KFC Marketing Strategy | Understanding the Positioning of KFC

 

KFC Marketing Strategy 

Understanding the Positioning and Business Model of KFC 

KFC – An American fast food brand is the second largest brand after Mcdonalds. Founded by Colonel Harland Sanders, in the year 1930, KFC has around 20,000+ stores globally in 123 + countries.

Over the years the brand has grown leaps and bounds and has given Mcdonalds tough competition on every front.

Let’s see what factors have attributed to KFC’s success all these years.

KFC Business Model: 

Name of the game – FRANCHISING.

KFC generates its revenue through the different franchisees it has opened up in the different countries. Each franchise will pay a fee based on a turnover to the master franchisor.

In other words, each franchise is actually an independent business but follows the method of operation of the franchise. The franchisor will provide the model help and other items as they deem necessary.

KFC has set certain guardrails for all its franchisees covering the degree of food quality and store cleanliness they have to maintain so as to run their store under their brand name:

Below is a pictorial diagram of the KFC business model canvas, explaining different blocks which form the KFC Business model.

KFC MARKET SEGMENTATION:

KFC mainly uses geographic market segmentation for its products and offerings:

1. Geographic Segmentation:

Geographic segmentation divides markets according to geographic criteria. KFC breaks its business into different geographical segments like

  1. America
  2. Europe
  3. Asia/Pacific, Middle East, and Africa
  4. Other Countries ( like Canada, Latin America)

Basis their geographic segmentation, KFC optimizes its Menu and food offerings to suit the regional tastes and needs.

Example: KFC offers Veg Rice Bowl in India just to cater to the vegetarian customers in India. In the USA  KFC offers different types of Chicken sandwiches which is not available in other countries.

KFC TARGET MARKET:

KFC target market includes both Non-vegetarian and Vegetarian customer segments. KFC has items in its menu that cater to adults as well as the young audience. Over the years the brand wanted itself to be perceived as a family restaurant and has been running campaigns communicating the same.

Below are three factors that are essential for evaluating a KFC target market.

  • Segment size and growth
  • Segment structural attractiveness
  • Company objectives and resources.

Above mentioned are the few potential market segments that KFC chooses to target for driving their business strategy, sales and marketing activities.

KFC COMPETITIVE ADVANTAGE:

KFC’s chicken has been a strong differentiating factor for the brand and the main reason for its success. KFC’s secret recipe of it’s fried chicken having a blend of 11 herbs and spices has been the driving force for all these years.

Owing to the customers changing needs and to cater to the vegetarian customer segment, KFC has included vegetarian items as well in its menu. Thus giving the opportunity to increase its sales volume and revenue.

KFC competitive advantage has been its ability to adapt to the changing time and needs to customers. Even though the KFC is 90+ years old, but still it has managed to keep the vibe of a  young brand intact.

KFC PRICING STRATEGY: 

The target audience of KFC is middle and upper middle class and price their products accordingly. There are different pricing strategies that KFC uses for its products and its variants.

Optional Pricing: Optional pricing is basically used by companies to attempt to increase the amount customers spend once they start to buy. Optional ‘extras‘ increase the overall price of the product or service. In KFC’s case, customers can buy the main items present in their menu and can then opt for “extras” or “sides” like drinks or desserts which go well with the main item that they purchased. The end result is that the customer ends up paying for the main item that he/she wanted to buy and also for the add-ons. 

Bundle Pricing: KFC bundles different products together and offers it to customers at a slightly lower price. KFC provides different combo offers to its customers and also provide an option to its customer to make the combo of their own choice.

That concludes the KFC marketing strategy

KFC MARKETING MIX:

Check out the article on marketing mix of KFC


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