KFC Chinese Coupon Casualties (^_^)
“Sales Promotion” is perhaps one of the most expensive methods of marketing that is employed by an organization. It stimulates demand by lowering the cost of the product to the consumer in order to make up the lost margin with higher overall profit with a higher turnover on products. One method which is employed is the use of coupons; which these days can be cutouts from the magazine or printed online on websites.
Quite archaic and inconvenient, when a simple loyalty club card could suffice, KFC used this method to market their products in China. What was the result of this campaign? Well, the outcome could have easily been predicted. In a market of over one billion consumers, it is near impossible to keep track of which coupon issuance is valid and which is not. And when clever consumers start making copies of this coupon; one that guarantees a 50% discount on products, you can see how margins not only thinned, but near evaporated.
Because of this manipulation by a few bad eggs, KFC cancelled the whole promotion to public outcry. A bad promotion campaign coupled by a bad marketing exit; KFC’s public image not only has been tarnished, but it has lost the confidence of its valuable consumers. In a country where reputation is everything, KFC should have handled the promotion better; perhaps by issuing coupons on print material instead of ones from its website, and by not using a 50% discount to stimulate demand (this is not loss sales..this is ridiculous).
How it will rebound is anyone’s guess; but it should be a valuable lesson in how not to run a campaign, that if it may turn out to be too costly, it’s probably not worth the money. (^_^)
http://www.adweek.com/aw/content_display/news/nontraditional/e3i2bf7a2a5a7ec6db2ebe035d420ef018c
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Interesting, I did not hear about this. KFC should have been wiser with its sales promotion, particularly in a country such as China where piracy is publicly practiced and accepted.
ReplyDelete...I was a bit surprised myself...because in the U.S., there are printable coupons all over the market...but here, we improvise a bit more magic...with the rebates at 50% off...understanding that our time-span is like 10 minutes, if even, and will likely not fill the rebate out... 50% discount is a bit steep, regardless...just bad idea on their part i feel.
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