Review the following case scenario and answer the following questions:
Question 1. What types of marketing strategies is Chick-fil-A following?
Question 2. How would you describe Chick-fil-A's positioning strategy?
Question 3. Is Sunday closing a competitive advantage for Chick-fil-A? Explain.
Question 4. Should other retailers consider closing on Sunday? Why? Why not?
Chick-fil-A: “Eat MorChikin” (Except on Sunday)
Video Cases:
There aren’t many companies like Chick-fil-A. Most U.S.companies struggle to balance ambitious financial objectiveswith the desire to be ethical in business dealings and demonstratea social conscience. Chick-fil-A easily surpasses industrynorms for financial performance and eagerly embraces andprotects a corporate culture rich with religious values andcharity. The contrast is striking to most observers. Yet theChick-fil-A phenomenon is easily understood when you studyits entrepreneurial heritage.S. Truett Cathy, founder, chairman, and CEO of Chick-fil-Astarted his restaurant career in 1946 when he and his brotherBen opened a restaurant in Atlanta called the Dwarf Grill (renamedthe Dwarf House two years later). It was not until 1967that Cathy opened the first Chick-fil-A restaurant in Atlanta’sGreenbriar Shopping Center. He is credited withintroducingthe original boneless breast of chicken sandwich and pioneeringthe placement of fast-foodrestaurants in shopping malls. Today,Chick-fil-A is the second-largest quick-service chicken restaurantchain in the United States, based on sales ($1.975 billionin 2005). It operates more than 1,250 restaurants in 37 states
and Washington, D.C.
Chick-fil-A’s unique corporate culture derives from Cathy’sChristian background and his desire to inspire and influencepeople. The company’s official statement of corporate purpose is“to glorify God by being a faithful steward of all that is entrustedto us and to have a positive influence on all who come in contactwith Chick-fil-A.” This level of commitment to religiousvalues is reflected in a number of ways. For example, all Chickfil- A locations, in a mall or stand-alone, are closed on Sundays.
Cathy has been quoted on numerous occasions as saying, “Ourdecision to close on Sunday (starting in 1946) was our way ofhonoring God and directing our attention to things more importantthan our business. If it took seven days to make a living witha restaurant, then we needed to be in some other line of work.Through the years, I have never wavered from that position.”Chick-fil-A also has an extensive corporate giving program.
The company has helped thousands of restaurant employees,foster children, and other young people through theWinShape Foundation that Cathy established in 1984 to help“shape winners.” The foundation sponsors WinShape Homes,which currently operates 14 homes in Georgia, Tennessee,Alabama, and Brazil. The WinShape College Program at BerryCollege in Rome, Georgia, is a co-op program offering jointfour-year scholarship funding to incoming freshmen of up to$32,000. In addition to the WinShape scholarships, Chick-fil-Aoffers $1,000 college scholarships to its restaurant teammembers. Camp WinShape is a summer camp for boys andgirls. WinShape Marriage provides development, education,and encouragement for married couples on the campus ofWinShape Retreat, a multiuse conference and retreat facilitylocated on the MountainCampus of Berry College.
Chick-fil-A’s unique corporate culture is matched by itsequally unique marketing efforts, especially in the advertisingand promotion areas. Its “Eat MorChikin” campaign is one ofthe longest-running advertising campaigns in the UnitedStates. Started in June 1995 when the first Chick-fil-A billboardwas erected in Atlanta, the Eat MorChikin cows havebecome cult figures, convincing diners to stray from the herdof beef-burger eateries and to “eat morchikin”—particularlyin Chick-fil-A restaurants. In focus groups, respondents rate the cows as one of the three things they like best about theChick-fil-A brand—the other two being the food and thecompany’s policy of being closed on Sundays.The Eat MorChikin theme, created by Dallas-based ad agency the Richards Group, was first introduced in 1995 asa three-dimensional billboard concept depicting a blackand-white cow sitting atop the back of another cow paintingthe words “Eat-Mor-Chikin” on the billboard.
Sincethen, the theme has been used as the basis of an integratedmarketing campaign, which encompasses billboards, instorepoint-of-purchase materials, promotions, radio and TVadvertising, clothing andmerchandise (e.g., plush cows,bobble-head cows), and calendars. Introduced in 1998,Chick-fil-A’s cow calendars have been a marketer’s dreamcome true. The calendar is produced annually by theRichards Group. Sales have sharply increased—from337,000 for the first printed calendar to 1.5 million for the2006 renaissance-themed calendar entitled “Cows in ShiningArmor,” featuring “famous” medieval cows named AngusKahn, Charbroilemagne, Boldhoof, Lady Guineveal,and Moolius Caesar. The calendars sell for $5 and containChick-fil-A food and beverage coupon offers.Sponsorship of collegiate sports such as the Chick-fil-A Peach Bowl (renamed the Chick-fil-A Bowl in 2006) are anotherway in which Chick-fil-A builds its brand. A local promotionemphasis at the market and restaurant level completesChick-fil-A’s integrated marketing approach.
In 1998, the Eat MorChikin campaign won a national silverEFFIE award in the Fast Food/Restaurants category forcreativity and effectiveness in advertising. The outdoorAdvertising Association of America recognized Chick-fil-Aand its renegade cows with the organization’s OBIE Hall ofFame Award in 2006.
Chick-fil-A is growing rapidly through store openings andmenu additions. Menu additions include Chick-fil-A Chick-nStrips in 1995, Chick-fil-A Cool Wraps in 2001, Chick-fil-ASouthwest chargrilled salad in 2003, fruit cup in 2004, and abreakfast menu featuring Chick-fil-A Chick-n Minis, a chickenor sausage breakfast burrito, and a chicken, egg, and cheesebagel in 2004. The chain introduced the industry’s first premiumtwo-blend coffee line in 2005 with Café Blends and thecomplementary Cinnamon Cluster. Hand-Spun milkshakeswere launched in 2006.
The company had sales of $1.975 billion in 2005 and forecastssales of $3 billion by 2010. Also by 2010, the companylooks to double its current size in terms of new locations, primarilythrough stand-alone restaurants and aggressive expansioninto the western United States. Chick-fil-A also haslicensed restaurants in nontraditional locations such as airports,corporate offices, hospitals, and college campuses.Dan Cathy, the son of S. Truett Cathy and Chick-fil-A’scurrent president and COO, takes restaurant openings seriously. The openings are not simple ribbon-cuttings. Cathyholds a dedication dinner during which he and other companyleaders wait on newly hired employees. He also “camps out”the night before a store opening with Chick-fil-A raving fansand customers. Beginning in 2003, Chick-fil-A offered thefirst 100 customers in line at its new stores a free combo mealeach week for a year. People lined up hours in advance, settingup tents and lawn chairs overnight in the parking lot to ensurea place in line. Observing this, Cathy decided to join them and since then, camping out with Chick-fil-A fans and customersat store openings has become a tradition for him.
Dan Cathy takes his role as a leader seriously and defineshis role through his interaction with customers and employees.He frequently visits Chick-fil-A restaurants and often pitchesin to help. Like his father, Dan Cathy is on a mission to meetcustomers, franchisees, and employees face to face and spreadthe Chick-fil-A business philosophy of “Second Mile” service,great food, and influencing others.