conclusion of kfc case study

KFC Marketing Strategy: A Comprehensive Analysis

KFC, or Kentucky Fried Chicken, is known worldwide for its finger-lickin' good fried chicken. But what sets this fast-food giant apart from its competitors? The answer lies in its effective marketing strategy . In this article, we will explore the key elements that have contributed to KFC's success and made it a household name.

Understanding KFC's Marketing Strategy

At the heart of KFC's marketing strategy is a strong focus on branding , product innovation , and advertising techniques. By understanding the role these elements play in the company's success, we can gain valuable insights into what makes KFC tick.

The Role of Branding in KFC's Success

KFC has built a powerful brand identity that resonates with consumers worldwide. The company's logo, featuring Colonel Sanders, is instantly recognizable. But branding goes beyond a logo – it encompasses the overall image, values, and experience associated with KFC. The consistency in branding has helped KFC establish trust and loyalty among its customers.

When customers see the iconic red and white KFC signage, they immediately associate it with the delicious taste of their famous fried chicken. The branding efforts have been so successful that even the sight of the Colonel Sanders logo can make mouths water in anticipation of a finger-licking good meal.

Moreover, KFC's branding extends to the restaurant's interior design and customer service. The warm and inviting atmosphere, coupled with friendly staff, creates a memorable dining experience that keeps customers coming back for more. KFC has successfully created a brand that not only represents tasty food but also a sense of comfort and familiarity.

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The Impact of Product Innovation

KFC is not just about fried chicken. The company has continuously introduced new products and menu items to cater to changing consumer preferences. From introducing healthier options to embracing plant-based alternatives, KFC has shown its commitment to keeping up with evolving trends and meeting the diverse needs of its customers.

One notable example of KFC's product innovation is the introduction of their Beyond Fried Chicken, a plant-based alternative to their traditional chicken. This move not only appeals to vegetarians and vegans but also to health-conscious consumers who are looking for more sustainable food options. By diversifying their menu, KFC has expanded its customer base and positioned itself as a brand that adapts to changing times.

KFC's commitment to product innovation is not limited to new menu items. The company also invests heavily in research and development to improve the quality and taste of their existing offerings. Through continuous improvement, KFC ensures that their customers always enjoy the best possible dining experience.

The Power of KFC's Advertising Techniques

Advertising plays a crucial role in creating awareness and driving sales for KFC. The brand's advertising campaigns are creative, engaging, and often evoke a sense of humor. Whether it's the catchy jingle or the humorous storytelling, KFC's advertisements stay top of mind and generate a strong emotional connection with consumers.

One of KFC's most memorable advertising campaigns was the introduction of their "Finger Lickin' Good" slogan. This simple yet effective phrase perfectly captured the essence of the brand and became synonymous with the joy of indulging in KFC's delicious chicken. The slogan became so ingrained in popular culture that it is still associated with KFC to this day.

KFC's advertising techniques also extend to social media platforms, where the brand engages with its customers in a fun and interactive way. From clever memes to engaging contests, KFC keeps its audience entertained and connected. By leveraging the power of social media, KFC has successfully created a strong online presence and fostered a community of loyal fans.

In conclusion, KFC's marketing strategy revolves around effective branding, continuous product innovation, and engaging advertising techniques . By staying true to its brand identity, adapting to changing consumer preferences, and creating memorable advertising campaigns, KFC has established itself as a global powerhouse in the fast-food industry.

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The Global Reach of KFC's Marketing

KFC's success is not limited to a single market – it has successfully expanded its reach to numerous countries around the world. So, what does it take to adapt marketing strategies for different cultures and address global trends?

Adapting Marketing Strategies for Different Cultures

KFC recognizes that cultural nuances can significantly impact consumer behavior. To succeed in different markets, the company tailors its marketing messages, menu offerings, and even store designs to suit local preferences. This localization approach has helped KFC position itself as a brand that understands and respects the customs and tastes of diverse communities.

For example, in India, where the majority of the population follows a vegetarian diet, KFC introduced a range of vegetarian options to cater to the local market. By offering dishes such as the Veg Zinger and Veg Rice Bowl, KFC was able to tap into the Indian market and attract a wider customer base.

In China, KFC adapted its marketing strategies to align with the Chinese New Year, a significant cultural event. They introduced special limited-edition menu items and launched festive campaigns to celebrate the holiday. This approach not only resonated with Chinese consumers but also showcased KFC's commitment to embracing local traditions.

The Influence of Global Trends on KFC's Marketing

As a global brand, KFC must monitor and adapt to global trends. From sustainability to convenience-driven consumer behavior, KFC identifies emerging trends and incorporates them into its marketing strategies. By staying ahead of the curve, KFC remains relevant and appealing to a wide range of customers worldwide.

One global trend that has greatly influenced KFC's marketing is the growing demand for healthier food options. In response, KFC introduced grilled chicken as an alternative to its signature fried chicken. This move not only catered to health-conscious consumers but also positioned KFC as a brand that values customer well-being.

Another global trend that has shaped KFC's marketing approach is the rise of social media and digital platforms. KFC leverages these platforms to engage with its audience, create viral marketing campaigns, and gather valuable consumer insights. By embracing digital trends, KFC has been able to connect with customers on a more personal level and maintain a strong online presence.

Furthermore, KFC recognizes the importance of sustainability and environmental responsibility. The company has taken steps to reduce its carbon footprint by implementing eco-friendly practices, such as using biodegradable packaging and sourcing ingredients from sustainable suppliers. By aligning its marketing messages with the global trend towards sustainability, KFC appeals to environmentally conscious consumers and showcases its commitment to a better future.

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The Role of Digital Marketing in KFC's Strategy

In today's digital age, no marketing strategy is complete without a strong online presence. KFC has embraced digital marketing techniques to engage with its customers in new and exciting ways.

But what exactly does digital marketing entail for KFC? Let's delve deeper into the various aspects of KFC's digital marketing strategy and how it has helped the brand thrive in the competitive fast food industry.

Social Media and KFC's Brand Image

KFC leverages social media platforms to connect with its audience and reinforce its brand image. Through entertaining and engaging content, KFC stays relevant and forms meaningful connections with its followers.

For instance, KFC's witty and humorous posts on Twitter have become a sensation, garnering thousands of retweets and likes. By adopting a playful tone and incorporating pop culture references, KFC creates a unique brand personality that resonates with its target audience.

Moreover, KFC's social media presence extends beyond just posting content. The brand actively interacts with its followers, responding to comments and messages, which further strengthens the bond between KFC and its customers. This approach helps drive brand loyalty and generate positive word-of-mouth.

KFC's Use of SEO and Online Advertising

KFC understands the importance of search engine optimization (SEO) and online advertising in reaching and attracting potential customers. By optimizing its website and running targeted online campaigns, KFC ensures its message reaches the right audience at the right time.

When it comes to SEO, KFC focuses on optimizing its website for relevant keywords, ensuring that it appears prominently in search engine results. This allows potential customers who are searching for fast food options to easily find and consider KFC as their preferred choice.

In addition to SEO, KFC also invests in online advertising to increase its brand visibility. Through strategic partnerships with popular websites and platforms, KFC's advertisements are strategically placed in front of its target audience, maximizing the chances of attracting new customers.

Furthermore, KFC embraces the power of data-driven marketing. By analyzing customer behavior and preferences, KFC can tailor its online advertising campaigns to deliver personalized messages to specific segments of its target audience. This strategic use of digital marketing channels contributes to increased brand awareness and customer acquisition.

In conclusion, KFC's digital marketing strategy encompasses various elements, including social media engagement, SEO, and online advertising. By leveraging these techniques, KFC has successfully built a strong online presence, connecting with its customers on a deeper level and driving brand loyalty. As the digital landscape continues to evolve, KFC remains at the forefront, constantly adapting its digital marketing efforts to stay relevant and continue its growth in the fast food industry.

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The Future of KFC's Marketing Strategy

What lies ahead for KFC's marketing strategy? Let's explore the emerging trends and the company's commitment to sustainability and ethical marketing .

Emerging Marketing Trends and KFC

KFC recognizes the ever-changing marketing landscape and continues to innovate. From embracing technology, such as mobile ordering and delivery apps, to exploring new ways to engage with Gen Z, KFC stays at the forefront of emerging marketing trends . This adaptability ensures that KFC remains relevant for years to come.

One of the emerging marketing trends that KFC has embraced is the use of social media influencers. By partnering with popular influencers who align with the brand's values and target audience, KFC is able to reach a wider audience and create a buzz around their products. These influencers often create engaging content featuring KFC's menu items, which not only increases brand visibility but also generates excitement and curiosity among consumers.

Another trend that KFC has tapped into is experiential marketing. The company understands that consumers are looking for more than just a meal - they want an experience. KFC has created immersive dining experiences, such as pop-up restaurants and themed events, where customers can not only enjoy their favorite KFC dishes but also engage with the brand in a unique and memorable way. These experiences not only create a sense of exclusivity but also encourage customers to share their experiences on social media, further amplifying KFC's reach.

Sustainability and Ethical Marketing at KFC

As consumer awareness of sustainability and ethical practices grows, KFC has made strides to address these concerns. The company has taken steps to source ingredients responsibly, reduce its carbon footprint, and contribute to local communities. By prioritizing sustainability and ethical practices, KFC not only meets consumer expectations but also differentiates itself as a socially responsible brand.

KFC has implemented various sustainability initiatives to minimize its environmental impact. For instance, the company has invested in energy-efficient equipment and technologies to reduce energy consumption in its restaurants. Additionally, KFC has partnered with suppliers who follow sustainable farming practices, ensuring that the ingredients used in their menu items are sourced responsibly.

Furthermore, KFC is committed to giving back to the communities it operates in. The company actively supports local initiatives and charities, focusing on areas such as education, hunger relief, and disaster response. By engaging in philanthropic efforts, KFC not only strengthens its relationship with local communities but also showcases its commitment to making a positive social impact.

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Final Thoughts on KFC's Marketing Strategy

In conclusion, KFC's effective marketing strategy has played a pivotal role in its worldwide success. Through a combination of strong branding, product innovation, and engaging advertising techniques, KFC has built a loyal customer base. Furthermore, by adapting its marketing strategies for different cultures, embracing digital marketing, and staying ahead of emerging trends, KFC continues to thrive in an ever-changing marketplace. As the company looks to the future, its commitment to sustainability and ethical marketing only solidifies its position as a leading global brand.

Frequently Asked Questions About KFC's Marketing Strategy

What type of marketing does kfc use.

KFC employs a blend of traditional and modern marketing strategies to connect with its audience across different platforms. This includes engaging in digital marketing efforts through social media, search engine marketing, and content marketing to interact with customers online.

Additionally, KFC invests in traditional advertising channels such as television, radio, and print to maintain widespread visibility. The brand also undertakes experiential marketing campaigns that create unique, branded experiences to foster a deeper emotional connection with its audience. Furthermore, KFC practices localized marketing strategies, tailoring its menu items and marketing messages to suit the cultural and regional preferences of its diverse global markets, ensuring relevance and appeal across various demographics.

What are the 4Ps of KFC marketing strategy?

The 4Ps of KFC's marketing strategy encompass Product, Price, Place, and Promotion. KFC's product strategy is centered around its signature original recipe chicken, complemented by a variety of other menu items designed to cater to local tastes and dietary preferences, including burgers, wraps, salads, and vegetarian options.

In terms of pricing, KFC adopts a competitive strategy that aims to deliver value for money while taking into consideration the local economic conditions and target customer segments.

The place aspect of KFC's strategy involves strategic location selection for its restaurant locations in high-traffic areas and an emphasis on online delivery platforms to maximize convenience for customers.

For promotion, KFC utilizes a mix of online and offline advertising, sales promotions, special offers, and local events to engage with customers and stimulate sales, ensuring a broad and effective reach.

What is KFC's business strategy?

KFC's current business strategy focuses on global expansion, innovation, and localization to drive growth and maintain its competitive edge.

The brand is committed to extending its international presence, particularly in emerging markets, by increasing its number of outlets and venturing into new regions. KFC places a strong emphasis on menu innovation, regularly introducing new and innovative products to keep the brand fresh and appealing.

Localization plays a critical role in KFC's strategy, with the brand adapting its menu and marketing efforts to align with local tastes, cultural norms, and preferences, a move that has been instrumental in its success across diverse markets. Additionally, KFC strives for operational efficiency by streamlining operations to reduce costs and improve customer service, leveraging technology in order processing and delivery services. The expansion of KFC's global footprint through franchising allows the brand to benefit from local expertise while mitigating operational risks.

What is KFC competitive strategy?

KFC's competitive strategy leverages differentiation and market penetration to maintain its position in the fast-food industry. The brand differentiates itself with its unique secret blend of 11 herbs and spices, high-quality ingredients, and distinct taste that sets it apart from competitors.

Through aggressive market penetration, KFC ensures that it remains accessible to a vast number of consumers by expanding the number of its outlets both domestically and internationally. KFC also focuses on enhancing the customer experience, improving service quality, restaurant ambiance, and engaging digitally to foster customer loyalty and encourage repeat business.

The brand is committed to adaptation and innovation, continuously updating its product offerings and embracing technological advancements in service delivery, such as mobile ordering and delivery services, to meet the evolving demands of consumers and stay ahead of competition.

About the Author

Hi, I'm Justin and I write Brand Credential. I started Brand Credential as a resource to help share expertise from my 10-year brand building journey. ‍ I currently serve as the VP of Marketing for a tech company where I oversee all go-to-market functions. Throughout my career I've helped companies scale revenue to millions of dollars, helped executives build personal brands, and created hundreds of pieces of content since starting to write online in 2012.

As always, thank you so much for reading. If you’d like more personal branding and marketing tips, here are more ways I can help in the meantime:

• Get my Personal Brand 101 Course
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• Read my free book, “ The Personal Brand Blueprint: A No-Nonsense Guide to Personal Branding in the Age of the Creator ”

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KFC Crisis Management Case Study: Preparing for the Unexpected

Crisis can strike unexpectedly and have a profound impact on a company’s reputation and bottom line.

The ability to effectively manage these crises becomes paramount, and one such case that captured global attention was the KFC crisis.

This blog post aims to delve into KFC crisis management case study examining the events of crisis and analyzing the company’s response.

By exploring the lessons learned from this event and studying best practices in crisis management, we can gain valuable insights into how businesses can navigate challenging situations, protect their brand reputation, and emerge stronger from adversity.

Join us on this journey as we uncover the intricacies of crisis management and uncover the key strategies necessary for successful resolution of a crisis.

Brief history of KFC as a global fast-food chain

Kentucky Fried Chicken, more commonly known as KFC, has established itself as a prominent global fast-food chain with a rich and fascinating history.

The story of KFC traces back to 1930 when Harland Sanders, a humble entrepreneur, started selling fried chicken from his roadside restaurant in Corbin, Kentucky. Known for his secret blend of 11 herbs and spices, Sanders’ fried chicken quickly gained popularity among the locals.

As word spread about the deliciousness of Sanders’ chicken, he began franchising his concept in the 1950s. This marked the beginning of KFC’s expansion into a worldwide phenomenon.

With its signature Southern-inspired flavors, crispy texture, and distinctive red and white branding, KFC grew rapidly across the United States and eventually ventured into international markets.

By the 1970s, KFC had become a global powerhouse, operating in numerous countries and serving millions of customers each day. Its success could be attributed not only to its mouthwatering fried chicken but also to its innovative marketing campaigns and strategic partnerships.

Over the years, KFC has continually evolved its menu to cater to changing consumer preferences, introducing new products like the famous KFC bucket, chicken sandwiches, and a variety of sides and desserts.

Today, KFC operates in more than 140 countries, with thousands of restaurants serving its iconic fried chicken to eager customers worldwide. The brand’s commitment to quality, consistency, and its unique blend of flavors has made KFC a beloved and recognizable name in the fast-food industry.

As we delve into the KFC crisis and its management, it is crucial to understand the significance of this global fast-food chain and its enduring legacy.

Through its journey, KFC has not only revolutionized the way people enjoy fried chicken but also faced its fair share of challenges, providing valuable lessons in crisis management for businesses worldwide.

Description of the specific crisis event

The specific crisis event that shook KFC and garnered significant attention occurred in February 2018. It all began when a major supply chain disruption caused a shortage of chicken, leading to the temporary closure of hundreds of KFC restaurants across the UK.

The shortage stemmed from issues with KFC’s new logistics partner, who experienced operational difficulties that disrupted the delivery of fresh chicken to the restaurants.

As a result, customers were met with signs on the doors of their local KFC branches, apologizing for the inconvenience and explaining the temporary closure.

Social media platforms quickly erupted with posts from disappointed and frustrated customers, expressing their disbelief at the absence of KFC’s famous fried chicken. The crisis intensified as the media caught wind of the story, further amplifying the negative publicity surrounding the situation.

The impact of this crisis was significant on multiple fronts. Not only did it disrupt the day-to-day operations of KFC restaurants, leading to financial losses, but it also tarnished the brand’s reputation.

Customers who had come to rely on the availability and quality of KFC’s chicken were left disappointed and turned to competitors for their fast-food cravings. 

The incident also raised questions about KFC’s supply chain management and the robustness of their contingency plans.

In the face of this crisis, KFC found itself under immense pressure to resolve the supply chain issues, reopen the affected restaurants, and regain the trust of its customers.

The company’s crisis management strategy and subsequent actions would play a crucial role in determining the trajectory of their recovery and the restoration of their brand reputation.

Initial response from KFC

In the wake of the supply chain disruption and subsequent closure of numerous KFC restaurants, the company swiftly took action to address the crisis and communicate with its customers.

KFC acknowledged the issue and released an official statement expressing regret for the inconvenience caused. They emphasized their commitment to providing high-quality food and assured customers that they were working diligently to resolve the situation as quickly as possible.

To keep customers informed, KFC utilized various communication channels, including their official website and social media platforms. They provided regular updates on the progress of resolving the supply chain issues and reopening affected restaurants.

These updates included transparent information about the challenges faced, the steps being taken to rectify the situation, and estimated timelines for the restoration of normal operations.

Furthermore, KFC proactively engaged with customers on social media, responding to inquiries, and addressing concerns in a timely manner. They expressed gratitude for the patience and support shown by customers during this challenging time, striving to maintain an open line of communication and demonstrate their commitment to resolving the crisis effectively.

KFC also collaborated closely with its franchise partners and suppliers to mitigate the impact of the crisis. They worked together to explore alternative solutions, such as sourcing chicken from different suppliers or redistributing stock from unaffected locations to minimize disruptions and reopen restaurants as quickly as possible.

While the initial response from KFC showcased a proactive approach to crisis management, the subsequent actions and long-term strategies implemented would be crucial in determining the ultimate success of their recovery and the rebuilding of customer trust.

Evaluation of the initial response

The initial response from KFC in addressing the supply chain disruption and communicating with customers demonstrated several commendable aspects of crisis management. Here is an evaluation of their response:

• Prompt acknowledgement: KFC promptly acknowledged the issue and expressed regret for the inconvenience caused. This proactive approach demonstrated their commitment to taking responsibility and addressing the crisis head-on.
• Transparent communication: KFC provided regular updates to customers through various communication channels, including their website and social media platforms. By sharing transparent information about the challenges they were facing and the steps being taken to resolve the situation, they instilled a sense of transparency and honesty, which are essential during a crisis.
• Engaging with customers: KFC actively engaged with customers on social media, responding to inquiries and concerns. This demonstrated their willingness to listen to customers and address their concerns promptly, which can help in maintaining a positive brand image and customer loyalty.
• Collaboration with stakeholders: KFC collaborated closely with franchise partners and suppliers to find alternative solutions and minimize disruptions. This collaborative approach showcased their commitment to working together as a team and finding solutions collectively, which can be crucial in overcoming a crisis.

While the initial response from KFC showcased positive aspects, there are a few areas that could be further improved:

• Clear action plan : While KFC provided regular updates, it would have been beneficial to outline a clear action plan or steps being taken to rectify the supply chain issues. This would have provided customers with a better understanding of the progress being made and instilled confidence in the company’s ability to resolve the crisis.
• Compensation or alternative offerings: As an additional measure, KFC could have considered providing compensation or alternative offerings to customers affected by the closures. This could have helped in mitigating customer dissatisfaction and maintaining goodwill during the crisis.
• Proactive communication: While KFC was responsive to customer inquiries, there could have been a proactive approach to reaching out to customers who were directly affected by the closures. Proactively addressing customer concerns and offering support can go a long way in building trust and loyalty.

Communication channels used by KFC

KFC utilized various communication channels to address the crisis and keep customers informed. Here are some of the communication channels employed by KFC:

• Official Website: KFC utilized its official website as a primary platform for sharing updates and information regarding the supply chain disruption and restaurant closures. They dedicated a section or a prominent banner on the website to provide regular updates, explanations, and estimated timelines for the resolution of the crisis. This ensured that customers visiting the website could easily access the latest information.
• Social Media Platforms: KFC leveraged popular social media platforms such as Facebook, Twitter, Instagram, and YouTube to communicate with customers. They posted regular updates, statements, and videos to address the crisis, inform customers about the progress being made, and apologize for the inconvenience caused. Social media platforms allowed KFC to reach a broad audience, engage in two-way communication, and respond to customer inquiries and concerns promptly.
• Email Communication: KFC likely utilized email communication to reach out to customers who had signed up for their newsletters or loyalty programs. Through email updates, they could provide detailed information about the crisis, offer exclusive deals or promotions, and express their gratitude for customer support and patience during the challenging period.
• Press Releases and Media Statements: KFC would have issued press releases and media statements to communicate with the media and the public at large. These official statements would have outlined the details of the crisis, the actions being taken, and the company’s commitment to resolving the situation. Press releases and media statements are vital in shaping public perception and ensuring consistent messaging across various media outlets.

Lessons Learned from the KFC Crisis 

Following are the key lesson learned form the KFC crisis management case study:

A. Importance of preparedness in crisis management

The KFC crisis highlighted the crucial lesson of the importance of preparedness in crisis management. Being prepared means having a well-defined crisis management plan in place, including clear protocols and procedures to follow when unforeseen events occur.

Companies should anticipate potential risks and develop contingency plans to mitigate their impact. In the case of KFC, having a robust supply chain backup plan and alternative supplier relationships could have helped minimize the disruption caused by the chicken shortage. By proactively preparing for crises, businesses can respond more swiftly and effectively, mitigating the negative consequences and safeguarding their reputation.

B. Effective communication during a crisis

Effective communication is a fundamental lesson learned from the KFC crisis. In times of crisis, open and transparent communication with stakeholders is paramount. Promptly acknowledging the crisis, providing regular updates, and being accessible to address concerns demonstrate a commitment to transparency and build trust with customers, employees, and the public.

KFC’s use of various communication channels, including their website and social media platforms, allowed them to disseminate information widely and engage directly with customers. By maintaining open lines of communication, companies can manage expectations, alleviate concerns, and retain customer loyalty during challenging times.

C. The role of transparency and honesty

Transparency and honesty emerged as critical factors in the KFC crisis. Being transparent about the causes of the crisis, the challenges faced, and the steps being taken to resolve it helps build trust and credibility. KFC’s acknowledgment of the supply chain disruption and their commitment to resolving the issue demonstrated honesty, which is essential for maintaining the confidence of customers and stakeholders.

By openly sharing information, companies can demonstrate accountability, showcase their efforts to rectify the situation, and reassure customers that their best interests are being prioritized. Transparency and honesty are vital components of effective crisis management, enabling organizations to navigate challenging situations while preserving their integrity.

Final Words 

KFC crisis served as a significant case study in crisis management, highlighting important lessons that businesses can learn from. The crisis emphasized the importance of preparedness, emphasizing the need for robust contingency plans and alternative solutions to mitigate disruptions. 

Effective communication emerged as a crucial aspect, with KFC demonstrating the power of transparent and timely communication through various channels. Transparency and honesty played a pivotal role in rebuilding trust and credibility. By openly addressing the crisis, sharing information, and taking accountability, KFC showed their commitment to their customers and stakeholders.

About The Author

Tahir Abbas

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KFC Marketing Strategy 2024: A Case Study

Kentucky Fried Chicken (KFC) has emerged as one of the leading players in the global fast-food industry, ranking second on Forbes’ prestigious list of top 10 fast-food chains. The success of KFC can be attributed not only to its delicious food offerings but also to its astute marketing strategy. In this article, we will delve into the key elements of KFC’s marketing strategy, highlighting the fast food marketing techniques and branding strategies that have propelled the brand to new heights.

Key Takeaways:

• KFC’s marketing strategy has helped the brand secure its position as a global fast-food leader.
• The brand employs effective fast food marketing techniques to engage customers and build brand loyalty.
• KFC utilizes demographic segmentation to target a wide range of customer segments.
• The brand leverages both personal and non-personal marketing channels , including social media, email marketing, and traditional media platforms.
• KFC’s social media strategy, particularly on Facebook, Twitter, and Instagram, is highly successful in driving customer engagement.

KFC Consumer Profile

KFC’s target audience is diverse and includes both vegetarian and non-vegetarian customers. The brand caters to various customer segments, including kids, young adults, families, and budget-conscious individuals. By analyzing their target audience, KFC strategically develops marketing efforts to appeal to different customer profiles.

Customer Segments

The primary customer profile that KFC targets is teenagers and families. These customers enjoy dining out or ordering KFC meals for a convenient and enjoyable experience. KFC understands the preferences and needs of this segment, and their marketing strategies effectively engage and resonate with teenagers and families.

In addition to teenagers and families, KFC also caters to adults. This secondary customer profile appreciates the quality and taste of KFC’s food, making them repeat customers. KFC continues to develop marketing initiatives to maintain the loyalty and satisfaction of this segment.

Lastly, KFC reaches out to customers with lower budgets, providing affordable meal options that meet their needs. This tertiary customer profile values cost-effective dining experiences without compromising on taste and quality.

Target Audience Analysis

KFC conducts thorough target audience analysis to understand the preferences, behaviors, and demographics of their customers. This analysis enables the brand to tailor their marketing efforts to specific customer segments and optimize their messaging to resonate with different demographics.

By targeting a wide range of customer profiles, KFC maximizes its reach and ensures that their marketing efforts capture the attention and interest of a diverse audience. Through research and data-driven analysis, KFC aligns its marketing strategy with the preferences and needs of their target audience, establishing a strong connection and driving customer engagement.

Understanding the consumer profile and effectively segmenting the target audience allows KFC to develop marketing initiatives that appeal to different customer needs and preferences. This targeted approach enables KFC to successfully reach and engage a wide range of people, creating a loyal customer base and driving business growth.

Types of KFC Marketing Channels

KFC’s marketing strategy encompasses a variety of channels to reach and engage its target audience. These channels can be categorized into personal and non-personal channels, each serving a specific purpose in the brand’s marketing efforts.

Personal Channels

• In-person sales: KFC employs a network of physical stores where customers can order their favorite menu items in person.
• Telephone interactions: Customers can also call KFC’s dedicated hotline to inquire about promotions, place orders, or provide feedback.

Non-personal Channels

Non-personal channels play a crucial role in spreading KFC’s message to a wider audience. These channels include:

• Newspapers and magazines: KFC utilizes print media to reach potential customers through advertisements and feature articles.
• Radio and television: KFC leverages broadcast media platforms to showcase its offerings and promotions.
• Leaflets, billboards, and posters: KFC uses visual marketing tools in strategic locations to catch the attention of passersby.

Moreover, KFC utilizes various digital platforms to extend its marketing reach:

• Emails: KFC sends promotional emails to its subscribers, sharing exclusive offers and updates.
• Webpages: KFC maintains its official website to provide customers with information about its menu, locations, and ongoing campaigns.
• Promotion campaigns and events: KFC actively organizes contests, giveaways, and events to engage customers and create buzz.
• PR activities: KFC works with the media to generate positive press coverage and enhance its brand image.
• Social media: KFC has a strong presence on platforms like Facebook, Twitter, and Instagram, where it shares news, interact with customers, and promote its products.

By utilizing both personal and non-personal channels, KFC ensures that its marketing messages reach a diverse range of customers through various touchpoints.

Digital Marketing Strategy of KFC

KFC’s digital marketing strategy plays a pivotal role in its overall marketing efforts. The brand utilizes various tactics to reach and engage its target audience. Let’s take a closer look at the different elements of their digital marketing strategy:

Search Engine Optimization (SEO) is an essential component of KFC’s digital marketing strategy. By optimizing their website and online content, KFC ensures that their brand appears prominently in search engine results, driving organic traffic and visibility.

Content Marketing

Content marketing is another key element of KFC’s strategy. The brand consistently creates and shares high-quality content such as blog posts, videos, and infographics to educate and entertain their audience. This helps to build brand loyalty and establish KFC as a trusted source of information in the fast-food industry.

Email Marketing

KFC leverages email marketing to connect directly with their customers and deliver personalized messages. Through targeted email campaigns, KFC keeps their audience informed about new products, promotions, and discounts. By segmenting their email list and tailoring content to specific customer groups, KFC increases the effectiveness of their campaigns and drives valuable conversions.

Social Media Marketing

Social media marketing is a significant part of KFC’s digital strategy. The brand has a strong presence on platforms like Facebook, Twitter, and Instagram. Their active engagement on these platforms allows KFC to connect with their audience, share updates, and respond to customer inquiries. By posting regularly about new offers, products, and discounts, KFC keeps their followers engaged and interested in their brand.

Video Marketing

KFC utilizes video marketing primarily for advertisements on platforms like YouTube. By creating captivating and shareable videos, KFC effectively promotes their products and enhances brand awareness. These videos showcase mouth-watering visuals of KFC meals and highlight the unique aspects of their offerings, enticing viewers to visit their restaurants or place online orders.

Overall, KFC’s digital marketing strategy combines various elements to create a comprehensive and engaging online presence. Through SEO, content marketing, email marketing, social media marketing, and video marketing, KFC effectively reaches and appeals to their target audience, driving brand awareness, customer engagement, and ultimately, business growth.

KFC’s Facebook and Twitter Presence

KFC utilizes its Facebook page and Twitter handle to effectively engage with customers, promote its offerings, and build brand loyalty. These social media platforms play a crucial role in KFC’s marketing strategy, allowing the brand to reach a wide audience and generate customer engagement.

On the KFC Facebook page, the brand regularly shares updates on new offers, discounts, and product information. Customers can also conveniently access online ordering facilities through the page. This proactive approach fosters a high level of engagement, with KFC posts frequently receiving hundreds of thousands of likes and thousands of comments. The brand’s Facebook page serves as a vibrant community where customers can connect, provide feedback, and stay up-to-date with the latest promotions.

Furthermore, KFC’s dedicated team is quick to respond to customer inquiries and complaints on Facebook, ensuring a positive customer experience. By encouraging customers to share their feedback, KFC demonstrates its commitment to delivering quality service and continually improving its offerings.

KFC’s Twitter handle is another platform where the brand excels in customer engagement. In addition to addressing customer concerns and queries, KFC’s Twitter team pacifies unhappy customers and organizes contests to actively engage the audience. This interactive approach not only helps in resolving customer issues promptly but also strengthens customer relationships and showcases the brand’s dedication to customer satisfaction.

With its strong presence on these platforms, KFC effectively builds brand awareness, attracts new customers, and retains existing ones through engaging content, promotions, and personalized interactions. By leveraging the power of social media, KFC cements its position as a leading fast-food chain and demonstrates its commitment to serving its customers.

KFC’s Instagram Presence

KFC understands the power of visual content in today’s digital age. To engage and entice customers, KFC maintains separate verified Instagram pages for various countries, cultivating a strong online presence. Through vibrant and enticing images of their mouth-watering food items, KFC captures the attention of followers and sparks desire for their products.

On Instagram, KFC showcases not only their delectable menu but also provides regular updates on the latest offers, new introductions, and other exciting schemes. By leveraging the visual nature of this platform, KFC effectively attracts customers and keeps them engaged with their brand.

The brand’s Instagram posts receive significant engagement from followers, highlighting the success of KFC’s Instagram presence in reaching a wide audience and promoting their offerings. Whether it’s a drool-worthy image of their signature fried chicken or a tempting sneak peek of their latest limited-time offer, KFC’s Instagram feeds inspire cravings and leave followers eager to visit their nearest KFC outlet.

Engaging Visuals and Exclusive Offers

Through their Instagram handles, KFC tantalizes followers with meticulously crafted visuals that showcase their food in all its glory. Alongside these delightful images, KFC presents exclusive offers, creating a sense of urgency and excitement among their followers:

KFC’s captivating visuals not only make viewers crave their food but also complement the exclusive offers, tempting followers to take advantage of the promotions. By combining enticing visuals with exciting deals, KFC entices their Instagram followers to become loyal customers.

KFC’s YouTube Channel and Email Marketing Strategy

In addition to utilizing other marketing channels, KFC recognizes the power of video marketing and email campaigns in reaching and engaging their target audience. Let’s explore how KFC leverages its YouTube channel and email marketing strategy to drive brand awareness and conversions.

KFC’s YouTube Channel: Showcasing Ads and Building Subscribers

KFC’s YouTube channel serves as a platform for showcasing its advertisements to a wide audience. While primarily focused on advertising, the channel has amassed a considerable number of subscribers, indicating the brand’s strong presence and appeal in the digital space.

Short videos are KFC’s preferred format for showcasing their ads on YouTube. These videos effectively highlight the brand’s offerings, capturing the attention of viewers and encouraging them to explore more. By leveraging the popularity of YouTube as a video-sharing platform, KFC expands its reach and builds brand recognition among its target audience.

KFC’s Email Marketing Strategy: Personalized Campaigns Driving Conversions

Email marketing is a crucial component of KFC’s overall marketing strategy. The brand recognizes the value of personalized campaigns in capturing the attention of subscribers, driving conversions, and fostering customer loyalty.

KFC employs Advanced Message Processing (AMP) technology to create interactive and personalized emails. These emails go beyond traditional text-based content and incorporate dynamic elements such as order buttons, product carousels, and subscription forms. By leveraging AMP technology, KFC enriches the email experience, making it more engaging and compelling for recipients.

The brand segments its audience based on various factors such as demographics, preferences, and past purchase behavior. By tailoring email campaigns to specific audience groups, KFC ensures that each recipient receives content that resonates with their interests and needs. This personalized approach enhances the effectiveness of KFC’s email marketing, leading to valuable conversions and increased brand awareness.

Table: Benefits of KFC’s YouTube Channel and Email Marketing Strategy

Competitor Analysis and Challenges Faced by KFC

KFC, as a leading player in the fast-food industry, faces fierce competition from major rivals such as McDonald’s and Burger King. These competitors have a significant market presence and a loyal customer base. However, KFC has managed to stand out by implementing a unique and authentic branding strategy that focuses on its original identity.

By embracing its real brand identity, KFC has successfully revitalized its marketing efforts and overcome challenges related to perception and health concerns. One notable example is the reintroduction of the iconic Colonel character, along with the full name “Kentucky Fried Chicken.” This decision has brought back nostalgia and excitement among customers, reinforcing the brand’s authenticity and differentiation in the market.

Through its authentic branding approach, KFC has been able to attract customers who appreciate the brand’s history and original recipes. This strategy has proven successful in driving positive sales growth and building strong customer engagement.

The table above provides an overview of KFC’s main competitors in the fast-food industry. While McDonald’s maintains a strong global presence and offers a diverse range of menu options, Burger King differentiates itself through its flame-grilled burgers and creative marketing campaigns.

Despite the competition, KFC’s authentic branding strategy has enabled it to carve out a distinct position in the market. By staying true to its roots and emphasizing its originality, KFC has successfully captured the attention of consumers seeking an authentic fast-food experience.

Kentucky Fried Chicken’s (KFC) marketing strategy has been instrumental in solidifying its position as one of the leading global fast-food chains. Through a well-crafted approach that targets a diverse audience and leverages various marketing channels, with a particular focus on social media, KFC has effectively engaged customers and established a robust brand presence.

The key to KFC’s success lies in its commitment to authenticity and embracing its true identity. By revitalizing its marketing efforts and staying true to its roots, KFC has overcome challenges related to public perception and health concerns. The brand’s unwavering dedication to its original identity and the reintroduction of the Colonel and the full name “Kentucky Fried Chicken” have played a significant role in its positive sales growth and continued customer engagement.

The case study of KFC serves as a shining example for other brands seeking to strengthen their marketing strategies. By implementing a comprehensive and customer-centric approach, brands can enhance their brand image, capture the interest of a broader audience, and achieve sustainable growth. Moving forward, the successful brand revitalization achieved by KFC will undoubtedly inspire and guide marketers in their pursuit of effective and impactful marketing strategies.

What is the marketing strategy of KFC?

KFC employs a diverse marketing strategy that includes demographic segmentation, personal and non-personal marketing channels, and a strong focus on social media.

Who is the target audience of KFC?

KFC targets a wide range of customers, including kids, young adults, families, and budget-conscious individuals.

What are the different marketing channels used by KFC?

KFC utilizes personal channels like in-person sales and telephone interactions, as well as non-personal channels such as newspapers, magazines, radio, television, leaflets, billboards, posters, emails, webpages, promotion campaigns, events, PR activities, and social media.

What is KFC’s digital marketing strategy?

KFC’s digital marketing strategy involves tactics like SEO, content marketing, email marketing, social media marketing, and video marketing.

How does KFC engage customers on social media?

KFC maintains active engagement on platforms like Facebook, Twitter, and Instagram, where they share new offers, product information, discounts, and engage with customer inquiries and feedback.

How does KFC utilize Instagram?

KFC has separate Instagram pages for various countries, where they showcase appealing images of food items, update followers on current offers, and attract a wide audience.

What is KFC’s approach to YouTube and email marketing?

KFC uses YouTube primarily for advertisements and employs email marketing with personalized campaigns, utilizing AMP technology to create interactive and engaging emails.

Who are KFC’s main competitors?

KFC faces competition from fast-food giants like McDonald’s and Burger King in the fast-food industry.

How has KFC overcome challenges related to branding?

By embracing its real identity, reintroducing the Colonel, and focusing on its original name “Kentucky Fried Chicken,” KFC has successfully revitalized its marketing efforts and overcome perception and health concerns.

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Table of Contents

Kfc consumer profile, types of kfc marketing channels, digital marketing strategy of kfc , kfc's social media marketing , kfc marketing strategy 2024: a case study.

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KFC uses demographic segmentation to serve the target market that has both vegetarian and non-vegetarian customer segments. Its offerings cater to kids, young adults, and almost all age groups. KFC's target audience can be categorized into four groups:

• Teens and young adults 
• Budget customers

Its primary customer profiles incorporate teenagers and families because most teenagers are impulsive, and they love to dine out with friends or order online to have a meal with their family. The secondary customer profile includes adults, and the tertiary customer profile has people with lower budgets.  

KFC started with an undifferentiated targeting strategy as it served the same menu worldwide. However, in recent times, it has started localizing its menu for better acceptability in the market. The KFC marketing strategy incorporates two types of marketing channels: Personal and Non-personal.

Personal channels involve communicating directly with the audience, such as a KFC salesperson introducing products to a customer in person or over the telephone. Non-personal marketing channels include the use of media both online and offline, such as

• Promotion Campaigns 
• PR activities 
• Social Media

The KFC marketing strategy primarily includes SEO , content marketing , email marketing , social media marketing , and video marketing. However, the company pays special attention to social media marketing and uses the most popular digital marketing platforms to highlight its price and customer satisfaction. 

KFC's Facebook and Twitter pages are extremely high on interactions with customers. 

KFC's Facebook Pages

KFC uses Facebook as a medium to educate its customers with new offers, products, discounts, and other schemes. It also uses Facebook to address customer grievances. The brand ensures that they put across product-oriented content. It promotes online ordering facilities via social media. 

KFC’s Official Facebook Page Displaying A Range of Meals

On festive occasions, the Facebook page has several animated photos that have often received tremendous responses and helped KFC connect with the audience on occasion. Their posts strike great engagement ratios, with likes soaring above 250,000 and comments reaching 5000+. On average, the total engagement level of the page is approximately 5% depicting quality interaction and engagement. 

KFC's team that handles its Facebook page is extremely quick in responding to customers. They encouraged the audience to lodge a complaint of dissatisfaction at their outlets.  

KFC's Twitter Handles

The Twitter handle of KFC is as interactive as the Facebook page. The team successfully pacifies unhappy customers and has an extremely high engagement level.

KFC’s Twitter Handle

To take interactions to the next level, the team organizes contests often integrated across Facebook and Twitter. They also promote new schemes and discounts via Twitter . Although the number of retweets or conversations on these tweets isn't quite high presently, the brand also seems focused on upscaling its business via Twitter. 

KFC's Instagram Handles

KFC’s Instagram Post with the Latest Offers

KFC has several verified pages on Instagram for various countries besides its main page. It uses this digital marketing platform mainly to attract customers by posting luring images of food items on its menu. The brand also publishes posts about its present offers, new introductions, and other schemes.

KFC on Youtube

KFC India Youtube Channel Displaying Ads

Although KFC has video marketing on its list of digital marketing strategies, it uses its YouTube Channel for advertisements only. It has short videos of not more than two minutes, but the channel still has a good number of subscribers. The company uses Youtube as a secondary medium to show its ads. 

KFC's Email Marketing Strategy

KFC restaurants create bulk mailings using the AMP technology to target its mobile phone users too. Its AMP emails are different from ordinary emails as these mails have interactive elements in the form of order buttons, product carousels, subscription forms, sliders, animations, an interactive showcase of meals, and more so that the emails do not get lost in the potential customer's inbox. The company also uses this strategy to segment its audience and personalize its email campaigns, targeting specific audiences. Their brand awareness campaigns lead to valuable conversions later.

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The KFC marketing strategy is strong and actively uses Twitter and Facebook to attract customers, share promotions and schemes, and solve customer grievances. The potential of YouTube has still not been completely explored by them. 

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Home » Management Case Studies » Case Study of KFC: Establishment of a Successful Global Business Model

Case Study of KFC: Establishment of a Successful Global Business Model

By mid 1950s, fast food franchising was still in its infancy when  Harland Sanders began his cross-country travels to market  “Colonel Sanders’ Recipe Kentucky Fried Chicken.” He had  developed a secret chicken recipe with eleven herbs and spices.  By 1963, the number of KFC franchises had crossed 300. Colonel  Sanders, at 74 years of age was tired of running the daily operations  and sold the business in 1964 to two Louisville businessmen —  Jack Massey and John Young Brown, Jr. — for $2 million. Brown, who later became the governor of Kentucky, was named president,  and Massey was named chairman. Colonel Sanders stayed in a  public relations capacity.

In 1966, Massey and Brown made KFC public, and the company was enlisted  on New York Stock Exchange. During late 1960s, Massey and Brown turned  their attention to international markets and signed a joint venture with  Mitsuoishi Shoji Kaisha Ltd. in Japan. Subsidiaries were also established in  Great Britain, Hong Kong, South Africa, Australia, New Zealand, and Mexico.  In the late 1970s, Brown’s desire to seek a political career led him to seek  a buyer for KFC. Soon after, KFC merged with Heublein, Inc., a producer of  alcoholic beverages with little restaurant experience and conflicts quickly  arose between the Heublein management and Colonel Sanders, who was  quite concerned about the quality control issues in restaurant cleanliness.  In 1977, Heublein sent in a new management team to redirect KFC’s strategy.  New unit construction was discontinued until existing restaurants could be  upgraded and operating problems eliminated. The overhaul emphasised  cleanliness, service, profitability, and product consistency. By 1982, KFC  was again aggressively building new restaurant units.

In October 1986, KFC was sold to PepsiCo. PepsiCo had acquired Frito-Lay  in 1965, Pizza Hut in 1977 with its 300 units, and Taco Bell in 1978 . PepsiCo  created one of the largest consumer companies in the United States.  Marketing fast food complemented PepsiCo’s consumer product orientation  and followed much the same pattern as marketing soft drinks and snack  foods. Pepsi soft drinks and fast food products could be marketed together  in the same restaurants and through coordinated national advertising .

The Kentucky Fried Chicken acquisition gave PepsiCo the leading market  share in three of the four largest and fastest growing segments in the U.S.,  quick-service industry. By the end of 1995, Pizza Hut held 28 per cent  share of $18.5 billion, U.S pizza segment. Taco Bell held 75 per cent of $5.7  billion Mexican food segment, and KFC held 49 per cent of the $7.7 billion,  U.S chicken fast food segment.

Japan, Australia, and United Kingdom accounted for the greatest share of  the KFC’s international expansion during the 1970s and 1980s. During the  1990s, other markets became attractive. China with a population of over 1  billion, Europe and Latin America offered expansion opportunities. By 1996,  KFC had established 158 company-owned restaurants and franchises in  Mexico. In addition to Mexico, KFC was operating 220 restaurants in the  Caribbean, and in the Central and South America.

Many cultures have strong culinary traditions and have not been easy to  penetrate. KFC previously failed in German markets because Germans were  not accustomed to take-out food or to ordering food over the counter. KFC  has been more successful in the Asian markets, where chicken is a staple  dish. Apart from the cultural factors, international business carries risks not  present in the U.S. market. Long distances between headquarters and foreign  franchises often make it difficult to control the quality of individual franchises.

In some countries of the world such as, Malaysia, Indonesia and some  others, it is illegal to import poultry, a situation that has led to product  shortages. Another challenge facing KFC is to adapt to foreign cultures.  The company has been most successful in foreign markets when local  people operate restaurants. The purpose is to think like a local, not like an  American company.

As KFC entered 1996, it grappled with a number of important issues. During  1980s, consumers began demanding healthier foods, and KFC’s limited  menu consisting mainly of fried foods was a difficult liability. In order to  soften its fried chicken chain image, the company in 1991, changed its  name and logo from Kentucky Fried Chicken to KFC. In addition, it responded  to consumer demands for greater variety by introducing several new  products, such as Oriental Wings, Popcorn Chicken, and Honey BBQ Chicken  as alternatives to its Original Recipe fried chicken. It also introduced a  dessert menu that included a variety of pies and cookies.

Soon after KFC entered India, it was greeted with protests of farmers,  customers, doctors, and environmentalists. KFC had initially planned to set  up 30 restaurants by 1998, but was not able to do so because its revenues  did not pick. In early 1998, KFC began to investigate the whole issue more  closely. The findings revealed that KFC was perceived as a restaurant serving  only chicken. Indian families wanted more variety, and the impression that  KFC served only one item failed to enhance its appeal. Moreover, KFC was  also believed to be expensive. KFC’s failure was also attributed to certain  drawbacks in the message it sent out to consumers about its positioning. It  wanted to position itself as a family restaurant and not as a teenage hangout.  According to analysts, the ‘family restaurant’ positioning did not come out  clearly in its communications. Almost all consumers saw it as a fast food  joint  specializing  in a chicken recipe.

KFC tried to revamp its menu in India. Cole Slaw was replaced with green  fresh salads. A fierier burger called Zinger Burger was also introduced. During  the Navaratri festival, KFC offered a new range of nine vegetarian products,  which included Paneer burgers. Earlier, KFC offered only individual meals,  but now the offerings include six individual meals, two meal combos for two  people, and one family meal in the non-vegetarian category. For vegetarians,  there are three meal combos for individuals, and meals for couples, and for  families.

KFC also changed its positioning. Now its messages seek to attract families  who look not only, for food, but also some recreation. Kids Fun Corner is a  recreational area within the restaurant to serve the purpose. Games like ball  pool, and Chicky Express have been introduced for kids. The company also  introduced meal for kids at Rs. 60, which was served with a free gift.

Over the years, KFC had learned that opening an American fast food in  many foreign markets is not easy. Cultural differences between countries  result in different eating habits. For instance, people eat their main meal of  the day at different times throughout the world. Different menus must also  be developed for specific cultures, while still maintaining the core product —  fried chicken. You can always find original recipe chicken, cole slaw, and  fries at KFC outlets, but restaurants in China feature all Chinese tea and  French restaurants offer more desserts. Overall, KFC  emphasizes  consistency and whether it is Shanghai, Paris, or India, the product basically  tastes the same.

Questions For Discussion

• Analyse the case and determine the factors that have made KFC’s a  success global business.
• Why are cultural factors so important to KFC’s sales success in India  and China?
• Spot the cultural factors in India that go against KFC’s original recipe;  KFC Fried Chicken.
• Why did Kentucky Fried Chicken change its name to KFC?

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• SouthEast Asia
• The Middle East
• Leaders Speak
• Brand Solutions
• Talent Management
• 10 min read
• KFC Case Study: How KFC is building a winning culture where people grow & thrive

In an interaction with Özlem Kalaca Yurdakul, Chief People Officer, KFC Middle East, North Africa, Pakistan, and Turkey shares her thoughts on great resignation, the importance of learning and development opportunities, and building a culture where talent thrives. Read on to know some of the strategies to build a culture to win talent.

• Anushree Sharma ,
• Updated On Nov 17, 2022 at 02:41 PM IST

• Flexibility at work: Even before the pandemic, when many companies were discussing and exploring mechanisms, we launched a hybrid way of working. We had a structure behind it, we expected our talents to be in the office for only communication, collaboration, celebration, and community days. We have a corporate calendar for this- 2-3 days we are in the office for these moments. During the pandemic, since working from home became a common practice, we added the WFH benefit, which supported them to have better wi-fi, a better headset, and ergonomic chairs. Also, during the pandemic as a distinctive approach, we launched the Work from Anywhere/Everywhere Policy. Our talents could work from “anywhere in the world.” This is a permanent practice now. 4 weeks a year, they can work anywhere in the world. We support them with a unique WFE monetary benefit so that they can ensure they have the appropriate distant working condition.
• Wellness & well-being: During the pandemic, on top of our wellness programs, we launched an advanced 360 Wellness program. We had many virtual sessions about wellness. After the pandemic, we elevated the program and now, we work with a vendor, to give our talents a menu so that they can choose and create their own recipes. From Yoga to Salsa Dances, from Spa to Table tennis they create their own wellness routine. Other than standard wellness programs we work with global experts in finance, and psychology who can take consultation when needed. We updated our benefit structure and fixed all the friction points from a fairness perspective. irrespective of their levels we included all employees in our health and life insurance. Families are included in yearly health check-ups. Families became an integral part of the KFC community. We have family offsites outside Dubai for families.
• Inclusion: We believe in ALL people. Our talents become their best selves when they feel that they are treated fair when they are included. Even during the pandemic, we kept our focus on diversity, inclusion, and belonging layers. We have 19 different nationalities in the office. Our gender parity ratio is 50%/50 same for advancements. Advt
• Employee Resource Group: We have Employee Resource Groups where we aim to have micro communities for a better feeling of belonging. From cooking to outdoor, language learning to photography our talents are sharing their passions. We have Special programs like Shine (globally selected programs) where we focus on underrepresented groups. Shine is a program to: a. S ponsor them to have a fair share in the ladder of opportunities, b. H elp them to equip themselves with the right light skills c. I nspire them to unlock their own potential, d. N arrate their Stories, road blockers, friction points in life and e. E ncourage them to have an impact with their full potential.
• By Anushree Sharma ,
• Published On Nov 14, 2022 at 09:00 AM IST

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2007: KFC, Brand Revitalisation: Case Study

A powerful combination of product development and inspired marketing that was true to the brand restored KFC’s fortunes on the high street.

Key insights

• A fresh business strategy, rigorously implemented through all aspects of marketing, transformed the KFC brand from sharp decline to category-beating growth.
• The strategy was based on the courageous decision to buck the trend among fast food outlets to talk about their ‘healthy’ options and instead stress the great product taste.
• This was accompanied by cleverly-timed new product development to reach both key target audiences of young people and families at the same time.

KFC Corporation, based in Louisville, Kentucky, is the world’s most popular chicken restaurant chain. It operates more than 5,200 restaurants in the US and over 15,000 around the world. It is part of Yum Brands!, which had revenues of just under $11 billion in 2009. KFC reached Britain in 1965 (before either McDonald’s or Burger King). It now has over 700 stores.

But by 2005 KFC had lost its way, with a lacklustre reputation on the high street and slumping sales. So in-depth research was carried out to find a way to revitalise the brand’s fortunes. A new strategy based on taste not only set the brand apart from its competitors but it brought back both families and young people. A cycle of new product development carried out over the year also increased both frequency of visits and expenditure.

By April of 2006 the brand grew steadily for the first time in three years, peaking at 30% year-on-year (YOY) growth. Communication boosted the brand’s popularity to the point that the average spend rose by over 60p per ticket throughout the year.

Headed in the wrong direction

By the end of 2005, KFC was in trouble. It had become a dinosaur on the high street. The brand remained as famous as ever, but now felt out of date and favour. KFC no longer seemed to have a role for consumers in modern Britain. Sales were in freefall, suffering ongoing and serious decline. Market penetration was also falling (as well as average ticket value).This poor performance was a result of a number of challenges facing both the category and the brand itself (Figures 1 and 2).

1. Category challenges

The nation’s attitudes to food changed significantly over 2005. The ‘health agenda’ that had been brewing for a few years, reached critical mass. Jamie Oliver launched ‘school dinners’ (See Chapter 10) and Gillian McKeith became a household name among a host of food and diet-related programming. As a result, quick-service restaurant (QSR) brands became public enemy number one. This, combined with the relentless coverage and hype about obesity in the media, had a significant impact on consumers’ dietary aspirations. For example, according to a 2006 study by TNS and the Food Standards Agency (FSA), by the end of 2005 67% of people believed they should eat fewer fatty foods, 64% fewer sugary foods and 58% less salt.

Moreover, new competitors were challenging the category, offering healthier alternatives. Service stations, supermarkets, chemists and coffee shops were all selling ready-to-eat food — significantly fragmenting the market. Branded sandwiches such as Subway and Prêt-a-Manger were stealing market share from KFC as they increased their number of stores and gained market penetration. McDonald’s and Burger King followed suit by attempting to become health-focused in response to public pressure.

2. Brand challenges

There was an abyss between how the brand projected itself and customers’ experiences. Recent advertising had given the brand a much-needed injection of credibility, youth and energy. However, while the advertising portrayed this appealing and sexy image, the reality was tired stores and underwhelming products.

The other challenge was new product development (NPD), an important element in this market. There were two key audiences for these quick-service restaurants: ‘families’ and ‘teens and young adults’. These groups accounted for 89% of KFC’s sales.

In 2005 KFC’s NPD was aimed at the youth market, with snacking items developed to increase their frequency of visits. The problem was that KFC then became the place for snacks (with low ticket prices and margins), not a meal destination. Attempts were also made to create healthier food with a range of non-fried chicken, salads and a response to new competitors with sub sandwiches. As well as confusing consumers about what the brand stood for, these innovations were either failing or cannibalising regular sales.

Meanwhile, families were leaving the brand. Despite eating more meals together they weren’t choosing KFC (an FSA food trends study in 2006 showed 57% of people ate one meal a day with all family members compared to 52% in 2004) and sales among families were suffering accordingly. Families did not feel the brand was for them any more — an image reinforced by poor service and stores frequented by ‘youths’. This was particularly damaging for sales because families’ average spend was almost three times that of young adults.

Learning from in-depth research

A new direction was badly needed. In the face of media pressure for healthy living and against fast food, what would motivate people to return to KFC? An in-depth qualitative study was launched to improve the understanding of consumer attitudes and inform brand repositioning.

• Fast food tastes good . The obesity debate gave consumers a new awareness that ‘fast food was not healthy’. However, this didn’t mean total abstinence from their favourite food. While still seeking ‘better for you’ cues, they didn’t want fast food to be ‘good for you’. Consumers choose fast food because it tastes good, not because it’s healthy. As one said, “You’ve decided to go to McDonald’s. Why would you buy chopped-up apple?”
• KFC tastes especially good . There’s something especially compelling about the taste of KFC: “You can’t make it yourself and competitors can’t get close”. KFC’s singular taste unified all consumers. Once the desire for KFC lodged in consumers’ minds, there was nothing else that would satisfy the urge. The thought of the taste quickly turned to a craving that had to be satisfied.
• What the KFC taste means to each audience . For families, KFC’s strength was the product itself. The media’s food obsession had made parents particularly aware of the authenticity of their food (in light of bad publicity surrounding products like Turkey Twizzlers ). As well as seeking an economic way to feed hungry mouths, they wanted the reassurance of ‘real food’. KFC was the only high street fast food outlet that served freshly-prepared whole chicken, not reformed or reconstituted chicken products. This authenticity was seen to be a crucial benefit.

Teens and youths also craved the taste of KFC. They were seen as impulsive eaters who ate whenever they were hungry. They followed their cravings and weren’t brand loyal, but constantly looking for variation and new tastes. Although their mealtimes were less formally defined than families, they were frequent purchasers of meals on the go. lf they got the urge for KFC, they followed it.

Devising a ground-breaking new strategy

The brand platform chosen for all communications was ‘That chicken urge can only be satisfied with the irresistible, indescribable taste of KFC’. This was indeed a radical step — doing the exact opposite of competitors and in the face of popularly-accepted consumer trends. While competitors attempted to embrace healthy eating trends, KFC repositioned itself around the fact that its product tasted delicious (Figure 3).

In other words, KFC became proud of its chicken again, reminding people about the heart of its brand and simultaneously connecting with what consumers sought from the fast food market.

The big challenge, however, was to take a single brand message and make it compelling for both audiences. So all marketing activities proudly put food at their heart. The brand’s endline was changed to become: ‘You’ve got great taste.’

Families were identified as the primary audience for reviving the brand, with mothers as the key decision-makers at dinner, deciding whether to take the night off or treat the family. Products, messages and media were all aimed at them. Youths became the secondary target, with separate products and communications developed specifically for them.

Nor was there any repeat of the previous mistakes where NPD sought to introduce healthy salads or ‘sub’ sandwiches. The year was instead divided into eight promotional periods in each of which one family and one youth product were promoted (Figure 4). As well as generating news, these products also encouraged current consumers to increase both their frequency and ticket price per visit, with new ‘layers’ of products avoiding cannibalisation of existing products.

Four new meals were introduced which either made mothers’ lives easier, or offered greater variety or better quality for the family. For younger consumers there were five new products offering variations of taste. The introduction of individual box meals also raised spend among this value-conscious group.

New products were not only rigorously tested in both qualitative and quantitative research, but were also trialled in test regions supported by above-the-line and in-store communications. Only after a sufficiently good test performance were they added to the national calendar.

Selling the great taste Given the strategy of constantly giving both targets new reasons to buy KFC, the challenge was to support all promotions with communications without significantly increasing the media budget.

1. Advertising

Advertising followed the NPD strategy by using media to ensure each group was targeted as effectively as possible. In all channels the core message was irresistible taste.

• To target mothers, prime-time TV was used in the run-up to the evening meal. Commercials used insightful truths about everyday family life to illustrate the relevance of new products and KFC began to feel like a mainstream, accessible, family brand again.
• The youth target was more likely to be out and about. Above-the-line spend was transferred from TV to posters within close proximity of stores. The product was made the hero of the ads, with appealing food photography in order to spark that unique KFC craving.

2. In-store communications

All messages were also carried through to the in-store environment which simplified the customer’s journey to purchase and reinforced new purchase behaviour. There was a distinct synergy of communications.

3. Other channels

In order to inform customers about provenance and nutritional details, a number of actions were taken. For example, the website was updated to contain all such information, and in-store leaflets about the food’s sourcing were produced. This was to provide reassurance, not to claim the food was ‘healthy’.

4. In-store experience

The new pride and energy in the brand was also reflected in the stores and customer experience. Staff training was focused on teamwork and education in new products. In addition, 30% of the estate was refurbished, with a tangible impact on sales.

Revolutionising brand performance

The results were dramatic. KFC demonstrated immediate growth as the new marketing plan was implemented.

• Sales rapidly improved. By April the brand was experiencing sustained growth for the first time since 2003, peaking at 30% year-on-year growth. Despite losses in the first quarter the year ended in significant growth (Figure 5).
• The brand’s increased penetration was a key factor behind the sales growth: shifting from a low of 31% in December 2005 to 49% a year later. This would be a significant change in fortunes for any brand, but was unprecedented, given the adverse factors this category had faced.
• Ticket price, which had been in continued decline, also rose steadily, partly as a consequence of the increased number of family meals but also because the brand was now able to sell products at a price premium based on the new positioning of superior taste. The average spend rose by over 60p per ticket over 2006.

Standing out from the competitive crowd

While other fast food brands continued to lose share of total eating occasions. KFC defied this trend, demonstrating continued growth at the expense of its competitors such as McDonald’s and Burger King. Perceptions of the KFC brand increased compared with its two major competitors. This measure combined perceptions of ‘value’, ‘experience’ and ‘food’ for each brand. KFC went from being considered the same or worse than these competitors to being superior in every area. Significantly, KFC’s food was its leading brand strength.

As well as a superior image, KFC also found a new salience among consumers. While awareness of its competitors declined, KFC reached an all-time high level of brand awareness. The communications strategy was clearly reaping its rewards.

However, KFC didn’t simply ‘purchase’ these improvements. The brand’s advertising spend increased only marginally between 2005-6, while it continued to be consistently outspent by McDonald’s. KFC’s proud new tone of voice was reflected in consumer attitudes. While other brands were losing their fans, KFC retained its popularity. By the third quarter of 2006, the gap between KFC and McDonald’s was at an all-time low (Figure 6).

The greatest success was among the new core target audience. KFC’s penetration and frequency among families improved radically, restoring KFC’s penetration to over 50% (a 20% change). This clearly demonstrated the fundamental role the marketing strategy played in the brand’s revival.

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Operational Strategies and Management of KFC: An Enquiry

EPRA International Journal of Research & Development (IJRD)

This is a business case report on one of the world largest fast food chain restaurants Kentucky Fried chicken (KFC) in accordance on its operation management and strategy. As the course requirement, the company has been selected on the preference of my own with a prior approval of the unit leader. The report critically analysis three operation management decision areas as design of goods and services, quality management and supply chain management of KFC with suggestions to better performance. Furthermore, it evaluates the strengths and weaknesses as well as strategies with recommendations for achieving competitive advantages. Finally, the report draws a conclusion with wrapping up the findings. KEYWORDS: Managing Quality, Supply Chain Management, SWOT Analysis, CSR

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Critical analysis of the importance of Operations Management to the organization and how it has had an impact to the performance levels of the organization. Brief of KFC-Kentucky Fried Chicken Kentucky Fried Chicken a.k.a. KFC, is one of the leading fast food giants in the world. It is based in Louisville. It has been ranked third largest chain with more than 13000 outlets in more than 109 countries and serves approximately 12 million consumers every day. KFC is known for its original recipe for fried chicken, which is prepared using a blend of secret 11 herbs and spices (Buick, 1982). They are operating in an industry which is based on quick service and delivery to its consumers. They have managed to curtail the service time by more than 50% and improved the productivity of its employees. This helped them to outperform others and yield higher profits and sales figures (Fitzsimmons, Fitzsimmons and Bordoloi, 2014). They aim at providing continued superior service whilst non-stop improvement. It is highly crucial for them to improve the efficiently of their entire operation so as to be able to serve customers as quickly as possible. To achieve this, they have focused on all aspects, such as facility layout, quality management, total costs and infrastructure to match up with the desires and need of its consumers. i

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Strategy Case Study: Analyzing the Success of KFC in China

Table of Contents

KFC Globalization Strategy

One of the secrets behind KFC’s global success is due to how it adapts its business to different countries and cultures while also standardizing other aspects of its operations at the same time. What this means is that the company standardizes some critical branding and operational aspects of the company, but carefully localizes various other aspects of its business model to adapt to local variables. This is known as a transnational strategy which we have covered in a separate guide .

Adopting such a hybrid strategy often allows companies to bank on advantages from both approaches simultaneously. Localization of strategies can be particularly important for large countries such as China which have a strong culture and local traditions. In fact, China is so large and diverse that there are significant differences in subcultures even within the country. Different regions of China have different local variables that may even be unique to them. We will explore in further detail how KFC has successfully cracked the code while competitors like McDonald’s have struggled.

Before delving into the specifics of how KFC won over China, we need to complete the first step in strategy analysis, which is to explore the internal and external factors that influence the success of a business. Most of the facts and figures presented in this case study are taken from the company’s Annual and Sustainability Reports for 2021.

Overview of KFC in China

How did KFC enter China?

KFC entered China in 1987 through a joint venture with two local partners. One of them was Beijing Tourist Bureau, which held 27% of ownership, and the other was Beijing Food Production, which held 13%. The remaining 60% remained under KFC. This was a time when governmental regulation on foreign ownership in China was still quite strict. Hence, the company had no other option but to partner with these local entities. However, this partnership came with the added benefit of allowing the company access to the connections of these entities within the government which made KFC’s entry in China smooth and successful.

There were some changes made to foreign ownership regulations in the 1990’s which allowed the company to dissolve the joint venture structure. The fact that the company had established a good foothold in the market by then, with a strong distribution network, stores, fleet, and flow of operations, helped it set out further on its own.

What is KFC Called in China?

KFC is called ‘Kendeji’ in China and as one may infer, it is an approximate transliteration using a close pronunciation of ‘Kentucky’. The official name of the company is written as 肯德基 in Chinese (Kěn Dé Ji in Pinyin). This isn’t a literal translation since it is more common for foreign companies in China to adopt the closest phonetical words corresponding to the original foreign name of the company. The actual meaning of the Chinese characters in KFC China’s official is as follows.

The choice of Chinese characters by foreign brands is often an effective signal of the company’s values and intended positioning strategy. What we can infer from the meanings of each individual character and their combines meaning is that KFC China aims to invoke a perception of trust and dependability in the minds of local Chinese customers. This is a particularly interesting choice, especially in the light of frequent food safety scandals in the food retailing industry of China, which we shall cover in subsequent sections.

KFC also has an unofficial nickname in China. Some people refer to it as ‘Kai Feng Cai’. This is a play on words as this name is taken from it’s initials, while also represents a popular dish in local cuisine. This another testament to the local association of KFC in China. The company has embraced this nickname in recent times by giving this name to its line of ready-to-cook meals.

Key Facts and Statistics About KFC China

Detailed analysis of various aspects of the company’s strategy, business model and performance in China shall follow in the subsequent sections. However, here’s a quick recap of some interesting facts and statistics about the company’s operations in China.

• KFC’s revenue in China was just over USD$7 billion in 2021
• The company operates 8,500 stores in the country
• It opens around 3 new stores per day on average
• Around 15% of the company’s stores in China are operated by franchisees
• There are 8,500 KFC stores in China, as of 2022
• KFC China sources the materials needed for its operations from 800 suppliers, as of 2022
• Delivery orders typically account for about 20% of total sales
• However, this increased to around 30% as a result of Covid-19

Growth of KFC in China

To say that KFC is ‘popular’ in China would be an understatement. The company has been far ahead of other international fast food retail chains in China since the 1990’s and continues to consolidate its position further. It must be recognized that right from the time of its entry in this market, KFC China successfully positioned its brand as being in tune with Chinese culture. In comparison, the localization efforts of McDonalds’s came a few years after its entry. This was a case of ‘too little, too late’ for McDonald’s as KFC made good use of its 3-year head-start to consolidate its position.

The success of KFC in China is exemplified by the fact that the company opens an astounding average of 3 new stores per day here! What makes this stat even more astonishing is the fact that these numbers are post-Covid!

The exponential growth achieved by the company can be better understood by looking at the number of stores under its banner in China. This is illustrated in the graph below. The company started gradually by establishing only 11 stores in its first 5 years of operations in this market. This was then scaled up to 100 stores within a decade. The next few years saw hundreds of stores being added every single year to reach almost 2,500 stores within a 20-year span.

As shown in the graph, the growth took a small hit during the few years following global financial crisis of 2008. However, it bounced back even stronger and hit a period of its highest growth during the next decade. As of the time of this case study in 2022, the KFC operates 8,500 stores in China. In comparison, McDonald’s only has about 4,000 outlets in China, which is barely half the number of outlets as KFC.

KFC China’s operations and profitability took a fairly big hit starting from the first quarter of 2020 due to the Covid-19 pandemic. This led to temporary store closures in many places and even permanent closures in some. During the peak of the pandemic in 2020, KFC had to close nearly 35% of its stores. However, the company has bounced back from this setback and looks to be back on track with its strategic vision of continuing to expand its presence in China by opening even more stores in 2022 and beyond.

Geographic Spread of KFC in China

When evaluating the growth of KFC in China, a key factor that needs to be taken into consideration is geography. Being a very large country, there is a high level of diversity in demographic variables for different regions of the country. The different cities in the countries are often separated by economists into four tiers based on economic growth, gross domestic product and geographic reach.

The Tier 3 and 4 cities often have a lower economic output, which also means that cost of labor would be less. It is also common to see lower populations and different social classes and levels of employment in these cities when compared to Tier 1 and 2 cities. While other foreign brands like McDonald’s have hesitated and stayed away from establishing outlets in lower tier cities due to lower perceived profitability, KFC has ventured and expanded much further in these areas as well. This distinction is also important to consider in the context of KFC’s success in China. More detailed discussion on this shall follow in subsequent sections.

Who Owns KFC China?

KFC China shares the same brand colors and imagery that all branches under the global fast-food restaurant chain of KFC have. However, it operates independently without direct influence or intervention from the branches in other countries. Unlike in other countries, KFC China’s ownership comes under Yum China which indirectly owns the subsidiaries operating the KFC brand in China.

This parent company is incorporated in the state of Delaware in the US. In other words, KFC’s operations in China are subject to the income tax regulations of both the US and China. The company effectively pays an income tax rate of 25% to Chinese authorities, plus an extra 10% withholding tax on the earnings which it repatriates out of the country (to its parent company). In contrast, companies which operate mainly in the US are subject to a flat corporate income tax rate of 21%.

However, not all stores in China are owned and operated directly by Yum China. Approximately 15% of the company’s stores in China are operated through franchising agreements with channel partners. KFC makes money from its franchisees by receiving both upfront franchise fees as well as on-going royalties such as a percentage of their sales.

KFC China Food Safety Issues and Scandals

KFC China has had its fair share of food safety issues and scandals over the years. In 2012, the company lost a lot of sales revenues due to a scandal related to claims that it was using antiviral drugs and growth hormones in its chickens. As this was in violation of food safety laws, the government launched a detailed investigation covering the use of antibiotics in food items.

The company had to fight an uphill battle to restore both consumer and government trust in its brand. KFC China also faced some controversy over food safety standards in 2015 when one of its suppliers was shut down due to claims of supplying expired meat. These kinds of issues increase consumer resistance towards the company, especially seeing as it is a foreign brand, a fact which invites additional scrutiny and concerns over trust in China.

SWOT Analysis for KFC in China

Based on our KFC China SWOT analysis, we have identified some key points that play a significant role in the company’s continued success in China.

Due to its adoption of the transnational strategy, the company benefits from using a well-established and recognizable global brand, while also reaping the rewards of adapting various elements of its business to suit local consumption patterns.

Another strength gained by the company solely due to this strategy is the fact that it does not need to look to management of the parent company in the US for decision-making. This allows the company to make quicker adjustments to capitalize on local trends.

The company has a key strength in procurement thanks to its strong presence in the country. Having so many stores in the country gives the company significant buyer power which often provides it the upper hand in negotiations with suppliers. The company has benefited even further in this regard through the central procurement model of its owner Yum China which also had other major restaurant chains such as Pizza Hut and Taco Bell under its banner.

The type of product which the company specializes in also gives it an edge over competitors like McDonald’s or Burger King. Fried chicken is a more generic and relatable product for Chinese customers as compared to hamburgers, which are obviously more alien to Chinese traditional cuisine.

Apart from price negotiation through high volume of purchases, the consolidation of the procurement function also gives the company an easier way to manage its extensive supplier network with better quality control and standardization measures.

The company has also managed to secure strategic locations for its stores which give it access to a greater level of footfall and customer traffic. This strength can also be traced back to the company’s first-mover advantage of being one of the first foreign food retail brands in the country. The company’s early entry to the market allowed it to lock-in prime locations before they competition became too high.

KFC no longer has the novelty factor which it used to have during its initial introduction to the country. Additionally, its excessive focus on localization of menu choices makes it more difficult for the company to stand out amongst a sea of local, home-grown restaurants.

The huge network of stores which the company has in China can be as much of a liability as it is a strength since it needs to invest more time and resources into managing this network. This is especially necessary when overseeing the operations of franchised stores and ensuring that they match the standard brand values of the company.

Opportunities

The changes to the ownership regulations in China in the 1990s was one of the first opportunities that the company immediately capitalized on. While the company had entered the market in a joint venture with local partners, it used this chance to dissolve the joint venture and consolidate ownership. This helped the company with faster and more efficient decision-making.

Another opportunity for the company in this market the relatively lower competition in lower tier cities since other foreign brands were predominantly focused on urban areas. The companies to make effective use of this opportunity to date as evidenced by the exponential increase in the number of stores year after year.

The size of the country and it’s population, combined with the fact that it is a growing economy with increasing disposable wages and less market saturation all provide a good climate for large companies to invest and grow rapidly. KFC has benefited greatly from these trends as part of its market penetration strategy, and the continued increase in its number of stores in the country is further proof of this.

The large size of the population and diversity in cuisines and tastes between different region also provide an obvious opportunity for market expansion through product diversification. KFC China also makes very effective use of this opportunity, as we shall cover in subsequent sections.

Food scandals and claims of contamination, adulteration or even diseases being spread through the operations of food retailers is a fairly common occurrence in China. This poses a major threat which can damage the trust in the brand. An isolated incident in a local area can have a significant negative impact on how the company is perceived across the country. In fact, KFC has already faced issues with foodborne diseases such as E. coli, Hepatitis A and Salmonella in its supply network. Another scandal took place in July 2014. The Chinese authorities closed restaurants in Shanghai following rumors of using expired meat. The brand broke the contract with their current supplier and tried to fix their good reputation.

The spread of diseases such as the Covid-19 pandemic in recent times or the African Swine Flu prior to that all have larger impacts in the food retail industry than in other sectors. The impact may not just be a disruption to operations; it might affect the profit margins directly. An example of this is how the price of protein and poultry went up drastically in China in 2019 due to the spread of the African Swine Flu.

It is important for the company to keep a tight control of its supply chain quality and effectiveness to protect itself against scandals and bad publicity. Negative incidents in the supply chain are especially harmful in the food retailing industry due to the direct impact that it has on health and safety of the consumers. KFC China has had some bad experiences in this regard, such as the failure of some of its upstream poultry suppliers to comply with the company’s established standards.

During the pandemic, many provinces had put tough measures in place to discourage travel. This was especially enforced during period of holidays, such as the Chinese New Year holiday in 2022. This was a tough pill for the company to swallow since holiday season is often the most profitable time of the year for the company. This was set against the backdrop of the fact the company had already suffered significantly due to operational restrictions caused by the pandemic.

The fact that the company leases nearly 8,500 properties in China opens the door to a lot of uncertainty. This includes various factors such as swings in the real-estate market and disputes over property ownership and inheritance which could disrupt store operations. Additionally, the company faces a huge risk since the Chinese government has the authority to obtain ownership and control of any land plots and the buildings which it considers to be in the interest of the public. There is usually no legal provision which the tenant can use to even claim compensation.

Another operational risk faced by the company arises from the fact that it deals with a large amount of cash as a part of its day-to-day operations. This opens the company to instances of fraud, theft and other forms of misconduct which are often difficult to detect and prevent.

PESTLE Analysis of KFC in China

Here’s our summary of the key points of external environment of KFC in China, using the PESTLE analysis tool. Detailed discussion of these points can be seen in the relevant subsections below.

The internal political environment of China is quite stable in terms of the party in power making the legislations. However, the government in known for making new sweeping changes on short notice. Often, the interpretation and application of new regulations is not clearly set out and there could be differences in enactment at local government levels. This element of uncertainty has a strong impact on KFC’s revenue in China. As we’ve mentioned before has spread out and expanded to the various tier levels in China which means that the company also has to deal with different local jurisdictions and administrative departments as well. Exposure to this level of uncertainty poses some difficulty to the vision of standardization which companies like KFC aim to achieve for better efficiency in operations.

On an international level, the situation becomes more difficult as the country often has soft escalations with both neighboring countries and those in the West, especially the US. For instance, the political tensions between China and US in 2020 led to various new policies being enacted by the Trump administration which affected businesses operating in China. Some specific examples include the Clean Network program which was launched with an aim of protecting U.S. telecommunication and technology infrastructure and the banning of transactions through certain software and applications which were associated with China. The list of banned applications included popular payment gateways such as Alipay, QQ Wallet and WeChat Pay. This was detrimental to operations of companies offering these payment options, including KFC for which sees a significant portion of digital orders and digital payments. In 2021, digital orders accounted for around 86% of total sales, and digital payments and mobile payments contributed to about 98% of total sales.

Despite all its efforts to come across as a brand which is well in-tune with local customs and traditions, there is no escaping the fact that the company is a well-recognized global brand originating in the West, and US specifically. This has created problems for the company in the past, such regional protests and boycotts from some segment of customers in China in the aftermath of political disputes regarding the claims of territories in the South China Sea.

Historically, the culture and traditions of Chinese consumers has encouraged them to pursue to long-term savings and makes them sensitive to price. Often, this mindset also leads them to seek out the best deals and promotions. More recently though, Chinese consumers are starting to show higher levels of individualism in their buying choices and are less price-sensitive compared to before. However, they are still more price conscious when compared to their counterparts in Western countries.

The tier system discussed in previous sections also points to an economic disparity across the country. Different regions are characterized by different levels of income and standard of living. Such differences in socio-economic backgrounds of consumers have implications on the type of products and price points that appeal to them. At the same time, it also represents differences for KFC in terms of the labor market which they can draw talent from.

Chinese consumers are found to be more willing to pay a higher price point for products that are perceived to be novel and foreign. This may have been the factor which guided the strategy of McDonald’s and other similar foreign brands to not localize their business as much as KFC did. The mistake in calculation of these other companies, and where KFC has done well, is that the novelty factor wears off soon unless products are being constantly innovated. In fact, the company is so good at keeping this novelty factor that it has invested resources in remodeling its stores regularly. In 2022, the company reported that nearly 78% of its outlets in China were remodeled or built in just the previous five years.

In terms of demographics, it is safe to conclude that the younger generation of customers often find fast-food brands such as KFC more appealing than older age groups. KFC has done well to make itself especially appealing to different target segments such as youth, rising middle class, teenagers, and college students. It has achieved this by choosing its marketing and advertising strategy carefully. Often, the company’s commercials show KFC products being shared in social settings and depicting KFC Stores as places where people can gather socially. The impact of this positioning strategy is noticeable in the fact that many Chinese eat KFC for Christmas as a social tradition, although perhaps not to the extent that this practice is common in Japan.

In recent times, the age structure of consumers in China has changed significantly. The one-child policy has led to a significant decrease in the fertility rate of the country. This has led to an increase in proportion of the older population segment. When combining this factor with the previous identified one about stronger preference for KFC from younger customers, the implication is obvious.

KFC can expect to see a proportion decline in its revenue as the average age of customers in the country increases further. However, against this background, the company has also done well to diversify its customer base through increased menu options and this another factor we shall touch upon in subsequent sections of this case study.

Technological

Technology has become increasingly accessible in recent times, and this is no different for the Chinese market. Many consumers in China are starting to show a preference for enhanced shopping experiences through greater digital interaction. The broader access to technology and the increasing trend of online shopping also contributed to this. This factor is noticeable through the fact that nearly 86% of the company’s total sales in China in 2021 were through digital orders. KFC China also relies on digital R&D centers to support its technological capabilities and capture customer value better. Three new R&D centers were established in 2021 alone.

The digital presence of KFC China is strong enough that it can run a massive loyalty program with 330 million members (this user base is shared with other brands under the Owner Yum China). This allows the company to reap the rewards in the form of higher order frequency and customer loyalty.

KFC China also uses a sophisticated artificial intelligence algorithm called the “Super Brain,” which combines and integrates data gathered through everyday store operations. This data is analyzed to improve the decision-making capability of the restaurant managers. The company has even experimented with proprietary smart watches and smart glasses to closely monitor the real-time operations and process flows. This is supposedly for the purpose of making suitable adjustments to staff schedules and improve management efficiency.

On the flip side, such an approach does pose various questions in terms of data privacy and excessive monitoring of personnel. One might expect similar resistance to the use of facial recognition data by business to provide new services. China is one of the early adopters of the application of facial recognition technology for mobile payments and it has since become commonplace. While acceptance of this technology was rapid in the early stages, consumer resistance has been growing in recent years . Such kinds of reactions by customers affects how well KFC China can undertake digital transformation efforts in the country.

In China, there are several food-safety laws which lay down detailed guidelines and rules for food safety assessment, standards, production, inspection, and distribution. In the wake of several scandals in the supply chains of different players in the food industry, violations of established regulations often draw financial, administrative, or even criminal penalties. KFC has been on the receiving end of such sanctions on multiple occasions. However, it is a testament to the popularity of KFC in China that such scandals have failed to make a significant negative dent on the company’s presence in the country.

While we touched upon increasing adoption and advancements in terms of technology in the previous section, this is accompanied in parallel by an increase in regulatory measures in the areas of information security and protection. The laws and requirements covering data privacy and cybersecurity have been tightened in recent times.

It is also worth noting that the laws in China do not always offer the same type or extent of protection which is expected and even taken for granted in the US. This is particularly true in the field of intellectual property rights. Apart from vagueness in the coverage of these rights, there is also a noticeable inconsistency in the enforcement of these laws at different levels of government and across different regions of the country. In fact, there many restaurants in the country which use imagery imitating established brands such as KFC and McDonald’s, seemingly without legal repercussions.

Environmental

A key environmental factor of importance in China is the increasing awareness about the negative impact of non-sustainable and single-use packaging. Going back to the point of long-term orientation, which is emphasized in traditional Chinese culture, generation of unwanted wastes is highly discouraged. KFC China has tried to overcome this by gradually replacing some of its plastic packaging with paper-based and biodegradable alternatives.

The company claims that it reduced nearly 9,300 tons of plastic waste and 4,320 tons of paper waste in 2021. However, this is a measure that nearly every other competitor has also announced as taking, so it does not distinguish the company from others. There is definite room for innovation in this regard which can further cement the company’s popularity in the country.

There is also an increasing awareness of and demand for better nutrition and healthier product choices from consumers in China. To cater to this trend, KFC China opened some specialty stores promising to deliver on a healthy concept model. This was done under the ‘K Pro’ brand, which was launched in 2017. In place of items which used fried chicken, healthier alternatives such as salads, paninis, and juices.

Porter’s Five Forces Industry Analysis of KFC in China

We have analyzed the food retailing industry in China based on Porter’s five forces model and summarized it in the figure below. Please read the detailed discussion of each of the factors to better understand the logic behind our assessment.

Industry Rivalry (High)

The main foreign brands which represent a higher level of industry rivalry for KFC China are McDonald’s, Burger King and Domino’s Pizza. Pizza Hut and Taco Bell are other foreign brand competitors, but they do come under the same parent company as KFC China (Yum China).

Some local Chinese fast-food competitors include chains such as Daniang Dumpling, Kungfu, Zhen Kong Fu and Malan Ramen. These have seen an increase in popularity in recent years. However, a factor that works against these local chains is that they do not often gave the benefit of standardized cooking methods and ingredients that KFC China does due to the incredible efficiency of its operations. There are also Asian brands like Home Original Chicken, Hua Lai Shi and Dicos which offer American-style dishes such as burgers and chicken nuggets, often at cheaper prices.

Apart from strong competition from these large foreign and local chains, the rivalry in the industry is further intensified by the convergence in grocery, convenience, deli, and restaurant services. As such, industry rivalry in fast food retailing in China is considered to be high.

Bargaining Power of Buyers (Very High)

With fast food restaurants, the obvious factor which gives more power to the buyers is the lack of any effective switching costs. In recent times, companies have tried to increase their bargaining power by offering membership and loyalty programs. In fact, KFC China’s loyalty program is quite large with nearly 330 million members, as we have covered previously. There is also a significant overlap between the menus and specific food items between the different options in the market. This also results in better bargaining power for the buyers. As such, we consider the bargaining power of buyers in fast food retail in China to be quite high.

Bargaining Power of Suppliers (Low)

The SWOT analysis of KFC in China in the earlier section established the fact that company enjoys a stronger hand in price negotiations with its suppliers due to its high-volume purchases and centralized procurement model. While the growth of the company’s scale of operations and number of stores is accompanied by a similar increase in the number of local suppliers, the proportion for the two increases has not been the same.

While the number of stores nearly tripled in the decade between 2010 to 2020, the increase in the number of suppliers was less than double (from around 500 in 2010 to about 750 in 2020). This comparatively lower increase in the number of suppliers can be taken to imply a much stronger position for the company during negotiations with suppliers. As such, the bargaining power of suppliers is evaluated as being low.

Threat of Substitutes (High)

As identified in the PESTLE analysis of KFC China in the earlier section, there is a growing trend of health-consciousness among consumers in China. This drives up the demand for substitutes which are healthier food choices for the customers. KFC seems to be fighting this threat by offering healthy seasonal vegetables in its menu. It’s K Pro is also an attempt to directly tackle this threat.

While the ‘fast-food’ concept does stay true to its name and offer a quick turnaround between making an order and getting the food, there is an even faster substitute that fast-food companies need to be weary of. In China, many convenience stores and even groceries have a section of food products which were pre-packaged earlier in the day or just the previous day. This represents a good substitute option for the working population seeking to get a quick lunch while avoiding the queues at restaurants. KFC China’s launch of KaiFengCai series of ready-to-cook meals can be seen as a way for the company to expand further into what were previously substitutes. Overall, the threat of substitutes is considered to be moderate to high.

Threat of New Entrants (Low)

The cost of entering this market in China is fairly high with significant investments being required to establish the necessary infrastructure, stores, distribution network, food safety certifications etc. This makes it difficult for new entrants to come and challenge the major established market players. Having said that, the threat of new entrants for food retailers in China mainly comes from new forms of product distribution and delivery.

In recent times, China has seen an increase in the number of food delivery aggregators, and new forms of food retail and delivery services such as ghost kitchens, cloud kitchens and shared kitchens. These new entrants often hold a high novelty factor and try to offer a wider range of cuisines and novelty dishes which can pull customers away, especially in urban areas. As we have covered in previous sections though, the novelty factor is one that often wears away quickly, and this has been observed in the food retail sector in China in the past. Hence, the threat of new entrants is considered to be somewhere between low to medium.

KFC China Localization Strategy

General overview of kfc china vs us.

The most important feature of KFC’s localization strategy in China is its significant commitment to embracing the local culture through targeted adaptation efforts. This is most noticeable in terms of the menu options offered in its outlets in China as compared to the US.

It works in the company’s favor that Chinese customers perceive the company as being better than the average fast-food store. It is not considered a ‘cheap’ dining option, which is often the association that most fast-food chains including KFC have in other markets. Instead, the customers place it somewhere in between casual dining and fine dining. This is entirely down to the company’s transnational strategy of combining its globally recognizable branding with localization at nearly point possible.

Another difference between the two countries is in the style of cooking. In China, boiling is the more preferred technique of cooking rather than deep frying. There are also differences in Chinese table manners compared to the US, ranging from obvious aspects such as the usage of chopsticks to more obscure differences such as the general approach to consumption of food. Chinese consumers frequently gather to sit together and eat in comparatively larger groups than in America. KFC China offers a greater variety of choices in its menu as compared to KFC in America and this is better suited to the local trend of eating food in larger groups because these customers like to order and share several dishes with each other.

Whereas consumers in the US may hesitate in consenting to the use of facial recognition technology, Consumers in China area already used to this, as identified in our PESTLE analysis. Despite some resistance to the use of such technology emerging in recent times, this application of technology does not appear to be going out of trend in China in the near future. This is another difference in the digital presence and user interaction aspects of KFC in China vs America.

Another distinction is that the company focuses mainly on chicken-based products in North American markets. In China (and several other markets) the company also offers beef and pork products. However, it is worth nothing that the company’s focus on chicken gives it another edge over McDonald’s because Chinese consumers show a greater preference for chicken compared to beef (which McDonald’s has a greater focus on).

Localization of Menu Options

As we touched upon several times in earlier parts of this case study, localization of the menu and available items to suit local tastes and preferences is the cornerstone of KFC’s strategy in China. The staple food items consumed by a lot of people in China are rice, porridge, and noodles. In comparison, consumers in the US and other Western cultures show a greater preference of bread and wheat-based items as their main source of nutrition. KFC China has paid attention to this factor and various other local tastes and preferences and carefully adapted a localized menu which must be recognized as a critical success factor for the company. Here are some localized items which are available in KFC China but in the US and most other markets.

• Matcha Ice Cream
• Soy Sauce Chicken
• Sandwiches With Prawns
• Soymilk Drinks
• Chicken Tendon Skewers
• Fried Dough Savories
• Rice-Based Meals
• Fried Dough Sticks
• Egg & Vegetable Soup
• Chilli Beef Pancake
• Dragon Twister
• Grass Jelly Milk Tea
• Shrimp Burgers
• Egg Custard Tarts
• Fish Ball Soup
• Soup Dumplings (Xiao Long Bao)
• Fried Donut Stick (Youtiao)
• Beef Noodles
• Seasonal Vegetables
• Bamboo Shoots
• Lotus Roots
• Tree Fungus Salad
• Pickled Chinese Cabbage
• Smelly Tofu
• Skewered Meat
• Preserved Eggs (Cantonese-style Pidan)

However, the company has not abandoned its conventional Western-style products altogether. It does offer them in parallel since the perception of a certain level of foreignness is what allows the company to charge a higher price point than local competitors. This is also part of the hybrid transnational strategy that we explained at the beginning of this case study.

KFC China even localizes products for different regions and provinces within the country based on local tastes. For instance, its products in Shanghai are less spicy compared to its menu in Sichuan and Hunan to better suit local preferences in each of these regions. Similarly, the company also added Wong Lo Kat herbal tea to its menu only in the Guangdong provide as this is one of the oldest brands of herbal tea which is widely popular in this region.

The company’s commitment to localization of its menu items runs so deep that the company has even established its own seasoning facilities. To ensure the authenticity of its flavors, the company also makes use of traditional Chinese spices including aniseed, Chinese cinnamon and sesame oil.

The company has also set up a massive 27,000 square-foot ‘innovation center’ in Shanghai which focuses on coming up with new recipes, cooking methods and menu items. The company has also set up a food advisory committee to lobby for support in its favor. KFC China also began selling a range of products branded as ‘local street food’ in 2019. This included options like chuan, boiled skewers.

Apart from introducing local menu items, the company also fuses some dishes together to introduce more innovative and partly localized products. One of its new additions is prepared similar to the traditional dish known as Peking Duck with chicken being substituted instead. This dish also makes use of sweet sauce that is made using fermented flour as this is the condiment used in Peking Duck.

It is worth noting that KFC China has made a conscious decision to not completely localize its menu options and give up its foreign brand status completely. Instead, the parent company of KFC China spun off a completely new brand known as Dongfang Jibai (which means East Dawning) based on the business model of KFC to exclusively serve Chinese Food.

Localization Aspects in the Supply Chain

As we had covered in our earlier KFC China SWOT analysis, a key strength of the company is its central procurement system through which group sales are centralized. This provides several benefits such as better management and control of the supply chain, while also putting the company in a better position to protect against food safety issues and scandals which were a key threat identified for this market.

For the most part, KFC China sources its chicken and other necessary materials locally. Its network of nearly 800 local independent suppliers account for almost 90% of the requirements of the company. Due to the large scale of the company’s operations, it has a dedicated team of almost 1,400 employees who are focused solely on supply chain management activities. However, their roles within the supply chain system range from safety, quality assurance, and procurement management to delivery, logistics, and even engineering.

The company has also invested heavily in integrating its logistics in China, which is evidenced by ongoing acquisition of properties to establish new logistics centers, with 3 new hubs being set up just in 2021. The company also relies on its network of 32 logistics centers which it operates in close coordination with independent distributors to move material and products around the country.

The company has also put in place agreements with local delivery aggregators to have their products listed on and ordered through their respective platforms. This further expands the sales network and reach of the company.

Localization of Store Design

The company also localizes its store design and undertakes frequent remodeling to ensure that it is staying in tune with customer expectations and local trends or preferences. As we mentioned earlier, almost 78% of KFC China stores have been remodeled or built between 2017-2022. Other examples of the company’s localization in terms of store design include themed restaurants which focus on certain specific aspects of Chinese culture.

As part of localization of store designs, KFC China set up some themed restaurants in partnership with the National Museum of China and the Palace Museum. This collaboration granted KFC the rights for usage of imagery and interactive displays of historical and traditional Chinese culture and artefacts in selected stores. Another example is a restaurant in Chengdu which has a distinct theme which recognizes the contributions of the poet Du Fu who was a native of this city.

Apart from localization of aesthetic elements in its stores, some other store design choices of the company also seemed to be well-suited to this market. For instance, we identified in the PESTLE analysis that Chinese consumers are increasingly technology-savvy and are also becoming more conscious of environmental impacts. The company’s decision to trial some pilot projects in which photovoltaic panels were installed in its stores to generate solar energy also capitalizes on these trends.

Some other distinct store decorations used by the company include placement of Cantonese-style redwood palace lanterns in its stores. The company also updates the theme and design of its stores with special decorations for certain occasions, such as the Chinese New Year and other traditional festivals.

Having covered localization of store design, it is also worth pointing that KFC brought over something from other markets, which was new to China. This was the inclusion of toilets in its facilities, which were also air conditioned. During the early years of the company’s operation in the country, such kinds of amenities were not common in public spaces and definitely not within local restaurants. This helped the company cultivate an image of luxury during its early days, although it has repositioned as a value-for-money option in recent times.

Variation in Pricing

As we identified earlier, Chinese consumers are typically more willing to pay a higher price for the products which they perceive as novel and foreign. This has allowed the company to charge a higher price in China as compared to other markets.

Overcoming Consumer Resistance

It was identified in our PESTLE analysis of KFC China that Chinese consumers are more sensitive to price. Compared to the US where KFC and other fast-food chains are already considered good ‘value-for-money’ options, KFC China charges a higher price point, as we have also mentioned earlier in this case study. Comparing these two points, it can be inferred that KFC China faced a greater value barrier of convincing consumers in China that its products still represent better ‘value-for-money’ for them when compared to other foreign and local brands.

Overcoming consumer resistance often requires educating consumers. In this regard, KFC is often quick to act on issues related to food safety standards and denounce outlandish claims such as the rumor that it was using ‘mutated’ chickens. In the wake of an earlier scandal, the company even put out a message on the paper placemats in its stores highlighting the steps that it was taking to ensure food safety in its supply chain. This proactiveness has allowed the company to weather the storm and recover fairly quickly from temporary drops in market value when such scandals come up.

Another strategy which the company uses to overcome consumer resistance is to focus on community development as part of its corporate social responsibility efforts. It seems to be picking and choosing specific initiatives which paint is as a part of the local community, instead of being just another foreign brand.

The KFC SWOT analysis in an earlier section of this case study revealed that Chinese consumers are becoming more wary about the incursion of technology such as facial recognition. Since the company makes use of this technology at the moment in many of its stores (even claiming that due to ‘positive feedback’, they have expanded this option to 1,600 KFC restaurants across China in 2021), it would do well to pay heed to changing trends and make adjustments to its services accordingly.

Concluding Remarks

This case study of KFC China’s success shows how the company has adapted its overall strategic outlook with locally driven tactics to consolidate its position in the market.

KFC China’s localization strategy has been comprehensive, starting from tangible elements like products (in the form of a locally driven menu) and store design (such as its themed restaurants and frequent remodeling), and extending to intangible elements such as payment systems (through the support of various local payment providers and facial recognition for payments) and advertisements.

Another thing that stands out is that KFC China expanded rapidly, yet organically to ‘lower tier’ cities, whereas competitors like McDonald’s hesitated, perhaps due to the perception of lower economic value. The fact that KFC expanded to the lowest tier of cities often means that it is the first foreign brand that residents of those localities experience. This continues to provide first mover advantage to the company, even to this day.

The market share of KFC China has remained high over the years. It is clear that China loves KFC, and that the company’s unassailable lead will hold strong for many more years to come. Even various food scandals over the years have failed to put a dent in the reputation and population of KFC in China.

In conclusion, the company’s strategy in China is an exemplary case study on the benefits of transnational strategy and how to execute it well.

<Disclaimer: The company logos used in this case study are registered to KFC>

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Ethical Dilemmas in Business: KFC Company’s Case

Introduction.

The ethical decision-making process in business is associated with resolving ethical dilemmas; i.e., situations in which a choice needs to be made among several options, each of which is unethical in a way (Crane and Matten 7). In such situations, it is crucial for an organization to predict all the possible consequences of available options and make a decision that will be the least harmful and will violate business ethics to the minimum possible extent. KFC, an international corporation operating a fast food restaurant chain famous for its fried chicken, recently faced a dilemma concerning the presence of medically important antibiotics in its products (“KFC in Ethical Dilemma”). To analyze the case, it is possible to factually summarize the dilemma, examine the organization’s response to it and the effect of the response on stakeholders, share an opinion, and explore alternative responses and the changes in the organization caused by making the decision it made.

A Factual Summary of the Ethical Dilemma

KFC faced the need to engage in a particular ethical decision-making process after the standard of the fast food industry changed in 2015 (“KFC in Ethical Dilemma”). That year, McDonald’s, one of the competitors of the addressed company, declared that it would no longer serve chickens raised with the use of human antibiotics. The reason for McDonald’s to make this decision had been the growing pressure from various organizations and groups engaged in environmental issues as well as from the medical community. The concern shared by these organizations was that medically important antibiotics—i.e., antibiotics that are used to treat human patients (World Health Organization)—should not be used in raising food animals. KFC initially refused to disclose any information about the company’s suppliers’ use of antibiotics (“KFC in Ethical Dilemma”). At that time, the organization’s dilemma was either to support the trend or to ignore it, and both options were potentially unethical and harmful.

The reason for the concern is that food producers use human antibiotics when raising food animals for “production purposes” (“FDA’s Strategy on Antimicrobial Resistance”)—that is, to enhance animals’ growth or make them gain more weight upon consuming less food—and this practice can be dangerous. When these substances are transmitted to people who consume food produced according to this practice, there is a risk that those people will develop resistance to certain antibiotics; i.e., it will be impossible to use these antibiotics to treat those people in case such treatment is needed. The development of resistance remains a debatable subject, but nowadays, the World Health Organization and the United States Food and Drug Administration (“FDA’s Strategy on Antimicrobial Resistance”) suggest avoiding the use of antibiotics in raising food animals. KFC could either commit to these requirements, thus failing its suppliers and jeopardizing its operation, or refrain from the change, thus adhering to a practice that is potentially harmful to its customers’ health.

The Organization’s Reaction

As it was mentioned, KFC initially refused to comment on its suppliers’ use of medically important antibiotics. When the news about McDonald’s decision appeared, the organization’s representatives were either unavailable for comments or refused to explain anything. Moreover, the statistics on who KFC buys chickens from and how much it buys annually was not disclosed. There was only one statement made by the company that owns KFC: “The chicken served in our U.S. restaurants is USDA high quality, and free of antibiotics” (“KFC in Ethical Dilemma”). However, as it was later explained, this statement referred to the absence of antibiotics in served food products and not to the practice of using antibiotics for production purposes in general. It can be assumed that KFC’s suppliers still used antibiotics for such purposes, and the company did not want to lose them (which would have been a major shock for KFC’s operation) due to the pressure coming from the advocates of terminating the use of human antibiotics in raising food animals.

However, later response was different. It is noteworthy that, despite the FDA’s efforts aimed at “[phasing] out the use of medically important antimicrobials in food animals for production purposes” (“FDA Strategy on Antimicrobial Resistance”), many restaurant chains still use the meat of animals raised with antibiotics. However, by 2017, KFC improved and currently “says it is committed to serving chicken raised without antibiotics” (“Antibiotics in Our Meat”). At the same time, McDonald’s received a worse score than KFC in this regard (the scoring was carried out by Consumer Reports in 2017) because, while chicken served at McDonald’s is antibiotic-free, its beef and pork are not (“Antibiotics in Our Meat”). Therefore, KFC managed to follow the trend toward reducing the amount of antibiotics in its products and to gain a better reputational benefit than even the company that initially posed the dilemma for KFC—McDonald’s.

The Reaction’s Effect on Major Stakeholders

To assess the results of the decision made by KFC, it is necessary to identify the stakeholders and evaluate the effect on them. Apart from KFC itself, including its employees and decision makers, the stakeholders include Yum Brands Inc. (the corporation that owns KFC, Taco Bell, and Pizza Hut restaurant chains), KFC’s suppliers, the advocates of terminating the use of antibiotics in meat production, and the customers. Concerning KFC itself and its owner, the refusal to buy chickens from suppliers who used antibiotics would have been a major shock and could have cost the company millions of dollars that would have needed to be spent on modifying the supply chain. However, the ultimately made decision to commit to the requirement on serving antibiotic-free meat without refusing altogether to cooperate with suppliers who still used the practice allowed KFC to avoid negative effects and additional burdens on its operation without damaging its reputation seriously.

Concerning KFC’s suppliers, they may still be accused of jeopardizing people’s health because they do not give up the practice of using antibiotics. If the industry’s largest players, including KFC, refused to buy from them, the suppliers would most likely be forced to stop using antibiotics for production purposes altogether. Now, they may continue their cooperation with KFC although there was a chance that such cooperation would be stopped. Concerning the advocates of terminating the practice, they have succeeded in promoting their agenda, and the KFC’s response showed that they can continue to change the standards in the food industry. Concerning the customers, they may feel safer now knowing that KFC adheres to the antibiotic-free-chicken policy; however, some of them may be still disappointed that KFC failed to condemn the practice of using antibiotics in food production.

My Opinion on the Reaction

There are several key aspects of the presented ethical dilemma that I would like to discuss. First of all, the use of antibiotics in agriculture and farm animals can be a factor in the development of antibiotic resistance (Landers et al. 4). Therefore, this practice is a health risk because it undermines the effectiveness of antibiotic therapies in treating people who consume food produced with human antibiotics. However, KFC claims that the chicken it serves is antibiotic-free even though the company’s suppliers most likely use antibiotics in raising those chickens (“KFC in Ethical Dilemma”). Therefore, the meat needs to be processed in a specific way or other measures need to be taken by KFC to ensure that the final product contains no medically important antibiotics. It helps the company comply with the requirements technically, but the practice of using antibiotics continues.

On the one hand, I can say that KFC made a wise decision because it was a compromise: the company preserved its supplier relations but, at the same time, managed to meet the requirements issued by the FDA, to respond to the claims made by the opponents of antibiotic use, and to comfort KFC’s customers by stating that they should not worry about antibiotic resistance. On the other hand, the fact that KFC did not condemn the practice of antibiotic use altogether and did not refuse to work with suppliers who adhered to the practice means that the practice will be continued and, one way or another, a lot of meat that contains human antibiotics will be produced and consumed. In this context, the KFC’s decision is ethically questionable. However, there are no universally correct solutions to ethical dilemmas (Crane and Matten 87). I still think that KFC made a reasonable decision that allowed it to reach a compromise between protecting its operation and meeting customer needs.

Alternative Responses

In analyzing an ethical dilemma, it is important to review all the possible responses to it available to an organization and evaluate their consequences. KFC could have alternatively refused to work with suppliers who employed antibiotics in raising food animals and could have made a statement on this decision to the public. It would have attracted praise from the opponents of antibiotic use in food production, and it can also be assumed that KCF would have gained a competitive advantage in terms of its reputation and image among the members of its target audience. It would have been a strong statement on how much the company cared about the health of its customers. However, the company could have suffered serious losses due to the need to create new supply chains. The current supplier would have been harmed, and the new ones might have been hard to find.

Another alternative decision would have been to continue the initial response and refuse to make comments concerning the use of antibiotics at all. It is a widespread practice, as many companies try to hide their mistakes or improper practices by misrepresenting or concealing facts. However, it has been repeatedly demonstrated that transparency and honesty (Crane and Matten 460) are more effective strategies. KFC’s attempt to conceal the presence of human antibiotics in its products and to ignore the topic could have resulted in lowered customer trust, and the company would have suffered serious reputational losses. The compromise reached by KFC helped the company avoid the negative outcomes of these two alternative scenarios.

How the Relationship between the Organization and Its Stakeholders Changed

In its approach to resolving the described ethical dilemma, KFC tried to maintain the balance in the relationships among stakeholders. It can be argued that the relationships with suppliers have been strengthened because the company has confirmed its determination to cooperate with them and protect this cooperation even under the pressure of the advocates of terminating the practice of antibiotic use in raising food animals. However, certain negative effects on the relationships with customers as a category of stakeholders can be expected. Some customers may develop a perception that KFC is not as strongly committed to protecting their health as it should be. While technically complying with safety requirements and avoiding serving chicken with human antibiotics in it, the company fails to condemn antibiotic use in farm animals in general, and this can be seen by some customers as an unethical and inappropriate position. Therefore, a certain decrease in demand can be expected.

KFC encountered a dilemma in which it could either refuse to work with its current suppliers or face allegations of neglecting the health of its customers. On the one hand, the company wanted to continue cooperating with its current suppliers in order to avoid significant losses caused by the need to create new supply chains. On the other hand, the company did not want to be thought of as a restaurant chain that served potentially harmful food. KFC opted for a compromise and managed to comply with safety requirements technically while preserving the cooperation with suppliers. Although the ethical aspects of this decision can be questioned (like any solution to any ethical dilemma), it can be argued that KFC responded reasonably and maintained the balance in the relationships with both suppliers and customers.

Works Cited

“Antibiotics in Our Meat: Restaurant Scorecard.” WEAR . 2017, Web.

Crane, Andrew, and Dirk Matten. Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization . 4th ed., Oxford University Press, 2016.

“FDA’s Strategy on Antimicrobial Resistance – Questions and Answers.” U.S. Food & Drug Administration . 2017.

“KFC in Ethical Dilemma after McDonald’s No-No to Chicken Raised with Antibiotics.” Health Care Asia Daily . 2015.

Landers, Timothy F., et al. “A Review of Antibiotic Use in Food Animals: Perspective, Policy, and Potential.” Public Health Reports , vol. 127, no. 1, 2012, pp. 4-22.

World Health Organization. WHO Guidelines on Use of Medically Important Antimicrobials in Food-Producing Animals . 2017.

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KFC Case Study and Success Story

If you are a non-vegetarian, odds are high that you are a huge fan of KFC already. We are pretty sure that you visit your nearest KFC restaurant at least once or twice a month?

Don’t you? Oh, come on! Don’t lie!

Although KFC offers a wide variety of non-veg products in India, it is best known for its fried chicken and zinger burgers. In this case study and success story, we will go back in history and see how and where KFC started, the methods that lead to its success and the hurdles faced by the company in its journey thus far. So let’s begin with this finger lickin’ good story right away.

Table of Contents

The background of KFC Founder

KFC was founded by an entrepreneur named Harland Sanders. Some biographies suggest that Sanders was born in the year 1890 and spent his childhood on a farm in Indiana.

Reports suggest that his father died when Sanders was only 6 years old, leaving the latter with the responsibility of taking care of a younger brother and a sister. Sanders’ mother spent days working for long hours; however, her profession is still debated. According to a report in the The New Yorker , Sanders was a decen t enough chef by the age of 10.

His mother remarried when he was 12 years old. However, the kids’ stepfather wasn’t kind enough to them; as a result, Sanders was sent for work on a farm 80 miles away, while his younger brother was sent to live with an aunt.

Dropping out of School

Sanders soon realized that he was not the right fit for school. So, he dropped out while in se venth grade and a few years later started taking up jobs such as operating a ferry boat, selling insurance, marketing tyres, stoking the steam engines of trains and making lighting systems.

Setting up a Restaurant

With the money made from all the above-mentioned jobs, Harland Sanders bought a small place at a service station in Corbin, Kentucky in 1930. Here, he started to serve classic southern dishes to travellers.

The place soon became popular for its cuisine and Sanders started to make a decent sum of money through quality food preparations . Soon, he acquired the complete service station and expanded his restaurant.

The Breakthrough

In the year 1939, he carried out a small experiment with a new kind of pressure cooker – not what we use at our home s these days . He fried his chicken with as many as 11 herbs and spices and found that this new pressure cooker was capable of delivering the ideal taste that he was looking for.

Thanks to this new mode of cooking, his restaurant enjoyed an overwhelming success for the next decade or so. The governor of Kentucky was so impressed with Sanders’ effort and hard work that he decided to confer the title of “Colonel” – the highest title a state can offer – upon the latter in 1950.

Two years later, in 1952, Sanders signed a deal with his friend, Pete Harman, who was willing to sell Sanders’ dish as “Kentucky Fried Chicken” through his own restaurant. Sanders received a 4-cent royalty on every successful sale. The success of this deal prompted him to sign similar contracts with several other restaurants .

A stumbling block

By this time, Sanders had two means of making money ; first, through his own restaurant; and second through royalties f rom local restaurants with whom he had shared his recipes. In 1952, however, the construction of a new highway rendered his restaurant with almost no customers. As a result, he sold the location, though at a loss, and started to re consider his future plans with a $105 monthly social security and small ro yalties from local restaurants.

After careful consideration, Col onel Harland Sanders decided to follow a complete franchise model, rather than set ting up new outlets of his own. So he packed his stuff including a few pressure cookers, flour, spices and herbs and hit the road with his wife accompanying him.

On the journey, he would stop and offer to cook free fried chicken for the restaurant owner/manager. If they liked the taste they could make a deal straightaway. Proceeding with this strategy, Sanders managed to get nearly 600 restaurants to serve Kentucky Fried Chicken – from both the United States and Canada – over the course of a few years .

Selling off franchise rights

In October 1963, a young lawyer named John Y. Brown and a venture capitalist, Jack Massey approached Colonel Sanders with an offer for full-fledged franch ise rights. Sanders was a little hesitant at first; however, after weeks of persuasion, he agreed to sell the franchise rights for a sum of $2 million (roughly equivalent to $16 million in today’s currency).

According to a report published by Bu sinessInsider , under the franchise contract, it was agreed that Kentucky Fried Chicken (KFC) would set up restaurants across the globe and will, under no circumstances, compromise the original recipe.

The Colonel was to have a lifetime salary of $75,000, a place on the board, a major share in the Canadian KFC outlets and the opportunity to serve as the company’ s brand ambassador.

The Aftermath

Many business experts believe that Sanders should have asked for a better deal . But, it seems that Sanders was never after money and was just looking for global fame for his quality food preparations. This can be validated by his constant grumbling of the poor quality gravy that the “new” KFC was offering. He spent the latter years of his life appearing in KFC commercials, talk shows and interviews.

Up until his death in 1980, Colonel Sanders maintained an active lifestyle, travelling long distances to promote the brand and taking feedback from patrons. The University of Houston has honoured him by featuring his name in the University’s Hospitality Industry hall of fame.

The present rules for KFC restaurants across the globe

Colonel Sanders wrote down a few rules before handing over the rights. Over the years some more additions have been made. So all KFC restaurants must follow these rules:

Only a pressure cooker should be used to cook the chicken. No other utensil is allowed.

Once the chicken has been cooked, it should not be removed from the cooker for at least 15 minutes.

All chicken pieces should be 8cm wide and must weight roughly 300g

All chickens shouldn’t be younger than 60 days or older than 70 days.

The chickens must remain marinated overnight before undergoing any sort of process

The Modern- Day KFC

KFC now has outlets in more than 120 nations and is, in fact, the second-biggest restaurant chain after McDonald’s. Due to the COVID-19 Outbreak many KFC outlets in the US and Canada removed the tagline “Finger lickin’ good” from its

banners, posters and commercials. KFC’s parent company, Yum! Brands, also operates Pizza Hut and Taco Bel l in India.

The story of Colonel Sanders is an inspiring one in its own right. It shows us that one can be of any age in order to run a successful business. It also inspires us to value quality more over money. We hope that you find this KFC success story useful and highly motivating .

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