Things you didn’t know

Every day, nearly eight million customers are served around the world in KFC
restaurants.

www.kfc.co.uk

More than a billion of the Colonel’s ‘finger lickin’ good’ chicken dinners are
served annually. KFC’s menu still includes Original Recipe chicken – made to the
same recipe that the Colonel created more than 50 years ago. For years, Colonel
Sanders carried the secret formula for his Kentucky Fried Chicken in his head and
the spice mixture in his car.

KFC’s vision is to bring people of all ages, races and backgrounds together to
enjoy ‘Soul Food’ – ‘proper food at reasonable prices’ – within bright and fun
interiors. KFC is designed to be perceived as a fun and inclusive brand.
Offerings and Values
KFC’s ‘Soul Food’ strategy, introduced in 2003, was established at the very heart
of KFC’s business – the product. The company’s core products are Buckets, Burgers
and Twisters and Colonel’s Crispy Strips chicken with home-style side dishes. But
little had occurred in terms of new product development within KFC since 2001. The
‘Soul Food’ proposition gave new focus to the new product strategy. The first ‘Soul
Food’ product to hit the stores was ‘Warm Chicken Salad’. The success of this salad
has led to new variants being developed, and more ‘Soul Food’ products continue to
feature on KFC’s menus. The new positioning also impacted on the pricing strategy.
This was an offering for real people and as a result, it needed to be proper,
wholesome food, offered at a reasonable price. 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. The Mini Fillet
Burger launched in 2004 and has had a positive impact upon sales and perceptions of
the KFC brand. 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. Stores have been designed along the
key elements of the philosophy, and the bright reds, blues and yellows, which are
generic and expected within quick service restaurants (QSRs) have been replaced
with more natural colours and materials to make the atmosphere less plastic and
more real.

takeaways, supermarket ready meals and a raft of sandwich retailers. Moreover, the
media focus on the evils of fast food had fuelled concerns over healthy eating.
Consequently, the major players in the QSR sector were all experiencing significant
declines. In order to rise to the challenge, KFC needed to overhaul not only its
product and high street presence, but also its image. At the heart of this was the
‘Soul Food’ concept, which was most visibly and dramatically brought to life by
advertising, created with advertising agency BBH. In fact, ‘Soul Food’ proved to be
an effective creative springboard and led to TV executions that

amplified the holistic ‘Soul Food’ experience. Each execution was able to
communicate individual product messages, to different targets, on different
occasions. In striking contrast to the conventions of the category, products were
shown being consumed in the midst of the action. Gone were the generic cutaways to
flying drumsticks, raining lettuce and bouncing buns. Soul music has been an
important component of the advertising, providing KFC with a specific media
property that has helped to make KFC ads famous.

Market Context
The British food-service industry has posted positive growth, increasing by 25%
since 1999 and reaching value sales of £26.5 billion in 2004 (Source: Mintel). The
number of consumer foodservice units stood at 177,600 in 2003, representing a rise
of 6.8% on 1999. A total of 5,224 million transactions were achieved in 2003,
representing an increase of 15.6% on 1999 (Source: Euromonitor).

Achievements and Future Prospects

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. Over the course of 2004 and 2005, KFC successfully launched a new
‘Singing Soul’ campaign. This followed the success of the ‘Soul Food’ campaign in
2003 and 2004 and takes the brand essence throughout the business, communicating it
at all consumer touch-points. In the UK, KFC operates 680 stores. Globally, KFC is
owned by Yum! Brands Inc. (formerly Tricon Global Restaurants), which operates more
than 33,000 restaurants in more than 100 countries and territories. Four of the
company’s brands – KFC, Pizza Hut, Taco Bell and Long John Silver’s – are global
leaders in their categories. Internationally, Yum! Brands opens about three new
restaurants each day, ranking it among the restaurant industry’s fastest growing
international retailers.

1939
Colonel Harland Sanders creates Original Recipe Kentucky Fried Chicken.

1964
With more than 600 franchised outlets for his chicken in the US and Canada, Sanders
sells his interest in the US company for US$2 million, but remains a spokesman.

1966
Kentucky Fried Chicken Corporation grows rapidly, going public on March 17th.

1971
More than 3,500 franchised and company-owned restaurants are in worldwide operation
as Heublein Inc. acquires KFC Corporation on July 8th for US$285 million.

1982
Kentucky Fried Chicken becomes a subsidiary of R J Reynolds Industries (now RJR
Nabisco), when Heublein is acquired by Reynolds.

1986
KFC is acquired from RJR Nabisco by PepsiCo for approximately US$840 million.

1997
PepsiCo Inc. announces the splitting of its brands – KFC, Taco Bell and Pizza Hut –
into an independent restaurant company, Tricon Global Restaurants.

2002
The corporation name is changed to Yum! Brands, which is the world’s largest
restaurant company in terms of outlets, with nearly 32,500 in more than 100
countries and territories.

Innovations and Promotions

At the beginning of 2003, KFC’s business was in a challenging situation. Its market
was in decline, struggling in the face of increasing competition from pizza, ethnic

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