Tuesday, September 3, 2013

The "out of stock excuse": a banalized company strategy in China!

Today I went to KFC.

They offer a lunch menu at 15rmb this includes french fries, hamburger and a glass of coke...
But after waiting for your turn, the employee apologizes and explain to customers that the menu is out of stock.
In the end the employee recommands the hamburger at 14,5rmb, plus a french fries and a drink, a total of 24-27rmb instead of 15rmb!


Chinese customers accept this without any complain.
Incredible, Chinese customers accept and pay without any complain.
Normaly Chinese customers bargain for even one rmb! They can even fight with a policeman just to refuse a fine and bargain the amount of the fine!

Therefore I wonder why Chinese customers accept this?
In fact I believe that Chinese customers have a very different way of thinking as compared to western customers.

A Chinese customer will agree to what you tell him:

  • He will not contest the word of KFC employee. He will not find suspiscious that KFC could be out of stock. He won't think that this might be a deliberate strategy from KFC Group or franchise!
  • He will not find abnormal that KFC can not respect its promises, the one from the advertisement. Therefore a Chinese customer will not claim a compensation or a equivalent offer for 15rmb. A advertisement promise or any promise in China is not worth a lot... Out of stock products are common in China!



Western logic no misleading advertisement
As a westerner, my reflection is as follow: I can not accept that the 15rmb lunch menu is out of stock.
According to my logic, KFC attracts customers with this promotional offer. All the KFC outlets should offer these 15rmb menus to their customers else their advertisement is misleading.

The KFC employee told me that they didn't have any Coke or any similar price range drinks.
I can not accept this excuse. In fact I think that this is a KFC internal problem but not my problem as a customer. I think KFC commits itself to one offer and shouldn't attract customers with a "out of stock" offer.
Else if KFC can not offer the 15rmb lunch menu, it should offer a similar offer.
This is what I told the KFC employee. The manager offered the 15rmb lunch menu and a glass of soya milk instead of the Coke.


The out of stock strategy
In China many companies banalized the "out of stock strategy".
Thus they can offer a wide range of products in order to attract or confort customers, or cut their costs... And this is what Chinese customers want: choice and small prices.

For instance, Sunning offer household electrical products.
Once in the shop you find out that most models on display are out of stock. You should select among the available models often a little more expensive.

KFC is often out of stock for its hamburger with cheese or chocolate sundays. In fact local Chinese customers order strawberry sundays and few hamburger with cheese. KFC willingly limits its offers so as to keep its costs low.




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