Mark Ritson: Ever heard the one about the Singapore noodle salesman…?

This is the touching story of the world’s first Michelin-starred street food chef, who in spite of his three-hour queues has hopelessly failed to grasp the concept of supply and demand.

Ritson_despair

Chan Hon Meng is a busy man. He rises early each morning and spends the first five hours of the day preparing his rice, pork and chicken. Then, for the next 10 hours, he cooks and serves this food at his tiny food stall in Singapore.

It is a routine that Chan has become accustomed to. A Malaysian by birth, he moved to Singapore in the 1980s to become a cook. He learned his culinary skills from a Cantonese chef, so in 2009 when the opportunity arose to open his own food stall, he named it Hong Kong Soya Sauce Chicken Rice and Noodle. I can already sense the collective sigh emanating from the design firms around Clerkenwell but it is clear that Chan favours a more prosaic, old-school approach to brand naming.

When Chan received an invitation from Michelin to attend its inaugural awards night in Singapore last month, he was certain it was a joke or some kind of mix-up – surely hawkers like him were not eligible for Michelin stars? But it was a genuine invitation and Chan’s stall really had been awarded its first Michelin star. At just S$2 a dish (about £1.10) and S$16 (£8.80) for a whole cooked bird, his is easily the most inexpensive Michelin-starred dinner on the planet.

Clearly, the award is a great honour but it also creates a classic marketing dilemma. The Hong Kong Soya Sauce Chicken Rice and Noodle stall was always popular but since the award and the global coverage that followed Chan’s tiny place has been overwhelmed with customers. The queues last week snaked out behind the 10 square metre stall as far as the eye could see.

Singaporeans are notoriously passionate about food and similarly aroused by anything fashionable, so the combination of these two elements manifesting in one central location has attracted hundreds of locals to Chan’s stall.

And then there are the food tourists from overseas visiting Singapore for a few days who have read about this little authentic food place that has a Michelin star and charges only two bucks a head. Add the locals to the visitors and you have a recipe for chaos. Customers were reportedly waiting for over three hours to sample Chan’s chicken last week.

Chan now has a marketing problem on his hands. He finds his food stall trapped between the jaws of two ancient elasticities as old as commerce itself. Amazing food, sudden publicity and ridiculous underpricing have created an enormous price inelasticity of demand for his stall.

Chan could literally add a zero to his price list and that long line of people standing outside his stall would watch the price change and remain in place with barely a whimper. To compound things further, Chan is also suffering from severe supply inelasticities too. His tiny stall was already operating at close to full capacity and his new-found fame has seen production increase from 150 chickens to 180 per day – but that’s about as big as it can go.

At this point, any well trained marketer will have their hand in the air and will be yelling: “Me! Ask me! I know! I know!” Inelastic supply and inelastic demand are usually God’s way of telling you to put your prices up. You put them up because demand will remain undiminished. You put them up because you are limited by the stall’s square footage and the number of chickens you can cook each day. You put them up because you can and because when you have world famous food to sell, you should charge for the experience.

Here, however, we run into a small Chan-shaped problem. The newly starred chef is adamant that he will not increase his prices. And even if he does eventually succumb to pricing pressures, the rise will be minimal.

Chan told the local newspaper The Straits Times that “customers will definitely not have to pay more than S$20 for a chicken”. Given that’s only about two quid more than he was charging before his global fame and that he is limited to 180 birds a day, it’s unlikely that Chan’s new pricing regime will have much effect on his bottom line.

It is also not going to do much to the other line – the giant army of sweaty punters standing patiently outside his stall waiting to be fed. Even after his potential price rise, Chan’s chicken will remain the cheapest in the shopping centre, despite the fact that he is the one with the Michelin star.

It’s a good job Chan Hon Meng is such an amazing cook. Because he is fucking hopeless at pricing. There is nothing – nothing I tell you – sadder than underpricing. You leave money on the table. You disappoint customers. You undermine the brand. If you have earned the right to charge more, charge it. And take pride, not only in your splendid product, but also the splendid price tag that comes with it.

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Comments
  • Claire 8 Sep 2016 at 9:54 am

    Can I ask a genuine question about loyalty though? Is there some way he could/would/should reward his loyal customers who might not be able to afford a price rise – but who got him to this position in the first place?

    I know he’s a marketing disaster but I already like this guy.

  • Matthew Knight 8 Sep 2016 at 4:55 pm

    Marketing disaster?? He’s a not a brand – he’s a sole trader doing what he thinks is right. i don’t think he’s looking to grow his customer base or become something larger. he has had recognition of his business through the michelin star, it wasn’t something he sought out to achieve. If he was looking to ‘growth engineer’ his business, your advice is probably right – but there is something way more authentic and wonderful in this story, that someone humble and passionate about what he does was recognised, without any marketing strategy or growth hacking. he just did something good for his customers. we can all learn a lesson from that.

  • Zbiggy 9 Sep 2016 at 8:48 am

    Mark, you regularly talk sense, challenge and make people think but in this case you show via your article what is wrong with so called marketing theory and the fact it has become obsessed with pleasing the “Bean Counters” rather than the Customer, who actually pay the wages.

    I find the dudes approach incredibly refreshing and agree with Matthew and Claire’s comments, we should be celebrating people like Chan rather than berating them. People who stand by their values rather than exploit their talents and forget those that made them successful. Matt Johnson Aka “The The” summed it up brilliantly in his song “Twilight of a Champion” far better than I could.

    “A big shot, overlooking this black iron skyline,
    Surrounded by his symbols of prosperity,
    Sits back in his new leather chair, ripped off the back of some unfortunate beast. I’m smiling through my teeth.
    Anybody can be a millionaire,
    so everybody’s gotta try but by the laws of this human jungle only the heartless will survive & down there–but for the grace of god–go I……..

    Y’see I sold my soul, to pay for my dinner.
    My stomach grew fatter, but my heart grew thinner,
    I ain’t foolin’ I’m fallin’, I wasn’t wicked, just weak,
    I ain’t lyin’ I’m dyin’, crippled by deceit”

    For me marketing is about adding value not exploiting it. So Amen to people like Chan.

  • Alastair Johns 9 Sep 2016 at 8:52 am

    The dude is just selling a bit of street food. I don’t think he knows what inelastic supply and demand is and I doubt he wants to. And so he shouldn’t.

    • Verity 15 Sep 2016 at 9:12 am

      Haha, short and straight to the point!

  • Shaun Whatling 9 Sep 2016 at 10:51 am

    Does he think he has a problem or just you? I have to assume you’re writing tongue in cheek as there are so many unchallenged assumptions here that surely can’t be out of your awareness…

  • Jeremy Detwiler 9 Sep 2016 at 2:11 pm

    The ultimate authority must always rest with the individual’s own reason and critical analysis. – Dalai Lama

    That being said, I do agree with Mark that 1 of the many ways Chan could take pride in his accomplishment would be to raise his prices. It does add to an experience when the experience itself is not so easily attainable.

  • AHA 11 Sep 2016 at 1:22 pm

    If he’s adamant that he wants to keep prices low he could expand his stall & also operate 24/7. Better still, he might open more stalls in order to satisfy demand. The trick is that he’d have to take on a new challenge – training up a small, hand-picked group of apprentices to cook as well as he can. That will take time but it doesn’t sound like he’s in a hurry. Spread the love – he may find training a new generation of Michelin quality chefs even more rewarding than delighting his customers.

  • Neil Anderson 12 Sep 2016 at 12:41 am

    Perhaps he could keep his prices the same, but temporarily request a sizeable charity donation to help shorten the queues during this fad period. He seems like the kind of man that would be happy to help others. Perhaps S$20 for a chicken, S$100 donation to a charity of his nomination.

  • Kelvin Lee 12 Sep 2016 at 11:29 am

    “He is f**king hopeless at pricing.”? What great choice of words and online class you show – considering the influence you wield in the world of marketing.

    If you bother to understand his upbringing, culture and environment he works in better, he doesn’t CARE for raising prices. He just wants to carry on as usual, serving food for patient folks who queue.

    You’re approaching this from a typical western, capitalistic point of view, that earning the right to charge more, means you NEED to charge more. Let’s throw in a few buzzwords like ‘demand/ supply’, ‘maximise revenue’, ‘ROI’, ‘brand equity’ etc etc.

    I am almost certain he doesn’t CARE about the Michelin star. Life will go on for him, because his world values are about hard-work, humility and keeping it real.

    By the way, he doesn’t care what you think. There are more important things in the world, and it’s not always about marketing and maximising turnover.

  • joelhopwood 13 Sep 2016 at 9:19 am

    Maybe his objective was not to make more money but to become famous. And thanks to your column Mark, that has happened.

  • m ritson 14 Sep 2016 at 4:04 am

    Loving all the comments but never seen such a soft response in a long time. We are meant to be marketers. We are meant to be about value and optimum pricing. For both the company and the customer.

    There is no honour in working 15 hours a day, 7 days a week with a young family – which Chan Hong Meng has.

    There is no honour in expecting customers to wait for 3 hours for their meal.

    There is no honour in disappointing many customers who cannot wait that long or who discover the food has sold out long before they get to the front of the line

    There is no honour in creating a long line of impatient customers who crowd out the rest of the mall and stand in front of other stallholders locations blocking them from their trade.

    All this soft, horseshit about it being about more than charging a higher price. Where are the true marketers out there? The right price is good for the company and for the customer. Where did all the softies come from?

    Pah!

    • Simon Ly 12 Oct 2016 at 10:01 am

      Two things. 1. He’s not actually that good in comparison to those around him. The competition in Singapore is such that he’d quickly lose those queues from locals if his price went up. There’ll be 4-5 similar stalls in the same food court let alone 10 minute walking distance. The novelty of the star would soon wear off. 2. He wasn’t thinking like a marketer, he was thinking like a business owner. He’s selling his recipe for c. £1m.

  • Verity 15 Sep 2016 at 9:08 am

    I find this article a little distasteful. The owner of this business is living his life and running his business the way he wants to – in his own right. He may be living his dream. He clearly does not care for money, just for cooking. He is a success in his own eyes not tainted by greed. Why does this make him a disaster?

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Tom Fishburne is founder of Marketoon Studios. Follow his work at marketoonist.com or on Twitter @tomfishburne See more of the Marketoonist here

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