Kotler ASEAN
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Transcript of Kotler ASEAN
Philip KotlerS.C. Johnson & Son Distinguished Professor of International Marketing
Kellogg School of Management, Northwestern University
2
Why ASEAN?
ASEAN Community 2015
ASEAN Regional Marketing
Contents
3
Why ASEAN?
ASEAN Community 2015
ASEAN Regional Marketing
4
Robert J. SamuelsonNewsweek columnist
“The World is Still Round”
“The World is Flat”
Thomas L. Friedman New York Times columnist
The Paradox of Globalization vs. Localization
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Globalization
Localization
Regionalization
Regionalization: The Right Balance
ICT has allowed wide information access. Goods and services can move cheaper thanks to
cheap transportation and ICT. The world is more borderless. In a flat world, competition searches for lowest
cost.
National borders still have economic meaning. National markets exist and are defined by
psychology and politics. National economic and political setbacks can
threaten globalization.
Convenience of flows of information, goods, services, and people within the region
Relatively similar psychology and national interest within region
6
The paradox has forced countries to form regional blocs
Source: Wikipedia.com
7
Regionalization of Asia
8
Regional Blocs, including East Asia will be prominentPrincipal blocs will be Europe, East Asia and the Americas.
The 21st Century is the Asian Century!
Asia will be almost half of the world’s economy by 2020
Global View of Asia
9
Asia Pre-Crisis: The Flying Geese
Note:“Flying Geese” is a concept developed by Kaname Akamasu that best describes the economic structure of Asia before the crisis.
The formation resembled flying geese, headed by Japan, while the rest of the group followed. Countries toward the front tend to transfer “older” industries to countries at the back.
Before the crisis, “the flying geese” phenomenon was soaring throughout Asia and influencing the Pacific Rim economies.
10
Asian Economic Crisis in 1997-1998: The End of “Flying Geese”, The end of the good old days of the Asian miracle
But the crisis put an end of “flying geese”.
Source: BBC
Asian Crisis
11
After the crisis, squadrons of the former flying geese, who increasingly drive regional integration.
SAARC Squadron
ASEAN Squadron
China Squadron
Korea Squadron
Japan Squadron
Asia Post-Crisis: The Regional Squadrons
12
Chindia, where the world's workshop meets its office
Manufacturing giant with the lowest prices
Hybrid communist-capitalist model that enables development
Solid primary schools Infrastructure that lures foreign
investment Good distribution of wealth with
higher per-capita income
Strong technology and service industry
Relatively efficient capital market
Strong private sector and legal framework
Younger workforce Growing population Great university system Strong entrepreneurial culture Attracts higher prices
Red tape, corruption, tough labor laws and bureaucracy all deter investment
Woeful infrastructure Lackluster primary education
system Exclusive growth environment
to the rich The privatization of key
industries has stopped
Heavy reliance on low prices Weak financial system Inefficient capital system Slow population growth
China India
Stre
ng
ths
Weakn
esses
Stre
ng
ths
Weakn
esses
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How should ASEAN ride the waveof the rising East (read: Chindia)?
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ASEAN Countries at a Glance
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The Rising East: Threat or Opportunity?
Threat Opportunity
ASEAN is the only region capable of being in the
driver seat of the Greater East Asia integration*
Individual countries in ASEAN are nothing
compared to Chindia
ASEAN Integration
* ASEAN is the first to seat ASEAN countries together with China, India, Japan, South Korea, Australia, and New Zealand, as well as Russia (as an observer) in one table during the first East Asia Summit.
16
Initiated by ASEAN, the first East Asia Summit held in Kuala Lumpur, Malaysia, in December 2005, brought together leaders of the former flying geese, with the objective to establish the East Asia Free Trade
Area by 2015 and moving towards the New Asia.
(Observer)
The First East Asia Summit Driven by ASEAN
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Why is ASEAN in the Driving Seat of the Greater East Asia?
Neutral Position
ASEAN
High Bargaining Power
Attractive Single Regional Market
Competitive Regional
Production Base
Huge market High
consumption Less
competitive
Smooth flow of goods, services, and people under FTA
Abundance of natural resources
Low labor cost
ASEAN is not considered a “threat” to China, India,
Japan, South Korea, Australia, and New Zealand
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Why ASEAN?
ASEAN Community 2015
ASEAN Regional Marketing
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Single Regional MarketRegional Production Base
The Peaceful, Prosperous, and People-Centric ASEAN
ASEAN Security Community
(ASC)
ASEAN Economic Community
(AEC)
ASEAN Socio-Cultural
Community (ASCC)
ASEAN COMMUNITY 2015
Towards ASEAN Community 2015
Dual Track Strategy
Production/Supply Consumption/Demand
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What does ASEAN Integration Mean?
Tariffs will be eliminated and non-tariff barriers will be gradually phased out
Rules and regulations will be simplified and harmonized
ASEAN investors will be permitted to invest in sectors formerly closed to foreigners and the services sector will also be opened up
All barriers to the free flow of goods, services, capital, and skilled labor
are removed
The region will become a more level playing field
Applicable international standards and practices are followed, and policies on intellectual property rights and competition are put in place
Regional infrastructure will be more developed with the expansion of transportation, telecommunications and energy linkages
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Four Key Success Factors of ASEAN Integration
Rigorous Focus on High-Impact Sectors
Source: McKinsey&Company, ASEAN Competitiveness Study, 2003.
Workable Institutions
Continued Support by ASEAN Leaders
More Effective Public-Private Collaboration
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Corporate Trends Supporting ASEAN Integration
Global trends in manufacturing indicate a shift towards adopting flexible production techniques and integrated
production chains
It is no longer cost effective for all manufacturing activities to be done in in-house or in a single country
MNCs are integrating their manufacturing activities across several locations
MNCs are not only seeking large consumer markets but also regional sites where they can establish efficient production networks
Regional Production Base
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Potential Cost Savings from ASEAN Integration
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Benefits to MNCs Targeting more sales
volume in the ASEAN market
Components procurement on an ASEAN-wide basis
More product specialization to achieve economies of scale
Greater emphasis on profitability using ASEAN-wide operations
Benefits to Local Companies
More export opportunities to ASEAN market
ASEAN-wide expansion opportunity for corporate growth strategy
Technology and financial support opportunities from MNCs
ASEAN-wide pool of talent
A Balanced Approach is Needed
A Balanced Approach
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Why ASEAN?
ASEAN Community 2015
ASEAN Regional Marketing
26
27
BRANDBRAND
Brand Integrity
Bra
nd Im
ageBrand Identity
Positioning Differentiation
Brand
Being Strategy Core Tactic
Value Indicator
What is Marketing?
28
(mind-share)STRATEGY
(market-share)TACTIC
Differentiation
'CORE' TACTIC
ProcessVALUE
'ENABLER'
1 2 3 4 5 6
7
8
9
VALUE(heart-share)
Explore Engage
Execute
Positioning'BEING'
STRATEGY
Nine Core Elements of Marketing
S T
V
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LOCALS LOCALS
MULTI-NATIONALS
ASEAN
(1) THE LOCAL CHAMPIONS (2) THE LOCALS GOING ASEAN
(3) THE MULTINATIONALS
FOCUSING ON ASEAN
Three Types of ASEAN Marketing Companies
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Local Champions
SPlay small by serving niche markets
TAddress the local needs and wants
V Maintain high level of customer intimacy
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BRANDBRAND
Brand Integrity
Bra
nd Im
ageBrand Identity
Positioning Differentiation
Brand
Malaysia’s largest and most innovative and issuer of niche
cards
Selection of cards suited to niche segments
Early adoption of new card technologies
MBF Cards of Malaysia
MBF Cards
Local Champions
32
BRANDBRAND
Brand Integrity
Bra
nd Im
ageBrand Identity
Positioning
Differentiation
Brand
The bakeshop with international
standards catering to Filipino taste
Varieties of Philippines original bakery products and cuisine
Understanding of Pinoy values and sentiments
Goldilocks of the Philippines
Goldilocks
Local Champions
33
BRANDBRAND
Brand Integrity
Bra
nd Im
ageBrand Identity
Positioning Differentiation
Brand
The convenient gift and souvenir
options of hand-made premium
cakes, kueh, and cookies
High quality hand-made products with attractive and exclusive packaging
Convenience for order, delivery, and collection
Gift voucher packages
Bengawan Solo
Bengawan Solo of Singapore
Local Champions
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Locals Going Regional
STranslate the regional positioning to local context
TEnsure regional visibility and availability
V Build regional brand
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BRANDBRAND
Brand Integrity
Bra
nd Im
ageBrand Identity
Positioning
Differentiation
Brand
The affordable core essence of energy
drink for core generation
In sachets, not in bottles
Generation Biang (core generation)
Large retail distribution networks
Extra Joss of Indonesia
Extra Joss
Locals Going Regional
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BRANDBRAND
Brand Integrity
Bra
nd Im
ageBrand Identity
Positioning
Differentiation
Brand
Food houses that combine West and
East
Extensive Western and Asian (especially Thai) food and coffee menu
Wild Wild West name and décor
Large chain of outlets
Black Canyon of Thailand
Black Canyon
Locals Going Regional
37
BRANDBRAND
Brand Integrity
Bra
nd Im
ageBrand Identity
Positioning
Differentiation
Brand
ASEAN no-frills and fun low-cost carrier
Low-cost structure Fun internal culture
AirAsia of Malaysia
AirAsia
Locals Going Regional
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MNCs Focusing on ASEAN
SCoordinate the regional strategy
TExecute the local customization
V Maintain the consistency of the global value
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Strategy Tactic Value
GlobalOffice
(Conceptor)
RegionalOffice
(Supervisor)
LocalOffice
(Operator)
Strategy Tactic Value
GlobalOffice
(Composer)
RegionalOffice
(Conductor)
LocalOffice
(Improviser)
ConsistentGlobalValue
CoordinatedRegionalStrategy
CustomizedLocalTactic
MNC Type 2 - MNC with Glorecalization Approach: Consistent global value,
Coordinated regional strategy, and Customized
local tactic (The 3C Formula)
MNC Type 1 - Strategy, Tactic, and Value are determined by the
global office with little modification. Regional and local offices merely act as supervisor
and operator.
Glorecalization Approach for MNCs
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Yamaha Motor
Consistent Global Value
Coordinated Regional Strategy
Customized Local Tactic
Yamaha Brand and “Three Tuning Forks” logo The spirit of creating “Kando” (feelings of deep
satisfaction and excitement) as the brand mission Yamaha technology and production
“Growth” strategy for ASEAN “Profitability” strategy for US and Europe
Different product mix for each ASEAN country Different communication approach for each ASEAN
country
41
Toyota Kijang
Consistent Global Value
Coordinated Regional Strategy
Customized Local Tactic
Toyota Brand and “Three Ovals” logo Japan-quality manufacturing Sales, Service, and Spare parts businesses
Positioning: ASEAN Family Car
Different communication approach for each ASEAN country
42
Conclusions
• ASEAN is a regional bloc of 550 million customers with rich resources.
• ASEAN is sure to get attention from MNCs and investors both as a source of products and a market for products.
• ASEAN will bring benefits to the companies in all 10 ASEAN countries because it will lower their costs and provide larger opportunities .