Kentucky Fried Chicken (KFC) has a somewhat negative brand reputation in the United States. As part of this perception, American consumers may not immediately consider that KFC is China’s largest fast food chain with over 9000 locations. To have accomplished this undertaking, KFC’s new product development team works around the clock to create new menu items to keep variety fresh and consumers intrigued. Each year, the menu will rotate 85-100 new and seasonal items, compared to an annual rotation in American stores of just 2 (1).
When KFC first entered the Chinese market in 1987, the business offered a very different experience to the one today. Over time, leadership realized that people did not actually enjoy the food there, but mostly came for the novelty of the brand. The issue of waning popularity was tackled through innovation, that being the complete overhaul of the menu. While they would still serve fried chicken in various forms, the restaurant became noticeably more Chinese. It began serving Chinese food like wonton soup, egg rolls, egg tarts, bacon rice, and even eventually congee. So how did they know exactly what the Chinese consumers wanted to eat?
KFC realized that there was no realistic way by which a foreign marketing officer from the United States would truly understand the tastes and desires of Chinese diners. Rather than create a top-down approach to new product development, a bottom-up, collaborative market intelligence gathering system was implemented. Teams from parallel departments in marketing, management, and new product development would meet to discuss upcoming menu items. They would listen to direct consumer feedback and local managers would pass their ideas up the chain of command for consideration.
Another key decision made by Sam Su, President of KFC China, was to exclusively hire ethnic Chinese leaders to form his middle and upper management teams. In Su’s mind, their hands-on experience compounded by traditional data gathering methods like surveys and social media engagement on platforms like WeChat could produce a more innovative menu. While initially unorthodox, it was a genius move. Their on-the-ground experience, coupled with data analysis and social media engagement, produced a more agile and innovative menu. On the creation of a KFC curry dish, for example, Su once explained,
“What curry flavors do Chinese people like? We can’t rely on chemical analysis alone. We developed a sensory profile, gave it to our suppliers, and asked them to develop a recipe, then trained our tasting panel—made up of local people—to taste curry… Everyone in the company is engaged in this process. Nowhere else does the very top management in the company spend three days every month discussing innovation. We have developed a process, the discipline, and the mind-set to constantly challenge ourselves.”
(1)
In an incredibly demanding consumer environment, KFC has maintained the top position in the nation for fast casual dining. Their methods of organic data gathering and consumer engagement has been part of KFC’s recipe for success and allowed them to stay above the competition. With all this in mind, I see no reason they wouldn’t stay in the number one seat. I, for one, may just give them a try next time I’m in Beijing.
Citations
- Bell, D. E., & Shelman, M. (2012, February 14). Yum! China. Yum! China – Case – Faculty & Research – Harvard Business School. https://www.hbs.edu/faculty/Pages/item.aspx?num=39780
- https://mpk732t22016clusterb.wordpress.com/2016/08/21/what-makes-kfc-successful-in-china-the-importance-of-marketing-research/
- https://finance.yahoo.com/news/kfc-admits-making-same-mistake-135903707.html