Marketing Research Kfc
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Table of Contents
Scope of study4
With over 60 outlets in 18 major cities, and local monthly procurements exceeding Rs 35 million, there is no doubt that KFC is a major player in the fast food industry of Pakistan. It is a wholly owned subsidiary of ‘Cupola’ which is a Dubai based multinational company. KFC Pakistan enjoys stable sales throughout the year with very little uncertainty of demand. The high levels of stability in demand also mean that growth in sales and profits remains a tough challenge for the management. Therefore, in order to maximize profits, the managers have to constantly improve the menu and keep introducing new products at regular intervals. They’ve got to ensure that each offering serves the right customers, at the right time, and is of the right quality. Anything less, is not acceptable. In recent times, the management of the company has noticed that the sales of the ‘Add Ons’ (Arabian Rice & Corn on the Cob) is below the desirable level.
The management argues that the very purpose of ‘Add Ons’ is to expand sales by forcing customers to increase their orders, which is not being fulfilled. However, the case against ‘Add Ons’ is only based upon personal judgment and sales trends. Therefore, the company is interested to carry out a marketing research which measures the performance of these ‘Add Ons’, and also predicts consumer response if these items were replaced with deserts. Business objectives
The Kentucky Fried Chicken (KFC) company has lots of business objectives. And their objective is not just money; the goal is to give each customer the great experience of fast quality food with KFC to provide a better, faster servicebetter customer service to beat competitors such as McDonalds, Hardees and Pizza Hut. In order to keep pressure on the competitors and to cater to the customer changing need is the basic objective of KFC.
The objectives of carrying out this research are listed below: * To measure the prevailing consumer perceptions regarding KFC. * To measure the perception and effectiveness of the Add-ons (Arabian Rice & Corn on the Cob) being offered by KFC. * To generate ideas for the replacement of the current Add-ons. Research design
Survey research is adopted. Survey research is the most widely used method for primary data collection. It approaches the best suited for gathering descriptive information, and it could help to understand people’s knowledge, attitudes, preferences, or buying behavior. The marketing research we carried out is primary in nature whereas we used both quantitative and qualitative methods for our research. In the marketing research we aim to gain people’s attitudes towards the Add-ons of KFC, their preferences of foods, and the buying behavior in KFC ,to measure the perception and effectiveness of the Add-ons so survey research is suitable for us to collect these kinds of data. Methodology
Quantitative and qualitative research techniques will be used. Data collection methods Two of the most common research methods to collect the data from the public will be used. The two categories include focus group interviews and surveys. In our research we will be using random sampling and convenience sampling. Random sampling is the purest form of probability sampling we will conduct approximately 2 focus groups to get an insight of the consumers. Convenience sampling which is a non-probability method will also be used during our preliminary research efforts to get a gross estimate of the results, without incurring that much cost or time. Total questionnaires to be filled: 100
Total focus groups to be conducted: 2
Scope of study This particular research conducted to gauge the consumer’s attitude towards the KFC Ad Ons will help the company to find where do the consumers actually perceive about the existing Ad Ons and what changes can they make to improve their Ad Ons. Conducting a research in Lahore regarding the launch of new KFC ad on is most appropriate because it has a competitive market. Apart from this Lahorities are fond of eating and they love to try new things. A green signal from Lahore will ensure positive response from other cities too. Respondent Profile
We have used split groups to conduct our focus groups. The groups are gender dominant, having their own distinct demographics and psychographics characteristics. The following chart highlights the different key characteristics of both the groups: Key characteristics| | |
Gender| Female| Male|
Age| 15-25| 15-20|
SEC| A| A|
Occupation| Student| Student|
Location| Lahore| Lahore|
Product usage| Medium – Heavy| Heavy|
Personality| Extrovert| Developing personality|
No. of participants| 8| 8|
Place of focus group conduct| LSE| TEC Society|
Basically, we have selected both males and females to conduct our focus group analysis to get a detailed outline of fast food users. The females are young students of Lahore School of Economics, who are about to graduate from the university. They like fast foods, but there are some key attributes which they consider before buying any fast food product – such as, taste, overall quality, hygiene factor, and quantity. The second group consists of males, students who are undergoing at the secondary and intermediate level of their education. They are fast food lovers, and mostly hang out at fast food retails. Both, our respondents of the focus groups, belong to the SEC A class and reside in the area of Lahore.
KFC –The Brand has an extremely strong brand association with ‘Chicken’, specially the word ‘Fried Chicken’. The company has not been able to use this aspect to their advantage. In fact it has gone against them in a big way. Most of the Participants, from both the focus groups felt that they only went to KFC whenever they felt like eating chicken, especially the Zinger Burger. This bring us to our second point of concern – Zinger Burger heavily dominates KFC’s Menu to an extent where the primary attraction and sole reason that the respondents felt like going to KFC was when they wanted to have the Zinger. Although this would ensure high profitability specific to this very product, this attitude is most likely to affect the overall performance of the company and keep sales to the minimal level. Another finding which was unanimous amongst the respondents of both focus groups was that KFC has severely deteriorated in terms of ‘value for money’.
Most of them argued that the items on the menu had gone up in size and considerably down in terms of quantity. Although most found the quality of KFC good (with the exception of two or three), it was reported to be much lower than that of Hardees and even McDonalds. When it comes to advertising, the marketing efforts of KFC were collectively criticized with the main reasons being lack of consistency and intensity. Most respondents simply couldn’t recall any KFC ad whatsoever. They said that the company not only lacks in terms of innovation to get new items on the table, but has even failed to effectively market even those that it currently offers. The favorite recommended advertising method was Billboards. As far as the Add-ons are concerned, most of the respondents did know that KFC offered them, but only a few could specifically pinpoint. The alarming aspect was that all of them had only noticed the Add-Ons on the menu. With the exception of 2-3 respondents, most didn’t like them. The main reason was that the Add-Ons lacked the pull and didn’t give the customers a good enough reason for purchase. They also lacked synch with other items on the menu. Additionally, they were considered overpriced. Focus Group 2 respondents (boys) were more inclined towards the pricing aspect than the Focus Group 1 respondents (girls). The girls felt that if the Add-Ons are good enough, then the pricing is not a very big issue.
As far as the replacement of the Add-Ons is concerned, this particular question resulted in varied responses. The clear winners were desserts and hot shots amongst girls. The boys all came up with different responses. Therefore, the responses resulting from this particular question might not be very reliable. Quantitative study
This Multiple Variable regression conducted in the study showed that the ‘Likeness’ of KFC is directly dependent upon the ‘Service Quality’ and the ‘value for money’ that is provided by the company. Also, the research found a healthy and extremely strong relationship between the length of time since the consumers viewed any KFC advertisement and the rating given by them to KFC’s overall promotional efforts. On the other hand, there is a statistically insignificant relationship between the consumer’s ‘Likeness’ of KFC and their perception of KFC’s promotional effectiveness. This is an important finding, it proves that although promotional efforts are extremely important for the success of any company, they do not necessarily influence the overall effectiveness of the company. Other factors like ‘Service Quality’ and ‘Value for Money’ play a more important role as has already been pointed out. There is also a significant relationship between the consumer’s openness to trying out KFC Add-Ons and ‘Likeness’ of these individuals for KFC. In simple terms, individuals who gave a higher rating to KFC were more likely to try out KFC Add-Ons (Current and New both) than those who gave it a lower rating. In addition, it can be safely said that
individuals who like eating ‘something extra’ after their normal meals at home (sweet dish, etc) are much more likely to try out Add-Ons than those who don’t.
This information can be useful to the company when analyzing and deciding upon newer options for Add-Ons. There was an insignificant relationship between the frequency of KFC visits and whether or not the individuals knew about the Add-Ons. This means that individuals who visited KFC more often were no more likely to know about the Add-Ons than those who visited less often. Also the individuals who considered that KFC offered superior value for money were much more likely to try out KFC Add-Ons than those who think otherwise. As far as the recommendations for new Add-Ons are concerned, Ice Creams and Hot Shots would stand at the top of the list. Out of 10 listed products in the questionnaire four products seemed to have a majority of the proportion in their favor – Ice-Cream, Hot Shots, Chicken wings and Arabian Rice were the most Preferred Add-ons respectively. The accept/reject decisions on the hypotheses are described in detail on page 63