The Always Interesting Brookstone

My Chinese firend Alex once worked in Brookstone 3 years ago. As he decribed, "Brookstone is a store where rich people and boring people spend there extra bucks for fun." 
 That was the first time I got to know Brookstone since I came to the U.S.Despite the fact that this description is biased, I somehow agree with his point because I also think many of Brookstone products are over priced. As a result, I almost go to Brookstone everytime I shop in the mall but much less frequently make a purchase.

However, I am a strong beliver of "gold for good", especially for ideas. So I think if I got rich someday, I will probably do a lot shopping in this place. The following is the interesting Brookstone products on my list. It is not in a particualr ranking order. The reason I put them here is just because of their smart design and interesting creation: (some of the descriptions are directly from Brookstone's website)

1. Mobile Mini Speaker: It is a portable speaker that can plug into any earphone plugs. Even though it is a new product for Brookstone, it is not necessarily new to the world. However, Brookstone really makes it look cute, modernized and smart.


2. This is called n'ICE Cubes

Because n’ICE Cubes will never melt and dilute your drinks. Simply place in the freezer for a few hours, then slip a handful into a glass and pour on your favorite potent potable, like a top-shelf single malt. In minutes, your drink is nicely chilled—and full strength. Afterwards, just rinse, dry and replace the stones in the freezer for next time.

3.This is called eComfort

Web surf, write and work anywhere.
Keeps you and your laptop cool and comfortable. Use it with your tablet, too! Perfect for on the couch, in bed…wherever you want. Angled work surface has a curved top, slanted cushion for comfortable emailing, Web surfing, reading or writing and more. Once done, grab the handle/cable pass-through and go. Only at Brookstone.

KFC China, Episode 2

Promotion: Focusing on Taste and Health

Just as other fast food companies, KFC puts a lot effort in traditional promotional strategy, such as advertising, price cutting, contesting, etc. However, KFC applies these strategies in its own way. In order to give a good brand image to its potential customers, KFC spends 10% to 15% of its total expenses for advertising every year.^[1] From a personal perspective, I believe KFC keeps doing this mainly to deliver two advantages of KFC foods, the fantastic flavor and health. KFC uses all kinds of sources you can imagine to draw the customers' attention. KFC promotes its newest product in its TV commercials, sometimes it shows how the food is made, and sometimes there is an interesting story about the updated product. About a week after the commercial displayed on TV, people can see the posters of this newest one on the street, bus station and even in an elevator.. With so many vivid pictures (like the one on the left) around, peoples' appetite will definitely be grabbed with an invisible hand.

Another smart promotion strategy KFC uses is its in-store coupon. Like many other fast food companies, KFC also provides coupons on websites or on the newspaper. However, only less than 3% of these coupons were actually redeemed. On the other hand, even with a much lower discount rate, the in-store coupons are the most used ones. It seems that Chinese people usually enjoys this sudden price-off in the restaurant. The in-store coupons are usually in calendar form, which means there are only price-off on certain days for certain foods. This really becomes another incentive to motivate the customer to go to eat and therefore ensures a certain number of traffic in the store.

In addition, even though the coupons are named "in-store coupon", you can actually get them out of the store. Since KFC restaurants are usually opened around malls, supermarkets and city squares, it is very common to see the hired employees handing out the coupons, sometimes wearing a costume with a KFC theme. 

Logistic Network: Building Suitable Supply Chain for China

Even though the logistic networking is not categorized marketing strategy, one can never omit the important role that supply chain management is playing in KFC's widely spreading in China's marketplace. When KFC first entered China in 1987, there was even no fast food supply chain in China. Therefore, KFC decided to build its own logistic system in China. It was an extremely costing and a time consuming project. However, the Yum! Brands is now enjoying the outcome of their former effort on supply chain building.

KFC applies a fast moving consumer goods (FMCG) strategy to ensure material quality, ability to capture market opportunities and the flexibility to suit the changing market structure in China.

On material section, KFC implements a Star System, "a selection of alternative suppliers, which is specifically for a global assessment of supplier management system in China since 1996, full implementation of the supplier"^[2]. This Star System is basically a district level material sourcing system. With Star System, KFC is able to select the most preferable material with a best price discount. Meanwhile, this system also functions as an information center for demand planning. It "consists of five areas: quality, technical, financial, reliability, and communication. Every three to six months of regular assessment and evaluation throughout the year were, from KFC’s technical department and the purchasing department were assessed at the end of the composite score will determine the supplier of the volume of business in the next year in the share."^[3]

On distributing section, KFC China uses rental-based distribution centers instead of building up their own. KFC also outsources third-party carriers from local companies to transport their materials.^[ Both of these two strategies aim to reduce costs. With the information generated from Star System and the inventory record, distribution channels can easily allocate the recourses according to the specific order from each restaurant with supplementary information from the demand planning department. Due to the large number of KFC restaurants and the short distance between each in every district, material allocation can be easily adjusted with extremely low costs.

From the above analysis, we can see several big advantages in KFC's logistic system: First, the tightly connected departments strongly support the expansion of KFC. Second, the Star System ensures the quality and quantity of materials. Third, the abundant information results in accurate demand planning, which significantly reduces the costs through the entire supply chain.

KFC China, Episode 1

According to detailed research, KFC achieved dominance in China over its major competitors for several reasons: well designed localized flavor, a high quality of service, suitable promotion strategy, a well developed logistic network, and its unique local management method. Just as David E. Bell and Mary L. Shelman from Harvard Business School said, "To succeed, the fast food giant had to throw out its U.S. business model. All of KFC's marketing strategies depart from the U.S. model"

Product: Localized Flavor

When it comes to food, especially fast food, flavor is usually the first thing that comes to mind, especially for a Chinese person. This does not necessarily mean that Chinese people totally do not care about the food health. But when faced with the same category, fast food, Chinese people are usually not so concerned on which is healthier.

Currently, KFC China has a menu which includes more than 50 items while the U.S. version only contains about 30. KFC China's menu not only contains more items, but it also includes more types. The 30 items in American KFC are mainly fried chicken, but the 50 items served in China contains a lot Chinese traditional cuisine such as shredded pork soup, Peking chicken rolls, porridge, egg tarts, pot sticker etc. Even the traditional burgers can be substituted by fish and shrimp burger, which attract significant amount of Chinese customers who do not like fried foods.

Because China is a big country with 56 provinces (similar to the states in U.S.), people from different cities have totally different diet habits. For example, people from Sichuan Province and Hunan Province especially like hot, spicy food while people from southeastern area (such as Jiangsu Province) would prefer sweet foods. To cater to different eating habits, KFC makes their food with regional sauce and ingredients. Therefore even though there is only 50 items listed on the menu, there might be more than 100 flavors combined all over China.

Service: Delivering High Quality and Culture

Service quality is also a big factor of KFC's success is its service quality. KFC delivers much superior service quality to its customer with good service attitude, quick serving speed and clean infrastructures. Thanks to the well designed employee training programs, each KFC employee is taught how to interact with customers. Interestingly, KFC does not spend much funding in its employee training. The first line employees' team consists of new employees with experienced ones, so the new comers can learn the most efficient way of delivering the high quality service. Unlike American customer, Chinese people tend to eat at home instead of sitting in the restaurant; therefore delivery becomes a big issue. In China, you can order KFC simply by calling the store and order your food. You can also order everything you want on a shopping website named TaoBao, which is very popular among Chinese people. It will usually take 30 to 45 minutes to get your food and you do not even have to pay extra for the delivery. This really explains why KFC's customer satisfaction rate is so high and why a lot of foreigners from western countries start eating KFC when they come to China. Even though that not all the people in China prefers KFC than other fast food restaurant, almost everyone admits that KFC always has the cleanest restroom compared to any other fast food restaurant.

 

What Makes Starbucks Succeed in China

This morning I read several articles about the strategies Starbucks applies in China.
http://www.Forbes.com/sites/helenwang/2012/08/10/five-things-Starbucks-did-to-get-china-right/
Here is the Chinese version of the same article.
http://www.21cbh.com/HTML/2012-8-24/0NMDQ1XzUwNTI0NA.html

I think it is very inspiring and it really leads me to think about more global brands that did excellent job in China, such as KFC, IKEA, Pizza Hut.
Being a Chinese person, I believe several "ingredients"that these companies have in common in their marketing strategy is adaptation and localization.
 

Chinese people do not really buy the whole idea of pure standadization. That's is why McDonald's China has lost so much market share to KFC China.It is the same story for Starbucks.
In someway, the entrance of Starbucks did indeed change the Chinese people's drinking pattern. The majority of Chinese people, especially the younger generation tends to drink both tea and coffee. The product adaptation nodoubtly contributed greatly to this coffee evolution.

To quote Forbes.com,
"The next thing Starbucks did was to capitalize on the tea-drinking culture of Chinese consumers by introducing beverages using popular local ingredients such as green tea. This strategy has effectively turned potential obstacles into Starbucks’ favor. Chinese consumers quickly developed a taste for Starbucks’ coffee, which was essential to Starbucks’ success in China."

Another thing about Starbucks' great success is localization.
China is not one homogeneous market. There are many Chinas. There are 56 peoples in China. And even within the major people, Hanzu, the culture from northern China is very different from that of the east.So it is actually really important for each Starbucks regional branch to partner with a local business.

OH, WeChat

WeChat is an instant text and voice communication mobile app developed by Tencent in China. WeChat become a phenomenal trend for the smartphone users almost as soon as it was issued since the company Tencent developed the most popular chatting platform, QQ, in China. WeChat became an extension of QQ and acquired almost half of the 700 million QQ users.

WeChat provides multimedia communication flexibility and convenience with text messaging, hold-to-talk voice messaging, broadcast (one-to-many) messaging, photo/video sharing, location sharing, and contact information exchange. WeChat also supports social networking via shared streaming content feeds and location-based social plug-ins ('Shake', 'Look Around', and 'Drift Bottle'). (Wikipedia)

WeChat almost contains all the features that all current U.S social media combined:

You can post pictures and public your status in your "Cycle" with WeChat. When you post a picture, you can use an artistic filter and built-in editing tool to beautify your photo. There are several new features that none of the U.S social media have. For example, the function "look around" helps the user locate all the contact near his/her current location. The function "Shake" and "Drift Bottle" can help new users to find new friends around and communicate without the requirement of "adding friends". To avoid disturbing and spamming, the users are provided with the alternatives to turn on and shut down certain functions at anytime.

Personally, I think WeChat will stay in China since 90% of its users are former QQ users and it will not affect the status of any platform like Facebook, Twitter or Instagram. However, there are many things that deserves to be learned and borrowed from WeChat to perfect current U.S. social media.