Serving jolly communities around the world! How is this Filipino fast-food chain so appealing to its target market? [Monday Marketing Marvels]
Juicy and crunchy fried chicken with gravy.
Sweet and saucy spaghetti.
Yummy and juicy burger.
When you visit the Philippines, you’ll discover these Filipino favorites…
… served by the largest Asian restaurant company in the world.
JOLLIBEE FOODS CORPORATION (JFC)
In 1975, 22-year-old Tony Tan Caktiong was inspired to start his own restaurant business after a trip to an ice cream plant. Using his family’s savings, he bought Magnolia Ice Cream franchises in Cubao, Quezon City and Quiapo, Manila for PHP 350,000.
Two years later, the business grew and its customers started asking for warm meals. The burgers and sandwiches it started to serve became more popular than their ice cream selection.
In 1978, the company decided to rebrand the business because of the success of its warm meal offerings. In the process, it changed its name, first to Jolibe then to Jollibee to easily be associated with the words…
“Jolly” that stands for happy and
“Bee” that stands for hard working.
“It compares the employees of the company to busy workers in a hive: hard working, industrious, and providing the sweet things in life.”
– Dennis Flores, President and Head of International Business, EMEAA, for parent company Jollibee Foods
In 1980, the company introduced Chickenjoy fried chicken in addition to its first line-up of products such as the Yumburger and sweet Jolly Spaghetti.
Eventually, the company expanded locally and internationally. One of its key strategies is to acquire and establish partnerships with other food chains including:
- Chowking
- Greenwich Pizza
- Red Ribbon Bakeshop
- Mang Inasal
- Burger King Philippines
- Yonghe King
- Hong Zhuang Yuan
- San Pin Wang
- Highlands Coffee
- Pho 24
- Sma
- Dunkin’ Donuts
Currently, Jollibee Foods Corporation has a total of 3,238 restaurant outlets in the Philippines and 5,863 stores worldwide.
It was hailed as the largest Asian restaurant company in the world, employing 16,690 workers.
This company is indeed one of the most successful and iconic Filipino brands of all time.
What strategies did the company use to stand out among other quick-service restaurants (QSR) through the years?
The SWOT analysis
Strengths, weaknesses, opportunities, and threats.
Jollibee refused to shy away from the competition with other global giants and instead, improved on internal strategic planning.
“We did a SWOT analysis on our strengths, our weaknesses and, what the gaps were.”
– Ernesto Tanmantiong, CEO and President, Jollibee
SWOT analysis is a strategy that helps businesses understand the internal and external factors to achieve a marketing goal.
It’s usually presented in a 2×2 grid.
This analysis technique helped Jollibee focus on strengthening one of its unique selling propositions (USP) that other international competitors could not compete with: the Filipino taste—the love for sweet flavors and spices.
Products that are tailored to meet local tastes
(Catering to the target market’s needs and wants)
Jollibee concentrates on offering products that satisfy the Filipino taste: spicy burgers, meals with rice, and Filipino-style spaghetti.
When Jollibee first enters a foreign market, it showcases its famous products—the chicken, the spaghetti, and the burger. Once it has established itself in that country, it diversifies its menu to include local products custom-made for the particular country.
Vietnam Jollibee’s chilli chicken and Brunei Jollibee’s nasi lemak are just some examples.
Great service to high volumes of people
(Customer service and store locations that the target market frequents)
Jollibee ensures high customer traffic by positioning branches in crowded places. Its stores offer great service to high volumes of people by functioning like a well-oiled machine.
As an example, the Jollibee outlet in Hong Kong is located at the Central district, an area where a large number of Filipinos gather.
Marketing and promotional efforts
(Known for its great brand identity and targeted advertising)
In the 1980s, the company started running a number of different TV ad campaigns and focused on marketing its well-known bee mascot inspired by the popularity of Disney’s Mickey Mouse.
In 2010, Jollibee created Jollitown, an animated children’s TV series starring the company’s mascots that each represented the company’s products. It became the highest rated children’s TV show in the Philippines within the period of August to November of the same year.
Jollibee also launched Jollibee Studios on YouTube that features videos of various stories that made its viewers laugh, cry, and fall in love.
All the videos uploaded on the channel gained 406,101,989 views combined.
Jollibee Foods Corporation received numerous recognitions and awards from prestigious award-giving bodies.
- Included in Forbes Asia’s Fabulous 50 Companies in 2015
- Asia’s Best Employer Brand in 2011 and 2013, recognized by the Employer Branding Institute and World HRD Congress
- One of the Best Managed Companies in Asia from 2010 to 2013
- No. 1 in innovation from 1997 to 2010 and corporate reputation in 2009 by The Asian Wall Street Journal
- One of the “Best under a Billion” companies in Asia recognized by Forbes Asia from 1994 to 2004
- One of Asia’s Leading Companies in the Philippines from 1994 to 2004
The company was not the only one that was recognized for its efforts and success.
Founder and Chairman of JFC, Tony Tan Caktiong, received many recognitions and awards too.
- Entrepreneur of the Year Philippines in 2004
- World Entrepreneur of the Year in 2004 by Ernst & Young
- Awarded as Management Man of the Year by the Management Association of the Philippines in 2002
- Agora Awardee for Outstanding Marketing Achievement
- Triple A Alumni Awardee of the Asian Institute of Management (AIM)
- Ten Outstanding Young Men (TOYM) Award for Entrepreneurship Star of Asia Award from BusinessWeek
- Two-time Star of Asia Awardee of BusinessWeek International
- Lifetime Achievement Awardee of the Hong Kong based Asian Chain Restaurant Operators and Suppliers Series
For the past 5 years, the company has reported a revenue of:
- PHP 100.78 billion in 2015
- PHP 113.81 billion in 2016
- PHP 133.58 billion in 2017
- PHP 161.17 billion in 2018
- PHP 179.63 billion in 2019
Jollibee became one of the Philippines’ pride when it comes to fast food staples. For some people, it always reminds them of their childhood and represents family traditions.
Jollibee Foods Corporation’s Earning Power: Valens Research vs. As-reported numbers
Jollibee Foods Corporation makes for a great case study that we come back to regularly. One great reason?
The company has proven itself to be a better earning power generator on average than investors might think.
So, how well has Jollibee Foods Corporation been growing its business in the past years?
The research doesn’t lie—nor do the results. Earning power (the blue bars) continues to show results higher on average than what traditional databases show.
The blue bars in the chart above represent Jollibee Foods Corporation’s earning power (Uniform Return On Assets). These numbers have been averaging at about 8% over the past sixteen years.
The global ROA average is just 6%.
The orange bars are the company’s as-reported financial information. If you relied on these numbers, you won’t see the 4% Uniform ROA (return on assets, a measure of earning power) for 2019. Albeit already a lower number, you’d see the company report a much lower number than that, at 2% as-reported ROA.
That’s what you’ll see in Yahoo Finance, Google Finance, and most other databases.
The company’s stock price also performed better than the rest of the stock market over the decade, which we can see in the blue line in the chart below. Its returns have been well above the market.
The numbers show that it has been doing well and making a profit.
As years go by, Jollibee Foods Corporation continues to grow even bigger and serve great tasting food while bringing the joy of eating to happy and hard working Filipinos all over the world!
Jollibee Foods Corporation is truly successful in maintaining its brand and market positioning today.
Doesn’t all this talk about food making you hungry?
Time to get some Chickenjoy, Jolly Spaghetti, and Yumburgers!
About The Dynamic Marketing Communiqué’s
“Monday Marketing Marvels”
Too often, industry experts and the marketing press sing the praises of some company’s marketing strategy.
…Only for the audience to later find out that their product was a flop, or worse, that the company went bankrupt.
The true ROI in marketing can’t be separated from the business as a whole.
What good is a marketing case study if one can’t prove that the company’s efforts actually paid off?
At the end of the day, either the entire business is successful or it isn’t. And the role of marketing is always paramount to that success.
Every Monday, we publish a case study that highlights the world’s greatest marketing strategies.
However, the difference between our case studies and the numerous ones out there, is that we will always make certain that the firm really did generate and demonstrate earning power worthy of study in the first place (compliments of Valens Research’s finance group).
By looking at the true earnings of a company, we can now rely on those successful businesses to get tips and insights on what they did right.
We’ll also study the greatest marketing fails and analyze what they did wrong, or what they needed to improve on. We all make our mistakes, but better we learn from others’ mistakes—and earlier, rather than later.
Hope you found this week’s marketing marvel interesting and helpful.
Stay tuned for next week’s Monday Marketing Marvels!
Cheers,
Kyle Yu
Head of Marketing
Valens Dynamic Marketing Capabilities
Powered by Valens Research
www.valens-research.com
