How KFC battled the eight-legged chicken (and other stories)

Rumours and planted stories can make or mar a brand’s fortunes. Here's how to counter - or not counter - them

Neelima Mahajan

KFC is in hot water in China - for the umpteenth time. The fast food giant, which was once a textbook case of how to win in the Chinese market, has taken a solid battering in recent years. The issues have ranged from food safety and supplier concerns to plain consumer fatigue with the brand, leading to a dramatic drop in sales.

This time around, however, the beleaguered fast food chain is in trouble not because of something it did (or did not do), but because of a practice known as dark PR. A couple of days back, a series of posts on WeChat said the fast food giant used genetically modified chickens with six wings and eight legs. The posts also carried images of said chickens, beautifully Photoshopped of course.

The posts went viral. There were at least 4,000 subsequent posts that were supposedly read over 100,000 times, the company claimed later.

In China, food safety is a big concern. The melamine-tainted-milk scandal in 2008, which killed many children, sparked nationwide outrage. Ever since, food safety issues have been top-of-mind for most citizens and rumours like this spread in no time.

For KFC, the rumours about mutant chicken appear to have fizzled out for now. KFC's parent company, Yum Brands, has filed a lawsuit against the three companies who supposedly started the rumours on social media and has demanded an apology and compensation.

Companies doing business in a foreign land routinely run into dark PR, as KFC did, where competitors may try to run you down by floating negative rumours about you.

Somewhat reminiscent of the Maggi episode--though there is no indication so far that it is a victim of dark PR--a brand of instant noodles called Master Kong found itself battling an unprecedented problem in 2012 during China’s territorial dispute with Japan over the Diaoyu Islands in the East China Sea. Even as the two countries exchanged hot words over the islands, someone (rival Uni-President, according to Master Kong) floated a rumour on Weibo, China’s Twitter equivalent, that Master Kong was actually owned by Japanese investors and that the company had donated money to the Japanese government to buy the disputed islands. Even though the company was quick to respond to these allegations, the damage was done. The share price tanked.

In any country, foreign and even local companies routinely become victims of dark PR. But what should you do if you are the target of such a campaign?

  • Be Transparent: Honesty goes a long way. Be responsive and share information on your company and processes in an open manner. Open the doors for audits by the relevant official authorities. The worst thing you can do at such a time is be secretive. It will only fan the rumour flames further.

  • Deal with Concerns: If there are genuine concerns, apologize and deal with them proactively. Last year McDonalds and KFC, among other food chains in China, got into trouble because the Chinese subsidiary of OSI Group, their meat supplier, was supposedly selling expired beef and chicken. McDonalds was quick to take the tainted items off the menu. I remember going to McDonalds at that time and the only things you could order were the fish burger, French fries, ice creams and beverages. Both McDonalds and KFC apologized, dropped that particular supplier, and promised to boost supplier audits. Be humble. No apology is too big. Even Apple CEO Tim Cook himself apologized to Chinese consumers over customer service and warranty policy complaints.

  • Do Not Retaliate Similarly: When hit with such a rumour by a rival, it is very tempting to hit back by planting similarly damaging rumours about the rival. Any such action can only come back to bite you because these practices are, at the end of the day, illegal. Play clean. Don’t throw out the rulebook.

  • Fight It with Humour: If anything can take the bite out of a venomous attack, it is humour. A humorous response is more likely to go viral on social media than a staid statement saying, "We refute XYZ." In the eight-legged chicken case, KFC has responded by saying that it would be impossible to create a chicken with eight legs and six wings and if KFC does manage to do so, it should get the Nobel Prize. That most certainly guarantees a retweet.

  • Build a Stronger Brand: Starbucks got into trouble in China last year after a China Central Television (CCTV) report accused it of selling pricier coffee in China. CCTV routinely does such reports on multi-national companies in China and everyone from Carrefour to Apple have been caught in its web. This report specifically said that a tall latte at Starbucks in Beijing costs Renminbi (RMB) 27, at least one-third higher than the price in the US. They accused Starbucks of exploiting the gullibility of their Chinese customers. While the higher prices in China are a function of higher costs and the company explained that, Starbucks emerged virtually unscathed from la affaire why-is-my-latte-so-expensive. Why? Because it is a strong brand in China and fans stood up for Starbucks on social media, effectively making CCTV look ridiculous.

A little maturity in dealing with rumours will go a long way. Rumours, after all, don't have legs - and definitely not eight of them.

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Rakhi india on Nov 16, 2017 6:50 a.m. said

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About the author

Neelima Mahajan
Neelima Mahajan

Senior Journalist

Beijing

When I landed in Beijing in 2012, I gave myself six months to either survive China or let it overwhelm me. I hadn’t been here before, yet I jumped at the opportunity to head the management publication of a leading Chinese business school with decidedly global ambitions. I was, after all, intrigued by the question: "What makes Chinese companies tick?"

Settling in wasn't easy with challenges ranging from language and food to biting cold winters and Beijing's infamous smog.

Before I knew it, the six months had become three years. While my decade-long experience in India, with publications like Businessworld, The Times of India and Forbes India, familiarized me with how Indian companies behave and view opportunity, my China stint gave me a completely different worldview. If anything, these three years here have challenged my preconceived notions about the Middle Kingdom.

For instance, the popular perception outside of China is that the state is dominant in the business sector here. I found, much to my surprise, that it is not true. If anything, China’s growth miracle owes its success to private enterprises. And Chinese entrepreneurs go through the same trials and travails as their counterparts elsewhere. So what makes them so successful? How is it that Alibaba’s Jack Ma has built a $251 billion enterprise in just 15 years? How did Pony Ma at Tencent lead his company to such a mammoth scale? I can’t say with certainty that I have fully cracked that question yet, but in my observations so far, a couple of things stand out: thinking big, relentless drive, tenacity , a difference in the way they view and crack opportunities, and loads and loads of spunk.

The other popular notion about China is that Chinese companies are simply clones of their Western counterparts. Once again, it is not entirely true. I have visited both the Google headquarters in Silicon Valley and Baidu’s headquarters in Beijing, and I can say with certainty that Baidu is not a copy of Google.

A third notion that I have seen crumble before my eyes is that China is all about cheap, low-quality products. While I don’t deny that there are cheap, fake products proliferating the market, I would urge you to look at the other side: Chinese companies that are leading the game in innovation. Walk into the innovation center of a Lenovo or a Haier, and you’ll know what I am talking about.

I have an avid interest in multinational company strategy as well as the so-called 'emerging giants'. It is fascinating to see how MNCs are navigating their way around this hard-to-ignore country and also how homegrown giants like Lenovo, Huawei, Alibaba, Baidu and Haier are approaching global markets.

I also have a keen interest in management thought. I have interviewed thought leaders like C.K. Prahalad, Michael Porter, Philip Kotler, Clayton Christensen, Henry Mintzberg, Henry Chesbrough, Marshall Goldsmith and Gary Hamel, and Nobel Prize winners John Nash and Amartya Sen.

Before coming to China, I was an International Visiting Scholar at the University of California Berkeley. There, I explored how publications need to evolve with changes in technology and reader habits, and business journalism in Silicon Valley. I was awarded a Bill and Melinda Gates Foundation fellowship as part of the Africa Reporting Project to write about coffee and climate change in Uganda, Africa.

In 2010, I received the Polestar Award for Excellence in IT and Business Journalism. I have researched and edited two books: Leading with Conviction (Jossey-Bass) by Shalom Saada Saar and Michael Hargrove, and Culture of the Sepulchre (Penguin India) by Madanjeet Singh. The second book is closely linked to my family’s personal history in East Africa.

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