Understanding
KFC’s
Retail Management
Presented by :
• Shuaib Ali Khokhar
• Anees Ahmed Shaikh
• Muhammad Samo
• Muhammad Arshad
• Ali Raza Dhoon
Outlines:
• Introduction of Retail Store
• Segmentation, Target and retail Format and competitive advantage
• Promotional and Pricing strategy of the Store
• Location strategy
• Competitors physical/online
• Buying strategy of the store
• Product Assortment , layout and store design strategy
• Customer relationship
• Level of technology used by Store
• Weaknesses of store and suggest how they can overcome their
weaknesses
INTRODUCTION:
• KFC was founded by Colonel Harland Sanders.
• The first franchise of KFC was
opened in UTAH in 1952 and the
• first outlet of KFC in Pakistan was
opened in Gulshan-e-Iqbal in 1997.
• Presently KFC has provided employment to over
1200 Pakistanis
• Cupola is a DUBAI based multinational company
involved in several business activities including oil
gas exploration, plastic cards, retail markets and
food franchising holds the master franchise rights
to operate KFC in Pakistan since 1999.
-Cupola takes more than 60 Outlets in Pakistan.
Segmentation:
• KFC’s has a different market segment as compared
to street food
stores.
KFC uses geographic, demographic, behavioral
and psychographic
segmentation.
GEOGRAPHIC:
• It is the division of the market into different
geographical units, for example states, nations,
regions, cities or countries.
• KFC deals internationally and has a number of
outlets in various countries.
• KFC sells its products according to the geographic
needs of the customers, worldwide and it is
measurable.
DEMOGRAPHIC:
• Demographic segmentation relates to dividing the
market into groups based on income, age,
education, gender, family size, religion,
occupation, race and nationality.
Age:
6-65
Income: $150 and
above
Religion: Not
specific.
Gender: both male
and female
Behavioral:
• Behavioral Segmentation is dividing a market into
groups based on the attitude, consumer
knowledge, and use or response to a product.
• KFC segmented the market on the basis of:
Taste conscious.
Quality conscious.
Class conscious
PSYCHOGRAPHIC:
• Psychographic Segmentation means to divide a
market into various groups based on lifestyle,
personality, or social class characteristics.
KFC has divided market on the basis of
psychographic as follows:
Division by Social Class: Middle class, Upper class
and Lower class.
TARGET MARKET:
• KFC targets children, teenagers and all those
people who like to eat fried chicken.
KFC's main customers are between 4-45 years old.
RETAIL FORMAT:
• KFC uses store based(ownership based) and non-
store based retailing format.
COMPETITIVE ADVANTAGE:
• - Strong brand image: KFC has maintained a strong
brand image worldwide. However, brand image is a key
driver of demand and popularity in the FOOD industry.
- Strong popularity and demand:
KFC enjoys higher popularity and stronger demand
globally.
- Supply chain management: It is also a critical source
of competitive advantage for the QSR (Quick Service
Restaurant) brands.
• Marketing:
Another source of competitive advantage in the
QSR industry is marketing. The food industry is
marked by heavy competition.
- Customer experience:
An important aspect of the restaurant business is
the customer experience. Superior customer
experience leads to higher customer loyalty,
superior sales, and higher revenue for sure.
How KFC promotes their restaurant:
• KFC being one of the biggest food giants promotes
itself vigorously. They promote their restaurant
through social media, television ads, billboards,
magazines, commercial hoardings and newspapers.
KFC has mostly utilized the push and pull strategy
whereby it has managed to draw customers
towards their restaurant.
Pricing Strategy :
• KFC is using skimming pricing strategy on the new
product to reach a segment of the market that is
relatively price insensitive and thus willing to pay
for a premium price for a product. As the product
is new, company need to adjust the price from
time to time base on customer respond and cost of
production.
Location strategy:
• There are many analytical techniques which KFC
uses in location strategy like factor rating, cost-
profit-volume analysis, center of gravity method.
Moreover, by identifying the strategic new location
for the facilities will help KFC to progress rapidly.
KFC uses many location strategies and one of most
important strategy is mobile location strategy by
which they tempt consumers into its restaurants
and away from competitors in a campaign to
promote its new burrito food range
Disadvantages of Location:
• Congested Area
• Parking Problems
Key competitors of KFC:
• -McDonald’s,
-Subway,
-Pizza hut,
-Charcoal.
-Local Street food
• -Bite
KFC’s buying strategy, and their main suppliers:
• KFC’s products are mainly on raw materials like chicken and seasoning
as they are the main source of revenue for KFC.
•
KFC Supply Chain Management System makes use of STAR SYSTEM,
which is a selection of alternative suppliers if their orders for the day
are unable to be made or the quality of the product is reduced. It is
also used as an assessment system which enables them to evaluate
their supplier throughout the year.
• After closing the store, the staff in charge of the inventory of raw
materials inventory and registration will calculate the amount of goods
left to prepare if any more ordering of raw materials is needed.
Product assortment, layout and design strategy of KFC:
• Product assortment: Some of the products of KFC
are: Chicken and Veg Zinger burgers, rice and
spice, Fiery chicken wings, Fried chicken
Hamburgers, Chicken sandwiches, French fries,
nuggets, Soft drinks, Milkshakes, ice cream etc.
Layout and Design strategy:
• Layout: All the layouts selected by the KFC are the
state-of-the-art KFC because they used the proper
methods for layouts analysis of new or existing
outlets.
• Design strategy: The vibrant new KFC restaurant
design is built on concept principles and developed
creative solutions for a range of scheme types,
from new build to re-fit.
Customer relationship strategy:
• Customer satisfaction is a phenomenon which firms
try to achieve through different tactics.
• One such technique for achieving customer
satisfaction and retaining consumers for longer
durations is through the development of customer
relationship marketing (CRM)
• Companies exist since they have a market to serve.
If consumers are not retained, the efforts taken by
a firm to provide diverse types of services and
products becomes a waste.
Technology used by KFC:
• KFC uses ROS (restaurant-based ordering system)
technology at Operational Level of its outlets for
taking in orders and informing its chefs inside the
kitchen to work on the order placed
• This type of technology is an example of INTRANET
Service that most of the fast-food restaurants
today use.
Weaknesses of KFC:
• Untrustworthy suppliers
• Negative publicity
• Unhealthy food menu
• High employee turnover
Suggestions:
• KFC should have to make food with low calories and
fats. KFC can introduce new products to its only
chicken range. KFC could introduce new meals to its
menu and offer pork, beef, or only vegetarian
meals, which would target a wider consumer group
and would result in more customers. KFC can
provide free home delivery services to attract more
customers. KFC can take good care of their
employees to overcome high employee turnover,
and KFC can provide them with bonuses or holidays.
THANKS!
