COMPANY DESCRIPTION

Established in California during the 1940s by two brothers, the McDonalds restaur
ant became a popular teen hangout in the first flush of post-war affluence. To f
eed these youthful bodies, the brothers reduced the menu to the perennial favour
ite hamburgers, applied assembly line techniques to food production and expanded
to four restaurants by 1953. Taking note of the brothers success, in 1955, Entre
preneur Ray Kroc bought the right to franchise the McDonalds System. Renamed the
McDonalds Corporation in 1960, Kroc focused his marketing effort on the family me
al and children, spending heavily on television advertising which promoted the s
miling clown face of its child-friendly brand mascot, Ronald McDonald. Today, th
e McDonalds franchise exceeds 30,000 restaurants globally and serves over 50 mill
ion people in more than 121 countries each day.
GOALS AND OBJECTIVES
1. McDonalds vision is to be the worlds best quick service restaurants experience.
2. McDonalds is committed to maintaining and developing the best food products
in the quick service restaurant market. 3. In order to deliver this, the company
has made a number of commitments to food safety and nutrition. 4. Lead the Quic
k Service Restaurant market by a program of site development and profitable rest
aurant openings, and by attracting new customers. Increasing sales through promo
tions will enable them to continue their program of expansion. 5. McDonalds have
an objective to continual enhance and improve their menu. This will
better satisfy their customers and give customers more reason to visit. Many ide
as for new items on the menu come from the franchisees responding to customer de
mand. Consumer tastes change over time and McDonalds has to respond to these cha
nges.
MISSION STATEMENT
"McDonald s vision is to be the world s best quick service restaurant experience
. Being the best means providing outstanding quality, service, cleanliness, and
value, so that we make every customer in every restaurant smile."
CORE COMPETENCY AND SUSTAINABLE COMPETITIVE ADVANTAGE
McDonalds core competency is providing convenience when people need and want to e
at fast food at prices that are competitive and provide best value for the custo
mers money. One of McDonalds competitive advantages is its focus on consistency of
quality, production of food and use of raw materials all around the world. The
world recognition associated with the brand McDonalds itself is also one of McDon
alds competitive advantages.
Demand Trends:
There are many variations observed in the demand trends for McDonalds in Pakistan
. The trend followed by the high income group is relatively stable and they comp
rise a very small percentage. The changes in the economy have very little effect
on the demand trends of McDonalds that is being followed by this high income gro
up. Other reasons for these variations are: McDonalds is a brand that is mostly p
erceived by an average Pakistani customer to be a place which is visited on some
occasion or once in a while. The main reason for this is the low disposable inc
ome that people have because of the inflation and some other unemployment reason
s. On the other hand McDonalds lovers such as college students, working individua
ls, kids and families fond of spending a lot on fast food restaurants make it a
place to be visited very frequently. One of the reasons is high disposable incom
e by blue collar individuals. Another reason is the attraction for McDonalds by k
ids as well as those who love it for every reason. There are also global issues
which affect food demand for McDonalds e.g. bird flu and cow diseases in western
countries brought down demand for McDonalds some years ago as it was a known fact
that they get their meat from international suppliers in order to maintain qual
ity. The demand also fell because of the security issues that affected demand fo
r McDonalds, e.g. suicide attacks on western establishments a year ago. One of t
he reasons for the decrease in the demand trend for McDonalds is the hostile atti
tude of the general public in Pakistan towards all the Western restaurants and m
ultinational companies. Therefore the demand trends for McDonalds have declined b
ecause of the some of the ill activities that have been observed during past som
e years regarding McDonalds.
Like many other nations people in Pakistan are becoming quite health conscious.
Fast food restaurants are giving rise to problems related to heart and others su
ch as obesity and excessive cholesterol that are making people very conscious. T
herefore it has been observed that to avoid such problems people have changed th
eir eating patterns and are spending less on restaurants such as McDonalds.
Key Success Factors:
McDonald s Pakistan has an aggressive plan to expand in all other cities of Paki
stan and is rapidly growing with the focus to provide friendly and a quick servi
ce restaurant experience to its customers. There are many key success factors du
e to which McDonalds is successful in the market. We have been successful in ide
ntifying a few: All the franchises of McDonalds in Pakistan are owned by Lakson
Group of Companies. Apart from the fact that LGC is one of Pakistans biggest corp
orations, their management allows not only standardization of quality but a more
uniform and effective marketing strategies in order to sustain in the market. T
herefore McDonalds being its part had to continue to strive to maintain its stand
ards in the local region. Many McDonald s restaurants have included a playground
for children and advertising geared toward children, and some have been redesig
ned in a more natural style, with a particular emphasis on comfort: introducin
g lounge areas and fireplaces, and eliminating hard plastic chairs and tables. T
his has given a new outlook to the McDonalds as a quick service restaurant that i
s still not be seen on other fast food restaurants. McDonalds doesnt offer just b
urgers. Their well diversified menu is also one of the key success factors as mo
st of McDonalds competitors are quite specialized: KFC in chicken, Pizza Hut in p
izzas etc. When it comes to eating out during Ramadan in any fast food restauran
t, the name that clicks to the customers is McDonalds. The reason is the affordab
le deals that they offer, that seem to beat all others when it comes to prices.
Another advantage that McDonalds has on its competitors is the location of its fr
anchises. Its main advantage is that it is located in vicinity that is easily ap
proachable. Secondly it has got in its surroundings other very attractive places
to be visited by people who want to enjoy their life to the full. These places a
re a source of attraction not for the services they provide but for McDonalds as
well. For example one of its outlets has been opened in Park Towers in Karachi s
o as to attract the shoppers who visit it very frequently. Another strategic loc
ation that McDonalds has acquired is at the Clifton beach. This has forced many o
thers nearby restaurants and one of the very famous cuisine restaurants with the
name of Kublai Khan to get closed. Same is the case in Rawalpindi/Islamabad whe
re McDonalds holds an important strategic location. The customers that are driven
to the Cinepax are automatically attracted towards McDonalds.
Product life Cycle Analysis:
In the Pakistani market McDonalds has been placed in the growth phase as it is st
ill growing and has the potential to grow further. There are many strategies tha
t have been employed in the other countries but are still to be made a part of t
he McDonalds franchises in Pakistan. Following are some of the strategies that ca
n be made a part of the Pakistani market so as to increase its market growth: a)
McDonalds in Pakistan can introduce breakfast in its menu to cater to the needs
of those who are in a hurry to get to office in time. This will give them an edg
e on its competitors and its growth will increase.
b) To gain advantage in the local market, McDonalds should introduce coffee at al
l the franchises. c) To maintain its brand image as a twenty four seven customer
restaurant, McDonalds must make its timings more flexible to the needs of those
who are usually very busy with their work schedules.
BCG Matrix:
According to BCG Matrix McDonalds is a star. The reason for this is its high mark
et growth and high market share in the Pakistani market. On the other hand KFC a
nd Pizza Hut are the cash cows because of their low growth rate and high market
share. During past some years KFC and Pizza Hut have lost their market growth be
cause of the fact that they lost their standard war to their competitor i-e McDo
nalds. Another direct competitor of McDonalds is Subway. According to BCG Matrix i
t is a dog. Some of the reasons that are responsible for its low market share an
d low market growth are the less expansion strategies being followed by the comp
any. Secondly they are not focusing at all on all the major cities, rather they
are only focused on the target segments of Lahore and Karachi.
CUSTOMER ANALYSIS (a) SEGMENTATION:
The customers of McDonalds have been segmented on the basis of AIOD into four cat
egories, based on the product attributes that fulfill needs like fast food, ambien
ce, status symbol and hygiene.
1
Fast food
Activities Student, working; Adventurous, Energetic.
Interests Sports, Entertainment , Fashion, Music, Recreation. Entertainment , Re
creation, Fashion, Music, Socialization. Sports, Entertainment , Fashion, Music,
Recreation. Home, Recreation, shopping, Fashion,
2
Ambience
3
Status Symbol
Student, working/selfmade businessmen; working on projects. Student, working; Ha
nging out, Adventurous.
Opinions Influenced by peer pressure, Energetic, Impulse buying. Ambitious, Futu
re business and social issues, Politics.
Demographics Age: 16-24 years old. Marital status: Single; Heavy users
4
Hygiene
Working women/men, house-wives; Shopping, Club memberships.
Age: 20-35 yrs old. Marital status: Single and Married. Light to medium users. E
nergetic, Age: 16-25 yrs Impulse old. Marital buying, status: Single; influenced
by light to medium peer users pressure Planned Age: 25-45 yrs purchasing, old;
Marital Authoritarian status: Newly , Strong married, Full views, Nest; Light Po
litics, users Future
busines s and social issues.
FAST FOOD:
This segment of customers enjoys the Quick Service Restaurant (QSR) facet of McD
onalds and has its needs fulfilled. Since McDonalds competes rigorously in the mar
ket on the quick delivery attribute, the customers expect their food to be deliv
ered to them fast, both at the outlet, and at home (home delivery). A large majo
rity of this segment is composed of students whose activities are adventurous, e
nthusiastic, energetic, and recreational and revolve around sports, clubs, hango
uts and shopping etc. This segment thus targets the market that indulges in impu
lse buying and is influenced by peer-pressure. These customers are heavy user of
the product at hand. A minority of newly working people are also included in th
is segment.
AMBIENCE:
This segment enjoys the unique ambience provided by McDonalds in Pakistan. Since
the regular consumers of this product belong to the upper-middle class, they pre
fer having a meal with the level of customer service and a tinge of sophisticati
on that the outlets provide. The customers of this segment are students as well
as working class. These people enjoy recreation and socialization activities. Th
ey have strong views about the current affairs and the future business and socia
l issues.
STATUS SYMBOL:
The people of this segment perceive the use of this product as a status symbol a
nd basically comprise students and new-working class. These customers like being
seen at the right places and like to associate and socialize with people of the
same class. These customers are enthusiastic about entertainment, fashion, music
and sports. They have fickle opinions and subject to change because of peer pre
ssure. They follow fads and indulge in impulse buying.
HYGIENE:
This segment comprises people who are concerned with hygiene and how the food is
prepared and served and also the cleanliness of the environment where they eat.
It comprises of middle-aged people mostly housewives and working women/men. The
se are light users and make purchases once in a while, probably as a substitute
rather than a first-choice. These people are authoritarian, have strong views ab
out politics, business and current affairs. They make planned purchases and weig
h their options before they make a buying decision.
a)
POSITIONING:
We have used perceptual maps to analyze the positioning of various QSRs in Pakis
tan. The attributes for perceptual mapping include customer satisfaction, pricin
g, popularity; market Share, sophistication and availability.
SWOT ANALYSIS Strengths:
McDonalds has been able to maintain its market share in the QSR market of Pakist
an since 1998 and this is actually the major strength of McDonalds that has made
it so popular. Other major strengths are listed below:
Products:
The reputation of the various products each season has made it possible for the
company to attract customers having different tastes and to try out the season s
pecialties. A major strength is the various deals that McDonalds offers so that
it could be made affordable. Recently McDonalds offered a deal for Rs.85 only, c
ontaining a beef burger along with a drink. McDonalds offers many flavors of Mcfl
urry ice cream from a mix of M&Ms to Oreo cookies. The M&Ms flavor was introduce
d about a year back and is still popular among the M&Ms lovers. McDonalds has als
o customized its meal according to the tastes of Pakistan. People in Pakistan do
not eat bacon so McDonalds does not offer such sort of meals in the country.
Social Responsibility:
The social responsibility acts of McDonalds are commendable. It has been able to
maintain a reputation as a socially responsible and aware enterprise all over th
e world. Its practice of going green and serving in an environment friendly way
has made it possible for McDonalds to gain fame.
On 27th March 2008, McDonald s announced that it is giving further backing to Rai
nforest Alliance certification by offering a cup of tea with a conscience in all
of its 1,200 restaurants in the UK. In Pakistan however, McDonalds has not yet c
ome up with an effort that can show the companys goodwill towards the masses here
. Like KFC, McDonalds should also involve itself in educational and social activi
ties so that people should know that McDonalds isnt yet another business oriented
corporation aimed at just making money but it actually cares.
Employment Opportunities:
The equal employment opportunities regardless of race, color, sex, national regi
on, age, disability etc are offered to people. People looking for jobs can also
upload their CVs online.
Brand Recognition:
McDonalds has gained recognition worldwide. The chain is present all over the wo
rld in more than 122 countries. In Pakistan a large number of franchises are pre
sent, majority of them in Karachi and Lahore and McDonalds is regarded as a symbo
l of value and quality for your money.
Good communication and friendly environment:
McDonalds has always ensured a friendly environment to offer to its customers. C
hildren love going there, having a happy meal and the toys that they get as a gi
ft. Play places also serve as a significant attraction where children can go and
make friends and play. Employees are also very polite and they are always ready
to serve you in every best possible way that they can.
Party celebrations:
McDonalds offers its clients, especially children to celebrate their birthdays th
ere. One can invite friends, they decorate the party area, various party games a
re organized along with face painting activity etc. Children are provided with a
n opportunity to celebrate their day in the way that they want.
Partnership with Coca Cola:
McDonalds and Coca Cola are official global partners. Coca cola is a big brand n
ame serving people all over the world with beverages.
Partnership with telecom companies:
McDonalds offered special deals to its clients with up size meals who are the us
ers of a particular company such as Warid and Ufone.
Weaknesses:
Product Variety:
McDonalds needs to develop more and more products to stay in the competition. Af
ter the opening of international QSRs in Pakistan, many local QSRs have also bee
n opened in various cities. The tastes are a bit different but they too are offe
ring chicken and cheese burgers, drinks and fries at competitive prices. This si
tuation requires McDonalds to be more innovative and price competitive.
More advertising:
In Pakistan, McDonalds rarely advertises at TV, however billboards often show off
juicy McDonalds burgers but this could affect its popularity in future. It defin
itely needs to advertise more to reach the target and the potential customers.
Drive-ins:
The service at McDonalds drive-ins has been subject to criticism all over the wor
ld and a lot of people complaint that the orders are either missing some of the
items or are entirely wrong. The service time at the drive ins is also subject t
o great variations and needs to be improved.

Opportunities:
Reasonable Prices:
McDonalds can broaden its market by offering meals at more competitive prices in
comparison to other local QSRs such as AFC, Al Maida etc. This way it could get
hold of the potential customers too.
Opportunity to be innovative:
McDonalds could make itself more innovative by offering deals that appeal more t
o Pakistani consumers e-g it can introduce desi flavors in the present products s
uch as Barbeque, Tandoori, Masala and other spicy tastes which are staple of the
country.
Breakfast and special noon meals:
Now in Pakistan most the trend of women going to work and opting for profession
is increasing as a result of which they are running short of time to carry out a
ll the home chores along with their work. McDonalds can offer deals to such mark
et by catering them in the morning for breakfast. During the office hours people
mostly go out for their lunch to restaurants. McDonalds can avail this potentia
l market too.
Growing dinning out Market:
In Pakistan the dining out trend is increasing especially in youngsters and uppe
r middle class. McDonalds has the opportunity to grasp this market quite well. I
t is already doing well by serving them but it could arrange various activities
for the people of this age.
Dine in Cafes:
McDonalds can open up with small-sized cafes for the teenagers in their universi
ties and colleges.
McCafes:
McDonalds has opened coffee shops by the name of McCafes in UK. Pakistan can serv
e as a new potential market for these cafes.
Threats:
More health conscious customers:
With increasing awareness about food and the importance of a balanced diet, peop
le are opting for low calorie food e-g salads and food with high fiber content.
To remain in the scope, McDonalds needs to serve this market as well as the pres
ent customers, this could be posed as a threat to McDonalds. Subway is offering
its low fat veggie and chicken sandwiches at prices almost the same as McDonalds
. For McDonalds diet meals could be a way out of this situation. Until now, McDo
nalds in Pakistan has nothing to offer to health conscious customers.
Foreign as well as local competitors:
In the growing market QSR market of Pakistan McDonalds competitors are entering
not only from other countries but from within the country too. Their competitive
prices could be a reason due to which McDonalds can lose its share in the Pakis
tani market.
Changing customer styles:
Pakistani culture has been changing for years now with new technologies and tren
ds. People who are not brand loyal move with the changing times. Some competitor
can easily enter into the market and make better offers to its consumers by foc
using on their needs and the satisfaction that they want. To remain competitive,
McDonalds needs to be innovative and should change along with the Pakistani con
sumer styles.
PEST ANALYSIS
Political Environment:
In general terms the government policies do not affect the company much nor do t
he changes in the government influence the organization of the company. Mostly w
hat company obligation to the government is the paying of different taxes which
include payroll taxes and business taxes. McDonalds enjoys an added advantage in
countries where consumer protection laws are not very strong. In countries like
US, where the consumer protection laws are very strong, there are great costs as
sociated with a breach in quality or service in the form of litigations and laws
uits.
Economical Environment:
There are many factors which can affect the operation of a company. In Pakistan
McDonalds offer the food at higher rates in comparison to the local food restaur
ants. Most of the people in Pakistan fall in the category of middle class and it
is not affordable for them to have McDonalds at regular basis. Due to layoffs a
nd other economic downturn of the current recession period the profits of McDona
lds might have dwindle as people consider it as a luxury to go and eat out at so
me foreign QSR.
Social Environment:
When McDonalds entered the Pakistani market people were not very much into fast
food eating style but now the business has been influenced by the changes made i
n the
society especially changes in the eating habits among young people who helped in
the acceptance of the fast food idea but also the rapid change of way of life w
hich is very quick now as everyday people are running out of time, QSR is the wa
y out for them. This in turn has helped the company to grow and to increase its
profits. As McDonalds offer Hilal food majorly so there are no religious, ethica
l or cultural issues associated with the operations. A negative aspect of a soci
al factor happening in Pakistan is sometimes the fact that many times anti Ameri
cans feelings rising for different reasons may a lot or a little affect the comp
any by boycotting Americans goods. For the rising importance of corporate social
responsibility recently McDonald s has announced that it is giving further back
ing to Rainforest Alliance certification by offering a cup of tea with a conscie
nce in all of its 1,200 restaurants in the UK.
Technological Environment:
Pakistan is a developing country and new technology gadgets and techniques are a
lways welcomed. McDonaldss introduced new food production techniques in Pakistan
which were later adopted by the local QSRs. Food made with the help of machines
is considered more hygienic. However, the continuous developments in the technol
ogy sector needs McDonalds to be updated regularly but as in Pakistan food makin
g technology is still in the development stage so McDonalds has an edge over oth
ers in this regard. It is natural that technology has helped McDonald and especi
ally its employees as they have to serve quick services. Computers and smart cas
hiers are used by the employees so they would not get confused and they are prov
ided with customized database management system.
COMPETITOR ANALYSIS PIZZA HUT:
Pizza Hut is a global fast food chain, a subsidiary of Yum! Brands Inc. , the wo
rlds largest restaurant company. It was founded in Wichita, Kansas, USA in 1958 a
nd is running its operations in about 91 countries worldwide. Its one of the majo
r competitions of McDonalds in the Pakistani QSR industry. It started its operati
ons in Pakistan in 1993 with a single outlet at Boat Basin, Clifton, Karachi. To
day it operates in nine cities of Pakistan with 38 outlets. The cities include K
arachi, Lahore, Islamabad, Peshawar, Faisalabad, Multan, Rawalpindi, Sialkot and
Hyderabad. Pizza Hut serves a large variety of starters, soups, salads, sandwic
hes, Pastas and deserts.
Strategic Objectives:
When we talk about strategic objectives, Pizza hut says: We want to satisfy our
customers by offering them The best. Diversification of the products that they off
er has always been a focal point of strategies at Pizza Hut. The strategies at P
izza hut are guided by principles like Cleanliness, Hospitality, Accuracy, Maint
enance, Product quality and Speed (CHAMPS). Since its a global chain, the strateg
ies are based upon customizing the services, advertising and marketing activitie
s according to the countries that they are operating in. Customer service and sa
tisfaction have of course always been a vital aspect of the strategies. Another
important feature of the Pizza Huts strategies are the 3 Fs (Fun, Friendly and Fa
miliar).
Problems and Weaknesses:
At one time, the biggest marketing problem Pizza Hut faced was lunch. As compare
d to McDonalds, its restaurants had virtually no lunch time sales, and neither di
d any of its pizza competitors. The reason, of course, is that it takes 20 minute
s to cook a pizza from scratch in a traditional pizza oven, and most people wont
spend that long at lunch time waiting to be served. By using a new, continuous-b
roiling technology adapted from burger business, Pizza Hut developed a personal
pan pizza that could be served in less than 5 minutes. It was quick, tasty and m
oderately priced. And Pizza hut rolled it out to all 4500 stores worldwide and l
ocked up the pizza-lunch business almost everywhere, almost overnight. One of th
e weaknesses of Pizza hut that it hasnt overcome yet is its price. Local chains ar
e constantly springing up, offering lower prices and similar recipes. Most peopl
e dont mind giving a lower price for slightly different taste because of which th
e sales at pizza hut at are suffering. Growing awareness about eco-friendliness
has forced a lot of the food chains to maintain practices that conform to intern
ational environmental standards. For example McDonalds is introducing coffee bean
s grown in environmental friendly conditions in order to appeal to the people wh
o are conscious about environmental friendliness. In the Pizza selling restauran
ts, organic pizzas are the new concepts that are appealing to the masses to thes
e days. Its a phenomenon that highlights the health conscious attitude as well as
environmental friendliness. Pizza Hut on the other hand has not come up with an
y strategy in this area and if it doesnt even in the future, it is going to lag b
ehind the chains that offer healthier food.
Competitive Advantages:
Pizza Hut has the first mover advantage in the pizza chains because of which it
has developed a strong customer base which is one of its strengths. In the Pakis
tani QSRs industry, the delivery service of Pizza hut is clearly a competitive a
dvantage that it enjoys. Pizza huts delivery service is one of quickest and the p
izzas delivered are oven hot in the real sense of the world. Pizza Hut is often
referred to as Pizza Innovation Leader because it is constantly coming up with new
varieties of pizzas to appeal the different audiences and at the same time, peo
ple at the pizza hut have a really good idea about which varieties are appealing
to the customers and they are thus retained in the menus The first mover advant
age is an advantage that Pizza hut was born with but time, Pizza hut has been su
ccessfully creating competitive advantages like a traditionally strong brand nam
e for itself and the quality service that it provides.
KENTUCKY FRIED CHICKEN (KFC):
KFC, founded and also known as Kentucky Fried Chicken, is a chain of fast food r
estaurants based in Louisville, Kentucky. KFC is a brand and operating segment,
called a "concept", of Yum! Brands since 1997, when that company was spun off fr
om PepsiCo as Tricon Global Restaurants Inc.. KFC has more than 11,000 restauran
ts in more than 80 countries. KFC came to Pakistan in 1996 with the first branch
opening in Karachi and later in Lahore. The Franchisee was a Pakistani owned an
d operated, Dubai-based Company the Cupola Group, which owns licenses and its ow
n restaurant throughout Pakistan and the middle-east.
Strategic Objectives:
KFC has the strategic objectives of expansion along with profits and sales growt
h. KFC has also been applying its strategies at improving services and making th
em more and more customer friendly. It has not only been customizing it s menu a
ccording to the
countries that it has been operating in, it has also been trying to cater to dif
ferent ethnic groups like African Americans and Hispanics. Such types of strateg
ies are focused on increasing the customer base by better customization of produ
cts. Other than the traditional eat-in restaurants, KFC has also been expanding
into non-traditional facilities like shopping malls, hospitals, universities, st
adiums; office buildings etc and a number of strategies have been formulated to
aid this kind of expansion.
Problems and Weaknesses:

The advertising campaign of KFC does not specifically appeal to any segment. It
does not appear to have a consistent long-term approach. The U.S. has enormous c
hanges in its demographics. Only in US, single-person households increased from
12% in 1970 to 25% in 1995. With this kind of dramatic change, KFC does not have
a proper approach to its target market.

The increased health concerns of the masses has put KFC at a great disadvantage
because of the word fried attached to it s brand name which gives an instant i
dea that the food would be oily and unhealthy.

Another weakness of KFC is that of the lack of a corporate direction because it

has been a part of four different parent companies till now namely, Heublein Inc
., R.J Reynolds, Pepsi Co. and Yumm! Brands Inc. The corporate functioning of th
ese companies has been pretty different from each other because of which a stron
g culture could not be established at KFC and it had long been struggling with i
t.

Because of the nature of the chicken segment of the fast food industry, innovati
on was never a primary strategy for KFC. However, during the late 1980 s, other
fast food chains, such as McDonald s, began to offer chicken as a menu option. D
uring this time, McDonald s had already introduced the
McChicken while KFC was still testing its own chicken sandwich. This delay signi
ficantly increased the cost of developing consumer awareness for the KFC sandwic
h.
Competitive Advantage:

A very strong financial background is one of KFCs competitive advantages. KFC has
been functioning as a multinational corporation for several decades. As a resul
t, the company is familiar with the logistical and quality problems which accomp
any operating an international food operation, and has demonstrated that it can
work with host countries and businesses within the host country to develop a str
ategy which works in the most cost effective way.

With the passage of time, KFC has developed another very important competitive a
dvantage for itself- Environmental Friendliness. In March 2009, the first eco-fr
iendly green KFC was opened in Northampton USA. The restaurant is designed accor
ding to environmental goals that include cutting energy and water consumption by
30 percent and reducing CO2 emissions. Operations at the new site are also expe
cted to reduce waste and the amount of rubbish sent to landfills; the restaurant
composts and recycles other waste, grease and used cooking oil. Other than this
, in an effort to reduce its packaging by 1,400 tons, KFC is now switching from
cardboard to recyclable and biodegradable paper wrapping for some of its product
s.
Subway:
Subway is a restaurant franchise that primarily sells submarine sandwiches and s
alads. It is owned and operated by Doctor s Associates, Inc. (DAI). Subway is on
e of the fastest growing franchises in the world with approximately 30,052 resta
urants in 90
countries as of April 2009. It is the second largest restaurant operator globall
y after Yum! Brands (35,000 locations) Subway restaurants are known for their su
b sandwiches and salads. The Subway restaurant chain is the fastest growing rest
aurant chain in the world surpassing even McDonald s. Subway has the second most
stores of any chain restaurant system in the world after McDonald s, and the mo
st locations in North America of any chain. Subway was founded in 1965, however
the franchising started in 1974. In Pakistan, subway has restaurants at 30 locat
ions, including Karachi, Lahore, Gujranwala, Islamabad, Sialkot and Multan. Majo
rity of the restaurants are located in Lahore and Karachi.
Strategic Objectives:
The strategic objectives of Subway focus on creating a global strategic plan to
enable Subway Restaurants to succeed internationally. Other than this subway is
intent upon introducing the concept of healthy fast food. Sandwiches of Subway hav
e been included in diet plans by experts. Jared Fogle, an obese college student
who weighed 425 pounds introduced a weight loss plan called the subway diet and
lost 245 pounds in 11 months. Subways stand regarding obesity in children is not
new to its customers. Strategies at Subway are not only about a really ambitious
increase in franchises all over the world but they are also about making the fo
od more and more appealing to the health conscious customers because health cons
cious attitudes, according to the experts, are here to stay now.
Problems and Weaknesses:

One of the major problems that can be identified with Subway right now is relate
d to the franchises. Although Subway has long been named as the number one franc
hise opportunity by The Entrepreneur magazine but it seems that Subway has devel
oped a myopic focus regarding the franchises. Subway has regional managers who h
ave the opening of new franchises as their sole aim and their bonuses and incent
ives are tied to the opening of new franchises.
These managers at Subway even don t care if the new franchises are detrimental f
or the existing ones and because of this; many of the franchises are becoming a
victim of internal competition or cannibalization. For example, in Lahore alone,
Subway has 20 outlets. Instead of this, Subway could have targeted Cities like
Faisalabad and explored a new market. Franchise owners believe that Subway has b
een irresponsible with allocating the franchises and uses bloated store sales pr
ojections as part of their sales pitch for encouraging new franchises. The openi
ng up of a lot of new stores in close proximities are also resulting in decline
in sales per store because of which the franchisees are not very satisfies with
Subway.

The environment at the Subway stores cannot be compared with that of McDonald s,
KFC or Pizza Hut. The Stores are small and suffocating and do not even provide
the necessary privacy to the people eating there. Subway has no standard size fo
r any of its store because of which the sales oriented Franchisees try to fix th
em at as smaller a place as possible. This is tarnishing the image of Subway as
an international brand.

The quality of the sandwiches and standards of cleanliness at Subway are going d
own day by day due to the greater and greater autonomy that franchisees enjoy. T
he Subway at Rawalpindi was recently closed down due to quality issues as well.

There is a dire need of a system to integrate the large number of Subway franchi
ses and to ensure that the original Subway practices are being followed there. T
he management of the franchises is one part of their operations that Subway has
not handled well.
Competitive Advantage:
One of the greatest competitive advantage that Subway was born with is it s heal
thy Menu. The salads and sandwiches appeal much more to the people as compared t
o fried chicken, burgers, fries and pizzas. With its advertising and promotion,
Subway has long been highlighting its healthy food in advertising and promotions
and with the passage of time, it has established itself as a healthy brand. Ano
ther competitive advantage that subway enjoys is the fact that along with tradit
ional locations, Subway restaurants can be found in more than 4,000 nontradition
al locations such as food courts, health clubs, hospitals, universities, amuseme
nt parks or just about anywhere. In fact, Subway restaurants can even be found i
n automobile showrooms and Laundromats! This global presence is indeed a sustain
able advantage for Subway and needs to be managed properly.

Subway s fresh food is also a competitive advantage because unlike it s competit

ors like McDonald s it allows it s franchisees to choose their own food supplier
s, to ensure they can access the freshest ingredients.
SCENARIO ANALYSIS
Scenario Analysis is traditionally considered to be a tool that provides a means
for considering multiple futures in relation to social, economical, political a
nd technological changes. There are different types of scenarios that are used f
or specific situations and circumstances. For McDonalds we have developed a numbe
r of scenarios keeping in mind the present socio-economic and political situatio
n. These scenarios are aimed at identifying assumptions at a macro level. Amongs
t the STEEP (social, technological, economic, environmental and political) force
s McDonalds focuses mainly on the political, environmental and the social factors
.
Economic Slowdown:
Like any other multinational companies, McDonalds is exposed to any changes in th
e global economy e.g. inflation over past some years. The fluctuation of the for
eign currency and its international expansion has left it as very sensitive to e
conomic slowdown of other countries. The economic slowdown in some countries, pa
rticularly in most of developing countries has made the customers become price s
ensitive, and it
has a great impact over the buying behavior of the customers because of reductio
n in the purchasing power of customers. In order to cope up with the upcoming re
cession McDonalds needs to focus on two major strategies: More for less (in terms
of price) McDonalds in developing countries like Pakistan should now focus on re
venue growth by attracting more customers to the existing franchises rather than
going for growth in terms of opening more and more franchises. In order to cut
costs it can form associations with food companies and suppliers just like it ha
s done with Coca-Cola. Other than this McDonalds should start diversifying in low
priced products like milkshakes and smoothies and introduce more variety in the
existing range. For most people out there, McDonalds is more of an experience ra
ther than just an eating out occasion and McDonalds has to focus on making the ex
perience more and more fulfilling in terms of both value and price. It can also
introduce a greater range of low priced snacks to cater to the recession driven
public for whom McDonalds is more of a status symbol.
Health Conscious attitude of People:
There are many social issues that can be thought of as potential threat to the c
ompany in present as well as in future. One of the concerning causes is the issu
e related to health conscious attitude of people. The fast food industry is ofte
n criticized because of its role in creating numerous health problems including
obesity. Initially these fast food chains were thought to be the driving force f
or the unhealthy eating disorders. Nowadays, more and more customers are becomin
g aware of nutritional values and health benefits of products and services than
before. Childhood obesity is also a major cause of cynicism regarding the fast f
ood chains. The said situation has a great impact over the brand, due to the fac
t that children have the big share on the revenue of the brand. The said trends
reduced the revenues, staff motivation as well as the interests of the sharehold
ers of the company, and it can be showed in the strong protest by different
nutritional campaigners against the food being promoted by the company that have
affected many lives, not only in the US but in other part of the world. These a
re still the potential source of threats for the company as the said events caus
ed so much negative impact on the image of the brand that it pushed Disney to de
cide not to renew its contract with the McDonalds. In order to cope with this sit
uation McDonalds will have to come up with greater variations in its menu for the
health conscious people. McDonalds will have to put greater emphasis on healthie
r food like sandwiches, baked potatoes and salads. The outlets in Pakistan serve
a little more than the traditional McDonalds burgers. Theyll have to introduce a
healthier menu and then emphasize the healthy side of McDonalds through aggressiv
e promotion to cope with the health concerns associated with its products. McDon
alds should also come up with low calorie variations of all its burgers and make
its fries healthier by using the right kind of oil.
Increased Competition:
One of the environmental factors surrounding McDonalds is the fierce competition
from the competitors. There are many players in the industry, and most of them a
re offering the same or similar products and services. The reason behind this gr
owth is due to the improvement of the entire fast food industry in the world. Th
ere is an intensive price war, extreme battle of innovations and breakthrough an
d serious promotions and advertisements are being implemented by different playe
rs in the global fast food industry. Increasing competition has led to aggressiv
e pricing policies amongst the large brands as well as pushed them to increase t
heir menu diversification as well as product developments in order to increase s
ales and market share, thus maintain current position in the entire market. The
start of new McCafes at McDonalds is also one of the strategies to capture some of
Starbucks market share. To keep hooked on with its current customers, McDonalds n
eed to focus more on the strategies that attract children to their store. This w
ould not only help them in keeping their customers but would build on relationsh
ip with the new ones.
McDonalds would also have to put greater focus on cutting costs because in these
times of recession, a lower price is something that attracts a lot of customers.
People at McDonalds should study their entire value chain and cut costs wherever
they can. Due to recession, a lot of fast food chains are losing their customer
and in todays competitive environment, the loss of one is the gain of other. By
applying this strategy McDonalds should see what is that factor because of which
the customers are abandoning these brands and then provide these customers such
alternatives that nobody else is providing.
HISTORICAL STRATEGIES AND ANALYSIS
We will now take a look at the strategies pursued by McDonalds and its two major c
ompetitors- KFC and Pizza Hut all over the world so that we can see where these
companies are headed in terms of strategic goals and objectives.
MCDONALDS
Hummer of a Summer PR strategy:
In August 2006, McDonalds in US launched a PR effort by the name of Hummer of a Su
mmer. This was a collaborative effort of General Motors and McDonalds and focused
on HUMMER- One of General Motors key divisions. To announce the program launch, M
cDonald s staged a three-mile long parade down Chicago s Michigan Avenue during
lunch hour. Ronald McDonald led the parade on the hood of a HUMMER and was follo
wed by the life-size versions of the trucks that will be available in the Happy
Meals. The parade ended at the flagship McDonald s restaurant in downtown Chicag
o. Kids at the restaurant were also invited to go inside the vehicles. The kids
were then treated to free happy meals.
There were also regional events and programs sponsored by local McDonald s resta
urants and GM dealers. McDonald s Happy Meal and Mighty Kids Meal HUMMER line-up
featured eight dynamic vehicles, capturing the power, excitement and unique sty
ling that make HUMMER one of the most recognizable vehicles on (and off) the roa
d. One of eight toy HUMMERS were packed in each "boy" Happy Meal ("girl" meals f
eatured Polly Pocket). The full HUMMER lineup was represented, from the nowdefun
ct H1 to the H3T Concept pickup. This strategy proved to be quite popular with t
he kids and the way people at McDonalds tried to cash the awe and charisma associ
ated with the brand HUMMER was remarkable. The strategy proved to be a win-win o
ne for both GM and McDonalds because it not only attracted the kids to the happy
meal even more than before but also magnified the iconic brand status that HUMME
R has acquired over the years.
McMommy Blogging Society:
In December 2007, McDonald s opened up its kitchens to an army of mother bloggers
, who will be reporting their allegedly unedited findings on McDonald s website,
and their verifiably unedited findings on blogs around the Internet. The fast f
ood giant s goal was to stem criticism that the restaurant s offerings are makin
g the country obese by making their processes more transparent to the public. Th
e burger giant apparently also was hoping that the program will help contradict
stories of fattening, unhealthy
food that have been detailed in books such as "Fast Food Nation" and movies such
as "Super Size Me." McDonald s equipped six mothers with laptop computers to re
cord their impressions of its operations over the next few months. The moms were
chosen by an independent company from a group of 4,000 applicants, and the blog
s and journals were posted "unedited" beginning June 20 2007 on McDonald s home p
age, where it hoped to attract other moms interested in seeing the comments, off
icials said last week. Selected moms were expected to participate in as many as
three "field trips" lasting two to three days, and received payment for "reasona
ble travel expenses." Nothing like this has ever been done on the internet by a
fast food company before and McDonalds intended to exceed the customer expectatio
ns by coming up with a new strategy that would astonish everybody and the campai
gn was indeed well received by the audience.
Tier Pricing Strategy:
For McDonalds, tier-pricing is becoming part of its global strategy. To stay comp
etitive in an era of food inflation, the US franchise is abandoning its one price
fits all approach. McDonald s has implemented a tier-pricing system in Taiwan, p
artitioning the island into three districts to counter the impact of food price
inflation. The three districts are the rural south and east; the industrial nort
h and west (plus three southern cities); and entertainment and high-rent distric
ts across the island. Future prices will be adjusted according to income levels,
the consumer price index and other factors for each district. In Japan, McDonal
ds was also the first marketer to introduce tier-pricing, according to Tsao. Japan
was a good choice of model for us to follow, he said. The economic situation in J
apan is similar to Taiwan. Both countries have crowded
restaurant sectors and face intense competition. Operating costs in Taiwan vary
widely due to rent, labour and transportation. In Taiwan McDonalds is using the co
nsulting firm, Revenue Management Solutions to analyze operating costs, customer
demand, price sensitivity and Government price indexes to create a map of the p
rice districts. For the menu-board price changes, McDonalds is scattering price r
ises on different items rather than instituting blanket increases. Tsao said the
reaction from Taiwans consumers had been mixed.
Strategy for increasing sales at existing restaurants:
McDonalds has also focused on increasing sales at existing restaurants instead of
opening new ones. To do so, McDonald s has remodeled many restaurants, kept sto
res open longer and increased menu options. Nevertheless, new McDonalds restauran
ts are still opening around the world at a rapid rate - the company plans to ope
n about 1,000 units in 2008, and continues to grow its new restaurants at a 1%-2
% rate each year. McDonald s executives say they re adding features that will in
crease sales. Mr. Alvarez showed off a self-service kiosk where customers can pl
ace orders electronically. He recently watched customers use kiosks at a McDonal
d s in Tours, France. Mr. Alvarez says a top complaint of French customers about
McDonald s is that they feel pressured to order, which keeps some families from
coming in. Ordering at a kiosk, he says, "allows them to either control their k
ids or control their order."
Remodeling of locations:
An estimated 7,000 U.S restaurants will be rebuilt, relocated or refreshed as pa
rt of the far reaching plan to upgrade its public persona with updated restauran
t designs intended to boost the bottom line. The redesign is risky and has many
franchisees up in arms over the high costs of a makeover. But company officials
believe the overhaul is needed. McDonald s, whose restaurants are visited by mor
e than 40 million people every day, has moved aggressively over the past three y
ears to revamp its menu and attract a new breed of customer. The traditional McD
onald s yellow and red colors will remain, but the red will be muted to terra co
tta and olive and sage green will be added to the mix. To warm up their look, th
e restaurants will have less plastic and more brick and wood, with modern hangin
g lights to produce a softer glow. Contemporary art or framed photographs will h
ang on the walls. The dining area will be separated into three sections with dis
tinct personalities. The conne The "linger" zone will offer comfortable armchair
s, sofas, and Wi-Fi ctions. focus is on young adults who want to
socialize, hang out, and linger.
Sponsoring the report cards:
For us it seems unthinkable that companies are allowed to extend their persuasiv
e activities inside the walls of elementary schools, especially if they sell wha
t could be called vice-products. An article appeared in August 2007 in Ad Age Da
ily which reported that McDonalds sponsors school children s report cards in Sem
inole County, Fla. The cover of the report card has the McDonalds logo, and (her
e it gets nasty) a good report gets rewarded with a gift coupon for a Happy me
al at McDonalds. From the company s perspective a very smart move: get you messa
ge to the captive target audience (I guess kids and parents HAVE to look at repo
rt cards), and apply two major conditioning procedures at the same time: - opera
nt conditioning: the coupon is a reward for performance - Evaluative condition
ing: the McDonalds brand is associated with a positive event (at least if the ra
pport is good) This strategy was however not a very good move at McDonalds part a
nd After nearly 2,000 parent complaints about children health concerns, McDonald
s ended its controversial report card advertising in Seminole County, Florida i
n January 2008.
McDonalds Coffee Strategy:
McDonald s who took some coffee ground away from Starbucks and Dunkin Donuts la
st year announced that they ll install coffee bars with Starbucks-like baristas
in 14,000 U.S. locations this year. Along with drip coffee, McDonald s will be s
erving high-end coffee drinks like lattes and cappuccinos. Following the success
ful introduction of their premium drip coffee, this would seem to be a natural,
next-step line extension, especially with so many locations to offer up product
throughout the United States. It has also been reported that the McDonald s proc
ess will use a single machine that automatically steams the milk and combines it
with the espresso, which cuts down on some of the drama and ceremony that comes
with the preparation of a really well prepared espresso. And since selection an
d variety is also a category loyalty driver,
McDonald s is bound to have a more narrow selection on offer than the gabillion
varieties available at Starbucks. However, there are two reasons to think that M
cDonald s might find the high-end coffee market surprisingly hard to crack. 1. T
he processes required to serve customized drinks are vastly different from the p
rocesses required to serve McDonald s tightly standardized menu. Running two dis
tinct systems in a single retail location can be very difficult. Lengthening lin
es could alienate core McDonald s customers looking for reliably quick food. 2.
McDonald s franchise model means it can t simply force the coffee bars on retail
locations. Individual franchise owners have to decide that investing in the bar
s is in their best interest. While McDonald s claims that early market tests hav
e proved quite promising, a consultant to some of McDonald s franchise owners to
ld USA Today, "It is certainly the biggest potential mistake in the history of t
he system."
Global Best of Green:
McDonalds has also been trying to show consumers its greener side with a new instit
utional marketing effort, Global Best of Green. McDonalds around the world has take
n a number of initiatives around the world as a part of this marketing effort wh
ich include the following. About 80 percent of packaging used by McDonalds Europe
comes from renewable resources. In Canada, switching from bleached white napkin
s to plain brown has saved $1.3 million annually, while reducing energy, wood an
d water use. U.S. restaurant locations recycle about 13,000 pounds of used cooki
ng oil per year, on average.

Using a fryer that requires less oil allows restaurants to cook the same product
with 40 percent less oil, saving 4 percent in energy over other fryer models. U
.S. locations completing an energy survey identify savings of $3,000-6,000. McDo
nalds USA recognizes Energy All-Stars, or store managers that have provided example
s for others.

In France, 10 restaurants that have committed themselves to an interactive softw

are, EcoProgress, have reduced electricity consumption 11 percent over a few mon
ths.

McDonalds Sweden is using CO2 detectors in 24 restaurants to adjust ventilation s

ystems to the amount of customers in the store, reducing electricity use 15 perc
ent annually.

McDonalds Europe is serving salads in cardboard bowls instead of plastic dishes,

and wooden coffee stirrers instead of plastic. In the U.S., decreasing the weigh
t of polypropylene cold cups has decreased costs by 6 percent and saved nearly 1
,000 tons of resin. Various anti-littering marketing campaigns have been impleme
nted in Portugal, Italy, Switzerland, the UK, Australia, Germany and other natio
ns. A variety of different waste and recycling bins have been tested in certain
countries. A German model achieved a 90 percent recycling rate. Restaurants in S
witzerland feature a separate receptacle for organic waste, which is sold to Kom
pogas, which ferments the waste into biogas.

KFC
Marketing Strategies for driving Sales:
KFC, which sold its first franchise in 1952, is modernizing its restaurants, imp
roving the quality of its food, and focusing more on marketing--strategies that
so far have pleased operators by driving sales. In addition, franchisees cite on
going initiatives--like a move to plated meals, exterior design upgrades, and mo
re resources on menu innovation--as providing momentum for further improvements.
Hiring the right people:
After KFC suffered from declining sales in 2000, the company brought Bachelder o
nboard in February 2001 as the chain s leader. Previously she was the top market
ing executive at Domino s Pizza. KFC has incorporated an updated exterior design
that features a larger image of its icon and founder, Col. Harland Sanders, "to
create a focal point for customers from a long distance" in almost half of its
stores with plans to debut the look system-wide in three to five years. Bachelde
r said the company is exploring dining room upgrades as well.
Advertising Strategies:
KFC is good at taking advantage of any activity that might generate publicity. I
n 2008, KFC earned a lot of good PR, making a big deal out of moving its secret
recipe to a new location, which was apparently not such a significant event. In
April 2009, KFC committed to fill 350 potholes in Louisville, KY. The only catch
is that Colonel Sanders will be legally allowed to graffiti on the ground Refres
hed by KFC stenciled drawings (KFC had assured the citizens of Louisville that it
is street chalk, so its not permanent). KFC has been changing its logo over time
and their latest logo was revealed by constructing a giant logo made up of 6,000
red, 14,000 white, 12,000 eggshell, 5,000 beige and 28,000 black tiles. They see
m to have tried to capitalize on the popularity of programs like Google Earth.
Menu:
KFC franchises around the world are not doing as good a job at customized meals
as McDonalds, but it is still doing well. In India, for example, where a big chun
k of the population is vegetarian. In order to capture that market, KFC at India
has made the most extensive veggie menu in the world. KFC is also planning on e
xtending its menu and giving out a new product line of Kentucky Grilled Chicken.
Celebrity Endorsement:
KFCs sales were suffering, so the company was hoping its new line of Kentucky
Grilled Chicken
could help lift its bottom line. To help spread the
word, it joined forces with the promotional juggernaut called Oprah, who announc
ed on her show downloadable couponsgood for a free 2-piece meal. KFC also sends o
ut open letters to celebrities, offering to host their parties for free. Jennife
r Lopez was offered to hold a VIP after-show party at a KFC fast food restaurant
.
PETA:
PETA, People for the Ethical Treatment of Animals, an organization founded in 19
80 that is perhaps best known for tactics such as throwing red paint on fur coat
s and comparing the slaughter of livestock to the Holocaust. PETA has been on a
fierce campaign against KFC, charging that the company treats chickens inhumanel
y, or at least allows its suppliers to. PETA has used media savvy, a stable of c
elebrity advocates and a sophisticated Internet operation to try to change the b
ehavior of consumers and some of America s largest corporations, including fast-
food chains. McDonald s, for one, made wholesale changes in the way it treats fa
rm animals after animal-welfare activists, including PETA, highlighted abuses. B
urger King and Wendy s
did the same after PETA launched campaigns called "Murder King" and "Wicked Wend
y s." What makes the KFC campaign unique is that the chicken chain has refused t
o submit to PETA s demands, which include stopping the use of growth-enhancing a
ntibiotics and using gas, rather than electric shocks and sharp knives, to kill
chickens. As a result, company executives have been doused with fake blood, crit
icized by the likes of Pamela Anderson, Al Sharpton and the Dalai Lama, and cont
inually subjected to the circuslike atmosphere of PETA protests at its restauran
ts.
PIZZA HUT
Pizza Huts Marketing Strategies:
Pizza Hut has gone back to the basics with higher quality ingredients, stronger
promotions, and new products with staying power. Following are some of the marke
ting strategies by Pizza Hut:
Pizza Hut going green:
Pizza Hut is now trying to appeal to the health conscious. In August, 2008 The D
allasbased Company has planned to launch a new all-natural pie made with organic t
omatoes, toppings made without artificial preservatives and a multigrain crust.
While customers are increasingly seeking options for more natural foods, they st
ill love pizza therefore Pizza Hut s offering the natural. It allows them to sta
y on the cutting edge of food trends while delivering on the amazing Pizza Hut t
aste their customers expect and demand. Even the boxes the pizzas are delivered
in are being made from 75 percent recycled material.
Pizza Hut rolls out Mobile Strategy:
In January, 2008 Pizza Hut introduced new cell phone services that let customers
order from any of its 6,200 outlets nationwide via either text message or the m
obile Web. As part of its bold strategy to tap into the mobile generation, the D
allas-based company aims
to earn half its revenues from orders originating from computers and mobile phon
es within five years. It is worth noting that Pizza Hut is not the first pizza p
lace to offer mobile ordering services, but the company says its service is the
broadest and most comprehensive.
Pizza Hut s leadership position in the digital space:
Pizza Hut has teamed up with up Warner Brothers in its quest to gain attraction f
or the new market segment i-e the movie-goers by supporting the release of Termi
nator Salvation, a sequel to the Terminator movies. Pizza Hut and Warner Bros. P
ictures debuted five minutes of exclusive Terminator Salvation footage that was
available to be viewed on pizzahut.com, allowing anxious Terminator fans to feed
their curiosity (and their stomachs) all in one stop. The Terminator Salvation
footage from the film was available for fans to be watched from May 11 - 30 and
featured a sneak peak from the movie before it hit theaters on Thursday, May 21.
Alongside the exclusive footage, visitors had the opportunity to instantly win
a number of great prizes, including a life size Terminator T-600 model, custom T
erminator Salvation Xbox consoles, Terminator: Salvation video games, Terminator
Salvation Action Figures from Playmates Toys(R), and other licensed products. F
ans that had been made the new customers of Pizza Hut also had the chance to wat
ch movie trailers, download wallpapers, and order all their favorites from Pizza
Hut.
Book It Programs:
Pizza Hut has been a long time sponsor of the Book It program to encourage the boo
k reading in American schools. This has been done as the corporate social respon
sibility to educate the children in the areas of the United States. Those who re
ad books
according to the goal set by the classroom teacher are rewarded with Pizza Hut c
oupons good for a free Personal Pan Pizza or discounted menu items.
Advertising Strategies:

Successful Delivery to Space:

In May 2001, the world s first space-consumable pizza had safely reached the Int
ernational Space Station (ISS), where it was eaten by the astronauts living onbo
ard. Despite the unusual delivery address, the pizza, called "the culmination of
nearly a year of collaboration" between the company and Russian nutritionists,
largely conformed to the familiar recipe served up by some 12,000 Pizza Hut rest
aurants worldwide -- crust, tomato sauce and cheese. However, the vacuum-sealed
space pizza was topped with salami rather than the traditional pepperoni. Resear
chers found that pepperoni did not withstand the 60 day testing process, a compa
ny release rather cryptically stated. After delivery, the station crew baked the
6-inch ("personal pan") pizza themselves in the ISS oven. Pizza Hut, a division
of Tricon Global Restaurants, pioneered the commercialization of space in July
by paying to have its logo placed on a Russian Proton rocket.
Promotion through Facebook:
As a company Pizza Hut launched the first Pizza Hut fan page on Facebook and in
October updated the page to add more features, including an application that all
ows customers to order from Pizza Hut without ever leaving Facebook. Pizza Hut p
rides itself on being innovators in the category, so embracing the latest social
media tools is something thats in line with their company philosophy.
Celebrity Endorsement:
In recent years, Pizza Hut has had various celebrity spokespeople, including Jes
sica Simpson, the Muppets, and Damon Hill and Murray Walker. Recent commercials
have Queen Latifah providing the voiceover. Also in 1997, Pizza
Hut reunited "greatest of all time boxer" Muhammad Ali with trainer Angel Dundee
in a sentimental made for Super Bowl commercial.
Pizza Hut Park:
Pizza Hut Park is a multi-purpose facility, featuring a 20,500-seat stadium in C
ollin County, Texas. It is expected that the stadium will make a significant amo
unt of revenue by hosting mid-sized concerts, as well as various other sporting
events, such as high-school football games. The stadium includes 18 luxury suite
s as well as a private 6,000-square-foot stadium club.
NEW STRATEGIES FOR KFC PAKISTAN
Get Rid of the Fried Concept:
In todays health conscious environment, it is essential for KFC to get rid of the
negative connotation attached with its name because FRIED is one word that tick
s off the health conscious faction these days. There are a lot of other ways to
serve chicken like roasted, grilled and smoked chicken and in order to cater to
a wider target market; KFC
Pakistan should expand in these types of chicken too. This would greatly contrib
ute towards expanding KFCs market share in Pakistan. It can even start offering M
asala Chicken and Tikka to customize its menu to cater to the Pakistani market.
This will be very useful because it can even attract those people who have a lot
of money but are not into traditional fast food.
Expand into other meat types:
Many people think that its time KFC should start offering types of meat other tha
n Chicken in Pakistan. Some fillet fish burgers are available in the menu but th
e choices are limited there. Specifically for the Pakistani market, Beef can be
a very good option and beef burgers could be very popular because there is a gen
eral conception that beef is a lot more healthier than chicken. KFC can also pla
y around with the fish items in its menu to cater to the more sophisticated audie
nces.
Variety in Menu:
The menu at KFC Pakistan needs serious revamping. The menu is very limited in te
rms of salads, desserts, drinks etc and one gets bored trying the same thing aga
in and again. For example, KFC offers just two types of salads i.e Cole slaw and
fruit salad. Menu extensions are also rare. Snacks and side orders also include
little more than nuggets, rice and corn on the cob. There is a great potential
for the variation and extension in the menu and the way Pakistani customers have
been reacting to fast food in the last couple of years, we can surely say that
it will be a success.
Coffee, Ice cream and Deserts- the new IN trend:
McDonalds has been diversifying into coffee and beverages all around the world bu
t outlets in Pakistan offer a little more than two flavors of milkshake and plai
n coffee. KFC Pakistan can take the lead by at least expanding into a few differ
ent types of beverages and take the lead. Other than this, KFC only offers a sco
op of Walls ice cream at the moment as a desert. With chains like Gloria Jeans a
nd Gellato affair which specialize
solely in coffees and deserts, KFC should recognize that there is a great deal o
f potential in the market for coffees and deserts and it can start by utilizing
at least some of it.
Expand into snacks:
During these times of recession and purchasing power parity, one strategy that c
an be very beneficial for KFC is to develop a good, healthy and affordable range
of snacks so that people who cant afford a full mean at KFC can rely on such ite
ms. Going out is not always accompanied by eating out and KFC can develop itself
as a place where people can come, enjoy, socialize, have a drink or maybe grab
a bite to eat. If KFC is the first choice for somebody who wants to have a quick
snack like Chicken strips or wings, than those people are surely going to chose
KFC for a full meal as well.
Drive-ins:
KFCs in Pakistan rarely have fully developed drive-ins which most McDonalds offer
s. Due to time constraints, drive-ins can be a great added advantage for any fas
t food chain that offers it. KFC can try to redesign its current outlets by addi
ng drive-ins if feasible and should make sure that all future outlets have drive
-ins and efficient drive-in services.
Increase the hours:
With the passage of time, late hour socialization is becoming a trend and one wa
y to increase revenues is to increase the number of hours that the outlets remai
n open. But this can only be done after KFC gets rid of the concept that it only
serves full fledge meals.
Advertisements:
KFC Pakistan rarely goes for televisions adverts and billboard adverts are used
whenever a new deal is out or there is an extension in the menu. Due to ongoing
economic slowdown and health conscious trends, KFC needs to reassure its custome
rs that it has all this in mind too. The most recent television advert of KFC us
ed taste as an
appeal. Now KFC needs to advertise on TV as well as billboard and use health con
sciousness, safety and affordability as an appeal. This will assure the customer
s that KFC definitely knows what is going around and it will help them cope with
it.
Corporate Social Responsibility:
Cupola group that owns KFC in Pakistan has been involved in a large number of co
rporate social responsibility acts in Pakistan from educating the poor and teach
ers training but it definitely needs to do more. Brands that support people in na
tional calamities are always remembered. For example, KFC can earn a lot of good
will by sampling directing its CSR efforts towards Swat IDPs or by helping earth
quake or flood affected. KFC can also emphasize that a certain portion of revenu
es will be contributed for any specific problem and win peoples sympathies in thi
s way.
Capitalize on social and national events:
KFC in our opinion should focus on becoming the national favorite brand. This ca
n help KFC earn a lot of incentive from the government as well. KFC should come
with special deals and discounts on national and social events like Eids, Pakist
an day and Independence Day so that people can actually relate with the brand.
Utilize the Internet:
During the past decade, internet usage has increased drastically in the country.
The youngsters are now at par with the global internet revolution and we will r
arely find somebody who has not experienced online blogging and social networkin
g. Twitter, Facebook, Orkut and My Space are as much popular in Pakistan as abro
ad. KFC should now regard internet as the new means of interacting with its cust
omers. Until now, KFC has only been relying on minimal market research but we th
ink now its time KF should focus on making itself as customer centric as possible
by directly interacting with its customers through blogging and social networki
ng because no feedback is as valuable as the one that your customer delivers to
you himself.
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