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University of Southern California Dissertations and Theses
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Strategic planning model: how KFC China can attract Gen Z and Millennials through appreciating Chinese values
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Strategic planning model: how KFC China can attract Gen Z and Millennials through appreciating Chinese values
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Content
STRATEGIC PLANNING MODEL:
HOW KFC CHINA CAN ATTRACT GEN Z AND MILLENNIALS THROUGH
APPRECIATING CHINESE VALUES
by
Zixiao Zhang
A Thesis Presented to the
FACULTY OF THE USC ANNENBERG SCHOOL FOR COMMUNICATION AND
JOURNALISM
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
MASTER OF ARTS
(STRATEGIC PUBLIC RELATIONS)
August 2020
Copyright 2020 Zixiao Zhang
ii
TABLE OF CONTENTS
List of Tables iv
List of Figures v
Abstract vi
Introduction 1
Chapter 1: Background 2
1.1 About KFC 2
1.2 KFC Operation: The Colonel's Business Model: Franchise System 3
1.3 KFC China 5
Chapter 2: Business Goal 7
Chapter 3: Statement of Problem and Opportunities 7
3.1 Competition 7
3.2 Social Media Influence 8
3.3 Adaptability 9
Chapter 4: Situation Analysis 10
4.1 Strengths 10
4.2 Weaknesses 12
4.3 Opportunities 13
4.4 Threats 14
4.5 Strategic Implications 15
Chapter 5: Research 15
5.1 Research Goals 15
5.2 Research Methodology 16
5.3 Primary (qualitative) 16
5.4 Secondary Research 17
Chapter 6: Communication Goals 17
Chapter 7: Objectives 18
Chapter 8: Target Audiences 19
Chapter 9: Key Messages 20
Chapter 10: Strategies & Tactics 22
Chapter 11: Evaluation 35
iii
Chapter 12. Timeline 37
Chapter 13: Budget 38
Chapter 14: Conclusion 38
REFERENCES 40
Appendix 45
A. Sample Press Release 45
B. Focus Group Report 48
C. Focus Group Guidelines 59
D. KFC China digital marketing campaign analysis 62
iv
List of Tables
Table 1 Communication Package Timeline 37
Table 2 Communication Package Budget 38
Table 3 Focus Group Session List 52
Table 4 Participant Profiles & Demographics 52
Table 5 Frequency of consuming fast-food 52
v
List of Figures
Figure 1 KFC Business Model Canvas 5
Figure 2 KFC Sauce 23
Figure 3 Tang soo yook 23
Figure 4 Zhajiangmian 24
Figure 5 Beyond Fried Chicken 25
Figure 6 Shanshan Yuan 1 26
Figure 7 Shanshan Yuan 2 27
Figure 8 Shanshan Yuan 3 27
Figure 9 KFC & Tencent 29
Figure 10 KFC Weibo 31
Figure 11 KFC Crocs shoes 31
Figure 12 Colonel Sanders Funko Pop Figure 32
Figure 13 KFC Coronavirus Donation 33
Figure 14 KFC App 35
Figure 15 KFC Late-night BBQ Bucket 63
Figure 16 Yibo Wang Weibo 1 64
Figure 17 Yibo Wang Weibo 2 65
Figure 18 AFK Arena Limited Gaming Card 66
Figure 19 KFC Children’s Day Limited Coupons 67
Figure 20 Han Lu Weibo 1 68
Figure 21 Han Lu Weibo 2 69
vi
Abstract
As the fast-food industry is growing in China, more and more local businesses are
entering the market competing with western brands. It is challenging to western fast-food
companies such as KFC to continue to stay as the leading quick-service restaurant in the Chinese
market. To continue to stay competitive in China, KFC China needs to find a way to stand out
from the western brands while adding traditional Chinese character to compete with the local
fast-food restaurants. It is crucial for KFC China to keep attracting Gen Z and Millennials
through appreciating Chinese values in its future campaigns.
1
Introduction
The increasing demand for fast food is the key factor driving the global fast-food market.
The fast pace of lifestyles and changing of eating habits are some of the other factors supporting
fast food market growth (Straits Research). In fact, according to an analysis of historical data on
food-spending habits by the University of Arkansas, eating out has increased from 25.9% of
consumers in 1970 to a current record of 43.5%. The International Food Information Council’s
2017 Food and Health Survey stated that 55% of Millennials say convenience is a top driver
when buying food (Rosenbloom). Apart from this, the increasing number of food chain stores is
a crucial factor expected to positively influence market growth. The global fast-food market is
expected to be worth more than $690 billion in 2022 with a compound annual growth rate of
4.2% from 2017 to 2022 (Research and Markets). The market was capitalized at over $539
billion in 2016 (Zion Market Research).
Globally, people are increasingly leaning towards healthy eating habits and subsequently,
healthy food options are gaining popularity. The fast-food industry is doing its best to provide
healthy alternatives to follow this change in lifestyle. Over the five years to 2019, the fast-food
restaurant industry has grappled with consumer preferences shifting from unhealthy foods, as
well as a saturated food service landscape that has kept prices low (IBISWorld).
The Asia Pacific is pegged to be the fastest-growing market for fast food (Straits
Research). The appealing fast-casual eating style and reduced leisure time have contributed to a
consumer shift from traditional full-service restaurants toward fast-food establishments in China.
In addition, increased Western influences in China have boosted the demand for fast food
(IBISWorld). With the opening of China to the West became a myriad of cultural exchanges.
According to Peng’s study on Chinese urbanities lifestyle, the Chinese middle-class purse the
2
“小资” (xiaozi) lifestyle, meaning the “chasing modern taste, living standards, and the arts,”
which is defined by the consumption of Western goods, attending Western classical music
concerts, watching Broadway shows, watching foreign films, drinking coffee, and eating western
food. Due to the rapid development of fast-food service providers, improvements in a chain store
and franchising management, and new brands and food styles, industry growth has been strong
over the past decade. There are about 2.4 million fast-food restaurant locations in China
(IBISWorld). IBISWorld estimates that the Fast-Food Restaurants industry in China generated
$177.6 billion in 2019, up 7.9% from 2018. Over the five years through 2019, industry revenue
is expected to grow at an annualized rate of 8.9%. Over the past decades, China has witnessed a
tremendous flow of foreign direct investment and there is an increasing number of foreign
companies working in Sino-foreign joint ventures, foreign representative offices, wholly foreign-
owned subsidiaries, and branches. Lots of Western fast-food giants had enjoyed such success in
the Chinese market thanks to their established brand awareness as well as consistent product and
service quality (Daxue Consulting).
Chapter 1: Background
1.1 About KFC
KFC, Kentucky Fried Chicken, founded by Colonel Harland Sanders in 1964, is an
American fast-food restaurant chain specializing in fried chicken and headquartered in
Louisville, Kentucky. KFC had its first franchise opened in Utah in 1952. As of 2019, KFC
operates more than 17,000 restaurants in the United States and with 22,621 locations globally in
136 countries. 99% of the units are franchised. According to the KFC Website, worldwide KFC
system sales grew 6% in 2019 and KFC was ranked #86 on FORBES lists for World's Most
Valuable Brands 2019 (KFC Web).
3
KFC's parent company is YUM! Brands, which also owns Taco Bell and Pizza Hut. It is
the world’s largest restaurant company in terms of quick-service restaurants, with more than
40,000 locations in more than 130 countries and territories and employing more than 1 million
associates. Yum! is ranked number 201 on the Fortune 500 list, with revenues exceeding $13
billion in 2012 (KFC Web).
KFC is famous for its original product, pressure-fried chicken pieces, seasoned with
Sanders' recipe of 11 herbs and spices. Larger portions of fried chicken are served in a cardboard
"bucket", which has become a well-known feature of the chain. KFC is specializing in that same
Original Recipe along with Extra Crispy chicken, home-style sides, and buttermilk biscuits. KFC
features its serving customers’ completion, freshly prepared family meals at affordable prices.
KFC was one of the first American fast-food chains to expand internationally, opening
outlets in Canada, the United Kingdom, Mexico, and Jamaica by the mid-1960s. Throughout the
1970s and 1980s, it experienced mixed fortunes domestically, as it went through a series of
changes in corporate ownership with little or no experience in the restaurant business. In the
early 1970s, KFC was sold to the spirits distributor Heublein, which was taken over by the R.J.
Reynolds food and tobacco conglomerate; that company sold the chain to PepsiCo. The chain
continued to expand overseas, however, and in 1987, it became the first Western restaurant chain
to open in China. It has since expanded rapidly in China, which is now the company's single
largest market (KFC Web).
1.2 KFC Operation: The Colonel's Business Model: Franchise System
It was smart of Colonel Sanders to expand the business and not let it remain a hometown
chicken store. In 1955, confident of the quality of his fried chicken, the Colonel devoted himself
to developing his chicken franchising business. Less than 10 years later, Sanders had more than
4
600 KFC franchises in the U.S. and Canada, and in 1964 he sold his interest in the U.S. company
for $2 million to a group of investors including John Y. Brown Jr., who later became governor of
Kentucky (KFC Web).
Under the new owners, Kentucky Fried Chicken Corporation grew rapidly. It went public
in 1966, was listed on the New York Stock Exchange in 1969, and eventually was acquired by
PepsiCo, Inc. in 1986. In 1997, PepsiCo, Inc. spun-off of its quick-service restaurants, including
KFC, into an independent restaurant company, Tricon Global Restaurants, Inc. Today, the
restaurant company (now YUM! Brands, Inc.), is the world's largest in terms of system units
with nearly 32,500 units in more than 100 countries and territories (KFC Global).
KFC generates its revenue through the different franchises it has opened up worldwide.
Each franchise pays a fee to the master franchisor based on its worldwide franchise performances.
In other words, each franchisee is an independent business but follows the method of operation of
the franchisor. To meet customers’ satisfaction and KFC’s company standard, the initial training
program is offered by KFC US LLC on the operation of a KFC outlet. The training includes a one-
week orientation, a two-week online training, and a four-week hands-on training in a certified
restaurant (KFC Web).
Below is a pictorial diagram of the KFC business model canvas, explaining different
blocks that form the KFC Business model (Heartofcodes).
5
Figure 1 KFC Business Model Canvas
1.3 KFC China
KFC is the leading quick-service restaurant brand in China in terms of system sales and
number of restaurants (Yum China). It became the first major global restaurant brand and
Western fast-food company to enter China. According to an analysis of KFC’s Radical Approach
to China, KFC opened its first outlet in Qianmen, Beijing, in November 1987. After over 30
years of operations, with its 1000th restaurant in China in 2004, KFC has developed deep
operating experience in the China market (Bell and Shelman). According to research by
Millward Brown, KFC was the most powerful foreign brand in China in 2013. It was ranked
#362 of Fortune 500 in 2019 and earned three Gold Cannes Lions Awards for KFC's "Pocket
Store" campaign (Millward Brown).
6
As of 2018, KFC is the largest fast-food restaurant chain and has 5,919 outlets in China.
Opening restaurants at an average of more than two new locations per day over the past five
years, KFC has grown to be one of China’s largest restaurant developers with over 6,500
restaurants in over 1,300 cities across China as of December 31, 2019 (Jacobs). KFC China
believes that there is a significant opportunity to expand within the country, and it intends to
focus its efforts on increasing its geographic footprint in both existing and new markets (QSR
Magazine).
KFC focuses on bringing the original taste of fried chicken to as many audiences as
possible in China. They hope to create delicious tastes and pleasant experiences that delight their
customers. WARC finds that Gen Z and Millennials consumers make up 17% of the total
population. "For Generation Z and Millennials, KFC is the most relevant food and beverage
brand in China. This is a phenomenal success considering it is a brand that's existed in China for
a while," said Jean Lin, CEO of digital agency Isobar, who helped lead KFC's digital
transformation in the country (WARC). That is to say, it is important for KFC to focus on
attracting the Gen Z and Millennials consumers. In addition to their Original Recipe Chicken,
they offer an extensive localized menu featuring authentic Chinese dishes such as rice soup, hot
pot, and many other products including premium desserts to cater to the local tastes. KFC China
constantly seeks to invest in innovation to give the customers the best possible in-store
experience (Yum China). For example, most KFC stores in China offer playgrounds for kids and
there are in-store radio announcements and gifts for KFC little customers who celebrate their
birthday in the stores. It has become a signature birthday go-to place for young children. KFC
brand is also seeking to increase revenues from its restaurants throughout the day with breakfast,
delivery, and 24-hour operations in many of its locations. It offers delivery service in most
7
restaurant locations, and they continue to embrace new technologies to build up the digital
ecosystem to enhance the customer experience.
Chapter 2: Business Goal
Because of the thriving global fast-food market and increasing competition entering the
Chinese market, KFC China plans to differentiate itself from competitors by offering a variety of
unique products and services. KFC does not only position itself as a fast-food restaurant but also
a recreational center with an appreciation of traditional Chinese values. To continue to attract
Gen Z and Millennials consumers, KFC has distinguished its goals based on its core values:
1. Differentiate KFC from other fast-food brands by demonstrating the Chinese
value-based, innovative localized menu, welcoming service, and food quality with
nutritional facts
2. Maintain and continue to expand its leading foreign brand status in the Chinese
market by showing care to the employees and offering internal training
3. Analyze and research potential competitors to stay powerful in the industry
Chapter 3: Statement of Problem and Opportunities
3.1 Competition
KFC has a strong national presence in China. However, it still has to compete against
various well-known brands in the market. For example, there are large and stable companies
such as McDonald’s and Pizza Hut, and also constantly growing potential local competitors. The
thriving of other fast-food restaurants could impede the development of KFC. For example,
Clarissa Wei, an L.A. based journalist at Eater, stated that the highest Pizza Hut in the world is
perched on the 24th floor of a skyscraper in Xiamen, a city (population: 3.5 million) in the
Chinese province of Fujian. There is often a wait for seats; calling in for reservations is highly
8
recommended. In 2017, McDonald's sold an 80 percent stake in its China and Hong Kong
operations for $1.7 billion, announcing that it would expand while focusing on menu adaptation.
Although American brands lead the fast-food market in China, domestic companies reinforce the
competition. Chinese fast-food brands like Daniang Dumpling, Zhen Kong Fu, and Malan
Ramen have grown rapidly in recent years (Wei). The growth of these local Chinese fusion
quick-service restaurants has impeded the expansion of KFC China. KFC needs to overcome the
difficulties involving the standardization of complex traditional Chinese cooking methods and
ingredient variety. The Chinese local brands are more competitive with their greater mastery of
the original characteristics of Chinese cuisine. Because there are more fast-food brands both
locally and internationally that enter the Chinese market and target the same target audience as
KFC, it is challenging for KFC to maintain its competitive edge over numerous competitors, and
to keep its prominent standing while thriving and attracting potential future customers.
3.2 Social Media Influence
Social trends could affect business tremendously. There are 7.7 billion people in the
world, with at least 3.5 billion of us online (Ortiz-Ospina). The more KFC China knows about
the social trends that affect KFC China’s community and the fast-food industry, the better KFC
China will be able to target marketing efforts and tailor its products to fit a shifting landscape.
Social media has changed the world, and it provides a new community that becomes part
of people’s life. Over time, social media has evolved into a great tool to connect the brand and its
customers. The viral growth of Popeye’s Spicy Chicken Sandwich and the chicken sandwich war
between Popeyes and Chick-fil-A on Twitter are great examples of utilizing social media to
connect with the community. It showed dramatic increasing sales at its Popeyes Louisiana
Kitchen chain as its spicy chicken sandwich hit a cultural-relevance sweet spot at just the right
9
time. Sales at Popeyes soared 42% in the quarter on a 34% surge in comparable-store sales (QSR
Magazine). Forbes showed that Apex Marketing Group estimated that Popeyes reaped $65
million in equivalent media value as a result of the Chicken Sandwich Wars, Popeyes’ success
showed the power of social media (Maynard). Elena Salazar, Digital Marketing Manager,
VMware, said smart brands should aim to make their social media social. In other words, social
media should be a transparent platform for everyone to express their own perspectives and make
them feel like they are part of a community where they can connect and engage with each other.
The rise of related groups, opinion leaders, and positive messages will lead to an increase in sales
in the long-term. “It is important to listen to your audience and provide value to them as opposed
to solely using your social media channels to promote your products or services. With more and
more competition on social media, truly connecting with people will help humanize your brand
and gain the trust of your audience (which will help your sales!),” Salazar said. It is vital for
KFC to keep up with the latest trends and present its appreciation of the Chinese values on social
media to connect with its consumers (Media).
3.3 Adaptability
Cultural adaptation is challenging, especially for product-related companies such as
KFC. Innovative products and brands often need time before the majority of consumers are ready
to adapt to them.
One of the biggest concerns for KFC China is that KFC needs to continue to blend its
Western restaurant style into the Chinese market. Even though KFC has been doing well on
localizing its brand into the Chinese market, KFC needs to make cross-cultural efforts in product
innovation to cater to Chinese taste. It is vital to show respect to different aspects of Chinese
culture, and make changes to its products and service considering Chinese taste, values, customs,
10
dining habits, and language. KFC is supposed to tap into consumers’ desire and differentiate
itself from the traditional fast-food chain image: there is more than just fried chicken at KFC. It
is crucial for KFC to adapt to the unique Chinese market with its own cultural and eating habits.
Moreover, it is essential for Western businesses to have an effective franchise system and
build trustworthy relationships with Chinese partners to deal with the cultural difference between
the two markets. They have to understand how to establish strong relationships with local
employees as well as by adjusting to the changes in management and communication style.
To sum up, to continue its success in the Chinese market, KFC needs:
To adapt to the Chinese traditions and local rules to keep good communication between
the brand and its consumers;
To create innovation design of the product portfolio which matches the Chinese
consumption habits and the current market’s taste;
To utilize efficient advertising and public communication to attract the attention of the
target market to meet Gen Z and Millennials’ interests.
Chapter 4: Situation Analysis
4.1 Strengths
● Solid well-established brand recognition and company culture.
KFC has a strong brand image as a leading retailer and master of fried chicken
worldwide. Its long history and experience give the company a solid foundation with a strong
brand culture and personality. Since its founding in the 1960s, KFC has strived to build its brand
identity by offering customers delicious and enjoyable dining experiences. It also builds an
image of a responsible and socially ethical company by creating opportunities through education,
training, and employment.
11
● KFC China offers a variety of food options at affordable prices.
KFC China is famous for its various kinds of Western-style meals that meet international
consumer demands at the same time. KFC adapts its menu internationally to suit Chinese
customer tastes and refresh the consumer’s standard. Additionally, the relatively affordable price
is a point of appeal to its consumers. KFC makes it easy for customers to relate and connect with
the company.
● Pleasurable customer experience.
KFC China has successfully stood out from its competitors by focusing on the quality of
the dining experience. For example, there are kids’ playgrounds and cute-decorated walls for
couples and friends to write on and share memories. The combination of high-quality food and a
friendly environment with good music, comfortable sitting area, and good service creates the
“KFC China Experience” beyond just a basic fast food restaurant, which leads to brand loyalty,
and potential growth of customer base and sales.
● Available at many locations and open late.
As a global chain brand, KFC has a total of 20,000+ outlets in 150+ countries. The
advantage that KFC has stores in all the major cities across the world makes it easily reachable
for the audience. For instance, there are three shops on one of the major tourist streets in Beijing,
China. Moreover, KFC China’s “open 24-hours” feature is a great option for people who need a
late-night bite or early-morning meal.
● The strong base of Gen Z and Millennials customers.
As the legend of fast food, KFC’s genuine value and quality products attract loyal Gen Z and
Millennials supporters for the brand. With KFC China’s fun and energetic brand image that fits
into the young people’s market, it has been able to attract a solid amount of Gen Z and
12
Millennials audiences successfully. The well-established customer base would provide KFC
China the foundation for further campaigns improving and loyal customer building.
4.2 Weaknesses
● Limited nutritional ingredients and food quality concerns
This is because KFC is the expert in fried chicken and its quick serving style could result
in negative health effects and low food quality. According to a paper by Bahadoran in the journal
Health Promotion Perspectives, fast food tends to contain various substances that are generally
unhealthy. It is high in sugar, salt, and saturated or trans fats, as well as many processed
preservatives and ingredients. It is also low in beneficial nutrients. Carter from Forbes stated that
Millennials are committed to eating right and exercising more than other generations, and
appropriately, are spending big dollars ensuring their children- generation Z and Alpha- are
living lives grounded in health and wellness as well (Carter). Gen Z and Millennials are paying
more attention to the food nutrition facts and quality besides just the taste of the food.
● Insufficient understanding of the unique Chinese market
Although KFC has been in the Chinese market for decades with well-trained and
professional global business experience, most KFC products are based on generalized corporate
standards that make it hard to align with cultural demands, especially in a complex and unique
country like China. It is important for KFC to have a deep and local knowledge of China to fit
into the market.
● Previous lawsuits and poor reputation and history
There have been countless scandals involving fast-food chains over the decade. KFC has
also faced lawsuits in the past and has a bad history regarding health concerns. For example,
there were scandals targeting KFC China regarding food quality concerns in 2014. The rumor
13
stated that KFC had been genetically modifying chickens to create larger, meatier birds. And
they even produced an eight-legged chicken for higher profits. Because Gen Z and Millennials
are more cautious about food nutrition and care about political and social issues, all the scandals
and lawsuits could hurt KFC’s brand image and reputation, which impacts the sales and growth
of the company in the long-term.
4.3 Opportunities
● Increasing demand for innovative convenient food.
KFC is known for its creative menu that meets local and cultural demands. Since more
and more Gen Z and Millennials are growing independently from their parents, the demand for
convenient food is increasing. Moreover, they are looking for interesting and tasty items that
could bring something new and refreshing to differ from the traditional plain convenient food.
KFC’s interesting, innovative limited-time food could generate buzz and discussion and refresh
the brand image to satisfy the needs of Gen Z and Millennials audiences.
● The growth of the Chinese economy and the increased integration of Western influences
in the Chinese market
China’s meteoric rise over the past half-century is one of the most striking examples of
the impact of opening an economy up to global markets. China's extraordinary economic growth
and active diplomacy to embrace Western culture have turned China into an international
melting-pot in the last few decades. Because China is more open-minded and positive with the
other side of the world, the increasing accessibility and people’s attitude help KFC to join the
Chinese market integration process.
● Increasing use of social media by Gen Z and Millennials to connect with KFC China
With the boundless potential of the Internet and the widespread use of digital and social
14
media platforms, product promotions, especially for food, are being embraced as an instrument
for self-expression and storytelling. KFC has easy access to influence and communicates with its
customer base through social media. It already has a strong social media stature and established a
distinct social media presence with its successful campaigns and strategies. They have a large fan
base on social, which is beneficial to increase brand awareness and sales.
4.4 Threats
● A large number of competitors and low entry barriers.
The Chinese fast-food industry has very low entry barriers, which means tough
competition, price wars, and shrinking margins and losses. Due to the fast pace of people’s
lifestyles in the modern world, there are more and more fast-food restaurants around, for
example, McDonald's, Chipotle, and other local brands are threats to KFC’s development.
● Unstable political relationships and restricted regulations between China and the U.S.
The tension between the U.S. and China regarding political and business issues may
negatively impact KFC’s development in the Chinese market.
● Distinctive local taste and strong culinary traditions
Customers in China have specific tastes. Even though KFC has been focusing on creating
localized items to adapt to the Chinese audience’s eating habits, it is difficult to convert the
western style to the traditional Chinese flavors. For example, Chinese people prefer flavorful
dishes with more added seasonings, whereas Americans enjoy the original taste from the food
ingredient itself. It is challenging for KFC to adopt cultural differences while maintaining core
values. The already established eating preference may increase the propensity of switching to
Chinese fast-food providers and put KFC at risk.
15
4.5 Strategic Implications
KFC is one of the world’s well-known fast-food restaurant chains and the most popular
foreign fast-food brand in China. There are lots of growth potential and opportunities for the
company, however, the American brand background and history could make it difficult for KFC
to meet cultural demands and local standards in the Chinese market. It is crucial for KFC to
overcome culture and communication barriers by embracing Chinese values, such as creating a
localized menu that follows its eating habits and preferences.
Due to the fast-pace development of modern society, there’s an increasing number of
young people, especially Millennials and Gen Z audiences, who look for and enjoy the fast-
paced lifestyles. Moreover, the barriers of entry for fast-food restaurants are fairly low, and there
are more and more competitors for KFC plus higher standards and larger options for consumers
to choose from. To stay and grow in the business, KFC needs to embrace the challenge and find
ways to stand out from the crowd and strengthen its brand image to keep its leading status for its
Millennials and Gen Z audiences in the market. It is important for KFC to emphasize the
communication process with young consumers by conveying appealing messages, utilizing
efficient media channels, and conducting strategic campaigns to achieve goals and gain
significant success.
Chapter 5: Research
To develop a strong communications campaign, KFC China will need to set the following
research goals.
5.1 Research Goals
● Identify key audiences and audience segments for KFC China.
16
● Determine and assess the unique values, behaviors, and characteristics of KFC’s target
audiences in China.
● Identify effective and ineffective messaging to determine the best methods of
communication strategies and tactics to launch campaigns.
● Analyze competitor communications strengths and leverage opportunities.
● Identify audience information needs, decision drivers, and media consumption.
● Establish benchmarks to measure the campaign process.
5.2 Research Methodology
To create an effective public relations strategy, KFC China should employ multiple research
methods including primary and secondary research. To establish the preliminary campaign
strategy, the following research was conducted:
5.3 Primary (qualitative)
Focus Group
The author will conduct a focus group by selecting a set of individuals with various
demographics who are from China. The participants are all familiar with the brand KFC and they
have purchased KFC’s items, and are its target audience. These participants will be asked
questions of KFC China and upon their responses, there will be detailed and deep analysis
regarding patterns, trends, and perceptions to grasp overall perspectives on KFC development.
Regarding the focus group, respondents should be aged between 21 and 34 and reside in
China. In addition, these respondents should range from male to female, frequent to infrequent
fast-food eaters, students to professionals. The purpose of the focus group is to compare the
different perceptions in terms of KFC China’s communication implementations and
development. It is crucial to observe and interact with different participants to stimulate a deeper
17
and wider response regarding KFC ’s development in the Chinese market. These participants will
be asked questions regarding their experience and opinions of KFC. Based on their responses,
the author will look for patterns, trends, and perceptions to grasp the group’s overall perspectives
on the situation. Findings from the focus group research are reported in the Appendix.
5.4 Secondary Research
● Previous Campaign Analysis
By conducting secondary research on previous campaigns to see what has been executed
to raise awareness of different geographic areas, analyze benchmarks and effective
measurements in the Chinese market and evaluate the results to create new strategies to promote
KFC China.
Chapter 6: Communication Goals
To achieve KFC communication outcomes, the strategic campaign for KFC needs to raise
awareness, maintain its top recognized fast-food brand standing, promote and strengthen the
positive image. It is crucial to distinguish KFC China from other competitors by showing its
appreciation of Chinese values to continue to attract Gen Z and Millennial consumers in the
Chinese market.
● Increase awareness and brand recognition in the Chinese market
As a foreign brand, KFC’s primary goal for the Chinese market is to let Chinese
audiences know and choose KFC. It is crucial to establish a connection between the brand and its
local consumers to create a favorable impression and prepare for future success.
● Promote KFC as a healthy alternative to other fast food options
18
Due to the increasing number of fast-food brands in the market, KFC needs to stand out
from others to show its audience why they should choose KFC over other brands by providing
innovative and healthy products and following the market trends.
● Establish and maintain a positive brand image and reputation in the market
KFC’s successful overall performance and long-lasting operation tell that a positive
audience attitude and stable market status are important for long-term accomplishment.
Chapter 7: Objectives
The objectives of the KFC campaign are to increase awareness and promote brand image.
● Raise KFC online discussions and engagements with the Chinese audience within
the second and third quarters of 2020
In the era of the digital world, social media platforms are the main place for people to
express their opinions and feelings. Building the connection between the brand and its consumers
through online social media platforms could gain a positive brand impression and effective
interaction.
● Improve media coverage of KFC in the Chinese market and establish at least 50
positive news articles by August 2020
Online news and reviews are the main access for both audiences and companies to get
information nowadays. Moreover, most people rely on and trust the perspectives of the press and
opinion leaders. An increasing number of positive brand exposure and comments could help
move forward the launch of the campaign and spread the word among the target market.
● Increase social media followers by 15% on Sina Weibo in the Chinese market by
December 2020
19
Since the majority of KFC’s target audience are Millennials, and Sina Weibo is the main
social media communication tool for them. The development of social media followers helps
increase potential consumers in the stores and the brand discussion volume and exposure at the
same time.
● Grow KFC sales by 5% in the KFC China restaurants
The most important tool to show the success of a business is to compare the sales result.
It is vital to launch effective communication campaigns to support sales improvements in the
end.
Chapter 8: Target Audiences
● Gen Z’s & Millennials
Teenagers and adults ages 14-40. The 2013–2016 data from the National Health and
Nutrition Examination Survey looks at who eats fast food how often, and it shows 44.9% of the
consumers are between the ages of 20 - 39. 54% of “super heavy” fast-food users (who eat fast
food at least once a day) and 37% of “heavy” fast-food users (two to six times per week) are
between the ages of 18 and 34 (QSR Magazine). That is to say, teenagers and young adults tend
to eat fast-food the most often in their daily life. Moreover, because younger customers are
usually the ones with lighter wallets, value menus and overall lower price points would seem a
natural hot spot for lower-income customers in the quick-serve industry. Gen Z’s & Millennials
are either too busy with work or don’t have time to cook or eat at home, or students who are tired
of family meals, and they seek tasty creative meals that are served quickly at affordable prices.
They appeal to KFC’s innovative menu options and enjoy engaging with the brand on social
media for rewards and offerings. To maximize the marketing strategy, KFC should focus on
these young people since they rely heavily on fast-food as their meals.
20
Chapter 9: Key Messages
The purpose of the key messages to KFC’s Gen Z and Millennial audiences is to
differentiate KFC from its competitors and give a unique and strong brand positioning in the
market. To reach out to target audiences for effective communication, it is vital for KFC to
utilize the internet to raise awareness and promote the brand. KFC needs to successfully address
the different focuses on Gen Z’s and Millennial audiences.
● Has a localized and innovative menu with the traditional Chinese taste
Generating a local preferred menu by following Chinese eating habits is one of the keys
to KFC’s international success. KFC should adapt its menu for Chinese audiences to suit
regional tastes. The Chinese KFC breakfast menu has been a signature menu for KFC China. In
other words, KFC needs to reinforce this strategy by providing more regional items such as
Chinese Herbal Chicken Soup, Shaokao Chicken Skewers (Chinese Style Barbecue), and
Chinese Scallion Pancakes Fried Chicken Wrap. These traditional Chinese recipes inspired
innovative items that will refresh the consumer’s mind and bring KFC China onto the next level.
● Has a China-friendly tone and engaging voice on social media to attract the audience
Social media statistics from 2019 show that there are 3.5 billion social media users
worldwide, and this number is only growing. That equates to about 45% of the current
population (Tjepkema et al.). Social media is everywhere, it has changed the way people live and
communicate with others. Following celebrities and influencers, interacting with friends and
family, and sharing interesting posts and news with the public all become essential parts of
people’s daily lives. It not only provides a unique and powerful platform for companies to
interact with its consumers beyond local and social boundaries but also offers countless
possibilities to share user-generated content to enhance the business marketing strategy.
21
Especially KFC’s target audience, Millennial and Gen Z are the generations with the highest use
of social media. Social media usage breakdown results by Emarketer shows that 90.4% of
Millennials are active social media users (Emarketer, 2019). Moreover, HubSpot shows that 74%
of global marketers invest in social media marketing (HubSpot, 2020). That is to say, KFC
should stay active and keep involved with social media users to enhance its brand reputation and
discussion volume. By delivering memorable messages and appealing campaigns that show
appreciation of Chinese values, social media helps to increase engagement between the brand
and its audience.
● Offer nutritional options to health concerned consumers
GenZ and Millennials tend to focus more on the ingredients and nutrition of their food.
According to USA Today, plant-based foods continue to thrive and have become the top trend in
the food industry. An increasing number of diners care about the environment and animal
welfare, and they are constantly finding sustainable food to support nature. Plant-based food
provides a perfect option for non-vegan consumers healthier purposes and vegans more food
options. It is important to tell its consumers that they are also able to get healthy alternatives
besides just fried chicken at KFC China.
● Follow current trends to engage with the community and remain active and positive
brand image
Forecasting and following trends is an everyday job for each entrepreneur to keep
business running in the long-term. It helps KFC to know what is happening in the quick-service
industry and how to improve itself. In addition, catching up with current social issues in China
could let KFC better predict its business in the future as well. To stand out from the fast-food
market, KFC needs to generate innovative items that follow the food trend in the market.
22
Chapter 10: Strategies & Tactics
● Innovative and Localized Chinese Sauce Launch: Northern Sauce & Southern Sauce
KFC is known for its hand-selected perfect sauces, especially dipping sauces are
indispensable for fried chicken. One interesting fact is that hot sauce is rising quickly in the
United States. According to Rothbaum from The Daily Beast, more than half of American
households have a bottle of hot sauce. The great success of hot sauce in the United States shows
that KFC China should learn from the States by expanding its regional menu and launching a
sauce kit with diverse flavors to target consumers in different areas (Rothbaum, Noah).
According to the CIW Team from China Highlight, China's cooking styles and dietary
preferences can be divided into different geographical areas, and each area has a distinct cooking
style (CIW Team). Northern China usually focuses on saltiness, with less sweet or sour tastes,
while the South prefers lighter salt with more sweet and sour flavors. KFC China will divide its
sauce based on the level of sweetness and saltiness. The northern sauce is based on black bean
paste and soy sauce, which is similar to the paste of Zhajiangmian(炸 酱面), the signature noodle
dish from Beijing. The Southern sauce focuses on sweet and sour taste, which is inspired by the
famous Cantonese dish Tang soo yook(糖醋肉).
23
Figure 2 KFC Sauce
Figure 3 Tang soo yook
24
Figure 4 Zhajiangmian
● Healthy Alternatives: Beyond Chicken - Plant-based Fried Chicken
According to the research data from the focus group, most participants are concerned
about the nutrition and quality of fast-food. In August 2019, KFC US offered a previous trial of
Beyond Chicken, a meatless fried chicken sold out in less than five hours according to the news
release (KFC). Now it is time to bring the Kentucky Fried Miracle Fried Chicken back. From a
study conducted by Stories+ Kitchen Stories among Chinese citizens in 2019, 73.62% of the
participants believe that they tend to eat a healthy and balanced diet to some degree. To keep up
with the trend, this time KFC China should launch plant-based chicken for a broader range of
Millennials and Gen Z audiences. For example, there should be plant-based bucket meals,
chicken sandwiches, chicken nuggets, and dipping sauce for substitution. Along with the new
chicken items launch, KFC also should provide a nutrition fact chart to compare with traditional
fried chicken. Moreover, it is crucial to invite a trustworthy spokesperson to make the campaign
more reliable, such as Shanshan Yuan, a popular celebrity in China who is famous for her
healthy lifestyle. With over 30 million followers on Sina Weibo, she would be a great support for
the campaign launch and gain positive discussion volume and buying powers.
25
Figure 5 Beyond Fried Chicken
26
Figure 6 Shanshan Yuan 1
27
Figure 7 Shanshan Yuan 2
Figure 8 Shanshan Yuan 3
● TencentVideo & KFC: Stay Home and Eat KFC
28
To effectively attract more audiences, KFC China should collaborate with brands that
have similar brand personalities and values. This will create a win-win situation and establish a
solid brand reputation in the market. KFC should partner with Tencent since both brands are
recognizable, leading, and powerful in their fields, and they share the same target audience
groups. Moreover, both KFC and Tencent position themselves as a creative, authentic, quirky,
and funky brand. The partnership could generate brand visibility and promotions.
According to Yahoo Finance, the average peak sales for both Tencent and KFC is from
November to the next January. It means that they should catch this holiday season where
Millennials and Gen Z audiences enjoy staying home watching TV shows and having fried
chicken with family and friends.
KFC and Tencent will create a “Family Bucket Holiday Pass” to catalyze their growth to
the next level. This pass can be redeemed for a free Family Bucket at KFC. This new promotion
meets the current market demand, which appeals to its target audience and will increase the
exposure and profit at the same time.
29
Figure 9 KFC & Tencent
● Chinese Valentine: Limited-edition Colonel Sanders Funko Pop Figure Contest
KFC is known for incorporating its brand icon into many merchandise-focused
campaigns. It is the time again for KFC to attract consumer attention with its quirky merchandise
by launching the Colonel Sanders Funko Pop Figure contest campaign on social media. Both the
Funko collection and the Bearskin Rug contest were successful and powerful in America. There
are still growing sales for KFC Pop! Icon, Tee, and accessories available online (Funko Shop).
KFC China needs to learn from the U.S. campaigns to develop interaction and brand
reinforcement for the Chinese market. KFC enthusiasts love Colonel's signature figurine, and
this new limited-edition will add more excitement and refresh their Mr. Colonel Pop Figure
collections.
30
The Double Seventh Festival (Qixi Festival) is one of the Chinese traditional festivals,
and also known as a Chinese Valentine's Day. It is based on a romantic legend about a weaver
girl and an ox herd. It is considered one of the most important festivals among Chinese people,
especially for Gen Z and Millennial audiences to celebrate. KFC is celebrating with its Chinese
audience by giving fans the opportunity to win a date-night package that includes a limited-
edition Colonel Sanders Funko Pop Figure, two pairs of KFC x Crocs shoes, a 3-month available
gift card with free KFC family bucket meal each month, and a yearly subscription to Tencent for
endless romantic entertainment.
KFC China is going to launch its contest campaign on Sina Weibo, a Chinese social
media platform that is similar to Twitter, and set up its Colonel Pop Figure contest via the KFC
official account on Weibo. Due to the large followers and Weibo users, this will be the best place
for KFC to build engagement and connection. Participants can be aspiring artists, designers, KFC
advocates, and can draw or create their own unique Chinese Valentine KFC icon. By posting
creative figures and the romantic meaningful stories on Weibo and tag KFC China, participants
can win the customized prize packages they created. These oddball marketing efforts seem to be
most resonating with Gen Z consumers, who are 20% more likely to visit fast-food restaurants
than older age groups, research by Foursquare, and Carat revealed (Sweeney). This contest
campaign provides a great opportunity for KFC to attract a wider range of audience, increase
global sales, and improve its brand image.
31
Figure 10 KFC Weibo
Figure 11 KFC Crocs shoes
32
Figure 12 Colonel Sanders Funko Pop Figure
● Fight Coronavirus with Mr. Colonel, #ColonelforCoronavirus (#肯 爱抗疫)
COVID-19 has become the most severe situation China is facing currently. Outbreaks of
this novel virus became a great concern for people worldwide. The death toll from the
coronavirus outbreak in mainland China reached 1,770 as of the end of Sunday, February 17th,
up by 105 from the previous day, according to the CNBC News reported by Meredith and Tan
(Sam Meredith). Chinese people are highly influenced by this disease. It is vital for KFC to
support and give back to the community at this time. KFC should keep showing support and help
to the public. It is important for KFC to continue to send love and care to people who are fighting
this virus. By leveling up the support, KFC will establish an online Colonel Charity and use its
leading brand power to raise money to encourage more people to support the community.
Since Weibo and WeChat are the dominant social media platforms in China, KFC will
generate a hashtag #ColonelforCoronavirus (#肯爱抗疫) to communicate with its audience on
33
social media. Because Weibo users often search for daily trending hashtags, KFC's use of this
hashtag opens up opportunities for the brand to gain more brand publicity. Therefore, by taking
some time to create a post with a trending hashtag helps KFC gain publicity when audiences are
browsing through the daily trending hashtag rank. This hot topic hashtag setup on both channels
will create a social cross-promotion gain and drive more attention for better results. KFC will
pick five lucky fans who contribute social media posts with the hashtag and offer a free family
bucket meal to each fan randomly on social media platforms. Additionally, KFC will lead its
action by continuing to give away delicious and nutritious meals to hospitals across the nation
and donate $5,000,000 to the Red Cross Society of China.
Figure 13 KFC Coronavirus Donation
● Loyalty Program: App Reward
34
Loyal customers and brand advocates are the foundation for KFC’s success. It is
important to make them feel special and continue this strong bonding relationship. KFC should
create innovative and signature merchandise and products to refresh the audience's minds and
make them feel special. Loyalty programs and promotional deals could help to extend the
connection and gain more returning customers.
Online communication is crucial between a brand and its consumers. Especially for our
target audience, Generation Z and Millennials are more comfortable with this simple and
efficient online payment system, which enables them to order instantly through a few clicks on
their mobile phone.
That is to say, KFC China should polish their food ordering app featuring a cumulative
reward program, since people love free rewards, and the online food order and delivery market
are growing quickly. It should look like a stamp card: you will get a free meal from KFC after
every 10 meals you purchased. There will also be special and limited time offers such as free
delivery Friday, 50% off Big Box, and a free dessert with a meal purchase.
35
Figure 14 KFC App
Chapter 11: Evaluation
The success of the launch of the communication campaigns will depend on whether or
not the following specific and measurable objectives are met:
● Social media engagement
The overall goal KFC wants to achieve is to raise awareness and reputation for the
company and its product and service offerings. Therefore, it is vital to check the buzz it has
created on social media. KFC will use Crimson Hexagon to evaluate the visibility and interaction
KFC has generated. Crimson Hexagon is a professional social media monitoring and analysis
platform that is designed to give companies actionable insight into consumer opinion of brands,
products, services, competitors, or any important topic from the billions of conversations
36
happening online. KFC will analyze the social media followers, discussion volume, the
frequency of keywords related to the brand, and the levels of traffic on the internet.
● Media coverage monitoring
The growth in media exposure is the fundamental requirement for KFC’s success. KFC
will track and keep follow up with content creators, opinion leaders, and journalists that KFC has
reached. The reflection of content engagement is a huge part of the campaign. Understanding
how insiders think about the campaign could help KFC learn more about the professions and
increase its trustworthiness among the public, which gives KFC more confidence in carrying out
public relations services in local and foreign markets. It is crucial to examine the quality and
attractiveness of the content provided through these online platforms and influencers. KFC
should also adjust its focus among different markets based on the performance in each stage and
categories.
● Sales report
The success of a campaign will be directly reflected by its sales. A comparative analysis
would be done by using KFC’s quarterly earnings reports released prior to and after the
implementation of its communications strategy to determine any apparent sales patterns.
● Consumer survey
KFC will conduct a survey to determine changes in consumer attitudes towards its
products and service. Based on the feedback, KFC will be able to improve its business and
conduct its future strategy to better success in increasing positive brand positioning between
target audiences.
37
Chapter 12. Timeline
The entire communication package will run from April 2020 to January 2021, and it will
be broken down into small categories and campaigns based on the different aspects of main
communication efforts discussed in the strategies and tactics.
Table 1 Communication Package Timeline
38
Chapter 13: Budget
Table 2 Communication Package Budget
Chapter 14: Conclusion
To sum up, the author has established comprehensive research and campaigns through
essential strategies and tactics to effectively promote KFC China. One key takeaway from the
primary research is that social media engagement is vital to the company’s development. Social
media has become a dominant part of people’s life. The ability to leverage social media to start a
conversation with the target audience successfully will lead to the success of the business. The
recommended campaigns focusing on social media platform utilization and outreach help KFC to
maximize its awareness-raising and reputation building efforts.
39
Moreover, to succeed as an international brand and stand out from the competitors, KFC
needs to understand cultural differences and implement effective plans to keep its leading status
in the market. This means that KFC should have an accurate and deep knowledge of its
consumers. It is imperative for KFC to be able to identify the attitudes and behaviors of its
consumers. Creating a reliable and compelling brand image is crucial for any business. Though
often challenging, KFC's effort to cultivate a positive brand image and infuse itself to the daily
life of its consumers will be a determining factor that leads to its worldwide success.
40
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Appendix
A. Sample Press Release
KFC Limited-edition Colonel Sanders Collectibles With Funko For Chinese Valentine
Fans can win the personalized KFC date night package by entering the online contest to
design your own Colonel figure
LOUISVILLE, Ky., Aug. 3, 2020,/PRNewswire/ -- Kentucky Fried Chicken® is
celebrating Valentine's Day with worldwide pop culture collectibles company Funko by offering
an online contest to KFC enthusiasts the chance to design the new Colonel Sanders figures line,
and win a special date night package to celebrate this romance festival with your significant
other.
Starting this week, some lucky fried chicken fans will compete to win an ultimate KFC
date night package featuring a limited-edition Colonel Sanders Funko Pop Figure, two pairs of
KFC x Crocs shoes, a 3-month available gift card with free KFC family bucket meal each month,
and a yearly subscription to Tencent for endless romantic entertainment.
"It's great to offer fans a beloved figurine that is created by their own and has captured
the hearts and stomachs of consumers across the world," said Andrew Perlmutter, Funko
president. "Colonel Sanders' name and image have been synonymous with the fried chicken
restaurant since its inception and we are excited to honor his influence on this special Chinese
Valentine‘s Day."
The contest is now live for fans who dream of cozying up with their significant other next
to the infamous fried chicken salesman or even those who have always dreamed of incorporating
46
the Colonel into their home decor. KFC is calling for its most loyal followers to go head to head
in an online creativity competition by submitting unique and wacky content on Weibo for a
chance at the ultimate date night package.
The way to enter the contest:
Post your talented design of a one-of-a-kind art piece inspired by Colonel Sanders and
traditional Chinese Valentine, and depicting the ideal romantic evening or the story you had on
Weibo then tag KFC China’s official account to share this amazing masterpiece with the world.
The contest will close on Sunday, August 17 at 11:59 p.m. EST and the deserving lucky-
in-love winners will be notified on Monday, August 18. Top 3 Fans who gain the most likes,
shares, and comments (only need to meet one requirement) by Weibo users will get the reward
for this romantic day celebration. KFC assures the packages will be safely delivered to each
winner just in time for the Chinese Valentine's Day.
About KFC
KFC Corporation, based in Louisville, Ky., is the world's most popular chicken restaurant
chain. KFC specializes in Original Recipe®, Extra Crispy™, Kentucky Grilled Chicken®, and
Extra Crispy™ Tenders, Hot Wings™, KFC Famous Bowls®, Pot Pies, freshly hand prepared
chicken sandwiches, biscuits, and homestyle side items. There are over 22,000 KFC restaurants
in over 135 countries and territories around the world. KFC Corporation is a subsidiary of Yum!
Brands, Inc., Louisville, Ky. (NYSE: YUM). For more information, visit www.kfc.com. Follow
KFC on Facebook (www.facebook.com/kfc), Twitter (www.twitter.com/kfc) and Instagram
(www.instagram.com/KFC).
About Funko
47
Headquartered in Everett, Washington, Funko is a leading pop culture consumer products
company. Funko designs, sources and distributes licensed pop culture products across multiple
categories, including vinyl figures, action toys, plush, apparel, housewares, and accessories for
consumers who seek tangible ways to connect with their favorite pop culture brands and
characters. Learn more at https://funko.com/, and follow us on Twitter (@OriginalFunko) and
Instagram (@OriginalFunko).
48
B. Focus Group Report
1. INTRODUCTION
● Executive Summary
Kentucky Fried Chicken, also known as KFC, was founded in Corbin, Kentucky by
Colonel Harland D. Sanders, an early developer of the quick-service food business and a pioneer
of the restaurant franchise concept. The Colonel perfected his secret blend of 11 herbs and spices
for Kentucky Fried Chicken in 1939 and signed up his first franchisee in 1952. KFC was the first
global quick-service restaurant opened in China in 1987. KFC China has infused its American
style fast-food products into traditional Chinese-oriented dining features under a variety of
localized items. It is now one of the most powerful foreign fast-food brands in China.
Since KFC has been the premier marketer and company in the quick-service restaurant
industry, to keep KFC’s worldwide leading status and continue to grow in the Chinese market,
KFC needs to develop a strong strategic campaign and conduct focus groups to identify its target
audience differences between China and the U.S. It is essential to gather deep insights and
information from the participants. The purpose of the focus groups is to better define audience
segmentation and gain a profound understanding of the customers’ perception and attitude for
future strategy and tactics implementation.
● Key Findings
KFC is the most popular Western fast-food chain in China. From the geographic
distribution, KFC is everywhere in China, especially in major cities. The most common reason
why Chinese people choose KFC over other competitors is that it has blended the American style
of a limited and cheap menu emphasizing takeout and China's strong restaurant dining culture
49
with various delicious Chinese food options, which is also the secret of success of KFC China.
All participants agreed that KFC is tasty and they truly enjoy the taste of its food.
The major reason people go to KFC is that it provides its customers with fast-serving
style meals and delicious irresistible tastes. Six out of seven participants in the group said they
walked into KFC only because they were hungry and wanted to get a substantial meal fast at that
moment.
Promotions and rewards can stimulate purchases. All participants said they would
purchase more or add the additional promotional items at KFC if there’s a good deal. Price can
affect consumer buying power, so the deal option is appealing to consumers as a key factor to
affect their decision-making.
A healthy eating habit was believed to be more important in today’s life, and more
health-related item options could be attractive. Five out of seven participants believed eating
clean is important, but they wouldn't choose fast food or KFC if they were seeking healthy
options. Some people said it would be a smart option to provide healthier meals as an alternative
and would be more likely for them to make purchases.
New trends and topics of a brand on social media can be a stimulus to generate attention
and new purchases. All participants agreed that they tend to discuss and follow current news and
issues. It is highly likely that brand exposures in social media led to increased purchases.
All participants used Weibo and WeChat to communicate with their friends and families.
This finding met the author’s expectation which helped improve the focus group efficiency and
future strategy implementation.
McDonald's is KFC's greatest rival. Most participants mentioned that McDonald’s was on
the top of their minds when thinking of fast food options. Moreover, according to the
50
discussions, they chose McDonald’s over KFC because McDonald’s offers more options, better
ordering services, and dining experiences.
KFC should target the younger generation who live fast-paced lifestyles. Through the
author’s observation and discussion in the two focus groups, people who were students or having
busy and irregular lifestyles were more likely to go to KFC. The affordable price and quick
service features are also matched with KFC’s target audience profiles.
2. METHODOLOGY
● Instrument Development
The author conducted a focus group by selecting a random set of individuals with various
demographics who are from China. The participants were all familiar with the brand KFC and
they had purchased KFC’s items and were its target audience. These participants were asked
questions of KFC China and upon their responses, there would be detailed and deep analysis
regarding patterns, trends, and perceptions to grasp overall perspectives on KFC development.
Regarding the focus group, respondents should be aged between 21 and 34 and reside in
China. In addition, these respondents should range from male to female, frequent to infrequent
fast-food eaters, students to professionals. The purpose of the focus group is to compare the
different perceptions in terms of KFC China’s communication implementations and
development. It is crucial to observe and interact with different participants to stimulate a deeper
and wider response regarding KFC ’s development in the Chinese market. These participants will
be asked questions regarding their experience and opinions of KFC. Based on their responses,
the author will look for patterns, trends, and perceptions to grasp the group’s overall perspectives
on the situation.
● Site Selection
51
The author chose to conduct the focus group online due to the multiple living locations of
the participants and the condition of Coronavirus. Since all members are from China, the best
way to gather the participants is by having a video call on WeChat so that each participant would
be familiar with the platform and feel comfortable for the discussion.
Moreover, the remote discussion allows participants to choose their own preferred place
setting and environment for the focus group. The online gathering avoids physical interaction
which creates a relaxing and safe atmosphere for participants to maximize the results. Because
there are minimal costs and can yield effective results, making this a win-win situation.
● Participant Selection
A group of viable recruits has been established. The size of the focus group was seven,
which is the ideal size and range to manage, considering the group should not be too large that
each participant does not have a chance to contribute. Nor should the group be too small that it
limits the range of experiences and opinions to be shared. KFC free coupon as honorarium was
provided after the focus group discussions. All participants were randomly selected from the
related regions as volunteers to participate. The profiles and demographics were considered and
analyzed before the invitation and confirmation of joining the focus groups.
Seven Chinese respondents participated in the focus group, who were aged between 19 to
34 and resided in China. In addition, these respondents ranged from male to female, light to
heavy fast-food users, students to professionals.
The following is the general information for the actual focus groups events, including a list of
dates, times and locations, the length of discussion, and instruments used to record the Session.
DATE TIME LOCATION LENGTH TOOL
52
Focus Group 02/18/2020 8 PM CST Online
62min Cell
PHONE
Table 3 Focus Group Session List
● Participant Profiles & Demographics
Participants
Name Gender Age Occupation
Location
Frequency of
consuming fast-
food
Focus
Group
1 Cheng F 20 College
Student
Beijing Often
2 Liu M 19 College
Student
Beijing Barely
3 B Zhang F 30 Accountant Beijing Sometimes
4 Sun F 28 Journalist Zhejiang Often
5 K Zhang F 34 Petroleum
Engineer
Shandong Sometimes
6 Wang M 24 Banking
Coordinator
Shanghai Barely
7 Ding F 22 Grad Student Hongkong Barely
Table 4 Participant Profiles & Demographics
Frequency of consuming
fast-food
Often Sometimes Barely
Less than 5 times a year
✔
At least once a month
✔
More than 3 times a month
✔
Table 5 Frequency of consuming fast-food
53
Race/ Ethnicity
All participants are Chinese and from China.
Marital Status and Number of Children
None of the participants have children. Three of the participants were in a relationship,
four were single, and one was divorced.
DISCUSSION RESULTS
● Topic #1 Brand Recognition and Interaction
Question #1 When you think about fast-food, what comes to mind?
In the focus group, the majority of participants think fast food is fast, convenient, and
unhealthy. Fast-food also reminds them of popular and signature items that quick-service
restaurants would offer such as fried chicken, burgers, and fries. Some people believe that they
go to fast-food not for food or service not just for food or service but because they are used to
this kind of lifestyle and it has been a habit since they were young.
Question #2 What is your first impression of KFC? What is your favorite item?
All participants conveyed that they first think of "fried chicken" when they think of KFC.
The typical impression of KFC is its tasty fried chicken as the most famous signature item it
offers. Due to the various options KFC China offers, it is hard to conclude one favorite item from
the Chinese focus group, however, the localized items were mentioned frequently by Chinese
participants. The U.S. group had a clearer result since there are less to choose from its simple
menu. Six out of eight participants from group two chose the original chicken from KFC as their
favorite item.
● Topic #2 Comparison
54
Question #1 If you have tried KFC in other countries (China or the U.S.). What are the
most different things you remember/like/hate about KFC? Any experience that you want to share
with us based on the comparison?
When asked about having KFC in other countries, the focus group had a lot more
comments and perspectives on this topic. Because of the unique offerings from KFC China, KFC
U.S. seemed plain and boring to them. Even only comparing burgers at KFC China and the U.S.,
they think Chinese stores have more options and varieties to choose from. The most memorable
items from KFC China would be the local traditional cold appetizer dish it offers, and unique
rice bowls that fit Chinese people's eating style.
The participants shared interesting experiences during the discussion regarding the
difference between getting KFC in China and the states. Five participants in the group one agrees
and think that KFC is harder to find in the states compared to in China, especially if you live in
small towns in the states. One participant who has lived in a small town in Pennsylvania stated
that it took him 30 minutes to drive to the nearest KFC from his place. And all participants
believe that KFC China offers a better variety of options compared to the monotonous fried
chicken menu offered by KFC U.S.
● Topic #3 Price
Question #1 Will you go to KFC if there’s no promotion or will you purchase KFC just
because there are good deals?
A surprising finding is that the majority of participants in both focus groups about KFC
promotions claimed that they would purchase KFC regardless if there’s promotion or deals. They
will still go to KFC without discounts or special offers. One key reason is that the price at KFC is
already low which means the pricing is not that important to affect their decision making.
55
However, an interesting fact is that according to participants from group two, it is more
reasonable to purchase a meal instead of ordering individual items at KFC. Because the major
purpose for them getting KFC is to fill them up through a quick meal, which a combo or meal
portion is better to meet their needs. Moreover, most of the time, purchasing a meal can be a
better deal than just getting one single product regarding the price. Group one had the same
conclusion but for different reasons. Participants in group one said price doesn't affect them
getting KFC. Compared to cheap local or street vendors in China, KFC China is treated as a
better quality restaurant where people can truly enjoy the food and environment with their family
and friends.
● Topic #4 Promotions
Question #1 If you can recall, what is the most memorable product/campaign KFC had in
your mind?
KFC China provides so many options for its customers. For this reason, participants
mentioned popular items such as Beijing chicken rolls and spicy tender beef pie. Furthermore,
KFC China is doing a much better job utilizing marketing and social media strategies to promote
the brand in the Chinese market. For instance, three out of seven participants believed that the
promotional campaign in 2014 “Who represents KFC?” challenge was one of the hottest
promotions KFC China had. In the campaign, KFC invited two celebrities, Zhendong Ke and
Kun Chen, with a high popularity on the internet to represent KFC original chicken and the new
golden crispy chicken for the battle.
The participants in the focus group showed another successful example KFC China had
on influencer marketing which was the launch of its unique Angry Burger in China. TFBoys is a
hugely popular Chinese boy band with three young boys and a combined Weibo following of
56
over 100 million. The trio helped launch KFC’s trendy Black Burger, a Zinger served on a bun
dyed black with vegetable carbon, and have regularly partnered with the company to push a
variety of other items, including the recent “Angry Burger” variation inspired by the Angry Birds
franchise. This kind of unconventional marketing strategy appealed to a large population and
increased KFC’s sales and reputation in the Chinese market.
Question #2 Could you share what social media platforms you use the most to connect
with your friends and families? And what’s the possibility you would share a promotional post
online?
According to people from group one, all respondents use WeChat and Weibo as their
primary social media platforms to talk and connect with family and friends. All participants in
group two believe that Instagram, Twitter, and Facebook are the major channels for their
communications.
Some respondents from both groups said that it is highly unlikely that they would share a
promotional post on their personal social media accounts from KFC or any fast-food chains.
However, other participants stated that they are willing to share if there are unique or popular
topics and subjects that are related to their personal life. For example, Sun from group one said
that she shared a post from Burger King’s “A hot Valentine’s special: Your ex for a Whopper”
promotion to her close friends to add more fun in their daily conversation. Participant Alex B
from group 2 also mentioned that she shared Popeye’s chicken sandwich on Twitter because it
was the hottest and fun topic on social media at that time with a lot of attention and discussion
from social media users.
● Topic #5 Audience Lifestyle
57
Question #1 What occasions do you generally get KFC or eat at KFC? Do you prefer to
take out or dine in?
The result of this question is quite contrasting between the two groups. The Chinese
group participants showed that they usually prefer to dine in at KFC since the atmosphere is
comfortable and relaxing, and they treat KFC as a place where they are able to hang out or spend
time with friends and family.
In contrast, none of the people from group two would choose to dine in. The most
common option for them is to drive through which they don’t even need to walk into the store for
ordering. They consider KFC as a place where they can get their food quickly, and there’s no
point for them to sit down and spend time in the shop.
Question #2 How important is it for you to have healthy choices at KFC, will you
purchase it, and do you believe fast-food such as KFC can be healthy?
Unfortunately, most respondents from the two groups don’t believe fast-food can be
healthy. Although it is hard to relate KFC to the healthy food category, they are willing to try if it
offers healthy alternatives in the future. But there are still unique thoughts from participants.
Wang from group one said that fast-food can be fast and healthy. He mentioned Chipotle would
be his go-to option for healthy and fast food alternatives. He also said that it would be hard for
KFC U.S. to be healthy considering its limited options, however, the increase of other options
could help KFC change these typical thoughts among the audience.
● Topic #6 Competitors
Question #1 Why would you choose or not choose KFC rather than other fast-food
chains? What other competitors come to mind?
58
The finding showed that people in China would choose KFC over others because KFC
China is so well-built with various options, appealing atmosphere, and pleasant service. They
think KFC is more than just a fast-food restaurant. On the other hand, KFC U.S. would not be
chosen first, most participants commented that they prefer to go to McDonald or Popeyes. The
feedback is really helpful as they mentioned that KFC U.S. generally has smaller and older
settings compared to other fast-food chains. Self-ordering from McDonald's and other chains
also seems more appealing and convenient for fast-food eaters.
RECOMMENDATIONS
Reinforce “Dining Experience” at KFC China
The focus group one discussion result showed that the Chinese audiences consider KFC
as a real restaurant where they could enjoy food with friends and families. It is important to
differentiate the stereotype Western KFC brand image in the Chinese market and establish the
exclusive experience to its Chinese customers from service, setting, and menu.
Emphasize the “fast & healthy” serving feature
According to the profiles of both group participants, the major buying power of KFC is
from people who live a fast-paced lifestyle and seek for quick meal options. Many respondents
stated that they enjoyed KFC’s convenience feature and would like to have more freshly cooked
meal options.
Involve social media use to generate buzz.
The focus group’s conclusion showed a significant correlation between the internet and
KFC's target audience. The development of consistent and engaging news on social media could
stimulate the KFC brand building process.
59
C. Focus Group Guidelines
● Moderator: Zixiao Zhang
Welcome and thank you for being here today. My name is Zixiao Zhang. I will be the
moderator in today’s discussion. As your moderator, it is my duty to direct the flow of the
discussion and comments everyone brings to the table today. Also, I will make sure that we
cover all of the main topics we have prepared. Thanks again for agreeing to be part of the focus
group. We appreciate your willingness to participate.
● Topic:
We have been asked by KFC to conduct the focus groups. The reason we are having
these focus groups is to gather your opinions and attitudes about issues related to your
experiences with KFC. We need your input and want you to share your honest and open thoughts
with us.
● Ground Rules
Before we begin our discussion today, we need to go over some basic rules:
1. WE WANT YOU TO DO THE TALKING.
We would like everyone to participate. I may call on you if I haven't heard from you in a
while. If you have any questions or need clarification on anything during this focus group, feel
free to ask. I don’t want to hinder you from answering a question due to confusion.
2. THERE ARE NO RIGHT OR WRONG ANSWERS, ONLY DIFFERENT POINTS OF
VIEWS.
You don't need to agree with others, but you must listen respectfully as others share their
views. Every person's experiences and opinions are important. We want to hear a wide range of
opinions.
60
3. WHAT IS SAID IN THIS ROOM STAYS HERE
We want folks to feel comfortable sharing when sensitive issues come up. We don't
identify anyone by name in our report. You will remain anonymous.
4. WE WILL BE TAPE RECORDING THE GROUP.
We want to capture everything you have to say. People often say very helpful things in
these discussions and we can't write fast enough to get them all down.
5. CELLULAR PHONES AND PAGER IF APPLICABLE.
We ask that you turn off your phones or pagers. If you cannot and if you must respond to
a call, please do so as quietly as possible and rejoin us as quickly as you can.
Let’s begin with introductions.
A. Neutral Opening: Ice Breaker
Please share with us your name and something you love to do in your free time. And how
often do you eat fast-food?
B. Introduction Questions
1. When you think about fast-food, what comes to mind?
2. Now let’s talk about KFC. What is your first impression of KFC? What is your favorite
item?
3. Why would you choose KFC rather than other fast-food chains? What other competitors
come to mind?
C. Launch-Oriented Questions
61
4. If you have tried KFC in other countries (China or the U.S.). What are the most different
things you remember/like/hate about KFC? Any experience that you want to share with
us based on the comparison?
5. If you can recall, what is the most memorable product/campaign KFC had in your mind?
6. What occasions do you generally get KFC or eat at KFC? Do you prefer to take out or
dine in?
D. Key Questions: Promotion Strategy
7. Will you go to KFC if there’s no promotion or will you purchase KFC just because there
are good deals?
8. How important is it for you to have healthy choices at KFC, and do you believe fast-food
such as KFC can be healthy?
9. Could you share what social media platforms you use the most to connect with your
friends and families? And what’s the possibility you would share a promotional post
online?
E. Ending Questions
10. Do you have any last thoughts regarding KFC or our discussion today?
That was our last question. Your feedback will help KFC to develop further strategies in
both the Chinese and U.S. markets. Thanks for coming today and talking about these issues.
Your comments have given us lots of different ways to see this issue. Thank you for your time
and participation.
62
D. KFC China digital marketing campaign analysis
KFC China has successfully launched its campaigns to attract Gen Z and Millennial
consumers through its Weibo account. As one of the top social networking platforms in China
with 462 million monthly active users, the power of the social media campaigns is crucial for
KFC China’s success (CIW Team). All the social media campaigns are selected based on the
evaluation of time efficiency, target audience interest degree, and traditional Chinese value
appreciation.
1. KFC China Delivery: Late-night BBQ Bucket
To appeal to its Gen Z and Millennial consumers in China, KFC China has launched its
Late-night BBQ Bucket with traditional Chinese Street Food: lou mei ( 卤味). This bucket
focuses on Chinese snack style menu items, including boiled BBQ skewers, stewed spicy wings,
pork ear, and crispy tofu skin.
This campaign launched in perfect timing. BBQ skewers have been a traditional late-
night snack for Chinese people in the summertime. According to Technomic’s new College and
University Trend Report, 42 percent of Gen Z-ers want street food on the menu. This could have
to do with the popularity of food trucks that serve street food that Generation Z has grown up
with (McSweeney). Moreover, the focus group finding shows that Gen Z and Millennial are
heavily involved with social media and technology. Online ordering and delivery have been
popular among the young audience. The campaign is a huge success in targeting young
consumers with Chinese fusion items through social media platforms.
63
Figure 15 KFC Late-night BBQ Bucket
2. KFC China Messy Cheese Fish Chicken Burger x Yibo Wang
KFC has also been incredibly adept at using celebrity endorsements to attract its Gen Z
and Millennial customers in China. Yibo Wang is a popular Chinese actor, dancer, and singer.
He has 30 million fans on Weibo, which brings a huge influence on promoting KFC’s new
burger social media. This newest burger launch post on Weibo had over 20000 likes, 9843
64
forwards, and 4759 comments within 24 hours(Sina). KFC posted posters of Yibo holding the
newest burger, which showed the audience that Yibo represents this burger with the innovative
ingredients features such as various chess mix, house special sauce, and the combination of
chicken and fish in one burger. The appealing posters with influencer effects and creative menu
features gained a lot of attention and discussion on social media.
Figure 16 Yibo Wang Weibo 1
65
Figure 17 Yibo Wang Weibo 2
3. AFK Arena Limited Gaming Card
KFC China’s recent partnership includes a stint with legendary Chinese Lilith game AFK Arena.
This brand collaboration successfully created a buzz on the internet for KFC China and its
featured items. The limited-time gaming card offers exclusive flashcards to optimize your result
in the game playing, and also includes a 40% off discount on KFC breakfast sets and free
delivery for 90 days. Lilith Games is an original Chinese produced gaming company. By
partnering with the local business, KFC China not only helps to support the Chinese community
but strengthens the relationship with Chinese audiences.
66
Figure 18 AFK Arena Limited Gaming Card
4. Happy Children’s Day limited 666 Coupons
China’s grown-ups are scoffing that age is just a number as they hop on the holiday’s
increasingly commercialized bandwagon. There have been trends of Millennials in China
ordering fast-food kids’ meals on Children’s Day to recall their past childhood memories (Sixth
67
Tone). Monday, June 1 is National Children's Day 2020 in China. To follow this nostalgia trend,
KFC China launched its #Super 666 Festival which offers adults a chance to celebrate Children’s
Day by offering seven new innovative items with 6.6 discount coupons. This social media post
successfully shows KFC China’s new appealing menu, great discounts, powerful celebrity
repressive, and digital scannable code for online purchases. This campaign is of great support for
combining the appreciation of traditional Chinese culture with social media power.
Figure 19 KFC Children’s Day Limited Coupons
5. Spicy Crawfish Taco Reward
Due to the success of digital marketing and online ordering, KFC China launched this
68
crawfish taco through its online store. Besides the innovative product with Chinese traditions,
KFC China invites one of the most popular celebrities in China for Collaboration. Han Lu is a
Chinese singer and actor with 62 million followers on Weibo. With the purchase of this new taco
item, there is a chance to win the signed poster of Han Lu. This campaign successfully targets a
younger audience. The poster design styles, item tastes, and promotional contents aim to attract
the characteristics of Gen Z and Millennial consumers.
Figure 20 Han Lu Weibo 1
69
Figure 21 Han Lu Weibo 2
Abstract (if available)
Abstract
As the fast-food industry is growing in China, more and more local businesses are entering the market competing with western brands. It is challenging to western fast-food companies such as KFC to continue to stay as the leading quick-service restaurant in the Chinese market. To continue to stay competitive in China, KFC China needs to find a way to stand out from the western brands while adding traditional Chinese character to compete with the local fast-food restaurants. It is crucial for KFC China to keep attracting Gen Z and Millennials through appreciating Chinese values in its future campaigns.
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Asset Metadata
Creator
Zhang, Zixiao
(author)
Core Title
Strategic planning model: how KFC China can attract Gen Z and Millennials through appreciating Chinese values
School
Annenberg School for Communication
Degree
Master of Arts
Degree Program
Strategic Public Relations
Publication Date
08/02/2020
Defense Date
07/30/2020
Publisher
University of Southern California
(original),
University of Southern California. Libraries
(digital)
Tag
China,fast-food,Gen Z,KFC,Millennials,OAI-PMH Harvest
Language
English
Contributor
Electronically uploaded by the author
(provenance)
Advisor
Yang, Aimeia (
committee chair
), Cook, Fred (
committee member
), Gretzel, Ulrike (
committee member
)
Creator Email
melodyzhangzhang@gmail.com,zixiaozh@usc.edu
Permanent Link (DOI)
https://doi.org/10.25549/usctheses-c89-353546
Unique identifier
UC11666501
Identifier
etd-ZhangZixia-8856.pdf (filename),usctheses-c89-353546 (legacy record id)
Legacy Identifier
etd-ZhangZixia-8856.pdf
Dmrecord
353546
Document Type
Thesis
Rights
Zhang, Zixiao
Type
texts
Source
University of Southern California
(contributing entity),
University of Southern California Dissertations and Theses
(collection)
Access Conditions
The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the a...
Repository Name
University of Southern California Digital Library
Repository Location
USC Digital Library, University of Southern California, University Park Campus MC 2810, 3434 South Grand Avenue, 2nd Floor, Los Angeles, California 90089-2810, USA
Tags
fast-food
Gen Z
KFC
Millennials