Build strong local brands before going regional, warns Kotler
The Jakarta Post, Jakarta
Foreign bottled mineral water was served to panelists speaking at an ASEAN marketing forum in Jakarta on Thursday.
As participants at the forum were discussing how to make a local brand recognizable regionally and internationally, the bottles in front of them could have served as an example.
The question would be why choose a foreign brand when host Indonesia has many local mineral water brands attractive enough to prompt giant multinational company Danone Group to acquire a major stake in one.
Lack of strong marketing strategy perhaps?
American marketing professor Philip Kotler highlighted that companies wanting to go regional should start by working to gain full attention from local consumers before expanding.
"Build strong brands in your country that deliver to the targeted market before coming in to another country," Kotler said, adding that going global should be done gradually.
Kotler co-founded the Philip Kotler center for ASEAN marketing with Indonesian marketing expert Hermawan Kartajaya. The center was officially opened at the same forum by ASEAN secretary- general Ong Keng Yong.
It aims to provide support for the enhancement of ASEAN brands toward the integration of its 10 member countries into one single European-style economic community.
The organization aims to see a single market of over 500 million people in goods, services and investments within the region by 2020.
Currently, total trade from and in the region amounts to US$720 billion annually, with a combined gross domestic product of $737 billion.
In 2003, intra-ASEAN trade accounted for only 23 percent, or about US$84 billion, of the regional grouping's 2003 exports. When the ASEAN Free Trade Area (AFTA) concept was first introduced in 1993, regional trade accounted for 18 percent of exports.
According to ASEAN Secretariat data, regional exports to the rest of the world increased to US$363 billion in 2003 from $321 billion in 2002, lower than the $387 billion reached in 2001.
In comparison, regional trade within the European Union accounted for 75 percent of total trade, while regional trade reached 35 percent in Mercosur -- a South American economic group comprising Brazil, Argentina, Paraguay, Uruguay, Chile and Bolivia.
Ong said that local and global marketing strategies were no longer valid for local players and multinationals, and thus a regional marketing strategy had to be developed to enable regional companies to compete better.
"The center is an important feature for the ASEAN marketing industry to help develop ASEAN as a brand," Ong said.
Could it perhaps help create strategies so that a locally or regionally produced mineral water is served at a global forum?