Sunday, May 18, 2008
My Training department worked closely with our Local Store Marketing (LSM) group in developing the training program that would produce these cadre of store-based marketing representatives.
Because they were going to be called "SMART" Coordinators we had to make sure that the people we hired were indeed smart. Our HR Recruitment and Operations representatives meticulously screened candidates for about six months until we were able to complete 2 batches of 12 SMART Trainees for our first pilot run of the program.
Since we did not have any idea of what these people were supposed to be doing we resorted to "counter-intelligence" tactics. We asked our managers who came from McD to brief us on what the STARs did by way of Key Result Areas (KRAs) and what they were supposed to do on a day-to-day basis.
For several months, I paid visits to McDonald's stores and observed the red-coated STARs as they went about their jobs. For example, I noticed that the McD STARs would go around and sometimes give novelty items to kids, or invite customers for a store tour,activities which we would also include in our own SMART's job descriptions.
Looking back, I can say that we had a good start to our own program.
The 24 SMARTs we hired lived up to expectations in that they executed what we taught them. One SMART (from JB Circle),for instance, really walked around her store's retail trading area and identified possible traffic generators. Another one (from the former JB Crossroads Arcade) was so good in customer relations that she impressed our then EVP S' Ato Tanmantiong with her skills in talking with customers.
As in any start up effort we had our share of problems. For one, some of our SMARTs were placed in high volume stores such that they did not need to initiate any new LSM efforts, and were stuck with just doing customer relations and running birthday parties.
Another problem had to do with the stores' need for additional help. Since the managers looked at the SMARTs as additional hands, more often than note they were "asked" to help out in operations specially during peak periods, to serve customer orders or deal with complaints. This left the SMARTs with little time to conceptualize sales building activities.
When Operations and Marketing finally threshed out the kinks in the system,the SMARTs were able to carry out their duties with maximum effect.
Having the SMARTs around helped Store managers maintain a focus on local store marketing,which had until then been given just a perfunctory effort by managers. As a result of this focus, store sales definitely grew further establishing Jollibee's dominance over it's American rival.
Tuesday, May 13, 2008
I can still remember the reaction of the store managers when Toti Ferriols,our Promotions Officer, "unveiled" this novelty item that was supposed to bring in incremental sales for that quarter. It was more like a collective groan of disappointment, and if you could just read the minds of the managers they were probably saying:"What the @#!!! are these marketing guys thinking?"
Jolly Bubbles was really nothing but soap bubbles in a small plastic container decorated with pictures of the Jollibee mascots. If I recall correctly,there were 4 designs to choose from, and each one cost P20.00 for a minimum food purchase.
Hands were raised after Toti made his pitch on the promotion's sales objectives. The main concern of the managers was how could they expect to sell this thing when cheaper,"unbranded" versions (about P15 -P16) were being peddled by vendors on the sidewalks!
Needless to say,Toti had a bad day that day. But things got worse!
Within the first week of the promotion, the Jolly Bubbles were sold out, and the stores were now asking for replenishment of their stocks. However, since Marketing didn't expect the response to the promo to be this great,they had prepared only so much buffer stock of the item.
The consumers' irrational response to the promo surprised everyone..specially the doubting Thomases among the store managers who didn't believe Jolly Bubbles would sell at all! They had underestimated the power of Brand Jollibee. They did not imagine that just by printing the Jollibee Mascots on something and selling it with the name "Jollibee" would make it saleable.
Toti had the last laugh after all...but he had to first find a way to supply the stores with stocks of Jolly Bubbles.
Since then, Toti's mood became an indicator of whether a promotion was successful or not. If he was calm and cool,then the promo was a flop (i.e. sales were slow so novelty items were abundant in supply .) If he was cranky and hot-tempered,that meant the promotion was a success (i.e., sales were so good, stocks were short in supply.)
After this came the Jolly Flipwatch,where in customers really flipped...but that's another story.
Thursday, April 24, 2008
Giving birth to the Jolly Twirls was difficult. For starters, the local distributor of the softserve machine,the Taylor 8756, did not have more than 100 units we needed for a systemwide launch. They informed us that these still had to be manufactured by Taylor USA which meant we had to wait about 3 months before we could finalize our product launch.
Our supplier had only one Taylor Machine available but it had to be housed at the R&D Office at the Commissary because our R&D specialists needed it for their product development studies.
This presented me with a big problem and a challenge.
The operations of the Taylor machine were complicated so my Training department had to train about 800 store managers and crews before they could use it. Problem was we had only that one machine for our use and we didn't have full control over its use!
We decided that the effective batch size to train was a maximum of 10 people at a time.For one,the room where the softserve was located was cramped.We also needed to keep group size manageable so our participants would have "hands on" training on how to assemble, disassemble and operate the machine.
In all, we needed about 80 training sessions to be done in a total of 45 days. So how to do this?
We figured that if we could increase the number of trainers then we could complete the training within the short time frame allowed us.So, I trained my staff first and required them to be able to do all machine operations. Next, we trained the Area Managers whom we would tap to help us train their own store teams.
We planned on conducting three sessions every day. The first class would start at around 7AM and run to about 11 AM. The second shift would then come in from 12 noon to 4:00PM. The last class would run from 4;30 to about 8:30PM.
It was hard work,specially for those of us who handled the night shifts because oftentimes the afternoon class ended late and so we were going home close to 10 PM at times. But we were able to give all managers and crews their first experience of handling the machine.
When time came for the roll-out of the product in all our stores,we were in for some surprises.
Because we had focused our training on the softserve machine operations and not so much on how to produce the final product, we had a lot of negative comments from customers about our crews not knowing how to serve a proper sundae or cone. Most of the time,the customers were served underportioned product because the crews did not know the technique for properly drawing the softserve.
To remedy the situation we required all stores to identify those crew members who knew how to draw the product correctly and designate them as softserve persons.
After a week or so, our crews got the hang of serving our Jolly Twirls correctly so we heard less and less complaints about the product. Less than a year after we introduced softserve,the novelty of the product wore off and we were faced with slow sales of the Chocolate flavored twirl and the Rainbow sprinkle sundae. We eventually phased these out.
There was one negative side-effect of the Jolly Twirls launch on me. Because I had to sample the product many times over during the training period, I developed an aversion for it so much so that I rarely ate softserve when it was finally on the market.
Wednesday, April 23, 2008
The idea of serving Peach Mango Pie was hatched as early as 1987. I know because it became the subject of an on-the - job Decision Analysis case study when we went through a Systematic Managerial Analysis course at DAP, Tagaytay early 1987.
The group tasked with figuring out how to get the product launched identified the "Must" criteria to enable the stores to serve the product. One of the critical musts was that the product must be at a frozen state when delivered to our stores. To be able to do that we needed a freezer van and that was going to cost millions of pesos!
When a rough payback analysis was made we realized that if we were to get a freezer van just to deliver pie to about 30 plus stores that year, the investment was not going to be worth it. So,the idea of serving Peach Mango Pie was shelved temporarliy until we could have the right number of stores to justify buying a freezer van.
It took about 4 years before we reached that critical mass. We had grown to about close to a hundred stores by then so the investment in freezer vans to deliver the frozen pies could now be justified.
We found out though that having a freezer van just solved one problem. We were in for a lot more surprises as we neared the launch of PMP.
During the initial tests of the prototype product we almost always had a perfect pie because our R&D produced these in small batches. The filling was a well balanced combination of mango bits and chunks of peach that tasted delicious and, we all agreed, would give McD's apple pie a run for its money.
However, when time came for big batch runs to be produced, we couldn't get the same consistency of the filling anymore. What we got was almost a liquid filling like mango jam, that didn't have any solids in it. We found out that when produced in commercial quantities the mango and peach tended to get beat into a pulp so the chunks and bits disappeared. R&D had to find a way to correct the problem.
When that problem was fixed we launched the product. It was an instant hit. Customers flocked to our stores to try the product out and because of this, during the first week we had complaints about stores running out of the pie.
However, as it turned out, the stock outs were not due to demand alone but because there were a lot of pies being rejected!
When the frozen pies reached the stores there were some that were a bit oversized. After frying, the edges of these pies got stuck on the pie holder and when the crew member tried to take these out,the pie crust would break.
So right in the middle of the product launch the Product Work Group had to figure out a way of getting pies unstuck without breaking.
The stopgap solution until Production corrected the size of the pies was for the stores to coat the pie holders with oil before loading the pies. This helped minimize the number of pies sticking to the metal. Then, in case a pie still got stuck, we recommended using a knife to pry it out of the pie slots.
Peach Mango Pie has since become a mainstay in the Jollibee Menu although its size has been reduced to what they now call Pocket Pies. There are also variants of the filling which include Tuna and Ube Macapuno.
Tuesday, April 22, 2008
This was the buzz that spread around Jollibee HQ when we learned that McDonald's had contracted RP's King of Comedy to do some commercials for them. This was about the time when McD was desperately trying to Filipinize its image in a bid to win over patrons to their side.
True, one of Jollibee's reason for success was that we were a homegrown brand and we had somehow instilled a sense of patriotism in our loyal customers. McDo realized this early on and so tried to present itself as maka-Pinoy and maka-masa. What better way to do this than to show Dolphy as a McDonald's fan.
There was reason to be concerned about this because Dolphy had such a great appeal with his fans. He was recognizable and he was likeable. He was also very expensive then so it just showed to what lengths McDonald's was willing to go to grab market share from us.
I don't exactly recall the content of the Dolphy TV commercials,but one showed him doing the "M" sign with his arms and hands on top of his head. The other which was an indirect attack on Jollibee showed him dressed up as a superhero,cape and all, punching a gigantic bee that was attacking him!
We could see the immediate impact of these commercials specially on kids who would imitate Dolphy's "M" sign. McDo also made sure that these were aired during primetime so you could just imagine the brand recall during the first two weeks of airing.
Unfortunately for McDonald's though, that's about how long they could put their material on air!
At about the time the commercials started being shown, Dolphy figured in a "scandal" that became the talk of the town. It involved sultry singer-actress Zsa Zsa Padilla. Rumor had it that she and Dolphy had an affair. At the time she was still married, (though not happily, I heard) to a dentist Dr. (I forget his first name)Tatlonghari,who coincidentally, lived just several floors below our unit at Continental Court in Greenhills.
Because of the scandal, Dolphy didn't appear "wholesome" anymore in the public's eye at the time. McDonald's had no choice but to pull out the commercials!
Lucky for us!
A few months later, Jollibee came out with a TV commercial featuring well-known singers who were members of the OPM (Organisayon ng Pilipinong Mang-aawit). The likes of the Apo Hiking society, Basil Valdez, Celeste Legaspi, Nonoy Zuniga,Subas Herrero,Noel Trinidad and others sang; "Awitin namin..Pilipino!"
It was a counterattack to McDo's Dolphy commercial! Basic Advertising, our ad agency then, had come up with a brilliant but subtle way of pitting Dolphy against all the members of OPM. And the song was a claim that the brand that OPM was supporting (Jollibee) was the real Pilipino!
Judging from the way our sales boomed that year, you can make a guess which brand's celebrity endorsement worked better.
Thursday, April 17, 2008
We, at Jollibee, were greatly concerned about the impact of this promotion on our sales because we foresaw that customers would really go for such a price down offering. So we advised all stores that had a McDonald's beside them to observe what would happen on the day of the promo launch and keep headquarters informed of any negative effects on their sales.
As expected, when McDonald's stores opened their doors that day,customers lined up to take advantage of the 10 Peso burgers. But what happened as the day progressed was completely unexpected!
Apparently, many of the McD customers who bought the burgers in bulk intended to resell these later. Because of the heavy demand,many McD stores ran out of stocks and started limiting the number of burgers each customer could buy at one time. Some stores started closing their doors to customers as early as mid-morning to avoid creating more demand.
The McD promo was a huge success in terms of creating demand...but it also backfired and worked to Jollibee's advantage.
Contrary to our expectations,our stores reported, not declining sales...but increasing sales!
It seems that when customers could not avail of the 10 Peso burgers, they got disappointed with McDonald's and went to our stores instead. McDonald's had brought customers out of their homes to buy burgers, but when they couldn't get McD's brand they readily shifted to ours.
"Ayaw niyo pa la kaming bigyan ha...eh di sa Jollibee na lang kami!" was an actual remark of customer who was disgusted at having to be turned away by a McD store when it had run out of stock.
At the end of the day, Jollibee stores reported huge increases in sales...thanks to McDonald's!
Friday, April 4, 2008
Landmark is a mall in Makati which had just opened its doors to the public that year, and it would have been insignificant except for the fact that this was the first time that the two competing burger brands,Jollibee and McDonald's, were located together in one foodcourt.
Makati,being predominantly a Class AB market was supposedly McDonald's territory. McD claimed that its stores in the area had bigger sales than our stores but no one had evidence that this was true.
This was going to be the litmus test of McDonald's boast.
Jollibee's and McD's stores were just at opposite ends of each other. McDonald's had a slightly larger area because it had its own exclusive dining area which Jollibee didn't have. Just by visually estimating the the size of the crowds at the counters or by checking the number of cups,or styro packs that would be found in the common dining area, one could get a feel of who was selling more.
Since the pride of the brand was at stake here, the battle for Landmark became a no holds barred affair.
From Day 1 both brands resorted to giving out leaflets to passing customers hoping to entice them to their side. It was a sight to behold! For every crew Jollibee had, there was a McD counterpart handing out leaflets.
When simple leafletting didn't do the trick, both brands resorted to a price and promotions war.
The leaflets were now stamped with FREE items that were to be given to customers for a specific food purchase. Each tried to outdo the other in giving away something, just to be able to attract customers. And the promos changed from day to day depending on what the competition did.
For example, if McDonald's offered a free sundae cone for every P 50 purchase, Jollibee would come out with a free Fries and Coke offering.
Since it was just the two brands going all out in giving away free food, naturally customers gravitated to either one of the two, leaving the other food court brands with the scraps. Eventually, though these also joined in the fray and started offering their own free items. It came to a point that if you wanted to get free meals all you needed to do was bring a friend along to Landmark,buy the minimum purchase and your friend would get everything else for free!
So who won after the battle for Landmark.
Of course, both sides claimed victory although our contact in the Landmark administration who used to work with Jollibee revealed that Jollibee's sales were slightly better than our rival.
The after effect of all this though was that both stores lost money during the initial skirmishes until they stopped their promos. It was the customers who won in the end.
A couple of years later, I was told that when Jollibee and McDonald's opened side by side in another Mall (Manuela now Starmall at Crossing,) the McDonald's sub-franchisee spoke with S' Tommy King, the Jollibee Manuela franchisee, and both agreed not to repeat what happened during the Battle for Landmark!