Kotler ASEAN by xiaohuicaicai

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									                      Philip Kotler
S.C. Johnson & Son Distinguished Professor of International Marketing
       Kellogg School of Management, Northwestern University
Contents



                 Why ASEAN?


            ASEAN Community 2015


           ASEAN Regional Marketing




                                      2
      Why ASEAN?


 ASEAN Community 2015


ASEAN Regional Marketing




                           3
The Paradox of Globalization vs. Localization



  “The World is Flat”
  Thomas L. Friedman
 New York Times columnist




                            “The World is Still Round”


                              Robert J. Samuelson
                               Newsweek columnist


                                                         4
 Regionalization: The Right Balance


                   ICT has allowed wide information access.
                   Goods and services can move cheaper thanks to
 Globalization      cheap transportation and ICT.
                   The world is more borderless.
                   In a flat world, competition searches for lowest cost.



                   Convenience of flows of information, goods, services,
                    and people within the region
Regionalization    Relatively similar psychology and national interest
                    within region



                   National borders still have economic meaning.
                   National markets exist and are defined by psychology
                    and politics.
 Localization      National economic and political setbacks can threaten
                    globalization.

                                                                             5
The paradox has forced countries to form regional blocs




Source:
Wikipedia.com                                             6
Regionalization of Asia




                          7
                       Global View of Asia




 Regional Blocs, including East Asia will be prominent
  Principal 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




                                                                8
                              Asia Pre-Crisis: The Flying Geese
  Before the crisis, “the flying geese” phenomenon was soaring throughout Asia
                     and influencing the Pacific Rim economies.




 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.


Note:
“Flying Geese” is a concept developed by Kaname Akamasu that best describes the economic structure of Asia before the crisis.
                                                                                                                                9
                           Asian Crisis

         But the crisis put an end of “flying geese”.




                                                                     Source: BBC


Asian Economic Crisis in 1997-1998: The End of “Flying Geese”, The end of
                 the good old days of the Asian miracle
                                                                                   10
          Asia Post-Crisis: The Regional Squadrons

After the crisis, squadrons of the former flying geese, who increasingly drive regional
                                      integration.




   SAARC Squadron
                                                                 China Squadron
                                                                 Korea Squadron
                                                                 Japan Squadron




                                   ASEAN Squadron
                                                                                          11
             Chindia, where the world's workshop meets its office

                         China                                      India
                                                           Strong technology and service
               Manufacturing giant with the lowest         industry
                prices                                     Relatively efficient capital
               Hybrid communist-capitalist model that      market




                                                                                               Strengths
 Strengths




                enables development                        Strong private sector and legal
               Solid primary schools                       framework
               Infrastructure that lures foreign          Younger workforce
                investment                                 Growing population
               Good distribution of wealth with higher    Great university system
                per-capita income                          Strong entrepreneurial culture
                                                           Attracts higher prices

                                                           Red tape, corruption, tough
                                                            labor laws and bureaucracy all




                                                                                              Weaknesses
Weaknesses




                                                            deter investment
                 Heavy reliance on low prices             Woeful infrastructure
                 Weak financial system                    Lackluster primary education
                 Inefficient capital system                system
                 Slow population growth                   Exclusive growth environment
                                                            to the rich
                                                           The privatization of key
                                                            industries has stopped
                                                                                                           12
How should ASEAN ride the wave
of the rising East (read: Chindia)?




                                      13
ASEAN Countries at a Glance




                              14
            The Rising East: Threat or Opportunity?




            Threat                                                    Opportunity

                                            ASEAN
                                          Integration
Individual countries in ASEAN                                     ASEAN is the only region
   are nothing compared to                                      capable of being in the driver
            Chindia                                             seat of the Greater East Asia
                                                                          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.
                                                                                                    15
       The First East Asia Summit Driven by ASEAN
 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)

                                                                                      16
Why is ASEAN in the Driving Seat of the Greater East Asia?


                                       ASEAN




                                                             High Bargaining
           Neutral Position
                                                                 Power


      ASEAN is not considered a
    “threat” to China, India, Japan,                                     Competitive
                                               Attractive Single
   South Korea, Australia, and New                                    Regional Production
                                               Regional Market
                Zealand                                                     Base

                                           Huge market               Smooth flow of goods,
                                           High consumption           services, and people
                                           Less competitive           under FTA
                                                                      Abundance of natural
                                                                       resources
                                                                      Low labor cost
                                                                                               17
      Why ASEAN?


 ASEAN Community 2015


ASEAN Regional Marketing




                           18
            Towards ASEAN Community 2015



                             ASEAN COMMUNITY 2015


                                                                       ASEAN Socio-
    ASEAN Security                    ASEAN Economic
                                                                     Cultural Community
   Community (ASC)                    Community (AEC)
                                                                           (ASCC)




                     The Peaceful, Prosperous, and People-Centric ASEAN




Production/Supply Regional Production Base        Single Regional Market   Consumption/Demand



                                     Dual Track Strategy



                                                                                                19
              What does ASEAN Integration Mean?


                                 Tariffs will be eliminated and non-tariff barriers will
                                  be gradually phased out
All barriers to the free flow
                                 Rules and regulations will be simplified and
of goods, services, capital,
                                  harmonized
    and skilled labor are
                                 ASEAN investors will be permitted to invest in
          removed
                                  sectors formerly closed to foreigners and the
                                  services sector will also be opened up


                                 Applicable international standards and practices
                                  are followed, and policies on intellectual property
                                  rights and competition are put in place
The region will become a         Regional infrastructure will be more developed
 more level playing field         with the expansion of transportation,
                                  telecommunications and energy linkages




                                                                                            20
      Four Key Success Factors of ASEAN Integration




                            Rigorous Focus on
                                                               Workable Institutions
                            High-Impact Sectors




                           Continued Support by                More Effective Public-
                             ASEAN Leaders                     Private Collaboration




Source: McKinsey&Company, ASEAN Competitiveness Study, 2003.
                                                                                        21
    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
                                                                                                     22
Potential Cost Savings from ASEAN Integration




                                                23
                  A Balanced Approach is Needed


Benefits to MNCs
                                                      Benefits to Local Companies
 Targeting more sales volume
                                                       More export opportunities to
  in the ASEAN market
                                                        ASEAN market
 Components procurement on
                                                       ASEAN-wide expansion
  an ASEAN-wide basis
                                                        opportunity for corporate
 More product specialization
                                                        growth strategy
  to achieve economies of
                                                       Technology and financial
  scale
                                                        support opportunities from
 Greater emphasis on
                                                        MNCs
  profitability using ASEAN-
                                                       ASEAN-wide pool of talent
  wide operations




                                A Balanced Approach


                                                                                       24
      Why ASEAN?


 ASEAN Community 2015


ASEAN Regional Marketing




                           25
26
            What is Marketing?


                 Brand Integrity
 Positioning                        Differentiation

Being Strategy                        Core Tactic




                      Brand
                      BRAND

                  Value Indicator




                                                      27
          Nine Core Elements of Marketing

                (mind-share)                      (market-share)
  S             STRATEGY                            TACTIC                   T


Explore             Positioning                    Differentia
                                                                           Engage
                      'BEING'                          tion
                     STRATEGY                      'CORE' TACTIC
            1   2       3                                4         5   6




                                           7

                                           8

                                          9
                                     Process         Execute
                                       VALUE
                                     'ENABLER'




                                   VALUE
                                  (heart-share)


                                       V
                                                                                    28
Three Types of ASEAN Marketing Companies

                                               (3) THE
                                           MULTINATIONALS
                                            FOCUSING ON
                                               ASEAN
                                               MULTI-
                                             NATIONALS




                           ASEAN



       LOCALS                     LOCALS



 (1) THE LOCAL CHAMPIONS   (2) THE LOCALS GOING ASEAN
                                                            29
                Local Champions



S   Play small by serving niche markets



T   Address the local needs and wants



V   Maintain high level of customer intimacy




                                               30
              MBF Cards of Malaysia

                                                                    Local Champions



    Positioning          Brand Integrity     Differentiation
                                            Selection of cards suited to
Malaysia’s largest and                       niche segments
 most innovative and                        Early adoption of new card
issuer of niche cards                        technologies




                              Brand
                              BRAND

                          MBF Cards


                                                                                  31
            Goldilocks of the Philippines

                                                                       Local Champions



    Positioning              Brand Integrity     Differentiation
                                                Varieties of Philippines
  The bakeshop with                              original bakery products
international standards                          and cuisine
catering to Filipino taste                      Understanding of Pinoy
                                                 values and sentiments




                                  Brand
                                  BRAND

                               Goldilocks


                                                                                     32
          Bengawan Solo of Singapore

                                                                    Local Champions



    Positioning           Brand Integrity     Differentiation
                                             High quality hand-made
The convenient gift and                       products with attractive and
  souvenir options of                         exclusive packaging
 hand-made premium                           Convenience for order,
                                              delivery, and collection
   cakes, kueh, and                          Gift voucher packages
       cookies

                               Brand
                               BRAND

                          Bengawan Solo


                                                                                  33
             Locals Going Regional



S   Translate the regional positioning to local context



T   Ensure regional visibility and availability



V   Build regional brand




                                                          34
              Extra Joss of Indonesia

                                                               Locals Going Regional



    Positioning           Brand Integrity      Differentiation
                                             In sachets, not in bottles
  The affordable core                        Generation Biang (core
essence of energy drink                       generation)
  for core generation                        Large retail distribution
                                              networks




                               Brand
                               BRAND

                            Extra Joss


                                                                                       35
            Black Canyon of Thailand

                                                           Locals Going Regional



    Positioning         Brand Integrity     Differentiation
                                           Extensive Western and
  Food houses that                          Asian (especially Thai) food
combine West and East                       and coffee menu
                                           Wild Wild West name and
                                            décor
                                           Large chain of outlets



                             Brand
                             BRAND

                        Black Canyon


                                                                                   36
                  AirAsia of Malaysia

                                                              Locals Going Regional



    Positioning           Brand Integrity      Differentiation
                                             Low-cost structure
ASEAN no-frills and fun                      Fun internal culture
   low-cost carrier




                               Brand
                               BRAND

                              AirAsia


                                                                                      37
         MNCs Focusing on ASEAN



S   Coordinate the regional strategy



T   Execute the local customization



V   Maintain the consistency of the global value




                                                   38
                     Glorecalization Approach for MNCs

       MNC Type 1 - Strategy, Tactic, and Value                  MNC Type 2 - MNC with
       are determined by the global office with                 Glorecalization Approach:
        little modification. Regional and local                  Consistent global value,
         offices merely act as supervisor and                 Coordinated regional strategy,
                        operator.                            and Customized local tactic (The
                                                                      3C Formula)
               Strategy   Tactic      Value                      Strategy       Tactic       Value


                                                                                            Consistent
  Global                                            Global                                    Global
   Office                                            Office                                   Value
(Conceptor)                                       (Composer)


                                                                 Coordinated
  Regional                                          Regional      Regional
   Office                                            Office        Strategy
(Supervisor)                                      (Conductor)



  Local                                              Local                     Customized
                                                                                  Local
  Office                                             Office
                                                                                 Tactic
(Operator)                                        (Improviser)




                                                                                                         39
                        Yamaha Motor


                       Yamaha Brand and “Three Tuning Forks” logo
Consistent Global      The spirit of creating “Kando” (feelings of deep satisfaction
     Value              and excitement) as the brand mission
                       Yamaha technology and production



                       “Growth” strategy for ASEAN
  Coordinated          “Profitability” strategy for US and Europe
Regional Strategy



                       Different product mix for each ASEAN country
Customized Local       Different communication approach for each ASEAN country
     Tactic



                                                                                        40
                        Toyota Kijang


                       Toyota Brand and “Three Ovals” logo
Consistent Global      Japan-quality manufacturing
     Value             Sales, Service, and Spare parts businesses




                       Positioning: ASEAN Family Car
  Coordinated
Regional Strategy



                       Different communication approach for each ASEAN country
Customized Local
     Tactic



                                                                                  41
                  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 .

                                                         42

								
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