Asian Competitors

Marketing for Competitiveness in the Age of Digital Consumers

Philip Kotler, Hermawan Kartajaya;Den Huan Hooi

• Publisher: WSPC
• Year: 2019
• Topic: Business
• eBook ISBN:
  9789813275485
• Subtopic: Business Development
• Index: Business

Today's dynamic and uncertain environment has contributed to the changing nature of markets. In order for companies to keep up, they will need to embark on new wave marketing to ride the wave of opportunities provided by the changes in the environment, such as the digital revolution.

This is critical all over the world, but none more so than in Asia. Asia is not only the world's biggest market, but also the fastest growing. It is therefore essential for marketers to understand the dynamics of Asian companies and what they have to offer to the wider world. This book analyzes competitive companies from 18 Asian countries that have successfully practiced new wave marketing and in so doing, provide invaluable lessons that others may find useful. Comprehensive case studies are used not only to describe how some of Asia's best companies compete, but also to analyze the concepts of new wave marketing their actions are based on. This book is unique in its depth and breadth of cases, from companies in the ASEAN region to North-east Asia, including Mongolia and SAARC.

The authors of this book, Professor Philip Kotler, arguably the Father of Modern Marketing, Hermawan Kartajaya from Indonesia, and Hooi Den Huan from Singapore, are all experts in their field and have previously produced other bestsellers. This book, with its focus on real life examples of competitive Asian companies in the age of digitalization, complements the principles and theoretical frameworks of new wave marketing that are detailed in its sister book, Marketing for Competitiveness. Together, these books provide a comprehensive picture of the changing Asian marketing landscape.

Contents:

• Marketing is Transforming?:
  • Product-Centric Perspective: Connectivity in Product Development
  • Customer-Centric Perspective: Connecting with Digital Consumers
  • Human-Centric Perspective: Doing Good by Doing Well in the Connected World
  • Marketing 4.0: Moving from Traditional to Digital
• Marketing is Creating?:
  • Marketing Strategies for Value Exploration
  • Marketing Tactics for Value Engagement
  • Marketing Values for Excellent Execution
• Glorecalization Mindset:
  • Asia's Local Champions
  • Asia's Regional Players: Asia Vision, Local Action
  • Asia's Multinational Companies: Global Value, Regional Strategy, Local Tactic

Readership: Marketing practitioners, business professionals, students and academics studying marketing, and general public interested in marketing.Asian Competitors;Asian Consumers;Asia;Digital Consumers;Digitization;Digitalization;New Wave Marketing;Marketing;Fourth Industrian Revolution;Changing Environment;Changing Landscape0 Key Features:

• This case book is unique in that it not only describes how some of Asia's best companies compete, but also analyses how they do so, based on concepts drawn from new wave marketing
• The depth and breadth of the cases is useful for readers to have a good understanding of competitive Asian companies from not only ASEAN but also from North-east Asia, including Mongolia and SAARC

Part I

Marketing Is Transforming?

Over the past decades, marketing has transformed through several stages. Long ago, during the industrial age — when industrial machinery was the core technology — marketing was about selling the factory’s products to all who would buy them. The products were fairly basic and were designed to serve a mass market. This was Marketing 1.0 or the product-centric era.

Marketing 2.0 evolved as a result of today’s information age, with information technology at the core of the digital revolution. Consumers are now well informed and can easily compare several similar product offerings. They can choose from a wide range of functional characteristics and alternatives. Marketers try to win the consumer’s mind and heart. This forms the basis of Marketing 2.0 or the customer-centric era. Unfortunately, the consumer-centric approach implicitly assumes that consumers are passive targets of marketing campaigns.

After that, we witnessed the rise of Marketing 3.0 or the human-centric era. Instead of treating people simply as consumers, marketers are beginning to approach them as human beings with minds, hearts, and spirits. Increasingly, consumers are not only more aware of social and environmental concerns but also look for solutions to their anxieties about making the globalized world a better place. They seek not only functional and emotional fulfillment but also human spiritual fulfillment in the products and services they choose.

Today, although technology continues to play an important role, customers are also becoming more human. Machine-to-machine (M2M) marketing tools are becoming more powerful if a company can utilize them to deliver human-to-human (H2H) interactions. In this transition and adaptation period in the digital economy, a new marketing approach is required to guide marketers in anticipating and leveraging on the disruptive technologies while maintaining the human-centric approach of Marketing 3.0. We call this approach Marketing 4.0.

Hence, we can say that some approaches in marketing are product-centric, customer-centric, and human-centric. Despite the trend toward Marketing 3.0, some business players continue to adopt product- and customer-centric perspectives. That is something normal. However, to win the new digital consumers, the old perspective should take into account new technology. Chapters 1–4 show how Asian companies can use different approaches by adopting new technology and the New Wave paradigm to win in the digital era.

CHAPTER 1

PRODUCT-CENTRIC PERSPECTIVE: CONNECTIVITY IN PRODUCT DEVELOPMENT

In today’s era of hyperconnectivity, a product-centric company in Asia cannot solely rely on its internal structure and resources to generate new ideas and innovate. In order for the new product development (NPD) process to run with as much accuracy and speed, the involvement of external parties such as customers, suppliers, and regulators is absolutely necessary. The contribution of external parties in each stage and gate of the NPD process becomes increasingly important. For example, in the discovery stage, companies cannot just rely on the marketing research team to look for new ideas out in the market; at this stage, customers should be actively engaged to provide inputs. Technological advancements have greatly improved companies’ abilities to establish greater connectivity with customers, thus aiding the process of collaboration on the development of new products.

Open innovation is an expression that was promoted by Chesbrough in 2003. It is defined as the purposive use of knowledge that exists in inputs and outputs of organizations to increase the speed of internal innovations and expansion of markets through the external use of innovations. Thus, open innovation is a paradigm that promotes the use of both external and internal ideas by organizations. In contrast, closed innovation is a traditional paradigm wherein an innovating organization generates its own ideas and then develops them.

The ability to perform open innovation, supported by internal and external connectivity, will make a product-centric organization develop competitive advantages over other industry players. The organization will be better prepared at capturing ideas from outside and swifter at executing them into a product or service, compared with its competitors.

New Wave technology has also enabled organizations not only in getting smarter at developing new products through open innovation but also in creating smarter and connected products. Connectivity in the product itself is becoming important. According to Porter and Heppelmann (2014), smart-connected products have three core elements: physical components, “smart” components, and connectivity components. Smart components amplify the capabilities and value of physical components, whereas connectivity components amplify the capabilities and value of smart components and enable some of them to exist outside the physical product itself.

A physical product is typically made of mechanical and electrical components. These components constitute the tangible part of the product — the part responsible for providing a benefit to the customer. However, if the other two components — smart and connectivity — weren’t there, a product consisting of only a physical component will be of limited use. For instance, consider a vehicle consisting of an engine, a powertrain, tires, and batteries. All these physical components form a very basic product primarily functioning as a means of transport, but as we add smart components in the product, such as think sensors, microprocessors, data storage, controls, software, as well as an embedded operating system and enhanced user interface, it serves to improve the functionality and user experience. In a vehicle, this will amount to adding smart components such as engine control unit, antilock braking system, rain-sensing windshields with automated wipers, and touch-screen displays.

In this chapter, we will learn how Hyundai Motor (Korea), Millennium (Bangladesh), FPT Corporation (Vietnam), and KYMCO (Taiwan) apply product-centric approaches by adopting open innovation and developing smart-connected products.

Hyundai Motor Company

The South Korea-based automotive manufacturer Hyundai Motor Company successfully became a global company, competing with five other biggest global automotive companies, including Toyota Motor Corporation and Mercedes-Benz. By integrating the open innovation center and R&D program and manufacturing innovative products to satisfy customers’ needs, Hyundai Motor Company can sustain its existence in the automotive field even though the technology has shifted significantly.

A Brief Company History

Hyundai Motor Company is an automotive manufacturer and a part of the Hyundai Group from Seoul, South Korea. Hyundai was established as a construction company by its founder, Chung Ju-Yung, in 1967 (Hyundai Motor Company, 2018a). It has achieved sustainable growth by taking part in product competitions and delivering an interactive brand experience, which allows direct communication with customers about innovation and future technologies. Hyundai Motor Group has become the world’s fifth largest motor group in less than 50 years. Its vision is to be a “lifetime partner in automobiles and beyond” and work “together for a better future”.

Hyundai produces many more goods than automobiles, including electronics, ships, steel, and energy products, but its best-known division is automotive. Over the years, Hyundai Motor Group designs, manufactures, and sells cars, commercial vehicles, buses, and many others. Its current product range includes cars, trucks, buses, vans, Special-CVs, and engines (industrial engine and generator engine). It sold 4.86 million vehicles globally in 2015 (Hyundai Motor Company, 2018b).

Today, Hyundai Motor Company has expanded its branches in countries such as United States, China, India, Czech Republic, Turkey, Brazil, and Russia, with more than 110,000 employees around the world. As of 2015, the company continues to improve its products with localized models and strives to strengthen its excellence in clean technology. It pioneered the ix35 Fuel Cell in 2013, the world’s first mass-produced hydrogen-powered vehicle, and IONIQ in 2016, the world’s first model with three electrified powertrains in a single body type (Hyundai Motor Company, 2018b).

By offering a wide range of vehicles with high quality, unique style, exciting performance, impressive efficiency, smart features, comfortable cabins, and awesome warranties at a competitive price, Hyundai has competed successfully with other companies and become a global brand (Table 1.1). In 2017, Hyundai Motor became the sixth most reputable automotive brand in the world, after Toyota, Mercedes-Benz, BMW, Honda, Ford, and Volkswagen (Interbrand, 2018).

Table 1.1: Hyundai’s milestones.

Year	Events
1967	Hyundai Motor Company was incorporated
1968	Began mass production of Cortina
1976	Launched the first Korean passenger car Hyundai Pony
1983	The Canadian subsidiary HMC was incorporated
1985	Launched Pony Excel and the first-generation Sonata The US subsidiary HMA was incorporated
1986	Launched the large-sized luxury car Grandeur (Azera)
1988	Launched the mid-sized luxury sedan Sonata
1990	Launched Elantra and Scoupe
1991	Developed Alpha engine, the first engine created in Korea and Sonata EV Launched Galloper
1993	Launched Sonata II
1994	Launched Accent and Avante (Elantra) Developed solar-powered and fuel-cell electric vehicles
1995	Established Hyundai Motor Europe Technical Center (HMETC)
1996	Inaugurated the Namyang Technology Research Center Launched Dynasty and Tiburon
1997	Independently developed the Epsilon engine Established the Turkey and the Asan plants
1998	Ind...

Table of contents

• Cover
• Title page
• Copyright
• Acknowledgements
• Dedication
• About the Authors
• List of Organisations
• Contents
• Preface
• Part I: Marketing is Transforming?
• Part II: Marketing is Creating?
• Part III: Glorecalization Mindset
• Index