MANILA: Fast food chains are stepping up marketing activities in
the Philippines, where a fragile economy has created growth
opportunities for this segment of the food and beverage business.
McDonald's has appointed DDB to handle its 20th anniversary campaign,
while the third-ranked Burger King has awarded its advertising contract
to Campaigns & Grey.
The fast food market is dominated by local player Jollibee Foods, which
is estimated to control 46 per cent of the 60 billion peso (USdollars
1.3 billion) business with its Jollibee and Chowking brands.
McDonald's is said to have 29 per cent of the market and Burger King at
just three per cent.
McDonald's decision has come as a surprise since its agency of record
Leo Burnett, the other agency in the pitch, was expected to win on the
back of a strong track record for the hamburger giant.
The two agencies have been battling around the globe to expand their
share of the McDonald's business.
A DDB source close to the pitch said its recent win has dealt a blow to
Burnett because the project is earmarked as one of McDonald's high
profile promotions in the country this year.
Despite the appointment, Burnett remains the brand steward.
A source from the agency shrugged off speculation that DDB was winning
the upper hand in the Philippine arena in the long-running DDB-Burnett
battle for the McDonald's account globally.
"Shifts will occur. It's normally a question of when, but it ain't
happening now," the source said.
Meanwhile, Campaigns outgunned Publicis AMA, Santiago & Puno Advertising
and incumbent Lowe-Lintas for the Burger King brief.
Campaigns had been doing promotional work for Burger King since December
last year, but had to wait until this year for head office approval to
handle local advertising, said the agency's account manager Jev
Ramos.
Both appointments were sealed amid intensifying competition in the fast
food market: McDonald's is said to be investing USdollars 50 million to
expand its presence, while Burger King's agency switch is in line with
the more aggressive advertising stance it has taken since mid-2000.
Burger King is looking to Campaigns to help it improve itslow market
share. It plans to focus on its value meals as well as expand marketing
efforts to provincial cities.
Campaigns' general manager and chief operating officer Angelito
Pangilinan said services will include advertising as well as PR to
introduce Burger King in the market, especially in the kids segment, and
expand its appeal to the mass consumer market.
Burger King is operated through a franchise held by Ayala Corporation's
Pure Foods Unit. It is understood that Ayala intends to keep the
franchise even after it sells off Pure Foods.
Since making its menu more affordable, Burger King has succeeded in
pinching market share from Jollibee, according to market observers.
Along with stepping up its marketing, the chain plans to increase the
number of outlets from 24 to 36 in the next three years.
- Additional reporting by Lee Chipongian.
