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Kfc China

In: Business and Management

Submitted By dhruv123
Words 1895
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Yum! is one of the world’s leading fast food service provider. KFC, which is one of its subsidiaries, not only specializes in fried chicken but is also the leading brand for it. KFC China, since its inception, has been growing at a very fast pace. It has taken astute strategic steps to establish itself in China. It had various key competitive advantages which permitted it to expand to more than 4000 outlets in China (Bell and Shelman, 2011). The company hired a managerial team from Taiwan which had an experience of more than 15 years in the fast food industry (Cho, 2009). It introduced a new concept of high-end, modern and western fast food in China. People considered KFC to be a nice place where they could take their dates. The Chinese love fried chicken, which is probably one of key reasons it has a competitive advantage over the beef focused MacDonald’s, with a ratio of 2:1 unprecedented anywhere else in the world (Cho, 2009). It also catered to local tastes by localizing its menu to suit the Chinese and acquired East drawing- a chain which serves local food. KFC china is also known for its frequent product releases. KFC also dealt with China’s dynamic and rapidly changing business environment by establishing its own supply chain and owning most of the chains instead of giving franchisees like it operates in the US. This was mainly to protect itself from the problems it could face by getting off on the wrong foot with the local partners. (Bell and Shelman, 2011)
However, in 2012, KFC china saw its sales fall for the first time and a significant number of people have over online platforms (such as blogs) expressed their apprehension towards the chicken’s food safety and decided not to eat it anymore. There have been various recent trends which could be attributed to the decline in KFC’s sales. The major reason which caused a sudden decline in the sales of KFC was the chicken safety scandal, where KFC’s suppliers were accused of feeding their chickens with toxic additives to enhance growth. Seconding this is the rise of competition in the Chinese fast food industry. With new local and international chains opening up, consumer gets a lot of buyer power and options. Lastly, the rise in the Chinese economy and a rise in health awareness have changed the consumer mindset in China. KFC has lost its image of modernity and doesn’t appeal as very exciting to consumers anymore. It’s just another junk food option. (Kaiman, 2013) The solution here is for KFC to come up with a marketing campaign to re-promote its image as the best fried chicken provider. KFC needs to come up with something to bring back its image and get back its lost customers as well as to attract new segments of consumers. There is a need to redevelop its positioning among its consumers as a good, safe and a high-ends place to not only eat but to also to spend quality time.
Benefits of the marketing campaign.
Although the December food scandal caused the sudden hit to its sales, as the news went viral in China on online platforms, increasing concern of the consumers over food safety made them apprehensive over eating at KFC any longer. This is just the tip of the ice- berg. There are other signs which indicate that KFC’s prime time in China is over. The fact that KFC is looking to expand in under-developed, low-income Chinese markets is an indication that the target segment of KFC has been saturated. Rise in intense competition, economic slowdown and changing consumer behaviour are other key factors which have hit the pioneer western food chain.
KFC needs a marketing campaign to bring back its image in China. The Chinese still love fried chicken. Although it is uncertain whether KFC may be able to achieve its growth rate of the last decade, it can certainly improve its sales by re-positioning itself as it expands to tap the unsaturated markets in China. The main reasons for the marketing campaign are to deal with its food- safety scandal, intense competition and the changing consumer mindset which has led to KFC losing its appeal of newness and modernity.
A marketing campaign will bring back KFC’s image. KFC needs to remind the consumers why it was successful in the first place. It needs something to capture the essence of KFC and attract its lost customers. Also, promoting East Drawing and its other recent new products could be another aim of the campaign to tackle competition and deal with the economic slowdown by promoting its cheap products. KFC has taken steps to deal with food-safety. It has agreed to co-ordinate with the government in routine health checks to ensure safety standards and has stopped doing business with the supplier accused of feeding its chicken with toxic additives. Thus, through advertisements, online platforms and distributing free samples, KFC could talk about this initiative and re-kindle the faith of the consumers in its chicken.
Food- Safety
Although KFC has taken steps against the food safety scandal, the Chinese consumers feel that KFC still has to go further to re-build the lost faith in its chickens. KFC wasn’t fined by the authorities but have promised to stop doing with the small suppliers who haven’t modified their operations. Also an official apology was issued on the online blog Weibo. KFC also launched an online poetry competition to highlight food safety where prices were given to the best poetry (Shenzhen Daily, 2013). But this hasn’t been enough and the Chinese consumers feel hurt as they had faith in KFC because it was a western brand (Shenzhen Daily, 2013). Therefore, a campaign which will be semi- apologetic and semi- marketing would be a great way to further deal with this problem and restore back complete faith of the Chinese consumers.
Intense Competition
After KFC’s success and the rapid rise in the fast food industry of China, the government took pro-active steps to promote the industry. The Chinese government included it in the Eighth Five-Year Plan (1991-1995) in 1994. Helped by this policy and the rising demand for fast food, new chains both local and international were attracted to the market. Competition is on the rise again (China Daily, 2008). And as market begins to mature, the local food chains have realized that the only way to compete with the international chains is to upgrade and standardize their outlets. Therefore with a cheaper and more localized menu, the local chains gain an edge over KFC. Thus, KFC’s comeback by introducing pumpkin porridge and youtiao (deep-fried dough) for breakfast, and egg soup and Beijing chicken rolls and the launch of the cheap and local chain- East Drawing in 2005 could be further promoted through the marketing campaign (China Daily, 2008).
Changing Consumer behaviour
There is an increase in health awareness among Chinese consumers and a rising attitude towards KFC as just junk food has hurt KFC. Also, as China grows and the people become more affluent, they start seeing KFC as less of a sign status. It is considered just as fried chicken (Kaiman, 2013). Thus a marketing campaign through advertisements and online blogs will be required to deal with this. By reminding people of its good quality and service and also its more recent healthy releases, it can improve its changing image.
Action plan
The marketing campaign would be divided into three steps- Online platforms, Advertisements and distribution of free samples around the country. Taking example from KFC’s Australian marketing campaign which was launched as a summer project (McGinn, 2012), we could follow on their footsteps and come up with a summer program and aim for it to take effect within the next six months and show results by the end of 2013. Also, taking Burger King as an example where they used celebrities such as David Beckham to promote its new launches. We could offer Mr. Jackie Chan to endorse out products and make him the brand ambassador of KFC. Being from Hong Kong and a hero among the Chinese, this could really help our sales as it did for Burger King (Brandau, 2012). The marketing campaign would fit in KFC’s annual budget of marketing and therefore be a perfect competitive strategy to help KFC recover from the recent unfortunate events and decline in its sales.
Online platforms- Another official apology will be issued by the CEO of the KFC Chain explaining that the suppliers have been boycotted and reassuring them that the Chinese consumers are as important as the western consumers and therefore KFC doesn’t undervalue the importance of food safety. KFC will guarantee complete food safety from now on that nothing of this sort will ever happen. Through popular online blogs such as Weibo, people could come and give their feedback and provide reviews on how KFC is keeping up with the health and food safety targets.
Video- The next step would be promoting KFC through an advertisement with a new tag line “Today tastes soo good”. KFC will promote its latest product innovations which are not only tasty and cheap, but are also healthier therefore dealing with the changing consumer behaviour. Also, Jackie Chan will be featured in the video where he eats a bite of the chicken and says the tag line.
Free samples- Free samples of the latest food products and the value meals will be provided in areas with a high density of youngsters such as outside Schools, universities. Flyers would be put all across cities talking about the latest deals.

To sum it all up, KFC China has been a model for other KFC’s around the world by showing its brilliant strategy to conquer the Chinese market. However, due to the recent food safety scandal, a rise in both local and international completion and a slowly changing consumer mindset as people become richer and more health conscious. KFC needs to promote its changes and fix its image as safe once again. Therefore, a marketing campaign would be a perfect way to do that and could hope to get results by the end of 2013.

Brandau, Mark. (2012, December 11). Top 5 restaurant marketing campaigns of 2012. Retrieved from Bell, David E. and Shelman, Mary L. (2011, November). KFC’s Radical Approach to China. Harvard Business Review. Retrieved from Cho, Karen. (2009, March 20). KFC China’s recipe for success. The European Business Review. Retrieved from Kaiman, J. (2013, January 4). China’s fast food pioneer struggles to keep customers saying ‘YUM!’ .The Guardian. Retrieved from McGinn, Cathie. (2012, November 28). KFC reveals partnership with the Madden Brothers. mUmBRELLA. Retrieved from (2013, March 13). Yum’s China recovery remains rocky. Shenzhen Daily. Retrieved from (2008, June 30). Competition gearing up in China’s fast food industry. China Daily. Retrieved from

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