Are your neighborhood restaurants lacking in service quality? Does their menu bore you with little variety of entrees? Do you want a dining experience that is low cost, healthy, and delicious? Looking for a venue for your special wedding day? Well search no longer – Kentucky Fried Chicken is the restaurant of your dreams.
The average American may find it surprising to ever think of Kentucky Fried Chicken (KFC) as synonymous with”full-service,” “quality,” “healthy,” “special,” and (especially) “wedding,” but the KFC mentioned above describes the dining experience of visitors to the Chinese KFC chain. Furthermore, this same description is also applied to Pizza Hut chains in China. As Sam Su, chairman and CEO of Yum! Brands China Division introduced these classic American fast-food chains to the Chinese market, he crafted a dining experience based on cross-cultural consumer behavior.
What is it that makes these Yum! brands so different there? Let the following list describe how different Yum! brands are in China in comparison to it’s not-so-identical twins in the United States:
At 300 to 450 square meters, KFC outlets in China are larger in size than traditional US fast food venues of under 280 square meters. Located in retail and office developments with high foot traffic, rent was higher for Chinese fast food venues. However, to correct the battle of high costs, they spread fixed costs by opening earlier and introducing breakfast items to their menu or by staying open 24/7.
Yum! China fast food venues were more modern than those of the US, equipped with a hostess and dining staff meticulously dressed and groomed. Additionally, the hostess would organize activities for children and guests were encouraged to linger. This positioned KFC to be an inviting place for the family, and even students looking to sit and do homework. Yum! China also developed a mascot for the Chinese brand, “Chicky” who would interact with the children, especially at birthday partied help within the venue, and added a localized figure that locals could understand in comparison to the western “Colonel Sanders” figure.
Yum! customized its menu to appeal to Chinese tastes by introducing spicier chicken dishes as well as local dishes that included Chinese staple-diet ingredients, such as rice, local vegetables, and seafood. However, spiciness varied by region, so each KFC was conscious of its areas spice-tollerance and customized flavors to that preference. Western dishes such as chicken wings, corn, and burgers were also customized by adding or altering the supplemental ingredients to local taste. Alternatively, coleslaw was eliminated because it did not fit the local preferences despite it’s presence as a complementary side-dish in US KFCs.
Redefining fast food
Americans view fast food restaurants as a place to get food that is usually tasty, mostly unhealthy, priced cheaply, and served promptly. The Chinese understand KFC to be a restaurant with exceptional staff and many dining options. Another Yum! brand, Pizza Hut, positioned itself in China as a 5-star restaurant at a 3-star prices, serving steaks, lamb, and salmon along with its popularized pizza. Additional items included European desserts, savory appetizers, and pasta/pizza toppings customized to local tastes. Furthermore, Pizza Hut in China introduced “afternoon tea” and “business lunch” to appeal to white collar business people’s dining habits. It’s here that numerous couples notoriously organized a wedding ceremony, according to a case study by Harvard Business School.
To make expansion successful, Yum! ensured that each store in China would be a source to train employees. Su’s strategy was to develop talent while building the brand. While in both markets, KFC workers can be considered to be students or entry level workers, employees of the Chinese brand were trained for management and aspired to grow with the company in contrast to those of the US, who are commonly temporary or low skilled workers. Yum! China employees also required heavier training than US employees because of the diversification, complexity, and magnitude of the Chinese-localized menu
Health food consciousness
Yum! China developed an aggressive program for new product development. While US stores introduced 1 or 2 new products a year, the Chinese stores were introducing 85 to 100 new products. New products served localized, customer tastes and were promoted through special programs, where popular products became permanent menu items. However, a major consideration in new product development was the promise of healthy food items. While US KFC items are known to be mostly unhealthy, Su refused to bring the unhealthy image to his China KFC vision. He eliminated the “supersize” tradition and established a model of healthy education. This included activities hosted by the hostess in stores, informational placemats, and inclusion of fruits and vegetables in meals unless requested otherwise. Yum! also held events and campaigns to encourage physical activity for its young customers and families.
Why did Yum! China’s KFC business strategy have to be different?
Cross-cultural consumer behavior drove different buying habits that Yum! China would have to adhere to in order to survive in China. Because the company shaped its heavily Western-inspired menu to localized preferences, Yum! China was able to outperform its US sister- stores by positioning itself as a premium company, with premium products, at a low-cost business model and price.