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Showing posts with label Colonel Sanders. Show all posts
Showing posts with label Colonel Sanders. Show all posts

Thursday, February 28, 2013

Stock News 2013: KFC launches China campaign to rebuild brand

Sanders remains the official face of Kentucky ...
Sanders remains the official face of Kentucky Fried Chicken, and appears on its logo (Photo credit: Wikipedia)

KFC launched a campaign Monday to rebuild its battered brand in China, promising tighter quality control after a scandal over misuse of drugs by its poultry suppliers.

The company, a unit of Yum Brands Inc., promised to test meat for banned drugs, strengthen oversight of farmers and encourage them to improve their technology. It said more than 1,000 small producers used by its 25 poultry suppliers have been eliminated from its network.

KFC is China’s biggest fast-food chain, with more than 4,000 outlets, but was hit hard when state television reported in December that some suppliers violated rules on the use of drugs to fatten chickens. The company estimates January sales plunged 37 percent.

“Starting now, we will stress strict management and the principle of zero tolerance in food safety,” Sam Sun, the chairman of Yum Restaurants China, said at a news conference. “We will immediately drop any supplier that lacks the determination or the ability to manage breeding well.”

The complaint against KFC was less serious than other product scandals in China over the past decade in which infants, hospital patients and others have been killed by phony or adulterated milk powder, drugs and other goods. But KFC’s high profile attracted attention, and its status as a foreign company with less political influence meant Chinese media could publicize its troubles more freely.

Yum, based in Louisville, Kentucky, said it expects sales in China to tumble by up to 25 percent in the current quarter. The company also owns Pizza Hut and Taco Bell.

CEO David Novak said earlier the company would need the “gift of time” for the controversy to die down. KFC has declined to say when it expects the business to fully recover.

The stakes are high for Yum. Even before the chicken scare, growth in China was slowing and fell into negative territory in October.

Executives blamed slower Chinese economic growth and the comparison with earlier explosive expansion. But KFC and other Western fast food chains also face mounting competition from young but ambitious Chinese rivals.

The locals started out copying global brands but are developing their own identity and the elusive skills to manage chains of hundreds of outlets and networks of far-flung suppliers.

One chain, Yonghe Dawang, copied KFC’s Colonel Sanders logo so closely with its image of a smiling, grandfatherly Chinese man that Western tourists did a double-take at its restaurants.

More recently, Yonghe Dawang has developed its own image and switched to a logo of a noodle bowl. Since being acquired by Jollibee Foods Corp., a Philippine fast food upstart that has expanded throughout Southeast Asia, Yonghe Dawang has expanded to 307 restaurants.

Zhen Gong Fu, which sells bowls of rice with beef, pork and other meat, has 479 restaurants nationwide. Other competitors include Master Kong Chef’s Table, with 100 outlets in 30 cities.

Executives note that Yum has bounced back from other troubles, such as an avian flu scare in 2005 that dragged down sales by as much as 40 percent.

http://business.inquirer.net/109339/kfc-launches-china-campaign-to-rebuild-brand

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Thursday, September 9, 2010

International News 2010: KFC tries to revive founder Colonel Sanders' prestige

Colonel SandersImage via Wikipedia
Our cultural connection to Colonel Sanders seems to have been lost in the deep-fryer of time.

Colonel Harland Sanders, the goateed founder of KFC known for his white suits, string ties and "finger-lickin' good" punch line, would have turned 120 years old today.

But young adults don't know him from beans. More than six in 10 Americans ages 18 to 25 — the chain's key demographic — couldn't identify him in the KFC logo, according to a survey last week by the chain.

Worse, five in 10 believe he's a made-up icon and three in 10 haven't a clue who he was.

That's why KFC is taking action. Today, the world's largest chicken chain, with 15,000 outlets in 109 countries, unleashes an online PR blitz aimed at bringing the Facebook generation eye-to-eye with the venerable colonel.

"As time has gone by, the younger generation didn't get to see and experience him like other generations did" in ads and personal appearances, says spokeswoman Laurie Schalow. "We plan to celebrate the fact that our founder was a real person."

KFC will be using its Facebook presence, Twitter, MySpace, the KFC website and other digital outreach to introduce them to Sanders and prod them to create and upload a piece of art that could become a painting to hang (temporarily) next to the famous Norman Rockwell painting of Sanders at the company's headquarters in Louisville.

The image confusion is in part KFC's own doing.

In the past few decades, it ping-ponged back-and-forth from fried-chicken-maker to grilled chicken specialist. In the logo, it put the colonel in a red apron instead of his iconic white suit. And it turned its Kentucky Fried Chicken name into KFC.

On a vaguely similar but much larger scale, Domino's late last year tossed out its pizza formula and mocked itself in ads that conceded the old pizza tasted like cardboard. Sales zoomed.

For KFC, it's been a rough year domestically. KFC's same-store sales fell 7% in the U.S. in the second quarter, facing a difficult comparison with the same quarter in 2009 when a new grilled chicken product was launched.

KFC has basically stopped growing in the U.S., and almost all growth is pegged to come internationally in 2010.


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