At present, Burger King numbers just 12 outlets in China, after entering the country in 2005. Its expansion plans are suitably respectable; after first claiming it would launch 1,000 stores by 2015, it has now settled for a more realistic target of 300 by 2012.
Either way, the company has its work cut out penetrating a market that is dominated by KFC, and has also seen solid growth from McDonald’s over the past two years.
Clearly, however, there is an opportunity for Burger King. The fast food sector is growing rapidly in China as consumers shift away from traditional modes of food consumption.
To date, the company has adopted a more premium image to distinguish itself from its two key rivals in the market. For example, it has added service bells to tables, and has priced its products slightly higher than McDonald’s which, given its similar product offering, is likely to be Burger King’s primary competitor.
Burger King will also find itself at a similar disadvantage as McDonald’s has, due to a strong bias towards beef on its menu. KFC, of course, has capitalised on Chinese consumers’ preference for chicken.
While McDonald’s has attempted to meet this challenge by launching a 2006 campaign to make beef ‘sexy’, it appears that Burger King may take another tack. The company has been investing in the development of premium chicken products in the US, including Tendercrisp chicken burgers with special toppings - an innovation that may prove particularly useful in China.
The news that it is searching for an advertising partner in the mainland is hardly unexpected. But Burger King, a company that counts some legendary US advertising campaigns under its belt, may need more than a nice jingle if it hopes to convince Chinese consumers to sink their teeth into a Whopper.
Fact Box
-Burger King has 12 outlets in China at present, compared to KFC’s 2,000, and McDonald’s 800.
-Burger King is believed to be in talks with Y&R and Nitro regarding its mainland creative business.
-China’s fast food market is valued at US$27 billion, up from US$5 billion at the turn of the millennium.
Matt Donovan, director of strategy, Asia-Pacific, Euro RSCG Worldwide
Confessions of an Aussie advertising man in China: I loved Hungry Jack’s.
The King of Burgers’ brand health in the mainland? Computer says ‘anaemic’. Burger King has a presence, with the brand in embryonic stages, though recent news of a 300-store push over five years is a welcome sign.
At the beginning of its real estate drive, Burger King has choices to make and a future to create: flame-broiled versus heatiness; beef versus chicken; burgers versus China; being a place to be seen versus just being served.
The Burger King of the future? I’d love to see it add sociability to ‘big food’. Create the 21st century ‘court’, where people gather for food, fun times, to collaborate and be themselves.
The brand will place a premium on creativity, dominate digital and buzz culturally. The brand could definitely be the next ‘place to be’ (make mine a Chicken Whopper with watermelon juice — to balance my qi).
Dicos? Best Food? You are atrocious - please leave. Mere distractions from the main event: The King, Ronald and The Colonel. As terrific as any CS Lewis tale, and far more delicious.
David Gompel, client service director, Publicis Beijing
In a booming quick-service restaurant (QSR) market, segmented between Chinese and Western fast food, Burger King opened its first restaurant in Shanghai in 2005 (and now has 12). It is one of many late entrants offering more options to Chinese youth, white-collar workers and families.
Western QSRs have consistently faced the challenge of localisation of products, brand personality and prices. Add to this operational difficulties and the usual low brand loyalty, and you have a good picture of the challenges Burger King faces. This leaves the brand with two approaches. ‘Me too’, based on the assumption that the market is big enough, or differentiation.
Burger King has gone for the latter, relying on three pillars: ‘Have it your way’, which is all about personalisation; superiority of beef; and innovative beverages.
Chinese youth and white-collar workers have entered the 2.0 era with great enthusiasm, fulfilling a burning need for self-expression. Provided it can scale-up quickly, there is therefore a good strategic rationale behind its ‘Have it your way’ positioning. Burger King needs to provide the associated experience from POS and product levels, to the selection of channels.
