KFC page 5
Kentucky Fried Chicken has enjoyed a great deal of success in the Japanese market. Loy Weston, who was in charge of KFC-Japan, hired Shin Okuhara, his Japanese executive vice president, to help him tune in to the Japanese way of doing business. Their strategy worked well: Within eleven years, 324 KFC outlets had opened in Japan. Of these, 125 were directly run by the company and 199 were franchises, owned by individuals who had bought a license form KFC.
Kentucky Fried Chicken has muscled its way into the number-one spot in Japanese fast food... its success, however, probably has less to do with luck than with good management and astute marketing.
One step in the marketing strategy is determining store location. Where a typical KFC outlet in the United States is freestanding - and thus built to the same size and specifications everywhere - the typical Japanese store is located in an existing building. many are smaller than KFC's standard size. "What we do is design a store appropriate for Japan," explained Weston. "Every time we find a little space, we design a way to fit our store in. We shrink equipment, redesigning it, making it taller instead of longer." Kentucky Fried Chicken's outlets may be only one-third the size of U.S. prototypes, but they do twice the business, and average of $620,000 a year.
Because the rent is high in Japan, sites have to be selected with particular car. To qualify for consideration a district must have at least 50,000 people using its train station every day.
The number of people fifteen minutes away by bus or by foot is computed, and the number of passersby per hour is multiplied by store frontage, to produce something called the location factor. Then all these figures are fed into a formula designed to estimate sales...
As in other countries, KFC varied the menu to accommodate local tastes. "The Japanese aren't thrilled about mashed potatoes and gravy, which are common in both the United States and Australia," Weston said, " so we switched to french fries." When Japanese consumers found the cole slaw (cabbage salad) too sweet, KFC cut the sugar in half. The company catered to Japanese preferences in other ways, too. Smoked chicken, yogurt, and fish and chips, for example, all adorn KFC's Japanese menus.