Case Study: KFC was rejected from India – here’s how it came back

During The Great Depression in America, Colonel Sanders used to sell fried chicken in his roadside restaurant in Kentucky, USA. When he came across the concept of franchising, he opened the first KFC (Kentucky Fried Chicken) in Utah in 1952. At that time, Sanders was 62 years old.

Today, it is the second-largest fast-food chain after McDonald’s. Colonel Sanders still remains the cartoon used on KFC’s advertising.

Source: Quora

The company has expanded globally with a presence in 150 countries through 30,000 outlets, valued at $12.87 billion. In 1995, KFC entered India with hurdles hey had to overcome. Let’s see how they did it.

Market Entry in India

KFC first entered India in 1995 with an outlet in Bangalore. After Globalization was implemented, it was the first fast-food chain to enter India. But Indians were unwelcoming towards the brand.

There were numerous concerns:

• that farmers would move away from crops
• that KFC used illegal amounts of monosodium glutamate
• that PETA held regular protests against the cruelty imposed on chickens.

So, the company was forced to exit.

They changed their positioning from a family restaurant to a teenage hangout spot and re-entered India in 1999. Since then, it has established itself in 240+ towns and cities like Chennai, Delhi, Mumbai, Chandigarh, Kolkata, and Pune with over 1,000 outlets.

STP Analysis

Segmentation:

• Geographic Segmentation:KFC zeroes in on urban centers and metropolitan cities in India.
  These bustling hubs have customers who crave quick and delicious meal options amidst their busy lifestyles.
• Demographic Segmentation:KFC primarily targets middle and upper-middle-class families, young professionals, and students.
  These groups have disposable income and a desire for dining out, making them ideal customers for KFC’s offerings.
• Psychographic Segmentation:The company appeals to individuals looking for a quick, satisfying meal experience.
  These customers prioritize taste and convenience, making KFC’s signature fried chicken a tempting choice.

Targeting:

KFC’s primary target market in India is young adults aged 18-34 years. This demographic is always on the lookout for affordable yet tasty meal options.

They also tend to be highly social, frequently dining out with friends or ordering in for casual get-togethers, making them a crucial segment for KFC to capture.

Positioning: 

KFC is positioned as a go-to place for affordable and delicious food. This is highlighted by its tagline – “It’s Finger Lickin Good” (more on this later).

SWOT Analysis

Strengths:

• Strong Brand Recognition:KFC’s iconic red and white branding, along with the friendly face of Colonel Sanders, is recognized worldwide.
  The branding instantly evokes thoughts of delicious, crispy chicken. 
• Unique Selling Proposition (USP):KFC’s secret blend of 11 herbs and spices is legendary.
  This closely guarded recipe gives KFC its distinctive taste that customers can’t find anywhere else.
  It’s a key factor that sets KFC apart from its competitors and keeps customers coming back for more. 

Weaknesses:

• High Dependency on Chicken:While their chicken is undeniably delicious, this narrow focus can be a drawback for those seeking different types of meals.
• Occasional Quality Issues:Instances of quality issues can damage KFC’s reputation and affect customer loyalty.
  Maintaining high standards across all outlets is a continuous challenge for the brand.

Opportunities:

• Growing Urbanization in India:Urbanization in India is on the rise, leading to an increased potential customer base.
  As more people move to urban areas, the demand for quick and convenient meal options like KFC is likely to grow.

Threats:

• Intense Competition:The fast-food industry is highly competitive, with both local and international brands vying for market share.
• Health Trends:With the increasing consumer preference for healthier food options, fast-food brands face the challenge of adapting their menus to meet these demands.
  KFC needs to balance its indulgent offerings with healthier alternatives to stay relevant. 

Marketing Mix (4Ps)

Product:

• Core Products:At the heart of KFC’s menu is its legendary fried chicken. With the classic buckets of crispy chicken, chicken sandwiches, mashed potatoes, and coleslaw, KFC knows how to deliver delicious food.

Source: KFC India Facebook

• Innovations:In India, KFC introduced the Veggie Zinger to cater to the local vegetarian population.
  This diversified their menu and showed a deep understanding of local culinary preferences. 

Price:

KFC employs a value-based pricing strategy, offering meals at various price points to appeal to a wide range of customers. Because KFC also serves burgers, it created an ad film to promote value burgers that were priced at Rs 69:

It also uses promotional offers to incentivize purchases. Bundle pricing is used to offer a package of products that is cheaper to buy than individual products. This strategy helps the brand to stay both competitive and profitable.

Place:

KFC’s strong presence in major urban centers is a key part of its success. They offer a mix of dine-in, take-out, and delivery options, ensuring that customers can enjoy their favorite KFC meals in whichever way suits them best.

Promotion:

Initially, Colonel Sanders used to advertise on TV:

After a stroke, he was unable to speak properly. But he was still the face of the brand and had to appear in the commercials. So, Ken Harbough, his restaurant manager, would take over it while he still was in the commercial, eating the chicken.

Once, he started licking his fingers which got some complaints from the viewers. Harbough instantly replied, “Well, it’s finger-lickin good.” And that became the brand’s tagline!

It perfectly encapsulates the irresistibly tasty nature of KFC’s food, making it a memorable and enduring part of its advertising. Not only this, it also has a good presence on social media. On Instagram, KFC mostly uses product showcases and announces offers

Throughout the page, it maintains its red-and-white aesthetic, establishing a cohesive brand identity that is easily recognizable by the audience. As the brand evolved, it introduced new campaigns.

For instance, when it wanted to target the youth and position itself as a hang-out place, it created ads like this:

Biryani remains the most popular Indian dish, and KFC capitalized on this by introducing biryanis on its menu:

These ads show how KFC keeps innovating in products and refining its approach to offer the best value to the customers as well as penetrate deeper into the consumer segments.

In a Nutshell

From its strong brand recognition and unique product offerings to its innovative pricing, distribution, and promotional tactics, KFC has consistently demonstrated an exceptional ability to connect with customers and adapt to changing market dynamics.

In India, KFC’s tailored approach has resulted in significant growth, making it a beloved brand among diverse demographics.

Key Takeaways from KFC’s Marketing

• Innovate with Local Tastes:Introduce regional menu items to cater to local preferences.
• Value-Based Pricing:Offer varied pricing to attract different customer segments.
• Multi-Channel Presence:Utilize dine-in, take-out, and delivery options effectively.
• Memorable Campaigns:Create lasting slogans and campaigns that resonate globally.