I recently discussed YUM Brands’ difficulties with their local chicken suppliers in China. However, it is important to recognize YUM’s incredible success in China regardless of their recent hiccups. YUM Brands Inc. is the parent company for KFC, Pizza Hut, A&W, Long John Silver’s and Taco Bell. Their two flagship brands, KFC and Pizza Hut, are the champions of China’s fast food industry. KFC alone boasts more than 4,000 locations in 650 cities, and the chain plans to open one store everyday through 2013.
It is remarkable to consider YUM’s success in a country that plays host to extreme regional tastes and preferences. From the start, KFC’s Chinese management team knew it would be important to present themselves as a local company, rather than a foreign product. Regional managers are encouraged to hire store management teams who are well versed in local dialects. These management teams are also empowered to market and feature products which appeal best to local preferences. This localized strategy means that teams are able to select the best locations for opening new stores, without spending too much time and money on research.
For Western tourists, visiting a KFC in China is an altogether different experience than eating at their local restaurant. Chinese locations offer a large assortment of choices which have never been made available in the United States. Instead of french fries, many meals come with a side of corn. Instead of simple chicken sandwiches, KFC now offers rice based entrees at dinner time. In fact, you often have to wait for them to cook a chicken sandwich if you order outside of the busiest hours. The American menu’s anchor is considered an odd order in China. Stores are generally more well kept than their American counterparts as well. Larger cities have even introduced delivery services.
Pizza Hut’s trademark in China is ‘Pizza and More’, with a heavy emphasis on the more. The menu boasts hundreds of different items from steak to spaghetti. Why not have a salad or soup as your appetizer? Would you like fries with that? YUM has also established Pizza Hut as a somewhat upscale dining location. Above all else, YUM has succeeded in attracting children to their brands in China. KFC and Pizza Hut are popular birthday destinations. At the former, employees will sing and dance at the front of the store with children. At the latter, a whole range of party options are offered. Even with the bit of trouble caused by their chicken suppliers, YUM Brands is definitely a company that others will attempt to emulate as they enter the Chinese marketplace.