KFC Chicken case study

KFC, the world’s largest chicken restaurant brand, is targeting 100 quick service restaurants in India by 2010 – end. The $ 12-billion brand, which is owned by leading global restaurant company Yum! Brands, Inc. that also owns other brands like Pizza Hut and Taco Bell, is present with 34 outlets across nine cities in the country.

               The restaurant plans to close 2008 with a total of 50 stores. The business model of KFC is primarily a franchise one and the aggregate investment involved in this expansion will be Rs. 200-300 crore (estimate). KFC has recently inaugurated a quick-service restaurant in Kolkata which also happens to be the first in India to be manned entirely by hearing-impaired employees.

               According to sources, over the next one to one – and – a - half years, expansion will mainly be in the metros and cities where KFC already has a presence. The company would be subsequently looking into tier-II and tier-III cities. In this business, a lot depends on the back end, including the supply chain and vendors. The company needs to have the infrastructure in place, before it moves into these smaller cities.

               While growth will be primarily franchise-driven, about 20% of the new restaurants will be company-owned. The new outlets will come up both in malls as well as in high-street locations. This apart, KFC will also be aggressively expanding its menu in India by rolling out some 10-15 products over the next two to three years. Keeping Indian tastes and preferences in mind, it will have offerings suited to the India palate, low cost items as well as significant variety of vegetarian products. However, the brand does not want to compromise on its global image and will continue to uphold that. The restaurant wants to have 80% of offerings as international while rest will be especially for the Indian market.

               The company was in a spot of bother with the outbreak of “bird-flu” in some parts of the country. The company retorted to this by asking for a certificate of safety from their vendors. However, the company stopped serving chicken during the ban.

 Questions

1. Would the quick-service restaurants be successful in India? How can you use marketing research to help the   company succeed in its project of quick-service restaurants?                                                                                     

 2. What tactics and strategies would you adopt to retort to bird-flu or other contingencies like this? How can marketing research be helpful in this?  

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