SUBMITED TO: SIR KAMIL YOUSUF

SUBMISSION DATE: 5TH-JUN-2010 MARINA

KHAN

SUBJECT: MBR MEHWISH ALI AKBER

ALMAS AMIR ALI

ALINA SHAH

SHAHNAZ KHURSHEED

PROJECT REPORT OF

|NEWPORTS INSTITUTE OF COMMUNICATION AND

ECONOMICS 1
 HYPOTHESIS:

IS KFC IS THE MARKET LEADER IN

FAST FOOD INDUSTRY?

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ECONOMICS 2
LETTER OF TRANSMITTAL
5th JUNE ’2010

Sir Kamil Yousuf

Course Instructor, Methods In Business Research

Newports Institute of Communication & Economics

Kashmir Road, Karachi.

Respected Teacher:
As you requested, here is our report of MBR. In the preparation of this report we have strictly
followed all your instructions and requirements.
The completion of this report are the results of combined efforts of our group, assistance of
Almighty Allah, and lastly all the help that you provided by assigning us this task and assisting
us throughout our report.
This report includes all the necessary details. We have a wonderful Experience and gained so
much from this project.
We hope that this report will fulfill your desired expectations of our group. We are grateful to
you for assigning us this task of responsibility. If you have any query regarding the report than
please let us know. We would be glad to further assist you.
Sincerely,
Marina khan (NI-S8-BBA-0306)
Almas Amir ali (NI-S8-BBA-0301)

Mahwish ali akbar (NI-S8-BBA-0303)

Alina shah (NI-S8-BBA-0308)

Shahnaz Khursheed (NI-S8-BBA-0309)

MBR STUDENTS

NEWPORTS INSTITUTE OF COMMUNICATION AND ECONOMICS

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 EXECUTIVE SUMMARY
KFC Corporation, based in Louisville, Kentucky, is the world’s most popular
TM
chicken restaurant chain, specializing in Original Recipe ®, Extra Crispy , and
Colonel’s Crispy Strips® chicken with home style sides and five new freshly made
sandwiches. Every day, nearly eight million customers are served around the
world. KFC’s menu everywhere includes Original Recipe® chicken—made 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 products—from 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 Colonel’s spirit and heritage are reflected in KFC’s 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 world’s largest
restaurant system with nearly 30,000 KFC, Taco Bell and Pizza Hut restaurants in
more than 100 countries and territories.

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FAST FOOD:

Fast food (also known as Quick Service Restaurant or QSR within the industry
itself) is the term given to food that can be prepared and served very quickly. While
any meal with low preparation time can be considered to be fast food, typically the
term refers to food sold in a restaurant or store with preheated or precooked
ingredients, and served to the customer in a packaged form for take-out/take-away.
The term "fast food" was recognized in a dictionary by Merriam–Webster in 1951.

FAST FOOD HISTORY:

The concept of ready-cooked food for sale is closely connected with urban
development. In Ancient Rome cities had street stands that sold bread and wine. A
fixture of East Asian cities is the noodle shop. Flatbread and falafel are today
ubiquitous in the Middle East. Popular Indian fast food dishes include vada pav,
panipuri and dahi vada. In the French-speaking nations of West Africa, roadside
stands in and around the larger cities continue to sell—as they have done for
generations—a range of ready-to-eat, char-grilled meat sticks known locally as
brochettes (not to be confused with the bread snack of the same name found in
Europe).

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Yum! Brands

Yum! Brands, Inc., based in Louisville, Ky., is the world's largest restaurant company in terms of
system restaurants with more than 37,000 restaurants in over 110 countries and territories and
more than 1 million associates. Yum! is ranked #239 on the Fortune 500 List, with nearly $11
billion in revenue in 2009. Four of our restaurant brands – KFC, Pizza Hut, Taco Bell and
Long John Silver's – are the global leaders of the chicken, pizza, and Mexican-style food
and quick-service seafood categories.

The Yum! System includes three operating segments: U.S., International (Yum! Restaurants
International) and China Division. Outside the United States in 2009, the Yum! System opened
more than four new restaurants each day of the year, making it a leader in international retail
development.

At Yum! we're building a vibrant global business by focusing on four key business strategies:

• Build leading brands across China in every significant category

• Drive aggressive international expansion and build strong brands everywhere
• Dramatically improve U.S. brand positions, consistency and returns
• Drive industry-leading, long-term shareholder and franchisee value

Results for 2009 once again affirmed our consistent record of success with 13 percent Earnings
Per Share (EPS) growth, which marks the eighth straight year we delivered at least 13% growth
and exceeded our 10% EPS growth target. For the full year 2009, we opened more than 1,400
new restaurants outside the U.S. Importantly, we maintained our Return on Investment Capital
(ROIC) of 20% and continued to be an industry leader.

We're proud of the unique culture we've built, one that's filled with energy, opportunity, and fun.
We believe in our people, trust in their positive intentions, encourage ideas from everyone, and
have actively developed a workforce that is diverse in style and background. Yum! is a place
where anyone can, and does, make a difference.

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INTRODUCTION:
KFC is the world largest and most well known chicken restaurant, with chains in
more then 10 thousand locations and worldwide in 80 countries. KFC and its
franchised employees are more than 200 thousand in all over the world.

John Y Brown and Jerry Messy purchased KFC for USA for $2 million in 1964 that
time KFC become a corporation. After five years, Colonel buys first 100 shares of
KFC. In 1986, Pepsi Company purchased KFC. Pepsi company changed the logo from
Kentucky fried chicken to KFC in 1991 and then in 1992 KFC 1000th restaurant
opened in Japan and in 1994 9000th restaurant in china.

KFC is the part of Tricon global restaurant. Tricon global restaurant is the world
largest restaurant group, with in nearly 100 countries around the world, which in
turn was spun off in 1997, and has now been renamed to Yum! Brands. In 1997, KFC
franchised with Gray Mecanza International and started work in Pakistan.
Rawalpindi branch started work in 1999 and in Islamabad in August 2002 and now
in Pakistan; there are 45 outlets nation-wide.

HISTORY OF KFC:
Since 1950’s KFC has grown at a remarkable pace from one road side restaurant
into an internationally renowned restaurant chain and one of the largest chain of
chicken restaurants in the world. But none of this would have happened if it would
not been the hard working and persistence of one man Colonel Harland D.
Sanders. The Colonel was born in 1890 and was only six when his father died and
his mother had to go out to work to support the family.

But it was at the age of 40 as an operator of a service station in Corbin, Kentucky,

Colonel returned to his love of cooking and began to cook and serve food to hungry
travelers from his own living quarters. After a short span of time, customers were
turning up for food alone so he moved across the street to a motel and 142-seater
restaurant which he named “Sander’s Court” it was during this time that the Colonel

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devised his recipe for fried chicken using a secret blend of 11 herbs and
spices the same blend of recipe is still used in KFC all over the world and is called
the “Original Recipe”. His restaurant became so popular the state governor
made Harland Sanders a Kentucky “Colonel” in honor of his fine contribution to
state cuisine.

The Colonel often visited small independent restaurants to teach the owners how to
prepare his unique chicken. After the cooking was complete the Colonel would go
into the restaurant’s dining room and do what he called Coloneling, making sure
that customers were happy with the chicken and the service they were receiving.

Eventually, the business grew larger than the Colonel could handle, so he sold it to
a group of people who formed the Kentucky Fried Chicken Corporation. The Colonel
remained KFC’s Goodwill Ambassador.

The Colonel died in 1980, at the age of 90. Although the Colonel is no longer with
us, but his philosophies of hard working and excellent service to be the number one

KFC
priority of KFC, will always be a part of KFC tradition.

KFC specialized in chicken and they says,

“No body’s cooking like KFC today and we are

the chicken experts”

“There is no competitor for spicy chicken

which is made by KFC”

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“To be the leader in western style quick service restaurants through friendly
service, good quality food and clean atmosphere”

Philosophy of KFC
Philosophy of KFC stands on “the Champs Program” whereas the philosophy of
McDonald is on “People”.

THE CHAMPS PROGRAM

Champs stands for our belief that the most important thing each of us can do is to
focus on the customer. It stands for our commitment to provide the best food and
best experience for the best value.

CHAMPS stand for the six universal areas of customer expectation common to all
cultures and all restaurants concepts. These are:

C leanliness

H ospitality

A ccuracy

M aintenance of Facilities

P roduct Quality

S peed of Service

CHAMPS is the philosophy to ensure that the customer has the consistent
quality experience in every restaurant, everyday, on every occasions and
you will be playing role in delivering CHAMPS to our customers.

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VISSION STATEMENT:

Food, Fun & Festival, this is what KFC is all about. Leading the market since
its inception

KFC provides the ultimate chicken meals for a Chicken Loving Nation.

Be it Colonel Sanders secret original Recipe Chicken or the Hot & Spicy
Version, every bite brings a YUM on our face. At KFC we can proudly say,

“We Do Chicken right ”

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Current market situation:
Customers generally choose the restaurant they will eat at based on quality, rapidity, and variety
of items. KFC’s customers are also really price sensitive and will go elsewhere if they find that
the value is not worth the price. They can also be characterized by being people that want to be
served fast and be out of the restaurant in no time.

KFC SWOT Analysis

Strengths
• Brand Equity
• KFC secret recipe of 11 herbs and species
• Very strong internationally
• Strong Franchises all over the world
• Interactive relationship marketing
• Strong trademarks recipes
• Ranks highest among all chicken restaurants
• Chains for its convenience and menu variety
• Largest multi-branded restaurant in the world

Weaknesses

• Lack of knowledge about their customers

• Lack of relationship building with employees, customers and suppliers
• Lack of focus on Research &Development
• KFC desserts portion is not as better as should be
• They only focus higher income level people

Opportunities
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 • They have the opportunity to expand their sweet products
• They can open more outlets to get maximum market share
• They can open temporary outlets in peak season in the hill stations like
naran, kaghan, swat etc.
• They can capture more customers by decreasing the price of their products
• Updating their restaurants, Balanced menu, customer focus and Increase
delivery service

Threats
• Rated 83 out of 100 in terms of competitiveness
• Increasing inflation rates directly affect menu prices
• Supermarkets and new competitors
• Health Trend away from fried foods
• Changing customer demands
• Some international events badly affected the market of KFC in Pakistan like
IRAQ and AFGHAN war and we know KFC is American based. Therefore, it
creates a great impact on the performance of KFC. During the war the sale of
sale KFC decrease more then 25%
• Current political situation is a big threat for KFC
• Diseases like bird flu is the big threat for KFC

Objectives of KFC
Every organization and company has some certain goals laid down by them
to achieve to make it renown and have value added services to satisfy
customers.

 Build an organization dedicated to excellence.

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  Consistently deliver superior quality and value in our products and
services.
 Maintain a commitment to innovation for continuous improvement and
grow, striving always to be the leader in the market place changes.
 Generate consistently superior financial returns and benefits our owner
and employees.
To establish a position in Pakistan as a leading WQSR (Western Quick Service
Restaurant) chain, serving good value added services and Innovative chicken
based products. KFC is consistently providing a pleasant dining experience,
with fast friendly, in a clean and convenient location. Every moment
dedicated to providing excellent and delighting customers.

Values of KFC
Focusing all resources to the 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.
 Dedicate ourselves to continuous growth in sales, profit and size of
organization.
 Work as a team.

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Issues of KFC

EVERY CHICKEN TESTED

K & N’s state-of-the-art Quality Assurance Lab
monitors the entire integration process from
livestock to feed and on to preparation of ready-
to-cook and cooked products.

EVERY CHICKEN CERTIFIED

HACCP – K & N’s ensures food safety by
implementing the international HACP (Food
Safety System) and enjoy the unique privilege of
being the first and only HACCP certified
company is Pakistan producing chicken and chicken products. Free from
diseases and bacteria, drug residues and other contaminants.

Quality Assurance Certificate

Director General (Research) has issued quality assurance certificate for the
chicken used by KFC.

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Marketing Strategy
SEGMENTATION
KFC has divided the market of Pakistan into distinct groups of customers with
different demands, tastes and behavior who require separate products or
marketing mix.

In Pakistan 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

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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

In the basis of the geographical factor we have divided our market in three
main segments.

 Urban areas
 Sub urban areas

TARGET MARKET FOR FAST FOOD

After evaluation of various segments, KFC has decided to target the market
of Urban and Sub-urban Areas of Pakistan.

 People are educated and they want variety in their diet.

 Normally people of rural areas don’t take fast food. On the other hand
people of urban areas take fast food.
 Income of the people of urban areas is normally high and they can
afford to purchase such products, which are slightly higher in price as
compared to prevailing prices of local food in the market.

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  People of Urban Areas are more quality conscious than the people
of Rural Areas.
 In Urban Area there lived people from every walk of life and profit
generation is easier than in Rural Areas.
 Population density is higher in Urban Areas as compared to Rural
Areas, so the numbers of customers are more in Urban Areas.

4P’s Of Marketing

Product

Their all products are different from every product and the packaging and other
products feature are different form other they change there products by introducing
new products but their main product the Kentucky fried chicken is the same

Price

The price is not affordable by all persons in Pakistan. Due to its large setup the price
selecting are very challenging for the new product of KFC

Place

They provide free home deliveries for some specific cities. They open their outlets in
those places in the cities where people can buy products easily and without
difficulties. They also introduce mobile units for delivery of their products

Promotions

In Pakistan KFC not advertise their products too much because people KFC
due to its reputation in other countries. They promote their products through
special packages like Ramadan packages, mid night package. They promote

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their products through billboard, pamphlets and through other
promotion strategies.

Services
KFC offered free home delivery service at specific branches in specifics cities. They
take at 30 min for delivery and the minimum delivery order should Rs.250.

They also provided services to celebrate the birthdays of kids at their home or in
KFC restaurants. Now recently KFC also provide services of mobile unit of KFC.

Environmental factors
Socio-Cultural Element
Culture element includes the attitudes, values, norms, beliefs, behaviors and
associated demographic trends that are features of a given geographic area.

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Multinational company faces the challenge to understand about the culture of
that country where they work. To solve these problems KFC hire all employees of
local area and now it is easy for them to understand about the culture of Pakistan.
KFC management knows about that Pakistan is a Muslim country; therefore they
use 100% Halaal (Zibiha) chicken.

KFC start their branches in those cities which are famous for food eating.
Pakistani people like spicy foods, therefore KFC also provide spicy foods in Pakistan.
KFC open its branches in advance cities of Pakistan like Lahore, Karachi, and
Islamabad/Rawalpindi etc. In these cities mostly come out with their family because
KFC mainly focus family.

Technological Elements
New techniques affect the quality of products and services in better way.
Technology is very important in order to compete with the competitors.
Organizations have an eye on their competitors and also new techniques which
their competitors used. Today the world going fast and market is globalize, new
techniques comes in production and services departments.

Although KFC and McDonald’s has same cooking machinery but KFC has efficient
delivery system; they provide home delivery so quickly. KFC purchase machinery
from Hanney Penny company, they are main suppliers of machinery through out the
world.

Economic Elements
In Pakistan there is a mixed economy so private organization easily perform their
tasks within any given economic system of course, organization are influenced by a
variety of economic features over which they have little independent control, such
as inflation, interest rates and recession

Another important input to the enterprise is the nature of government fiscal and
policies. KFC paid tax properly.
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Sales Promotion
For sales promotion KFC has introduced different strategies such Ramadan Package,
Birthday Package, Midnight Package and many other. Also they have introduced
goods like watches, keychain, coffee cup, T-shirt, toys e.t.c to the customers

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Advertisement
Press advertising

• Jang (Karachi, Lahore & Rawalpindi):

• The news (Karachi, Lahore & Rawalpindi):
• Dawn (Karachi, Lahore, Rawalpindi):
• Magazines

Hoardings
In addition to regular hoardings, temporary hoardings for 2-3 months have also
been taken.

Commercials

Advertising on different Cable channels like Geo, Ary World, Ten Sports, Music
channels, etc and also advertising on world call Cable advertising

Price
Samples of some products that KFC offers, how they set the price of a product

PRICING STRATEGY FOR TWISTER

Manufacturing cost RS. 225/-

5% marketing cost (PER UNIT) RS. 5/-

Total cost RS.230/-

15% G.S.T +15% RETAIL MARGIN RS.69/-

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Total retail Price RS.300/-

PRICING STRATEGY FOR HOT SHOTS

Manufacturing cost RS. 117/-

5% marketing cost (PER UNIT) RS. 5/-

Total cost RS.122/-

15% G.S.T +15% RETAIL MARGIN RS.53/-

Total retail Price RS.175/

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QUESTIONNNAIRE ANALYSIS

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 120%

100%
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80%
 140%
120%

ECONOMICS 26
100%
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 1. What is fast food
15%
80%
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70%
 2. What you prefer

3. Which is healthi

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 4. Why you eat fas

100%
90%
5. Do you think all
80%
ECONOMICS 70%
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29
 6. How often do yo

7. With whom you

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42
 8. If you conside

9. An average how m

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 10. In your thinki

11

100% 20
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90%
ECONOMICS 32
 13

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 14. Wh

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34%
 16. How

100%
90% 17
80%
ECONOMICS 70%
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35
 18. If KFC in

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 180%

160%

140%
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 22. Does KF

23

ECONOMICS
160%
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38
 24.

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 26. D

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136%
118%
CONCLUSION

According to our research our hypothesis proved right that KFC is the market leader
in Pakistan fast food industry

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BIBLOGRAPHY

 www.kfcpakistan.com

 www.google.com

 www.scribd.com

 www.wikipedia.com

REFRENCE

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