NEW BUSINESS PITCH

It’s Finger Lickin’ Good!

NAME BRAND PITCH TYPE

Media

MARKET DATE

September 8 , 2016

The Data You Need to Win This Pitch

DESCRIPTIONYum Brands just launched a review of KFC’s $220 million media business. WPP’s MEC has handled media duties for the brand for over a decade but opted not to participate in the review. According to Kantar Media, the fast food brand spent around $55 million on measured media during the first quarter of 2016, down

from $56.5 million over the same period last year. “The search seeks to identify and select a world-class agency capable of deploying innovative media strategies while leveraging cost efficiencies and

maximizing return on investment,” a brand rep said in a statement. The review is being handled by Los Angeles consultancy Select Resources International. MEC has yet to publicly respond to the news, but the WPP shop has

recently changed several of its biggest accounts including AT&T, which recently consolidated its $2 billion account with Omnicom by picking BBDO for creative and the recently launched Hearts & Science for media duties.

Yum Brands Launches Review for

$220 Million KFC Media Account

thU.S.

Client Profile / Market

KFC Corporation, based in Louisville, Kentucky, is one of the few brands in America that can boast a rich, decades-long history of success and innovation. It all started more than 70 years ago with one cook who created a soon-to-be world famous recipe with a list of secret herbs and spices scratched out on the back of the door to his kitchen.

That cook was Colonel Harland Sanders of course, and now KFC is the world's most popular chicken restaurant chain, specializing in that same Original Recipe®, along with Extra Crispy™ chicken, home-style sides and buttermilk biscuits. There are more than 18,000 KFC outlets in 115 countries and territories around the world, each with chefs preparing delicious, complete family meals at affordable prices.

COMPANY BACKGROUND

MAIN COMPETITORS

2014 Sales (mil)

2015 Employees (total yum brands)

Employee Growth Percent

Assets (mil)

Net Income Growth Percent

Sales Growth Percent

16,000.00

505,000

-1.11%

-

-4.4%

7%

FINANCIAL OVERVIEW- Source: AccessConfidential.com -

Mr. Kevin D. Hochman

Chief Marketing Officer

Mr. Steve KellySenior Manager,

Digital Marketing

DECISION MAKERS by

U.S. Fast Food Market

2015 U.S. REVENUE

$225b- IBISWorld -

ANNUAL GROWTH 10-15

2.5%- IBISWorld -

200,000FAST FOOD IN THE U.S.

50% 50%

OTHERS QSR

Quick Service Restaurants (Fast Foods + Fast Casual)Account for half of sales in the entire restaurant sector

Americans & Fast Food

- Technomic -

In 2015, annual sales for the chicken industry rose

8%

- CDC’s National Centerfor Health Statistics -

8%of children and adolescents,

aged 2-19, consume fast food on any given day

$625Annual per capita expenditure

on Fast Food

50 MlnAmericans eat at one

fast food restaurant everyday

- FranchiseHelp.com -

- FranchiseHelp.com -

Quality Doesn’t Mean Healthfulness

Technomic’s Consumer Brand Metrics tool asks consumers to rate brands on a range of attributes. According to Technomic’s 2015Future of Limited Service Restaurants Consumer Trend Report, the most important factor for fast-food patrons is “high-quality, fresh food”.

While the top 10 brands that ranked highest for “availability of healthy options” had unimpressive sales growth,the top 10 fast-food brands that ranked highest for “food quality,” on average, had double digit growth.

Consumer Ranking

TOP 10 FAST FOOD CHAINS FOR AVAILABILITY OF HEALTHY OPTIONS

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Chain

Jamba Juice

Subway

Pinkberry

Chick-fil-A

Potbelly Sandwich Shop

Golden Corral

Quiznos

Sizzler

Papa Murphy’s Pizza

Luby’s

2015 YOY Sales Change

2.1%

-3.4%

-1.9%

8.8%

14.2%

0.3%

-28.8%

0.8%

4.7%

0.2%

AVERAGE SALES CHANGE: -0.3%

Consumer Ranking

TOP 10 FAST FOOD CHAINS FOR FOOD QUALITY

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Chain

In-N-Out Burgers

Papa Murphy’s

Chick-fil-A

Krispy Kreme

Marco’s Pizza

Culver’s

Cold Stone Creamery

Jet’s Pizza

Potbelly Sandwich Shop

Ben & Jerry’s

2015 YOY Sales Change

5.1%

4.7%

8.8%

7.4%

34.3%

15.5%

-0.4%

13.4%

14.2%

-5.5%

AVERAGE SALES CHANGE: 10.9%

- Technomic Consumer Brand Metrics - - Technomic Consumer Brand Metrics -

Fast Food industry in numbersKentucky Fried Chicken

$4,328

2014 AD spending $251.9 Million

- QSR Magazine -

- Source: AccessConfidential.com -

U.S. Sales 2015(millions) % change

3%

14,577 unitsKFC has

Operating in 125

countries

70% locatedOutside the U.S.

TOP CHICKEN CHAINS

Segment rank

Qsr 50Rank

CompanyName

2015 U.S. Sales (Mln)

1 8 Chick-fil-A $6,825.9

2 14 KFC $4,328.3

3 20Popeyes Louisiana Kitchen

$3,100.0

4 25 Zaxby’s $1,576.4

Fast Food industry in numbersThe re-Colonelization

KFC data indicates that only two out of five millennials have

even tried KFC.

Kevin Hochman, KFC’s CMO

After 21 years, KFC brought back the brand’s

mascot to its TV ads.

In addition to a marketing campaign starring Colonel

Sanders, the brand is working to freshen up the food to the

Colonel’s standards.

The “Re-Colonelization” will also involve a national employee

retraining program and a new satisfaction guarantee.

The ad had 80% positive reactions. Analysts and

company executives have credited the campaign with boosting sales in the U.S.

Same-store sales grew 3% in 2015, after plunging by more than 15% two years earlier.

Fast Food industry in numbersColonel Sanders goes to Comic Con

At San Diego and New York 2015 Comic Cons, Life-sized Wi-Fi-enabled Colonel Sanders statues were positioned in various spots around the comic con area

When con-goers located the Colonel statues and connected to the Wi-Fi, they were directed to a co-branded KFC and "Robot Chicken" digital hub to check out KFC and Robot Chicken custom content.

At the event, KFC created and distributed a graphic novel called “KFC Presents: The Colonel's Adventure Comics”.

Additionally, TV network Adult Swim and KFC brought together Colonel Sanders and the Robot Chicken for the very first time in a multi-platform programs spanning on-air, online and on-site activations.

Consumer Opinions

Raising Cane’s 70%

Zaxby’s 63%

Chick-fil-A 77%

FAVORITE CHICKEN CHAINS

El Pollo Loco 59%

Buffalo Wild Wings 53%

Bojangles’ Famous 60%

Boston Market

Popeyes

Wingstop 52%

KFC 37%

Church’s Chicken

Source: Marketforce.com

51%

51%

46%

Market Force studied consumers’ favorite Quick Service Restaurant over a range of

attributes, including:food quality, healthiness, fast and friendly

service, atmosphere, cleanliness, and value.

KFC scores last out of the brands studied on four ofthe seven measures.

Healthiest food optionsBest Food Quality

Fast Food Chicken Trends

80%

60%

20%

0

40%

PDQ

FASTEST GROWING CHICKEN CHAINS

Nando’s Raising Cane’s Chicken Fingers

Total Unit GrowthSales Growth

80%

Purchase Consideration: QSR categories. Base: Frequent Fast Food Eaters

17.5% 14% 9%- YouGov -

QSR Chicken QSR Burger QSR Pizza QSR Mexican

19.5%

48% visited a chicken chain at

least five times in the previous 90 days

18% brought children

on their visit

40% have downloaded a chicken chain’s app

- Source: Marketforce.com -- Technomic-

FAST FOOD CHICKEN

CONSUMERS

QUICK DEFINITION: These Chicken Lovers Buy From KFC’s Competitors

Fast food chicken consumers are people interested in at

least one of the top four fast food chicken chains by sales. We’ve excluded KFC in order to better highlight the

differences between Colonel Sander’s current fans and the consumers buying the competition.

47%

10%

20%

0

30%

13-17

• • •

• • •

13-17 13-17 13-17 13-17 13-17

53%FEMALE

57%MARRIED

42%WITH

CHILDRENFOODIES

178.4

SPORTS ENTHUSIASTS

125.6

FASHION LOVERS

129.7

POLITICALLY ACTIVE

178.4

45%

Fast Food Chicken Consumer

Compare the Fast Food Chicken Consumers Demographicwith KFC’s Audience

KFC audience overlaps with our

Fast Food Chicken Consumers

demographic by 58% in interests, including:

Food, Sports, Politics and Fashion

FAST FOOD CHICKEN CONSUMERS:FOOD

The foodies trait collects high popularity points on KFC’s

audience.

They don’t love to cook and highly over-index on Food-to-go

trait (193.6)

They are enthusiasts about Snack Foods (176 pop) and

more specifically chips. Among their favorite brands we can find

Pringles, Doritos and Lay’s.

GOURMET &

170.7

FOODIES178.4

FOOD WEBSITES22%

SELF CONSCIOUSSNACKERS182.8

SPECIALTY FOOD

TOP GOURMET FOOD BRANDS TOP FOOD WEBSITE

KNOWMORE

IGOURMETFOODS

TONYCACHERE’S

MARBLE SLAB

CREAMERY

KNOWMOREeMEALS

KFC’s AUDIENCE CROSSOVERS

FAST FOOD CHICKEN CONSUMERS:FASHION

KFC audience doesn’t dedicate much time to research for latest fashion trends (fashion lovers:

101 pop).

Their favorite apparel categories are footwear (150.1 pop) and athletic apparel (128.4 pop).

Most popular brands are: Adidas, New Yorker and

Ice-Watch

FASHIONLOVERS

129.7 POPULARITY

ACCESSORIESADDICTED

178.1 POPULARITY

CHILDRENCLOTHING

160.0 POPULARITY

CLICK HERE TO SEE TOP FASHION BRANDS

AND RETAIL STORES

KFC’s AUDIENCE CROSSOVERS

Similarly to Fast Food Chicken Consumers, KFC audience is

interested in sports (118.0 pop) and over-index as Athletes

(148.1 pop) and Fans of Fighting (127.4 pop).

They are highly interested in Wrestling (176.5 pop) and Soccer (166.0 pop). Their

favorite athletes are: Usain Bolt, Lionel Messi and Neymar Jr.

FAST FOOD CHICKEN CONSUMERS:SPORTS

SPORTSENTHUSIASTS

125.6 POPULARITY

ATHLETES

136.3 POPULARITY

VOLLEYBALL

125.6 POPULARITY

TOP VOLLEYBALL PLAYERS

KNOWMOREJEN KESSY

KFC’s AUDIENCE CROSSOVERS

KFC’s AUDIENCE CROSSOVERS

KFC audience is not interest at all in politics. The politically

active trait scores 29.8 popularity points.

Among People & Society matters, Religion & Belief is the

only one having positive popularity index points (103.9)

FAST FOOD CHICKEN CONSUMERS:POLITICALLY ACTIVE

POLITICALLY ACTIVE

123.8

POLITICALACTIVISTS157.9

• • • • • •

RELIGION & BELIEFMATTERS

162.5

CLICK HERE TO SEE FAVORITE POLITICIANS &

POLITICAL ORGANIZATIONS

TOP PEOPLE & SOCIETY ORGANIZATIONS

KNOW MORE

United Bible

Societies

OperationChristmas

Child

CONSUMER INSIGHTS SUITE

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