kfc strategic management case study

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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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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KFC Global Marketing Strategy 2024: A Case Study

KFC, the renowned fast-food chain, has established itself as a leading player in the global fast-food industry. Ranking second on Forbes’ list of the top 10 global fast-food chains, KFC operates in over 145 countries worldwide. This staggering presence is a testament to the brand’s successful global marketing strategy.

Key Takeaways:

• KFC ranks second on Forbes’ list of the top 10 global fast-food chains, reinforcing its prominence in the industry.
• KFC targets a diverse audience, including vegetarians and non-vegetarians, catering to various segments such as children, teens and young adults, families, and budget-conscious individuals.
• KFC utilizes both personal and non-personal marketing channels to engage with its target audience effectively.
• KFC actively utilizes social media marketing , SEO, content marketing, and video marketing strategies to enhance brand visibility and customer engagement.
• KFC’s Facebook page boasts impressive engagement ratios, with posts receiving over 250,000 likes and 5000+ comments.

When it comes to marketing channels, KFC leverages both personal and non-personal strategies. In-person sales, phone interactions, print media, and broadcast media are used to engage with customers on a personal level. KFC’s visual marketing tools , digital platforms, email marketing, webpages, promotional campaigns, PR activities, and social media presence are instrumental in reaching a broader audience.

KFC’s digital marketing strategy focuses on building brand awareness and driving customer engagement. By utilizing SEO, content marketing, email marketing, and video marketing, KFC effectively reaches and engages its target audience. With a strong presence on social media platforms such as Facebook, Twitter, and Instagram, KFC drives high customer engagement through interactive posts, contests, and addressing customer concerns promptly.

Furthermore, KFC’s YouTube channel primarily focuses on short advertisement videos to effectively convey the brand’s unique offerings and messages. With over 20,000 franchises and 27,000 outlets worldwide, KFC’s extensive global reach further solidifies its market prominence.

As KFC continues to expand its global presence, the brand’s comprehensive marketing strategy remains at the forefront. By understanding consumer behavior, conducting market segmentation analysis, and positioning the brand effectively, KFC continues to stay ahead of the competition in the fast-food industry.

Stay tuned for our next sections, where we will explore KFC’s target audience, types of marketing channels utilized, the brand’s digital marketing strategy, and its presence on Facebook, Twitter, Instagram, and YouTube.

KFC Consumer Profile

KFC has successfully established a powerful brand identity that resonates with consumers worldwide. The company’s branding efforts have led to increased trust and loyalty among customers. KFC’s commitment to product innovation has enabled it to cater to changing consumer preferences, including the rise of vegetarianism and plant-based diets.

The company introduced Beyond Fried Chicken, a plant-based alternative, showcasing its adaptability to evolving trends. This move not only appeals to vegetarian customers but also provides options for non-vegetarian customers who are looking for healthier alternatives. By expanding its menu to cater to diverse dietary preferences, KFC effectively targets a wider market.

To better understand their target market , KFC employs demographic segmentation, recognizing that different customer segments have unique needs and preferences. Their primary customer profiles are teenagers and families, followed by adults and individuals with lower budgets. This segmentation allows KFC to tailor its marketing efforts to different target audiences and meet their specific needs.

KFC’s advertising campaigns are creative, engaging, and generate a strong emotional connection with consumers. The brand effectively leverages social media platforms like Instagram, Facebook, and Twitter to engage with customers and build a loyal fan base. By utilizing these platforms for marketing, KFC reaches a broader audience and maintains an active presence in the digital space.

Furthermore, KFC’s global success extends to numerous countries worldwide through its adaptive marketing strategies for different cultures. The brand’s rapid growth and global presence are evident in the fact that KFC opens a new restaurant somewhere in the world every 3.5 hours. By 2024, KFC aims to enter its 150th country, emphasizing its commitment to continued expansion.

With more than 15,000 outlets in 100 different countries globally, KFC has a vast reach that showcases the extensive distribution network and global presence of the brand. While more than 50% of KFC’s sales come from developed nations, the company also faces stiff competition from various fast-food chains in these markets, such as McDonald’s, Subway, Kokoriko, and Kyochan. This reflects the competitive landscape in the fast-food industry and highlights the importance of these markets to KFC’s revenue.

KFC’s product strategy includes a variety of offerings such as rice bowls, chicken/veg zinger burgers, fiery chicken wings, veg strips, boneless chicken wings, among others, to cater to diverse consumer preferences. By constantly innovating and expanding their menu, KFC ensures that they can meet the needs of both vegetarian and non-vegetarian customers, further strengthening their consumer relationships and market positioning .

KFC’s consumer profile includes both vegetarian and non-vegetarian customers, with a focus on target market segments such as teenagers, families, and individuals with lower budgets. By continuously adapting to consumer preferences and leveraging their global presence, KFC maintains its position as a leading fast-food chain worldwide.

Types of KFC Marketing Channels

In order to reach a wide audience and effectively promote its offerings, KFC utilizes a combination of personal and non-personal marketing channels. These channels play a crucial role in driving brand awareness, increasing sales, and maintaining customer engagement.

Personal channels involve direct interactions between KFC and its customers and include in-person sales at KFC outlets and telephone interactions for orders and inquiries. These channels provide an opportunity for KFC employees to offer personalized customer service, answer questions, and address any concerns, creating a positive and memorable experience for the customers.

On the other hand, non-personal channels include various forms of communication and promotion that do not involve face-to-face interactions. These channels allow KFC to reach a broader audience and extend its marketing efforts beyond physical locations.

Print media plays a significant role in KFC’s non-personal marketing channels. The brand frequently utilizes newspapers and magazines to advertise its products and promotions, capturing the attention of potential customers. By leveraging the power of print media, KFC ensures that its messages are seen by a large number of people, generating brand awareness and driving sales.

Broadcast media, such as radio and television, is another key non-personal marketing channel for KFC. Through radio ads and TV commercials, the brand can effectively convey its messaging to a wide audience, engaging potential customers and enticing them to visit KFC outlets or place orders.

KFC also utilizes visual marketing tools to grab attention and create a lasting impression. These tools include leaflets, billboards, posters, and other display materials that feature enticing visuals and persuasive messaging. By strategically placing these visuals in high-traffic areas, KFC maximizes its reach and encourages people to try its delicious offerings.

As digital platforms have become increasingly popular, KFC has embraced the power of online marketing. The brand leverages social media platforms, emails, websites, and webpages to connect with modern customers who heavily rely on digital devices. By maintaining an active presence on platforms like Facebook, Twitter, Instagram, and YouTube, KFC engages with its audience, shares updates, and runs promotional campaigns to drive online and offline sales.

Promotion campaigns and PR activities are also important non-personal marketing channels for KFC. The brand organizes various campaigns and events to create buzz and generate excitement among its target audience. By sponsoring sporting and cultural events, KFC increases brand awareness and strengthens its positioning as a prominent fast-food brand.

In summary, KFC utilizes a diverse range of marketing channels, both personal and non-personal, to effectively reach its target audience and promote its offerings. From in-person sales and telephone interactions to print media, broadcast media, visual marketing tools, and digital platforms, KFC employs a multi-channel approach to engage customers, drive sales, and maintain its position as a global leader in the fast-food industry.

Digital Marketing Strategy of KFC

KFC, a global fast-food chain with over 29,000 restaurants in nearly 150 countries and territories, has implemented a comprehensive digital marketing strategy to engage its target audience and drive business growth. By leveraging various digital channels, including search engine optimization (SEO), content marketing, email marketing, social media marketing, and video marketing, KFC effectively reaches and resonates with its customers worldwide.

As part of its digital marketing strategy, KFC utilizes SEO techniques to enhance its online visibility and attract organic traffic to its website. By optimizing key elements such as website content, meta tags, and backlinks, KFC ensures that its brand appears prominently in search engine results pages, driving more customer traffic and potential conversions.

Content marketing plays a crucial role in KFC’s digital strategy, as the brand consistently creates high-quality and engaging content to educate and entertain its audience. Through blog posts, articles, and videos, KFC shares interesting stories, recipes, and promotions, effectively building customer loyalty and brand affinity.

Email marketing is another key component of KFC’s digital strategy, allowing the brand to establish personalized communication with its customers. By collecting customer data and preferences, KFC sends targeted email campaigns, delivering relevant offers, discounts, and exclusive content directly to subscribers’ inboxes.

Social media marketing is an integral part of KFC’s digital strategy, as the brand understands the power of platforms like Instagram and TikTok to engage with younger generations. Through captivating visuals, humorous content, and interactive campaigns, KFC builds a strong social media presence and connects with its target audience on a personal level.

Video marketing is also a crucial element of KFC’s digital strategy, as the brand creates captivating advertisements and promotional videos to engage customers on various platforms. From mouth-watering food shots to entertaining storytelling, KFC’s video marketing initiatives attract and retain customer attention, contributing to brand awareness and sales.

Overall, KFC’s digital marketing strategy encompasses a combination of SEO, content marketing, email marketing, social media marketing, and video marketing to effectively engage its target audience and drive business growth. By continuously adapting to changing consumer preferences and leveraging digital innovations, KFC remains at the forefront of the global fast-food industry.

KFC’s Facebook and Twitter Presence

As a global fast-food chain, KFC recognizes the importance of customer engagement and effective marketing strategies. With a strong digital presence, KFC leverages social media platforms like Facebook and Twitter to connect with its audience, promote its offerings, and build a loyal customer base.

KFC’s Facebook page has become a central hub for engaging with customers and sharing the latest updates. With almost 3 million “likes” and a global presence in over 100 countries, KFC’s Facebook page serves as a platform to communicate new offers, discounts, and product information. Additionally, the page acts as a customer service portal, allowing KFC to promptly address customer grievances and ensure a positive brand experience. The high level of engagement is evident through the thousands of likes, comments, and shares on each post.

On Twitter, KFC’s official handle, @kfc_colonel, has cultivated a loyal following through genuine interactions with fans. By responding to customer inquiries, resolving complaints, and organizing engaging contests, KFC maintains an active and interactive presence on Twitter. This customer-centric approach has earned KFC thousands of Twitter followers and reaffirmed its commitment to building strong relationships with its audience.

One notable social media initiative was the social media scholarship program on Twitter. This program generated nearly 3,000 tweet applications for a $20,000 college scholarship. The program gained national news coverage, including prominent outlets like CNN and USA Today, significantly raising awareness for the scholarship program. This success underlines KFC’s ability to utilize social media platforms for impactful marketing campaigns and positive brand exposure.

Looking ahead, KFC plans to leverage its Facebook and Twitter presence to share stories about the real Colonel Sanders. By focusing on the brand’s history and heritage, KFC aims to educate and engage younger audiences, fostering a deeper connection with the brand and its values.

With a presence in over 145 countries and territories worldwide, KFC’s Facebook and Twitter platforms serve as powerful tools for customer engagement and social media marketing. By actively participating in online conversations and continually interacting with its audience, KFC continues to solidify its position as a leader in the fast-food industry.

KFC’s Instagram Presence

KFC recognizes the power of visual marketing on social media platforms to engage with its audience and showcase its delicious offerings. As part of its comprehensive digital marketing strategy, KFC maintains a strong presence on Instagram, one of the most popular social media platforms globally.

On its official KFC Instagram page, the brand treats its followers to tantalizing product images that highlight the irresistible taste and quality of its menu items. These visually appealing posts serve as promotional tools, capturing the attention of users scrolling through their feeds. KFC leverages the power of enticing visuals to evoke cravings and stimulate customer interest.

The brand’s Instagram posts not only feature mouthwatering images of its signature fried chicken but also showcase new introductions and limited-time offers. By regularly updating its Instagram feed, KFC keeps its followers informed about the latest menu innovations and promotions, creating a sense of excitement and urgency.

KFC understands the importance of tailoring its marketing efforts to suit local tastes and preferences. With its millions of followers, KFC’s Instagram page allows the brand to engage with a global audience, transcending geographical boundaries. Furthermore, KFC maintains verified Instagram pages for various countries, providing localized content and catering directly to unique regional preferences.

Through its Instagram presence, KFC reinforces its brand image and connects with its audience on a personal level. By combining high-quality visual content with strategic promotional posts, KFC effectively leverages the power of Instagram’s platform to drive brand awareness and spark customer interest in its delectable offerings.

KFC on Youtube

KFC, the iconic global fast-food brand founded in 1952 by Colonel Harland Sanders, has established a strong online presence on various digital platforms. One of these platforms is YouTube, where KFC utilizes video marketing to engage with its audience and promote its delicious offerings. While KFC has a dedicated YouTube channel, its primary focus on the platform is to showcase enticing advertisements that appeal to its customers.

On the KFC YouTube channel, viewers can find a collection of short videos that highlight the mouth-watering meals and special promotions. These videos are designed to captivate the audience with visually appealing visuals and engaging storytelling, sparking their desire to visit KFC and enjoy their favorite meals.

With a substantial number of subscribers, KFC’s YouTube channel is a popular destination for fast-food enthusiasts. However, the brand has the potential to further explore the benefits of video marketing on YouTube by leveraging the platform’s extensive reach and engagement features.

The Power of Video Marketing

Video marketing is an essential tool in today’s digital landscape. It allows brands like KFC to connect with their target audience in a more interactive and authentic way. By utilizing YouTube, KFC can leverage the platform’s user-friendly interface and vast user base to promote its products, engage with viewers, and build brand loyalty.

Through well-executed video advertisements on YouTube, KFC can effectively showcase its menu options, catering to local tastes globally. These videos can also highlight KFC’s commitment to innovation, such as its menu customization in various regions and partnerships with popular franchises like Street Fighter and The Legend of Zelda.

Beyond traditional advertising, KFC can also create unique content for its YouTube channel. Whether it’s behind-the-scenes footage, cooking tutorials, or interactive challenges, creative and engaging videos can generate user-generated content and strengthen the brand’s online presence.

By actively engaging on YouTube, KFC can connect with its target consumers, such as children, teenagers, young adults, families, and budget-conscious customers, who are active on the platform. KFC can also reach a global audience, given its presence in nearly 150 countries and territories.

Overall, YouTube provides KFC with a valuable opportunity to share its brand story, promote its offerings, and foster a sense of community among its online followers. With strategic video marketing efforts, KFC can continue to leverage the power of YouTube to enhance its brand image, engage its audience, and drive customer loyalty.

KFC’s Email Marketing Strategy

KFC recognizes the power of email marketing in reaching and engaging its target audience. Leveraging advanced technology, such as AMP emails, KFC delivers personalized and interactive content directly to subscribers’ inboxes. By incorporating call-to-action buttons, product carousels, subscription forms, sliders, animations, and more, KFC creates engaging and interactive email experiences for its customers.

The use of AMP technology allows KFC to showcase its products in a visually appealing way, providing customers with a seamless and immersive experience within their email client. With the ability to dynamically update content and enable real-time interactions, AMP emails enhance customer engagement and increase the likelihood of conversions.

Through targeted campaigns, KFC tailors its email marketing efforts to specific segments of its audience, ensuring that each recipient receives relevant and compelling content. By analyzing customer data and preferences, KFC can personalize its campaigns to deliver the right message to the right people at the right time.

With the global expansion of KFC, email marketing plays a crucial role in maintaining brand loyalty and driving customer interest. By keeping subscribers informed about new menu items, limited-time promotions, and exclusive offers, KFC cultivates a sense of excitement and urgency among its audience.

Furthermore, KFC’s email marketing strategy is integrated with its overall digital marketing efforts, creating a seamless customer journey across multiple channels. By aligning email campaigns with social media content and other marketing initiatives, KFC maximizes its reach and reinforces its brand message.

KFC’s email marketing efforts have proven to be a valuable asset in driving customer engagement, maintaining brand loyalty, and generating conversions. By combining personalization, interactive elements, AMP technology, and targeted campaigns, KFC continues to leverage the power of email marketing to connect with its audience and deliver impactful messaging.

Target Audience Analysis

KFC, with its more than 24,000 outlets in 145 countries and territories, conducts extensive target market analysis to understand the preferences and behaviors of its diverse consumer base. By gaining insights into its target audience, KFC effectively tailors its marketing efforts to meet the specific needs and wants of different customer segments.

Consumer behavior plays a crucial role in defining KFC’s target audience. The brand recognizes that consumer preferences vary across regions and cultures. For instance, KFC faced the challenge of serving a predominantly vegetarian population in India. To cater to this audience, the company obtained vegetarian and halal certifications for its products, ensuring compliance with local dietary preferences and cultural norms.

In China, KFC successfully embraced Chinese festivals as part of its localization strategy. The brand introduced menu items that incorporated elements of Chinese cuisine, modifying its fried chicken recipe to incorporate Chinese spices and flavors. This approach helped KFC connect with the Chinese target audience on a deeper level by aligning its offerings with their cultural traditions and preferences.

Similarly, in Japan, KFC capitalized on the tradition of having KFC as a popular meal during Christmas. The brand regularly introduces limited-time menu items to cater to seasonal and cultural events, aligning with the preferences of its Japanese target audience.

KFC’s target audience analysis extends beyond cultural preferences. The brand strategically positions its pricing in competition with fast-food rivals like McDonald’s and Burger King. By offering value for money, KFC attracts price-conscious consumers who seek affordable yet satisfying meals.

The company also utilizes price bundling strategies like “Bucket Meals” and “Box Meals” to increase revenue per transaction. Additionally, KFC employs promotional pricing strategies for events or holidays to maintain customer interest and drive sales.

To reach its target audience effectively, KFC operates a significant number of physical locations in both urban and suburban areas. This strategy allows the brand to reach a wide customer base, including the youth demographic. KFC strategically places its outlets near schools, universities, workplaces, and educational institutions, recognizing the higher consumption of fast-food products among younger consumers.

KFC’s marketing efforts are not limited to physical locations. The brand invests in advertising through various channels, such as television, radio, print, outdoor billboards, and digital platforms. KFC has a strong presence on social media platforms like Facebook, Instagram, Twitter, and YouTube to engage with customers directly and stay connected with their target audience.

In summary, KFC’s target audience analysis enables the brand to understand and cater to the diverse preferences and behaviors of its customers. By adapting its offerings, pricing, and marketing strategies to specific customer segments, KFC maintains its relevance and continues to appeal to a wide range of consumers globally.

KFC Brand Positioning

KFC has successfully positioned itself as a leader in the fast food industry through its authentic identity and consistent branding. With a presence in over 145 countries and territories, KFC showcases its global reach and dominance in the market. The franchise model has allowed KFC to rapidly grow its footprint, with thousands of outlets worldwide.

Established in the early 1930s by Colonel Harland Sanders, KFC expanded internationally in the 1960s, opening its first outlet in Canada. Since then, KFC has continued to innovate, introducing new product offerings like the Zinger burger, Krushers beverages, and the plant-based “Beyond Fried Chicken.” This commitment to innovation has helped KFC maintain its competitive edge in the fast food industry.

KFC emphasizes customer engagement through various channels, including social media, contests, giveaways, and loyalty programs. By actively connecting with its customers, KFC fosters a strong brand community and loyalty among its consumers.

One of the key factors in KFC’s success lies in its consistent branding. Operating on a franchising model, KFC ensures that its brand identity, quality, and service are maintained across all locations. This consistency helps to build trust and recognition among its customers.

KFC also understands the importance of catering to local tastes and preferences. Through menu localization, KFC tailors its offerings to various markets, ensuring that customers can enjoy a familiar and satisfying experience. This localization strategy further enhances KFC’s brand positioning and allows the brand to resonate with consumers worldwide.

Another aspect of KFC’s brand positioning is its active engagement in community events, sponsorships, and CSR initiatives. By giving back to the community and aligning with social causes, KFC not only enhances its brand image but also connects with consumers on a deeper level.

In today’s digital age, KFC recognizes the significance of technology in maintaining a positive brand image. The brand invests in digital technology for online ordering, digital marketing, personalized promotions, and enhancing the overall customer experience. This commitment to technological advancements helps KFC stay ahead of the competition and meet the evolving demands of its customers.

Furthermore, KFC places a strong emphasis on environmental sustainability. Through eco-friendly packaging, energy conservation practices, and sustainable sourcing methods, KFC showcases its commitment to environmental responsibility. This dedication to sustainability not only strengthens the brand’s image but also resonates with consumers who prioritize eco-friendly practices.

With over 29,000 restaurants worldwide and plans to enter its 150th country by 2024, KFC’s reach and scale of operations highlight its strong brand positioning in the global market. Despite facing fierce competition from fast food chains like McDonald’s, Subway, Kokoriko, and Kyochan, KFC continues to thrive and maintain its position as a top player in the industry.

Overall, KFC’s brand positioning is built on its authentic identity, consistent branding, and positive brand image. By effectively engaging with customers, tailoring offerings to local preferences, and embracing innovation, KFC secures its place as a leader in the fast-food industry.

KFC’s Global Expansion Strategy

KFC, the renowned fast-food chain, has experienced significant global expansion and success due to its strategic approach in entering new markets and catering to diverse consumer preferences. The company’s global expansion strategy revolves around market research , localization, and cultural adaptation.

Market research plays a crucial role in KFC’s international market penetration. Before entering a new market, the company conducts thorough research to understand the local culture, consumer behavior, and preferences. This helps KFC tailor its menu options and marketing strategies to resonate with the target audience.

Localization is a key aspect of KFC’s global expansion strategy. The company recognizes the importance of adapting its offerings to suit local tastes and preferences. Through the development of country-specific menus, KFC ensures that its customers can enjoy unique menu items that cater to their culinary preferences while maintaining the brand’s high standards.

From the creation of unique menu items to the design of restaurant interiors, KFC’s cultural adaptation efforts further enhance its global expansion strategy. By embracing local flavors and incorporating regional favorites, such as rice porridge and congee in China, KFC successfully appeals to the diverse palates of its customers worldwide.

Impressive Statistics Highlighting KFC’s Global Presence:

KFC’s global expansion strategy has not only allowed the brand to thrive but also create employment opportunities on a massive scale. With nearly one million jobs generated worldwide, KFC’s presence goes beyond satisfying appetites, contributing to the economies of various countries.

KFC’s global marketing strategy has been instrumental in driving brand growth and success. By adapting to local markets and consumer preferences, KFC has successfully expanded its reach and established a strong presence worldwide.

The brand’s effective digital marketing strategies, including social media engagement, personalized online advertising, and optimized website visibility, have contributed to its digital marketing effectiveness .

KFC’s commitment to customer satisfaction has been evident through its focus on research and development to improve the quality and taste of its offerings, as well as its active engagement with customers on social media platforms to build and strengthen brand loyalty.

With over 15,000 outlets in 100 countries and a ranking of 147 in brand equity, KFC’s global marketing strategy continues to drive brand growth and establish its position as one of the fastest-growing and most successful fast-food brands worldwide.

What is the focus of KFC’s global marketing strategy?

Who is kfc’s target audience, what types of marketing channels does kfc utilize, what is kfc’s digital marketing strategy, how does kfc utilize facebook and twitter in its marketing strategy, how does kfc use instagram as a marketing platform, how does kfc leverage youtube in its marketing strategy, how does kfc incorporate email marketing into its strategy, how does kfc analyze its target audience, how does brand positioning contribute to kfc’s success, what is kfc’s global expansion strategy, how has kfc’s global marketing strategy contributed to its success, related posts:.

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Nina Sheridan is a seasoned author at Latterly.org, a blog renowned for its insightful exploration of the increasingly interconnected worlds of business, technology, and lifestyle. With a keen eye for the dynamic interplay between these sectors, Nina brings a wealth of knowledge and experience to her writing. Her expertise lies in dissecting complex topics and presenting them in an accessible, engaging manner that resonates with a diverse audience.

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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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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.

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.

Related: Dyson Marketing Strategy: A Look at Home Appliance Go-to-Market Strategy and Branding

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.

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.

Related: The Effective Lego Marketing Strategy: Building Success Brick by Brick

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.

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.

Related: Unveiling Home Depot's Winning Marketing Strategy

The Role of Digital Marketing in KFC's Strategy

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.

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.

KFC's social media presence extends beyond just posting content. The brand actively interacts with its followers and exemplifies a nice approach to community management. This includes 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 Social Media Channels

KFC has amassed millions of followers across its social media channels. The brand's social presence spans short form video platforms like TikTok and Instagram to corporate branding on LinkedIn.

This comprehensive approach to social media marketing has given KFC a broad platform to engage with its audience and establish its brand in the modern marketing landscape.

Check out KFC's primary social media profiles and pages:

• KFC Instagram
• KFC Facebook Page
• KFC YouTube
• KFC X / Twitter
• KFC LinkedIn

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.

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.

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.

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

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.

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.

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:

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Detailing the Business Model Of KFC from End-to-End

By Aditya Shastri

KFC holds a prominent position in the fast-food industry, with a presence in over 145 countries and an extensive network of 25,000 outlets, earning it the rank of the third-largest global fast-food chain. It was one of the 1st American fast-food chains to venture into international markets. As of 2023, the brand boasts a substantial estimated brand value of approximately $17,662 million.

Thus this makes us keen to know the business model of KFC. In this blog, we have listed the detailed business model of KFC which includes the value proposition, key partners, revenue model, cost structure, etc.

Before we start with its business model let us know about KFC as a company.

Colonel Harland Sanders, the founder of KFC, initially used to sell fried chicken from his roadside restaurant in Kentucky, USA. Colon Sanders, the founder of KFC kept the recipe of his trademark chicken a secret. 

KFC changed the way Americans ate chicken and posed a serious threat to the existing hamburger culture. Seeing the overwhelming response, Sanders decided to expand further by adopting the franchisee business model.    

Kentucky Fried Chicken ( K FC ), is a global fast-food chain that is widely known for its delicious fried chicken. Its headquarters is located in Louisville, Kentucky, in the United States. Founded by Colonel Harland Sanders in the 1930s, this brand is renowned for its secret blend of 11 herbs and spices, which makes their chicken irresistibly flavorful and crispy.

Sanders initially used to sell fried chicken from his roadside restaurant in Kentucky, USA. He kept the recipe of his trademark chicken a secret. KFC changed the way Americans ate chicken and posed a serious threat to the existing hamburger culture. Seeing the overwhelming response, Sanders decided to expand further by adopting the franchisee business model.    

Today, KFC’s distinctive red-and-white logo and finger-licking good chicken have made it a beloved household name with a global presence spanning more than 25,000 locations. Since 2002, KFC has operated as a subsidiary within the “YUM!” corporate family, which also owns several other well-known restaurant chains like Taco Bell and Pizza Hut, among others.

What’s new with KFC

Check out some current news about KFC:

Big Boro Eats

The KFC Youth Foundation launched a program “Big Boro Eats” to provide food aid and education to youngsters in Middlesbrough. The major aim of this initiative was to address the pressing issue of youth deprivation, with almost a third of children living in income-deprived households. The program was conducted for seven consecutive weeks from 24th July to 8th September. It included several activities such as teaching food-related skills, budgeting, and nutrition. Through this, they successfully created a safe and inclusive space for young people to develop life skills. This was a huge step towards establishing a permanent KFC Youth Foundation center in Middlesbrough.

Partnership with Deion Sanders and his family

KFC has partnered with NFL legend and University of Colorado Boulder head football coach Deion “Prime Time” Sanders and his family to promote their latest menu innovations, including new Kentucky Fried Chicken Nuggets. The Sanders family, who are longtime KFC fans, collaborated with the brand in various promotional activities. This partnership highlights the tradition of enjoying KFC as a family during meal times, with Coach Prime and his five children appearing together in promotional content. 

Drone delivery

In a recent cricket match between Australia and South Africa, a drone delivered a KFC chicken bucket to South African cricketer David Miller mid-match, creating an innovative and entertaining moment. The video was shared by the official handle of South Africa’s national cricket team. David Miller expressed his delight at the unique experience, praising KFC for their creative delivery method. The use of drones to deliver indicates a potential future trend in improving convenience and speed in food delivery services.

Target Audience of KFC

Below is a buyer persona for KFC which will help us understand the target audience.

Buyer’s Persona

Profession:

• Affordable options.
• Convenient locations.
• Diverse menu. 
• Quality foods.
• Loyalty rewards.

Interest & Hobbies

• Art and craft
• Playing Guitar
• Socializing with new people

Pain Points

• Inconsistent opening hours.
• Overcrowded restaurants and slow checkout process.
• Lack of healthy options. 
• Inconsistent portion sizes.

Social Media Presence

Let us now start reading in detail about the business model of KFC.

Business Model of KFC

KFC’s management cannot oversee all the operations of its outlets over the world by sitting in one city. Thus, KFC adopted the Franchise Model as its Business Model just like the other fast-food restaurant joint did.

The franchise model is used when the parent company has a unique product and gives permission through means of licenses to others to use its logo, brand name, operating methods, etc. An agreement needs to be signed where the franchisee agrees to strictly adhere to the conditions laid down by the parent company. 

Let us now see step by step the different pasts under the business model of KFC.

Business Model of KFC – Value Proposition

Let us see the below-listed value proposition of KFC:

1. High-quality food

As their tagline says “Nobody does chicken like KFC”. KFC makes sure that the quality is not compromised in any manner in any franchise all over the world. All the raw material goes through thorough quality checks. The food is always clean and fresh and prepared from scratch by the cooks in the kitchen. 

KFC makes sure that most of its items can be afforded by the fast-food eating population. However, the prices vary from location to location due to import duties, etc. They also have Super Meals, Buddy Meals, and Combo Meals that can fit your budget and value for money. 

3. Ambiance and staff

KFC ensures that the vibe of the restaurant is very family-friendly. The layout, the decor, and the music all help to create a lively and upbeat environment that does not make you want to leave but instead makes you want to spend more time with your loved ones. 

4. Variety of options 

KFC is constantly trying to come up with new and innovative ways to serve its customers’ needs. Although KFC specializes in non-vegetarian food, it makes sure to add a couple of items that cater to its vegetarian audience too. They try to come up with new dishes that satisfy the local tastes of the people of that location keeping its original roots intact. Eg. Tandoori Chicken Zinger in India, Scoff EE Cup in the UK, and Porridge in China.  

5. Brand name and loyalty

KFC is very popular and known worldwide for its food and services. It has created a long-standing loyalty from individual customers and families. Its iconic recipes comprising a secret blend of “11 herbs and spices” make you want to go back again and again.

Let us now see the different key partners of KFC.

Business Model of KFC – Key Partners

Handling such a huge business is not an easy job. One needs constant support on various fronts from the people specialized in that field so that the business operates smoothly and efficiently. The partners that make up the heart of the KFC Business Model are: 

1. Franchise Partners 

Franchise partners are very crucial to KFC’s success. Since they operate the restaurants they can make or break the brand image and identity. Thus, KFC shall make sure that it gives franchising licenses to only those food companies and private business owners whom they trust and they feel will be able to abide by the standards and rules. 

2. Suppliers and Vendors 

These partners supply the restaurants with raw materials, ingredients, equipment, and all those things that are necessary for the operating and day-to-day functioning of the business. It is crucial to tie up with only those suppliers that can provide good quality goods and services. 

3. Marketing Partners 

KFC needs to tie up with influencers on social media, celebrities, sports teams, commercial brands, advertising agencies, and other organizations that help to create a desire for the product, pique the interest of the customers , generate leads, and eventually lead to a sale. 

4. Delivery and Distribution Partners 

KFC needs constant support from its logistics partners, delivery agencies, home delivery services, etc that will help to streamline the process and enhance the customer experience. 

Let us now see the revenue model of KFC.

Business Model of KFC – Revenue Model

KFC earns most of its revenue from the sale of food and drinks to its customers (both online and in-store). It also earns from its franchise agreement through its licensing fees. As of 2022, KFC earned around US$ 31.116 billion worth of total revenue. The annual revenue for 2022 was 6.8 billion, which was estimated to be a 3.92% growth from 2021.

Let us now see the cost structure of KFC.

Business Model of KFC – Cost Structure

KFC’s pricing cannot be the same in every country. The price depends on various factors like- 

• the cost of equipment, raw materials, and ingredients
• operational costs, occupancy costs, 
• payments to its various partners 
• advertising costs, marketing costs, etc. 

Let us now see the customer segments and marketing strategy of KFC.

Business Model of KFC – Customer Segments and Marketing Strategy

KFC targets three main customer segments. 

• The Individual Customer- this customer is usually a working person who just wants something filling but it shall be quick, affordable, and accessible. 
• Families- KFC is a very family-friendly place. The staff too is trained in such a way that will make families feel at home. There is also a separate play area for young children and small toys in the meals. 
• Group Events- Be it a birthday party, an office get-together, or any celebration, KFC is your ultimate go-to destination. 

Sander’s picture is still used today for marketing purposes. It is considered to be KFC’s international symbol of hospitality. 

Business Model of KFC-Channels

KFC primarily caters to its customer base through a vast network consisting of over 25,000 outlets strategically located worldwide. This expansive network extends its reach to approximately 145 countries and territories across various continents, including North and South America, Asia, Europe, the Middle East, and Africa. They have dedicated and friendly sales and service staff who are readily available to assist the customers.

In addition to this, KFC offers the convenience of online ordering through their website or app . Customers can select their preferred dishes, place orders, and even schedule a delivery at their convenience. KFC has its own team of delivery drivers to ensure that food arrives at the doorstep. This option is great for those who prefer to order from the comfort of their homes.

Let us now see the competitor analysis of KFC.

Top 5 Competitors of KFC

• McDonalds : McDonalds is the world’s largest fast-food restaurant chain. It’s widely known for its yummy burgers, crispy fries, and refreshing drinks. People love to go there for a quick and tasty meal, and they have lots of different choices on their menu. McDonald’s is a place where one can enjoy delicious food with friends and family.
• Starbucks : Starbucks is a famous coffee chain found all around the world. They are the second largest competitors of KFC and they are known for their wide range of coffee and specialty drinks, like lattes and frappuccinos. People often visit Starbucks to enjoy a cup of coffee or to work/study in a cozy environment.
•   Burger King : Burger King is a fast-food restaurant chain recognized globally. They are famous for their flame-grilled burgers and a menu that includes items like the Whopper and chicken sandwiches. Burger King provides a convenient option for people looking for tasty burgers and fast meals.
• Subway : Subway is a global fast-food restaurant chain specializing in customizable sandwiches and salads. They offer a wide variety of fresh ingredients and bread choices, allowing customers to create their own sandwiches or choose from a menu of pre-designed options. Subway is known for its “Eat Fresh” slogan and is a popular choice for quick and healthy fast food options.
• Pizza Hut : Pizza Hut is a global pizza restaurant chain recognized for its diverse menu of pizza offerings. They offer a wide selection of pizzas, including classics like pepperoni. Pizza Hut often offers delivery and dine-in options, making it a convenient choice for pizza enthusiasts worldwide.

Before we conclude let us have a look at an example of a failed campaign that faced customer backlash.

Example of a Failed Campaign

The kfc coupon fiasco.

To market their newly revealed grilled chicken, KFC joined forces in 2009 with Oprah Winfrey. As a part of this business partnership, Oprah was to promote KFC’s offer of a free two-piece grilled chicken meal. Having underestimated Oprah’s influence, KFC was flabbergasted when an estimated 10 million people downloaded the coupon for the free meal online.

KFC customers felt cheated and infuriated when they were told they couldn’t receive the free chicken they were promised.

Not having enough of the product to meet the demand, KFC had to actually turn customers away and in some locations, close early. KFC was forced to drop the deal and apologize to its frustrated clientele.

Conclusion 

On the overview of the business model of KFC, we have can clearly see that the company utilized its business model very well and has been growing at a wide range.

In its value proposition, it has high-quality food, affordable prices, a variety of products, and brand name and loyalty which plays a crucial role in the growth of the business. It has different partners in the market which help it grow in the market like franchise partners, suppliers and vendors, marketing partners, and distribution partners.

It has a well-distributed cost structure which constitutes the cost of equipment, raw material, and ingredients, operational costs, occupancy costs, payments to its various partner’s advertising costs, marketing costs, etc. 

Wasn’t it interesting to know the business model of KFC? Learn how to grow your business using digital marketing, check out our website for more information . You can also check out Free Digital Marketing Masterclass by IIDE to understand what digital marketing is all about.

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Do share your thoughts about the case study in the comments below. Hope you liked this case study and found it informative and insightful!

Author's Note: My name is Aditya Shastri and I have written this case study with the help of my students from IIDE's online digital marketing courses in India . Practical assignments, case studies & simulations helped the students from this course present this analysis. Building on this practical approach, we are now introducing a new dimension for our online digital marketing course learners - the Campus Immersion Experience. If you found this case study helpful, please feel free to leave a comment below.

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Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs...... [Read full bio]

Thank You for a brief and concise explanation on key points related to the KFC Business model.

Thanks, very informative. Kindly touch base on the organizational culture management of KFC stores in USA

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KFC’s Radical Approach to China

• Mary L. Shelman

To succeed, the fast-food giant had to throw out its U.S. business model.

Reprint: R1111K

Global companies face a crucial question when they enter emerging markets: How far should they go to localize their offerings? Typically they try to sell core products or services pretty much as they’ve been sold in Europe or the United States, with headquarters calling all the shots—and usually with disappointing results.

The authors, both of Harvard Business School, examined why KFC China has been able to find fertile ground in a market that is notoriously challenging for Western fast-food chains. KFC’s executives believed that the dominant logic behind the chain’s growth in the U.S.—a limited menu, small stores, and an emphasis on takeout—wouldn’t produce the kind of success they were looking for in China. KFC China offers important lessons for global executives seeking guidance in determining how much of their existing business model to keep in emerging markets—and how much to throw away.

Global companies face a critical question when they enter emerging markets: How far should they go to localize their offerings? Should they adapt existing products just enough to appeal to consumers in those markets? Or should they rethink the business model from the ground up?

• David Bell is a Harvard Business School professor and chairs its marketing unit.
• MS Mary L. Shelman is the director of the Agribusiness Program at Harvard Business School.

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SWOT analysis: The tool of organizations stability (KFC) as a case study

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Kentucky Fried Chicken (KFC): Strategic Management

Introduction

Kentucky Fried Chicken (KFC), is a world renown fast food brand. The company is based in the United States but has expanded its operations in numerous countries world wide. The company operates through a franchise model, whereby it established the brand in the international markets and allots franchising license for the brand and the company to local businessmen. This enables the company to take advantage of increased market on a global scale while giving the management of the franchise opportunity to use their expertise and knowledge of the local markets to best cater to their needs.

The product line of the company includes roasted chicken products, side dishes of chicken, vegetables, and deserts. Recently the company has also started offering salads, kebabs and regional fare which is local of origin or the culture of its international regions of operations.

The company has a long history being acquiring other businesses and being acquired itself. Currently as of 2002, the company is an owned subsidiary of Yum Brands. The KFC Corporation has operated in the local and the international markets by promoting the brand of KFC and forming co-branding relationships with its suppliers and products like Pepsi. The company has recently as of 2007, started to re-brand itself again, for the US market only, by losing the abbreviation and branding itself Kentucky Fried Chicken.

External Analysis

Porters five forces.

The Porter’s analysis has been performed specific to the KFC Corporation and the fast food industry in the United Kingdom.

The buyers in the market are the customers which buy the products and the services offered by the KFC Corporation. The power of the buyer in the fast food industry in the United Kingdom is weak as while not everyone in the UK likes to eat fried fast food, this kind of food is widely popular in the region. Moreover the extensive effort put by the KFC Corporation and its competitors for brand building activities also weakens or moderates the power of the buyers by making the product offering uniform for all buyers.

The power of the suppliers in the industry is also moderate. The reason for this is mostly because of the joint collaboration and partnership alliances which are formed between the suppliers of the fats food companies like the KFC Corporation and the uniform product that they require.

There exists intense rivalry between the players in the fast food competition in which the KFC Corporation operates. “Players of all sizes in this market tend to be highly focused on fast food, which means that their survival depends on maintaining profitability in this business. Furthermore, the UK is a large market, which means that revenues from this country may be important even for geographically diversified players. Overall, rivalry is assessed as strong.” (‘Industry Profile: Fast Food in the United Kingdom’, 2007)

The threat of substitutes is for the KFC Corporation in the fast food industry is moderate to relatively high. This is because of the low costs of switching to the consumers and the high level of competition in the market. Moreover the substitute for fast food products are numerous taking the form of restaurant food, ready made meals as well as home cooked meals which are much preferred by the customers in the market.

The threat of new entrants into the industry is very high as it is relatively easy for a new fast food business to enter the market and establish itself. There is high demand for food in the fast food market and the intense rivalry creates low barriers for entry for new entrants. Moreover the franchise model which is popular in the fast food industry increases the threat of new entrants in the market.

Strategic Group Theories

The KFC Corporation tends to comply with the strategic group theories. The strategic group theories state that when the industry is taken as a group, the players in the industry tend operate in a similar manner, employing the same strategies. This is true for the KFC Corporation as well. The company which is now owned and operated by Yum Brands is tends to follow the same strategies that are employed by its competitors in the industry as well.

The company has been responding to the customers demand for healthier food. This promoted the company to come up with food which was prepared in trans fat free oil while also include salad, and green based vegetable side dishes in its menu.

The strategies for operations employed by the KFC Corporation are similar to the ones employed by Wendy’s Burger King, Pizza Hut and McDonalds. The company operates through a franchise business model in the local and the international markets. In this model the local businessmen open franchises for the KFC Corporation and operate them while using the equipment and facilities provided by the KFC Corporation. In return they share part of their profits through the royalty program.

The marketing strategies employed by the company are also similar to the ones employed by its competitors. The company leverages its bran on the combo meals offered, the convenience of the fast food and the happy environment which is depicted in its advertisements.

Internal Analysis

Competencies.

The core competency of a company provides the consumers of its products with benefits while not being easy for the competitors of the company to imitate and providing leveragability for different products and markets. The core competencies of the KFC Corporation include its capability to deliver a unique recipe based chicken which has a distinctive taste. This recipe is shared with the franchises all over the world which results in a uniform product being disbursed amongst the global markets. Moreover the KFC Corporation also has significant expertise in managing and opening franchises and restaurants in the international markets.

The company also has bargaining power with its suppliers which enables the company to get supplies at lower costs increasing its profit margins on the products sold. The company also can realize economies of scale with its local, regional and international operations. This can be used to strengthen their cots advantage with suppliers, however currently the strategy has not been employed.

Management Analysis

The management of the KFC Corporation has changed many a times. After the Pepsi Co acquired the business of KFC, the company made significant change sin its management. They had little control on the KFC franchises (Krug) which they wanted to rectify. As a result the company employs strategies of staff reduction, replacement of KFC managers and changing the corporate culture to the one which was not mutually exclusive for the two organizations.

The strengths of the company include the brand name of the KFC which is recognized by people all around the world and the desires it invokes in the consumers for food related to fried chicken. Aside from this the good quality of hygienic food provided and the product offering of the company is also strength for the company. The diverse and expansive market which is catered by the KFC Corporation and its franchises provides it with a large share of the consumers specific to the fast food market.

Weaknesses and Constrains

The weaknesses and the constraints that the company and the fast food brand is exposed to is its lack of innovation to come up with new products on a periodic or a regular basis to meet the needs to the customers. The research and development is not investment in by the company which enables other competitors for the company like McDonalds to take pioneering advantage for new products launched by them in the market.

Strategy in the Future

The strategies that can be implemented by the company for its operations in the future take the form of investing in the research and development projects and facilities. The company should invest in R&D to increase its capability to come up with new products, while also searching innovative methods to prepare the products according to the changing demands of the customers. The customers want a healthy product offering which has the same great taste. The company can invest in developing processes and procedures which are much healthier for the consumers while delivering the same great taste.

Aside from this the company should also provide the consumers in the different markets with a diverse range of products. This can be done by following the new trends which are preferred by the customers in the markets. The company should also closedown those operations which are unprofitable for the company and are creating problems for the company by taking away its profit margins and cash reserves. The US market is highly saturated when it comes to fried chicken based fast foods, and in this regard the company should expand to diverse and much profitable markets.

Comprehensively the aspects of the business which can be built upon pertain to the working atmosphere in its outlets and workplaces, development of menus which are more diverse and healthier, closing those restaurants and operations which are unprofitable or promoting a negative image of the company as well as performing an in detail evaluation and analysis of the new markets and countries before establishing operations through company owned business and franchises.

Reasons for KFC’s Strategy Change

The strategy change for the KFC operations was much required as mentioned in the case as a result of the strategies employed by the company in the 1980s. In the 80s, the company was highly dependent on its unique recipe for its popularity, bard image and the growth of its business. However as the fried chicken based fast food industry increased the company has been facing significant loss of market share as the consumers switch between different fast food brands.

The earlier strategy of the company ha also resulted in a restricted and limited menu offering by the KFC company which can become boring and unattractive in the long run. Aside from this the different franchises in the international and the local markets which are not operated directly by the company have been depicting degrees of neglect and falling standard which eliminates the uniformity of the product and service offering at the eating outlets as well as presented a bad image of the company and the KFC brand.

Market Situation

The fast food industry is a highly competitive market with dynamic change staking place. “The global fast food market generated total revenues of $102.7 billion in 2006, this representing a compound annual growth rate (CAGR) of 3.5% for the period spanning 2002-2006. In comparison, the United States and European markets grew with CAGRs of 3.7% and 3.3% over the same period, to reach respective values of $55.2 billion and $19.5 billion in 2006. Market consumption volumes increased with a CAGR of 1.5% between 2002 and 2006 to reach a total of 80.3 billion transactions in 2006. The market’s volume is expected to rise to 86.4 billion transactions by the end of 2011, this representing a CAGR of 1.5% for the 2006-2011 period.” (‘Global Industry Profile: Fast Food’, 2007)

Some of the significant changes taking place in the industry pertain to increased attention being paid to recyclable packaging, green operations and introducing healthier menus which are demanded by the consumers in the market. The future growth of the fats food industry is predicted to “have a volume of 86.4 billion transactions, an increase of 7.6% since 2006. The compound annual growth rate of the market volume in the period 2006-2011 is predicted to be 1.5%.” (‘Global Industry Profile: Fast Food’, 2007)

Advantages and Disadvantages of KFC Competitors

The main competitors that are present in the fast food market for KFC are Popeyes owned by AFC Enterprises, McDonalds and Burger King. The following depicts the various advantages that are experienced by the competitors of the KFC Corporation and the disadvantages or the weaknesses that the competitors have to face while operating in the fast food industry.

The advantages that are available to Popeyes is its unique fried chicken offering and the distinct favors in which its products are prepared. “AFC’s signature Cajun fried drives its Popeyes brand chicken. Popeyes’ specialty menu consists of hand-battered, bone-in fried chicken available in two flavors, New Orleans Spicy and Louisiana Mild, and a wide assortment of signature Cajun cuisine side dishes, including red beans and rice, Cajun rice, Cajun fries and buttermilk biscuits.” (‘AFC Enterprise Inc’, 2008)

McDonalds has the advantage of diversified operations worldwide, it’s expansive and quick distributive network, the established high level of customer service and the wide range of packaging options that are available to it for its products. The advantages that are available to the Burger King Company pertain to the significantly strong market position of the company and its brand, the brand image of the company which it has as a perceived image and value in the minds f the consumers. The franchise mix, and global franchise network of the company is also one of the main advantages that the Burger King company has and has been exploiting for market diversification.

The weaknesses of the Popeye brand pertain to the limited scale of operations of the company.

The weaknesses for McDonalds include the high bargaining power of the customers for McDonalds, the limited diversification of its products, and the lacking scale to compete with larger competitors in the market. The weaknesses for Burger King include the market concentration of the company and the weak operating performance of the company in the recent past.

2007, ‘Industry Profile: Global Fast Food Industry Profile’, Data Monitor Reports. Web.

2007, ‘Industry Profile Fast Food Industry Profile: United Kingdom’, , Data Monitor Reports. Web.

Guilbault, M., 2004, ‘KFC and the Global Fast-Food Industry’. Web.

Leask, G., 2004, ‘Is There Still Value in Strategic Group Research’. Web.

2007, ‘Burger King Corporation SWOT Analysis’, Data Monitor Report, Analysis. Web.

2005, ‘Golden State Foods Corporation SWOT Analysis’, Data Monitor Reports, p5, 4p. Web.

2007, ‘Company Profile: AFC Enterprises’, Inc, Data Monitor Reports. Web.

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BusinessEssay. (2023, January 14). Kentucky Fried Chicken (KFC): Strategic Management. https://business-essay.com/kentucky-fried-chicken-kfc-strategic-management/

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BusinessEssay . "Kentucky Fried Chicken (KFC): Strategic Management." January 14, 2023. https://business-essay.com/kentucky-fried-chicken-kfc-strategic-management/.

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

• 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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Performance Management System of KFC

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