Situational Analysis And Marketing Strategy For Chick-fil-a

Situational Analysis and Marketing

Strategy

Mary Meister, Emma Parker, Jeff Slaughter, Jaclyn Underwood

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Marketing Problem

Chick-Fil-A: Situation Analysis

Chick-Fil-A is known for its production of chicken products in the chicken restaurant

industry. The company has been widely recognized across the southern region of the United

States which is promising. However, the marketing problem Chick-Fil-A now faces is low

recognition in regions outside of the south. Chick-Fil-A needs to expand to other regions of the

U.S. in order to continue their growth in the market and to ensure that the company remains a

strong competitor among other chicken restaurants.

Product/Brand Analysis

Chick-Fil-A, Inc., headquartered in Atlanta, Georgia, is the nation’s second-

largest quick-service chicken restaurant chain, currently with 1,500

restaurants in 38 states and Washington D.C. The first Chick-Fil-A was

established in 1967 in Atlanta’s Greenbrair Mall by the company’s founder, Truett Cathy. Chick-

Fil-A reached record sales of $3.2 billion in 2009 while consuming 20% of the market, which

showed a 7% increase in the market share from 2004. Credited with inventing the boneless

chicken breast sandwich and first introducing the chicken nugget concept, Chick-Fil-A serves

nutritious and freshly prepared food products.

Offerings include chicken entrees, sandwiches, salads, waffle fries and fresh-squeezed

lemonade and desserts served separately and in combo meals. Chick-Fil-A serves the

communities through freestanding buildings with drive-through lanes and mall-based locations.

The company is also licensed to airports and schools. Trademark products include the Chick-Fil-

A Southwest Chargrilled Salad, Cool Wrap, Original Chicken Sandwich and a line of recently

introduced breakfast items. Prices range from a small order of fries for $1.35 to an original

chicken sandwich for $2.75. The combo meal is also available for $5.39. The Chick-Fil-A Kid’s

Meal Program includes activities to educate children in math and language arts skills and

provides healthy alternatives to fries and soda for a starting price of $2.85. The Chick-Fil-A

Kid’s Meal Program includes activities to educate children in math and language arts skills and

provides healthy alternatives to fries and soda. The company also offers catering services with

large trays of menu items.

Chick-Fil-A attributes its growth over the past 30 years to dedicated franchise owners and

the company’s emphasis on product quality. The company advertises through its signature cow

antics, featuring ads wherein cows try to convince consumers to eat more chicken, or “chikin” as

the cows spell it. In 2008, Chick-Fil-A spent $13,161,000 in general promotion advertising. As

shown in Figure 1, Chick-Fil-A spends most of its advertising budget on network TV, but cable

TV and spot TV also make up a large portion of advertising spending.

Chick-Fil-A’s mission statement is “to glorify God by being a faithful steward of all that

is entrusted to us; and to have a positive influence on all who come in contact with Chick-Fil-A.”

Chick-Fil-A lives by its mission statement through their corporate sponsorships, which reflect

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the most important core value of making a positive influence on the company’s communities and

the people in them. The company has a WinShape Foundation to help kids in need through

homes, camps and scholarships. Chick-Fil-A is also a proud sponsor of the Big 12 Conference,

as well as the Chick-Fil-A Bowl and Chick-Fil-A Kickoff Game.

Primary Competitors Analysis

The KFC Corporation was founded in Louisville, Kentucky by Colonel

Harland Sanders in 1952. As of 2009, KFC’s market share is 30%, decreasing by

six percent since 2004. Over 12 million customers are served in over 109 countries

or territories in a day. KFC specializes in Original Recipe, Extra Crispy, Kentucky Grilled

Chicken, and original recipe strips served with home-style sides. KFC’s best seller, Original

Recipe fried chicken is made from Colonel Sander’s secret blend of 11 herbs and spices. This

recipe has remained unchanged since the beginning of the chain. The cost of a two piece original

recipe or Kentucky Grilled Chicken combo is $5.97. The combo comes with chicken, a drink, and

a side. KFC’s grilled chicken sandwich combo costs $4.79. It includes the sandwich, a drink, and

a side. Customers can choose from 300 menu items around the world, from Kentucky

Grilled Chicken in the U.S. to a salmon sandwich in Japan. Their revenue in 2008 was over $11

billion.

KFC is the first fast food restaurant to introduce reusable take-out food containers. The

campaign’s slogan is “reuse, renew, rejoice.” The containers are Tupperware style,

microwaveable, and dishwasher safe. Also, on the KFC website, there is a petition that customers

can electronically sign to try to get Colonel Sanders on a postage stamp.

Popeyes first opened in Arabi, Louisiana, a suburb of New

Orleans, on June 12th 1972. There are restaurants in more than 40

states and 20 countries. As of 2004, it has a market share of 10.2% of

the chicken fast food market.

The company’s official history states that Popeyes started off serving “tradition mild fried

chicken” but business was too slow so they decided to spice up the recipe a bit to appease the

pallets of New Orleanains, who love big flavor.

The franchising of Popeyes started in 1976 in Baton Rouge, Louisiana. Popeyes is

concentrated in the South. Ten years after Copeland began his franchising in Baton Rouge, 500

more Popeyes locations were added to the southern region. In 2006 Popeyes announced that the

company planned on introducing a trans-fat free biscuit and French fries with only 1 gram of

Trans fat. A two piece meal at Popeyes costs $4.99 and includes the chicken, a side, a drink, and

a biscuit. In true Louisiana fashion, Popeyes has a shrimp po’boy, which costs $2.99. You can

make it a combo with a drink and side for three dollars extra. In 2007, Popeyes had over $167

million in revenue in 2007. There is a link on the Popeyes website for store locations and coupon

offers.

Secondary Competitors Analysis

Sonic is a fast food chain that is mainly southern. They sell

chicken products, but also have burgers, hotdogs, and many other fast

food favorites. Since Sonic is not just a chicken fast food restaurant, it is a

secondary competitor. Sonic’s market share within the top fast food

restaurants is 5.5%. it is based mainly in the South with a substantially higher index number than

any other region in the U.S.

Sonic is a fast food restaurant but with a twist. They employ carhops, wearing roller

skates, who serve your food to you while you sit in your car. Sonic is based in Oklahoma City

and as of 2009, there were 3,500 Sonic restaurants in 44 out of 50 U.S. states.

Sonic’s founder, Troy N. Smith Sr., returned home from WWII to his home town of

Shawnee, Oklahoma and opened a restaurant name Troy’s Pan Full of Chicken. In 1953 he added

a small root-beer stand named Top Hat Drive-In to the property and was averaging $700

dollars a week from the stand’s sales in root-beer, hamburgers, and hotdogs. He changed his plan