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Situational Analysis and Marketing Strategy

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Situational Analysis and Marketing Strategy Situational Analysis and Marketing Strategy Mary Meister, Emma Parker, Jeff Slaughter, Jaclyn Underwood Chick-Fil-A: Situation Analysis Marketing Problem Chick-Fil-A is known for its production of chicken products in the chicken restaurant industry. The company has been widely recognized across the southern region of the United States which is promising. However, the marketing problem Chick-Fil-A now faces is low recognition in regions outside of the south. Chick-Fil-A needs to expand to other regions of the U.S. in order to continue their growth in the market and to ensure that the company remains a strong competitor among other chicken restaurants. Product/Brand Analysis Chick-Fil-A, Inc., headquartered in Atlanta, Georgia, is the nation's second- largest quick-service chicken restaurant chain, currently with 1,500 restaurants in 38 states and Washington D.C. The first Chick-Fil-A was established in 1967 in Atlanta’s Greenbrair Mall by the company’s founder, Truett Cathy. Chick- Fil-A reached record sales of $3.2 billion in 2009 while consuming 20% of the market, which showed a 7% increase in the market share from 2004. Credited with inventing the boneless chicken breast sandwich and first introducing the chicken nugget concept, Chick-Fil-A serves nutritious and freshly prepared food products. Offerings include chicken entrees, sandwiches, salads, waffle fries and fresh-squeezed lemonade and desserts served separately and in combo meals. Chick-Fil-A serves the communities through freestanding buildings with drive-through lanes and mall-based locations. The company is also licensed to airports and schools. Trademark products include the Chick-Fil- A Southwest Chargrilled Salad, Cool Wrap, Original Chicken Sandwich and a line of recently introduced breakfast items. Prices range from a small order of fries for $1.35 to an original chicken sandwich for $2.75. The combo meal is also available for $5.39. The Chick-Fil-A Kid’s Meal Program includes activities to educate children in math and language arts skills and provides healthy alternatives to fries and soda for a starting price of $2.85. The Chick-Fil-A Kid’s Meal Program includes activities to educate children in math and language arts skills and provides healthy alternatives to fries and soda. The company also offers catering services with large trays of menu items. Chick-Fil-A attributes its growth over the past 30 years to dedicated franchise owners and the company’s emphasis on product quality. The company advertises through its signature cow antics, featuring ads wherein cows try to convince consumers to eat more chicken, or "chikin" as the cows spell it. In 2008, Chick-Fil-A spent $13,161,000 in general promotion advertising. As shown in Figure 1, Chick-Fil-A spends most of its advertising budget on network TV, but cable TV and spot TV also make up a large portion of advertising spending. Chick-Fil-A’s mission statement is "to glorify God by being a faithful steward of all that is entrusted to us; and to have a positive influence on all who come in contact with Chick-Fil-A.” Chick-Fil-A lives by its mission statement through their corporate sponsorships, which reflect 1 the most important core value of making a positive influence on the company’s communities and the people in them. The company has a WinShape Foundation to help kids in need through homes, camps and scholarships. Chick-Fil-A is also a proud sponsor of the Big 12 Conference, as well as the Chick-Fil-A Bowl and Chick-Fil-A Kickoff Game. Primary Competitors Analysis The KFC Corporation was founded in Louisville, Kentucky by Colonel Harland Sanders in 1952. As of 2009, KFC’s market share is 30%, decreasing by six percent since 2004. Over 12 million customers are served in over 109 countries or territories in a day. KFC specializes in Original Recipe, Extra Crispy, Kentucky Grilled Chicken, and original recipe strips served with home-style sides. KFC’s best seller, Original Recipe fried chicken is made from Colonel Sander’s secret blend of 11 herbs and spices. This recipe has remained unchanged since the beginning of the chain. The cost of a two piece original recipe or Kentucky Grilled Chicken combo is $5.97. The combo comes with chicken, a drink, and a side. KFC’s grilled chicken sandwich combo costs $4.79. It includes the sandwich, a drink, and a side. Customers can choose from 300 menu items around the world, from Kentucky Grilled Chicken in the U.S. to a salmon sandwich in Japan. Their revenue in 2008 was over $11 billion. KFC is the first fast food restaurant to introduce reusable take-out food containers. The campaign’s slogan is “reuse, renew, rejoice.” The containers are Tupperware style, microwaveable, and dishwasher safe. Also, on the KFC website, there is a petition that customers can electronically sign to try to get Colonel Sanders on a postage stamp. Popeyes first opened in Arabi, Louisiana, a suburb of New Orleans, on June 12th 1972. There are restaurants in more than 40 states and 20 countries. As of 2004, it has a market share of 10.2% of the chicken fast food market. The company’s official history states that Popeyes started off serving “tradition mild fried chicken” but business was too slow so they decided to spice up the recipe a bit to appease the pallets of New Orleanains, who love big flavor. The franchising of Popeyes started in 1976 in Baton Rouge, Louisiana. Popeyes is concentrated in the South. Ten years after Copeland began his franchising in Baton Rouge, 500 more Popeyes locations were added to the southern region. In 2006 Popeyes announced that the company planned on introducing a trans-fat free biscuit and French fries with only 1 gram of Trans fat. A two piece meal at Popeyes costs $4.99 and includes the chicken, a side, a drink, and a biscuit. In true Louisiana fashion, Popeyes has a shrimp po’boy, which costs $2.99. You can make it a combo with a drink and side for three dollars extra. In 2007, Popeyes had over $167 2 million in revenue in 2007. There is a link on the Popeyes website for store locations and coupon offers. Secondary Competitors Analysis Sonic is a fast food chain that is mainly southern. They sell chicken products, but also have burgers, hotdogs, and many other fast food favorites. Since Sonic is not just a chicken fast food restaurant, it is a secondary competitor. Sonic’s market share within the top fast food restaurants is 5.5%. it is based mainly in the South with a substantially higher index number than any other region in the U.S. Sonic is a fast food restaurant but with a twist. They employ carhops, wearing roller skates, who serve your food to you while you sit in your car. Sonic is based in Oklahoma City and as of 2009, there were 3,500 Sonic restaurants in 44 out of 50 U.S. states. Sonic’s founder, Troy N. Smith Sr., returned home from WWII to his home town of Shawnee, Oklahoma and opened a restaurant name Troy’s Pan Full of Chicken. In 1953 he added a small root-beer stand named Top Hat Drive-In to the property and was averaging $700 dollars a week from the stand’s sales in root-beer, hamburgers, and hotdogs. He changed his plan on turning the restaurant to a steakhouse and turned it all into a drive in instead. Originally people would park their cars anywhere on the gravel parking lot and walk up to the counter to order, but this all changed when Smith took a trip to Louisiana and saw drive- ins using speakers. Smith franchised his drive-in, in 1956, when a man named Pappe joined the business. Smith and Pappe had to change the name Top Hat after learning it was already trademarked, the two decided on the name as it is known today, Sonic. One of Sonic’s best sellers is their Coney. It is a foot long hotdog with chili and cheese. A Coney costs $2.99, or you can make it a combo with fries and a drink for $5.59. Sonic’s grilled chicken sandwich is $3.69. A grilled chicken sandwich combo is $5.59. Sonic has the SONIC Cruisers Club which is their official fan club. By being a member of the club, you receive a monthly e-mail newsletter and a surprise on your birthday. You are also able to purchase a SONIC card. This card is a reloadable card that can be used at all Sonics in place of credit cards or cash. Many people buy SONIC cards as gifts. Sonic supplies games for kids to play on their website, and a birthday club where children are able to get a free Kid’s Meal on their birthdays. Sonic also has a special happy hour from 2-4 pm where you get half-priced drinks and slushes. 3 Unlike all of our other competitors, Burger King is large not only in the South, but in every region of the U.S. It is second to McDonald’s in top burger chain market shares, controlling 13.9% of the market. It sells chicken products, but makes most of their revenue from their flame broiled burgers. Burger King is a global chain. It is headquartered in Florida. It began as a small restaurant chain in Jacksonville, Florida in 1953. Originally called Insta-Burger King, it began having financial troubles in 1955 while being run by two men named Kramer and Burns.
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