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2003 was a challenging year for KFC. Early<br />

in the year we had some success with Honey<br />

BBQ Boneless Wings, which drove samestore<br />

sales by 6%, however our sales for the<br />

balance of the year declined. After listening<br />

to the voice of our customers, we have identified<br />

the critical issues that have caused our customers to visit<br />

us less frequently. Simply put, our customers told us we need to<br />

be more Relevant, and more Reliable. We’re going to respond by<br />

working hard to rebuild that trust, and re-earn customer loyalty.<br />

We have a plan in place for a fresh, exciting KFC, one that our<br />

customers will consider Relevant and Reliable. We began that<br />

journey toward the end of the year by introducing ads that invite<br />

our customers to KFC What’s Cookin’, which got people talking<br />

about our unbeatable fried chicken. We then were named as<br />

one of the top 10 fastest drive-thru restaurants in America by<br />

QSR Magazine, a major win on the operations front. Building<br />

on this momentum, in 2004 we will be introducing new, delicious<br />

non-fried products, outstanding value meals, better-run<br />

restaurants, new menu boards and improved product packaging.<br />

And we’re not going to stop there….You’ll see a whole new<br />

advertising campaign that will remind our customers that our<br />

fried chicken is kitchen-fresh. And one of America’s hottest<br />

race car drivers, Dale Earnhardt Jr., will be behind the wheel<br />

of the new KFC car, convincing our customers to rush to KFC<br />

this summer for our Finger Lickin’ Good fried chicken.<br />

As you can see, there’s a lot cookin’<br />

at KFC.<br />

Gregg Dedrick<br />

President and Chief Concept Offi cer, KFC<br />

19.

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