KFC’s story starts with a man named Harland Sanders, who started selling fried chicken in Kentucky during the great depression. Through rapid expansion, massive investments, and showcasing the image of the brand, ‘the Colonel’, KFC is now the second largest restaurant chain in the world with over 18000 locations in over 110 countries. The brand is now owned by Yum! Brands, which is a conglomerate consisting of other food chains such as Taco Bell and Pizza Hut. Yum! Brands identify themselves as the competitors to the dominance of the hamburger in fast food, and KFC is coined as the innovator of chicken into the industry.
According to an article by Hayley Peterson, the “finger lickin’ good” company has made three recent changes in its operations. These changes are noteworthy as KFC has experienced recent increases in same-store sales. Although their same-store sales dropped by 15% in 2013, KFC changed their trajectory and now their US same-store sales have increased by 8% on a two-year basis. So how did KFC do it and how is their new success related to our class?
May of 2015 was the first time KFC used Colonel Sanders in their marketing campaigns since 1994. The revival of their original brand image got people talking, especially due to their use of celebrities to portray Colonel Sanders. Social media spread the images and videos to a length that may not have been possible before, this led to KFC’s ad reaching market segments that they may have overlooked in previous campaigns. Although some people reacted negatively towards the revitalized branding, the CEO of Yum! Brands was quick to interpret the negative reactions positively, saying “[people] are actually talking about KFC, and you can market to love and hate-you cannot market to indifference”. He also pointed out the fact that there were many posts on social media of people dressing up as the Colonel for Halloween.
The article also identifies the $5 ‘fill-up’ meals as being a factor to KFC’s recent success. The meal consists of a drink, an entree (if you want to call it that), several sides, and a desert. The ‘fill-up’ has boosted same-store sales and at the same time diversifies their menu.
The last contributing factor is that KFC began renovating their locations on the inside and outside. The stand-alone locations have revamped their exteriors and the results are quite impressive for a fast food chain. The interiors are also surprisingly classy, with red accents and eye catching fonts.
Peterson’s article demonstrates the importance of some of our class’ concepts. The marketing campaigns with the Colonel relates to the reach and spreading abilities of social media. The Colonel is also part of the shopper experience at KFC; he invites you into the locations with a smile and he is the face that people associate with the brand. The $5 fill-up meals are a way for KFC to expand their target market because it offers a standardized meal for a very low price. KFC is managing the way consumers feel about the restaurant’s value through these fill-up meals, and the increase in same-store sales proves the boost in perceived value. Lastly, the renovations relate to the significance of the store format as well as the value proposition. By changing the format of the locations, KFC can portray a certain level of classiness or they can aim to steer the customer in a certain direction. Aspects such as lighting can also affect how a customer feels in the environment, which can influence purchasing behavior and overall enjoyment. Overall, I think KFC is making some great changes that their finances are backing up. It will be crucial to continue to monitor the changes to see long term effectiveness and return on investment. Personally, I am indifferent to the Colonel and their marketing campaigns (or maybe I subconsciously like them). I do like the fill-up menu items because the more choice, the better; I am also a fan of the new designs of the stores. All this being said, I have known the brand for as long as I can remember, so their small efforts to change my perception of value will most likely go unnoticed.
References:
http://www.businessinsider.com/kfc-made-3-drastic-changes-and-now-the-business-is-on-fire-2016-2
http://www.businessinsider.com/tons-of-kfc-customers-hate-the-new-tv-ad-2015-5
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