A Report On Kfc 13u19

7 P’S of Service Marketing, Customer’s Expectation and Service Perception on

Executive Summary: It starts with the introductory of this report including objective and methodology of the study. In the profile of the company, it contains short history and information about basic strategy, technology, ownership as well as the foreign and native shareholders of the company.Then accordingly in situation analysis, it refers a short circumstance analysis of the brand “KFC” strengths and weaknesses from an image perspective followed by the strength andweaknesses of product/service of KFC After it comes up with the concern factors influenceconsumers

buying pattern. This paper focuses how cultural, social, personal,

psychological factors bias the purchase decision of the consumer. The paper is also contains the buyingdecision process of KFC. In addition, the paper will define the marketing mix of the KFC. Lastly, the paper comes up with necessary recommendations and conclusion. List of sourcesof information is also attached at the bottom.

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Introduction: The specific object of this paper to understand the influencing factors of 7ps‟ Marketing Mix., Customer expectation of service and customer‟s perception about service in Bangladesh. Specifically, KFC, one of the largest fast foods company in Bangladesh, how consumer take buying decision and by which factors they influence towards KFC in Bangladesh is the main objective of this term paper. Besides, another important object is to define the service marketing mix of the KFC.

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Service Marketing Mix An expanded marketing mix for services was proposed by Booms and Biter (1981), consisting of the 4 traditional elements–product, price, place, and promotion and three additional elements– physical evidence, participants, and process. These additional variables beyond the traditional 4 Ps distinguish „customer service‟ for service firms from that of manufacturing firms. Marketing mix consists of 4P s. It contains everything a firm can do to influence the demand For its product. The 7P s is:       

PRODUCT PRICE PLACE PROMOTION PEOPLE PROCESS PHYSICAL EVIDENCE

PLACE: PRODUCT: Design Technology Usefulness Convenience Value

Retail Wholesale Mail order Internet

Quality

PRICE:

PHYSICAL Evidence : Smart Rundown Interface Comfort Failities

SERVICE MARKETING MIX

PROMOTION:

PROCESS: Relevent to inductries. How are consumed?

Strategies Skimmining Penentration Psychological Cost-plus Loss Leader

service service

PEOPLE: Employees Management Culture Customer service

Special Offers Advertising Endorsement Trial Direct Mailing Free gifts

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The service marketing mix is also known as an extended marketing mix and is an integral part of a service blueprint design. The service marketing mix consists of 7 P‟s as compared to the 4 P‟s of a product marketing mix. Simply said, the service marketing mix assumes the service as a product itself. However it adds 3 more P‟s which are required for optimum service delivery. The product marketing mix consists of the 4 P‟s which are Product, Pricing, Promotions and Placement. These are discussed in my article on product marketing mix – the 4 P‟s. The extended service marketing mix places 3 further P‟s which include People, Process and Physical evidence. All of these factors are necessary for optimum service delivery.

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Company Profile OF KFC

Kentucky

Fried

Chicken (KFC) stands for

array

of complete

high-quality

food

in

meals to enrich

the

a

fast

popular

consumer s

everyday life. KFC strives to serve great-tasting, “finger licking good” chicken meals that enable the whole family to share a fun, uninhibited and thoroughly satisfying eating experience, with the same convenience and affordability of an ordinary Quick Service Restaurant. Kentucky Fried Chicken (KFC) one of the most known fast food chains in the world started in the early 1930's by Kernel Sanders in the Southern USA as a small franchise operation. Colonel Sanders has become a well-known personality throughout thousands of KFC restaurants Worldwide. Quality, service and cleanliness (QSC) represents themost critical success factors to KFC's global success. 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 ColonelSanders secret Original Recipe Chicken or the Hot & Spicy version, every bite brings a YUMon 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

Heubleinmanagement over quality control issues and restaurant.

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KFC is part of Yum! Brands, Inc., however in the case of Bangladesh KFC builds the relationof Quality Service and cleanliness for Customer.KFC was acquired by PepsiCo in 1986, it had grown to approximately 6,600 units in 55countries and territories. Due to strategic reasons, in 1997 PepsiCospun offits restaurantbusinesses (Pizza Hut, Taco Bell and KFC). 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. In Bangladesh totally Chicken buy from Bangladeshi Poultry Firms, and also this Chicken is100% Halal.

KFC in Bangladesh: Transcom Foods Limited (TFL) started its journey in 2003 as a franchisee of Pizza Hut, thefirst International Chain Restaurant in Bangladesh, and went on to sign the contract

tobecome

the

franchisee

of

Kentucky Fried Chicken (KFC) in the year 2006. Both Pizza Hutand subsidiaries restaurant

of

the

KFC

world‟s

company

are largest Yum!

RestaurantsInternational. In a span of seven years, TFL has opened 4 Pizza Hut and 7 KFC outlets so farthroughout the country.TFL successfully launched the flagship KFC on South Avenue, Gulshan in September 2006. It has already won over the heart of the Dhaka crowd with its great tasting food, highstandard of hygiene, cleanliness, terrific interior and of course excellent and affordablepricing. Following its enormous success in Gulshan, the second outlet was opened inDhanmondi in November 2008, and yet another in Bananiin December 2008. Most recentlyTFL has opened two outlets at Eskaton on February 2010 and another one is in Paltan.In2011,TFL has open another two new outlets in Uttara and sea beach city of Bangladesh “Coxsbazar” 6

Analysis of 7ps’ of KFC 1. Product: The product in service marketing mix is intangible in nature. Like physical products such as a soap or a detergent, service products cannot be measured. Tourism industry or the education industry

can

be

an

excellent

example.

At

the

same

time

service

products

are heterogeneous, perishable and cannot be owned. The service product thus has to be designed with care. Generally service blue printing is done to define the service product. For example – a restaurant blue print will be prepared before establishing a restaurant business. This service blue print defines exactly how the product is going to be.KFC's specialty is fried chicken served in various forms. KFC's primary product is pressure-fried pieces of chicken made with the original recipe. The other chicken offering, extracrispy, is made using a garlic marinade and double dipping the chicken in flour before deepfrying in a standard industrial kitchen type machine.

i.

Product Planning:

Their product is classified as consumer product as it has no intermediates.

ii.



KFC offers specialty goods.



The stock turnover of KFC is high.



Price and quality of the product is always compared.



Their product includes



Goods (Burgers, Chicky Meals etc)



Services (cleanliness, quick service, parties, and meetings).

Product Line:

KFC product line includes all chicken based products.

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a. Burgers: Zinger Burger Colonel s Chicken Burger Colonel s Fillet Burger SUB60 Zinger Jr. b. Chicken: 1 piece 2 pieces 5 pieces 10 pieces

c. Combos: Chicken Meals Sandwich Meals Family Meals d. Desserts & Beverages: Fruit Salad Regular & Large Drink Regular & Large Mineral Water Tea Scoop of Walls Ice cream Coffe e. Snacks & Side Orders: 5 & 20 Pieces Nuggets 8

Arabian Rice 5 & 10 Pieces Hot wings Dinner Roll Regular & Large Fries Hot Shots Corn on the Cob Hot & Crispy Soup Cole Slaw

iii.

Product Mix Strategy:

The product mix strategies are in relation to: (a) Competitors: KFC has a head-on competition with McDonalds so wherever theyplace their products; KFC goes there as well. Locally in Bangladesh KFC face a closecompetition with the local brands like AFC (Al-Baik Fried Chicken), Fried Chicks, DixyChicks etc which are producing more or less the same product as KFC. (b)Attributes: The brand KFC is so strong that it is the attribute itself. (c)Place and Quantity: KFC products are based on high quality and prices. iv.

Product Mix Expansion:

(a) Line Extension: Through introducing new meals offers. 9

(b)Alteration of existing products: Quality Assurance department does it. Thedepartment decides which product should be sold and when (seasonal products as rice andsoups offered in winters). (c)Functional modification: It is also decided by the Q.A. department to introduce newrecipes. (d)Quality modification: KFC has moved to masses rather than the original recipe. v.

Contraction: When the new deals or offers are not sold as expected, Q.A. department contracts the previous offers and introduces new offers.

vi.

Change in Product Positioning:

KFC products were first offered to upper socio-economic group. Later, introducingdiscounted and lower price deals, they are now dealing in masses. So, KFC has traded down. In doing so KFC has used the same brand name and same high quality product. vii.

Product Life Cycle:

KFC introduced itself, has grown and now it is at maturity stage for the last ten yearsin Bangladesh.

(xiv)Product, Brand, Packaging and Labeling: (a) Brand Name: KFC. (b) Color: Red, white. (c) Symbol: Colonel Harland Sander s picture and KFC written with it. (d) Master Brand: The brand itself is so dominant, that it immediately comes in mind. 10

(xv)KFC Brand: KFC's brand identity, the logo features Colonel Harland Sanders, one of the bestrecognized icons in the world. 

KFC is trademarked ed brand.



It is distinctive, adaptable to addition to product line.



It suggests something about product.



It is legally protected and ed.

(xvi)Brands Equity: The brand equity is very high as the value added by brand to the product effects theproduct selling. (xvii)Brand Strategy:KFC is marketing the entire output under products own brand. (xviii)Complimentary branding:Pepsi & Nescafe

(xix)Packaging Strategy: KFC makes its own disposable packaging. If they need promotion Pepsi contributesin improving the packaging quality. KFC does family packaging. They use paper material forpackaging to avoid health hazards and environmental pollution. (xx)Labeling: KFC does brand labeling. Some of its products also have informational labels such asHalal, Veggi Burgers and Chicky Meals. 11

2. Price: Pricing in case of services is rather more difficult than in case of products. If you were a restaurant owner, you can price people only for the food you are serving. But then who will pay for the nice ambience you have built up for your customers? Who will pay for the band you have for music? Thus these elements have to be taken into consideration while costing. Generally service pricing involves taking into consideration labor, material cost and overhead costs. By adding a profit mark up you get your final service pricing. You can also read about pricing strategies.

KFC Pricing Strategy: 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 isdetermined according to the rates of the raw materials and policies of the Govt. The politicaland legal forces often affect the policies of KFC and eventually results in change of pricesthat is due to imposing of taxes.

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3. Place: Place in case of services determine where is the service product going to be located. The best place to open up a petrol pump is on the highway or in the city. A place where there is minimum traffic is a wrong location to start a petrol pump. Similarly a software company will be better placed in a business hub with a lot of companies nearby rather than being placed in a town or rural area.

i.

Distribution Channel:

KFC has only one channel of distribution i.e. direct where the goods are transferred tothe consumer directly. KFC has no middlemen. ii.

Distribution of Customer Goods and Services:



KFC does distribution of consumer goods directly to the consumer.



KFC also does distribution of services to the consumer like parking, sitting, homedelivery, etc.



KFC intends to further develop its mobile network nationwide through more suchUnits.

iii.

Intensity of Distribution:KFC does intensive distribution on its outlets.

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iv.

Vertical Marketing System:

KFC has corporate vertical marketing system because it is centrally owned by its subsidiary Yum Brands. KFC is affected by the geographic distribution (they have fewoutlets then its competitor McDonald s). The unit value of the items is comparatively lowerthen McDonald s. KFC has a well-equipped sitting area for the customers and a Chicky playarea for the kids.

4. Promotion: Promotion is the method used to inform and educate the chosen

target audience about

theorganization and its products. Using all the resources of promotion: •Advertising •Sales Promotion •Public Relations •Events and Experiences •Coupons, Discounts and Bundled packages •An organization finds most of its meanings and survival through promotion. At KFC, Promotion is the main tool to bring all chicken lovers attention towards its deliciousone-of-a-kind product, the Fried Chicken.The logo features Colonel Harland Sanders that is one of the best logo in the world hascreated its name as a standard in the market. Today the Colonel s Spirit and heritage arereflected in KFC s brand identity. It was launched here as an innovative product. KFC has got one product line but later they introduced products in the same line to protect their market share. New product ideas aregenerated from: Customer services (comments cards) Gallops survey (mystery shoppers) 14

They have a Quality Assurance department that decides the new product innovation. Q.A.department prepares screening of new ideas and product s feasibility report. This department does the technical evaluation (whether it is practical to produce the new product or not). The products are tested externally by offering trials to customers by giving them free samples. KFC uses telemarketing, print media, billboards and most recently televised marketing for promotion. KFC adds a new product in its present assortment based on 

Their competitors



Product s adequate demand



The satisfaction of key financial criteria



Its compatibility with environmental standards

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KFC by its ments derives the desire in the customer to come and enjoy healthy foodin their favorite restaurant. They spend 2% of its profits on ment. They use printmedia and most recently doing televised marketing to promote it products. Their advertisingmedia involve: Newspapers, Pamphlets, Billboards and Television. KFC does both the primary demand advertising (“Become a Chicken Fanatic”) and the selective demandadvertising (e.g. “Zinger Meal”) . In its advertising it gives informative messages KFC doesinstitutional advertising to stimulate demand. When KFC offersnew productsthen it doesproduct advertising. KFC s ad s act as counteracts which means to drive the customer toKFC i.e. it uses pull advertising strategy.KFC have t sale promotions with differentcompanies like HP, Philips, Value Meals, Pepsi-Cola.

5. People:

People are one of the elements of service marketing mix. People define a service. If you have an IT company, your software engineers define you. If you have a restaurant, your chef and service staff defines you. If you are into banking, employees in your branch and their behavior towards customers defines you. In case of service marketing, people can make or break an organization. Thus many companies nowadays are involved into specially getting their staff trained in interpersonal skills and customer service with a focus towards customer satisfaction. In fact many companies have to undergo accreditation to show that their staff is better than the rest. Definitely a USP in case of services. 

Yum! University -global for the education andinstitutionalization of key



Yum! Leadership programs



Management Team



Training -six to eight weeks training for key restaurant personnel



Multiband

training

depends on

your

level

of previous

quick-servicerestaurant

(QSR) experience 

Graduate Recruitment

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

Program –giveGraduates broad experience acrossthe business in real jobs through various departments



Employment opportunities to neighborhood residents



All employees from managerial level onwards receive training in variousdepartments including operationsbilling etc

6. Process: Service process is the way in which a service is delivered to the end customer. Lets take the example of two very good companies – Mcdonalds and Fedex. Both the companies thrive on their quick service and the reason they can do that is their confidence on their processes. On top of it, the demand of these services is such that they have to deliver optimally without a loss in quality. Thus the process of a service company in delivering its product is of utmost importance. It is also a critical component in the service blueprint, wherein before establishing the service,

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the company defines exactly what should be the process of the service product reaching the end customer.

7. Physical Evidence:

The last element in the service marketing mix is a very important element. As said before, services are intangible in nature. However, to create a better customer experience tangible elements are also delivered with the service. Take an example of a restaurant which has only chairs and tables and good food, or a restaurant which has ambient lighting, nice music along with good seating arrangement and this also serves good food. People will generally prefer the one with the nice ambience. That‟s physical evidence. Several times, physical evidence is used as a differentiator in service marketing. Imagine a private hospital and a government hospital. A private hospital will have plush offices and well-dressed staff. Same cannot be said for a government hospital. Thus physical evidence acts as a differentiator.Bright, and bold graphics on the restaurant exterior and interior that incorporate theKentucky Fried Chicken as well as KFC, communicates a fresh sense of pride.

Logo of the founder with his signature string tie 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 cookingdelicious, high quality, freshly prepared by hand, just the way the founder did 50 yearsago. The giant colonel sanders logo was build off the world‟s only extraterrestrial highway. Thisdenotes that if there are extraterrestrials, KFCwants to be their restaurant of choice.

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

Heroic use of the signature red color and bold architectural way .



Warm and contemporary interior designs, spacious and innovative seating help customers feel welcome and comfortable.



Thoughtful interior and exterior lighting which enhances customer experience.



A digital juke box that is free of free of charge allows customer to play the music they enjoy.

Factors Influencing Consumer Expectation and Buying Pattern:

Customer expectations are beliefs about service delivery that serve as standards or reference points against which performance is judged. Because customers compare their perceptions of performance with these reference points when evaluating service quality, thorough knowledge about customer expectations is critical to services marketers. Knowing what the customer expects is the first and possibly most critical step in delivering good quality service. Being wrong about what customers want can mean losing a customer‟s business when another company hits the target exactly. Being wrong can also mean expending money, time and other resources on things that do not count to the customer. Being wrong can even mean not surviving in a fiercely competitive market.

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Level of Customer Expectation:

A. Cultural Factor: Culture, subculture, and social class are particularly important influences on consumer buying behavior. I.

Culture:

Culture is the most fundamental determinant of a person s wants and behavior. However it isexposed to these broad cultural values: achievement and success, activity, efficiency andpracticality,

progress,

material

comfort,

individualism,

freedom,

external

comfort,humanitarianism, and youthfulness. Different

cultures

have

different

beliefs:

for

some

cultures

Non

-Veg

is

completelyprohibited, whereas chicken is the main food item. Different cultures permit different beliefsand norms.

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This reflects the consumption patterns of an individual Culture is a very important factorfrom the view of a marketer. As KFC entered Bangladesh, they studied the Bangladesh culture, the norms followed here,as in Bangladesh pork is not consumed, so they did not include the pork food items in theirmenu. Only adopt the Bangladeshi culture but also the Religion as well. They offer Halal foods tothe customers, which is the symbol that they adopted the Muslim religion. Subculture: Each culture consists of smaller subcultures that provide more specific identification andsocialization for their . Subcultures include nationalities, religions, racial groups,and geographic regions. Social class: Social classes are relatively homogeneous and enduring divisions in a society. They arehierarchically ordered and their share similar values, interests, and behavior.As we discuss earlier that KFC target all the class including the upper class, upper middleand lower middle class etc. For middle classes they have launched a segment of products atcheaper rates. Social class is determined by 

Income



Occupation



Education

Balanced level of all three creates awareness of new products and income gives thepurchasing power. So, social class forms an important part of external influence onconsumers buying behavior.

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Social Factors: In addition to cultural factors, a consumer s behavior is influenced by such social factors as reference groups, family, and social roles and statuses.

Reference groups: Consist of all of the groups that have a direct (face-to-face) or indirect influence on aperson s attitudes or behavior. Reference group is the one to which an individual refers. An individual adapts its self to the group he is in. His consumption patterns, taste, beliefs, behavior etc changes according to thegroup. Reference groups expose new behaviors and lifestyles, influence attitudes andselfconcept.

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Customar’s Perception about KFC Customer perception about service:

Dimensions of Quality: Reliability: Every time the food is available, billing accuracy and items are delivered without any errors. Responsiveness:Ability to accommodate any orders at any given point in time Assurance: KFC gives the assurance that the food is hygienic, fresh Empathy:Based on the local needs it offers new dishes Tangibles:Convenience, clean ambience, good lighting 23

and ventilation etc.

Quality service by Design facility: Good ambience, toilet facilities, space convenience, proper lighting etc Facilitating goods: hygienic food, pure water, clean tables etc. Explicit services: tastier foods, proactive employees, calm atmosphere,etc Implicit services:assurance of hygienic food, value for money, goodparking facilities.

Customer Satisfaction: Customer‟s perception is fulfilled by the most important element customer satisfaction. According to Zairi (2000) the feeling of pleasure and expectation fulfillment is known as Satisfaction. In other words customer satisfaction is goods or services which fulfill the customer expectation in of quality and service for which he paid. If Customer satisfaction develops they will become loyal to that product or brand and their loyalty will be good for the company in sense as a Profit. Customer satisfaction is the part of marketing and play important role in the market. In any organization satisfaction of customer is more important, because if your customer is satisfied with services or products, company‟s position will be good in the market. The distinction between tangible and intangible goods becomes cozdifferent factors of customer satisfaction, and that is why they should be treated separate and distinct. For the fast food company like KFC there are three elements which have impact on customer‟s satisfaction. They are: 

Service Quality and Brand



Price



Physical Evidence

Customer Loyalty: 24

There are many factors which are affecting the customer‟s loyalty. Among the factors are marketing mix such as product, price, place, promotion and services. I have collected data from a research work which shows the percentage of the scores that adjust with maximum score is presented in Table 1. Table 1 show that the factors that have good marks are the taste of fried chicken (86, 4%), the cleanliness and room design (84, 2%) and also location access (82, 4%). Meanwhile, there are few items that have minimum percentages; there are reasonable prices (65, 6%) and satisfaction of price (69, 4%) and parking area (71, 0%) In of KFC product prices, customer thinks that the price is quiet expensive.So, the KFC has made a few packages that are cheaper such as the combo economic. Because of these, the facilities are used together with other customers. Even so, it is an advantage for the restaurant, since the consumers can also go shopping and eating at the same place. It makes this KFC restaurant to have a good access and yet customer can do many activities in a very limited of time

Recommendation: Some recommendations for the KFC senior executives are as given below: As KFC has a costlier brand, KFC may consider the price in of targeting more econsumers in Bangladesh.KFC can launch more outlets notonly in Dhaka as well as the other mega cities inBangladesh.KFC can go for more promotional activities to attract more customers in Bangladesh.KFC should open the road street wheel based vehicle van restaurants in Bangladesh.If KFC expands their business, it will create more employment opportunities for thelocal people in Bangladesh.KFC can arrange technical and effective assistant to the people who want to-do job inthis fast foods industry.

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CONCLUSION: KFC is a very strong chain of fast food restaurants with more than 10,000 restaurantsall 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 e outlets inBangladesh as well as in other countries.What the customer actually gets out of the service and how he or she perceives the service may not always match. So the customer‟s judgment or evaluation of the service is the crucial factor in the delivery of a service. But service marketers can influence these perceptions to a large extent by controlling favorably the service marketing mix variables. It is all the more difficult because a service cannot be broken down into logical steps or sequences. If service organizations pay more attention to their employees as well as their customers, it would increase both employee motivation as well as customer satisfaction.

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