Davids AND Goliaths: How BIG and SMALL brands can learn from each other


Davids AND Goliaths: How BIG and SMALL brands can learn from each other

Halo-halo had something to do with it. 

The colorful, jolly layered dessert is a dream for those who have a sweet tooth and among Moms, but not for the reason that you may imagine.

As Alaska Milk Corporation discovered in the early 2000s, the majority of micro-enterprises in the country were food businesses owned by housewives looking to augment the family income, and operated right out of the home. 

These nanaypreneurs often included halo-halo in their menu offerings because it is easy to make and virtually every region in the country has their own favorite version. Many of these nanaypreneurs used Alaska milk products for their halo-halo and other delicacies. Sensing a gold mine, Alaska not only provided milk supplies for their food products, but also marketing advice and planning. Alaska even organized events for these business owners to sell their wares. The company launched the Halo-Halo Negosyo Festival in the summer of 2003 to staggering success. It is now an annual event in at least 60 areas around the Philippines.

According to Blen Fernando, VP for Marketing for the Alaska Corporation, not only has this support launched many successful micro-businesses, it has also revived and boosted the national profile of the humble halo-halo as well as other regional delicacies with halo-halo being offering across fastfood restaurants to high-end hotels. 

It was a win-win situation and a classic example of how big corporate giants and small mom & pop stores can come together and learn from each other. As shown in the PANA General Members Meeting (GMM) last June, there are many other examples of David and Goliath coming together—and thousands of opportunities.

Big and small working together

In 2016, the Philippine Statistics Authority reported that there are 915,000 registered businesses in the Philippines. 

A whooping 99.57% are what are called MSMEs—micro-, small-, and medium-sized enterprises. Dissect that number even further and you’ll see that 89.63% of that are micro-businesses run by nanaypreneurs. These are mom-and-pop businesses where the workers are family members and other relatives, the supply and production chains are literally in-house, and where there is only a small amount of business volume.

How do these micro and medium businesses survive in a marketspace alongside larger companies that produce the same goods and services at a faster rate and at less cost? 

The answer is: they don't. In fact, they don't have to.

In the case of the Alaskapreneur campaign, Fernando says its success was due to contributions from both Alaska and the nanaypreneurs themselves.

Alaska provided these micro-businesses with a framework that allowed for solid networks with suppliers and other businesses. The milk brand giant also shared best practices on clear communication and storytelling. With the advent of technology, this evolved into selling authenticity using social media and other digital avenues. 

For their part, nanaypreneurs who have direct interface with their consumers, lent on-the-ground knowledge that shaped the campaign design to be inclusive and reflective of Filipino habits, rituals, cultural quirks. 

Potential in the Pivot

On the other hand, sometimes it's good to be a plucky David going up against an entrenched Goliath. Especially if you are talking about the disruptive model, where outsiders in an entrenched industry create a new market and value network that disrupts.

Mercato Centrale, the food and lifestyle night market business is the Philippines' answer to the hawker markets of Singapore, Bangkok, and Taipei. In 2010, Mercato Centrale opened its first night market in Bonifacio Global City. Later, other night markets began popping up in different parts of the metropolis.

Mercato Centrale was a market disruptor said television presenter, and self-described serial entrepreneur RJ Ledesma who started the Mercato Centrale with his partners.

Mercato Centrale was a smashing success, taking advantage of the BPO community's work hours as well as the metropolis's traffic situation, with peak hours hitting at 6 pm to 8 pm as people wait out rush hour. It was so successful it also spawned other night markets in competition.

New night markets and burgeoning food-truck businesses compelled Mercato Centrale to rethink and refocus, and reinvent itself as a food business incubator. To date, around five hundred food entrepreneurs have come and gone through Mercato Centrale, capitalizing on Mercato Academy—Mercato's vast network of food and equipment suppliers, operations experts, financial and marketing consultants, and investors.

According to Ledesma, the way to survive is to pivot—to keep reinventing the business. "Remember. It is not a failure, it's a pivot," said Ledesma.

GoNegosyo, Go Kapatid

This is where the Kapatid Mentor ME program (KMME), developed by the Philippine Center for Entrepreneurship (GoNegosyo) comes in. The KMME is part of a three-pronged initiative designed to help micro- and small-sized enterprises manage by guiding them through the nitty-gritty of running a business.  

There is one area though where big corporations have a lead over SMEs: sufficient capital and access to market through wide distribution networks. While MSMEs account for 99% of the total number of establishments in the Philippines; however, their contribution to the country's GDP is around 35.7%. 

The KMME program, through weekly mentorship sessions, teaches modules in subjects such as marketing, operations management, product development and innovation, among others. The program is wildly successful and expanded its operations from Negosyo Centers in 11 regions in 2016 to virtually nationwide by 2018. KMME has also launched a Mentor Me On Wheels offshoot, with a rolling caravan bringing mobile classes so far through Metro Manila and the CALABARZON region. In the works is putting these business tips in the hand of the entrepreneur through the launch of a Mentor Me app.

The KMME program, and ultimately GoNegosyo, furthers the goal of establishing a favorable entrepreneurial climate in the Philippines, and with the big brands giving their little brothers and sisters a helping hand, it may actually be achieved.