7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
1/39
Why ASEAN?
ASEAN Community 2015
ASEAN Regional Marketing
Contents
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
2/39
Why ASEAN?
ASEAN Community 2015
ASEAN Regional Marketing
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
3/39
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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
4/39
The paradox has forced countries to form regional blocs
Source:Wikipedia.com
http://upload.wikimedia.org/wikipedia/en/4/43/ActiveBlocs.PNG7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
5/39
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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
6/39
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.
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
7/39
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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
8/39
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.PNG7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
9/39
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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
10/39
How should ASEAN ride the waveof the rising East (read: Chindia)?
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
11/39
ASEAN Countries at a Glance
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
12/39
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.
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
13/39
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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
14/39
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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
15/39
Why ASEAN?
ASEAN Community 2015
ASEAN Regional Marketing
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
16/39
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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
17/39
2
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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
18/39
2
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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
19/39
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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
20/39
2
Potential Cost Savings from ASEAN Integration
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
21/39
2
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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
22/39
2
Why ASEAN?
ASEAN Community 2015
ASEAN Regional Marketing
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
23/39
2
Wh i M k i ?
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
24/39
2
BRAND
Brand Integrity
Positioning Differentiation
Brand
Being Strategy Core Tactic
Value Indicator
What is Marketing?
Ni C El t f M k ti
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
25/39
2
(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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
26/39
2
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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
27/39
3
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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
28/39
3
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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
29/39
3
BRAND
Brand IntegrityPositioning Differentiation
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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
30/39
3
BRAND
Brand IntegrityPositioning Differentiation
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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
31/39
3
Locals Going Regional
S Translate the regional positioning to local context
T Ensure regional visibility and availability
V Build regional brand
Extra Joss of Indonesia
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
32/39
3
BRAND
Brand IntegrityPositioning Differentiation
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
Locals Going Regional
Black Canyon of Thailand
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
33/39
3
BRAND
Brand IntegrityPositioning Differentiation
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
Locals Going Regional
AirAsia of Malaysia
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
34/39
3
BRAND
Brand IntegrityPositioning Differentiation
Brand
ASEAN no-frills and funlow-cost carrier
Low-cost structure Fun internal culture
AirAsia of Malaysia
AirAsia
Locals Going Regional
MNCs Focusing on ASEAN
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
35/39
3
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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
36/39
3
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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
37/39
4
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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
38/39
4
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
7/31/2019 Kotler ASEAN -The Paradox of Globalization vs Localization
39/39
4
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 .