KFC And Burger King Strategies - Case Study Example

KFC And Burger King Strategies KFC and Burger King are two of the leading players in the fast food market of United Kingdom. An analysis of their strategies is as follows: Products KFC serves a wide range of real chicken burgers, including the world famous Chicken Fillet burger and the spicy Zinger burger, all of which are made from 100% chicken breast fillet and coated in a unique recipe of 11 herbs and spices to give that distinct taste of KFC. The chicken is continually tested against these tough criteria, which include succulence, crispiness and the secret recipe flavour to ensure that customers enjoy the great taste of KFC every time. The Original Recipe chicken is served in a variety of delicious individual and family meals, to offer a great choice. The company's core products are Buckets, Burgers and Twisters and Colonel's Crispy Strips chicken with home-style side dishes. The first 'Soul Food' product to hit the stores was 'Warm Chicken Salad'. The success of this salad led to new variants being developed, and more 'Soul Food' products continue to feature on KFC's menus. . The 'Soul Food' philosophy has also made a real impact upon KFC's retail estate, manifesting itself in all aspects of communication, from window posters to the menu boards and staff uniforms. (www.kfc.co.uk) In case of Burger King, the philosophy of "One size fits all" does not fit with its customers, as customisation is king for them. The target segment is core 18- to 35-year-old "burger-and-fries-loving" customers. To appeal to a broader customer base, it offers a variety of food options, such as a full line of breakfast products, salads, BK VEGGIE burgers, desserts and more. Product Modification This strategy involves making modifications in the product characteristics so as to stimulate sales. (Kotler, 367).KFC is committed to serving foods that meet the changing needs of its customers. Kentucky Fried Chicken (KFC) has slashed the amount of dangerous trans fats in its foods in the UK. It uses a low trans fat blend of cooking oil in its 713 British and Irish stores. Previously the company used a partially hydrogenated rapeseed oil. The fast food chain says the switch means that all of its products will contain less than one per cent trans fat. The trans fats have been removed without sacrificing the great taste that is the foundation of KFC brand. Trans fats occur naturally in small amounts in dairy products and meat, but they're also formed artificially when manufacturers hydrogenate liquid vegetable fat or oil. (KFC slashes trans fats on UK menus) Product Line Extension This strategy involves adding new products or services to the existing product line (Onkvisit, Shaw, 384). Burger King has planned to build a chain of Whopper Bars in Britain, which will sell a variety of its signature hamburgers in a hipper, more adult setting. THE "barbell strategy "is being used by Burger King to beef up profits, pushing higher-priced products and cheap items on the same menu. Burger King has plans to build Whopper Bars in places such as airports and other venues with limited space (Rushe , 2008). Product Innovation This strategy involves introducing new products from time to time so as to cater to the changing needs of the customer. KFC and Burger King have followed this strategy. Burger King launched The Angus Steak Burger, which was differentiated based on higher quality beef, while TenderCrisp Chicken Sandwich gave BKC a product in the chicken sandwich category where it was traditionally weak. KFC launched The Wrapstar with delicious ingredients for the young, busy adult who eats lunch on the go.(www.utalkmarketing.com).KFC would launch a revolutionary finger lickin' new menu addition -- Kentucky Grilled Chicken This great tasting product will help KFC continue to evolve and increase its relevance among consumers looking for nonfried menu options. It's the latest and most exciting of many recent menu innovations at KFC and would deliver the great flavor that the customers expect.Even the Colonel's iconic bucket has a new and exciting look. KFC locations serving Grilled and Fried Chicken would do so in buckets that are half red and half white -- a design unlike any other in the 50-plus year history of the bucket. This version includes "Kentucky Grilled Chicken" graphics on the white side and "Kentucky Fried Chicken" graphics on the red side. Images of KFC's world famous founder Colonel Sanders will also adorn the bucket, which is designed to communicate the variety of menu offerings at KFC.This transformation to reach new audiences is happening beyond the menu.Both KFC and Burger King provide complete nutrition information on all our menu items so that consumers could make informed choices based on their personal dietary goals (Kentucky fried chicken testing new grilled chicken) The fast food chains are primarily based on an actual product and its augmented offerings. As KFC is committed to continually exceeding its customers' expectations it regularly monitors how it is doing through CHAMPS Check which ensures that the restaurant should be clean, the team should be hospitable, the order should be accurate, the restaurant should be well maintained, the product should be consistently great and the food should be served with speed. Branding Branding refers to a name, term, symbol or design that distinguishes the goods or services of one seller from another. (Onkvisit,423). Burger King's goal is to be not just a good brand, but also a social brand and become "A brand that is on the move in pop culture. Burger King has adopted the marketing strategy of 'Turning Your Brand over to the Consumer'. Its "Have it Your Way" campaign clearly comes from this line of thinking. Have it Your Way enables consumer empowerment and Burger King has used this in its marketing campaign to create social currency. Its brand has been repositioned to include news employer brand based on the concept of 'Fun with a Future,' and speaks about the satisfaction that comes from working as a Burger King Corp. employee. Its strategy not only differentiates the Burger King Corp. employer value proposition, but also is also supportive of the consumer brand. The goal is to help current and potential employees better understand that Burger King Corp. supports an invigorated brand with a clear sense of direction, and that this energised organisation offers locally supported professional and personal development.(http://www.reuters.com) KFC has also been given a new global design which is refreshing, contemporary, highly-differentiated and helps keep KFC relevant with customers by giving them a higher quality overall dining experience. KFC's new look contemporises one of the most recognized and cherished brand icons in the world and spans all visual elements from logo to restaurant design, advertising, packaging, uniforms and more. Through its 'Soul Food' strategy, KFC has effectively changed public perception of its brand and built an emotional relationship with its consumers, without compromising the immediate sales requirements of retail marketing. Marketing techniques to encourages brand loyalty The UK KFC website claims that one should always try to choose the lower fat options such as pure chicken breast meat (as served at the nearest KFC!).KFC promotes its products to children by a 'healthy' spin. Energy-dense, low nutrient foods are often marketed as if they are much more than a treat -described as making a valuable contribution to a child's diet. The UK KFC website offers healthy eating advice that calls KFC chicken a 'lower fat option', 'pure chicken breast meat' implying it is healthier than 'high fat sausages and burgers'. Burger King offers free toys with children's meals and it is one of Burger King's most effective strategies. The impressive record of Teletubbies to attract children has made it popular with food manufacturers, who can pay BBC Worldwide for the right to include Teletubbies on their food packaging, giving them instant toddler appeal. This technique is known as 'character licensing'. Burger King credited a Teletubbies Burger King promotion featuring 50,000,000 Teletubbies dolls with doubling sales of Kids Club Meals in the UK. Spiderman and X-Men 2 toys are being offered with KFC children's meals in the UK. Burger King has extended its gaming presence into mobile phones, with a series of games featuring the brand's avatar, the King. Far from being free advertising, consumers will have to pay to download the games, providing the company with both revenue and brand presence ( http://brandstrategy.wordpress.com/2007/10/) It can be said that KFC and Burger King have managed to keep their brand equity high and this has resulted in high brand recall. Pricing strategies KFC uses the high pricing strategy when setting the retail price of its products. The high retail pricing strategy allows KFC to charge a price that is above the competition, but also promote frequent sales to lower the price below them. Introducing a premium-priced brand can make a similar positive impact on adding profitable market share as the food lovers will happily pay a hefty price premium for that sense of being well served. Several sales promotions and coupons are used to lower the price below those competitors. The bundle pricing (614,Onkvisit) is also being thought of be used wherein a soft drink with a burger combo would cost less than the usual. In some cases, the psychological pricing method is used where by all the menu prices end with either 5 or 9 number, associated with the theory of 'magic numbers or costless approaches. One item KFC sells that is reasonably good value for money is their small 99 pence chicken sandwich. which makes a tasty lunch at a decent cost. (How KFC has taken off in the UK fast-food market) .The new positioning of KFC as a family oriented chain also impacted on the pricing strategy. Soul Food was an offering for real people and as a result, it needed to be proper, wholesome food, offered at a reasonable price. (Profile-Kicking-KFC-shape). Prior to repositioning the brand, the lowest priced item on KFC's menu was 2.99, which was a barrier to purchase for many consumers. 'Soul Food' meant that pricing was looked at in a different way and the case for a value product at less than 1 was put forward. In case of Burger King, the high/low pricing strategy has offered several advantages. It has paid off for Burger King with premium-priced Fiesta platters -- alongside 99-cent cheesy bean-and-rice burritos. A value meal would cost $2.99 or $3.49, which has a burger, fried potatoes and a soft drink. The "barbell strategy" is being used by Burger King to beef up profits, pushing higher-priced products and cheap items on the same menu. By offering both brands, burger King has become more competitive on with those who care about price of a product offering while being more competitive on image and quality for those who are more sensitive about those factors. Distribution / channel strategies Contractual Vertical Marketing System (Kotler, 544) has been used by KFC and Burger King. In this type of marketing system, different firms at different levels of production and distribution integrate their programs on a contractual basis to obtain more economies or sales than they can achieve alone. In contractual VMS, franchise organisation have been used wherein service firm organises a whole system for bringing its services efficiently to consumers. Most popular VMS, where interorganisational relationships are formalised through contracts that spell out each member's rights and obligations. The type of distribution channel used by KFC is the direct channel. The direct channel is successful when there is an extremely large market that is geographically dispersed. The direct channel is also useful when there are a large number of buyers, but a small amount purchased by each. KFC uses two different methods of selling its products directly to the market. One method of distribution is for customers to dine-in. Customers can go to the nearest KFC, place an order, and either leave with the order or eat at the restaurant. With the drive thru option available, there is no need to look for a parking space; if customer is in a hurry he could take his order and eat it while on his way to office. One of KFC's largest competitive advantages is its restaurant style facility. It offers a clean place to sit down and enjoy the variety of food items in a fun, family atmosphere cafes with comfortable seating .The cafes are located on prime streets or malls where families tend to hang out or socialise thus enabling maximum accessibility for the elite. Burger King also uses the franchising system and offers customers the dine in facility along with the drive thru option. There is convenient parking facility at its chains. It also has plans to set up small chains at places where it can easily attract the customers like airports, petrol stations etc. which would be called Whopper Bars. USPs / differentiation Differentiation refers to the act of designing the company's offer and image so as to distinguish it from the competitor. Burger King's differentiates on the basis of its brand and attributes. Its strategy not only differentiates its employer value proposition, but also is supportive of the consumer brand. It starts with the BURGER KING brand, one of the strongest and most recognized in the world. It's a brand that celebrates individuality and choice, so much so that HAVE IT YOUR WAY isn't just a slogan. Its part of its heritage and drives its culture. Burger King Corp. has decided to distinguish itself not only through its products, but also through its people. Every employee is a 'brand ambassador' and it's imperative that employees at all levels are engaged with the company brand. Burger King Corp. is embarking on a bold, distinctive campaign to brand itself as a fun, responsible and caring employer to the people who work - or want to work - within its organisation." Thus it is an employee centric organisation. For KFC, the service delivery through process and physical environment has become the differentiating offer. The uniqueness of its taste due to the 11 secret herbs, which no one has been able to emulate, is its unique selling proposition. At KFC, Customer Mania involves each of the employees thinking about what the customer wants, and then exceeding their expectations. It is an attitude and set of behaviors that puts the customer at the center of everything .Customer Mania is about delivering 100% CHAMPS with a Yes! The employees' are taught to be proud of THEIR: Food: Restaurants: Service: Branding: Culture: Thus it is a customer centric organisation. www.premier-recruit.com/kfc.doc Social Responsibility KFC and Burger King understand their social responsibility well and make efforts to become a socially responsible organisation. KFC Efforts Recycled Paper All KFC clamshells and chicken boxes contain as much recycled material as it is legally allowed. By law it is required to have virgin fiber board in any part of the packaging that is in contact with food. Any virgin fiber comes from board suppliers who use pulp bought from managed forest in Scandinavia. This ensures that any wood cut for paper production is replaced with new plantings. Environmental concerns Over and above ensuring that the packaging is supplied via recycled or renewable resources; KFC enthusiastically complies with the new environmental directives on recovery and recycling of packaging waste. Litter KFC UK is aware of its responsibilities to the Management of Litter and all its packaging carries the 'Keep your Country Tidy' signs. The company also has a Litter Picking Policy. http://www.kfc.co.uk/KFC_Infopack2008.pdf Burger King has decided to stop advertising during kids' programmes and cease to produce TV adverts directly aimed at children in UK. It will concentrate its marketing promotions on the outstanding quality of food as well as consumer choice, the Have It Your Way' brand platform. (Burger King to stop advertising during kids programmes.) Burger king would buy egg and pork from suppliers who keep their animals in more humane conditions. They would buy raw materials from cage free birds and pork from farms that allow pigs to move inside pens. (Burger King to move to using ethical producers). Promotion The Subservient Chicken - BKC's Viral Marketing Campaign Internet has revolutionised the way the organisations work. Word of mouth marketing had existed for years, but the capability of e-mail and other electronic forms of communication to cheaply and efficiently forward information and links to other people made viral marketing online an exciting prospect for consumer marketers. The power of -send it to friend marketing was widely credited with building major online brands such as Hotmail and You Tube. On April,2007 something odd emerged on the Web: a chicken dressed in garters that could do seemingly any command viewers requested. After being seeded into several Internet chat rooms, the "Subservient Chicken" instantly struck a nerve with bloggers, in part because the site's technology allowed users to type in nearly anything and get a response from the chicken. He could do jumping jacks, dance, do push-ups and even watch television. He seemed impossible to stump. Within a day after being released, the site had a million hits. Within a week, it had received 20 million hits. Many visitors to the site were surprised to see it was Burger King. In addition to Web surfers, the creative community applauded the campaign. To take that idea [that you can have chicken any way you like it] for something that really isn't that exciting-a chicken sandwich-and to so seamlessly put it into such an innovative use of technology, was just really hit.It let the brand association of Burger King easy (viral_marketing_helped_burger_king_recovery/ ). EMI has announced they have signed a deal with the Chicago based digital agency Verve Life that will allow the company to use its massive client list for DRM-free music promotions. The new deal will be immediately used by fast food giant Burger King which will be offering codes included with its meals that will allow consumers to download a pre-paid DRM-free EMI track from a promotional website run by Burger King (EMI joins up with Burger King for DRM-free promotion) "Cross-selling" is when two or more companies advertise each other's products to reach a broader audience. For example, Burger King made a deal with the makers of the Teenage Mutant Ninja Turtles movie. Before the movie came out, Burger King promoted the characters. In return, Burger King was included in the movie. Cross-selling is a more complicated version of licensing. (http://www.family.org/entertainment) At KFC, for the new kids meals that features Simpson's "Get Sporty" figures. There are 5 toys in all, (1)Skateboard Bart, (2)Ice Hockey Lisa, (3)Tennis Marge, (4) Bowling Homer and (5) Mini Putting Maggie. Every toy moves in some way like Maggie really putts, Marge swings her racket, Bart shoots off skating and so on.(www.simpsoncrazy.com).KFC also teamed up with Warriors and gave fans the chance to win a Free Toasted Wrap. The rule was that if the warriors scored 100 or more points at any of the games included in the list,, then they would be given coupons for a free Toasted Wrap.(KFC_100_Point_Promotion.html). From February 13th,2006, for eight weeks, there was a Magic at every every KFC in UK. During February - April 2006, there was a treat in the KFC kid's meal .In the UK, Marvin's Magic was chosen to be the brand that supported the tricks. (www.marvinsmagic.com). KFC would launch a national multi-media campaign to support the launch of its latest product, the Wrapstar.Created by BBH , the campaign will include a 30 second and a 10 second TV advert, breaking on June 18 and running until July 22. (www.utalkmarketing.com) The fast-food brands have been ploughing more adspend into press vouchers to reach consumers. As a result, newspapers have been brimming with buy-one-get-one-free offers aimed at tempting those seeking a bargain breakfast or lunch. Both of the UK's biggest fast-food chains,KFC and Burger King, increased spend on press advertising in 2007. Excluding the internet, press was the only medium that recorded an upswing. Employees BURGER KING UK & Ireland presents Long Service Awards to honour staff whose longevity of service deserved special recognition. The awards were presented to those who have worked at BURGER KING for 10, 15, 20 or 25 years respectively. Even at KFC, the employees are given a very healthy work atmosphere so that they could give their 100%.The success of the CHAMPS philosophy is entirely in the hands of employees. So its essential to keep them motivated. ( BURGER KING REWARDS FALKIRK STAFF FOR A WHOPPING 40 YEARS OF SERVICE) Both KFC and Burger King have made adaptations in their strategies in order to maintain their leadership in a strong market like UK. These adaptations have made them survive in the fiercely competitive business world. Still there are a lot of strategies that are yet to be implemented. The upper management along with the employees' cooperation would surely maintain the growth rate in the existing market and would also plan entry into other untapped market. List Of References Kotler, Marketing Management, Prentice Hall, 8th Edition Onkvisit Shaw, International Marketing,Prentice Hall, 3rd Edition KFC slashes trans fats on UK menus ( http://www.which.co.uk/reports_and_campaigns/ )| 31 July 2007 Dominic Rushe ,The Sunday Times Burger King plan new chain of Whopper Bars April 13, 2008, Kentucky fried chicken testing new grilled chicken (http://www.portfolio.com) /2008/03/24/ http://www.reuters.com/article/pressRelease/idUS124652+25-Mar-2008 http://brandstrategy.wordpress.com/2007/10/ October 11, 2007 How KFC has taken off in the UK fast-food market (http://www.helium.com/items/867052-intrinsic-american-decades-residents) Profile Kicking KFC Shape-Jennelle Tilling http://www.brandrepublic.com/InDepth/Features http://www.kfc.co.uk/KFC_Infopack2008.pdf Burger King to stop advertising during kids, pprogrammes. (www.caterersearch.com), 15th Nov 2006 .Burger King to move to using ethical producers), (www.caterersearch.com/UK), 28th MArch,2007 T. http://www.afterdawn.com/news/archive/10495.cfmEMI joins up with Burger King for DRM-free promotion 26 July 2007 15:17 by Andre "DVDBack23" Yoskowitz | 9 comments http://www.marvinsmagic.com/Default.asp/Page/News/News/28 Gemma Charles ,McDonald's, Burger King newspaper voucher promotions could be short lived Marketing (http://www.brandrepublic.com/login/Research),11th March 08 BURGER KING REWARDS FALKIRK STAFF FOR A WHOPPING 40 YEARS OF SERVICE (http://www.burgerking.co.uk/CompanyInfo/press/040818a.aspx) Viral Marketing helped burger king recovery, (http://www.hotelmarketing.com/index.php/) KFC 100 Point Promotion.html (http://www.nba.com/warriors/corp_partners/) http://www.utalkmarketing.com/pages/CreativeShowcase.aspx http://www.simpsoncrazy.com/news/news.phpid=508 Read More