Krushers Kfc

pic Report Title Krushers securities indus deforming Strategic project Submitted By Group name Date 15 April, 2010 Submitted To Dr Melodena Stephens Balakrishnan Assistant Professor, staff of stemma and Man ripenment, University of Wollongong in Dubai T commensurate of Contents 1. Background3 1. 1. Introduction and accusive3 1. 2. Situational Analysis3 1. 3. Constraints and Assumption. 5 1. 4. harvest Need and Value. 7 2. atomation, invest & Positioning8 2. 1. Segmentation and manoeuver8 2. 2. Positioning routine9 3. Marketing Mix10 3. 1. carrefour strategy10 3. . Pricing strategy10 3. 3. Place strategy11 3. 4. Promotion strategy12 4. Business Plan12 4. 1. Sales and Pro satisfactorys12 Bibliography13 App obliterateix14 Background 1 Introduction and Objective Introduction KFC Corporation, excessively known as Kentucky heat Chicken, is a concatenation of betting victuals persistaurants known primitively allw here the creation since 1952, however the history of t he company goes back to 1930. KFC is serving to a greater extent than 12 million guests in 109 countries through turn out the populace e genuinely day. beau monde is actively franchising cross guidances the World during 58 years1.Loyal customers quite a little govern their favorite restaurant in most e truly developed farming crosswise the Globe. KFC establish heavy position in the foodstuff stead and recognized by millions of spate in the World for its finger lickin sober bellyacher. KFC is serving more than 12 million customers in 109 countries throughout the world every day. Currently, The Company is the most best-selling(predicate) chicken restaurant chain in the entire Globe. This p prowessicular report is focusing on KFC Arabia, coupled Arab Emirates in start outicular. KFC restaurants introduced to the Middle East region by franchise first mate Ameri sensa since 1973.Currently, there ar KFC branches in over 70 several(predicate) fixs across United Arab Emirates. Menu extended to the Arab World is more foc employ on chicken sandwiches and Colonels Crispy Strips, and also includes side items that argon suited to topical anesthetic preferences and tastes. 2 Product Portfolio The item that, KFC restaurants are associated by the customers with chicken, does not limit the lead of outputs has been offe blushing(a) to the customers. Currently, more than 300 different types of wares make been introduced by the company wholly over the World.World Famous menu contains of chicken pieces, salads, sandwiches, hamburgers, wraps, kebabs, snacks, sweets and sides, beverages. KFC Corporation evermore upgrades its menu with spic-and-span innovative products in order to satisfy unmet ineluctably of their current and future customers. KFC is introducing a new product called Krushers to the region a new re headying crisp take up. This new refreshing frozen suck first was introduced in 3 different flavors Strawberry, coffee bean Krumbl e, Kookies N Kream, followed by Karamel Krunch flavor that has been introduced later on in the Middle East.Objective The objective of this report is to create strategic merchandise plan for Krushers product and successfully launch it in the UAE. 2 Situational Analysis External environmental digest PESTEL Environmental (competitors) Krushers is introduced in a very competitive environment. in that location are several treat competitors in this product sept, the biggest ones are MC flurry from MC Donalds and Hand-Scooped raise up from Hardeess, these are traditional competitors for KFC in the fast-food part and prepare similar products to the Krushers.Other competitors in this product category include Baskin Robins, StarBucks and Jonny Rockets as they offer frozen drunkennesss as part of their product portfolio. Indirect competitors include Liptons Ice tea and Pulp ju grouch bars frozen drinks, they are considered as indirect competitors because they offer product replaceme nts or substitutes to the Krushers. Sociological The UAE population has utmoster levels of disposable income compared to the rest of the world, live to HSBC bank study, UAE is the fifth top country in the World in terms of disposable income. 3 As a chair, eating out is almost a daily exercise in the cordial life sentence of UAE residents, which in turn produces a bigger mart for restaurants and food outlets. In addition to that, In terms of age groups, the UAE has a dominant young person population, with the 25-29 years emerging as the largest group of intimately 777,000 at the end of 2008. It is projected by the Ministry to peak at 830,000 at the end of 2009. 4 This combining of in high spirits disposable income and young population makes the UAE a perfect market for KFC Krushers product which physical objects age group of 18-24.Technological From a technological psyche of view, production of cold beverages relies heavily on the right equipment. KFC has state of the art production equipment. The company also utilizes advanced CRM solutions to gear its direct marketing efforts. Economic In the UAE over two-thirds of expats in the UAE stated that their attitudes to spending had changed as a result of the economic crisis, however over three-quarters of expats (82%) living in the UAE also said that they had not considered a move home. 5 Having said that, the UAE cadaver one of the strongest economies in the region (third in the region afterward Saudi Arabia and Iran). 6 As mentioned earlier, the disposable income in the UAE is cooperatively high, which makes it an ideal market for KFC and the new product Krushers. Industry Analysis Porters Five Forces Market Rivalry Krushers is a product category that sees high rivalry from various(a) direct and indirect competitors. These competitors do not only include fast food chain restaurants with a similar product category, exclusively also chains that focus exclusively on that market niche (frozen shakes and drinks).The fact that Krushers is a hybrid or mix of different products (i. e. ice cream, milk, smoothie, ice, fruits, juice, cookies, etc. makes it vexed to place it in a specific product category and and so exposes it to higher competition from those various product categories. In addition, competing products have been established in the market and have a healthy market share. It would be a challenge for KFC to strongly flummox by in this product category, part because the product is new and partly because they are not strongly associated with frozen drinks care Krushers.Bargaining violence of suppliers KFC is one of the largest leveragingrs globally all their suppliers go through a very rigid screening process to jibe their quality standards. Having said that, KFC only uses high quality suppliers with which they have strong relationships, therefore, the threat of suppliers is minimized. Threat of Substitutes Krushers falls into the frozen drinks category, delinque nt to this point, it faces a high threat of substitution from a quash of relevant product categories including carbonate drinks, milk shakes, ice cream, ice tea, ice coffee tree, frapuccinos, fresh juice and smoothies.In order to offset this threat, KFC has to rely strongly on their established disfigurement image and large customers base to market and sell the product. Bargaining power of buyers As it mentioned earlier, the target separate(s) (18-24) are high in population, however, there is a large number of product substitutes operational to them. Therefore, they enjoy a virtuallywhat high power of bargaining. Barriers to entry The barriers to entry to this specific product market are relatively low. The investment fatalityed is not very high and the health regulations can be met with groundsable effort.However, due to the size and the number of KFC branches across the UAE, it would be very difficult for new players to significantly compete with KFCs market share unless they make significant financial investments, so reversing the barriers to entry to very high. 3 Constraints and Assumption. Constraints There are several constraints that KFC face in the introduction level of a new product Krushers. Customers are not aware of a new product that has been introduced by KFC. need of awareness can be explained by poor procession and advertizing, teaching of the employees. Krushers should be prepared within 1 subtle, however, according to the survey, almost 95 per centum of the gainrs received their Krushers during the quantify frame 3 minutes to 6 minutes. 7 KFC is known all over the World for its finger lickin good chicken, it would be difficult for consumers to associate KFC as a place where they can purchase Krushers. The company didnt define the product for the customers whether it is a milk shake or it is a recant, etc.However official launch of the product capacity solve these constrains. Assumptions KFC does not publish any sales figures as a reference point therefore the sales forecasts are found on an assumption that each branch pass on be able to sell 5 Krushers per hour on an average from their branch duty. presumptuous that branches operate from 10 a. m. to 3 a. m. that makes a chalk up of 17 working hours a day. concord to data published on the Americana website, they have 70 locations across the UAE, which equals total working hours of 1,190 per day (17X70).Assuming that the price of Krushers is at 9 drh per drink without a meal, and 4 dhs per a drink with a meal and based on the re look to channeled with consumers, 25 percent of the consumers forget buy a Krushers with a meal and 75 percent of the consumers testament buy it without the meal. 8 Based on these assumptions, we can conclude the future(a) number number of Krushers sell per a day = total working hours X number of Krushers sold per hour = 1,190 X 5 = 5,950 Krushers per day across all locations.Therefore, total taxs per day would be ca lculated as following R up to nowue of Krushers sold with a meal = (5,950 X 25%) X 4 = 5,950 dirham R levelue of Krushers sold without a meal = ( 5950 X 75% ) X 9 = 40,162dirham Total revenue of Krushers per day = revenue with meal + revenue without meal= 5,950 + 40,162 = 46,112 Monthly Total revenue of Krushers = total revenue per day X 30 days = 46112 X 30 = 1,383,375 dirham Annual revenue of Krushers = monthly revenue X 12 = 1,383,375 X 12 = 16,600,500 dirham Since KFC spends 6% of the total revenue on marketing and packaging, we can estimate the annual marketing budget for Krushers at annual revenue of Krushers X 6% = 16,600,500 X 6% = 996,030 dirham Due to the lack of information on protean or direct exists, we give limit our forecasts to only revenues. However there is more right way to estimate net profit of the company from Krushers. Target segment that has been chosen by the company is the youth in the age jog 18-24 of UAE, which has been estimated to 1,417,300 peop le.It has been assumed that 60 percent of the total youth in the age range 18-24 would be a potential target of the Krushers, according to the chosen target segment UAE explorers, which is 850,four hundred people. 9 Penetration has been assumed according to seasonal demand, much(prenominal) as hot summer weather effect. Shopping festival was early(a) reason to estimate increase in penetration in the month of celestial latitudeember, and there is other reasons that has an effect on penetration percentages across the year, which is explained in the personal credit line plan section 4. 1 of the report. Revenue has been calculated according to the total users that would purchase the Krushers and the selling price.Expenses that would go on the marketing part of the Krushers have been assumed by the group and calculated in the business plan section 4. 1. Expenses have been estimated according to Magazine = 150,000 dirham paper = 168,000 dirham Facebook = 20,000 dirham In house AD 30, 000 dirham TV = 600,000 dirham Road signage = 200,000 dirham Billboard = 300,000 dirham Campaign = 50,000 dirham 4 Product Need and Value. KFCs order characteristics Consumers need analysis KFC is a well known brand as a evaluate for bullion all around the Consumers would search for a reliable drink with no encounter to world. their health. KFC has large number of branches, as well as big form of People living in gulf countries much(prenominal) as UAE would always search items, all delivered in a by the bye fashion, all of these give for a drink which refreshes their olfactory propertying. high value of convenience. Consumers would go for a product which is faster to be delivered to them and easier to carry with them musical composition doing their familiar routines during the day. Actually people are always after new things in their life. Those things could be a new product like Krushers or even its new flavors to be introduced to the market in future. There many other distinguished factor in the consumers mind to be considered as their unavoidably of product much(prenominal) as pricing, great taste and optional plectron. Krushers value analysis based on the mentioned needs above Krushers is introduced as a smoothie drink that doesnt have negative effect or risk on consumers health. It supposed cosmos a drink to be alternative to those of energy drinks fulfilled of caffeine. Krushers came up with different flavors for word form seekers and those valuing a product based on optional natural selection. Offering Krushers as a value-added to meal as of satisfying perception of value for money promised by KFC. They offer customers to add 4dhs to their meal and have Krushers with their meal in spite of soft drink or juice. Soon enough Krushers could be a replacement for cold drink at KFC by oblation less than half the price if it is with any KFC meal. As of the discussed need of customer relating the weather of UAE the n Krushers could be the best solution for relieving the thirst and the heat. Segmentation, Target & Positioning 1 Segmentation and Target Segment 1 academesUniversity students actively socialize in groups for many reasons, be it for regular(a) chat ups between classes, for examinations studying or even group assignments etc. Therefore as the above points display that a Krushers will fit in perfectly with all three areas of a university student. Students usually have a red bull or a coffee or a milk shake etc with them while working on assignments with a group or while studying in order to lapse them going. Its become more like habit to do so. This is where we feel a Krushers can come in to play as it is a thick ice cream based shake with different flavors that will be able to fulfill a students need and indigence in terms of a having a drink that goes with what they do. Segment 2 Beach & Shopping kernel goers (Fun)For this group what we squarely involve is the lifestyle of hav ing fun and constantly active. We used the beach and shop marrow as examples of places where those who are in constant search of fun and activity can have a Krushers. The reason we used the beach and shopping mall as examples is due to the fact that a Krushers can be consumed in both situations / locations where on the beach it can be used as a refreshing cold drink to keep smooth under the sun where as in the same time people dont usually take food with them to the beach as it spoils under the sun and so having a Krushers on the beach is like a two in one feeling as it has current bits in some of its drinks like kookies n kream.Where as in the mall those shopping around can have a Krushers as a drink to crack around with while shopping or/and even as a drink to but and relax with while taking a break or even while meeting friends for a coffee. Segment 3 UAE venturers This is a group of people who are constantly out and about but dont in touchableity engage in activity. They unsloped simply roam around places much(prenominal) as the mall or the JBR walk etc. by just watching other people or window shopping or even simply go for drives around the city in search of something to do. Basically they dont have anything to do and just want to keep themselves busy. Generally they do this in groups of two or more.The reason why have inserted such a lifestyle in our segment is because a thick shake like Krushers can be very appealing to them in terms of keeping them busy with a drink in their hand. Not only do they have a choice from a variety of flavors but the fact that it takes only a minute to prepare the drink of their choice , thus allowing them to think its quick, ill tally and get one on the way. There is a KFC available in almost if not every mall in Dubai, as well as on popular roads such as the Jumeirah beach road where a drive through option is available. Target Segment & Justification (U. A. E Explorers) According to feedback, most people would consume a Krushers on the move. They look at it more of a milkshake like drink with pieces in it than anything else. Krushers drink does not fit in with the food served at KFC, and therefore existing KFC customers will not have one at a dine in time especially considering they dont see it as a desert either. Sports people have energy bars and drinks to consume. University students opt for a red bull or coffee based drink to keep them up and alert. The fun group of people would not really consider having a Krushers as it is not suitable for them. They would not meet for a coffee in KFC nor would they buy a Krushers and sit on a judiciary for a chat. Therefore the best group and lifestyle is that of a UAE Explorer as on a drive they can go to a KFC drive through almost anywhere in Dubai, Krushers is available at almost every mall in Dubai and at the notable JBR walk too. A Krushers fits in well with a UAE Explorers activities as it is packaged in a way that can be taken in almo st any environment and placed almost anywhere easily without risk of leak or spilling over etc. 2 Positioning Map Krushers is perceived as a refreshing shake that you can have between your main meals. It can satisfy both thirst and hungers fundamental needs of a person. There are two main benefits which Krushers has over its competitors in relation to the target segment, such as Brand examine and farm animal Location K FCs brand image in the UAE is stronger than that of McDonalds and Hardees. Therefore having a strong brand image is advantageous to the consumer in terms of trusting to try a new product and in reality consuming it.Store location is a big factor to the target segment as KFCs stores are more convenient in terms of reach and comfort. Basically this is because KFC is available at all track malls in the UAE, but so are its competitors McDonalds and Hardees but what makes the difference here are famous roads and hang out spots such as JBR where there is a KFC restaura nt but no McDonalds or Hardees. Not only that, in one of the most famous areas for food in Dubai, the Diyafah area there is no McDonalds yet there is a KFC restaurant there too. There is no McDonalds or Hardees in the fellowship village area or the AUS (American University in Sharjah) food court but there is a KFC.UAE Explorers are on the go and so with KFC restaurants being on their way (drive thru) Jumeirah Beach Road, which is one of the most famous cruising streets a Krushers will be just the thing they will go after as it keeps them busy through their drive or walk at JBR etc. Marketing Mix 1 Product strategy Krushers is a sub product that has been represented by KFC. Introduction of this product increases variety of the product line available in KFC Corporation. Krushers has been introduced in order to mold customers throughout the day. The drink is available in 4 different flavors in the region. Strawberry, Chocolate Krumble, Caramel Krunch, Kookies N Kream are the types of flavors that has been introduced by KFC.According to the survey, customers identified two most popular flavors which are Kookies N Kream and Chocolate Krumble. Currently it is represented in 1 size. It is advisable to add more size options to suit different needs of the consumers. KFC offers Krsuhers as a value-added to a meal by just adding 4Dhs by customer to their meals which is less than the real price of Krushers purchased separately. The promise of great and natural taste is given by KFC through their advertising slogan by saying full of real bitZ. This slogan says that Krushers contains real pieces of fruits and chocolates in it. Thus one of the other increase products of Krushers is the stated promise. 2 Pricing strategyOne of the most important factors that must(prenominal) be considered carefully by companies is appropriate price strategy. Krushers is a new product, due to this point it is recommended to follow penetration strategy while pricing process. However it must be based on Krushers demand, as the demand are more for Krushers it is more obvious that penetration might be superior strategy to follow. Beside they also can gain some market share in marketplace however the supplier of Krushers must be assure when they imply this strategy for their product , they are sure-footed to handle demanders and distribution ravishs . After all thoughtfulness about KFC Krushers, it is better off if they follow penetration strategy.According to the survey, 23 percent of the respondents were dissatisfied, 40 percent were neutral, which makes it total of 63 percent of the respondents (which is more than a half), that were not satisfied with the current price choices. Cutomers are unhappy which style the price does not affect their objectives toward purchasing products. 10 Normally the fixed cost for supplier is 60% of variable cost of products, Krusher is 9 Dhs, 60 % of variable cost would be 5. 4 Dhs which is the fixed cost and the profit almost might be 3. 6 Dhs on each Krushers. According to the question made with one of the KFC stuff, assumptions were made as followed Integrant of Krushers for each cup 60 % of each cup contains ice cream (2Dhs for each cup) Because they purchase the ice creams in retail, it costs less than an ice cream that is selling in stores). 0 % Slash (blended water and sugar), (30 fils for each cup) Flavor (1 ounce), with consideration that the battle is 30 Dhs but for each cup they use just one ounce), (Around 30 fels). These amounts of materials imply for the entire available flavor. All the unhurriedness is Close to 3 Dhs and approximately 1Dhs or less for packaging in overall it cost 4 or 5 Dhs for company. Option terms There is just one size of krusher available in all of the outlets however option price are as below 9 Dhs for any flavor in regular cup size 5 Dhs for having a Krusher with the meal. 3 Place strategy KFC Corporation uses one channel distribution across the World, which is their n etwork of restaurant outlets or branches. Krushers are sold directly to the customers without having any middlemen. KFC branches are available almost in every neighborhood across the country. Restaurants spread out across 70 different locations in United Arab Emirates. Examples would be Shopping mall food courts(Dubai Mall, metropolis Centre) Close to schools and universities(knowledge village) Petrol stations (Emirates Petrol station) Office buildings (Sheikh Zayed Road) High traffic roads like (The Walk in Dubai)11 Customers can dine in the branches of KFC that accommodate dining areas, as well as choose pull back option and consume their Krushers outside in any other location they would prefer to have it.In the Introduction stage of the Krushers Corporation did not represent delivery service for the product these might be due to ice ingredients in it. Before opening any store KFC conduct market research to estimate and consider the population of that area, consumers demogra phic details and major streets which are close to that specific location. It is worth mentioning that the Krushers is not part of the home delivery service due to the physical reputation of the product (is it cold and can melt). 4 Promotion strategy In promotion strategy there are some factors that can be used to promote the products base on MARCOM mix that is used for KFC Krushers promotional strategy.Direct marketing As a direct marketing, KFC departments can conduct some people mostly young girls and boys to promote the Krushers in a very small cup to let the volunteers just taste it and promoters can encourage and motivate the volunteers to go for the bigger Krushers, and the best place for this mien of promotion is in the malls, at the foot court entrance. Sales promotion KFC already gives the customer this chance that if they want Krushers with their meal the price will be reduced for them to 4 Dhs, which the price is 9 Dhs regularly. While the doglike customers buy a comb o from KFC outlet , as a promotion they can give the customers coupons with four blank checklist , that if they buy KFC combo meal for four times as a promotion they can get one free Kruchers with their flavor choice. Generally it can be remunerative for Kentucky chicken part sales and for Krushers, and also that would lead to better result for KFC and keep the customer loyal to the brand. AdvertisingCoupons are Another tools in sale promotion, KFC can sign contract with well known and famous companies or organization which stated whenever they have customer who purchase something from the companies or organization, they give the customers KFC voucher, the vouchers are for specified items but this sort of promotion can bring the customer to the outlet to use their voucher and make them to try new or their favorite products that are available in outlets. It is very important to use online marketing today. Print advertising is another way to market the product. Sample has been develo ped by the group. There are twelve pieces of ice, with person inside each of it.There is one person rest in it and one of the piece contains Kentucky in four of the ices the Krushers flavors are representing and in the other ice pieces there are all the smiley faces that is representing the , iciness ,freezes , pleasingness and freshness of the Krushers and The people in the ice are young and fresh people because it is related to our target segment which is the youth from age 18 24 who are the young generation whenever you look at the advertising it gives a positive , delight feeling about the product and the taste, the choice of putting people in the ice pieces is showing the coldness and freezing feeling that Krushers can give the customers. Krushers has been displayed in the official website, however social networks should be taken into consideration as well as the popular search engines etc. Also it is advisable to use media advertisement, such as radio, tv, etc. Also print advertising like newspapers magazines etc. Business Plan, 2010. 1 Sales and Profits Jan Feb march april may june july Aug Sep Oct Nov Dec potential segment 850 four hundred 850 400 850 400 850 400 850 400 850 400 850 400 850 400 850 400 850 400 850 400 850 400 heavy user 3% 5% 10% 13% 15% 30% 40% 50% 52% 55% 60% 65% 25512 42520 85040 110552 127560 255120 340160 425200 442208 467720 510240 552760 moderate user 2% 4% 8% 10% 11% 25% 32% 40% 43% 46% 50% 57% 17008 34016 68032 85040 93544 212600 272128 340160 365672 391184 425200 484728 Total user 42520 76536 153072 195592 221104 467720 612288 765360 807880 858904 935440 1037488 (SP=9) X 75%(users) 287010 516618 1033236 1320246 1492452 3157110 4132944 5166180 5453190 5797602 6314220 7003044 (SP=4) X 25%(users) 42520 76536 153072 195592 221104 467720 612288 765360 807880 858904 935440 1037488 total revenue 329530 593154 1186308 1515838 1713556 3624830 4745232 5931540 6261070 6656506 7249660 8040532 expense magazine 150000 150000 150000 150000 newspaper 168000 168000 168000 168000 168000 radio 135000 135000 135000 135000 135000 135000 135000 135000 facebook , 20000 20000 20000 20000 20000 20000 20000 In house Ad 30000 30000 30000 30000 30000 30000 Tv 600000 600000 600000 600000 road 200000 200000 200000 200000 billboards 300000 300000 300000 campaign 50000 50000 50000 50000 total 455000 768000 355000 230000 1153000 500000 333000 535000 818000 335000 985000 653000 profit/ evil -125470 -174846 831308 1285838 560556 3124830 4412232 5396540 5443070 6321506 6264660 7387532 total profit 40727756 Bibliography KFC official website, 2010, universal resource locator www. kfc. com, last accessed April 6, 2010 KFC Locator, 2010, Americana group official website, uniform resource locator http//www. americana-group. net/Default. aspx? Id=1207 , last accessed April 7, 2010 KFC, 2010, Wikipedia, UR L http//en. wikipedia. org/wiki/KFC,last accessed April 4, 2010 KFC Arabia official website, 2010, URL http//www. kfc-arabia. com/new_products. hypertext mark-up languageKrushers,last accessed April 8, 2010Annual report, 2008, Americana group, URL http//www. americana-group. net/Default. aspx? Id=1316, last accessed April 14, 2010 Annual report, 2008, Yum, URL http//www. yum. com/annualreport/docs/annualReport08. pdf, last accessed April 4, 2010 UAE population to exceed five million by years end, 2009, UAE Interact, URL http//www. uaeinteract. com/docs/UAE_population_to_exceed_five_million_by_years_end_/37085. htm, last accessed April14,2010 Appendix interpret 1. pic Graph 2. pic Graph 3 pic Graph 4 pic Based on 1. potently dissatisfied 2. Dissatisfied 3. Neutral 4. Satisfied 5. Strongly satisfied 1 KFC incorporated website (2010) 2 Americana group website (2010) 3 AMEinfo press release, June 24-2009. http//www. ameinfo. com/201597. html 4 Ministry of social affairs, annual st atistic, 2008 5 AMEinfo press release, June 24-2009. http//www. ameinfo. com/201597. html 6 Wikipedia, 2010 7 Appendix, Graph 1, page () 8 Appendix Graph 2, page ( ) 9URLhttp//www. uaeinteract. com/docs/UAE_population_to_exceed_five_million_by_years_end_/37085. htm 10 Appendix, Graph 4, page () 11 Americana group website (2010) High Brand Image KFC Krushers McDonalds get High Store location convenience Low Store location convenience Hardees Shake Hardees Shake Low Brand Image