Kentucky Fried Chicken – Management Mission and Values of the Cupola Group

Food, Fun & Festivity, this is what KFC is all about. Leading the market since its inception, KFC provides the ultimate chicken meals for the Chicken Loving Nation. Be it Colonel Sanders secret Original Recipe Chicken or the Hot & Spicy version, every bite brings a YUM on the face. At KFC we proudly say:  KFC has more than 11,000 restaurants in more than 80 countries and territories around the World.

In 1971, Heublein, Inc. acquired KFC, soon after, conflicts erupted between the Colonel (which was working as a public relations and goodwill ambassador) and Heublein management over quality control issues and restaurant.

Mission statement

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KFC is an internationally renowned fast food industry in the world. They have the main ambition to increase & maintain the quality in fast food industry.

Their aim is to capture the fast food market. Basically they want to provide their products to anyone that is why they expending their branches in all over the world. They want to increase their profit through giving maximum satisfaction VISION “Our passion, as a restaurant company, is to put a YUM on people's faces around the world, satisfying customers every time they eat our food and doing it better than any other restaurant company”. still used today. “We Do Chicken Right”

Perfecting its secret recipe of 11 herbs and spices in 1939, KFC has come a long way, with over 10,000 outlets in the world; KFC has maintained its title, for the last 60 years, of being “The Chicken Experts”. Kentucky Fried Chicken has become KFC. Does anybody know why? We thought the real reason was because of the "FRIED" food issue. It's not. The reason why they call it KFC is because they can not use the word chicken anymore. Why? KFC does not use real chickens. They actually use genetically manipulated organisms.

These so called "chickens" are kept alive by tubes inserted into their bodies to pump blood and nutrients throughout their structure. They have no beaks, no feathers, and no feet.  Their bone structure is dramatically shrunk to get more meat out of them. This is great for KFC because they do not have to pay so much for their production costs. There is no more plucking of the feathers or the removal of the beaks and feet.  KFC In Pakistan Presently KFC is branched out in nine major cities of Pakistan (Karachi, Lahore, Rawalpindi, Faisalabad, Multan, Peshawar, Sialkot, Hyderabad, and Islamabad) with 45 outlets nation-wide.

Opening the first KFC outlet in Gulshan-e-Iqbal, Karachi in 1997, and KFC wore the title of being the market leader in its industry. Serving delicious and hygienic food in a relaxing environment made KFC everyone’s favorite. Since then, KFC has been constantly introducing new products and opening new restaurants for its customers. About Cupola Cupola is a Dubai based multinational company involved in several business including, oil gas exploration, plastic cards, retail markets and food franchising. Cupola Pakistan Cupola holds the master franchise rights to operate KFC in Pakistan since 1999.

That was a major difference that when Cupola takes complete Operate in Pakistan that was only 05 Outlets in all over Pakistan, and then now the major difference that Cupola takes 45 Outlets in Pakistan. Apart from fulfilling the commitment of serving delicious, fresh and hygienic food and at the same time providing the customers with the ultimate entertainment; KFC also plays part in the economic development of our country. KFC Facts Presently KFC has provided employment to over 1200 Pakistanis, which adds up to 6000 individuals directly dependent on KFC Pakistan.

The Government of Pakistan receives over Rs. 10 to 11 million per month from KFC Pakistan as direct taxes. 95% of all food and packaging material used in KFC Pakistan is procured locally, which sums up to a purchase of over Rs. 35 million per month. Each new outlet developed by KFC Pakistan costs approximately Rs. 40 million, which is a huge amount for our construction industry. Annual turn over in Pakistan 2. 5 billion.  KFC doesn’t buy its supplies from Pakistan “KFC and Pakistan…Growing Together”

Performance Overview

KFC does not consider Mc Donald’s are its direct competitors. As Mc Donald’s has a limited menu and cater to different segments of society e. g. Mc Donald is catering to lower middle society of Pakistan. Though KFC has faced a little competition from local restaurants but their breakeven in terms of revenue has been done and they are planning to expand further to other cities like Islamabad and Peshawar. Yum! Brands, Inc.

International Presence & Competition

The International Portfolio of 5 leading U.S. Brands give Yum! a distinctive advantage over the single-brand competitors. Customers KFC’s customer market consists solely of the consumer market (Kotler et al 2003). KFC’s products are bought by individuals (males, females, singles, and families).

Therefore, the product range KFC offer should appeal to as many people within this consumer market as possible, to ensure that the maximum amount of products can be sold. The characteristics of these individuals and a segmentation of them are discussed later in this report. Company KFC is a multinational fast food chain company that has successfully established itself in the Pakistan market. It has a long history, going back to where Colonel Harland Sanders created its distinct recipes. The KFC brand is well known in Pakistan, which makes it a powerful marketing tool to use against competitors. One of KFC's_ advertisements is a commercial advertising its "wicked crunch box meal".

The commercial features a fictional black metal band called "Hellvetica" performing live, the lead singer then swallows fire. The commercial then shows the lead singer at a KFC eating the "wicked crunch box meal" and saying "Oh man that is hot". In 2007, the original, non-acronymic Kentucky Fried Chicken name was resurrected and began to reappear on company marketing literature and food packaging, as well as some restaurant signage.

Organizational Structure

The KFC adopted traditional structure for their outlets that other food chains are following. There is one General Manager for Pakistan.

The outlet is leaded by the Manager, assisted by two assistant managers, and one shift in-charge for each shift, that supervises the performance of counter workers and kitchen workers.

Satisfied customers and profitability follow.  Respond To The Voice Of The Customer…Not just listen.  The Restaurant General Manager Is Our #1 Leader…Not senior management.  Run Each Restaurant As If It’s Our Only One…Avoid the trap of the averages. Recognition Shows You Care…People leave when you don’t.Quality In Everything We Do…Especially the food. Refocused international strategies

Competitive marketing strategy

Distribution strategy

Lesser production costs Building healthy customer relationships Efficient hierarchical structure within the company starting from area manager till the food service team membersEvery single chicken goes through Quality Assurance Lab.

Porters Five Force Analysis Entry

For the current Pakistanmarket for fast food, it is not difficult for a fast food restaurant to enter the market.

However, it would be extremely difficult to take over already running major fast food chains' dominancy in Pakistanor even make a significant amount of profit. While there are enough people in urban Pakistan for any restaurant to survive, KFC holds the first-mover advantage into the 'non-veg food specialty food segment' that gives them free reputation. Customers, especially children who are used to going to KFC as a treat or reward from their parents or grandparents, are not going to want to go to other restaurants they’ve never heard of.

The brand name is already established. Also, there is already a large variety in the numerous western-style dining places in Pakistan, such as McDonald’s, Pizza Hut, Domino's and Subway, and any new fast-food entrants would just be presenting something very similar to what’s already there. While small Neighborhood restaurants generally have low barriers to entry, these are the barriers to entry for similar restaurant businesses to enter the fast-food chain market.

The customers of KFC, especially as individual buyers, have almost no bargaining power because if only one customer threatens to no longer eat at KFC, the store is not going to lower its price because the cost of losing one customer is not very great. The suppliers, like the buyers, have very little bargaining power. In terms of food, KFC, upon its move into Pakistan, urged many of its U. S. suppliers to also extend branches into Pakistan. KFC also began helping local suppliers by giving them technological support to improve their products.

This is a brilliant strategy because the supplies that KFC would otherwise need to import from the  U. S. can now be obtained domestically, and if the U. S. suppliers decide to raise their prices, KFC can easily switch to the local suppliers. This gives us a brilliant strategy. With this strategy, KFC created competition among its suppliers, lowering the supplier bargaining power. In terms of human resources, labor cost is extremely low because the supply of non-skilled workers great exceeds the demand for them.

With so little buyer and supplier bargaining powers, KFC is able to have a very tight control over its prices and expenditures. As mentioned above, there are a few major competitors in the fast-food industry in Pakistanfor KFC, namely McDonald’s, Pizza Hut, Domino's and Subway. The substitute products, in this case, would be burgers, pizza, and sandwiches. Though they are competitors, their primary products differ greatly from each other, in that they sell, chicken, burgers and fries, pizzas, and sandwiches, respectively.

Traditional

Pakistandining, home-cooked meals, and grocery stores with ready-to-eat foods are also substitutes, as families could choose any one of these over fast food for a meal. These substitutes are definitely considered healthy as compared to the fast food chains. Even foods from street vendors count as substitute goods. Unlike what one would expect, KFC has little rivalry with similar fast-food chains in Pakistan. The primary reason is that their core products are different, as in they sell different kinds of fast foods with very different tastes and styles.

For example, if KFC raised its price for chicken by a small amount, Pakistan chicken lovers who may not be as accepting to pizzas (many Pakistanpeople strongly dislike the taste of cheese) are not going to switch to Pizza Hut just because the price for KFC increased. In addition to that, these restaurants have such different target customers that the fluctuation of price for one restaurant is not going to affect the others. For example, a full meal at KFC ranges about Rs. 100, whereas a full meal at Pizza Hut can cost over Rs. 300. The drastic difference in price assures no price competition between these restaurants.

As it is a fairly new product it comes in the category of the Question Mark in the BCG Matrix. It has a low market share thus brings low revenue. KFC is advertising a lot to popularize this product so there is a lot of expenditure on it. This product is individually not bringing any profits and is a cash drain for the company. Company may decide to completely remove this product from the market if it does not do well soon and start bringing in revenue.

Veg Thali comes under this category. Although company had launched this product much earlier, it has still failed to become a success. As KFC is known more for its non-veg food, this also results in low demand for this item. It has a low market share and although low on expenditure (as company does not spend on its promotion), it does not bring in much revenue as demand is low. The product is mostly. It has the highest market share amongst all the other products. KFC Business Strategy KFC fast-food chains are currently under the restaurant division of PepsiCo Incorporated. Some major threats include the changing attitudes of society toward healthier eating habits, KFC has more than 9,800 outlets located in 77 countries.

In marketing, KFC restaurants are not restricted from locating within close proximity of other KFC restaurants. There are two alternative strategies for KFC. The first strategy involves keeping PepsiCo beverage division and snack foods division together, and a divestiture of PepsiCo restaurant division; selling Taco Bell, Pizza Hut, and KFC. Market Strategies: KFC Target Market: KFC targets the young generation, as here in this country the young generation is more towards eating out and is more energetic. It targets the early single segment that is the upper class.

Aggregation Strategy

KFC does not need aggressive marketing or advertising because Brand is strong enough.

Market Segmentation

Previously they were focusing on single segment that was through Niche Marketing by offering “Combo Deals”. Now they are focusing more on other classes as well. They are dealing in masses by introducing value deals; most recently introduced “Zinger Junior”.

Benefits

Colonel’s value combo meals introduced previously were expensive and so there were less sales but through their recent offers, they have increased the sales by offering low prices. Purpose: Inflation highly affects the purchasing power of the customers.

And here the purchasing power of many customers is low. To cover this major segment, they have introduced affordable meals, so that it is in reach of the masses. Want Specification: The people here need a friendly and family restaurant, which must be affordable for them.

Consumer Market Segmentation

• Region: Karachi, Lahore, Rawalpindi, Faisalabad, Multan, Peshawar, Sialkot, Hyderabad and Islamabad
• Geographic: Gulberg: The main Gulberg branch is situated on M. M Alam Road, which covers a wide area and serves a large number of customers. This restaurant faces competition with many top Fast Food restaurants located on the same road.
• Defence: Their Defence Branch in H-Block focuses the potential customers of Defence. Barket Market: This branch covers the area of Model Town, Johar Town, Muslim Town, Garden Town and Faisal Town. It is situated among many offices and banks.
• Cavalry Ground: Shadman: The Shadman branch is located on Jail Road and serves potential customers.
• Thokar Niaz Baig: This restaurant branch serves latent customers.
• Mall Road: Fortress Stadium:

Marketing Mix

Marketing mix consists of 4P’s. It contains everything a firm can do to influence the demand for its product. Their product is classified as consumer product as it has no intermediates. KFC offers specialty goods. The stock turn over of KFC is high. Price and quality of the product is always compared.

Brands Equity

Branding Strategies KFC is marketing the entire output under products own brand. Complementary Branding Packaging Strategies They use paper material for packaging to avoid health hazards and environmental pollution.

Labeling Pricing In introduction stage KFC entered the market using market-skimming strategy. Their products were high price and targeted only upper class. Gradually they trickle down focusing on the middle class to penetrate the market. Also KFC follows one price strategy. Price is determined according to the rates of the raw materials and policies of the Govt. The political and legal forces often affect the policies of KFC and eventually results in change of prices that is due to imposing of taxes. KFC has only one channel of distribution i. e. direct where the goods are transferred to the consumer directly.

KFC has no middlemen. KFC does distribution of consumer goods directly to the consumer. KFC also does distribution of services to the consumer like parking, sitting, home delivery, etc. KFC gets Wheels! KFC launched its first mobile unit, which took the streets of Karachi by storm. The mobile unit has been designed to cater to the needs of those who are on the go, and have little time to stop by at a restaurant. It also provides a unique convenience of enjoying the delicious KFC offering anytime, anywhere, thus making fast food truly fast and convenient. KFC intends to further develop its mobile network nationwide through more such units KFC does intensive distribution on its outlets. (All and everything on every outlet).

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. Today the Colonel’s Spirit and heritage are reflected in KFC’s brand identity. KFC by its advertisements derives the desire in the customer to come and enjoy healthy food in their favorite restaurant. They spend 2% of its profits on advertisement. They use print media and most recently doing televised marketing to promote it products.

Their advertising media involve: Newspapers, Pamphlets, Billboards and Television. KFC does both the primary demand advertising (“Become a Chicken Fanatic”) and the selective demand advertising (e. g. “Zinger Meal”). In its advertising it give informative messages like “Faryad: Keep the city Clean”. KFC does institutional advertising to stimulate demand. When KFC offers new products then it does product advertising. KFC’s ad’s act as counteracts which means to drive the customer to KFC i. e. it uses pull advertising strategy. Unlike McDonald’s, KFC’s promotion is highly decentralized.

It adopts cultural values for their advertisements PSO had made a scheme in which PSO had given the coupons of KFC having 10% off. (1 coupon was given after each purchase of 10 liters of petrol) KFC in its advertisements says; “Nobody does chicken like KFC” “We do chicken right” The message conveyed in the ads is recognition for the brand. KFC does competitive advertisement with its head on competition with McDonalds. Regarding this KFC uses Pricing below competition strategy. KFC sponsor’s many NGO’s and other social welfare organizations like Regular sponsorship to SOS village.

Sponsorships to a plant and life association. They also offer different deals according to the season and occasions.

Quality Assurance

• Food Safety: Chicken & its Products: Locally produced and processed chicken.

Supplied in frozen form Marketing Research and methods to collect information: Marketing research was done before launching the product through different mediums. It was conducted after the survey that mostly students prefer to go to KFC than other people. The second in majority were people who are in services. That covers the majority of this country. Recent Achievement of KFC The Stevie International Business Awards KFC Pakistan was honored to receive the award among 100 countries and 800 participants. The award was presented to Mr. Rangoonwala by Mr. Graham Allan, President, YUM Restaurants International at a recent conference in Prague, Czech Republic.

KFC is a very strong chain of fast food restaurants with more than 10,000 restaurants all over the world. Being in “Maturity Stage” it has high opportunities of introducing its new products and deals. In Future it will be expanding its chain by introducing more outlets in Pakistan as well as in other countries. Believe in value creation. Provide ultimate choice of quick service restaurants for consumers. Won the hearts of millions of Pakistanis

References

1. Yum! Brands, Inc. http://www. yum. com KFC http://www. kfc. com
2. KFC Barkat Market Mr. Shabir (Marketing Manager)

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