Agency: Young & Rubicam New York Author: Terry Dukes

KFC

The Animated Colonel Campaign

INTRODUCTION

A brand resting on its laurels is vulnerable

This is the story of how a wellestablished, wellknown brand, Kentucky Fried Chicken, was caught napping by competitors who moved more quickly than it did to capitalize on the changing eating habits of Americans. Since the movement of consumer eating habits was toward greater preference for chickenbased meals, KFC should have had the major business benefit of this trend. However, Quick Service Restaurant chains like McDonald's and Burger King successfully eclipsed KFC because it failed to remain contemporary in three areas:

  1. The brand and its symbol were old. Even a change of name from Kentucky Fried Chicken to KFC couldn't do enough to overcome that.
  2. The menu was the same (old) one devised early in the history of Quick Service Restaurants, kept in place by the greater profit margins chickenonthebone offers vs. sandwich menu items.
  3. The restaurants themselves are geared for 'takeout' and do not provide the amenities and `entertainment' factor that other chains do (like McDonald's, Wendy's and Burger King).

Although these aspects would have to be improved, doing so would take too long to stem the decline in business that KFC was undergoing. Advertising would have to make an immediate initial and powerful contribution to modernizing KFC, in order to buy time and revenue to accomplish these other improvements. 

Kentucky Fried Chicken began its existence in the form of a now famous 'Secret Recipe' written by Colonel Sanders in 1939. Twelve years after the birth of the Colonel's 'Secret Recipe,' a franchise was formed, and that franchise has now grown to a multibillion dollar corporation of many franchisees all over the United States. In doing so KFC gave American consumers their first convenient takehome meal. A major strategy behind the growth of Kentucky Fried Chicken was created in 1957, by an enthusiastic franchisee who advocated the `bucket of chicken pieces' as 'Sunday dinner seven days a week'.

However, throughout the 1990s, KFC suffered limits in growth due to fundamental changes in consumer eating habits and associated changes in consumer expectations for Quick Service Restaurants. KFC rested on its laurels as the 'Chicken Expert' in home meal replacement despite a new, growing category of Quick Service Restaurants catering to increasing numbers of American consumers who desired meals 'onthego.' 

By the latter half of the 1990s, a new American mindset again reshaped consumer eating habits and motivations supporting the Quick Service Restaurant industry. Consumers considered themselves younger, healthier and busier than the generation before them. However, they did not view convenience as a necessary tradeoff to quality. In fact, American consumers did not believe it was necessary to compromise their options at all in order to accommodate their quicker pace and more sophisticated palates. If anything, they expected the marketplace to adapt to their needs. That mindset drove the rise in popularity and also the variety of 'onthego' meals. The introduction of chicken items to the formerly hamburgerbased menus of Burger King and McDonald's seriously changed KFC's competition, reducing the perceived uniqueness of its menu.

THE PROBLEM: CONSUMERS AND COMPETITORS MOVED AWAY FROM KFC

This younger, healthier American mindset also drove Quick Service Restaurant per capita chicken consumption from 1995 to 2000 to 6.1% across all fast food competitors (Economic Research Service/USDA; Figure 1). This could have offered KFC a clear opportunity to increase its presence, but the competition was quicker to capitalize on the trend. 

Quick Service Restaurants such as McDonald's, Burger King and Wendy's (the 'Burger Boys') answered the consumer chicken demand with expanded menus while also satisfying the demands of fastpaced, often impulsedriven Quick Service Restaurant consumers. The 'Burger Boys' were helped by consumer advantages unavailable at KFC. If one member of a party of consumers didn't want a burger, chicken was now an option in the same location, allowing several people with different meal preferences to eat together. Sales of easytocarrychicken menu items (sandwiches rather than buckets of chickenonthebone) increased dramatically at the 'Burger Boys,' increasing their overall volume (Figure 2). 

KFC was familiar as a `chicken only' place to eat. As the 'Burger Boys' capitalized on growing chicken consumption, KFC failed to win what should have been a national increase in its market share. The 'Chicken Expert' could not gain the interest of new chicken consumers because unlike the 'Burger Boys,' serving chicken was not 'news' for its chickenonly business, and its menu remained limited to chicken. Compounding this problem were consumer perceptions of shortcomings in cost, convenience, variety and occasiontooccasion availability of its menu items. 

Despite an obvious discrepancy between its existing consumer base of individuals using KFC to replace home cooking with a take home' meal and market changes favoring the increasing number of consumers looking for an individual, fast `meal onthego', KFC remained entrenched in its old brand equity. Unfortunately that equity was no longer as differentiating or as relevant as it had been. KFC's advertising agency provided a diagnosis of the brand via its BrandAsset ValuatorTM research which demonstrated this. The BrandAsset ValuatorTM diagnostics, based on a large survey of consumers, showed perceptions of the KFC brand to be low in differentiation and soft on relevance and esteem, though very well known (Figure 3).

ORGANIZATIONAL COMPLEXITY COMPOUNDS BRAND PROBLEMS

Internal organizational constituencies complicated KFC's ability to respond to its vulnerable business situation. KFC is, first and foremost, a retail establishment. This means it is comprises, not only a central corporate management entity, but also independent franchise owners whose approval is required for all new product launches as well as all advertising. The company aims to accomplish its fundamental business goal of increased sales and successful introduction of new menu items. This is not necessarily the primary interest of US franchisees. While corporate management may think long term and recognize the business value of investments in brand rejuvenation, the franchisees are focused on daytoday sales of base menu items. The advertising has to satisfy both corporate brandbuilding goals and franchise retail sales goals. Unfortunately the strategic value of consumer understandings is not always shared by the corporation and its franchise operators, but consumer insights did clarify the problems KFC faced.

PRODUCT/SERVICE DEFICIENCIES ADD TO BRAND PROBLEMS

Following the completion of quantitative diagnostic consumer research, one of the main areas of weakness identified by the KFC marketing team was the consumer belief that the KFC menu offered limited variety and convenience. Even within the limited fried chicken menu, consumers complained, franchises would not have all of the items available. 

In addition, evidence suggested that KFC's advertising reinforcement of its core brand identity was actually hampering its ability to remain competitive in the changing Quick Service Restaurant market. The bucket of chickenonthebone that established the business originally had become a barrier to future growth, because the bucket of chicken represented the 'oldfashioned menu' and did not match the expectations of a more contemporary marketplace. 

Ironically, one of KFC's main points of pride its unprocessed, fresh chicken menu items was also acting as a barrier between the franchisee and the new wave of Quick Service Restaurant consumers. The price of a meal at KFC is at the high end of the price range in the Quick Service Restaurant category. The higher price of meals is attributable to the superior product offered (highquality, pure chicken in its natural, onthebone state), but that fact was never fully valued by consumers. 

To make the situation worse, the 'Burger Boys' continued to dominate the Quick Service Restaurant category by offering fast service, menu variety and mobility to their everevolving consumers. Table 1 showing Quick Service Restaurant usage illustrates the fact that the greatest increases in consumption were in areas of slow growth for KFC. Increasing occasions were for 'moving lunches' and individual meals during the daily grind. Essentially, the 'Burger Boy' new variety menu options eclipsed the allchicken menu offered by KFC by providing easytogo chicken sandwiches. Consumers who were out for a lunch 'onthego' or a 'quick meal' were more likely to patronize KFC's competitors out of greater certainty that they would get exactly the portable food item they wanted, quickly. 

TABLE 1: PRESANDWICH KFC SHARE/ RANKING OF USAGE. COMPETITIVE SET: MCDONALD'S, BURGER KING, WENDY'S, SUBWAY, TACO BELL, PIZZA HUT, KFC

Occasion growth (%)
through 2010

KFC share (%)
1998

KFC share ranking*
1998

Quickmealsout occasions

Out to lunch

5.5

2.8

(T) 7

Daily grind

40.5

2.1

6

Moving lunches

56.8

2.5

(T) 7

Homemeal replacement occasions

Quiet night in

69.3

6.7

2

Quick meal in

77.1

8.1

1

Dinner crises

46.5

5.1

(T) 5

In with the family

42.3

4.8

(T) 5

* (T) = Tied
Source: 1999 Crest (presandwich launch)

Figure 4 identifies aspects of KFC shown by consumers to inhibit the inclination to patronize KFC. The cumulative result of these situations was the realization that if KFC advertising were to go beyond merely selling the latest featured menu item to actually building a brand, a miracle was required. Such an effort would have to (1) appeal to younger consumers to whom the KFC brand was less relevant than other fast food purveyors, (2) satisfy a productsalesoriented franchisee group whose funds paid for the advertising, and (3) capitalize on a wellentrenched though anachronistic brand equity. To do this it would have to change its menus, change its restaurants to provide a much more contemporary experience, and change its brand. None of these options would constitute a rapid enough response to its declining business position. Advertising would have to do the job initially, and it would have to do it well enough to buy time for KFC to make these other basic improvements.

CONSUMER TARGET

Identification that KFC's traditional, familybased mealreplacement target was no longer comprising the majority of Quick Service Restaurant consumers prompted a thorough reconsideration of its message. Market vulnerability rested in the fact that KFC ranked low among consumers who were in motion, looking for a quick lunch on premises, or a meal 'onthego'.

KFC recognized the growth opportunity offered to heavy fastfood users who comprised approximately 40% of the customer base, but accounted for approximately 80% of the Quick Service Restaurant volume. This group had a young skew of 1834 years old. To capitalize on this consumer group, KFC would have to update its image and increase its relevance among the younger demographic (adults 1849 years). However, it would have to retain the brand essence it had spent years building in order to keep the business of its loyal, traditional consumer base which tended to buy KFC's higher margin, chickenonthebone meals.

STRATEGIC OBJECTIVES

The challenge facing KFC was to create advertising that would satisfy two stakeholders, corporate management and its need to upgrade the brand value, and also the needs of the franchise owners in terms of driving product sales. Both required that any plan succeed quickly. Furthermore, the advertising messages created also would have to serve two functions, acting as both brand enhancer and product awareness and preference builder. Finally, KFC would have to address a new audience: young, onthego Americans.

CREATIVE SOLUTIONS

First, KFC decided to attempt to leverage the brand equity in a way that would gain credible awareness among a new, younger consumer base. It realized it could not simply walk away from its previous, longstanding investment in the brand symbol of Colonel Sanders. The Colonel had appeared in person in many KFC advertisements over the years, contributing to the warm, genuine hospitality intrinsic to the brand reputation. Could he still be a credible and knowledgeable brand spokesman who would nevertheless be a contemporary and charismatic voice? The Colonel had clear value as the strongest leveraging point for KFC's brand equity, so the advertising would have to deliver to its audience a Colonel who met these requirements. 

Second, KFC wanted to retain and reaffirm its position as the 'Chicken Expert,' foremost among the Quick Service Restaurant category. The Colonel symbol could help here, too, as continuity with the originator of the 'Secret Recipe'. Recognizing the necessity of expanding the KFC brand relevance beyond home meal replacement, KFC decided to diversify its purchase offerings to include items considered more 'onthego,' especially sandwiches. It would deliver that new product news via a more contemporary Colonel Sanders messenger. If executed well, a contemporary Colonel could provide a bridge from brand heritage to a 'new', more modern KFC. 

Diversified menu offerings and reaffirmation of the 'Chicken Expert' equity alone would not have an impact on today's consumers. KFC would have to use adroit advertising to lay the groundwork for a successful retail product sales result.

ADVERTISING TACTICS

Having made the decision to capitalize on years of brand identity investment in the Colonel, KFC realized that it would have to update his character. In considering how to accomplish this, there arose corporate and franchisee questions about whether to continue using Colonel Sanders as the KFC spokesman at all. Colonel Sanders himself had died in 1980, at the age of 90. Qualitative research indicated that loyal KFC consumers would not take well to an actor's portrayal of the Colonel, seeing it as false. The agency had to create an acceptable solution that would address concerns about loyal customers' aversion to a 'pretend Colonel Sanders'.

Colonel Sanders was 'brought to life' in animated form in order to retain his reputation for Southern hospitality and to add humor and vigor based on the animated persona. The Animated Colonel could use humorous delivery to appeal to the casual food orientation of young customers while featuring the new product offerings to revive relevance to the broader consumer market. Contemporary music was understood to be a critical component in reinforcing the 'uptodate' image of not only Colonel Sanders but also KFC. 

The Animated Colonel could not only serve as an embodiment of the uptodate KFC brand identity, but also act as a trusted ambassador to the public in continuing the 'Chicken Expert' reputation. Delivering important news on new menu items and special offers would help build the sales demanded by franchisees in order to continue the advertising budget. His portrayal had to honor the consumer memory of the real Colonel Sanders. The Animated Colonel allowed KFC to avoid any implication of replacing him with a 'faux Colonel' portrayed by an actor. 

Figure 5 is the strategic profile developed for creatives to use in designing the Animated Colonel while keeping him true to the character of the human original.

MEDIA

The media strategy was built on the premise that media are 'delivery systems' for the message. Since the target sought comprised  younger consumers of primarily single meals 'onthego,' specialized cable networks and programs were used to address the 18 to 49yearold American. Networks like VH1 (the rock history channel), the WB (a youthfocused channel), and Fox (home of the 'Television Counterculture' of programs) were used. Programs that had succeeded with younger audiences such as 'Buffy The Vampire Slayer' and 'Friends' were chosen to carry the younger, more hip Animated Colonel. 

This media strategy overlapped with an existing plan focused on the three largest American television networks: NBC, ABC, and CBS. This allowed KFC to continue addressing its established consumer base while reaching out to a younger audience by expanding KFC's visibility. Additionally, ad placement shifted to more primetime slots than daytime in an attempt to increase its youth market visibility. 

More pressure was put on the creative to drive the successful (literal) rejuvenation of the KFC brand by the fact that its adspend was lower than four out of five of its leading competitors. Despite fluctuations between 1995 and the present, McDonald's and Burger King consistently dominated the consumer's attention with its advertising far outweighing KFC and their other competitors. In the immediate period of the Animated Colonel campaign, KFC was also outspent by Wendy's and Taco Bell (Figure 6). 

Compounding KFC's low spend vs. its primary Quick Service Restaurant competition was the fact that the TRP buying power of dollars diminished between 1995 and 2000. Although KFC's modest budget did increase, the cost of spending to reach the 18 to 49yearold target diminished its impact markedly (Figure 7).

PREPOSTADVERTISING EVALUATION

To achieve the marketing success demanded of it even before payback could be assessed, the Animated Colonel campaign had to cut through the clutter in a disadvantageous spending situation. Then it had to restage brand perceptions so strongly that the consumer would patronize the stillanachronistic restaurants until they could be improved. Then, it had to change perceptions on the strategically identified barriers. Moreover, the fact that the Animated Colonel campaign accomplished this, not positive brand heritage, had to be verified as the source of desired impactonmarket. Finally, payback had to be confirmed by brand equity improvement and increased restaurant usage vs. competitors.

Cutting through

Using early figures as a measure of success for the new advertising, KFC quickly recognized that the Animated Colonel campaign was delivering to the new consumer target group. Total advertising awareness increased 50% with the campaign launch (Figure 8). Additionally, awareness was sustained beyond the initial 3month period. 

KFC advertising awareness increases were also greater than those of competitor brands. These data suggested that consumers were remembering the Animated Colonel himself and were, therefore, recognizing KFC as a member of the Quick Service Restaurant set. This evidence was viewed as a success not only in terms of 'breakthrough' accomplished by the creative, but also in terms of creating more brand awareness among its target audience than the competition versus a year ago (Table 2). 

TABLE 2: ADVERTISING AWARENESS GREW SUBSTANTIALLY OVER COMPETITORS

Index 1999 vs. 1998

Taco Bell

101

McDonald's

100

Wendy's 

103

Burger King

99

KFC

143

Pizza Hut

97

Subway

103

Source: 1999 KFC National Tracking

Not only did KFC advertising awareness increase dramatically following the introduction of the Animated Colonel, but also the quality of that awareness increased. Ad Works 10 defines cutthrough as the percentage of a target group who manage to describe a television execution to the extent that it is clear they have seen that particular execution and no other (p. 266). In the United States, this is called 'proven recall.' It is the measure that allows us to attribute rises in awareness of advertisements and brands to the specific campaign that is doing the work. This is especially important when trying to upgrade a very wellknown and liked, but decreasingly differentiated or relevant brand like KFC. 

How can we be sure this campaign cut through? In this creative, the solution also provided the measurement verifiers: the Animated Colonel character himself. Proven recall almost doubled from a precampaign average of 36% to a 70% average immediately following the launch of the Animated Colonel, regardless of which new chicken product was featured in the advertisements. Prior to this, recall was based primarily on goodwill toward the old KFC brand. Mentions of the Animated Colonel were what counted as proven or verified recall (Figure 9).

Creating the right impressions

The Animated Colonel served the primary purpose of regaining the attention of the Quick Service Restaurant consumer, but another hurdle existed for the campaign: brand equity perceptions of the KFC had to improve as a result of the more contemporary, credible advertising delivered by the Animated Colonel, KFC positive perception change had to be greater than that of the 'Burger Boys' if it was to catch up in its market. 

Prior to the campaign, consumers considered convenience, variety, and availability major obstacles to their opting for a meal from KFC. KFC attribute ratings increased by 12% overall, with marked improvements in perceptions of uniqueness, menu variety, and speed of service (Table 3). The Animated Colonel created specific desired perception shifts on these key attributes and attitudes. Most important was the motivator shift in 'being a place for me,' which increased by 10%. Since advertising initially preceded the actual service/product offering change, we have to credit advertising and the persona of the Animated Colonel for their effect on KFC perceptions. 

The Animated Colonel campaign also helped improve the KFC brand equity. This can be seen in the upward movement of the KFC brand strength and stature, which increased in the opinions of consumers at a time when other Quick Service Restaurants were experiencing marked drops in their brands' strength and stature. 

TABLE 3: IMPROVED ATTRIBUTE RATINGS FOLLOWING CAMPAIGN

Attribute

Pre advertising

Post advertising

Index

Overall ranking 

61

66

108

Speed of service

59

68

119

Variety menu items

54

65

126

Place for people like you

53

58

109

Being unique and distinctive

37

48

127

Source: 1999 KFC National Tracking

For the corporate management this is the critical pay off: increasing the brand's competitive edge so stock evaluations and other reputational contributors to respect for the business will rise. The ad agency's BrandAsset ValuatorTM was again used, compared to preadvertising data to chart equity change. Unlike Taco Bell, Wendy's and McDonald's, KFC's brand strength (differentiation 6 relevance) increased along with its stature (esteem 6 knowledge) (Figure 10). Several pizza Quick Service Restaurant equities also fell during this time. Although Burger King's rose, it paid a much higher price than KFC to do it. 

As a natural result of this increased brand strength and stature, KFC saw its differentiation grow dramatically following the Animated Colonel campaign. KFC differentiation not only grew, but grew to higher levels than those of its competitors. 

Brand equity diagnostics show that the upward shifts occurred on all four of the component measures of strength and stature (Figure 11). Finally, BrandAsset ValuatorTM diagnostics also show that KFC achieved these shifts among the desired 18 to 49yearold target consumer vs. competitive Quick Service brands (Figure 12).

Translating attitudes into desired behavior

The cutthrough and branding benefits delivered by the Animated Colonel fulfilled the major corporate goal of the campaign and helped lay the groundwork for the second franchise goal: increased usage and sales (Figure 13). Usage grew to 12.4 points over a period of 3 months, per restaurant average sales increased by 8.9% for the duration of the campaign, surpassing the 5% goal, and transactions increased by 7.4%. 

Not only did KFC exceed its usage goals, but also most of its competitors did not increase their usage in the same time period. Only Wendy's generated the equivalent usage change in the same time period (Table 4).

TABLE 4: INCREASED BRAND USAGE IN AN OVERALLSTRONGINDUSTRY. PAST 3MONTH USAGE

Index 1999 vs. 1998

McDonald's

105

Burger King

111

Taco Bell

104

Wendy's

117

Pizza Hut

110

Subway

111

KFC

116

Source: 1999 KFC National Tracking

CONCLUSION

The KFC case illustrates in an interesting way the power of a wellestablished, meaningful brand symbol. After the death of the real Colonel Sanders, KFC took a very long time to recover from having built a brand so successfully around one man's reputation. With his passing, the brand was almost frozen in time, though the business carried on. 

When the market situation forced KFC to reexpress the values of Colonel Sanders, their strategy again came to life. Colonel Sanders was a remarkably intuitive, progressive thinker who recognized the need of American families to have a 'Sunday meal' without the timeconsuming work involved. His 'Secret Recipe,' carryhome chicken revolutionized American restaurant meal habits of that time. In the process of distilling the essence of Colonel Sanders to respond to today's market situation, the client marketing and agency teams were prompted to innovate once again. With the careful transformation, through animation, of the qualities of the man who originated the brand, KFC was able to regain its position in the market.

NOTES & EXHIBITS


FIGURE 1: PER CAPITA CONSUMPTION. NOTE: 1997 ESTIMATED BY ERS/USDA; 1998�2000 PROJECTED BY NBC