KFC Market Segmentation PDF

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UNIVERSITI TEKNOLOGI MARA PERLIS BRANCH PRINCIPLES AND PRACTICE OF MARKETING (420) ASSIGNMENT 1 CASE STUDY KENTUCKY FRIED CHICKEN (KFC)

PREPARED BY: NUR SYAZWANI NABILAH BT ELIAS STUDENT ID: 2019800534 GROUP: RBMHA SESSION: MARCH 2020 – JULY 2020 PREPARED FOR: MR. MOHAMAD NIZA BIN MD NOR

TABLE OF CONTENT No 1

List of Content 1.1 Introduction

Pages 1

2.1 Market Segmentation 2.1.1 Geographic Segmentation, 2

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2.1.2 Demographic Segmentation,

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2.1.3 Psychographic Segmentation

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2.1.4 Behavioural Segmentation.

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3.1 Market Targeting

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4.1 Market Positioning

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5.1 Recommendation and Conclusion

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6.1 References

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LIST OF PHOTOS No

List of Photo

Pages

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Photo 1.1 KFC Milestones

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Photo 2.1 KFC Outlet in Mall

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Photo 2.2 KFC Family Meals Products

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Photo 2.3 KFC K-pop Fried Chicken

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1.1 Introduction Kentucky Fried Chicken, better known as KFC was founded by Colonel Harland Sanders. Kentucky Fried Chicken (KFC) is the largest chicken restaurant chain worldwide with almost 1000, outlets located in well over 70 countries. Kentucky Fried Chicken (KFC) was one of the first fast food chains to expand internationally. Kentucky Fried Chicken (KFC) recipe blends of 11 herbs and spices to the rest of America. KFC is famous for its fried chicken because the fried chicken is a mixture of wheat flour, salt, black pepper, and monosodium glutamate cooked in hot oil in a pressure cooker. In the early of 1970’s, the recipe by Colonel Harland Sanders was reached in Malaysia. In 1973, the first Kentucky Fried Chicken (KFC) in Malaysia was opened at Jalan Tunku Abdul Rahman. The high demand out of the community in Malaysia, KFC now has over 700 restaurants and KFC’s 700th restaurant located in Seremban. Until now, KFC Malaysia still continues to serve delicious and quality of their products. KFC serves mainly chicken related items but offers side dishes to its consumers as well. This herbal and spice-rich blend gives the KFC chicken a delicious and appetizing aroma while retaining its original chicken flavour, leaving it unmatched. KFC is proud to be a fast food restaurant that offers customers a great selection of home-cooked chicken options. Its target market would largely be based on segmentation of age, where it would be focused on customers in the age group of between 4 to 40 years old and senior citizen. In Malaysia, children age from 4 years old to senior citizen knows about KFC very well.

Photo 1.1 KFC Milestones

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2.1 Market Segmentation Market segmentations are the techniques used to attract the right customer The objective

of

market

segmentation

is

to

minimize

the

risk

of

determining

where, when, how and to whom a product, service or brand will be marketed and to improve marketing efficiency by especially directing efforts towards the designated segment in a manner consistent with the characteristics of that segment. The base for segmentation can be divided into four which is geographic segmentation, demographic segmentation, psychographic segmentation and behavioural segmentation. 2.1.1 Geographic segmentation Geographic segmentation is the process of dividing the market into geographical unit. Examples of geographical units are nations, regions, state, counties cities or neighbourhoods. In Malaysia, KFC was focuses on geographic segmentation to attract and target their customers. KFC Malaysia would target areas in urban area and semi – urban area comprises high population density. Besides that, the population in urban area that are more populated than rural area can help attracting higher revenue. Normally, urban people tend to choose higher quality of food compare to people from the rural area. Furthermore, KFC Malaysia has strategy to attract their customers which to put the KFC outlet or franchise in the strategic place. If we can see, all the outlet or franchise KFC in Malaysia normally located near to the school, universities, cinema, airport, shopping mall and mostly populated by the people that are young and those who are in hurry. The benefit of location KFC Malaysia make customers enjoys a large of number footfalls every time because can enjoy the delicious fast food easily.

Photo 2.1 KFC Outlet in Mall

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2.1.2 Demographic segmentation Demographic segmentation is the process of dividing the market into groups based on demography. Example of demographic variable are age, gender, family size, income, occupation, education, religion, race, and nationality. In Malaysia, KFC uses socio demographic segmentation to target customers. KFC Malaysia give their concern in following demographic segmentation: Age and Gender: In Malaysia, there is no age limit focus by KFC as food products of KFC targets every age group customer. KFC Malaysia was focuses on each and every individual in a society. The children age from 4 years old to senior citizen in Malaysia knows about KFC very well. For gender, KFC’s target will be both males and females. Young people in society are the highest demographic groups in KFC Malaysia. However, KFC focuses on all social class in the society as the products are considerably affordable for people. Family Size: KFC Malaysia target whole families rather than single person. This is because the family meal which are normally served at the cheaper price.Bellow is the example KFC products for family meals that a cheaper rather than to buy single when customer come to KFC.

Photo 2.2 KFC Family Meals Products 3

Religion and Race Malaysia is an Islamic country. All KFC outlet or franchise in Malaysia prepare food in accordance with “Halal” guidelines. Always monitored by Department of Islamic Development Malaysia (JAKIM). KFC in Malaysia is not focussing on Muslim only, but it focuses to the all races in Malaysia. Income: Income is another popular basic for segmentation. Meanwhiles, income is an important key factor for KFC. This element determines which class is targeted for tube targeted. KFC focused on the upper class in the early rise of their business but KFC are slowly introducing economical meals which attract the lower to middle classes. In Malaysia, the price of KFC product is affordable from upper class to middle class or to a student of any society. 2.1.3 Psychographic segmentation Dividing market into group based on social class, lifestyle or personality characteristics is known as psychographic segmentation. Social Class: KFC has adopted different pricing techniques, such as market skimming, competition and cost-based approaches. KFC enters the market globally through market skimming. Their product is expensive and targets people in the middle to the upper class. In order to reach both sides of the market they slowly trick down the price concentrating on middle class and lower-class customers. Once the competitor offers the same product at a much cheaper price, the price must be cheaper too. The prices of KFC product such as burgers, French fries and soft beverages are related to their competitors. Lifestyle: The life style of a consumer group defines what will be the need of that particular customer. KFC Malaysia also have a lot strategy such as like product innovation, differentiation, and product variation to follow lifestyle their customers. KFC Malaysia always create a new product and made an innovation to their old products in promoting their product to customer. For example, in Malaysia young people is crazy about K-pop. Then, KFC made an innovation the old recipe fried chicken into a new recipe. K-pop Fried Chicken has a spicy sweet sauce to poured. The taste is very tasty and customer make want it again after try it for very first time.

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Photo 2.3 KFC K-pop Fried Chicken 2.1.4 Behavioural segmentation KFC Malaysia uses behavioural segmentation to target on customers. For example, in Malaysia during occasions like Eid Mubarak, it develops a need of people to eat during the festivals.

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3.1 Market Targeting Target Market can define as the process of evaluating the different market segments and deciding how many and which one to choose is market targeting. In the process of evaluation, three factors must be taken into consideration which is segment size and growth, segment structural attractiveness and company objectives and resources. Firstly, KFC enters the market globally through market skimming. Before this their product is expensive and targets people in the middle to the upper class. In order to reach both sides of the market they slowly trick down the price of their product concentrating on middle class and lower-class customers. For examples, KFC Malaysia is focusing on customers by introducing KFC Celebration Bucket to target customers. As customers receive benefits from KFC products based on the high-quality ingredients used and affordable KFC value meals pricing. Besides that, families have been defined as the main market to revive the KFC brand. This reason because KFC target whole families rather than single person. This is because the family meal which are normally served at the cheaper price. Meanwhiles, young people became the secondary target. Furthermore, KFC Malaysia also target people on urban area and semi urban area. The population in urban area that are more populated than rural area can help attracting higher revenue. Normally, urban people tend to choose higher quality of food compare to people from the rural area. Besides that, hectic personal lifestyle people in urban area that let them have more time at work and less pressure to wait for food. KFC also target their customer with placement of outlets of their outlet. KFC places itself close to schools, colleges, cinemas and markets because KFC serves a large number of consumers every day, mostly populated by the youth and those in a hurry. Target market KFC Malaysia also would largely be based on segmentation of age, where it would be focused on customers in the age group of between 4 to 40 years old and senior citizen. For example, in response to the investments achieved by KFC's competitors in offering healthy fast food, KFC is to launch a new variety of healthy foods directly aimed at people living in Malaysia who are health conscious. Furthermore, KFC Malaysia also have to fight with other competitors that selling fast food like them such as Kenny Roger’s, Burger King, A&W, Radix Chicken and KFC’s biggest rival, McDonald’s, who are also trying to take hold of the new market of healthier product.

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4.1 Market Positioning Positioning is arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers. The image of KFC customers carry in their mind is the important factors for management of KFC Malaysia. That's why for them the performance of the product, which is almost, standardizes a whole world except for small differences due to local requirements and promotions are very critical factor. KFC want their environment of their customer went get in into the KFC focus at built KFC’s image. This is because, KFC trying to bring positive changes in the environment so that every time their customer enters the KFC, customers can feel the difference in their minds. KFC think that trough continuous efforts they have developed such a brand image in their customer’s minds that their customers have become brand loyal.

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5.1 Recommendation and Conclusion KFC Malaysia can introduce the new recipe in every time to compete their competitors. Besides that, KFC Malaysia also need to offering a lot promotion towards the consumer, to attract and increase the food fall of their consumer. In conclusion, KFC Malaysia have targeted their customer following the market segmentation. Their target using base of segmentation which is geographic segmentation, demographic segmentation, psychographic segmentation and behavioural segmentation. KFC Malaysia target their customers using age, family size, income, religion and race, social class and lifestyle. Besides that, KFC was taking care about the performance of their products to maintain of the quality of their products to compete well with their competitors. Lastly, KFC really take care of their customers.

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6.1 References 1. Kentucky Fried Chicken Executive Summary & Introduction Assignment. (2018, Oct 14). Retrieved June 5, 2020, from https://anyassignment.com/samples/kfc-executivesummary-introduction-1479/ 2. KFC Corporation – Introducing Strategy in Malaysia (2016, Jul03): Retrieved June 15 2020, from https://phdessay.com/kfc-corporation-introducing-strategy-in-malaysia/. 3. 4. 5. 6.

http://docshare02.docshare.tips/files/29501/295016696.pdf https://kfc.com.my/ https://phdessay.com/kfc-target-market https://www.studymode.com/essays/Kfc-Target-Market-61513558.html

7. http://studentsrepo.um.edu.my/5306/5/DISERTASI_BAB_3_TERKINI__21.03.11..pdf 8. https://www.slideshare.net/Shahrina17/assignment-on-market-segmentation-of-kfc-inbangladesh 9. https://www.ukessays.com/essays/marketing/the-current-marketing-practicesmarketing-essay.php

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