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

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.