This is a project that I did for my corporate communication class. I analyzed KFC’s food safety crisis and mapped out actions-to-take. Based on scanning the background, assessing the source of the problem and sorting customers’ reactions, a sequent tactics are suggested for crises management.
Corporate Case Study—KFC China
Time: July 20th 2014
Executive Summary
This report is written to the CEO of KFC China，Jingbing Su，forthe food safety scandal due to its meat supplier—HUSI Co, Ltd.
On July 19th 2014, Shanghai Dragon TV exposed that HUSI Co, Ltd, OSI Group’s Chinese subsidiary, mixes expired meats and supplies these dangerous semi-finished products to its partner company—KFC. In the video recorded by the undercover reporter, unethical conducts in HUSI’s plant shocked the customers of KFC. For example, the worker picks up meat that has dropped on the floor and puts itback to the mixing bowl. Expired meats were used to produce KFC’s cheese hamburgers and barbeque hamburgers. After Dragon TV aired the breaking news, anonymous workers from HUSI revealed that the company provides fake quality reports to KFC and only acts well when KFC’s quality control department comes to check HUSI’s plant. (People.com)
In the statement of problem, I analyze the focal problems that have to be solved based on an online polling about KFC’s brand image and the timeline of the crisis. Next, in the assessment of problem, I propose three possible solutions with pros and cons for each of them.
After I deliberately evaluate the company’s current brand image and the costs of time and money, I recommend choosing to make a viral video as the best instant tactic. The solution will target the priority consumers of KFC—youth generation, through social media. It can also indirectly reach its mature and older customers. .
From my analysis, a creative strategic plan is constructed. It will also fundamentally better KFC’s brand image among its peers in the food industry.
Statement of problems
HUSI Food Co. Ltd states they will take the full responsibility for offering KFC expired meats, forging quality reports and only acting well when KFC’s quality control department comes to the factory for routine checking. However, on an online polling conducted by Sina.com, 51707 out of 65479 people think KFC must have known the irregularities of its supplier. 45959 out of 65479 people claim that they would never eat at KFC again. This shows customers believe HUSI and KFC are the “friends of crime.”
KFC has been accused for using harmful meats since May 2005 when Sudan Red G, an industrial pigment was detected in its chicken wings. In January 2013, the reporter found out that KFC allowed its chicken supplier to feed the animals with growth hormone to shorten the growing period. The statement from the CEO of Yum Co, Ltd (KFC’s mother company in China) stated that KFC will work on increase quality control, internal communication with its suppliers and the external information transparency. (KFC.cn)
Attacked constantly by food safety crises, KFC lost its credibility due to stereotyped crisis tactics. The statements released are all really dry and only posted on the company’s website. The customers can barely see any actual movements even KFC has done some. KFC needs its PR department to maximally show any improvements that the company has been done to its customers through various media. KFC has to separate itself from HUSI’s crime. The company should show to its customers that KFC is also the victim. KFC passively received unfair stigma due to HUSI’s irregular conducts.
Assessment of problem
Social media platforms are effective tools that allow KFC to make multi-formats content to change people’s perceptions. An anime video called “Indignant Kentucky colonel” will be made by featuring the founder of KFC, Harland Sanders, and a group of angry chicken and pigs. They will harshly punch bad workers from HUSIbecause they underestimated Kentucky colonel’s trust to HUSI and harmed the colonel’s beloved customers. This anime video will be uploaded to Weibo (which literally means microblog and is a Chinese version of Twitter), Renren (a Chinese version of Facebook), andYouku (a video website that similar toYouTube).
Visual message can arguably create maximum impacts on people. Especially in Asia-Pacific, mobile web is becoming increasingly popular because more and more people can afford smartphones like iPhone and Samsung. People are constantly on their phones to check their Weibo and Renren. Visual storytelling content is constructing major parts of online posts. (Burson-Marsteller 45) According to the Blue Book of New Media by Institute of Journalism and Communication from Chinese Academy of Social Sciences, 55.78 percent of Weibo users are between 10 and 29 years old. The characteristics of these users are socially active, low –income and easily persuaded (Jian Zhongguo,com). For Renren (the Chinese version of Facebook), its users are mainly students due to the registration requirement. In other words, KFC’s major customers are all active social media users at the same time. Therefore, a viral video on social media can instantly reach KFC’s priority customers. It is the most effective way to save the sell and repair the image by “making sure that the most important audience is appeased first.” (Benoit 183)Besides, people are more likely to share or retweet funny contents on social media and video website. People’s laughing after watch the hilarious video will lessen the negative image.
However, one of the major drawbacks of this tactic is that the mature and senior generation are not active internet and social media users. Therefore it is hard for KFC to reach this group of customers who may alsolike KFC’s food or often eat with their children, or grandchildren. Besides, unlike western countries, doing part-time jobs are not popular among students in China. People can financially depend on their parents until they have a stable job, which will most likely happen in their late 20s to 30s. Even though their children may help to persuade the older customers by describing this video to them, it is tough to change their negative perception towards KFC by letting them to watch directly. They may not take the kids to KFC or give money to the kids to buy foods from KFC anymore.
Shorting the distance between KFC China’s CEO and its customers andusing the strategy of defeasibility can also work for speedy recovery. First, a formal letter from CEO will be issued on the traditional media (newspapers and magazines), online media (popular websites like Yahoo.cn, sina.com and 163.com). In order to reach the population effectively and to increase the possibility of the message being read, a hard copy of the letter will be deliver to people’s home mailboxes. In the letter, the CEO will emphasize that KFC’s core value is to provide delicious and safe foods to the customers. Selling unqualified foods is not only against KFC’s core value, but it also will decrease the sell in the long-run. The letter will also use the strategy of defeasibility to shift the blame (Benoit 184). It will emphasize the fact that HUSI acknowledged that they provided fake quality reports to KFC and only behaved well when KFC’s quality control department comes to the plant to check. All these statements will show that KFC is innocent and also a victim. At the end of the letter, the CEO’s email address (especially sets-up for this crisis), Weibo handle and office address will be provided. The customers are welcome to write feedback “directly” to KFC’s CEO through the venues above. The PR department will be in charge of selecting some letters, writing responses from CEO’s perspective and publishing responses on CEO’s Weibo, blog and print media.
One of the major disadvantages is the high cost. First, KFC has to communicate with China’s Post Office to deliver the copies of the letters. The mailbox advertisement fee is arguably high because the Chinese post office belongs to the government. Printing the copies of letters, withprepaid envelopes to encourage customers to write feedback and envelopes for the letters,will also create high costs. Buying space on print media and online media to put the CEO letter and the responses from the CEO to the customers’ lettersalso need a big budgets.
However, these costs are meaningful. According to the Page Principles, it is important to listen to the customer and make the customer feel their voice is being heard when dealing with the crisis and rebuilding the company’s image in the long run. This method delivers the most clear and effective message from KFC’s CEO to a wide range of customers through multi platforms. “Having the right message, delivered by the right messengers, to the right audiences and via a mix of old and new channels is critical to speedy recovery.” (Burson-Masterller.com)
KFC can strategically insert a quality control office in its meat supplier’s plant to supervise the production. The PR department can work with this office to set up a Weibo account and a blog to post production dairies with pictures and reports. Meanwhile, the PR department can post short videos to show the safety and clean conducts of the plant online.
In order to insert an office in the meat supplier’s plant, KFC may need a period to settle things up. Therefore, it is not the most instant solution to the crisis. Also, because the posts are online based, people not active on social media cannot be reached.
However, in the long run, this office can help KFC to avoid to have the same food safety issue. Besides, the online posts can instantly prove that KFC is making progresses and changes day by day. It is essential because “public perception of an organization is determined 90 percent by what it does and 10 percent by what it says” (Page Principles).
Recommended course of action
I think making the viral anime video is the most effective, applicable and creative solution to speedy recover the brand image.
First, a letter from the CEO may look really formal so inserting an office in the supplier’s plant is more strategic. However, making the anime video has the lowest cost. Besides, the content of the video will be really hilarious and can speak for itself. Therefore people will voluntarily share it on their Weibo or Renren’s newsfeeds just because the video made them LOL (laugh out loud) or LMFAO (laugh my fu*king ass off). KFC does not even have to pay to get on the home page of the video websites like Youku because the most viewed video will be automatically promoted on the home page. In the video, the iconic KFC’s founder “Kentucky colonel” and a group of angry chicken and pigs will punch the bad workers from HUSI. The chicken will bite away the hair of the bad people. The pig will attack HUSI’s people by farting. The Kentucky colonel will punch them by his cane. The major cost will be only for recruiting the best available anime specialists and script writers to make a high quality viral video. The objective of this video is to reach as many people as possible and to collect their comments for KFC’s PR department to set direction for further image recover campaign. The objective can be achieved by counting how many people watched video through the counter below the video and conducting content analysis towards comments on Weibo, Renren and Youku.
Second, for crisis management, timing is everything. Making a video requires a shorter period and as long as the content is funny enough, it will be retweeted and shared right away. However, spreading a CEO letter through print and online media, plus printing hard copies and letting the mailmen deliver to people’s home requires longer time to complete. Inserting an office in the meat supplier’s plant will require excessive internal coordination. And it is hard for PR people to make dry quality reports and production diaries into interesting and reader friendly contents. This office should definitely on company’s management plan for avoiding future crisis. But it is not the quickest response to an existed crisis.
As I discussed before, the video relies on social media to get quick spreads. Therefore, the population that can be reached are mainly young generation. They rely on their parents or grandparents to make purchases in KFC restaurants. It is important to recover KFC’s image among the amateur and senior generations in order to save profits in the long run. The problem can be overcome by buying spacefor the video on television. KFC can also buy cheaper advertisement screens in the elevators, bus stations’ waiting areas and seat backs of taxis to air the video.
Call to action
Sometimes the sell can even automatically increase after a food safety crisis because people believe that the scandal will tighten the company’s nerves. The foods will be better because the company will be so afraid of making any further mistakes. However, KFC’s image got completely crushed based on the online polling results after the crisis. One of the major reasons is that KFC has been constantly attacked by food safety scandals since 2005. Based on the analysis I did towards KFC’s responses after each of the food safety crises, I think KFC’s crisis management plan is nothing but issue a statement letter with formal and serious tone on the company’s website and promise to do well in the future. The humorous video can decrease the negative impacts by shortening the distance between the brand and the customers. The company can also know the most up-to-date perceptions and expectations of customers by doing content analysis based on the comments of the video. These are valuable materials for the company to set the direction for the future image recovery plan.
This video will break KFC’s stereotype image of having a monopoly in China. It will help KFC to build a positive image among its competitors, promoting it as a leader in the fast food industry. The humorous content of the video will also win sympathy for KFC from its peers and help the communications.
Reference
- HUSI says will take the full responsibility for providing unqualified foods
- Online Polling
- Blue Book of Weibo Users
- The Page Principles
- KFC statesments for past crises
- Burson-Marsteller Global Social Media Check-up 2012
- L. Benoit, William. Image Repair Discourse and Crisis CommunicationPublic Relations Review. 23(2): 177-186. IAI Press Inc, 1997, Print.
- Corporate Reputation Takes 3.2 Years To Recover From A Crisis, Finds Burson-Marsteller Market Research