ANALYSIS: KFC bucks fast-food closure trend

Changing tastes have put chicken high on the menu. Ben Bold looks at the next stage of Colonel Sanders' campaign of UK expansion.

KFC, the fast-food chain formerly known as Kentucky Fried Chicken, is on a roll. At a time when McDonald's, the biggest player in the fast food sector, is closing restaurants, KFC is adopting an aggressive expansion drive across the UK (Marketing, November 28).

KFC is investing more than £100m in its plan to have 850 stores by 2005, with a target of 1000 by 2008. This comes as McDonald's is to close down 175 restaurants in ten countries. In 2001 the US burger giant had 1184 outlets in the UK (according to Mintel).

On the KFC web site its founder and brand icon Colonel Sanders speaks from beyond the grave, saying: "You like my chicken so much that we're growing faster than any of them other big restaurant names - including them Burger Boys". And it's those 'burger boys' who'd better watch out as KFC proceeds to carve a chunk out of the market.

Not that KFC's ambitions stop there. Last week the chicken chain announced it is moving its UK advertising account out of Ogilvy & Mather and into Bartle Bogle Hegarty, raising the possibility of some creative sparkle in its ads.

Evolving market

But why is KFC enjoying a hike in UK sales when other fast-food brands are experiencing a dip? And how will KFC's marketing keep sales buoyant and sustain the chain's expansion plans?

One reason is a shift in people's dietary preferences as the media's promotion of health awareness has steered people away from fatty and red meat toward white meat. Dominik Nosalik, market analyst at Datamonitor, says: "People who are meat reducers are on the rise. They are cutting back predominantly on red meat, and chicken is generally seen as a healthy option. Whether KFC is better for you, given what it is fried in, is arguable."

The fast-food industry has historically attracted criticism. While McDonald's is widely acknowledged to use processed meat, KFC sells 'real' cuts of chicken. But as a mass-producer of food, it is still not immune to negative publicity.

In January 2000 KFC was the victim of an e-mail hoax that originated from the University of New Hampshire in the US. The e-mail claimed KFC used the flesh of featherless, feetless and beakless genetically mutated poultry and claimed its chickens were kept alive by tubes inserted in them. The mailing urged consumers to contact their local restaurants and demand the return of 'real chicken'. The crisis management response was immediate and effective and the rumour was soon quashed.

KFC has adapted its menu over the years and embraced product development.

It ditched processed chicken in 1999 and introduced more convenient-to-eat products. Burgers and wraps now account for an estimated 40% of the chain's sales, according to Mintel.

This innovation may well continue under its marketing director, Claire Harrison-Church, who joined from Unilever in August 2001. As the marketer behind the launch of Lynx Barber Shops, she is no stranger to innovation.

But with the menu in hand and the money available to expand, the next question is where?

"KFC doesn't have as many premium locations in city centres, which is a chink in its armour," says Nosalik. "Perhaps it is pursuing this as an opportunity." It is highly probable that as KFC opens more outlets it will do so in more prominent locations. Part of people's perception of the brand is that it resides on the fringes of town and city centres and that it attracts a customer from a lower demographic group.

If its growth strategy is to be successful KFC will need to broaden its target market and this is where marketing and the BBH appointment will come into their own.

"We want to find a way to talk about the food, but in such a way to get non-users to use the brand. We are aware of the negative perceptions, which is part of the problem," says Harrison-Church.

Strengthening awareness

KFC clearly draws on its heritage, using Colonel Sanders to market the brand. Ogilvy & Mather's advertising used the US' template of an animated Colonel, which it adapted for different markets. Then there was a spate of live-action ads with a voiceover by Samuel L Jackson that attempted to shift the tone away from the US-style executions. Will that style of ad resurface?

"We are not embarrassed about being a US brand. Equally, we don't believe in going over the top about it. We did move away from the animated Colonel.

It was a good branding device, but over time it didn't work," Harrison-Church says. In fact, she adds the ads were degrading the 'real' Colonel's image. "We see him as the stamp of authority but not necessarily as the only thing in the advertising.

"We want BBH to create a stronger brand awareness, to be more assertive about our food and the way we talk about it." KFC will continue to advertise specific products, but with a "consistent campaign - a big idea that pulls those products together," she concludes.

KFC is not going to overthrow the burger giants yet, as McDonald's and Burger King have far greater market penetration. But as consumers continue to seek fast-food alternatives to red meat, KFC's ambitions couldn't come at a more opportune time.

NUMBER OF UK OUTLETS

Outlet 1995 1998 2000 2001 % change Adspend pounds

(year to

Nov 2001)

McDonald's 577 836 1016 1184 105 39,411,836

Burger King 379 465 630 750 101 8,677,379

KFC 370 400 489 560 51 14,031,615

Nando's 5 8 23 44 780 N/A

Source: Mintel (number of outlets); ACNielsen MMS

Discussion

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now

Latest

Facebook ad revenue leaps $1bn as it invests in targeting
Malteser or Maltesers? Mars takes Hershey trademark dispute to court
Apple Q2 profits top $10bn as iPhone sales soar
Lynx tells men not to leave love to fate
HBO captures awkwardness of watching sex scenes with parents
Primark to open first US stores with Boston chosen as flagship location
Marketing spend on the up but a reality check is needed before celebrating
Top 10 ads of the week: Jackpotjoy and BT Broadband fend off Kevin Bacon
Lidl beats Tesco to 10m Facebook fans
Center Parcs ad banned for encouraging parents to take kids out of school
Coca-Cola, Cadbury and Amazon named top brands for targeting youth market
Leaked document shows Nokia to be rebranded as Microsoft Mobile
Nike lays-off hardware staff in move that casts doubt on future of FuelBand
Greenpeace says save the bees or humans will die
What brands need to know about changes to VAT and online downloads in 2015
Jimmy Savile victims urged to claim compensation in new ad campaign
UKIP launches biggest  ad campaign and stirs up 'racist' accusations
Apple boss Tim Cook provides voiceover on ad touting firm's renewed green commitments
John Lewis walks consumers through its history to celebrate 150 years of business
Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Tom of Finland's 'homoerotic' drawings made into stamps
Toyota achieves the impossible by calming angry Roman drivers
YouTube reveals user habits to appeal to 'older' marketers
Ex-M&S marketing chief Steven Sharp consulting at WPP
Wolff Olins reveals new CEO after Apple poaches Karl Heiselman
Glasgow offers £30,000 prize to best digital idea for 2014 Commonwealth Games
Google's revenues surge but shares drop as it grapples with transition to mobile
Facebook beats Twitter to most 'marketing friendly' social media site crown, says DMA