The Role of Personal Selling in KFC - Essay Example

Introduction KFC Corporation, with headquarters in Louisville, Kentucky is globally the most popular chicken restaurant chain, catering to more thana billion of the Colonel’s “finger lickin’ good” chicken per year in more than 80 countries around the world (KFC 2009). With above 11,000 restaurants worldwide, KFC serves nearly eight million customers every day (KFC 2009). KFC is part of Yum! Brands, Inc., which is the worlds largest restaurant system as it owns over 32,500 KFC, A&W All-American Food, Taco Bell, Long John Silvers and Pizza Hut restaurants in over 100 countries (KFC 2009). KFC came to Singapore in 1977 with its first outlet on Somerset Road. It took the firm 30 years, to establish over 70 outlets which signify the popularity of the chain (KFC 2009). KFCs menu includes Original Recipe chicken – having the same exuberating recipe Colonel Harland Sanders created more than a half-century ago. Customers around the world also enjoy a variety of more than 300 other products – like the Shrooms Burger in Singapore (KFC 2009). Sales KFC Singapore’s performance in 2007 was at its peak. The sales climbed 3.0% to RM280.2 million from RM272.0 million in 2006; while profit before tax augmented 12.3% to RM10.1 million from RM9.0 million the year before (QSRbrands 2007). KFC Singapore attained these record sales with their varied deals throughout the year year. In March, KFC Singapore used its energetic 30th Anniversary media campaign to introduce the new KFC logo, uniform and packing. KFC Singapore also coupled this with their toasted range with Cheesy BBQ Meltz in April the same year. By the end of the year, KFC Singapore had 69 stores, with four new restaurants, five repositioned and eight closures (QSRbrands 2007). But due to the global crunch, sales are declining overall. New ideas and menu items are needed at for the business to keep up with its performance in 2007 (Uniquely Singapore 2009). Moreover cost effective methods of marketing products have to be utilized like personal selling to boost the sales graph which is now taking a downward trend. To analyze the causes of the falling sales and to comprehend the plausible opportunities for growth, an external environmental analysis is conducted using the PEST analysis. External environmental analysis- PEST Technology -Technology plays an eminent role in the growth of an economy. Singapore has the largest and most IT-savvy Port in the world which enables businesses to have efficiency in the supply chain (Field 2002). The country has a very sophisticated telecommunications infrastructure which gives the opportunity to reach new customers and keep a closer check on their preferences (Field 2002). Economic - Singapore is considered as one of the best economies for business in the world as per World Bank’s ranking. Despite the current global recession, Singapore has managed to survive in the economic slowdown with its strong resourcefulness that provides further support to both households and the business sector (Uniquely Singapore 2009). Social - Singapore is recognized to be the ‘Melting Pot’ of cultures and ethnicities in Asia. This is because Singapore has mix of Chinese, Mandarin, Malay, Thai, Tamil and Eurasian culture (Uniquely Singapore 2009). Singaporeans are very fervent about food and eating which is why Singapore is known as the ‘Food Capital’ of Asia. This cosmopolitan city offers a wide variety of regional cuisine from across the globe (Asia one 2007). Political/Legal - The government is deeply involved in every business/industry decision be it recruitment or regulation. The aim is to understand the culture and challenges faced by the country and then avail the existing opportunities (Asia one 2007). Marketing Mix Product - The heart and soul of KFC is the Colonels 11 herbs and spices finger-lickin flavor that makes the KFC Original Recipe. Other than that KFC also has specialties like Crispy, Twister and Colonels Crispy Strips chicken (KFC 2009). With restaurants in more than 80 countries, KFC caters to a wide variety of customers by localizing its products as per market needs. Customers around the globe also enjoy more than 300 other products for example Shish Kebab and Fish Zinger which have been designed to cater to the local market needs (KFC 2009). Price- The pricing of KFC is very competitive being part of the fast-food industry. KFC attempts to give the customer value for money and by offering a wide variety of deals for them. The idea is to promote the purchase of a Meal rather than a single item thereby increasing sales (KFC 2009). Place and Physical Evidence-KFC outlets mirror the true spirit of the Colonel Sanders heritage. Every characteristic of KFCs brand identity is very well exhibited on all point of communication with customers- be it the outlet or the delivery channel going to the customers (KFC 2009). Promotion -KFC believes in intense promotion to attract and retain customers. These tools vary from offering Value Meals to providing free service to the customer like home delivery and take-away (KFC 2009). KFC also utilizes television, print, radio and internet especially to inform about new deals. People-KFC believes in having a friendly, helpful and responsible team that will always put the customers first (KFC 2009). Such strong work ethics echo their behavior with the customers, which is very important in any service industry. Training is done on a regular basis which keeps the employees updated and efficient (KFC 2009). Process-KFC not only offers quality food but also offers a fun and satisfying experience along with convenient and cost effective meals at a Quick Service Restaurant for the whole family (KFC 2009). SWOT Strengths KFCs secret recipe-Colonel Sanders’s secret combination of 11 herbs and spices is what gives it a competitive edge (KFC 2009). Brand Equity- KFC is the market leader when it comes to the chicken segment of the Singapore Quick Service Restaurant Industry (The Poultry site 2009). Part of the world’s largest restaurant system- KFC is part of Yum! Brands, Inc. under whose umbrella come over 32,500 restaurants in over 100 countries (KFC 2009). Gold Standard Quality- KFC assures high quality food and only uses chicken which have been approved for import by Agri-Food & Veterinary Authority of Singapore (AVA) (The Poultry site 2009) Halal Certification - Catering to the Muslims in Singapore, there are several halal food restaurants by KFC in Singapore licensed by the MUIS (Islamic Religious Council of Singapore) this enables them to tap the Muslim market (The Poultry site 2009). Business relations- Since KFC is a global chain, it has good business relations and thus is able to get supplies at competitive rates (The Poultry site 2009). Weaknesses Lack of menu variety – The primary focus is on fried chicken and so the menu options are limited for people not fond of it. Even though KFC looks for opportunities to add on variety to its menu with items other than chicken like fish, mushrooms, greens etc. in a multicultural market like Singapore, lack of variation means a significant portion of the market may be untapped (The Poultry site 2009). Opportunities The Singaporean market –Singapore is exceptionally renowned as the Food Capital of Asia (Asia one 2007). Having a blend of various cultures living together, all kinds of food are welcome here. This poses as a great opportunity for KFC to develop their business and cater to the different market segments and create its unique niche (Asia one 2007). Tourism industry – Singapore has approximately 10.1 million visitors coming in (Uniquely Singapore 2009). KFC has great potential to grow in this market as an influx of tourists comes in the country and the majority of them are aware of KFC. McDonalds and health – Nowadays the McDonalds has been heavily targeted as being bad for health. This gives KFC an opportunity to grab their market share by introducing healthy meal options (Chiem 2000). Threats Rich tradition of exotic Singaporean Cuisine - This cosmopolitan city has a wide variety of unusual dishes to offer. To satisfy such a market and to retain customers can prove to be a tough job as it will be difficult to match the tastes and preferences of customers with such varied cultures. Moreover, local cuisine restaurants can pose as tough competition to KFC (Uniquely Singapore 2009). Increasing competition –New innovative options of food chains are entering the market which might eventually takeover as they meet the changing market needs (Uniquely Singapore 2009). Changing preferences of consumers – Consumers are much more aware of healthier food options today and KFC faces the issue of having a limited menu consisting mainly of fried foods (Forster 2002). However, healthier alternatives have been added to the menu like the Oriental Chicken Salad but a lot more improvement has to be made in this realm. Roles of Personal selling in increasing Sales: Personal Selling plays an important role as a tool for increasing sales in the hospitality industry. In case of KFC, this personal contact with the customers can occur through many ways like face-to-face meeting at the outlet or telephone conversation for example in case of home delivery and customer service (KFC 2009). Personal selling is a very effective technique which can be used in various other ways to build strong long term relationships with the customer. To increase sales, personal selling should be improved so that brand loyalty increases and customers buy more. Recommendations on how to improve sales through Personal Selling: Internet Marketing can be used to reach the customer in various way using the KFC Website, customer emails and also by setting up KFC Links on other popular website. The idea is to generate demand by attracting customers. Maintaining a database of consumers will help KFC understand the purchasing patterns of the consumers. The firm can then send personalised emails to customers about new deals, promotions and products. This will be personalised and help build customer loyalty thereby increasing sales. KFC Loyalty Card- The employees can promote their loyalty cards and prompt customers to use them. Customers of KFC can be given a loyalty card for free through which they can earn points with every purchase. These points can then be en-cashed for discounts gifts or free meals. This will make customers buy more often thereby increasing sales. Customer Information Database –KFC should interlink customer database collected from all customer contact spots which includes sales personnel, customer service, websites etc. to collect information about the customers (e.g. their product likes and dislikes, their special occasions etc). This will enable KFC to expand their data and be more informed about individual customers. This information can then be used to create value for both parties. For example, using the customer database, loyal customers can be given special offers on their favorite deal on their birthday, or send a personalized message on special occasions. This would connect the customer and the brand more closely thereby boosting sales. Participation in Food Events – KFC can participate in the popular food events of Singapore and use the medium to reach out to a large number of customers. They can create attractive stalls with various activities and games and offer free food samples to those participating. This will attract new customers and will be an opportunity to increase sales as the customer base increases. Create an interactive magazine An online magazine where customers can interact with representatives of KFC should be created. This is where they can read articles, lodge complaints, write blogs about products, ask about the products and health related issues, play games, meet other customers and find new outlets etc. it will be interactive and thus make customers come closer to the brand. Using mobile advisements Using the customer database, personalized messages can be sent to customers informing them of new deals and products that have been introduced. This will save costs as the advertisements will be focused and sales to existing customers can be increased. Effectively deal with customer concerns - Personal Selling is a two way interaction and this allows the sales team to directly deal with any customer concern. KFC also has a UAN number through which customers can be in contact through phone for delivery or any other question they have. Singapore’s efficient technology can be effectively utilized to enhance their personal selling by connecting employees, supply chain and management regionally with the internet and private phone systems. This will enable employees to be more updated as the system will be more efficient and thus they will be able to satisfy customers better. Help build good long term relationships with the customer - If the experience with the staff at the outlet is good and helpful then the customers will feel more comfortable in visiting the place again. The employees should be extra kind and polite to customers. Problematic situations where customers’ complaints are involved should be handled with extra care and employees should make sure that they are satisfied when they leave the premises. Such an attitude will build trust and build a long-term relationship. Improve suggestive selling techniques. This is a wonderful tool for KFC where the order-taker attempts to suggest an order for the customer. This strategy works well in various situations for example, when up-sizing a meal, generating new product trial, or attracting kids. However, the firm needs to focus more on it and improve it by training the employees more regularly and keeping a tab on how employees use this tool so that there is improvement and thus more sales are generated. Co-branding – KFC can take advantage of being part of the largest restaurant network and thus improve economies of scale within its restaurant operations. This can be done by opening restaurants in conjunction with Pizza hut whereby customers can get more variety. Customers will be getting a unique blend of products and services. This unique feature can attract new and existing customers. Conclusion KFC is one of the largest fast-food chains in the world. The firm has been doing very well with sales figures having an upward trend. However, with the changing economic conditions and the global economy going down, the sales have also gone down as people have little disposable income. Coupled with that, competition is stiffening and people’s preferences are changing as they are becoming more health conscious (Forster 2002). However, KFC aims to maintain their sales graph but at the same time it has to cut its costs and be more creative where its marketing is concerned. Slashing its marketing budgeted the firm should resort to innovative and cost effective means of promoting their products in an attempt to increase their sales in Singapore and globally. The firm should resort to focusing on personal selling and use it as an essential tool to market its products. Today technology like the internet, telephone systems, mobiles etc can be used to market their products using personal selling. Mobile marketing, interactive magazines, enhancing customer database, loyalty cards and suggestive selling are amongst the many recommendations made. However, sales should be increased using personal selling but at the same time other changes need to be made like menu addition, cleanliness, efficiency and changes in restaurant interiors to make a greater impact on sales. References Asia one 2007, Singapore top paradise for business: World Bank, accessed on: 15th Feb 2009, available at: http://business.asiaone.com/Business/News/SME%2BCentral/Story/A1Story20070926-27084.html Chiem, P 2000, ‘Putting the Sizzle Back in McDonalds,’ Chicago Tribune. Forster, J 2002 ‘Thinking Outside the Burger Box,’ Business Week, pp. 66-67. Field, T 2002, Advice for Technology Executives on Doing Business in Singapore, accessed on: 15th Feb 2009, available at: http://www.cio.com/article/31179/Advice_for_Technology_Executives_on_Doing_Business_in_Singapore?page=1July%2001,%202002- KFC 2009, accessed on 17th Feb 2009, available at: http://www.kfc.com.sg/ QSRbrands 2007, accessed on 14th Feb 2009, available at: http://www.qsrbrands.com/english/pdf/AnnualReport2007/05_Review_of_Operations.pdf The Poultry site 2009, CEO Criticizes KFC for Weak Sales and Lack of Ideas, accessed on 16th Feb 2009, available at: http://www.thepoultrysite.com/poultrynews/15450/ceo-criticises-kfc-for-weak-sales-and-lack-of-ideas Uniquely Singapore 2009, accessed on 16th Feb 2009, available at: http://www.visitsingapore.com/publish/stbportal/en/home.html Read More