RETAIL MARKETING

FINAL PROJECT

SUBMITTED TO
MR. HANEEF

SUBMITTED BY
MR. NAVEED IQBAL MR. WAQAS AHMAD MR. YASIR SALAMAT & MR. FAHIM ROSHAN SIYAL

CLASS
BBA 5 SEMESTER MORNING
TH

SUBMITTED

ON

FRIDAY, MAY 04, 2007

National University of Modern Languages

We dedicate this report to our Parents and respectable Teachers

ACKNOWLEDGEMENT:

First of all, we would like to offer our eternal thanks to the Almighty Allah who blessed us with the perseverance and the sprit of hard work to complete this project. We are also grateful to our parents for their patience and belief in us. We offer our respectful gratitude to our Retail Marketing course supervisor Mr. Haneef for his guidance & encouragement. We would like to thank all of those people specially the Marketing Manager of KFC Mr. Sheikh Sohaib who helped us through our entire Retail Marketing project.

KFC Group Members

2007 University of Modern Languages May 04TH, National

TABLE

OF

CONTENTS:

Topics covered in this report:

Companys Profile..
..02

EXECUTIVE SUMMARY
KFC Corporation, based in Louisville, Kentucky, is the worlds most popular chicken restaurant chain, specializing in Original Recipe , Extra Crispy
TM

, and Colonels Crispy

Strips chicken with home style sides and five new freshly made sandwiches. Every day, nearly eight million customers are served around the world. KFCs menu everywhere includes Original Recipe chickenmade with the same great taste Colonel Harland Sanders created more than a half-century ago. Customers around the globe also enjoy more than 300 other productsfrom a Chunky Chicken Pot Pie in the United States to a salmon sandwich in Japan. KFC continues reaching out to customers with home delivery in more than 300 restaurants in the United States and several other countries. And in quite a few U.S. cities, KFC is teaming up with other restaurants, Taco Bell and Pizza Hut, selling nearly fifty years ago; Colonel Sanders invented what is now called home meal replacement selling complete

meals to harried, time-strapped families. He called it, Sunday Dinner, Seven Days a Week. Today, the Colonels spirit and heritage are reflected in KFCs brand identity the logo features Colonel Harland Sanders, one of the best-recognized icons in the world. KFC is part of Tricon Global Restaurants, Inc., which is the worlds largest restaurant system with nearly 30,000 KFC, Taco Bell and Pizza Hut restaurants in more than 100 countries and territories.

Mission statement:
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 & other better facilities to people that they want. Now after catching such a marvelous position in the International Market, KFC is introducing a new item Boneless Fried Chicken, with even more attractive and charming taste.

Company overview:
Colonel Harland sanders, born September 9, 1890, actively began franchising his chicken business at the age of 65. Now, the Kentucky fried chicken business he started has grown to be one of the largest retail food service systems in the world. And colonel

sanders, a quick service restaurant pioneer, have become a symbol of entrepreneurial spirit. More than two billion of the colonels finger lickin good chicken dinners are served annually. And not just in America. The colonels cooking is available in more then 82 countries around the world. When the colonel was six, his father died. His mother was forced to go to work, and young Harland had to take care of his three year old brother and baby sister. This meant doing much of the family cooking. By the age of seven, he was a master of a score of regional dishes. Ate age 10, his first job working on a nearby farm for $2 a month. When he was 12, his mother remarried and he left his home near Henryville, Ind., for a job on a farm in Greenwood, Ind. He held a series of jobs over the next few years, first as a 15-year-old streetcar conductor in New Albany, Ind., and then as a 16-year-old private, soldiering for six months in Cuba. After that he was a railroad fireman, studied law by correspondence, practiced in justice of the peace court, sold insurance, operated an Ohio River steamboat ferry, sold tires, and Operated service station. When he was 40, the colonel began cooking for hungry travelers who stopped at his service station in Corbin, KY. He didnt have a restaurant then, but served folks on his own dining table in the living quarters of his service station. As more people started coming just for food, he moved across the street to a motel and restaurant that seated 142 people. Over the next nine year, he perfected his secret blend of 11 herbs and spices and the basic cooking technique that is still used today.

Operations in Pakistan:
KFC (Kentucky Fried Chicken) was introduced in the Pakistani market by the Artal Group of Belgium and although a late entrant, it managed to establish several outlets in Karachi, Lahore and several more areas. After a through survey and analysis KFC opened its first branch in Garden town Lahore five years back. Since then there was no looking back for KFC as it started to earn profits and grow to other different cities. KFC in Pakistan has been shoeing a steady growth and profitability. Some profits were used for team making, uplift of the restaurants etc. KFC believes in providing value for money to its customers. They have high quality standard and they are in concurrence to those prevailing in other countries. They have an international brand name to protect so there is strict implementation of quality standards.

Procurement Issues:

All the raw materials like chicken are bought from value chicken, vegetables from Monsalwa and they use caned fruit for salads. The machinery is all automated and is in conformance to international standards. KFC officials often visit the outlets without giving prior notice in order to check the conformance to quality standards and procedures. Moreover, Food Inspection Teams from Health Ministry visits twice a year to ensure Hygienic Conditions at the Kitchen.

Performance Overview:
KFC has taken advantage of all these excellent investment opportunities that Pakistan offers for franchising and has expanded and penetrated the market a lot. KFC has adapted to the legal and political environment and conditions of Pakistan. The Pakistani culture has also molded the operations of KFC in Pakistan. All the outlets of KFC in Pakistan present Pakistani food culture. KFC has displayed banners that it servers Halal food all over its outlets which represents Pakistani culture. They also offer families deals as the people are very close to their families and like to have General Manager food with them. KFC has also brought (GM) some changes in the culture of Pakistan. Manager The most significant is the way it has changed the eating habits of the local Assistant Manager (I) Assistant Manager (II) population. People now are aware of unhygienic conditions that prevail in Shift In-charge some of local restaurants. And KFC has also brought the idea of self-service in Counter workers Pakistan.
Kitchen workers Guards

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.

Competition:
KFC does not consider Mc Donalds are its direct competitors. As Mc Donalds 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.

SWOT Analysis:Strengths:Weaknesses:Opportunities:Threats:-

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.

There are 4 Ps of Marketing:

1. 2. 3. 4. 1. PRODUCTION PRICING PROMOTION PLACEMENT

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 allover the glob. 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 CrispyTM chicken Hot WingsTM pieces Tender Roast chicken Chunky Chicken pot pie Kentucky Nuggest Colonels Crispy Strips Honey BBQ sandwich Original Recipe Sandwich Tender Roast Sandwich Triple Crunch Sandwich Triple Crunch Zinger Sandwich

BRAND: There are three brands of the KFC: 1) Taco bell 2) Pizza Hut 3) Long john silvers 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 =$1.51 We assume that Fixed Cost is = $6000000000 Variable Cost = $675000000 Profit Margin is Or Mark Up = $225000000(25% of Sales) Per Unit Variable Cost = $675000000 / 5890000000 = $ 0.115 Unit Cost = Variable Cost + Fixed Cost / Chicken pieces Sold = 0.115 + 6000000000 / 5890000000 = 0.115 + 1.02 = $1.135 Now suppose manufacturer wants to earn 25% mark up on sale. The manufacturer mark up 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 they uses the bill boards the major source of advertisement and one of the most important thing that they uses media especially the newspapers to promote their products. They are also creating awareness among the masses about their existing product range as well they tell us about the future product. Marketing efforts to be taken by the restaurant: Paste delivery posters at petrol pumps, flats, colleges, plazas, and departmental stores. Distribution of delivery flyers in residential areas, markets, plazas and institutions (as per the plan) Visit offices and business places.

4.

Placement:

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 also target the Faisalabad and open its branch in D 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 middle class 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.

CONCLUSION
After my research of KFC, 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 McDonalds targeting by making a play land because children are the main 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.