In the early days, KFC and McDonald’s tried to conquer China’s consumers with a standard US menu. Now diversification and localization have become a key feature in the success of both fast-food chains, although the road has not been without bumps, says marketing expert Ashley Dudarenok to the Panda Daily.
The Panda Daily:
While these food items may seem too peculiar to appear on the menus of these major US chains, they could signify a broader adjustment in strategy from these food giants, said analysts who spoke with Pandaily.
“These are diversification strategies, trying to seize other markets such as the breakfast market,” Ashley Galina Dudarenok, long-time author on Chinese marketing strategies and founder of social media agency Alarice and marketing training company ChoZan, told Pandaily.
The total consumption of breakfast food by Chinese consumers is expected to increase from 1.3 trillion yuan ($201 billion) in 2015 to 1.9 trillion yuan in 2021, according to marketing intelligence agency Mintel. By 2021, sales of breakfast food are expected to exceed 840 billion yuan.
In early 2008, KFC added youtiao, or fried dough sticks, its first Chinese street food snack to its menu. Soon after, other breakfast items, including tofu, congee, rice balls, egg rolls and tea leaf eggs were included. In fact, KFC’s congee is the chain’s number one seller at breakfast in China, according to Harvard Business Review.
McDonald’s followed closely, attempting to also capture the breakfast market. In addition to youtiao, soy milk, and congee, it also offers steamed bun burgers.
“These strategies have been relatively successful,” Dudarenok said, but increased competition in the breakfast market has prompted McDonald’s and KFC to go hyper-localized, a targeted form of marketing that focuses on reaching local, motivated buyers — hence roujiamo and hot dry noodles.
While McDonald’s has been accused of butchering the Shaanxi street-food staple due to inconsistencies between what was advertised and the actual product — with angry net users flooding Weibo with photos of two dry buns with a less-than-generous filling, KFC’s 7 yuan hot dry noodles have really resonated with people, Dudarenok said.
“KFC’s take on the Wuhan delicacy has really expanded consumer expectations. As breakfast food providers, KFC and McDonald’s are not only chasing hot trends, but also launching new products regularly, attracting consumers to keep coming back to try new things,” she added.
Are you looking for more marketing experts at the China Speakers Bureau? Do check out this list.