While celebrating its 20^th anniversary, Canadian burger chain Triple O’s announced its plans of further expansion in Asia, including the opening of 4 additional outlets in Hong Kong. Since its arrival in Hong Kong 2004, Triple O’s has already opened 6 shops and these shops demonstrated notable growth and revenue. Triple O’s franchisee Cynthia Suen initial decision of expanding into Hong Kong was prompted by the large numbers of Hong Kong residents that traveled to, or stayed in Vancouver since the 1980s. The high revenue reports from Hong Kong outlets has proven Suen’s decision to be profitable. In fact, Triple O’s president Warren Erhart stated that “Asia has some of our top locations. Our restaurants in Pacific Place and Shatin do more sales on a per-unit basis than any of our stores in British Columbia”.

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However, an increasing number of burger chains with a value proposition similar to that of Triple O’s – an emphasis on ‘quality burgers’, are beginning to expand into Asia, increasing the competition Triple O’s will face. Shake Shack has announced its plans to open its first Hong Kong outlet in 2018 and complete a total of 14 outlets by 2027. Although Triple O’s have the advantage of high brand recognition in Hong Kong, the entry of companies like Shake Shack will bring threats to Triple O’s by providing more substitutes.

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Foreign markets in many cases are similar to a big pie, and with more players the difficulty of securing a large piece will become increasing difficult. Preksha Singhvee’s blog on international business provides insight into this issue by suggesting how additional market research may be required to understand the new set of consumers with somewhat different values and experiences. Additionally, Singhvee’s blog noted that international expansion often involved the redesigning of good or services, which aimed to target this new consumer segment with different culture and taste preferences. This strategy is used by many burger chains including Shake Shack, who plans to increase the variety of chicken products offered in their Hong Kong outlets. In contrast, Triple O’s did not, and does not plan to adjust its menu or flavours to fit the preferences of the Hong Kong market. Although Triple O’s has seen significant success in its Hong Kong outlets, with increasing competition, it may need to reconsider its points of different to stand out from the variety of burger chains.

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Less than a week ago, the 2017 Nobel prize in economics was awarded to Richard Thaler for his contributions to the field of behaviour economics, more specifically for the development of the ‘nudge’ theory. The field of behaviour economics focuses on the prime assumption of traditional economics – that humans always make rational decisions and proposes the contradictory, that people make irrational decisions all the time. Thaler’s nudge theory suggested the idea that small incentives, such as tweaking the working of tax demands can influence people’s response. Applications of the theory can be seen in how by changing the wording of tax reminder letters could lead to increases in HMRC takings in Britain. Notably, Thaler previously commented on how Brexit illustrates how British voters went for an economically irrational choice due to incentives from elites and the mainstream media.

Retrieved from: https://voiceofpeopletoday.com/richard-thaler-wins-2017-nobel-economics-prize/

As a blend of economics and psychology, behaviour economics provides insights that could be applied to marketing strategies. Loss aversion is the mentality where consumers are more willing to avoid loss than pursue gains. Gift with purchase is a strategy that utilizes loss aversion, as consumers will be more willing to avoid the loss of a free gift than to gain the savings brought by discounts. While insights gained from behaviour economics doesn’t necessarily help a brand build its value proposition or reputation, it can help some brands win the active consideration stage of the consumer decision journey. Ultimately, by utilizing the insights from behaviour economics, the effectiveness of marketing strategies could be augmented.

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