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Outlets Promotional Methods Adopted By KFC

Paper Type: Free Essay Subject: Marketing
Wordcount: 3081 words Published: 8th May 2017

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KFC has come with its perfect secret recipe of 11 herbs and spices in 1939 with over 10,000 outlets in Pakistan, KFC has maintained its title for being the Chicken Experts from last 60 years.

In 1996, KFC wore the title of being the market leader in its industry.

KFC is branched out in nine major cities of Pakistan with 35 outlets nationwide.

Company Information:

Outlets & Promotional methods adopted by KFC:

KFC has resorted to Direct Selling approach for selling their products. They sell their products in their own outlets.

Type of Promotion Methods:


Print advertisements

Television Advertisements

Our Vision:

“Cupola creates value through change, challenging paradigms and by applying vision, innovation and skill execution. We seek opportunities for investment where others do not look and we examine these opportunities with open mindedness, thoroughness and hard-headed practicality.”

Mission Statement:

“Our mission is to harness and reap the potential of the rapidly developing markets of the Arabian Peninsula and South Asia. We apply a regional focus to allow us the reap the potential of rapidly expanding markets in the Arabian Peninsula and South Asia. In the mature capital markets of Europe and the United States, we are well regarded as innovative and creative niche investors. We believe in the minimization of risk; through the depth of our senior management and the quality of our professional staff; through exhaustive and through an emphasis on pre-feasibility. What everyone in Cupola shares is an most obsessive drive for quality, an active consciousness of the team approach and a commitment to our collective success. We strive continually to improve the tangible and intangible returns for all our stakeholders.”

Analysis of Mission statement:


KFC has mentioned about the services they provide to the customers:

“We strive continually to improve the tangible and intangible returns for all our stakeholders.”


KFC has mentioned about the markets in which they operate in words:

“In the mature capital markets of Europe and the United States, we are well regarded as innovative and creative niche investors.”

Concern for survival, growth and profitability:

This aspect has been used in the mission statement of KFC in the following words:

“We believe in the minimization of risk; through exhaustive and through an emphasis on pre-feasibility.”

Concern for survival, growth and profitability:

This aspect has been used in the mission statement of KFC in the following words:

“We believe in the minimization of risk; through exhaustive and through an emphasis on pre-feasibility.”


Philosophy is included in the mission statement of KFC in words:

“We are well regarded as innovative and creative niche investors.”

Competitive Analysis:

Porter’s Five Forces Model

Rivalry among competing firms:

There is price competition among KFC and its direct competitors like McDonalds and indirect competitors like Pizza Hut.

KFC is engaged in an intense advertising battle with its competitors which include both advertisement promotion and price competition.

KFC is in an intense product competition with its competitors as all are striving to introduce innovative products at any time period possible.

Above all these, they are trying to improve their service and operations efficiency in order to attract more customers.

The competition is still not very intense as the industry is still in the growth stage as KFC has a upper hand in few areas whereas as it’s competitors has in others.

Currently fixed costs for each competitor in the industry is high which the only entry barrier is for any new comer.

Potential entry of new competitors:

In the fast food industry there is no or very less product differentiation. So new competitors can come up with innovative products into the market which may pose a threat to KFC.

The most important factor that constitutes a barrier of any potential entry into the market is the economies of scale that KFC currently has.

There is lack of adequate distribution channels for new entrants as no new entrants would have enough funds to either join a distribution channel or create their own whereas KFC has an adequate distribution channel.

Potential development of Substitute Products:

Threat of substitute products is always present in the industry as all the competitors of KFC have more or less same products in terms of chicken and other junk food they offer.

But this threat is currently present only in some specific products which has a result on the prices on these products with limited differentiation.

Chicken has the highest substitutability so there are price ceilings on this specific product.

Bargaining power of Suppliers:

The bargaining power of suppliers in the fast food industry for KFC is very low as there are a number of local suppliers from whom KFC buy few ingredients whereas their major ingredients come from foreign suppliers.

There are a number of foreign and local companies who would at any time be willing to supply KFC the ingredients.

Also the fast food industry importance to the suppliers is much more as it is very profitable and also KFC always has the option to switch suppliers.

Bargaining power of Customers:

The bargaining power of customers in the fast food industry is growing with the availability of substitute products and the increasing number of competitors.

There are also the small vendors and indirect competitors in the local fast food industry which increase the bargaining power of customers.

KFC is also facing the same problem of relatively high bargaining power of customers for which they have to rely on aggressive marketing, lower price and products schemes and well trained and efficient operational staff.


External Audit:

External audit includes the external environment assessment. It is a completely professional area in any firm to assess the opportunities and threats that the external environment poses. All the top managerial staff and also few experts are brought together to perform these functions. This assessment is even more important to company than internal assessment or any other because the progress, survival of the company is dependent upon that. It includes issues like,

Competitive advantage of competitors.

Economic conditions in the economy.

Political/ legal conditions in the economy.

Environmental stability to progress.

Technological assessment in both local and international markets with respect to competitors.

Social, cultural, demographic trends in the country.

Internal Audit:

KFC uses internal audit techniques in order to assess and evaluate company’s internal performance. It also helps in formulating strategies for them. This audit includes all the managers at all levels to participate in the audit of the company. This auditing includes issues like,

Conflicts at operational level among staff

Internal strengths and weakness of the company

Competitive advantage of the company

Suggestions and innovative ideas directly and through suggestion boxes

Structuring pay plans, rewards, performance and progress of employees and the company.

Culture of KFC

The culture of KFC is very simple yet impressive. There culture has the following intriguing elements.

Environment that encourages hard work and zeal in work task.

Strict time management for staff.

Complete harmony among employees.

Every new employee has to start from the lowest jobs just to let them know how the actual system operates.

Friendly behavior with customers is a tradition.

Meetings held twice a month to analyze performances.

Every employee and customer is invited to send his suggestion about the restaurant through complaint and suggestion boxes.

Strategy-formulation Framework:



Number 8 in world

Clearly defined strategic goals

Organizational commitment to quality

Economies of scale

Smooth production &operations

Acknowledge training program of staff

Financial &marketing strengths of company increase

Leader in fast food in Lahore , Karachi and Hyderabad

Innovative idea of play are

Introduction of new low cost products


Minimal differentiation in products

Operating in losses till now

One client primary focus

Absence of low fat products in product line

High employ turnover

Relatively higher wages as compared to competitors

Affordability not for masses

Being an MNC have to pay high tax


Potential of a growing fast food industry overtime in other major cities of Pak

Online Delivery can be used for low cost

Demographic trends of increasing educated & professional class

The number of middle class being a target markets increasing in Pak.

Pizza Hut and KFC not expanding very fast in Pak

Opportunity to capture the lower middle class


Growing number of small local restaurants and vendors

Seasonal affect on sales

Food laws in Pak are very strict on MNCs

International environment posing threats to sales and expansion

Slow development in industry due to 9/11 attacks

Poor political stability like in Karachi

Competitive Profile Matrix (CPM)



Pizza Hut


Rating Score

Rating Score

Rating Score


Marketing 0.2

3 0.6

4 0.8

3 0.6


Product quality 0.2

3 0.6

3 0.6

4 0.8


Price 0.1


2 0.2

2 0.2

2 0.2


Operation Quality 0.1

2 0.2

3 0.3

2 0.2


Financial position 0.2

3 0.6

2 0.4

3 0.6


Expansion 0.2

2 0.4

3 0.6

2 0.4


Market share 0.1

2 0.2

2 0.2

3 0.3





Space Matrix:










KFC is competing

well in an unstable


Annual Objectives

Expanding in Pakistan through more retail outlets.

To create more brand recognition.

To close down non-profitable branches in Pakistan.

To introduce new varieties in junk food.

Better sales through marketing and trained staff.

To play a part in community service programs.

To reduce leverage ratio from 32% this year.

To increase net income by more then 60% this year.


HR Policies

Crew will be given much more importance than anything else.

Strict time management will be for all employees.

Every employee shall start working from the lower most jobs to the highest one.

Lazy and incompetent employees shall be terminated on the spot.

KFC shall train their employees themselves through a very strict training program.

General Policies

Targets will be given to every employee for a specific time period.

Different policies are there for different working shifts for employees.

Quality shall to be maintained by the company and the employees

Incentives and rewards shall be given to employees for good performance.

Policy of strict measures to discourage women employee harassment.

To emphasize more on in-store marketing.


As the structure of KFC is centralized, so all the functional area managers can intervene into the tasks of their subordinate managers which creates conflicts as well as inter functional conflicts also arise between the functional areas.

There are also some conflicts arising in KFC like any other company. Some of these are,

Conflicts amongst staff employees.

Conflicts arising due to harassment of women staff.

Conflicts due to customer complaints about any employee.

Conflicts arising due to insubordination of crew leader.

The crew leader is the one who is responsible for the behavior of the staff and he is responsible for solving all the conflicts that arise at this level. In addition, the HR manager and the branch manager may help him.

Method used for resistance to change

Change raises anxieties because people fear economic loss, inconvenience, uncertainty and a break in social patterns.

KFC tries to overcome all the problems by using the educative strategy.

An educative strategy is one that presents information to convince people of the need for change


Restructuring involves reducing the site of the firm in terms of number of employees, number of divisions or units.

KFC reduces its employees by judging their behavior with the customers.

Lazy and incompetent employees shall be terminated on the spot.


Reengineering involves reconfiguring or redesigning work, jobs, & processes for the purpose of improving cost, quality, service & speed.

KFC tries to make their new products to attract customers.

They try to improve their service quality.

Organizational Structure

KFC follows a Functional Structure, which is least expensive and is highly centralized.


Simple to follow.

Least expensive.


More accountability by functional area managers.


Conflicts among managers created.

Organizational inefficiency due to centralized system.

Less co-ordination among functional areas.

Difficulty in implementing policies.

Incentives and Rewards

Pay for Performance:

KFC has a pay for performance policy. Every new employee is first given the lowest job and then scrutinized in that job for the quality of his work and his dedication towards work. If he comes out to above expectations then he is given either a pay raise or some incentives.

Promotion on Performance:

KFC follows a promotion on performance too. Every employee in KFC has to start from the lowest job offered. He has to remain there and his performance is being scrutinized. If he is found to possess certain necessary skills for a higher job, he is promoted.

Employee of the Month:

There is a system of employee of the month in KFC where each month one employee is given the honor of becoming the employee of the month. He receives a cash bonus for it.

Market Segmentation (Crafts M. J)

Geographic Segmentation:

KFC has segmented it’s branches all over Pakistan in such a way that more financially sound areas have more branches of KFC whereas, you’ll seldom see any branch of KFC in areas where the target market is not present.

Demographic segmentation:

KFC has segmented it’s products demographically as cheaper deals are also available for middle class families. There are special deals for young people as well as deals for families and others.

Psychographic segmentation:

KFC deems itself as meant for the middle and upper middle class. So it currently only caters this class through it’s products but it is also trying to segment it in the lower middle class by introducing new cheaper deals like 100 rupee deals.

Behavioral segmentation:

KFC has also segmented itself with occasions as they celebrate every local occasion and introduce new deals.

Product Positioning Map

Strategy Evaluation

There are four criteria for any strategy to be successful.

The strategy should present consistent goals and policies and should not be ambiguous.

The strategy should abide by the concept of consonance where they have to keep up to date of the internal and external environment.

The strategy should be feasible enough to be applied according to the resources and the environment.

The strategy should provide a competitive advantage to the firm.

If a strategy goes by all these rules, then only can it be evaluated as a successful strategy.

KFC’s Current Strategies

To expand into more markets in Pakistan.

Online delivery business.

Introduction of new products at low prices.

Capitalization on strong franchises.

To have aggressive marketing in low return months.

To introduce low cost products.

Produce products of high quality.

To expand in further cities of Pakistan.

Low fat products to be introduced.

To introduce low cost products.

To expand with low cost products.

Research viability before expansion.

Strategy-Evaluation Framework

As we did not get their evaluation so we will continue with the same set of strategies and we will have to get satisfied with the assumptions that the current strategies are in congress achieving the objectives and plans.


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