Kentucky Fried Chicken Marketing

Strategy (English)
BY WISNUDEWOBROTO DECEMBER 25, 2011

HISTORY
KFC (formerly known as Kentucky Fried Chicken) is a trademark
franchise of Yum! Brands, Inc., headquartered in Louisville,
Kentucky, United States .Founded by Col. Harland Sanders, KFC is
known mainly for his fried chicken, which is usually served in a
bucket .
Col. Sanders began selling fried chicken at his gas station in the
year 1939 in Corbin, Kentucky which subsequently moved to a
motel. He closed his business in the late 1940s when the
Interstate highway through town. In the early 1950s, he began
traveling the United States and met with Pete Harman in Salt Lake
City, Utah, and in 1952 co-founded the Kentucky Fried Chicken
restaurant is the first in the world (his first restaurant does not
use that name). Sanders sold the entire KFC franchise in 1964
worth 2 million USD, which has since been resold three times.
Ultimate owner is PepsiCo, which incorporate them into the
company Tricon Global Restaurants division, now known as Yum!
Brands, Inc. In 1997, Tricon from PepsiCo separately.
In Indonesia, sole franchisee of KFC is PT. Fastfood Indonesia, Tbk
( IDX : FAST ), which was founded by Gelael Business Group in
1978, and registered as a public company since 1994 .
Indonesias first KFC restaurant opened in October 1979 in Jalan
Melawai, Jakarta.
MARKETING STRATEGY
KFC Corporation, or KFC, founded and also known as Kentucky
Fried Chicken, is a chain of fast food restaurants based in
Louisville, Kentucky. KFC is a brand and operating segment, called
a concept of Yum! Brands since 1997 when that company was
spun off from PepsiCo.

KFC primarily sells chicken in form of pieces, wraps, salads and

sandwiches. While its primary focus is fried chicken, KFC also
offers a line of roasted chicken products, side dishes and desserts.
1. Marketing: Managing Profitable Customer Relationship
The marketing mix is generally accepted as the use and
specification of the four Ps describing the strategic position of a
product in the marketplace.
a. Product
Anything that can be offered to a market to satisfy a want or
need. KFCs specialty is fried chicken served in various forms.
KFCs primary product is pressure-fried pieces of chicken made
with the original recipe. The other chicken offering, extra crispy, is
made using a garlic marinade and double dipping the chicken in
flour before deep frying in a standard industrial kitchen type
machine.
The main products of KFC still are fried chicken but KFC tried to
development new products for suitability with modern situation;
the menu for health. Moreover, new menu of KFC will emphasize
the taste and health.
b. Price
The cost of KFC products use high pricing strategy but its not
high overly. KFC in the country tried to enhance quality of fast
food restaurants to change attitude of people that they think KFC
is junk food.
c. Place
Most KFC restaurants are located in the source communities such
as shopping malls, the petrol, and lodging en route.
d. Promotion
The promotion of KFC is quite varieties such as TV program,
Internet, public relation, leatlet and etc. moreover, KFC innovate a
new menu set for it is easy to order and its save money. That a
special menu set also is cheaper than normal.
2. Company and Marketing Strategy: Partnering to build customer
relationships
a. Marketing Strategy

KFC used the Demographic Segmentation, Geographic

segmentation, and Psychographic segmentation. In demographic
segmentation, the market is divided into groups based on an age,
gender, family size, income, occupation, religion, race and
nationality. KFC divides the market on demographic basis in this
way:
Age is between 6-65.
Gender is both males and females.
Family size is 1-2, 3-4, 5+
Income is Rs 10,000 n above.
Family lifestyle is almost all.
KFC has outlets internationally and sells its products according to
geographic needs of the customer. In India KFC focuses how
geographically its customers demand different products. In north
India Chicken is the main selling product, while in the south the
Veg. items sell more than the chicken.
Dividing a market into different groups based on social class,
lifestyle, or personality characteristics is called psychographic
segmentation. KFC divides market on the basis of psychographic
variables like:
Social class- Upper and Middle class.
Lifestyle is not specific.
Personality is ambitious and authoritarian
b. Target Marketing
As the outlets of KFC are in posh area and prices are too high
(overhead expenses-rent, air-conditioning, employees), so KFC
targets upper and middle classes. Target market depends upon
size and growth rate of population, Company resources and
structural attractiveness of market segment.
c. Market Positioning
For a product to occupy a clear, distinctive and desirable place
relative to
Competing products in the minds of target consumer. In KFC
feedback is taken from the customer in order to know the

customer demands and then improvements are made in products.

KFC focuses on pure and fresh food in order to create a distinct
and clear position in the minds of customers KFC has a strong
brand name and they are leading the market in fried chicken.
3. The Marketing Environment
The microenvironment consists of all forces that are close to KFC
and on which KFC has an impact. They directly affect KFCs ability
to serve its customer. Three major components influence KFCs
microenvironment:
a. Competition
We can compare the price of their products with McDonald,
Dominoes and Pizza Hut. If the competitor provides the same
product at a lower price then the organization usually lowers the
price of its product too. In the case of KFC, Fried Chicken is its
main selling point and controls a monopoly over the Indian fast
food market (only with fried chicken). It prices its burgers, French
fries and soft beverages with relation to its competitors.
b. Consumer
KFCs customer market consists solely of the consumer market.
KFCs products are bought by individuals (males, females, singles,
and families).Therefore, the product range KFC offer should
appeal to as many people within this consumer market as
possible, to ensure that the maximum amount of products can be
sold.
4. Segmenting, Targeting, and Positioning : Building the right
relationships with the right customers
a. Segmenting
Demographic Factor
Age: Generally there is no age limit focus by the KFC. The target
and focus is on each and every individual in a society. KFC finds
its largest demographic in the young of any society.
Gender: Both male and females are focused by KFC, gender does
not play any role here.
Household Size: This plays a vital role in the demographic factor

of the KFC. Generally they target whole families rather than single
persons. This being the reason for their Family Meals which are
basically bundled items served at a nominally cheaper rate.
Economic Factors
Income: Income is an important key factor for KFC. This factor
decides which class is to be targeted. In the early rise of KFC they
focused on the upper class but slowly are introducing economy
meals that attract the lower to middle classes.
Consumption Behavior: It estimates the behavior of people, their
liking and disliking towards the pricing of the products.
Behavior Factors
In behavioral aspect they segmented the market on the basis of
quality, taste and price. Following are the different possible
segments in this regard: taste conscious, quality conscious, class
conscious, and combination of price and quality.
Geographic Factors
On the basis of the geographical factor we have divided our
market in two main segments, urban and semi urban.
Political Factor
The operations of KFC are affected by the government policies on
the regulations of fast food operation. Currently government are
controlling the marketing of fast food restaurant because of
health concern such as cardiovascular and cholesterol issue and
obesity among the young and children in the country.
Governments also control the license given for open the fast food
restaurant and other business regulation need to follow such as
for a franchise business. Good relationship with government in
giving mutual benefits such as employment and tax is a must for
the company to succeed in any foreign market.
b. Targeting
Location
Hectic lifestyle of individuals giving them more time at work and
less stress about waiting for food.
Commercialization of urban and sub-urban markets leading to
more mid-sector people that find high-end eating joints very to

expensive.
Mid-sector people are always looking for change which KFC
provides in their range of fast food.
Quality conscious people in urban areas are more conscious
about the quality of food than rural areas.
Urban areas are more populated therefore they help with
attracting higher revenues.
Placement Outlets
Due to KFC placing itself close to schools, colleges, cinemas and
markets which are mostly populated by the young and those who
are in a hurry, KFC enjoys a large number of footfalls every day. In
addition, they also have outlets close to non-vegetarians (mostly
Muslim populated areas).
Strategy
Given the competitive nature of fast food joints, KFC uses the
Push Strategy to help them create awareness, be different, and
sound attractive.
c. Positioning
Products
Basically the product is anything that be offered to a market for
attention, acquisition, use, or consumption that might satisfy a
want or need. KFC is specially dealing in the chicken products;
Basically, KFC has the special raspy for chicken products that is
why, KFC known as a chicken specialist all over the globe. KFC
target the Asia and East side because people like chicken product
so they enter in the market due to the demand of their chicken
products. KFC product variety of product in the chicken.
Channel
KFC believes in first level channels in the order given:
manufactures, retailers, and consumers. KFC works on the flow of
good operation techniques i.e.
Good Operating Manager leads to Good Team Selection Good
Services Good Targets Good. Revenues through the following
internal strategies:
Training

Incentive based targets

Recognition for good work
Performance based bonus
Employee benefits to keep them motivated
Promotion

Promotion
Promotion is the method used to inform and educate the chosen
target audience about the organization and its products. Using all
the resources of promotion:
Advertising
Sales Promotion
Public Relations
Events and Experiences
Coupons, Discounts and Bundled packages
An organization finds most of its meanings and survival through
promotion.
At KFC, Promotion is the main tool to bring all chicken lovers
attention towards its delicious one-of-a-kind product, the Fried
Chicken.
Services
KFC offered free home delivery service at specific branches in
specifics cities. They take at 30 min for delivery and the minimum
delivery order should Rs.200.They also provided services to
celebrate the birthdays of kids at there home or in KFC
restaurants. Now recently KFC also provide services of mobile unit
of KFC.
5. Product Services and Branding Strategy
a. Branding
Brand identity was defined as the customer impressions of four
different KFC identity elements properties, products,
presentations, and publications. A survey of young consumers in
the countries (n = 795), showed that the respondents were more
apt to eat within KFC restaurants, and spend more time doing so,
than the Americans. The Chinese also had much more positive
impressions of KFC. Brand identity impressions were correlated

with overall customer satisfaction and with future patronage

intentions for both groups. These findings support a model where
differences in cultural frames of reference lead consumers to
actively localize the brand identity of this nominally globalized
product.
b. Packaging
The packaging for KFC products is chosen according to
performance against three criteria: heat retention, moisture
removal, and grease absorption. The packaging material and
carton design are all adapted to maximize performance against
these three criteria.
Recycled Paper
All our clamshells and chicken boxes contain as much recycled
material as it is legally allowed. By law we are required to have
virgin fiber board in any part of the packaging that is in contact
with food. Any virgin fiber comes from board suppliers who use
pulp bought from managed forest in Scandinavia. This ensures
that any wood cut for paper production is replaced with new
plantings. For example:
sogood in so many ways
KFC is as committed to the environment as we are to our food and
to our customers. We are proud of the steps we have taken so far
to reduce our environmental footprint and are committed as a
brand to do even more in the in future. Its an ongoing journey
that were on and we want to keep you our customers
informed along the way!
In 2010, KFC introduced fast foods first reusable food container.
We have also replaced our plastic plates with paper serving
boxes. It is part of our plan to reduce our use of non-renewable
resources and to reduce the amount of Styrofoam from our
restaurants.
Environmental concerns
Over and above ensuring our packaging is supplied via recycled
or renewable resources; KFC are enthusiastically complying with
the new environmental directives on recovery and recycling of

packaging waste.
Litter
We at KFC UKI are aware of our responsibilities to the
Management of Litter and all our packaging carries the Keep your
Country Tidy signs.
6. Pricing Products and Pricing Strategies
a. Pricing Strategies
Market skimming: KFC globally enters the market using market
skimming. Their products are priced high and target the middle to
upper class people. Gradually they trickle down the prices
focusing on the middle to lower class people to penetrate both
sides of the market.
We can compare the price of their products with McDonald,
Dominoes and Pizza Hut. If the competitor provides the same
product at a lower price then the organization usually lowers the
price of its product too. In the case of KFC, Fried Chicken is its
main selling point and controls a monopoly over the fast food
market (only with fried chicken). It prices its burgers, French fries
and soft beverages with relation to its competitors.
KFC price their product keeping different points in view. They
adopt the cost base price strategy. Pricing of the product includes
the govt. tax and excise duty and then comes the final stage of
determine the price of their product. The products are bit high
priced according the market segment and it is also comparable to
the standard of their product. In the cost based method we
include the variable and fixed cost.
b. Promotional
Promotion is the method used to inform and educate the chosen
target audience about the organization and its products. Using all
the resources of promotion: advertising, sales promotion, public
relations, events and experiences, coupons, discount and bundled
packages, and organization finds most of its meanings and
survival through promotion. At KFC, Promotion is the main tool to
bring all chicken lovers attention towards its delicious one-of-akind product, the Fried Chicken.

KFC uses the following tools to further enhance its sales.

Premiums
Exhibits
Coupons
Entertainment
All KFC outlets offer its customers with various forms of incentives
to buy its Chicken. Using coupons that one can acquire after
spending a particular amount over a period of fixed time,
customers can enjoy the benefits of free meals or free add-ons.
Additionally they provide meal vouchers and exciting offers in
their print ads, which the customer must cut and bring along.
7. Advertising, Sales Promotion, and Public Relations
a. Advertising
Any paid form of non personal presentation and promotion of
ideas, goods, or services by an identified sponsor.
Inform
KFC introducing the new products to the customers using many
kind of advertising. They inform the customers about the new
products. About what kind of product, the price, etc.
Persuade
With the advertisement, KFC persuade their customers to buy
the products. In order to do that, KFC will make a good and
attractive advertisement. So, their customer will attract to buy
the products.
Remind
Using the good advertising will make the customers remember
about the products. And certainly, they will come again to buy the
products.
There are some Media Types that KFC use for their advertising:
Newspaper
Television
Radio
Magazine
Internet

 Outdoor
b. Sales Promotion
Consumer Promotion Tools:
In order to make the customer satisfied with the products, KFC
make the customer promotion. There are:
o Cash Refunds (Rebates)
o Price packs (cents-off deals)
o Advertising Specialties
Trade Promotion Tools:
KFC also give the trade promotion to the customers. Example:
o Discounts if the customers buy many products, the KFC will
give some amount of discount.
For example:
c. Public Relations
KFC also building a good relation with the companys various
publics by obtaining favorable publicity, building up a good
corporate image, and handling or heading off unfavorable rumors,
stories, and events.
Public Relations Tools:
o News
o Speeches
o Internet
The good relationship with their partner, KFC can increase their
investors, lobbying more people, and also can develop a good
relation with the customers. For example:
1. SOCIAL RESPONSIBILITY
KFC Colonels Scholars
is looking for high school seniors with entrepreneurial drive,
strong perseverance, demonstrated financial need and who want
to pursue a college education at an accredited public institution in
the state they reside.
The KFC Colonels Scholars Program is about you, your dreams
and aspirations, and the perseverance to succeed. This program
is offered to high school seniors planning to attend a public instate college or university. Students who meet the criteria may

apply online to become a KFC Colonels Scholar. Students selected

for this scholarship are eligible to receive up to $20,000 to
complete a bachelors degree program.
2. SOCIAL DIVERSITY
Yum! Global Diversity and Inclusion
For us, diversity is not a target its a way of life and a way of
doing business. Everyone can and does make a difference in our
organization. One of our HWWT2 principles Believe in all People
underscores the importance of actively seeking diversity in
others; believing everyone has the potential to make a difference;
and coaching and supporting every individual to grow to their full
capacity. This adds perspective and depth to everything we do.
Weve also found that a diverse team makes for better problem
solvers, services all our customers more effectively, and creates a
richer culture for all of us to enjoy.
In our company-owned operations in the U.S. for example, about
35 percent of our associates are Caucasian and the remaining 65
percent are Hispanic, African American and/or Asian. In 2010,
minorities and women made up 63 percent of our external
management hires and 56 percent of internal management hires
(promotions).
We are also increasing the representation of African Americans,
Hispanics and women among our key talent/decision makers, and
growing the pipeline of diversity in our mid-level manager ranks.
All of our brands have leadership initiatives focused on highpotential diversity talent, and all leaders serve as mentors. In
addition, last year each of the brand presidents went into their
communities to provide business-growth coaching for local
networks of minority businesses.
Making progress in diversity is a business priority and the work of
everyone in our system. This commitment is reflected in David
Novaks annual goals, or Blue Chips. We also have a dedicated
Global Diversity and Inclusion Officer who guides our strategy and
a number of initiatives that enhance our inclusive workplace
3. SUPPLIER CODE OF CONDUCT

YUM! Brands, Inc. (Yum) is committed to conducting its business

in an ethical, legal and socially responsible manner. To encourage
compliance with all legal requirements and ethical business
practices, Yum has established this Supplier Code of Conduct (the
Code) for Yums U.S. suppliers (Suppliers).
Compliance with Laws and Regulations
Suppliers are required to abide by all applicable laws, codes or
regulations including, but not limited to, any local, state or federal
laws regarding wages and benefits, workmens compensation,
working hours, equal opportunity, worker and product safety. Yum
also expects that Suppliers will conform their practices to the
published standards for their industry.
Employment Practices
Working Hours & Conditions: In compliance with applicable laws,
regulations, codes and industry standards, Suppliers are expected
to ensure that their employees have safe and healthy working
conditions and reasonable daily and weekly work schedules.
Employees should not be required to work more than the number
of hours allowed for regular and overtime work periods under
applicable local, state and federal law.
Non-Discrimination: Suppliers should implement a policy to
effectuate all applicable local and federal laws prohibiting
discrimination in hiring and employment on the grounds of race,
color, religion, sex, age, physical disability, national origin, creed
or any other basis prohibited by law.
Child Labor: Suppliers should not use workers under the legal age
for employment for the type of work being performed in any
facility in which the Supplier is doing work for Yum. In no event
should Suppliers use employees younger than 14 years of age.
Forced and Indentured Labor: In accordance with applicable law,
no Supplier should perform work or produce goods for Yum using
labor under any form of indentured servitude, nor should threats
of violence, physical punishment, confinement, or other form of
physical, sexual, psychological, or verbal harassment or abuse be
used as a method of discipline or control.

Notification to Employees: To the extent required by law, Suppliers

should establish company-wide policies implementing the
standards outlined in this Code and post notices of those policies
for their employees. The notices should be in all languages
necessary to fully communicate the policy to its employees.
Audits and Inspections
Each Supplier should conduct audits and inspections to insure
their compliance with this Code and applicable legal and
contractual standards. In addition to any contractual rights of Yum
or Unified Foodservice Purchasing Co-op, LLC (UFPC), the
Suppliers failure to observe the Code may subject them to
disciplinary action, which could include termination of the Supplier
relationship. The business relationship with Yum and UFPC is
strengthened upon full and complete compliance with the Code
and the Suppliers agreements with Yum and UFPC.
Application
The Code is a general statement of Yums expectations with
respect to its Suppliers. The Code should not be read in lieu of but
in addition to the Suppliers obligations as set out in any
agreements between Yum or UFPC and the Supplier. In the event
of a conflict between the Code and an applicable agreement, the
agreement shall control.
4. ANIMAL WELFARE PROGRAM
Yum! Brands, parent company of KFC, is committed to the
humane treatment of animals.
Yum! Brands is the owner of restaurant companies and, as such,
does not own, raise or transport animals. However, as a major
purchaser of food products, we have the opportunity, and
responsibility, to influence the way animals supplied to us are
treated. We take that responsibility very seriously, and we are
monitoring our suppliers on an ongoing basis to determine
whether our suppliers are using humane procedures for caring for
and handling animals they supply to us. As a consequence, it is

our goal to only deal with suppliers who promise to maintain our
high standards and share our commitment to animal welfare.
To assist us in that effort, Yum! Brands formed the KFC Animal
Welfare Advisory Council, which consists of highly regarded
experts in the field. The Council provides us with information and
advice based on relevant data and scientific research. The Animal
Welfare
Advisory Council has been a key factor in formulating our animal
welfare program.
In consultation with our Council, KFC has developed guidelines
and audit programs for our suppliers in the broiler industry. We
were also a prominent player in the joint effort conducted by the
National Council of Chain Restaurants and the Food Marketing
Institute to develop comprehensive guidelines for all species of
farm animals.
KFC has implemented a farm level audit program a program
which is industry-leading in the areas of poultry care and
handling.
With the good relationship, KFC become the famous company that
delivering chicken. Also, they have many customers, because the
KFC can take care of their relations. And nowadays, KFC have
many branch in many countries.