Tony Tan Caktiong: Growing a Hamburger Chain the Filipino Way!
Jollibee has become a household name in the Philippines, even obscuring the popularity of the world’s largest hamburger chain, McDonald’s. In recent years, Jollibee has even invaded major towns and cities in various provinces all over the Philippines. There’s one in Cauayan City and another one in Roxas, Isabela. If I were still living there, I would probably be eating breakfast regularly there.
Tony Tan Caktiong started out small. He didn’t really start with a big idea of competing against McDonald’s. Even before McDonald’s arrived in the Philippines, Tony Tan Caktiong was already in business operations. But he wasn’t always in the fast-food industry. In fact, he started his business operations in 1975 by franchising Magnolia Ice Cream in two locations in Metro Manila—one was in Cubao, Quezon City along Aurora Boulevard. If you ever go there, the first ever branch of Jollibee is still there. The other branch was in Quiapo, Manila.
To expand your business, get the right people.
Being a tropical country, people started buying a lot of ice cream from Tony Tan Caktiong and his brother. That’s when they realized that they cannot manage the operations by themselves. This is when they started hiring the right people who will manage their business operations.
Listen to your customers and offer them what they want.
Not too long after they started operations, the customers were telling the service personnel of Tony Tan Caktiong that they wanted more than just ice cream. That is why, they started offering additional products—hamburgers and chicken. By 1978, their operations had six ice cream parlors. Then they noticed that people were lining up more for the hamburgers instead of the ice cream.
Set up a corporation and pick a brand name.
Because of this increased demand in hamburgers, they decided to shift the focus of the company from ice cream to hamburgers! They then incorporated themselves and thought of a name that could become their flagship brand. They came up with JOLLIBEE! It simply means a jolly bee! Happiness is incorporated in their brand name. The bee is also seen as an industrious insect, which can produce honey! It is also a social animal! We probably don’t know what was going on in their minds back then. But the brand name Jollibee has certainly stuck to the minds of Filipinos from 1978 up to now!
Dream big and compete!
By 1982, McDonald’s arrived at the shores of Manila. People kept asking Tony Tan Caktiong if they will become franchisers of Jollibee. After all, McDonald’s is a business behemoth, which could be a very fierce competitor. Yet, Tony Tan Caktiong had big dreams for Jollibee. Had he decided to franchise for McDonald’s, he would not have expanded his operations to the United States, China and other countries around the world! Thankfully, he dreamed big and chose to compete instead of succumb to the multinational might of McDonald’s!
Know the culture of your customers!
Put side by side, McDonald’s could have easily beaten Jollibee in competition for the hamburger market in the Philippines. But how come Jollibee won the competition?
The answer is simple, Jollibee knew the taste buds of Filipinos and knew the local culture! Hence, they created effective communication campaigns that effectively captured the market! Tony Tan Caktiong and his team knew that Filipinos love to smell their food before eating. In addition, the Filipino taste tends to be sweet! They also knew that Filipinos love eating rice together with various viands. Eventually McDonald’s managed to catch up and offered rice meals. But Jollibee was there first.
Expand the empire but protect the brand and the industry.
Jollibee, through Tony Tan Caktiong, started expanding in recent years. They acquired other food establishments such as Chowking, Greenwich, Delifrance, and Red Ribbon. These fastfood restaurants may seem to be competitors at first glance. Yet, they belong to different sub-niches in the restaurant industry.
Jollibee is more like McDonald’s. Its products are mainly hamburgers, spaghetti and chicken meals. Chowking offers Chinese and Filipino food. Greenwich sells pizza and pasta. Red Ribbon sells cakes and pastries and Delifrance sells bread products.
The company has also launched Tio Pepe’s Carinderia in 2007 in the attempt to professionalize the Filipino carinderia industry.
All over the Philippines and even in other countries, Jollibee is regarded as a global brand worthy of recognition and respect! It shows the marketing and entrepreneurial genius of Filipino-Chinese! Here’s an excerpt from the Philippine edition of the Entrepreneur magazine. This piece was written by Jet Ramos-Cruz
“An engineering graduate, Tony Tan Caktiong got started in the food service business in 1975 when he and his brothers opened two franchised Magnolia Ice Cream outlets, one in Cubao, Quezon City and the other in Quiapo, Manila. Both outlets did well but the brothers noticed that their customers often wanted something more than just ice cream, so they added sandwiches and spaghetti to the menu. When these hot meals soon outstripped ice cream in sales, the brothers converted the two ice cream parlors into dine-in fast-food restaurants, naming them Jollibee. Tan Caktiong then used astute marketing to make Jollibee one of the country’s most popular brands, later acquiring several major food-service chains to fortify the Jollibee Group’s market leadership.
“For his accomplishments, Tan Caktiong was honored as Ernst & Young’s “World Entrepreneur of The Year” and “Entrepreneur of the Year Philippines” in 2004. He was named “Man of the Year” by the Management Association of the Philippines in 2002 and was presented the Agora Award for “Outstanding Marketing Achievement” from the Philippine Marketing Association in 1986.” (taken from Entrepreneur Philippines Magazine, August 2007 issue, page. 63).
image credit: PassionBasket