Introduction
Kentucky Fried Chicken (KFC) is a US leading global chain of fast food restaurants founded by Harland Sanders in 1930. With its headquarters in the US, KFC is the world’s most famous restaurant chain that sells chicken pieces in various forms. Globally, the organization receives millions of daily customers in its many branches worldwide. KFC was one of the pioneers of US fast food companies to expand in the international market. Some of the first countries where the fast food chain opened outlets include Jamaica, Mexico, the United Kingdom, and Canada. Throughout the 1960s, 70s, and 80s, the company opened various branches worldwide. KFC is a relatively big company that has over 25,000 locations globally. Today, the organization has a presence in over 145 countries worldwide and continues to grow. KFC is one of the most successful companies worldwide primarily because of how it approaches market demand. In addition, the company has robust pricing and profit maximization strategies. The substantial increase in demand for fast food services has led KFC to cater to new requirements and serve new markets.
Why KFC has Succeeded Globally
With over 25,000 locations globally, KFC is a prominent player in expanding internationally. In this case, its global marketing strategy focuses on localization. Every country where the chain is located has a local menu that caters to its unique clients in that area (Liu & Rekettye, 2019). Therefore, its strategy is tailored to meet the unique tastes and preferences of the areas it seeks to serve. Whether an individual visits France, the Philippines, or Australia, they will have unique menus that are popular in those localities. This unique marketing strategy is not familiar to many other firms worldwide. Kentucky Fried Chicken has built various country-based menus with the help of a two-fold approach that focuses on local tastes and preferences. While innovation is a top priority for the fast food chain, the organization also ensures strict adherence to KFC brand standards.
Another factor that has made KFC succeed globally is its brand perception and implementation of local preferences in all its areas. In any marketing strategy, something that ensures that the company becomes successful is its brand perception. For example, positive brand perception attracts new clients and encourages existing ones to return for more goods and services (Liu & Rekettye, 2019). The brand perception of KFC has a globalized perspective which also promotes robust branding strategies that encourage clients to accept an international brand as being local. Implementing local tastes and preferences for the fast food chain is critical to solid brand perceptions. The global marketing strategy of the organization is an example as it acknowledges that food and its services are interconnected with the customs and cultures of a country.
How KFC Approach Market Demand
KFC approaches market demand in various ways through its marketing strategies. Some of the strategies that the company uses include branding and advertising. The promotion strategy applies a pull and push approach that is more efficient when the organization wants to supply its stock to stores. In addition, the approach also helps to create demand-supply for its commodities. Fast-moving goods like the ones sold by KFC are better sold using a push strategy where the clients are ready to make purchasing decisions (Liu & Rekettye, 2019). In many cases, KFC usually engages its many franchises worldwide in promotion strategies such as enhancing stock at the outlets and face-to-face selling. Once the product gains a foothold in the market, it can sustain itself in the market even without further promotion. The product is popular among clients in a pull strategy, and consumers begin actively seeking the commodity.
The KFC marketing strategy also promotes the 7P’s, which include price, products, positioning, and promotion. For example, promotional offers are a primary strategy for marketing its products such as chicken, burgers, and pizza. When KFC opens franchises worldwide, location becomes a relevant consideration for the business. Therefore, the positioning of the business directly affects its sales and profitability (Liu & Rekettye, 2019). The firm always wants to know what the consumers think of its products on the ground. For example, quality is a significant aspect that the company seeks to evaluate from time to time to gauge the clients. Its quality assurance department always wants to know how customers perceive the products.
KFC Pricing Strategy
KFC’s geographical pricing strategy ensures a differentiated pricing structure in different regions. In this case, the menu prices are set differently for every country where the organization operates. For instance, KFC Singapore has a different pricing structure than KFC Malaysia. The company applies a market penetration pricing structure for its new products in a particular region to attract customers (Liu & Rekettye, 2019). In new markets, KFC always sets its prices lower than its business rivals to have a competitive edge in the industry and attract more clients. This kind of strategy gives clients the urge and awareness to purchase in perceptive of its low pricing structure compared to the rivals. In other cases, KFC has a higher pricing structure targeting the upper and middle-class people. Such a pricing structure has promotions, discounts, and offers.
The fast food chain operates in an oligopolistic marketing environment where only a few firms control the pricing structure. In this case, KFC is among a few companies that offer almost the same goods and services. Fast food companies operating as KFC include McDonald’s, Pizza Hut, Domino’s Pizza, Burger King, Starbucks, and Subway, among others. Since these companies are few, they have the power to determine the prices they offer in the market (Liu & Rekettye, 2019). In the environment where KFC operates, firms’ profits are interdependent. In an oligopoly market, a small number of firms make every organisation’s output and price decisions affecting every other business entity’s marginal revenue and demand conditions. All these firms in the oligopoly market have the market power to raise their prices at will without losing all their customers.
KFC Profit Maximization Strategies
The fast food chain has a robust planning strategy that is meant to maximize its profitability while at the same time enhancing shareholder value and promoting sustainable growth on an annual basis. To achieve the objective, the company applies a growth and differentiation strategy to promote the ability to compete with its business rivals, such as McDonald and enhance profits and sales of the business entity (Liu & Rekettye, 2019). In addition, KFC offers an original recipe manufactured using 11 spices and herbs from over eight decades ago. KFC’s secret recipe helps the firm always have a competitive advantage against its competitors in the fast foods industry. The fast food chain can provide exceptional fried chicken, which its business rivals cannot offer. In this case, the fast food chain prides itself as an expert in spicy fried chicken not offered by the competition.
KFC also applies a growth strategy to maximize its profits against its competitors in the business. In the growth strategy, the fast food chain launches new products that it eliminates after some time. Such a strategy is relevant to the firm because it facilitates the fast food outlet to make short-term profits and sales and enhance its market share. Having new products and services within a limited time helps to attract new and existing clients to have a try before it is out of the market (Liu & Rekettye, 2019). Such short-term products receive a lot of attention from clients, enhancing sales and profitability for some time. In addition, KFC evaluates its organization by applying external and internal analysis to clarify the firm’s current position. The external analysis comprises of strengths and weaknesses of the organization.
Conclusion
Kentucky Fried Chicken (KFC) is a leading fast food chain that has continued to grow exponentially. KFC is a relatively big company with over 25,000 outlets across the world. The company operates in over 145 countries and continues to open more franchises. KFC has a robust approach to market demand, making it competitive in all the areas it operates. Additionally, the fast food chain has unique profit maximization and pricing strategies, which have promoted the organisation’s growth. For example, its growth strategy ensures that it continuously produces new products that are eliminated after a while. The strategy is meant to attract new and existing customers, ensuring the brand is popular among clients.
Reference
Liu, J. & Rekettye, G. (2019). Pricing: The new frontier. Transnational Press London.