Pricing Strategy Of Kfc

KFC is known for serving fried chicken, wraps, salads, sandwiches, cold drinks, shakes and other delicious meals. KFC has a narrow product line as they only focus on selling chicken with less depth (less variety that is offered in the product line). Their products can be seen as a select good since most consumer have to think of which fast food they must purchase from and will compare the brands.

I’m going to be focusing on KFC’s life cycle as a company. When looking at its introductory phase, they managed to have a strong name and strong control over the market as there wasn’t a lot of competition at that time. They followed the rapid skimming strategy in its introductory phase, which is selling a few products without any variants at higher

Optional pricing is when the consumer can buy from the basic menu and go for add-ons and mixed bundling pricing is when KFC offers combos which compromise a mix of items. (Bhasin, 2018) The pricing of products ranges from R7.90 to R199.90. KFC uses the cost base pricing strategy or the cost-plus pricing strategy which involves estimating how many products will be produced, then calculating the total cost of producing this output and finally adding a % mark-up for a profit. This is inclusive of the variable and fixed costs which includes exercise duty and the tax imposed by the government in various and fixed costs. Another pricing strategy that KFC uses is market/ price skimming. KFC globally enters the market by using marketing/price skimming and initially most of its products are priced very high therefore focusing on the middle and upper class. Soon they introduce economy foods which gradually trickle down the prices focusing on the middle and lower class. In this way, they penetrate both sides of the market. KFC also uses competitive pricing which involves comparing the price of their products with other fast food restaurants. For example: if McDonald’s provides similar products at a lower price, KFC will do the same thing to retain its consumers. However, fried chicken is KFC’s main selling point and nearly controls a monopoly over the fast food market only with chicken if it weren’t for Nandos. But it will price its burgers, French fries and beverages with relation to its competitors. For example: KFC’s a.m. Snacker with Snack Patty at R19.90 has a nearly similar price to McDonald’s McMuffin R21. (Pratami, et al., 2009) & (BOHA ALA, 2018) KFC also does promotional pricing. For example: they have Wednesday special where you can get 10 pieces of chicken and 6 Zinger Wings for R89.90 between 5pm and 10pm. Where it usually costs R114.90 for a 9 piece bucket and R44.90 for 8 hot Zinger Wings. That is a