TY-BMS SEM 5.............! YUM! BRANDS INC.


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TY-BMS SEM 5.............! YUM! BRANDS INC.

  1. 1. HOSPITALITY INDUSTRY The hospitality landscape is diverse and rapidly changing. Through lodging, gaming, entertainment and other channels, hospitality companies around the world seek to provide discerning guests with memorable experiences, which then lead to referrals and repeat visits. In today‟s uncertain economy, business and leisure travelers alike want to maximize the value they receive for their money. At the same time, hospitality providers are looking for efficiencies and effectiveness that lead to faster cash flow, optimized working capital, and increased revenue per available room. Genpact, through its smarter processes, smarter analytics and smarter technology, delivers enhanced business value to its clients, enabling them to serve guests in the best possible manner.
  2. 2. HOSPITALITY INDUSTRY IN INIDA India is known as the land of snake charmers to some, as land of religious diversity to some others and as land of Bollywood to entertainment lovers. Whether it‟s the food, the diversity in cultures, handicrafts or business opportunities, everybody seems to have some or the other reason to travel to India. And the fact that the World Travel and Tourism Council considers India to be one of the top most tourist spot with the highest ten year growth potential (2009-18), we have a reason to believe that India is only going to see more visitors. It is said that the Indian tourism brings a substantial share to the country‟s foreign exchange earnings and if you closely examine it, most of that comes from the hospitality business in India. The revenue from the hospitality sector in India broadly comes from two sources: 1. Hotels: Which include lodging, attending business conferences and meetings 2. Restaurants: Which includes all sort of eateries whether fine dining restaurants, quick service restaurants, takeaways or other forms of eating joints.
  3. 3. Hotels and Restaurants after all are the prerequisites for any visitor, local or foreign. And focusing on the last bit, it‟s hard to not miss out on the fact that not only the foreign visitors, but Indian visitors travelling across states and cities bring in a huge chunk of revenue for the country‟s Hotel and Restaurant Industry. Therefore it can be said that the Tourism and the Hotel and Restaurant Sectors go hand in hand. Or rather, it can be said that the latter forms a prominent and an important part of the former. The market comprising of the foreign tourists is huge and is only growing year after year. The Foreign Tourist Arrivals standing at a figure of 4.15 Lakh in September 2012, registered a growth of a little over 3 percent compared to the corresponding month in the previous year. To prove the huge amount of foreign exchange that is added to the country‟s reserves is the fact that the Foreign Exchange Earnings during September 2012 were almost Rs. 6,650 Crores! The rise in incomes coupled with fascination to travel to a new country is a considerable reason to believe the growth of foreign visitors to India. Similar reasons can be attributed to upsurge in the domestic visitors too.
  4. 4. India is believed to be a country with the fastest growing middle class, and applying the general principles of economics with respect to availability of leisure time and disposable income, travelling is now a necessity for many. Visiting the dear ones, exploring your own country, taking a break from work, searching for business opportunities, there are reasons galore for Indian citizens to look to travelling.
  5. 5. Hotels and Restaurants Industry: A source for bread for many It is clear that the Tourism and the hospitality industry are highly inter-related but not only that, the hospitality or the Hotels and Restaurants sector is substantially linked with other industries in the economy like agriculture, transportation and construction which can be easily reasoned. To add to that the sector creates the maximum number of jobs than any other industry in the economy. After all it has place for all kinds of people, no matter how unskilled or specialized, which can be easily sampled in any hotel or a restaurant.
  6. 6. Typically a hospitality unit such as a Hotel or a Restaurant consists of various departments which work in close tandem to provide the combine service a customer enjoys. There is facility maintenance and direct operations which includes bartenders, kitchen workers, servers, housekeepers, porters, etc. Apart from that there is the obvious and more prominent Human Resources department, people taking care of the marketing and the management.
  7. 7. CHALLENGES AND GROWTH IN HOSPITALITY Mobility has become part and parcel of the high paced lives people lead today, especially so in the metros. Competition you call it or the most modern manifestation of the famous Charles Darwin‟s theory of Survival of the Fittest, everybody is working very hard to the extent of being available 24x7. And this makes it ever important for people to indulge in activities that rejuvenate their sense, good food being one of them. West has this popular culture of food trucks which are nothing but mobile catering vans which move around in localities (very much like the ice cream carts here) selling anything from fast food to gourmet food served by amateur chefs. Such vans are very popular among people for various reasons: one, because of the convenience of locality; second, because of their lower prices in comparison to proper restaurants and third, the quickness of their service. India has a similar concept bur more or less with the vans stationery at a place and that too is more common in industrial areas. For someone who likes to cook and feed people as a hobby, this is the best work idea where you not only get to fulfill your interest but get to earn as well.
  8. 8. One thing to consider here is that the initial investment in a van which can accommodate your cooking appliances depending on your preferences and the type of food you wish to sell. How you can differentiate your food van from others is by giving your van a proper look, having uniforms for all the staff that you plan to have, giving attention to the appearance of food you serve, emphasizing on hygiene and using social media to connect to the people. You can also give a new dimension to your business by accepting contracts for catering and getting booked for private events Among other formalities before starting a business, you will have to consider the license and registration as per the Food Safety and Standards (Licensing and Registration of Businesses) Regulations 2011 and also seek permission from the Traffic Police in case you want your mobile food van to be mobile in the truest sense of the word.
  9. 9. COMPETITION AND USAGE RATES Usage rate or its inverse "vacancy rate" is an important variable for the hospitality industry. Just as a factory owner would wish a productive asset to be in use as much as possible (as opposed to having to pay fixed costs while the factory isn't producing), so do restaurants, hotels, and theme parks seek to maximize the number of customers they "process" in all sectors. This led to formation of services with the aim to increase usage rate provided by hotel consolidators. Information about required or offered products are brokered on business networks used by vendors as well as purchasers.
  10. 10. HISTORY: Yum! Brands Inc. operates the Taco Bell, Pizza Hut, KFC, Long John Silver's, and A&W chains. The company is the largest quick – service restaurant concern in the world in terms of units with approximately 33,000 locations in over 100 countries across the globe. Taco Bell, Pizza Hut, and KFC were part of PepsiCo Inc.'s restaurant group until 1997, when they were spun off as Tricon Global Restaurants Inc. Tricon changed its name to Yum! in 2002, the same year that Long John Silver's and A&W were added to its holdings. Key Dates: 1952: Harland Sanders establishes his first franchise. 1958: Pizza Hut is founded by brothers Dan and Frank Carney. 1962: The first Taco Bell location opens. 1977: PepsiCo purchases Pizza Hut.
  11. 11. 1978: PepsiCo acquires the Taco Bell chain. 1986: Kentucky Fried Chicken is added to PepsiCo's arsenal. 1997: PepsiCo spins off its restaurant holdings as Tricon Global Restaurants Inc. 2002: Tricon changes its name to Yum! Brands Inc.; the company acquires Long John Silver's and A&W All American Food Restaurants.
  12. 12. INTRODUCTION OF YUM! BRANDS Yum! Brands, Inc., based in Louisville, Kentucky, is the world's largest restaurant company in terms of system restaurants with over 39,000 restaurants in more than 130 countries and territories. Yum! is ranked 201 on the Fortune 500 List with revenues of over $13 billion in 2012. The Company's restaurant brands - KFC, Pizza Hut and Taco Bell - are the global leaders of the chicken, pizza and Mexican- style food categories. Outside the United States, the Yum! Brands system opened over five new restaurants per day, making it a leader in international retail development. The Yum! System is comprised of company - owned restaurants (about 20% of the system) and franchised or licensed restaurants and operations (about 80% of the system). Yum! Brands does not own or operate its franchised or licensed units. The Yum! System includes four operating segments: U.S., International (Yum! Restaurants International), China and India Divisions. Outside the United States in 2012, the Yum! system opened approximately five new
  13. 13. restaurants each day of the year, making it a leader in international retail development.
  14. 14. FRANCHSING: Yum! was created on May 30, 1997, as Tricon Global Restaurants, Inc. an independent company, as a result of a spin - out of the former fast food division of PepsiCo, which owned and franchised the KFC, Pizza Hut, and Taco Bell brands worldwide. Because of the company's previous relationship with Pepsi, Yum! Brands have a lifetime contract with PepsiCo, with notable exceptions the contracts of franchisees. Yum's lifetime PepsiCo contract, along with some scattered KFC franchises across the United States which continue to maintain Coke fountain rights. Yum! Brands, is connect successful professionals to brands people crave: KFC, Pizza Hut, and Taco Bell! These drive and these team combined with Yum! Brands can be a powerful combination! Yum! Brands want to help leverage the experience to become a multi - unit franchisee with some of the biggest brands in the restaurant industry.
  15. 15. Yum! Brands proven process supports every step of the way with development experts, business coaches and a peer network of more than 1,200 experienced franchisees, all part of what they call the Yum! Value Network. Yum! Brands is committed to franchising with over 80% of the stores owned by independent franchise operators. They are actively seeking operators with the vision and capability to open multiple restaurants.
  16. 16. PIZZA HUT: The history of Pizza hut began in 1958, when what is now the world's largest pizza franchise was born. Today the Pizza hut company is part of the Pepsi Empire, but back then two brother‟s borrowed $600 from their mother and started to forge the history of Pizza hut. Pizza Hut has subsequently branched out and developed franchises all over the world. In fact it is diversity that has made the history of pizza hut so successful. Their menus and recipes are not the same, different locations use different suppliers and different toppings, according to the demand of their clients. The building block of the history of pizza hut has been this diversity, not often present in such a large concern. The whole history of pizza hut has been achieved through innovation, but the history of pizza hut really took off with union into the Pepsi Company and more aggressive marketing techniques especially in the take out market
  17. 17. Pizza Hut was founded in 1958 by brothers Dan and Frank Carney in their hometown of Wichita, Kansas When a friend suggested opening a pizza parlor, they agreed that the idea could prove successful, and they borrowed $600 from their mother to start a business with partner John Bender. Renting a small building at 503 South Bluff in downtown Wichita and purchasing secondhand equipment to make pizzas, the Carneys and Bender opened the first "Pizza Hut" restaurant; on opening night, they gave pizza away to encourage community interest. They chose the name "Pizza Hut" since the sign they purchased only had enough space for nine characters and spaces. Additional restaurants were opened, with the first franchise unit opening in 1959 in Topeka, Kansas. The original Pizza Hut building was later relocated to the Wichita State University campus. Pizza Hut's prototype version of a restaurant (1950 – 1961) at Wichita State University. This was only used at four prototype Pizza Hut locations. There are only a few menu items on this version.
  18. 18. Dan and Frank Carney soon decided that they needed to have a good standard image. The Carney brothers contacted Wichita architect Richard D. Burke, who designed the distinctive mansard roof shape and standardized layout, hoping to counter competition from Shakey's Pizza, a chain that was expanding on the west coast. The franchise network continued to grow through friends and business associates, and by 1964 a unique standardized building appearance and layout was established for franchised and company owned stores, creating a universal look that customers easily recognized. In 1978, Pizza Hut was acquired by Pepsico, who later also bought KFC and Taco Bell. In 1997, the three restaurant chains were spun off into Tricon, and in 2001 joined with Long John Silver's and A&W Restaurants to become Yum! Brands. The oldest continuously operating Pizza Hut in the world is in Manhattan, Kansas, in a shopping and tavern district known as Aggieville near Kansas State University.
  19. 19. Pizza hut cannot be accused of not listening to their customers, when a Dallas survey declared that most people like to dip their slices of pizza into a sauce. Pizza hut quickly conducted their own survey online and then added dippers to their pizza menus.
  20. 20. MARKETING: Marketing, the first thing that comes to our mind is about the personal selling or the advertisement of goods and services. Though, the selling and advertising are only the two of many kinds of the marketing activities. Generally, the marketing activities are associated with the identification of the particular needs and wants for the customer‟s target market yet satisfying the customers as better the competitors. Then, it includes the market research for the customers who can analyze their needs so that the management can make the proper decisions regarding the pricing, design, distribution, and promotion. Accordingly, the term marketing has many definition and one of these is the one made by Boone and Kurtz which is the process for executing and planning the pricing conception, distribution, and promotion of the goods, ideas, and services for the given organization as well as events in maintaining and creating the relationship which can satisfy the organizational
  21. 21. and individual objectives. On the other hand, according to the book of Ries and Trout, it goes beyond the traditional definition of marketing which is the satisfaction of customers‟ wants and needs . This is the activity of the human that directly satisfy the needs of customers through the exchange of process. This is also the performance of the business activities that directs the services and flow from the producers and to the consumers. Marketing can also considered to be the performance of the activities that seeks the organizational accomplishments to their objectives on anticipating the clients or customers needs by the direction of the flow of need - satisfying services and goods that came from producers and pass to the client or to the customers. Thus, the marketing can also be defined into process as the identification of the customers needs, then, it needs to conceptualize the needs to the capacity of the organization in producing. The communication will then follow to the concept for the appropriate law into the power of organization. The concept will be consequent the output to the customers needs earlier. Lastly, the communication for the concept to the customers
  22. 22. needs to be done. Generally, the term can be used in order to describe the business functions and most concerned to the demand fulfilling and stimulating activities for the business organization.
  23. 23. MARKETING OBJECTIVES A marketing plan must be created to meet clear objectives. Objectives guide marketing actions and are used to measure how well a plan is working. These can be related to market share, sales, and goals, reaching the target audience and creating awareness in the communicate what marketers want to achieve. marketplace. The objectives
  24. 24. 7 P’S OF PIZZA HUT: PRODUCT Worldwide and in India, Pizza Hut has come to become synonymous with the „best pizzas under one roof‟. This is because at Pizza Hut the belief is that every pizza has its own magic, thus making it a destination product – which everyone seeks. It is this belief that has ignited the passion to create, innovate and serve the finest product the industry has to offer, while setting standards for others to strive to replicate. Pizza Hut is committed to providing uncompromising product quality, offering customers the highest value for money and giving service that is warm, friendly and personal. A critical factor in Pizza Hut‟s success has been its unique dining experience. Crewmembers at Pizza Hut strive each day to provide „customer mania‟ the kind of service that ensures that every visit of the customer is a memorable one. Over the years Pizza Hut has also developed and successfully introduced a range of products especially suited to the Indian palate. These products like Chicken Tikka, Spicy Korma, Spicy Paneer and the Masala and Tandoori
  25. 25. pizzas have been a tremendous success. What has also given Pizza Hut a competitive edge is that in addition to an extensive range of internationally renowned pizzas like The Italian, the proprietary Pan Pizza and Stuffed Crust, in India the menu offers the option of a complete meal. It includes appetizers, a Salad Bar - where the customers can make their own fresh salads, a range of soups, pastas and desserts.
  26. 26. PRICE In the past, Pizza Hut has successfully used the high / low pricing strategy when setting the retail price of its products. The high / low retail pricing strategy allows Pizza Hut to charge a price that is above the competition, but also promote frequent sales to lower the price below them. Both Pizza Hut and the beverage Mountain Dew are Pepsi subsidiaries, bundle pricing will be used. Pizza Hut will be able to sell two products together at a single price to suggest a good value. Different groups of customers are willing to pay different prices for the same product. Pizza Hut can sell "The Extreme" to the customers who will pay the higher price to be the first to buy and also to the bargain hunters Finally , this strategy will emphasize product and service quality. Pizza Hut sets a high initial price for its products to send a signal to customers that its products are quality and the service is excellent.
  27. 27. PROMOTION The objectives of promotion are to introduce a new product, stimulate demand, change the short - term behavior of the customers, and encourage repeat or greater usage by current customers. Pizza hut uses many promotional strategies. The main promotion is a coupon to purchase. This promotion is also distributed mainly by mail (VIP members), but also by fliers on college campuses around the country in order to reach the target market. They are using billboards on main stream places to get there customer. They are also distributing door to door brochures to capture more and more customers. Pizza huts also using marketing techniques. These are the strategies Pizza hut is using for its marketing. Pizza huts try's to attract the younger generation as their main market segment. Apart from this Pizza Hut is using intense marketing strategies they are also giving ads in magazines. Advertising camping will creates awareness of the products in our target markets.
  28. 28. DISTRIBUTION The type of distribution channel used by Pizza Hut is the direct channel. The direct channel is successful when there is an extremely large market that is geographically dispersed. The direct channel is also useful when there are a large number of buyers, but a small amount purchased by each. Pizza Hut uses three different methods of selling its products directly to the market. The first method of distribution used by Pizza Hut is delivery. Customers can call Pizza Hut ahead of time, place an order, and the order is delivered to the customer's home. Another method of distribution is for customers to dine - in. Customers can go to the nearest Pizza Hut, place an order, and either leave with the order or eat at the restaurant. One of Pizza Hut's largest competitive advantages is its restaurant style facility. Pizza Hut offers a clean place to sit down and enjoy the variety of pizzas, salads, and sandwiches in a fun, family atmosphere.
  29. 29. The third method of distribution is! Online ordering. Customers can now go on the Internet and place an order. This method is useful because it allows customers to view the entire menu, download any special coupons, and order without having to disclose any credit card numbers. The market coverage for "The Extreme" will be nationwide. Customers all over the country will be able to order "The Extreme" by one of the three distribution methods.
  30. 30. PEOPLE Here the job design is not the most difficult task to do. Also there is no specific requirement for recruiting process. After talking one of the employees in Pizza Hut, we came to know the criteria of selection. The girl was from west India, she was only 10 th passed out. After this we it was confirmed that there is no proper requirement of the educational background. The only factor they were considering on the communication skills, how they communicate with the customers. Since the communication is the most important factor between the customer and employee because the whole process is depended on giving the orders for food. For this the Management conducted the training process for the new employees. The Training is given for total 5 days. Out of 5 days, they have 3 days for kitchen training and other 2 days in the main dining, that is, how to take orders and basically how to communicate with customers and make them happy by their services.
  31. 31. PROCESS The design of the process of the pizza hut is very efficient pizza hut do not follow any kind of hierarchy, all the employee is at the same level, pizza hut has a very prescribe and well known process by adopting various technology software which help them to upgrade their supply management and also manage their crowd of customer efficiently.
  32. 32. PHYSICAL EVIDENCE The ambience of the pizza hut is good enough to catch up the people. They provide a very good dining experience with high quality of atmosphere in terms of their physical evidence. and pizza hut always try to upgrade with changing envierment and modernization is key of success of the pizza hut.
  33. 33. PIZZA HUT, INC. COMPETITION When it comes to tossing around dough, no one does it more often than Pizza Hut. The unit of YUM! Brands operates the world's 1 pizza chain with more than 13,000 outlets in about 90 countries worldwide. The chain serves a variety of pizza styles, including its flagship Pan Pizza, as well as Thin n' Crispy, Stuffed Crust, Hand Tossed, and Sicilian. Other menu items include pasta, salads, and sandwiches. Pizza Hut offers dine - in service at its characteristic red - roofed restaurants, as well as carry - out and delivery service. About 15% of the restaurants are company - operated, while the rest are franchised. The world's largest fast food company, YUM! Brands runs KFC and Taco Bell in addition to Pizza Hut.  Dominos Pizza, Inc. is a pizza delivery company located in United States. The company was founded in 1990 and it is ranked as the second largest pizza chain in the United States (Dominos). Currently, the company has franchise of more than 9,000 corporate and franchised
  34. 34. products. The starting point for this comparison would be on the produc stores, which are located in more than 60 international markets (Dominos). The company operates in all 50 states in the United States (Dominos). Domino’s Pizza was sold in 1998 and the company went public in 2004. The company menu mainly features pizza, pasta, over baked sandwiches, wings, boneless chicken, salads, and others.  Pizza Hut, Inc. is a leading American restaurant chain that offers different kinds of pizzas. The company was founded in 1958 by two brothers, Dan and Frank Carney, in Wichita, Kansas (Pizza Hut). With an initial capital of $600, the company opened the first Pizza parlor in the region that has grown to the restaurant giant it is today (Pizza Hut). is the largest world‟s restaurant company operating in more than 34,001 restaurant and delivery centers in more than 100 countries (Pizza Hut). Pizza Hut has different restaurant formats. Pizza Hut Express and The Hut are the main locations for fast foods including pizza (Pizza Hut). These two offers limited menu t itself.
  35. 35.  Considering the fierce competition between the two pizza kings, their pricing strategy is mainly geared towards ensuring that they align their products to this competition. One of the featured pricing for both companies is that they tailor their price to the season. They give deals that come with different prices. For example, Pizza Hut has great value deals from $6 when one buys two pizzas (Pizza Hut). A large pizza with three toppings goes for $10 while cheesy bite pizza goes for $11.99 (Pizza Hut). Pizza Hut also sees 2 liter and breadsticks for $5.00. In the same way, Dominos also offers different deals (Pizza Hut). It offers carryout lunch deal for $5 that comes with two toppings (Dominos). On pricing strategy, it therefore appears that Pizza Hut has different pricing strategies that are meant to attract customers.
  36. 36. TACCO BELL: Taco Bell is an American chain of fast - food restaurants based in Irvine, California. A subsidiary of Yum! Brands, Inc., they serve a variety of Tex Mexfoods including tacos, burritos, quesadillas, nachos, other specialty items, and a variety of "Value menu" items. Taco Bell serves more than 2 billion customers each year in more than 5,800 restaurants in the U.S., more than 80 percent of which are owned and operated by independent franchisees.
  37. 37. KENTUCKY FRIED CHICKEN Way back in 1930‟s Colonel Harland Sanders got some distinguished Kentucky folks licking‟ their fingers. It‟s been In fashion since then! Colonel Harland Sanders, founder of the original Kentucky Fried Chicken, was born on September 9, 1890. When he was six, his father died and his mother was forced to go to work while young Sanders took care of his three year old sibling. This meant he had to do much of the family cooking. By the time he was seven, Harland Sanders was a master of a range of regional dishes. After a series of jobs, in the mid 1930s at the age of forty, Colonel Sanders bought a service station, motel and cafe at Corbin, a town in Kentucky about 25 miles from the Tennessee border. It is here that Sanders began experimenting with different seasonings to flavor his chicken which travelers loved and for which he soon became famous. During the next nine years he developed his secret recipe of 11 herbs and spices and the basic
  38. 38. cooking technique which is still used today. Sander's fame grew. He sold his chicken on the highway! But when the highway was removed, he sold up and traveled the United States by car, cooking chicken for restaurant owners and their employees. If the reaction was favorable Sanders entered into a handshake agreement on a deal which stipulated a payment to him of a nickel for each chicken the restaurant sold. By 1964, from that humble beginning, Colonel Harland Sanders had 600 franchise outlets for his chicken across the United States and Canada. Later that year, Colonel Sanders sold his interest in the United States operations for $2 million. The 65- year - old gentleman had started a worldwide empire using his $105 social security cheque . Sadly, Colonel Harland Sanders. His legacy lives on with KFC restaurants all over the world. KFC now stretches worldwide with more than 13,000 restaurants in more than 80 countries and territories around the world serving up the Colonel‟s Original Recipe. It is a $13 billion brand based out of Kentucky and is the leading QSR around the world which is based in Louisville, Kentucky. Yum! Brands own 5 brands, out of which KFC is the largest brand within the Yum! Portfolio, founded by Colonel Harland Sanders in the year 1938.
  39. 39. 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. Renowned worldwide for it‟s finger licking good food, KFC offers its signature products in India too! KFC has introduced many offerings for its growing customer base in India while staying rooted in the taste legacy of Colonel Harland Sander‟s secret recipe. Its signature dishes include the “crispy outside, juicy inside” Hot and Crispy Chicken, flavorful and juicy Original Recipe chicken, the spicy, juicy & crunchy Zinger Burger, Toasted Twister, Chicken Bucket and a host of beverages and desserts. For the vegetarians in India, KFC also has great tasting vegetarian offerings that
  40. 40. include the Veggie Burger, Veggie Snacker and Veg Rice meals. In India, KFC is growing rapidly and today has presence in 11 cities with close to 50 restaurants.
  41. 41. I. PRODUCT - It must provide value to a customer but does not have to be tangible at the same time. Basically, it involves introducing new products or improving the existing products. II. PRICE - Pricing must be competitive and must entail profit. The pricing strategy can comprise discounts, offers, and the like.
  42. 42. III. PLACE - It refers to the place where the customers can buy the product and how the product reaches out to that place. This is done through different channels, like internet, wholesalers and retailers. VI. PROCESS - It refers to the methods and process of providing a service and is hence essential to have a thorough knowledge on whether the services are helpful to the customers, if they are provided in time, if the customers are informed in hand about the services and many such things. VII. PHYSICAL (EVIDENCE) - It refers to the experience of using a product or service.
  43. 43. COMPETITION  KFC faces competition from a number of fast food companies which include Burger King, Subway, McDonald‟s.  McDonald‟s, Subway, and Burger King. COMPETITIVE COMPETITION KFC may offer chicken sandwiches and strips and other things of that nature, they push a variety of other items more heavily, which generally causes consumers to view them in an entirely different category from restaurants like McDonalds.
  44. 44. Recent visitors at KFC outlets across the country have been getting a surprise - there is a new, 10 - item, low – price menu on offer. Its highlight is the 'Potato Krisper', a vegetarian burger costing Rs 25, where the fried patty within consists almost entirely of potato. This was created exclusively for the Indian market, the first time the global fast food giant has done so. Indeed, it is also the first time KFC - known for its chicken items, marinated in a 'secret sauce' - has ever created a potato burger. Other items on the new menu, called the 'Wow' menu, include 'Chicken Shotz - pieces of fried chicken - again available for Rs 25. 'Combos', where a fizzy drink or other accompaniments are offered along with the burger or the chicken fries, are available for just Rs 59. It is a steep price slash for KFC, where all other items cost a lot more - the popular 'Chicken Zinger', for instance, sells at Rs 99 a plate. Not surprisingly, even more than the trendy music and décor at KFC outlets, the new bargain – basement menu has proved a great attraction for
  45. 45. young people, especially students, whose disposable income is limited. The key feature of the Happy Price Menu too is a potato burger called McAloo Tikki, also priced currently at Rs 25. (It used to be Rs 20 when launched in 2004.) In comparison, McDonald's well known Chicken Maharaja Mac costs Rs 95. A part – by part evaluation of the KFC and McDonald's potato burgers shows there is hardly any difference between them, though McAloo Tikki is a shade heavier.
  46. 46. BOSTON CONSULTING GROUP MATRIX ( BCG ) This technique is particularly useful for multi-divisional or multiproduct companies. The divisions or products compromise the organisations “business portfolio”. The composition of the portfolio can be critical to the growth and success of the company. The BCG matrix considers two variables, namely.. x MARKET GROWTH RATE x RELATIVE MARKET SHARE
  47. 47. The market growth rate is shown on the vertical (y) axis and is expressed as a %. The range is set somewhat arbitrarily. The overhead shows a range of 0 to 20% with division between low and high growth at 10% (the original work by B Headley “Strategy and the business portfolio”, Long Range Planning, Feb 1977 used these criteria). Inflation and/or Gross National Product have some impact on the range and thus the vertical axis can be modified to represent an index where the dividing line between low and high growth is at 1.0. Industries expanding faster than inflation or GNP would show above the line and those growing at less than inflation or GNP would be classed as low growth and show below the line. The horizontal (x) axis shows relative market share. The share is calculated by reference to the largest competitor in the market. Again the range and division between high and low shares is arbitrary. The original work used a scale of 0.1, i.e. market leadership occurs when the relative market share exceeds 1.0.
  48. 48. The BCG growth/share matrix is divided into four cells or quadrants, each of which represent a particular type of business. Divisions or products are represented by circles. The size of the circle reflects the relative significance of the division/product to group sales. A development of the matrix is to reflect the relative profit contribution of each division and this is shown as a piesegment within the circle.
  49. 49. x QUESTION MARKS These are products or businesses, that compete in high growth markets but where the market share is relatively low. A new product launched into a high growth market and with an existing market leader would normally be considered as a question mark. Because of the high growth environment, they can be a “cash sink”. Strategic options for question marks include..  Market penetration  Market development  Product development Which are all intensive strategies or divestment.
  50. 50. x STARS Successful question marks become stars. i.e. market leaders in high growth industries. However, investment is normally still required to maintain growth and to defend the leadership position. Stars are frequently only marginally profitable but as they reach a more mature status in their life cycle and growth slows, returns become more attractive. The stars provide the basis for long term growth and profitability. Strategic options for stars include..  Integration – forward, backward and horizontal  Market penetration  Market development  Product development  Joint ventures
  51. 51. x CASH COWS These are characterized by high relative market share in low growth industries. As the market matures the need for investment reduces. Cash Cows are the most profitable products in the portfolio. The situation is frequently boosted by economies of scale that may be present with market leaders. Cash Cows may be used to fund the businesses in the other three quadrants. It is desirable to maintain the strong position as long as possible and strategic options include..  Product development  Concentric diversification If the position weakens as a result of loss of market share or market contraction then options would include..  Retrenchment (or even divestment)
  52. 52. x DOGS These describe businesses that have low market shares in slow growth markets. They may well have been Cash Cows. Often they enjoy misguided loyalty from management although some Dogs can be revitalised. Profitability is, at best, marginal. Strategic options would include..  Retrenchment (if it is believed that it could be revitalised)  Liquidation  Divestment (if you can find someone to buy!) Successful products may well move from question mark though star to Cash Cow and finally to Dog. Less successful products that never gain market position will move straight from question mark to Dog. The BCG is simple and useful technique for strategic analysis. It is convenient for multi-product or multi-divisional companies. It focuses on cash flow and is useful for investment and marketing decisions.
  53. 53. BCG MATRIX OF YUM! BRANDS. Yum! Brands Inc. has several business units that are considered cash cows. The first business unit that is a cash cow is Pizza Hut. In 2003, Pizza Hut's sales were 5 billion dollars. It has almost 50 percent of the industries market share. Although its market share is fairly high, its growth rate is only 1.3 percent. The average sales per unit are $605,700 throughout its 7,523 units Another cash cow is Kentucky Fried Chicken (KFC). As well as Pizza Hut, KFC is also the market leader in the chicken chain. In 2003, KFC's total sales were almost 5 billion dollars, more than 50 percent of the market share in the chicken chain segment. KFC had a growth rate of 2.8 percent.
  54. 54. The average sales per unit are $897,800 throughout its 5,524 units. Despite its dominance, KFC is slowly losing market share as other chicken chains increases sales at a faster rate. Sales indicated that KFC's share of the chicken segment fell from a high of 64 percent in 1993, a 10 year drop of 14 percent. The last cash cow of Yum! Brands Inc. is Taco Bell. Taco Bell is Yum Brand Inc. most profitable among the business units. In 2003, its sales were 5.3 billion dollars, averaging $879,700 per unit. Although it has a high market rate, it only has a growth rate of 2.8 percent. Taco Bell was able to generate greater overall profits because of its lower operating cost. Its profits also were greater because the cooking machinery was simple, less costly, and required less space then a pizza oven or chicken broiler. Despite the fact that the company has many cash cows throughout its business units, it also has two dogs in A&W restaurants and Long John Silver's. In 2003, A&W had sales of only 200 million dollars. That is over 5 billion dollars less than the sales that Taco Bell exceeded. Additionally, Long John Silver's had sales of 777 million dollars, averaging $640,000 throughout its units. Its growth rate was a low 2.8 percent six percent less than the industry leader McDonald's.
  55. 55. Whereas, Zinger is of KFC, Twister birthday buffer is of MC DONALDS, Rice spice is of PIZZA HUT and Arabian rice is of LONG JOHN SILVER‟S.
  56. 56. SWOT ANALYSIS SWOT analysis is a structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. A SWOT analysis can be carried out for a product, place, industry or person. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective. The technique is credited to Albert Humphrey, who led a convention at the Stanford Research Institute (now SRI International) in the 1960s and 1970s using data from Fortune 500 companies. The degree to which the internal environment of the firm matches with the external environment is expressed by the concept of strategic fit.
  57. 57. Setting the objective should be done after the SWOT analysis has been performed. This would allow achievable goals or objectives to be set for the organization. Strengths: characteristics of the business or project that give it an advantage over others Weaknesses: are characteristics that place the team at a disadvantage relative to others Opportunities: elements that the project could exploit to its advantage Threats: elements in the environment that could cause trouble for the business or project
  58. 58. Identification of SWOTs is important because they can inform later steps in planning to achieve the objective. First, the decision makers should consider whether the objective is attainable, given the SWOTs. If the objective is not attainable a different objective must be selected and the process repeated. Users of SWOT analysis need to ask and answer questions that generate meaningful information for each category (strengths, weaknesses, opportunities, and threats) to make the analysis useful and find their competitive advantage.
  59. 59. SWOT Analysis of KFC KFC Corporation was founded by Colonel Harland Sanders in 1952. KFC, also known as Kentucky Fried Chicken is a chain of fast food restaurants based in Louisville, Kentucky, in the United States. KFC is part of Yum! Brands, Inc (the world‟s largest restaurant company in terms of system restaurants, with more than 36,000 locations around the world). Every day, KFC serves more than 12 million customers in 109 countries and territories around the world. KFC operates more than 5,200 restaurants in the United States and more than 15,000 units around the world. The SWOT analysis of the KFC Corporation is given below: STRENGTHS  KFC continued to dominate the Chicken Segment, with sales of 4.4 billion in 1999.  Strong trademarks recipes.  Ranks highest among all chicken restaurant chains for its convenience and menu variety.  Generate $1B each year.  KFC is the world‟s biggest chicken restaurant chain and 3rd largest fast-food chain.  KFC is a market leader in chicken foods for 50 years. It has more than 50 percent of the market share and has secret recipe of spice and 11 herbs.
  60. 60.  KFC is a most identifiable brand in chicken/fried food.  It has the strong location, store management, motivated work force and franchises.  KFC has a good image all over the globe and is globally placed for many years.  It has a strong distribution network such as outlets in shopping malls, airports, etc.  Positioning among competitors is favorable.  Unconventional methods of distribution multi branding.  Management Objectives and goals are measurable and achievable Team empowerment Productions/Operations.  Constant improvement on quality of chicken WEAKNESSES  KFC was losing market share as other Chicken chain increased sales at a faster rate.  Lack of knowledge about their customers.  Question of over franchising leads to loss of control and quality.  KFC finds difficulty in entering the German market (culture incompatibility)  KFC sales stagnated. There was widespread discontent among the franchisees, some of whom felt the new owners did not understand the chicken business and were not providing leadership expected from a franchisor.
  61. 61.  Company stores floundered and become underperforming the franchised operations, further convincing franchisees that the company did not know its own business. (KFC HQ acquired them to company-owned)  Lack of focus on R&D.  KFC is not innovative because it serves only the chicken products to the customers. It does not offer new or differentiated products.  KFC fell after the market in offering new products because it was doubling other fast food chains to remain competitive.  Mergers with different corporations resulted in big cultural problem for KFC employees such as Merger with PepsiCo.  The company is only focusing on few locations and is ignoring to visit or check standards at franchises in different countries.  KFC is facing problems to maintain the higher standards of hygienic food. It is being charged in different countries due to poor standards of hygienic food. Some of the important examples in this regard.
  62. 62. OPPORTUNITIES  Changing demographic trends provides opportunity to diversify into new products and locations.  Increasing demand for foodstuff eaten outside the home.  Expand globally to capture the untapped markets and increase the revenue.  Expansion for the Latin American markets/ Mexican market.  Consumers are becoming health-conscious; introduce new products line for this segment.  Be environment responsible because it will improve the public image of KFC and will help it to increase its revenue.  Diversify into other fast-food and meals.  Overseas expansion with the rapid economic growth and trend toward twoincome families that had fuelled the growth of fast-food industry in the 1950s and 1960s were appearing in the late 1960s in the other country.  US market maturity- many restaurants expand to international markets as strategy for growing sales.  KFC is an American company and 35 largest restaurant chains in the world (2000) were American firms Expansion program for the Mexican market/Latin
  63. 63.  American markets NAFTA advantage Demographic trends (demand for food eaten outside of the home.  McDonald‟s accounted for 35 percent of the Sandwich Segment while Burger King ran a distant Second, with a 16 percent market share.  In family Segment, Friend‟s and Shoney‟s were forced to shut down restaurants because of declining profits.  Within the Pizza Segment, Pizza Hat and Little Caesars Closed underperforming restaurants.  Boston Market was a new restaurant chain that emphasized roasted rather than fried chicken. THREATS  KFC is facing strong competition from its competitors, such as McDonalds, Yum and Subway.  It is also facing competition from local restaurants in different countries of the world.  The company is facing problem in maintaining same standards at their international franchises.  To sustain a market leadership position in the global fast-food industry.
  64. 64.  Sustaining U.S. market leadership is also another important threat for the company.  Other players are turning to new menu offerings, location and outlets.  Increasing number of health conscious consumers.  Saturated fast food industry in the U.S Market.  High rates on the prices as compared to the other brands selling same items may cause the customer‟s shift.  Less economical packages and deals are being offered in comparison of its biggest competitor McDonalds, which work on the strategy of seasonal induction of tempting deals.  Shift of customer demand to more healthy and fresh food, avoiding the all fried items.  Less variety of products pose a threat to the company, as they have very few products other than their portfolio” Fried chicken”.  Saturation of the U.S. market  Increasing competition and rising sales of substitute products.  Obstacles associated with expansion in Mexico.
  65. 65. SWOT ANAYSIS OF PIZZA HUT Is a restaurant chain and international franchise based in Addison, Texas, USA (a northern suburb of Dallas) specializing in American-style pizza along with side dishes including (depending on location): buffalo wings, breadsticks, and garlic bread. Pizza Hut is the world's largest pizza restaurant chain and is a subsidiary of Yum! Brands, Inc., whose restaurants total approximately 34,000 restaurants, delivery carry out units, and kiosks in 100 countries. The chain was founded as a pizzeria in 1958 by the Carney brothers - Dan and Frank.Borrowing $600 from their mother, the brothers purchased some second-hand equipment. The then Wichita State University students took a family pizza recipe, rented a small building, and opened the first restaurant at a busy intersection in Wichita, Kansas. The oldest continuously-operating Pizza Hut in the world is in Manhattan, Kansas, in a shopping and tavern district known as Aggieville.
  66. 66. STRENGHTS  Over 20,000 franchises around the world.  Brand leader in the UK.  Innovative range of pizzas under one roof.  Famous television advertising.  Food attracts people of various ranges from young to old.  Sound financial situation and international turnover.  100% owned by yum!  Pizza Hut sits on top of global full-service restaurant tree.  Through pizza hut being the largest restaurant chain in the world, this obviously means they dominate their market, and can invest in new products, example new pizzas.  They have low competition, although they do have competitors such as dominos pizza, yet they have an advantage over these as pizza hut are a restaurant as well as a take away unlike dominos pizza, this means pizza hut may have more sales therefore more income, which may help pizza hut with any improvements or adjustments needed to the business.
  67. 67.  Pizza hut has a huge market segment, attracting more customers meaning a higher percentage in sales, which may lead to greater profits. WEAKNESSES  Loyal customers are feeling that the satisfaction of the pizzas is declining. This may lead to low customer satisfaction and a reduction in customers and credibility in the market, this may lead to customers converting to main competitors such as dominos pizza.  While Novak said Pizza Hut‟s expansion into China is going exceedingly well, there is battling problems in New Zealand and Australia. This therefore meaning they are losing money in places such as new Zealand and Australia, this could be due to their culture and lifestyle, maybe meaning pizza hut need to introduce a more varied range of products to attract customers of all lifestyles and cultures.  There are complex computer systems and internal conflicts from franchisees, this leads to de-motivation of staff. Lowering the quality of products (pizzas), service to customers, and could lead to a lack of new ideas.
  68. 68. OPPORTUNITIES  Pizza Hut can introduce new Pizzas with different crust sizes and flavours. This may attract new customers with new tastes and this may increase their sales.  Pizza Hut has expanded into the Indian market menu and looks to the old favourite to bolster sales in the US.  Pizza Hut has targeted upscale products and a downscale consumer base; this will attract customers who are more willing to buy these Pizzas.
  69. 69. THREATS  Rising competition undermines Pizza Hut as consumers go for greater convenience; this will lower the amount of sales consumed by Pizza Hut as these sales are going to smaller companies who are charging less.  Rising cheese costs threaten margins, cheese is essential to the business as it is there primary good, there for they are unable to go with out it, this may lead to Pizza Hut eventually buying goods from abroad or buying cheaper brands.  Threat from Dominos pizza, also from Mc Donald‟s who have tried to introduce a new meal that is a Pizza called: McPizza. So Pizza hut will have to improve or maintain the quality of the pizzas in order to compete with Dominos and McDonalds, to ensure that Pizza hut dominate this market.  They will also have to keep their prices down and this may lead to them buying good from abroad where it is cheaper.
  70. 70. CONCLUSION As a restaurant company, is to put a YUM on people's faces around the world, satisfying customers every time they eat YUM! BRANDS food and doing it better than any other restaurant company. A&W, KFC, Long John Silver's, Pizza Hut, and Taco Bell offer customers food they crave, comeback value, and customerfocused teams. The unique eating experience at each of YUM! BRANDS restaurants makes customers smile and inspires their loyalty for life. Toward that end, YUM! BRANDS 750,000 associates around the world are trained to be customer maniacs. PIZZA HUT have many targets which it has achieve in a given period of time. The time-period is mostly a year. Therefore, in order to fulfill the targets different strategies are adopted by PIZZA HUT It can be concluded that these strategies have been successful and there is flexibility in the strategies, as they can be changed with the changes in the market conditions as well as the targets. KFC operates in the environment that is influenced by the diverse cultures, ethnic‟s customers, religious tenets, political systems, consumer watchdog groups, and fierce competition from other entities seeking to erode some of the dominant market that KFC enjoys. Including all of its shareholders in the process of ensuring that quality, values, customer‟s relations, willingness to change with the winds of consumer preference has been that recipe for success
  71. 71. WEBLOGRAPHY 1. http://www.kronosglobal.be/case-study/YUM-brands.aspx 2. www.pizzahut.co.in 3. www.kfc.co.in 4. www.tacobell.com 5. www.images.google.co.in 6. www.wikipedia.org 7. www.google.co.in BIBLOGRAPHY Marketing management-(Philip Kotler)