When being asked what their favourite fast food restaurant is, more than half of the people in China would say it’s KFC. KFC is without a doubt the biggest winner within the fast food industry in China. But why can’t KFC beat its competitors in Europe? What has KFC done in China to be so successful?
We could see that there are 32% of people who go to KFC because KFC got some special food that McDonald’s don’t have, 29% because there are some new products that they want to try, and 21% because they see the advertisements of KFC. This is what KFC did great in China. We focused on these parts and found something more specific below:
- KFC has adjusted to the local environment and provides several kinds of local food.
Most likely, people in Europe or America cannot imagine going to KFC at 8:30 AM to have soya bean milk and traditional Chinese fried Youtiao as breakfast. It is probably unbelievable to people in the Western World but Chinese people are just this lucky to have KFC providing these kinds of food in China. Since Chinese food is totally different from Western food, Chinese people are good at cooking, and they are critical about the ingredients of food, it is hard for them to accept American fast food. However, by creating so many new kinds of local tasting food, KFC enjoys a lot of appreciation by the biggest nation in the world. While McDonald’s didn’t manage to do as well as KFC, KFC has specialized in certain products and some of them are especially for Chinese people. This is the main reason why Chinese people prefer KFC over other fast food restaurants.
- In contrast to McDonald's strategy of directing much attention to children…
KFC focuses on people who are of age 16 to 25. This is smarter because according to a survey 60% of the people in China who go to fast food restaurants actually are from 16 to 25 years old. The remaining 40% are either adults or children who usually don't have the money to pay for themselves and, therefore, have to ask their parents to buy them fast food. This dependence poses a threat to fast food companies that focus on children since more and more parents become aware of fast food's negative effects on health and they tend not to buy their children whatever they like. So the slight difference can influence a lot, like the whole fitment of the restaurant, the advertisement styles, the products and the location of the restaurants.
One look at the creative and vivid advertisement pictures of KFC in China already gives an impression of how elaborately KFC promotes its products. Everybody who watches TV could certainly name some products that KFC provides. The clear message is that KFC has something to offer for every taste. There are advertisements everywhere, not only in TV programs, but also on the streets, in the elevator; there are even coupons in newspapers. In Europe, however, the situation is different. Within the fast food industry it is McDonald's that predominates in terms of media presence. We have done a survey to measure and analyse the performance of KFC in Rotterdam. We have asked 100 McDonald’s customers why they prefer McDonald’s above KFC. Our survey shows that 21% people go to McDonald’s because they see the advertisements, 20% of people go to McDonald’s because they want to try new products there, which is also a contribute of advertisements. In contrast to its main competitor, KFC is barely noticed, not to mention its various products and their respective prices.
According to the results of our questionnaire 18% people go to McDonald’s because it is more convenient. In Rotterdam there is only one KFC restaurant in the city center but it is not close enough to the main streets like Coolsingel and Google Map does not even show it. In contrast to that, there are three McDonald’s in the city center and two of them are right at Coolsingel. When we conducted our survey to find out why customers at McDonald's do not go to KFC instead we found that especially many of customers at the two McDonald's at Coolsingel would go to KFC as well but they did not know where one is at. Also Burger King chooses restaurants' locations more wisely than KFC: One is just next to Central Station and the other one in the city center, although not being located at one of the main streets, either, does at least show up in Google Map. KFC speaks proudly of a distinct original taste the offered food is supposed to have, nevertheless, most customers do not see any salient differences between the products offered by several fast food companies so they simply go to a restaurant that is close. After all, crossing long distances to get food contradicts the main idea of fast food: saving time, while according to our survey 30% people don’t give fast food up because they want to save time.
We see that KFC here is beaten by McDonald’s. But why does KFC not apply the strategy used in China and create some new products that fit the local tastes of western people? In Europe KFC's range of products is limited and one can hardly ever see any advertisements. It is true that there is a common believe that McDonald’s is very good at making hamburgers but that does not mean KFC is condemned to be powerless against McDonald's. Instead, KFC really needs to take some action like:
- Hiring experts and develop new products, for instance, some fish hamburgers in the Netherlands as Dutch people like fish, and, most importantly, it is healthy!
- Getting the image of a fancy place young people would be attracted to since they are the largest group of fast food customers as in China. In order to do so KFC could equip its restaurants with nicer furniture. Basically, "Differentiation from competitors" is what KFC should take into consideration.
- Offering discounts to steady customers such as a free meal after ten times of visiting a KFC. This would enhance customer loyalty especially among those people who have a low budget which is, again, the target group: teenagers, college students, apprentices.
- Making more advertisements for new products with new catchwords and using various kinds of media.
- Detecting and closing those restaurants which do not make much profit, open some restaurants at crowded places like the city center, central station, or schools. Fast food should be easily accessible and since there is not much of a difference in the tastes comparing the products available in the fast food industry, it must be due to reasons such as the wrong location if a restaurant is not making enough profit.
- KFC could also consider selling some other products like Chinese fast food. The result of our survey shows that 18% of all people are interested in Chinese or Indian fast food, as it contains more vegetables and less fat, it will be healthier. And the style of the food also changes and people will have a new image of KFC.