Innovation and New Product Development Case Study

KFC's New Grilled Option: Contemporising Its Legacy

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Abstract:
In 2008, the US based Kentucky Fried Chicken Corporation (KFC), a global fast food chicken chain, faced a major dilemma. Though KFC grew significantly in the international markets, its domestic market sales were stagnating. The key attitudinal shift towards healthier foods among Americans was driving significant changes in the business environment for the fast food companies. KFC, primarily associated with fried chicken recipes, faced critical growth challenges. To de-emphasise its association with the fried form of chicken, which was largely considered as unhealthy, KFC decided to expand its menu with Kentucky Grilled Chicken. The move brought in a set of new issues and challenges for the KFC. Analysts believed that moving away from its core competency might alienate its loyal customers. Furthermore the Colonel's legacy attached to the brand was also at risk with such an offering. Whether KFC's move into the non-fried chicken category would make a successful strategy in the long run was yet to be seen.

Pedagogical Objectives:

• To analyse the dynamics of the fast food industry in the US.
• To understand the role of product mix.
• To analyse the opportunities and challenges in addressing changing customer attitudes.
• To understand the issues related to product cannibalisation.

Keywords :  KFC or Kentucky Fried Chicken, Fast food industry, Consumer behaviour, Product mix, Product cannibalisation, Marketing mix, Growth strategy, Core competency, Brand dilution, Fast food chain, Market segmentation, Business environment, Brand positioning, Competitive dynamics, Colonel Sanders