Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

kfc vs macdonald world


Published on

  • Login to see the comments

kfc vs macdonald world

  1. 1. EXECUTIVE SUMMARY The international market is flooded with various sectors and industries that involve products ofdaily aswell as occasional use for the consumers. The use of the products can vary from industrialpurpose toprivate consumption. One such thriving industry in the modern world is the food andbeverageindustry. Food and beverage industry combined with the hospitality sector makes up one ofthe mostattractive target sectors for multi-national corporations. The concept evolved from the veryfirst dinersin the late 18thcentury, when the world realized the concept of paid dining experience.Now, the worldcannot live without the taste of a McAloo Tikki or the zing of a Zinger. The bottomline being that theorder-to-eat MNCs have taken over the market like ants on a corpse, gobbling upevery ounce of it.This sector has slowly covered all income groups of consumers and has targeted toachieve a marketshare of the highest percentage and the ever increasing competition is resulting inmore profitableoptions for the consumers.The consumers are being served with a range of food andbeverages to relish on catering every style of taste and preferences. With growing competition thefood giants have take their services to a higherlevel with better decreased serving time, value formoney prices and changing specialties in theirproducts.The following report is a comparative analysisof the operational parameters of McDonalds andKentucky Fried Chicken (KFC) and projects anoverview of various factors that differentiate theservices of the two food giants. It covers factors likethe product variety, customer reach, pricingstrategies, hospitality management, customer relationshipmanagement, supply chain management andemployee satisfaction programmes.The survey was basedon the consumer’s response on their choice between KFC and McDonalds andthe basis of their choicewas differentiated into various factors 1
  2. 2. INTRODUCTIONMcDonald’s vs KFCMcDonald’s and KFC are everybody’s favorite food trip destinations. When you like hambur gers,McDonald’s is always the top option. When you like fried chicken, KFC is always the first thingthatcomes to everyone’s mind. The reason for this is these companies claim of particularproducts thathave became their trademark until now. The difference between McDonald’s and KFC ismainly thecuisine.McDonald’s1940 is the birth year of McDonald’s and they have started everything. Their Speedier ServiceSystemthat was introduced in their very first restaurant is being followed until now in modern day fast foodchains. Their very first mascot was a man with a head of a hamburger that is wearing a chef’s hat.Itwas replaced by McDonald’s ever popular clown man. McDonald’s is recorded to currently serving58million customers each day in 119 countries. Their restaurants differ from their settings, some offerby-passers with their drive thru service, some have playgrounds for kids but are just counter servicealone.Some of their restaurants have outer seats as well. McDonald’s signature colors are redand yellow.Their well-supported products are their famous hamburgers, breakfast offers, desserts,chickensandwiches and French fries. For vegetarian customers, McDonald’s have offerings that aresuitablefor them. When it comes to regional branches, McDonald’s are known for being fond ofoffering thesecountries food taboos for them to have some sort of relationship with people around. Forexample,Portugal McDonald’s are the only ones who have soup in the menu. Another example wouldbeIndonesia for McRice. 2
  3. 3. KFCOn the other hand, KFC or Kentucky Fried Chicken started during the Great Depression, which wasin the year 1930. It was first named as “Sanders Court and Cafe”, following the name of HarlandSanders,the original creator from Kentucky. Their current and most popular logo is the cartoonedimage of Sanders with their acronym, KFC. They are popular for their trade secret, their secret recipemade from11 herbs and spices that is known to create the“finger lickin’ good” flavor of theirchickens.Theirbasic products are fried chickens, chicken wraps, sandwiches, salads and some roasted andgrilledchicken cuisines and desserts, too.Be it McDonald’s or KFC, you’ll surely have a great treat ofa meal. Differentiating both will help usrecognize as to what we’d really love to consume.McDonald’s main offer is hamburgers while KFCoffers various kinds of chicken dishes.OBJECTIVES1. To conduct a comparative analysis on the marketing parameters of McDonald’s and KFC2. To study the various aspects of supply chain management, employee satisfaction and hospitalitymanagement of both companies.3. To conduct survey analysis on the consumer’s preference of food joint amongst McDonald’s andKFC. 3
  4. 4. COMPANY PROFILEMCDONALD’SHistory1955 Ray Kroc opens his first restaurant in Des Plaines, Illinois and the McDonalds Corporation iscreated.1957 Quality, Service, Cleanliness and Value (QSC& V) becomes the company motto.1959 The 100th McDonalds opens in Chicago.1961 Hamburger University opens in Elk Grove, near Chicago.1963 One billion hamburgers sold. Ronald McDonald makes his debut.1964 Filet-O-Fish sandwich is introduced.1965 McDonald’s Corporation goes public.1967 The first restaurants outside of the USA open in Canada and Puerto Rico.1968 The Big Mac is introduced. The 1,000th restaurant opens in Des Plaines, Illinois.1972 A new McDonalds restaurant opens every dayThe Quarter Pounder is introduced. 4
  5. 5. 1973 Egg McMuffin is introduced.1974 The first Ronald McDonald House opens in Philadelphia.The Happy Meal is launched.1983 Chicken McNuggets is introduced.New Hamburger University campus opens in Oak Brook,Illinois. Set in 80 wooded acres. Training is provided for every level of McDonalds managementworldwide.1984 50 billionth hamburgers sold. Ronald McDonald Childrens Charities is founded in Ray Kroc’smemory to raise funds in support of child welfare.1989 McDonalds is listed on the Frankfurt, Munich, Paris and Tokyo stock exchanges.1990 McDonalds opens in Pushkin Square and Gorky Street, Moscow.1993 The first McDonalds at sea opens aboard the Silja Europa, the worlds largest ferry sailingbetween Stockholm and Helsinki.1994 Restaurants open in Bahrain, Bulgaria, Egypt, Kuwait, Latvia, Oman, New Caledonia,Trinidadand United Arab Emirates, bringing the total to over 15,000 in 79 countries on 6 continents.1996 McDonalds opens in India –the 95th countryMcDonalds is a leader in convenient foods and beverages, with revenues of about $23 billion andover1.6 million employees serving the customer’s worldwide. The company consists of the snackbusiness of Beverages and Foods. PepsiCo brands are available in nearly 115 countries having morethan 24,500restaurants in the world providing 24 hour service having about 1 billon customers to beserved all overthe world.McDonalds’s success is the result of superior products, high standards of performance, distinctivecompetitive strategies and the high integrity of our people. McDonalds is continuing to expand andintroduce new alternative beverages in the market. Approximately 85% of McDonald’s restaurantbusinesses world-wide are owned and operated by franchisees .All franchisees are independent,fulltimeoperators. McDonald’s was named Entrepreneur’sNumber-one franchise for 1997. 5
  6. 6. Mc Donalds in India•McDonald’s entered India in 1996.•McDonald’s India has a joint venture with Connaught Plaza Restaurants and Hard CastleRestaurants.•Connaught Plaza Restaurants manages operations in North India whereas Hard CastleRestaurantsoperates restaurants in Western India.•Today it has around 211 Restaurants across India.•Presently, it has around 57 outlets in the National capital region. McDonald’s has developed a menu especially for India with vegetarian selections to suit Indiantastes And preferences. Keeping in line with this, McDonalds does not offer any beef or pork items inIndia. Inthe last decade it has introduced some vegetarian and non-vegetarian products with localflavours that have appealed to the Indian palate. There have been continuous efforts to enhancevariety in the menu by developing more such products.McDonalds has also re-engineered itsoperations repeatedly in its 11 years in India to address thespecial requirements of a vegetarian menu.Vegetable products are 100% vegetarian, i.e. 6
  7. 7. •They are prepared separately, using dedicated equipment and utensils Only pure vegetarian oil isused as a cooking medium.• Cheese and sauces are completely vegetarian and egg less.•Separation of vegetarian and non-vegetarian food products is maintained throughout the variousstagesof procurement, cooking and serving Business model The McDonalds Corporationsbusiness modelis slightly different from that of most otherfast-foodchains. In addition to ordinaryfranchisefees, supplies, and percentage of sales, McDonaldsalso collectsrent,partially linked to sales. As a condition of the franchise agreement, the Corporationowns theproperties on which most McDonalds franchises are located. The UK business model isdifferent, in thatfewer than 30% of restaurants are franchised, with the majority under the ownershipof the company.McDonalds trains its franchisees and others atHamburger UniversityinOakBrook,Illinois. According to Fast Food Nation byEric Schlosser(2001), nearly one in eight workers intheU.S.have at some time been employed by McDonalds. (According to news piece on Fox News thisfigure is one inten). The book also states that McDonalds is the largest private operator ofplaygrounds in the U.S., aswell as the single largest purchaser of beef, pork, potatoes,andapples.Theselection of meats McDonalds uses varies with the culture of the host country. 7
  8. 8. McDonald’s corp. is currently one of the most successful consumer products company in the worldwithannual revenues exceeding $23 million and has more than 1.6 million employees. McDonald’sproducts are recognized and are most respected all around the globe. Currently, its divisions operateinall over the world in beverages, snack foods, and restaurants. The corporations increasing successhas been based on high standards of performance, marketing strategies, competitiveness,determination, commitment, and the personal and professional integrity of their people, products andbusiness practices. Products McDonalds predominantly sellshamburgers,various types of chickensandwichesandproducts,French fries, soft drinks, breakfastitems, anddesserts.In most markets, McDonaldsofferssaladsand vegetarianitems,wrapsand other localized fare. This local deviation from the standardmenu is a characteristic for which the chain is particularly known, and one which is employed eitherto abide byregional food taboos (such as the religious prohibition of beef consumption inIndia)or tomakeavailable foods with which the regional market is more familiar (such as the sale of McRiceinIndonesia). 8
  9. 9. Pricing StrategyValue Ladder strategy:-b) Started offering value meals in a range of prices.c) Ensure affordability and attract widest section of customers.d) Brought the customer and provided arrange of entry-level products.e) Try those new items and graduate to higher-rungs.f) E.g. - if a customer starts with McAloo Tikki, he will finally graduate to McVeggie and so inNonveg. 9
  10. 10. 80-20 Menu Board•80% visual.•20% descriptive.•Easier for customers to understandwhat 29, 39, 49, 59, 89, 99 rupee options are.•Pricing range, quick service, no-tips environment attracted middle class and students.Package deal• The mostcommon strategy in fast food industry.• The most preferred style for customers ofMcDonald’s.• Plays on Psychological factor of thecustomer.• Consumers appreciate the resultingsimplification of the purchase decision 10
  11. 11. Advertising Over the years, McDonalds has developed TV advertising campaigns that have become,likeMcDonalds, a part of our lives and culture. McDonalds commercials have focused not only onproduct,but rather on the overall McDonalds experience, portraying warmth and a real slice ofeveryday life.This "image" or "reputation" advertising has become a trademark of the company andcreated manymemorable television moments and themes, includingMcDonalds is Your Kind of Place (1967)You Deserve a Break Today (1971)We Do it All for You(1975)Twoallbeefpattiesspecialsaucelettucecheesepicklesonionsonasesameseedbun (1975)You, Youre The One (1976) 11
  12. 12. Nobody Can Do It Like McDonalds Can (1979)Renewed: You Deserve a Break Today (1980 & 1981)Nobody Makes Your Day Like McDonalds Can (1981)McDonalds and You (1983)Its a Good Time for the Great Taste of McDonalds (1984)Good Time, Great Taste, Thats Why This is My Place (1988)Food, Folks and Fun (1990)McDonalds Today (1991)What You Want is What You Get (1992)Have you Had your Break Today? (1995)My McDonalds (1997)Did Somebody Say McDonalds (1997)We Love to See You Smile (2000)Theres a little McDonalds in Everyone (2001)Canada OnlyI’m lovin it (2003) 12
  13. 13. McDonalds has for decades maintained an extensive advertising campaign. In addition to theusualmedia (television, radio, and newspaper), the company makes significant use ofbillboards(outdoors, onwhich large advertisements or notices are posted.) and signage, sponsorssporting events from ranging from Little League to the Olympic Games, and makes coolers of orangedrink with their logo availablefor local events of all kinds. Nonetheless, television has always playeda central role in the companysadvertising strategy. The taglines were always centralized towards theconcept of overall diningexperience and complete service satisfaction 13
  14. 14. Employee benefit plans The Company’s Profit Sharing and Savings Plan for U.S.-based employees includes a 401(k)feature,a leveraged employee stock ownership (ESOP) feature, and a discretionary employer profitsharingmatch. The 401(k) feature allows participants to make pre-tax contributions that are partlymatched fromshares released under the ESOP. The Profit Sharing and Savings Plan also provides fora discretionaryemployer profit sharing match at the end of the year for those eligible participants whohave contributedto the 401(k) feature. All contributions and related earnings can be invested in severalinvestmentalternatives as well as McDonald’s common stock in accordance with each participant’selections.Participants’ contributions to the 401(k) feature and the discretionary employer match arelimited to20% investment in McDonald’s commonstock. The Company also maintains certainsupplementalbenefit t plans that allow participants to (i) make tax-deferred contributions and (ii)receive Company-provided allocations that cannot be made under the Profit Sharing and Savings Planbecause of InternalRevenue Service limitations. The investment alternatives and returns are based oncertain market-rateinvestment alternatives under the Profit Sharing and Savings PlanTraining• February 24, 1961, Hamburger Universities first class of 14students graduated 14
  15. 15. • Today, more than 5,000 students attend HAMBURGER UNIVERSITY each year• Since 1961, more than 80,000 restaurant managers, mid-managers and owner/operators have graduatedfrom this facility•McDonald’s invests more than $1billion annually in training•“Best Place to Work” – Fortune Magazine 2005• “One out of 5 Best Places to Work in Latin American Finance DepartmentMcDonald’s Finance Department has two key areas of responsibility: financial reporting andmanagement accounting. Although each of these functions has different priorities, workingtogetherensures the best financial position for the company now and for the future. McDonald’s has two sources of profit:• Sales made by company-owned restaurants• Rental androyalty income from franchised restaurants. 15
  16. 16. Restaurant salesMcDonald’s retains all of the profit earned by company-owned restaurants. In addition to variablecosts,which increase or decrease depending on the level of sales, McDonald’s also incurs coststhat are largelyfixed, for example utilities and advertising, which need to be paid for even before therestaurant makesany sales. Increasing sales and controlling costs are fundamental to ensuring theprofit of each restaurantis either maintained or increasedSupply chain management at McDonalds (India) The seed of McDonalds success was sown in 1990 - six years before it started its actualoperations.About two decades ago, the QSR (Quick service restaurants) wouldnt have meant much tothe IndianF&B segment. Today, the acronym has been seamlessly absorbed in the industry lingo. 16
  17. 17. McDonalds 17
  18. 18. 1518
  19. 19. 19
  20. 20. 20
  21. 21. Kentucky Fried Chicken 21
  22. 22. 22
  23. 23. 23
  24. 24. 24
  25. 25. 25
  26. 26. 26
  27. 27. 27
  28. 28. 28
  29. 29. 29
  30. 30. 30
  31. 31. 31
  32. 32. 32
  33. 33. 33
  34. 34. SURVEY ANALYSIS The report has been designed to study the consumer behavior with respect to McDonaldsand KFC. A questionnaire was designed in order to understand the reasons of the consumerperception towards the two food giants. Our method of going about the study at hand involved thebasic survey method, whereby we put forward questions to individuals who were divided into thebasic segments provided by and aimed at as either the source or target service provider. This wascarried out by a survey comprising of two questionnaires, one aimed at the customers at either of thetwo food joints and the other for the employees employed at the food joints. Our questions weredesigned to capture the market trends, the grounds behind such a trend, the peripherals related to thefunctioning of the food joint, key marketing strategies adopted and finally aimed at drawing theinferences and conclusions for the same.Question 1Which age group do you belong to?The first question was essentially designed to throw light on the age group of people visiting/dining atthe food joints. This gave us an idea of the preference of a particular food brand among a given agegroup if any. For e.g. the HAPPY MEAL available at McDonalds attracted the major portion of theyounger crowd. As a matter of fact as shown in the following questions, this particular strategydrained almost the entire young consumer segment. Of the individuals surveyed a majority of theindividuals belonged to the 18-25 yr age group both for McDonald’s as well as KFC.Question 2What is your profession?This question was essential in calculating the trend of the customers who visit these food joints i.e. theworking class of the people visiting the respective places. The survey revealed that the majorityof people visiting both the places i.e. 46% for KFC and 55% for McDonalds were students. This thuslays direct stress on the strategies adopted by both the joints resulting in a heavy demand among thestudent group. 34
  35. 35. Question 3Are you a vegetarian/non-vegetarian?This was essentially designed to demarcate the groups according to whether they were vegetarians orotherwise. It was a preconceived idea that the vegetarians preferred McDonalds of the two while KFCproved to be a non-vegetarian paradise. This thus showed a balanced market for McDonalds whereasa strong shift for KFC towards the non-vegetarian sectionQuestion 4What is your saying on the pricing of the joint?In KFC 31% found the food priced nominally and an equal amount of people surveyed i.e. 31% foundinexpensive. Hence it was concluded that it dropped down to the individual in the case of KFC andthere was no clear market trend. In McDonalds 46% found it nominally priced as well as value formoney while just 8% found it expensive. Hence in terms of comparative study it was concluded thatMcDonalds was optimally priced although KFC wasnt overpriced either.Question 5How much do spend on an average per visit?This question again was concerned with the pricing as well as spending capability of the people. Theresults indicated that a major section, i.e. around 52% for KFC and 42% for McDonalds, of peoplespent between Rs.100-500 thus advocating the fact that the places are priced moderately.Question 6Do you get drawn in by the television commercials of the food items?This question was designed to get an idea about the publicity/advertising strategy of the food brands.Both the brands under consideration are big brands and hence have the capability to allocate adequatebudgets towards all sections of marketing. Whether they choose to or not to, is the question at hand.This particular question analyzes the potency of the advertising strategies used by the food brands inattracting or influencing the customers. The significant questions from the survey and their respectiveresponse have been mentioned in the Annexure. 35
  36. 36. CONCLUSION In India fast food market is strongly dominated by these 2 brands. But when it comes tocomparing thesetwo brands the following study brings us to a conclusion that as far as marketpresence and brand valueis concerned McDonalds has definitely proved a point for themselves. ButKFC who reentered in 2003has shown a rapid progress and no wonder if in the coming years KFCovertakesMcDonald’s in the Indian market share. Both the food-giants have given each otherimmense competition in terms of customer satisfaction and promotional strategies. The range ofproducts and offers offered by each isremarkable in every context. Although McDonalds has an upperhand with the vegetarian crowd becauseof its exclusive products, KFC is slowly catching up to thechallenge. KFC provides vegetarianalternatives with an added advantage of a complete mealincluding rice and desert. Where McDonaldsfall into the snack option KFC had covered the meal area.Thus it is not quite evident which one can betermed as better than the other.RECOMMENDATIONS•KFC needs to re-vamp its vegetarian menu and add more options to it. The fried chickencategoryalready has more options and varieties as compared to the vegetarian section.•McDonalds could try to enter the meals category into its menu•Both companies need to work on their logistics and inventory management (as discussed withBranchmanagers)•Need to train their staff better in handling of the cooked food 36
  37. 37. 37
  38. 38. 38
  39. 39. 39
  40. 40. 40