<ul><li>A STUDY ON ATMOSPHERIC STRATEGY OF KFC AND BMWCONTENTS:SL NO. CONTENT PAGE NO. INTRODUCTION TO THE PROJECT 4 INTRODUCTION TO KFC 6-11 INTRODUCTION TO BMW 13-17 ATMOSPHERIC STRATEGY OF KFC 19-21 ATMOSPHERIC STRATEGY OF BMW 23-25 FINDINGS 27 RECOMMENDATIONS 29 CONCLUSIONS 31 REFERENCES 33 APPENDIX 35-36INTRODUCTION TO THE PROJECT</li></ul>Introduction to the Project<br />The study is based on the store atmospherics and space strategy which different retail stores follow to attract their customer and make them buy or generate interest to buy from their retail outlets.<br />Atmospherics and retail space management are critical to any form of retail business. Their relevance emerges from the link between the shopping behavior and physical environmental factors. Physical environmental factors, for instance, influence the perception of shopping hours spent and the evolution of merchandise. It, therefore becomes important for the retailer to effectively plan and organize all the aspects related to atmospherics and retail space to be able to optimize scare resources and improve profitability. Atmospherics refers to the physical characteristics associated with the store.<br />Atmospherics refers to as a store’s physical characteristics that are used to develop the retail unit image and draw customers. It describes the physical elements in a store’s design that appeals to the customers and encourage them to buy.<br />These characteristics include both interior and exterior elements, as well as layout planning and display. Display is popularly referred to as visual merchandising. Atmospherics plays a significant role in attracting customers to the store, improving to the quality of service experience, creating a brand positioning for the outlet, and improving customers retention rates. Another equally significant but related concept is retail space management attempts to ensure optimum utilization of retail space along with convenience to customers and employees.<br />In this study two different type of retail outlets are taken. One is KFC and another one is BMW showroom. Both these retail outlets are situated at Connaught Place, New Delhi.<br />Both these retail outlets follow different atmospherics and store layout strategy to attract their customer. This study mainly talks about what are the different atmospherics and store layout strategy follow by KFC and BMW, comparison between them, and some recommendation to the retail outlets.<br />INTRODUCTION TO KFC<br />Introduction to KFC<br />KFC, founded and also known as Kentucky Fried Chicken, is a chain of fast food restaurants based in Louisville, Kentucky, in the United States. KFC has been a brand and operating segment, termed a concept of Yum! Brands since 1997 when that company was spun off from PepsiCo as Tricon Global Restaurants Inc.<br />KFC primarily sells chicken pieces, wraps, salads and sandwiches. While its primary focus is fried chicken, KFC also offers a line of grilled and roasted chicken products, side dishes and desserts. Outside the USA, KFC offers beef based products such as hamburgers or kebabs, poutine, pork based products such as ribs and other regional fare.<br />The company was founded as Kentucky Fried Chicken by Colonel Harland Sanders in 1952, though the idea of KFC's fried chicken actually goes back to 1930. Although Sanders died in 1980, he remains an important part of the company's branding and advertisements, and "Colonel Sanders" or "The Colonel" is a metonym for the company itself. The company adopted KFC, an abbreviated form of its name, in 1991. Newer and remodeled restaurants will adopt the new logo and name, while older stores will continue to use the 1980s signage. Additionally, Yum! continues to use the abbreviated name freely in its advertising.<br />History of KFC:<br />Born and raised in Henryville, Indiana, Sanders passed through several professions in his lifetime. Sanders first served his fried chicken in 1930 in the midst of the Great Depression at a gas station he owned in North Corbin, Kentucky. The dining area was named Sanders Court & Café and was so successful that in 1935 Kentucky Governor Ruby Laffoon granted Sanders the title of honorary Kentucky Colonel in recognition of his contribution to the state's cuisine. The following year Sanders expanded his restaurant to 142 seats, and added a motel he bought across the street. When Sanders prepared his chicken in his original restaurant in North Corbin, he prepared the chicken in an iron skillet, which took about 30 minutes to do, too long for a restaurant operation. In 1939, Sanders altered the cooking process for his fried chicken to use a pressure fryer, resulting in a greatly reduced cooking time comparable to that of deep frying. In 1940 Sanders devised what came to be known as his Original Recipe.<br />The Sanders Court & Café generally served travelers, often those headed to Florida, so when the route planned in the 1950s for what would become Interstate 75 bypassed Corbin, he sold his properties and traveled the U.S. to sell his chicken to restaurant owners. The first to take him up on the offer was Pete Harman in South Salt Lake, Utah; together, they opened the first "Kentucky Fried Chicken" outlet in 1952. By the early 1960s, Kentucky Fried Chicken was sold in over 600 franchised outlets in both the United States and Canada. One of the longest-lived franchisees of the older Col. Sanders' chicken concept, as opposed to the KFC chain, was the Kenny Kings chain. The company owned many Northern Ohio diner-style restaurants, the last of which closed in 2004.<br />With these new groups of investors undertaking the corporation, KFC expamded and matured quickly.<br />The corporation was listed on the New York Stock Exchange on January, 16, 1969. Only after three years it had gone public on March 17, 1966.<br />Sanders sold the entire KFC franchising operation in 1964 for $2 million USD, equal to $14,161,464 today. Since that time, the chain has been sold three more times: to Heublein in 1971, to R.J. Reynolds in 1982 and most recently to PepsiCo in 1986, which made it part of its Tricon Global Restaurants division, which in turn was spun off in 1997, and has now been renamed to Yum! Brands.<br />In 2001, KFC started test in Austin, Texas restaurants of "Wing Works" chicken wing line sold with one of a few flavored sauces. Also, KFC hired a consultant to develop a breakfast menu.<br />Additionally, Colonel Sanders' nephew, Lee Cummings, took his own Kentucky Fried Chicken franchises (and a chicken recipe of his own) and converted them to his own "spin-off" restaurant chain, Lee's Famous Recipe Chicken.<br />Recipe:<br />The recipe of 11 herbs and spices used by KFC in preparation of their chicken remains a trade secret. Portions of the secret spice mix are made at different locations in the United States, and the only complete, handwritten copy of the recipe is kept in a vault in corporate headquarter.<br />On September 9, 2008, the one complete copy was temporarily moved to an undisclosed location under extremely tight security while KFC revamped the security at its headquarters. Before the move, KFC disclosed that the recipe, which includes exact amounts of each component, is written in pencil on a single sheet of notebook paper and signed by Sanders. It was locked in a filing cabinet with two separate combination locks. The cabinet also included vials of each of the 11 herbs and spices used. Only two unnamed executives had access to the recipe at any one time. One of the two executives said that no one had come close to guessing the contents of the secret recipe, and added that the actual recipe would include some surprises. On February 9, 2009, the secret recipe returned to KFC's Louisville headquarters in a more secure, computerized vault guarded by motion detectors and security cameras. Reportedly, the paper has yellowed and the handwriting is now faint.<br />In 1983, writer William Poundstone examined the recipe in his book Big Secrates. He reviewed Sanders' patent application, and advertised in college newspapers for present or former employees willing to share their knowledge. From the former he deduced that Sanders had diverged from other common fried-chicken recipes by varying the amount of oil used with the amount of chicken being cooked, and starting the cooking at a higher temperature (about 400 °F (200 °C)) for the first minute or so and then lowering it to 250 °F (120 °C) for the remainder of the cooking time. Several of Poundstone's contacts also provided samples of the seasoning mix, and a food lab found that it consisted solely of sugar, flour, salt, black paper and Monosodium Glutamate (MSG). He concluded that it was entirely possible that, in the years since Sanders sold the chain, later owners had begun skimping on the recipe to save costs. Following his buyout in 1964, Colonel Sanders himself expressed anger at such changes, saying:<br />That friggin' ... outfit .... They prostituted every goddamn thing I had. I had the greatest gravy in the world and those sons of bitches-- they dragged it out and extended it and watered it down that I'm so goddamn mad!<br />Ron Douglas, author of the book America's Most Wanted Recipes, also claims to have figured out KFC's secret recipe.<br />International Operations:<br />According to the corporate website, KFC is present in 109 countries and territories around the world. It has in excess of 5,200 outlets in the United States and more than 15,000 units in other parts of the world.<br />Countries with KFC restaurants<br />KFC India:<br />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 India too in the year 2001. 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 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.<br />Menu offered in India:<br /><ul><li>StreetWise Range-
Brownie Sundae.</li></ul> <br />INTRODUCTION TO BMW<br />Introduction to BMW<br />Bayerische Motoren Werke (BMW), (literally English: Bavarian Motor Works) is a German automobile, motorcycle and engine manufacturing company founded in 1916. It also owns and produces the Mini brand (Mini Cooper) and is the parent company of Rolls-Royce Motor Cars.<br />The worldwide production network of the BMW Group is the backbone for growth in all our global markets. Thanks to the close cooperation between all of the plants, manufacturing takes place quickly and flexibly. This creates significant advantages in the international market. The BMW Group currently has 17 production facilities in five countries: Berlin plant, Dingolfing plant, Eisenach plant, Contract production in Graz (Austria), Goodwood plant (GB), Hams Hall plant (GB), Landshut plant, Leipzig plant, Munich plant, Oxford plant (GB), Regensburg plant, Rosslyn plant (South Africa), Shenyang plant (China), Spartanburg plant (USA), Steyr plant (Austria), Swindon plant (GB), Wackersdorf plant. <br />The BMW Group currently engages in assembly with the help of external partners in the following countries: <br />Jakarta, Indonesia; Kaliningrad, Russia; Cairo, Egypt; Kuala Lumpur, Malaysia; Rayong, Thailand; Chennai, India. <br />The BMW Group is committed to maintaining and enhancing its presence in key markets worldwide. BMW Group marketing subsidiaries are present in the following countries: Argentina, Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Great Britain, Greece, Hungary, Indonesia, Ireland, Italy, Japan, Luxembourg, Malaysia, Mexico, Netherlands, New Zealand, Norway, Philippines, Poland, Portugal, Russia, South Africa, South Korea, Spain, Sweden, Switzerland, Thailand, USA. <br />The company is a charter member of the U.S. Environmental Protection Agency (EPA) National Environmental Achievement Track, which recognizes companies for their environmental stewardship and performance. It is also a member of the South Environmental Execellence Programs and is on the Dow Jones Sustainability Group Index, which rates environmentally friendly companies. BMW has taken measures to reduce the impact the company has on the environment. It is trying design less-polluting cars by making existing models more efficient, as well as developing environmentally friendly fuels for future vehicles. Possibilities include: electric power, hybrid power(combustion, engines and electric motors) hydrogen engines.<br />BMW offers 49 models with EU5/6 emissions norm and nearly 20 models with CO2 output less than 140 gm/km, which put it on the lowest tax group and therefore cloud provide the future owner with eco-bonus offered from some European countries.<br />However, there have been some criticisms directed at BMW, and in particular, accusations of greenwash in reference to their BMW Hydrogen 7. Some critics claims that, the emissions produced during Hydrogen fuel production outweigh the reduction of tailpipe emissions, and that the Hydrogen 7 is a distraction from more immediate, practical solutions for car pollutions.<br />Apart from the passenger cars BMW has a long and successful history in touring car racing which include Formula 1 racing, Dakar Rally and many more.<br /> <br /> BMW’s Business Model: <br />BMW’s core competence lies in luxury cars. Though after acquiring Mini BMW still focus on luxury car market. They also manufacture bikes for sports enthusiasts and touring customers. BMW increased its product offering after acquiring Rolls-Royce in 1998, BMW went super luxury after this acquisition.BMW surprised all the leading luxury car manufacturers in Europe when it acquired Mini in 2001. According to the Chief Executive, Helmut Panke ‘The product initiative allows us to be focused on market segments that we see developing in the future. Tastes are changing. Customers are slicing the market into more focused pieces. It's becoming more differentiated…. The market is shifting. But satisfying the market's demand for new niche products is a strategic risk anyone in the industry has to take. To be successful, you have to fulfill 100% percent of customers' expectations’. This statement gives a peak into the window of future activities of BMW. <br />Today BMW offers super luxurious Rolls-Royce for the rich executives to sporty hatchbacks aimed at upper-middle-class buyers. But it is worthy to note that BMW itself still continues to roll out the 3-series, 5-series and the 7-series from its stable. BMW still continue to keep production facilities of Roll-Royce and Mini independent from its original stable. <br />BMW motorcycles are specifically designed keeping in mind the touring tradition it does not manufacture low powered motorcycles. The target market for such motorcycles is again the rich and the affluent. <br />BMW has also stepped into manufacturing of luxury SUVs. This a new line that BMW plans to profit from as across the globe the need for high performance and luxurious SUVs is at a rise. <br />In mid BMW surprised the luxury car makers when for the first time it introduced Series 1. Series 1 was designed keeping in mind the need to have fuel efficient and mid-sized sedan market. There are rumors that Series 1 was launched to offer low quality BMW for the mid-class customers in Europe who cannot afford a expensive luxurious BMW. BMW has just kept Series 1 exclusive for the European market, though the company is considering offering Series 1 across the globe.<br />BMW & India:<br />BMW entered the emerging Indian automobile market in December, 2006. Their initial strategy was to provide with dealerships in India, the first dealership opened up in New Delhi (Dealer: Deutschen Motors). Presently, 12 active dealership have opened up across India. In the first year (2007) only 2% of the new car buyers in India knew about BMW brand. But in 2008, this figure went up to 13%. <br />Andreas Schaaf, Country Head of BMW India, promoted the brand through strong finance options by way of strategic alliance with Bajaj Allianz general insurance for the motor insurance and with ICICI bank to offer the customized and personalized solution for the finance, and also with the Orix Auto, for the leasing for the customers, these all services are being handled by a separate department in India known as BMW Finance India. <br />In the year 2007, BMW opened their 1st assembly plant in Chennai with a capital investment of Rs. 1.1 billion. The assembly line started manufacturing Series 3 & Series 5 cars solely for the Indian customers. The production and sales subsidiary is wholly owned by the BMW Group. In addition, they also set up a sales subsidiary in New Delhi as they plan to expand their operations in Asia<br />Mode of Entry in Unexplored Market <br />BMW has so far used three modes to go international: - 1) Export, 2) Acquisitions and 3) Foreign Direct Investment (FDI). In case of the Indian market BMW initially use to export few of its model and it was in 2006 when BMW funded their first assembly plant in Chennai. <br />BMW has gone acquiring other companies like Rolls-Royce and Mini.<br /> Technology Transfer <br />Since the invasion of BMW in India, many local automobile component manufacturers have benefitted due to increase in competition. Many OEM suppliers like Apollo Tyres, Bosch, and Asahi Glass so on and so forth. This is also a result of need of quality spares by foreign companies. Though most of the components of BMW cars in India are imported from abroad but lately Bosch India has started supplying ECU (Electronic Computer Unit) for two models of BMW manufactured in India. <br />BMW’s set up in India has shifted attention of many international car manufacturers towards India. Mercedes Benz planning to invest 700 million Euros to set up their plant in Chennai. Tata’s are considering shifting their production to India for Jaguar Land Rover. Apart from such luxury car makers Renault-Nissan has set up a plant in Chennai too with a production capacity of 400,000 units. Exotic car manufacturer Ferrari is planning to open dealership in India this year itself. <br />All such automobile giants coming to India will significantly improve the standards of OEM suppliers in India. With better know-how from such companies product development will be inevitable. For instance, Asahi India Glass Ltd developed a high strengthen automotive glass which is now being used in Mercedes Benz M-Class. As of now BMW has Rico Auto and Sundaram Clayton as its global suppliers for differential case and brackets<br />ATMOSPHERIC STRATEGIES OF KFC<br />Atmospheric Strategy of KFC<br />KFC adopt various strategies on exterior atmospherics, interior atmospherics, store layout and visual merchandise to attract their customer. Some of them are stated below-<br /><ul><li>Exterior Atmospheric:
Store Front: At the front of the store, there was a big hoarding of KFC to increase the visibility. Also there was two display windows in both the side of the entry and the exit door to attract the customer.
Entrances: At the entrance there was a gatekeeper to welcome and to greet the customer.
Display Windows: in that stores the display window is full of attractive adds of KFC’s product. Also the window is transparent, so that outside people can see inside easily. It was done to create attractiveness among the outside people.
Flooring: The floor of the store is well furnished and also well cleaned.
Lightning: The lightning of the store is not bright but u can easily see everything. But at the food counter they used bright lightning so that, the advertisement of their product can be well visible to the customer.
Personal: They have many personal to help their customers. Separate division also there for every personal. They have food counter controlling personal, drink counter controlling personal, personal to clean the table and personal at the back store to help in order processing. But everybody wearing red t-shirt with KFC logo printed on it.
Cleanliness: The store is well cleaned. Cleaning personal, cleans the tables when the customer left the tables. They also frequently cleans the washroom and the clean the floor 2 times in a day. They also cleans the glass window one time in a day.
Wall: The wall is colored in red to reflect the patent color of the company. The wall also consist of various adds of their products to attract the customer.
Wash Rooms: the wall is well cleaned and there was board telling the customer that ”Please use liquid soap to avoid the spread of Swine Flu”.
Aisles: The aisles are also cleaned like the tables.
Temperatures: The temperature of the sore is comfortable, to give a relax situation to the customer.
Sitting areas: They have different sitting areas, like, two chair table for the couples, large tables for the families and for the large group of friends, crouches are also there.
Music’s: They play the music continuously to make the customer relax and comfortable.
washroomSupporting back RoomVisual MerchandisingEntry and ExitVisual MerchandisingSitting Areas (Crouches)Sitting areas for families or large groupsPayment counters for solid food.</li></ul>ATMOSPHERIC STRATEGIES OF BMW<br />Atmospheric strategy of BMW<br />BMW adopt various strategies on exterior atmospherics, interior atmospherics, store layout and visual merchandising to attract their customer. Some of them are stated below-<br /><ul><li>Exterior Atmospheric:
Store Front: At the front of the store there was a big logo of BMW and also there were various cars of BMW standing outside of the store. They do that to attract their customers.
Entrances: The entrance door is of transferable glass so that the cars inside the store, is easily visible.
Display Windows: They don’t have any display windows but the cars inside the store do the job of displaying.
Visibility: The store is situated at the junction of four lanes and they have big hoarding, which consist of the logo of BMW, to increase the visibility.
Adjoining Stores: Though they have an adjoin store of SKODA but they don’t target the same category of the customer as BMW targeting. They mainly target the high class segment in automobile sector.
Upstairs & DownstairsSitting Areas (Crouch)Sitting Areas (Chairs)Staff Room
Visual Merchandising(New cars)Payment CountersEntry & ExitVisual Merchandising(New cars)Visual Merchandising</li></ul>FINDINGS<br />Findings<br />From the study the major findings for KFC are listed below-<br /><ul><li>Different stores adopt different atmospheric strategies based on their operations and target customer.
KFC colored the walls inside the store in red to reflect the brand image as they are using red as the color of their brand during promotional activities.
The lightning inside the store is not bright to give a comfortable environment to the customer while they are using bright color at the outside to increase the visibility.
Their store situated at the junction of four lane so that it can be easily accessible.
They don’t have any adjoin fast food store to avoid competition.
They have separate food counters and drink counters to avoid long ques. </li></ul>From the above study the major findings for BMW store are listed below-<br /><ul><li>BMW using new cars as visual merchandising and also to attract the customers.
They colored the wall in white to reflect maximum light on to the cars and to make them glow.
They have a screen touch computer into their store, which displaying various features, performance of the cars continuously, if any customer want to know about any part in details then he/she have to touch that options in the menu bar and the details will be displayed.
They brought the sitting crouches and carpet from Italy to attract high class customers into their stores.
They also have the brochure for their products and for safety drive, to create awareness among the customer. </li></ul>RECOMENDATIONS<br />RECOMMENDATIONS:<br />For KFC:<br /><ul><li>The store was completely & well furnished though there was few points we would like to recommend for KFC store is that washroom was not visible to customer. So that, the customer don’t need to ask the waiters for direction towards washroom.
In the cold drinks section they only have PEPSI and their own products. They should keep COKE and other verities also so that the customer can have what they wants.
They are playing only western music in their store. They should play hit hindi songs also while they are operating in India.
They should maintain a customer information database system, where mobile no. of every customer is noted. They can send sms to their customer in various festive seasons to attract them.</li></ul>For BMW:<br /><ul><li>Store should be spacious
At the front gate they should hire a gatekeeper, who will open the gate for the customer and greet them.
They should increase their sitting space. Because if two or three customer come to the store at the same time then they might face a problem of shortage of sitting space.
They should also play some pleasant music to give the customer a pleasant mood.</li></ul>CONCLUSIONS<br />CONCLUSIONS:<br />From the above study we can conclude that depending upon the target customer different retail store adopt different store atmospheric and layout strategies. Though sometimes these strategies are not visible to the customer eyes but they have deep effect on the customer conscious and unconscious mind.<br />It also can be found that the atmospheric environment for a retail store is very important from the retailers and also from the customer point of view.<br />Customer perception about a retail store depends upon the atmospheric environment of that retail store. For example KFC made the wall oh their store red to reflect their brand image where as BMW made their wall white to reflect maximum amount of lights on the cars in the retail store to make them glow and to catch customer attention.<br />REFERENCES<br /> <br />REFERENCES:<br /><ul><li>BOOKS:
http://www.google.co.in/</li></ul>APPENDIX<br />APPENDIX:<br />WITH THE STORE MANAGER IN KFC AT CP<br />WINDOW DISPLAY OF KFC<br />VISUAL MERCHANDISING INSIDE THE STOREWITH THE STORE HEAD OF THE BMW AT CP<br /> <br />WINDOW DISPLAY AT BMW STORE<br />