When it comes to doing business in China, one American company’s success story soars above the rest.
It was the first major Western fast-food company to enter the Chinese market, and it catapulted to the top of the industry with an additional 2000 stores in less than two decades.
Today, KFC is the largest restaurant chain in China with over 5000 outlets as of 2015. Parent company Yum! Brands plans to open 600 new restaurants across China in 2016.
That’s over one new store every day!
KFC China is so successful it outperforms its closest competitors by two-to-one.
How has KFC accomplished such success and leadership in this highly competitive industry?
Former KFC executive and author of the book “KFC in China, a Secret Recipe for Success,” Warren Liu, believed being the first Western fast-food restaurant to enter the Chinese market gave the company a substantial competitive edge.
In addition, Liu states that China is a “different market.” He emphasizes how important local cultural understanding is for real success in China.
To achieve success in China, foreign brands must have a deep and broad understanding of the Chinese and their culture. Something that cannot be achieved with just a visit or two. It must come from within.
KFC understood this, so the company did something very smart.
They hired a local leadership team. Most were educated in Taiwan and had studied abroad for many years.
Their intuitive knowledge of the Chinese market, combined with their training and experience, enabled them to identify KFC’s target customers with laser precision and develop promotional campaigns that appealed to them.
KFC’s success in China rests on several key elements.
- Early entry into China gave KFC many first mover advantages.
- Hiring a Chinese leadership team gave KFC local intuition and effectiveness.
- KFC adapted its products and promotional campaigns to match the tastes of the local Chinese customers.
- KFC’s primary product “chicken” was already a familiar food in China.
While expanding into China involves a great deal of uncertainty, KFC’s successful international growth has been remarkable.
The company’s success is also due to the dynamic changes that have been taking place in China over the past 30 years. During this time, China has changed from a developing country into one of the world’s largest economies with its GDP doubling every seven years.
Today, China has a rapidly expanding middle class, who can afford to travel, and have a growing desire for general aviation and business aircraft as well as chicken.
This is good news for aviation companies with the vision and desire to expand and invest in China. Not only in manufacturing, but also in airport design, construction, and operating services.
By 2021, China plans to invest $64 million (US) into constructing new airports and improving existing ones.
Developing a promotional campaign in China …
Marketing aviation products and services may seem vastly different from marketing fried chicken; however, key fundamentals remain the same.
- Early entry into the new markets provides first mover advantages.
- Recruiting local talent and leadership provides local intuition and drives other success factors.
- Corporate support for local innovation provides the flexibility required to meet market fluctuations.
- Adapting promotional campaigns to match the local culture elevates effectiveness.
- Promoting a familiar product with new and improved benefits reduces resistance.
Navigating China’s aviation expansion is still involved, yet there is plenty of opportunity for reward. As the country’s skies continue to open to accommodate general aviation, the process will improve. As it does, more companies will enter the market, and competition will increase. In 1987, KFC saw a growth opportunity in China and seized it. Today, that same opportunity exists for general aviation companies.