Restaurant Value Engineering- KFC and Christmas in Japan
This is the second part of our Value Engineering episode and this time we will delve into a case study. Restaurant Value Engineering is a fairly new term for restaurants but has been in practice in some industries. They are doing some components of it but this something that will bring to the forefront, something that can be quite tangible for you to be able to understand how you can increase the profitability of your restaurant
How do Japan, KFC, and Christmas go together in any way shape, or form?
Japan is not a country that celebrates Christmas.
Christmas is not the time when people traditionally celebrate with chicken but somehow the Coronel’s got in there.
What is the value that has been created in there? I view this as Value Engineering more than Marketing because Marketing is about getting the word out of a product or service that meets a demand. This is something that did not have a demand
Religion in Japan is manifested primarily in Shintoism and Buddhism and only 1 % worship Christianity.It is interesting that Christmas can be so popular in Japan. The story begins started in 1945 with the end of the second world war after Japan surrendered to the US. This brought a big amount of austerity to the Japanese people as the economy is slowly rebuilt. In the 50 and 60, there is an increase in prosperity and people started to have disposable income. and they are much interested in the culture of the US.
KFC in Japan
KFC Japan was originally formed as a joint venture between the American parent and the Japanese Mitsubishi Corporation. The first store was opened in Osaka in March 1970. KFC HQ wanted to have a suburban strategy but that did not work too well because of the differences in the way that public transportation works in Japan. Cars are not as big in Japan and that made it difficult to be mobile in the suburbs and that is why KFC Japan was keen to transition to an urban rollout in 1972 and things started to take off. Colonel Sanders personally visited KFC Japan 3 times, by 1983 they had 390 outlets and 300 million in sales. In 1993 1,2 billion in sales and a thousand outlets but as often happens with franchise roll-outs there was a significant amount of same-store cannibalization and there was not enough geographic spread among stores so a hundred of them closed. Now they are back again with 1100 stores and doing 730 million in sales
How do we get Christmas in this mix?
In 1970 Takeshi Okawara, the first manager in KFC restaurant in Japan. The story goes that he heard 1 of his western friends complaining that it is impossible to get Turkey for a Christmas lunch. He did not have the turkey to sell but he was selling chicken. Another story that floated around is about a customer wanting to have fried chicken delivered in a Santa costume. Then there is a story of Okawara going to a Christmas party dressed as Santa. and the kids loved it so he saw a business opportunity.
Okawara came up with a concept of a party barrel which is an analogy for the turkey that you would have for Christmas. Though the concept of Christmas was nonexistent in Japan so there is an opportunity for what Christmas could be or should be in Japan and chicken became a popular Christmas meal. In 1975, they launched their Kentucky For Christmas campaign.
Have a listen and learn from this case study using the lens of Restaurant Value Engineering.
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