Ahead of their breakfast debate on global versus local in Hong Kong on September 10th, Seraphina Wong – UBS, APAC head of Advertising, Communications & Branding and Charles Lankaster, managing partner, SharpeLankester, Hong Kong have a conversation.
What should all marketers know about the global vs local debate in Asia?
SW: Operating in a global economy, particularly given the tremendous growth of the Asia market, it is inevitable and important that all marketers understand the issues surrounding global/local. With the surge of social media and digital, especially Mobile, there is nothing that consumers do not know. Marketers who want to stay ahead of the game, will want to be a part of the discussion. To begin to participate, marketers really need to be engaged in this topic. Like it or not, marketing is no longer a local business.
CL: First, 'Asia' only exists as a geographic construct and not as a market reality – in the same way that 'Europe' does not exist. As a proof point, consider marketing strategies in Spain and German. Very different. Consider some staggering differences from two Asian countries population and GDP POV. Singapore with a population of just 5.46 million has a GDP of US$277 billion. This is higher than the Philippines whose population is close to 20 times higher than Singapore and yet whose GDP trails at US$250 billion. Second, the advancement of wi-fi, smart phones and social media will define marketing strategies. Corporations must embrace digital and seek more and more creative solutions for reaching and mobilizing highly diverse, diffuse populations. Buses in the remotest parts of Vietnam and Laos are wi-fi enabled. Most trains and buses operating thirty miles south of London are not.
Why is this a topic close to your heart?
SW: Being engaged in the global/local topic is not only inevitable (to not lose out), it is necessary when doing global business. I work for a global financial servicing firm with local footprints in over 50 financial centers; our clients are sophisticated and emerging investors. To offer our clients superior financial advice and solutions, and be a category leader it is vitally important to know and understand the global outlook and its implications on local markets. In reverse, marketers ought to have local insights around customers that can translate into global opportunities.
What does best practice look like?
SW: Best practice depends on the business you are in, but first and foremost it's essential to know your customers. Know that customers have access to information faster than you think. You must understand the market environment, and be willing to learn from your competition – why they win or lose. It is not that difficult, but some companies still are not open to change, and marketers fail because they do not listen and can therefore not answer customers' needs.
CL: Data, data, data. And more data. With creative being driven from results, not vice versa. Potentially cold-blooded, but more and more the case. The availability of predictive technology in terms of data analysis (what people 'will' do vs. 'are' doing) will revolutionise the marketing. In the same way that Hollywood now takes an algorithmic approach to film-making to ensure the highest box-office returns, so too data will drive product development, marketing and sales. Being agnostic about 'big brother' (or sister) for purposes of this paper, the terabytes of data we all leave lying around on Facebook, WeChat, WhatsApp and the rest are marketing data heaven. Technology will extrapolate where conversations are going and what services and products will be desired next.
Are the days of a cookie cutter approach over?
SW: Was the cookie cutter approach ever proven successful in new markets? That's the question. Marketing is a cost centre, an expense to companies' P&L – on the other hand, marketing is able to create profits by opening markets, building brands and driving sales. So as marketers we need to be flexible to win – be it new business, sales, shares or reputation. To be successful, marketing should be dynamic, constantly creating needs and opportunities that satisfy consumer needs. So, a cookie cutter approach would never work. That said, some basics shouldn’t change – for example, quality assurance, best talent and retention, consistency and investing in branding, those should not change - but be expressed in a way that the locals will 'buy'.
CL: Were they ever in? Yes, definitely, anyone who has a cookie cutter in their desk should drop it into the trash. For careful recycling, naturally. Ideally into a compass, which will be far more useful.
What advice would you offer Western brands in your market?
SW: If you mean global brands tapping in to Asia, my advice would be:
Do your homework, not one-off research but regularly walk the markets and talk to the locals. Not only meeting the senior management, but go out and meet clients, talk with your distributors and suppliers, and, if possible, talk to the competition.
I'd advise pilot and test market before you invest heavily. Conduct social listening – you will be surprised how much you can learn from the local conversations.
When you know something needs to be changed (for the better), be prepared to present your case to 'HQ' – why would you need to modify your business plan and offering to accommodate local consumer/market requirement? How would you win (shares, sales) over time? You can stay the course and force-create a need or 'import' a trend, but conversion takes time and resources, to get there you will need early wins (revenue) to help sustain the business … and eventually be profitable. To do so, you might want a plan that brings in sales sooner rather than later.
Anticipate how you would react if your USP (could be an established global brand) is not as equally valued in a new market. Are you prepared to find the differentiators that matter and a marketing approach that resonate with the local consumers? Or, do you keep going with your global strategy? In Hong Kong, McDonalds sell chicken-a-la-king rice box, Pizza Hut offers Teriyaki and Satay chicken on menu, the answer is clear.
What else? Watch your competition – don't ignore the success stories of the 'non-rivals', instead, learn how local brands get built on WeChat – and believe it, consumer relationships can be built on social media among the Chinese consumers. Why? If you are selling a western (new) brand to the same consumers, why would they turn to you when they are happily buying their local products and at a cheaper price.
CL: Treasure your reputation. Western brands are highly regarded – often loved – in the Asian economies. Yes, there are worthy local competitors (Singha, Jollibee, LiNing), but Heineken, McDonalds and Nike still command extraordinary presence in this region. As successful brands all know, long-term growth comes from the creation of trust.
This trust can be very hard to break – consider the recent HK and McDonald’s chicken scare. My anecdotal understanding is that sales post-scare will likely be down, but not because consumers stayed away, but because supply was unavailable. This says a huge amount about how much McDonald’s is trusted. It takes truly seismic circumstances to see widespread changes in consumer behaviour, but far-sighted corporations must think through what could catastrophically damage them and then prepare for these eventualities.
Connected, be clear on your market values, purpose and direction. It may well be that your HQ is in California or Copenhagen, but if you want to be successful in Bangkok, you have to resonate with Thailand. You need to become a little bit (or, in some cases, a lot) Thai. Whatever your business, make it clear what you stand for, what you are giving back and what role you play in the country you do business. Be part of the community and be clear why you are there and what role you play. Do this from Day #1 or as part of ongoing operations. Build advocates and be known and trusted. Because when you need a friend, it’s too late to make one.
Always look for the 'Gondola Solution'. I was moving furniture into my HK apartment last week. One cabinet could not get into the lift for love nor money. Rather than put it back on the truck, the removal team and I walked around my building seeking inspiration. We found it in the form of a painting crew’s gondola that was temporarily attached to the building. Just enough room for the cabinet. A unique HK fix to an impossible problem – and highly relevant to business problem solving in Asia-Pacific. What’s your Gondola Solution?
The Global vs Local breakfast debate with Seraphina and Charles is taking place in Hong Kong on September 10th at 8:30am. Ahead of the event, join the conversation #globalvslocal.
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