3.2.

KFC (Pinku)

3.2.1. Introduction

Kentucky Fried Chicken (KFC) also known as Kentucky Fried Chicken in Vietnamese.
KFC is owned by the YUM group, Restaurants International (YRI), which operates the
world's largest restaurant chain. After McDonald's, KFC is the second most popular fast-
food restaurant in the world, ahead of Pizza Hut and Starbucks. KFC specializes in
chicken fast food, with Kentucky Fried Chicken being the most well-known. Although
the key ingredients in KFC products are the same, they are varied to produce a variety of
classes, sizes, and dishes. With the above main dishes, the portion and taste of the dish
will be adapted according to each country's customs and culture while maintaining fair
prices. KFC currently operates over 10,000 franchised restaurants in over 90 countries,
employing approximately 273,800 people worldwide.

3.2.2. Competitive Advantage

KFC's competitive advantage is its supply chain and distribution system. This allows the
fast food giant to cultivate relationships with business partners and establish a footing in
regions where the competition is still struggling. Because KFC's supply chain and
distribution system is so well set up around the world, it has less difficulty than other fast
food giants in establishing a presence, especially in less saturated areas where there is
still much opportunity for growth.

KFC is also able to compete effectively because of its famous trade secret, includes 11
different herbs and spices, which make unique Kentucky fried chicken that sold all over
the world.

3.2.3. Business Strategies of KFC in Vietnam

a. Localization strategy

An important strategy of KFC that has contributed to their success not only in Vietnam
but other countries is its localization strategy. This strategy means KFC devotes a
significant amount of time and money to researching local eating habits. KFC develop
and produce similar cultural fast food based on eating habits. The perceived value
generated from KFC's menu would directly benefit customers. KFC's local cultural
approach aids in customer retention. For example, in addition to traditional dishes such as
fried chicken and hamburger, when entering Vietnam, KFC has processed some more
dishes to serve Vietnamese dishes such as: boneless crispy chicken, soft bread, chicken
gravy rice, Jumbo mixed cabbage ... The size of Hamburger has also changed, becoming
smaller, which is more suitable for Vietnamese people’s diet. The product catalog is
arranged in many categories to help consumers easily choose their favorite foods. This
category includes traditional fried chicken, convenient every day, children's meals, soft
 drinks, snacks, side food, economy every day, salad and desserts. Besides, new items
have been introduced to the Vietnamese market, contributing to the diversity of the list.

b. Densely distribution system

In Vietnam, KFC has densely distribution system, placed in convenient places for
customers. It is expected that by 2022 there will be 180 KFC stores across the country.
Furthermore, KFC stores all own very beautiful locations, located in front of large, well-
ventilated streets. KFC also chooses restaurant locations at supermarkets and shopping
malls, where the number of shoppers is very large.

This shows the strategy of expanding distribution channels in many localities to reach the
maximum customers. Stores are concentrated in major cities such as Hanoi and Ho Chi
Minh City as this is considered a focus of the target group of businesses. With such a
large coverage, the distribution strategy is included in KFC's Marketing Mix strategy to
create more convenience for customers when they want to search for their nearest KFC
store. This saves travel time, but customers do not have to go too far from their place to
get a meal at KFC
This shows the strategy of expanding distribution channels in many localities to reach the
maximum customers. Stores are concentrated in major cities such as Hanoi and Ho Chi
Minh City as this is considered a focus of the target group of businesses. With such a
large coverage, the distribution strategy is included in KFC's Marketing Mix strategy to
create more convenience for customers when they want to search for their nearest KFC
store. This saves travel time, but customers do not have to go too far from their place to
get a meal at KFC
This shows the strategy of expanding distribution channels in as much localities as
possible to reach the maximum customers. KFC concentrated in opening stores in major
cities such as Hanoi and HCM city with an aim to reach their target business group.

c. E-commerce application

For approximately 8 years ago, KFC had launch mobile application in order to make it
easier for customer to make the order online, instead of directly call on the restaurants’
hotlines. However, in the beginning of 2020 the new KFC App is available for free on the
App Store and Google Play Store, with more news and exclusive offers.
 The new app still keeps features that are already existed in the initial version such as
digital coupon offers and option of finding near restaurants. But now, the new app with
new style which increasingly distinctive KFC are even more attract with the invention of
an e-commerce channel for the “click and withdraw” service. Through this app, customer
can conveniently make an order, booking tables before arriving to the restaurant, and the
order will be well prepared before the customer come. Furthermore, customer now can
even pay directly from the app with credit card or Satisfpay which will minimize waiting
times and avoid queues.

In the new digital platform, more attractive and usable, information is instantly
accessible. This is an essential requirement for the generation that KFC is targeting.

3.2.4. Achievements and challenges

a. Achievements

Success is expected during 7 years of persistent "loss compensation" with a conservative

development strategy. Until the trend of approaching the new of urban youth took the
throne, KFC now can expanded its chain of stores across the country with more than 140
stores across 14 provinces.

Every year, kfc attracts about 20 million domestic tourists, accounts for about 60% of the
fast food market in Vietnam and has a turnover of more than 1500 billion VND. KFC's
image has deeply imprinted on the Vietnamese subconscious.

b. Challenges

The first is the textual culinary difference between the East and the West. When KFC
started to do business in Vietnam, KFC's products were still too unfamiliar, and users did
not really pay attention when the media of the nation was always attached to family
meals, with rice and heating air, being warm for each special person in the family, going
to a crowded door and not having private space like KFC is an inconvenient and unhappy
condition.
 The next problem is the system supermarket: the commercial center in Vietnam is not
growing fast enough, it cannot answer the application for KFC to develop the restaurant
system. In addition, the infrastructure system, roads in the urban centers are not sturdy
and sturdy enough, there are many residential areas but poor infrastructure and quality
make distribution activities difficult.

Finally, the competition problem: entering Vietnam at the same time as KFC is Lotteria,
the main competitor of KFC. In addition, in Vietnam, there are two domestic competitors
competing on this stage: Mc Donald's and Burger King.

3.2.5. Conclusion and lessons

a. Lessons

From the success that KFC has achieved, there are some great lessons that other
enterprises should follow:

- Strong financial potential

KFC has entered Vietnamese market since 1997, however, it was not until 2006,
which means 9 years later, that KFC can make profit and became successful like
today. There are not many businesses that can endure losses that long.
 - Properties

The façade, paint schemes and décor, arrangement of indoor ordering and dining
areas, lighting levels, and bathroom facilities are examples of tangible materials that
hold the building together. As a result, theses are crucial in helping the restaurant
stand out from the competition. With colors across all the restaurant home and
abroad, it becomes easy for consumers to identify KFC outlet everywhere they see
one.

- Products

These are the menu items they sell, along with the names and details of each dish.
Except for some side dishes that are customized to the taste and preference of the
locals, size, food presentation, smell and taste, food ingredients, nutrition, balance,
and assortment tend to be uniform across the globe. In this world of migration, similar
products make identification easy.

International marketers have long recognized the need to adapt goods and services to
the diverse needs and preferences of consumers in different countries. As a result,
KFC has tailored its side dishes to the preferences of the people in the countries
where they do business. In the case of McDonald's, such standardization, along with
the company's sheer ubiquity, is one of the reasons why it has become an icon, and to
some opponents, a victim, of overbearing globalization and even "American cultural
imperialism."

- Presentations

Employee appearance, quality, and courtesy seem to be consistent across their outlets,
as well as in-store settings (trays, tableware, napkins, and so on).

- Publications

Advertising, web sites, outdoor signs, and trade characters are all examples of this.
No matter where they are located, all publications appear to be the same. When
customers are engaged in an intimate, unforgettable way, ordinary service encounters
become experiences.

b. Conclusion

KFC has been around for a long time spanning over some five decades over which it
has gained a strong foothold in the fast - food industry. As the market leader in fried
chicken, it can be safe to conclude that KFC is in the maturity stage in the product life
cycle. While it currently a dominating presence in the industry, changes in consumer
preferences, the entry of new fast-food chains and their increasingly out - of - date
marketing system threatens to send KFC into the decline stage of the Product Life
 Cycle unless the organization takes on certain changes that keep KFC up to date with
the current market.

Although currently KFC is the market leader in Fastfood industry in Vietnam with
significant market share of 79%, KFC is still confronted with the fierce competition
from other potential competitors, particular is Lotteria, and also the newcomer:
McDonald’s. Consequently, KFC needs to make provisions for the future.

Reference:

http://www.aabri.com/SA2018Proceedings/SA18012.pdf

https://doanhnhansaigon.vn/thoi-su-trong-nuoc/kfc-7-nam-chiu-lo-va-chien-luoc-than-trong-
1027725.html

https://123doc.net/document/5536709-chien-luoc-canh-tranh-cua-lotteria-tai-thi-truong-viet-
nam.htm

https://mpk732t12016clusterb.wordpress.com/2016/05/14/kfc-a-giant-of-fastfood-intrustry-in-
vietnam/

https://www.brandsvietnam.com/20915-Thi-truong-fastfood-Viet-Tang-doanh-thu-hon-40-
Jollibee-tro-lai-cuoc-dua-bam-duoi-KFC-Lotteria?
fbclid=IwAR1RjMqdWOpCiibdvBvZJrYlYo1sfJe_Sdmjj3agHA634mL2TD80SeswFpA