KFC Marketing Plan - Research Paper Example

KFC Marketing Plan Environmental Analysis The Marketing Environment 1. Competitive Forces The competitive forces are a major factor of concern for any organization operating in any industry (Pride & Ferrell, 2012). In the context of KFC, the competitive forces is intense as there are low storage costs, fast growth rate of industry, large industry size and even the exit barriers are relatively low (Morrison, 2014). The industry in which the organization operates is highly competitive and this forces the firm to update its operations so as to sustain in the market place (Chen, Guo and Pei, 2007). As per the competitive forces, the major rivals in the industry for KFC are Pizza Hut, McDonald’s and Burger King (Aaseng, 2011; Morrison, 2014). 2. Economic Forces There are various economic forces that have a significant impact on the business operations of KFC (KFC, 2014a). This organization is greatly affected by global and national economic factors such as inflation and interest rates, cost of labor, stages of business cycle, unemployment rates and growth rates of economy (KFC, 2014a; Pride & Ferrell, 2012). The recession factor has affected the overall income of KFC and this has resulted into making some employees jobless and others hired for fewer hours (Ohme, Birinyi and Gupta, 2010). This was in major part due to the cutting down of the budget by the company. Economic forces restrict customers to spend lavishly in such fast food outlets (Ferrell & Hartline, 2014). 3. Political Forces Government procedures and policies to a certain extent provide the required guidelines for smooth functioning of business operations of an organization (Ferrell & Hartline, 2014). There are certain political forces that affect operations of KFC and these forces encompass some legal factors. Notably, the actions taken in political fields leads to guidelines that affect a restaurant’s customer satisfaction, menu, payroll and profits (Jurevicious, 2013). The stability of the political environment, position of government in relation to market ethics, government view on religion and culture, policies of government with respect to economy, and taxation policy on incentives and tax rates are the major forces that outlines the political environment (Ohme, Birinyi and Gupta, 2010). For instance, the intense rivalry of national election season can generate problems for KFC by creating an environment of negativity among the patrons (Jurevicious, 2013). In this case, the ambiguity about the economic conditions hinders spending. Therefore, patrons concerned about the national budget are probable to reduce their spending, which implies less eat outs (Hower et al., 2011). Other big areas of political strife engross workforce proposals such as proposed wake hikes and immigration laws (Jurevicious, 2013). Other top political issues that may affect the operations of KFC include the food and nutrition topics such as food safety, childhood obesity and allergen worries (Hower et al., 2011). It can be stated that these forces can have an adverse effect or prove to be beneficial for the company. 4. Legal and Regulatory Forces There are some regulatory and legal forces which need to be taken into consideration by the organization in order to achieve their desired goals and objectives (Kurtz & Boone, 2009). KFC needs to maintain the regulations and rules in relation to hygiene factors such as proper training of employees regarding personal hygiene, safety with food, proper usage of utensils and hygienic work environment (Ohme, Birinyi and Gupta, 2010). It even comprises of the legal environment within which a firm operates such as in the United States, there has been a legislation passed related to minimum wages and more recycling requirements (Hower et al., 2011). Additionally, KFC may need to consider financial regulations and tax laws such as the rules for food donations, restaurant depreciation write-offs and credit-card swipe fees (Hower et al., 2011). Moreover, since the legal arena keeps on changing, it would be significant for the restaurant to prepare for other future regulations such as the possible ban on single use plastic bags and the agricultural policies that require the use of local produce and products (Jurevicious, 2013; Hower et al., 2011). 5. Technological Forces Technology is useful in almost all aspects of daily activities. Technological forces can be considered as the major drivers in the context of globalization (Pride & Ferrell, 2012). These forces help to increase efficiency levels of production and even some of these forces can be treated as technological developments (Alves & Vazquez, 2013). The emergence of new technological devices such as smart phones and tablets has made online reservations and purchases in restaurants very easy (Kurtz & Boone, 2009). In KFC, technology is the most vital component as this facilitates customer satisfaction at its food outlets (Ohme, Birinyi and Gupta, 2010). The organization has incorporated the latest technology into their systems (Morrison, 2014). The restaurant will incorporate new mobile platforms where patrons can place their orders and make reservations online and make payments online too or through mobile money (KFC, 2014a). KFC also plans to partner with some of the mobile providers to offer USSD codes through which they can access the day’s menu and also make suggestions on the kind of meals they would like served (ET Bureau, 2014). Additionally, some of the latest advanced technological methods that are used in KFC are digital screens, cooking utensils, special devices for staff such as wireless headphones (KFC, 2014a). 6. Socio-cultural Forces Socio-cultural forces majorly encompass demographic and cultural aspects related to external macro environments (Ferrell & Hartline, 2014). KFC operates in different zones and is even comprised of employees belonging to different cultural backgrounds (KFC, 2014a). Hence the socio-cultural aspect is not only present external to the organization but even internal to the organization (Ferrell & Hartline, 2014). The various customer trends have to be taken into consideration by KFC and offer products as per the needs and demands of the consumer market (Pride & Ferrell, 2012). Demographics and ever changing needs of customers can be considered as utmost priority of the organization (Ohme, Birinyi and Gupta, 2010). People in the United States have very busy schedules and they often rely on such fast food outlets. One of the notable trends among all people is the health consciousness (Frumkin, 2013). People have become particularly concerned on what they eat and have reduced the consumption of fat foods (Frumkin, 2013). In line with this trend, KFC seeks to incorporate food items that are somewhat lower in fat, as compared to most of the food items on their current menu (KFC, 2014a; Dixon, 2010). Moreover, the menu will also include healthier choices such as boneless chicken, rice bowls, salads, and flatbreads (CNNMoney Reports, 2013). Target Markets The target market of KFC can be divided into four segments such as children, teens and young adults, customers on a budget, single working mothers, families and organizations (ET Bureau, 2014). KFC targets those children (girls and boys 12 or below), who like fried chicken (ET Bureau, 2014). Additionally, the firm even targets young adults between 12 to 25 years old who have a craving and love of fried chicken and desire a meal at an affordable price (Sachitanand, 2012). KFC targets this group of customers because most of them tend to have their meals at fast foods during lunch time when there are co-curricular activities and during weekends (Ferrell & Hartline, 2014). The next target group is families as in today’s busy world there is less of family time, which to a certain extent is accomplished by such food outlets (ET Bureau, 2014). On the other hand, the firm even targets customers on a budget who desire a wide variety of foods at low prices. Because of the lack of adequate time to prepare for meals, it is anticipated that the young single working mothers will find their solutions at KFC. Because there has been an increase in the number of single young working mothers, KFC will offer them a one stop place where they can purchase food for their young one or ones (Wiseman, 2012). Additionally, KFC will target institutions and organizations such as schools, colleges and firms. These organizations offer a huge customer base during meal times (ET Bureau, 2014; KFC, 2014a). Current Marketing Objectives and Performance The current marketing objective of the company is to gain a competitive advantage (KFC, 2014a). It has adopted such strategies which promotes its product line as a meal at affordable prices. In the past few years, the firm has been able to perform as desired and has acquired a significant market share (Donnelly, 2010). On the other hand, the marketing objectives are well aligned with the target group (Chistian & Gereffi, 2010). The firm brings forth certain changes in the marketing plan as per the needs and wants of customers (Dixon, 2010). However, the primary marketing focus of KFC remains to be creating customer awareness in the vicinities (KFC, 2014b, ET bureau, 2014). The organization will continue to direct its programs and tactics towards the objective of explaining who KFC is and what it does and offers (KFC, 2014a). III. SWOT ANALYSIS (a) Strengths KFC is recognized as the second best global fast food brand. The value of the company is almost $ 6 billion (Jurevicius, 2013). Prompt services and hygienic foods are the significant strengths of the company. Trademarked recipes like “Hot ‘N’ Crispy” chicken, “Fiery Grilled” chicken etc. are the major strengths in terms of competitive advantage (Jurevicius, 2013). KFC has a rich history as a recognized brand in fried chicken (Jurevicius, 2013). The Kentucky Fried Chicken restaurant is a renowned chicken restaurant with an outstanding image across the world and has been globally placed for almost 50 years from its inception (ET Bureau, 2014). KFC runs almost 5200 fast-food outlets in United States and almost 15, 000 outlets in other parts of the world (ET Bureau, 2014). This makes KFC the biggest chicken restaurant in the world. KFC has a market share of 50% and is estimated that this may increase in the near future. KFC serves a customer base of more than 13 million customers in more than 110 countries (KFC, 2014a, Ferrell & Hartline, 2014). KFC offers an original recipe with extra crispy grilled chicken that is served with home-style sides. KFC has a secret recipe that is served with 11 spices and herbs (Abbiewhouse, 2014). (b) Weaknesses The organization has a significant weakness of high employee turnover. The company has less global presence than McDonald’s (Ferrell & Hartline, 2014). It also has weakness regarding global franchise management (Kurtz & Boone, 2009). KFC has serious weaknesses in terms of marketing exchange with PepsiCo. Soft drinks of only PepsiCo are available in KFC stores. This is a strategic weakness of this global food chain (Jurevicius, 2013). Additionally, KFC primarily offers chicken products to its patrons. This implies that it does not offer novel or differentiated products (Jurevicius, 2013). KFC faces dilemmas in sustaining high standards of hygienic foods (Abbiewhouse, 2013). Additionally, the company faces different challenges in several nations because of poor standards of hygiene (Woollaston, 2013). (c) Opportunities The organization has significant opportunity and can take substantial advantages of the North American Free Trade Agreement. The company has enough opportunities in vegetarian food items (Jurevicius, 2013). The company has substantial opportunities to become responsible towards the environment. It can help them to remove all the negative publicities (Jurevicius, 2013). The shifting demographic trends offer an opportunity to KFC to diversify into new products and regions (Bhushan, 2014). For instance, there is a new trend where patrons are becoming health-conscious, and KFC can target such customers with new healthy products such as the corn on the cob, cornbread muffin and macaroni salad (Bhushan, 2014). Additionally, the increased number of single mothers and take-out foods offers an increased demand for KFC’s products (Brand Republic, 2013). The contemporary business environment requires an organization that is environmentally conscious and accountable (ET Bureau, 2014), as a result, KFC’s move to be environmentally responsible will heighten its reputation and image and increase its revenue and profits (ET Bureau, 2014). Another opportunity available for KFC is the expanding Latin American Market (Brand Republic, 2013). This market presents an opportunity to grow and expand to the region through offering a blend of KFC’s cuisine and local cuisines (ET Bureau, 2014). (d) Threats Competitions from other fast food giants like McDonald’s and Subway are increasing day by day and it is an alarming threat for the company (ET bureau, 2014). Fast food markets are getting saturated in the developed economies and the business of the organization is significantly dependent on the developed economies only (Jurevicius, 2013). Because of its wide expansion, KFC faces the problem of sustaining similar standards in their outlets across countries (Morrison, 2014). Additionally, the increasing number of health conscious customers poses a threat to KFC since most of its menu consists of chicken products (Bhushan, 2014; Morrison, 2014). (e) Matching Strengths to Opportunities/Converting Weaknesses and Threats With the help of a strong financial situation, the organization can mitigate the threat of market saturation by opening new stores in the developing economies (Ferrell & Hartline, 2014). Prompt services i.e. short “Turnaround Time (TAT)” of KFC can reduce the weakness of high employee turnover. With the strength of hygienic and fresh food items the organization can improve its position as far as their environmental stewardship is concerned (Jurevicius, 2013). IV. MARKETING OBJECTIVES According to the annual report of KFC (KFC, 2014a), revenue of the organization in 2013 was US$23 billion. One of the most important marketing objectives of the organization is to increase its market share in the industry of the fast food (KFC, 2014a). Global business expansion is also an important marketing objective for the company (Donnelly, 2010). The organization has a clear cut objective to improve its profit margin to push their growth. The company has designed its marketing strategies according to their marketing objectives (Donnelly, 2010). Increasing customer loyalty is also an important marketing objective of the company. The organization always encourages and seeks for their satisfied customers to be repeat customers (Donnelly, 2010). As far as KFC is concerned, providing dynamic and positive customer experiences are the integral parts of the marketing objectives of the company. The fast food industry has cut throat competitions (ET Bureau, 2014). Being a player in the industry, the organization has significant challenges from different competitors like McDonald’s and Subway (ET Bureau, 2014). KFC has a clear cut marketing objective to gain competitive advantages in the market (KFC, 2014a). Due to that, the organization uses marketing as an effective weapon (Donnelly, 2010). Competitive supremacy with the help of attractive and effective marketing strategy is an inseparable part of their marketing objectives. The organization has stakeholders like investors and franchises and marketing objectives of the company are also being decided to attract the investors and franchisees (Donnelly, 2010). The organization is trying to diversify its portfolio of food items to target more customers (ET Bureau, 2014). KFC has a prominent marketing objective to introduce the newly added food items into the market (Jurevicius, 2013). V. MARKETING STRATEGIES Target market(s) Target markets of the organization are the individuals who have busy and hectic lifestyles (ET Bureau, 2014). People who want or need to devote more time to work rather than spend their time preparing food, the organization targets those customers (Sachitanand, 2012). These kinds of customers are very busy in their life styles and are typically seeking a wholesome good meal at an affordable price (Saxena, 2006). The company also targets middle and high income people. Due to the nature of their business KFC intentionally targets urban and suburban areas (KFC, 2014b). Population of the urban areas is generally higher than the population of the rural areas (Miah, 2014). People of the urban areas have much more disposable incomes as compared to the people of the rural areas (Miah, 2014). These areas generate significant revenues for the company. That is why KFC has chosen these kinds of markets (Miah, 2014; ET Bureau, 2014). Marketing Mix 1. Product Products of the organization are predominantly fried chicken related. All the products of the company are original in nature and give significant importance towards the quality and hygiene of the products (Miah, 2014). 2. Price KFC follows market skimming pricing strategy. The organization enters into the global market with this kind of pricing strategy and targets upper and middle class people of the society (Miah, 2014). 3. Place Urban and semi urban areas are typically the selected areas for the organization (Miah, 2014). The organization usually set up their stores into the commercial and more highly populated areas of the city where lifestyles of the people are significantly more busy and modern (Miah, 2014). 4. Promotion KFC manages its promotions with the help of sales promotion, public relationship, advertising, events, and social media marketing by offering attractive discounts to their customers (Miah, 2014). Marketing Implementation Marketing Organization A marketing organization is an attribute of a marketing campaign and plan (Saxena, 2006). All the departments of KFC are harmoniously interconnected for achieving their objectives (KFC, 2014a). The organization is popularly known for its healthy and effective cooperation. The company is significantly focused towards the customers’ needs and manages suitable human relationship (Darden & Darden, 2010). The organization has unity of command which is significantly important for a marketing organization and KFC focuses on the optimum utilization of resources (Dixon, 2009). Moreover, according to the definition of Piercy (2015) on a functional marketing organization, KFC is a functional marketing organization. In KFC stores, each and every activity is grouped on the basis of function (KFC, 2014a). Ferrell and Hartline (2014) note that all the functions in KFC are sub-divided into different sub-functions. All the sub-functions are supervised by the different managers and all of those managers are controlled by the marketing manager of the company (KFC, 2014a). Activities, Responsibility, and Timetables for Completion In the last 11 years, KFC has sponsored all the Twenty20 international cricket tournaments in Australia, and for the last 5 years, the organization was the main sponsor for the Australian Big Bash (Cricket Australia, 2014). In between 1998 to 2000, the organization was significantly related with the different gaming and entertainment related companies. During this time, KFC joined up with Game Freak, Nintendo and 4 Kids Entertainment (Johnston, 1998; Morrison, 2014). In the last 16 years, Kentucky Fried Chicken Foundation has fulfilled different responsibilities. Starting from 2006 to 2012 the organization has continued with Colonel’s Scholars program (KFC, 2012). In this program the organization awarded $12.5 million educational grants. This responsible activity awarded scholarships to almost 500 brilliant students in US. Since 2005 to 2013 the organization has donated almost 200,000 meals whenever a disaster struck the United States. Evaluation and Control Performance Standards and Financial Controls Sponsoring Twenty20 International in Australia has been significantly successful for the organization (KFC, 2014b). This sponsorship has helped the growth of the company in Australia and it also has sparked the business growth in neighboring New Zealand (Morrison, 2014). Overall performance standards are satisfactory and the company is considering continuing with it (KFC, 2014a). The decision to join up with the different gaming companies has increased the popularity of the brand among the children and youth (Morrison, 2014). Also, in the case of this activity, the company maintained a superior performance standard. Colonel’s Scholarship program and the donation of meals impacted the minds of the citizens in the United States (KFC, 2012). Citizens of our country were emotionally attached with all of these programs. All these activities were managed well by the company and their performance standards were up to par (KFC, 2012). Additionally, the organization has both internal and external financial controls. Lastly, the organization uses both internal audit and the external audit of their different marketing activities (Saxena, 2006). Monitoring Procedure KFC has structured monitoring procedures. They monitor each and every activity on a regular interval. The organization compares results of the previous activities with the current activities (Reynolds, 2005). The regular monitoring procedure helps the organization to adjust any of its marketing activities if required. This procedure assists the organization to be aware of the performance of any activity (Reynolds, 2005). According to Alves and Vasquez (2013), a continuous monitoring procedure reduces the chances of the failure of a particular marketing activity, waste of financial resources, and time. This monitoring procedure is significantly useful for the company to get the competitive picture in the industry (Pride & Ferrell, 2012; Ferrell& Hartline, 2014; Kurtz & Boone, 2013). Executive Summary Marketing implementation, evaluation and control, and monitoring procedures are inseparable parts of the consolidated marketing plan (Kurtz & Boon, 2009). Through the years, KFC has managed all these three things in suitable and professional ways (Dixon, 2012). The organization has evolved as a functional marketing organization, where the organizational goals are significantly dependent on the departmental cooperation. The organization has come up with different marketing activities and tried to gain significant competitive advantages by performing various marketing activities (Dixon, 2012). KFC has involved itself with the sponsorship of different sporting events and they have teamed up with various gaming companies and entertainment media to market their products in a more profitable way to attract more and more customers (KFC, 2014c). KFC has come up with different philanthropic responsibilities (CSI News, 2014; KFC, 2014c). They have continued with their scholarship program now for 6 years (KFC, 2014b). They have donated free meals and during all the activities or social responsibilities, the organization has maintained satisfactory standards of performances (KFC, 2014a). This has given substantial benefits to the company as far as their business profitability is concerned. Moreover, KFC manages strict financial control (Morrison, 2012). The whole financial control is guided and measured by the internal and external audit. Therefore, it helps them to utilize their financial resources in a suitable manner without wasting money. The monitoring procedure of this organization is also very structured and effective (Pride & Ferrell, 2012; Kurtz & Boone, 2009). The continuous monitoring procedure after regular intervals of time assists the management of the company to adjust their marketing plans according to the needs of the situation (Reynolds, 2005). Lastly, this information is clearly indicating that the organization has a suitable marketing plan where all the above parts are taken care of properly. References Aaseng, N. (2011). Business builders in fast food. Minneapolis: Oliver Press. Abbiewhouse, A. (2013, January 23). Poor food hygiene discovered at Yeovil's KFC weeks after opening. Retrieved October 27, 2014, from www.westerndailypress.co.uk/Poor-food-hygiene-discovered-Yeovil-s-KFC-weeks/story-17939224-detail/story.html Alves, H., & Vázquez, J. L. (2013). Best practices in marketing and their impact on quality of life. Dordrecht: Springer. Bhushan, R. (2014, September 27). Restaurant chains increasing vegetarian menu rapidly in the country - Economic Times. Retrieved October 27, 2014, from http://articles.economictimes.indiatimes.com/2014-09-27/news/54377122_1_vegetarian-yum-restaurants-kfc Brand Republic. (2013, June 16). KFC targets women customers - Economic Times. 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