Proceedings of Annual Shanghai Business, Economics and Finance Conference
3 - 4 November 2014, Shanghai University of International Business and Economics, Shanghai, China
ISBN: 978-1-922069-63-4
Analysis of Success and Failure for Non-Chinese Companies
Building Brand Value in China
R.K. Marjerison
The objective of this paper is to present an overview of lessons learned
on marketing in China, specifically creating and managing brand value for
western and non-Chinese businesses and on how to and how not to build
brand awareness and brand value in the Chinese market. The first case
considers the failure, against all odds, of eBay; and the second case considers
the enormous success of Kentucky Fried Chicken (KFC) in the same market. In
the summary section we conclude that the definitive difference between the
two cases, and a likely driving force in their respective failure and success , is
the extent to which each company was able, or willing, to localize and
regionalize their respective products/services to meet the expectations,
preferences and cultural norms of the Chinese consumers. In doing so, KFC
was able to build a powerful and valuable brand, while eBay achieved suffered
crushing losses and eventual withdrawal from the market.
JEL Codes: F20, F23, M14, M31
1. Introduction
As large international and multinational corporations continue to pursue opportunities in
China, targeting the immense and steadily growing consumer marketplace, they face a
complicated business environment. Much has been written about the nature of joint venture
structures and operations in China however, this paper considers the complicated nature of
creating and managing brand value in China.
The first generation of western brands that entered the Chinese market were very successful
primarily based on their appeal as western and unique. Subsequently, as Chinese
consumers’ behavior and purchasing patterns have evolved, it is no longer enough to have
international or western brand value in the Chinese market.
*Associate Professor R.K. Marjerison, Business Department, Royal Thimphu College, Bhutan. Email:
RMarjerison@gmail.com
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Proceedings of Annual Shanghai Business, Economics and Finance Conference
3 - 4 November 2014, Shanghai University of International Business and Economics, Shanghai, China
ISBN: 978-1-922069-63-4
2. Methodology - Case Studies
To learn more about what characteristics contribute to success or failure of large
multinational organizations seeking to enter the Chinese market, we compared the strategies
or two well-known and established international brands; one, eBay a pronounced failure and
the other KFC, a resounding success and one,. Considered were the respective marketing
strategies, the respective philosophies regarding the recruitment of senior and mid-level
management, and the extent to which the core activities of the organizations were adapted,
revised or modified from the way they operate in their original or ―home‖ markets.
3. eBay
While the Chinese economy has continued to grow at an incredible rate in nearly every
measureable manner, eBay floundered and failed where few considered such failure was
possible. Given the considerable strengths and assets that eBay enjoys in the North
American market, particularly its powerful brand recognition and brand value, how then could
the company have done so poorly in Asia in general, and in China in particular?
A systematic evaluation of the impact of eBay’s leveraging of its assets and core strengths in
China should include the mention of eBay’s considerable liquid financial assets, which, while
necessary in any attempt to penetrate the Chinese market on a large scale in any industry,
does not set the company apart in any meaningful manner. There are many wealthy
companies willing to invest in growing their businesses in China, as well, there is no shortage
of investment capital available worldwide for investment in China. Therefore, eBay’s wealth,
and the willingness to invest in the Chinese market is neither a critical success factor nor a
key differentiator.
A second major asset of eBay is its brand value. Many companies entering into new or
developing markets, including some expanding into China, have leveraged their brand value
to play a role in their business strategy and success. In the case of eBay, the brand was
relatively unknown in China, and moreover, unlike the case of some consumer goods or
luxury brands known for their quality or for fashion/status/prestige value, eBay does not itself
have a brand that can be worn by, or displayed by consumers. Therefore, the eBay brand,
while very valuable in the North American market, proved to have little to no value in China.
This unique situation could have been an advantage, or a disadvantage for eBay in China
depending how it was incorporated into a strategy of brand value creation and management.
The eBay website, arguably the core of eBay’s very successful business model, differs
stylistically from typical Chinese websites which tend to be less menu-driven and have much
more content per page. As well, the color scheme of the eBay page is very different from
what Chinese users are accustomed to, or expect. While the stylistic or fashion perspective
of a website may not seem to be a critical matter in the success or failure of an e-commerce
website/business, ease of use and how intuitive a website is for users is typically very
important to end-user satisfaction and ―usability‖. Just as important, perhaps more telling is
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Proceedings of Annual Shanghai Business, Economics and Finance Conference
3 - 4 November 2014, Shanghai University of International Business and Economics, Shanghai, China
ISBN: 978-1-922069-63-4
that eBay did not attempt to adapt its user interface, (website), for Chinese users. This could
be seen as either lacking in awareness of the differences, poor due diligence, or possibly
simply not recognizing the stylistic differences between western and Chinese web design and
the importance of adapting to the customers’ preferences and expectations.
Evidence on the importance of adapting to local or regional user preferences include the
findings of Quaddus; ―The results indicate that a subject’s norms, trust and behavioral control
have significant impact on the buying intention via on-line auction but personal
innovativeness and attitude don't.‖ (Quaddus, 2007) This is important as it envelops the core
of the significant cultural differences between China and the U.S.
―When eBay entered the China market, Jack Ma, founder and CEO of Alibaba, was alarmed
that ―someday, eBay would come in our direction.‖ He knew too well that there was no clear
distinction between small businesses and individual consumers in China. As a defensive
strategy, Ma decided to launch a competing consumer-to-consumer (C2C) auction site, not to
make money, but to fend off eBay from taking away Alibaba’s customers.‖ (Wang, 2010)
The new Web site named Taobao—meaning ―digging for treasure‖—was launched free of
charge for individuals buying and selling virtually any consumer goods, from cosmetics to
electronic parts.
It is important to note the differing ways in which relationships are created, developed and
maintained in China and the importance of doing so. Research on the success of eBay’s
main competitor in China, Taobao, makes clear the importance of managing social and social
media based relationships;
―The largest Chinese online auction company Eachnet, was purchased
by eBay but faced tough competition from a new Chinese online auction
company, Taobao. Now Taobao's market share is twice as large as eBay's.
Why has eBay quickly lost its market share to the newly launched Taobao?
What is the nature of this market? On the premise of the customer relationship
management (CRM) process model, we conduct a case study to describe the
whole picture of this market and to find out what strategies are most suitable to
the current Chinese market and likely to lead to success. Our study shows that
the company to customer (C2C) market in China is a young and experience‐
seeking market whose customers are price‐sensitive, willing to try new services
and new vendors, and comfortable with switching. The market is also a social
environment where customers' loyalty to a vendor can be built more easily by
the vendor's social relationship management service than by the transaction
service. The findings suggest that vendors in China's C2C market should not
only provide a functional service to acquire customers, but also foster the
development of social marketing to retain customer loyalty. The social
marketing design should be tailored to Chinese culture.‖ (Chen, 2007)
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Proceedings of Annual Shanghai Business, Economics and Finance Conference
3 - 4 November 2014, Shanghai University of International Business and Economics, Shanghai, China
ISBN: 978-1-922069-63-4
This indicates clearly that marketing, at least in this case, is more effective when it is word of
mouth than when it is managed through the vendor’s website. Consistent with the evidence
above is the fact that eBay did not incorporate the important functionality in the website
design that would allow a forum for buyer feedback which may have served as a partial
substitute for personal referral. Customer feedback is an important part of the U.S. based
eBay model and proved to be even more important in the Chinese market where much
depends upon relationships and personal recommendations.
To grow brand awareness in China, any company should consider a marketing strategy that
has at its core the ability to leverage existing personal relationships between its customers
and its potential customers. Chinese are hesitant to do business with someone with whom
they have absolutely no relationship with and no introduction or recommendation. This
recommendation or referral concept is a deeply imbedded part of Chinese culture and while
imprecisely defined in Western business texts, is very important in personal and commercial
relationships in China. There is some uncertainty as to the scalability of this concept, known
as ―Guanxi‖, as it is based on personal relationships, not inter-corporate relationships, but it
is very real, and very important.
―Guanxi means good connections. Although guanxi is often said to be the
source of sustained competitive advantage for foreign companies doing
business in China, there is little theoretical basis for this view. What is known is
that guanxi has to be valuable, rare, and imperfectly imitable before it can lead
to a sustained advantage. Even if a certain advantage is gained, it can be
difficult to sustain, because guanxi can be disrupted by something as simple as
staff mobility. By suggesting ways for companies to protect their guanxi, it is
hoped that this important aspect of Chinese management may be made more
understandable to westerners and its use by western managers enhanced and
encouraged.‖ (Tsang 1998)
Research makes known the importance of acknowledging and adapting business strategies
and policies to reflect the preferences and culture of the local or regional customers and
business partners.
―Cultural conditioning is so powerful that it defines thought, determines
behavior, and limits expression. If you understand your counterpart’s cultural
conditioning, you will have a great advantage. An understanding of how foreign
cultures dominate and permeate foreign economies, politics, and business is
vital for negotiating and managing abroad.‖ (Leppert, 1994)
Another related aspect of personalization of the user experience that was not included in the
China version of the eBay website is a forum for public feedback. While still not based on
personal relationships, such feedback may have given users enough of a level of comfort to
use the eBay service because such functionality is similar and vaguely related to the Guanxi
notion of relationships or referrals. The ample research on customer feedback made public is
well represented by the following:
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Proceedings of Annual Shanghai Business, Economics and Finance Conference
3 - 4 November 2014, Shanghai University of International Business and Economics, Shanghai, China
ISBN: 978-1-922069-63-4
―This study revealed cross effects of negative ratings on the performance of a
seller. By separating the cross effects of magnitude and reputation of negative
ratings, this study demonstrated that positive ratings have a significant positive
impact on the performance of sellers, while negative ratings have negative
reputation effects and positive magnitude effects. (Ye, 2009)
The public feedback functionality has proven to be important and valuable in the U.S.
operations of eBay. Whether and to what extent such functionality would be useful or of what
importance to eBay China is uncertain, however, researcher Fong’s work indicates its
importance;
―The important influence of peer recommendations on consumer purchases has
been strongly established. However, recent growth in electronic discussion
boards has increased the potential for electronic word-of-mouth (eWOM)
between people who have never met. This study examines and compares the
extent of eWOM on electronic discussion boards within U.S. and China-based
websites. Using online surveys (N = 214) and observation of discussion
postings (N = 3,029), data was collected from the ―Digital Photography‖
discussion boards on eBay, Yahoo, and Google (U.S. based websites) and
EachNet, Sina, and Netease (China based websites). The findings indicated
both similarities and differences in the information giving and seeking
behaviors, with the U.S. participants more likely to provide information than
Chinese participants, resulting in the U.S. based discussion boards containing
a richer source of information relative to requests.‖ (Fong, 2006)
In review of the issues surrounding the eBay website, appearance and functionality, we
consider the following findings; ―The second challenge is the localization of market services.
Online businesses originating from the western countries seem to have difficulties in adapting
to the Chinese environment and localizing their business and web sites. It seems ineffective
to simply apply previous business strategies from western countries to the Chinese
marketplaces.‖ (Li, 2008)
With a different philosophy and a very different approach the market, Alibaba was able to
capitalize and and seize market share in China even though the brand was virtually unknown
the U.S. ―In 2004, eBay had just entered China and was planning to dominate the China
market. Alibaba was a local Chinese company that helped small- and medium-sized
enterprises conducting business online. Most people in the West had barely heard about it.‖
In summary, we see that the assets and strengths of eBay in the North American market, its
brand value, available cash, web-site functionality and strategic integration with the payment
processer and the logistics organizations, are all either of questionable value in China, or of
no value at all. Further, combined with the lack of due diligence and localization or adaptation
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Proceedings of Annual Shanghai Business, Economics and Finance Conference
3 - 4 November 2014, Shanghai University of International Business and Economics, Shanghai, China
ISBN: 978-1-922069-63-4
to cultural differences, the inability to create brand awareness and brand value made eBay’s
foray into China a dismal failure.
4. KFC (Kentucky Fried Chicken)
In contrast to the failure of eBay in China we consider KFC, an unparalleled success in the
Chinese market for a U.S. based company, building both brand awareness and brand value.
The reasons for the success of KFC may be numerous and varied, and there has been much
speculation and research on this topic. In comparing KFC China to eBay China and
attempting to identify the contrasts between the two, we are able to identify some patterns
and some likely explanation for their different results in the Chinese market.
―No company illustrates Asia’s potential better than Yum! Brands, the proprietor
of KFC and Pizza Hut. KFC opened its first restaurant on China’s mainland in
1987, and now operates 2,497 in the country (compared with 5,253 in the
United States), and counts on it for nearly 30 percent of global revenue. Yum!’s
total sales there, which soared 31 percent last year, helped the company shrug
off the US recession. CEO David Novak, who tells investors that Yum!’s
business in China is merely ―in the first inning of a nine-inning ball game,‖ vows
the company will eventually have more than 20,000 restaurants in the country.
He says KFC in China ―can be every bit as big as McDonald’s in the US.‖ (Yang
2011)
One aspect of doing business in China is the different behavior of consumers in general, and
more specifically the behavior of the market demographic on which KFC relies for its
customer base. KFC in China was able to reposition itself in a distinct manner, differently
than its traditional brand image in the U.S.. Research by Witkowski helps explain this
change;
―This research measured and compared the brand identity of Kentucky Fried
Chicken (KFC) in China and the United States. Brand identity was defined as
the customer impressions of four different KFC identity elements – properties,
products, presentations, and publications. A survey of young consumers in the
two countries (n = 795), showed that the Chinese respondents were more apt
to eat within KFC restaurants, and spend more time doing so, than the
Americans. The Chinese also had much more positive impressions of KFC than
their American counterparts. Brand identity impressions were correlated with
overall customer satisfaction and with future patronage intentions for both
groups, but much more so for the Americans. These findings support a model
where differences in cultural frames of reference lead consumers to actively
localize the brand identity of this nominally globalized product.‖ (Witkowski,
2003)
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Proceedings of Annual Shanghai Business, Economics and Finance Conference
3 - 4 November 2014, Shanghai University of International Business and Economics, Shanghai, China
ISBN: 978-1-922069-63-4
There is extensive research supporting the idea that Chinese consumers enthusiastically
embrace Western products and brands as they become available in China. According to
the Financial Times;
―China swallows fast food at an even faster rate than ever, the success of
Kentucky Fried Chicken (KFC) and McDonald's in China is the result of a
transformation of China's lifestyles, which are becoming more geared to speed
and convenience. There is also some sense of curiosity and faddishness on the
part of Chinese youth toward Western fast food restaurants. There are now
over 800 KFCs and half as many McDonald's in China.‖ (Cheng, 2003)
This is one example of many research reports on this topic of Chinese consumers perceiving
Western brands, in this case fast food brands, not only as dining alternatives, but as prestige
brands, meaning that at least part of the value is in the status or brand alone, not just in the
value of the food. Note the date on the Cheng research as 2003; this is important in tracking
trends in the rapidly changing market conditions of China.
In contrast to the research of Cheng, done just over ten years ago, there was already
evidence of a rebound effect in consumer behavior away from favoring Western brands
toward favoring Chinese brands. While some will argue that this shift in consumer behavior is
a result of more and better local products/services, others believe it is a shift in perception of
brand value or ―prestige‖ value. For example;
―In the People’s Republic of China (PRC), consumers have recently shown a
tendency to shift away from foreign products in preference for local offerings.
Some commentators have speculated that this new market phenomenon is a
result of government intervention, consumer ethnocentrism, and improvement
in the quality of local products. In this study, the authors offer an alternative
reason, which pertains to the fading symbolic value of foreign products in the
PRC market.‖ (Zhou, 2003)
This indicates that there was already a trend towards the de-glamorization of Western brands
in China which would be entirely reasonable as the novelty of those brands’ offerings wore
off and consumers returned to their pre-Westernization preferences. ―The results challenge
the conventional wisdom that improvement in the quality of local products is the main cause
of the decreasing competitiveness of foreign products in the PRC.‖ (Zhou, 2003)
Timing of the research related to brand value and brand preference, specifically as a factor in
the success of KFC is important. Research results that appear to conflict may in fact be a
function of overlapping time lines in rapidly changing market conditions. For example,
supporting the idea that part of the success of some Western brands, in this case the fast
food brands of KFC and McDonalds is the novelty or foreign and exotic nature of the product
brand is this research by Shen;
―The empirical analysis based on these predictions consistently suggests that
market learning is more likely to explain the positive effect of KFC on
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Proceedings of Annual Shanghai Business, Economics and Finance Conference
3 - 4 November 2014, Shanghai University of International Business and Economics, Shanghai, China
ISBN: 978-1-922069-63-4
McDonald's and that demand expansion is more plausible with McDonald's
positive spillover on KFC. In other words, the results are consistent with the
presence of KFC signaling market demand potential and growth to McDonald's
and the presence of McDonald's helping to cultivate consumer taste and
generate demand for Western fast food, which benefits KFC.‖ (Shen, 2014)
The implication from this research is that the two brands, KFC and McDonalds are not
competing for a share of the fast food market business in China, but rather are part of a trend
towards favoring Western brands by Chinese consumers. More importantly, the indication is
that brand value is a key factor in the success of both companies.
In considering the different positions that KFC has managed to place its brand in the US and
China, and how such brand positioning has been accomplished it is useful to consider the
different ways that consumers react to marketing and brand positioning between the two
countries. In research on this topic Cui reports that;
―Previous research has attributed the differences in consumer attitudes
toward marketing between countries to either the life cycle of consumerism
development or cultural values such as individualism. We conducted a crosscultural study of China and Canada to test the two competing hypotheses. The
survey results suggest that Chinese consumers are more positive about
marketing and have a higher level of satisfaction than their Canadian
counterparts. But the Chinese report more problems with marketing and less
positive attitudes toward consumerism than the Canadians. While Chinese
consumers are less likely to complain or engage in negative word-of-mouth,
they are more supportive of government actions and public resolution.
Consumerism and individualism have significant negative correlations with
consumer attitudes toward marketing for the Canadians, but not for the
Chinese. The cross-cultural variations may reflect the cultural values (i.e.
individualism) and the role of government institutions, which are different
between the two countries. These findings have significant implications for
managing customer relationships in different countries and for interpreting the
differences in consumer attitudes in cross-cultural studies. (Cui, 2008)
While Cui’s research is on Canadian vs. Chinese consumer behavior and perceptions, it can
be useful in generalizing the differences between cultures in general, and assuming a
similarity between American and Canadian consumers can help to understand the success of
the positioning of the KFC brand in China. Perhaps the key factor in the success of KFC in
China is that from the onset KFC understood the importance of localization or regionalization
in its business and marketing strategies. The importance of such a strategic view is critical
and well put by Guild;
―McKinsey’s experience suggests that even the most sophisticated
multinationals must change significantly to realize Asia’s growth potential. The
region is as diverse as it is vast. Its markets come in a bewildering assortment
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Proceedings of Annual Shanghai Business, Economics and Finance Conference
3 - 4 November 2014, Shanghai University of International Business and Economics, Shanghai, China
ISBN: 978-1-922069-63-4
of sizes and development stages, and its customers hail from a multitude of
ethnic and cultural backgrounds. Their tastes and preferences evolve
constantly. The speed and scale of change in Asian consumer markets can
surprise even experienced executives. To meet the challenge, global
companies will have to organize themselves regionally to coordinate strategy
and use resources in the most efficient way while at the same time targeting the
tastes of consumers on a very local level.‖ (Guild, 2009)
This philosophy was embraced by KFC and evidenced through implementation on two levels
as both the menu offerings were adapted to Chinese regional and local tastes, and the HR
strategy included hiring local Subject Matter Experts, (SMEs) as part of the management of
the business, as well as unskilled or semi-skilled labor to work in the restaurants.
Recognizing the importance of deeply imbedded cultural traditions, KFC was able to work
within the Chinese culture, rather than at odds with traditions. This is evidenced by KFC
including the Chinese matter of Guanxi into its business strategy. ―For instance, when KFC
opened its largest chain store in Tiananmen, Beijing, in 1987 its good Guanxi with Chinese
central government helped them, to a large extent, to get the building permission.‖ (Luo,
2000)
It has been hypothesized that the importance of traditional ways of conducting business in
China, including Guanxi, has diminished since the opening up of trade with the west. This
idea is contradicted by the research of Yang, who concludes just the opposite - that in fact
Guanxi remains a critical part of success even for multi-national corporations seeking to do
business or build brand awareness or value in China.
―Many scholars argue that the importance of Guanxi has declined since China’s
opening-up and reform policies have reached an advanced stage. So, this
paper has also discussed whether the importance of Guanxi to multinational
companies in China has declined or not. It reached to the conclusion that
Guanxi remains significant for international enterprises doing business in
China.‖ (Yang, 2011)
It is certain that KFC is enjoying considerable success in China, and all indicators are
pointing towards a high probability that the success will continue for the foreseeable future.
5. Relevant Findings and Recommendations
Perhaps the key factor in the success of KFC in China is that from the onset KFC understood
the importance of localization or regionalization in its business and marketing strategies. This
was implemented on two levels as both the menu was adapted to Chinese regional tastes,
and the HR strategy included hiring local Subject Matter Experts, (SMEs) as part of the
management of the business as well as unskilled or semi-skilled labor to work in the
restaurants. The importance of engaging support of local ―experts‖ or ―consultants‖ in China
simply cannot be overemphasized and is well put by Barr;
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Proceedings of Annual Shanghai Business, Economics and Finance Conference
3 - 4 November 2014, Shanghai University of International Business and Economics, Shanghai, China
ISBN: 978-1-922069-63-4
―There are many barriers to doing business in China: most notably, language.
Only a very small percentage of the population speaks English and very few
factories have English speaking personnel. There are also many rules and
regulations as to how business can be conducted in China and they are
changing rapidly and are in a major state of flux.‖ (Barr, 2003)
Further support of the idea that sensitivity to local or regional preferences is critical can be
found in research on related businesses to KFC.
―Brands are powerful symbols that reflect not only the image with which
marketers hope to imbue them but also the cultural milieu in which they are
imbedded. If that milieu is in a state of flux, brands can come to represent some
surprising ideas and values to which marketing efforts must be sensitive. In this
research, the authors relate the nature of societal change, a common
occurrence in many developing markets and especially China, to evaluation of
a brand by a broad cross-section of urban Chinese consumers. Using the
methodology of scenario completion, the authors reveal that the McDonald’s
brand is evaluated in the context of societal norms and values that are brought
up in various usage situations. Brand evaluations can be inconsistent and often
paradoxical depending on the context. The results suggest that marketers
should be closely involved with the way their brand is interacting with cultural
values in transitional markets.‖ (Eckhardt, 2002)
Depending on the product or service being considered, and the demographic of the target or
identified consumer it can be necessary to shape the marketing strategy very differently in
China. For example, Chinese in rural areas have very different purchasing patterns than
those in urban areas. Many Western brands, including KFC, have identified their target
consumers as primarily urban and with greater discretionary income. Marketing to such a
demographic is a specialized task and may require rapid identification and execution of
marketing strategies such as the use of social or innovative media. This is supported by
research conducted by Accenture Consulting.
―Accenture research shows that creating a successful brand in this environment requires a
sophisticated understanding of what segments of the Chinese markets value in a brand and
a willingness to reach China's increasingly choosy consumers through innovative media.‖
(Nunes, 2010)
Further evidence of the rapidly changing nature of the Chinese consumer is provided by
Michael of BCG, ―China may still be classified as an emerging market, but on the internet it
has arrived. By 2015, China will add nearly 200 million users, reaching an internet population
of more than 700 million—almost double the combined number of Japan and the U.S.‖
(Michael, 2012) While this research concerns internet usage, not direct brand promotion, it
can be generalized that internet technology savvy consumers will be likely to respond to nontraditional means of brand promotion as reported by Michael; ―China has become a major
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Proceedings of Annual Shanghai Business, Economics and Finance Conference
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ISBN: 978-1-922069-63-4
internet market with increasingly sophisticated consumers, who are online 3.6 hours a day. In
a few years, it will likely become the largest online retail market in the world. Companies that
want to win in China must understand the rapidly evolving digital lifestyles of these
consumers.‖ (Michael, 2012)
In summary, the very demographic that is sought by prestige or status-oriented brands will be
a demographic that is more likely to be reached over time through innovative media as
evidenced by Nunes (above). It is difficult to hit the fast moving target that is the Chinese
consumers’ preferences and behavior, nevertheless, some facts that may be useful in
marketing strategy development do stand out. As China overtakes the U.S. for the largest
number of internet users, it will be important for any organization seeking to build brand value
to use the web effectively.
―The Internet is an exciting new avenue for the advertising industry: it increases
the value of advertising by making it measurable and targetable as never
before. Spending on online advertising in China was a paltry 6 billion RMB in
2006, but had risen to 32 billion in 2010, a CAGR of nearly 50%. That trend is
expected to continue, with forecasts putting the total spend for 2011 at around
51 billion RMB, at RMB 80 billion in 2012, and approaching RMB 100 billion in
2013.‖ (Cainey, 2012)
From these findings we can draw some conclusions both regarding the reasons the failure of
eBay and for the success of KFC, specifically that western multi-nationals wishing to
successfully do business in China must regionalize and adapt to Chinese culture and
customs, as well as to customer expectations and preferences. We can also identify some
areas of focus for KFC going forward as it attempts to continue its success through brand
value creation and maintenance. It is noteworthy that some of the marketing strategies used
by KFC in the past, and suggested as part of an ongoing strategy, might very well be
generalized as useful for other brands seeking to establish, maintain or build brand value in
China.
6. Suggestions for Additional or Related Research
Finally, a suggestion for further research would be to consider the health implications of
introducing higher processed western fast food to the population of China. This consideration
comes to light as no discussion of the introduction of Western brands, particularly of fast food
restaurant and food brands into China would be complete without mention of some of the
potential downside issues for the Chinese consumers and well worthy of further
consideration. Foods that have traditionally been part of the local dietary habits are being
marginalized or at least partially replaced by non-local foods. For example, Hagen Daaz ice
cream is popular in many cities in China, even though dairy has not traditionally been a part
of the local dietary habits in many of these areas. Another good example of this consideration
would be noted by Witkowski; ―Anti-globalization critics have accused marketing in
developing countries of undermining local cultures, placing intellectual property rights ahead
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Proceedings of Annual Shanghai Business, Economics and Finance Conference
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ISBN: 978-1-922069-63-4
of human rights, contributing to unhealthy dietary patterns and unsafe food technologies, and
promoting unsustainable consumption.‖ Witkowski (2005)
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Proceedings of Annual Shanghai Business, Economics and Finance Conference
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