Marketing Management Assignment

On
Kentucky Fried Chicken (KFC)

Submitted by- Anirudh Maria (MBA D)

Submitted to – Dr. Neha Gupta

Kentucky Fried Chicken or KFC is a fast-food restaurant chain from the United States of
America headquartered in Louisville, Kentucky. As the company name suggests, it
specializes in fried chicken. KFC was established by Colonel Harland Sanders, a business
visionary who started selling fried chicken from his side-of-the-road eatery in Corbin,
Kentucky, during the Great Depression.
As of today, there are more than 25,000 KFC outlets in over 145 countries around the world.
(KFC, 2021). It ranks at the 96th position in World's Most Valuable Brands 2020 list and is a
subsidiary of Yum! Brands, a restaurant company that also owns the Pizza Hut, Taco Bell,
and WingStreet chains. (secdatabase.com)

Harland Sanders became a prominent figure of American cultural history by marking himself
as "Colonel Sanders," and his image remains widely used in KFC advertising to this day.
Some of the notable facts of this company are: -
 Kentucky Fried Chicken (KFC), the world's most famous
chicken brand, is the second-largest restaurant after
McDonald's as per sales. (https://en.wikipedia.org/wiki/KFC,
n.d.)
 The first franchise was opened in Salt Lake City, Utah, by
Pete Harman in 1952.
 The term "It's finger-licking good" was coined by Pete
Harman, its tagline, and used worldwide.
 The menu started with the legendary original recipe pressure
fried chicken, i.e., 11herbs and spices, to include chicken
strips, grilled chicken, hot wings, beverages, and desserts.
 According to company figures, 12 million customers are
served daily by KFC.
 Mission statement: KFC's mission statement is to build the most loved, trusted, and
fastest-growing restaurant brand.

ENVIRONMENTAL ANALYSIS

The environmental or PESTLE analysis is used to assess the industry in which the company
operates and is used in coexistence with SWOT Analysis to find out significant threats or
opportunities facing companies. A company uses these techniques to investigate external or
internal forces that affect its ability to provide superior value to its customers at a reasonable
price. The PESTLE analysis of KFC is as follows: -

1. POLITICAL FACTORS: - KFC has collaborated with many government and non-
governmental organizations to effectively overcome barriers influencing the delivery
of premium value to customers. Over the years, many consumers and environmental
groups have spoken against and raised their concerns against many fast-food giants
(including KFC) providing junk and unhealthy food to their consumers.

According to critics, Burgers, French Fries, Fried Chicken, etc., are high in fat and salt. The
government has also prohibited fast-food corporations from marketing food to children under
a certain age and has mandated that companies modify their product menus to not contribute
to the national obesity epidemic. Fast food companies, according to critics, are harming
consumer health by serving fat food. Also, in 2017 the new guidelines issued by the Food
Safety and Standards Authority of India (FSSAI) state that restaurants or cafes with a central
license or with more than ten outlets will have to mention the calorific values on menu cards,
boards, or booklets. (Dash, 2020)
KFC has complied with the rules over the years and signed up to the Government's Public
Health Responsibility Deal in countries such as the UK and the USA, promising to include
calories on menu boards. KFC India has also launched a nutrition calculator on its official site
to check Fats, Calories, Proteins, and Carbs in grams they consume. KFC stated on its official
site that its chicken products contain Monosodium Glutamate and is not recommended for
infants below 12 months. (https://online.kfc.co.in/terms-conditions, n.d.)

2. ECONOMIC FACTORS: - KFC is strongly related to chicken only. The problem

with this is that many vegetarians did not go to KFC despite having limited vegetarian
options. Another issue is that because many people go to KFC for its chicken, it
cannot diversify its menu to accommodate healthier and more diverse foods.
Fortunately, KFC developed vegan options to cater to vegan and dieting customers. KFC
began experimenting with fried chicken sandwiches a few years ago. They created two vegan
fried "chicken" options, which are essentially boneless wings and vegan nuggets. Hordes of
people flocked to the nearest KFC location to sample these new creations. These experiments
were profitable for the company, both financially and socially.

3. SOCIAL FACTORS: - KFC has done something very clever and daring without
spending any money. Its name was changed from Kentucky Fried Chicken to KFC
because the word "fried" is associated with unhealthy foods and people became more
cautious before purchasing fried food. It was challenging for the company to establish
its brand in India because it is predominantly vegetarian, and beef is disrespectful to
the cow, considered sacred by Hindus. As a result, it removed beef from its menu in
India.
Many people have been concerned about how animals are used and treated; many are injected
with hormones, kept in cramped compartments for the entirety of their lives, and forced to
carry more fat than average. Organizations like PETA in the year 2009 have raged against the
mistreatment of these animals, boycotting the companies who follow this unethical practice.
In response to PETA's protest, KFC issued a statement saying. However, they appreciate and
understand the concerns regarding animal welfare highlighted by PETA; KFC is committed
to the highest poultry welfare standards.

"Our suppliers meet all relevant national animal welfare legislation and industry standards.
We do not own or operate any poultry farms, but purchase products from the highest quality
producers who also supply other leading supermarkets and retailers, " said KFC spokesperson
Ashna Sridhar. (Correspondent, 2009)
 4. TECHNOLOGICAL FACTORS: - KFC is a technology-savvy company constantly
improving its technology to serve its customer better. KFC launched its first-ever AI
robot named DUMI in May 2006 in Shanghai, China. The KFC Original+ concept
restaurant idea was to design a new dining experience using digital technologies to
accommodate young consumers' interests and behavior. They can fully manage and
enjoy their dining experience in their way while also improving operational
efficiency. (Chen, 2017)
KFC predicts what customers will order using facial recognition technology. It will collect
data from various users, analyze it, and then decide what a customer will buy based on how
they appear through learning. The company has implemented a mobile payment system that
allows users to pay in stores and drive-thru's using Apple Pay, Android Pay, and Samsung
Pay.

5. LEGAL FACTORS: - The company is present in approximately 145+ countries

worldwide. It must adhere to all applicable laws in the countries in which it operates.
In its financial statement, the company should disclose all relevant information so that
all stakeholders are aware of its actual position. Any violation of the law can put the
company in jeopardy.
KFC is in the food business, so they have particular safety and quality standards set by
various countries that the company must adhere to under the requirements of the different
countries. Many customers complained about the company's tainted food. In one such case,
the company was ordered to pay £19,000 after a health inspector discovered a cockroach
eating food from a food dispensing machine.

6. ENVIRONMENTAL FACTORS: - When customers become more environmentally

conscious, businesses are compelled to implement measures that make their products
more environmentally friendly and sustainable. With the consumer's best interests at
heart, KFC has taken several steps to reduce its carbon footprint and make its supply
chain more environmentally friendly.
KFC has reduced its packaging by 1400 tonnes by switching from cardboard to recyclable
and biodegradable paper. It joined hands with Tidy Planets, which has developed a small-
scale cogeneration system called CHiP that uses cooking oil into electricity and hot water on
the site where it was produced. (Thorpe, 2013) It will save 1000 miles of waste transportation
by each store and reduce carbon emission by more than 4000 tonnes a year.
 CONSUMER PROFILING

Consumer profiling is the process of extracting value from data to learn everything there is to
know about your target consumers and the market in which they live. Leading brands are
putting insight in charge of their messaging to put consumers first, guiding everything from
campaign planning to brand positioning. (GWI, n.d.)

MARKET SEGMENTATION
Marketing segmentation is the identification of market segments that differ from one another.
Segmentation enables the company to meet the needs of its potential customers better.
Marketing segmentation allows firms to tailor the marketing mix for specific markets, thus
better satisfying customer needs, rather than offering the same marketing mix to vastly
different customers. The market segmentation of KFC is as follows: -

Geographic Segmentation: KFC has international locations and sells products based on its
customers' geographic preferences. KFC, for example, has added poutine to its menu in
Canada because it is a famous Canadian dish.
• KFC is available in Islamic countries: Most KFC restaurants in Muslim-majority countries
prepare their food under halal guidelines.

Demographic Segmentation: The market is divided into different groups based on age,
gender, family size, income, occupation, religion, race, and nationality in demographic
Segmentation.
• Age: Is between 6-65 years old. KFC does not have an age limit in its focus, but it generally
tries to attract young age groups.
• Variable Family Sizes such as 1-2, 3-4, and 5+: KFC caters to entire families rather than
single individuals. This is the primary reason for their family meals, which are typically
served at a lower cost.
• Income: This is the most crucial factor for KFC. This determinant determines which class
will be targeted. KFC initially targeted the upper class but later introduced economy meals
that drew in the middle class. Prices are still relatively high to serve the lower classes.
• Gender, occupation, religion, race, and nationality have no significance to KFC
Psychographic Segmentation: is classifying a market based on social class, lifestyle, or
personality traits.
• Social Class − Upper and Middle classes

Behavioral Segmentation: is the classification of a market based on consumer knowledge,

attitude, use, or reaction to a product.
• Taste Conscious
• Quality Conscious

MARKET TARGETING
Targeting is the process of evaluating the attractiveness of each market segment and selecting
two or more components. The target market is determined by the population's size and
growth rate, the company's resources, and the structural attractiveness of the market segment.
KFC's outlets are in posh areas, and the prices are too high (overhead expenses-rent, air
conditioning, employees), so the company caters to the upper and middle classes.

MARKET POSITIONING
The ability to influence customer perception is referred to as market positioning. The
positioning strategy informs customers about why they should use the company's products
and how they differ from the competition. KFC has this unique strategy of positioning in the
different countries they serve. Some of the examples are as follows:

Japan: KFC understood people's preference for dark meat over white meat and started selling
bento boxes and rice bowls familiar to Japanese families. One of the most striking features of
the Japan KFCs is their Christmas popularity which dates back to 1974- "Kurisumasu ni wa
kentakkii," which translates to "Kentucky for Christmas." Today the KFC Christmas meal
consists of chicken, wine, cake, and champagne.
China: KFC started with a wrong foot in China as their tagline- its finger looking good
meant "eat your fingers off" when translated into Chinese characters. However, they
overcame the same, and now the franchise has large sitting areas and large kitchens to serve
the large families dishes like rice dishes, egg tarts, soy milk drinks, and youtiao fried dough
sticks. They also replace the western side dishes such as mashed potato and coleslaw with a
salad of fungus, shredded carrot, and bamboo shoots keeping in mind the customers' demand.
India: KFC tried to enter the Indian markets in the 1990s but was not very successful.
However, after relaunching in 2004, they adapted to the Indian market and started with a
vegetarian menu and non-vegetarian one in 2012- they added Veg Zinger, Potato Krisper
Burger, Paneer Zinger, and Hot Veg Snacker. KFC Bengaluru started to leave behind the
non-necessary plastic and have edible tortilla bowls for their rice bowls menu.
Russia: The KFC Russia menu is generally comfortable to Americans with a few quirks, for
example, cereal on the morning meal menu and draft beer on the drinks menu. Teriyaki rice
bowl, which comes with disposable chopsticks to add a Japanese feel, is another unexpected
item on their menu there.
Philippines: It was a challenge for KFC to enter the Filipino market as there was a powerful
competitor- a local franchise by the name Jollibee, who served plenty of fried chicken,
spaghetti, burgers, Bangus (milkfish), and lumpia (meat-filled egg rolls). KFC's strategy was
to be experimental and serve dishes and give offers that were both attractive and dangerous,
which worked well for them.

Future Strategy on Improvement

Analyzing the present scenario of KFC, there are some short term and long term tips that the
company can follow to expand its business in India as well as have an impact on its present
and potential customers:-

SHORT TERM
 Introduce new recipes tailored to local tastes
 Introduce cheaper items in comparison to its competitors
 Introduce healthier recipes
 Work to improve the image of a healthy fast-food chain through advertising

LONG TERM
 Change the image of the brand from fried to 'healthy.'
 Engage in Corporate Social Responsibilities for animals and the environment actively
 Develop a strong culture of good service

Recommendation for Positioning

KFC has been around for nearly five decades and has established a strong foothold in the
fast-food industry. As the market leader in fried chicken, it is safe to assume that KFC is in
the maturity stage of the product life cycle. While it currently has a dominant presence in the
industry, changes in consumer preferences, and the entry of new fast-food chains, threaten to
send KFC into the decline stage of the Product Life Cycle unless the organization implements
specific changes that keep KFC current with the current market.
Therefore KFC, for its positioning, can make use of the following marketing tactics and
actions: -
 Social Media Advertising: KFC can promote the new product launch on social media
sites with their creative advertisement campaigns. Facebook, Twitter, YouTube,
Instagram, and Snapchat have increased the business's accessibility to customers. The
new advertisements and taglines for the new stores in India and the latest healthy food
items would raise customer awareness.

 Pay Per Click (PPC): PPC would assist KFC in bringing customers from various
sites to their page, encouraging them to try out their new products. The new healthier
product line that will be launched can be advertised on multiple websites and a link
that will take customers to the main page of KFC.

 Sponsorship: By sponsoring events or people, KFC can improve its corporate social
responsibility. For example, the biggest sports event of the world Olympics is being
held in Tokyo these days. Following the marketing strategy of Domino's and Inox,
KFC can also sponsor athletes as well as famous personalities who bring laurels to our
country by either making them ambassadors or giving them a lifetime supply of
products.

 Referral: KFC can create a customer portal to persuade customers and fans to share
their positive feelings about new products or business locations. This would
contribute to the improvement of the customer-business relationship. KFC's
marketing tactics can be carried out with the help of social media messages and blog
posts.

 Franchise Model: KFC can also improve its franchise model framework by cutting
some costs of its franchise as there is cut-throat competition in the fast-food industry.
As compared to Subway, which charges Rs. 60-80 Lakhs or Domino's charges 5-10
Lakhs, KFC charges 1-2 Crores depending upon the size. The company can also help
by providing training to the staff.