A Research Report on“Marketing Segmentation in Kentucky Fried Chicken”

Final Project for MKT 211

Course Instructor:

Dr. Maher Bakri

Prepared By:

Zeina Saleh

Hussein Jaber

Suzane Hmedeh

American University of Culture and Education – Tyre CampusFaculty of Business - Spring Semester/ 2010

A Research Report on“Marketing Segmentation in Kentucky Fried Chicken”

Page | 2

DEDICATIONS

We would like to dedicate this project to our course instructor Dr.

Maher Bakri. We also would like to thank him for guiding us through

every step of it. It is he who helped us gain a thorough understanding

of the many areas encountered in the busy marketing environment

which in-return, has helped us in the completion of this project and

most definitely will benefit us in our future careers.

Page | 3

TABLE OF CONTENTS Page Abstract……………………………………………………………………………………………………………………5General Information………………………………………………………..……………………………………...6

Additional Information……………………………………………………………………………………KFC’s Story…………………………………………………………………………..…………………………

Basis for Success………………………………………………..……………………………..………..…………..8The Colonel’s Promise and Vision……………………………………………..……………………The C.H.A.M.P.S. Program..................................................................................

Corporate Overview……………………………………………………………………………………..………...9Facts and Figures……………………………………….………………………..…………………………Type of Restaurant / Outlet…………………….……….………………………………..…………..Franchise Model…………………………………….………………………………………..…………….

Organizational Structure………………………………………………………………….……………………10Major Competitors………………………………………………………………………..………………………11

In the Chicken QSR Segments………………..………………………….…………………………..In the Other Segments……………………………………………………….………………………….

Market Share……………………………………………………………………………………….…………………..Chicken QSR Segment Graph……………………………………………………………….…….12Global QSR Industry Graph…………………………………………………….……………….…….

Products………………………………………………………………………………………………….…………....13KFC’s Original Recipe…………………………………………………………………….……………….KFC’s Second Secret…………………………………………………………………….…………………

KFC’s Marketing Team………………………………………………………………………………………........Brand Equity……………………………………………………………………………………..…………….……14

Brand Identity………………………….…………………………………………….………………………Strategy Identity………………………………………………………………….…………………………Brand Name……………………………………………………….………………..…………………….15

Advertisements …………………………………………………………………………..……..…………….……..Slogans used worldwide………………………………………………………………..………………….….16Market Segmentation…………………………………………………………………………..……………...18

The Need for Market Segments…………………………………………………………………….Types of Segments………………………………………………………………………………………..

KFC’s Market Segmentation…………………………………………………………………..……….……19KFC 4 P’s Marketing Mix……………………………………………………………………..…..…...…………Product Placement/ Brand Transformation………………………………..………………..……..21

The New Campaign……………………………………………………………………………………….New Product Targeting………………………………………………………….………………………Test Marketing of the New Product…………………………………….………………….…….New Product Promotion………………………………………………………….…………………….

Analysis and Recommendations………………………………………………………….……………….22References……………………………………………………………………………………….…………………..23

Page | 4

ABSTRACT

KFC is a major quick serving restaurant (QSR) serving over 12 million customers on a

daily basis through its 21,400 restaurants in 109 countries. This report views the

marketing segmentation that KFC implements. Prior to that, the report gives an

introduction about KFC, its establishment and history.

Throughout the years, KFC has lost a large number of their market share to other

healthier fast food restaurants due to the fact that consumers have become more health

conscious. In response to the consumer’s demands, KFC introduced a healthier product

that is mainly targeted at health conscious people. This particular product was discussed

thoroughly because it has transformed the entire image of KFC.

Furthermore, the report provides an insight into the organizational purpose of KFC.

Current strategies and recommendations include the analysis of the strategies that KFC

is using to expand and maintain its market share.

Page | 5

GENERAL INFORMATION

KFC Corporation, also known as Kentucky Fried Chicken is the world's most popular chicken restaurant chain. KFC primarily sells chicken pieces, chicken sandwiches, chicken pot pies, crispy chicken strips, wraps and salads. KFC is part of Yum! Brands, Inc., the world's largest restaurant company in terms of system restaurants, with more than 36,000 locations around the world. Type: Fast Food ChainFounded: 1930 (North Corbin, Kentucky)First Franchised: 1952 (South Salt Lake, Utah)Founder: Harland SandersHeadquarter: Louisville, KentuckyIndustry: Quick Service Restaurant (QSR) industry Revenues: $ 520.3 million (2007)Employees: 24,000 (2007)Parents: Yum! BrandsKey People: Roger Eaton, President

Harvey R. Brownlea, COOJames O'Reilly, VP for Marketing

ADDITIONAL INFORMATIONIn French-speaking Quebec, Canada, KFC is known as PFK (Poulet Frit Kentucky); this is one of the few instances in which the KFC initials is changed for the local language (even in France itself, it's called KFC). In Puerto Rico and Spanish-speaking areas of the United States, KFC is known as PFK (Pollo Frito Kentucky).

KFC’S STORYPete Harman was building a successful burger business in Utah when a white-haired,

goateed acquaintance from Kentucky showed up unexpectedly and offered to cook for him a fried chicken dinner.

Colonel Harland Sanders had a business proposition. He was certain that one helping of his specialty chicken, coated with a blend of 11 herbs and spices, would persuade Mr. Harman to add chicken to his menu.

Mr. Harman was hooked after a few bites. Soon, his restaurant was promoting the dish, called Kentucky Fried Chicken.

The chicken became an instant hit in that August of 1952 as customers lined up outside the Salt Lake City eatery to take home dinners by the bucketful. For $3.50, they got 14 pieces of chicken, mashed potatoes, rolls and gravy.

Page | 6

From humble beginnings, Kentucky Fried Chicken became a fast-food staple and its originator one of the world's most recognizable faces.

Fifty years later, the chain built on Mr. Sanders' salesmanship and home-style cooking boasts nearly 12,000 restaurants worldwide generating sales of nearly $10 billion a year.

For Mr. Sanders, success was a long time coming. He drifted from job to job, including stints as a railroad fireman, insurance salesman, steamboat ferry operator, tire salesman and service station operator. He perfected his chicken and the cooking technique in the late 1930s while serving hungry customers who stopped at his service station — now a historic landmark in Corbin, Ky. The title “colonel” was an honorific bestowed on Mr. Sanders by a Kentucky governor.

He decided to take his chicken from a handful of local restaurants to a national stage at the age of 62, a time when most people are thinking of retiring.He crisscrossed the country by car, his cookware and herbs and spices in the back, to whip up batches of chicken for restaurateurs and their employees. The demonstrations sealed many handshake deals in which restaurant operators agreed to pay Mr. Sanders a nickel for each chicken sold.

By 1964, Mr. Sanders had signed up more than 600 franchised outlets when he sold the company for $2 million to a group headed by Jack Massey and Mr. Brown, who later became governor of Kentucky.Kentucky Fried Chicken took flight under Mr. Brown and his partners. By 1971, when they sold the company for $285 million to Heublein Inc., it had more than 3,500 franchised and company-owned restaurants.

Mr. Brown attributed the company's success to its emphasis on take-home dinners that resembled the kind mother made, a revolutionary concept in the restaurant industry.

The company also capitalized on Mr. Sanders' popularity. The colonel always looked the part of the Southern gentleman, wearing his trademark white suit and black string tie while pitching chicken or dishing out homespun wisdom on television shows.Mr. Sanders stayed on as company spokesman, promoting the chicken in folksy television commercials, until his death in 1980 at the age of 90.KFC changed hands a few more times. It became a subsidiary of R.J. Reynolds Industries — later RJR Nabisco — when Heublein sold it in 1982. PepsiCo acquired KFC from RJR Nabisco in 1986 for about $840 million.

In 1997, PepsiCo's three fast-food restaurant chains — KFC, Taco Bell and Pizza Hut — spun off to form Tricon Global Restaurants Inc. This year, Louisville-based Tricon changed its name to Yum! Brands Inc.

Page | 7

BASIS FOR SUCCESS

KFC’s success is owed much to the vision, energy, and heart of its founder and corporate icon, Colonel Sanders. Colonel Sanders developed the special cooking process and created the blend of 11 secret herbs and spices known to the world today as Original Recipe Kentucky Fried Chicken.

The Colonel’s Promise and vision which states the following:

To Serve Our Valued Customers Hot, Great Tasting Meals Great Value for Your Money Quickly and Accurately In a Clean, Comfortable Environment In a Friendly, Courteous Manner

Today, the company continues to maintain rigorous quality control programs to ensure that its customers around the world enjoy the highest possible quality restaurant services and food products. KFC employees are trained to deliver this promise to each and every customer that is served.

The C.H.A.M.P.S ProgramIt is a program that backs up the Colonel’s promise to the customers. C.H.A.M.P.S stands for the six universal areas of customer expectation common to all cultures and all restaurants concepts which are:

Cleanliness Hospitality Accuracy Maintenance of Facilities Product Quality Speed of Service

C.H.A.M.P.S is the operating platform used to ensure that the customer has the consistent quality experience in every restaurant, everyday and on every occasion.

CORPORATE OVERVIEW

Page | 8

Facts and Figures

KFC restaurants are located in 109 countries and territories around the world and serves over 12 million customers every day generating sales of nearly $10 billion a year. KFC operates more than 5,200 restaurants in the United States and more than 16,200 units around the world, employing more than 24,000 people worldwide.

Type of Restaurant / Outlet

Its locations can be found operating as free-standing units and kiosks in high-traffic areas. Many KFC locations are co-located with one or more of Yum Restaurants including Long John Silver's, Taco Bell, Pizza Hut, or A&W Restaurants. Many of these locations behave like a single restaurant, offering a single menu with food items from both restaurants.

Franchise ModelMore than 20% of the restaurants are company-operated; the remaining 80% are either franchised or licensed. Franchisees are required to meet certain operating standards as part of their franchise agreement.

Page | 9

ORGANIZATIONAL STRUCTUREKFC has adopted a traditional fast food chain restaurant structure.

Area Managers Area Managers are accountable for providing coaching, leadership and operational support to 8-10 KFC Restaurants within a defined Area. Restaurant General Managers (RGM) The Restaurant General Manager (RGM) is accountable for creating and running an energetic and valuable work environment, which is committed to serving the best chicken at the fastest speed and with a smile.The Restaurant General Manager reports directly to an Area Manager and is accountable for successfully implementing and maintaining all company policies and procedures in relation to operations, customer service, cash handling, marketing, purchasing, human resources, health & safety, administration, training and development. Assistant Managers The Assistant Manager is responsible for assisting the Restaurant General Manager (RGM) in creating an energetic and valuable work environment, which is committed to serving the best chicken at the fastest speed and with a smile. Assistant Managers are also responsible for ensuring all company policies and procedures are followed in relation to operations, customer service, cash handling, marketing, purchasing, human resources, health & safety, administration, training and development. Trainee Managers Responsible for assisting the Restaurant General Manager and Assistant Managers in creating an energetic and valuable work environment, which is committed to serving the best chicken at the fastest speed and with a smile. Trainee Managers help with day-to-day running of the restaurant, and need to ensure that all operations, customer service, cash handling, marketing, purchasing, human resources, administration and training & development policies are followed. Customer Service Team Members Responsible for working the service areas and ensuring quality product, service and cleanliness is delivered to all customers at top speed and with a smile! Food Service Team Members/ Cooks The cook’s main task is to prepare and cook the irresistible KFC products! The cook must also maintain the cleanliness of the cooking area as well as the quality of product and speed of preparation.

Page | 10

MAJOR COMPETITORS

Chicken QSR Segment

Chick-fil-A Popeyes Church's Chicken Zaxby's Bostom Market

Other QSR Segment

McDonald’s Burger King Wendy’s Domino’s

Bojangles' El Pollo Loco

MARKET SHARE

KFC is the world's most popular chicken chain. It is part of the Quick Service Restaurant (QSR) industry. KFC is the dominant player in the chicken QSR segment . Increased chicken choices at burger joints like McDonalds, Burger King, and Wendy's are also grabbing sales from KFC. As a competitor in the QSR industry, KFC must deal with product prices, health concerns, and intense competition. The main input for KFC is chicken. If product prices rise, intense competition makes it difficult to counter by setting higher prices. Health and obesity concerns are a constant factor in this industry. In response to these concerns, KFC has eliminated trans fat and has innovated Kentucky Grilled Chicken.

KFC has a 39% market share in the chicken QSR segment.From a market perspective KFC faces its fiercest competition in the US. This is due in large part to the fact that US market is extremely saturated with QSRs. Overseas, KFC has a very strong position and plans to expand its already very successful International division into continental Europe, Russia, and India. KFC is the most popular Western fast-food chain in China.

Page | 11

Chicken QSR Segment

Sales in millions

KFC $5,200.00

Chick-fil-A $2,962.00

Popeyes $1,593.00Church's Chicken $1,150.00

Zaxby's $664.00

Boston Market $648.30

El Pollo Loco $626.90

Bojangles' $607.90

Global QSR Industry Market Share

PRODUCTS

Page | 12

KFC’s Original Recipe is what made Colonel Sanders and KFC famous. He developed the secret formula of 11 herbs and spices in the 1930's in Corbin, Kentucky, and it still defines the irresistible flavor of KFC today. It is breaded and juicy pieces of chicken and lightly fried to golden perfection.

KFC’s Second Secret Recipe was introduced in April 2009 targeting the health conscious customers. Kentucky Grilled Chicken is marinated and seasoned with a savory blend of six secret herbs and spices and slow-grilled to juicy perfection. It has less fat, calories, and sodium than the original recipe fried chicken.

Other than fried and grilled chicken, KFC serves side dishes like coleslaw, potato wedges, mashed potatoes with gravy, biscuits, corn on the cob. KFC also offers other entrées such as popcorn chicken, pot pies, chicken strips, hamburgers, pork ribs, buffalo wings, sandwiches and desserts. However, not all products may be found in all locations. Some sides are available only in a particular region or country. Some menu items were innovated by regional stores. The Canadian management has added poutine to the menu. The Singaporean management introduced the Colonel Burger in 1977, the Hot & Crispy Chicken in 1990, and the Zinger burger in 1993. The Chinese Local menu items include egg tarts, and lotus root salad and the Japanese one includes salmon sandwiches. In the summer of 2006 and at KFC's special test market store in Louisville, KFC introduced the "Famous Bowl", a bowl layered with mashed potatoes or rice, gravy, corn, popcorn chicken, and cheese. The bowl had been available since the fall of 2005. There are more than 300 KFC products worldwide.

MARKETING TEAM

The driving force behind the KFC Marketing team is a shared passion to deliver a constant pipeline of irresistible tasting meals. The process starts with defining consumer needs and exploring new ways to deliver consumer led innovation. The Marketing team is also the heart of communication, both within the business and most importantly to the consumers. KFC engages in substantial advertising and promotion of its trademarks, its restaurant services, and its food products. KFC spends hundreds of millions of dollars each year on marketing expenses. KFC’s marketing efforts reach its ever-increasing number of customers through virtually every type of media. In the U.S. alone, users encounter KFC trademarks, including the image of Colonel Sanders and other Colonel

Page | 13

Logo 1952 Logo 1978 Logo 1991

Sanders formative marks, in advertisements on broadcast television and cable television, in radio and print ads, in newspaper inserts, on outdoor signage and billboards, on product packaging, and menus.

BRAND EQUITY

Brand IdentityThe Kentucky Fried Chicken has three main components: the logo which since the 50's has been founder Colonel Sanders, one of the most widely recognized individuals in the world, the name and its typography, and the red, white, black colors palette. The image of Colonel Sanders appears in numerous aspects of KFC’s business: from the bucket in which KFC’s famous chicken is sold and served, to its store signage, menus, posters, billboards, TV commercials, and Internet websites.

Strategy IdentityKFC’s main purpose for altering its logo is to become more appealing to a younger, on-the-go consumer.

The Colonel’s white, three-piece suit has been replaced with a red apron. The addition of an apron provides context for a new generation of consumers who are unaware of the Colonel’s passion for cooking and his “hands-on” attitude.

His face has been given the equivalent of a graphic facelift. The line edges are sharper and smoother making him look more youthful and energetic.

A new, more international color palette with rich reds and warm flesh tones has been used.

The bucket is another key piece of brand equity, and the new KFC signage features the re-designed Colonel in an abstracted bucket shape. The new Colonel appears friendlier and inviting.

The new KFC logo and in-store graphics address this: re-energizing the brand with fun, irreverent copy and “old school cool” graphics – all combining to create a striking balance between a retro and contemporary style.

The revised logo appears contemporary and strategically positioned.

Page | 14

Logo 2007 Current Logo

Brand NameThe company adopted the abbreviated form of its name in 1991 for three reasons:

To de-emphasize chicken because the chain was moving to offer other foods. The unhealthy association with the word "fried" The shorter name was considered more appealing to youth.

Some say that the Commonwealth of Kentucky planned legal action against the chain due to a trademark on "Kentucky", and an assertion that KFC had been prevented from declaring their products to be made from chicken due to using genetically modified animals which were easier to harvest. Both such tales have been debunked.Recently, the company has begun to re-embrace the Kentucky Fried Chicken name, and now uses both "Kentucky Fried Chicken" and "KFC" in advertisements. The Kentucky Fried Chicken name can be seen on some buckets of chicken. KFC.com started using Kentucky Fried Chicken for the logo in the U.S as of 2006. In the future, KFC plans to change "Kentucky Fried Chicken" and add grilled to the name.

ADVERTISMENTS

Early television advertisements for KFC regularly featured Colonel Sanders licking his fingers & talking to the viewer about his secret recipe and the importance of a family joining one another for a meal. Despite his death in 1980, this angle was quite common through the 1980s and up until the early-mid 1990s.Throughout the mid 1980s, KFC called on Will Vinton Studios to produce a series of humorous ads. These most often featured a cartoon-like chicken illustrating the poor food quality of competing food chains, mentioning prolonged freezing and other negative aspects.

Page | 15

In 1997 KFC briefly entered the NASCAR Winston Cup Series as sponsor of the #26 Darrell Waltrip Motorsports Chevrolet with driver Rich Bickle at the Brickyard 400.

By the late 1990s, the stylized likeness of Colonel Sanders as the KFC logo had been modified. KFC ads began featuring an animated version of "the Colonel" with a lively and enthusiastic attitude. He would often start out saying "The Colonel here!" and moved across the screen with a cane in hand. The Colonel was often shown dancing, singing, and knocking on the TV screen as he spoke to the viewer about the product.

The animated Colonel is uncommon today. Still using a humorous slant, the current KFC campaign revolves mostly around customers enjoying the food. It also features a modified version of Lynyrd Skynyrd's "Sweet Home Alabama" as the theme song for practically all its commercials, though the restaurant hails from Kentucky.

In 2006 KFC claimed to have made the first logo visible from outer space, though Ready mix has had one since 1965.) KFC says "[It] marked the official debut of a massive global re-image campaign that will contemporize 14,000-plus KFC restaurants in over 80 countries over the next few years." The logo was built from 65,000 one-foot-square tiles, and it took six days on site to construct in early November. The logo measured a record-breaking 87,500 square feet and was placed at 37°38'46N, 115°45'02W (NAD83/WGS84), in the Mojave Desert near Rachel, Nevada.

On November 15, 2006, there was a contest to win a free KFC Snacker Sandwich if one could find the secret message in the giant logo mentioned above. The hidden message was Finger Lickin' Good. It was found in the small white spot on the Colonel's tie, which was actually an "impostor" Colonel holding a sign.

The chain has also advertised in video games. The Sega Dreamcast game Crazy Taxi, has a KFC as a destination for patrons.

SLOGANS USED WORLDWIDE

Page | 16

Kitchen Fresh Chicken (2005) There's fast food, then there's KFC Finger lickin' good! This was once translated into Chinese as "eat your fingers

off". Nobody Does Chicken Like KFC! (Australia, New Zealand, Singapore, and UK) Can't Beat that Taste! (2005/06 - Australia and New Zealand) Satisfy That Crave! (2005/06 - Australia and New Zealand) Kiwi For Chicken (2004/05 - New Zealand) I Can't Wait - for the great taste of Kentucky Fried Chicken (Late 1980s, Australia) Today's KFC: I Like It Like That (1992) Everybody Needs a little KFC. (1990s - United States) If you want Kentucky Fried Chicken, you have to visit me (1969, sung by Colonel Sanders) If you can fry chicken like this - why cook? (1970) Barrel of fun (1970s) Real goodness from Kentucky Fried Chicken (1970s) It's so nice - nice to feel - so good about a meal - so good about Kentucky Fried

Chicken (late 1970s) We do chicken right! (mid-1980s) Chicken Capital USA (2005 - United States) You've got to KFC what's Cookin' (2003-2004) Dinner's Ready At Kentucky Fried Chicken (1970s - Canada) Pick up Kentucky Fried Chicken in your neighborhood; Colonel Sanders and his

boys make it finger lickin' good!" (Later changed to "Colonel Sanders' boys and girls") (1970s - Canada)

Got Chicken Got Soul (2005-2006 - UK) There's More Inside The Bucket (2005-2006) Share The Secret! (2005-2006 - Austria) The Taste Lives Here (2006-present - Canada) So Real! (Hong Kong) You've got great taste! (2006-present - UK) KFC, We know what to do with chicken (2006-present - the Netherlands) Kapag Fried Chicken, KFC (Translated as "If it's Fried Chicken, It's KFC Philippines) KFC is the spice in your life (Thailand)

MARKET SEGMENTATION

Page | 17

Market segmentation is the identification of portions of the market that are different from one another. Segmentation allows the firm to better satisfy the needs of its potential customers. The division of a market into different homogeneous groups of consumers is known as market segmentation.Rather than offer the same marketing mix to vastly different customers, market segmentation makes it possible for firms to tailor the marketing mix for specific markets, thus better satisfying customer needs.

The Need for Market Segmentation

The marketing concept calls for understanding customers and satisfying their needs better than the competitors. Different customers have different needs, and it is impossible to satisfy all customers by providing one homogenous product.

Types of Segmentation

Mass marketing refers to treatment of the market as a homogenous group offering the same marketing mix to all customers. Mass marketing allows economies of scale to be realized through mass production, mass distribution, and mass communication. The drawback of mass marketing is that customer needs and preferences differ and the same offering is unlikely to be viewed as optimal by all customers. If firms ignored the differing customer needs, another firm likely would enter the market with a product that serves a specific group, and the incumbent firms would lose those customers.

Target marketing on the other hand recognizes the diversity of customers and does not try to please all of them with the same offering. The first step in target marketing is to identify different market segments and their needs.

KFC SEGMENTATION

Page | 18

Geographic Segmentation: KFC has international outlets and it sells product according to the geographic tastes of the customers. For example, in Canada, KFC has included the poutine in its menu since poutine is a popular Canadian dish.

KFC is Islamic countries: Most KFC stores located in predominantly Islamic countries prepare foods in accordance with halal guidelines.

Demographic Segmentation: In demographic segmentation, the market is divided into different groups based on an age, gender, family size, income, occupation, religion, race and nationality.

Age: Is between 6-65 years. There is no age limit in focus by KFC, however generally KFC tries to attract the young age groups.

Variable Family Sizes like 1-2, 3-4, 5 +: KFC targets whole families rather than single persons. This is the main reason for their family meals which are normally served at a cheaper price.

Income: Is the main key factor for KFC. This factor decides which class is to be targeted. Initially, KFC focused on the upper class but later they started introducing economy meals that began to attract the middle class. Prices are still reasonably high to serve the lower classes.

Gender, occupation, religion, race & nationality have no significance to KFC.Psychographic Segmentation: Dividing market into groups based on social class, lifestyle or personality characteristics is known as psychographic segmentation.

Social Class – Upper and Middle classBehavioral Segmentation: Dividing a market into groups based on consumer knowledge, attitude, use or response to the product.

Taste Conscious Quality Conscious

4P’S MARKETING MIX

Product is anything that can be offered to a market to satisfy a want or need.KFC is special in serving fried chicken in different forms.

KFC’s main product is pressure-fried pieces of chicken made with the original recipe only.

Packaging is used for chicken, burgers and snacks. Services: KFC provide home delivery and kids’ play area. In most countries, KFC

provides online ordering, mobile units and outdoor catering.

Page | 19

Price is the amount of money paid by customers for purchasing the product. KFC’s prices vary however; they are quite high compared to other restaurants.

Place includes all company activities that make the products available to target consumers. There are about 21,400 KFC restaurants world wide and 16 KFC outlets in Lebanon which are positioned in the highly populated places.

Raouche- Facing Raouche Rock. Jounieh-Maamiltein. Aley main road. Tripoli main road. Saida-Abra. Khaldeh-Highway. Tyre - Abbassieh entrance. Tyre – beside La Costa Zalka-Highway. Airport Road. Chiyah-Facing Nissan. Concord-Verdun. Saida main Road. Chtoura - Jdita High Way. Nabatieh. Ashrafieh Sassine Square.

Promotions are activities that communicate the merits of the products and persuade target consumers to buy it. At KFC, the main tool of promotion is to bring all chicken lovers’ attentions towards its delicious one-of-a-kind product, the Fried Chicken. Some KFC outlets provide its customers with different forms of inducements to buy the chicken from KFC. When customers spend a particular amount over a period of fixed time, then they can acquire coupons and can enjoy the benefits of free meals.

PRODUCT PLACEMENT / BRAND TRANSFORMATION

Page | 20

No brand retains its position in today’s competitive world without adapting to, and even leading, changes in customer dynamics.

KFC sales have decreased in the past few years due to the growth of health conscious individuals who dropped fried chicken from their diets. Therefore, KFC came up with the ‘Unthink’ campaign and Kentucky Grilled Chicken (KGC) to meet with the changing needs of the consumers.

"KGC is the latest menu innovation that showcases our commitment to meeting our customers' ever-changing needs while staying true to the standards of high quality and great taste pioneered by Colonel Sanders”, says KFC President Roger Eaton.

The New Campaign

The ‘Unthink’ campaign was launched when the Kentucky Grilled Chicken was introduced which proved to be the biggest new-product introduction in the company’s history. It is intended to encourage consumers to think about KFC in a new way. "UNTHINK What You Thought About KFC." Colonel Sanders' now-famous fried chicken may have put KFC on the map, but the introduction of grilled chicken shows KFC is not too chicken to think outside the bucket.

New Product Targeting

Kentucky Grilled Chicken targets health conscious consumers who have been visiting KFC less because they're eating fried chicken less often or not at all

To build on its core dinner business and strengthen lunch and snack segments.

Test Marketing

The grilled product was tested in six cities before it was commercialized nationally and internationally.

New Product Promotion

In promoting the new grilled product, KFC plans to change "Kentucky Fried Chicken" storefront signs to add grilled to the name. Chicken buckets will still feature KFC founder Harland Sanders but will get a redesign to promote fried and grilled chicken.

Page | 21

Now KFC plans a series of TV ads promoting grilled chicken in test markets, including a spot featuring workers adding grilled to a storefront name.

ANALYSIS & RECOMMENDATIONS

After analyzing KFC closely, we have come up with some recommendations for KFC to gain a better market share.

The KFC Grilled Chicken is a great idea to gain more market share. Many individuals, including myself, avoid eating KFC because of health and calorie count issues. I recommend that KFC should introduce this new KGC product in Lebanon. In my opinion, this new product would attract new customers leading to a higher market share and increasing profits.

KFC should decrease their prices in order to gain consumers from all the class segments. This could be achieved by introducing a cheaper meal to target the lower classes.

KFC should also include more vegetarian meals to target the vegetarian consumers.

The quality of the product should be the major concern of the management. Special care should be given to make sure that the quality of the product late at night remains consistent.

KFC should introduce more outlet options such as malls, universities, amusement parks etc to increase their market share in quickly growing markets.

REFERENCES

Page | 22

www.kfc.comwww.yum.comwww.tesser.com/news_kfc_logo.htmwww.americana-group.net/Default.aspx?Id=1186www.dmnews.com/kfc-draftfcb-launch-grilled-chicken-campaign/article/131169/www.kfc.co.uk/custom_images/documents/KFC_Infopack2008.pdfwww.wikinvest.com

Page | 23