Krushers Kfc

pic Report Title Krushers Marketing Strategic plan Submitted By Group name Date 15 April, 2010 Submitted To Dr Melodena Stephens Balakrishnan Assistant Professor, dexterity of Business and Management, University of Wollongong in Dubai Table of Contents 1. Background3 1. 1. Introduction and Objective3 1. 2. Situational Analysis3 1. 3. Constraints and Assumption. 5 1. 4. Product Need and Value. 7 2. Segmentation, Target & Positioning8 2. 1. Segmentation and Target8 2. 2. Positioning Map9 3. Marketing Mix10 3. 1. Product outline10 3. . set strategy10 3. 3. Place strategy11 3. 4. Promotion strategy12 4. Business Plan12 4. 1. Sales and Profits12 Bibliography13 App lastix14 Background 1 Introduction and Objective Introduction KFC Corporation, also known as Kentucky Fried Chicken, is a drawing string of fast food eaterys known all everywhere the humanity since 1952, however the history of the company goes back to 1930. KFC is serving more than 12 million clients in 109 countries thro ughout the world every day. Company is actively franchising across the World during 58 years1.Loyal customers burn down find their favorite eatery in or so every developed country across the Globe. KFC realized strong position in the market hind end and recognized by millions of people in the World for its finger lickin good chicken. KFC is serving more than 12 million customers in 109 countries throughout the world every day. Currently, The Company is the intimately popular chicken restaurant chain in the entire Globe. This particular report is focusing on KFC Arabia, United Arab Emirates in particular. KFC restaurants introduced to the Middle East region by franchise spo social function Ameri johna since 1973.Currently, thither atomic number 18 KFC branches in over 70 different locations across United Arab Emirates. Menu attainered to the Arab World is more focused on chicken sandwiches and Colonels Crispy Strips, and also involves side items that are suited to local pre ferences and savors. 2 Product Portfolio The fact that, KFC restaurants are associated by the customers with chicken, does not limit the range of increases has been offered to the customers. Currently, more than ccc different types of convergences have been introduced by the company all over the World.World Famous menu contains of chicken pieces, salads, sandwiches, hamburgers, wraps, kebabs, snacks, sweets and sides, beverages. KFC Corporation constantly upgrades its menu with spick-and-span groundbreaking products in order to satisfy unmet needs of their new and future customers. KFC is introducing a refreshful product called Krushers to the region a new refreshing frozen drinking. This new refreshing frozen drink first was introduced in 3 different flavors strawberry mark, Chocolate Krumble, Kookies N Kream, followed by Karamel Krunch flavor that has been introduced later on in the Middle East.Objective The objective of this report is to create strategic marketing plan fo r Krushers product and successfully arrange it in the UAE. 2 Situational Analysis outside(a) environmental analysis PESTEL Environmental (competitors) Krushers is introduced in a very competitive environment. There are several rank competitors in this product family line, the biggest ones are MC flurry from MC Donalds and Hand-Scooped shake from Hardeess, these are traditional competitors for KFC in the fast-food segment and have similar products to the Krushers.Other competitors in this product category include Baskin Robins, StarBucks and Jonny Rockets as they offer frozen drinks as part of their product portfolio. Indirect competitors include Liptons Ice tea and Pulp Ju grouch bars frozen drinks, they are considered as indirect competitors because they offer product replacements or substitutes to the Krushers. Sociological The UAE population has gamyer levels of disposable income compared to the rest of the world, according to HSBC bank study, UAE is the fifth part top count ry in the World in terms of disposable income. 3 As a result, eating out is to the highest degree a daily activeness in the social life of UAE residents, which in turn produces a bigger market for restaurants and food outlets. In addition to that, In terms of age groups, the UAE has a dominant young population, with the 25-29 years emerging as the largest group of about 777,000 at the end of 2008. It is projected by the Ministry to peak at 830,000 at the end of 2009. 4 This combination of high disposable income and young population makes the UAE a perfect market for KFC Krushers product which purposes age group of 18-24.Technological From a technological foretell of view, production of cold beverages relies heavily on the right equipment. KFC has state of the art production equipment. The company also utilizes advanced CRM solutions to gear its direct marketing efforts. stinting In the UAE over two-thirds of expats in the UAE stated that their attitudes to spending had changed a s a result of the economic crisis, however over three-quarters of expats (82%) living in the UAE also verbalize that they had not considered a move home. 5 Having said that, the UAE remains one of the strongest economies in the region (third in the region after Saudi Arabia and Iran). 6 As mentioned earlier, the disposable income in the UAE is cooperatively high, which makes it an ideal market for KFC and the new product Krushers. Industry Analysis Porters Five Forces Market Rivalry Krushers is a product category that faces high rivalry from various direct and indirect competitors. These competitors do not only include fast food chain restaurants with a similar product category, but also chains that focus exclusively on that market niche (frozen shakes and drinks).The fact that Krushers is a hybrid or mix of different products (i. e. crackpot cream, milk, smoothie, ice, fruits, juice, cookies, etc) makes it difficult to place it in a specific product category and thus exposes it t o higher competition from those various product categories. In addition, competing products have been established in the market and have a healthy market share. It would be a challenge for KFC to strongly compete in this product category, partly because the product is new and partly because they are not strongly associated with frozen drinks like Krushers.Bargaining power of suppliers KFC is one of the largest bargain forrs globally all their suppliers go through a very rigid screening process to meet their quality standards. Having said that, KFC only uses high quality suppliers with which they have strong relationships, therefore, the threat of suppliers is minimized. Threat of Substitutes Krushers travel into the frozen drinks category, due to this point, it faces a high threat of substitution from a number of relevant product categories including carbonated drinks, milk shakes, ice cream, ice tea, ice coffee, frapuccinos, fresh juice and smoothies.In order to offset this thre at, KFC has to rely strongly on their established speck image and large customers base to market and trade in the product. Bargaining power of dealers As it mentioned earlier, the target segment(s) (18-24) are high in population, however, there is a large number of product substitutes purchasable to them. Therefore, they enjoy a fairly high power of bargaining. Barriers to entry The barriers to entry to this specific product market are relatively low. The investment needed is not very high and the health regulations layabout be met with reasonable effort.However, due to the size and the number of KFC branches across the UAE, it would be very difficult for new reviveers to significantly compete with KFCs market share unless they make significant financial investments, thus reversing the barriers to entry to very high. 3 Constraints and Assumption. Constraints There are several constraints that KFC face in the insertion level of a new product Krushers. Customers are not aware of a new product that has been introduced by KFC.Lack of awareness can be explained by poor packaging and advertising, training of the employees. Krushers should be prepared within 1 minute, however, according to the survey, almost 95 percent of the consumers received their Krushers during the time put together 3 minutes to 6 minutes. 7 KFC is known all over the World for its finger lickin good chicken, it would be difficult for consumers to associate KFC as a place where they can purchase Krushers. The company didnt define the product for the customers whether it is a milk shake or it is a desert, etc.However official launch of the product great power solve these constrains. Assumptions KFC does not publish any gross revenue figures as a reference point therefore the sales forecasts are ground on an assumption that each(prenominal) branch will be able to sell 5 Krushers per hour on an average from their branch traffic. Assuming that branches get from 10 a. m. to 3 a. m. that ma kes a essence of 17 working hours a day. According to data published on the Americana website, they have 70 locations across the UAE, which equals match working hours of 1,190 per day (17X70).Assuming that the price of Krushers is at 9 drh per drink without a meal, and 4 dhs per a drink with a meal and based on the search conducted with consumers, 25 percent of the consumers will buy a Krushers with a meal and 75 percent of the consumers will buy it without the meal. 8 Based on these assumptions, we can conclude the following Total number of Krushers sold per a day = total working hours X number of Krushers sold per hour = 1,190 X 5 = 5,950 Krushers per day across all locations.Therefore, total tax incomes per day would be calculated as following Revenue of Krushers sold with a meal = (5,950 X 25%) X 4 = 5,950 dirham Revenue of Krushers sold without a meal = ( 5950 X 75% ) X 9 = 40,162dirham Total revenue of Krushers per day = revenue with meal + revenue without meal= 5,950 + 40 ,162 = 46,112 Monthly Total revenue of Krushers = total revenue per day X 30 days = 46112 X 30 = 1,383,375 dirham Annual revenue of Krushers = monthly revenue X 12 = 1,383,375 X 12 = 16,600,500 dirham Since KFC spends 6% of the total revenue on marketing and promotion, we can estimate the annual marketing budget for Krushers at annual revenue of Krushers X 6% = 16,600,500 X 6% = 996,030 dirham Due to the lack of information on variable or direct woos, we will limit our forecasts to only revenues. However there is more accurate management to estimate net hit of the company from Krushers. Target segment that has been chosen by the company is the spring chicken in the age range 18-24 of UAE, which has been estimated to 1,417,300 people.It has been assumed that 60 percent of the total youth in the age range 18-24 would be a potential target of the Krushers, according to the chosen target segment UAE explorers, which is 850,four hundred people. 9 Penetration has been assumed accordi ng to seasonal worker demand, such as hot summer weather effect. Shopping festival was an opposite reason to estimate increase in penetration in the month of December, and there is former(a) reasons that has an effect on penetration percentages across the year, which is explained in the business plan voice 4. 1 of the report. Revenue has been calculated according to the total drug users that would purchase the Krushers and the selling price.Expenses that would go on the marketing part of the Krushers have been assumed by the group and calculated in the business plan section 4. 1. Expenses have been estimated according to Magazine = 150,000 dirham Newspaper = 168,000 dirham Facebook = 20,000 dirham In house AD 30,000 dirham TV = 600,000 dirham Road signage = 200,000 dirham Billboard = 300,000 dirham Campaign = 50,000 dirham 4 Product Need and Value. KFCs value characteristics Consumers need analysis KFC is a well known brand as a value for money all around the Consumers would sea rch for a reliable drink with no risk to world. their health. KFC has large number of branches, as well as big shape of People living in gulf countries such as UAE would always search items, all delivered in a timely fashion, all of these give for a drink which refreshes their feeling. high value of convenience. Consumers would go for a product which is faster to be delivered to them and easier to carry with them while doing their linguistic rule routines during the day. Actually people are always after new things in their life. Those things could be a new product like Krushers or even its new flavors to be introduced to the market in future. There many other important factor in the consumers mind to be considered as their needs of product such as pricing, great taste and optional choice. Krushers value analysis based on the mentioned needs above Krushers is introduced as a smoothie drink that doesnt have negative effect or risk on consumers health. It sup posed being a drink to be alternative to those of energy drinks fulfil of caffeine. Krushers came up with different flavors for variety distinguishkers and those valuing a product based on optional choice. Offering Krushers as a value-added to meal as of satisfying detection of value for money promised by KFC. They offer customers to add 4dhs to their meal and have Krushers with their meal in spite of soft drink or juice. Soon abounding Krushers could be a replacement for cold drink at KFC by offering less than half the price if it is with any KFC meal. As of the discussed need of customer relating the weather of UAE then Krushers could be the best solution for relieving the thirst and the heat. Segmentation, Target & Positioning 1 Segmentation and Target Segment 1 AcademiasUniversity students actively socialize in groups for many reasons, be it for regular chat ups between classes, for examinations study or even group assignments etc. Therefore as the above points display that a Krushers will fit in perfectly with all three areas of a university student. Students usually have a red mis comprise or a coffee or a milk shake etc with them while working on assignments with a group or while studying in order to keep them going. Its become more like habit to do so. This is where we feel a Krushers can come in to play as it is a thick ice cream based shake with different flavors that will be able to fulfill a students need and want in terms of a having a drink that goes with what they do. Segment 2 Beach & Shopping mall goers (Fun)For this group what we really have in mind is the lifestyle of having fun and constantly active. We used the bank and shopping mall as examples of places where those who are in constant search of fun and activity can have a Krushers. The reason we used the beach and shopping mall as examples is due to the fact that a Krushers can be consumed in both situations / locations where on the beach it can be used as a refreshing cold dr ink to keep cool under the sun where as in the same time people dont usually take food with them to the beach as it spoils under the sun and so having a Krushers on the beach is like a two in one feeling as it has real bits in some of its drinks like kookies n kream.Where as in the mall those shopping around can have a Krushers as a drink to manner of walking around with while shopping or/and even as a drink to provided and relax with while taking a break or even while meeting friends for a coffee. Segment 3 UAE adventurers This is a group of people who are constantly out and about but dont really call for in activity. They yet simply roam around places such as the mall or the JBR walk etc. by just watching other people or window shopping or even simply go for drives around the city in search of something to do. Basically they dont have anything to do and just want to keep themselves interfering. Generally they do this in groups of two or more.The reason why have inserted such a lifestyle in our segment is because a thick shake like Krushers can be very appealing to them in terms of keeping them busy with a drink in their hand. Not only do they have a choice from a variety of flavors but the fact that it takes only a minute to prepare the drink of their choice , thus allowing them to think its quick, ill stop and get one on the way. There is a KFC available in almost if not every mall in Dubai, as well as on popular driveways such as the Jumeirah beach road where a drive through option is available. Target Segment & Justification (U. A. E Explorers) According to feedback, most people would consume a Krushers on the move. They look at it more of a milkshake like drink with pieces in it than anything else. Krushers drink does not fit in with the food served at KFC, and therefore existing KFC customers will not have one at a dine in time especially considering they dont see it as a desert either. Sports people have energy bars and drinks to consume. U niversity students opt for a red bull or coffee based drink to keep them up and alert. The fun group of people would not really consider having a Krushers as it is not suitable for them. They would not meet for a coffee in KFC nor would they buy a Krushers and sit on a bench for a chat. Therefore the best group and lifestyle is that of a UAE Explorer as on a drive they can go to a KFC drive through almost anywhere in Dubai, Krushers is available at almost every mall in Dubai and at the famous JBR walk too. A Krushers fits in well with a UAE Explorers activities as it is packaged in a way that can be taken in almost any environment and placed almost anywhere easily without risk of leak or spilling over etc. 2 Positioning Map Krushers is perceived as a refreshing shake that you can have between your main meals. It can satisfy both thirst and hungers basic needs of a person. There are two main benefits which Krushers has over its competitors in relation to the target segment, such as Brand Image and Store Location K FCs brand image in the UAE is stronger than that of McDonalds and Hardees. Therefore having a strong brand image is expedient to the consumer in terms of trusting to try a new product and actually consuming it.Store location is a big factor to the target segment as KFCs stores are more convenient in terms of reach and comfort. Basically this is because KFC is available at all leading malls in the UAE, but so are its competitors McDonalds and Hardees but what makes the difference here are famous roads and hang out spots such as JBR where there is a KFC restaurant but no McDonalds or Hardees. Not only that, in one of the most famous areas for food in Dubai, the Diyafah area there is no McDonalds yet there is a KFC restaurant there too. There is no McDonalds or Hardees in the Knowledge village area or the AUS (American University in Sharjah) food court but there is a KFC.UAE Explorers are on the go and so with KFC restaurants being on their way (drive thru) Jumeirah Beach Road, which is one of the most famous cruising streets a Krushers will be just the thing they will go after as it keeps them busy through their drive or walk at JBR etc. Marketing Mix 1 Product strategy Krushers is a sub product that has been represent by KFC. Introduction of this product increases variety of the product line available in KFC Corporation. Krushers has been introduced in order to bring customers throughout the day. The drink is available in 4 different flavors in the region. Strawberry, Chocolate Krumble, Caramel Krunch, Kookies N Kream are the types of flavors that has been introduced by KFC.According to the survey, customers identified two most popular flavors which are Kookies N Kream and Chocolate Krumble. Currently it is represented in 1 size. It is advisable to add more size options to suit different needs of the consumers. KFC offers Krsuhers as a value-added to a meal by just adding 4Dhs by customer to their meals which is less than the real price of Krushers purchased separately. The promise of great and natural taste is given by KFC through their advertising slogan by saying full of real bitZ. This slogan says that Krushers contains real pieces of fruits and chocolates in it. Thus one of the other augmented products of Krushers is the stated promise. 2 Pricing strategy angiotensin converting enzyme of the most important factors that must be considered carefully by companies is appropriate price strategy. Krushers is a new product, due to this point it is recommended to follow penetration strategy while pricing process. However it must be based on Krushers demand, as the demand are more for Krushers it is more obvious that penetration might be superior strategy to follow. Beside they also can gain some market share in marketplace however the supplier of Krushers must be assure when they imply this strategy for their product , they are capable to handle demanders and distribution channels . After all devotion abo ut KFC Krushers, it is better off if they follow penetration strategy.According to the survey, 23 percent of the respondents were dis contented, 40 percent were neutral, which makes it total of 63 percent of the respondents (which is more than a half), that were not satisfied with the current price choices. Cutomers are unhappy which means the price does not affect their objectives toward purchasing products. 10 Normally the fixed cost for supplier is 60% of variable cost of products, Krusher is 9 Dhs, 60 % of variable cost would be 5. 4 Dhs which is the fixed cost and the profit approximately might be 3. 6 Dhs on each Krushers. According to the interview made with one of the KFC stuff, assumptions were made as followed Integrant of Krushers for each cup 60 % of each cup contains ice cream (2Dhs for each cup) Because they purchase the ice creams in retail, it costs less than an ice cream that is selling in stores). 0 % Slash (blended water and sugar), (30 fils for each cup) Flavor ( 1 ounce), with consideration that the battle is 30 Dhs but for each cup they use just one ounce), (Around 30 fels). These amounts of materials imply for the entire available flavor. All the calculation is fill up to 3 Dhs and approximately 1Dhs or less for packaging in overall it cost 4 or 5 Dhs for company. Option Price There is just one size of krusher available in all of the outlets however option price are as below 9 Dhs for any flavor in regular cup size 5 Dhs for having a Krusher with the meal. 3 Place strategy KFC Corporation uses one channel distribution across the World, which is their network of restaurant outlets or branches. Krushers are sold directly to the customers without having any middlemen. KFC branches are available almost in every neighborhood across the country. Restaurants spread out across 70 different locations in United Arab Emirates. Examples would be Shopping mall food courts(Dubai Mall, City Centre) Close to schools and universities(knowledge villag e) Petrol stations (Emirates Petrol station) Office buildings (Sheikh Zayed Road) last traffic roads like (The Walk in Dubai)11 Customers can dine in the branches of KFC that accommodate dining areas, as well as choose need option and consume their Krushers outside in any other location they would prefer to have it.In the Introduction stage of the Krushers Corporation did not represent address service for the product these might be due to ice ingredients in it. Before opening any store KFC conduct market research to estimate and consider the population of that area, consumers demographic details and major streets which are close to that specific location. It is worth mentioning that the Krushers is not part of the home delivery service due to the physical nature of the product (is it cold and can melt). 4 Promotion strategy In promotion strategy there are some factors that can be used to promote the products base on MARCOM mix that is used for KFC Krushers promotional strategy .Direct marketing As a direct marketing, KFC departments can hire some people mostly young girls and boys to promote the Krushers in a very small cup to let the volunteers just taste it and promoters can encourage and motivate the volunteers to go for the bigger Krushers, and the best place for this single out of promotion is in the malls, at the foot court entrance. Sales promotion KFC already gives the customer this chance that if they want Krushers with their meal the price will be reduced for them to 4 Dhs, which the price is 9 Dhs regularly. While the loyal customers buy a combo from KFC outlet , as a promotion they can give the customers coupons with four blank checklist , that if they buy KFC combo meal for four multiplication as a promotion they can get one free Kruchers with their flavor choice. Generally it can be profitable for Kentucky chicken part sales and for Krushers, and also that would lead to better result for KFC and keep the customer loyal to the brand. Adverti singCoupons are Another tools in sale promotion, KFC can sign entreat with well known and famous companies or organization which stated whenever they have customer who purchase something from the companies or organization, they give the customers KFC voucher, the vouchers are for specified items but this sort of promotion can bring the customer to the outlet to use their voucher and make them to try new or their favorite products that are available in outlets. It is very important to use online marketing today. Print advertising is another way to market the product. Sample has been developed by the group. There are cardinal pieces of ice, with person inside each of it.There is one person standing in it and one of the piece contains Kentucky in four of the ices the Krushers flavors are representing and in the other ice pieces there are all the smiley faces that is representing the , iciness ,freezes , tastiness and freshness of the Krushers and The people in the ice are young and f resh people because it is colligate to our target segment which is the youth from age 18 24 who are the young generation whenever you look at the advertising it gives a positive , joyfulness feeling about the product and the taste, the choice of putting people in the ice pieces is showing the coldness and freezing feeling that Krushers can give the customers. Krushers has been displayed in the official website, however social networks should be taken into consideration as well as the popular search engines etc. Also it is advisable to use media advertisement, such as radio, tv, etc. Also print advertising like newspapers magazines etc. Business Plan, 2010. 1 Sales and Profits Jan Feb march april may june july Aug folk Oct Nov Dec potential segment 850 400 850 400 850 400 850 400 850 400 850 400 850 400 850 400 850 400 850 400 850 400 850 400 heavy user 3% 5% 10% 13% 15% 30% 40% 50% 52% 55% 60% 65% 25512 42520 85040 110552 127560 255120 340160 425200 442208 467720 510240 5 52760 view as user 2% 4% 8% 10% 11% 25% 32% 40% 43% 46% 50% 57% 17008 34016 68032 85040 93544 212600 272128 340160 365672 391184 425200 484728 Total user 42520 76536 153072 195592 221104 467720 612288 765360 807880 858904 935440 1037488 (SP=9) X 75%(users) 287010 516618 1033236 1320246 1492452 3157110 4132944 5166180 5453190 5797602 6314220 7003044 (SP=4) X 25%(users) 42520 76536 153072 195592 221104 467720 612288 765360 807880 858904 935440 1037488 total revenue 329530 593154 1186308 1515838 1713556 3624830 4745232 5931540 6261070 6656506 7249660 8040532 expense magazine 150000 150000 150000 150000 newspaper 168000 168000 168000 168000 168000 radio 135000 135000 135000 135000 135000 135000 135000 135000 facebook , 20000 20000 20000 20000 20000 20000 20000 In house Ad 30000 30000 30000 30000 30000 30000 Tv 600000 600000 600000 600000 road 200000 200000 200000 200000 billboards 300000 30000 0 300000 campaign 50000 50000 50000 50000 total 455000 768000 355000 230000 1153000 500000 333000 535000 818000 335000 985000 653000 profit/loss -125470 -174846 831308 1285838 560556 3124830 4412232 5396540 5443070 6321506 6264660 7387532 total profit 40727756 Bibliography KFC official website, 2010, universal resource locator www. kfc. com, last accessed April 6, 2010 KFC Locator, 2010, Americana group official website, URL http//www. americana-group. net/Default. aspx? Id=1207 , last accessed April 7, 2010 KFC, 2010, Wikipedia, URL http//en. wikipedia. org/wiki/KFC,last accessed April 4, 2010 KFC Arabia official website, 2010, URL http//www. kfc-arabia. com/new_products. htmlKrushers,last accessed April 8, 2010Annual report, 2008, Americana group, URL http//www. americana-group. net/Default. aspx? Id=1316, last accessed April 14, 2010 Annual report, 2008, Yum, URL http//www. yum. com/annualreport/docs/annualReport08. pdf, last accessed April 4, 2010 UAE population to exceed five million by years end, 2009, UAE Interact, URL http//www. uaeinteract. com/docs/UAE_population_to_exceed_five_million_by_years_end_/37085. htm, last accessed April14,2010 appendix Graph 1. pic Graph 2. pic Graph 3 pic Graph 4 pic Based on 1. Strongly dissatisfied 2. Dissatisfied 3. Neutral 4. Satisfied 5. Strongly satisfied 1 KFC corporate website (2010) 2 Americana group website (2010) 3 AMEinfo press release, June 24-2009. http//www. ameinfo. com/201597. html 4 Ministry of social affairs, annual statistic, 2008 5 AMEinfo press release, June 24-2009. http//www. ameinfo. com/201597. html 6 Wikipedia, 2010 7 Appendix, Graph 1, summon () 8 Appendix Graph 2, page ( ) 9URLhttp//www. uaeinteract. com/docs/UAE_population_to_exceed_five_million_by_years_end_/37085. htm 10 Appendix, Graph 4, page () 11 Americana group website (2010) High Brand Image KFC Krushers McDonalds chill High Store location convenience Low Store location convenience Hardees Sha ke Hardees Shake Low Brand Image