Download - Kotler ASEAN -The Paradox of Globalization vs Localization

7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization

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Why ASEAN?

ASEAN Community 2015

ASEAN Regional Marketing

Contents


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Why ASEAN?




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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


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The paradox has forced countries to form regional blocs

Source:Wikipedia.com
http://upload.wikimedia.org/wikipedia/en/4/43/ActiveBlocs.PNG


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Regional Blocs, including East Asia will be prominentPrincipal blocs will be Europe, East Asia and the Americas.

The 21stCentury is the Asian Century!

Asia will be almost half of the worlds economy by 2020

Global View of Asia


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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. Countriestoward 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.


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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


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

SAARC Squadron

ASEAN Squadron

China Squadron

Korea Squadron

Japan Squadron

Asia Post-Crisis: The Regional Squadrons
http://images.google.co.id/imgres?imgurl=http://www.aesf.org/branches/100/japaneseflag.gif&imgrefurl=http://www.aesf.org/bd.cfm%3Fbr%3D100&h=393&w=600&sz=6&tbnid=oiDQpPDzHnkJ:&tbnh=87&tbnw=133&hl=en&prev=/images%3Fq%3Djapan%2Bflag%26hl%3Den%26lr%3D&oi=imagesr&start=1http://en.wikipedia.org/wiki/Image:SAARC.JPGhttp://upload.wikimedia.org/wikipedia/en/3/3f/SAARC2.PNG


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Chindia, where the world's workshop meets its office

Manufacturing giant with the lowestprices

Hybrid communist-capitalist model thatenables 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, toughlabor laws and bureaucracy alldeter 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

Strengths

Weaknesses

Strengths

Weaknesses


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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 regioncapable of being in the driverseat of the Greater East Asia

integration*

Individual countries in ASEANare nothing compared to

Chindia

ASEANIntegration

* 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 EastAsia Summit.


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Initiated by ASEAN, the first East Asia Summit held in Kuala Lumpur, Malaysia, inDecember 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 theNew Asia.

(Observer)

The First East Asia Summit Driven by ASEAN


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hy is ASEAN in the Driving Seat of the Greater East Asia

Neutral Position

ASEAN

High BargainingPower

Attractive SingleRegional Market

CompetitiveRegional Production

Base

Huge market

High consumption Less competitive

Smooth flow of goods,

services, and peopleunder FTA

Abundance of naturalresources

Low labor cost

ASEAN is not considered athreat to China, India, Japan,

South Korea, Australia, and NewZealand


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Why ASEAN?




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Single Regional MarketRegional Production Base

The Peaceful, Prosperous, and People-Centric ASEAN

ASEAN SecurityCommunity (ASC)

ASEAN EconomicCommunity (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 willbe 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 theservices sector will also be opened up

All barriers to the free flowof goods, services, capital,

and skilled labor areremoved

The region will become amore level playing field

Applicable international standards and practicesare followed, and policies on intellectual propertyrights 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 onHigh-Impact Sectors

Source: McKinsey&Company, ASEAN Competitiveness Study, 2003.

Workable Institutions

Continued Support byASEAN Leaders

More Effective Public-Private Collaboration


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2

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 asingle country

MNCs are integrating their manufacturing activities across several locations

MNCs are not only seeking large consumer markets but also regional sites where they canestablish 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 ofscale

Greater emphasis onprofitability using ASEAN-

wide operations

Benefits to Local Companies More export opportunities to

ASEAN market ASEAN-wide expansion

opportunity for corporategrowth strategy

Technology and financial

support opportunities fromMNCs

ASEAN-wide pool of talent

A Balanced Approach is Needed

A Balanced Approach


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Why ASEAN?




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Wh i M k i ?


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BRAND

Brand Integrity

Positioning Differentiation

Brand

Being Strategy Core Tactic

Value Indicator

What is Marketing?

Ni C El t f M k ti


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(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

Th T f ASEAN M k ti C i


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LOCALS LOCALS

MULTI-NATIONALS

ASEAN

(1) THE LOCAL CHAMPIONS (2) THE LOCALS GOING ASEAN

(3) THE

MULTINATIONALSFOCUSING ONASEAN

Three Types of ASEAN Marketing Companies

Local Champions


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Local Champions

S Play small by serving niche markets

T Address the local needs and wants

V Maintain high level of customer intimacy

MBF Cards of Malaysia


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BRAND

Brand IntegrityPositioning Differentiation

Brand

Malaysias largest and

most innovative and

issuer of niche cards

Selection of cards suited toniche segments

Early adoption of new cardtechnologies

MBF Cards of Malaysia

MBF Cards

Local Champions

Goldilocks of the Philippines


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BRAND


Brand

The bakeshop withinternational standardscatering to Filipino taste

Varieties of Philippinesoriginal bakery productsand cuisine

Understanding of Pinoy

values and sentiments

Goldilocks of the Philippines

Goldilocks

Local Champions

Bengawan Solo of Singapore


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3

BRAND


Brand

The convenient gift andsouvenir options of

hand-made premium

cakes, kueh, andcookies

High quality hand-madeproducts with attractive andexclusive packaging

Convenience for order,

delivery, and collection Gift voucher packages

Bengawan Solo

Bengawan Solo of Singapore

Local Champions

Locals Going Regional


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S Translate the regional positioning to local context

T Ensure regional visibility and availability

V Build regional brand

Extra Joss of Indonesia


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BRAND


Brand

The affordable coreessence 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


Black Canyon of Thailand


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BRAND


Brand

Food houses thatcombine West and East

Extensive Western andAsian (especially Thai) foodand coffee menu

Wild Wild West name and

dcor Large chain of outlets

Black Canyon of Thailand

Black Canyon


AirAsia of Malaysia


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3

BRAND


Brand

ASEAN no-frills and funlow-cost carrier

Low-cost structure Fun internal culture

AirAsia of Malaysia

AirAsia


MNCs Focusing on ASEAN


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MNCs Focusing on ASEAN

S Coordinate the regional strategy

T Execute the local customization

V Maintain the consistency of the global value

Glorecalization Approach for MNCs


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Strategy Tactic Value

GlobalOffice

(Conceptor)

RegionalOffice

(Supervisor)

LocalOffice

(Operator)

Strategy Tactic Value

GlobalOffice

(Composer)

Regional

Office(Conductor)

LocalOffice

(Improviser)

Consistent

Global

Value

Coordinated

Regional

Strategy

Customized

Local

Tactic

MNC Type 2 - MNC withGlorecalization Approach:

Consistent global value,Coordinated regional strategy,

and Customized local tactic (The3C Formula)

MNC Type 1 - Strategy, Tactic, and Valueare determined by the global office with

little modification. Regional and localoffices merely act as supervisor and

operator.

Glorecalization Approach for MNCs

Yamaha Motor


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Yamaha Motor

Consistent GlobalValue

CoordinatedRegional Strategy

Customized LocalTactic

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

Toyota Kijang


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Toyota Kijang

Consistent GlobalValue

CoordinatedRegional Strategy

Customized LocalTactic

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


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Conclusions

ASEAN is a regional bloc of 550 million customerswith rich resources.

ASEAN is sure to get attention from MNCs and

investors both as a source of products and a marketfor products.

ASEAN will bring benefits to the companies in all 10

ASEAN countries because it will lower their costsand provide larger opportunities .