Basics of Marketing

“Branding Strategies of KFC”

Introduction

YUM!

Yum! Brands, Inc., based in Louisville, Kentucky, has over 48,000 restaurants in more than 145
countries and territories primarily operating the company’s restaurant brands – KFC, Pizza Hut
and Taco Bell – global leaders of the chicken, pizza and Mexican-style food categories.
Worldwide, the Yum! Brands system opens over eight new restaurants per day on average, making
it a leader in global retail development. In 2018, Yum! Brands was named to the Dow Jones
Sustainability North America Index and ranked among the top 100 Best Corporate Citizens by
Corporate Responsibility Magazine. In 2019, Yum! Brands was named to the Bloomberg Gender-
Equality Index for the second consecutive year.

Yum! Brands, Inc., or Yum! And formerly Tricon Global Restaurants, Inc., is an American fast
food corporation founded on May 30th 1997 and is listed on the Fortune 500. Yum! Operates the
brands Taco Bell, KFC, Pizza Hut, worldwide, except in China, where the brands are operated by
a separate company, Yum China. Prior to 2011, based in Louisville, Kentucky, it is one of the
world's largest fast food restaurant companies in terms of system units.

I. Subsidiaries Of Yum!
1) Taco Bell
2) Pizza Hut
3) KFC

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1. Taco Bell

Taco Bell is an American chain of fast food restaurants based in Irvine, California and a subsidiary
of Yum! Brands, Inc. The restaurants serve a variety of Mexican inspired foods that include tacos,
burritos, quesadillas, and nachos. Taco Bell was founded by Glen Bell on March 21st 1962. It has its
headquarter based in Glen Bell way Irvine, California United States.

2. Pizza Hut

Pizza Hut is an American restaurant chain and international franchise which was founded on 15th June 1958
in Wichita, Kansas by Dan and Frank Carney. The company is known for its Italian-American cuisine
menu, including pizza and pasta, as well as side dishes and desserts. Pizza Hut has 18,431 restaurants
worldwide as of December 31, 2018, making it the world's largest pizza chain in terms of locations. It is a
subsidiary of Yum! Brands, Inc., one of the world's largest restaurant companies. It’s currently leading the
branches from their headquarters at 7100 Corporate Dr, Plano, Texas.

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3. KFC (Kentucky Fried Chicken)

KFC is a global chicken restaurant brand with a rich, decades-long history of success and
innovation. It all started with one cook, Colonel Harland Sanders, who created a finger lickin’
good recipe more than 75 years ago—a list of 11 secret herbs and spices scratched out on the back
of his kitchen door. Today, we still follow his formula for success, with real cooks breading and
freshly preparing our delicious chicken by hand in more than 23,000 restaurants in over 135
countries and territories around the world.

Colonel Sanders was a born innovator and founded KFC on values like hard work, hospitality and
generosity that still live large in the KFC brand today. KFC believes in making chicken the right
way, by using quality ingredients and freshly preparing them by hand every day. They also proudly
welcome everyone to enjoy a seat at our table. From our more than 800,000 Team Members to our
guests around the world, KFC treats everyone with generosity and like family.

KFC is always evolving to make it easier for their guests to enjoy their chicken. They do this
through digital innovation and building new restaurants with their valued franchise partners. In
fact, every six hours, a new KFC restaurant opens somewhere in the world. As they grow, KFC is
committed to doing so responsibly through commitments like their 2025 global plastic packaging
goal, the realization of their 2018 commitment to stop purchasing chicken raised with antibiotics
important to human medicine in the US and the KFC Harvest program, which to date has donated
over 80 million pounds of food to the local communities around the world.

From KFC’s world famous Original Recipe to the new signature flavors and formats, they are
about making the most craveable, Colonel-inspired chicken in the world, the right way. If it’s not
finger lickin’ good, it’s not KFC. And with the help of incredible franchise partners around the
world, they will continue to be one of the fastest growing retail brands globally, both in emerging
and developed markets alike.

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History of KFC

Harland Sanders was born in 1890 and raised on a farm outside Henryville, Indiana. His father
died in 1895, and to make ends meet his mother took work at a canning plant. As the eldest child
at the age of five, Sanders was left to care for his two siblings. When he turned seven his mother
taught him how to cook. After leaving the family home at age 13, Sanders pursued several
professions including railroad worker and insurance salesman, with mixed success. In 1930, he
took over a Shell filling station on US Route 25 just outside North Corbin, a small city on the edge
of the Appalachian Mountains. By June, he had converted a storeroom into a small eating area
using his own dining table, serving meals such as steaks and country ham to travelers.

In 1934, Sanders took over the lease of the Pure Oil filling station on the other side of the road,
due to its greater visibility for motorists. He then began to sell fried chicken. To improve his skills,
Sanders took an eight-week restaurant-management course at the Cornell University School of
Hotel Administration. By 1936, his business had proved successful enough for him to be given the
honorary title of Kentucky colonel by Governor Ruby Laffoon. In 1937, Sanders expanded his
restaurant to 140 seats, and in 1940 purchased a motel across the street, the Sanders Court & Cafe.

 SWOT Analysis of KFC

 Strengths

Strong global presence: With a presence in over 130+ countries and with 21,000+ stores, KFC has
an impressive global presence.KFC is the world’s 2nd largest restaurant chain and market leader in
a majority of the countries in the Non-veg food segment.

–Loyal Customer Base: KFC has its own loyal follower base and all thanks to its secret chicken
recipe. It’s the taste and the crunchiness of KFC’s chicken that is loved by the consumers.

–Variety in Menu: One of the major strengths of KFC is the variety of food that KFC offers to its
customers. KFC tweak’s its menu and food offerings, basis the region in which it operates. For

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example – KFC offers veg food in India just to cater to vegetarian customers along with chicken
lovers.

—KFC’s Secret recipe: Sanders’ Original Recipe of “11 herbs and spices” is one of the most
famous trade secrets in the catering industry. A copy of the recipe, signed by Sanders, is held inside
a safe inside a vault in KFC’s Louisville headquarters, along with eleven vials containing the herbs
and spices.

 WEAKNESS:

Weaknesses stop an organization from performing at its optimum level. They are areas where the
business needs to improve to remain competitive:

–Supply chain and Distribution issues: Early this year, KFC has faced a major distribution issue
with the delivery of the chicken. This issue became so big that it led to the closing of some of its
stores in the UK. Read the full story here

It took a KFC a lot of logistical and marketing effort to come out of this coup.

In order to avoid facing the same issue in the future, KFC needs to take extra care of its supply
chain and distribution of its raw materials like Chicken, spices etc.

–Managing Franchisees: Franchisee management is one of the critical issues in the success of the
fast food chains and due to conflicting operational issues between KFC and its franchisees many
of its outlets got closed since its inception.

 THREATS:

Threats refer to factors that have the potential to harm an organization in the future. Given the
fact, threats give a brand a far-sighted view about the problems that the brand is likely to face in
the future, it is one of the most important factors in the SWOT Analysis of KFC.

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— Changing consumer food trends and preferences: Due to the emergence of Millennials, the food
trends and preferences are changing. Consumers are preferring foods that are healthy in nature
(low in fats and calories).

This changing food preferences of the consumers are putting additional pressure on the fast food
giants like KFC.

— Food quality challenges: Food quality is an important challenge before KFC. KFC has faced
criticism in the past as well for the quality of oils it uses for cooking its food. Also, the laws related
to food quality has become quite stringent in different countries and is becoming a major challenge
for fast food chains.

— Competition from global and local players: Despite having grown very fast during the past few
years, it is still not at number one. KFC faces stiff competition from not just global players but
also local players as well. Competitors are introducing new food items to their menu to grow their
market share and customer base and KFC too needs to be on its toes to beat the competition.

 OPPORTUNITIES:

Opportunities refer to the factors which the organization can use to its favor to grow its market
share, sales, brand recognition etc. It’s the second most important factor in SWOT Analysis of
KFC as it will shape the future of the company’s strategy.

–Expanding to new Geographies: Emerging economies, changing lifestyle of consumers and their
increasing buying propensity is allowing fast food giants to explore new geographies to increase
their market share and revenue.

–Exploring new food items in Menu: Catering to the changing food demands and needs of the
millennials, KFC has a big opportunity to introduce healthy foods in their menu that are low in
fats and calories.

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Marketing Mix of KFC

 Product: Product Mix of KFC

KFC, an American fast food restaurant chain specializes in fried chicken. KFC’s original product
is pressure fried chicken pieces, seasoned with Sanders’ recipe of 11 herbs and spices. KFC adapts
its menu internationally to suit regional tastes and there are close to 300 menu items present
worldwide, Eg: In Islamic and Middle Eastern countries the chicken served by KFC is halal.

In India, in order to cater to vegetarian customers, KFC offers Veg Burgers and Veg Rice bowls.
KFC Chicken Zinger burger is KFC’s bestselling product. In American states, KFC sandwich is
its bestselling product.

 Price: Pricing strategy of KFC

The target audience of KFC is middle and upper middle class and price their products accordingly.
There are different pricing strategies that KFC uses for its products and its variants.

Optional Pricing: Optional pricing is basically used by companies to attempt to increase the
amount customers spend once they start to buy. Optional ‘extras‘increase the overall price of the
product or service. In KFC’s case, customers can buy the main items present in their menu and
can then opt for “extras” or “sides” like drinks or desserts which go well with the main item that
they purchased. The end result is that the customer ends up paying for the main item that he/she
wanted to buy and also for the add-ons.

Bundle Pricing: KFC bundles different products together and offers it to customers at a slightly
lower price. KFC provides different combo offers to its customers and also provide an option to
its customer to make the combo of their own choice.

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 Place:

KFC uses a combination of Franchise outlet system as well as company-owned outlets. There are
a total of 20,000+ outlets in 150+ countries that KFC has outlets in all the major cities. Customers
can visit these outlets and enjoy their products/Items and can also order online and get their favorite
chicken delivered to their doorstep.

Online Channels: KFC provides an option to the customer to order food online through the KFC
website and can also order KFC food from leading food ordering apps/websites that KFC has
partnered with.

 Promotion: Promotion Mix of KFC

Promotion plays an important role in the marketing mix of KFC, the company uses a proper mix
of ATL, BTL and Digital channels for creating awareness and promoting their products.

It is the strong product portfolio that makes it different from its competitors. KFC uses all media
like TV, hoardings, print, online ads etc. for its promotion.

KFC has a strong social presence will also allow it to interact and engage with its customers and
get better insights about their products and other services.

KFC also uses their outlets to the maximum extent to promote their new offerings.

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Competitors

i) Because the fast food market in India is highly competitive, KFC faces a wide number
of direct and indirect competitors. KFC’s main competitors are fast food chains such
as McDonald’s and Domino’s, which are already well established throughout India.
ii) McDonalds’s in particular is a direct competitor, as they have already successfully
introduced their Salads plus line which directly targets ‘healthy food’ conscious
Indians. But, there are a number of other competitors that is also focusing on ‘chicken’
types products.
iii) All this competition makes it quite difficult for KFC to maintain or even broaden their
customer base. However, with the introduction of a new and healthy product range,
KFC can differentiate itself from most competitors and will gain a competitive
advantage

McDonald’s:

Another American fast food company that gives KFC a run for its money is McDonald’s.
Considered as the world’s largest restaurant chain by revenue, McDonald’s serves over 69
million customers daily in over 100 countries across approx 36,900 outlets as of 2016.

BURGER KING:

With over 15,243 outlets in 100 countries, Burger King (BK) is an American
global chain of hamburger fast food restaurants. Headquartered in the unincorporated
area of Miami-Dade County, Florida.

WENDY’s:

Founded by Dave Thomas on November 15, 1969, in Columbus, Ohio, as of 2016, Wendy’s
became the world’s third largest hamburger fast food chain with 6,500+ locations,
following Burger King and McDonald’s.

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KFC Business Model:

 FRANCHISING.

KFC generates its revenue through the different franchisees it has opened up in the different
countries. Each franchise will pay a fee based on a turnover to the master franchisor.

In other words, each franchise is actually an independent business but follows the method of
operation of the franchise. The franchisor will provide the model help and other items as they deem
necessary.

KFC has set certain guardrails for all its franchisees covering the degree of food quality and store
cleanliness they have to maintain so as to run their store under their brand name:

Below is a pictorial diagram of the KFC business model canvas, explaining different blocks which
form the KFC Business model.

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 KFC MARKET SEGMENTATION:

KFC mainly uses geographic market segmentation for its products and offerings:

GEOGRAPHIC SEGMENTATION:

Geographic segmentation divides markets according to geographic criteria. KFC breaks its
business into different geographical segments like

1. America
2. Europe
3. Asia/Pacific, Middle East, and Africa
4. Other Countries ( like Canada, Latin America)

Basis their geographic segmentation, KFC optimizes its Menu and food offerings to suit the
regional tastes and needs.

Example: KFC offers Veg Rice Bowl in India just to cater to the vegetarian customers in India. In
the USA KFC offers different types of Chicken sandwiches which is not available in other
countries.

 KFC TARGET MARKET:

KFC target market includes both Non-vegetarian and Vegetarian customer segments. KFC has
items in its menu that cater to adults as well as the young audience. Over the years the brand
wanted itself to be perceived as a family restaurant and has been running campaigns
communicating the same.

Below are three factors that are essential for evaluating a KFC target market.

 Segment size and growth

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Above mentioned are the few potential market segments that KFC chooses to target for driving
their business strategy, sales and marketing activities.

 KFC COMPETITIVE ADVANTAGE:

KFC’s chicken has been a strong differentiating factor for the brand and the main reason for its
success. KFC’s secret recipe of its fried chicken having a blend of 11 herbs and spices has been
the driving force for all these years.

Owing to the customers changing needs and to cater to the vegetarian customer segment, KFC has
included vegetarian items as well in its menu. Thus giving the opportunity to increase its sales
volume and revenue.

KFC competitive advantage has been its ability to adapt to the changing time and needs to
customers. Even though the KFC is 90+ years old, but still it has managed to keep the vibe of
a young brand intact.

 KFC PRICING STRATEGY:

The target audience of KFC is middle and upper middle class and price their products accordingly.
There are different pricing strategies that KFC uses for its products and its variants.

Optional Pricing: Optional pricing is basically used by companies to attempt to increase the
amount customers spend once they start to buy. Optional ‘extras ‘increase the overall price of the
product or service. In KFC’s case, customers can buy the main items present in their menu and
can then opt for “extras” or “sides” like drinks or desserts which go well with the main item that
they purchased. The end result is that the customer ends up paying for the main item that he/she
wanted to buy and also for the add-ons.

Bundle Pricing: KFC bundles different products together and offers it to customers at a slightly
lower price. KFC provides different combo offers to its customers and also provide an option to
its customer to make the combo of their own choice.

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Marketing strategy of KFC

KFC with its 750000+ workforce, serves fresh delicious fried chicken to customers in
nearly 18000 restaurants across the world in 120+ countries.

 Segmentation, targeting, positioning in the Marketing strategy of KFC

KFC (Kentucky Fried chicken) uses demographic segmentation to serve the market as
per the customer needs & wants. The consumers of KFC are the young as well as young
adults.

It used to serve the same menu all around the world which means that it was using
undifferentiated targeting strategy. However, in recent times,
following McDonalds example, KFC has started localising its menu, giving it better
acceptability in the market. Moreover it has transformed its positioning strategy
from product based to value based in recent times.

KFC is strongly positioned in the minds of consumers for its Chicken menu. There are
very few outlets which serve anything in vegetarian. But when it comes to non
vegetarian, KFC is just superb. Its chicken wings, and chicken bucket is a favourite with
everyone. This excellent targeting technique is the reason that most non vegetarian
lovers flock at KFC.

 Competitive advantage in the Marketing strategy of KFC

Original recipe of fried chicken with secret blend of 11 herbs & spices have been the
driving force for KFC from last 75 years. KFC has a broad menu with many options for
customers and now even Vegetarian food items have been added by KFC which has
helped KFC in increasing its customer base and sales volume.

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Presence in developed & developing nations is helping the company in strategizing its
future growth plans as it is giving them exposure & experience which is essential
element in and fast food industry’s success.

Promotion in local market:

Promotion is one of the necessary plates in any form of business or in other words you
can say that promotion is the key of success. If you promote your product at the right
time. KFC also known the importance and significance of promotion so they uses the
bill boards the major source of advertisement and one of the most important thing that
they uses media especially the newspapers to promote their products. They are also
creating awareness among the masses about their existing product range as well they
tell us about the future product.

Marketing efforts to be taken by the restaurant:

1. Paste delivery posters at petrol pumps, flats, colleges, plazas, and departmental
stores.
2. Distribution of delivery flyers in residential areas, markets, plazas and
institutions (as per the plan)
3. Visit offices and business places.

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Conclusion

KFC is an American Fast food brand which is spread across 145 Countries with more than 23000
outlets and 800000 Members, KFC being a Brand need to market about every product whether its
ongoing or upcoming, as the market keeps changing and the taste of a person changes along with
that it is very necessary for a business to study about the market before making any kind of decision
regarding marketing of the product in the market. Any business whether a brand or not needs to
study about a market before stepping into one, market study and customer survey will help us
understand more about the product and the requirement of the customer as per generation and trend
in the local market, it is also important to understand the competitors as they are one threat any
business needs to deal with.

Bibliography:

1. https://allz.in/lifestyle/kfc-india-full-menu-with-prices.html

2. https://en.wikipedia.org/wiki/KFC

3. http://heartofcodes.com/

4. https://www.yum.com/wps/portal/yumbrands/Yumbrands/

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