Thursday, 3 May 2012

Marketing Mix for Kentucky Fried Chicken (KFC)


Question 1: Describe the current marketing mix for the KFC

     KFC or is founded and also known as Kentucky Fried Chicken, is a chain fast food restaurant based in Louisville, Kentucky in the United States of America. KFC is a brand on operating segments, termed a concept ‘Yum’! Brand since 1971 when that company was founded as Kentucky Fried Chicken by Colonel Harland Sanders in 1952 though the idea of KFC fried chicken goes back in1930. Colonel Sanders have become a well known personality throughout thousand of KFC restaurants or outlets worldwide. Quality, service and cleanliness (QSC) represents the most critical success factors to the KFC’S global success. Food, fun and festivity is the success and what is KFC all about. Leading the market since the inception, KFC provides the ultimate chicken meal for the chicken lovers all over the world. KFC has more than 11,000 restaurants or outlets more than 80 countries and territories around the world as a part of a  new corporate re-banding program.

     What is marketing mix? What is the marketing mix for KFC? Marketing mix is generally accepted as the use and specification oh the 4p’s describing the position of a product in the market place. The 4P’s are Product which is the goods and service, Price, the value and product, Promotion where it aware the people about the product and Place where the distribution of the product occurs. The marketing mix of KFC contains all the 4P’s. It contains everything KFC do it to influence the people and demand for their products.

     The first and then most important thing that a company need to have is the ‘P’, Product. A product is anything that can be offered to a market that might satisfy a want or a need. KFC’S product planning is classified as consumer product as it has no intermediate. It offer special goods and the stock turnover of KFC is very high. Of course the price and the quality of the product is always compared. KFC’s product includes goods such as chicken, burgers etc and services such as cleanliness, quick service and parties. Let talk about their current product strategy, KFC was launched as an innovative product. KFC has got one line but later they introduced product in the same line to protect their market share. New product ideas are generated from customer services via comments card and gallops survey which is thru mystery shoppers. KFC have a quality assurance department that decides the new product innovation. Q.A department prepared screening of new ideas and products feasibility report. This department does the technical evaluation, whether it is practical to produce the new product or not. KFC’s products are tested externally by offering trials to customers by giving them free samples. KFC adds new product in its present assortment based on their competitors, product’s adequate demand, the satisfaction of the key financial criteria and its compatibility with environment standard. KFC’S product line includes all chicken based products, burgers such as Colonel burger, Zinger burger and Alaskan fish burger, Combo’s such as chicken meal and family meal, desserts and beverages such as ice-cream and tarts and of course some side orders such as rice, soup, etc.

    Product mix strategy of KFC is in relation to its competitors. KFC has a head-on competitor with McDonalds. Wherever McDonald places their product; KFC goes there as well. Locally in Malaysia KFC face a close competition with brands like Burger King, Marry Brown, The chicken rice shop, Secret Recipe and many more. The product mix strategy of KFC also in relation to attribution and place & prices, where the brand of KFC is strong that it is the attribute to itself and its product are based on high prices and high quality.

     KFC has several ways to expand their product. The first one is the Line Expansion. Line expansion is introducing new meal. The second is Alteration of existing product where the Quality Assurance department do it. The department decides which product should be sold and when seasonal product such as rice and soup should be offer and sell. The third ways to expand their product is via Functional Modification, for this modification KFC has moved to masses rather than the original recipe like ‘Hot and Spicy’ recipe. Market entry was not a big problem for KFC as it is a well known international brand. In that stage they did promoted through their original or own brand name. KFC also has their packaging system. They make their own disposal packaging.  KFC also does family packaging and they use paper material for packaging to avoid health hazards and environmental pollution. KFC also does brand labeling. Some of its product also have informational labels such as ‘halal’ and chicky meals.

     The second ‘P’ from 4P’s is the Price. Price is the any amount of money that customers have to pay while purchasing the products. More broadly, price is the sum of all the values that consumers exchange for benefits of having or using the products or services. In introduction stage KFC entered the market using market-skimming strategy. Their product were high price and targeted only to the upper class community. But now, they trickle down and focusing on all the community level to penetrate the market. KFC also follows one price strategy. Price is for its product is determined according to the rates of the raw material and policies of the government. The political and legal forces often affects the policies of KFC and eventually results in change of price that is due to imposing of taxes. Comparison can be done. We can compare the price of KFC product with McDonalds, Marry Brown, Pizza Hut, Domino and many other fast food restaurants. If the competitors provides the same product at a lower price then the organization usually lower the price of its product too. In the case, KFC’s fried chicken is the main selling points and controls a monopoly over the fast food markets. It prices the burger, French fries, soft drinks and many other KFC’s product.

     KFC has a unique pricing strategy that falls solely on their product lines. Their ‘Value meals’ fall into the category of Product Line Pricing, where there is a range of product or services. The pricing reflects the benefits or part of the range. When KFC first began to break into the markets, they ran a large market campaign in order to gain some market share in the industry. KFC prices their product keeping different point of view. They adopt the cost pricing strategy and pricing out the product includes the government tax and excise duty and then comes the final stage of determines the price of their product. The products of KFC are a bit higher priced according to the market segment and it is also comparable to the standard of their product. They also include the variable and fixed cost in their cost base method. So as conclusion, I can say that, KFC charges high prices, offer different coupons, KFC targeted all level of community, no clear policy for discounts and KFC sells their experiences on high rates and high revenue due to best strategies.

     The third ‘P’ is the Place. Place refers to how the product gets to the consumer. For example point-of-sale placement or retailing. This third has also called as placement, referring to the channel by which a product or service is sold either online or retail, which geographic region or industry, to which segment either young, adults, families, business people, etc. It is also referring to how the environment in which the product is sold an can affect the sales. KFC has only one channel distribution. Its only distribute its product directly to the consumer and no need of middleman. It does distribution of consumers good directly to the consumer. KFC also does distribution of services to the consumer like parking, sitting, home delivery, etc. What is the target area strategy for KFC? The target area strategy of KFC is free home delivery, where they provide free home delivery to offices and homes. They also target to those who experience hectic life style. Due to some people hectic lifestyle, the fast food concepts as KFC saves times of preparing food and give them a full meal quickly. KFC place their outlets in strategic areas such as college, schools, offices urban places or any other market are mostly populated by youngsters and some adults. They place it strategically so that KFC can pleasure their consumers with their products. KFC enjoys large number footfalls every day. In addition KFC also have many outlets in one district. KFC works on the flow of good operation techniques. Good operating manager leads to good team selection, good services, good targets and good revenue through training, incentive based targets, recognition for good work, performance based bonus and motivated promotion. KFC has corporate vertical marketing system because it is centrally owned by its subsidiary Yum Brand. KFC is affected the geographic distributions. They have few outlets in some region and their competitor is McDonalds. The unit value of the item is comparatively lower than McDonalds. KFC has a well-equipped sitting area for the consumers and ‘chicky’ area in some outlets.

     The last ‘P’ is Promotion. Promotion is the method to inform and educate the chosen target audience about the organization and its product. KFC promotion strategy is the logo itself. The logo features Colonel Harland Sanders that is one of the best logo in the world has created its name as a standard in the market. The logo of the smiling Colonel is probably one of the most recognized faces in the world and instantly brings the image of fried chicken to one’s mind. Today the Colonel’s spirit and heritage are reflected in KFC’s brand identity. There are several way KFC promote its product. KFC finds most of the meanings and survival through promotions. Promotion is the main tool to bring all chicken lovers attention toward KFC.

     Advertising is the most fundamental way KFC promote its products. KFC, by its advertisements derives the desire in their customer to come and enjoy their meal. KFC spend 2% out of its profits on advertisement and use print media and most recently doing internet advertisements marketing to promote their products. The advertising media involve newspaper, pamphlets, billboards, television, radio and internet. KFC also do institutional advertising to stimulate demand. When KFC offers new product then it does product advertising. KFC’s to advertising act as magnet to drive the customer to KFC.

     Sponsorship is another way to strengthen on organization image. KFC’s sponsor’s many NGO’s and other social welfare organization. They also offer different deals according to the season and occasions. KFC is currently the sponsor of the Australian Cricket Team. KFC have joint sale promotion with different companies like HP, Philips, Value Meals. Pepsi Cola, ARY Gold digital and World Call Internet Services. KFC uses premiums, exhibits, coupons and entertainment as a tool to further enhance it sales. KFC also does it promotions in parties. I come to conclusion that KFC has a good product as far as chicken items are concerned. But they have to increase other varieties to attract the customers. And they must targets the children, as McDonald’s targeting by making a play land because children are the mains source and important ones to push their parents to go to their favorite restaurants. And one more aspect for KFC is that it must also reduce their prices to compete their competitors like McDonald, Crisps Pins and Pizza Hut. The largest threat KFC is faced with is the restaurant industry as a whole. The consumer continues to have many choices when it comes to fast food restaurants.











Question 2: Change in lifestyle has influences consumer’s eating habits. In your opinion, does the company need to suit the changes and how they can be fit tin this situation.

     Does change in lifestyle influence the consumers eating habit? As for me yes it is. The change in a person lifestyle changes a person eating habits and there are various factors for these changes. All human eat to survive. They also eat to express appreciation, for a sense of belonging, as a part of family customs and for self –realization. People eat according to learned behaviors regarding the etiquette, meal food combinations and portion size. A meal or food is is usually defined as a assumption of two or more food in one structured setting at a time. A common eating habit is three meals which is breakfast, lunch and dinner per day with snacks between the meals. The component of food varies across the cultures. For example Indian that practice Hinduism cannot consume beef meat meanwhile the Muslims cannot consume pork meat.

     The factors that really influence one’s eating habits is one’s personal preferences. Every individual has unique likes and dislikes concerning foods. These preferences develop overtime, and are influenced by personal experiences such as encouragement to eat, exposure to eat, family customs and ritual, advertising and personal views. For instant in French fries are served in Malaysia’s KFC outlet if the customers buys it as a add-on snacks, but in Singapore’s KFC outlets French fries is one of the snacks that served for any purchase of at KFC.


     Some consumer of KFC focuses on something that is nutritionally healthy and low fat. So Malaysian KFC outlets realized the trend of living healthier would affects the sales of their fried chicken, so in response to consumer’s demands they have launched ‘Chicken Salad’. It has fewer calories, fewer fat grams and less sodium. The investment that KFC help them to be more competitive in producing new menus.

     So the companies need to suit the changes that occur and they can use several ways to fit this change. The can use the last ‘P’ or Promotion to fit this change. KFC can use several type of mass media such as newspaper, television, radio, internet, pamphlets and many more mass media to promote and educate the chosen customers. They also can use the word ‘Trend’ as a path to promote and educate the chosen customer.

      KFC can create a new propaganda such as “Healthy Food For All” and educate them about the new trend as stated by the Malaysian Ministry of Health. The company must make sure to compensate the customers to consume the new product and generate new product in thru Customer Service where comments card are given to customer to evaluate and Gallops Surveys which is via mystery shoppers. KFC also can say use the newly trend where organic food is gaining popularity around the world. They can use this reason to respond to their customer if their customer questioned them. They also need to still continue produce their previous product to gain more attention from all types of customers.

Question 3: Challenges faced by the company such as war in other countries affect their activities. In your opinion, how company can gain back their customer’s trust and loyalty?

     How a company gains back their customer’s loyalty and trust when war? As for me, although war is going on, it is not going to occur all part of the country. It only occurs in certain place where they can destroy the each other port. So for me the business will still move on but will face some problems to gain customer eventually profit. A company can gain back their customer loyalty and trust via Building again the existing Company’s Brand. Branding is actually more than just a business buzz word. The Marketing Association defines a brand as a name, term, sign, symbol or design or a combination of them to identify the goods and services of one seller or a group of seller and to intermediate them from those other sellers. Therefore, branding is not about getting your target market to choose the company over the competition but it is about getting your prospect to see you as the only one that provides a solution to their problem. The main objective of branding is to deliver the message clearly, confirms the company’s credibility, connects the company’s target prospect emotionally, and motivates the buyer and concentrate users’ loyalty. To succeed in branding, the company must understand the needs and wants of the customers and prospects. The company must do this by integrating the brand strategies throughout the company at every point of public contact. A strong brand is invaluable as the battle for customers intensifies day by day. It’s important to spend time investing in researching, defining and building the company’s brand is the source of a promise to your consumer. It is a foundational piece in the company’s marketing communications.

     The second strategy is to know the Company’s Customers or Target Prospects. This is because customers or target prospects are not a dime a dozen come with variety of characteristic, desires needs and expectations. It is important or vital to a company to know everything about their target prospects. The company must know from the basic information, name address, tittle and the area of responsibility the customers wants and needs. It is also important to understand and to enhance communication, articulate the company’s preposition and to develop the foundation for trust.

     The third strategy is to Develop a Customer Strategy. Companies must spend a lot of time and money developing the strategic plan for their business, their technology solutions, and operational strategies and rarely develop the customers strategy. Developing a good plan to enhance clients individual experience will result in uncovering areas for improvement and areas where the company excel that may easily translate to another client.

     The fourth strategy is by Educate the Staffs. Educate company’s front lines with your customer knowledge. The characteristic of company’s customers, what they are buying, the promises that were made and train company’s staff on how to not only deliver customer service but how to go over and beyond the basics. They should know how to react in all situations and be empowered to respond to the customers' requests. They should know it is okay to tell the customer that they don't know the answers, but will find out and get right back to them. Customer service is a culture and a theme that must permeate your entire organization
So as conclusion these are the ways to gain back the trust and the loyalty of the customers.

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