KFC Launches Campaign to Rebuild Image in China

Published on Author vanmeter

Two recent articles written by cbsnews and Bloomberg discuss KFC’s intentions of launching a campaign to rebuild its brand in China. The campaign follows December allegations that a former chicken supplier was found to supply meat with high levels of antibiotics to Chinese chains. YUM Brands Inc., which owns the company, has promised to enforce a more strict level of monitoring and managing of suppliers based on a principle of “zero tolerance in food safety.” Even though the complaints against KFC are less serious than other Chinese product scandals from the past decade, the controversy has damaged the foreign company’s image in China.

KFC, which is the largest fast-food chain in China with 4,000 outlets, has estimated that sales will fall by 25 percent in the current quarter after falling 6 percent in the fourth quarter of 2012. This estimated fall in sales is particularly significant as 44 percent of the company’s sales revenue was generated from Chinese chains in 2011. As part of the rebuilding campaign, KFC has eliminated 1,000 small producers that supplied chicken to Chinese chains. Furthermore, KFC has planned to develop 700 new locations this year outside of Beijing, Shanghai, Guangzhou, and Shenzhen in areas with higher potential for future growth.



5 Responses to KFC Launches Campaign to Rebuild Image in China

  1. With the recent decline in sales and credibility of food health, even though KFC has been hurt by their recent allegations, they should focus heavily on rebuilding their image in China. With an image blow comes a need for larger amounts of advertisement, marketing, and bolstering of image through these. Even though declines have been sharp, it is likely that these are just from recent issues with antibiotic levels and that once these issues are corrected, revenue will lively rise and will begin to increase and level off. Advertising from their sources of chicken and being able to show that the problems have been dealt with can help the company has its feet stepping back in the right direction.

  2. Although KFC may be able to rebuild its brand and move forward from the chicken supplier scandal, it may be difficult for the Company and other Western Fast Food Chains to maintain the same level of economic growth because of Chinese rival restaurants. One such restaurant chain is Yonghe Dawang which copies KFC’s Colonel Sanders logo (includes grandfatherly Chinese man). Moving forward how will foreign restaurants compete with the local Chinese food chains?

  3. There’s a book on KFC in China and on McD across Asia, as well as books on Walmart in China and British big box / supermarket operators in China. So what are / are not the challenges?

  4. It seems like a good step for KFC to try and rebuild itself, especially when it is the largest fast food chain in China. Though, I can’t imagine it going over too well that KFC is eliminating over 1,000 small producers. Or perhaps this is just an American sentiment.

  5. I’m curious how larger global scandals about the use of horse meat, among other less savory things, in food affects KFC’s plan for China. In light of the bad press a number of other firms are getting, I’d imagine the chicken KFC used doesn’t seem nearly as egregious a mistake. That being said, there is also a chance that consumers will begin to distrust lower end food chains on a global level.