Kentucky Fried Chicken Marketing Strategy (English) BY WISNUDEWOBROTO · DECEMBER 25, 2011 HISTORY KFC (formerly known as Kentucky Fried Chicken) is a trademark franchise of Yum! Brands, Inc., headquartered in Louisville, Kentucky, United States .Founded by Col. Harland Sanders, KFC is known mainly for his fried chicken, which is usually served in a bucket . Col. Sanders began selling fried chicken at his gas station in the year 1939 in Corbin, Kentucky which subsequently moved to a motel. He closed his business in the late 1940s when the Interstate highway through town. In the early 1950s, he began traveling the United States and met with Pete Harman in Salt Lake City, Utah, and in 1952 co-founded the Kentucky Fried Chicken restaurant is the first in the world (his first restaurant does not use that name). Sanders sold the entire KFC franchise in 1964 worth 2 million USD, which has since been resold three times. Ultimate owner is PepsiCo, which incorporate them into the company Tricon Global Restaurants division, now known as Yum! Brands, Inc. In 1997, Tricon from PepsiCo separately. In Indonesia, sole franchisee of KFC is PT. Fastfood Indonesia, Tbk ( IDX : FAST ), which was founded by Gelael Business Group in 1978, and registered as a public company since 1994 . Indonesia’s first KFC restaurant opened in October 1979 in Jalan Melawai, Jakarta. MARKETING STRATEGY KFC Corporation, or KFC, founded and also known as Kentucky Fried Chicken, is a chain of fast food restaurants based in Louisville, Kentucky. KFC is a brand and operating segment, called a “concept” of Yum! Brands since 1997 when that company was spun off from PepsiCo. KFC primarily sells chicken in form of pieces, wraps, salads and sandwiches. While its primary focus is fried chicken, KFC also offers a line of roasted chicken products, side dishes and desserts. 1. Marketing: Managing Profitable Customer Relationship The marketing mix is generally accepted as the use and specification of the ‘four Ps’ describing the strategic position of a product in the marketplace. a. Product Anything that can be offered to a market to satisfy a want or need. KFC’s specialty is fried chicken served in various forms. KFC’s primary product is pressure-fried pieces of chicken made with the original recipe. The other chicken offering, extra crispy, is made using a garlic marinade and double dipping the chicken in flour before deep frying in a standard industrial kitchen type machine. The main products of KFC still are fried chicken but KFC tried to development new products for suitability with modern situation; the menu for health. Moreover, new menu of KFC will emphasize the taste and health. b. Price The cost of KFC products use high pricing strategy but it’s not high overly. KFC in the country tried to enhance quality of fast food restaurants to change attitude of people that they think KFC is junk food. c. Place Most KFC restaurants are located in the source communities such as shopping malls, the petrol, and lodging en route. d. Promotion The promotion of KFC is quite varieties such as TV program, Internet, public relation, leatlet and etc. moreover, KFC innovate a new menu set for it is easy to order and it’s save money. That a special menu set also is cheaper than normal. 2. Company and Marketing Strategy: Partnering to build customer relationships a. Marketing Strategy KFC used the Demographic Segmentation, Geographic segmentation, and Psychographic segmentation. In demographic segmentation, the market is divided into groups based on an age, gender, family size, income, occupation, religion, race and nationality. KFC divides the market on demographic basis in this way: Age is between 6-65. Gender is both males and females. Family size is 1-2, 3-4, 5+ Income is Rs 10,000 n above. Family lifestyle is almost all. KFC has outlets internationally and sells its products according to geographic needs of the customer. In India KFC focuses how geographically its customers demand different products. In north India Chicken is the main selling product, while in the south the Veg. items sell more than the chicken. Dividing a market into different groups based on social class, lifestyle, or personality characteristics is called psychographic segmentation. KFC divides market on the basis of psychographic variables like: Social class- Upper and Middle class. Lifestyle is not specific. Personality is ambitious and authoritarian b. Target Marketing As the outlets of KFC are in posh area and prices are too high (overhead expenses-rent, air-conditioning, employees), so KFC targets upper and middle classes. Target market depends upon size and growth rate of population, Company resources and structural attractiveness of market segment. c. Market Positioning For a product to occupy a clear, distinctive and desirable place relative to “Competing products in the minds of target consumer.” In KFC feedback is taken from the customer in order to know the customer demands and then improvements are made in products. KFC focuses on pure and fresh food in order to create a distinct and clear position in the minds of customers KFC has a strong brand name and they are leading the market in fried chicken. 3. The Marketing Environment The microenvironment consists of all forces that are close to KFC and on which KFC has an impact. They directly affect KFC’s ability to serve its customer. Three major components influence KFC’s microenvironment: a. Competition We can compare the price of their products with McDonald, Dominoes and Pizza Hut. If the competitor provides the same product at a lower price then the organization usually lowers the price of its product too. In the case of KFC, Fried Chicken is its main selling point and controls a monopoly over the Indian fast food market (only with fried chicken). It prices its burgers, French fries and soft beverages with relation to its competitors. b. Consumer KFC’s customer market consists solely of the consumer market. KFC’s products are bought by individuals (males, females, singles, and families).Therefore, the product range KFC offer should appeal to as many people within this consumer market as possible, to ensure that the maximum amount of products can be sold. 4. Segmenting, Targeting, and Positioning : Building the right relationships with the right customers a. Segmenting Demographic Factor Age: Generally there is no age limit focus by the KFC. The target and focus is on each and every individual in a society. KFC finds its largest demographic in the young of any society. Gender: Both male and females are focused by KFC, gender does not play any role here. Household Size: This plays a vital role in the demographic factor of the KFC. Generally they target whole families rather than single persons. This being the reason for their Family Meals which are basically bundled items served at a nominally cheaper rate. Economic Factors Income: Income is an important key factor for KFC. This factor decides which class is to be targeted. In the early rise of KFC they focused on the upper class but slowly are introducing economy meals that attract the lower to middle classes. Consumption Behavior: It estimates the behavior of people, their liking and disliking towards the pricing of the products. Behavior Factors In behavioral aspect they segmented the market on the basis of quality, taste and price. Following are the different possible segments in this regard: taste conscious, quality conscious, class conscious, and combination of price and quality. Geographic Factors On the basis of the geographical factor we have divided our market in two main segments, urban and semi urban. Political Factor The operations of KFC are affected by the government policies on the regulations of fast food operation. Currently government are controlling the marketing of fast food restaurant because of health concern such as cardiovascular and cholesterol issue and obesity among the young and children in the country. Governments also control the license given for open the fast food restaurant and other business regulation need to follow such as for a franchise business. Good relationship with government in giving mutual benefits such as employment and tax is a must for the company to succeed in any foreign market. b. Targeting Location Hectic lifestyle of individuals – giving them more time at work and less stress about waiting for food. Commercialization of urban and sub-urban markets leading to more mid-sector people that find high-end eating joints very to expensive. Mid-sector people are always looking for change which KFC provides in their range of fast food. Quality conscious – people in urban areas are more conscious about the quality of food than rural areas. Urban areas are more populated therefore they help with attracting higher revenues. Placement Outlets Due to KFC placing itself close to schools, colleges, cinemas and markets which are mostly populated by the young and those who are in a hurry, KFC enjoys a large number of footfalls every day. In addition, they also have outlets close to non-vegetarians (mostly Muslim populated areas). Strategy Given the competitive nature of fast food joints, KFC uses the “Push Strategy” to help them create awareness, be different, and sound attractive. c. Positioning Products Basically the product is anything that be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. KFC is specially dealing in the chicken products; Basically, KFC has the special raspy for chicken products that is why, KFC known as a chicken specialist all over the globe. KFC target the Asia and East side because people like chicken product so they enter in the market due to the demand of their chicken products.