Yum Brands is an industry-leading group of QSR brands. The group includes KFC, Taco Bell, Pizza Hut, and Habit Burger Grill. It has its headquarters in Louisville, Kentucky, United States. Yum brands continued to optimize its portfolio for faster growth and acquired Habit Burger Grill in 2020. While the coronavirus pandemic harmed its business, the company still achieved revenue growth during 2020 compared to the previous year.
Yum brands operate more than 50,000 stores worldwide, of which more than 50% are of KFC. KFC is the largest brand in the portfolio of Yum brands based on the net revenue it generates. As of the end of 2020, the number of total restaurants operated by Yum brands was 50,353. This post will analyze the marketing mix of Yum brands, including the four P’s – Product, Place, Price, and Promotion.
Marketing Mix of Yum brands: An overview
Brands in the product portfolio of Yum brands:
KFC is the largest brand in Yum Brands’ portfolio and a global leader in the QSR chicken segment. As of December 31, 2020, the company had 25,000 stores operational around the globe in 146 countries. KFC was founded in Corbin, Kentucky, by Colonel Harland D. Sanders. KFC restaurants worldwide offer fried and non-fried chicken products such as sandwiches, chicken strips, chicken-on-the-bone, and other chicken products marketed under various names.
Pizza Hut is the second-largest brand in the portfolio of Yum Brands. The first Pizza Hut restaurant was opened in 1958 in Wichita, Kansas. It is now the largest restaurant chain globally, specializing in the sale of ready-to-eat pizza products. Pizza Hut operates in the delivery, carryout, and casual dining segments around the world. As of December 31, 2020, 17,639 Pizza Hut stores were operational worldwide, with sales across 110 countries.
Taco Bell, an American brand of Tacos, Burritos, and other Mexican-style food products had 7,427 stores operational in 2020. It is the third-largest source of revenue for the company based on the net revenue it generated in 2020. The first Taco Bell restaurant was opened in 1962 by Glen Bell in Downey, California.
Habit Burger Grill:
Habit Burger Grill is the latest addition to the portfolio of Yum brands. The company acquired this brand in March 2020. It is a fast-casual restaurant concept specializing in made-to-order chargrilled burgers, sandwiches, and more. The first Habit Burger Grill restaurant opened in 1969 in Santa Barbara, California.
Yum Brands is a US-based brand with a global presence. It is actually a group of brands that has two leading international brands in its portfolio. KFC and Pizza Hut have a strong global presence. Yum brand has used an omnichannel strategy to serve its customers worldwide. The company serves its customers using both online and offline channels.
KFC is the largest brand in the company’s portfolio and has extended its presence to 146 countries and territories. The number of KFC restaurants in 2020 was 25,000, of which 84% were located internationally and the rest in the United States.
Pizza Hut is the largest restaurant chain in the QSR pizza category. The company has expanded its presence worldwide to 110 countries. In 2020, the company had 17,639 stores operational worldwide.
Taco Bell has its headquarters in Irvin, California, United States. The company has a limited international presence compared to the first two brands in the company’s portfolio. It is present across only 13 countries in the world. The number of Taco Bell stores operational worldwide was 7,427 in 2020.
Habit Burger Grill:
The company newly acquired habit Burger Grill in 2020. It is present across only 3 countries. The number of Habit Burger Grill restaurants operational across all its markets was only 287 as of the end of 2020.
Yum brands mainly follow a competitive pricing strategy across its various brands. It also serves some higher-priced items through KFC and Pizza Hut. Still, the growing competition in the pizza industry has led to a higher focus on pricing. The company has adopted a more competitive pricing strategy to grow its sales and revenue across various markets. Taco Bell is well known for its competitive pricing strategy. However, KFC and Pizza Hut are also selling a highly diversified menu of items sold at competitive prices.
The QSR industry has grown highly competitive, and several brands compete for market share in the global market. From McDonald’s to Burger King and Domino’s, there are several large competitors of Yum brands in the global market. These brands also offer a highly diversified menu. Due to the high level of competition in the industry, the focus on pricing has grown higher. The QSR industry is experiencing a price war that has led to most brands reducing the prices or offering a large range of products for competitive prices.
Due to the heavy competition in the QSR industry, marketing and promotion are critical to growth. All the leading QSR companies, including Yum, McDonald’s, and others, invest a significant portion of their revenues into marketing and promotions.
Yum uses several channels for marketing and promotions. The use of digital channels for promotions and engagement in the QSR industry has grown. Yum uses its website, apps, and social media channels for promotions and customer engagement. Apart from that, the company-owned stores and franchised stores dedicated a part of their annual revenue to advertising and promotions.
KFC has 57 million followers on Facebook. The brand has also maintained a strong presence on other social media channels like Instagram.
In the QSR segment, marketing is a key driver of market and revenue growth. Yum brands dedicate more resources to digitization and digital marketing to maintain their market share and growth momentum.