Kfc Kentucky Fried Chicken In Nigeria

Kfc Kentucky Fried Chicken In NigeriaKFC Corporation, or KFC, alike k straightawayn as Kentucky Fried Chicken, is a chain of fast diet for thought restaurants ground in Louisville, Kentucky. The peculiar history of KFC Kentucky Fried Chicken started amongst 1952 and 1964 when Colonel Harland Sanders (born on September 9, 1890), a politically appointed Kentucky colonel convinced the owners of 600 restaurants in multiple states to pay him a nickel for ein truth sensationalistic they on the watch using his secret recipe seasoning. The seasoning is a blend of 11 herbs and spices and sold with his name on it (kfc 2010).In 1964 The colonel as he was popularly called sold the franchise system to John Y. Brown and his course sector at passant Jack Massey for only(prenominal) $2 million. In 1966 Brown and Massey took their fellowship exoteric and increased efforts towards system growing with the help of franchisees and Sanders himself who was a marting exposure by all rights, owing to his entrepreneurial success story and image. The comp any(prenominal) was listed on the New York Stock Exchange on January 16, 1969. Since KFC Corporation went universe and registered tremendous growth over the years, it has been acquired by a couple of former(a) multinational corporations. The latest acquisition of KFC was by PepsiCo, Inc. in October of 1986, from RJR Nabisco, Inc. for $840 million (Liddle 2010).In January 1997, PepsiCo, Inc. make KFC and a couple of its separate small quick operate restaurants into an Independent entity existn as Tricon Global Restaurants, Inc. And subsequently changed the corporations name to Yum Brands, Inc. in May of 2002. Yum Brands, Inc. overly owns AW every(prenominal)-Ameri digest food Restaurant, KFC , Pizza Hut, Long John and wetback Bell restaurants qualification it the worlds principal restaurant corporation in legal injury of system units and spread, having over 32,500 units spread across over 100 countries. magic s pell its primary focus is heat up chicken, KFC withal offers a line of roasted chicken proceedss, side dishes and desserts (kfc 2010)This report depart be looking at KFC in Nigeria with the aim of investigating and analyzing their briny commercialize activities and operations in general. KFC looking to develop and extend the volume of their market started operation in Nigeria by opening the number one Nigerian KFC restaurant in declination 2010. correspond to Keith Warren, Yums general manager for Africa, We always k unsanded a cl million people eating chicken on the bone as their primary protein, had to be a nifty thing for KFC, only if we didnt kinda know how good a thing it was going to be. They withdraw sise computer memorys in Nigeria now and they plan on twist 20 much stores in 2011. They alike forecast that by 2020 KFC will have three hundred restaurants doing business in Nigeria (kfc 2010).This report is particularly interesting beca map KFC in Nigeria is a crude venture for Yum Brands, Inc. This pith that KFC is a well known globose brand in a saucily-sprung(prenominal) market surround, therefore, the implementation of its market druthers is still taking shape. In otherwise words, the way that KFC has unyielding to do business in Nigeria is still taking shape. Their market orientation, selling mix and strategies etc.will depend on their perception of the naked as a jaybird Nigerian market, so we will be looking at KFCs market dodging. In general terms, especially multinational slosheds use a varied strategy in Nigeria than they do in other markets. We argon hoping that KFC will conserve the same trend.2. KFCS ORIENTATIONA business besidestocks be intersection point orientated, Marketing Orientated or Sales Orientated but businesses tail assembly develop reinvigorated growths based on either a trade orientated onward motion or a ingathering orientated uprise (Tutor2u 2010). Organizations orientation refers to its familiarization with and approach to the market. A watertight base develop new w argons either based on what it thinks is the best for the market in tramp to maximize sales or what the guests think. Sales orientated approach fits the compose of market orientation because it uses such skills as selling, price, promotion and distribution shut out it pays little attention to node deprivation, priority be sales maximization ( interlocutor 2007). Market-orientated approach is popular among well-nigh successful businesses as opposed to product orientated approach where firms develop products based on their competencies and capabilities rather than the customers unavoidably (Tutor2u 2010).However, (Tutor2u 2010) cited that around products are argued to create a need or pretermit in the customer/consumer, especially products that have high technology content. E.g. liquid phones have moved from creation a business rileory to be a big consumer brand item, with ma ny surplus gad nabs, such as pictures, video and Inter give the axe retrieve. Innovations create the need rather than the customer being able to second-guess how new technology is going to develop. Most technology driven products that requires high level origin fall within this undulate because the products create customer postulate and market segmentation takes care of the rest. KFC as an organization is Marketing Orientated because it tends to tailor its products and go to the needs of customers in a particular market.2.1 KFCS MARKETING ORIENTATIONAccording to Kaur and Gupta (201088) Market orientation is a business culture that ensures a set of behaviours ask for generating, disseminating and responding to two internal and external market selective information for creating superior customer order through superior organizational skills and competencies which ensures long term serviceability by continuously identifying and managing limitation in the system that preven ts market-orienting culture in an organization. This is a whole any(prenominal) definition of what market orientation is all about, in that it takes into shape the business environment, competences, constraints, activities, strategies, implementation and results/targets of merchandising orientation, A market orientation needs to be balanced with creativity and a deep understand of the firms extraordinary capabilities, competencies and nonsubjectives (Houston 1986 Sharp 1991 Hamel and Prahalad 1994). Alternatively, the definition of market orientation acknowl adjoins the understanding and acting upon the dynamics of the markets in which they operate and concentrating on critical relationships (Povey 2000). The market dynamics he is referring to may icon from the needs of the customers, to what influences their corrupting decision.There are decreed relationships amongst market orientation and business performance (Pelman and Wilson 1996 Ruekert (1992). As is the regain with KFC, their technique of market specialization (i.e. simply put, giving the customers what they really need and importantly non giving them what they dont need) has made them stiff in Nigeria. Market orientation is a popular approach especially for a product/ supporter organization like KFC. The need to gain customer pick over major competitors makes them react to the needs and expects of the customer, in order words, they are customer/consumer focuse. KFC in Nigeria takes feedback from customers seriously, and they use feedback from customers/consumers to alter or change their step products correspond to the customer specifications.The major characteristics of KFC as a Marketing Orientated business is outlined in Table 1 below accord to the compilation of Jobber (2007)Table 1.Business Function ActivitiesIdentifying Customer/Consumer needs and wants. Marketing ResearchDeveloping productions to hurt customer/consumer Research and organic evolution/Productionneeds and wantsDe ciding on the value of the product to customers determine (Sales and merchandise department)Making the products usable to customers at the Distributionright age and chargeInforming customers.consumers of he existence of Promotionthe product and persuading them to buy it2.1.1 CUSTOMER NEEDSIn KFC Nigeria, customer needs are primary. The business decisions that KFC make in Nigeria are in general based on the needs or otherwise complaints or feedback from the end consumer. The service of this approach to KFC is that it gives them an edge (competitive advantage) over their ambition in terms of meeting and exceeding customers needs. Because a satisfied customer is a happy customer, a happy customer is a loyal customer and a loyal customer is an additional word of mouth promotion for the company thereby maintaining and increasing KFCs market share. This approach is in like manner growing in popularity mainly because the honest consumer has now become knowledgeable and throw ou t have very easy access to information, therefore, rather than vindicatory working on making their products and function much than than saluteing to the target consumers, KFC is now paying more attention to the customers wants and needs. This approach changes KFC to not only attract customers, but also to satisfy and more importantly retain them.Groucutt (2005 6-10 and 60) cited that an organization can achieve this by basic identifying and selecting their target customers and learn their needs and desires by building relationships that will enable them key in to the customers real needs and develop products or services that can be sold at a profit in conformity with customers desire. He further stated that there must(prenominal) be some form of dialogue between the firm and the customers, where customers state their face-to-face needs and wants, and this may be direct or indirect. Through marketing look a customer may communicate directly with the firm, where the firm seeks feedback on particular market issues. He goes on to secern that on the other hand, customers may communicate indirectly with the firm by turn brands, and this is to inform the firm that there is a problem with the product (could be scathe or musical note or both) Groucutt (2005)Groucutt (2005 335) The real needs of customers depends on a hierarchy of motives/motivators ranging from Psychological, Safety, Love and belongingness and self-esteem to self-actualization. KFC uses this approach as well, however, with business profitability as the needed end result. This means that they keep the needs of the customers in focus, while they aim at maximize their profit in general. A good implementation of this approach by KFC in Nigeria is observable in the way they tailored their lineup for different split of Nigeria. For instance, their wit in the Northern move of Nigeria does not contain pork because customers in those parts are predominantly moslems who prohibit the eating of pork, and because the case of belongingness is a huge determinant on what people eat. In the southern parts of Nigeria where you have a high density of educated families who tend to be more safety and health conscious when it comes to what they eat, KFC drafted their menu according to nourishment specifications, making it appear heathy and diet packed.2.1.2 MARKETING RESEARCHGroucutt (2005) defines Marketing research as the process of designing, collecting, analyzing and reporting of information that may be used to solve a specific problem in a firms marketing. The marketing problem he refers to can put from the market for a new product, new market for product (as is the case of KFC in Nigeria), to lack of hold up for an existing product. Groucutt (2005) cited that Organizations need to narrow down their targeted segment i.e. who they want to appeal to, out front undertaking a proper marketing research. It is only when you know who to appeal to that you devise means to appeal to them. He further express that after understanding their targeted segment, firms must have a clear objective as to what the firm aims to achieve both marketing wise and collective wise. This is because for KFC to have a competitive advantage, they must be able to successfully tailor customer satisfaction with their objectives and end target. KFC Nigeria use feedback from customers as a major marketing research quill.According to Groucutt (2005) When efficiently and in force(p)ly used, marketing research can benefit the organization in the short-run and long-run. It can give the organization a complete understanding of the market, which includes understanding their trustworthy customers, current competitors, latent customers and the impact of macro environmental forces. Organizations can be proactive or reactive to changing conditions only through understanding these diverse conventions, according to Groucutt (2005). Market research is important for KFC to understand the manner of a typical Nigerian customer, by analyzing both current and emf purchasing habits, tastes and influences. Marketing research is both a talk tool and a means of communication for KFC, because they use it to get needed information about current market conditions on the other hand, customers give them feedback on their products and services.Forsyth (2007) cites market research as the planned problem analysis, model building and fact purpose to enable fracture decision making and authority in the marketing of goods and services. This implies that marketing research in addition to being an information tool, also enables the organization to guild their internal activities effectively for better results in the market place. According Forsyth (2007) market research contributes to the management of the marketing mix as well as used to help reconcile on the marketing strategy needed to better exploit new opportunities which market discontinuity to tackle and the key interest a reas for future marketing strategy. In application to KFCs activities in Nigeria, the information they get from market research helps them to better adapt to the Nigerian business environment. For instance, the no camera policy in KFC stores is a way they decided to curtail the excesses of some tough topical anaesthetic competitors, because there is no limit to the extent a competitor will go to beat business tilt in Nigeria.2.1.3 RESEARCH AND reading/PRODUCTIONEffective and efficient use of marketing research creates more information for the organization to potentially undertake research and development of new products this entails developing products based on customers wants and needs. Ideally, this is should be a continuos process. According to Groucutt (2005). The development of new products and services is unremarkably the key to the beginning of new firms, or the continuation of an existing one. Organizations undertake constant research and development of new products in o rder to be innovative and stay competitive.Firms engage in New Product Development for various reasons like To replace a product, to modify a product, to develop products in support of the firms long-term strategic objectives, the adaptation of an existing product, unexpected occurrence leading to unexpected innovation and product and in response to societal, including demographic factors. Societies change and so does their needs, according to Grouccut (2005). The amount Nigerian customer is more aware and has easy access to information about different products therefore his needs and preferences are no longer the same with the last 10 years. KFC capitalized on this by paradiddle out products and services that appeal to Nigerian customers. The important thing is making the products available to the customer when, how and where they want it. For instance, KFC incorporated a special guinea pigface of local chicken seasoning called Suya into their menu in Nigeria because people ten d to prefer their chicken made in this way with a mound local pepper spices, different from the rest of the world. KFC also made their chicken a lot spicier because approximately 85% of Nigerians love spicy food and eat spicy food three times in a day.2.1.4 PRICING bell is an inherent part of the product/service and must be used as an element of the marketing process (Forsyth 2007) This means that pricing needs to be set carefully because not only does it reflect fictional character, it ensures that the financial objectives of KFC are met and also creates good image and aspect of value for money by the consumers (Forsyth 2007). Pricing is particularly a erogenous and delicate issue in Nigeria because to just about people the damage is the first impression about any product. This means that just the mention of the price of a product determines if the average Nigerian customer actually buys a product or not without further inquiry about the fibre of the product. Groucutt (2005) thinks that customers may be particularly sensitive to either the set price or increases, even if the increase are marginal. throng usually attendant this price sensibility to economic class i.e. lower income groups, but anybody could be price sensitive depending on different factors like economic environment or volatility (high growth or low growth).However, price sensitivity in Nigeria can easily be linked to the higher universe or high density of lower income people in the population. People work hard and earn comparatively less, so it makes sense to want higher value for as low as possible price. Moreover, for most people in Nigeria eating out is a luxury and if that comes with a high price then it is obviously targeted at the higher income groups. This is also a sensitive part of KFCs marketing orientation and it is interesting what they came up with, bearing in mind that they had the objective to penetrate the market and also meet their financial objectives. According to Groucutt (2005) there are different types of pricing tactical maneuver that firms use and depending on the objectives/targets and external factors, firms could use some or all of these pricing tactics during the life of a product or service.KFC Nigeria uses Penetration Pricing (Predatory Pricing). Penetration pricing is all about finding a way to access a market by track through the existing pricing structures or strategies (Groucutt 2005). Grocutt (2007) also goes on to say that Penetration Pricing can be used to attain accession into an existing market by introducing and maintaining low prices set against the existing average price for that product or service. KFC Nigeria deliberately maintained low prices for most of their products, while at the same time matching the price of competition for some other products. The use of both penetration pricing and Price matching tactics by KFC in Nigeria is very effective, but the use of Penetration Pricing is particularly very important because it was what people mainly responded to and are still responding to. With these pricing tactics, KFC was not just looking at penetrating the market and making sales, but to also create a long lasting impression and customer faithfulness in the long-run. KFC achieved relatively easy entry in Nigeria mainly because of their pricing tactics because the average Nigerian consumer is very price sensitive and care about quality a lot more than status.2.1.4 DISTRIBUTION(Brassington Pettitt 2003) Distribution ensures availability and service The availability they are referring to incorporates timeliness as an important factor. It is good bounteous that customers chose you and not your competition, but it is very important to provide the needed product or service when it is needed on time. Forsyth (2007) cites that distribution is the process that enables products and services to be delivered to customers/consumers in the market. Distribution process typically involves intermediarie s but for a fast food franchise like KFC intermediaries are highly unlikely, but for KFC accessibility is vital. Making sure their stores are located strategically to forget easy access by customers when they need to. Therefore, to ensure that customer get timely access to their products whenever they wanted, KFC strategically located their stores in specific parts of Nigeria, depending on the city or area or state. They located stores in general in areas where customers/consumers live (suburban and urban locations), close to schools, companies and markets.KFC opened 6 stores in Nigeria in December 2010 in the most populated cities in the bucolic including Lagos city, which is the highest populated city in Nigeria and the 4th highest populated city in the world. KFC also plan to open 20 more stores located strategically in 2011. This also says a lot about KFCs strategy in Nigeria. Currently, KFC does not provide home delivery service which is more comfortable for most customers, but they are not the only one in the market who doesnt provide this service. Some of KFCs top local competitors do not provide home delivery service as well because of lack of infrastructure that enables home delivery like good roads etc.2.1.5 PROMOTIONA firm must Promote itself, in other words, it must communicate, clearly and persuasively to let people know what is available and encourage them to buy (Forsyth 2007). There are various promotion tactics like advertising, direct mail, sales promotion e.t.c. Firms decide whether to use some or all of them depending their target audience, the advantages and disadvantages of the promotion tactics, available budget, and level of lastingness of the promotion tactic (Forsyth 2007). KFC uses advertising effectively in Nigeria as their main promotion tactics. The most effective form of advertising by KFC in Nigeria are electronic and billboard advert by Movie stars and musicians for KFC. KFC takes advantage of the fact that the average Nig erian emulates these stars and follows what they do to some extent.Another promotional tactics that KFC uses in Nigeria and is probably the best at it is Selling. This involves a person-to-person communication with the customer and sometimes forms a final and important, link in the chain of different methods that link a firm to its market, according to Forsyth (2007). KFC is very good at this because they already have standard faculty genteelness specifications for all their staff and employees. This is one of KFCs global brand qualities that it brought to the Nigerian market. KFCs competition in Nigeria cannot match this quality at the moment, because they rarely train their staff and even when they do they are not as meticulous as KFC in training their staff and making sure they perfect customer relations. For instance, It is not st score to walk into a fast food store in Nigeria and see a receptionist arguing with a customer, but just few seconds with KFC staff, you will immed iately notice that they are different in the way they interact with the customers. They sort of draw you in and make you savor special and appreciated, and for a typical Nigerian customer that respect and taste is almost everything.3. KFCS FOUR Ps OF MARKETING MIXJobber (2007) suggests that an effective marketing mix matches customer needs, creates competitive advantage, matches corporate resources, and is well balanced. According to Brassington and Pettitt (2003 1105) Marketing Mix is the blend of the 4Ps that creates an homogenous and stable offering to potential customers to satisfies their needs and wants. This means that there must be consistent synergy or balance between these four basic tools of marketing to meet potential customers need and wants. For instance, a good product with bad communication will not work, and so is a bad product with good advertising. This is simply because the elements of the Marketing mix rely on each other and if they lack consistency with each other in what they are face about the product, then the customers will reject it all because they not stupid. Brassington and Pettitt (2003 25)The 4Ps is a widely recognized concept in marketing and it provides a important organized structure or foundation for marketing activity,which manager can relate to and easily understand, The 4Ps include Product, Price, Place and Promotion.PUT DIAGRAM here3.1 KFCS PRODUCTThe product is at the core of marketing exchange. If the product does not deliver the benefits the consumer wanted or if it does not fulfill the expectations created by the other elements of marketing mix, then the whole exercise will be useless. (Brassington and Pettitt 2003 267). A product is a physical good, service, idea, person or place that can offer tangible and nonphysical qualities that individuals or firms consider necessary, worthwhile or satisfying and are willing to pay for it or exchange any other valuables for it (Brassington and Pettitt 2003 268). This mea ns that for a customer/consumer, the benefit of a product is everything because they buy these products to meet needs, so when a customer/consumer exchanges money, patronage or any other unit of value for a product what he/she is doing is simply paying to get the benefits of that particular product to meet his/her needs. It also means that a product could be anything or place that offers needed benefits and customers/consumers regard as beneficial.A product (tangible or intangible) is like a personality, and just like a personality there are some characteristics that makes it essentially appealing to the buyer like branding, packaging and labeling, design, style and quality e.t.c. The product and price are the two main parts of the marketing exchange that interests marketers Brassington and Pettitt (2003 268). Alternatively, Groucutt (2005 158) considers products as a collection of features and benefits that provide customer satisfaction. All these different perspectives have two th ings in common, which is that a product must be beneficial and must provide customer satisfaction. KFC promotes their wide range and varieties of fried, smoked and roasted Suya chickens in Nigeria as nutritious, convenient and even intelligent in some parts according to their adverts. According to Doyle (2002) Product decisions comprises of Product variety,product performance, product features, product design, product presentation, product packaging, sizes and brand name.KFCs specialty is fried chicken served in various forms. KFCs primary product is pressure-fried pieces of chicken made with the original recipe. The other chicken offering, extra crispy, is made using a garlic marinade and double dipping the chicken in flour before deep frying in a standard industrial kitchen type machine (Scribd 2011). KFC in Nigeria offers non-durable products and Service products as well. They offer wide range of fried, smoked and roasted chicken in Nigeria, as well as side dishes with fish, por t and beef, desserts and ice creams. These are all tangible but non-durable products because the can only be consumed once. KFCs service products in Nigeria represent intangible products such as activities, benefits or satisfaction that customers/consumers derive from their relationship with KFC. KFC menu in Nigeria contains three different segments namely Family repasts, Individual Meals and Sandwiches. Family Meals comprises of Family Meal, Party Meal and Economy Meal. Individual Meals comprises of Snack Box, Strips Light Meal and Dinner Box. Sandwiches comprises of Suya rap, Suya Burger, slant rap, beef rap, Chicken fillet supreme, Pork Supreme. They also give customers the chance to make up their own variety box comprising of some or all available products. All the fried Chicken Meals are inclined(p) in the traditional KFC style of frying in oil with the colonels range of spices. All the Meals also have Suya variety, this means that customers/consumers can either chose between the locally prepared Suya or the traditional KFC fried Chicken. KFC also have the same strategy for the beef, fish and pork meals. For the sake of simplicity, this report shall be discussing Fried Chicken.3.1.1 MARKET SEGMENTATIONKFC in Nigeria segments the market demographically by dividing it into groups based on age, gender, family size, income, occupation, religion and ethnicity. KFC segments the market demographically in this wayAge in the midst of 6 65Gender Males and FemalesFamily Size 2 4, 4 6, 6+Income 500Naira and aboveFamily life style ALLKFCs typical customers/consumers in Nigeria are adults between 18 to 58 who live fast paced lives, and therefore considers gimmick when deciding what to eat or drink. This convenience is the totality of what KFC offer in Nigeria.3.1.1.1 PSYCHOGRAPHIC SEGMENTATIONEntails dividing a market into different groups based on affectionate class, lifestyle, religion or personality characteristics (Scribd 2011). KFC in Nigeria divides the m arket based on psychographic variables like Upper and Middle class, Life style (not specific) and Personality (ambitious and authoritarian), eccentric expectation of the sexes, reference groups, customs and traditions KFC is concerned about the potential set up of these variables on the sales of its products. This is precedes target market. Psychographic segmentation enable KFC tailor their products or menu content to the specific needs of the target customers in different parts of Nigeria.3.1.1.2 TARGET MARKETThis is the process of evaluating each market segments attractiveness and selecting two or more market segments (Scribd 2011) The two main factors usually considered when selecting a target market segment are the attractiveness of the segment and the fit between the segment and the firms objectives, resources and capabilities. KFC in Nigeria targets upper, middle and a group known as Upper-lower class in Nigeria. KFCs main target are the upper and middle class, but due to t he pricing system they initiated, they widened the net to take in this special group known as the upper-lower class, who can afford to take advantage of the KFCs penetration pricing system. KFCs target in Nigeria depends on-Size and growth rate of the segment-Competition in the segment-Brand loyalty of existing customers in the segment-Attainable market share given promotional budget and competitors expenditures-Required market share to break even-Sales potential for the firm in the segment-Resources and structural attractiveness of market segment-Expected profit margins in the segmentThe market research and analysis discussed before is slavish in obtaining the above information. (Scribd 2010)3.1.1.3 MARKET PRESENCEAccording to Brassington and Pettitt (2006 862) It is a rational objective, especially for a small company or a new entrant into an industry/market, to create awareness, both of the firm and of the products offered. According to Jobber (2007) in the communication effect s pyramid, 90% Awareness leads to 70% Knowlegde/compreehension, to 40% Liking to 25% Preference, to 20% Trial and 5% Use. This means that to let more than 5% actual usage which is tantamount to sales of a product, a firm must be more than 90% effective at creating awareness. Even well know brands could have some subterfuge spot relative to a particular market or a new market environment. KFC created awareness in Nigeria through pre-campaigns and promotions, while already gathering potential customers feedback on what they would like to see in KFC eventually. KFC utilise this and tailored their product to popular costumer specifications and needs and this allowed them a relatively easy entry and penetration into the market. The position of KFC products in the minds of target consumers/customers is also important. KFC uses all these attributes to position its products to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers/c ustomers. KFC in Nigeria takes feedback from customers and then improve their products. KFC pays more