Marketing Planning JOLLIBEE Identify a Essay Example

Central district, one branch is currently undergoing renovation while considering opening a second branch. As of end-September 2012,Jollied operated a total of 2,040 stores in the Philippines across all its brands including Jollied stores (765), Chocking Stores (383), Greenwich Stores (201), Red Ribbon stores (209), Mange 'nasal store(457),and Burger King Stores(25).Regarding Papua New Guinea, with a population of five million people, there are limited options for fast food. Jollibee has an opportunity to establish high standards and attract many customers in this area. However, in order to remain competitive and cover costs effectively, they would need to rapidly open three or four additional stores. Nonetheless, it is not advisable for Jollibee to enter Papua New Guinea at this time due to concerns about whether the area can support 20 stores and uncertainties regarding the benefits provided by the local partner as well as low profit potential.

On the other hand, in Hong Kong, Jollibee strategically located its store near a densely populated area that also has a loyal Filipino customer base. While these customers contribute significantly to weekend business, sales decline during weekdays due to the lack of local Hong Kong customers. Moreover, there were notable challenges with Chinese stores which resulted in all managers resigning and many employees quitting since Chinese individuals prefer working within their own community. This situation clearly highlights tensions between Chinese and Filipinos.

Having a fourth store in Hong Kong could serve as an invaluable learning opportunity; however, it would not generate sufficient revenue to build a global empire alone. To successfully navigate cosmopolitan Hong Kong and potentially attract better partnerships while increasing brand exposure, Jollibee should adapt its offerings according to

the taste preferences of the local Chinese population.Considering the staffing problems and uncertainty surrounding the local Chinese customer base, it would be more beneficial for Jollied to focus on improving their current operations rather than investing additional resources in a new store. However, targeting the Asian community in California, particularly in the US, would be a great idea for Jollied due to the opportunities offered by the highly competitive US fast food market. They have also received significant support from the Filipino-American community and found aspects of their restaurants that appeal to Americans. Jollied plans to expand throughout California before going eastward to demonstrate their determination for recognition. Additionally, America's diversification is advantageous as it offers a variety of ethnic cuisines that Americans are open to trying, increasing the possibility of Jollied's success in the fast food market in the United States. However, it's important to consider that there are formidable competitors for Jollied in the United States and being a late-mover may pose challenges accessing distribution channels, suppliers, and store locations that allowed them to become a cost leader in the Philippines.In addition, Jollied lacks experience operating within a Western business environment apart from their experience in Guam. It is essential to gather specific information about legal and ethical requirements, market trends, competitors, market size, and potential sales volume when considering international expansion. Expanding internationally becomes logical when foreign markets offer higher profit potential than the home market.

When exploring new markets in other countries, it is crucial to acknowledge the differences in legal structures and ethical frameworks compared to the United States. Addressing the legal and ethical issues involved in entering these markets

is necessary for ensuring the success of your expansion. These issues include Traditional Small Scale Bribery that involves small payments made to foreign officials for misconduct or expediting routine government actions. Large Scale Bribery includes larger payments intended to induce law violations or influence policy, such as political contributions. Additionally, offering gifts, favors, and entertainment ranging from expensive physical gifts to opportunities for personal travel at the company's expense and extravagant gestures should also be considered.

The text emphasizes various unethical practices that can occur in international business transactions.The text highlights several illegal or questionable activities that may occur in the host country, which include unfair differential pricing, questionable invoicing, dumping products at low prices, and engaging in pricing practices aiming to eliminate local competition. It also mentions the use of banned products or technology, tax evasion practices like transfer pricing and tax havens, environmental pollution, and unsafe working conditions. Additionally, it raises concerns about unauthorized copying of products or technology without implementing patent, trademark, or copyright protection. Excessive commissions or fees paid to channel members such as sales agents, consultants, and importers are also mentioned. Cultural differences are another important factor to consider as they can lead to potential misunderstandings regarding traditional exchange requirements between cultures. Practices like gifts, monetary payments, favors entertainment,and political contributions may be viewed differently across cultures. Furthermore,the involvement in political affairs is discussed where marketing activities are combined with politics including multinational companies exerting political influence and engaging in marketing activities during times of war either in their home country or the host country. Lastly,it brings up illegal technology transfers as well.There is a growing trend in the market

where youths prefer trendy cafes with Wi-Fi internet access, located in creative locations. Multi-branding is also becoming popular. Consumers prioritize cleanliness in the environment. Competitors claim a large market size. Jollied holds 65% of the hamburger market in the Philippines.

According to JEFF's annual report, they reported revenues of PH 82 billion by the end of 2011, with Jollied earning PH 50 billion revenue that year. The total sales for JEFF claiming a 65% market share amount to PH 82 billion, while the total market share is valued at PH 126 billion.

Jollied Foods Corp., a local fast food giant, experienced a net profit growth of 24.5 percent in 2013, reaching PA.64 billion due to increased sales both domestically and internationally from its restaurant network. In Q4 alone, Jiff's net profit grew by 20 percent, totaling Pl.

The retail sales for JEFF grew by 13.9 percent and12.8 percent in Q4 and for the full year respectively,reaching $87 billion and $1billion marking the highest rate rise in organic sales in six years.This allowed them to surpass the $1billion milestone for the first time.

According to Ernest Atomization, JEFF's chief operating officer and incoming chief executive officer, they achieved growth in retail sales by increasing sales volume, improving their store chain's operating efficiency, and expanding their distribution network.
In 2013, JEFF achieved a net income margin of 5.8 percent, which was higher than the previous year's margin of 5.2 percent. During that year's fourth quarter alone, JEFF opened a record-breaking 98 stores in its 35-year history. By the end of 2013, JEFF had a total of 2,764 international stores, with the majority (2,181) located in the Philippines. This progress was observed across

different brands and countries.

Moving forward, JEFF aims to strengthen its brands and accelerate profitable growth through superior product quality and taste, value, service, restaurant experience,and store locations. The company has allocated PA.3 billion for capital spending in 2014 to open new stores and renovate existing ones—a budget that surpasses the PA.Billion spent on capital expenditures in the previous year when they opened 235 new stores.

JEFF experienced significant business growth in various regions: China at 19 percent, United States at 17.2 percent, Southeast Asia and Middle East at 35.3 percent. Particularly noteworthy was Vietnam's outstanding growth rate of 40.2 percent within Southeast Asia.

During the fourth quarter of last year, same store sales across their global network increased by an estimated range of between eight to nine percent compared to the previous year due to higher customer traffic and purchases per store.

JEFF's impressive net profit resulted in a return on equity rate of 21.3 percent—an all-time high over the past fifteen years—compared to the previous year's rate of18 .3percentJEFF operates various brands, including Jollied, Chocking, Greenwich, Red Ribbon, Mange 'nasal', and Burger King. In China, they have Younger King, Hong Chuan Yuan, and San Pin Wang chains. The company has invested in joint ventures in countries like Vietnam, Philippines, Indonesia, Hong Kong, Macaw ,and Cambodia. PEST analysis is used to analyze external factors for each market. Jollied's products are highly demanded in the Philippines due to the high footfall of consumers in their stores daily. Fast-food companies face challenges due to the distinctive geographical landscape of the Philippines. Filipinos can be found in overseas markets such as United States, Hong Kong,Brunet,and Indonesia where Jollibee's stores attract not

only Filipinos but also other Asians. Developing countries' growing economic capabilities provide opportunities for fast-food companies like Jollibee to establish their presence. Therefore,Jollibee has entered the Indonesian market by introducing their Chocking Brand.Additionally,Jollibee acquired 85 percent ownership in Young he King Chain driven by China's potential fast-food market.The success of Jollibee's "longhand-scrap" concept globally may be influenced by social and cultural differences between countries.For example,in China,noodles are preferred over rice.
Foreign consumers may not appreciate the traditional taste of Jollibee's food in comparison to larger global players like McDonald's. Competing in foreign markets adds complexity for Jollibee due to the ever-changing global landscape. Despite being dominant in the fast-food market in the Philippines, Jollibee must introduce their successful local recipe to foreign markets while competing against established players such as McDonald's, Wendy's, and KFC. Estimating costs, risks, and financial viability for each market is crucial for Jollibee as well.

In early 1996, a poultry business in Papua New Guinea approached Jollibee about opening a franchise. This opportunity prompted Jollibee to raise their expansion standards. The country had a population of five million and was only served by one poorly run fast-food chain with three locations. Recently, this chain had ended its affiliation with an Australian chicken restaurant franchise. In a conversation with Kitchener, it was expressed that Port Moresby lacked decent dining options. Jollibee believed they could improve the quality of both food and service to capture a significant portion of the Australian chain's market share and discourage new competitors.

Initially, the plan was to open one store soon in Port Moresby. However, Tingling believed that the franchisee would need to open at least three or four more

locations in order to cover market development costs.
There was uncertainty regarding Papua New Guinea's ability to meet their goal of having 20 stores, which they believed was crucial for entering new markets. In comparison, the Philippines had around 1,200 fast food outlets serving a population of 75 million people. Both countries had similar per capita GNPs of approximately $2,500. Furthermore, there was a suggestion to open a fourth store in Hong Kong. This particular franchise was owned by Jollibee in collaboration with local businessmen and managed by Tommy King, who happens to be Tact's brother-in-law.

The first Jollibee store opened successfully near a major transit hub in the Central district in September 1996. It quickly gained popularity among Filipino expatriates, particularly migrant workers. However, attracting the local population in Central proved challenging for Jollibee. While weekends saw high customer volume as Filipinos gathered to socialize, weekdays experienced decreased foot traffic from local office workers.

To address this issue, two more stores were opened in Central that attracted many Filipinos but heavily relied on Chinese customers. Consequently, these stores generated only about one-third of the sales compared to the first store.

One obstacle faced by Jollibee was hiring local Chinese crew members due to language barriers and concerns about potential embarrassment when interacting with predominantly Filipino and Nepalese counter staff.
Jollibee faced the challenge of weak brand recognition among locals who were more familiar with McDonald's, as it dominated the city. To address this, Jollibee collaborated with Henry Shih, owner of the second store, to launch an advertising campaign. However, the limited funds from the small Hong Kong operation posed a challenge.

In California, Jollibee had plans to open one store

per quarter starting in early 1998 to support the settlers there. They also saw potential in establishing a presence in Kitchener - known as the birthplace of fast food - which could bring them significant prestige and publicity. In order to achieve their goal, Jollibee formed a partnership with Manila-based businessmen who would own 40% of the venture.

Their plan was to establish company stores in California and then expand through franchising in 1999. The confidence for this expansion plan came from Jollibee's success in Guam. While initially targeting the Filipino population, they discovered that their menu also appealed to other American groups. They adapted their Philippine operating methods to suit the high labor cost environment in the US by developing new equipment and cooking processes.

After succeeding in Guam, Jollibee was ready to expand into mainland USA with Daly City chosen as their first location due to its sizable Filipino population and limited fast-food competitors. Furthermore, California had a large population of affluent immigrants from Philippines, making it an ideal market for Jollibee.The menu at these stores would remain the same as those in the Philippines. The plan for Jollibee was to expand both geographically, including regions like San Francisco and San Diego, and demographically by targeting Asian-American and Hispanic-American consumers, along with Filipinos. According to Jollibee International's corporate website, the company currently operates over 50 locations in Brunet, Hong Kong, Vietnam, Saudi Arabia, Qatar, and the U.S. Their goal was to expand nationwide in the U.S., following successful expansion strategies in PANG and Hong Kong. This project received support from Filipino-Americans, interest from local investors, and a desire to succeed in McDonald's back-yard from Jollibee.

However, as stated on Jollibee's website, they have temporarily modified their global strategy and halted international franchising. Currently in the U.S., there are a total of 26 Jollibee stores - 9 in Northern California, 15 in Southern California, one in Las Vegas,and one in New York.