FC Brand for a Health Club - Business Plan Example

Title: KFC Brand Plan for a Health Club Student Number: Word count: 2488 Date: Executive summary This brand management plan is based on an idea for KFC to introduce a health club brand. KFC is one of the largest fast food restaurants and the health club is expected to help in addressing issues associated with sedentary lifestyles and poor diet habits. The report starts by analysing the new health club brand and justifies it as an attractive market opportunity. The report then looks at the brand proposition where the new brand is named as KFC Health Club. The brand will compete in the UK market with other competitors such as Stakis, David Lloyd Leisure and LivingWell. There is almost no fast food chain with a health club which makes KFC idea unique. It is aimed that the brand will be able to raise awareness on health and fitness within a year and increase its membership. Based on the analysis, the best brand metrics to use are: target vs. achievement, return on investment (ROI), target sales and measuring customers’ engagement. The report shows that it is possible for the new brand to gain a market share in the health and fitness market and help KFC boost their image. Table of Contents 1 Background Information 4 2 The New Product Idea 5 2.1 Unmet needs to address 5 2.2 Target market 6 3 Market analysis 6 3.1 Macro analysis (PESTEL) 6 3.2 Micro analysis-Porter 8 3.3 SWOT analysis 9 4 The Brand Proposition 10 4.1 Brand name and logo 10 4.2 Product 10 4.2.1 Brand packaging 11 4.3 Brand positioning 11 5 Brand Launch Details [Mainland UK only] 11 5.1 Year 1 'SMART’ objectives 11 5.2 Year 1 ‘pro forma’ 11 5.3 Overview of ‘generic strategy’ 12 5.4 Overview of Price, Place and Promotion strategies 13 5.4.1 Promotion 13 5.4.3 Place 13 6 Brand Launch Measurement 14 7 Conclusion 14 8 References 15 9. Brand Plan Marking Grid 18 Figure 1 Logo 10 Table 1 Pro forma profit and loss 12 1 Background Information Introduction Kentucky Fried Chicken (KFC) is one of the most successful fast food companies. The firm has been spreading fast in the global fast food industry penetrating most of the markets. KFC has over 18,875 outlets and its presence is in 118 countries mainly through franchise (KFC, 2016). The restaurant has been serving over 8 million customers daily. Despite the fast growth, KFC menu have faced negative criticism due to their health impacts. The main health impacts that have been associated with KFC are obesity, heart diseases, and asthma. The restaurant has been criticised for promoting unhealthy eating habits (Schrempf, 2014). With these critical issues, it is important for KFC to come up with a healthy and lifestyle brand that will put it back in the map as a healthy restaurant. Research shows that by 2020, two thirds of the diseases will be attributable to lifestyles mostly associated with diets (Mintel Group Ltd, 2016). Sedentary lifestyles combined with the fast foods are a major cause of obesity hence the need for healthier lifestyles (Fitzpatrick, 2011). KFC have been facing legal suits due to negative impacts associated with the fast foods. Summary Instead of taking a defensive strategy on health challenges, KFC will come up with a health club brand idea as analysed in this report. This will help the restaurant to promote itself as health conscious while at the same time addressing the health challenges associated with fast food (Schrempf, 2014). Moreover, a health club will help in addressing the sedentary lifestyles associated with back pain (Mintel Group Ltd, 2012). 2 The New Product Idea Based on the current health issues facing the fast food industry, starting a health club are the best approach to deal with them. Research shows that compared to the previous generations, current generations are increasingly living a sedentary lifestyle (González-Gross & Meléndez, 2013). Most of the time is spent on computers, TVs, Mobile devices and there is less time on exercising and sports activities. The sedentary lifestyles combined with the availability of junk foods have highly contributed to obesity. At the moment, childhood obesity has skyrocketed and currently stands at 18% in some of the countries. Research shows that most of the youngsters which stand at 34% suffer from back pain. This is caused by too much sitting which weakens muscles (Khan et al., 2012). Sedentary lifestyles among the populations lead to high costs of medical care and poor health. At the moment, health lifestyle is a trend among most of the people. In fact, people are now turning into a healthy diet and regular exercise (Mintel Group Ltd, 2016). The main aim is to stay healthy and in shape. If KFC can start a gym as part of the healthy club, they can help a lot of people in living healthy lifestyles. 2.1 Unmet needs to address In UK, the levels of obesity are on rise with 62.9% of adults being considered overweight and obese. The number with Body Mass Index (BMI) over 30 has been substantial (NCD Risk Factor Collaboration, 2016). In the USA, 55% of the population is overweight and the number is rising in the developed countries. This has raised the risk of diseases such as hypertension, stroke and diabetes among others (Imes & Burke, 2014). Most of these problems are associated with diets especially with the expansion of fast food and lack of physical exercises. Fast food has been associated with the changing eating patterns with a lot of people eating out. The health club will address the existing health challenges associated with unhealthy eating and act as a complement to KFC menu which has been revised to include healthy offerings. Obesity is caused by energy imbalance where there are few calories being burnt. The amount of physical activities plays a major role in determining the amount of calories being burnt (González-Gross & Meléndez, 2013). The fast food has a lot of calories which are associated with obesity and hence health club can help a lot. Through keeping active, it will be possible for the clients to stay healthy and lose excess weight. This will also help in lowering the risks from stroke, high blood pressure, types of cancers and also help in reducing stress. Physical activities are highly recommended by the WHO, and government health agencies among other organisations. It is important to note that globally, people are becoming less active than decades ago (Mintel Group Ltd, 2012). 2.2 Target market The markets for the health club are the teenagers, young professionals, young parents and middle aged customers (16-40 years). These are the main customers at KFC who are interested in keeping fit. This is a group that has been highly affected by sedentary lifestyles and ease of access to fast food (Mintel Group Ltd, 2012). For the teens, they see fast food joints as a place to meet with friends and enjoy snacks. The health club will make it possible for the target groups to take exercises at convenience and low prices. It will also be possible to create a fitness culture through encouraging exercise. Research shows that most people in proximity to fast food restaurants have low proximity to recreational facilities. 3 Market analysis 3.1 Macro analysis (PESTEL) Political Governments have the ability to influence the market. This is through specific initiatives which can benefit the industry in great way. There has been push by the government which is aimed at promoting healthy living (Mintel Group Ltd, 2012). This is through promoting exercises and healthy eating. KFC health club can benefit a lot from policies promoting physical activities which may lead to an increase in membership. Economic Economic factors such as the reducing wages and high costs of the utilities will have a great impact on the health club. This may lead to members prioritising to spend their cash in other basic amenities due to reduction in disposable income. The prospect group is highly dependent on the economic conditions hence are very volatile. Good economic conditions in the areas of operations will highly support the brand (Mintel Group Ltd, 2016). Social With the rise of fast foods and home entertainment, there have been rises in sedentary lifestyles. Despite this, the celebrity culture has led to a lot of pressure for people to look good and fit. This will influence the number of people who wants to subscribe to the health club. There is also a lot of pressure to shun unhealthy eating and living habits (Geidne, Quennerstedt & Eriksson, 2013). Technological The health club must have the most modern machines in the industry for it to compete with others. This includes use of website and social media which has gained prominence among the target group. This will help in attaining the target market attention and attracting them to subscribe. Environmental The health clubs have been encouraged to maintain there is environmental consciousness. This includes encouraging members to cycle or walk especially those living in close proximity. Legal The health club has to comply with their local regulations. This includes regulations on the health and safety, smoking bans and ensuring that there is access to the disabled. 3.2 Micro analysis-Porter Threat of new entrants The barriers to entry in the fitness market are medium. This is especially due to fact that the highly advanced equipment required in this industry is costly. There is also need for expert staff which makes it hard for a new entrant in the industry. Bargaining powers of the buyers There are high bargaining powers for the buyers. This is due to fact that the membership have been rising in the physical fitness industry leading to saturation and high buyers powers. Bargaining powers of suppliers There are a lot of equipment suppliers in the market. Despite this, the number of fast food restaurants with fitness centres is few. Thus, the suppliers have high bargaining powers. Threat of substitutes There is low threat of substitutes since there are very few restaurants which have started a health club services. The fact that exercise has been highly supported to curb obesity and sedentary lifestyles makes it hard to go for the substitutes. Competitive environment Competitive rivalry in the industry is high. The health and fitness industry has been facing high competition in the UK market. This is with health clubs such as Stakis, David Lloyd Leisure and LivingWell being successful in the market. Despite this, there are few fast-food restaurants with health clubs. 3.3 SWOT analysis Strengths KFC have high experience in the fast food industry. The restaurants have a large market share and they aim at target their customers. This makes it easy for KFC to reach their target market. KFC has adequate resources hence have the ability to buy high end equipment and hire expert trainers. Weakness Poor health image that is associated with KFC may lead to sceptical brand acceptance in the market. KFC will also face an increase in their staff costs which may hurt their budget. Opportunities The current trend on heath awareness among the population will help KFC a lot in gaining customers. The society is highly health conscious and is ready to pay for health and fitness (González-Gross & Meléndez, 2013). In addition, the current policies by the government and health organisations are in support for healthy living. There have been rise in the number of people who wants to join fitness club based on the doctors’ advice. Threats With the rising trend on health and fitness, many health clubs may open up. This may lead to intense future competition in the health and fitness sector. Moreover, the industry is susceptible to changing technology in the equipment being used. Another threat is from the high street stores that sells gym machines (Geidne, Quennerstedt & Eriksson, 2013). When the costs of the machines are low, there is high possibility of people buying them to use at home. 4 The Brand Proposition 4.1 Brand name and logo The brand will be known as KFC health club. The health club logo will be as shown below in figure 1.The pictures contained symbolise health and fitness. Figure 1 Logo 4.2 Product This is a product that will offer the best experience to KFC customers and the community around. It will be able to cater for the varying needs for the customers through experienced staff and high end equipment. The health club will offer all physical exercises equipment to the KFC customers in a convenient and easy to access locations. 4.2.1 Brand packaging The health club will feature the premium facilities in line with the KFC status. This will include a highly supervised gym with expert instructors. The clients will be offered with a membership card and free health advice. There will also be special advice on dieting to ensure that the clients are provided with the best services available. In addition, there will be use of the latest technology and a website which keeps the clients updated on offers and costs. 4.3 Brand positioning The fitness club will be positioned as affordable, competitive fitness club with focus to the KFC customers. The target audience will be aged between 16 years to 40 years mainly KFC customers. This will be only fitness club located in a fast food joint with an aim of supporting customers’ healthy lifestyle goals. 5 Brand Launch Details [Mainland UK only] 5.1 Year 1 'SMART’ objectives Within the 1st year, the health club aims at increasing health and lifestyle awareness and it benefits to KFC customers. To come up with strategies and training programs which are best suited for healthcare within the 1st month of operation. Increase the number of participants in UK mainland by 50% within the end of the year. 5.2 Year 1 ‘pro forma’ Year 1 pro forma is as shown in the table 1 below. Table 1 Pro forma profit and loss 5.3 Overview of ‘generic strategy’ The generic strategy to be used in this case to attain the objectives will involve use of personal selling, encouraging membership to health club and using sales promotions. The health club aims at using the current trend which is in favour of health and fitness. People are opting to live a healthy lifestyle through exercising and taking more care to their diet habits (Braithwaite et al., 2014). 5.4 Overview of Price, Place and Promotion strategies 5.4.1 Promotion Promotion is used to enhance product or service awareness. This will include the use of electronic, printed and personal selling. Due to low costs and viral marketing, there will be use of social media tools such as Facebook and twitter. There will be paid adverts in the newspapers and sales promotion techniques such as use of discounts and coupons will be utilised (Armstrong et al., 2014). Public relations will be used to build a positive public image for the company. This will make it possible for KFC to communicate their goals for their new health and fitness brand while at the same time evaluating the public attitudes. Sales promotions will be used to stimulate customers who will be using the club services. This involves use of coupons and giveaways. 5.4.2 Price The costs will be based on the value of the services being offered. This will also be based on the costs incurred to provide the gym services and a mark-up with an aim of making profits. There will be considerations on what the target customers can pay and the costs will not be higher than that of the competitors (Armstrong et al., 2014). With the expert trainers involved, high technology equipment and brand strength, it will be possible to have customers willing to pay the price. 5.4.3 Place The gym will be located close proximity to each of KFC outlets. This will make it easy for the customers to access the services. 6 Brand Launch Measurement After launching the health club, it will be important for KFC to have appropriate brand measurement techniques. The most appropriate metrics to use in this case are; target vs. achievement, return on investment (ROI), target sales and measuring customers’ engagement. Target vs. achievement will be used to determine whether it has been possible to attain financial target in a specific time. Target sales will be based on the number of customers who have utilised the club services in a specific period. Through ROI, the business will analyse the returns on the venture against the investment that have been made. Through measuring customer engagement, it will be possible to determine customers’ level of satisfaction. This will require the use of user engagement pyramid (Seiter, 2008). 7 Conclusion To sum up, KFC Health club will be aimed at curbing the current sedentary lifestyle and associated health impact. The club is also in line with the current trend where people are more concerned on their fitness. KFC has faced criticism due to their menu which has been associated with morbid obesity among other health issues. The target market for the KFC health club will be their customers from the teenagers, young professionals, and young parents to the middle aged customers. This is a group that is physically active and are more health conscious. The brand will be launched as an affordable fitness centre with an aim of promoting healthy living. The health club will strategies on the promotion mix while at the same time relying on the current fitness trends. To measure brand performance, the KPIs to be used includes; target vs. achievement, return on investment (ROI), target sales and measuring customers’ engagement. 8 References Armstrong, G., Adam, S., Denize, S., & Kotler, P. (2014). Principles of marketing. Pearson Australia. Braithwaite, I., Stewart, A. W., Hancox, R. J., Beasley, R., Murphy, R., Mitchell, E. A., & ISAAC Phase Three Study Group. (2014). Fast-food consumption and body mass index in children and adolescents: an international cross-sectional study. BMJ open, 4(12), e005813. Fitzpatrick, K. (2011). Obesity, health and physical education: A Bourdieuean perspective. Policy Futures in Education. 9(3), pp.353-366. Geidne, S., Quennerstedt, M., & Eriksson, C. (2013). The youth sports club as a health- promoting setting: An integrative review of research. Scandinavian Journal of Public Health. 41(3), pp.269-283. González-Gross, M., & Meléndez, A. (2013). Sedentarism, active lifestyle and sport: Impact on health and obesity prevention. Nutr Hosp, 28(Suppl 5), pp.89-98. Imes, C. C., & Burke, L. E. (2014). The obesity epidemic: the USA as a cautionary tale for the rest of the world. Current epidemiology reports, 1(2), pp.82-88. KFC (2016). KFC-our story. Available at: http://www.kfc.ca/our-story (Accessed: 22 February 2017). Khan, K. M., Thompson, A. M., Blair, S. N., Sallis, J. F., Powell, K. E., Bull, F. C., & Bauman, A. E. (2012). Sport and exercise as contributors to the health of nations. The Lancet. 380(9836), pp.59-64. Mintel Group Ltd (2012). It’s a pain – a third of 16 to 24s suffer from back pain. Available from: http://www.mintel.com/press-centre/beauty-and-personal-care/its-a-pain-a- third-of-16-to-24s-suffer-from-back-pain [Accessed: 22 February 2017]. Mintel Group Ltd (2016). Health and fitness club-going Brits forecast to grow 20% by 2020. Available from: http://www.mintel.com/press-centre/social-and-lifestyle/health-and- fitness-club-going-brits-forecast-to-grow-20-by-2020 [Accessed: 22 February 2017]. NCD Risk Factor Collaboration. (2016). Trends in adult body-mass index in 200 countries from 1975 to 2014: a pooled analysis of 1698 population-based measurement studies with 19· 2 million participants. The Lancet. 387(10026), 1377-1396. Schrempf, J. (2014). A social connection approach to corporate responsibility: The case of the fast-food industry and obesity. Business & Society. 53(2), pp.300-332. Seiter, S. (2008). On track for launch excellence: Succeeding with the right key performance indicators. Available from: https://www.pm360online.com/on-track-for-launch- excellence-succeeding-with-the-right-key-performance-indicators/ [Accessed: 22 February 2017]. 9. Brand Plan Marking Grid CRITERIA FIRST (70% +) UPPER SECOND (60-69%) LOWER SECOND (50-59%) THIRD (40-49%) FAIL (0-39%) Background information 10% Excellent, thorough and concisely stated to Health & lifestyle Industry data/ Company & Industry overview. Good Health & lifestyle Industry data/ Company & Industry overview-- with the odd minor error or omission. Sound Health & lifestyle Industry data/Company & Industry overview with a number of minor errors or omissions. Basic Health & lifestyle Industry data/Company & Industry overview- with the odd major error/omission and a few minor errors/ omissions. Task has been incorrectly attempted or does not demonstrate sufficient understanding of ‘Background Information’. New Product Idea 20% Extensive and accurate knowledge of the topic. Well-developed argument with sound analysis, judgement and justification. Integration of a range of materials; question addressed imaginatively. Comprehensive and accurate topic knowledge. Analysis based on evidence. Well-developed arguments and above-average relevance to the task. Integration of a range of materials. Accurate and well-informed topic knowledge. Provides good evidence of relevant theory, knowledge, examples and independent thought. Limited topic knowledge. Lacks depth. Identifies main issues. Not always logical. Some evidence of independent thought. Minimal relevance to the task. Very limited topic knowledge. Approach to the task in error. Little/ no comprehension demonstrated. Little/ no relevance to the task. The Brand Proposition 30% Extensive and accurate knowledge of the topic. Brand propositions statement(s) have been articulated and justified using academic and market information at an excellent level. Comprehensive and accurate topic knowledge. Brand propositions statement(s) are correct and clearly identified. Market evidence and theory used to support these with the odd minor omission or error. Accurate and well-informed topic knowledge. Brand propositions statement(s) are largely correct. Some market evidence and theory used to support, but with a number of minor errors or omissions. Limited topic knowledge/depth. Brand propositions statement(s) are largely correct. Some market evidence or theory has been used but with a major error/omission and a few smaller ones. Very limited topic knowledge. Little/ no relevance to the task. Brand propositions statement(s) are not sufficiently addressed with minimal rationale. Brand Launch Details 20% Extensive and accurate topic knowledge. Presents thoroughly holistic/synergic marketing mix/launch strategies, which are explained and just in excellent detail. Comprehensive and accurate topic knowledge. Good attempt to present marketing mix/launch strategies, which are explained in good detail with a few minor errors or omissions. Accurate and well-informed topic knowledge. Sound attempt to present marketing mix/launch strategies, which are explained in good detail with a number of minor errors or omissions. Limited topic knowledge/depth. Some attempt to present marketing mix/launch strategies which are basically outlined but with a major error/omission and a few smaller ones. Very limited topic knowledge. Approach to the task in error. Little/ no relevance to the task. Little or no attempt to present marketing mix/launch strategies and rationale. Brand Launch Measurement 10% Demonstrates an excellent understanding and application of brand measuring techniques. Demonstrates a good understanding of brand measuring techniques to the SME’s brand with a few minor errors or omissions. Demonstrates a sound understanding of brand measuring techniques with a few minor errors/omissions with a number of minor errors or omissions. Demonstrates a basic understanding of brand measuring techniques with a major error/omission and a few smaller ones. Demonstrates a limited, flawed or poor understanding of brand measuring techniques. Presentation of your work clearly in the form of a formal business report referenced using UWE Harvard as appropriate. (10%) Report is presented to a professional standard with excellent standards of English, punctuation and grammar. Referenced correctly using UWE Harvard. Report is presented to a good standard with good standards of English, punctuation and grammar. Referenced correctly using UWE Harvard. Minor errors only. Report is presented to a reasonable standard with acceptable standards of English, punctuation and grammar. Referenced correctly using UWE Harvard. A number of minor errors. Basic attempt to present work in report format with acceptable standards of English, punctuation and grammar. Referenced correctly using UWE Harvard. A number or major and minor errors. Presentation of report is of an unacceptable standard with poor standards of English, punctuation and grammar. Little or no attempt to reference correctly using UWE Harvard. Read More