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ProjectonKFCNovember4th,2009

SUBMITTEDBY:
RamanpreetKaurTaluja
PrakritiAhluwalia
VikasDubey
AshishDhawan
AditiChopra
AmitSaini

JoinDate:Nov
2009

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IntegratedAssignment
On
Concepts&Application
On
KENTUCKYFRIEDCHICKEN

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PREFACE
OurinstituteK.R.MangalamGlobalInstituteofManagementhasgivenusanopportunitytoshowourintellectualability
throughanintegratedprojectandallowustodecidetheservicesectoronwhichwewanttomakeourproject.
ForthiswehavechosentheKFCfoodchain.KFCisthegrowingbrandintheworldforfoodindustry.KFCbasicallydealsin
chickenrecipeswhosemainfocusincrispyanddeepfriedchickens.
ToknowthemarketresponseofKFCwevisitedvariouschainsofKFCandwealsohadsurveyonthepublic(whoarethe
basicconsumersoftheKFC).
WevisitedKFCchainofNoidaSector18,LajpatNagar,CenterStageMall,Noida,andGhaziabad.Weconcludedthat
accordingtotheareasthedemandkeepsonfluctuating,likethereismoredemandinSector18marketchainofNoidain
comparisontoCenterStageMallandwehavethemaximumdemandinLajpatNagar.
Afterthesurveyonchainswehadasurveyonthepublicofcitythroughafeedbackform.Wealsohadasurveyonthe
peopleworkingintheKFCthroughthehumanrecoursefeedbackfrom.
WefoundthattheyaretotallysatisfiedbythehumanresourcestrategiesofKFC.Bypeopleweconcludedthattheyarealso
satisfiedbytheserviceprovidedbyKFC,andtheproductwhattheyprovideareuptothemark.TheyfindKFCfoodabest
qualityfood.ButthenalsoKFChavetoworkhardtoearnthegoodwillinmarketincomparisontootherfastfoodchains.
ACKNOWLEDGEMENT
Tocompletethisproject,therehavebeenmanypeoplewhograciouslygavetheirtimeandexpertiseinreviewingthe
manuscript.Theirexperienceanddirectionhassignificantlyhelpsustocompletethisproject.Wewouldliketothankthe
following:
1.Dr.AtharAli(DeanofKGIM)
2.Prof.S.S.Khullar(Programmedirector,MBA)
Andallthefacultymembersandallofourfellowmateswhohelpustocompletethetask.

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Severalpeoplehavebeenoftremendousassistanceinthefinetuningofthisproject.AlltheMangersandworkersofKFC
outletwherewevisitedandalsothecitizensofNewDelhiwhogaveustheirprecioustimeforfeedback.

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CONTENTS

CBSEAIPMT2015Examon...

S.No.TOPICPAGENO.
IIntroduction4
IIHistoryofKFC58
IIISuccessStory9
IVKFCsSuccessinIndia10
VFactorsAgainstKFCinIndia11
VIFinanceStrategy1219
VIIHumanResourceStrategy2028
VIIIOperationsStrategy2938
IXMarketingStrategy3949
XManagementInformationSystemsStrategy5054
XIAnnexures5556
XIIBibliography5758

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INTRODUCTION
KFCCorporation,basedinLouisville,Kentucky,istheworld'smostpopularchickenrestaurantchain,specializinginOriginal
Recipe,ExtraCrispy,TwisterandColonel'sCrispyStripschickenwithhomestylesides.
KFCispartofYum!Brands,Inc.,whichistheworld'slargestrestaurantsystemwithover32,500KFC,A&WAllAmerican
Food,TacoBell,LongJohnSilver'sandPizzaHutrestaurantsinmorethan100countriesandterritory.
1.FoundedbyHarlandSandersin1950swhenfastmovingfranchisingwasstillinitsinfancy.ColonelSanderswasableto
tapatalenthunt.
2.Secretrecipeofchickenwithelevenherbsandspices.
3.Hisforeseeingseemedtobetruewhichislessthan13yearsthechainhadcrossedthe300mark.
4.Hisgrowingagepromotedcolonelsanderstoselloffthebusinessfor$2millionin1964toJackMasseyandJohnBrownJr
twoLouisvillebusinessman.
5.In1970KFCmergedwithHeublienInc,aproducerofalcoholicbeverageswithlittlerestaurantexperience.
6.Howeversoonenoughconflictsaroseregardingqualitycontrolissuesandrestaurantcleanliness.

ProjectsHelpline

RetailManagementNotes
byanudeepsengupta
LastpostbyRajeshNimbunkar
6DaysAgo12:06PM

7.In1986KFCwassoldtoPepsico.

MaharashtraValueAdded...
byAVINASHPUNMIYA

8.NextKFCturnedtheirattentiontowardstappingintointernationalmarketsandbyaround1980sithadenteredJapan,
Australia,MexicoandplacesintheCarribeanandUK.

LastpostbyJoelFrancis
1WeekAgo10:46AM

9.Inthe1990sitcouldforeseethevirginmarketsifINDIAandCHINA.
THEBIGFIGHT
KFCHISTORYATAGLANCE
9/9/1890
HarlandSandersisbornjustoutsideHenryville,Indiana.
19001924
HarlandSandersholdsavarietyofjobsincluding:farmhand,streetcarconductor,armyprivateinCuba,blacksmith's
helper,railyardfireman,insurancesalesman,tiresalesmanandservicestationoperatorforStandardOil.
1930
Inthemidstofthedepression,HarlandSandersopenshisfirstrestaurantinthesmallfrontroomofagasstationinCorbin,
Kentucky.Sandersservesasstationoperator,chiefcookandcashierandnamesthediningarea"SandersCourt&Caf."
1936
KentuckyGovernorRubyLaffoonmakesHarlandSandersanhonoraryKentuckyColonelinrecognitionofhiscontributions
tothestate'scuisines
1937
TheSandersCourt&Cafaddsamotelandexpandstherestaurantto142seats.
1939
TheSandersCourt&CafisfirstlistedinDuncanHines'"AdventuresinGoodEating."FiredestroysTheSandersCourt&
Caf,butitisrebuiltandreopened.Thepressurecookerisintroduced.SoonthereafterColonelSandersbeginsusingitto
fryhischickentogivecustomersfreshchicken,faster.
1940
BirthdateoftheOriginalRecipe
1949
SandersmarriesClaudiaPrice.

NoThreadstoDisplay.

1952
TheColonelbeginsactivelyfranchisinghischickenbusinessbytravelingfromtowntotownandcookingbatchesofchicken
forrestaurantownersandemployees.TheColonelawardsPeteHarmanofSaltLakeCitywiththefirstKFCfranchise.A
handshakeagreementstipulatesapaymentofanickeltoSandersforeachchickensold.
1955
AninterstatehighwayisbuilttobypassCorbin,Kentucky.Sanderssellstheservicestationonthesamedaythathereceives
hisfirstsocialsecuritycheckfor$105.Afterpayingdebtsowed,heisvirtuallybroke.Hedecidestogoontheroadtosell
hisSecretRecipetorestaurants.
1957
KentuckyFriedChickenfirstsoldinbuckets
1960
TheColonel'shardworkontheroadbeginstopayoffandthereare190KFCfranchiseesand400franchiseunitsintheU.S.
andCanada.
1964
KentuckyFriedChickenhasmorethan600franchisedoutletsintheUnitedStates,Canadaandthefirstoverseasoutlet,in
England.SanderssellshisinterestintheU.S.companyfor$2milliontoagroupofinvestorsheadedbyJohnY.BrownJr.,
futuregovernorofKentucky.TheColonelremainsapublicspokesmanforthecompany.
1965
ColonelSandersreceivestheHoratioAlgerAwardfromtheAmericanSchoolsandCollegesAssociation.
1966
TheKentuckyFriedChickenCorporationgoespublic.
1969
TheKentuckyFriedChickenCorporationislistedontheNewYorkStockExchange.
1971

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Morethan3,500franchisedandcompanyownedrestaurantsareinworldwideoperationwhenHeubleinInc.acquiresKFC
Corporation.
1976
AnindependentsurveyrankstheColonelastheworld'ssecondmostrecognizablecelebrity.
1977
ColonelSandersspeaksbeforeaU.S.CongressionalCommitteeonAging.
1979
KFCcooksup2.7billionpiecesofchicken.Thereareapproximately6,000KFCrestaurantsworldwidewithsalesofmore
than$2billion.
12/16/1980
ColonelHarlandSanders,whocametosymbolizequalityinthefoodindustry,diesafterbeingstrickenwithleukemia.Flags
onallKentuckystatebuildingsflyathalfstaffforfourdays.
1982
KentuckyFriedChickenbecomesasubsidiaryofR.J.ReynoldsIndustries,Inc.(nowRJRNabisco,Inc.)whenHeublein,Inc.
isacquiredbyReynolds.
1986
PepsiCo,Inc.acquiresKFCfromRJRNabisco,Inc.
1997
PepsiCo,Inc.announcesthespinoffofitsquickservicerestaurantsKFC,TacoBellandPizzaHutintoTriconGlobal
Restaurants,Inc
2002
TriconGlobalRestaurants,Inc.,theworld'slargestrestaurantcompany,changesitscorporatenametoYUM!Brands,Inc.In
additiontoKFC,thecompanyownsA&WAllAmericanFoodRestaurants,LongJohnSilvers,PizzaHutandTaco
Bellrestaurants.
2006
MorethanabillionoftheColonel's"fingerlickin'good"chickendinnersareservedannuallyinmorethan80countriesand
territoriesaroundtheworld.
2007
KFCproudlyintroducesanewrecipethatkeepstheColonel's11herbsandspicesandfingerlickin'flavor,butcontainsZero
GramsofTransFatperservingthankstonewcookingoil.

KFCSSUCCESSSTORY:
Colonelsanderscommitmenttoqualityandhygiene.
PepsiCotakingoverKFCprovedtobeaturningpointinitslifecycle.
BeingaleaderinitsfieldPepsiCoprovidedthatextraedgetoKFCwherebythesoftdrinksweremadeavailableatKFC
outletsalongwiththeirmenu.
Coordinatedthroughnationaladvertising.
Consumerswereabletorelatethesoftdrinkswiththesnackfoods.
WasabletoforeseeahugeuntappedmarketintheAsianCountries.
Thinklikealocal..notlikeanAmericanCompany.KFCgelledwiththepeopleastheoperationswereintheir
hands.
MelloweddowntheirFriedchickenimagebychangingtheirnametoKFCin1991.
Wereabletoprovideawidervarietytothecustomerstochosenfrom,thusstrengthenstheirmarketpositions.
Customizationindifferentcountries.DifferentcultureandcustomerspreferencesweretakenintoaccounttoattainGCTC
[GETTINGCLOSETOTHECUSTOMERS].
KFCisalsoquiteawareofitsCSR.
Differentreliefprogrammesandothersocialundertakingshavebeenwellexecutedbythem.

CULTURALFACTORSCONTRIBUTINGTOKFCs
SUCCESS
ININDIA
Reducingthepsychicdistancebyhandlingoverofoperationstolocalpeoplesothatcustomerscouldrelatetothemmore
easily.
Abletoadapttoculturaldifferences,tastesandpreferences.ForexamplekeepinginmindtheIndiantastesbudsKFC
launchedafierierZINGERBURGER.
GotanedgesincechickenisastapledishandistakenmorefrequentlyinAsiancountries.
Moreaccustomedtotakeoutfoodoverthecounter.
ThetargetcustomerofKFC[upper,middleandabove]arehealthconsciousandhencetocatertotheirinterestKentucky
friedChickenchangeditsnametoKFC.
PricesensitivityofthetwoeconomiesdroveKFCtointroducemenusthatwereeasyontheconsumerspocket.

CULTURALFACTORSININDIATHATGOAGAINSTKFCsORIGINALRECIPE:
KFCisperceivedasarestaurantservingonlychickenIndianfamiliesobviouslywantedmorevarieties.
Believedtobeexpensive..novalueformoney.
Wantedtopositionitselfasafamilyrestaurant,notasateenagehangout
Ambiencewasmissing.
Perceiveddifferencesineatinghabits.
Triedtotargetthevegetariansegment.HoweverthisbackfiredasinIndiahavingvegfoodcookedinanonvegkitchen
doesntcomeoutwellwiththevegetariansegment.
ETHICALFACTORS:
TheregulatoryauthoritiesfoundthatKFCschickendidnotadheretothepreventionofFOODADULTRATIONACT,1954.
Chickenscontainednearlythreetimesmoremonosodiumglutamate(popularlyknownasMSG,aflavorenhancing

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ProjectonKFC
ingredients)asfollowedbytheact.Sincethelate1990s,KFCfacedsevereprotestsbypeopleforEthicalTreatmentof
Animals(PETA),ananimalrightsprotectionorganization.PETAaccusedKFCofcrueltytowardschickensandreleaseda
videotapeshowingtheilltreatmentofbirdsinKFCspoultryfarms.

FINANCE
STRATEGY

FactorsAverageDemand(perdayperbranch)
Duringregularperiod150200
Duringpeakperiod(promotionschemes)350450
Duringfestivals450650
GRAPHICALREPRESANTATION

COMPARISIONOFFINANCIALSTATEMENT
1.ShortTermSolvencyRatio
CurrentRatio:Idealis2:1
=CurrentAssets/CurrentLiabilities
=Stock+debtors+cash+loans&advances/currentliabilities
CURRENTRATIO1.64:1
Conclusion
ShorttermsolvencyofKFCitscurrentassetratioisclosertoidealratioof2:1orwecansaythatitscurrentassetscanbe
morereadilyconvertedintocashtomeetthecurrentliabilities.
LongTermSolvencyRatio
2.DebtEquityRatio=Acceptableratio=2:1
(Althoughnowdayslendinginstitutionsprefer1:1)
=Debt(Longtermloan)/Equity(Shareholderfund)
=Securedloan+unsecuredloan/Equity+Reservesurplus
Debtequityratio0.61
Conclusion
Higherratioindicatesariskyfinancialpositionwhilealowerratioindicatessafefinancialposition.Alsoitindicatesthe
amountofcapitalsuppliedtothecompanybyitsproprietorsandofassetcoveravailabilitytoitscreditorsonliquidation.
3.InterestCoverageRatio=NPBIT/Interestonfixed(longterm)loansor
debenture
Interestcover9.12

Conclusion
Thisratioindicateshowmanytimestheprofitcoversfixedinterest.Itmeasuresmarginofsafetytolenders.Thehigherthe
numbersmoresecurethelenderinrespectofhisperiodicalinterestincome.
3.FixedAssetRatio=Shareholderfund+longtermloan/Netfixedasset
=Equityshare+Reserve+securedloan+unsecuredloan
/NetblockInvestment
Fixedassetratio1.14
Conclusion
Ifratio<1,firmhasadoptedimprudentpolicyofusingshorttermfundsforacquiringfixesassets.
Ifratio>1,indicatesthatlongtermfundsarebeingusedforshorttermpurposei.eforfinancingworkingcapital.Itisnot
goodfromthefirmspointofviewasitsusuallymoredifficulttoraiselongtermfunds.
4.ProprietaryRatio=Proprietaryfund/Totalasset
=Equityshare+Reserveandsurplus/Netfixedasset+Currentasset
ProprietaryRatio0.76
Conclusion
Thisratioisofparticularimportanceforcreditors.Ahigherratioshowssafetyforcreditors.Ratiobelow50%maybe
alarmingforcreditorssincetheymayhavetolooseheavilyintheeventofcompanysliquidationonaccountofheavy
looses.
ACTIVITYRATIO
5.CapitalTurnoverRatio=Netsales/Fixedasset+Networkingcapital
CapitalTurnoverRatio0.29
Conclusion
Thisratioindicateshowefficientlycapitalemployedisbeingused.Highturnovermeansefficientutilizationandimproves
liquidityandprofitabilityofbusiness.Howevertoohighratiomayindicateovertradingresultinginpaucityoffunds.

PROFITABILITYRATIO
6.OperatingProfitRatio=Operatingprofit*100/NetSales
OPM(%)43.58
Conclusion
Thisratiomeasuresprofitabilityandsoundnessofbusiness.Highertheratiobetteritis.
7.NetProfitRatio=Netprofit*100/NetSales

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ProjectonKFC
NPM(%)22.11
Conclusion
Thisratiodeterminestheoverallefficiencyofthebusiness.Highertheratiobetteritis.
OVERALLPROFITABILITYRATIO
8.Returnoninvestment(ROI)=PBITD*100/CapitalEmployed
ROCE(%)28.89
Conclusion
Thisratiomeasurestheearningpowerofnetassetsofbusiness.Higherratioindicatesbetterposition.
9.Returnonequity(ROE)=Netprofit(afterinterest,tax&dividend)/Equityshareholderfund
ROE(%)26.87
Conclusion
Thisratiohelptheshareholderofthecompanytoknowhowmuchthereinvestmenthaveearnedtothemi.eprofitavailable
toequityshareholders.
Higherratioispreferable.
10.EarningPerShare=NetprofitPreferencedividend/Numberofequityshare
EPS(Rs)38.67
Conclusion
Ratiohelpsinevaluatingtheprevailingmarketpriceofshare.Moreearningpershareispreferable.
Keyfinancials
YearendMar07(incrores)
Netsales413.78
Operatingprofit180.33
Netprofit91.50
Equitycappd22.80
Keyoperatingratios
YearendMar07
EPS(Rs)38.67
NPM(%)22.11
OPM(%)43.58
ROCE(%)28.89
ROE(%)26.87
Debt/equity0.61
Interestcover9.12
Valuationratios
YearendMar07
EV/EBIDTA10.09
Marketcap/sales3.97
Dupontmodel
YearendMar07
PBIDT/sales(%)43.58
Sales/netassets0.29
PBDIT/netassets(%)0.13
PAT/PBIDT(%)50.74
Netassets/networth3.76
ROE(%)26.87

HUMANRESOURCE
STRATEGY

HUMANRESOURCEPOLICYINKFC
Hiringandretainingtherightemployeesiscriticaltothesuccessofyourrestaurant'soperation.Hereyou'llfindnewsand
researchongettingthemostfromyourhumanresourcesprocesses.
AreaManager:
AreaManagersareaccountableforprovidingcoaching,leadershipandoperationalsupportto810KFCRestaurantswithina
definedArea.
RestaurantGeneralManagers:
TheRestaurantGeneralManagerisaccountableforcreatingandrunninganenergeticandvaluableworkenvironment,
whichiscommittedtoservingthebestchickenatthefastestspeedandwithasmile.
TheRestaurantGeneralManagerreportsdirectlytoanAreaManagerandisaccountableforsuccessfullyimplementingand
maintainingallCompanypoliciesandproceduresinrelationtooperations,customerservice,cashhandling,marketing,
purchasing,humanresources,health&safety,administration,traininganddevelopment.
AssistantManagers:
TheAssistantManagerisresponsibleforassistingtheRestaurantGeneralManager(RGM)increatinganenergeticand
valuableworkenvironment,whichiscommittedtoservingthebestchickenatthefastestspeedandwithasmile.
AssistantManagersarealsoresponsibleforensuringallCompanypoliciesandproceduresarefollowedinrelationto
operations,customerservice,cashhandling,marketing,purchasing,humanresources,health&safety,administration,
traininganddevelopment.
TraineeManagers:
ResponsibleforassistingtheRestaurantGeneralManagerandAssistantManagersincreatinganenergeticandvaluable
workenvironment,whichiscommittedtoservingthebestchickenatthefastestspeedandwithasmile.
TraineeManagershelpwithdaytodayrunningoftherestaurant,andneedtoensurethatalloperations,customerservice,
cashhandling,marketing,purchasing,humanresources,administrationandtraining&developmentpoliciesarefollowed.
CustomerServiceTeamMembers:
Responsibleforworkingtheserviceareasandensuringqualityproduct,serviceandcleanlinessisdeliveredtoallcustomers
attopspeedandwithasmile!
FoodServiceTeamMembers:

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ProjectonKFC
ResponsibleforputtingthecrunchinthecoatingandthezingintheZingerthecooksmaintaskistoprepareandcookthe
irresistibleKFCproducts!Thecookmustalsomaintainthecleanlinessofthecookingareaaswellasthequalityofproduct
andspeedofpreparation.
RecruitmentandSelectionatKFC
PartofKFCsrecruitmentstrategyistoofferemployeeshighqualityoptionssuchaspotentialforadvancement,company
reputation,benefitspackageandsalaryscale.WhenKFCwaslookingforseniorexecutiveswhocouldrunabusiness,for
twoyearsitscouredthemanagementteamsacrossvariousindustriesandofferedseniorexecutivesofcompanieslikeCoca
Colaattractivebenefitsandabettersalaryscaletogetthemontheteam.Theseexecutiveswerepromisedquick
advancementontheirjobs,andapparentlygivensuchincentivestojointhatmostofthepeopleofferedjobsjoinedKFC
eventhoughtheyweretoldbeforehandthatatimmediatepresent,noseniorpositionwasvacant.Hence,KFCsattractive
salaryandbenefitspackageisaneffectivelureforpotentialemployees(Rigdon,1991).
Forexample,amongthebenefitspackagethatKFCoffers,isamedicalcoverageandprescriptionbenefits,dentalcoverage,
vision/hearingcoverage,lifeanddisabilityinsurance,a410kplan(whichhelpsemployeessavefortheirfuture),stock
options,amanagementincentiveplan(underwhicheveryonefromassistantmanagertoseniorexecutiveisrewardedfor
remarkableperformance),adoptionassistance,tuitionreimbursementplan,collegeplanningassistance,employeediscount,
paidvacationandagrouplegalplan.KFCalsobelievesinpromotingfromwithin,asitencouragesemployeestoperform
wellontheirjobs,tellingthemthattheyinfactcangofrombeingjustateammembertotherestaurantmanagerandlater
areaorregioncoach(KFCOfficialsite).
Asfarasselectionisconcerned,KFCmanagementstronglybelievesthathiringyoungpeopleandlatertrainingthemisthe
waytoasuccessfulorganization.Hence,theagefactorisdefinitelyanissueofconcernforrecruitersatKFC.Thecompany
alsostronglybelievesindiversification.AccordingtoKyleCraig,presidentofKentuckyFriedChicken'sU.S.operations,We
wanttobringinthebestpeoplebutiftherearetwoequallyqualifiedpeople,we'dclearlyliketohavediversity.Fromthis,
wecansafelyassertthatKFCbelievesineliminatingtheglassceiling,andhiringandkeepingfemaleandminoritygroup
executives.Thisseemstobeworkingforthecompanyandisaneffectivepolicy:wherein1989,notevenoneofthe
company's17seniorU.S.managerswereminorityorfemale,thesituationhasimprovedtoday,withtherebeingnumerous
managerseitherfemaleorpartofaminoritygroup.KFCadmitsthatitactivelytriestorecruitandpromotewomenand
minoritymembersinmiddleandtopmanagementranks(Rigdon,1991).
RetentionPracticeatKFC
KFCisaclientoftheO.C.TannerCompany,whichspecializesinhelpingcompaniesmotivateemployeesthrough
comprehensiverecognitionsolutions.Accordingtoitsdirector,marketingandcorporatecommunications,KFChasthe
lowestturnoverrateinthefastfoodindustrybecauseitisafunplacetowork.Thecompanyensuresthatcomingtoworkis
notsomethingemployeesdreadbymakingthedayasenjoyableforitsworkersaspossible.Employeeshavebeengiven
theautonomytohavefunonthejob:theycanstartstandingovationsfortheywhenevertheywant,cansingsongsfor
birthdaysetc.(Kufahl&Agoglia,2003).
Staffretentionshouldbeamajorconcernforemployersbecauseithasbeenproventimeandagainthatifthecompanyis
everinafinancialmess,ithastodealwiththeaddedlossofemployeesresigningandleavingthecompany,rightwhentheir
energyandworkisneededthemost.KFCisoneofthosecompanieswhichrealizesthisfactor.Ithasincorporatedalotof
recognitionprogramsinitsculture,likeFloppyChicken,orKFCPresidentCharlesRawley'sBulldogAwardtomotivate
employeesandkeepthemhappy(Servingupabucketofrecognition,2001).
Recommendations
TherecommendationsthatIwouldofferKFCistomaintainitscurrentlowturnoverratesandincorporateevenmore
practicesinitsculturewhichproviderecognitiontoemployeesandmakethemfeelvalued.Asforselectionandrecruitment
practices,ageshouldnotbeabiasfactorandtheprincipleofpromotionfromwithinshouldbeadheredto.Thisisbecause
forcompanieslikeKFC,itisveryimportanttopromoteacertainemployeeculturehence,itisbettertopromoteolder
employeesratherthanhiringpeoplefromexternalsources.
TrainingandDevelopmentarePriority!
OnthepathfromTeamMembertoRestaurantGeneralManager,extensivetraininganddevelopmentisapriority.Nationally
RecognisedTrainingProgramsareavailabletoemployees*.
CertificateIIinRetailOperations
CertificateIIIinRetailSupervision
CertificateIVinRetailManagement

Whatdoyouneedtobecomepartofourteam?
Goodinterpersonalskills,strongworkethic,commonsenseandgreatcustomerserviceskills.Youmustbepreparedtowork
shiftwork,includingnightsandweekends.
Availabilityvariesbyarea*
CorporateCulture
"RewardandRecognition"
"Promotionfromwithin"
"BeliefinPeople"
OurRestaurantGeneralManagersareNo.1,andtheyarerewardedfortheirachievementsthroughcompetitivesalary
packages,incentiveschemeandshareownershipprogramsforcompanyemployees.
WeareanEmployerofChoice
Yum!'scommitmenttobeingan"EmployerofChoice"isdemonstatedbyYum!beingaRegisteredTrainingOrganisationand
our:
EqualOpportunityEmploymentPolicy
ExecutiveTraineeProgram
FamilyFriendlyPolicies
WorldClassTrainingSystems
EducationAssistanceProgram
ProductDiscountProgram
Performancebasedsalaryincreasesand
Employeefranchising

KFCFASTFOOD
INDUSTRY

QUESTIONNAIRE
0N
HUMANRESOURCE

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PLEASEREADTHISPAGEBEFORESTARTINGTHEQUESTIONNAIRE:
AIM:
Theaimoffthesurveyistofindoutabouttheexperiencesandproblemsofyoungpeopleworkinginthefastfoodindustry
aspartoftheresearchstudy.
DEFINITIONS:
Fastfoodindustryincludebusinesseswhichprimarilysellmealsthatarereadytoeatimmediatelyandarepackagedintake
awaycontainersorarepackagedwherenotableserviceisinvolved(thatareeatenonthepremisesbuttherearenot
waitersorwaitresses).Forexample:KFC,MCDONALDS,etc.
Q1.Doyouwork,orhaveyouworked,foroneofthefollowingfastfoodoutlets(ifworkedformorethanoneoutletplsfillin
otherquestionnaireofeachoutlet)?
a.)Pizzahut
b.)Subway
c.)Subross
d.)McDonalds.
Q2.Whatsuburbistheoutletlocatedin?_________________________________
______________________________________________________________.
Q3.Whatisyourjobtitleanddutiesatthefastfoodoutlets?_________________
_____________________________________________________________.
Q4.Whatisforemploymentstatus?
a.)apprentice/training
b.)casualparttime
c.)casualfulltime
d.)permanentfulltime
e.)permanentparttime
f.)other(pleasespecify)_______________________________________________
Q5.Howlongyouhaveworkedforthefastfoodoutlets?
a.)lessthanonemonth
b.)lessthanthreemonths
c.)3monthto6months
d.)6monthsto12months
e.)morethan1year.
Q6.Pleaselistthedaysandshiftsyouhaveworkedthat?

Q7.Onanaveragehowmanyhourswouldyouworkaweek?________________
_________________________________________________.
Q8.Didyousignanemploymentcontractwhenyoustartedyourjob?
a.)yes
b.)no
c.)donotknow.
Q9.whattrainingdidyoureceiveforthejob?
a.)trainingbeforecommencedthejob.
b.)onthejobtraining
c.)notraining
d.)donotknow
Q10.Doyouhaveasupervisorataworkplace?
a.)yes
b.)no
c.)donotknow
Q11.Didyouremployerpaysyouduringyourtrainingperiod?
a.)yes
b.)no
c.)donotknow
NAME:_________________________________
ADDRESS:__________________________________
PHONENO.:____________________________
AGE:______________________________
SEX:______________________________
ETHNICBACKGROUND:_____________________________________
THANKYOUFORYOURTIMEANDASSISTANCEINTAKINGPARTINTHISSURVEY.

OPERATIONS
STRATEGY

OneofthefirstfastfoodmultinationalstosetfootinIndiawasKentuckyFriedChicken(KFC),ownedbyPepsiCo.KFC
receivedpermissiontoopen30newoutletsacrossthecountry.ItchoseBangaloreasitslaunchpadbecausethecityhada
substantialuppermiddleclasspopulation,withatrendoffamilieseatingout.Also,itwasconsideredIndiasfastgrowing
metropolisinthe1990.TheBangaloreoutletwasopenedinJune1995.ApartfromBangalore,PepsiCoplannedtoopen60
KFCandPizzaHutoutletsinthecountryoverthenextsevenyears.However,KFCbecameembroiledinvarious
controversiesevenbeforeitstartedfullfledgedbusinessinIndia.
ISSUESFACEDBYKFCININDIA:
ThecasehighlightstheethicalissuesinvolvedinKentuckyFriedChicken's(KFC)businessoperationsinIndia.KFCentered
Indiain1995andhasbeeninmidstofcontroversiessincethen.TheregulatoryauthoritiesfoundthatKFC'schickensdidnot
adheretothePreventionofFoodAdulterationAct,1954.Chickenscontainednearlythreetimesmoremonosodium
glutamate(popularlyknownasMSG,aflavorenhancingingredient)asallowedbytheAct.IndianpeoplecondemnedKFC's
entryintoIndia,sayingthatitwasunethicaltopromotehighlyprocessed'junkfood'inapoorcountrylikeIndiawithsevere
malnutritionproblems.Sincethelate1990s,KFCfacedsevereprotestsbyPeopleforEthicalTreatmentofAnimals(PETA),
ananimalrightsprotectionorganization.PETAaccusedKFCofcrueltytowardschickensandreleasedavideotapeshowing
theilltreatmentofbirdsinKFC'spoultryfarms.However,undeterredbytheprotestsbyPETAandotheranimalrights
organizations,KFCplannedamassiveexpansionprograminIndia.
KFCdidnotappreciatetheneedforprotectinganimalrightsindevelopedanddevelopingcountrieslikeIndia.
Theydidnotunderstandtheimportanceofethicsindoingbusiness.
TheydidnotexaminethereasonsforprotestsofPETA.
KFCdidnotaddtheflavoursandspicesintheirmenuwhichIndiansfavoured.
MajorreasonwasKFCwastargetinghigherincomegroupinIndiainordertocompetewiththelocalchickendhaba
walas.

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KFCReentryintoIndianMarket
KFCenteredIndiain1995,butacontroversysurroundingthelevelsofMSGinitspreparationsandsubsequentprotests
fromfarmers'groupsandanimalrightsactivistsspelttroubleforthecompany.Ultimately,thecompanyhadtoshutallbut
oneoutletinthecountry.Onlyrecentlyin2003itmadeaquietreentryintotheIndianmarket.Thenitcameupwiththe
strategiesandmenuthatwasdesirablebytheIndianconsumers.Andsince2003itisexpandingsuccessfullyitsbusinessin
India.
AtthesametimeitprovidedmenuitemswhichcanbeaffordedbythemiddleincomegrouplevellikeKFCsMiniBurgerfor
Rs.25,HotCrispyChickenwhichcontainedIndianspicesthatwerelikedbyIndians.Nowtheyareadheringtotherulesof
FoodCorporationofIndiaandPETA,helpingthemtoexpandbusinesssuccessfully.Thecompanyaimedattargeting
cosmopolitancitieslikeChandigarh,Pune,Kolkata,ChennaiandHyderabad,wheremallcultureisfastdeveloping.PepsiCo
alsodecidedtoconcentrateontheexpansionofKFCsinceitsotherbrand,"PizzaHut",hadsuccessfullyestablishedastrong
footholdinIndia.TheexpansiondrivewouldtakePizzaHutacross33citiesKFCwillsetfootinKolkataandHyderabadafter
havingforayedintoPunerecently.
MsSharanitaKeswani,Director,KFCMarketing,saysthatKFCalsooperatesonthefranchiseemodel."Weexpecttoscale
upto1213restaurantsbytheendofthisyear,fromsixatpresent.KFCislookingatextendingitspresenceacrossIndiato
createanationalfootprint."BothPizzaHutandKFChavemadevariousalterationstotheirmenusinIndiatoattractmore
footfalls.Ithasdevelopedarangeofpurevegetarianfood.Allthevegetarianproductsarestored,cookedandserved
separately,byaseparatecrewdistinctlyidentifiedbytheircolourcodeduniform,saysMsKeswani.
KFChasaround10,286unitsworldwide,followedbyTacoBellwith7,111restaurantunitsworldover.LongJohnSilver'sis
America'slargestquickserviceseafoodchainwithmorethan1,200unitsworldwide.KFCcaterstonearly7million
customersinmorethan78countriesthrough11,338outlets.ThecompanybelievesthatIndia,owingtoitssizeandgrowing
aspirationsofanupwardlymobilemiddleclass,isacriticalmarketinitsoverallschemeofthings.Yum!isafortune500
corporationthatoperatesorlicensesTacoBell,KFC,PizzaHut,andLongJohnSilversrestaurantsworldwide.
YUM!Brands,Inc.iscommittedtoconductingitsbusinessinanethical,legalandsociallyresponsiblemanner.Toencourage
compliancewithalllegalrequirementsandethicalbusinesspractices,YumhasestablishedthisSupplierCodeofConductfor
Yum'sU.S.suppliers.
Yum!hasadoptedbestoperationalpracticestoensurehighcustomerorientation,whichisdemonstratedthrough
C.H.A.M.P.S.Thisistheumbrellaoperationprogrammefortraining,measuringandrewardinganemployee'sperformance
againstcustomerstandards.C.H.A.M.P.Sstandsfor:cleanliness,hospitality,accuracy,maintenance,productqualityand
speed.KFCschallengehereistomakesuretomeetourqualitystandardsintermsoffood,facilities,peopleandtheoverall
experience.KFCwanttoensurethatthecustomersexperienceinIndiaisnodifferentfromaPizzaHutoutletanywhereelse
intheworld.
KFCcaterstonearly7millioncustomersinmorethan78countriesthrough11,338outlets.ThecompanybelievesthatIndia,
owingtoitssizeandgrowingaspirationsofanupwardlymobilemiddleclass,isacriticalmarketinitsoverallschemeof
things.Stringentcleaningstandardsensurethatalltables,chairs,highchairsandtraysaresanitisedseveraltimeseach
hour.Suchmeticulousattentiontocleanlinessextendsbeyondthelobbyandkitchentoeventhepavementandimmediate
areasoutsidetherestaurant.
Didyouknowthateveryyear,Rs.50,000croreworthoffoodproduceiswastedinIndia?Thisismainlybecauseofthelack
ofproperinfrastructureforstorageandtransportationundercontrolledconditions.KFCiscommittedtoprovidingquality
productswhilesupportingotherIndianbusinesses.Andso,KFCspentafewyearssettingupauniqueSupplyChain,even
beforetheyopenedtheirfirstrestaurantinIndia.
KFCsSupplyChain
ASupplyChainisanetworkoffacilitiesincludingmaterialflowfromsuppliersandtheir"upstream"suppliersatalllevels,
transformationofmaterialsintosemifinishedandfinishedproducts,anddistributionofproductstocustomersandtheir
"downstream"customersatalllevels.So,rawmaterialflowsasfollows:suppliermanufacturerdistributorretailer
consumer.Informationandmoneyflowsinthereversedirection.Thebalancebetweenthese3flowsiswhataSupplyChain
isallabout.
Whenthereisabalanceinthefinishedproductordering,theSupplyChainoperatesatitsbest.Anymajorfluctuationinthe
productorderingpatterncausesexcess/fluctuatinginventories,shortages/stockouts,longerleadtimes,higher
transportationandmanufacturingcosts,andmistrustbetweensupplychainpartners.ThisiscalledtheBullwhipEffect.
Dependingonthesituation,theSupplyChainmayincludemajorproductelements,varioussuppliers,geographically
dispersedactivities,andbothupstreamanddownstreamactivities.Itiscriticaltogobeyondonesimmediatesuppliersand
customerstoencompasstheentirechain,sincehiddenvalueoftenemergesoncetheentirechainisvisualized.For
example,adieselenginemanufacturermaybeabletointegrateaGPSlocatorsystemintoitsenginecontrolsystem.Its
immediatecustomer,aheavytruckmanufacturer,mayseenoneedforthisfunctionality.However,thedownstream
customer,atruckingcompanywithalargefleet,maybeveryinterestedinalocatorsystem.Understandingthevaluetothe
downstreamcustomerispartofthesupplychainmanagementprocess.
ColdChain
TheColdChainisnecessarytomaintaintheintegrityoffoodproductsandretaintheirfreshnessandnutritionalvalue.The
ColdChainisanintegralpartoftheSupplyChain.SettinguptheColdChaininvolvesthetransferofstateoftheartfood
processingtechnologybyKFCanditsinternationalsupplierstopioneeringIndianentrepreneurs,whohavenowbecomean
integralpartoftheColdChain.
ThetermColdChaindescribesthenetworkfortheprocurement,warehousing,transportationandretailingoffoodproducts
undercontrolledtemperatures.KFCsoutletsstoreproductstobeusedonadailybasis,withinatemperaturerangeof
18Cto4C.About52%ofthefoodproductsneedtobestoredundertheseconditionsbeforetheyareused.
VitalLinksinKFCsColdChain
AllsuppliersadheretoIndiangovernmentregulationsonfood,healthandhygienewhilecontinuouslymaintainingKFC's
recognizedstandards.Astheingredientsmovefromfarmstoprocessingplantstotherestaurant,KFC'sQualityInspection
Programme(QIP)carriesoutqualitychecksatover20differentpointsintheColdChainsystem.SettingupoftheCold
ChainhasalsoenabledKFCtocutdownonoperationalwastage.
HazardAnalysisCriticalControlPoint(HACCP)isasystematicapproachtofoodsafetythatemphasizespreventionofillness
orpresenceofmicrobiologicaldatawithinKFCssupplierfacilitiesandtheoutletsratherthanitsdetectionthroughinspection.
BasedonHACCPguidelines,controlpointsandcriticalcontrolpointsforallKFCmajorfoodprocessingplantsandoutletsin
Indiahavebeenidentified.TheHACCPverificationisdoneatleasttwiceinayearandcertified.
TriyakaAgricultureSupplierofIcebergLettuce
ImplementationofadvancedagriculturalpracticeshasenabledTrikayatosuccessfullygrowspecialitycropslikeiceberg
lettuce,specialherbsandmanyorientalvegetables.Farminfrastructurefeatures:
Aspecialisednurserywithateamofagriculturalexperts.
Dripandsprinklerirrigationinraisedfarmbedswithfertilisermixingplant.
Precoolingroomandalargecoldroomforpostharvesthandling.
Refrigeratedtruckfortransportation.
VistaProcessedFoodsPvt.Ltd.SupplierofChicken&Vegetable
AjointventurewithOSIIndustriesInc.,USA,andKFCIndiaPvt.Ltd.VistaProcessedFoodsPvt.Ltd.producesarangeof
frozenchickenandvegetablefoods.AworldclassinfrastructureatitsplantatTaloja,Maharashtra,has:
Separateprocessinglinesforchickenandvegetablefoods.
Capabilitytoproducefrozenfoodsattemperatureaslowas35DegreeCelsiustoretaintotalfreshness.
Internationalstandards,proceduresandsupportservices.
DynamixDiarySupplierofCheese
DynamixhasbroughtimmensebenefitstofarmersinBaramati,Maharashtrabysettingupanetworkofmilkcollection
centresequippedwithbulkcoolers.Easyaccessibilityhasenabledfarmersaugmenttheirincomebyfindinganewmarket
forsurplusmilk.Thefactoryhas:
Fullyautomaticinternationalstandardprocessingfacility.
Capabilitytoconvertmilkintocheese,butter/ghee,skimmedmilkpowder,lactose,casein&wheyproteinandhumanised
babyfood.
StringentqualitycontrolmeasuresandcontinuousResearch&Development
AmritFoodSupplierofMilk&MilkProducts(FrozenDesserts)
AmritFood,anISO9000company,manufactureswidelypopularbrandsGaganMilkandNandanGheeatitsfactoryat
Ghaziabad,UttarPradesh.Itsplanthas:
Stateoftheartfullyautomaticmachineryrequiringnohumancontactwithproduct,fortotalhygiene.
Installedcapacityof6000litresperhourforproducinghomogenizedUHT(UltraHighTemperature)processedmilkand
milkproducts.
Strictqualitycontrolsupportedbyafullyequippedqualitycontrollaboratory.
RadhakrishnaFoodlandDistributionCentre
AnintegralpartoftheRadhakrishnaGroup,Foodlandspecialisesinhandlinglargevolumes,providingtheentirerangeof
servicesincludingprocurement,qualityinspection,storage,inventorymanagement,deliveries,datacollection,recording
andreporting.Salientstrengthsare:
Aonestopshopforalldistributionmanagementservices.
Dryandcoldstoragefacilitytostoreandtransportperishableproductsattemperaturesupto22DegreesCelsius.
Effectiveprocesscontrolforminimumdistributioncost.
KFCtakegreatprideandcaretoprovidecustomerswiththebestfoodanddiningexperienceinthequickserviceoutlet
business.Theybelieveeatingsensibly,combinedwithappropriateexercise,isthebestsolutionforahealthylifestyle.KFC
offersavarietyofmenuitemsforthosethatwantlowerfatandlowercaloriechoicesintheirmenu.
LocalSourcing
KFChasalwaysbeencommittedtosourcingitsrequirementsfromlocalsuppliersandfarmers.Thisassuranceisrootedin
thephilosophyofourcompany'sfounder.HefirmlybelievedinmutualbenefitsarisingfromapartnershipbetweenKFCand

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thelocalbusinesses,thusensuringthatKFCcommitmenttogrowthwasmirroredbythatofitspartners.
Inkeepingwiththisbelief,KFChascarefullyidentifiedlocalIndianbusinessesthattakeprideinsatisfyingcustomersby
presentingthemwiththehighestqualityproducts.AdherencetoIndianGovernmentregulationsonfood,healthandhygiene
isnowatoppriority.
KFCIndiatodaypurchasesmorethan96%ofitsproductsandsuppliesfromIndiansuppliers.Evenourrestaurantsare
constructedusinglocalarchitects,contractors,labourandmaximumlocalcontentinmaterials.TherelationshipbetweenKFC
anditsIndiansuppliersismutuallybeneficial.AsKFCexpandsinIndia,thesuppliergetstheopportunitytoexpandhis
business,hasaccesstothelatestinfoodtechnology,andgetsexposuretoadvancedagriculturalpracticesandtheabilityto
growortoexport.
Allourrawmaterialstoo,havecertificationsfromoursupplierstoconfirmthattheycomplywithhalalrequirements.Allin
all,ourcommitmenttohalalunderscoresourcommitmenttoputtingCustomersFirstinallthatwedo.Toensurethatall
ourlocallymanufacturedproductsconformtohalalrequirements,weimplementstringentinternalcontrolsoverraw
materials,manufacturingandpackaging.Weareextremelycarefultopreventcrosscontaminationwithfilthordangerous
contaminantsduringthestorage,preparation,handling,packagingandtransportofourproducts.Wealsoadheretobest
practicestomaintainthehigheststandardsofqualityandhygiene.
KFCOperationalModel
Problem
Whatistheperfectdiet?Anidealdietwouldmeetorexceedbasicnutritionalrequirements,beinexpensive,havevariety,
andbe``pleasingtothepalate''.Howcanwefindsuchadiet?
Supposetheonlyfoodsintheworldareasfollows:
Afterconsultingwithnutitionists,wedecreethatasatisfactorydiethasatleast2000kcalofenergy,55gofprotein,and800
mgofcalcium(vitaminsandironaresuppliedbypills).Whilesomeofuswouldbehappytosubsiston10servingsofpork
andbeans,wehavedecidedtoimposevarietybyhavingalimitonthenumberofservings/dayforeachofoursixfoods.
Whatistheleastcostsatisfactorydiet?
Formulation:
Firstwedecideondecisionvariables.Letuslabelthefoods1,2,...6,andletrepresentthenumberofservingsoffoodiin
thediet.
Ourobjectiveistominimizecost,whichcanbewritten
Wehaveconstraintsforenergy,protein,calcium,andforeachserving/daylimit.Thisgivestheformulation:

MARKETING
STRATEGY

KFCasaBrand
KFCisoneofthebestknownbrandsworldwideDoingIntegratedassignmentwestudyhowKFCcontinuallyaimstobuildits
brandbylisteningtoitscustomer'salsoidentifiesthevariousstagesinthemarketingprocess.
Brandingdevelopsapersonalityforanorganization,productorservice.BrandImagerepresentshowconsumersviewthe
organization.
Brandingonlyworkswhenbehavesandpresentsitselfinaconsistentway,Marketingcommunicationmethods,suchas
advertisingandpromotion,areusedtocreatedcolors,designandimagewhichgivesarecognizableface.AtKFCthisis
representedbyitsfamiliarlogoColonelHarlandSandersissheddinghiswhitesuitjacketforaredcook.
Marketinginvolvesidentifyingcustomer'sneedsandrequirementsandmeetingtheseneedsinbetterwaythenits
competitors.Inthiswayacompanycreatesloyalcustomers.
ThestatingpointistofindoutwhoarepotentialcustomersarenoteveryonewillwantwhatKFChastooffer.Thepeople
KFCidentifiesaslikelycustomersareknownaskeyaudiences.
TheMarketingMixandMarketingResearch.
Havingidentifieditskeyaudiencesacompanyhastoensureamarketingmixthatcreatedthatappealsspecificallytothose
people.Themarketingmixisatermusedtodescribethefourmainmarketingtools(4P's):
1.Product
2.Price
3.Place
4.Promotion

Usingthatdetailedinformationaboutitscustomers.KFC'smarketingdepartmentcandetermine:
1.Whatproductsarewellreceived?
2.Whatpricesconsumerwillingtopay?
3.WhatT.V.Programmes,newspapersandadvertisingconsumerreadorview?
4.Whatrestaurantsarevisited?
MarketresearchistheformatwhichenablesKFCtoidentifythiskeyinformation.Accurateresearchisessentialincreating
therightmixtowincustomersloyalty.
InallitsmarketKFCfacescompetitionfromotherbusinesses.Additionallyeconomic,legalandtechnologicalchanges,social
factorsretailenvironmentandmanyotherelementsaffectKFCsuccessinthemarket.
Marketresearchidentifiesthesefactorsandanticipateshowtheywillaffectpeopleswillingnesstobuy.Astheeconomyand
socialattitudeschange,sodobuyingpatterns.KFCneedstoidentifywhetherthenumberoftargetcustomersisgrowingor
shrinkingandwhethertheirbuyinghabitswillchangeinthefuture.
Marketresearchconsiderseverythingthataffectbuyingdecisions.Thesebuyingdecisionscanoftenbeaffectedbywider
factorsthanjusttheproductsitself.Lfpsychologicalfactorsareimportant,e.g.whatimagedoestheproductgiveorhowthe
consumerfeelswhenpurchasingit?Throughmarketing,McDonaldsestablishesaprominentpositioninthemindsof
customers.ThisisknownasBranding.
MeetingtheneedsofKeyaudience
Therearealimitednumberofcustomersinthemarket.Tobuildlongtermbusinessitisessentialtoretainpeopleoncethey
havebecomecustomers.ForexampleaparentwithtwochildrenmightvisitandvisitsKFCtogivethechildrenatreat.
Childrenwanttovisitsasitisfunplacetoeat.AbusinesscustomervisitsKFCduringtheworkdayasserviceisquickthe
foodtasteisgreatandcanbeeateninthecarwithoutaffectingabusyworkschedule.Theseexamplesrepresentjustafew
ofKFC'spossiblecustomersprofile.EachhasdifferentreasonstocomeKFC.
UsingthistypeofinformationKFCcantailorcommunicationtotheneedsofspecificgroups.Itistotheneedsofspecific
group.Itistheirneedsthatdeterminethetypeofproductsandservicesoffered,pricescharged,promotions

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Createdandwhererestaurantsarelocated.Tomeettheneedsofthekeymarketitisimportanttoanalysestheinternal
marketingstrengthstheorganization.
Strengthsandweaknessesmustbeidentified,sothatamarketingstrategywhichisrightforthebusinesscanbedecided
upon.
Theanalysiswillincludethe:
Companysproductsandhowappropriatetheyareforthefuture.
Qualityofemployeesandhowwelltrainedtheyaretotheseadditionalpsychologicalfactorsaresignificantlyofferthebest
servicetoimportanttothecustomer.Theycanbeevenmorecustomersimportantthantheproductsphysicalbenefits.
Systemsandhowwelltheyfunctioninprovidingcustomersatisfactione.g.marketingdatabasesandrestaurantsystems.
Financialresourcesavailableformarketing.
Thebusinesscanthendeterminewhatitneedstodoinidentifydifferenttypesofcustomers.Forexample:
AparentwithtwochildrenmightvisitVisitsKFCtogivethechildrentreat.
AchildrenwantstovisitKFCAsitisafunplacetoeat
Abusinesscustomer
VisitsKFCduringtheworkdayasserviceisquick,thefoodtasteisgreatcanbeeateninthecarwithoutaffectingbusywork
schedule.
TeenagervisitsKFC
TheRupeesavermenuisaffordableandthereisInternetaccessinsomerestaurant.
TheseexamplesrepresentjustafewofKFCpossiblecustomerprofileseachhasdifferentreasonstocomeKFC.Usingthis
typeofinformationKFCcantailorcommunicationtotheneedsofspecificgroups.Itistheirneedsthatdeterminethetypeof
productsandservicesoffered,pricescharged,promotionscreatedandwhererestaurantsarelocated.Tomeettheneedsof
thekeymarketitisimportanttoanalyzetheinternalmarketingstrengthsandweaknessesmustbeidentified,sothata
marketingstrategywhichisrightforthebusinesscanbedecidedupon.Theanalysiswillincludethe:
Companysproductsandhowappropriatetheyareforthefuture
Qualityofemployeesandhowwelltrainedtheyaretotheseadditionalpsychologicalfactorsaresignificantlyofferthebest
servicetoimportanttothecustomer.Theycanbeevenmorecustomersimportantthantheproductsphysicalbenefits.
Systemsandhowwelltheyfunctioninprovidingcustomersatisfactionexamplemarektingdatabase
Financialresourcesavailableformarketing
Oncethestrengthsandweaknessesaredetermined,theyarecombinedwiththeopportunitiesandthreatsinthemarket
place.ThisisknownasSWOTanalysis(Strengths,Weaknesses,Opportunities,andThreats).
Thebusinesscanthendeterminewhatitneedstodoinordertoincreaseitschancesofmarketingsuccessfully.
SwotAnalysis
Strengths(Internal)
thebranddetailedmarketresearchtocreatetherightmarketingmix.

Weaknesses(Internal)
Kfchasbeenforaroundlongtime.thereforetheyhavetokeepinnovating.

Opportunities(External)
increasingnumberofcustomerslookingforfoodthatisservedinquickandfriendlyway.

Threats(External)
Newcompetitorschanginglifestyles.
MorepeopledaybydaybecomingVegetarianday
byday.

MarketingObjectives
AmarketingplanmustbecreatedtomeetclearObjectives.
Objectivesguidemarketingactionsandareusedtomeasurehowwellaplanisworking.Thesecanberelatedtomarket
share,sales,andgoals,reachingthetargetaudienceandcreatingawarenessinthemarketplace.
TheobjectivescommunicatewhatmarketerswanttoachieveLongtermobjectivesarebrokendownintoshorterterm
measurabletargets,whichKFCusesasmilestonesalongtheway.
Resultscanbeanalyzedregularlytoseewhetherobjectivesarebeingmet.Thistypeoffeedbackallowsthecompanyto
changeplans.Itgivesflexibilitymarketingobjectivesaresetthenextstageistodefinehowtheywillbeachieved.The
marketingstrategyisthestatementofhowobjectiveswillbedelivered.Itexplainswhatmarketingactionsandresources
willbeusedandhowtheywillworktogether.

4P'sofMarketing
Atthispointthemarketingmixisputtogether:
1.Product
Itisimportantthingtorememberwhenofferingmenuitemstocustomersisthattheyhaveachoice,theyhaveahuge
numberofways
ofspendingtheirmoneyandplacestospendit.
Therefore,KFC'splacesconsiderableemphasisondevelopingamenuwhichcustomerswant.Marketresearchestablishes
exactlywhatthisis.
Howevercustomersrequirementschangeovertime.Whatisfashionableandattractivetodaymaybediscardedtomorrow.
Marketingcontinuouslymonitorscustomerspreferences.InordertomeetthesechangesKFChasintroducedandphased
outoldones.Andwillcontinuetodoso.
Careistakennottoadverselyaffectthesaleofonechoicebyintroducinganotherchoice
whichwillcannibalizethesalefromtheexistingone(tradeoff).KFCknowsthatitemsonitsmenuwillvaryinpopularity.
Theirabilitytogenerateprofitswillvaryatdifferentpointsintheirlifecycle.
Productsgothroughalifecyclewhichisillustratedbelow:

Thetypeofmarketingtakenandamountinvestedwillbedifferent,dependinguponthestageproductisreached.For
examplelaunchinganewproductinvolvesautomaticallytelevisionandotheradvertisingsupport.
Atanytimecompanywillhaveaportfolioofproductseachisindifferentstageofitslifecycle.SomeofKFC'soption

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growingtremendouslybutsomeHalalproductsisinitsmaturitystage.
2.Price
Thecustomersperceptionofvalueisanimportantdeterminantofthepricecharged.
Customersdrawtheirownmentalpictureofwhataproductisworth.Aproductismorethanaphysicalitem,italsohas
psychologicalconnotationsforthecustomer.
Thedangerofusinglowpriceasamarketingtoolisthatthecustomermayfeelthatqualityisbeingcompromised.Itis
importantwhendecidingonpricetobefullyawareofthebrandsandintegrity.
Afurtherconsequenceofpricereductionisthatcompetitorsmatchpricesresultinginnoextrademand.Thismeansthe
profitmarginhasbeenreducedwithoutincreasingsales.
3.Promotion
Thepromotionsaspectofthemarketingmixcoversallmarketingcommunications.Themethodsincludeadvertising,
sometimesknownasabovethelineactivity.AdvertisementsconductedonT.V.,Radio,newspaper,onwebsite,etc.
Whatdistinguishesadvertisingfromothermarketingcommunicationsisthatmediaownersarepaidbeforetheadvertiser
cantakespaceinthemedium.Otherpromotionalmethodsincludesalespromotions,telemarketing,exhibitions,seminars,
loyaltyschemesdoordrops,demonstrations,etc.Theskillinmarketingcommunicationsistodevelopacampaignwhich
usesseveralofthesemethodsinawaythatprovidesthemosteffectiveresults.
Forexample,TVadvertisingmakespeopleawareofafooditemandpressadvertisingprovidesmoredetail.Thismaybe
supportedbyinstorepromotionstogetpeopletotrytheproductandacollectablepromotionaldevicetoencouragethem
tokeepbuyingtheitemsupporteachotheranddonotconfusecustomers.
Athoroughunderstandingofwhatthebrandrepresentsisthekeytoaconsistentmessagethepurposeofmostmarketing
communicationsistomovethetargetaudiencetosometypeofaction.Thismaybetobuytheproduct,visitarestaurant,
andrecommendthechoicetoafriendorincrease,purchaseofthemenuitem.KeyObjectiveofadvertisementistomake
peopleawareofanitemfeelpositiveaboutitandrememberit.
ThemoreKFCknowsaboutthepeopleitisservingthemoreitisabletocommunicatemessageswhichappealtothem.
Messagesshouldgaincustomersattentionandkeeptheirinterest.Thenextstageistogetthemtowantwhatisoffered.
Showingthebenefitswhichtheywillobtainbytakingactionareusuallysufficient,therightmessagemustbetargetedtothe
rightaudience.
Forexample,toreachasingleprofessionalwomanwithincomeaboveacertainlevel,itmaybebettertotakean
advertisementinCosmopolitanthanWomanEra.Toadvertisetomotherswithchildren,itmaybemoreeffectivetotake
advertisingspaceincinemasduringDisneyfilms.
Therightmediadependsonwhotheviewers,readersorlistenersareandhowcloselytheyresemblethetargetaudience.
4.Place
Placeinthemarketingmix,isnotjustaboutthephysicallocationordistributionpointsforproducts.Itencompassesthe
managementofrangeofprocessesinvolvedinbringingproductstotheendconsumer.
InDelhiKFChasopenitsshopwheremiddleandhigherclassfamily,teenagerswillcomeandenjoythefood.
WhatwehavefindaboutKFC,bypreparingquestionnaireandmakingahypothesisontheresultofquestionnaire.
Questionnaire
Pleasetelluswhatyoulikedandwhatyoudidn'taboutyourvisit.HelpUstoprepareaintegratedassignmentandimprove
KFC,sothateveryvisittoKFCwillhaveyousay,itfingerlickinggood..!
PleaserateonthefollowingCriterion:
Ambience
Airline1.excellent2.good3.ok4.bad5.worstBlueline
Dcor
Inviting1.excellent2.good3.ok4.bad5.worstFrightening
Service
Quick
Ferrari1.excellent2.good3.ok4.bad5.worstAnari
Impressive
Gold1.excellent2.good3.ok4.bad5.worstCold
Complete
Allthere1.excellent2.good3.ok4.bad5.worstWhatwhenwhere
Food
Hot'n'Fresh
Mother'sKitchen1.excellent2.good3.ok4.bad5.worstHostelMess
Taste
Tastesyummy1.excellent2.good3.ok4.bad5.worstTastesfunny
Variety
Hazzar1.excellent2.good3.ok4.bad5.worstN'tagainyaar
PriceNottomuch1.excellent2.good3.ok4.bad5.worstLetsgodutch
Courtesy
Yahoooo1.excellent2.good3.ok4.bad5.worstDump
Cleanliness
Diningarea
Caneatoffthefloor1.excellent2.good3.ok4.bad5.worstCan'teathereanymore.
Washrooms
Soapsebhisaaf1.excellent2.good3.ok4.bad5.worstArebhaimaafKaro
ValueForMoney
Ilefthappy1.excellent2.good3.ok4.bad5.worstIleftbroke
HowoftendoyouvisitKFC
1.Daily2.weekly3.Monthly4.Occasionally
Wehaddonesurveyon40people,30peoplewereshowingresultproductorientedand10
mainlyonserviceorientedat.001significancelevel24.32goodnessoffit.

MANAGEMENTINFORMATION
SYSTEMS
STRATEGY

ManagementInformationSystems(MIS)isthetermgiventothedisciplinefocusedontheintegrationofcomputersystems
withtheaimsandobjectivesonanorganization.
EachKFCoutletuseMISinaccounting,knowingproduction,andveryusefulinformulatingHRpolicieswhichhelpsthemto
ratetheiremployees.

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Thedevelopmentandmanagementofinformationtechnologytoolsassistsexecutivesandthegeneralworkforcein
performinganytasksrelatedtotheprocessingofinformation.MISandbusinesssystemsareespeciallyusefulinthe
collationofbusinessdataandtheproductionofreportstobeusedastoolsfordecisionmaking.
Withcomputersbeingasubiquitousastheyaretoday,there'shardlyanylargebusinessthatdoesnotrelyextensivelyon
theirITsystems.However,thereareseveralspecificfieldsinwhichMIShasbecomeinvaluable.
MISsystemscanbeusedtotransformdataintoinformationusefulfordecisionmaking.Computerscanprovidefinancial
statementsandperformancereportstoassistintheplanning,monitoringandimplementationofstrategy.
MISsystemsprovideavaluablefunctioninthattheycancollateintocoherentreportsunmanageablevolumesofdatathat
wouldotherwisebebroadlyuselesstodecisionmakers.Bystudyingthesereportsdecisionmakerscanidentifypatternsand
trendsthatwouldhaveremainedunseeniftherawdatawereconsultedmanually.
MISsystemscanalsousetheserawdatatorunsimulationshypotheticalscenariosthatanswerarangeofwhatif
questionsregardingalterationsinstrategy.Forinstance,MISsystemscanprovidepredictionsabouttheeffectonsalesthat
analterationinpricewouldhaveonaproductwhichisveryusefulforKFCfuturedevelopment.TheseDecisionSupport
Systems(DSS)enablemoreinformeddecisionmakingwithinanenterprisethanwouldbepossiblewithoutMISsystems.
NotonlydoMISsystemsallowforthecollationofvastamountsofbusinessdata,buttheyalsoprovideavaluabletime
savingbenefittotheworkforce.Whereinthepastbusinessinformationhadtobemanuallyprocessedforfilingandanalysis
itcannowbeenteredquicklyandeasilyontoacomputerbyadataprocessor,allowingforfasterdecisionmakingand
quickerreflexesfortheenterpriseasawhole.
ManagementbyObjectives
WhileMISsystemsareextremelyusefulingeneratingstatisticalreportsanddataanalysistheycanalsobeofuseasa
ManagementbyObjectives(MBO)tool.
MBOisamanagementprocessbywhichmanagersandsubordinatesagreeuponaseriesofobjectivesforthesubordinate
toattempttoachievewithinasettimeframe.ObjectivesaresetusingtheSMARTratio:thatis,objectivesshouldbe
Specific,Measurable,Agreed,RealisticandTimeSpecific.
Theaimoftheseobjectivesistoprovideasetofkeyperformanceindicatorsbywhichanenterprisecanjudgethe
performanceofanemployeeorproject.
BenefitsofMIS
ThefieldofMIScandeliveragreatmanybenefitstoenterprisesineveryindustry.Expertorganizationssuchasthe
InstituteofMISalongwithpeerreviewedjournalssuchasMISQuarterlycontinuetofindandreportnewwaystouseMISto
achievebusinessobjectives.
KFCsCoreCompetencies
Everymarketleadingenterprisewillhaveatleastonecorecompetencythatis,afunctiontheyperformbetterthantheir
competition.Bybuildinganexceptionalmanagementinformationsystemintotheenterpriseitispossibletopushoutahead
ofthecompetition.MISsystemsprovidethetoolsnecessarytogainabetterunderstandingofthemarketaswellasabetter
understandingoftheenterpriseitself.
EnhanceSupplyChainManagement
Improvedreportingofbusinessprocessesleadsinevitablytoamorestreamlinedproductionprocess.Withbetter
informationontheproductionprocesscomestheabilitytoimprovethemanagementofthesupplychain,including
everythingfromthesourcingofmaterialstothemanufacturinganddistributionofthefinishedproduct.
QuickReflexes
Asacorollarytoimprovedsupplychainmanagementcomesanimprovedabilitytoreacttochangesinthemarket.Better
MISsystemsenableanenterprisetoreactmorequicklytotheirenvironment,enablingthemtopushoutaheadofthe
competitionandproduceabetterserviceandalargerpieceofthepie.
ThesefactorshelpKFCtoworksmoothlyandefficientlyaswealreadyknownthattheyaretheonlyfastfoodchainwhichis
sellingfriedchickeninwhichtheyarespecialized.
MISsystemslettheKFCmanagement:
Tocaptureinformationandstoreit,whenevertheyaremakingbillsithelpsthemtocountsalesperday,perweekandper
monthbecauseacopyofthebillisstoredinthecomputer.
Accessstoredinformationeasilyandmanipulateitfortheneedsoftheirclientswhilebillingortakingordertheyjustenter
thecodeoftheproductrequestedatthattimeandthequantitydemanded.
ProductcodeProductnameProductprice(inRs.)
01SmallCoke20
02Mediumcoke35
03Largecoke45
04Smallcoke+LollipopChicken65
05FriedChickentub(small)105
06SmallFrenchFries25
07LargeFries45
08ChickenBurger25
09FriedChickentub(large)145
10Veg.Burger20
InKFCtheabovementionedkindofinformationisstoredineachcomputerthattheyusetomaintainisSAPsalemodule
.Theygivencodestotheir45productsjustbyenteringthecodetheproductnamecomesoutwithcostonthescreen.
NOTE:Thisisahypotheticaltableandthepricesmentionedmaydiffertheactualprices.
Controlflowofinformationinto,aroundandoutofthesystems.
WorkwithinlegislationsuchastheDataprotectionAct.
Manageresourcesthisisaveryimportantfunctionaseverydayinventoryisrecordedandthereforeresourcescouldbe
managed.
Producereportsforthemselvessothattheycancomparetheirownperformanceswiththeirownandother.
Maintainrecordsneededforqualitycontrolsothatthesuccessstoryofalltheemployeescanbeappraised.
RespondconfidentlytothedemandsoftheCommonInspectionFrameworkMIShelpthembecausetheynoweasilycheck
whenthelaststockingwasdone.
Manageandtrackemployeerecordsofwork,achievementandprogressionforpromotions.
Recordandtrackoutcomes.
Managemarketinginformationtofurtherimprovesales..
Andahostofotherinformationrelatedfunctions.
IfManagementInformationSystemsareflexible,andrelatetotheneedsoftheorganization,theclientsandthecurriculum
thattheyaredelivering,thentheyworkwellandeffectively.Onehastobesurethat,whateversystemsyouuse,theysuit
yourpurposesandcanbecustomizedtodoso,areeasytouseandallowrapiddataentrywithrapidandflexibleaccessfor
reportingpurposes.

ANNEXURES
Annexure1
KFCBalanceSheet
YearMar07(incrores)
ShareCapital22.80
Reserves&Surplus1,171.68
TotalShareholdersFunds1,194.48
SecuredLoans207.76
UnsecuredLoans0.00
ShopSecurityDeposits2.07
TotalDebt209.83

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TotalLiabilities1,404.31
GrossBlock1,505.45
Less:Accum.Depreciation118.45
NetBlock1,387.00
CapitalWorkinProgress26.33
Investments24.59
Inventories8.31
SundryDebtors13.30
CashandBank34.15
LoansandAdvances99.36
CurrentLiabilities109.63
Provisions79.10
NetCurrentAssets33.61
MiscellaneousExpensesnotw/o0.00
TotalAssets1,404.31
ContingentLiabilities2.40

Annexure2
ProfitandLossAccountKFC
YearMar07(incrores)
Restaurants,Services&Others413.78
OtherIncome1.34
TotalIncome415.12
Food,Bevarages&ProvisionsConsumed33.52
Power&FuelCost22.26
EmployeeCost53.60
OtherOperating&GeneralExpenses111.94
MiscellaneousExpenses13.47
Less:PreoperativeExpenditureCapitalised0.00
ProfitbeforeInterest,Depreciation&Tax180.33
Interest&FinancialCharges17.35
ProfitbeforeDepreciation&Tax162.98
Depreciation22.11
ProfitBeforeTax140.87
Tax49.37
ProfitAfterTax91.50
Adjustmentbelownetprofit0.00
P&LBalancebroughtforward62.72
Appropriations35.29
P&LBal.carrieddown118.93
ExtraordinaryItems1.48

BIBLIOGRAPHY
KFCistheServicesectorcompanywhichwehavechosenforourintegratedassignment.Wegotalltheinformationabout
KFCgroupfromvariousresourceslike:
WevisitedonvariousoutletsofKFCinDelhi,NoidaandGhaziabadforgettingtheinformationaboutservicesand
resourcesusedinmakingfoodatKFC.
A.TwooutletsatNoida,oneatsecor18andsecondatcenterstagemall.
B.Ghaziabad.
C.Lajpatnagar,delhi
Someofthemgaveusthefavorableresponseandsomeofthemwerereluctantinnotprovidingustheinformationon
variousfunctionsofKFC.TheywereclearonthestatementthattheyhavenoauthoritytoexposetheinformationaboutKFC
strategies.
WedidthesamplesurveyinallthemarketswevisitedatdifferentlocationofDelhiandNCRregionforgettingthe
knowledgeaboutpotentialdemandofKFC.ThroughthiswewereabletoknowwhatpeoplethinkaboutKFCandwereable
todrawtheinformationaboutKFC.
BooksReferences:
1.HumanResourcesauthoredbyVSPRao.
2.CorporateFinancebyKhan&Jain.
3.StatisticalMethodsbyS.PGupta
4.OperationsResearchbyJ.KSharma
5.ManagementInformationSystemsbyLauden&Lauden.
6.MarketingManagementbyPhilipKotler&Armstrong.
WevisitedKFCwebsiteWelcometoKFC.com.
Weusedsearchenginesofgoogle,yahooandrediffforgettingmoreknowledgeaboutKFC,itsproducts,outletsand
globalinformation.
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