KFC takes on McDonald’s by cutting prices
A wannabe student-politician enters the college canteen with his followers only to find it empty. The mystery is solved soon: all the students now hang out in KFC.
The latest TVC (launched earlier this month) of the quick service restaurant chain has made its intentions clear. With prices as low as Rs 25 – and not crossing Rs 99 in the Streetwise menu – KFC is taking on market leader McDonald’s which had come up with a Happy Price Menu starting at Rs 20.
“The youth today like anything with value. They want a place to hang out, to connect, to have a chat and eat at the same time. We want KFC to be just that”, says Dhruv Kaul, Director – Marketing, KFC India. The game plan is clear – KFC now wants to become the new ‘adda’ spot for students and hopes that larger volumes will make up for the thin profit margin of the new menu. The company plans a 360 degree campaign to promote the new range.
“We have kept prices to a minimum. And the range consists of vegetarian items – because we value our vegetarian customers and know some prefer to have vegetarian on certain days of the week – along with our popular chicken items”, adds Kaul. In the Streetwise range, one can choose from veg snacker (Rs 25), chicken snacker (Rs 30), snack box – with chicken and fries (Rs 55), Rizo – consisting of rice, dip and fried chicken (Rs 99) and a Mini Krusher (Rs 39).
So far, the products of KFC, which is the largest brand of Yum Restaurants, a company that owns other leading brands like Pizza Hut, Taco Bell, A&W and Long John Silver, were priced between Rs 65 and Rs 500.
Experts say while both KFC as well as McDonald’s have taken the price cut route, the similarity ends there. While Big Mac wants to be a preferred destination for breakfast and lunch, KFC wants to attract more footfalls as a snack-time brand only.
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Anand Halve, co-founder, Chlorophyll, says KFC scores over McDonald’s because while the latter has been overtly flagging its brand as a family joint, KFC is looked at more as an independent youth hang-out. “Also, a Rs 5 price difference will not matter much as an entry price point. The Indian mentality is basically to get the most out of every rupee, and if that means paying Rs 5 more and eating a more filling meal, I don’t think anyone will shy away”, he adds.
While no one knows whether the latest strategy will help KFC give McDonald’s a run for its money, the consensus is that both have a bright future, given that only 2 per cent of the eating-out sector in India is organized and hence there is immense scope to get new customers.
KFC opened in India in 1995 but after an unsuccessful stint, made a comeback in 2004. Just like McDonald’s which had to forgo its beef products to survive in the country, KFC had to introduce a new vegetarian line, which meant a vegetarian avatar of the popular zinger burger in 2010. The same year saw KFC coming out with Krushers – a range of chilled beverages in three flavours. At the same time, the KFC Game Box and Box Master provided new meal options.
The chain plans to launch more products this year – both in the veg and non-veg line. A rapid expansion is also in the pipeline. Presently the chain has 108 stores and has seen a compound average growth rate of 75 per cent in the last five years. Adds Kaul, “We plan to make it 500 stores by 2015”.
KFC is the official restaurant partner for the ICC World Cup. To make the most of the partnership, KFC has launched a limited edition ‘Fan Bucket’. The traditional chicken bucket would be recrafted and rebranded with the ICC logo and doodles of cricketing terminologies. During the World Cup, they would be giving out two bottles of Pepsi free with the bucket.
“Our in-store pieces like trays will reflect this promotion. We are looking at the social and online media to connect more”, points out Kaul. The KFC India page on Facebook has nearly 83,000 fans. The page has been announcing contests for Streetwise under ‘Click It - Claim It - Win It’ name. Cricket themed merchandise and ticket to the matches are also up for grabs.