final presentation - kfc

Service Marketing Group Assignment

Group B1

Crew Members

Names Student No

Tuan Kitchilan (Team Leader) HDM / 2014 / 014

M. Marwan HDM / 2014 / 017

P.I.J. George HDM / 2014 / 030

Dinusha Lakmal HDM / 2014 / 022

Srikara Abayagunawardhana HDM / 2014 / 006

Hafeez Afzal Nazim HDM / 2014 / 041

M. Shafraz HDM / 2014 / 016

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Company Introduction & SWOT analysis

Environment and Market Analysis

Problem Behavior and Integration to Service Concepts

Recommendations and Solutions for Service Marketing Problems at

KFC

Conclusion

Content

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Company Profile Type: Wholly owned subsidiary

Industry: Fast food

Genre: Southern fried chicken

Founded: 1930 (original) (North Corbin, Kentucky)

1952 (franchise) (South Salt Lake, Utah)

Founder(s): Harland Sanders

Headquarters: Louisville, Kentucky, U.S.

Key people: Roger Eaton, President

Harvey R. Brownlea, COO

James O'Reilly, VP for Marketing

Products: Fried chicken, grilled chicken, etc…

Revenue: $520.3 million

Employees: 455000

Parent: Yum! Brands

Website: http://www.kfc.com4

KFC is an international fast food chain Few countries operated as under franchise agreements Reputed for unmatchable tasty food, Best in class service and

hygienically certified fast food KFC serves more than 12 million customers every day Geographically well spread & KFC serves in 115 countries Well penetrated & It operates more than 17,000 restaurants Ranked as 201, One of the Fortune 500 companies in the world, with a

annual revenue exceeding $13 billion

Introduction to

Africa – 70 Outlets Malaysia – 579 Outlets

Sri Lanka – 26 Outlets China - 4,563 Outlets

India – 361 Outlets Indonesia – 466 Outlets

Japan – 1200 Outlets United Kingdom – 784 Outlets

Australia – 600 Outlets New Zealand – 100 Outlets5

KFC is currently catering to few clearly identified segments. Following is an analysis of the each segment and their needs.

Segmentation Approaches and Needs by Segment


• Kids• Teens• Youth• Family• Young Executives

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SWOT Analysis

Weaknesses

Opportunities Threats

- Strengths - •Worldwide recognized brand

•Trusted quality, known as one of the best in the world

•Repeat purchases are above the industry standards

•Can delight customers who loves to eat chicken (Product depth)

•No direct competition on the core product with the same taste

•Successful distribution of outlets

•Strategically selected locations

•Successful brand, Possibility of cross selling with the support of patent

company. (KFC, Pepsi Cola and Lays)

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Weaknesses


- Strengths -

•Financial strength and stability

•Successfully managed value chain. i.e.– Long term contract with suppliers

•Strong bond with suppliers

•Well trained, well managed employees

•Capable of diversifying into new segments of food products within a very

short period

•Well designed services: Pre purchase stage Service encounter stage (Moment of truth) Post encounter stage

SWOT Analysis

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Weaknesses


- Weaknesses -

• No island wide coverage / limited island wide delivery radius

• Poor market penetration strategies – Middle class

• Poor adaptability on customer changing needs (Local trend)

• Mainly related for chicken related products / narrow product width

• Mainly dependent only on one core product

• Need more sales revenue to reach the break-even point

• Poor communication flow with in the organization

SWOT Analysis

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Weaknesses


- Weaknesses -

• Poor Human Resources Management / High employee turnover

• Poor pay management system

• Few options available for health concern customers

• Raw materials for the core products to be depend on third party

suppliers

• Can not change the enhancing elements according to the geographical

locations. i.e. – Using the air conditioner in Nuwara-eliya

• Maintain the consistency on taste (Dining & take away)

SWOT Analysis

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Weaknesses


- Opportunity -

• Economic growth may help the future business expansion

• Opportunity on low cost labour by using part time employees

• Ability of expansion with fast food counters. Universities, institutes, cricket

matches, etc…

• Ability for cross selling. Using the customer base of Franchisee partner.

Eg: Can open up mini outlet in Cargills food city

• Expansion in distribution. i.e. – Increasing the number of drive-through

• Introduction of new product varieties for kids. i.e. – high calorie foods

SWOT Analysis

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Weaknesses


- Opportunity -

• Can use cost effective advertising methods for the target group by TTL

• Product development - Offer high calorie nutrition foods

• Outdoor catering. i.e.: Kids Birthday Parties, etc…

• Growing trends for fast food

• Social and cultural changes favoring for hygienically certified fast foods

• Expediting a TTL strategies for effective communication, SMS alert when

passing a KFC outlet. i.e. – developing a mobile app (Android, IOS)

SWOT Analysis

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Weaknesses


- Threats -

• Changing the food habits may influence the customers to deviate from KFC

offerings

• Diseases like bird flu, viral diseases are the big threat for KFC

• Difficult to convince customers on perceived pricing strategies as competitors can

offer similar products for low price

(Net value = perceived benefits to customer – all perceived outlays)

• Growing trend for health conscious food. i.e: Oil free food, Low sugar

• Growing head on competition with major players in the market. i.e. – Introduction

of Mc Chicken and Crispy Chicken Burger by McDonalds

• Intensive competition among existing players

• Viral marketing can destroy the brand image

SWOT Analysis

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PESTEL Analysis

Political

Economic

Social

Impact - Moderate

Impact - High

Impact - High

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Ecology

Legal

Cost effective communication methods on digital marketing platform

Efficiency & productivity is key component on selecting the technology

Used to preserved the food values

Technological

HACCP Certification – Hazard analysis for critical control point FSSC – Food safety security certification Food authority approvalMedical screening Test. Eg: Communicable diseases,Business registration ISO 22000 – Food safety management systemFactory Ordinance – Working hours, leave entitlement, safety and security, over time payments, etc..Food Grade Certificate – Supplier should certify for adding ingredients

Impact - High

Impact - Moderate

Impact - High

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Michael Porters 5 Force Theory AnalysisForce Impact Remarks

Bargaining power of suppliers

High

• Very few formal suppliers, informal suppliers are plenty as the company adhere to international standards company purchases only from formal suppliers whom could meet the international standards

• Have to depend on imported raw materials

Substitutes Moderate

• Availability Alternatives products for the competitive price range

• Intensive distribution for substitute products• Customized options are available with competitors

Threat Of New Entry

Very High

• Any competitor can substitute the products in a very short period of time

• No patent rights • Tax free concession for local entrepreneurship• Availability of New innovative ways enter to the market

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Force Impact Remarks

Barging Powerof Customers

Low

• Customer expects on perceived value

• Availability of wide variety of food items

• Difficult to change the customers cultural attitudes

Competitor Rivalry

(Industry) Very High

• Financial strength and stability

• Competition among the Internationally reputed brands

• Wide range of product availability with a better value for money

Michael Porters 5 Force Theory Analysis

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MARKET SCOPE

- Analysis of Current and Potential Competitors -


PRODUCT SPACES18

Weaknesses


- Pre purchase stage -

•Value chain management

•International proven technology and processors for food manufacturing

•ISO adoption and other required certifications under the legal compliances

•Successful service blueprinting

•Well trained employees on hard skills and soft skills

•Internationally recognized and accepted physical evidences

•Uniform communicates the uniqueness and the team spirit among them

Service Design

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Weaknesses


- Service encounter stage – Moment of truth

•Soft skills of employees

•Using the aroma for mouth watering

•International recognized display standards

•Moment of truth is well managed (Customer touch points)

•Food is served in a way it could preserve the freshness

•On job training

Service Design

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Threats

- Post encounter stage – Evaluation of service performance •Staff recondition card system

•Suggestion box

•Instance customer feedback by

using the corporate website

Service Design

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Strategies to overcome Weaknesses to Strengths

• Island wide coverage / cost effective way of delivery in remote areas

• New product lines to suite the needs of middle class

• New product line for local cultural needs (Vegetarian foods)

• Availability of wide product range with varieties (Product Length / product

width / product depth)

• Introduction of read meat and sea food

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• Cost effective operations through centralized back office

(Intensive distribution)

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• Solutions for poor HR management - proper job designing, clear job

description, proper pay management system, using the correct job

designing technique (Job rotation), KPI’s for each and every job category,

clear carrier path, identification of performance gap, designing of a proper

T & D according to the performance gap.

• Signing up a long term contract with third part suppliers

• Standardized service designing according to the geographical locations.

i.e. – Using heaters in Nuwara-eliya

• Cabins to be installed to preserve the food quality in transportation – i.e. –

hot cabins on delivery bikes

• Ensuring effective communication methods. i.e. - top down and bottom up 24

Strategies to overcome Threats to Opportunities

• Adaptation of out- in approach in designing recipe and menus. i.e.:- Customer

observation, questionnaires , focused group discussions , social and cultural

changes to be considered.

• Designing of service & product pricing according to the competition without

compromising the quality standards & brand image

• Introduction of healthy food varieties. i.e.- Fat free / sugar free

• Branding with local values

• Associating the brand with opinion leaders

and opinion formers to enhance the credibility

of the brand Adaptation to Local Culture

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Method used for service quality measurement

• Cleanliness

• Hospitality

• Accuracy

• Maintenance of Facilities

• Product Quality • Speed of Service

To provide good services they have a philosophy of CHAMPS Program. CHAMPS stand for the six universal areas of customer expectation common to all cultures and all restaurants concepts.

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Introduced SERVQUAL attribute related survey questionnaire to obtain customer satisfaction.

Tangibles: The physical representation or images of our service

KFC has up to date equipment and technology. KFC has appealing facilities. KFC uses visually appealing materials – e.g. Uniform. Communication channels make you find information easily.

Reliability: Our ability to perform the promised service dependably and accurately

When KFC promises to do something by a certain time, it does so. KFC shows a sincere interest in solving customer complaintsKFC performs the service right the first time. KFC insists on error free records.

Responsiveness:Our willingness to help you and to provide prompt service

The staff of the KFC tells you exactly when services will be performed

The staff of the KFC gives you prompt service. The staff of the KFC is always willing to help you. The staff of the KFC is not too busy to respond to your questions

Assurance:The knowledge and courtesy of staff, their ability to inspire trust and confidence.

The staff of the KFC instills confidence in customers. Customers have comfortable interactions with employees. Staff of the KFC is courteous with you. Staff of the KFC Have the knowledge to answer your questions.

Empathy: The caring individualized attention we provide to stakeholders.

Customers are given individual attention by KFC staff KFC operating hours are convenient to all its customers. KFC staff has your best interest at heart. Staff of the KFC understands your specific needs.

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How KFC Has Tangibilised The Intangibles

CRITERIA THE ACTION

Visualization In store Images, menu card presentation, Physical atmosphere

AssociationFood manufacturing technology, experience and technological know-how of the franchisee partner, brand logo represent the founder & symbolizes of the original recipe - metaphor (Colonel Harland Sanders)

Physical Representation

Physical Appearance of employees, Uniforms, internal seating arrangement, cleanliness, music, pleasant environment, Service standards in all aspects

Documentation

FSSC – Food safety security Certification

Medical screening Test. i.e: Communicable diseases, etc..

ISO 22000 – Food Safety Management System Factory Ordinance – Working hours, leave entitlement, safety and security, over time payments, etc.. ISO 14001 – Environnemental management system

HACCP Certification – Hazard analysis for critical control point Food Authority Approval Business Registration Food Grade Certificate – Supplier should certify for adding ingredients ISO 50001 – Energy management system

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CRITERIA THE ACTION

People Involvement

Continuous training & development, based on performance gap analysis, distribution – home delivery, soft skills of employees, instance customer feedback system, suggestion box, staff recognition card, etc…

Place Advantage 26 branches island wide mainly covering cities with the support of delivery members

BrandingAssociation of Premium Branding, sensory branding, aroma, colour associated with red and white (Red – strong, Aggressive and ruggedness)

Use of TechnologyUse of internationally recognized and reputed technology for highest safety standards for food processing

Tangibility the Intangibles

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Recommendations and conclusion for service marketing problems at KFC

• Positioning promise: Premium Quality, Localization and positioned as a credible brand

• Value Proposition: “More for More”

Introduced SERVQUAL attribute related survey questionnaire to obtain customer satisfaction.

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- ADOPTED STRATEGIES FOR MARKETING MIX –

•Product Strategy : New product lines to suite the needs of middle Social Class, Vegetarian food, Availability of wide product range with varieties i.e.- Fat free / sugar free. high calorie foods for kids.

• Price Strategy: Cost effective operations through centralized back office operation, Designing of service & product pricing according to the competition without compromising the quality standards & brand image

(Competitor Based Pricing)

• Place Distribution Strategy: Intensive distribution developing island wide networks

• Promotion Strategy: ATL and TTL Advertising methods for effective communication, SMS alert when passing a KFC outlet. i.e. – developing a mobile app (Android, IOS)

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• People Strategy: Uplifting the standards of HR management - proper job

designing, clear job description, proper pay management system, using

the correct job designing technique (Job rotation), KPI’s for each and

every job category, clear carrier path, identification of performance gap,

designing of a proper T & D according to the performance gap.

• Strategies Aligned to Service Process Development:

SERVICE BLUEPRINTING (Visualization of service delivery, identifying

points where failures are most likely to occur) Service process , points if

contact and evidence of service from the customer’s point of view.

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MANAGE THE SERVICE ENCOUNTER - front-line staff need to be motivated with hard skill and soft skills

FAIL SAFE METHODS Eliminate the error Identify potential fail points; take preventive measures; prepare contingency

1. Treatment errors—human failures during contact with customer eg. ensuring effective communication methods

2. Tangible errors—failures in physical elements of service eg . Cabins be installed to preserve the quality of food

Strategies aligned to Physical EvidenceStandardized service designing according to the geographical locations. i.e. – Using heaters in Nuwara-eliya. 33


Questions

Thank You

final presentation - kfc

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