A certain pizza place we shall now disguise behind the name Norwich Pizza had been acquired by a large food conglomerate we shall call Bumblebee Food Corporation for purposes of discussion. BFC sought to turn Norwich from a simple mom and pop type of operation into a highly profitable nationwide franchise.
It set about doing this by hiring a very prominent ad agency to deliver a strong and appealing message to the public. The firm wisely picked a celebrity, a certain Ms Nonita Flowers, to be in their commercials.
Within months of the launch of the media campaign, sales rose rather well in line with projections made by the company’s bean counters. Unfortunately, after a quarter of stellar performance, revenues started to head south quite dramatically. This puzzled the head honchos at BFC. Everything had been proceeding according to plan until very recently. What had happened?
To investigate and remedy the situation, one of BFC’s vice presidents who successfully steered another major acquisition, the Chun King Express, was brought in. The vice president proceeded to inspect the premises of Norwich. Within a month or two, he had not only arrested the decline in sales, but restored it to its previous trajectory.
So how did he do it?
Well, having cut his teeth in the fast and furious world of Chinese takeaway, the vice president of Chun King knew the importance of maintaining good customer service. This could only be achieved if the stores were equipped with proper equipment particularly in the kitchen. Within the first few weeks of his assignment, the new manager had placed orders for new ovens to replace or augment the standard kit that had been originally installed in Norwich stores, which he deemed highly inadequate.
The capital investment paid off and Bumblebee proceeded to earn a positive return on its acquisition of Norwich, albeit at a lower rate in the first year than previously expected due to the unforeseen expenditures. The vice president was given a fat bonus for his efforts in rescuing the venture. Money well spent from the point of view of BFC’s board and stockholders.
This case study demonstrates the importance of coupling good marketing with good operations. Without a quality product, no amount of spending on ad campaigns could restore or improve the brand’s sinking reputation. In the fast food business, it doesn’t matter how tasty the food might be, if customers have to wait too long, they won’t be coming back.
The same can be said of tourism and travel. The Department of Tourism under Sec Jimenez is looking to increase the flow of visitors into the country with a catchy slogan, “It’s more fun in the Philippines” and the usual slick marketing campaign. It is in talks with Singapore to co-brand the two nations as the “sunshine belt”.
These ideas are brilliant, but the problem is that the Ninoy Aquino International Airport is already operating above its normal capacity with visible signs of wear and tear all too evident. Even with the renovation of Terminal 1 and the recent conclusion of the decade’s long case involving Terminal 3 paving the way for the full use of it for international flights, these developments will not unclog the bottlenecks due to the limited number of runways. No amount of renovations will fix that as there is no more room for expansion. As arrivals are slated to rise from 3.9 million in 2011 to 4.2 million this year, how will the airport cope?
This problem is compounded by the growth in domestic flights. During my recent visit to the Philippines, I spent an hour waiting at the departure lounge of the domestic terminal in Manila for a flight to Kalibo. The reason given for the delay was “heavy congestion”. After boarding the plane, we were grounded for close to another hour waiting to be cleared for take-off. As the plane finally taxied onto the runway, I stared at my watch, then at the frustrated businessman seated next to me.
“Only two hours delayed, not bad,” I jokingly uttered. He laughed. That was all we could do to cope with the situation.
The same thing occurred on the way back. As the voice boomed in the speaker stating that our flight was behind schedule, a power outage stopped it in mid-sentence. It was nearing nightfall and the blackout was quite a shock to the passengers.
“It’s more fun in the Philippines!” I heard a man snicker in the darkness.
Meanwhile on a separate road trip up to Northern Luzon, our convoy experienced a very weary trek. Each town we passed through, every ten kilometres or so, caused us to slowdown as their town hall plazas, central markets, public schools and cemeteries were all located along the main artery causing both vehicular and pedestrian traffic.
The road widening still unfinished due to the slow spending rate of public works projects in 2011 delayed our trip in certain sections. We were told that an extension of the Subic-Clark-Tarlac Expressway would provide better access to the North bypassing most of these populous towns from Tarlac to La Union, but our guide said this had been halted by the new administration. It was clear though that such a road project was long overdue.
That’s as far as infrastructure and transport corridors are concerned. We haven’t discussed the problem of environmental degradation. In both Baguio and Boracay where I took my family, the effects of what urban planners call regional agglomeration were quite evident. Tourism was enticing a major “big box” shopping center to expand in Baguio. Such a move could upset the already congested situation, worsening the air quality, not to mention the aesthetic and cultural appeal of the tourist destination.
Meanwhile, I was shocked to see D’Mall in Boracay. It sort of depressed me actually. I ended up skipping lunch because I had lost my appetite after seeing this transplanting of Divisoria or Baclaran to the once pristine island. It made me wonder if there was such a thing as having too much fun in the Philippines.
If tourism was sold to our government planners as an environmentally safer path towards development compared to industry or mining, I say, think again. There are no free lunches as economists are wont to say. We can’t expect rapid development not to have an impact on the natural habitat. It would be dangerous to think so.
I actually prefer having a greater emphasis on industry, because you can at least concentrate the site of industrial projects within a confined area and choose the type of industries (say light industries or agro-industrial ventures with a smaller ecological footprint) or provide incentives and regulations to govern the heavy polluting ones.
The Philippines has a lot of catching up to do in this area. I am not simply speaking of tourism now. Wasn’t inclusive, sustainable growth and development at the heart of PNoy’s social compact though? This administration like its predecessors is fond of catchy slogans beginning with Daang Matuwid (Righteous Path). It’s more fun is just the latest. But apart from having these platitudes, where is the plan? We have yet to see a blue print for developing the infrastructure, the security, the regulations and incentives that would responsibly manage the growth in our economy? The case of Norwich must be heeded; otherwise, the Philippines could remain grounded for a bit longer.