7 PS of Service Marketing, Customers

Expectation and Service Perception on

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Executive Summary:
It starts with the introductory terms of this report including objective and methodology of the
study. In the profile of the company, it contains short history and information about basic
strategy, technology, ownership as well as the foreign and native shareholders of the
company.Then accordingly in situation analysis, it refers a short circumstance analysis of the
brand
KFC strengths and weaknesses from an image perspective followed by the strength
andweaknesses of product/service of KFC After it comes up with the concern factors
influenceconsumers buying pattern. This paper focuses how cultural, social, personal,
psychological factors bias the purchase decision of the consumer. The paper is also contains the
buyingdecision process of KFC. In addition, the paper will define the marketing mix of the KFC.
Lastly, the paper comes up with necessary recommendations and conclusion. List of sourcesof
information is also attached at the bottom.










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Introduction:
The specific object of this paper to understand the influencing factors of 7ps Marketing
Mix., Customer expectation of service and customers perception about service in Bangladesh.
Specifically, KFC, one of the largest fast foods company in Bangladesh, how consumer take
buying decision and by which factors they influence towards KFC in Bangladesh is the main
objective of this term paper. Besides, another important object is to define the service marketing
mix of the KFC.

















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SERVICE
MARKETING
MIX
PLACE:
Retail
Wholesale
Mail order
Internet

PHYSICAL
Evidence :
Smart
Rundown
Interface
Comfort
Failities

PRICE:
Strategies
Skimmining
Penentration
Psychological
Cost-plus
Loss Leader


PROMOTION:
Special Offers
Advertising
Endorsement
User Trial
Direct Mailing
Free gifts


PROCESS:
Relevent to service
inductries.
How are service
consumed?

PEOPLE:
Employees
Management
Culture
Customer service

PRODUCT:

Design
Technology
Usefulness
Convenience
Value
Quality


Service Marketing Mix

An expanded marketing mix for services was proposed by Booms and Biter (1981), consisting of
the 4 traditional elementsproduct, price, place, and promotion and three additional elements
physical evidence, participants, and process. These additional variables beyond the traditional 4
Ps distinguish customer service for service firms from that of manufacturing firms.
Marketing mix consists of 4P s. It contains everything a firm can do to influence the demand
For its product. The 7P s is:
PRODUCT
PRICE
PLACE
PROMOTION
PEOPLE
PROCESS
PHYSICAL EVIDENCE





















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The service marketing mix is also known as an extended marketing mix and is an integral part of
a service blueprint design. The service marketing mix consists of 7 Ps as compared to the 4 Ps
of a product marketing mix. Simply said, the service marketing mix assumes the service as a
product itself. However it adds 3 more Ps which are required for optimum service delivery.

The product marketing mix consists of the 4 Ps which are Product, Pricing, Promotions and
Placement. These are discussed in my article on product marketing mix the 4 Ps.
The extended service marketing mix places 3 further Ps which include People, Process and
Physical evidence. All of these factors are necessary for optimum service delivery.
















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Company Profile OF KFC


Kentucky Fried
Chicken (KFC) stands
for high-quality fast
food in a popular
array of complete meals to enrich the consumer s
everyday life. KFC strives to serve great-tasting, finger
licking good chicken meals that enable the whole family to
share a fun, uninhibited and thoroughly satisfying eating
experience, with the same convenience and affordability of
an ordinary Quick Service Restaurant.
Kentucky Fried Chicken (KFC) one of the most known fast
food chains in the world started in the early 1930's by
Kernel Sanders in the Southern USA as a small franchise
operation. Colonel Sanders has become a well-known personality throughout thousands of
KFC restaurants Worldwide. Quality, service and cleanliness (QSC) represents themost critical
success factors to KFC's global success.
Food, Fun & Festivity, this is what KFC is all about. Leading the market since its inception, KFC
provides the ultimate chicken meals for the Chicken Loving Nation. Be it ColonelSanders
secret Original Recipe Chicken or the Hot & Spicy version, every bite brings a YUMon the face.
At KFC we proudly say:
KFC has more than 11,000 restaurants in more than 80 countries and territories around the
World. In 1971, Heublein, Inc. acquired KFC, soon after, conflicts erupted between the
Colonel (which was working as a public relations and goodwill ambassador) and
Heubleinmanagement over quality control issues and restaurant.
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KFC is part of Yum! Brands, Inc., however in the case of Bangladesh KFC builds the relationof
Quality Service and cleanliness for Customer.KFC was acquired by PepsiCo in 1986, it had
grown to approximately 6,600 units in 55countries and territories. Due to strategic reasons,
in 1997 PepsiCospun offits restaurantbusinesses (Pizza Hut, Taco Bell and KFC).
Perfecting its secret recipe of 11 herbs and spices in 1939, KFC has come a long way, with over
10,000 outlets in the world; KFC has maintained its title, for the last 60 years, of being The
Chicken Experts. Kentucky Fried Chicken has become KFC. In Bangladesh totally Chicken buy
from Bangladeshi Poultry Firms, and also this Chicken is100% Halal.

KFC in Bangladesh:
Transcom Foods Limited (TFL) started its
journey in 2003 as a franchisee of Pizza Hut,
thefirst International Chain Restaurant in
Bangladesh, and went on to sign the
contract tobecome the franchisee of
Kentucky Fried Chicken (KFC) in the year
2006. Both Pizza Hutand KFC are
subsidiaries of the worlds largest
restaurant company Yum!
RestaurantsInternational. In a span of seven years, TFL has opened 4 Pizza Hut and 7 KFC
outlets so farthroughout the country.TFL successfully launched the flagship KFC on South
Avenue, Gulshan in September 2006.
It has already won over the heart of the Dhaka crowd with its great tasting food,
highstandard of hygiene, cleanliness, terrific interior and of course excellent and
affordablepricing. Following its enormous success in Gulshan, the second outlet was
opened inDhanmondi in November 2008, and yet another in Bananiin December 2008. Most
recentlyTFL has opened two outlets at Eskaton on February 2010 and another one is in
Paltan.In2011,TFL has open another two new outlets in Uttara and sea beach city of
Bangladesh Coxsbazar
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Analysis of 7ps of KFC


1. Product:
The product in service marketing mix is intangible in nature. Like physical products such as a
soap or a detergent, service products cannot be measured. Tourism industry or the education
industry can be an excellent example. At the same time service products
are heterogeneous, perishable and cannot be owned. The service product thus has to be designed
with care. Generally service blue printing is done to define the service product. For example a
restaurant blue print will be prepared before establishing a restaurant business. This service blue
print defines exactly how the product is going to be.KFC's specialty is fried chicken served in
various forms. KFC's primary product is pressure-fried pieces of chicken made with the
original recipe. The other chicken offering, extracrispy, is made using a garlic marinade and
double dipping the chicken in flour before deepfrying in a standard industrial kitchen type
machine.

i. Product Planning:

Their product is classified as consumer product as it has no intermediates.

KFC offers specialty goods.
The stock turnover of KFC is high.
Price and quality of the product is always compared.
Their product includes
Goods (Burgers, Chicky Meals etc)
Services (cleanliness, quick service, parties, and meetings).


ii. Product Line:
KFC product line includes all chicken based products.

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a. Burgers:
Zinger Burger
Colonel s Chicken Burger
Colonel s Fillet Burger
SUB60
Zinger Jr.
b. Chicken:
1 piece
2 pieces
5 pieces
10 pieces

c. Combos:
Chicken Meals
Sandwich Meals
Family Meals
d. Desserts & Beverages:
Fruit Salad
Regular & Large Drink
Regular & Large Mineral Water
Tea
Scoop of Walls Ice cream
Coffe
e. Snacks & Side Orders:
5 & 20 Pieces Nuggets
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Arabian Rice
5 & 10 Pieces Hot wings
Dinner Roll
Regular & Large Fries
Hot Shots
Corn on the Cob
Hot & Crispy Soup
Cole Slaw

iii. Product Mix Strategy:
The product mix strategies are in relation to:
(a) Competitors:
KFC has a head-on competition with McDonalds so wherever theyplace their products;
KFC goes there as well. Locally in Bangladesh KFC face a closecompetition with the local
brands like AFC (Al-Baik Fried Chicken), Fried Chicks, DixyChicks etc which are producing
more or less the same product as KFC.
(b)Attributes:
The brand KFC is so strong that it is the attribute itself.
(c)Place and Quantity:
KFC products are based on high quality and prices.
iv. Product Mix Expansion:

(a) Line Extension:
Through introducing new meals offers.
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(b)Alteration of existing products:
Quality Assurance department does it. Thedepartment decides which product should be sold
and when (seasonal products as rice andsoups offered in winters).
(c)Functional modification:
It is also decided by the Q.A. department to introduce newrecipes.
(d)Quality modification:
KFC has moved to masses rather than the original recipe.
v. Contraction: When the new deals or offers are not sold as expected, Q.A. department
contracts the previous offers and introduces new offers.

vi. Change in Product Positioning:
KFC products were first offered to upper socio-economic group. Later, introducingdiscounted
and lower price deals, they are now dealing in masses. So, KFC has traded down.
In doing so KFC has used the same brand name and same high quality product.
vii. Product Life Cycle:
KFC introduced itself, has grown and now it is at maturity stage for the last ten yearsin
Bangladesh.


(xiv)Product, Brand, Packaging and Labeling:
(a) Brand Name: KFC.
(b) Color: Red, white.
(c) Symbol: Colonel Harland Sander s picture and KFC written with it.
(d) Master Brand: The brand itself is so dominant, that it immediately comes in mind.
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(xv)KFC Brand:
KFC's brand identity, the logo features Colonel Harland Sanders, one of the best-
recognized icons in the world.
KFC is trademarked registered brand.
It is distinctive, adaptable to addition to product line.
It suggests something about product.
It is legally protected and registered.
(xvi)Brands Equity:
The brand equity is very high as the value added by brand to the product effects theproduct
selling.
(xvii)Brand Strategy:KFC is marketing the entire output under products own brand.
(xviii)Complimentary branding:Pepsi & Nescafe


(xix)Packaging Strategy:
KFC makes its own disposable packaging. If they need promotion Pepsi contributesin improving
the packaging quality. KFC does family packaging. They use paper material forpackaging to
avoid health hazards and environmental pollution.
(xx)Labeling:
KFC does brand labeling. Some of its products also have informational labels such asHalal,
Veggi Burgers and Chicky Meals.
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2. Price:
Pricing in case of services is rather more difficult than in case of products. If you were a
restaurant owner, you can price people only for the food you are serving. But then who
will pay for the nice ambience you have built up for your customers? Who will pay for
the band you have for music? Thus these elements have to be taken into consideration
while costing. Generally service pricing involves taking into consideration labor, material
cost and overhead costs. By adding a profit mark up you get your final service pricing.
You can also read about pricing strategies.


KFC Pricing Strategy:
In introduction stage KFC entered the market using
market-skimming strategy. Their products were high
price and targeted only upper class. Gradually they
trickle down focusing on the middle class to penetrate
the market. Also KFC follows one price strategy. Price
isdetermined according to the rates of the raw materials
and policies of the Govt. The politicaland legal forces
often affect the policies of KFC and eventually results in
change of pricesthat is due to imposing of taxes.






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3. Place:
Place in case of services determine where is the service product going to be located. The best
place to open up a petrol pump is on the highway or in the city. A place where there is minimum
traffic is a wrong location to start a petrol pump. Similarly a software company will be better
placed in a business hub with a lot of companies nearby rather than being placed in a town or
rural area.

i. Distribution Channel:
KFC has only one channel of distribution i.e. direct where the goods are transferred tothe
consumer directly. KFC has no middlemen.
ii. Distribution of Customer Goods and Services:
KFC does distribution of consumer goods directly to the consumer.
KFC also does distribution of services to the consumer like parking, sitting,
homedelivery, etc.
KFC intends to further develop its mobile network nationwide through more
suchUnits.
iii. Intensity of Distribution:KFC does intensive distribution on its outlets.



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iv. Vertical Marketing System:
KFC has corporate vertical marketing system because it is centrally owned by its
subsidiary Yum Brands. KFC is affected by the geographic distribution (they have
fewoutlets then its competitor McDonald s). The unit value of the items is comparatively
lowerthen McDonald s. KFC has a well-equipped sitting area for the customers and a Chicky
playarea for the kids.

4. Promotion:
Promotion is the method used to inform and educate the chosen target audience about
theorganization and its products. Using all the resources of promotion:
Advertising
Sales Promotion
Public Relations
Events and Experiences
Coupons, Discounts and Bundled packages
An organization finds most of its meanings and survival through promotion.
At KFC, Promotion is the main tool to bring all chicken lovers attention towards its
deliciousone-of-a-kind product, the Fried Chicken.The logo features Colonel Harland Sanders
that is one of the best logo in the world hascreated its name as a standard in the
market. Today the Colonel s Spirit and heritage arereflected in KFC s brand identity.
It was launched here as an innovative product. KFC has got one product line but later they
introduced products in the same line to protect their market share. New product ideas
aregenerated from:
Customer services (comments cards)
Gallops survey (mystery shoppers)
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They have a Quality Assurance department that decides the new product innovation.
Q.A.department prepares screening of new ideas and product s feasibility report. This
department does the technical evaluation (whether it is practical to produce the new product or
not). The products are tested externally by offering trials to customers by giving them free
samples. KFC uses telemarketing, print media, billboards and most recently televised marketing
for promotion. KFC adds a new product in its present assortment based on
Their competitors
Product s adequate demand
The satisfaction of key financial criteria
Its compatibility with environmental standards
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KFC by its advertisements derives the desire in the customer to come and enjoy healthy foodin
their favorite restaurant. They spend 2% of its profits on advertisement. They use printmedia and
most recently doing televised marketing to promote it products. Their advertisingmedia involve:
Newspapers, Pamphlets, Billboards and Television. KFC does both the primary demand
advertising (Become a Chicken Fanatic) and the selective demandadvertising (e.g.
Zinger Meal) . In its advertising it gives informative messages KFC doesinstitutional
advertising to stimulate demand. When KFC offersnew productsthen it doesproduct advertising.
KFC s ad s act as counteracts which means to drive the customer toKFC i.e. it uses pull
advertising strategy.KFC have joint sale promotions with differentcompanies like HP,
Philips, Value Meals, Pepsi-Cola.

5. People:

People are one of the elements of service marketing mix. People define a service. If you have
an IT company, your software engineers define you. If you have a restaurant, your chef and
service staff defines you. If you are into banking, employees in your branch and their
behavior towards customers defines you. In case of service marketing, people can make or
break an organization. Thus many companies nowadays are involved into specially getting
their staff trained in interpersonal skills and customer service with a focus towards customer
satisfaction. In fact many companies have to undergo accreditation to show that their staff is
better than the rest. Definitely a USP in case of services.

Yum! University -global support for the education andinstitutionalization of key
Yum! Leadership programs
Management Team
Training -six to eight weeks training for key restaurant personnel
Multiband training depends on your level of previous quick-servicerestaurant
(QSR) experience
Graduate Recruitment
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Program giveGraduates broad experience acrossthe business in real jobs through various
departments

Employment opportunities to neighborhood residents

All employees from managerial level onwards receive training in variousdepartments
including operationsbilling etc




6. Process:
Service process is the way in which a service is delivered to the end customer. Lets take the
example of two very good companies Mcdonalds and Fedex. Both the companies thrive on
their quick service and the reason they can do that is their confidence on their processes. On top
of it, the demand of these services is such that they have to deliver optimally without a loss in
quality. Thus the process of a service company in delivering its product is of utmost importance.
It is also a critical component in the service blueprint, wherein before establishing the service,
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the company defines exactly what should be the process of the service product reaching the end
customer.

7. Physical Evidence:

The last element in the service marketing mix is a very important element. As said before,
services are intangible in nature. However, to create a better customer experience tangible
elements are also delivered with the service. Take an example of a restaurant which has only
chairs and tables and good food, or a restaurant which has ambient lighting, nice music along
with good seating arrangement and this also serves good food. People will generally prefer the
one with the nice ambience. Thats physical evidence. Several times, physical evidence is used
as a differentiator in service marketing. Imagine a private hospital and a government hospital. A
private hospital will have plush offices and well-dressed staff. Same cannot be said for a
government hospital. Thus physical evidence acts as a differentiator.Bright, and bold graphics on
the restaurant exterior and interior that incorporate theKentucky Fried Chicken as well as KFC,
communicates a fresh sense of pride.



Logo of the founder with his signature string tie with a red apron. The apron symbolizes the
home-style culinary heritage of the brand and reminds customers that KFC is always in the
kitchen cookingdelicious, high quality, freshly prepared by hand, just the way the founder did 50
yearsago. The giant colonel sanders logo was build off the worlds only extraterrestrial highway.
Thisdenotes that if there are extraterrestrials, KFCwants to be their restaurant of choice.

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Factors Influencing Consumer Expectation and Buying Pattern:



Heroic use of the signature red color and bold architectural way .
Warm and contemporary interior designs, spacious and innovative seating help customers
feel welcome and comfortable.
Thoughtful interior and exterior lighting which enhances customer experience.
A digital juke box that is free of free of charge allows customer to play the music they
enjoy.




Customer expectations are beliefs about service delivery that serve as standards or reference
points against which performance is judged. Because customers compare their perceptions of
performance with these reference points when evaluating service quality, thorough knowledge
about customer expectations is critical to services marketers. Knowing what the customer
expects is the rst and possibly most critical step in delivering good quality service. Being wrong
about what customers want can mean losing a customers business when another company hits
the target exactly. Being wrong can also mean expending money, time and other resources on
things that do not count to the customer. Being wrong can even mean not surviving in a ercely
competitive market.


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Level of Customer Expectation:











A. Cultural Factor:
Culture, subculture, and social class are particularly important influences on consumer
buying behavior.
I. Culture:
Culture is the most fundamental determinant of a person s wants and behavior. However it
isexposed to these broad cultural values: achievement and success, activity, efficiency
andpracticality, progress, material comfort, individualism, freedom, external
comfort,humanitarianism, and youthfulness.
Different cultures have different beliefs: for some cultures Non -Veg is
completelyprohibited, whereas chicken is the main food item. Different cultures permit different
beliefsand norms.
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This reflects the consumption patterns of an individual Culture is a very important
factorfrom the view of a marketer.
As KFC entered Bangladesh, they studied the Bangladesh culture, the norms followed here,as in
Bangladesh pork is not consumed, so they did not include the pork food items in theirmenu.
Only adopt the Bangladeshi culture but also the Religion as well. They offer Halal foods tothe
customers, which is the symbol that they adopted the Muslim religion.
Subculture:
Each culture consists of smaller subcultures that provide more specific identification
andsocialization for their members. Subcultures include nationalities, religions, racial
groups,and geographic regions.
Social class:
Social classes are relatively homogeneous and enduring divisions in a society. They
arehierarchically ordered and their members share similar values, interests, and behavior.As we
discuss earlier that KFC target all the class including the upper class, upper middleand lower
middle class etc. For middle classes they have launched a segment of products atcheaper rates.
Social class is determined by
Income
Occupation
Education
Balanced level of all three creates awareness of new products and income gives
thepurchasing power. So, social class forms an important part of external influence
onconsumers buying behavior.



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Social Factors:
In addition to cultural factors, a consumer s behavior is influenced by such social factors as
reference groups, family, and social roles and statuses.

Reference groups:
Consist of all of the groups that have a direct (face-to-face) or indirect influence on
aperson s attitudes or behavior.
Reference group is the one to which an individual refers. An individual adapts its self to the
group he is in. His consumption patterns, taste, beliefs, behavior etc changes according to
thegroup. Reference groups expose new behaviors and lifestyles, influence attitudes andself-
concept.











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Customars Perception about KFC
Customer perception about service:


Dimensions of Quality:
Reliability: Every time the food is available, billing
accuracy and items are delivered without any errors.
Responsiveness:Ability to accommodate any orders at
any given point in time
Assurance: KFC gives the assurance that the food is
hygienic, fresh
Empathy:Based on the local needs it offers new dishes
Tangibles:Convenience, clean ambience, good lighting
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and ventilation etc.

Quality service by Design
Support facility: Good ambience, toilet facilities, space convenience, proper lighting etc
Facilitating goods: hygienic food, pure water, clean tables etc.
Explicit services: tastier foods, proactive employees, calm atmosphere,etc
Implicit services:assurance of hygienic food, value for money, goodparking facilities.

Customer Satisfaction:
Customers perception is fulfilled by the most important element customer satisfaction.
According to Zairi (2000) the feeling of pleasure and expectation fulfillment is known as
Satisfaction. In other words customer satisfaction is goods or services which fulfill the customer
expectation in terms of quality and service for which he paid. If Customer satisfaction develops
they will become loyal to that product or brand and their loyalty will be good for the company in
sense as a Profit. Customer satisfaction is the part of marketing and play important role in the
market. In any organization satisfaction of customer is more important, because if your customer
is satisfied with services or products, companys position will be good in the market.
The distinction between tangible and intangible goods becomes cozdifferent factors of customer
satisfaction, and that is why they should be treated separate and distinct. For the fast food
company like KFC there are three elements which have impact on customers satisfaction. They
are:
Service Quality and Brand
Price
Physical Evidence
Customer Loyalty:
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There are many factors which are affecting the customers loyalty. Among the factors are
marketing mix such as product, price, place, promotion and services. I have collected data
from a research work which shows the percentage of the scores that adjust with maximum
score is presented in Table 1. Table 1 show that the factors that have good marks are the taste
of fried chicken (86, 4%), the cleanliness and room design (84, 2%) and also location access
(82, 4%). Meanwhile, there are few items that have minimum percentages; there are
reasonable prices (65, 6%) and satisfaction of price (69, 4%) and parking area (71, 0%) In
terms of KFC product prices, customer thinks that the price is quiet expensive.So, the KFC
has made a few packages that are cheaper such as the combo economic. Because of these, the
facilities are used together with other customers. Even so, it is an advantage for the
restaurant, since the consumers can also go shopping and eating at the same place. It makes
this KFC restaurant to have a good access and yet customer can do many activities in a very
limited of time

Recommendation:
Some recommendations for the KFC senior executives are as given below:
As KFC has a costlier brand, KFC may consider the price in terms of targeting more econsumers
in Bangladesh.KFC can launch more outlets notonly in Dhaka as well as the other mega cities
inBangladesh.KFC can go for more promotional activities to attract more customers in
Bangladesh.KFC should open the road street wheel based vehicle van restaurants in
Bangladesh.If KFC expands their business, it will create more employment opportunities for
thelocal people in Bangladesh.KFC can arrange technical and effective assistant to the people
who want to-do job inthis fast foods industry.




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CONCLUSION:
KFC is a very strong chain of fast food restaurants with more than 10,000 restaurantsall over the
world. Being in Maturity Stage it has high opportunities of introducing its new products and
deals. In Future it will be expanding its chain by introducing more e outlets inBangladesh as well
as in other countries.What the customer actually gets out of the service and how he or she
perceives the service may not always match. So the customers judgment or evaluation of the
service is the crucial factor in the delivery of a service. But service marketers can influence these
perceptions to a large extent by controlling favorably the service marketing mix variables. It is
all the more difficult because a service cannot be broken down into logical steps or sequences.
If service organizations pay more attention to their employees as well as their customers, it
would increase both employee motivation as well as customer satisfaction.