cb project.doc

1CONSUMER BEHAVIOUR – KFC

COMPANY PROFILE

In the small German village of Herzogenaurach the world began its love affair

with Adidas (Ryno’s Company History). In 1920, Adolf “Adi” Dassler brought to life

those three little stripes. With his brother, Rudolph, Dassler manufactured his first

sports shoe, made for training, after realizing the need for performance athletic

shoes. In1948, the Dassler brothers separated to form their own two separate

companies. Dassler formed Adidas and his brother formed Puma, both

headquarters in Herzogenaurach.

The Adidas mission has changed little since founder Adi Dassler began making

sports shoes in the 1920s: to be the best sports brand in the world. The history of

Adidas is one of consistently meeting the evolving needs of the athlete. Focusing

more on function and less on fashion, Adidas strives to provide athletes with

shoes that can make a noticeable difference in their performance. Meeting athlete

needs is what makes Adidas the best. Adidas America has continued to build on

this history.

In February of 1993, Adidas acquired Sports Inc., a US-based sports marketing

company founded by former Nike executives Rob Strasser and Peter Moore.

Sports Inc. had been working in conjunction with Adidas USA on the design,

development, and marketing of the Adidas Equipment line. This line helped

rejuvenate and reposition the Adidas brand in the United States by creating an

exclusive line focused on fulfilling the functional needs of the athlete and by

utilizing the best materials and athlete input in the tradition of Adi Dassler. It

offered moisture management, thermal insulation, weather protection, ease of

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movement, and safety, helping the athlete to perform more efficiently. After the

successful creation and launch of Adidas America

General Information

For over 83 years Adidas has been part of the world of sports on every level,

delivering state-of-the-art sports footwear, apparel and accessories. Today, with

total net sales of 6.1 billion and net income of 208 million, Adidas - Salomon is a

global leader in the sporting goods industry and offers the broadest portfolio of

products. Adidas-Salomon products are available in virtually every country of the

world. Our strategy is simple: continuously strengthen our brands and products to

improve our competitive position and financial performance.

The company's share of the world market for sporting goods is estimated at

around 15 percent. Activities of the company and its approximately 100

subsidiaries are directed from Adidas-Salomon AG's headquarters in

Herzogenaurach, Germany. Also located in Herzogenaurach are the strategic

business units for Running, Soccer and Tennis as well as the Research and

Development Center. Additional key corporate units are based in Portland, Oregon

in the USA, the domicile of Adidas America Inc. and home to the strategic

business units Basketball, Adventure and Alternative Sports. The strategic

business unit Golf is based in California. The business unit Winter Sports is in

Annecy, France. The company also operates design studios and development

departments at other locations around the world, corresponding to the related

business activity. Adidas-Salomon AG has approximately 13,400 employees

worldwide.

Adidas’ Range of Products in India

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A month after announcing the joint venture, Adidas India Ltd. launched its range of

sports footwear, apparel and accessories in New Delhi on November 1, 1996.

Subsequently, Adidas products were also launched in Mumbai, Bangalore,

Chennai, Hyderabad and Calcutta. Currently, Adidas products are available in 30

cities in India.

The range of Adidas products available in India include sports footwear featuring

some of the most popular innovations and technologies developed by Adidas such

as Feet You Wear, Torsion system and adi wear. The sports footwear available in

India includes a wide range of core categories such as adventure, basketball

cricket, golf, indoor, running, tennis, training, soccer and workout.

Adidas has introduced in India, a wide range of sports wear for both men and

women. These include apparel for athletics, basketball, cricket, golf, running,

soccer, swimming, tennis and training for Men. The women’s range includes

apparel for athletics, golf, running, swimming, tennis, training and workout.

Accessories include bag packs, campus bags, medium and large kit bags, caps,

socks, wrist and headbands.

Adidas Markets its products in India through a combination of mega exclusive

stores (area of 1000 sq. feet and above), exclusive stores, multi-brand stores and

distributors. At present, Adidas is available in 80 exclusive outlets out of which 34

are company – owned with 8 new Company – owned stores planned for 2005 and

in 500 multi-brand outlets in India.

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Menu items

Chicken

KFC's specialty is fried chicken served in various forms. KFC's primary

product is pressure-fried pieces of chicken made with the original recipe. The

other chicken offering, extra crispy, is made using a garlic marinade and

double dipping the chicken in flour before deep frying in a standard industrial

kitchen type machine.

Kentucky Grilled Chicken – This marinated grilled chicken is targeted

towards health-conscious customers. It features marinated breasts, thighs,

drumsticks, and wings that are coated with seasonings before being grilled. It

has less fat, calories, and sodium than the Original Recipe fried chicken.

Introduced in April 2009.

KFC has two lines of sandwiches: its "regular" chicken sandwiches and its

Snackers line. The regular sandwiches are served on either a sesame seed

or corn dusted roll and are made from either whole breast fillets (fried or

roasted), chopped chicken in a sauce or fried chicken strips. The Snackers

line are value priced items that consist of chicken strips and various toppings.

In the UK, Australia and New Zealand, sandwiches are referred to as

"burgers"; there is the chicken fillet burger (a chicken breast fillet coated in an

original-recipe coating with salad garnish and mayonnaise) and a Zinger

Burger (as with the former but with a spicier coating and salsa). Both of these

are available as "tower" variants, which include a slice of cheese and a hash

brown.

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o KFC considers its Double Down product a sandwich in spite of

containing no bread.

A variety of smaller finger food products are available at KFC including

chicken strips, wings, nuggets and popcorn chicken.

Several pies have been made available from KFC. The Pot Pie is a savory

pie made with chicken, gravy and vegetables

The KFC Twister is a wrap that consists of either chicken strips or roasted

chicken.

KFC Fillers are a 9 in (23 cm) sub, available in four varieties over the

summer period in Australia.

Shish kebab – in several markets KFC sells kebabs.

Kentucky Barbecued Chicken – barbecued chicken dipped in the original

recipe

Other products

In some international locations, KFC may sell hamburgers, pork ribs or fish.

Some international locations also may sell KFC 'Mashies' - balls of mashed

potato cooked in original recipe batter.

Three types of salads (which can be topped with roasted or fried chicken) are

available.

Zinger Burger

Chili Cheese Fries

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Parfait desserts – "Little Bucket Parfaits" in varieties such as Fudge Brownie,

Chocolate Crème (once called the Colonel's Little Fudge Bucket), Lemon

Crème and Strawberry Shortcake are available at most locations in the US.

Sara Lee Desserts – Available in either Cookies and Cream Cheesecake or

Choc Caramel Mousse.

Krushers, available in Australia, South Africa and New Zealand. These are

drinks containing "real bits". They include "classic krushers", "smoothie

krushers" and "fruit krushers". Selected outlets are now equipped with

"Krushbars" to serve these drinks.

Nutritional value

KFC formerly used partially hydrogenated oil in its fried foods. This oil contains

relatively high levels of Trans fat, which increases the risk of heart disease. The

Center for Science in the Public Interest (CSPI) filed a court case against KFC, with

the aim of making it use other types of oils or make sure customers know about

trans fat content immediately before they buy food.

In October 2006, KFC announced that it would begin frying its chicken in trans fat-

free oil. This would also apply to their potato wedges and other fried foods,

however, the biscuits, macaroni and cheese, and mashed potatoes would still

contain trans fat. Trans fat-free soybean oil was introduced in all KFC restaurants in

the U.S. by April 30, 2007.

Advertising

Early television advertisements for KFC regularly featured Colonel Sanders licking

his fingers and talking to the viewer about his secret recipe, and by the 1960s both

the Colonel and the chain's striped bucket had become well-known. Despite his

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death in 1980, Sanders remains a key symbol of the company in its advertising and

branding. Before he became a platinum-selling pop star in the 1970s, Barry Manilow

sang the commercial jingle "Get a Bucket of Chicken", which was later included on

Barry Manilow Live as part of "A Very Strange Medley."

Throughout the mid 1980s, KFC called on Will Vinton Studios to produce a series of

humorous ads. These most often featured a cartoon-like chicken illustrating the

poor food quality of competing food chains, mentioning prolonged freezing and

other negative aspects. In 1997, KFC briefly re-entered the NASCAR Winston Cup

Series as sponsor. By the late 1990s, the stylized likeness of Colonel Sanders as

the KFC logo had been modified. KFC ads began featuring an animated version of

"the Colonel" voiced by Randy Quaid with a lively and enthusiastic attitude. He

would often start out saying "The Colonel here!" and moved across the screen with

a cane in hand. The Colonel was often shown dancing, singing, and knocking on

the TV screen as he spoke to the viewer about the product. The animated Colonel

is uncommon today. Still using a humorous slant, the current KFC campaign

revolves mostly around customers enjoying the food. In 2006, KFC claimed to have

made the first logo visible from outer space. KFC says "It marked the official debut

of a massive global re-image campaign that will contemporize 14,000-plus KFC

restaurants in over 80 countries over the next few years." The logo was built from

65,000 one-foot-square tiles, and it took six days on site to construct in early

November. .Many KFC locations are co-located with one or more of Yum! Brands

restaurants, Long John Silver's, Taco Bell, Pizza Hut, or A&W Restaurants. Many of

these locations behave like a single restaurant, offering a single menu with food

items from both restaurants. One of KFC's latest advertisements is a commercial

advertising its "wicked crunch box meal". The commercial features a fictional black

metal band called "Helvetica" performing live, the lead singer then swallows fire.

The commercial then shows the lead singer at a KFC eating the "wicked crunch box

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http://en.wikipedia.org/wiki/Will_Vinton_Studios

http://en.wikipedia.org/wiki/Animated


meal" and saying "Oh man that is hot”. In 2007, the original, non-acronymic

Kentucky Fried Chicken name was resurrected and began to reappear on company

marketing literature and food packaging, as well as some restaurant signage.

In 2010, an advertisement was shown in Australia showing an Australian cricket fan

giving West Indies fans KFC chicken to keep them quiet. The ad sparked a debate

over racism in the ad, suggesting that all black people eat fried chicken. Fried

chicken was eaten by black slaves because it was cheap and easy to make.

Though KFC stated that it was "misinterpreted by a segment of people in the US”

the ad was later pulled from TV. However, several Australian commentators have

expressed the opinion that the ad is not racist, because this is not a racial

stereotype in Australia and the cricket fans in the ad are not African American, but

West Indies cricket supporters (the West Indies cricket team was playing a Test

cricket series against the Australian cricket team at the time of the ad).

KFC is known to be the world’s No.1 Chicken QSR and has industry leading stature

across many countries like UK, Australia, South Africa, China, USA, Malaysia and

many more. KFC is the largest brand of Yum Restaurants, a company that owns

other leading brands like Pizza Hut, Taco Bell, A&W and Long John Silver.

Renowned worldwide for its finger licking good food, KFC offers its signature

products in India too! KFC has introduced many offerings for its growing customer

base in India while staying rooted in the taste legacy of Colonel Harland Sander’s

secret recipe. Its signature dishes include the “crispy outside, juicy inside” Hot and

Crispy Chicken, flavorful and juicy Original Recipe chicken, the spicy, juicy &

crunchy Zinger Burger, Toasted Twister, Chicken Bucket and a host of beverages

and desserts. For the vegetarians in India, KFC also has great tasting vegetarian

offerings that include the Veggie Burger, Veggie Snacker and Veg Rice meals. In

India, KFC is growing rapidly and today has presence in 11 cities with close to 50

restaurants.

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Target Market

• “The process of evaluating each market segment’s attractiveness and selecting

two or more segments”

• As the outlets of KFC are in posh area and prices are too high (overhead

expenses-rent, air-conditioning, employees), so KFC targets upper and middle

classes. Target market depends upon size and growth rate of population,

Company resources and structural attractiveness of market segment.

Market Positioning

• For a product to occupy a clear, distinctive and desirable place relative to

“Competing products in the minds of target consumer.”

• In KFC feedback is taken from the customer in order to know the customer

demands and then improvements are made in products. KFC focuses on

pure and fresh food in order to create a distinct and clear position in the

minds of customers KFC has a strong brand name and they are leading the

market in fried chicken.

• For a product to occupy a clear, distinctive and desirable place relative to

“Competing products in the minds of target consumer.”

• In KFC feedback is taken from the customer in order to know the customer

demands and then improvements are made in products. KFC focuses on

pure and fresh food in order to create a distinct and clear position in the

minds of customers KFC has a strong brand name and they are leading the

market in fried chicken.

Marketing

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The marketing mix is generally accepted as the use and specification of the 'four

Ps' describing the strategic position of a product in the marketplace.

Product

Price

Place

Product

KFC's specialty is fried chicken served in various forms. KFC's primary product is

pressure-fried pieces of chicken made with the original recipe. The other chicken

offering, extra crispy, is made using a garlic marinade and double dipping the

chicken in flour before deep frying in a standard industrial kitchen type machine.

Segmentation

Dividing a market into distinct groups of buyers on the basis of needs characteristics

or behaviour who might require separate product or marketing mixes.

Levels of Market Segmentation

Segment marketing

Individual marketing

Niche marketing

Local marketing

. Individual marketing – Extreme marketing in which marketers focus on

individual customers.

Keep track of individual tastes & preferences of individual customers

Many companies are approaching individuals through e-mails to promote

their products.

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Segment marketing – Dividing the market into different segments on the basis

of homogenous need.

Segmented on basis of broad similarity with regard to some attributes

Segmentation is also sometimes identifying, capturing & retaining potential

new markets

Niche marketing – Marketers effort to position their product or service in

smaller markets that have similar attributes and have been neglected by

other marketer

Segment further divided into sub segments to cater unsatisfied needs of small

group is called as niche

Local marketing – marketers offer customized products to suit the local

markets.

KFC introduced “Muslimized” or “Pakistani” products such as Spicy Chicken,

Hilal Chicken, Zinger Extreme and more…

Geographic segmentation :

KFC has outlets internationally and sells its products according to geographic needs

of the customer. In India KFC focuses how geographically its customers demand

different products. In north India Chicken is the main selling product, while in the

south the Veg. items sell more than the chicken.

Demographic Segmentation

In demographic segmentation, the market is divided into groups based on an age,

gender, family size, income, occupation, religion, race and nationality.

KFC divides the market on demographic basis in this way:

Age is between 6- 65.

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• Gender is both males and females.

• Family size is 1-2, 3-4, 5+

• Income is Rs 10,000 n above.

• Family lifestyle is almost all.

Psychographic segmentation

Dividing a market into different groups based on social class, lifestyle, or personality

characteristics is called psychographic segmentation.

KFC divides market on the basis of psychographic variables like

• Social class- Upper and Middle class.

• Lifestyle is not specific.

• Personality is ambitious and authoritarian

Pricing Strategy

• Market skimming: KFC globally enters the market using market skimming.

Their products are priced high and target the middle to upper class people.

Gradually they trickle down the prices focusing on the middle to lower class

people to penetrate both sides of the market.

• We can compare the price of their products with McDonald, Dominoes and

Pizza Hut. If the competitor provides the same product at a lower price, then

the organization usually lowers the price of its product too.

• In the case of KFC, Fried Chicken is its main selling point and controls a

monopoly over the Indian fast food market (only with fried chicken). It prices

its burgers, French fries and soft beverages with relation to its competitors.

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• KFC price their product keeping different points in view. They adopt the cost

base price strategy. Pricing of the product includes the govt. tax and excise

duty and then comes the final stage of determine the price of their product.

The products are bit high priced according the market segment and it is also

comparable to the standard of their product. In the cost based method we

include the variable and fixed cost.

Channels

• KFC believes in first level channels in the order given below:

– Manufacturers

– Retailers

– Consumers

KFC works on the flow of good operation techniques i.e. “Good Operating

Manager→ leads to “Good Team Selection →Good Services → Good

Targets → Good Revenues through the following internal strategies:

• Training

• Incentive based targets

• Recognition for good work

• Performance based bonus

• Employee benefits to keep them motivated

• Promotion

.

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RESEARCH OBJECTIVE

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