International Marketing

Group Assignment
Assignment Topic KFC failed in mutual launch in India but the same product became a big hit in relaunch. Analyse the critical success factor in marketing strategy. Shrikant Mulay Zoeb Eisa

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Date: 20th April, 2012

International Marketing Assignment

Table of Contents
Introduction of Company .............................................................................................................................. 2 Values of KFC................................................................................................................................................. 3 Time-Line....................................................................................................................................................... 4 KFC Current Scenario in INDIA ...................................................................................................................... 5 KFCs Entry in INDIA in 1990s.................................................................................................................. 6 Issues/Problems Faced By KFC in 1995 ......................................................................................................... 7 Critical Success Factors that made it successful Post-Launch ...................................................................... 8 PESTLE Analysis ......................................................................................................................................... 8 MARKETING STRATEGIES OF KFC .............................................................................................................. 9 Promotion: .............................................................................................................................................. 10 Sales promotion .................................................................................................................................. 10 Advertisement..................................................................................................................................... 10 Place .................................................................................................................................................... 11 Pricing Strategy ................................................................................................................................... 11 Strength of KFC ................................................................................................................................... 11 Segmentation, Targeting and Positioning ........................................................................................... 12 Value Proposition Triangle Current Scenario:..................................................................................... 14 Recommendations: ..................................................................................................................................... 15

International Marketing Assignment

Introduction of Company
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, timestrapped 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.

International Marketing Assignment

Values of KFC

Focus all our resources to our restaurants operation because that is where we serve our customers.

Reward and respect the contributions of each individual at KFC.

Expand and update training with time and be the best we can be and more.

Be open, honest and direct in our dealings with one and other.

Commit ourselves to the highest standard to the personal and professional integrity at all times.

Encourage new and innovative ideas because these are the key to our competitive growth.

Reward result and not simple efforts.

International Marketing Assignment

Time-Line
12/16/1980 Colonel Harland Sanders, who came to symbolize quality in the food industry, dies after being stricken with leukemia. Flags on all Kentucky state buildings fly at half-staff for four days. 1982 Kentucky Fried Chicken becomes a subsidiary of R.J. Reynolds Industries, Inc. (now RJR Nabisco, Inc.) when Heublein, Inc. is acquired by Reynolds. 1986 PepsiCo, Inc. acquires KFC from RJR Nabisco, Inc. 1997 PepsiCo, Inc. announces the spin-off of its quick service restaurants - KFC, Taco Bell and Pizza Hut - into Tricon Global Restaurants, Inc. 2002 Tricon Global Restaurants, Inc., the world's largest restaurant company, changes its corporate name to YUM! Brands, Inc. In addition to KFC, the company owns A&W All-American Food Restaurants, Long John Silvers, Pizza Hut and Taco Bell restaurants. 2006 More than a billion of the Colonel's "finger lickin' good" chicken dinners are served annually in more than 80 countries and territories around the world. 2007 KFC proudly introduces a new recipe that keeps the Colonel's 11 herbs and spices and fingerlickin' flavor, but contains Zero Grams of Trans Fat per serving thanks to new cooking oil. 2008 The Colonel has a new look! KFC updates one of the most recognized, respected and beloved brand icons with a new logo. The new logo depicts Colonel Sanders with his signature string tie, but for the first time, replaces his classic white, double-breasted suit with a red apron. The apron symbolizes the home-style culinary heritage of the brand and reminds customers that KFC is always in the kitchen cooking delicious, high-quality, freshly prepared chicken by hand, just the way Colonel Sanders did 50 years ago. 2009 KFC introduces Kentucky Grilled Chicken - a better-for-you option for health conscious consumers who love the flavor of KFC. Kentucky Grilled Chicken has less calories, fat and sodium than KFCs Original Recipe chicken, without sacrificing the great taste of KFC.

International Marketing Assignment

KFC Current Scenario in INDIA

KFC is the worlds No.1 Chicken QSR and has industry leading stature across many countries like UK, Australia, South Africa, China, USA, Malaysia and many more. KFC is the largest brand of Yum Restaurants, a company that owns other leading brands like Pizza Hut, Taco Bell, A&W and Long John Silver. Renowned worldwide for its finger licking good food, KFC offers its signature products in India too! KFC has introduced many offerings for its growing customer base in India while staying rooted in the taste legacy of Colonel Harland Sanders secret recipe. Its signature dishes include the crispy outside, juicy inside Hot and Crispy Chicken, flavorful and juicy Original Recipe chicken, the spicy, juicy & crunchy Zinger Burger, Toasted Twister, Chicken Bucket and a host of beverages and desserts. For the vegetarians in India, KFC also has great tasting vegetarian offerings that include the Veg Zinger and Veggie Snacker. In India, KFC is growing rapidly and today has presence in 21 cities with close to 107 restaurants.

International Marketing Assignment

KFCs Entry in INDIA in 1990s

KFC was the first fast food multinational to enter India, after the economic liberalization policy of the Indian Govt. in early 1990s. KFC received permission to open 30 new outlets across the country. KFC opened first fast food outlet in Bangalore in June 1995 by targeting upper middle class population. 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. PepsiCo planned to open 60 KFC and Pizza Hut outlets in next 7 years in the country. However, KFC got embroiled in various controversies even before it started full- fledged business in India.

International Marketing Assignment

Issues/Problems Faced By KFC in 1995

Protests by farmers led by the Karnataka Rajya Ryote Sangha (KRRS) & the farmers leader was Nanjundaswamy who used the term junk food against KFC. Protests by Ecologist. Protests by PETA . Support of celebrities in against of KFC Non-Conformity with food products regulations Govt. was criticized for granting permission to multinational food giant Threat to domestic business Nutritionists highlighted the high rates of obesity, hypertension, heart disease and cancers Not adding the flavors and spices in the KFC Menu which Indian People like.

"Each bird whom KFC puts into a box or a bucket had a miserable life and a frightening death. People would be shocked to see our footage of a KFC supplier's employee who walks through a barn, carelessly lighting lamps and letting flames fall on the terrified birds. The air inside these filthy barns reeks of ammonia fumes, making it difficult for the birds to breathe. No one with a grain of compassion should set foot in KFC." - Ingrid Newkirk, Director, PETA. "The chicken they serve is full of chemicals, and the birds are given hormones, antibiotics and arsenic chemicals to fatten them quickly." Nanjundaswamy From the very first day of opening its restaurant, KFC faced problems in the form of protests by angry farmers led by the Karnataka Rajya Ryota Sangha (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 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.

International Marketing Assignment

Critical Success Factors that made it successful Post-Launch

PESTLE Analysis
Political: India is liberally opening doors for international fast food joints. Positive Technological: Enough enabling technologies available Positive Economic: An ever growing middle class with increasing purchasing power Positive Legal: Franchising models available and working successfully in India Positive Social: Women are moving out of kitchen to offices. A lot of Indians are veggies, so the menu has to change. Positive Environmental: Activists against killing of animals like PETA can create trouble Watch Out When KFC came to India in 1995, it had to shut down because of the controversy about their handling of poultry.

International Marketing Assignment

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.

International Marketing Assignment

Promotion:
Sales promotion

For the sales promotion KFC introduced their goods like watches and keychain to the customers.

Advertisement The advert titled Pool was done by OGILVY & MATHER, New Delhi advertising agency for KFC ZINGER BURGER (KFC Company) in INDIA. It was released in the June 2009. Business sector is Fast food outlets & restaurants.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 ones mind. KFC and its new company jingle, finger lcikin good is a frequent announcement on televisions, billboards, flyers and radio. The concept of showing a normal customer deeply involved in devouring his piece of chicken usually turns on the drool factory in everybodys mouth and makes them rush to the nearest KFC. In India where chicken lovers are plenty abound these ads featuring normal people connect instantly and create a rush at their outlets. Using the following methods KFC spreads its message of finger licking good chicken. One of KFC's latest 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. Using Reminder advertisements KFC stimulates repeat purchases of its products. The company anthem finger licking good is just a wake up call to the consumer to remind them how good they felt the last time they ate KFC chicken.

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International Marketing Assignment

Place

Placement of outlets
Due to KFC placing itself close to schools, colleges, cinemas and markets which are mostly populated by the young and those who are in a hurry, KFC enjoys a large number of footfalls every day. In addition, they also have outlets close to non-vegetarians.

Pricing Strategy KFC globally enters the market using market skimming. Their products are priced high and target the middle to upper class people. Gradually they trickle down the prices focusing on the middle to lower class people to penetrate both sides of the market. KFC price their product keeping different points in view. They adopt the cost base price strategy. Pricing of the product includes the govt. tax and excise duty and then comes the final stage of determine the price of their product. The products are bit high priced according the market segment and it is also comparable to the standard of their product. In the cost based method we include the variable and fixed cost.

Strength of KFC

Goodwill and reputation: The Company certainly has earned a good name and reputation by its previous products and services in the market. It is even more recognised in other markets outside India, where the company is among the leading fast food giants. The brand is recognised and trusted in India for its quality products, price, and customer service. It therefore has a good head start and enjoys a good chance of becoming a leader in Indian fast food industry. Employee Loyalty: Employee Loyalty is one of the major strengths of KFC. The turnover rate in the company is amongst the lowest in the industry. Customer Loyalty: Customer base remained loyal to the KFC brand because of its unique taste. KFC has continued to dominate the dinner and take out segment of the Industry. Ranks highest among all chicken restaurant chains for its convenience and menu variety. It generates $1B revenue each year.

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International Marketing Assignment

Segmentation, Targeting and Positioning:

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 the income factor i.e. high income, average income and low income.

BEHAVIOR In behavioral aspect they segmented the market on the basis of quality, taste and price. Following are the different possible segments in this regard.

Taste conscious Quality conscious Class conscious Combination of price and quality

GEOGRAPHICAL BASIS
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International Marketing Assignment On the basis of the geographical factor we have divided our market in three main segments. Urban areas Sub urban areas Profile criteria: 1. Gender: KFC is for each gender both male and female. 2. Income: Everyone can use the KFC service upper and middle class . 3. Age: age limitation for using this product above 15 4. Occupation: By profession also everyone can use this product means businessman student workers and other peoples. 5. Education: It has no need more education that why the person who know something can easily enjoy with this product. 6. Family life cycle: KFC is suitable in every stage of life like single married couple and also those who have children can use this product. 7. Lifestyle: This product is used in every level of social class like upper, middle class. 8. Attitude: When the customers once buy this product after that they can use the product continuously. 9. Purchasing decision: Often KFC changes the purchasing decision of customers because of its good attributes. 10. Geographic region: Geographically KFC is used in every part of the country as well as all over the world.

Product positioning Customer perceive this product as a unique product that other are not giving . Attitudes The attitudes of the public is very good people like our this new product like others. Purchasing process: Many people come from home to eat this, and some make impulse decision as they see it.
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International Marketing Assignment

Value Proposition Triangle Current Scenario:

KFCs Extensive Menu/Taste No of Outlets Customer Service

Competencies
Patented recipes
Brand Equity

Customer centric culture

Ensuring superior dining experience by offering a wide range of specialized recipes, wherever you go!

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International Marketing Assignment

Recommendations:
Engage is CSR activities related to animals & environment. Work on the image of a healthy fast food chain through advertising Introduce new recipes suited to local taste Introduce cheaper items in the menu Introduce healthier recipes The company should be able to use an ethical management strategy that will uplift the image of the company. Uses of marketing knowledge, concepts, and techniques as well as with the social consequences of marketing policies, decisions, and actions Every business organization should understand the importance the culture, regulatory & ecological issues in different countries.

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