It was McDonald's 10th anniversary in the Philippines, and to celebrate this milestone McDonald's offered 10 Peso burgers! (If I remember right,this was in 1992.)
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!