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.
