Strategic Thought Transformation - The IIPM Think Tank

S U R V I V A L S T R A T E G I E S
Multinational companies have realised that
increasingly larger percentages of their sales and
profits will start coming from the Asia Pacific region
Naresh Gupta,
National Head-Planning, Grey Worldwide
The dynamics of a global economy are
prone to two distinct kinds of changes.
The first kind of change can be a story
of unintended consequences when powerful
developments affect the growth trajectory of
a nation or a corporation. The 1997 currency
crisis of South East Asia is a case in point. The
crisis triggered a deep pause in South Korea’s
powerful engine of growth and eventually
also led to the collapse of the conglomerate
Daewoo. For marketing, brand and advertising
strategists, such stories of unintended
consequences cannot usually be anticipated
and there is nothing much that can be done
about their impact on sales and brand performance.
Globalization also produces another
kind of change that is far more deep rooted
and that cannot be ignored by marketing,
advertising and branding strategists of any
corporation that hopes to survive in the 21st
century. This change is the shifting centre of
economic gravity from Western Europe and
North America to the Asia Pacific region in the
21st century. A company and a strategist that
persists with the belief that the global economy
will be dominated by the so called G-7
countries (USA, Japan, UK, France, Germany,
Canada and Italy) will surely face extinction
after a few years or decades.
As the Asia Pacific region becomes increasingly
important in the global economic
scheme of things, multinational companies
have realized that increasingly larger percentages
of their sales and profits will start coming
from the Asia Pacific region. In that context,
it is becoming increasingly important for the
corporations to understand the behavior of
the Asian consumer. Some fundamental questions
need to be answered before large global
corporations can be assured of success in the
newly emerging markets. In what ways are
the Asian consumers similar to Western consumers
More importantly, in what ways are
Asian consumers different from their Western
counterparts The right answers to these
questions will mean immense success for a
company while the wrong answers will doom
the same company to failure.
Grey Worldwide and research firm Millward
Brown conducted an exhaustive pan-
Asian survey called Eye on
Asia of consumer behavior,
attitudes, aspirations and associations
to be able to answer
the two fundamental questions
raised above. A vast cross
section of Asian consumers in
many countries was surveyed
before arriving at some preliminary
results. In the survey,
4,400 Asian adults, age 18+
across 12 countries using both
quantitative and qualitative
research, including in-depth
ethnographic interviews and
extensive secondary research.
Even a cursory reading of the
survey and its conclusions leads us to some
strategies that should not surprise anybody
with insights into marketing and strategy. The
three basic lessons that are drawn are:
• Think global, but act local
• Value for money matters a lot to consumers,
even those with ‘money to burn’.
• An emotional connect with the consumer’s
aspirations is the key to a brand’s enduring
success in Asian markets.
Reading these lessons, a strategy student
might well be prompted to remark: the more
things change, the more they remain the
same For aren’t these what management
pundits have been proclaiming for decades
while advising corporations on how to build
enduring brands and ensuring long term
consumer loyalty This article will attempt
to answer this question and analyze the validity
of the lessons raised above in subsequent
paragraphs. But first, it would be instructive
to understand why Asia Pacific is becoming
such a magnet not just for investors, but also
companies and brands that survive into the
Asia Pacific is fast
becoming such a magnet
not just for investors, but
also companies and
brands that survive into
the 21st century
21st century.
In 2004, around the time international
columnist Thomas Freidman wrote the best
seller The World is Flat, Goldman Sachs
published a now famous report called the
BRICS Report that did two things. The first
was that it virtually overnight transformed a
relatively young and obscure Indian Economist
Rupa Narashiman working in Goldman
Sachs into a virtual celebrity as an economic
pundit (subsequently, Narashiman left the
gold standard and gold plated confines of
Goldman Sachs to join Pantaloon, the retail
major of India. That itself speaks a lot for the
An IIPM Intelligence Unit Publication STRATEGIC INNOVATORS 19