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KFC - Marketing Strategy

Paper type: Essay
Pages: 22 (5407 words)
Categories: Business, Fast Food, Food, Marketing
Downloads: 30
Views: 742

The purpose of this paper is to critically evaluate the marketing strategies of KFC (Kentucky Fried Chicken). The researcher will analyze how the organization creates superior value and builds strong relationship to capture value from customers in return. The paper explores facts for building and maintaining profitable customer relationship by delivering superior value and satisfaction. The researcher is going to investigate the social obligations of the company to observe the impact organizational policies on the environment, community, health of the consumer and use of available resource At the end the researcher will suggest how the company can design customer driven marketing strategy for acquiring, retaining and attracting new customers.

The paper also focuses on creating superior value and satisfaction through blissful marketing and communication programmes.


KFC which stands for Kentucky Fried Chicken formed in 1930 and based in Louisville is the world’s famous chicken restaurants chain specializing in original recipe, extra crispy, Kentucky grilled chicken etc.

Everyday more than 12 million customers are served in more than 109 countries and regions. KFC operates more than 800 restaurants in UK, more than 5200 restaurants in USA and more than 15,000 restaurants around the globe. KFC is part of YUM brands corporation, the world’s largest restaurant company in terms of system restaurants with more than 36,000 locations around the world. The company is ranked 239# on fortune 500 list, with revenue in excess of $11 billion in 2008.

KFC is as committed to the environment as we are to our food and to our customers. We are proud of the steps we have taken so far to reduce our environmental footprint and are committed as a brand to do even more in the in future. It’s an ongoing journey that we’re on and we want to keep you – our customers – informed along the way! KFC introduced first reusable fast food container in 2010. The company replaced plastic plates with paper serving boxes and reduced use of non-renewable resources like styrofoam from the restaurants. By 2011 the company will reduce foam and plastic use by 62% and 11% respectively. Note: You can check the entire history of the corporation at http://www.kfc.com/about/pdf/timeline.pdf


It is the process by which the company creates value for the customers, builds strong relationship with the consumers and captures value in return. (Kotler, 2007) Let’s use the simple model of marketing process to assess the secrets behind the success of KFC.


The basic reason behind the success of KFC is their ability to understand the marketplace and needs of the customers. KFC conducts consumer research to go great length in learning about their market, competitors and customers. Consumer’s wants are satisfied by providing superior value and satisfaction. Other factors behind such a resounding success are the capability of company to understand whom to serve, how to serve by integrating customer driven marketing strategy and how to capture the value in return to build long term profitability. The company has adopted the concept of increasing the share of the customers rather than increasing product market share.


After successful segmentation the company decides about how it will serve the customers to differentiate and position itself in the market place. Through value proposition the company creates set of benefits that distinguish itself as a premium brand in the market. the company provides superior food and dining experience to kids, families and visitors in order to discover dinning and to differentiate itself from competitors. The company offers products that offer most in quality, performance and taste. Due to service oriented nature of the hospitality industry; the company maintains customer-centred sense of marketing by developing the right products for their customers instead of finding the right customer for their products.


The primary goal of developing a customer driven marketing strategy is to build strong and profitable relationship with the customers for accomplishing short and long-term organizational goals. Through market segmentation, targeting and positioning the company divides its overall market into smaller segments to be served effectively. It identifies the needs of the target market by selecting the most promising segments and then delivers premium value in order to foster customer satisfaction and loyalty. In order to design a best marketing strategy and marketing mix; the company makes use of environmental analysis, marketing analysis, planning, implementation and control measures.

To survive and be competitive in the market; KFC designs customer oriented strategies to win customers from their competitors and to grow by delivering superior value. The managements is aware about the cost of having dissatisfied customers who disparage the products to other individuals. Therefore they design products and services that are appealing to all the consumers.


At first place the company decides whom it will serve? By dividing the target market into different segments like Family, Kids, Visitors, Tourists, Professionals, age, region, culture etc and then developing superior value for specific segments. Market segmentation enables the company to select and serve only those segments offering the best opportunity for achieving the organizational goals and objectives. Consumers are grouped and served based on demographic and geopgraphic factors. The segmentation also enable the company to analyze the behavioural patterns, affordability, best communication and delivery channel.


After the careful selection of the segments, the company evaluates the attractiveness and profitability of available segments. Based on such findings the company selects segments pledging for superior customer value, generating more profitability and where it can sustain value over time.


In order to make a clear, distinctive and desirable product image before the target market; KFC makes use of competitive intelligence to get useful information about their competitors for gaining competitive advantage in the market, benefiting from first mover advantage (FMA) and for having a competitive prices. The company sustains the competitive advantage by having lower prices than competitors and providing more benefits. The company differentiates itself through by rewarding customer loyalty and appreciating staff’s or customer’s input for customizing their menu. Another useful tactic used by the company is the selection of medium through which the information is distributed (disseminated) to the general public for maintaining the desirable brand recognition and picture. The company effectively uses all the available media (print, electronic etc) for targeting the potential customers and creating a distinct corporate image.


It is the set of controllable tactical marketing tools that the company blends in order to get the desired response from the target market (Kotler, 2005). It includes everything that the company aspires to influence demand in the target market.


KFC offers tasty and convenient food to customer at nominal prices. The company produces products for family, kids and people of age groups to discover dinning. Although company has done alot for offering quality food to the target market but critics point that hamburgers, friend chicken, fries, and snacks contain high fat and salt. Sometimes meals are “Super sized” leading to over eating and becoming an evident cause of obesity epidemic. Although the products are wrapped in convenient packaging but raise demands for handling substantial waste and pollution. KFC being the largest fast food supplier generates tons of solid waste every day where significant percentage isn’t recyclable and lasts longer on the landfills. Therefore in the shorter run the company is satisfying consumer needs but creating environmental problems in the longer run.

The company has a reputable image and brand name in the world for producing quality food with essential nutritions, healthy ingredients, low calories and drinks containing needed minerals. Customers can easily get the information about the products from the company’s website with guidance on how the product is made, customer can also customize product on their own premises and change the ingredients to their likings. All the burgers are filled with chicken breast only. Recently the company invest The company invests £1 million per annum to switch to nutritionally superior high oleic rapeseed oil; following that recently company announced to use only high oleic rape seed oil in all products and aborting the use of palm oil.

The company has variety of things distinguishing itself from the competitors operating within the same industry. Some of the defining aspects distinguishing company from its competitors are easy to cook food, elegant packaging and status value. Buyers don’t estimate the product’s values and costs objectively and are only persuaded by perceived image of the company and its food in the market.


The company deploys yield management to come up with competitive prices for their products. The prices are really low due to large number of players penetrating in the same market or industry and satisfying consumer needs. More than anything it’s the “brand identity” influencing people to acquire the product. The company also uses “Augmented Product” concept in order to boost the sales, provide special discounts and schemes for rewarding loyalty. The company has s different prices for different segments based on number of servings.


The company greatly emphasizes on customer convenience for obtaining products/services therefore have designed free standing outlets so that customer’s are not few minutes walk away from the outlet, suburbs, cities or high street. The outlets are positioned at all major shopping malls, train stations, cities, city centres and suburbs so the cost of reaching the market, acquiring and disposing the product is low. Apart from expressing deep concerns for customer health issues; the company directly interacts with the target market by providing toll free number and facility to go online for reserving orders. The company has also adopted the concept of “Direct Marketing” where consumers can buy virtually anything without going to the outlet by telephone, mail-order catalogue or by visiting online. KFC uses www.kfc.co.uk or www.kfc.com for direct marketing.


KFC deploys different activities for communicating the merits of their products and persuading customers to obtain their products/services. The company uses print and electronic media to target the potential customers and for maintaining a distinctive image of their products/service before the public. KFC has the presence on different social websites such as Facebook, Flickr and Linkedin to promote the products. The company spends considerable amount of money for Advertising and Selling.

The marketing experts design different TV Ads for promoting the products, targeting the individuals, disseminating the merits of products and attracting new ones. The company also uses bill boards, sign boards, print publications, brochures, magazines, printing success stories in the newspaper and forming partnership with other famous organizations to boost selling and preserve an elative face before the public. Recently the company was ranked as a Britian Top Employer and recognized as a great place for work on the basis of following catalyst characteristics performance recognition culture, friendliness, team work, career progression, advancement and development opportunities.


Apart from being good at marketing, KFC pays significant attention to management that includes in depth market analysis, planning, implementation and control. The company gathers lot of information about the market to analyze whether the window of opportunity is opened for their products before actually marketing products to the target market. The company first develops marketing oriented mission statement, then develop strategic plan for products, services, brands and target markets. After thorough consideration and planning the company turns plan into actions.


The environmental or PEST analysis is used to assess the industry in which the company is operating and is used in conjunction in SWOT Analysis to find out major opportunities or threats facing company. The company can use such techniques to examine the internal or external forces affecting their ability to provide superior value to customers at a fair price. The pest analysis of the KFC is as under


KFC has partnered with several government and non-government organizations to effectively circumvent barriers influencing to deliver premium value to customer. Many consumers and environmental groups have raised their voice against fast food giants providing junk and unhealthy food to consumers. Critics suggest that hamburgers, French fries, fried chicken etc are high in fat and salt. The government has also restricted the fast food giants not to market the food to under age groups and regulated the companies to modify their product menu that doesn’t contribute to national obesity epidemic. Critics feel that fast food companies are harming consumer health and providing fat food. Recently KFC signed up to the Government’s Public Health Responsibility Deal, promising to include calories on menu boards.

The company will also be launching a ‘Lighten Up’ initiative at point of sale by offering customers an opportunity to lighten up their meals for free or by swapping a regular drink to diet, and fries for corn or beans – saving up to 295 calories. The company was also the first QSR to introduce salad to the menu and to stop salting its fries, and eliminated artificial trans fats in 2007 by removing hydrogenated vegetable oils from its menu. Furthermore, a salt reduction programme launched in 2005 has so far cut salt by up to 40% across the menu. The company has adopted fair trade practices e.g having the culture of equal opportunity employment, minority rights, accurately declaring business income, paying taxes. In united states Food and Drug administration, Consumer product safety commission set safety standards for the products and penalize companies failing to meet them.


The management keeps an eye on ongoing economic events so that the company isn’t affected by economic volatilities or uncertainties. The company closely monitors per capita income of consumers in different regions, ongoing inflation affecting buying behaviour and exchange rates limiting their ability to obtain or import material from suppliers. The company gathers all that information to exploit from labour market imperfections in the international arena and from expanded opportunity rationale.


The company deploys Societal Marketing in order to maintain the equilibrium between consumer short-run wants and long-term welfare; the company has established strict guidelines for portraying a favourable public image and to sustain brand recognition. KFC is a company that satisfies the needs of the target market by doing what’s best for them in the longer run? To curb the concerns of consumers and environmental groups the company has taken different initiatives to look after health and safety issues of their employees and customers in particular. Recently the company introduced “Brazer (non-fried, griddled range”, to consistently improve the nutritional profile of their menu (products), to fulfil promises made about health and to cut down the level of saturated fat.

The company has also done partnership and signed memorandums with other organizations to look after public health issues. Recently the company was ranked as a Britain top employer and as a pleasant place to work for individuals. The company executive disclosed that the company provides advancement opportunities to individuals on merit and encourages team work and individual participation. The company established environmental leadership council in 2006, became a member of Considerate Contractor Scheme and presently working with Carbon Trust to reduce energy emissions. The company has also taken initiatives for reducing carbon footprints, making efficient use of natural resource e.g water, electricity etc. The company has also formed alliance with environmental defence system to handle solid waste and maintain environmentally favourable image.


The company is operating in a rapidly changing environment creating new opportunities and posing threats. The new technology creates new opportunities but the of replacing new technology is always high. The company is aware about the cost of ignoring new technology and its side effects as well. KFC is a company that keeps with the technological changes and refines its product menu on regular basis. Such changes have resulted in much higher research and development costs; due to the complex nature of the technology the marketers and consumers must have technical know how.


SWOT ANALYSIS is the acronym of Strengths, Weakness, Opportunity and threat; is a strategic tools used by the company to analyze the circumstances in which the company is operating. Strengths and Weaknesses are the internal factors on which the organization has total control where as Opportunities and threats are the external uncontrollable factors.

Strengths of KFC

* Favourable public image and Brand Equity
* Second largest fast food supplier after Macdonalds
* Global Existence
* Nominal Prices
* Customer Convenience
* Professional certifications and awards
* Proactive management
* Britain’s top employer and great place to work
* Flexible Franchising bringing considerable revenue
* Customer Equity
* Organizational culture

Weaknesses of KFC

* High labour turnover
* Junk food
* Same taste twice
* Lack of innovation
* Cultural clash of two titans namely Pepsi and KFC
* Hygienic food problems as one of the outlet in America was declared rat infected

Opportunities for KFC

* Rapidly changing economy and global trends
* Increased demand for convenient food
* Pursue Conglomerate Diversification for health conscious people * Increased diversity
* Global market imperfections
* Expanded opportunity rationale

Threats for KFC

* Saturated Market
* Increased Competition
* Rapidly changing technology
* Legal legislations and political regulations
* International political chaos
* Low variety
* Availability of substitute products
* Threat of new entrants
* Bargaining Power of Customers
* Lack of competitive intelligence
* Health and safety concerns
* Environmental and Government Regulations


It is a portfolio mangement tool for identfying growth opportunities through market penetration, market development, product development and diversification. The model is depicted as

Since its inception the company has used different tactics in order to hover around in the international market to market their products to domestic, national and international consumers.


In 1930 the Harland Sanders opened his first restaurant in Corbin in front of gas station.


In 1937 Sanders Court & Café added a motel and expanded the restaurant to 142 seats.



In 1960 Colonel’s hard work on the road begins to pay off and there were 190 KFC franchisees and 400 franchise units in the U.S. and Canada. In 1964 Kentucky Fried Chicken had more than 600 franchised outlets in the United States, Canada and the first overseas outlet, in England. In 1971 the company had more than 3,500 franchises and restaurants worldwide when Heublein Inc. acquired KFC Corporation. At the end of 1979 the company had There are approximately 6,000 restaurants worldwide with sales of more than $2 billion.


In 2007 KFC introduced a new recipe that keeps the Colonel’s 11 herbs and spices and finger-lickin’ flavor, but contains Zero Grams of Trans Fat per serving thanks to new cooking oil. In 2008 The Colonel had a new look! KFC updated one of the most recognized, respected and beloved brand icons with a new logo. The new logo depicted Colonel Sanders with his signature string tie but replaced his classic white double-breasted suit with a red apron symbolizing the home-style culinary heritage of the brand and reminded customers that KFC is always in the kitchen cooking delicious, high-quality, freshly prepared chicken by hand, just the way Colonel Sanders did 50 years ago.


In 2009 KFC introduced Kentucky Grilled Chicken™ – a better option for health conscious consumers to care for their long run welfare in order to capture the entire stream of purchases they would make for the rest of their life. Kentucky Grilled Chicken had less calories, fat and sodium than KFC’s Original Recipe® chicken, without sacrificing the great taste of KFC.


In 2011 the company launched first ever non-fried range the Brazer! that is is a lighter, great-tasting alternative to KFC’s existing menu, and includes three new items; a burger, a Twister (a tortilla wrap) and a salad, each of which are lower in calories (by up to 60%), fat (by up to 87%), saturated fat (by up to 82%) and salt (by up to 45%) than regular menu items. The company has been using the Ansoff’s product market expansion grid by introducing the existing products internationally, providing halaal food to different communities opening new market and needs to be satisfied, by modifying the nutritional profile of their menu and by slightly changing the cooking ingredients at times.


According to Philip Kotler (2007); customer relationship management is an art of building and maintaining profitable customer relationships by delivering superior value and satisfaction. KFC has developed an extensive database about their customers in order to track touchpoints where they can deliver superior value and maintain profitable relationship with the customers. The major reason for the success of KFC is their ability to offer products having “highest customer perceived value” and exceeding the “customer perceived value”. Another reason of such a phenomenol success is the capability to market products whose perceived performance normally exceeds customers expectations. Beyond offering high quality products; the company has designed several customer loyalty and retention programs by rewarding customers on frequent purchases.

The company also uses “Selective Relationship Managment” by undertaking customer profitability analysis where overall motive is to weed out loosing customers and target winning ones for pampering. The company creates profitable customers by providing exceptional quality products and delivering customer oriented superior value. The company knows that losing a single customer means losing the entire stream of purchases the customer would make over the entire lifetime. The firms leverages CRM to offer great variety to customers in order to increase the “Share of customers” rather than the “market share”. KFC examines its relationship with social values, responsibilities and the Earth that sustains it.

Recently the company announced to cut the use of plastic by 17% and foam by 62% for the year 2011. The social responsibility and environmental movements have placed even strict demands on the company. As KFC is a forward looking company so it readily accepts the responsibility to the world and people around it. The company views such actions as an opportunity to do well by delivering good (new slogan of the company is “So Good”). The company compares the “opportunity cost” of its actions against the long-run interests of the customers and communities. The company has also taken initiatives towards Data Protection and Privacy Issues to curb the misuse, scam or phishing.


Public relation is an art of managing communication between the organization and the public with an objective to create and maintain favorable public image. KFC uses different communication tools for building awareness about their products and for preserving socially image in the marketplace for their products and services. The company deploys numerous equity or perceived value and dent the reputation of the organization in the market. All the efforts are aimed at helping the public to understand the company and its products in more depth. The company sends “mystery shoppers” to different outlets to unveil defects in service or product. The company also gathers a lot of information about the customers and different topics of their interests to leverage relationship for building a strong public image.

Apart from using different media in order to influence the public; the comany also deploys lobbying, printing success stories in the newspaper, launching products, posting particular achievements online and by sponsoring UN HUNGER FOOD PROGRAM for providing food to needy people. Recently the company was nominated as the great place to work for individuals and was awarded an award of Britain Top Employer. Such measures play critical role in achieving a competitive edge, attracting high calibre individuals, creating and delivering superior customer value; moreover protecting the well being of the company in the time of crisis.

Yum! Brands which is the parent of KFC has formed an Animal Welfare Advisory Council whose role is to get information and advice based on relevant scientific research. The company also obtains positive headlines in the media by showing the commitment to the environment and by productively (efficiently, frugally) using the natural resources. In 2010 the company introduced fast food reusable container. The corporate policy is to reduce the usage of non-renewable resources, cut down the use of Styrofoam and carbon foot prints. In that respect the company is using the concept of “Subsistence Economy”. The company has also developed guidelines, limitations, and rules (restrictions) for the suppliers in the broiler industry. The company is also proud to be a prominent player in the collaborative effort conducted by National Council of Chain Restaurants and the Food Marketing Institute in developing comprehensive guidelines for all species of farm animals. The company has also implemented programs in the area of poultry care and handling.

The company has initiated partnership with Barnardo’s, the UK’s biggest charity supporting children and young people to address the issue of youth unemployment. The company is backing the United Nations’ World Food Programme against world hunger by raising over half a million pounds last year – that’s about 3.35 million meals for children in some of the poorest regions of the world. The company is also implementing the concept of “product liability” where the manufacturer is responsible for the faulty product or any damages made by the product to the consumer. In the past the companies were sued, dragged in court and evicted on ignoring the product liability obligations.

For instance when considering the tragic tampering case in which eight people died from swallowing cyanidelaced capsules of Tylenol; a Johnson & Johnson brand. The company knew that the pills were altered in some stores not in the factory so it decided to recall all of its products. The total recall cost was $240 million in earnings but in the longer run such initiative strengthened customer’s confidence, trust and loyalty in the company. It shows the importance of managing public relations in crisis to preserve the favourable image of the organization. KFC bought the best quality chicken from UK Farms that meet Red Tractor Standards.

The company has decided to cut the level of saturated fat by 25%, use of plastic by 17%, use of Styrofoam by 62% and invested £1 million annually on replacing palm oil with rape seed oil. The company also provides all the nutrition information on the internet so that the consumers are aware about their calorie intake and has reduced the use of salt on menu board. All these initiatives show the dedication of the company towards protecting the long-run welfare of the community and customers. The company was recently conferred with an honorary award of Carbon Trust Standard for continued CO2 reduction. In 2009 the company opened first eco-store with salient energy saving features.


Based on primary and secondary research; it can be deduced that the company has taken best initiatives to build strong public image, influence people buy their products by effectively leveraging the selective relationship management and in improving work place practices from employment and production perspective. As the study suggests that the company knows the overall impact of its operations on Environment, health of the consumer and reputation of the organization. So it has taken measures to curb the environmental pollution by decreasing the use of plastic and Styrofoam, reducing calories, saturated oil and fats in the food by replacing palm oil with rape seed oil, reducing salt, providing nutrition information to the consumers, obtaining high quality chicken from british farms and by modifying the nutritional profile of the menu on consistent basis. As suggested in earlier part of analysis the company is also funding the United Nations World Food Hunger Program, joined charity in order to help the unemployed youth and reducing the use of non-renewable resources to certain extent by building eco-stores with some energy saving features.

The company is making a significant contribution in the well being of the society and in preserving the natural climate by reducing carbon footprints. All these initiatives are the premium examples of how organization’s create and maintain profitable customer relationship by using public relations, societial marketing and customer relationship management. When observed from the business perspective; the company is operating within a highly saturated market not showing any signs growth for the future. The company can increase the share of their customers by closely analyzing the other cultural values and perceptions. As the company is operating worldwide it can add new products to menu board by undertaking global cultural research analysis and consequently creating superior customer values shaped by consumer’s needs, wants and demands by observing culture.

Based on my own judgement it seems like company’s policy is to sell everything to everyone. They should focus on particular segment of the market, closely analyze their needs, carefully select the customers and deliver superior customer value to capture back the value in return. As United Kingdom is the country with rich diversity; so all these issues should be taken into consideration when creating superior customer value, selecting the appropriate communication channel for positioning the product or targeting the customer, crafting an effective message for the public for communicating the merits of the product and designing loyalty scheme.

In analysis it has been discovered that the company hasn’t been able to develop customer loyalty and retention programs beyond offering consistently high value and satisfaction. Now a days companies offer “frequency marketing programs” whereby they reward customers for buying more or in bulk. For instance airline companies offer frequent flier programs, hotels provide room upgrades to regular guests and supermarkets give patronage discount to valuable customers. KFC isn’t implementing such schemes to reward customers for their loyalty and commitment. The company can issue membership cards with certain validity providing special discounts for generating revenue and increasing sales.


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http://www.kfcdevelopment.co.uk/assets/KFC_Sustainability_EPCs.pdf http://www.youtube.com/watch?v=73H5Bs2pDuQ&feature=player_embedded#at=15 http://www.kfc.com/menu/

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KFC – Marketing Strategy. (2016, Oct 13). Retrieved from https://studymoose.com/kfc-marketing-strategy-essay

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