metro manila fast food market
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Burger KingPHILIPPINES
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Florida based Burger King Holdings Ltd operated and franchised fast food hamburger restaurants through its subsidiary , Burger King Corporation. It ran 11300 restaurants in 69 countries and was the second largest hamburger restaurant chain in the world.
In philippines , PERF restaurants Inc was the franchise holder of Burger King and operated out of 23 locations wh were located in the National Capital Region. In philippines , it was facing a tough competition with the leading home-grown brands , Jollibee and the world’s largest brand , Mc Donald’s. Although burgers, chicken and fish, sides and desserts were offered, the company’s unique selling proposition was its range of Whoppers. Burger King’s brand awareness in the philippines was pretty low. The company’s current communication efforts had not been able to increase brand awareness. Mr. Kim Tan, vice president, Marketing, had to take decision about the value proposition, communication strategy of the company amongst host of other marketing decisions, within next 3-4 days.
overview
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ProblemsCommunicating Burger
King’s value proposition to its target market was a major problem for the company despite having a list of strengths such as superior products , higher quality , great ambience etc. The company’s current communication efforts had not been able to increase brand awareness.
ReasonsThe company had lower visibility due to
less no. of stores. It also had low accessibility due to the same reason, as pointed out in the focus group discussion.
The company’s offerings did not include kid meals, chicken and non-burger main items. Rice was not served as aside option to buy which was served at Jollibee and McDonalds. In philippines it was common to offer rice along with the food.
There was also a negative perception that Burger King didn’t cater to the local Filipino taste. As reported in the FGD, many respondents didn’t appreciate the absence Filipino flavored products.
Problems faced and their reasons
Fast food had become one of the fastest growing industries in metro manila due to :oRapid urbanisation o Increase in disposable income of the populationoGrowing preference of Filipinos for quick-value
meals in a clean and cool environment
METRO MANILA FAST FOOD MARKET
Major players in fast food market of metro manila : Jollibee Mcdonalds Burger king Kfc Wendy’s Chow king Greenwich
Some smaller niche players are also there, such as –
Brother burgerMax’sGoldilocksTokyo-TokyoHotshots
COMPETITIVE LANDSCAPE
OUR BRAND COMPETITORS
JOLLIBEE Operating for 32+ years 600 domestic outlets ( key strength) 30 international outlets Expanded market through acquisition of
other fast food restaurants and bakeries Products :
American – burgers and fried chickenFilipino – palabok and lumpia
Emotional attachment from filipinos – “langhap sarap” meaning “savoring happiness”
Target market- filipino family in home country and abroad
Committed to community programs such as “ maAga ang Pasko”, a donation drive of used clothes and toys that were annually distributed to street children and orphanages.
MCDONALD’S First opened in 1981 Multi-billion peso company with 250 outlets in
Philippines. First one to Operates 24/7 Products:
Burgers Cheeseburgers Burger mcdo Big mac Quarter pounder w/cheese
Chicken Chicken mcdo McChicken sandwich
Friesdessert
Target market- Filipino family with a taste for American fast food.
Strong marketing campaign Received multiple awards for “lolo”
campaign in 2003 Key strength – ability to market itself
as the recognised global leader in hamburger chains
Quite visible with a good choice of location and appealing advertisements
Limitation – its non- Filipino taste
KFC Has been in philippines for more than 2
decades. Most popular product – KFC original
recipe fried chicken Major strength – brand recall when it
came to fried chicken Major weakness – absence of legitimate
hamburger in the burger segment However, they were attempting to cater to
a new crowd of chicken burger lovers with their line of zingers and chicken fillet sandwiches .
WENDY’S Opened first outlet in Philippines in 1983 31 outlets in the country Target market- similar to Jollibee and
McDonalds but also those who prefer healthier fast food
Products- American fast food (burgers and fries)Unique salad bar ( key strength)The baked potato ( unique item)
Key weaknesses – lack of visibilty in terms of
No. of outletsMarketing promotion
PIZZA PARLORS Pizza - among the top fast food items Pizza parlour industry second to the
burger industry Notable franchises-
Shakey’sPizza hutGreenwich
Only Greenwich comparable to burger king in terms of price as others commanded a higher average purchase price
Acquired by Jollibee to enter into pizza
segment
GREENWICH
Major weakness – always located near a jollibee or chow king outletDid not cater to the burger segment ( absence of hamburger on their menu)
OTHER BURGER JOINTS New fast food restaurants that had
burger as their main food such as brother burger and hotshots
Too few outlets at the moment , even if they are popular
These players are in premium burger segment, serving high end quality burgers at premium pricing .
Major weakness – Lack of number in outletsWeak visibility
BROTHERS BURGER Opened in the philippines in 1999
13 outlets in total today
HOTSHOTS 15 outlets in philippines 8 in indonesia 1 in singapore
SUMMARISED COMPARISON
BURGER KING
JOLLIBEE
MCDONALD’S
WENDY’S
AGE IN THE PHILIPPINES
11 years
33 years
27 years
25 years
# OF OUTLETS (PHILIPPINES)
23 600 250 40
MAJOR PRODUCT/S
Burgers, fries, dessert
Burgers, local offerings, chicken, fries , and dessert
Burgers, chicken, fries, and dessert
Burgers, salads, desserts, and baked potato
ENVIRONMENTPOLITICAL FACTORS
Govt proposed policy- Allowing almost 100% foreign ownership in all sectors
Increased competitiion More investment like increase in franchises ECONOMIC FACTORS Increased Remittance In 2007 overseas remittances was 13.2% over the 2006
remittances Services boom and the resulting increase in net
disposable income Service output increased by 8.7% from last year Increase in demand and consumption of fast food
SOCIAL FACTORS Changing lifestyle and perception Increased foreigners and expats due to rise in service
economy-imbibing latest fashion, technologies, and world class taste and preferences
Increased educated and health conscious people Increase in no. of working women Average increase of 6.7% from 2006 to 2007 It has increased from 13,394,000 to 14,286,000 in 2007
TECHNOLOGICAL FACTORS Use of automated vertical grills, self service
kiosks ,automated french fries system Increased interactions with customers &reduced labour
cost POSSIBLE SUCCESS FACTORS Product, pricing, advertising, efficient service, breakfast
menus, value preposition, add on services, etc
Market Research FindingsA UAI Survey along with a focus group discussion was conducted by a team of Asian Institute of Management and following was a summary of the findings of the survey and group discussions.
• Pizzas and Burgers were the most preferred fast food items:-
The survey showed that an equal percentage (of 28.9%) of people preferred pizzas and burgers to other fast food items. Following figure depicts the percentage split among the respondents on the most preferred food items.Pizzas
BurgersPastasSandwichesSaladsOthers
Jollibee had the highest brand recall amongst the fast food brands:-
Advertising forms an important component of fast food operations. The items were generally bought on impulse and a well-advertised brand easily gained recognition. Almost half of the respondents recalled Jollibee when asked about fast food and only 2.2% recalled Burger King.
Brand Recall
Mcdonald'sJollibeeBurger KingOthers
REASONS FOR THE LESSER BRAND RECALL AND BURGER KING BEING A FOLLOWER.
Lesser visibility and accessibility of Burger King. Although higher-end (costly) burgers were good, the lower-end burgers were considered below-par compared to competitors such as Jollibee and McDonalds. Burger King did not have much variety in the kids’ food.
Food quality, price and service were the primary factors taken into consideration before choosing a restaurant:- There were various factors that people looked for, while choosing a fast food restaurant. The most important factor in decision making was the food quality, service and price. Below graph shows things people look for in a restaurant (on scale of 5)
Food Quality Price Location Convenience
Promotions Offered
Ambience Service0
0.51
1.52
2.53
3.54
4.5
Jollibee led in all the main factors like quality, value for money, menu and the service provided:-
In the average ranking of brands on the basis of quality, value for money, menu and service it was concluded that Jollibee lead in all factors. Following cluster graph shows the average ranking of brands on the aforementioned factors.
Quality Value for Money
Menu Service0
0.51
1.52
2.53
3.54
4.5
McDonald'sJollibeeKFCBurger KingWendy's
Jollibee and McDonald’s were neck-to-neck in convenience, ambience and cleanliness:-
In the average ranking of brands on the basis of convenience, ambience and cleanliness, it was found that Jollibee and McDonalds were neck-to-neck.
Soft drinks and Fries were the two main supplementary food items that people liked to have with their fast food meals:- Out of a list of sides, people preferred soft drinks and fries along with their fast food meals. The figure below showed the percentage of people who like to have other things with their meal at a fast food restaurant.
Soft Drinks
Ice Cream
Fries Desserts Soup/Salad
Ice Tea0
102030405060708090
01020304050607080
44
6470
3 3 2 2
0ther Add On Services That People Desire At A Fast Food Restaurant
Add On Ser...
FOOD AMBIENCE ADDITIONAL SERVICES
VALUE FOR MONEY
0
10
20
30
40
50
60
70
8071
26
47
17
Attributes People Like About Burger King
0204060
18
65 62
4 3
What are the services/changes people like to be offered at burger king
Services/Changes
Large variety and cheaper prices were what people want from Burger king.
SWOT ANALYSISSTRENGTHS
◦Food quality – rated 3.99 on a scale of 5 , better than almost all other fast food joints
◦Brand name- “burger king” is a brand name associated with burger
◦Authentic American taste- value differentiator that could be leveraged in attracting the trendy and westernised Filipino youth
WEAKNESSES◦Limited number of outlets- regular
customers of burger king had to switch to other fast food joints, if they did not find an outlet in vicinity
◦Limited choice in menu- should offer varied type of products like its competitors
◦Not suited to Filipino taste – had a bit more American flavour to its products
◦Higher prices- jollibee and mcdonalds had cheaper products
OPPORTUNITIESSpending on fast food is increasing
Urbanization Increase in no. of working women
Increase in the no. of people who came to fast food joints for different services like phone charging and mobile phonesTHREATSIncrease In concern about healthIncrease in no. of outlets of other fast food chainsCORE COMPETENCIESExcellent supply chain, good service standards, good quality products, innovative side orders, excellent ambience, tech-savvy outletsPOINT OF DIFFERENTIATIONAMERICAN FLAVOR AND AMERICAN FACTOR IN PHILIPPINESBurger kings strong association with American flavor and the authenticity maintained was ,hence, a “POINT OF DIFFERENTIATION”TARGET MARKETTeenagers and young adults up to the age of 35, studying or working from metro manilla.
THE 4 Ps
4 Psproduc
t
priceplace
promotion
PRODUCT
Burgers
•Beef •Chicken •Fish
Side order
s
•French fries •Onion rings•Criss-crossed French fries
Cold and hot
drinks
•Sodas•Hot chocolate•Lemonade•Ice-tea•Hot coffee
Desserts
•Hershey’s chocolate pastries•Ice creams•Sundaes•fudge
Burger king’s menu
Highly preferred and
unique
Burger king also introduced breakfast menu New offering – burger shots (many small
sized burgers in a single order ) Apart from burgers, the whopper sub brand
was a unique sub brand associated with burger king
Burger king also offered various chicken sandwiches which were highly sold
Most of the desserts were supplied from other major brands .
PRICE
Expensive compared to all its competitors Burger starting from 50 PHP
Price could go up to 250 PHP
Average price of a meal – 175 PHP
PLACE
Sold its products only through its 23 outlets in metro manila.
No home delivery on phone Options with consumers- eat here or
take away Most outlets located in malls with
high footfall, premium malls which attracted A and B income segment customers ( richest customers)
PROMOTION
Constraints
• Spent lesser than McD and Jollibee due to the sheer scales that they currently command in Philippines.
• Outlet visibility was a natural form of increasing brand awareness – difficult with only 23 outlets
Keeping the constraints in mind, company advertised through following modes : Direct mailers sent to customers via
mails and network marketing used Communication through facebook Team sponsorship - Had its logo
printed on jersey of a famous local basketball team
Advertisements in newspaper and magazines
Small banners and kiosks an malls to show direction to outlet
Discount coupons ( up to 100% discount coupons used ) – coupons awarded to winners of events sponsored by burger king
Communication messages used Common message rode on the WHOOPER – “
Angry whooper , and it’s cool to be angry” Other messages such as photographs of
basketball players wearing burger king jerseys were used
Most messages showed a meal – a sumptuous burger with coke, fries and dessert
ANNEXURE
KEY RESPONSES:◦Burgers will be the dominant fast food
preferred by people ◦People thought of big king size burger when
thinking of burger king◦Fried chicken is an important offering ◦Visibility and accessibility of burger king are
low.◦Low-end burgers were considered as “not worth
it”
◦High-end burgers were considered “worth it”◦Burger king has maintained the American taste,
not adapted to Filipino tastes.◦Jollibee offers better toys for kids ◦Kid’s meals offered weren’t good enough◦Credit card payment available at burger king
was appreciated◦Cell phone charging facility – major attraction ◦Burgers preferred to be served with chips
◦Home delivery service which is not available is very important
◦Filipinos like Filipino breakfast – should introduce breakfast with Filipino flavour
◦Free internet – major attraction ◦Burger king’s old policy ( not existing now) of
unlimited drinks was highly appreciated and still remembered – offering be started again
◦Burger king should increase its visibility – currently low
◦Suggestions given were for the introduction of drinks other than aerated drinks.
QUESTIONS
1. Despite having strengths such as superior products, higher quality, great ambience, etc., burger king’s brand awareness in the Philippines was pretty low. Analyze the situation that may help Mr. Kim Tan, Vice president , Marketing of burger kings, Philippines. What is the role of local culture in this context ?
2. Should Tan retain the main point of differentiation, its American flavour as its core equity? Suggest Tan on continuation of current positioning and communication of its value proposition.