I would like to see Ramon Jimenez succeed as Secretary of Tourism. Because he’s an advertising colleague. Because I would like to see Noynoy Aquino succeed (having created one of the key concepts that helped him win the presidency). And most of all, because I’m a Pinoy. With that said, I hope Mon will take my comments in the spirit they are being given.
I assume he needed a memorable sound bite when he quipped that selling the Philippines as a tourist destination will be “as easy as selling Chickenjoy.” So typical of an ad man with a creative bent.
The harsh reality, however, is that selling Chickenjoy and the whole Jollibee concept in an overseas market like the United States hasn’t been all that easy. But the analogy may yield some lessons for our country’s tourism promotion efforts.
When Jollibee began to lay the groundwork for its U.S. entry, its international marketing manager sought the advice of Carlos Go, CEO of the Seafood City Supermarket chain (now the largest Filipino-owned retail chain in the U.S., with an impressive presence in Northern and Southern California, Las Vegas and Seattle). At the time, Seafood City had only expanded from its base in San Diego to Los Angeles, but it was already seen as a model for successfully operating in the U.S. market.
Carlos suggested that I join the meeting (I've been a Seafood City consultant since its San Diego days). He felt I could share some valuable insights, especially on how to avoid the pitfalls suffered by such major Philippine brands as San Miguel Beer and Sarsi.
We learned that Jollibee planned to go after the American mainstream market, dominated by McDonald’s. After all, it had outdone McDonald’s in the Philippines. Why not use the same success formula in the U.S.?
We politely suggested that Jollibee should first build on its logical consumer base, the Pinoys. That would allow the company to gain a steady footing, before crossing over to the mainstream – if at all.
“Pinoys are already in our pocket,” said the marketing manger. “Besides, our first store will be in Daly City where they make up over 30% of the population. That’s why we feel we can afford to focus on the rest of America.”
“You can’t presume to automatically own the FilAm market,” I cautioned. “You might want to learn a lesson from San Miguel and Sarsi.”
Sarsi had been a miserable failure in the U.S. (a story worth telling separately). San Miguel concentrated its marketing efforts on the U.S. mainstream, believing that Pinoys were “in the bag.” But it failed to make a dent in a market dominated by Anheuser Busch and Miller. Worse yet, a research study commissioned by San Miguel U.S.A. revealed that the brand only ranked fifth among imported brands drank by FilAms. One of the reasons was the company’s failure to nurture its relations with the community.
In 1990, as CEO of Advertising & Marketing Associates, which had a pioneering branch in the U.S., I headed a team that helped San Miguel reconnect with FilAms across the U.S. This resulted in a volume growth of 27% in one year. But when Barton Beers, a major distributor, took over the distribution and marketing of the brand, it took the Pinoys for granted again. The gains were wiped out.
At any rate, Jollibee went ahead with its original plan, even hiring a mainstream PR agency to handle the launch. When it opened its first store in Daly City, there were long lines for days. But the customers were mainly Filipino.
Inexplicably, after the initial media burst, the brand was not given the same aggressive marketing support that had made Jollibee a phenomenal success in the Philippines. Not surprisingly, even the Pinoy customer lines soon dwindled and dwindled…and dwindled.
A year later, Arnie Balague, Jollibee’s head of U.S. operations, admitted to me that they should have listened to our advice.
"Now, you're just part of the scenery with hardly any top-of-mind awareness,” I said. “If someone wants a burger, McDonald’s first comes to mind. Some chicken? It’s KFC. Spaghetti? It’s an Italian restaurant."
“But we can’t afford advertising,” said Balague “We only have one store.”
“You’re not investing in a store,” I said. “You’re investing in a brand. Unless you do, you won’t be able to build a chain.”
It would take almost another year before Jollibee found its bearings. Unlike Sarsi, Jollibee management took a reality check and learned from it. Among other things, it accepted the wisdom of building on its logical consumer base and invested in advertising and promotions. It thus began to expand, first in Northern California and then in Southern California, then on to other states.
For some reason, however, it has gone back to depending on the Field of Dreams theory (build it and they will come). There has hardly been any advertising or promotional support. Fortunately, Jollibee also saw the advantage of building strategic alliances. From originally insisting on stand-alone stores, it now goes wherever Seafood City opens a facility, thereby benefiting from the customer traffic.
In this regard, Mon Jimenez could take a cue from Robert Kwan, the sharp entrepreneur who built the Chow King chain. Shortly after Robert opened his first Chow King store in America, he realized that it wasn’t possible to simply transplant his success formula of good-food-quick-service-reasonable-price. He faced a Catch 22 situation (which is another marketing case worth telling).
But Robert was wise enough to acknowledge that he needed someone more familiar with the market to make his venture succeed. He arranged to make the Seafood City group master licensee of Chow King for the U.S. After a few bumps, Chow King began to take off (Robert subsequently sold the business to Jollibee).
I suppose Jollibee still wants to cross over to the American mainstream. And it could succeed. But not without a product makeover and, most certainly, not without investing in demand creation.
I’m sure that, as a seasoned marketing practitioner, Mon can relate these marketing cases to his new challenge of selling the Philippines abroad. It’s not entirely an apples-and-oranges analogy.
He also has to cope with such issues as lack of awareness and negative consumer perceptions, needs and expectations, product improvements and new product development, improved customer service, a formidable competitive environment, the imperative of advertising and promotional support and the challenge of a limited marketing budget.
Unfortunately, on top of that, he also has to suffer the plague of patronage politics, the scourge of special interests, and a media sector with a habit of sensationalizing problems without providing solutions. And he will have to deal with the Philippine travel and tourist industry which is used to being spoon-fed, demanding “action” and “results” from the government but unwilling to put its own money behind those demands.
Frankly, selling Chickenjoy overseas is a much easier challenge.
And yet, at the end of the day (to use a PNoy cliché), Mon Jimenez has no choice but to create magic out of what he has, and win some victories before the nitpicking pundits and special interests begin ganging up on him.
He can, of course, be assured that I’m rooting for him, along with many of his ad industry friends. And if Mon thinks he can pick up a few tips from folks who have had to break into the U.S. market with nothing more than spit, prayer and bubble gum – and have managed to run circles around much better funded mainstream competitors – we’ll be happy to help.
It’s our country, too.
(gregmacabenta@hotmail.com)
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