Yum! Brands Executive Summary for Term Paper

According to Spring (2002), in 2002, YUM! Brands acquired a&W and Long John Silver's; at that time, the company reported that, "The acquisition allows us to accelerate our multi-branding strategy and...to be expanded international leaders...in chicken, pizza, Mexican and seafood" (quoted in Spring at 203).

As noted above, the company's motto is, "Our passion is to put YUM on our customer's faces all over the world," and this marketing approach appears to be paying big dividends. Indeed, Spring notes that YUM! Brands is currently a leader in the construction and operation of themed environments: "For instance, in 1922, the a&W logo was created by Roy Allen and Frank Wright to represent their two last names. Opening in Lodi, California, the men constructed an outdoor stand that looked like a root beer barrel. In 1923, a&W developed the first car-hop service initiating the spread of drive-in restaurants. Later restaurants relied on the logo rather than the barrel design for name recognition" (Spring 203).

Likewise, when Long John Silver's was opened in 1968, it featured new "exteriors," described by the company as being "a stronger retail identity with bolder colors, accent stripes, illuminated canopies on drive-thrus, and a new roof design" (quoted in Spring at 203). As Waldo (2006) points out, when it comes to eating out, "Consumers crave choice, quality, and affordable luxury. This has translated into growth for several food and dining niches. Multiple brands under one roof such as YUM! Brands (KFC, Taco Bell, Pizza Hut, etc.) fill this demand by offering an array of menu items. Juice it Up! serves up specialty beverages and smoothies -- great for health-conscious professionals and morns on-the-go" (104).

This mixing and matching of multiple popular brands under one roof has proven highly effective and has provided customers with some choices that they might not otherwise have readily available, thereby increasing sales for both brands. For example, as De Marco (2005) reports, "Clayton Wike got the best of both worlds when he stepped into the new Long John Silver's and a&W All American Food restaurant last week in Capitol Heights. The hungry diner feasted on the unusual combination of an a&W double bacon cheeseburger and a Long John Silver's fish sandwich for lunch. 'This beats going to a carryout,' he said, commenting on the variety of fish and burger choices he had. it's that choice that keeps Yum Brands Inc., owner of Taco Bell, KFC, Pizza Hut, Long John Silver's and a&W All American Food, mixing and matching its brands. Yum, which has combined such foods as pizza and tacos and chicken and burgers all under one roof, now has more than 2,800 multibrand restaurants worldwide, with the majority in the United States. The company added 550 stores last year and has plans to open another 550 locations in 2005 (De Marco 10). In addition, the company has announced plans for expansion of its current Long John Silver's and a&W co-branded concept, which ties fish, hamburgers and root beer together; there are currently approximately 275 such locations in the United States (De Marco 10).

Some of the company's other marketing initiatives, like many from Coca-Cola and GEICO (and perhaps, "Head on"), remain firmly embedded in the national consciousness because of their ubiquity and pervasiveness. Indeed, even today, who can forget the little Mexican Chihuahua sporting a black beret that promoted Taco Bell's "Yo quiero Taco Bell"? (Flusty 188). According to this author, the marketing wizards at YUM! recognized a winner when they saw it, and took this campaign to the extreme:

Taco Bell restaurants flew red flags emblazoned with the beret-clad animal. Car antennae sprouted red pennants, again adorned with the canine Che. And in television spots, on a balcony high above the throngs of a dusty colonial city, the Che-huahua appeared in heavy rotation at a bank of antiquated microphones. Upon the dog's echoing intonation of "-iva Gorditas!" adoring throngs chanted and sang in unison as giant red banners unfurled across the sides of buildings, each emblazoned with a massive arm holding a taco aloft. Throughout the campaign, the gorditas slogan was endlessly repeated: 'The Revolutionary Taco.' (Flusty 188).

More recently, the company has contracted for a five-year aggressive marketing campaign at the Kentucky Derby, beginning in 2006. The company's Web site's press release for the event stated, "Yum! Brands, Inc., the world's largest restaurant company in terms of units, and parent of KFC, Taco Bell, Pizza Hut, Long John Silver's and a&W Restaurants, announced today that it will debut its first advertising ever on network television as part of the first-ever sponsorship of the 132nd Kentucky Derby" (YUM! Brands Debuts Advertising 1).

According to O'Halloran (2006), though, if the marketing gurus at YUM! had managed to get everything they wanted, they would have even changed the look of the historic setting in which the race is run, an initiative that many observers felt was taking things too far: "Yum! logo, which is all over Churchill Downs this week, is causing a stir. it's on the starting gate and tote boards, in the grandstand and paddock.Even the pony riders who will escort the Derby horses to the starting gate late this afternoon will wear jackets with the logo. On television, Yum! will air six 30-second commercials during NBC's 90-minute broadcast [but] plans to place a Yum! sign on the roof between the historic twin spires were scrapped after the public raised objections" (1).

Finally, the company's most recent Form 10-Q reports that YUM! continues to focus on improving its U.S. position through differentiated products and marketing and an improved customer experience; in addition, the company has made efforts to provide industry leading new product innovation which adds sales layers and expands day parts.

Support Activities (Procurement, Technology Development, Human Resource Management, General Administration).

From a human resources perspective, a number of other companies of all sizes could look to YUM! For some sound best practices. For example, the company has been recognized as one of Fortune Magazine's "Top 50 Employers for Minorities" for the previous four years as well as being recognized as one of the "Top 50 Employers for Women" by Fortune, one of the "40 Best Companies for Diversity" by Black Enterprise Magazine for the past two years, one of the "Corporate 100 Companies Providing Opportunities for Hispanics" by Hispanic Magazine and by BusinessWeek as one of the "Top 15 Companies for in-Kind Corporate Philanthropy" (About YUM! Brands 2-3). Further, the company has been named the number one company for Work/Life Balance in Louisville, one of the Best Places to Work in Kentucky and Pizza Hut has been named the #1 Best Place to Work in Dallas (About YUM! Brands 3).

Beyond its marketing initiatives, the company is also a global leader in multibranding by providing its customers with a variety of choices, locations and pricing schemes. According to their corporate literature, "YUM!'s formula for success is centered on putting people capability first because when we do that, we satisfy our customers and generate more profits. Around the world, our 900,000 Customer Maniacs are striving each and every day to put a YUM! On our customers' faces around the world" (About YUM! Brands 2).

The "Customer Maniacs" to which they refer, of course, are the company's line employees who have been provided with the acronym CHAMPS to help them remember the focus of this initiative: Cleanliness, Hospitality, Accuracy, Maintenance, Product Quality and Speed, all of which are designed to improve customer perceptions of quality and service, a formula that is applied equally in all of the company's eating establishments (About YUM Brands 2).

In this regard, according to Black Enterprise magazine (2003), "Although known for serving delicious food, it's the company's "Customer Mania" that remains at the top of its core menu. Yum! promotes a culture that is positive and energetic, builds people capability and creates an environment of true team spirit. Yum! Brands is proof that rewarding careers can be found in the quick service restaurant industry. The company's African-American restaurant, corporate and franchisee leadership is an example that no matter who you are, or where you work at Yum! you have the opportunity to make the most of your career and your life. At Yum! "Great Things really do Start Here'" ("It's All in Yum! Brands" 176). The editors also emphasize that almost a quarter of the total domestic workforce at YUM!'s is African-American, and add that diversity has always been encouraged at the company ("It's All in Yum! Brands" 176).

Although the company continues to own and operates just over 20% of its restaurants, its emphasis on franchising has paid major dividends for the company as well as those entrepreneurs that had hitched their horses to the YUM! wagon: "As Yum! Brands grows the world over, so do the ranks of their franchise business partners. In fact, Yum's African-American franchisees are some of the country's most successful entrepreneurs and are building thriving neighborhoods with expanded economic opportunities.….....