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Project Report On

Kentucky Fried Chicken

From

Supervised by : Prof.Dr.Zain Yousafzai

Submitted by : Siawoosh Wared ( BBA Hons )


Registration # 1711-306055 ( BBA 11 )
th

Preston University Peshawar


Session 2006 – 2010
Project Report
Marketing Strategies With Reference To

Kentucky Fried Chicken

A Project report submitted to the Preston University in partial


fulfillment of the requirement for the Degree of Bachelor of
Business Administration.

Supervised by : Prof.Dr.Zain Yousafzai

Submitted by : Siawoosh Wared ( BBA Hons )


Registration # 1711 – 306055 ( BBA 11 )
th

Preston University Peshawar


Session : 2006 – 2010

II
Project Report
On

CD Page

III
Approval Sheet

Vice Chancellor : ______________________


Prof.Dr.Anwar Hassan

Internal Supervisor : ______________________


Prof.Dr.Zain Yousafzai

External Supervisor : __________________

IV
Department of Business Administration
Preston University
Peshawar

Preface

This report focus on KFC marketing strategies, its marketing


environment , demographic factor ,marketing factors.

I designed a report to provide a brief description about its marketing


mix & its major competitors in Pakistan. We also discuss four P’s of
marketing & their marketing tools.

In addition to it, this report includes a research base survey on KFC.


We all have tried our level best to fulfill all the requirements mentioned
to us. Now its depend upon the reader to read it carefully and
understand what we want to communicate. This report provides a brief
knowledge about KFC in Pakistan.

_____________________________________________________

V
Acknowledgement
With profound sense of gratitude and regard, I express my
sincere thanks to my guide and mentor Prof.Dr.Zain for his
valuable guidance and the confidence he instilled in me, that
helped me in the successful completion of this project report.

Without his help, this project would have been a distant affair.

His thorough understanding of the subject and professional


guidance was indeed of immense help to me. Also, this
acknowledgement would remain incomplete
without thanking the staff of KFC Islamabad and Peshawar for
their whole-hearted and kind co-operation. I am also greatly
thankful to the faculty members of our institute who co-
operated with me and gave me their valuable time.

Siawoosh Wared
VI
________________________________________________

Table of Contents
Chapter 1st Introduction
.

1. Introduction of company . . . . . . . . . . . . . . . . . . . . . . . 11
2. Introducing New Product . . . . . . . . . . . . . . . . . . . . . . 12
3. Pricing Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13

Chapter 2nd Situation Analysis


.

1. KFC History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2. Company’s Overview . . . . . . . . . . . . . . . . . . . . . . . . 15
3. KFC Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4. Values of KFC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Chapter 3rd Company and Branches


.

1. Situation Analysis ( Current Products ) . . . . . . . . . . 19


2. KFC’s Original Recipe . . . . . . . . . . . . . . . . . . . . . . 20
3. KFC’s Outlets In Pak . . . . . . . . . . . . . . . . . . . . . . 21

Chapter 4th KFC’s Mission and Philosophy .

1. Philosophy of KFC The “CHAMPS” Program . . . . . . 24


VII
2. The CHAMPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
3. Mission of statement . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4. Goal of KFC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Chapter 5th Product Issue


.

1. Quality Control Over ingredients . . . . . . . . . . . . . . . . . . 27


1.1 Every chicken tasted . . . . . . . . . . . . . . . . . . . . . . . . . . .
27
1.2 Every chicken certified . . . . . . . . . . . . . . . . . . . . . . .
27
1.3 Quality assurance certificate . . . . . . . . . . . . . . . . . . . . .
27

2. Packaging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27
2.1 Recycled Paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28
2.2 Environment Concerns . . . . . . . . . . . . . . . . . . . . . . . . 28
2.3 Litter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28

3. Branding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28

Table of Content . . . .

Chapter 5th Product Issue


.

4. Four Forces Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30


4.1 Entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.2 Buys / Supplies Bargaining Power . . . . . . . . . . . . . . . . . . 30
4.3 Substitute and Complements . . . . . . . . . . . . . . . . . . . . . . . 31
4.4 Rivalry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

VIII
Chapter 6th Current Target Market
.

1. Promotions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

2. Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.1 Demographical Basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.2 Behavior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.3 Geographical Basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

3. Profile criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4. Market Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
5. Market for fast food . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

6. Economic Analysis of Market . . . . . . . . . . . . . . . . . . . 35


6.1 Macro Environment . . . . . . . . . . . . . . .. . . . . . . . . . . . 35
6.2 Micro Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.3 Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35
6.4 Costumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

7. Strength and Weakness of Competitors . . . . . . . . . . . . . 35


8. Current Sale Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

9. Environmental Factors and Opportunities . . . . . . . . . . . 36


9.1 Political . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.2 Economical . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .....
37
9.3 Socio Cultural . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.4 Technological . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.5 Environmental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.6 Legal Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

10. Summary of Current Situation . . . . . . . . . . . . . . . . . . . . . . . 38


10.1 Strengths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39
10.2 Weaknesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39
10.3 Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39
10.4 Threats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41

Table of Contents . . . .

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Chapter 7th Marketing Strategies of KFC .

1. Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2. 4-Ps of Marketing . . . . . . . . . . . . . . . . . . . . . . . . 43
3. Competitive Analysis . . . . . . . . . . . . . . . . . . . . 45
4. Promotion Issues . . . . . . . . . . . . . . . . . . . . . . . . 46
5. Advertisements . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6. Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
7. Questionnaire . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
8. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Table of Graphs

1. Macro Enviromnet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2. Competiive Advantages . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3. Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4. Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5. Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
6. Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Project Report
X
On

Chapter No # 1st

Introduction

Department of Business Administration


Preston University
Peshawar

XI
Introduction of
Company

KFC Corporation, based in Louisville, Kentucky, is the


world’s most popular chicken restaurant chain, specializing in
Original Recipe ®, Extra Crispy TM, and Colonel’s Crispy
Strips® chicken with home style sides and five new freshly
made sandwiches. Every day, nearly eight million customers
are served around the world. KFC’s menu everywhere
includes Original Recipe® chicken—made with the same great
taste Colonel Harland Sanders created more than a half-
century ago. Customers around the globe also enjoy more
than 300 other products—from a Chunky Chicken Pot Pie in
the United States to a salmon sandwich in Japan.

KFC continues reaching out to customers with home


delivery in more than 300 restaurants in the United States
and several other countries. And in quite a few U.S. cities, KFC
is teaming up with other restaurants, Taco Bell and Pizza Hut,
selling nearly fifty years ago; Colonel Sanders invented what
is now called “home meal replacement” – selling complete
meals to harried, time-strapped families. He called it, “Sunday
Dinner, Seven Days a Week.”

Today, the Colonel’s spirit and heritage are reflected in


KFC’s brand identity – the logo features Colonel Harland
Sanders, one of the best recognized icons in the world.

XII
KFC
KFC specialized in chicken and they says,

“No body’s cooking like KFC today and we are


the chicken experts”
“There is no competitor for spicy chicken which is
made by KFC”

Introducing New Product


Now enjoy T2O Cricket festivity with KFC's exciting new offer;
Get a complete T20 Meal Box which includes;
1 Zinger Burger, 3 pcs. Hot Wings, 1 regular Drink, 1 Fries and 1 Dinner
Roll ! in only
Rs 320/- only

XIII
Pricing Issues

Pricing Policy for “Zinger Burger” new product from


KFC
Manufacturing cost RS.180/-

5% marketing cost ( Per.Unit ) RS. 50/-

Total cost RS.230/-

15% G.S.T +15% RETAIL MARGIN RS.90/-

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Total retail Price RS.320/-

Pricing Strategy for “Deal 6” From KFC

Manufacturing cost RS. 140/-

5% marketing cost ( Per.Unit ) RS. 25/-

Total cost RS.165/-

15% G.S.T +15% RETAIL MARGIN RS.45/-

Total retail Price RS.210/-

Project Report

On

XV
Chapter No # 2nd
Situation Analysis

Department of Business Administration


Preston University
Peshawar

KFC History

KFC is an internationally renowned fast food industry in the


world. They have the main ambition to increase & maintain the
quality in fast food industry. Their aim is to capture the fast food
market. Basically they want to provide their products to anyone that
is why they expanding their branches in all over the world.

They want to increase their profit through giving maximum


satisfaction & other better facilities to people that they want. Now
after catching such a marvelous position in the International Market,

XVI
KFC is introducing a new item “Boneless Fried Chicken”, with even
more attractive and charming taste.

Company’s Overview

Colonel Harland sanders, born September 9, 1890, actively


began franchising his chicken business at the age of 65. Now, the
Kentucky fried chicken business he started has grown to be one of the
largest retail food service systems in the world. And colonel
sanders, a quick service restaurant pioneer, have become a symbol of
entrepreneurial spirit. More than two billion of the colonel’s
“finger lickin’ good” chicken dinners are served annually. And not
just in America. The colonel’s cooking is available in more then 82
countries around the world.

When the colonel was six, his father died. His mother was forced
to go to work, and young Harland had to take care of his three year
old brother and
baby sister. This meant doing much of the family cooking. By the
age of seven, he was a master of a score of regional dishes. Ate
age 10, his first job working on a nearby farm for $2 a month. When he
was 12, his mother remarried and he left his home near
Henryville, Ind., for a job on a farm in Greenwood, Ind.

He held a series of jobs over the next few years, first as a 15-
year-old streetcar conductor in New Albany, Ind., and then as a 16-
yearold private, soldiering for six months in Cuba.

After that he was a railroad fireman, studied law by


correspondence, practiced in ustice of the peace court, sold
insurance, operated an Ohio River steamboat ferry, sold tires, and
Operated service station. When he was 40, the colonel began cooking
for hungry ravelers who stopped at his service station in Corbin,
KY. He didn’t have a restaurant then, but served folks on his own
dining table in the living quarters of his service station.
XVII
As more people started coming just for food, he moved across the
street to a motel and restaurant that seated 142 people.Over the
next nine year, he perfected his secret blend of 11 herbs and spices
and the basic cooking technique that is still used today.

KFC Pakistan

KFC is 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 it’s
finger licking good food, KFC offers its signature products in
Pakistan too! KFC has introduced many offerings for its
growing customer base in Pakistan 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. KFC also has great tasting vegetarian offerings
that include the Veggie Burger, Veggie Snacker and Veg
Rice meals. In Pakistan, KFC is growing rapidly and today
has presence in 10 cities with close to 60 restaurants.

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Values of KFC

• Focus all our resources to our restaurants operation


because that is where we serve our customers.

• Reward and respect the contributions of each individual


at KFC.

• Expand and update training with time and be the best we


can be and more.

• Be open, honest and direct in our dealings with one and


other.

• Commit ourselves to the highest standard to the personal


and

professional integrity at all times.

• Encourage new and innovative ideas because these are


the key to our competitive growth.

• Reward result and not simple efforts.

• Dedicate ourselves to continuous growth in sales, profit


and size of organization.

• Work as a team.

XIX
Project Report

On

Chapter No # 3rd
Company & Branches

Department of Business Administration


Preston University
Peshawar
XX
Situational Analysis
Current Products

Kentucky fried chicken


• · Zinger burger
• · Krushers
• · GameBox
• · Twister
• · Boxmaster
• · Chicken Bucket
• · Hot wings
• · Fries
• · Corn on the cob
• · Zing Kong
• · Snacker(chicken & veggie)
• · Veggie Feast
• · Soft Drink
• · Coleslaw
• · Chicken Thali
• · Veg Finger
• · Snack Box
• · Sundae
• · Soft Twirl
• · Brownie Sundae

XXI
KFC Original Recipe

6 cups Crisco Shortening


1 eggs well beaten
2 cups Milk
2 cups Flour
2 teaspoons ground pepper
3 tablespoons salt
1 teaspoon MSG
1/8 teaspoon Garlic Powder
1 dash paprika
2 Frying Chickens cut into 6 pieces
Place shortening into the pressure cooker and heat over
medium heat to the shortening reaches 400F. In a small bowl,
combine the egg and milk. In a separate bowl, combine the
remaining six dry ingredients. Dip each piece of chicken into
the milk until fully moistened. Roll the moistened chicken in
the flour mixture until well coated. In groups of four or five,
drop the covered chicken pieces into the shortening and lock
the lid. When pressure builds
up cook for 10 minutes.

XXII
KFC Outlets in Pakistan

Islamabad
.
11 - United Bakery
Building, F-6/2, Super
Market, Islamabad.
For Delivery:
Ph: 111-532-532
Chicky Fun Area

Karachi

SA-2, See Breeze Centre,
F1-17, Block - 5,
Kh-e-Roomi, Clifton,
Karachi.
For Delivery:
Ph: 111-KFC-KFC
(111-532-532)
Chicky Fun Area

Peshawar
.
University Road,
Burjaman Plaza
Near Shadman Chowk,
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Peshawar.
For Delivery:
Ph: 111-532-532
Chicky Fun Area

Lahore ……………………………………………………
160/2, Block 2,
Phase-1 LCCHS,
Lahore
For Delivery:
Ph: 111-532-532
Chicky Fun Area

Hyderabad
.
Unit No. 1,
Shah Latifabad,
Thandi Sarak, Hayderabad.
For Delivery:
Ph: 111-532-532
Chicky Fun Area

Project Report

On

XXIV
Chapter No # 4th
KFC’s Mession & Philosophy

Department of Business Administration


Preston University
Peshawar

Philosophy of KFC the CHAMPS program

Champs stands for our belief that the most important thing
each of us can do is to focus on the customer. It stands for our
commitment to provide the best food and best experience for
the best value.

CHAMPS stand for the six universal areas of customer


expectation
common to all cultures and all restaurants concepts.

The CHAMPS

These are:

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Cleanliness

Hospitality

Accuracy

Maintenance of Facilities

Product Quality

Speed of Service

CHAMPS is the philosophy to ensure that the customer has


the consistent quality experience in every restaurant,
everyday, on every occasions and you will be playing role in
delivering CHAMPS to our customers.

Mission of Statement

“ To be the leader in western style


restaurants through friendly service, good
quality food and clean atmosphere “

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Goals of KFC

• Build an organization dedicated to excellence.


• Consistently deliver superior quality and value in our products
and
services.
• Maintain a commitment to innovation for continuous
improvement
and grow, striving always to be the leader in the market place
changes.
• Generate consistently superior financial returns and benefits our
owner and employees.

• To establish in Pakistan our position as leading WQSR (Western


Quick Service Restaurant) chain, serving good value. Innovative
chicken-based products.

• Consistently, providing a pleasant dining experience, with fast


friendly, in a clean and convenient location. At all times we must
be dedicated to
providing excellent and delighting customers.

Project Report

On

XXVII
Chapter No # 5th
Product Issues

Department of Business Administration


Preston University
Peshawar

Product Issues

General description:

XXVIII
Features:

Quality Control Over Ingredients

Every Chicken Tested

K & N’s state-of-the-art Quality Assurance Lab monitors the entire


integration process
from livestock to feed and on to preparation of ready-to-cook and
cooked products.

Every Chicken Certified

HACCP – K & N’s ensures food safety by implementing the international


HACP (Food
Safety System) and enjoy the unique privilege of being the first and
only HACCP
certified company is Pakistan producing chicken and chicken products.
Free from diseases
and bacteria, drug residues and other contaminants.

Quality Assurance Certificate

Director General ( Research ) has issued quality assurance certificate


for the chicken used
by KFC.

Packaging
We are asked as many questions on our packaging as our
products by our customers. The packaging for KFC products is
chosen according to performance against three key criteria:

• Heat Retention
• Moisture removal
• Grease absorption

The packaging material and carton design are all adapted to


maximize performance against these three criteria.

XXIX
Recycled Paper
All our clamshells and chicken boxes contain as much recycled
material as it is legally allowed. By law we are required to have
virgin fibre board in any part of the packaging that is in contact
with food. Any virgin fibre comes from board suppliers who use pulp
bought from managed forest in Scandinavia. This ensures that any
wood cut for paper production is replaced with new plantings.

Environmental Concerns
Over and above ensuring our packaging is supplied via recycled
or renewable resources; KFC are enthusiastically complying with the
new environmental directives on recovery and recycling of packaging
waste.

Litter
We at KFC UKI are aware of our responsibilities to the
Management of Litter and all our packaging carries the ‘Keep your
Country Tidy’ signs.

Branding

This research measured and compared the brand identity of


Kentucky Fried Chicken (KFC) in Pakistan. Brand identity was defined
as the customer impressions of four different KFC identity
elements - properties, products, presentations, and publications.

A survey of young consumers in the countries (n = 795), showed


that the respondents were more apt to eat within KFC restaurants,
and spend more time doing so, than the Americans. The Chinese
also had much more positive impressions of KFC. Brand identity
impressions were correlated with overall customer satisfaction and
with future patronage intentions for both groups. These findings
support a model where differences in cultural frames of reference
lead consumers to actively localize the brand identity of this nominally
globalized product.

XXX
Four Forces-Analysis
Entry

For the current Pakistan market for fast food, it is not difficult for a fast
food restaurant to enter the market. However, it would be extremely
difficult to take over already running major fast food chains' dominancy in
Pakistan or even make a significant amount of profit.

While there are enough people in urban Pakistan for any restaurant to
survive, KFC holds the first-mover advantage into the 'non-veg food
specialty food segment' that gives them free reputation. Customers,
especially children who are used to going to KFC as a treat or reward
from their parents or grandparents, are not going to want to go to other
restaurants they’ve never heard of. The brand name is already
established. Also, there is already a large variety in the numerous
western-style dining places in Pakistan , such as McDonald’s, Pizza Hut,
Domino's and Subway, and any new fast-food entrants would just be
presenting something very similar to what’s already there. While small
Neighborhood restaurants generally have low barriers to entry, these are
the barriers to entry for similar restaurant businesses to enter the fast-food
chain market.

Buyer/Supplier Bargaining Power

The customers of KFC, especially as individual buyers, have almost no


bargaining power because if only one customer threatens to no longer
eat at KFC, the store is not going to lower its price because the cost of
losing one customer is not very great. The suppliers, like the buyers,
have very little bargaining power.

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In terms of food, KFC, upon its move into Pakistan, urged many of its
U.S. suppliers to also extend branches into Pakistan. KFC also began helping
local suppliers by giving them technological support to improve their
products. This is a brilliant strategy because the supplies that KFC would
otherwise need to import from the U.S. can now be obtained
domestically, and if the U.S. suppliers decide to raise their prices, KFC
can easily switch to the local suppliers. This gives us a brilliant strategy.

With this strategy, KFC created competition among its suppliers,


lowering the supplier bargaining power. In terms of human resources, labor
cost is extremely low because the supply of non-skilled workers great
exceeds the demand for them. With so little buyer and supplier
bargaining powers, KFC is able to have a very tight control over its prices
and expenditures.

Substitutes and Complements

As mentioned above, there are a few major competitors in the fast-


food industry in Pakistan for KFC, namely McDonald’s, Pizza Hut, Domino's
and Subway. The substitute products, in this case, would be burgers,
pizza, and sandwiches. Though they are competitors, their primary
products differ greatly from each other, in that they sell, chicken, burgers
and fries, pizzas, and sandwiches, respectively. Traditional Pakistan dining,
home-cooked meals, and grocery stores with ready-to-eat foods are also
substitutes, as families could choose any one of these over fast food for
a meal. These substitutes are definitely considered healthy as compared
to the fast food chains. Even foods from street vendors count as substitute
goods.

While other fast foods serve as substitute to KFC, they can also serve
as complements for fast foods as a whole. If the general price of fast foods
goes up,KFC’s price rises as well, and the same can be said of the quantity
sold of these products, which make them complements to each other.
KFC also sets up stores located near popular tourist attractions, so tickets to
these tourist spots are also complementary goods because the more
people tour these attractions, the more customers KFC will get.

Rivalry

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Unlike what one would expect, KFC has little rivalry with similar fast-
food chains in Pakistan. The primary reason is that their core products are
different, as in they sell different kinds of fast foods with very different
tastes and styles. For example, if KFC raised its price for chicken by a small
amount, Pakistan chicken lovers who may not be as accepting to pizzas
(many Pakistani people strongly dislike the taste of cheese) are not going to
switch to Pizza Hut just because the price for KFC increased. In addition to
that, these restaurants have such different target customers that the
fluctuation of price for one restaurant is not going to affect the others.
For example, a full meal at KFC ranges about Rs. 100, whereas a full meal
at Pizza Hut can cost over Rs. 300. The drastic difference in price assures no
price competition between these restaurants.

Project Report

On

XXXIII
Chapter No # 6th
Current Target Market

Department of Business Administration


Preston University
Peshawar

Current Target Market


Promotions

In Pakistan KFC not advertise there products too much because people
KFC
due to its reputation in other countries. They promote their products
through
special packages. They promote there products through billboard,
pamphlets
and through other promotion strategies.

Segmentation

XXXIV
KFC has divided the market of Pakistan into distinct groups of
customers with
different demands, tastes and behavior who require separate
products or
marketing mix.
In Pakistan the niche marketing is being used for particular
classes of people.
They have made segments of the market on the following bases.

• Demographical

• Behavior

• Geographical

By using these three bases they segmented the market as under.

Demographical Basis
In demographics their first segment is consisted of the income
factor i.e.
high income, average income and low income.

Behavior
In behavioral aspect they segmented the market on the basis of
quality, taste
and price. Following are the different possible segments in this
regard.

• Taste conscious
• Quality conscious
• Class conscious
XXXV
• Combination of price and quality

Geographical Basis
On the basis of the geographical factor we have divided our
market in three
main segments.

• Urban areas
• Sub urban areas

Profile criteria:

1.Gender: KFC is for each gender both male and female.

2.Income: Everyone can use the KFC service upper and middle class .

3.Age: age limitation for using this product above 15

4.Occupation: By profession also everyone can use this product means


businessman
student workers and other peoples.

5. Education: It has no need more education that why the person who
know something can easily enjoy with this product.

6. Family life cycle: KFC is suitable in every stage of life like single
married couple and also those who have children can use this product.

7. Lifestyle: This product is used in every level of social class like


upper, middle class.

8. Attitude : When the customers once buy this product after that they
can use the
product continuously.

9. Purchasing decision: Often KFC changes the purchasing decision of


customers
because of its good attributes.

10. Geographic region: Geographically KFC is used in every part of the


country as well as all over the world.

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Product positioning
Customer perceive this product as a unique product that other are not giving
.
Attitudes
The attitudes of the public is very good people like our this new product like
others.
Purchasing process:
Many people come from home to eat this , and some make impulse decision
as they saw
it .

Market Coverage Strategy


KFC will be using differentiated market coverage strategy. It means that
different
marketing mix will be used for different age groups.

Target Market For Fast Food


After evaluation of various segments, KFC has decided to target the market
of Urban
and Sub-urban Areas of Pakistan.

Product usage
• People are educated and they want variety in their diet.

• Normally people of rural areas don’t take fast food. On the other hand
people of urban areas take fast food.

• Income of the people of urban areas is normally high and they can
afford to
purchase such products, which are slightly higher in price as compared
to
prevailing prices of local food in the market.

• People of Urban Areas are more quality conscious than the people of
Rural Areas.

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• In Urban Area there lived people from every walk of life and profit
generation is easier than in Rural Areas.

• Population density is higher in Urban Areas as compared to Rural


Areas, so the number of customers are more in Urban Areas.

Economic Analysis of Market


A market in this context refers to a number of all actual and potential
buyers of a product
(Kotler et al 2003). These buyers have a need to satisfy their needs
through exchange . These needs make up the demand for particular
products and services. Several components must be considered, as all
these components have a direct or indirect impact on KFC’s success.

Changes in the below described components over the last couple of


years have led to big
changes in people’s attitudes towards healthy food. It explains why
Australians today
want to eat healthy and nutritious-rich food in order to keep
themselves healthy and that
KFC must adjust their range of product and their company image to
appeal to these new
expectations, people have .

Macro environment
KFC operates in a larger macro environment of forces that creates
opportunities, but also
threats. (Kotler et al 2003). A company such as KFC usually cannot
influence trends in
the macro environment, as they affect people and organisations on a
larger scale.

However, KFC has to carefully examine macro environmental trends


and must create

XXXVIII
competitive responses to such trends. There are six major macro
environmental forces
KFC has to take into account.

Micro environment
The microenvironment consists of all forces that are close to KFC, and
on
which KFC has an impact. They directly affect KFC’s ability to serve its
customers. (Kotler et al 2003). Three major components influence
KFC’s micro
environment:

Competitors
Because the fast food market in India is highly competitive, KFC faces
a wide number of direct and indirect competitors. KFC’s main
competitors are fast food chains such as McDonald’s and Domino’s, which
are already well established throughout Pakistan .
McDonalds’s in particular is a direct competitor, as they have already
successfully
introduced their Salads plus line , which directly targets ‘healthy food’
conscious Pakistanis. But, there are a number of other competitors that is
also focusing on ‘chicken’ types products. All this competition makes it
quite difficult for KFC to maintain or even broaden their customer base.
However, with the introduction of a new and healthy product range, KFC

XXXIX
can differentiate itself from most competitors and will gain a competitive
advantage.

Customers
KFC’s customer market consists solely of the consumer market (Kotler
et al 2003).
KFC’s products are bought by individuals (males, females, singles, and
families).
Therefore, the product range KFC offer should appeal to as many
people within this
consumer market as possible, to ensure that the maximum amount of
products can be sold. The characteristics of these individuals and a
segmentation of them are discussed later in this report.

Strengths and weakness of competitor


Strengths: 38 products, Attractive Outlets, Huge
Marketing,
Budget, More entertainment for kids

Weaknesses: Same type of Menu, No Home Delivery

How they compete their competitors ?


It is found that KFC compete its competitors by five ways:
· KFC compete its competitors through marketing strategy
· They offered different packages at different events like ramdan
offer,
midnight offer etc.
· KFC compete there competitors by providing good services
· They must hired the hard selling persons to market their product
in the
market and motivate their employees for the sake of
organizations and
employees do well and they compete there competitors
KFC has quality products and through these quality products they
compete their competitors

Current Sales Analysis


Market Share
XL
KFC has a very long history and has the most recognize able
brand in chicken with over 50% of the market share. It becomes
difficult for the companies like Sub way, Mc Donald’s, Chicken planet,
Dixie or those who may want to enter in the market of fast food
restaurants.
Due to with over 50% of the market share in fast food industry
KFC has recognition around the world and has been globally
positioned for many years in Pakistan and to capture the market share
in Pakistan adopts champs philosophy

Environmental Factors and Opportunities


Political :
The operations of KFC are affected by the government policies on
the regulations of fast food operation. Currently government are
controlling the marketing of fast food restaurant because of health
concern such as cardiovascular and cholesterol issue and obesity
among the young and children in the country.

Governments also control the license given for open the fast food
restaurant and other business regulation need to follow such as
for a franchise business. Good relationship with government in
giving mutual benefits such as employment and tax is a must for the
company to succeed in any foreign market.

Economic:
Though for last 1 year their was economic slowdown all across the
globe but
the sales of KFC and other fast food chains did not slow down to
that extent
that of other sectors in. The GDP (Purchasing Power Parity) is
estimated at
2.965 trillion U.S. dollars in the year 2010. The GDP- per Capita
(PPP) was
2700 U.S. dollars as estimated in 2008. The GDP- real growth rate
in 2007
was 8.7%. Pakistan has the third highest GDP in terms of
purchasing power
parity just ahead Japan and behind U.S. and China. Foreign direct
investment rose in the fiscal year ended March 31 2007 to about
$16 billion
XLI
from just $5.5 billion a year earlier. There is a continuous growth
in per
capita income; Pakistan’s per capita income is expected to reach
1000 dollars
by the end of 2007-08 from 797 dollars in 2006-07. This will lead
to higher
buying power in the Hands of the Pakistani consumers. So taking
into
considerations the economic factors of Pakistan KFC is safe. The
only danger to
it will be if there is a terrorist attack in Pakistan and the victim is
KFC.

Socio cultural:
Pakistan’s population is divided in the following age structure: 0-
14 years – 31.8%, 15- 64 years – 63.1% and 65 years and above –
5.1%.

There has also been a continuous increase in the consumption of


fast food in Pakistan. The social trend toward fast good
consumption is changing and Pakistan has seen an increase of 90%
fast food consumption from the year 2002- 2007. This increase is far
greater than the increase in the BRIC nations of Brazil (20 per cent),
Russia (50 per cent) and China (almost 60 per cent). Thus this
shows a positive trend for fast food industries in Pakistan.

Technological:
The Pakistani fast food Industry is heating up with a lot of foreign
players entering the Pak market. The technological know how and
expertise will also enter the Pak market with an increase in
competition. With the lower rates and increase technology the fast
food counters are attracting youth by giving them attractive deals. For
e.g. KFC and Domino’s pizza. For a fast food restaurant, technology
does not give a very high impact on the company and it is not a
significant macro environment variables.

However KFC should be looking to competitors innovation and


improve itself in term of integrating technology in managing its
operation. For example in inventory system, supply chain
management system to manage its supply, easy payment and
XLII
ordering systems for its customers and wireless internet
technology. Implementation of technology can make the
management more effective and cost saving in the long term. This
will also make customer happy if cost savings results in price reduction
or promotional campaign discount which will benefits them from
time to time.

Environmental:
As one of world largest consumer of beef, potatoes and chicken,
KFC always had been critics for world environmentalist. This is
because high consumption of beef causing the green house effect by
methane gasses coming from the cow’s ranch. Large-scale
plantation has effect the environment and lost of green forest opening
for plantation activities.
Vegetarian environmentalist criticizes the fast-food giant for
cruelty to animals and slaughtering.

In America, once KFC want to introduce whale burger causing


uproar because whales are endangered species. Before using paper
packaging, KFC once had been criticized for being insensitive to
pollution because of using ne based packaging for its food products.
Imagine millions of people purchase from fast food operator and how is
the impact to world environment by throwing away those hard to
recycle packaging.

Our world is getting concern on environment issue and business


operating here should not just care for profit, but careful usage of
world resources for sustainable development and care for
environment safety and health for our future generation. Critics
and concern from all public or activist should be review and support if
necessary to ensure we play our social responsibility better.

Legal factors:
As a certified fast food operator, there are many regulations and
proceduresthat KFC should follow. For example is the Halal certification
that becomes a concern to Muslim consumers. KFC should protect
its integrity and consumer confidence by ensuring all materials
and process are as claimed or must followed.

XLIII
Other legal requirement that the business owner should follow as
stipulated in laws are such as operating hours, business registration,
tax requirement, labor and employment laws and quality &
environment certification (such as ISO) in which the outlethas been
certified. The legal requirement is important because the offenders will
be fined or have their business prohibited from operating which
can be disastrous.

Summary of current situation


SWOT analysis mean strength, weakness, opportunities and
threats and the SWOT analysis of KFC are:

Strengths
• Goodwill and reputation: The company certainly has earned a
good name and reputation by its previous products and services
in the market. It is even more recognized in other markets outside
Pakistan, where the company is among the leading fast food
giants. The brand is recognized and trusted in Pakistan for its
quality products, price, and customer service. It therefore has a
good head start and enjoys a good chance of becoming a leader
in Pakistan fast food industry.

• Employee Loyalty: Employee Loyalty is one of the major


strengths of KFC. The turnover rate in the company is amongst
the lowest in the industry.

• Customer Loyalty: Despite gain by Boston Market and Chick-fill


A, KFC customer base remained loyal to the KFC brand because of
its unique taste. KFC has continued to dominate the dinner and
take out segment of the Industry.

• Ranks highest among all chicken restaurant chains for its


convenience and menu variety. It generates $1B revenue each
year.

Weaknesses

XLIV
• KFC was losing market share as other Chicken chain increased
sales at a faster rate.

• KFC share of Chicken Segment sales fell from 71 percent 1999 , to


less than 56 percent in 2009 , a 10 -years drop of 15 percent.

• Huge competition in this segment.

• KFC has not yet invested much on R&D, and innovating new
products for Pakistan Markets. This may lead to failure of their
products as they are not in line with the Pakistan mind set,
peoples taste and preferences and their likes and dislikes. This
may prove fatal for the company.

Opportunities

• New Markets: Globalization has opened doors for new markets


for the company. As the developed markets are mostly saturated,
the developing countries like Pakistan and China promises a good
market and generation of demand in the future. With more than
70% of the markets in Pakistan being unexplored and un
organized, KFC has a good scope of expanding its operations in
the country.

• Cross Culture: Generally there is a good acceptance of


American culture of fast food in Pakistan. People are opening up
to fast foods more regularly in their daily lives and not just
keeping it a once in a month affair. Thus Pakistan mindset is fast
changing.

• Large Youth population: Pakistan has a very large share of


youth population a compared to other countries. More than 60%
of the population is under the age of 30yrs. As the young
generation are more open to fast foods and demand it more, this
is a good news for the company.

• New variety: Company can also come up with new variety in the
menu like Pizzas, garlic breads to attract more customers.

XLV
Threats

• Competition: Competitor companies like McDonalds are fast


catching up with the market.McDonald’s with sales of more than
19 billion in 1999, accounted for 15 percent of the sales of the
nation’s top 100 restaurant chains.

• Organisations like PETA People for Ethnic Treatment for Animals


have given a bad name to the company which may prove
disastrous to the image of the firm. Currently, KFC is under
massive attacks from animal organizations, questioning the way
KFC’s suppliers are threatening the chicken, before they got
slaughtered. Anti-KFC campaigns, such as the one from PETA are
affecting KFC’s brand image in a negative way and result in direct
dollar losses, as less people are consuming KFC chicken

• Saturated US Market: Now KFC cannot rely on just its home


market to generate sales. As the US markets are already saturated and
leave no or little scope for growth, company necessarily needs to look
at offshore foreign markets to generate sales and keep up the profits.

XLVI
Project Report

On

Chapter No # 7th
Marketing Strategies of KFC

XLVII
Department of Business Administration
Preston University
Peshawar

Marketing Strategies Of KFC

There are different strategies adopted by KFC for


different events. They market their products on different
events and in different activities as they are helping SOS
village.

According to KFC, kids become the future permanents


customers and we know very well that without any
marketing strategy no marketing program and no product is
successful because we depend upon customers, customer
not depend on us. KFC is following Niche Marketing and
Societal Marketing techniques. KFC possess a western culture
because some of the Pakistanis people are also following that
culture.

• KFC are moving from Divisional Level to the District level


by opening branches

• KFC also offer free home delivery.

• KFC open their outlets on reachable places.

• KFC menu consists of more than 30 products.

• KFC gives more priority to Family.


XLVIII
Marketing

Since 1982, KFC’s “All-American salute to Mothers”


national card contest has been KFC’s way of honoring moms
and their families for making mother’s Day KFC’s biggest
sales day of the year. The contest encourages children to
creatively express their feelings for their moms by making a
homemade card and give them chance to compete for
more than $10,000 in cash and prizes. Educational packets,
including language, history and art exercises highlighting
Mother’s Day, were sent to thousands of schools nationwide.

There are 4 P’s of Marketing:

1. Production
2. Pricing
3. Promotion
4. Placement

1st. Production:
Basically the product is anything that be offered to a market for
attention, acquisition, use, or consumption that might satisfy a want
or need. KFC is specially dealing in the chicken products; Basically,
KFC has the special raspy for chicken products that is why, KFC
known as a chicken specialist allover the glob. KFC target the Asia and
east side because they observe that they people are like the chicken
products, so they enter in the market due to the demand of their
chicken products. KFC product variety of product in the chicken,
those products are:

Products:

· Original recipe® chicken


· Extra Tasty CrispyTM chicken
· Hot WingsTM pieces
XLIX
· Tender Roast® chicken
· Chunky Chicken pot pie
· Kentucky Nuggest®
· Colonel’s Crispy Strips®
· Honey BBQ sandwich
· Original Recipe® Sandwich
· Tender Roast® Sandwich
· Triple Crunch® Sandwich
· Triple Crunch ®Zinger® Sandwich

Brand:
There are three brands of the KFC:

1) Taco bell
2) Pizza Hut
3) Long john silvers

2nd. Pricing:
KFC during pricing their products keep the different points in the mind
like they adopt the cost base price strategy. Pricing of the product
includes the Government taxes and excise duties and then they come at
final stage of determine the price of their products. KFC prices of
products are a bit high according to the market segment and it is also
compatible to the stander of their products.
Calculation of the price under Cost Based Pricing Strategy:

Total Pounds of Chicken Served in KFC Restaurant Annually = 1.914


Billion

Total KFC Chicken Pieces Sold Annually = 5.89 Billion

Total Retail Sales = $8.9 Billion

Sales Price of per Chicken Piece = Total Retail Sales / Chicken Pieces
sold = $8.9 Billion / $5.89 Billion =$1.51 We assume that Fixed Cost is =
$6000000000

Variable Cost = $675000000

L
Profit Margin is Or Mark Up = $225000000(25% of Sales) Per Unit Variable
Cost = $675000000 / 5890000000 = $ 0.115

Unit Cost = Variable Cost + Fixed Cost / Chicken pieces Sold = 0.115 +
6000000000 / 5890000000 = 0.115 + 1.02 = $1.135 Now suppose
manufacturer wants to earn 25% mark up on sale. The manufacturer mark up
price is calculated:

Mark Up Price = Unit Cost / (1 – Desired Return on Sales) =1.135 / (1-.25)


= 1.135 / 0.75 = $1.51

3rd . Promotion:
Promotion is one of the necessary plates in any form of business or in
other words you can say that promotion is the key of success. If you
promote your product at the right time. KFC also known the importance
and significance of promotion so they uses the bill boards the major
source of advertisement and one of the most important thing that they uses
media especially the newspapers to promote their products. They are
also creating awareness among the masses about their existing product
range as well they tell us about the future product.

Marketing efforts to be taken by the restaurant:

• Paste delivery posters at petrol pumps, flats, colleges, plazas, and


departmental stores.

• Distribution of delivery flyers in residential areas, markets, plazas and


institutions (as per the plan)

• Visit offices and business places.

4th .Placement:
In the case of the KFC the placement of the product is not important
but the placement of the restaurant is important. The products of the KFC is
cooked at the sport and then served after that. KFC Cavalry branch opened
in June 1998, in the main commercial zone of Cavalry Grounds near the
LI
Jinnah Flyover. The restaurant is a three-story building including the
basement (where the chicky play area is located). It is ideally located in the
center of a main commercial and residential area of Lahore. The area
that KFC Cavalry caters for is the residential and office area of Cavalry
Grounds and Cantt, as the main target market. Another branch the KFC
opened in the Lahore is in Garden Town (opposite to Barkat Market). KFC
also target the Faisalabad and open its branch in D ground.

Now we can easily judge that the KFC target the place for their
restaurant, which is well known and is in the Porsche area where the
income level of the people is high then the middle class level. Because the
prices of the KFC products is high with comparison to the local products
manufacturer who are dealing in the same kind of product in which KFC is
dealing but the prices of the KFC is high due to special taste, high
quality, and due to international brand, it is the world recognized fast food
restaurant all around the world. So, for the placing strategy, KFC chose
the well income class area for their restaurants.

Competitive analysis
Competitors
You cannot enjoy the business without competitors. No organization can
afford to ignore
there competitors. It is very important for a marketing managers to monitor
the activities
of there competitors, what they are doing? KFC adopted such sort of strategy
that there is
no competitor for spicy chicken, which is made by KFC.
LII
KFC beats its competitors through the revising marketing strategy at every
movement but
the main competitor of KFC are Mc Donalds

Competitive Advantage

KFC Mc Donald’s
Spicy Product

Pakistani People like spicy food French Fries and Burgers


rather than boiled food

Arabian Rice and Zinger Burger Big Mac

Free Delivery Chargers on Home Delivery

Chicken is eaten in very Beef is banned is some community


community

Local stuff and highly qualified Its stuff is consists of simple


because local stuff can better deal graduates and give them training
with customers

KFC uses Top to Bottom and Mc Donald’s use Top to Bottom


Bottom to Top approach in their approach in their Management
Management

Promotion Issues
LIII
Sales promotion
For the sales pormotion KFC introduced their goods like watches ,
keychain,
e.t.c to the customers.

LIV
Advertisement
I do not normally think that advertising stunts are particularly
interesting or creative, but I thought this one by KFC was…well…
inspired.

KFC, the fried chicken franchise , is offering itself as a corporate


sponsor for pothole repair. An actor dress as KFC founder Colonel Sanders
and a road repair group got started this week in the franchise’s
hometown of Louisville, Ky. Filling up hundreds of holes.

Many of the repairs are decorated with a while stencil saying the spot
was”Re-freshed by KFC” A play on KFC’s ad campaign stressing the
freshness of their chicken . KFC spokesman Russell Dayer said that crew is
using “ Regular asphalt,” not day – old biscuits .

LV
Business sector is Fast food outlets & 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 "Hellvetica"
performing live, the lead singer then swallows fire. The commercial
then shows the lead singer at a KFC eating the "wicked crunch box 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.

Data Analysis
The data we received is as follows:-

We did a survey on KFC on people with age group of mostly 20-25yrs. Mostly all
were open to KFC’s recipe , and following were the results. As seen below KFC has
shown a good report on all the micro factors that we considered.

We also asked questions on whether they would like KFC to start home
delivery services.

LVI
We also inquired “How close is the nearest KFC outlet from your
house?

Would you like to order at home or Dine in?

LVII
Questionnaire about KFC in Peshawar
1. Age………… 7. In terms of location, why do you come to KFC?
2. Your occupation a. It lies on a main road
………………………………… b. It lies next to a supermarket
3. When did you know about KFC?....................... c. It looks out of 2 roads
4. Why do you choose KFS but other restaurants? d. Others…………………………….
…………………………………………………… (You can tick more than 1 option)
……………………………………………………
8. Would you prefer order at home or dine in the
5. By what way did you know about KFC? KFC ?
a. Advertisement on newspaper/magazine a. Dine In
b. Internet b. Order at home
c. Family/friends/ colleagues c. Really doesn’t matter
d. Banner 9. What factors of location affect your decision?
e. People working for KFC a. Near your house
f. Leaflets b. On the way to work or school
g. Others……………… c. Near shopping centre
6. Do you think KFC should start Home Delivery d. Near the red light so that it’s easy to be
Service ? recognized
a. Yes e. Others………………………….
b. No
c. If Yes ( Why )
LVIII
10. What do you think about the parking area at Toronto Alum’06 peace and Conflict
KFC? studies , International Relations
a. Good +001-647-2845838 (
b. Normal an_wared@hotmail.com ) (
c. Bad
http://arashwared.blogspot.com/ )
(Please, specify your reasons)
Corporate Office ( Karachi )
……………………………………………
Cupola Pakistan Ltd. 5th Floor , Park
11. How does the KFC’s prestige affect your Tower , Sharah-e-Firdousi
decision
Clifton , Karachi
a. Very much Tel : 92-21-5877976 (
b. Normal http://www.facebook.com/pages/KFC-
c. Very little pakistan )
12. Does the logo attract you?
Yes…………..No…………….
Akhtar Munir
(if yes, please specify your reasons)
…………………………………………………… NBP , University Town Branch ,
Peshawar
13. How often do you come to KFC
Tel:+92-333-9157958
a. Every 3 days
b. Once a week http://www.coursework4you.co.uk/essay
c. Once a month s-and-dissertations/analysis-of-
d. Other options…………………. companies/kentucky-fried-chicken-
kfc/kentuckyfriedchickenkfc.php
14. What do you think about the price here?
a. Very expensive http://www.scribd.com/doc/6546600/Qu
b. Expensive but still payable estionnaire
c. Reasonable
d. Cheap http://foodcourt.pk/index.php?
option=com_wrapper&Itemid=113
15. How do you feel about KFC's food?
a. Delicious http://www.kfc.com/contact/
b. Good
c. Normal http://www.pueblo.gsa.gov/
d. Not Good
http://www.kfcpakistan.com/
17. What are your suggestions for improving KFC's
service quality? (If any)
…………………………………………………………

Thank you very much for your


cooperation! 

Reference
Arash.N.Wared
LIX
Conclusion
It is clear from the above report that a high number of
people actually like to order from their home or workplace
rather than coming. This may be due to more convenience,
time shortage or just not willing to come and dine. Certainly
the home delivery market is huge and KFC can take well
advantage of the situation.

Thus it would be in the best interest of the company to start


the service as soon as possible and capitalize on the
opportunity. KFC expects a
rise in the orders by at least 20% by starting this service.

Therefore, to conclude we would say that KFC should


definitely have a home delivery service.

_____________________________________________________________________

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