How Come Mcdonald'S Never Beat Jollibee As Market Leader?'
How Come Mcdonald'S Never Beat Jollibee As Market Leader?'
How Come Mcdonald'S Never Beat Jollibee As Market Leader?'
Q: We read your column last Friday. It was about how a local brand can become
a global brand like Jollibee assuming that Jollibee qualifies as a global brand.
But what about the case of a global brand that has never been able to beat a local
brand as market leader? Is this not true with McDonald’s? It has never surpassed
Jollibee as fast food market leader in terms of market share.
We heard that this is true only for the Philippines. Is this because Jollibee had
established its No. 1 position long before McDonald’s opened here? In other
words, is this following one of Al Ries’ “22 immutable marketing laws?” That’s
the one which says: “Being first is better than being better?”
A: You are raising at least two good questions. The first is about market
leadership—is market share the accepted and valid metric of market leadership?
The second interesting question is about the true reason for McDonald’s’ failure
to grab market leadership from Jollibee.
“What is not measured is not managed,” Tom Peters told his audience. When his
CEO audience told Professor Peters that they all have “scorecards,” the Harvard
professor reminded the CEOs that they then ought to mind how correct and valid
are their metrics. As a follow-up, he added: “What is not well measured is not
well managed.”
The consumer behavior logic serving as the basis for this expectation says this:
“Every external change in consumers’ buying for a brand is preceded by an
internal change in them.”
In other words, when consumers lessen their buying of your brand, that comes
from their lowered top-of-mind awareness for it. If you as a consumer reflect on
this, you’ll find that there’s a compelling experiential validity in it.
There’s actually a third market leadership metric although it has not been as
accepted as the share of mind metric. This one has come by the term “share of
heart.”
It was in 1997, when Michael Treacy and Fred Wiersema published their best-
selling book, “The Discipline of Market Leaders,” that this metric came along.
This book coined and introduced the concept of “customer intimacy.” A year
later, Professor Wiersema’s book (also a best-seller), Customer Intimacy,
proposed “share of customer” as the metric for customer intimacy. Later,
Professor Philip Kotler coined the term “share of heart” as that metric. Today,
several formulas for this metric are available. The final formula has yet to come
to a “generally agreed measure.”
In its absence, it makes more practical marketing sense to stick to the first two
market leadership metrics of share of market and share of mind. Your periodic
UAI survey provides you with just as periodic a set of measures of them.
If we can uncover how Goody’s did it and then compare this causal factor to how
Jollibee stayed ahead of McDonald’s in the Philippines, then we have succeeded
in insighting the true story and the true key to the puzzle. According to media
reports, in Greece, it was Goody’s persistence tailoring of its fast-food menu
items to the local taste and preferences of the Greeks that slowly but surely drew
more and more of the fast-food customers toward Goody’s and more and more
away from McDonald’s. McDonald’s followed its founder’s (Ray Kroc)
standards for fast-food menu.
Let’s now go back and look at the Philippine fast-food market. Taste tests after
taste tests have shown that Filipino fast-food customers prefer, for example,
Jollibee’s hamburger with its cooked-in taste versus McDonald’s’ original
“bland”-tasting hamburger. Many say that McDonald’s was slow to learn this
and adapt. The truth is that it’s the “bureaucracy” at Headquarters in Oak Brook,
Illinois, that was responsible for why McDonalds Philippines took such a long
time to come out with a “built-in taste” hamburger to challenge Jollibee’s. So, a
key factor in Jollibee’s market share leadership comes from its “customer
intimacy,” its tailoring its menu items to the changing Filipino palate.
That happens to be the very reason how in Greece, Goody’s was able to overtake
McDonalds as fast-food market leader even though in Greece it was McDonald’s
who was first in the market. This insight then negates the proposition that it was
Jollibee’s first mover advantage that’s responsible for preventing McDonald’s in
taking over market leadership. In sum, it’s adhering to “consumer centricity,” to
honoring the “consumer-is- king” rule that’s the secret to market leadership
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