A New Marketing Case Study: KFC

Grilled Chicken a Kentucky Fried Fiasco

Off-Brand Bet Sunk by Poor Planning and Oprah-Driven Crowds

By Emily Bryson York

Published: May 11, 2009

CHICAGO (AdAge.com) -- KFC's grilled-chicken launch was to be the biggest in the chain's history. Now it might also go down as a marketing case study in what not to do.

The story starts with a marketer testing the elasticity of its brand. After all, we all know what the 'F' stands for in KFC, so suddenly insisting the consumer associate the fast feeder with grilled chicken, rather than the Colonel's fried version, was always going to be a stretch.

KFC thought the way to meet the challenge was to spend millions on a TV ad campaign from DraftFCB, Chicago. TV is a marketing channel that's worked well for other fast-food introductions, but the creative was simultaneously underwhelming and yet, by telling consumers to "Unthink KFC," seemed to undermine the chain's main game, fried chicken.

Whether it was working or not we may never know, because this was the point at which the marketer brought in the big gun, Oprah Winfrey, and the trouble really started. The company's offer on the daytime diva's talk show May 4 of two free pieces of grilled chicken, two sides and a biscuit to anyone who downloaded a coupon within a two-day period should have been a huge promotional coup. Instead, it turned into an unmitigated disaster when the company was unable to execute and actually had to rescind the offer.

KFC's offer sent the chain skyrocketing to the No. 1 topic on Twitter. By Wednesday, blogs began reporting "riots" at New York City KFCs. On Thursday, local news crews interviewed fuming customers getting turned away in other markets, including Chicago. Consumers complained about rude service, and media complained about a PR team that seemed asleep at the wheel. By Friday, the day after KFC pulled the promotion, NPR was calling KFC "the James Frey of fast food," referring to the author of a memoir praised by Ms. Winfrey that was later exposed as fiction.

In the end, KFC managed to strain relationships with three core constituents: consumers, the media and franchisees that swallowed the cost of the free food themselves. "This is going to damage their brand," said Gene Grabowski, senior VP, Levick Strategic Communications.

Just how did things go so far awry?

Multiplication
KFC spokeswoman Laurie Schalow maintained that the chain prepared thoroughly, given the time constraints. After months of seeking Ms. Winfrey's approval, she said KFC wound up with a one-week window to execute its promotion. KFC accepted Ms. Winfrey's projections for response, based on other offers from her show -- and doubled them. About 10.5 million coupons were downloaded, but in what might have been a twist unexpected by KFC, many were also photocopied.

There was also a report at the website Consumerist that some KFC franchisees did not participate in the promotion because they were not reimbursed for the giveaway by corporate. KFC told Ad Age the company did fund the promotion for its own stores and franchisees were expected to pay for the free meals at theirs, but stressed that franchisees have been happy to participate in the promotion -- despite numerous reports to the contrary.

In all, KFC gave away 4 million meals in two days. That sounds like a lot, but it pales in comparison to the 4 million pieces of grilled chicken it doled out April 27 alone when it declared a national "Unfry Day" in ads featuring Mr. Eaton. By the time KFC realized it wasn't keeping up with demand -- and there were 6 million or more coupons outstanding -- the chain pulled the plug on the promotion and issued rain checks to consumers willing to go back to a KFC, fill out a form and wait for another coupon to arrive in the mail. They'll be rewarded with a free Pepsi. The chain never called in a crisis firm.

News of the bungled giveaway became so widespread that Mr. Eaton appeared on Ms. Winfrey's show May 9 and offered this spin: "We had very big projection numbers on this, but not in our wildest imagination could we believe the response we've gotten," he said. "It's been absolutely fantastic. But in fact, it's been so big it's been overwhelming. Yesterday and the day before, some of our stores, our lobbies were full, the drive-throughs were packed, we had crowds everywhere."

Negative feelings grow
KFC did accomplish one thing -- a sea of buzz for its product. But the chatter got nasty when the promotion ceased. According to Zeta Interactive, which monitors blog chatter, KFC generally popped up in about 538 blog posts daily, with 72% of mentions positive. During the promotion, that number soared to 1,319 mentions, 89% of which were positive. But cutting the cord on Thursday had an immediate effect, with 772 posts. Negative ratings shot up, to 33%

"The free-chicken promotion created a sense of enthusiasm within online communities and enhanced KFC's online reputation," Al DiGuido, CEO of Zeta Interactive, said in an e-mail. "However, as soon as KFC decided to halt the promotion, their brand suffered a brutal backlash, plummeting down to 67% positive buzz. With this overwhelmingly negative response, KFC did more damage to its brand by running an incomplete promotion than if they had just not launched the campaign in the first place."

KFC begs to differ. "We have never had more positive customer response," said Ms. Schalow, noting that about two in four grilled-chicken customers it's attracted are new or rare visitors to the chain. However, Technomic President Ron Paul said that's the group easiest to alienate.