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Colonel Sanders Would Be Proud, KFC is a Global Brand
When companies expand to other countries, they must decide how to adapt their marketing strategy to suit the environment in each market. This activity is important because in our increasingly global business climate, marketers must be able to identify and evaluate different approaches to global marketing. A global marketing strategy includes two components: determining the target markets to pursue and developing a marketing mix that will sustain a competitive advantage over time.
The goal of this activity is to consider the various global marketing strategy issues involved in the context of global expansion by companies.
Read the case about how KFC is implementing its global marketing strategy and then answer the questions that follow.
We know that KFC originated in Kentucky—it’s right there in the original name, “Kentucky Fried Chicken.” Colonel Harland Sanders started KFC in 1929, selling his chicken out of a gas station in Corbin, Kentucky.1 The company is proud of its origins, as displayed by its Harland Sanders Café and Museum in Corbin.2 The fast-food chain also is popular throughout the United States, with 4,074 stores nationwide.3
Yet despite this storied history and wide range, only 17 percent of KFC sales currently comes from U.S. locations,4 and it ranks only fourteenth among fast-food restaurants in the United States in terms of sales.5 That is, the success of the clearly American brand KFC relies mainly on its global presence.
On that global level, KFC proclaims itself “the world’s most popular chicken restaurant chain,” with 21,000 outlets in more than 130 countries.6 It is particularly deeply entrenched in China; it generates 27 percent of its total sales from the more than 5,600 restaurants locations throughout the country.7 When KFC opened its first store in China in 1987, it was the first U.S. fast-food restaurant in the country, and its proactive, early expansion has paid off with continued growth and success. Today, China is KFC’s largest market, and unlike its competitive positioning in the United States, KFC is the top fast-food restaurant, with 11.6 percent of China’s fast-food market share. The menus also reflect their locations, incorporating more culturally relevant options such as congee (rice porridge), shrimp sandwiches, soy sauce wings, egg tarts, and bubble tea.8
New menu items aren’t only for China either; KFC is invested in introducing innovative and culturally relevant products around the globe. An annual “Marketing Planning Meeting,” held at KFC’s global headquarters in Plano, Texas, gives marketers from around the world an opportunity to share their experiences and plan global menu items. Support for the production of new products in different regions also comes from 18 food innovation teams worldwide. The food innovation team at the company’s global headquarters ensures that all new products adhere to brand standards, such as the inclusion of KFC’s famous 11 herbs and spices. These standards help ensure that, even when the offerings become more diverse, each restaurant is clearly still a KFC.
The global experience and diverse backgrounds of the employees on KFC’s food innovation teams, combined with the clear quality standards, have contributed to a variety of successful regional menu items. Menus in Thailand feature shrimp doughnuts; Indonesian outposts offer chicken skin fries; Australian KFCs serve nacho boxes. Regional inventions, such as the Zinger Chicken Sandwich developed in Trinidad and Tobago, can also become global successes. The Zinger has been available in the United States since 2017, and it is coveted in Australia, where more than 22 million of the globetrotting sandwiches are sold each year.9
Another factor in its global success is KFC’s ability to weather challenges and scandals. Growth in China has remained strong despite a tainted meat scandal in 2014 and an outbreak of the avian flu in 2016.10 In the United Kingdom, KFC’s fifth-largest market, distribution issues have been rampant. Sustaining a global presence and supply chain isn’t easy, which became abundantly clear when KFC moved a distribution center and then 646 UK restaurants ran out of chicken. Luckily, customers in the United Kingdom expressed a sense of humor about the sudden chicken shortage, with tweets likening the shortage to the apocalypse. KFC effectively matched the local response by releasing cheeky ads, aligned with the type of edgy humor British consumers embrace, with a headline that read, “FCK—we’re sorry.” The appropriateness of the humor for its local market allowed the global firm to turn a short-term bungle into a publicity boon.11
In the longer term, though, a continuing challenge to KFC around the world is widespread demand for healthier meals. In the United Kingdom in particular, politicians are considering restricting fast-food offerings to curb obesity. Therefore, KFC has attempted to introduce grilled chicken and fries that absorb less oil. However, it turned out that the healthier options were not very popular; ultimately, it had to pull these options from its menus.12 In contrast, the launches of a vegan chicken product from Beyond Meat have been far more successful in both the United States and the United Kingdom.13
Building on these successes in international markets, KFC is focusing on growth in the U.S. market, where it has struggled in recent years. Its popular advertising campaign features a variety of comedians and entertainers dressed as the Colonel, from Darrell Hammond and Jim Gaffigan to Reba McEntire and the wrestler Hafthor “The Mountain” Bjornsson. Its expansion plan calls for opening more stores in airports and on college campuses.14 Plus, just as it does in other countries, KFC is releasing new products tailored to the U.S. market. The new chicken wing flavors “Nashville Hot” and “Tangy Buffalo” indicate that the innovation that supports KFC internationally may also help KFC regrow in the United States.15
References:
Christopher McFadden, “The History of KFC: The Past and the Tech Building Their Future,” Interesting Engineering, October 20, 2019, https://interestingengineering.com/the-history-of-kfc-their-past-and-the-tech-building-their-future.
“KFC Preserving Colonel Sanders’ Home for ‘Amazing’ Future Project,” CBS New York, October 17, 2019, https://newyork.cbslocal.com/2019/10/17/kfc-preserving-colonel-sanders-home-for-amazing-future-project/.
“Ranking the Top 50 Fast-Food Chains in America,” QSR, www.qsrmagazine.com/content/qsr50-2019-top-50-chart.
Keith Siegner, “Yum! Brands Reports,” press release, February 7, 2019, http://investors.yum.com/Cache/1001248402.PDF?O=PDF&T=&Y=&D=&FID=1001248402&iid=4025819.
“Ranking the Top 50 Fast-Food Chains in America,” QSR, www.qsrmagazine.com/content/qsr50-2019-top-50-chart.
KFC, “What Made Us Great Is Still What Makes Us Great,” www.kfc.com/about.
Keith Siegner, “Yum! Brands Reports,” press release, February 7, 2019, http://investors.yum.com/Cache/1001248402.PDF?O=PDF&T=&Y=&D=&FID=1001248402&iid=4025819.
Ashley Turner, “This Is How KFC Became the Biggest Fast Food Chain in China,” CNBC, September 6, 2018; Harrison Jacobs, “KFC Is by Far the Most Popular Fast Food Chain in China and It’s Nothing Like the US Brand—Here’s What It’s Like,” Business Insider, March 8, 2019.
Alicia Kelso, “A Look at the Menu Innovation Driving KFC Global’s Sales Momentum,” Forbes, July 22, 2019.
Harrison Jacobs, “KFC Is by Far the Most Popular Fast Food Chain in China and It’s Nothing Like the US Brand—Here’s What It’s Like,” Business Insider, March 8, 2019.
Harry Wallop, “‘Chicken Is Where It’s At’: The Unstoppable Rise of KFC,” The Guardian, August 18, 2018.
Bill Bostock, “A Senior KFC Executive Said It Gave up Trying to Do Healthy Alternatives in One of Its Biggest Markets Because Nobody Was Buying Them,” Business Insider, September 13, 2019.
Maria Chiorando, “KFC Beyond Chicken Sells Out in 5 Hours: Described as ‘Kentucky Fried Miracle,’ ” Plant Based News, August 29, 2019; Derrick Bryson Taylor, “What Sandwich War? KFC Sells Out of Plant-Based ‘Chicken’ in Atlanta,” The New York Times, August 28, 2019.
“KFC Wants to So Something It Hasn’t Done in 15 Years: Grow,” Restaurant Business, March 8, 2019.
Kat Thompson, “KFC Has New Fried Chicken Wings and You Can Order Them 4 Ways,” Thrillist, October 9, 2019.
If you visit a Kentucky Fried Chicken restaurant in China, along with KFC's regular menu items, you will find congee, a rice porridge that can feature pork, pickles, mushrooms, and preserved egg, on the menu. This is an example of which global product strategy?
