Marketing startegies of kfc Essay

Harland Sanders was born in 1890 and raised on a farm outside Henryville, Indiana. His father died when he was five years old, forcing his mother to work at a canning plant, and leaving her eldest son to care for his two younger siblings. After he reached seven years of age, his mother taught him how to cook. After leaving the family home at the age of 12, Sanders passed through several professions, with mixed success. In 1930, he took over a Shell filling station on U.S. Route 25 just outside North Corbin, a small city on the edge of the Appalachian Mountains. It was here that he first served to travelers the recipes that he had learned as a boy: fried chicken and other dishes such as steaks, country ham, and pancakes. Originally using his own dining room table, in 1934, he purchased the larger filling station on the other side of the road and expanded to six tables By 1936, this had proved successful enough for Sanders to be given the honorary title of Kentucky colonel by Governor Ruby Laffoon. The following year he expanded his restaurant to 142 seats, and added a motel he purchased across the street, naming it Sanders Court & Cafà ©. Sanders was dissatisfied with the 30-minute duration it took to prepare his chicken in an iron frying pan, but he refused to sacrifice quality by deep frying the product. If he pre-prepared the chicken in advance of an order, there was inevitably wastage. In 1939, the first commercial pressure cookers were released onto the market, predominantly designed for steaming vegetables. Sanders bought one, and modified it into a pressure fryer, which he then used to fry chicken. As well as reducing production time to be comparable with deep frying, the new method produced flakier, moister chicken. In 1940, Sanders finalized what came to be known as his Original Recipe of 11 herbs and spices. Although he never publicly revealed the recipe, he admitted to the use of salt and pepper, and claimed that the ingredients â€Å"stand on everybody’s shelf†. After being recommissioned as a Kentucky colonel in 1950 by Governor Lawrence Wetherby, Sanders began to dress the part, growing a goatee and wearing a black frock coat (later switched to a white suit), a string tie, and referring to himself as â€Å"Colonel†. His associates went along with the title change, â€Å"jokingly at first and then in earnest†, according to biographer Josh Ozersky. History KFC (Kentucky Fried Chicken) is a fast food restaurant chain which specializes in fried chicken and is headquartered in Louisville, Kentucky. It is the world’s second largest restaurant chain overall (as measured by sales) after McDonald’s, with over 18,000 outlets in 120 countries and territories as of December 2012. The company is a subsidiary of Yum! Brands, a restaurant company which also owns the Pizza Hut and Taco Bell restaurant chains. KFC was founded by Harland Sanders, a colorful figure who began selling fried chicken from his roadside restaurant in Corbin, Kentucky, during the Great Depression. Sanders identified the potential of the restaurant franchising concept, and the first â€Å"Kentucky Fried Chicken† franchise opened in Utah in 1952. KFC popularized chicken in the fast food industry, diversifying the market by challenging the established dominance of the hamburger. By branding himself as â€Å"Colonel Sanders†, Harland became a legendary figure of American cultural history, and his image remains prominent in KFC advertising. However, the company’s rapid expansion saw it grow too large for Sanders to manage, and in 1964 he sold the company to a group of investors led by John Y. Brown, Jr. and Jack C. Massey. KFC was one of the first fast food chains to expand internationally, opening outlets in England, Mexico and Jamaica by the mid-1960s. Throughout the 1970s and 1980s, KFC experienced mixed fortunes domestically, as it went through a series of changes in corporate ownership with little or no experience in the restaurant business. In the early 1970s, KFC was sold to the spirits distributor Heublein, who were taken over by the R.J. Reynolds food and tobacco conglomerate, who sold the chain to PepsiCo. The chain continued to expand overseas however, and in 1987 KFC became the first Western restaurant chain to open in China. The chain has since expanded rapidly in China, and the country is now the company’s most profitable market. PepsiCo spun off its restaurants division as Tricon Global Restaurants, which later changed its name to Yum! Brands. KFC primarily sells fried chicken pieces and variations such as chicken fillet burgers (chicken sandwiches [US]) and wraps, salads and side dishes such as French fries and coleslaw, desserts and soft drinks, often supplied by  PepsiCo. Its most famous product is pressure fried chicken pieces, seasoned with Sanders’ â€Å"Original Recipe† of 11 herbs and spices. The exact nature of these ingredients is unknown, and represents a notable trade secret. Larger portions of fried chicken are served in a distinctive cardboard â€Å"bucket†, which has become a signature product of the chain since being introduced by franchisee Pete Harman in 1957. KFC is known for the slogan â€Å"finger lickin’ good†, which has since been replaced by â€Å"Nobody does chicken like KFC† and â€Å"So good†. Marketing Marketing is the process of communicating the value of a product or service to customers, for the purpose of selling the product or service. It is a critical business function for attracting customers. From a societal point of view, marketing is the link between a society’s material requirements and its economic patterns of response. Marketing satisfies these needs and wants through exchange processes and building long term relationships. It is the process of communicating the value of a product or service through positioning to customers. Marketing can be looked at as an organizational function and a set of processes for creating, delivering and communicating value to customers, and managing customer relationships in ways that also benefit the organization and its shareholders. Marketing is the science of choosing target markets through market analysis and market segmentation, as well as understanding consumer buying behavior and providing superior customer value. There are five competing concepts under which organizations can choose to operate their business; the production concept, the product concept, the selling concept, the marketing concept, and the holistic marketing concept. The four components of holistic marketing are relationship marketing, internal marketing, integrated marketing, and socially responsive marketing. The set of engagements necessary for successful marketing management includes, capturing marketing insights, connecting with customers, building strong brands, shaping the market offerings, delivering and communicating value, creating long-term growth, and developing marketing strategies and plans. Marketing Strategies Marketing strategy is defined by David Aaker as a process that can allow an organization to concentrate its resources on the optimal opportunities with the goals of increasing sales and achieving a sustainable competitive advantage. Marketing strategy includes all basic and long-term activities in the field of marketing that deal with the analysis of the strategic initial situation of a company and the formulation, evaluation and selection of market-oriented strategies and therefore contribute to the goals of the company and its marketing objectives. Marketing Strategies of KFC KFC IS synonymous with chicken. It has to be because chicken is its flagship product. The latest they have on offer is the marinated hot and crispy chicken that is â€Å"crrrrisp and crunchy on the outside, and soft and juicy on the inside†. It gives you a regular Pepsi with this at nothing more than just Rs. 39. But make no mistake, while this is a rage across the world, and in our very own Bangalore, KFC has made sure one other thing: it doesn’t want to alienate the vegetarian community â€Å"that gave birth to the vegetarian menu†. It means you can be veg and yet be at KFC. KFC offers a wide range of vegetarian products such as the tangy, lip-smacking paneer tikka wrap ‘n’ roll, the veg de-lite burger, and the veg crispy burger. There are munchies such as the crisp golden veg fingers and crunchy golden fries served with tangy sauces. If you are veg and looking for a meal, you can combine the veg fingers with steaming, peppery rice and a spice curry. The mayonnaise and sauces don’t have egg in them. Sharanita Keswani, Director, KFC Marketing, says the vegetarian menu in India came about when KFC found the country had about 35 per cent vegetarians, and in metros such as Delhi and Mumbai, almost 50 per cent. The non-vegetarian is the obvious target customer because, as Ms. Sharanita points out, Bangalore and the rest of south India have over 70 per cent non-vegetarians. But she also observes that chicken is KFC’s strength. KFC’s vegetarian menu is almost exclusive to India and is the most extensive. Most countries either do not have a vegetarian menu, and some which do, have a burger at the most. â€Å"Contrary to affecting chicken sales, the presence of a vegetarian menu has made the brand more relevant to a wider cross-section of the consumer society. This is essential as we grow the brand across the country,† says Ms. Sharanita. The KFC menu strategy is to â€Å"balance standardisation and localisation†. The localisation works in two ways: to modify a standard chicken product with a different topping or sauce; and to have a vegetarian menu, where necessary, along with the flagship product, chicken. The localisation exercise is undertaken in every country. â€Å"The U.S. and European markets have a traditional KFC menu based on chicken burgers and wraps, while Asian markets like India have been more experimental and adventurous. Here, they have rice meals, wraps, and sides. The change is imperative as Asian tastes can be very different from Western ones,† Ms. Sharanita observes, adding that KFC learnt very early the high demand for vegetarian products in India. KFC has taken care to maintain safeguards on the production of its non-vegetarian products in response to observations by People For Ethical Treatment of Animals that chicken were not being treated humanely by suppliers. The debate has been on for years now and animal rights activists have prompted companies to adopt stringent measures. Pankaj Batra, Director, Marketing, Indian Sub-Continent, Yum! Restaurants International, observes: â€Å"KFC is committed to the well being and humane treatment of chickens. We require all our suppliers to follow welfare guidelines developed by Yum! Restaurants International, U.S.A., with leading experts on their Animal Welfare Advisory Council. In India, we source chicken from Venkateshwara Hatcheries Limited (Venky’s), which is one of the leading and respected organised players in the poultry farming business. They also supply chicken to several reputed hotel and restaurant chains in the country. We respect the Indian law and our guidelines completely adhere to them.† Ms. Sharanita points out that while KFC’s brand standard products are their strength throughout the world, KFC works around the core and gives consumers products with a familiar taste, especially â€Å"important in a country like India that is home to such distinct and different food habits†. All KFC outlets offer its customers with various forms of incentives to buy its Chicken. Using coupons that one can acquire after spending a particular amount over a period of fixed time, customers can enjoy the benefits of free meals or free add-ons. Additionally they provide meal vouchers and exciting offers in their print ads, which the customer must cut and bring along. KFC in India The first Indian KFC opened in Bangalore in June 1995.[198] Protests ensued from left wing, anti-globalisation and environmental campaigners, as well as local farmers, who objected to the chain bypassing local producers.[199] Many Indians were concerned about the onslaught of consumerism, the loss of national self-sufficiency, and the disruption of indigenous traditions.[200] The protests came to a head in August 1995, when the Bangalore outlet was repeatedly ransacked.[198] KFC Bangalore demanded, and received, a police van permanently parked outside for a year.[199] Rural activist M. D. Nanjundaswamy subsequently claimed KFC would adversely affect the health of the impoverished, by diverting grain from poor people to make the more profitable animal feed.[201] Former environment minister Maneka Gandhi joined the anti-KFC movement.[201] KFC was also accused of using illegally high amounts of monosodium glutamate (MSG) and frying its food in pork fat.[202] A second store opened in Delhi, but was closed by the authorities soon afterwards, purportedly for health reasons, but more likely to avoid a repetition of the Bangalore incident. The two stores only managed to attract a limited, affluent clientele, and KFC decided to abandon the Indian market. KFC returned to India in 1999, with a new Bangalore outlet. This was the sole KFC in India until 2004, when the chain began to expand, albeit with a makeover and a range of new vegetarian dishes. As of December 2012, there were 280 KFCs in the Indian market. As well as the standard KFC offerings, the chain sells a chickpea burger and hot wings with chilli lemon sprinkles.