kfc brand extension
DESCRIPTION
KFC Brand Extension If KFC doing brand extension what effect on other brands of KFC's..TRANSCRIPT
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Contents
ACKNOWLEDGEMENT ................................................................ 2
INTRODUCTION .......................................................................... 3
KFC IN PAKISTAN ...................................................................... 3
KFC BRAND PORTFOLIO…………………………………….....................4
KFC MARKETING STRATEGY ........................................................ 5
GRILLED CHICKEN AS A CATEGORY EXTENSION .......................... 7
MARKET ANALYSIS ...................................................................... 8
3C’S OF MARRKETING ENVIROMENT ....................................... 8
MARKETING MIX ....................................................................... 10
ASSESSMENT OF CONCLUSION ................................................. 11
RECOMMENDATIONS…………………………………………………………12
Questionnaire………………………………………………………………………13
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ACKNOWLEDGEMENT
24TH April, 2015.
Mam Duria Hassan,
Brand Management (MKT-607),
Institute of Business and Technology-IBT
Respected Mam,
The success and final outcome of this project required a lot of guidance and assistance from
many people and we are extremely fortunate to have got this all along the completion of our
project work. Whatever we have done is only due to such guidance and assistance and we
would not forget to thank them.
We respect and thanks Mam , for giving us an opportunity to work on Research “ Impact of
Brand extension on Parent Brand Image “ and providing us all support and guidance which
made complete the research on time. We are extremely grateful to her for providing such a
nice support and guidance.
We heartily thank our external project guide and suggestions during this project work.
We hope that we have fulfilled your requirements and require a great appreciation.
Thanking you,
Sincerely,
Tahseen Raza
Ashfaque Ali
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INTRODUCTION
Colonel Harland Sanders identified the
potential of the restaurant franchising
concept, and the first "Kentucky Fried
Chicken" (KFC) franchise opened in Utah
(western United States) in 1952. KFC
popularized chicken in the fast food
industry. He did not have a restaurant
yet. It was then that he invented what's
called “home meal replacement” –
selling complete meals to busy, time-
strapped families. He called it, “Sunday
Dinner, Seven Days a Week.”
Kentucky was listed on the New York Stock Exchange in 1969 and eventually was acquired by
PepsiCo, Inc. in 1986. KFC is one of the most loved and fastest growing retail chains in the world
with over 18,800 restaurants globally. The KFC system serves more than 12 million customers
each day in more than 115 countries and territories around the world. KFC's parent company is
Yum! Brands, Inc., the world's largest restaurant company in terms of system restaurants.
KFC IN PAKISTAN
KFC came to Pakistan in 1996 with the first branch opened in Karachi and later in Lahore. The
Franchise was a Pakistani owned and operated, Dubai-based Company the Cupola Group, which
owns licenses and its own restaurant throughout Pakistan and the middle-east. Serving
delicious and hygienic food in a relaxing environment, Presently KFC is branched out in eighteen
major cities of Pakistan (Karachi, Lahore, Gujranwala, Sukkur & Muree) with more than 60
outlets nation-wide.
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KFC BRAND PORTFOLIO
There are different products divided into sections according to the differentiation in them.
1. Chicken
2. Burger
3. Beverages & Desserts
KFC PRODUCTS AND DEALS IN PAKISTAN MARKET
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KFC MARKETING STRATEGY
Marketing Segmentation
KFC used the Demographic Segmentation, Geographic segmentation, Psychographic
segmentation & Behavioral segmentation.
Demographic Segmentation
KFC divides the market on demographic basis in this way:
All Age
Gender is both males and female
Income is Rs 10,000 and above
Geographic Segmentation
KFC has outlets internationally and sells its products according to geographic needs of the
customer. In Pakistan KFC focuses how geographically its customers demand different products.
Psychographic
KFC serves on the basis of needs of customers. It actually serves:
Social class: Upper and Middle class
Behavioral Segmentation
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, and combination of price and quality.
Targeting
Hectic lifestyle of individuals – giving them more time at work and less stress about
waiting for food.
Mid-sector people are always looking for change which KFC provides in their range of
fast food.
Quality conscious – people in urban areas are more conscious about the quality of food
than rural areas.
Urban areas are more populated therefore they help with attracting higher revenues.
Due to KFC placing itself close to Shopping Centers, Commercial Areas, Cinemas and
markets which are mostly populated by the young and those who are in a hurry
Given the competitive nature of fast food joints, KFC uses the “Push Strategy” to help
them create awareness, be different, and sound attractive.
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Positioning
Products
KFC is specially dealing in the chicken products; Basically, KFC has the special recipe for chicken
products that is why, KFC is known as a chicken specialist all over the globe. KFC target the Asia
and East side because people like chicken product so they enter in the market due to the
demand of their chicken products.
Channel
KFC believes in first level channels in the order given: manufactures, retailers, and consumers.
KFC works on the flow of good operation techniques i.e.
“Good Operating Manager→ leads to “Good Team Selection →Good Services → Good Targets
Promotion
Promotion is the method used to inform and educate the chosen target audience about the
organization and its products. Using all the resources of promotion:
• Advertising
• Sales Promotion
• Public Relations
• Events and Experiences
KFC jingle “Finger Lickin’ Good” is a frequent announcement on television, billboards, flyers and
radio & it is just a wake-up call to the consumer to remind them how good they felt the last
time they ate KFC chicken.
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.200. Recently KFC also provide
services of mobile unit of KFC.
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BRAND EXTENSION RECOMMENDATION Many companies adopt brand extension as strategy with the aim of benefiting from the brand Knowledge achieved in the current markets. When a company launch a new product and market under the umbrella a well-known brand name, failure rates and marketing costs are reduced. More than 80 per cent of firms resort to brand extensions as a way of marketing goods and services. Competition forces firms to adopt strategies that create a competitive advantage for the firm. Creating a brand name with well -established associations is one way of achieving this aim. Brand extension as a marketing strategy has become even more attractive in today’s environment where developing a new product costs a lot of money and can be time consuming.
This is where an existing brand introduces a new product category to the market under existing brand name. Advantages of Brand extension are:
Acceptance of new product category by loyal customer of the brand,
Brand reputation/brand awareness can be increased.
Disadvantages of the brand extension are:
Failure in poor products can harm the reputation of entire brand,
Certain product can fail as not all products are suitable to be introduced under certain
brand names.
GRILLED CHICKEN AS A CATEGORY EXTENSION
The introduction of grilled chicken was an unprecedented sensation. KFC wants to use
Grilled Chicken as an entirely new platform with potential for adding flavored variation and
other product innovation. One of such innovation is Fiery Grilled Wings, a hot wing version of
KFC Hot wings in fried category.
This has come as a result of changing orientation of customer towards health conscious
food items. Over the last two decades consumers have become more concerned with their
health and more sensitive about the negative effects of this type of fast food.
Diversification strategy gives KFC an opportunity to widen their consumer base and
create an entry barrier to any new firm looking to enter this new segment of Grilled Chicken
and create an anti-Fried chicken promotion. So this strategy can be seen as KFC looking ahead
to tap new customers, and fend off any competitors that can harm the parent brand. As a new
brand diversification it can caters those customers who think about dry chicken, so it can be as
substitute and it can remove the concepts of health harm.
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MARKET ANALYSIS
3C’S OF MARKETING ENVIRONMENT The microenvironment consists of all forces that are close to KFC and on which KFC has an
impact. They directly affect KFC’s ability to serve its customer. Three major components
influence KFC’s microenvironment:
1. Customer
KFC’s customer market consists solely of the consumer market. KFC’s products are bought by
individuals. Therefore, the product range of KFC offers appeals to as many people within this
consumer market as possible, to ensure that the maximum amount of products can be sold. By
introducing Grilled chicken in KFC it is easy for customers to have it from any outlet of KFC in
Karachi.
2. Competition
KFC follows the competitive pricing strategy. KFC compare the price of their products with
competitor. If the competitor provides the same product at a lower price, KFC lowers the price
of its product too. In the case of KFC, Fried Chicken is its main selling point and controls a
monopoly over the Pakistan fast food market (only with fried chicken). Prices of burgers, French
fries and soft beverages with relation to its competitors. The competition of Grilled chicken in
market is tough as our competitors are highly well known such as Nandos, Rowtisserie etc, can
compete with them with our product quality.
3. Corporation
KFC Corporation is the world's most popular chicken restaurant chain. KFC is truly a global
brand with a local heart. KFC is a leader in emerging markets. KFC is an iconic global brand and
believe that the best customers in the world, KFC strives to make each experience with brand a
memorable one. KFC provides the quality goods (food), serve customer quickly but efficient and
effective. The packaging of the food also attractive and the surrounding of environment also
clean and comfort for customer to having meal.
PEST ANALYSIS
Political
The operations of KFC are affected by the government policies on the regulations of fast food
operation. Currently government are controlling the marketing of fast food restaurant because
of health concern such as cardiovascular and cholesterol issue among the young and children in
the country. Governments also control the license given for open the fast food restaurant and
other business regulation need to follow such as for a franchise business. Good relationship
with government in giving mutual benefits such as employment and tax is a must for the
company to succeed in any foreign market.
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Economical
Income is an important key factor for KFC. This factor decides which class is to be targeted. In
the early rise of KFC they focused on the upper class but slowly are introducing economy meals
that attract the lower to middle classes.
Social
The Social/Cultural Factors includes the Social Class, KFC target all the class including the upper
class, upper middle and lower middle class etc. Although the culture of KFC from where they
come is entirely different but they have adopted the Pakistani culture as they had to serve the
people living in Pakistan having entirely different culture from other areas. And it has not only
adopted the Pakistani culture but also the Religion as well. They offer Halal foods to the
customers, which is the symbol that they adopted the Muslim religion strategies as they had to
serve in the Muslim country, to the Muslim customers.
Technological
The technological factors include the Pace of change at a fast level. Pace of change mean rate of
change Research & Development is also an important factor in the Technological factor. KFC
always support the work of research & development in order to introduce the new technology.
KFC has a stock of machinery in order to run its business activities. In other words KFC has a
good amount of Capital Formation.
STP
SEGMENTATION
Demographic Segmentation
Demographic segmentation of grilled chicken is on the basis of Income and age. Our best
demographical segments are male and female, all ages (10 to 65) years are included and for this
normal income.
Geographic segmentation
In Pakistan KFC focuses how geographically its customers demand different products. As a
demand of chicken increases, grilled chicken will be used in whole market of Pakistan where
outlets of KFC are located.
Psychographic segmentation
Grilled chicken will be used by both upper and middle class. Due to affordable prices, it can
create a difference as compare to the competitors.
Behavior segmentation
In behavioral aspect Grilled chicken segment the market on the basis of quality, taste and price.
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TARGETING
For grilled chicken KFC should follow the mass (undifferentiated) strategy. This product can be
used by whole market of Pakistan. Market share for chicken is very high in Pakistan market so
demand of this product exists in the market, those customers who avoid junk or fast food due
to oil in food can be attract because of nature of grilled chicken is free from oil.
POSITIONING
Positioning of grilled chicken is described in Products itself, its channel and the promotional
activities.
Product
KFC is a chicken Specialist so Grilled Chicken is the new product for it. It will target the region of
Pakistan initially to see the demand of Market and customers requirement. Pakistan market is
well known about chicken so this product captures the market.
Channel
As a new product, its nature is very fresh so KFC should choose the direct channel for its
customer. In direct channel outlets should be used for communication with consumers. Flow of
this product‘s flow if from outlet to final customer or consumer.
Promotion
For this delicious product, promotional campaign can attract the customers. Main purpose is to
inform current product and its price to the customers. In which various tools should be use:
Billboards
TV advertising
Sales promotion
Radio
Social media
MARKETING MIX KFC primarily sells chicken in form of pieces, wraps, salads and twister. While it’s primary focus
is fried chicken.
Following are the 7Ps marketing strategically process of KFC;
Product
KFC’s Specialty is fried chicken served in various forms. One of the new forms that we are
introducing is “Grilled Chicken”. Grilled chicken will be served both types of customers one
who are used to eat oily products and one who are health conscious and go for hot menu and
avoid oil.
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Price
KFC in the country tried to enhance quality of fast food restaurants to change attitude of people
that they think KFC is junk food. Price of our new grilled chicken will be reasonable & affordable
as compare to the other products of KFC as we are giving Full grilled chicken at the price of:
Rs:950
Place
As a new brand places are same. KFC outlets are all at the best possible places, so with our new
product it will be easy to target the new customer with new product. Most KFC restaurants are
located in the source communities such as shopping malls, cinema house and food court area.
Promotion
The promotion of KFC for Grilled Chicken will be same, such as TV commercials, social
networking, billboards , print media etc. For Grilled chicken promotional campaign will make
difference in market sale. Initially for 1stmonth, on Full of grilled chicken 1 Pepsi of 1 liter will be
given to customer.
People
People are the employees of KFC. Employees play very important role to promote a product.
They should be well informed about products and company offerings. Employees will be
communicated well as new category is introduced by 1 day of training, regarding price and
offers on purchasing in a bulk quantity. Employees, who are well dressed with good manner,
can create an image for company.
Process
The food manufacturing process at KFC is completely transparent i.e. the whole process is
visible to the customers. In fact, the fast food joint allows its customers to view and judge the
hygienic standards at KFC by allowing them to enter the area where the process takes place.
The customers are invited to check the ingredients used in food.
Physical Evidence
KFC focuses on clean and hygienic interiors of is outlets and at the same time the interiors are
attractive and the fast food joint maintains a proper decorum at its joints.
As a new brand introduce, it will be promoted in interior side of outlets so customer can easily
get information about it.
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ASSESSMENT OF CONCLUSION
After analysis of detailed report we have concluded that Brand extension of KFC make
sale after effective promotional campaigns and advertisement. KFC as a market leader in
a food chain can be utilize effective segmentation for this new brand.
Those customers who are health conscious and they cannot serve by oily products can
be attracted easily to hot menu like Grilled Chicken.
Local sellers of grilled chicken in the market are huge in number but like KFC others have
not such kind of the strength to compete.
As a new brand, it is expected to make sale as compare to competitors. Only effective
distribution channels and advertisement is required to gain the market share.
RECOMMENDATIONS
KFC is a market leader in providing Fried chicken. As KFC, so it is competing with the
prominent market signs like pizza hut, McDonalds. New items should be introduced by
varying the taste.
KFC should also try the local desi taste addressing the desi food lovers, thus it will help
to increase their market share.
The prices of KFC are reasonable as compared with other fast food restaurants. But as
price is always a primary concern for the customer, therefore, they should adopt certain
strategy to attract new customers.
It could be by introducing some discount packages for families, employees, students or
regular customers.
KFC needs to have more outlets, at commercial areas. It will help to target the actual as
well as the potential customers.
KFC should organize and run the proper advertisement campaign. It would definitely be
an incremental factor for their sales.
They can also use the brand promotions. They can set up the promotional campaigns.
All they need is an effective marketing department to facilities the promotional
activities.
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Questionnaire KFC Brand Extension
Personal Information
Gender Male Female
Name_____________________________________________
Age ____________
Profession ___________________________
Brand Knowledge
1- Are you familiar with brand name KFC Restaurant? Yes / No
2- Did you know what the product of the KFC taste is like? Yes / No
3- Can you Recognize KFC Brand among other competitor brands? Yes / No
4- Is KFC Brand is appealing to you? Yes / No
5- Is the product of the KFC with brand extension doing satisfy your need? Yes / No
Brand Extension effects
1. If KFC will bring a new brand the name grilled chicken then will you like this? Yes / No
2. Are you agree with that extension of brand make your choice easy? Yes / No
3. Are you Agree this type of brand extension not effect on your health? Yes / No
4. Are you agree KFC will provide better grilled chicken from others? Yes/ No
If any suggestion regarding KFC new extension grilled chicken, write in box.