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Kfc Japan Case Study Analysis

Describes the internationalization of Kentucky Fried Chicken (KFC) fast food chain, focusing on the entry into the KFC in Japan. Entrepreneurial country general manager Lou Weston, battles with multiple problems of business creation, and ultimately very successful. At the same time, Weston ignores or circumvents policy and management from the headquarters of KFC and gets very upset when more sophisticated planning, coordination, monitoring and systems begin to restrict his freedom. The case presented as the headquarters and subsidiary perspectives and allows discussion of the conflict between strategic planning and control, and entrepreneurial independence in a multinational company. "Hide
by Christopher A. Bartlett, U. Srinivasa Rangan Source: Harvard Business School 19 pages. Publication Date: November 20, 1986. Prod. #: 387043-PDF-ENG

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Kentucky Fried Chicken (Japan) Ltd.

Tell me something. When was the last time you, your family – or, for that matter – any of your friends who celebrate Christmas, woke up on Christmas morning, rubbed crusty eyes from shopping hangovers, and said: “Hey, let’s go get a huge bucket of deep fried, fat-drenched chicken from KFC?

Well, in Japan they do. Though if you haven’t reserved your KFC Christmas bucket weeks in advance, you’re probably stuck in a ridiculous line.

All is not lost: lucky line-waiters might get a view of Colonel Sanders dressed as Santa Claus. The story behind KFC in Japan on Christmas is an instructive tale of diabolical marketing genius we all can learn from.

KFC in Japan – by the numbers

The numbers are finger-lickin’ good. As BBC reports:

  • Every Christmas season an estimated 3.6 million Japanese families treat themselves to fried chicken, in what has become a nationwide tradition.
  • Daily sales at Japan KFCs can run ten times the usual sales volume. KFC says that the special Christmas meal packages can account for as much as 1/3 the annual sales in Japan.
  • Customers who don’t order ahead must wait in lines that make United Airlines holiday service lines seem speedy by comparison.
  • Christmas Eve is the sales peak. For employees, it’s all hands on deck. In 2012, The Smithsonian reported that back office staff and executives pitch in to ease the Christmas Eve lines.

KFC on Christmas – “It’s not about the chicken”

But the real achievement goes beyond numbers. “KFC on Christmas” has embedded itself in Japanese culture. The BBC tells of the Ando family:

But for [Ando], he sees the tradition as more than just a company promotion. It’s not about the chicken. It’s about getting the family together.

KFC means family on Christmas day:

On Christmas night, the family will gather around the KFC bucket, just as Ando once did as a child, and just as his children will do in another generation. “It’s kind of a symbol of family reunion,” Ando says. “It’s not about the chicken. It’s about getting the family together, and then there just happens to be chicken as part of it.”

Contrast that with the shock of showing up to Christmas dinner in the U.S. with KFC. Kevin Gillespie, a chef from Atlanta, sums it up well:

If you brought a bucket of fried chicken to Christmas dinner, honestly, I’d be mad at you.

According to the BBC, the story dates back to 1970. Not long after the first KFC opened in Japan, store manager Takeshi Okawara woke up at midnight. The idea came to him in a dream: a “party barrel” to be sold on Christmas.

Okawara’s idea was spurred by overhearing foreigners in his store talking about missing turkey on Christmas in Japan. So, the legend goes – why not chicken? In 1974, KFC took the program national, dubbing it Kurisumasu ni wa Kentakkii – or “Kentucky for Christmas.” A big advertising blitz in 1974 took hold. The catchphrase, which some report as “Christmas = Kentucky,” took hold.

The rest is marketing history. Okawara did pretty well also. He climbed the proverbial ladder, serving as president and CEO of Kentucky Fried Chicken Japan from 1984 to 2002.

The opening was there: there isn’t a Christmas tradition to speak of in Japan (only 1 percent or so of Japan’s population is Christian). Why not fill the void with… buckets of chicken? The offering has evolved – now families can get meal-sized boxes with chicken, wine and cake. A Kentucky Christmas dinner ranges from a box of chicken (3,780 yen, or $32), to a “premium” whole-roasted chicken and sides. That will run you 5,800 yen (50 bucks).

My take – diabolical marketing lessons

I don’t call these lessons diabolical because KFC managed to gain cultural relevance in Japan. That’s up to the Japanese. But there is something wickedly clever about twisting the U.S. narrative.

Some lessons:

  • Start small with a localized campaign; double down hard on what works.
  • Take advantage of global reach – but only in the context of cultural nuances.
  • Have people on the ground who grasp the culture – and who are given the freedom to bring ideas forward.
  • Ensure you are pulling customer feedback into future offerings. Complaints are the seeds of winning ideas, but are often buried or ignored.
  • Look for openings that are not filled by other traditions and habits.
  • Create a perceived need from nothing.
  • Brand so that people feel like losers if they aren’t part of it. (See a recent KFC for Christmas commercial)
  • Adapt the product or service for cultural appeal (adding wines, cakes, etc). Don’t impose your solution or culture; blend with local rituals.
  • Convince people they are a part of something special by participating in your brand. Allow them to own it in a way that downplays its corporate origins.
  • Make your product so culturally appealing that the downsides of the product are irrelevant (in KFC’s case, the highly questionable nutritional value of their core offering).

KFC would probably take issue with my nutritional potshots. They’d point out that turkey aside, once you pile on the gravy, stuffing, fried green beans, desserts, and general overeating, that a KFC spread is not nutritionally inferior to a traditional Christmas feast. It would be a fair rebuttal.

Americans don’t want to see you on their Christmas doorstep with a bucket of KFC – but they might not have a nutritional leg to stand on. Unless you have a “free range meats only” advocate at your Christmas table. Oh, and maybe don’t read the 35 day life of a KFC chicken before ordering yours. KFC is also under pressure to cut human antibiotics from its chicken raising, something McDonald’s has already eliminated.

On the progress front, KFC’s nutritional info says they now only cook with Canola Oil, which has zero grams in trans fats. That’s not new to KFC – they’ve cooked without trans fats since 2006.

The rise of fast-but-healthier food is a trend I’ve seen in multiple countries via EAT, Pret and so on. That’s a KFC battle for another time. Two days before their big day in Japan, I’ll tip my cap to a cultural and marketing accomplishment that may be a tad diabolical, but has stood the test of time.

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