Marketing in Developing Areas of China - Kfc

1. Introduction

1.1. About KFC

KFC (Kentucky Fried Chicken) is the world's largest chain of fried chicken fast food restaurants, headquartered in the United States. In China, where KFC first opened in 1987, it is the largest Western restaurant chain, with over 5,000 restaurants. KFC aims to attract various groups of people; from individuals to families, and children as well.

1.2. Market overview

As a variety of multinational and local catering enterprises are keen to grab market share of developed cities, the fast food industry competition has become very fierce in Tier 1 and 2 cities. On the other hand, in developing areas, fast food market is mainly occupied by some local brand. Most of foreign famous fast food enterprises pay no attention this market. Relatively relaxed competition environment in Tier 3 and 4 cities provides a great opportunity for KFC.

Meanwhile, nowadays, only 33.5% of retail sales come from the top 24 cities. The strong purchasing power in low tier markets has become the engine for market expansion. More and more people consider the KFC’s price to be acceptable in developing areas, and begin to be dissatisfied with poor service provided by local fast food companies.

Moreover, most Chinese, especially fashionable young, are quite interested in western food culture, and regard it as a fashion to have pure western food. But the opportunities of access to pure western food are limited in developing areas, which make it possible for KFC to expand explosively in Tier 3 and 4 cities.

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2. SWOT Analysis

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3.1. Strengths

* Brand prominence

KFC has been one of the most household international brands in China since it opened its first Western-style quick service restaurant in Beijing in 1987.

* Excellent in quality and reasonable in price

KFC products have achieved the standardization and industrialization to ensure product quality. Meanwhile, as foreign fast food brand, its...