Marketing Mix of KFC

UNIVERSITY OF MUMBAI
PROJECT REPORT ON
MARKETING MIX OF KFC
SUBMITTED BY
JAYESH DURGAWALE.
ROLL NO 16015
T.Y.B.M.S
ACADEMIC YEAR: 2014 2015
PROJECT GUIDE
Dr. VEENA PRASAD
S.I.W.S
N.R SWAMY COLLEGE OF COMMERCE & ECONOMICS
SMT. THIRUMALAI COLLEGE OF SCIENCE
337, SEWREE WADALA ESTATE,
WADALA, MUMBAI 400 031.

PROJECT REPORT
ON
MARKETING MIX OF KFC
SUBMITTED
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR

THE AWARD OF DEGREE OF BACHELOR OF MANAGEMENT
STUDIES (B.M.S)
BY
JAYESH DURGAWALE
ROLL NO 16015
T.Y.B.M.S
S.I.W.S
N.R SWAMY COLLEGE OF COMMERCE & ECONOMICS
SMT. THIRUMALAI COLLEGE OF SCIENCE
337, SEWREE WADALA ESTATE,
WADALA, MUMBAI 400 031.

DECLARATION
I Mr.___________________________________________ the student

of S.I.W.S N.R Swamy College of Commerce & Economics, studying
in T.Y.B.M.S hereby declare that I have completed the project report
on MARKETING MIX OF KFC in the academic year 2014 2015.
The information submitted is genuine and practical to the best of my
knowledge.
Date: ________________ ________________

Place: Mumbai JayeshDurgawale
(Signature of Student)
Marketing Mix of KFC
ACKNOWLEDGEMENT
I would like to express my gratitude and sincere thanks to my Project Guide

(Dr. VEENA PRASAD), S.I.W.S College,for instilling confidence in me to
carry out this study and extending valuable guidance and encouragement
from time to time, without which it would not have been possible to
undertake and complete this project.
I also wish to extend my appreciation to our Principal Dr. P. G.

GOPALAKRISHNAN and the Coordinator of BMS (Prof.VINOD NAYAK),
for their kind co-ordination and support.
I would like to thankmy colleagues for their valuable comments and

suggestions for making this acherishable experience for me.
I would also like to thank my parents and my friends, who have stood by me
when ever needed and without whose support this task would not have been
accomplished.
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INDEX
CONTENT PAGE NO.
Executive Summary 1
Chapter 1: Introduction to the study
Objective of the project 6
Limitation 7
Research Methodology 8
Chapter 2: Review of the Literature 8
Chapter 3.1 Introduction to Marketing. 9
3.2 Introduction to Marketing Mix. 30

3.3 Introduction to KFC. 39
Chapter 4: Marketing Mix of KFC. 57

Chapter 5: Case Study 63
Bibliography
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Chapter 1: Introduction to the study
OBJECTIVES OF RESEARCH
To understand the concept of marketing.
To understand how Marketing Mix helps Company to build its image.
To understand the approach of KFC towards their customers through

their marketing strategy.
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LIMITATIONS OF THE STUDY
Demographic Constraints - The study seeks to provide a helicopter view

of the field reality and hence inferences drawn do not provide conclusive
evidence to any social characteristics in particular albeit they aid us in spotting
an underlying trend.
The findings are based entirely upon the research conducted in Mumbai
and hence may not be applicable directly to other metropolitan areas on
counts of socio-cultural diversity and contextual factors.
Time Constraint - Due to constraints of time, certain topics have not been
touched upon at all during the course of the study while some of them like the
actual Sales pattern have been explored in a 'limited' manner. An in-depth
analysis may be further taken up in each of the sub-topics covered.
Such a survey needs to be undertaken periodically to gauge the exact consumer

perceptions and level of awareness that they keep changing with time.
With a large sample size spread across other metropolitan cities in India one might
arrive at results with higher confidence levels and also at trends for urban India in
particular.
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RESEARCH METHODOLOGY
Primary Data: The primary data are those which are collected afresh and for
the first time, and thus happen to be original in character. We collect primary
data during the course of doing experiments in an experimental
research but in case we do research of the descriptive type and performs
surveys.
Here the Primary data will be collected by means of preparing a

questionnaire and getting it filled by a large sample space of General
public which includes Business man, Students, professionals like doctors,
teachers, etc. These questionnaires will help in drawing conclusions about
the case.
Secondary Data: Secondary data means data that are already available i.e
they refer to the data which have already been collected and analyzed by
someone else. When the research utilizes Secondary data then he has to look
into various sources from where he can obtain them.
In this case we are certainly not confronted with the problems that are
usually associated with the collection of original data. Secondary data may
either be published data or unpublished data.
Processing and analyzing the data: The data analysis has been done in correct
form. Usage of current information & graph is made in the project so as
to make it easier & appropriate to understand
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CHAPTER 3.1
INTRODUCTION TO MARKETING
Marketing is the methodology of communicating the value of a product or service

to customers, for the purpose of selling that product or service.
Marketing techniques include choosing target markets through market analysis

and market segmentation, as well as understanding consumer behavior and
advertising a product's value to the customer. From a societal point of view,
marketing is the link between a society's material requirements and
its economicpatterns of response. Marketing satisfies these needs and wants
through exchange processes and building long term relationships. Marketing
blends art andapplied science (such as behavioral) and makes use of information
technology.
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History of Marketing
Earlier approaches
The marketing orientation evolved from earlier orientations, namely, the
production orientation, the product orientation and the selling orientation.
Production -until the 1950s-
A firm focusing on a production orientation specializes in producing as much as

possible of a given product or service. Thus, this signifies a firm exploiting
economies of scale until the minimum efficient scale is reached. A production
orientation may be deployed when a high demand for a product or service exists,
coupled with a good certainty that consumer tastes will not rapidly alter (similar to
the sales orientation).
Product -until the 1960s-
A firm employing a product orientation is chiefly concerned with the quality of its
own product. A firm would also assume that as long as its product was of a high
standard, people would buy and consume the product.
Selling -1950s and 1960s-
A firm using a sales orientation focuses primarily on the selling/promotion of a

particular product, and not determining new consumer desires as such.
Consequently, this entails simply selling an already existing product, and using
promotion techniques to attain the highest sales possible.
Such an orientation may suit scenarios in which a firm holds dead stock, or
otherwise sells a product that is in high demand, with little likelihood of changes in
consumer tastes that would diminish demand.
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Marketing-1970s to the present day-
The 'Customer orientation' is perhaps the most common orientation used in

contemporary marketing. It involves a firm essentially basing its marketing plans
around the marketing concept, and thus supplying products to suit new consumer
tastes. As an example, a firm would employ market research to gauge consumer
desires, use R&D (research and development) to develop a product attuned to the
revealed information, and then utilize promotion techniques to ensure persons
know the product exists. R&D companies often parallel customer orientation with
R&D phases to ensure the desired customer specifications are produced.
Customization Maximization (similar to profit maximization in economics,) is the
measurable approach to more efficiently sustaining specific customer needs, in
effort to maximize the customization of the product or service offered to the
customer, by the measure of data relating to responses, feedback, and elasticity.
Holistic Marketing -21st century-
The holistic marketing concept looks at marketing as a complex activity and

acknowledges that everything matters in marketing - and that a broad and
integrated perspective is necessary in developing, designing and implementing
marketing programs and activities. The four components that characterize holistic
marketing are relationship marketing, internal marketing, integrated marketing, and
socially responsive marketing. Market segmentation and positioning have
increased the divergence of society, further segregating and preventing a holistic
population. Holistic Marketing helps converge the segments in an approach to
improve the entire market through social responsibility and convergence. Holistic
marketing disengages the political marketing activities of "divide and conquer", or
market segmentation.
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Contemporary approaches
Recent approaches in marketing include relationship marketing with focus on the

customer, business marketing or industrial marketing with focus on an organization
or institution and social marketing with focus on benefits to society. New forms of
marketing also use the internet and are therefore called internet marketing or more
generally e-marketing, online marketing, "digital marketing", search engine
marketing, or desktop advertising. It attempts to perfect the segmentation strategy
used in traditional marketing. It targets its audience more precisely, and is
sometimes called personalized marketing or one-to-one marketing. Internet
marketing is sometimes considered to be broad in scope, because it not only refers
to marketing on the Internet, but also includes marketing done via e-mail, wireless
media as well as driving audience from traditional marketing methods like radio
and billboard to internet properties or landing page.
Relationship marketing / Relationship management -1960s to present day-
Emphasis is placed on the whole relationship between suppliers and customers.

The aim is to provide the best possible customer service and build customer
loyalty.
Business marketing / Industrial marketing -1980s to present day-
In this context, marketing takes place between businesses or organizations. The

product focus lies on industrial goods or capital goods rather than consumer
products or end products. Different forms of marketing activities, such as
promotion, advertising and communication to the customer are used.
Societal marketing -1990s to present day-
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Similar characteristics to marketing orientation but with the added proviso that
there will be a curtailment of any harmful activities to society, in either product,
production, or selling methods.
Branding -1980s to present day-
In this context, "branding" refers to the main company philosophy and marketing is
considered to be an instrument of branding philosophy.
Customer orientation
A firm in the market economy survives by producing goods that persons are
willing and able to buy. Consequently, ascertaining consumer demand is vital for a
firm's future viability and even existence as a going concern. Many companies
today have a customer focus (or market orientation). This implies that the company
focuses its activities and products on consumer demands. Generally, there are three
ways of doing this: the customer-driven approach, the market change identification
approach and the product innovation approach.
In the consumer-driven approach, consumer wants are the drivers of all strategic
marketing decisions. No strategy is pursued until it passes the test of consumer
research. Every aspect of a market offering, including the nature of the product
itself, is driven by the needs of potential consumers. The starting point is always
the consumer. The rationale for this approach is that there is no reason to spend
R&D (research and development) funds developing products that people will not
buy. History attests to many products that were commercial failures in spite of
being technological breakthroughs.
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A formal approach to this customer-focused marketing is known as SIVA

(Solution, Information, Value, Access). This system is basically the four Ps
renamed and reworded to provide a customer focus. The SIVA Model provides a
demand/customer-centric alternative to the well-known 4Ps supply side model
(product, price, placement, promotion) of marketing management.
Product Solution
Promotion Information
Price Value
Place (Distribution) Access
If any of the 4Ps were problematic or were not in the marketing factor of the
business, the business could be in trouble and so other companies may appear in
the surroundings of the company, so the consumer demand on its products will
decrease. However, in recent years service marketing has widened the domains to
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be considered, contributing to the 7P's of marketing in total. The other 3P's of

service marketing are: process, physical environment and people.
Some consider there to be a fifth "P": positioning. See Positioning (marketing).
Some qualifications or caveats for customer focus exist. They do not invalidate or
contradict the principle of customer focus; rather, they simply add extra
dimensions of awareness and caution to it.
The work of Christensen and colleagues on disruptive technology has produced a

theoretical framework that explains the failure of firms not because they were
technologically inept (often quite the opposite), but because the value networks in
which they profitably operated included customers who could not value
a disruptive innovation at the time and capability state of its emergence and thus
actively dissuaded the firms from developing it. The lessons drawn from this work
include:
Taking customer focus with a grain of salt, treating it as only a subset of one's
corporate strategy rather than the sole driving factor. This means looking
beyond current-state customer focus to predict what customers will be
demanding some years in the future, even if they themselves discount the
prediction.
Pursuing new markets (thus new value networks) when they are still in a
commercially inferior or unattractive state, simply because their potential to
grow and intersect with established markets and value networks looks like a
likely bet. This may involve buying stakes in the stock of smaller firms,
acquiring them outright, or incubating small, financially distinct units within
one's organization to compete against them.
Other caveats of customer focus are:
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The extent to which what customers say they want does not match their
purchasing decisions. Thus surveys of customers might claim that 70% of a
restaurant's customers want healthier choices on the menu, but only 10% of
them actually buy the new items once they are offered. This might be
acceptable except for the extent to which those items are money-losing
propositions for the business, bleeding red ink. A lesson from this type of
situation is to be smarter about the true test validity of instruments like surveys.
A corollary argument is that "truly understanding customers sometimes means
understanding them better than they understand themselves." Thus one could
argue that the principle of customer focus, or being close to the customers, is
not violated herejust expanded upon.
The extent to which customers are currently ignorant of what one might argue
they should wantwhich is dicey because whether it can be acted upon
affordably depends on whether or how soon the customers will learn, or be
convinced, otherwise. IT hardware and software capabilities and automobile
features are examples. Customers who in 1997 said that they would not place
any value on internet browsing capability on a mobile phone, or 6% better fuel
efficiency in their vehicle, might say something different today, because the
value proposition of those opportunities has changed.
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Organizational orientation
In this sense, a firm's marketing department is often seen as of prime importance

within the functional level of an organization. Information from an organization's
marketing department would be used to guide the actions of other departments
within the firm. As an example, a marketing department could ascertain (via
marketing research) that consumers desired a new type of product, or a new usage
for an existing product. With this in mind, the marketing department would inform
the R&D (research and development) department to create a prototype of a product
or service based on the consumers' new desires.
The production department would then start to manufacture the product, while the
marketing department would focus on the promotion, distribution, pricing, etc. of
the product. Additionally, a firm's finance department would be consulted, with
respect to securing appropriate funding for the development, production and
promotion of the product. Inter-departmental conflicts may occur, should a firm
adhere to the marketing orientation. Production may oppose the installation,
support and servicing of new capital stock, which may be needed to manufacture a
new product. Finance may oppose the required capital expenditure, since it could
undermine a healthy cash flow for the organization.
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Marketing research
Marketing research involves conducting research to support marketing activities,

and the statistical interpretation of data into information. This information is then
used by managers to plan marketing activities, gauge the nature of a firm's
marketing environment and attain information from suppliers. Marketing
researchers use statistical methods such as quantitative research, qualitative
research, hypothesis tests, Chi-squared tests, linear regression, correlations,
frequency distributions, poisson distributions, binomial distributions, etc. to
interpret their findings and convert data into information. The marketing research
process spans a number of stages, including the definition of a problem,
development of a research plan, collection and interpretation of data and
disseminating information formally in the form of a report. The task of marketing
research is to provide management with relevant, accurate, reliable, valid, and
current information.
A distinction should be made between marketing research and market research.

Market research pertains to research in a given market. As an example, a firm may
conduct research in a target market, after selecting a suitable market segment. In
contrast, marketing research relates to all research conducted within marketing.
Thus, market research is a subset of marketing research.
Marketing environment
Staying ahead of the consumer is an important part of a marketer's job. It is

important to understand the "marketing environment" in order to comprehend the
consumers concerns, motivations and to adjust the product according to the
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consumers needs. Marketers use the process of marketing environmental scans,

which continually acquires information on events occurring outside the
organization to identify trends, opportunities and threats to a business. The six key
elements of a marketing scan are the demographic forces, socio-cultural
forces, economic forces, regulatory forces, competitive forces, and technological
forces. Marketers must look at where the threats and opportunities stem from in the
world around the consumer to maintain a productive and profitable business.
The market environment is a marketing term and refers to factors and forces that
affect a firm's ability to build and maintain successful relationships with customers.
Three levels of the environment are: Micro (internal) environment - forces within
the company that affect its ability to serve its customers. Meso environment the
industry in which a company operates and the industry's market(s).Macro
(national) environment - larger societal forces that affect the microenvironment.
Market segmentation
Market segmentation pertains to the division of a market of consumers into persons

with similar needs and wants. For instance, Kellogg's cereals, Frosties are
marketed to children. Crunchy Nut Cornflakes are marketed to adults. Both goods
denote two products which are marketed to two distinct groups of persons, both
with similar needs, traits, and wants. In another example, Sun Microsystems can
use market segmentation to classify its clients according to their promptness to
adopt new products.
Market segmentation allows for a better allocation of a firm's finite resources. A

firm only possesses a certain amount of resources. Accordingly, it must make
choices (and incur the related costs) in servicing specific groups of consumers. In
this way, the diversified tastes of contemporary Western consumers can be served
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better. With growing diversity in the tastes of modern consumers, firms are taking
note of the benefit of servicing a multiplicity of new markets.
Market segmentation can be viewed as a key dynamic in interpreting and executing

a logical perspective of Strategic Marketing Planning. The manifestation of this
process is considered by many traditional thinkers to include the
following; Segmenting, Targeting and Positioning
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Types of market research

Market research, as a sub-set aspect of marketing activities, can be divided into the
following parts:
Primary research (also known as field research), which involves the conduction
and compilation of research for a specific purpose.[14]
Secondary research (also referred to as desk research), initially conducted for
one purpose, but often used to support another purpose or end goal.
By these definitions, an example of primary research would be market research

conducted into health foods, which is used solely to ascertain the needs/wants of
the target market for health foods. Secondary research in this case would be
research pertaining to health foods, but used by a firm wishing to develop an
unrelated product.
Primary research is often expensive to prepare, collect and interpret from data to
information. Nevertheless, while secondary research is relatively inexpensive, it
often can become outdated and outmoded, given that it is used for a purpose other
than the one for which it was intended. Primary research can also be broken down
into quantitative research and qualitative research, which, as the terms suggest,
pertain to numerical and non-numerical research methods and techniques,
respectively. The appropriateness of each mode of research depends on whether
data can be quantified (quantitative research), or whether subjective, non-numeric
or abstract concepts are required to be studied (qualitative research).
There also exist additional modes of marketing research, which are:
Exploratory research, pertaining to research that investigates an assumption.

Descriptive research, which, as the term suggests, describes "what is".
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Predictive research, meaning research conducted to predict a future occurrence.

Conclusive research, for the purpose of deriving a conclusion via a research
process.
Types of marketing
Consumer-generated
Account planning
advertising
Affinity marketing
Content marketing
Aggressiveness strategy
Cross-media marketing
Agricultural marketing
Customer advocacy
Alliance marketing
Customization
Ambush marketing
Database marketing
Article marketing
Digital marketing
Article video marketing
Digital omnivore
Association of Publishing
Direct marketing
Agencies
Brand language
Business model
Diversification (marketing
Call to action (marketing)
strategy)
Chaotics
Diversity marketing
Close Range Marketing (CRM)
Ethical marketing
Cloud Marketing
Evangelism marketing
Cause marketing
Experience curve effects
The Cellar (marketing)
Faith-based marketing
Close Range Marketing
Figure of merit
Community marketing
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Freebie marketing Pre-installed software

Global marketing Product bundling
Guerrilla marketing Project SCUM
Horizontal integration Proximity marketing
Inbound marketing Relationship marketing
Influencer marketing Revenue Technology Services
Limited edition candy Scenario planning
Loyalty marketing Secret brand
Marketing communications Seeding trial
Marketing warfare strategies Share of voice
Mass customization Shopper marketing
Mega marketing Social pull marketing
Menu engineering Social marketing
Multi-domestic strategy Special edition
Multi-level marketing Strategy dynamics
Nano-campaigning Student marketing
Native advertising Undercover marketing
Next-best-action marketing Vertical disintegration
Online advertising Vertical integration
Permission marketing Yield management
Personalization Z-CARD
Pitch book
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Marketing planning
The marketing planning process involves forging a plan for a firm's marketing
activities. A marketing plan can also pertain to a specific product, as well as to an
organization's overall marketing strategy. Generally speaking, an organization's
marketing planning process is derived from its overall business strategy. Thus,
when top management are devising the firm's strategic direction or mission, the
intended marketing activities are incorporated into this plan. There are several
levels of marketing objectives within an organization. The senior management of a
firm would formulate a general business strategy for a firm. However, this general
business strategy would be interpreted and implemented in different contexts
throughout the firm.
Marketing strategy
The field of marketing strategy considers the total marketing environment and its
impacts on a company or product or service. The emphasis is on "an in depth
understanding of the market environment, particularly the competitors and
customers."
A given firm may offer numerous products or services to a marketplace, spanning

numerous and sometimes wholly unrelated industries. Accordingly, a plan is
required in order to effectively manage such products. Evidently, a company needs
to weigh up and ascertain how to utilize its finite resources. For example, a start-up
car manufacturing firm would face little success should it attempt to rival Toyota,
Ford, Nissan, Chevrolet, or any other large global car maker. Moreover, a product
may be reaching the end of its life-cycle. Thus, the issue of divest, or a ceasing of
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production, may be made. Each scenario requires a unique marketing strategy.

Listed below are some prominent marketing strategy models.
A marketing strategy differs from a marketing tactic in that a strategy looks at the
longer term view of the products, goods, or services being marketed. A tactic refers
to a shorter term view. Therefore, the mailing of a postcard or sales letter would be
a tactic, but changing marketing channels of distribution, changing the pricing, or
promotional elements used would be considered a strategic change.
A marketing strategy considers the resources a firm has, or is required to allocate

in effort to achieve an objective. Marketing Strategies include the process and
planning in which a firm may be expected to achieve their company goals, in
which usually involves an effort to increase revenues or assets, through a series of
milestones or benchmarks of business and promotional activities.
Positioning
The marketing activity and process of identifying a market problem or opportunity,

and developing a solution based on market research, segmentation and supporting
data. Positioning may refer the position a business has chosen to carry out their
marketing and business objectives. Positioning relates to strategy, in the specific or
tactical development phases of carrying out an objective to achieve a business' or
organization's goals, such as increasing sales volume, brand recognition, or reach
in advertising.
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Buying behavior
A marketing firm must ascertain the nature of customers' buying behavior if it is to

market its product properly. In order to entice and persuade a consumer to buy a
product, marketers try to determine the behavioral process of how a given product
is purchased. Buyer behavior in the digital age is assessed through analytics and
predictive modelling. The analysis of buyer behavior through online platforms
includes Google Analytics and vendor side software such as Experian. The
psychology of marketing is determined through the analysis of customer
perception pertaining to brands. Marketing theory holds that brand attributes is
primarily a matter of customer perception rather than product or service features.
Buying behavior is usually split into two prime strands, whether selling to the
consumer, known as business-to-consumer (B2C), or to another business, known
as business-to-business (B2B).
B2C buying behavior

This mode of behavior concerns consumers and their purchase of a given product.
For example, if one imagines a pair of sneakers, the desire for a pair of sneakers
would be followed by an information search on available types/brands. This may
include perusing media outlets, but most commonly consists of information
gathered from family and friends. If the information search is insufficient, the
consumer may search for alternative means to satisfy the need/want. In this case,
this may mean buying leather shoes, sandals, etc. The purchase decision is then
made, in which the consumer actually buys the product. Following this stage, a
post-purchase evaluation is often conducted, comprising an appraisal of the
value/utility brought by the purchase of the sneakers. If the value/utility is high,
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then a repeat purchase may be made. This could then develop into consumer
loyalty to the firm producing the sneakers.
B2B buying behavior
Relates to organizational/industrial buying behavior.[16] Business buy either

wholesale from other businesses or directly from the manufacturer in contracts or
agreements. B2B marketing involves one business marketing a product or service
to another business. B2C and B2B behavior are not precise terms, as similarities
and differences exist, with some key differences listed below:
In a straight re-buy, the fourth, fifth and sixth stages are omitted. In a modified re-
buy scenario, the fifth and sixth stages are precluded. In a new buy, all stages are
conducted.
Use of technologies
Marketing management can also rely on various technologies within the scope of
its marketing efforts. Computer-based information systems can be employed,
aiding in better processing and storage of data. Marketing researchers can use such
systems to devise better methods of converting data into information, and for the
creation of enhanced data gathering methods. Information technology can aid in
enhancing an MKIS' software and hardware components, and improve a company's
marketing decision-making process.
In recent years, the notebook personal computer has gained significant market
share among laptops, largely due to its more user-friendly size and portability.
Information technology typically progresses at a fast rate, leading to marketing
managers being cognizant of the latest technological developments. Moreover, the
launch of smartphones into the cellphone market is commonly derived from a
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demand among consumers for more technologically advanced products. A firm can
lose out to competitors should it ignore technological innovations in its industry.
Technological advancements can lessen barriers between countries and regions.

Using the World Wide Web, firms can quickly dispatch information from one
country to another without much restriction. Prior to the mass usage of the Internet,
such transfers of information would have taken longer to send, especially if done
via snail mail, telex, etc.
Recently, there has been a large emphasis on data analytics. Data can be mined
from various sources such as online forms, mobile phone applications and more
recently, social media.
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Services marketing
Services marketing relates to the marketing of services, as opposed to tangible

products. A service (as opposed to a good) is typically defined as follows:
The use of it is inseparable from its purchase (i.e., a service is used and consumed
simultaneously)
It does not possess material form, and thus cannot be touched, seen, heard, tasted,
or smelled.
The use of a service is inherently subjective, meaning that several persons

experiencing a service would each experience it uniquely.
For example, a train ride can be deemed a service. If one buys a train ticket, the use
of the train is typically experienced concurrently with the purchase of the ticket.
Although the train is a physical object, one is not paying for the permanent
ownership of the tangible components of the train.
Services (compared with goods) can also be viewed as a spectrum. Not all products
are either pure goods or pure services. An example would be a restaurant, where a
waiter's service is intangible, but the food is tangible.
Right-time marketing
Right-time marketing is an approach to marketing which selects an appropriate

time and place for the delivery of a marketing message.
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As the number of vendors and delivery channels has increased, customers demand
a right time and place for accepting messages and only pay attention to messages
when and how it is convenient for them.
CHAPTER 3.2
INTRODUCTION TO MARKETING MIX
The marketing mix is a business tool used in marketing and by marketers. The
marketing mix is often crucial when determining a product or brand's offer, and is
often associated with the four P's: price, product, promotion, and place. In service
marketing, however, the four Ps are expanded to the seven Ps or Seven P's to
address the different nature of services.
In the 1990s, the concept of four C's was introduced as a more customer-driven
replacement of four P's. There are two theories based on four Cs: Lauterborn's four
Cs (consumer, cost, communication, convenience), and Shimizu's four Cs
(commodity, cost, communication, channel).
In 2012, a new four P's theory was proposed with people, processes, programs, and
performance.
History of Marketing Mix.
In his paper "The Concept of the Marketing Mix", Neil Borden reconstructed the
history of the term "marketing mix". He started teaching the term after an
associate, James Culliton, described the role of the marketing manager in 1948 as a
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"mixer of ingredients"; one who sometimes follows recipes prepared by others,

sometimes prepares his own recipe as he goes along, sometimes adapts a recipe
from immediately available ingredients, and at other times invents new ingredients
no one else has tried.
McCarthy's four Ps
The marketer E. Jerome McCarthy proposed a four Ps classification in 1960, which

has since been used by marketers throughout the world
Product- A product is seen as an item that satisfies what a consumer demands. It is

a tangible good or an intangible service. Tangible products are those that have an
independent physical existence. Typical examples of mass-produced, tangible
objects are the motor car and the disposable razor. A less obvious but ubiquitous
mass-produced service is a computer operating system.
Every product is subject to a life-cycle including a growth phase followed by a

maturity phase and finally an eventual period of decline as sales fall. Marketers
must do careful research on how long the life cycle of the product they are
marketing is likely to be and focus their attention on different challenges that arise
as the product moves.
The marketer must also consider the product mix. Marketers can expand the
current product mix by increasing a certain product line's depth or by increasing
the number of product lines. Marketers should consider how to position the
product, how to exploit the brand, how to exploit the company's resources and how
to configure the product mix so that each product complements the other. The
marketer must also consider product development strategies.
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Price- The amount a customer pays for the product. The price is very important as
it determines the company's profit and hence, survival. Adjusting the price has a
profound impact on the marketing strategy, and depending on the price elasticity of
the product, often it will affect the demand and sales as well. The marketer should
set a price that complements the other elements of the marketing mix.
When setting a price, the marketer must be aware of the customer perceived value
for the product. Three basic pricing strategies are: market skimming pricing,
market penetration pricing and neutral pricing. The 'reference value' (where the
consumer refers to the prices of competing products) and the 'differential value'
(the consumer's view of this product's attributes versus the attributes of other
products) must be taken into account.
Promotion- All of the methods of communication that a marketer may use to

provide information to different parties about the product. Promotion comprises
elements such as: advertising, public relations, sales organization and sales
promotion.
Advertising covers any communication that is paid for, from cinema commercials,
radio and Internet advertisements through print media and billboards. Public
relations is where the communication is not directly paid for and includes press
releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and
events. Word-of-mouth is any apparently informal communication about the
product by ordinary individuals, satisfied customers or people specifically engaged
to create word of mouth momentum. Sales staff often plays an important role in
word of mouth and public relations (see 'product' above).
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Place- The product should be available from where your target consumer finds it
easiest to shop. This may be High Street, Mail Order or the more current option via
e-commerce or an online shop.
The "seven Ps" is a marketing model that adds to the aforementioned four Ps,
including "physical evidence", "people", and "process": It is used when the
relevant product is a service, not merely a physical good.
Physical evidence- Almost all services include some physical elements even if the
bulk of what the consumer is paying for is intangible. For example a hair salon
would provide their client with a completed hairdo and an insurance company
would give their customers some form of printed material. Even if the material is
not physically printed (in the case of PDFs) they are still receiving a physical
product by this definition.
People- All companies are reliant on the people who run them from front line
Sales staff to the Managing Director. Having the right people is essential because
they are as much a part of your business offering as the products/services you are
offering.
Processes- The delivery of your service is usually done with the customer present
so how the service is delivered is once again part of what the consumer is paying
for.
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Lauterborn's four Cs
Robert F. Lauterborn proposed a four Cs classification in 1990which is a more

consumer-oriented version of the four Ps that attempts to better fit the movement
from mass marketing to niche marketing
Consumer wants and needs (Product)
A company will only sell what the consumer specifically wants to buy. So,
marketers should study consumer wants and needs in order to attract them one by
one with something he/she wants to purchase.
Cost (Price)
Price is only a part of the total cost to satisfy a want or a need. The total cost will
consider for example the cost of time in acquiring a good or a service, a cost of
conscience by consuming that or even a cost of guilt "for not treating the kids". It
reflects the total cost of ownership. Many factors affect cost, including but not
limited to the customer's cost to change or implement the new product or service
and the customer's cost for not selecting a competitor's product or service
Communication (Promotion)
While promotion is "manipulative" and from the seller, communication is

"cooperative" and from the buyer with the aim to create a dialogue with the
potential customers based on their needs and lifestyles. It represents a broader
focus. Communications can include advertising, public relations, personal selling,
viral advertising, and any form of communication between the organization and the
consumer
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Convenience (Place)
In the era of Internet, catalogs, credit cards and phones people neither need to go
anyplace to satisfy a want or a need nor are limited to a few places to satisfy them.
Marketers should know how the target market prefers to buy, how to be there and
be ubiquitous, in order to guarantee convenience to buy. With the rise of Internet
and hybrid models of purchasing, Place is becoming less relevant. Convenience
takes into account the ease of buying the product, finding the product, finding
information about the product, and several other factors.
Four Cs: in the 7Cs Compass Model
After Koichi Shimizu proposed a four Cs classification in 1973, this was expanded
to the 7Cs Compass Model to provide a more complete picture of the nature of
marketing in 1981. It attempts to explain the success or failure of a firm within a
market and is somewhat analogous to Michael Porter's diamond model, which tries
to explain the success and failure of different countries economically.
The 7Cs Compass Model comprises:
(C1) Corporation- The core of four Cs is corporation (company and non profit
organization). C-O-S (organization, competitor, stakeholder) within the
corporation. The company has to think of compliance and accountability as
important. The competition in the areas in which the company competes with other
firms in its industry.
The four elements in the 7Cs Compass Model are:
A formal approach to this customer-focused marketing mix is known as "Four Cs"

(commodity, cost, communication, channel) in the Seven Cs Compass Model. The
four Cs model provides a demand/customer centric version alternative to the well-
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known four Ps supply side model (product, price, promotion, place) of marketing
management.
Product Commodity
Price Cost
Promotion Communication
Place Channel
(C2) Commodity- (Latin derivation: commodus=convenient) : Co-creation.It is

not "product out". The goods and services for the consumers or citizens. Steve Jobs
has been making the goods with which people are pleased. It will not become
commoditization if a commodity is built starting.
(C3) Cost- (Latin derivation: constare= It makes sacrifices) : There is not only
producing cost and selling cost but purchasing cost and social cost.
(C4) Communication- (Latin derivation: communis=sharing of meaning) :

marketing communication : Not only promotion but communication is important.
Communications can include advertising, sales promotion, public relations,
publicity, personal selling, corporate identity,internalcommunication,SNS,MIS.
(C5) Channel- (Latin derivation: canal) : marketing channels. Flow of goods.
The compass of consumers and circumstances (environment) are:
(C6) Consumer- (Needle of compass to consumer)
The factors related to consumers can be explained by the first character of four
directions marked on the compass model. These can be remembered by the
cardinal directions, hence the name compass model:
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N = Needs
W = Wants
S = Security
E = Education:(consumer education)
(C7) circumstances- (Needle of compass to circumstances )
In addition to the consumer, there are various uncontrollable external

environmental factors encircling the companies. Here it can also be explained by
the first character of the four directions marked on the compass model:
N = National and International (Political, legal and ethical) environment
W = Weather
S = Social and cultural
E = Economic.
These can also be remembered by the cardinal directions marked on a compass.

The 7Cs Compass Model is a framework in co-marketing (symbiotic marketing). It
has been criticized for being little more than the four Ps with different points of
emphasis. In particular, the seven Cs inclusion of consumers in the marketing mix
is criticized, since they are a target of marketing, while the other elements of the
marketing mix are tactics. The seven Cs also include numerous strategies for
product development, distribution, and pricing, while assuming that consumers
want two-way communications with companies.
An alternative approach has been suggested in a book called 'Service 7' by

Australian Author, Peter Bowman. Bowman suggests a values based approach to
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service marketing activities. Bowman suggests implementing seven service

marketing principles which include value, business development, reputation,
customer service and service design. Service 7 has been widely distributed within
Australia.
IS THERE AN 8TH P?
In some spheres of thinking, there are 8 Ps in the Marketing Mix. The final P is
Productivity and Quality. This came from the old Services Marketing Mix and is folded
in to the Extended Marketing Mix by some marketers so what does it mean?
THE 8TH P OF THE MARKETING MIX:
Productivity & Quality
This P asks is what youre offering your customer a good deal? This is less about
you as a business improving your own productivity for cost management, and more
about how your company passes this onto its customers.
Even after 31 years (or 54 in the case of the original Ps) the Marketing Mix is still very
much applicable to a marketers day to day work. A good marketer will learn to adapt the
theory to fit with not only modern times but their individual business model.
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CHAPTER 3.3
INTRODUCTION TO KFC
KFC (the name was originally an initialism for Kentucky Fried Chicken) is a fast
food restaurant chain that specializes in fried chicken and is headquartered in
Louisville, Kentucky, in the United States. It is the world's second largest
restaurant chain (as measured by sales) after McDonald's, with 18,875 outlets in
118 countries and territories as of December 2013. The company is a subsidiary of
Yum! Brands, a restaurant company that also owns the Pizza Hut and Taco Bell
chains.
KFC was founded by Harland Sanders, an entrepreneur who began selling fried
chicken from his roadside restaurant in Corbin, 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
popularized chicken in the fast food industry, diversifying the market by
challenging the established dominance of the hamburger. By branding himself as
"Colonel Sanders," Harland became a prominent figure of American cultural
history, and his image remains widely used in KFC advertising. However, the
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company's rapid expansion saw it overwhelm the ageing Sanders, and in 1964 he
sold the company to a group of investors led by John Y. Brown, Jr. and Jack C.
Massey.
KFC was one of the first fast food chains to expand internationally, opening outlets
in the United Kingdom, Mexico, and Jamaica by the mid-1960s. Throughout the
1970s and 1980s, KFC experienced mixed fortunes domestically, as it went
through a series of changes in corporate ownership with little or no experience in
the restaurant business. In the early 1970s, KFC was sold to the spirits distributor
Heublein, who were taken over by the R.J. Reynolds food and tobacco
conglomerate, who sold the chain to PepsiCo. The chain continued to expand
overseas however, and in 1987 KFC became the first Western restaurant chain to
open in China. The chain has since expanded rapidly in China, which is now the
company's single largest market. PepsiCo spun off its restaurants division as
Tricon Global Restaurants, which later changed its name to Yum! Brands.
KFC's original product is pressure fried chicken pieces, seasoned with Sanders'
recipe of 11 herbs and spices. The constituents of the recipe represent a notable
trade secret. Larger portions of fried chicken are served in a cardboard "bucket,"
which has become a well known feature of the chain since it was first introduced
by franchisee Pete Harman in 1957. Since the early 1990s, KFC has expanded its
menu to offer other chicken products such as chicken fillet burgers and wraps, as
well as salads and side dishes, such as French fries and coleslaw, desserts, and soft
drinks, the latter often supplied by PepsiCo. KFC is known for the slogan "finger
lickin' good," which has since been replaced by "Nobody does chicken like KFC"
and "So good."
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History of KFC
Harland Sanders was born in 1890 and raised on a farm outside Henryville, Indiana
(near Louisville, Kentucky). When Harland was five years old, his father died,
forcing his mother to work at a canning plant. This left Harland, as the eldest son,
to care for his two younger siblings. After he reached seven years of age, his
mother taught him how to cook. After leaving the family home at the age of 13,
Sanders passed through several professions, with mixed success. In 1930, he took
over a Shell filling station on US Route 25 just outside North Corbin, Kentucky, a
small town on the edge of the Appalachian Mountains. It was here that he first
served to travelers the recipes that he had learned as a child: fried chicken and
other dishes such as steaks and country ham. After four years of serving from his
own dining room table, Sanders purchased the larger filling station on the other
side of the road and expanded to six tables. By 1936, this had proven successful
enough for Sanders to be given the honorary title of Kentucky colonel by Governor
Ruby Laffoon. In 1937 he expanded his restaurant to 142 seats, and added a motel
he purchased across the street, naming it Sanders Court & Caf.
Sanders was unhappy with the 35 minutes it took to prepare his chicken in an iron
frying pan, but he refused to deep fry the chicken, which he believed lowered the
quality of the product. If he pre-cooked the chicken in advance of orders, there was
sometimes wastage at day's end. In 1939, the first commercial pressure cookers
were released onto the market, mostly designed for steaming vegetables. Sanders
bought one, and modified it into a pressure fryer, which he then used to fry
chicken. The new method reduced production time to be comparable with deep
frying, while, in the opinion of Sanders, retaining the quality of pan-fried chicken.
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In July 1940, Sanders finalised what came to be known as his "Original Recipe" of
11 herbs and spices. Although he never publicly revealed the recipe, he admitted
to the use of salt and pepper, and claimed that the ingredients "stand on
everybody's shelf." After being recommissioned as a Kentucky colonel in 1950 by
Governor Lawrence Wetherby, Sanders began to dress the part, growing a goatee
and wearing a black frock coat (later switched to a white suit), a string tie, and
referring to himself as "Colonel." His associates went along with the title change,
"jokingly at first and then in earnest," according to biographer Josh Ozersky.
The Sanders Court & Caf generally served travelers, so when the route planned in
1955 for Interstate 75 bypassed Corbin, Sanders sold his properties and traveled
the US to franchise his chicken recipe to restaurant owners. Independent
restaurants would pay four (later five) cents on each chicken as a franchise fee, in
exchange for Sanders' "secret blend of herbs and spices" and the right to feature his
recipe on their menus and use his name and likeness for promotional purposes. In
1952 he had already successfully franchised his recipe to his friend Pete Harman of
South Salt Lake, Utah, the operator of one of the city's largest restaurants.
Don Anderson, a sign painter hired by Harman, coined the name "Kentucky Fried
Chicken." For Harman, the addition of KFC was a way of differentiating his
restaurant from competitors; a product from Kentucky was exotic, and evoked
imagery of Southern hospitality. Harman trademarked the phrase "It's finger lickin'
good," which eventually become the company-wide slogan. He also introduced the
"bucket meal" in 1957 (14 pieces of chicken, five bread rolls and a pint of gravy in
a cardboard bucket). Serving their signature meal in a paper bucket was to become
an iconic feature of the company.
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By 1963 there were 600 KFC restaurants, making the company the largest fast
food operation in the United States. KFC popularized chicken in the fast food
industry, diversifying the market by challenging the established dominance of the
hamburger.
In 1964, Sanders sold the company to a group of investors led by John Y. Brown
Jr. and Jack C. Massey for US$2 million (around US$15 million in 2013). The
contract included a lifetime salary for Sanders and the agreement that he would be
the company's quality controller and trademark. The chain had reached 3,000
outlets in 48 different countries by 1970. In July 1971, Brown sold the company to
the Connecticut-based Heublein, a packaged food and drinks corporation, for
US$285 million (around US$1.6 billion in 2013). Sanders died in 1980, his
promotional work making him a prominent figure in American cultural history. By
the time of his death, there were an estimated 6,000 KFC outlets in 48 different
countries worldwide, with $2 billion of sales annually.
In 1982, Heublein was acquired by R. J. Reynolds, the tobacco giant. In July 1986,
Reynolds sold KFC to PepsiCo for $850 million (around US$1.8 billion in 2013).
PepsiCo made the chain a part of its restaurants division alongside Pizza Hut and
Taco Bell. The Chinese market was entered in November 1987, with an outlet in
Beijing.
In 1991, the KFC name was officially adopted, although it was already widely
known by that initialism. Kyle Craig, president of KFC US, admitted the change
was an attempt to distance the chain from the unhealthy connotations of "fried".
The early 1990s saw a number of successful major products launched throughout
the chain, including spicy "Hot Wings" (launched in 1990), popcorn chicken
(1992), and internationally, the "Zinger", a spicy chicken fillet burger (1993). By
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1994, KFC had 5,149 outlets in the US, and 9,407 overall, with over 100,000
employees. In August 1997, PepsiCo spun off its restaurants division as a public
company valued at US$4.5 billion (around US$6.5 billion in 2013). The new
company was named Tricon Global Restaurants, and at the time had 30,000 outlets
and annual sales of US$10 billion (around US$14 billion in 2013), making it
second in the world only to McDonald's.Tricon was renamed Yum! Brands in May
2002.
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Operations
KFC is a subsidiary of Yum! Brands, one of the largest restaurant companies in the
world. KFC had sales of $23 billion in 2013. KFC has its headquarters at 1441
Gardiner Lane, Louisville, Kentucky, in a three-story colonial style building
known colloquially as the "White House" due to its resemblance to the US
president's home. The headquarters contain executive offices and the company's
research and development facilities. KFC is incorporated at 1209 North Orange St,
Wilmington, Delaware.
By December 2013, there were 18,875 KFC outlets in 118 countries and territories
around the world. There are 4,563 outlets in China, 4,491 in the United States, and
9,821 across the rest of the world. Outlets are owned by franchisees or directly by
the company. Eleven percent of outlets are company owned, with the rest operated
by franchise holders. Although capital intensive, company ownership allows for
faster expansion of the chain.
Most restaurants are furnished with images of the company founder, Colonel
Harland Sanders. As well as dine-in and take-out, many stand-alone KFC outlets
offer a drive-through option. KFC offers a limited delivery service in a small
number of markets. Units include express concessions and kiosks which feature a
limited menu and operated in non-traditional locations such as filling stations,
convenience stores, stadia, theme parks and colleges, where a full scale outlet
would not be practical. Average annual sales per unit was $1.2 million in 2013.
Worldwide, the daily average number of food orders at an outlet is 250, with most
occurring within a two hour peak-period.
As chairman and CEO of Yum!, David C. Novak ultimately has foremost

responsibility for KFC operations. Sam Su is chairman and CEO of
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Yum!'sChineseoperations, and Muktesh Pant is the CEO of KFC. Richard T.

Carucci is president of Yum!, and Roger Eaton is the COO of Yum! and the
president of KFC.
KFC in India
In December 2013, there were 361 KFC outlets in India. As well as the standard
KFC offerings, the chain sells a chickpea burger, a paneer burger, hot wings with
chilli lemon sprinkles and other country-specific products. A major franchise
holder is QSR Brands (M) Holdings, which operated 26 outlets as of 2012.
The first Indian KFC was a two-storey outlet on the fashionable Brigade Road in
Bangalore in June 1995. According to journalist Michael White, the company
could not have chosen a "more difficult venue for its maiden entre into the
country." Bangalore housed the headquarters of the Karnataka RajyaRaithaSangha,
one of the most influential, vocal and anti-foreign investment farmers' associations
in the country. The first outlet suffered protests from left wing, anti-globalisation
and environmental campaigners, as well as local farmers, who objected to the
chain bypassing local producers. Many Indians were concerned about the
onslaught of consumerism, the loss of national self-sufficiency, and the disruption
of indigenous traditions. The protests came to a head in August 1995, when the
Bangalore outlet was repeatedly ransacked. The KFC outlet in Bangalore
demanded, and received, a police van permanently parked outside for a year. The
outlet was closed on September 13, 1995 by local authorities, who claimed the
company used illegally high amounts of monosodium glutamate (MSG) in its food.
The outlet re-opened a few hours later as the result of an appeal by KFC to the
Karnataka High Court. The company stated the recipe was no different than that
used in any other KFC store. Rural activist M. D. Nanjundaswamy claimed KFC
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would adversely affect the health of the impoverished, by diverting grain from
poor people to make the more profitable animal feed. Former environment minister
Maneka Gandhi joined the anti-KFC movement. A second outlet opened in Delhi,
but was closed by the authorities throughout November, purportedly for health
reasons, but more likely to avoid a repetition of the Bangalore incident. The Delhi
outlet soon closed permanently.
KFC began to expand outside of Bangalore in 2004, with a localized menu that
was the most extensive meat-free menu across the chain's worldwide operations. It
introduced a vegetarian menu that included rice meals, wraps and side dishes and,
like McDonald's, served eggless mayonnaise and sauces. UnnatVarma, marketing
director of KFC India, states "The vegetarian offerings have made the brand more
relevant to a larger section of consumers and that is necessary for KFC's growth."
KFC also began using Indian spices and cooking techniques to localize its chicken
dishes. By 200809, KFC operated 34 outlets in India. In 2014, KFC launched the
"So Veg, So Good" menu as part of an India-specific promotional strategy focused
on enhancing their vegetarian range. DhruvKaul, marketing director of KFC India,
stated, "The So Veg, So Good menu launch does not mean that we are moving
away from our core chicken offerings. It enhances and strengthens our existing
vegetarian range and helps broaden the brand's relevance in a diverse country such
as India.
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Products
KFC's core product offering is pressure fried on-the-bone chicken pieces seasoned
with the "Original Recipe". The product is typically available in either two or three
piece individual servings, or in a family size cardboard bucket, typically holding
between 6 and 16 chicken pieces. Poultry is divided into 9 different cuts (2
drumsticks, 2 thighs, 2 wings, 1 keel, and a backbone based breast cut divided into
2 pieces. The product is hand-breaded at individual KFC outlets with wheat flour
mixed with seasoning in a two to four minute process. It is then pressure fried for a
maximum of seven minutes at 185 degrees celsius. Following this, the chicken is
left to stand for 5 minutes in order for it to sufficiently cool before it is placed in
the warming oven. It is KFC policy to discard chicken if it has not been sold within
90 minutes, in order to ensure freshness. The frying oil varies regionally, and
versions used include sunflower, soybean, rapeseed and palm oil. A KFC executive
stated that the taste of the chicken will vary between regions depending on the oil
variety used, and whether the chicken has been corn-fed or wheat-fed.
As well as its core chicken on the bone offering, KFC's major products include
chicken burgers (including the Zinger and the Tower burgers); wraps ("Twisters"
and "Boxmasters"); and a variety of finger foods, including crispy chicken strips
and hot wings. Popcorn Chicken is one of the most widely available KFC products,
and consists of small pieces of fried chicken. In some locations, chicken nuggets
are sold, and are sometimes sold, as in Australia, under the "Kentucky Nuggets"
trademark.
KFC adapts its menu internationally to suit regional tastes, and there are over three
hundred KFC menu items worldwide. Some locations, such as the UK and the US,
sell grilled chicken. In predominantly Islamic countries, the chicken served is
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halal. In Asia there is a preference for spicy foods, such as the Zinger chicken
burger. Some locations in the US sell fried chicken livers and gizzards. A small
number of US outlets offer an all-you-can-eat buffet option with a limited menu.
A number of territories, such as Japan, Jamaica, Trinidad, Barbados, Ecuador and

Singapore sell fried seafood products under the "Colonel's Catch" banner. In
Jamaica, what was originally a seasonal offering for the Lent period was expanded
to a year-round offering from 2010.
Value menu items are sold under the "Streetwise" name in locations such as
Canada. Side dishes often include French fries, coleslaw, barbecue baked beans,
corn on the cob, mashed potato, bread rolls and American biscuits. Salads include
the bean salad, the Caesar salad and the garden salad. In a number of territories,
KFC sell onion rings. In Asia, rice based side dishes such as congee are often sold.
In Malaysia, chicken meatball soup is sold. In the US and Greece, potato wedges
are sold instead of French fries.
McCormick & Company is KFC's largest supplier of sauces, seasonings and

marinades, and is a long-term partner in new product development.
Due to the company's previous relationship with PepsiCo, most territories supply
PepsiCo products, but exceptional territories include South Africa, the Philippines,
Turkey, Romania, Greece and Barbados, which stock drinks supplied by The
Coca-Cola Company, and Aruba, which stocks RC Cola from the Cott
Corporation. In Peru, the locally popular Inca Kola is sold. In a number of Eastern
European locations and Portugal, beer is offered, in addition to soft drinks.
Launched in 2009, the Krusher/Krushem range of frozen beverages containing

"real bits" such as Kit Kat, Oreo and strawberry shortcake, is available in over
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2,000 outlets. Egg custard tart is a popular dessert worldwide, but other items
include ice cream sundaes and tresleches cake in Peru.
In 2012, the "KFC am" breakfast menu began to be rolled out internationally,
including such items as pancakes, waffles and porridge, as well as fried chicken.
11 herbs and spices
Sanders' Original Recipe of "11 herbs and spices" is one of the most famous trade
secrets in the catering industry. The recipe is not patented, because patents
eventually expire, whereas trade secrets can remain the intellectual property of
their holders in perpetuity.
A copy of the recipe, signed by Sanders, is held inside a safe inside a vault in
KFC's Louisville headquarters, along with eleven vials containing the herbs and
spices. To maintain the secrecy of the recipe, half of it is produced by Griffith
Laboratories before it is given to McCormick, who add the second half.
Equipment
KFC initially used stove-top covered cooking pots to fry its chicken. In the 1960s,
the officially recommended model was the L S Hartzog developed "KFC 20-Head
Cooker," a large device that cost $16,000. The Hartzog model had no oil filtration
system, meaning that filtering had to be done manually, and the pressure fryers
occasionally exploded. In 1969, an engineer called Winston Shelton developed the
"Collectramatic 519" pressure fryer that would self-filter the oil, and used precision
timers and temperature controls. Fred Jeffries, then vice president of purchasing at
KFC, claimed that the invention helped fuel the company's rapid expansion and
success: "There's no way it could have grown like it did without the
Collectramatic. Stores were doing about $200,000 a year in sales on average with
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the pots but they could never have done the $900,000 a year it became without
Win's fryer."
Although a number of franchisees bought the Collectramatic, which had the

support of Colonel Sanders from 1970 onwards, John Y. Brown had already signed
an exclusive contract to only use the L S Hartzog fryer. Brown warned franchisees
that they were in violation of their contract if they used the Collectramatic. Brown
held his ground on the issue until he learned that his father, John Y. Brown, Sr.,
who was a KFC franchisee himself, was also using the Collectramatic. The issue
was eventually resolved after Heublein purchased KFC and acquired Hartzog in
order to invalidate the contract. The Collectramatic thus became the official
pressure fryer for KFC from 1972 onwards.
Winston previously supplied KFC with holding cabinets, but since 2010, these
have been supplied by Henny Penny.
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Advertising
Colonel Sanders
Colonel Sanders was a key component of KFC advertising until his death in 1980.
Despite his death, Sanders remains a key symbol of the company; an "international
symbol of hospitality."
Modern renditions of the Colonel are sometimes used in post-1980 advertising. In

1994, Henderson Forsythe portrayed the Colonel in a television campaign entitled
"The Colonel's Way." From 1998 to 2001 an animated version of the Colonel
voiced by Randy Quaid was used for television advertisements. In 2012, a UK
advertisement entitled "4000 cooks" featured an actor made up to resemble
Sanders.
The ubiquity of Sanders has not prevented KFC from introducing a mascot aimed
at children. "Chicky," a young animated chicken, was first introduced in Thailand
in the 1990s, and has since been rolled out across a number of markets worldwide,
mostly in Asia and South America.
Slogans
Early official slogans included "North America's Hospitality Dish" (from 1956)
and "We fix Sunday dinner seven nights a week" from 1957 until 1967.
The "finger lickin' good" slogan was used from 1956, and went on to become one
of the best-known slogans of the twentieth century. The trademark expired in the
US in 2006, and was replaced in that market with "Follow your taste" until 2010.
In 2011, the "finger lickin' good" slogan was dropped in favor of "So good," to be
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rolled out worldwide. A Yum! executive said that the new slogan was more
holistic, applying to staff and service, as well as food.
"Nobody does chicken like KFC" was first introduced by KFC Australia in 1998,
and has continued to be used by the company in some markets.
Logos
The first KFC logo was introduced in 1952 and featured a "Kentucky Fried
Chicken" typeface and a logo of the Colonel. It was designed by the Lippincott &
Margulies corporate identity agency. Lippincott & Margulies were hired to
redesign it in 1978, and used a similar typeface and a slightly different Sanders
logo. The "KFC" initialism logo was designed by Schechter &Luth of New York
and was introduced in 1991, and the Colonel's face logo was switched from brown
to blue ink.
Landor redesigned the logo in 1997, with a new image of the Colonel. The new
Colonel image was more thinly lined, less cartoonish and a more realistic
representation of Sanders. In 2006, the Colonel logo was updated by Tesser of San
Francisco, replacing his white suit with an apron, bolder colors and a better defined
visage. According to Gregg Dedrick, president of KFC's US division, the change,
"communicates to customers the realness of Colonel Sanders and the fact that he
was a chef.
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Television
United States
KFC Yum! Center in Louisville, Kentucky
Advertising played a key role at KFC after it was sold by Sanders, and the
company began to advertise on US television with a budget of US$4 million in
1966. In order to fund nationwide advertising campaigns, the Kentucky Fried
Chicken Advertising Co-Op was established, giving franchisees ten votes and the
company three when deciding on budgets and campaigns.
In 1969, KFC hired its first national advertising agency, Leo Burnett. A notable
Burnett campaign in 1972 was the "Get a bucket of chicken, have a barrel of fun"
jingle, performed by Barry Manilow.
By 1976 KFC was one of the largest advertisers in the US. Young & Rubicam
(Y&R) was KFC's agency of record in the US from 1976 until December 2000.
From 1978 to 1980 "It's nice to feel so good about a meal" was the slogan. It was
chosen because KFC had identified consumer guilt as its core marketing obstacle.
Meanwhile, KFC hired the Mingo-Jones agency to target African American
audiences. Mingo-Jones coined the "We do chicken right" slogan, which was later
adopted across the whole chain from 1981 until 1990. "Nobody's cooking like
today's KFC" was used from December 1990 until March 1991.
From 1991 to 1994, the television campaign focused on the fictional town of Lake
Edna. When he took over the CEO role at KFC, David Novak ended the campaign,
which he derided as "hokey." The campaign was replaced by one with the tagline,
Page | 54
"Everybody needs a little KFC," which Novak credited with helping to boost sales
at the company.
BBDO took over the KFC US account in December 2000. Its first campaign,
featuring Jason Alexander, debuted on television in July 2001. It ran until May
2003 with the tagline, "There's fast food. Then there's KFC." In September 2003,
BBDO was replaced by Foote, Cone & Belding. Its first campaign aired in
November, but was pulled after less than a month following complaints from the
National Advertising Division and the Center for Science in the Public Interest that
it advertised the health benefits of eating fried chicken.
International
In 1994, Ogilvy & Mather became KFC's international agency of record. From
1997 to 1999, Ogilvy & Mather used celebrities such as Ivana Trump, Tara
Palmer-Tomkinson and Ulrika Jonsson to endorse KFC products in television
advertisements in the UK. After this campaign, the agency simply adapted Y&R's
American campaigns, such as the animated Colonel, for a British audience. In late
2002, BBH was appointed KFC's UK agency. In 2003, the "Soul Food" campaign
was launched, aiming to capture the young urban market with 1960s and 70s
African-American music. By 2005, this believed to have been a failure, and KFC
UK's marketing director left the company amid speculation that the US head office
was unhappy with the campaign. Marketing subsequently moved towards a more
family-orientated line.
Page | 55
Promotional tie-ins and corporate sponsorships
In 2013, WPP's BrandZ valued the brand at US$10 billion.
In 1994, KFC embarked upon its first US nationwide promotional tie in, with the
Looney Tunes franchise. Customers could buy a Looney Tunes character 3D mug
for $1.99 with each $14.99 Mega Meal that was purchased.
KFC in the US featured a Matchbox promotion in Spring 1995.
Between November 1998 and January 2000, KFC US teamed with Nintendo,
Game Freak and 4 Kids Entertainment in a Pokmon tie-in. Pokmon themed
promotional days were held, Pokmon Beanie Babies were sold, and Pokmon toys
were given away free with children's meals. In 1999, PepsiCo signed a $2 billion
agreement with Lucasfilm in order to market Star Wars themed meals in its KFC
and Pizza Hut chains.
Since 2010, KFC has sponsored the KFC Yum! Center in Louisville. In Australia,
KFC has sponsored the Big Bash League Twenty20 cricket tournament and
Twenty20 international matches since 2003.
Page | 56
CHAPTER 4
MARKETING STRATEGIES OF KFC
There are different strategies adopted by KFC for different events. They market
their products on different events and in different activities as they are helping SOS
village. According to KFC, kids become the future permanents customers and we
know very well that without any marketing strategy no marketing program and no
product is successful because we depend upon customers, customer not depend on
us. KFC is following Niche Marketing and Societal Marketing techniques. KFC
possess a western culture because some of the Indian people are also following that
culture. KFC are moving from Divisional Level to the District level by opening
branches. KFC also offer free home delivery. KFC open their outlets on reachable
places. KFC menu consists of more than 30 products. KFC gives more priority to
Family.
Marketing
Since 1982, KFCs All-American salute to Mothers national card contest has
been KFCs way of honoring moms and their families for making mothers Day
KFCs biggest sales day of the year. The contest encourages children to creatively
express their feelings for their moms by making a homemade card and give them
chance to compete for more than $10,000 in cash and prizes. Educational packets,
including language, history and art exercises highlighting Mothers Day, were sent
to thousands of schools nationwide.
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Marketing mix of KFC
1.Production:
Basically the product is anything that be offered to a market for attention,

acquisition, use, or consumption that might satisfy a want or need. KFC is
specially dealing in the chicken products; Basically, KFC has the special raspy for
chicken products that is why, KFC known as a chicken specialist all over the
globe. KFC target the Asia and east side because they observe that they people are
like the chicken products, so they enter in the market due to the demand of their
chicken products. KFC product variety of product in the chicken, those products
are:
PRODUCTS:
Original recipe chicken
Extra Tasty Crispy TM chicken
Hot Wings TM pieces
Tender Roast chicken
Chunky Chicken pot pie
Kentucky Nuggest
Colonels Crispy Strips
Honey BBQ sandwich
Original Recipe Sandwich
Tender Roast Sandwich
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Triple Crunch Sandwich
Triple Crunch Zinger Sandwich
2. Pricing:
KFC during pricing their products keep the different points in the mind like they
adopt the cost base price strategy. Pricing of the product includes the Government
taxes and excise duties and then they come at final stage of determine the price of
their products. KFC prices of products are a bit high according to the market
segment and it is also compatible to the stander of their products. Calculation of
the price under Cost Based Pricing Strategy: Total Pounds of Chicken Served in
KFC Restaurant Annually= 1.914 Billion Total KFC Chicken Pieces Sold
Annually = 5.89 Billion Total Retail Sales = $8.9 Billion
Sales Price of per Chicken Piece = Total Retail Sales /Chicken Pieces sold= $8.9
Billion / $5.89 Billion=$1.51We assume that Fixed Cost is =
$6000000000Variable Cost = $675000000Profit Margin is Or Mark Up =
$225000000(25% of Sales)Per Unit Variable Cost = $675000000 / 5890000000= $
0.115Unit Cost = Variable Cost + Fixed Cost / Chicken pieces Sold= 0.115+
6000000000 / 5890000000= 0.115 + 1.02= $1.135Now suppose manufacturer
wants to earn 2525% mark upon sale. The manufacturer markup price is
calculated: Mark Up Price = Unit Cost / (1 Desired Return on Sales) =1.135 / (1-
.25)= 1.135 / 0.75= $1.51
3. Promotion:
Promotion is one of the necessary plates in any form of business or in other words
you can say that promotion is the key of success. If you promote your product at
the right time. KFC also known the importance and significance of promotion so
Page | 59
they uses the bill boards the major source of advertisement A survey of young
consumers in the countries(n = 795), showed that the respondents were more apt to
eat within KFC restaurants, and spend more time doing so, than the Americans.
The Chinese also had much more positive impressions of KFC. Brand identity
impressions were correlated with overall customer satisfaction and with future
patronage intentions for both groups. These findings support a model where
differences in cultural frames of reference lead consumers to actively localize the
brand identity of this nominally globalized product.
In India KFC not advertise their products too much because people KFC due to its
reputation in other countries. They promote their products through special
packages. They promote their products through billboard, pamphlets and through
other promotion strategies.
Sales promotion
For the sales promotion KFC introduced their goods likewatches , keychain, etc to
the customers.
4. Place:
In the case of the KFC the placement of the product is not important but the
placement of the restaurant is important. The products of the KFC is cooked at the
sport and then served after that. KFC Cavalry branch opened in June 1998, in the
main commercial zone of Cavalry Grounds near the Jinnah Flyover. The restaurant
is a three-story building including the basement (where the chicky play area is
located). It is ideally located in the center of a main commercial and residential
area of Lahore. The area that KFC Cavalry caters for is the residential and office
area of Cavalry Grounds and Cantt, as the main target market. Another branch the
KFC opened in the Lahore is in Garden Town (opposite to Barkat Market).KFC
Page | 60
also target the Faisalabad and open its branch in the ground. Now we can easily
judge that the KFC target the place for their restaurant, which is well known and is
in the Porsche area where the income level of the people is high then the
middleclass level. Because the prices of the KFC products is high with comparison
to the local products manufacturer who are dealing in the same kind of product in
which KFC is dealing but the prices of the KFC is high due to special taste, high
quality, and due to international brand, it is the world recognized fast food
restaurant all around the world. So, for the placing strategy, KFC chose the well
income class area for their restaurants.
Purchasing process:
Many people come from home to eat this, and some make impulse decision as they
saw it .Market mix Strategy KFC will be using differentiated market coverage
strategy. It means that different marketing mix will be used for different age
groups. TARGET MARKET FOR FAST FOOD After evaluation of various
segments, KFC has decided to target the market of Urban and Sub-urban Areas of
India. Product usage People are educated and they want variety in their diet.
Normally people of rural areas dont take fast food. On the other hand people of
urban areas take fast food. Income of the people of urban areas is normally high
and they can afford to purchase such products, which are slightly higher in price as
compared to prevailing prices of local food in the market. People of Urban Areas
are more quality conscious than the people of Rural Areas. In Urban Area there
lived people from every walk of life and profit generation is easier than in Rural
Areas. Population density is higher in Urban Areas as compared to Rural Areas, so
the numbers of customers are more in Urban Areas.
Page | 61
Current target market Segmentation
KFC has divided the market of India into distinct groups of customers with
different demands, tastes and behavior who require separate products or marketing
mix. In India the niche marketing is being used for particular classes of people.
They have made segments of the market on the following bases.
Demographical
Behavior
Geographical
By using these three bases they segmented the market as under.
DEMOGRAPHICAL BASIS
In demographics their first segment is consisted of theincome factor i.e. high

income, average income and lowincome.
BEHAVIOR
In behavioral aspect they segmented the market on thebasis of quality, taste and
price. Following are the differentpossible segments in this regard. Taste conscious,
Quality conscious, Class conscious, Combination of price and quality.
GEOGRAPHICAL BASIS
On the basis of the geographical factor we have divided ourmarket in three main
segments.UrbanareasSub urban areas.
Page | 62
CHAPTER 5
CASE STUDY
Abstract:
The case highlights the ethical issues involved in Kentucky Fried Chicken's (KFC)
business operations in India. KFC entered India in 1995 and has been in midst of
controversies since then. The regulatory authorities found that KFC's chickens did
not adhere to the Prevention of Food Adulteration Act, 1954. Chickens contained
nearly three times more monosodium glutamate (popularly known as MSG, a
flavor enhancing ingredient) as allowed by the Act. Since the late 1990s, KFC
faced severe protests by People for Ethical Treatment of Animals (PETA), an
animal rights protection organization. PETA accused KFC of cruelty towards
chickens and released a video tape showing the ill-treatment of birds in KFC's
poultry farms.
However, undeterred by the protests by PETA and other animal rights

organizations, KFC planned a massive expansion program in India.
Issues:
Understand the significance of cultural, economic, regulatory and ecological

issues while establishing business in a foreign country
Appreciate the need for protecting animal rights in developed and developing
countries like India
Page | 63
Understand the importance of ethics in doing business
Examine the reasons for protests of PETA
Identify solutions for KFC's problems in India.
Protest Against KFC
On August 20, 2003, a five-foot tall chicken complete with an ensemble of feathers
and beak hobbled on a pair of crutches outside Kentucky Fried Chicken's (KFC)
Indian outlet in Bangalore.
The chicken was brought by PETA (People for Ethical Treatment of Animals)
activists, who carried placards reading, "Quit India" and "Stop Playing Fowl" (a
pun on "Foul"). The chicken was placed at the centre and a peaceful protest was
held against the alleged ill treatment of birds in KFC's poultry farms. Media
persons were called to give the demonstration a wide coverage (Refer Exhibit I for
a visual on the protest by PETA activists).
Explaining the rationale behind the protest, BijalVachcharajani, special projects

coordinator of PETA, said, "Ours is the land of Gandhi. Just as 61 years back our
leaders gave a call for colonizers to quit India, we too are saying we will not
tolerate cruel multinationals."5
Business Ethics Case Studies | Case Study in Management, Operations, Strategies,

Business Ethics, Case Studies
Page | 64
On the 61st anniversary of the 'Quit India' movement,6 PETA India wrote a letter
to the Managing Director of Tricon Restaurant International, the parent company
of KFC, asking them to close their sole KFC outlet in India.
They got no reply. PETA activists decided to protest against KFC by carrying
crippled chicken, which represented the birds suffering in the KFC's farms. PETA
claimed that after two years of intensive campaigning to increase animal welfare
standards in poultry farms, other foreign fast food restaurants operating in India
like McDonald's7 and Burger King8 had improved the treatment of animals
specially raised and slaughtered for food.
Only KFC had not acted. Though PETA had organized other protests earlier, the
crippled chicken campaign became the precursor for more intensive protests.
PETA's was one of the many shows of protest against KFC's Indian outlet.
Background Note
KFC was founded by Harland Sanders (Sanders) in the early 1930s, when he
started cooking and serving food for hungry travellers who stopped by his service
station in Corbin, Kentucky, US.
He did not own a restaurant then, but served people on his own dining table in the
living quarters of his service station. His chicken delicacies became popular and
people started coming just for food.
Kentucky Fried Chicken was born. Soon, Sanders moved across the street to a
motel-cum-restaurant, later named 'Sanders Court & Cafe,' that seated around 142
people.
Page | 65
Over the next nine years, he perfected his secret blend of 11 herbs and spices and
the basic cooking technique of chicken. Sanders' fame grew and he was given the
title Kentucky Colonel by the state Governor in 1935 for his contribution to the
state's cuisine.

Sanders' restaurant business witnessed an unexpected halt in the early 1950s, when
a new interstate highway was planned bypassing the town of Corbin. His restaurant
flourished mainly due to the patronage of highway travellers.
The new development meant the end of this. Sanders sold his restaurant operations.
After settling all his bills, he was reduced to living on a meagre $105 social
security cheque. But Sanders did not lose hope. Banking on the popularity of his
product and confident of his unique recipe for fried chicken, Sanders started
franchising his chicken business in 1952. He called it Kentucky Fried Chicken. He
travelled the length and breadth of the country by car, visiting as many restaurants
as possible and cooking batches of chicken. If the restaurant owners liked his
chicken, he entered into a handshake agreement that stipulated payment of a
nickel9 for each plate of chicken sold by the restaurant. By 1964, Sanders
franchised more than 600 chicken outlets in the US and Canada.
Page | 66
KFC's Entry in India
Foreign fast food companies were allowed to enter India during the early 1990s
due to the economic liberalization policy of the Indian Government. KFC was
among the first fast food multinationals to enter India.
On receiving permission to open 30 new outlets across the country, KFC opened
its first fast-food outlet in Bangalore in June 1995. Bangalore was chosen as the
launch pad because it had a substantial upper middle class population, with a trend
of families eating out. It was considered India's fastest growing metropolis in the
1990s. Apart from Bangalore, PepsiCo planned to open 60 KFC and Pizza Hut
outlets in the country in the next seven years. However, KFC got embroiled in
various controversies even before it started full- fledged business in India. When
the issue of granting permission to multinational food giants to set up business in
the country came up for discussion in the Indian parliament, some members from
the opposition parties were vocal in their displeasure.
Problems for KFC
From the very first day of opening its restaurant, KFC faced problems in the form
of protests by angry farmers led by the Karnataka RajyaRyotaSangha (KRRS).
The farmers leader, Nanjundaswamy, who led these protests, vehemently

condemned KFC's entry into India, saying that it was unethical to promote highly
processed 'junk food' in a poor country like India with severe malnutrition
problems. Nanjundaswamy expressed concern that the growing number of foreign
fast food chains would deplete India's livestock, which would adversely affect its
agriculture and the environment. He argued that non-vegetarian fast-food
restaurants like KFC would encourage Indian farmers to shift from production of
Page | 67
basic crops to more lucrative varieties like animal feed and meat, leaving poorer
sections of society with no affordable food. KRRS held a convention on November
01, 1995 to protest the entry of fast food multinationals and the Westernization of
local agriculture.
The Aftermath
By late 2003, PETA further intensified its campaign against the cruel treatment
meted out to chickens by KFC through protests at regular intervals. Celebrities like
Anoushka Shankar, daughter of the legendary sitar maestro Ravi Shankar, directly
supported the cause of PETA.
Anoushka, a sitarist herself, wrote a letter to the top management of PepsiCo

condemning the continued cruelty of KFC in spite of repeated requests of PETA.
The organization also had the support of other celebrities like the famous cricket
player Anil Kumble (based in Bangalore), popular Indian models like
AditiGovitrikar, the late Nafisa Joseph and John Abraham, who promoted
vegetarianism. Film actresses like RaveenaTandon and Ameesha Patel also took up
the cause of animal abuse. Undeterred by the continued protests, KFC added three
more outlets to its existing one at Bangalore. KFC also announced a major
expansion programme for 2005. SharanitaKeswani (Keswani), KFC's Marketing
Director, said that as the retail business was poised for a boom in India, they
considered it the right time for expansion.

Page | 68
Feeling positive about the flourishing malls in all big cities, Keswani revealed that
this time KFC planned to have a presence in prime locations or in a mall where
turnout would be assured.
The company aimed at targeting cosmopolitan cities like Chandigarh, Pune,

Kolkata, Chennai and Hyderabad, where mall culture was fast developing.
PepsiCo also decided to concentrate on the expansion of KFC since its other brand,
"Pizza Hut", had successfully established a strong foothold in India.
Vegetarianism was predominant and was a way of life in India. Many people ate
non-vegetarian food only occasionally and avoided it during festivals or religious
occasions.
Exhibits
Exhibit I: Protests by PETA Activists
Exhibit II: Definition of Adulterated Food
Exhibit III: KFC's Cruelity, Camera Shots
Exhibit IV: PETA'S Fact Sheet of KFC's Cruelty
Exhibit V: Relevant Provision of the Animal Welfare Legislation
Exhibit VI: KFC's Poultry Welfare Guidelines
Page | 69
BIBLOGRAPHY
www.kfc.com
www.google.com/wikipedia
www.encyclopedia.com
Page | 70

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UNIVERSITY OF MUMBAI

ACADEMIC YEAR: 2014 2015

Dr. VEENA PRASAD

N.R SWAMY COLLEGE OF COMMERCE & ECONOMICS

SMT. THIRUMALAI COLLEGE OF SCIENCE

337, SEWREE WADALA ESTATE,

WADALA, MUMBAI 400 031.