XING Indonesia

XING Indonesia

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  • Thomas Brandt
    Thomas Brandt    Premium Member   Group moderator
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    “Franchising is not that easy… ” - Did you know that "the Asian Marketing Guru" comes from Indonesia?
    For all marketers,

    you should read this article about franchise business in Indonesia. It is an interview with HERMAWAN Kartajaya, he is Co-Author from "the marketing bible" in the world from Philip Kotler.

    He will describe first his viewpoint of Indonesia's status quo in business and business qualities. It is quiet interesting to read that the bigger companies in Indonesia don't need to have an international standard in business and products cause of the size of the country and the population in Indonesia... until... smaller countries are coming in the market. Singapore, Malaysia, they must have international business standards, because their home markets are too small and they have to expand... and many other reasons... read..

    In the second part he is telling a bit about an interesting topic, franchising! Lots of companies in Indonesia trying to expand with franchising but almost the people are not aware, they need the highest quality, the highest marketing know-how, the highest understanding of their customers and a proofed business model... otherwise... it will suck.



    AsiaViews, Edition: 25/VI/July/2009
    “Franchising is not that easy…
    ” http://new.asiaviews.org/?content=45tyg70tukmh098&infocu...
    For franchise fans in Indonesia... have a look here too
    http://new.asiaviews.org/?content=45tyg70tukmh098&infocu...

    ________________________________________________

    Hermawan Kartajaya, President of the World Marketing Association, is one of the “50 Gurus Who Have Shaped The Future of Marketing” appointed by The Chartered Institute of Marketing, United Kingdom (CIM-UK). Founder and President of MarkPlus & Co, a management consultancy company with offices around the region, Hermawan Kartajaya is perhaps best known for co-authoring several books with world-renowned marketing guru Philip Kotler. Some have said that Hermawan is to Asian marketing what Philip Kotler is to global marketing. AsiaViews spoke with Hermawan Kartajaya to gain his insights into the competitive future of the ASEAN economy and the prospects for franchising.

    By 2015, ASEAN will be transformed into an Economic Community with the free movement of goods, services, investment, skilled labor and capital. How can ASEAN companies take advantage of this?
    Yes, this is the target and it’s good that ASEAN has a target. If we don’t have a target we would be drifting like in the past 40 years. Now we have a Charter and we also have specific targets. This of course will have a positive impact on the economies but the other political and the socio-cultural pillars of ASEAN must also be working.
    Besides the opportunities, there are also the challenges. What, in your opinion, is the most difficult challenge to overcome?

    For me as an Indonesian, for example, it is the country reputation. Indonesians are not trusted. We have to work twice, three times harder than other people. That’s why the socio-cultural pillar of ASEAN is very important. We have to tell the people of ASEAN to respect each other. Singapore considers itself more advanced, next Malaysia, then Thailand, and Indonesia ranks fourth or fifth with the Philippines. Vietnam ranks below us but they don’t want to learn from Indonesia, they want to learn from Singapore.

    One of the key characteristics of the ASEAN Economic Community is that it will become a highly competitive region. How will this affect the way business is conducted within the region?
    Three years ago I wrote a book called ‘Think ASEAN’ with Phillip Kotler. In it I wrote that there are three types of companies: the local champions, the local companies that have gone regional and the multinational companies.

    With the opening up of markets, companies in Indonesia and Philippines must realize that they are going to be flooded by foreign products so they should build themselves up and become strong in their local markets. If they are kings in their own country, they will not be worried about foreign competition. They can take advantage of the economies of scale, especially in consumer goods, because the domestic market is big.

    Whereas In Singapore and Malaysia, many of their companies are local companies which have gone regional with the backing of their governments and this is because their home markets are small. Singapore Airlines and Malaysian Airlines, for example, their management is very good and their product is of world class quality.

    Indonesian companies are more complacent because they already have a big market and can expand without having a world-class product. This is okay but as soon as they face competition from outside, they are in trouble. Smaller countries are better at developing regional companies because the small local markets have forced companies to go out.

    Mind you, there are exceptions. Brunei is a small country but it has no companies that are strong in the region and that is because it is a very wealthy country. Singapore doesn’t have anything, no oil, no resources, no markets but it has a good government which tells companies to be smart. Malaysian businesses were also told by Mahathir that a population of 24 million is still not enough. Malaysia also must have world-class products. Bigger countries don’t have this edge because they are not trained to think this way whilst Vietnam, Thailand, still lag behind Singapore.

    And then the third type of companies is the multinational company which looks at ASEAN as an opportunity. They look for countries with resources, be it natural or human, and countries with a big market. If a company is a hi-tech company, it will be attracted to Singapore with its sophisticated R&D facilities and skilled labor. If it is not a hi-tech company, it will opt for Indonesia because of its huge market or its natural resources.

    Which local ASEAN-grown companies are successfully anticipating the changes 2015 will bring?
    Businessmen don’t really think about 2015, they just keep going but because there is this target companies should be reminded to prepare themselves for the opening up of markets and to produce world-class products. Otherwise you’re dead.

    One of the most effective ways to market one’s products in regional markets is by franchising. What are the advantages of franchising?

    Franchising is not that easy. We need to provide a brand, a concept, and if we can’t control the growth, we will be in trouble. Franchising is a concept business, a software business, and if you don’t have high quality standards, high knowledge, and consistency in your products, you will not survive.

    Which companies do you think have succeeded in creating a good brand and marketing the brand in the region?

    The strongest franchisors are from Singapore and Malaysia. There’s BreadTalk from Singapore, Secret Recipe from Malaysia. Indonesian companies are not ready for this industry, not as franchisors. Nevertheless there are a few Indonesian companies who have succeeded such as Es Teler, J.Co doughnuts and Mooryati Soedibyo’s spa business. Philippines has JolliBee and Chow King and Thailand has Black Canyon.

    What are the prerequisites for successfully franchising one’s business?
    You must have a world-class quality product. Secondly, you must have the right entry strategy into the market you are eyeing. Then you must be consistent in developing your business model. You must think long-term.
    This post was modified on 20 Aug 2009 at 07:51 am.
    • 19 Aug 2009, 04:47 am
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