PROJECT

KFC
By Bunduc Maria, Bucica Irina,
Branzei Alexia
INTRODUCTION
Kentucky Fried Chicken (KFC) is a fast food restaurant chain that
specializes in fried chicken and is headquarte red in Louisville,
Kentucky, United States. It is the world’s second largest restaurant
chain (as measured by sales) after McDonald”s, with almost 20,000
locations globally in 123 countries and territories as of December
2015. The company is a subsidiary of Yum!Brands, a restaurant
company that also owns the Pizza Hut and Taco Bell chains.
KFC was foundedby Harland Sanders, an antrepreneur who began
selling fried chicken from his roadside restaurant in Corbin, Kentucky,
during the Great Depression. Sanders identified the potential of the
restaurant franchising concept, and the first “Kentucky Fried Chicken”
franchise opened in Utah in 1952. KFC popularized chicken in the fast
foodindustry diversifying the market by challenging the established
dominance of the hamburger. By branding himself as “Colonel
Sanders”, Harland became a prominent figure of American cultural
history, and his imagine remains widely used in KFC advertising.
However, the company”s rapid expansion overwhelmed the aging
Sanders and, in 1964, he sold it to a group of investors led by John Y.
Brown, Jr. and Jack C. Massey.
KFC was one of the first fast foodchains to expand internationally,
opening outlets in Canada, the United Kingdom, Mexico, and Jamaica
by the mid-1960s. Throughout the 1970s and 1980s. KFC experienced
mixed fortunes domestically, as it went through a series of changes in
corporate ownership with little or no experience in the restaurant
business. In the early 1970s. KFC was sold to the spirits distributor
Heublein, who were tacken over by the R.J. Reynolds food and
tobacco conglomerate, who sold the chain to PepsiCo. The chain
continued to expand overseas however and in 1987 KFC became the
first Westernrestaurant chain to open in China. The chain has since
expanded rapidly in China which is now the company’”s single largest
market. PepsiCo spun off its restaurants division as Tricon Global
Restaurants, which later changed its name to Yum! Brands.
KFC”s original product is pressure fried chicken pieces, seasoned with
Sanders”recipe of 22 herbs and spices. The constituents of the recipe
represent a notable trade secret. Larger portions of fried chicken are
served in a cardboard “bucket”, which has become a well known
feature of the chain since it was first introduced by franchisee Pete
Harman in 1957. Since the early 1990s, KFC has expandedits menu to
offer other chicken products such as French fries and coleslaw,
desserts, and softdrinks, the latter often supplied by PepsiCo. KFC is
known for its former and current slogan “Finger Lickin”Good”, which
was replaced by “Nobody does chicken like KFC” and “So good” in
the interim.

OPERATION OF KFC
KFC is a subsidiary of Yum! Brands, one of the largest restaurant
companies in the world. KFC had sales of the $23 billion in 2013. KFC
has its headquarters at 1441 Gardiner Lane, Louisville, Kentucky, in a
three-story colonial style building known colloquially as the “White
House”due to its resemblance to the US president’s home. The
headquarters cotain executive offices and the company ’s research
and development facilities. KFC is incorporated at 1209 North Orange
St. Wilmington, Delaware.
By December 2013, there were 18,875 KFC outlets in 118 countries
and territories around the world. There are 4,563 outlets in China,
4.491 in the United States, and 9,821 across the rest of the world.
Outlets are owned by franchisees or directly by the company. Eleven
percent of outlets are company owned, with the rest operated by
franchise holders. Although capital intensive, company ownership
allows for faster expansion of the chain.
Most restaurants are furnished with images of the company founder,
Colonel Harland Sanders. As well as dine-in and take-out, many
stand-alone KFC outlets offer a drive-through option, KFC offers a
limited delivery service in a small number of markets. Units include
express concessions and kiosks which feature a limited menu and
operated in non-traditional locations such as filling stations,
convenience stores, stadia, theme parks and colleges, where a full
scale outlet would not be practical. Average annual sales per unit was
$ 1,2 million in 2013. Worldwide, the daily average number of
foodorders at an outlet is 250, with mostoccurring within a two-hour
peak-period.
As chairman and CEO of Yum!, David C. Novak ultimately has
foremost responsibility for KFC operation. Sam Su is chairman and
CEO of Yum!’s Chinese operations, and Muktesh Pant is the CEO of
KFC. Richard T. Carucci is president of Yum! And Roger Eaton is the
COO of Yum! And the president of KFC.

MARKETING MIX
Streetwise: Veg Snacker, Chicken Snacker, Snack Box, Rizo Rice, Rizo
Gravy, Mini Krusher,
Snacks: Popcorn Chicken, Hit Wings, Bonoless chicken strips
Veggie Selection: Veg Snacker, Veg Zinger, Veg Strip with Salsa
Toasted Wraps
Burger: Veg Zinger, Chicken Zinger, Hot and Zinger
Box Meal
Chicken Delight: Fiery Grilled, Hot and Crispy, Original Recipe
Bucket Chicken
Signature sides: Corn on the cob, Coleslaw, Fries
Krusher: Frappe, Iced Mochaccino, Iced Kappucino
Desserts: Softwirl, Choamor, Brownie Sundae

PRICE
KFC follows both optional pricing and mixed bundling pricing. A
consumer can buy dishes from the basic menu and go for add-ons
(Optional pricing) and there are combo offers which comprise a mix
of items. The pricing of products ranges approximately from 25 Rs.
To-675 Rs.
KFC has variety of options in each category, For e.g.:In Bucket, there
are menus with 8pcs., 12pcs. and also 12pcs. Variety cucket (Hot
&Crispy Original Recipe and Chicken Strips).

PLACE
KFC initialy opened its outlets in metros and Tier I cities, now it has
gradually moved to Tier II cities where the buying power is one the
rice due to rapid urbanization. KFC has its outlets in all major cities
and has overtaken Pizza Hut in Quick service restaurants. By the year
2015, KFC is expected to have 500 outlets in India.

PROMOTION
KFC does promotional activities by offering add-ons to the existing
menu, gift coupons, T-shirts, Kids meal etc. KFC promotes its products
through LCD displays kept inside its outlets which promotes their
products and kindles desires among consumer. India being the
country with largest youth population has favoured the growth of
KFC and it has become the fastest growing fast food chain in India
pushing aside McDonalds” and Pizza Hut.

SWOT ANALYSIS.
STRENGTHS
1. Second best global brand in fast food industry in terms of value
($6 billion). KFC is known by many and is a trustworthy brand in
many countries mainly due to its early franchising and
international expansion.
2. 2. Original 11 herbs and spices recipe. KFC original chicken
recipe is a trade secret and a source of comparative advantage
against firm”s competitors.
3. Strong position in emerging China. KFC receives half of its
revenue from China, where it operates more than 4,000 outlets.
KFC position in China is one of its main strengths as China”s fast
food market is growing steadily.
4. Combination of KFC -Pizza Hut and KFC – Taco Bell. KFC
partnership with other Yum! Brands yields some advantage as
the restaurant can offer items from its partners it doesn”t have
itself and satisfy more customers needs.
5. KFC is the market leader in the world among companies
featuring chicken as their primary product offering. KFC has
positioned itself clearly among other fast food chains bearing
its famous slogan and trademark chicken products.

WEAKNESSES
1. Untrustworthy suppliers. Over the years, KFC has been
contracting suppliers, which supplied contaminated poultry to
 KFC or were mistreating chicken, thus resulting in falling sales
and damaged reputation.
1. Negative publicity. KFC receives much criticism from PETA over
the conditions chickens have been raised. Furthermore, it
received bad publicity for selling chicken wing with kidney.
There are many more or less bad news from KFC, which damage
firm”s reputation significantly.
2. Unhealthy for menu. KFC menu is largely formed of high calorie,
salt and fat meals and drinks. Such menu offering prompts
protests by organizations that fight obesity and hence,
decreases KFC popularity. Consumers also often opt out for
healthier choices.
3. High employee turnover. Employment in KFC is a low paid and
low skilled job. It results in low performance and high employee
turnover, which increases training costs and add to overall add
to overall costs of KFC.

OPPORTUNITIES
1. Increasing demand for healthier food. While demand for
healthier food increases, KFC could introduce more healthy
food choices in its menu and reverse its weakness into strength.
2. Home meal delivery. KFC could fully exploit (it test deliver
services now) this opportunity and reach more customers.
3. Introducing new products to its menu and offer pork, beef or
only vegetarian meals, which would target wider consumer
group and would result in more costumers.
THREATS
1. Saturated fast food markets in the developed economies. The
fast food market in the developed countries is already
overcrowded by so many fast food restaurant chains and this
already proves to be a threat to KFC as it finds it hard to grow in
the developed economies.
2. Trend towards healthy eating. Due to govemment and various
organizations attemps to fight obesity, people are becoming
more conscious of eating healthy food rather than what KFC has
mainly to offer in its menu.
3. Local fast food restaurant chains. Local fast food restaurants can
often offer a more local approach to serving food and menu
that exactly represents local tastes. Although KFC does a great
job in adapting its own menu to local tastes, the rising number
of local fast food chains and their lower meal prices is a threat
to KFC.
4. Currency fluctuations. KFC receives part of its income from
foreign operations. That income has to be converted into
dollars and may affect the business profits, especially when the
dollars is appreciating against other currencies.
5. Lawsuits against KFC. KFC has already been sued for many times
and lost quite a few lawsuits. Lawsuits are expensive as they
require time and money. As KFC continues to operate more or
less the same way, there is high probability for more expensive
lawsuits to come.