KFC´s Reputation and Action Plan in China

Main Finding

Sales figure in KFC

The sales in KFC started to drop in fourth quarter 2012. Although the overall sales in 2012 were higher than 2011, the fourth quarter’s sales figure went down by 6% (Matthew B, 2013). From that quarter until October, the sales figure decreased continuously. Although Yum! Brand persistently estimated that the sales figure will increase after the bird flu and still predicts that the sales will go up in fourth quarter 2013, it is unpredictable whether KFC’s sales will be positive or negative. However, the trend shows that the percentage decrease has been reduced gradually, so it seems that the sales value will be recovered gradually as well.

Quarter Percentage growth
2012 third quarter +6
2012 fourth quarter -6%
2013 first quarter -20%
2013 second quarter -16%
2013 third quarter -11%
[ Table 1: percentage growths in KFC China during late 2012 and 2013]

Why are Chinese people so fervent about western food chain?
China was isolated from the outside world both economically and socially for over fifty years. Not only did foreigners curious about the forbidden country, but also Chinese people desired to learn about the world. After Deng xiao ping introduced new economic strategy, Chinese people were exposed to new information. The exquisite and technological products were almost a culture shock to those long “protected” people, and it implanted an idea to local people that Western products are the best of all, no matter where it is from or what it is. Chinese people, who have never been to other countries yet, had a fantasy of western society, which also made them to believe in the quality of western goods. The same formula worked in fast food industry. Surprisingly and ironically, people from late 90...

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...ining power of buyers, so the significant drop in sales would mean that some of the customers have switched the brand or left the company. The main reason comes from the loss of faith. After a scandal, the bird flu challenged the company and soon after the hygiene problem disappointed the customers again. A series of health issues made KFC to lose the customer trust so people do not come back even after the bird flu.

Although KFC’s reputation is shaken, it seems that the sales value will be recovered again with its experience in China and the excellent marketing strategy it has. KFC will reshape their brand image, though it may take some time. However, KFC should be aware of the fact that what they really need to deal with is the quality of the products. If the service continues to be kept in low quality, the brand image will not help to booster the sales anymore.