Surviving tough times beautifully

MANILA, Philippines - I think almost everyone will agree with me when I say that 2008 was a difficult year. It was the year when oil and gasoline prices soared to record highs. It will also be remembered in history as the year when the US, one of the world’s biggest economies, plunged into its worst economic recession since The Great Depression, and started the chain reaction of what we now refer to as the “global financial meltdown”.

The goal for most companies last year was no longer to grow the business, but rather just to simply stay in business.

A lot of people already advised us to brace ourselves and prepare to end the year miserably since consumers would likely give up their desserts and focus spending on more basic food items. We were discouraged from continuing with our marketing initiatives and proceeding with our expansion plans.

But we at Red Ribbon were not about to throw in the towel just like that. And, it’s a good thing we didn’t.

We surprised everyone when we told them that 2008 was actually a banner year for Red Ribbon. We achieved double-digit growths and still managed to expand our store network to over 200 stores nationwide. What happened? What did we do differently?

Much as I would like to tell you that I locked our Management Committee in a room to brainstorm on new and unorthodox strategies to overcome this challenge, I can’t. I would be lying through my teeth. The simple truth is, what we did was far less dramatic – we went back to basics.

We remembered the key factors that allowed our business to grow over the years and focused our organization on strengthening these fundamentals. For Red Ribbon, our 30 years of existence has been all about delivering ultimate Customer Satisfaction through (a) product superiority and (b) excellent service. We strive to make every celebration more beautiful with a Red Ribbon.

When inflation rates began going up as a result of skyrocketing oil prices, we immediately conducted a series of group discussions to get a feel of our target consumers’ coping behavior and understand their mind set during hard times. We were expecting to hear that they would trade down to cheaper products or stop buying certain “luxuries” altogether. What we learned was a little different. They told us that it is during tough times that people look for the things which can provide them a bit of comfort, such as their favorite desserts, when they are feeling depressed. Also, they would not necessarily trade down to cheaper alternatives or stop buying altogether. Rather, they will be extra conscious of the quality of the products they buy to ensure that they get their hard-earned money’s worth. With this in mind, we made sure Red Ribbon would not disappoint.

Last year, we were unrelenting in introducing delicious and truly innovative products across all our categories. Some of the more notable ones are our Dulce De Leche, S’mores Chocolate Cake, Mango Cashew Roll and our Bangus Ala Pobre meal. All of these products received exceptional quality and taste ratings from our consumers; some even surpassing the ratings of old time Red Ribbon favorites. And, the reason is simple; we stayed true to what consumers have come to expect from Red Ribbon – innovative products that are made only from the choicest, freshest and finest ingredients. In any of the products that we develop and introduce, we spend a lot of effort and resources to make sure that with every bite, consumers will be convinced that there is really nothing like Red Ribbon.

Of course, having the best products was just half of the equation in order to convert Consumers into Customers. We needed to ensure that our stores upped their game in terms of delivering service levels that set the Red Ribbon experience apart from others. And, they rose to the challenge. Products were always available and properly displayed. Customers were greeted with a smile and served on time. Store premises were always kept spic and span.

The combination of Product Superiority and Excellent Service in this industry isn’t a new strategy. It isn’t even mind-blowing. But, I can say this… it works!

However, strategies are only as good as the people who will ultimately execute them. While we aim to make our customers happy, we are also busy in developing programs to make our employees happy. Even in hard times, we did not stop our people development programs. We continued to provide training to further strengthen our team. We invested in introducing many organizational improvements to make our team more focused. We had several national and regional gatherings to motivate our people and strengthen our organization. In good times, it is through our people that we build Red Ribbon stronger. And in hard times, we rely even more on our people to survive and thrive.

The economic forecast for 2009 remains generally conservative, and to a certain extent, gloomy, but we see this as another opportunity to delight our customers and make them feel our commitment to our Mission statement - Red Ribbon is here to make everyone experience the sweetness of life. That’s why in good or tough times, it’s more beautiful with a Red Ribbon.