Marketing Analysis: KFC's Environment and Marketing Strategies

This report provides a comprehensive analysis of Kentucky Fried Chicken (KFC), focusing on its sales management and marketing strategies. It begins with an introduction to sales management and the significance of KFC in the fast-food industry. The report then delves into an industry profile, highlighting the global fast-food market and KFC's position within it, particularly in Australia. A micro-environment analysis is conducted using the resource-based view, identifying KFC's valuable, rare, inimitable, and organized resources. The macro-environment is assessed through a PESTLE analysis, examining political, economic, social, technological, environmental, and legal factors affecting KFC. A SWOT analysis reveals the company's strengths, weaknesses, opportunities, and threats. The current marketing mix, encompassing product, place, price, and promotion, is thoroughly examined. Finally, a proposed marketing mix is presented, suggesting the introduction of a new fried chicken burger with extra cheese, including recommendations for product, place, price, and promotion strategies. The report concludes by summarizing the key findings and offering insights into KFC's market position and future strategies.

MARKETING AND SALES MANAGEMENT
STUDENT DETAILS

SALES MANAGEMENT 1
Table of Contents
Introduction................................................................................................................................2
Industry Profile...........................................................................................................................3
Micro Environment Analysis.....................................................................................................4
Resource-Based View............................................................................................................4
Macro Environment analysis......................................................................................................5
PESTLE Analysis...................................................................................................................5
SWOT Analysis.........................................................................................................................7
Current Marketing Mix..............................................................................................................9
Proposed Marketing Mix..........................................................................................................11
Conclusion................................................................................................................................12
References................................................................................................................................13

SALES MANAGEMENT 2
Introduction
Sales management is a method which is centred around the practical use of sales
technique and association's business methods (Yakovleva, Sarkis & Sloan, 2012). It is a
significant business work as net sales through the clearance of stocks brings profit margin to
the business (Wensley, 2016). These are additionally regularly the objectives and execution
pointers of sales management. Selected company for this assignment is “Kentucky Fried
Chicken” (KFC). The company was founded by Colonel Harland Sanders, he started selling
browned chicken by setting a roadside stole in Corbin, Kentucky during the Great Depression
(economictimes, 2019). Sanders recognized the capability of restaurant franchising, then the
first "Kentucky Fried Chicken" restaurant opened in Salt Lake City, Utah in 1952. Apart from
this, branding includes the face mark of "Colonel Sanders", the organizer transformed into a
conspicuous figure because of KFC publicizing. In 1964, he offered the organization to John
Y. Brown, Jr. and Jack C. Massey. KFC targeted those people who belong from the middle
class and above (economictimes, 2019). They mainly attracted those people who like to eat
non-vegetarian snacks. In this assignment, there will be an analysis of the macro and
microenvironment of the company. Apart from this, an analysis of the current marketing mix
and proposed marketing mix will be considered.

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Industry Profile
The company KFC belongs to fast-food restaurant industry. Globally, the fast-food
industry generated the revenue of more than $570 billion. The Australian foodservice market
is estimated to cross $80.7 billion by the year 2024, seeing a CAGR of 5.1% during the time
frame 2019 - 2024. The well-known drive-through eatery chains in Australia are Domino’s,
McDonald's, KFC and Hungry Jacks (Banerjee & Soberman, 2013). However, it has been
noticed that nowadays buyers moving towards the utilization of food which have proper
nutrition value in it, instead of approaching fast-food chains (economictimes, 2019). Many
global brands are also approaching global market such as Domino’s, McDonald's, KFC, etc.
They are focusing on the consistently development of their market capital by opening new
outlets globally (Wensley, 2016). Domino's is also trying to grow its quality in Australia and
had 693 outlets situated the nation over, starting at 2018 (economictimes, 2019).

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Micro Environment Analysis
Resource-Based View
KFC’s resource and capabilities Valuable Rare Inimitable Organized
Uniqueness of taste
Adoption of new technology for processing
orders
Employee engagement
Size of restaurant franchises
Economies of scale
KFC’s core competitive advantages
Globally recognized
Portfolio of popular trademark

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Macro Environment analysis
PESTLE Analysis
 Political:
KFC designs their political boundaries through which it helps them in performing
those function which are under the law (Yakovleva, Sarkis & Sloan, 2012). For
example, when any political party gets selected in the country, it affects the
functioning of the business. The honesty or integrity of the politicians and their
probability to participate in illegal activities have huge impact over the political
framework of KFC. Such kind of political moves also shows their adverse or positive
effect on the company (Banerjee & Soberman, 2013).
 Economical:
KFC charged low prices for their product or services which helps them to catch the
attention of their targeted audience (Yakovleva, Sarkis & Sloan, 2012). Economic
factors include changes in the deflation and inflation rate, interest rate, current
unemployment rate, literacy rate, the foreign exchange rate, etc (Wensley, 2016).
These components and their subsequent effect on aggregate demand and supply can
make KFC profitable in the business climate (Varadaranjan, 2015).
 Social factor:
The demographics of the population, particular age group and sexual orientations are
the social factors (Banerjee & Soberman, 2013). Apart from this, their class of
distributing a particular product or service is also important (Tiago & Veríssimo,
2014). For example, KFC or any other industry cannot able to advertise their premium
product, if the majority of the people belongs to the middle or lower-middle-class
circle.
 Technological factors:

SALES MANAGEMENT 6
Technology impact the prices and profitability ratio of the company. Thus, the KFC
needs to make technological changes in order to maximize their profit percentage and
enhance reputation. For example, facial recognition to predict orders and accept
payment is the very innovative technology introduced by the company (Shanker,
Carpenter & Farley, 2012).
 Environmental factors:
It includes how climate changes, global warming, etc. affect the functioning of the
KFC. KFC provides a large number of wastes; thus, they require to manage their
waste habits in order to provide protection to the environment. On the other hand, if
KFC contributes to harming the environment then they may be backlash from their
targeted customers (Saravanakumar & SuganthaLakshmi, 2012).
 Legal Factors:
Discrimination law made by the government in order to protect employees
(Moghaddam & Foroughi, 2012). KFC cannot provide wages to any employees lower
than the prescribed wages rate in the law of Australia. Health and safety laws are
created for maintaining the quality of food with proper nourishment (Wensley, 2016).

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SWOT Analysis
Strength Weakness
Global status:
KFC is currently operating in more than
130 nations (economictimes, 2019). It has
around 21000 outlets all over the world.
KFC is the second largest fast-food chain in
the world after the McDonald’s (Lovelock
& Patterson, 2015).
Supply, distribution and other issues:
KFC mainly face issue in the getting the
supply of chicken and other crude material.
For overcoming this issue, they need to setup
strong connections with their suppliers and
distributors (Lockrey, 2015).
Dedicated and loyal customers:
KFC has loyal customers, it is true. Reason
behind their loyalty is the taste of mystery
chicken formula offered by the company.
People love the taste of KFC’s chicken and
other dishes (Yakovleva, Sarkis & Sloan,
2012).
Operational issues in managing franchise:
Franchisee management is one of the
important issues for the company. KFC had
shut down a number of its outlets since its
initiation because their management had
failed to handle the problems incorporated by
its franchise partners (Leonidou, Fotiadis &
Zeriti, 2013).
KFC’s recipe (secretive):
Sanders' recipe of "11 herbs and flavours" is
the prized formulas. Sanders has this formula
kept inside a vault in KFC's Louisville head
office, with 11 vials containing the herbs and
flavours (Wensley, 2016).
Managing employee retention ratio:
The company faces huge challenges when
they're existing leave them due to certain
reasons (Banerjee & Soberman, 2013). An
increasing number of employee attraction
enhances the training and development cost

SALES MANAGEMENT 8
of the company.
Opportunities Threats
 Expanding to new Geographies:
 The company is consistently expanding its
boundaries over the new market in every
nation. This will help them in building their
strong market presence and will also
increase their market share (Berthon, Pitt,
Plangger & Shapiro, 2012).
Competition from the global and local
market:
KFC is performing very well since the past
few years, but still, they are failed to reach
on the number 1 position (Yakovleva, Sarkis
& Sloan, 2012). Competitors are acquainting
new items, food types and services in their
menu to develop their market share
(Yakovleva, Sarkis & Sloan, 2012).
Consistently, introduce new recipe:
For fascinating the interest of the buyers,
KFC introduce new items in their menu.
These items are introduced as per the on-
going demand and preferences of the
customers (Wensley, 2016).
Changing taste and preferences of customers:
The taste of the customers changes quickly
because they have huge availability of
different cuisine (economictimes, 2019).
Purchasers are focusing on a healthy diet that
includes proper nourishments. Rapid
changing of taste and preference creates
various threats for the KFC (Banerjee &
Soberman, 2013).

SALES MANAGEMENT 9
Current Marketing Mix
Marketing mix of the company is explained below. This marketing mix is consisting
brief discussion about the product, place, price and promotion.
 Product:
They have a great specialty in making fried chickens, chicken fries, burgers, chicken
soup, extra Crispy Chicken and buttermilk biscuits (Banerjee & Soberman, 2013).
KFC always focus on the feedback they received from their customers for adding or
modifying items in their menu. In Australia, KFC introduced Hot and Crispy Chicken,
Fiery Grilled basin choices, Chicken Zinger Burger, Rice Bowlz, etc. (economictimes,
2019).
 Place:
Place refers to the distribution channel of a product. KFC open their restaurants in the
prime location that can be easily reached by the targeted audience. Location
parameter has a huge effect on the profitability of a product (Varadaranjan, 2015).
 Price:
Under the price mix, KFC set prices by considering their targeted audience. Price is
the essential marketing mix because its includes the profit margins and per unit cost of
the company (Yakovleva, Sarkis & Sloan, 2012). KFC generally charges around $5-
$8 for chicken single layers burgers, fries, etc. They even create many offers to catch
the interest of its buyers. Like: Buy one get one offer, 50% flat discount offer, etc.
From the buyer’s prospective, they get items in the discounted rates (Varadaranjan,
2015).
 Promotion:

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KFC promotes its brand on television and social media such as facebook, Twitter,
YouTube, Instagram, etc (Saravanakumar & SuganthaLakshmi, 2012). They also use
billboards and hoardings to advertainment on a large scale (Shanker, Carpenter &
Farley, 2012).

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Proposed Marketing Mix
While proposing the marketing mix, we are assuming that KFC is about to introduce
fried chicken burger with extra cheese.
 Product:
KFC is about to introduce new item in their menu that is “Fried chicken burger with
extra cheese”. For making this product they need to add the elements from the secret
recipes (Shanker, Carpenter & Farley, 2012). In addition to this, they can also decide
to offer veg rice bowls along with this new product (Moghaddam & Foroughi, 2012).
 Place:
KFC should introduce this new product in the place near to collages, hangout places,
shopping malls, etc. As the new product can fascinate young people (Saravanakumar
& SuganthaLakshmi, 2012). So, it will be beneficial for the company to introduce this
new product near the place where a large number of students, youngsters, etc can
easily approach (Moghaddam & Foroughi, 2012).
 Price:
Currently, the company is charging $7.45 for double tender burger combo
(aussieprices, 2019). Similarly, this new food item should be between $8 to $15. One
more important aspect is that KFC should introduce this product with an introductory
offer such as buy one fried chicken burger with cheese and get another free (Lovelock
& Patterson, 2015).
 Promotion:
KFC has a solid social presence that will enable them to communicate and connect
with their targeted audience (Lockrey, 2015). For this product, they are targeting
young people so they choose to use promotions over social networking sites, etc.