Think ASEAN!
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Rethinking Marketing toward ASEAN Community 2015 By Philip Kotler, 2007 |
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Preface
Have you noticed an interesting phenomenon recently in Southeast Asia? Let us give you some clues.
BreadTalk, the Singapore-based bakery, is spreading its bread boutique to Jakarta, Malaysia, and the Philippines. Airasia, the Malaysia-based low-cost carrier, is spreading its wings to Thailand with its Thai AirAsia and to Indonesia with its Indonesia AirAsia. Black Canyon, the Thailand-based coffee shop, is dispersing its unique coffee flavors in Indonesia, Singapore, and Malaysia.
Moreover, you can see Es Teller 77, one of Indonesia’s largest restaurant chains, in Orchard Road, Singapore. Pho24, the famous noodle restaurant chain in Vietnam, is now open in Indonesia. You can also see San Miguel beer, which originates in the Philippines, now widely available across and even beyond the region.
What is happening?
The answer is simple: Regionalization is happening in Southeast Asia! The Association of Southeast Asian Nations (ASEAN) is no longer just an association of neighboring countries. It is becoming one integrated market that possesses great potential. The market is not mature so there is room for aggressive growth. Companies are eyeing this market and have started to go regional.
The development of Asia after the Asian financial crisis has been tremendous. On the whole, not only are Asian countries performing a great comeback, but they are also emerging as the new powerhouse of the world. Economically, China in particular is growing at a very fast pace. It has become the new manufacturing hub of the world. China can make anything and everything cheaper than other countries. The 1.3 billion populations, as one huge market, adds to the excitement it creates. It is even dubbed the world’s new superpower. India is another superpower. It, however, has chosen to be the service hub of the world. The Indian outsourcing service has changed how business is done today, especially in the IT and telecommunication sectors.
Both new world superpowers have become Asia’s major business attraction at this moment. However, through this book, we would like to introduce you to a new emerging market as an alternative: ASEAN. This market may not be as attractive as the superpower, but as we stated earlier, the market possesses great potential that should not be missed.
For those who are from local companies in ASEAN, we would like to encourage you to capture this opportunity because it is the most feasible market to target. China and India are very promising markets because of the low cost of resources and the large population bases. Nevertheless, they are at times far too competitive to enter. ASEAN, on the other hand, may offer an alternative viable market. The emergence of ASEAN as one entity has one aggregate potential – both as a production base and as a target market. Its low-cost structure – although no as low as China’s – and 600 million population plus the closer geographic distance make ASEAN an attractive alternative. Instead of just chasing after the highly competitive and relatively more distant markets of China and India, you should look to ASEAN markets, especially if you have operations in Southeast Asia.
The Miracle of ASEAN Is Back!!!
There is no doubt that the Asian crisis in mid-1997 has had a significant impact on ASEAN member countries. The power of ASEAN itself as one entity to face the crisis was being questioned at the time. However, as the crisis is over, each of the ASEAN countries is regaining its dignity and bringing back the miracle of the region through more efforts, individually and collectively. These efforts have now shown some remarkable achievements in making ASEAN one of the most important regions within the Asia Pacific.
As one entity, ASEAN also launched several joint efforts to support each country’s individual efforts. One of the efforts is by raising the ambitious vision of becoming one community: ASEAN Community 2015. ASEAN member countries have agreed in principle to speed up efforts to create a single market by 2015, five years ahead of schedule. The ASEAN Community will learn on three pillars: ASEAN Security Community, ASEAN Economic Community, and ASEAN Socio-Cultural Community to create a peaceful, prosperous, and people-centric ASEAN. This common vision of becoming one community has made ASEAN countries work hand in hand to achieve its goals.
At the corporate level, this emerging community has created a paradox in the business world. A progressively more unified and borderless ASEAN will pose greater business challenges to the local players in the region. They are not only competing with the other local players, but also with competitors from neighboring countries and multinationals penetrating their home market. However, this business challenge also comes along with tremendous marketing opportunity. The huge market of ASEAN can be more attractive than the limited home market. Local players have started to eye this opportunity. Large multinationals have even started building regional production bases for the ASEAN market. The increasingly dynamic and tangible ASEAN as a regional production base and as one single market shows that ASEAN Community 2015 is not merely a dream.
This fact also supports the argument that regionalization is the new emerging trend that is even more important than globalization. Globalization is no longer valid, especially for large multinationals. They have been expanding their businesses globally to take advantage of globalization; it is a done deal for them. Now, it is time for regionalization. It is time for them to focus on specific regions. On the other hand, local companies see globalization as something that is too abstract in scope. That is why they are also aiming at the regional market.
ASEAN, as one market, possesses the quality of being targeted by both multinationals focusing on ASEAN and locals going regional. Multinationals think of ASEAN as the potential unsaturated market. On the other hand, locals seeking to expand, think of ASEAN as the real tangible market to go after since other countries and regions in the Asia Pacific may be too distant for them. That is why ASEAN has now become one of Asia’s major attractions, besides China and India, for business people around the globe.
Think ASEAN!
One question arises: How can the ASEAN market be captured? In this book, we try to answer this one question.
We argue that both multinational corporations and local companies that seek entry into the ASEAN market will require regional marketing. Specifically, they will need ASEAN Marketing approaches. This is where the Philip Kotler Center for ASEAN Marketing, as a non-profit organization, fits in – to promote to the ASEAN marketers that ASEAN marketing may be a more relevant tool than just local or global marketing.
This book, which is the first publication of the Philip Kotler Center for ASEAN Marketing, tries to explore how companies should think of ASEAN as one borderless market that requires different marketing strategies to capture. It offers fresh perspectives to marketers all over the region about the upcoming trends or regionalization that can cause significant changes in future marketing activities. It argues that ASEAN marketers should not only be concerned about their local or global but also their regional marketing activities.
The Executive Summary explores why you will need ASEAN Vision and Local Action to engage the regional market. Part I describe the landscape of ASEAN and explains clearly why we need ASEAN Marketing. Parts II and III discuss companies that have been very successful in implementing ASEAN Marketing – Part II contains short cases of companies in ASEAN that explore their core marketing strategies while Part III contains comprehensive cases that explore the detailed marketing strategies of selected companies in ASEAN.
By reading this book, we hope that you will have a comprehensive understanding of what kind of strategy and tactic to apply when dealing with the ASEAN market. We certainly hope that you are also inspired to bring your company to the region and begin to THINK ASEAN!
Philip Kotler
Visit McGraw-Hill Education (Asia) at www.mcgraw-hill.com.sg
