MBA: Mini Case Study Jollibee: Beating McDonald’s in Burgers McDonald’s is clearly the most successful fast-food brand in the world, with annual sales around $30 billion. It dominates most markets by providing customers with consistent product quality and service-but not in the Philippines. Jollibee Foods Corp. is a family-owned chain with about P6. 1 billion annual sales. It has, however, captured about 52% of the Philippines market (compared with 16% of McDonald’s). The company has twice as many stores in the Philippines as McDonald’s does.
How Jollibee has been able to beat McDonald’s in this market? The major key to success is understanding and meeting the needs of the local market. Jollibee’s offers spicy burgers, fried chicken and spaghetti and serves rice with all entrees. The food is similar to what “a Filipino mother would cook at home” and is designed “to suit the Filipino palate”. And Jollibee charges prices from 5-10% lower than McDonald’s. This combination of the right food at a lower price gives customers real value.
Jollibee also uses some marketing approaches that have been borrowed from McDonald’s. Its works hard to attract kids by targeting ads to children, providing in-store play activities, and offering signature characters and other licensed toys and products. The company locates restaurants in prime spots often surrounding a McDonald’s outlet. And Jollibee maintains high standards for fast service and cleanliness. The company is trying to duplicate success in the Philippines in other international markets.
It currently has restaurants in 10 countries- even in the United States. Although Jollibee has plans to expand internationally in Asia, the Middle East, and the United States, its major focus is to be the leading food service in the Philippines. The company now serves over one million Filipinos a day at its 400 restaurants. It has expanded into the pizza-pasta, French cafe-bakery, and oriental quick service restaurant market segments by acquiring Greenwich Pizza, Delifrance, and Chowking.
The basic marketing strategy for all its restaurants is based on a superior menu lineup, creative marketing programs, efficient manufacturing and logistics facilities, and cheerful and friendly service. The company is highly respected by the Filipino people. In fact, every time a new store is opened, especially overseas, Filipinos form long lines to support the store opening. Questions 1. Why do you think McDonald’s is has not been more successful against Jollibee in the Philippines? 2.
What are the fast food brand choice drivers in the Philippines? 3. What would you recommend McDonald’s do to increase its market share in the Philippines? 4. What will you recommend to Jollibee to do to remain market leader in the Philippines? 5. What is your evaluation of Jollibee’s strategy to expand into Asian, Middle East, and U. S. markets? 6. What marketing strategy would you recommend to Jollibee for successful operations in the U. S. markets? How do you think McDonald’s will respond as Jollibee enters the U. S. market? 7.
If you are the marketing Director of Jollibee, what would your principal accountabilities be? 8. Jollibee has a holistic marketing orientation. As a consultant to Papaye, explain what Holistic marketing orientation is all about, emphasizing why this orientation is superior to the marketing orientation. Also explain each of the components of holistic marketing to Papaye management. 9. Explain how Jollibee integrates its marketing communication effectively? 10. What is Jollibee’s target market, brand positioning? How is Jollibee differentiating its brand business?