Analyzing KFC's Marketing Strategies and Industry Positioning

The task is to analyze KFC’s strategic marketing approaches in the UK, employing tools like PESTEL analysis to evaluate external environmental influences and Porter's Five Forces to scrutinize competitive dynamics. This involves reviewing key academic literature on these frameworks, examining KFC's marketing mix decisions, and understanding their implications for firm performance within the fast food industry. The aim is to derive insights into how KFC positions itself against competitors like McDonald’s in a dynamic market environment.

RUNNING HEAD: Marketing management
Hewlett-Packard
Marketing management
KFC New Zealand

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Executive summary
KFC is known as Kentucky Fried Chicken, a food chain famous for serving fried chicken. The
present report has highlighted the marketing management practices undertaken by KFC.
The organization is currently facing many marketing environmental issues affecting the
overall performance. In this regard, the organization should develop strategies related to
marketing management of the organization like segmentation, targeting and positioning to
improve the performance of the company. It should implement a marketing mix analysis
which will enable company to focus on 4P of the mix. The product, price, place and
promotion strategy is defining the marketing mix of the KFC. The marketing manager of KFC
should also develop a future marketing management plan for managing the situation in
future in the organization. It should encompass different action plan, metrics and various
other measures to define the future strategy of the organization.

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Table of Contents
Executive summary............................................................................................................................1
1. Introduction:.................................................................................................................................3
1.1 Background of KFC....................................................................................................................3
1.2 Portfolio of organization........................................................................................................3
2. Current market environment......................................................................................................3
2.1 PESTEL analysis:................................................................................................................3
2.2 Micro analysis of KFC (Porter Five Force):.....................................................................5
2.3 Market situation.....................................................................................................................6
3. Marketing strategies...................................................................................................................7
3.1 Market Segmentation analysis:..............................................................................................7
3.2 Target Market Analysis............................................................................................................8
3.3 Market Position Analysis.........................................................................................................8
4. Marketing mix analysis...............................................................................................................8
4.1 Product strategy analysis:.......................................................................................................8
4.2 Price strategy analysis:............................................................................................................9
4.3 Place Strategy Analysis.........................................................................................................10
4.4 Promotion Strategy Analysis:................................................................................................10
5. Marketing Budget......................................................................................................................11
6. Marketing Action Plan..............................................................................................................12
7. Marketing controls:...................................................................................................................13
7.1 Marketing metrics......................................................................................................................13
Conclusion...........................................................................................................................................14
References........................................................................................................................................15

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1. Introduction:
1.1 Background of KFC
KFC started operating in New Zealand in 1971 in Auckland. KFC is now present in more
than 98 stores in the country. It also maintains consistency in serving the same delicious
food in all its stores. The real original recipe Chicken popular in New Zealand is uses
Colonel’s world known 11 herbs and spices. KFC New Zealand also introduced a wide range
of fresh taste familiar product. The menu of KFC also includes Hot and Spicy chicken,
Wicked Wings, Twisters, and many more delicious varieties for which the people of New
Zealand are crazy. Most recently, transformation of stores with cubicle space sitting
arrangement, outdoor seating and plasma screens is the main aim of KFC. They developed
more than 65 stores in New Zealand. In fact, New Zealand’s store plan has been so effective
that it has been taken on as the standard for KFC worldwide. The vision of KFC is to be the
leading food services provider group in the world and give consistent quality products. The
mission of the KFC is to increase the profitability, enhance shareholder value and providing
sustainable growth every year.
1.2 Portfolio of organization
The products offered by KFC are chicken, mashed potatoes, biscuit, gravy coleslaw, corn on
the cob, green beans, and drinks. The report describes the various marketing practices of
KFC New Zealand. The analysis of various current market environment factors is discussed
to know the impact of environmental factors on KFC. After this the competitor analysis is
described to know the effect of competitors on the performance of KFC. Then the marketing
strategies like segmentation, targeting and positioning is discussed to know the target
market strategy of KFC. After analysing marketing strategies the marketing mix various
components is discussed in detail to know the 4P strategy of company. In the end future
marketing plan and strategy of the company is analysed to find the future target and aim of
company.
2. Current market environment
2.1 PESTEL analysis:
2.1.1 Political factors:

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Present: The political factors which affect the performance of KFC primarily are tax
regulations and government stability. The company’s presence in New Zealand will be
affected positively as the political system in New Zealand is stable and company
performance will not be affected due to instability.
Future: The Company needs to adopt changes frequently according to the political
environment in a country in future (De Mooij, 2013). Moreover there are several laws related
to health and food security and are becoming mandatory for the organizations to follow
them.
Legal factors:
Present: KFC is a well-known company in the food industry. In order to comply with the
applicable law, the KFC is adopting and adhering to prevalent regulations in New Zealand.
The company’s financial statement and other documents need to be authentic and valid in
order to exist in that country (Hollensen, 2015).
Future: KFC should also fulfill sustainability regulations whichever applicable on it. The
organization will try to enhance the sustainable economic growth and social equity.
2.1.2 Economic factors:
Present: The economic factors bring the concentration of the organization towards the
specific determinants which affect business. The main determinants are interest rates,
inflation and taxation leaving impact on the revenue generation of KFC. Moreover the prices
of products of KFC are changed as there is higher tax on the food products.
Future: In future, the purchasing power parity (PPP) inside the New Zealand is increasing
from time to time. The increase in PPP started already in last decade which is leaving effect
on the restaurants chain like KFC. The KFC future growth will be affected due to less
purchasing power amongst youth and middle income families.
2.1.3 Social factors:
Present: Society's attitudes are towards the habit of consumption of healthy food are
changing in the recent year. Individuals these days are consuming more healthy food and
less fried food. Today, customers are selecting the restaurant which provides quality food,
lesser service time and variety of products.
Future: KFC's customers are generally price sensitive and will go to some other restaurant in
the event they find the value they received isn't justified. In future also the customers will

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needed to be served quickly in very less time and to be out of the eatery in very less time. In
New Zealand KFC, is adorning its outlets indifferent national and social occasions. The
advantage which KFC provides is employment with every new store to approximately 20-25
people.
2.1.4 Technological analysis:
Present: KFC uses technology to attract customers from other competitors. The innovative
techniques are introduced in the business area with an increase in competition. With the
lower rates and modernization, fast food companies are attracting youth by providing the
entertainment activities at restaurant.
Future: For a fast food diner, innovation will have an impact on the company reputation.
However KFC should look to competitor’s improvement and upgrade itself in terms of
organizing development.
2.1.5 Environmental factors:
Present: It is one the important analysis needs to be done by the company to know the effect
of its activities on the environment. KFC is moreover preferred by customer as the waste
produced by it is not harming the environment to great extent like industrial waste.
Future: KFC purchases its packaging and raw material from a company which will be
contributing in deforestation for preparing the packing material.
2.2 Micro analysis of KFC (Porter Five Force):
2.2.1 Threat of new entrants:
Present: Though the fast food chain industry is difficult to enter due to the
presence of a large number of competitors. KFC, Pizza Hut, and many other
brands are giving a stiff and tough competition to new entrants in the market.
Moreover, the Radix Fried chicken has become more popular nowadays because
of offering a renewed menu (Dobbs, 2014).
Future: KFC is having the advantage and image of possessing well-known brand
amongst the mind of customers. This is creating the benefit for KFC as the
international ventures of KFC are becoming more popular (Armstrong, et al.,
2014). It is preferable by customers as they choose KFC in comparison to other
new fast food restaurants unless the new entrants actually offer different menus
as compared to the more established restaurants.
2.2.2 Threat of substitute products:

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Present: There are various fast food outlets in the market offering comparative
food variety as KFC (Magretta, 2011). For example Popeye's Louisiana Kitchen
has been one of the best market opponents for KFC. The fast food eatery offers
side dishes such as, Cajun sauce, pureed potatoes and rice notwithstanding
giving customers mellow and fiery chicken alternatives (Varadarajan, 2010).
Future: The threats of substitutes in case of KFC products in future are high as
other competitors are providing identical products only. This has made the fast
food eatery exceptionally prevalent. Moreover, KFC has increased its diversion
by giving Wi-Fi administrations and furthermore providing morning service to
customers.
2.2.3 Bargaining power of suppliers:
Present: KFC is having access to numerous suppliers of their primary item which
is chicken. This gives the eatery adaptability to work with the best suppliers. For
example in 2004 the organization terminated an agreement with one of their
chicken providers on account of unrefined butchering of the chicken. The major
population of suppliers declines the impact of individual suppliers on McDonald's.
Future: In light of the absence of territorial or worldwide organizations together
among suppliers the power of suppliers will decrease in future as well. This
implies they don't control the delivery system connected to McDonald's offices.
The abundance of other items present in market easily like flour, wheat and other
also reduces the effect of these suppliers on KFC.
2.2.4 Bargaining power of buyer:
Present: The bargaining power of buyer is high in influencing KFC’s business. In
case of KFC buyer’s high bargaining power depends on two factors like they are
low switching cost for individuals and small quantity of product purchased by
customers. It is simple for customers to switch brands, consequently making
them capable in convincing establishments like KFC to assure consumer
satisfaction.
Future: Every buyer purchase is small in comparison to KFC aggregate income
(Shen & Xiao, 2014). For future determination of demand by customers becomes
a difficult task as customer switch to other brands easily. In this manner, the Five
Forces model demonstrates that KFC must incorporate the buying power of
customers as amongst the most critical factors in creating future strategies.
2.2.5 Competitors rivalry
Present: KFC is facing the strong competition from rival companies. This
component of Porter’s five force model discloses the power of competitors

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present in market on each other. Companies like McDonalds, Pizza Hut and
Subway are the main competitors of KFC.
Future: in future aggressiveness will be significant factor in development, forceful
promotion, exchanging cost, and brand name loyalty (Dey, 2016). These all
implies that earning customers loyalty is difficult and in this manner making rivalry
significantly harder in future also. The Five Forces model demonstrates that
competitive analysis is among the huge attentive point in KFC strategy formation.
2.3 Market situation
2.3.1 Competitor Analysis:
Competitor Brand Product benefit/features
McDonalds Burger  McDonald’s products
never run out of
stock, Less costly,
low calorie,
convenient to carry
anywhere, double
Cheeseburger
(Zaheeruddin, 2015).
Subway Chicken  Gluten free options,
freshly cooked, 100%
white meat chicken,
special species used.
Pizza hut Pepperoni Pizza Fresh and frozen for safety
from harmful food infection,
Different toppings available.
3. Marketing strategies
3.1 Market Segmentation analysis:
3.1.1 Demographic:

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Present: KFC has many demographic segments to provide product according to the target
customer needs. It is called division of market into various geographical units, for instance
countries, regions and cities (Ryan, 2016). KFC has outlets in almost every country.
Future: KFC will be selling its products in accordance with the needs and demands of
customer. For instance, it is planning in New Zealand to have has approximately 500
numbers of outlets and to be present geographically in every city of New Zealand.
3.1.2 Psychographics:
Present: This segment helps KFC to find out the lifestyle, personality traits and values of
people. These factors will be enabling KFC to find out the needs and demands of family and
trends in food industry.
Future: In future the families will be more active and going for picnics will be targeted by KFC
preferably more than families who prefer home food at daily basis (Zahay & Griffin, 2010).
Moreover the modern family will purchase more frequently market food for their family
members then conservative family.
3.1.3 Geographic:
Present: KFC is a global company and located all over the world. Therefore the company
should target other countries to introduce their product and become a famous brand in every
possible country (Wymer, 2011).
Future: The segmentation in geographic areas in future will be done by KFC like in country,
states and cities variety of choices of customers. Then after deciding segment company
should focus on best way like regional retail stores to introduce KFC’s product.
3.1.4 Behavioural:
Present: It is dividing the market in different groups on the basis of the customer behaviour,
attitude and response towards the product. KFC is segmenting the market in behavioural
segment according to taste, quality, ingredients and many more categories.
Future: Following four will be main categories in future which KFC will use in behavioural
segment.
1. Taste conscious
2. Quality conscious
3. Class conscious

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4. Combination of price and quality
3.2 Target Market Analysis
Undifferentiated marketing analysis:
Present: In an undifferentiated marketing also known as Mass marketing, a firm typically
ignores individual segment differences and targets the whole market with mainly one offering
(Dibb, 2010). It emphasizes on designing a marketing program for a product or a service
with a superior image that can be sold to huge number of buyers through mass distribution
and communication channels.
Future: Undifferentiated Marketing will be appropriate for KFC in future also, as all the
consumers in fast food have identical preferences and the market showing no natural
segments (Keegan & Green, 2015). Moreover the undifferentiated will be preferred by KFC
and they will be having good marketing team and resources. This will help KFC in producing
more and more products and expanding the marketing base to great level of people.
3.3 Market Position Analysis
Present: The positioning statement of KFC is Life tastes better with KFC. The positioning of
KFC is its remarkable taste of item that and it not only offers chicken, it offers variety of
products and fulfillment of client needs and demands (Fuchs & Diamantopoulos, 2010).
Future: For future, KFC is designing consumer preferable interior of restaurant like.
Four Seat Zone- Nearly 160-180 seats underline of the various gathering of customers. That
it can be quiet zone for client.
Dinning Zone- It is a zone for clients who require a formal eating. Dinning zone comprise of a
square table, a red living room seat that it is attractive during family gathering.
Eating Zone- It is a zone for clients who need a light meal or can wait for an arrangement to
taste water, the French fries. This zone is the chair type of the Red Lounge Chair that make
feels casual and agreeable (Blankson & Crawford, 2012).
KFC amended new stores for the desire of customer since they would prefer not to be just
products to be served quickly but should be flavourful as well. For example, the KFC eatery
on Floor 6 of Central World was revolted store and a picture that it is fashionable with music
of Beyonce. It indicates worldwide Brand's KFC as a high brand.

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4. Marketing mix analysis
4.1 Product strategy analysis:
Present: KFC is exceptionally managing its operations and product development in the
chicken products. Primarily, KFC has the special recipe for all chicken products making it
unique from competitors (Jobber & Ellis-Chadwick, 2012). KFC is famous as a chicken
expert everywhere throughout the New Zealand due to the varieties and quality of product
offered by it.
Future: KFC will focus on the population of different zones of New Zealand which like the
chicken items. They will be entering in the every possible market because of the request of
their chicken items (Stark, 2015).
KFC is variation of item in the chicken, those well-known products are:
Product Categories
There are distinctive items which customers prefer are:
1) Chicken
2) Burger
3) Desserts and Beverages
4) Snacks and side requests.
Augmented products:
KFC is delivering superior products services and still the scope of administrations isn't
finished (Blattberg & Deighton, 2010). KFC equips its workers to give fast and productive
support of the customers who are standing in lines to take their order.
To give great augmented services they have a strategy of CHAMPS Program. CHAMPS
define that customer satisfaction and loyalty can be achieved only by focusing on values
desired by customers from KFC. CHAMPS remain for the six general territories of customer
desire normal to all societies and eateries ideas.
The CHAMPS for products is as follows:
· Cleanliness
· Hospitality
· Accuracy

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· Maintenance of Facilities
- Product Quality
· Speed of Service
4.2 Price strategy analysis:
Market Skimming:
Present: KFC enters the market by using market skimming. The products of KFC are
generally priced high and focus on the high as well as middle class individuals. Then after
some time they move down the costs concentrating on the lower class individuals as well to
infiltrate the both sides of the market (Peter & Donnelly, 2011). On account of KFC, Fried
Chicken is the main offering product which controls monopoly over the fast food market. It
generally set prices for its burgers, French fries and drinks by keeping in the mind the
strategy of rivals.
Future: KFC in future also will values different product keeping distinctive focuses on all
categories. Pricing of the product is already inclusive of the government taxes and other
obligations. The final price of the product in future also will be decided by after taking
consideration of all cost and taxes. The products are generally higher than the market price
in comparison to the market competitors but it do provide standard of the product.
4.3 Place Strategy Analysis
Distribution strategy:
Present: KFC is using the service firm sponsored supplier franchise system. The franchise
buys all the ingredients it uses and fulfils all other requirements of the KFC. This practice is
adopted to have the product up to the standards of international KFC chain (Lin, 2011). The
Suppliers of KFC include K & Ns, Pepsi Co, Hilal and Nescafe. Breads and bunsare
produced by KFC chefs only. Chicken is mainly imported from California, India and Dubai.
Future: The food companies within New Zealand will compete in the industry by raising
prices or reducing quality of produced goods or services and reach to huge number of
population. Moreover KFC will be using the franchise system for providing products to its
customers. The suppliers will meet the requirement kept by the KFC which it sets according
to the international standards. The distribution strategy helps KFC in reaching to all the
target customer effectively.