SatisIied SatisIied Not


To which level do you think that (KFC n` McD.) meet your expectations:


Excellent Poor







1 2 3 4 5

Convenient
Locations
KFC:
Inconvenient
Locations



Wide Range
oI Meals
KFC:
Small Range
oI Meals

Excellent
Taste
KFC:
Poor
Taste

Very Fast
Service
KFC:
Very Slow
Service

Friendly
Service
KFC:
Not Friendly
Service

Reasonable
Prices
KFC:
Un-Reasonable
Prices

Clean KFC:
Not
Clean

Pleasant
Atmosphere
KFC:
Un-Pleasant
Atmosphere
KFC:
1 2 3 4 5
KFC:
1 2 3 4 5

40 [ P a g e




























41 [ P a g e