Proton Vs Indonesia: Between Dreams and Reality

Proton as one of SE Asia own automotive marque is regarded as one of the most successful brand in the industry. As a SE Asia bigger company, it stretches its sales network to Europe, Middle East, Australia, New Zealand, Singapore, China, many other countries and recently Indonesia. Even though many late comers did not enjoy high growth or sales immediately, Proton sales in Indonesia is awfully lacking.

Indonesians are well known for their impulsive buying habit and have tendency to become super early adopter. Many China made bikes, cars, products which had bad quality being bought as soon as they come up, and the reason why because they are cheap. Sure in the end the quality problem rears its ugly head and people started ditching them. However, Proton did not enjoy that kind of “first step” as none even bought their products (well actually there are some). Until today since last year Proton opens up its business in Indonesia, I only saw 4 Protons on the road with one of them being towed… Probably had a problem, the driver seemed very unhappy. So why oh why…?

The reason Proton is very unsuccessful in Indonesia as far as I know is attributed to several obvious things. One being political, two being product portfolio, and three being the product styling.

Politically, Malaysia and Indonesia has a bit of tension regarding Indonesian labor being treated bad there. As deaths has been reported due to neglect and abuse in Malaysia. To make things worse, there are claims about Malaysia claiming Indonesia’s cultural products such as songs, indigenous dance and what not. I would not go into details because I think politics are stupids and most politician goes where a marketer and lawyers went when they are dead anyway.

On product portfolio front, Proton only made available cars which are sedans and supermini, which are cars most Indonesians dislike. Indonesian market dictates that a car must be:

  1. Cheap.
  2. Can sit minimum of 6 comfortably.
  3. Frugal
  4. Handsome… This one is subjective

So Proton current product portfolio only consists of two sedans, one hatch coupe, and one supermini hatch. They certainly could not seat 6, the price range is weird, their looks are… Somewhat unique, and frugality is unproven. Proton’s product price range is unique in a connotative way. Proton Savvy as a supermini is aggressively priced at Rp. 107 million, that is quite right, considering it is automatic model, the Gen-2 sedan hatch is also attractively priced at Rp. 146 million, so does the Waja sedan at Rp 168 million (all A/T models). However, the Satria Neo, which is a 2 door hatch coupe is priced at Rp. 190 million, quite expensive for a late comer considering at that price you can get the more popular Honda City VTEC A/T. So price is okay, one star product with three cash cow is not bad at all.

Then there is the look… Frankly speaking personally, aside from Proton Savvy, all of Proton’s offering is… Different… In a negative way. The Savvy is different in a unique way, it looks very European. The unique side profile, the center exhaust, and every line puts me head over heel. If I have excess money, then I will buy this car, but since I do not have any, then it will have to suffice I am writing good impression of the car 🙂 Do you know that the Savvy has engine and transmission lifted directly from Renault Clio? Yup, the D4F engine and Quickshift 4 (or is it 5?) can be found powering the Savvy. Some say the Savvy itself is based on the Clio, but I could not found definitive info on this. Suffice to say, the engine and transmission itself is worthy to be called awesome, as this means that Savvy is a true European car. There is a popular culture here in Indonesia that if you cannot afford Mini Cooper, than Suzuki Swift is the next best thing… WHOA! The Swift might have the look, but the Savvy is the truer representation of European technology (because it actually is). Interior wise it is also quite good, considering it is a Rp 107 million car.

Other Proton cars… Err… The Waja looks like small VW Passat, a bad impersonation that is. The Gen-2 rear end is good, I like it, but the overall roundness does not suit the front end of the car, which happens by the way has smallish headlights. Proton Satria Neo profile also look like it belongs to the 90s. Overall, aside from the Savvy, all Proton cars looks outdated to me.

So why Proton is unsuccessful in Indonesia? Aside from political problems, Proton did not do the number one mantra in the business world, they did not do enough marketing effort. Marketing effort to change the perception of Proton when it was just taxi fleet so many years ago. The problem is, Proton Indonesia needs to get rid of its taxi fleet image that has been perceived for so many years. Mind you, when Proton (Saga) was used as taxis, it is not a good taxi, the ride was rough, and the engine noise was awful. Sure time changes everything, but perception is one thing that time could not easily change.

So Proton needs to change or rather reinvent their marketing strategy. For sure the existing campaign is less than effective, and they can follow what Suzuki, Toyota and Honda had done in the past to introduce youth oriented marketing and approach. At least the Savvy is quite good, Proton could abuse the European connection because people are sucker for International exposure.

One more thing I like about the Savvy is that it looks very different than any other car out there. Perfect to be targeted to those who wanted to be different.

The Shit That Follows (Counter Marketing Again… With Pictures)

Okay, as I have wrote on my previous post about counter marketing, there are two Indonesian GSM providers who are currently involved in a marketing battle. I promised about posting a picture of a counter claim from Xplor whose image has been soiled by Indosat’s effort to gain a market share. First of all, Indosat put up this billboard complete with a plethora of similar TV and print ads.

crappy ad

The wording on the billboard means (loosely): Anything cheaper (tariff)? With Rp. 0 (free) next to the lady’s head. Then there’s the usual misconception problem about the ad as people accuses Indosat for making a misleading information. First of all, the Rp. 0 (free) is a tariff scheme whereby you used Rp. 5000 and you will get a free Rp. 5000 for the next one call on the same day. The call also only applicable for the same operator. The problem is that Indosat put up Rp. 0 that implies the call is free although it’s not, and a lot of people thinks it’s free.

Furthermore, the ad is a counter marketing for Xplor’s (another GSM provider) Rp. 1/second promotion. Xplor has this promotion of Rp. 1/second, and Indosat anything cheaper notion is specifically aiming at Xplor’s marketing effort. As I have mentioned on my previous post, this move is enough to send Xplor up in flames and decided to do a counter marketing. Then, Xplor made this billboard and its many variations through tv and print ads.

billboard

The wording on the billboard means: empty barrel sounds loud when hit… A famous Indonesian phrase hinting at those who exuberantly exaggerate things. In this case, the Rp. 0 Indosat claim is just one big bag of hot air, because it is not a tariff, it’s a bonus. I used Indosat as my personal GSM provider, but I do however side with Xplor on this… Indosat doesn’t have any “smart” thing to say about this, because Xplor is right. Rp. 0 is not tariff, unlike Xplor’s Rp. 1/second. Because the real Indosat tariff is around Rp. 8 /second, and after a cumulative of Rp. 5000 is amassed then the user got their bonus free call for Rp. 5000 duration.

If you guys take a look closer at the wording under the girl who sits on the barrel is the Rp. 0 crossed out with font and visual styling of Indosat’s original Rp. 0 ad.

Indosat… Shame on you… Xplor, I have your back… I’m still keeping my subscription though, even though Indosat is expensive, my number has flew around the world.

Accord 2008 Global Image Comparison

I might have been too harsh for my preview of the 2008 Honda Accord Asia version. The thing is that, Toyota as Honda main competitor tried very hard to differentiate products where different aesthetic taste is appreciated. Western stereotypes and Eastern stereotypes are very different like cats and dogs, especially when appreciating something visually. Simple and utilitarian are a perfect combination for Westerners while Easterners prefers “the blings”.

Toyota decided to change the face of Camry for American and Eastern market, creating an almost altogether different car (visually). You guys can check it out with the image below…

accord us front

Accord Asia front

Can you guess which Accord is for Asian and American market? (hint:you can’t, it’s the same)

Accord Asia Back

Accord America Back

Can you guess which Accord is for Asian and American market? (hint:you can, now it’s a bit different)

Now let’s take a look at US and Asian Toyota Camry…

Asian Camry

US Camry

Asian Camry (above) and US Camry (below)

As you guys can see, how starkingly different the US and Asian Camry are, while the Accord is just that… The same. As US market is utilitarian, they mostly didn’t care about the exclusion of projector headlight on the Accord, while the US Camry has them. This is once again, only a cosmetic as it is the bulb that is more important than the shape of the headlight. However, Asian market whores about silly cosmetics, and Accord doesn’t have it.

Management wise, Honda did the right thing. It’s cost saving measure to the highest degree, after all, what we need is basic transportation right? Wrong… Marketing wise it’s not the right thing to do. In marketing we have what we call customer focus, where one shaped a product based on what is the market demand. However, Honda has this penchant notion that Honda users are glad being shoved on what they need not what they want.

Truth be told, even though I’m rambling how the Accord looks, magazines and people love the new Accord. In America, the new Accord gains first place in many mid sedan comparisons (cars.com, edmunds.com, wheels.ca). Even though one publication rates the Accord third, at least three other publication rates the Accord at first.

So there you go, visually I loathe at the new Accord, but my friends told me… When you are sitting/driving in the new Accord you won’t see what’s on the outside, you drive the car, you enjoy the seating, you feel the raw power of the engine and bathe in the luxurious and cozy interior. They might be right… I am to cynical about how it looks, I forgot what makes a Honda a Honda… A sensible car. Because in the end, I guess it’s not how you look, but it’s what you have inside, that makes you as a person, that also applied to a car I guess.

(I’m watching 12 days of Christmas eve at Hallmark, and I guess it softens this bitter heart a bit)

Images are taken from Temple Of Vtec, Toyota Indonesia website, Honda Thailand website, and Edmunds.com, cropped to fit.

Accord finishes first at Edmunds comparison

Cars.com Accord comparison

Wheels Accord car of the year candidate

Franchising The Final Frontier: Part Dos! (Warning: Long Read)

Now, let’s continue my entry about franchising. Be warned though, this is a long read… Get some chips and dips, because I believe this will be interesting.

The last time I blabber about franchising, I talk about problematic brands that tried to extend its wing but seemingly didn’t have the strength to flap it out. Es Teler 77 probably a small example from a good pool out there, but it is good enough to illustrate. Let’s take a recap, this is weekend anyway where I usually wrap things up in weekend roulade.

Es Teler 77 is what I call a geographic resource centric business, meaning that it can’t operate at 100% efficiency outside the boundaries or places that it needs its resource to operate. Es Teler 77 needs ripe-fresh-and ready tropical fruits that can only be found… D’oh, in tropical countries. Opening a branch or selling a franchise on non tropical countries means that it has to deal with the hassle of exporting and importing fresh produces which in itself is a hassle. Creating Es Teler 77 signature product is not quite the easiest thing in the world. It’s like making Sushi, you have to select the best ingredient out there, ingredients which are best taken directly and used immediately from mother earth.

There’s also the problem of habit of eating when introducing Es Teler 77 signature product outside tropical countries. It’s not a dessert, it’s heavier, it’s not condiment, it’s something more, so what is it? Well for sure on four seasoned countries it can only be eaten on summer or at least best to, so there goes 9 months of potential revenue. What about culture? Here in Indonesia people love impulse buying, especially snacks. Almost anywhere in Indonesia you can find small stalls which sells snacks from simple fried cassava/banana/tofu/chicken, to traditional snacks. Mind you that these are not light snacks but can be considered as light meal. Now what countries have that kind of eating habit? Not much eh?

Speaking of habit of eating, let’s continue on to our second example, Krispy Kreme…

Donut’s as we know is an American thing, coffee and donuts, just like the cops on those movies always took in the morning or when they are in break. For years donuts are considered as snacks in Indonesia, made not so popular by Dunkin Donuts, the first Indonesian franchised store which sells donuts. Then suddenly, two years ago J.co, a locally owned donut retailers opened up its business and BOOM! Donuts are on its way to stardom baby! Donuts are now hip and a cool thing, far from so so image Dunkin Donuts has created for years. Indonesians love new things, they will always took that 1st chance to try anything new. In marketing term you can say that Indonesians are super early adopters. Sell anything that is new here and people will buy it, seriously! Nokia E90? We got it, there’s even engineering sample sold on a local mega store. Lexus? Seen it driven here and there, even though they are ridiculously overpriced (Lexus IS250 is more expensive than Mercedes E260, and Mercedes has better image and recognition here). Chinese cars? There’s few on the road, Chinese motorcycle, ditto.

Yes Indonesians are super early adopters, but they also put emphasize on satisfaction and expectation. When a product is bad, most often than not the product will be literally shunned by the community. After all we are talking about Easterners stereotype where word of mouth are more believable than advertising or promotion. Chinese motorcycle for example, about 4 years ago it’s super cheap and people (at first) flock on to it, anywhere it’s Chinese motorcycle for a while. However, just like flash flood, it’s over instantly (in this case less than half a year), as cheap also equals cheap quality and everywhere Chinese branded motorcycle dying on the roads, on the workshop, everywhere. 4 years later, only a handful of people bought Chinese branded motorcycle, and that even after extensive test driving and manually selecting the bike before purchasing.

Now let’s back to Krispy Kreme stuff. 1 year after J.co opens up its business, it seems that everything is fine and dandy, people still queue long lines to purchase even half a dozen of donuts. Now does this means J.co’s donuts are a success, you bet it is. However, hot on the tail of J.co is PT. Mitra Adi Perkasa, Indonesian Krispy Kreme franchiser who wants a piece of the donut so to speak (pardon the pun). There are rumors that J.co is using Krispy Kreme recipe therefore it is expected that with brand name and originality claim, it is expected that Krispy Kreme will do better than J.co.

However, this is my critics lie upon Mitra Adi Perkasa, do they actually did a research about the eating habit of Indonesians rather than just following in J.co’s successful steps? Do they did a research that Indonesians like to eat donuts? This actually a classic condition where one fails to oversee the immediate surrounding or the market condition. Ya Kun Kaya, a Singaporean owned breakfast stall was a hit in Singapore even until today. When you visit Singapore, be sure to eat breakfast at one, the combination of milked tea and kaya sandwich are top notch. However here in Indonesia Ya Kun Kaya is positioned as a lavish upscale snack place in shopping complexes which opens at noon… WTF?? For years I saw mostly empty chairs and I’m just sad how a wonderful product was put out of its intended place. This is because Indonesians didn’t eat breakfast outside of their house, it’s just habit, custom, culture or whatever you might called it. Indonesians are communal individuals, they eat breakfast with the family in the morning, and if possible eat dinner together with the family. How about the singles? Well, they eat alone, but still at the comfort of home. Indonesia’s capital is not the friendliest place to travel you know, with traffic jams 24/7, there is not enough time to go anywhere to eat.

Does Mitra Adi Perkasa knows about donuts are not indigenous to the locals? I don’t know. Now let’s continue to the horror story that haunted Indonesia’s Krispy Kreme franchiser until today.

If you wanted to know how Krispy Kreme fair, please check my previous post about Krispy Kreme. I suspect that Mitra Adi Perkasa relies solely on J.co’s success and that Krispy Kreme is an international brand that they expect the franchise will be successful. However that’s just wrong. In my days of observing Krispy Kreme is that they are successful enough in the first months, queue line as long as J.co’s but it only lasts for a brief time. Now Krispy Kreme is like Dunkin Donuts, barren, devoid of customers except for the occasional people lured by the buy a dozen get two dozen more promo. So how can J.co survived but Krispy Kreme couldn’t? The answer is deceptively, and eerily simple.

While Mitra Adi Perkasa seemingly rely on promotion and Krispy Kreme brand, J.co actively pursue recognition in the form of pure marketing campaign. I’ve talked about habit of eating, where as donuts are not staple food or even snacks for Indonesians, so what does J.co did? They did a roadshow, taking donuts and coffee to universities and literally educate students to integrate donuts and coffee into their life. Now who wouldn’t target young aspiring future users these days? This conforms to Adam Morgan’s book, Eating The Big Fish (1999). He wrote about how second liner brands could outperform the number one brand. In this case, J.co used the classic approach of education, educating how to properly eat donuts and the likes. Who knows that glazed donuts are overly sweet because it is meant to be dipped into the hot coffee to soften the sweetness thus making the coffee sweeter along the way… I do, but most Indonesian’s don’t.

For J.co and Krispy Kreme, everything is already written in stone, as J.co aggressive marketing strategy seemingly defeat Krispy Kreme costly promotion. The defeat of Krispy Kreme lies not on its unattractive promotion, it is attractive indeed, you get triple for the amount you paid, but for what? Those who got “touched” by J.co will surely know how to eat and when to eat it properly. But those who eat Krispy Kreme just ate it because they bought it. Now it’s not just about Krispy Kreme lack of creative marketing effort, but also on its lack of improvement of the product they sell.

I’ve also noted on the last post about how Krispy Kreme franchise characteristic is its own down fall against creative competitors. It cannot changed its recipe because it’s a franchise company. Robert M. Grant wrote on his book (Contemporary Strategy Analysis, 2006) about evolutionary theory and organizational change. He mentions about organizational willingness to change and adapt to their surroundings if they see it fit. The lack of creativity out of Krispy Kreme might not be the fault of their franchisers, but attributed also to Krispy Kreme headquarter to not let local franchisers to introduce new products in its lineup.

I see Krispy Kreme Indonesia is dying, unless Mitra Adi Perkasa could introduce the same marketing concept as J.co, they might succeed, but for this time being, I’ll be watching from a distance, the slow death of Krispy Kreme Indonesia.

Franchising: The Final Frontier – Part Uno

As I have noted previously on my Franchise or Not To Franchise post, one must take careful consideration to take a franchise. There are lots of considerations to make before taking a decision, decisions such as:

• Availability of suppliers
• Location desirability
• Brand image
• Product desirability amongst the would be consumer

Those I mentioned above seem like a very simple process that anybody with limited knowledge might know. However, you might want to take a look at these next examples how a franchise is not done the right way following the criteria I described above.

For this entry I will take two examples that spans the globe, the internationally renowned Krispy Kreme and the not so known Es Teler 77. Both are a distinctively different company although both has similarities in term of the business they are into, the food business. I don’t have to describe in detail about Krispy Kreme, it is after all already spawn across the globe, however I do have to detail it out about Es Teler 77. Es Teler 77 is a chain store business mainly selling unique Indonesian dessert of a mixed fruits with syrup and crushed ice. The name of this dessert is the brand name of the store itself, es teler, or drunken ice in English… The name doesn’t do justice for the product though as the dessert has no intoxicating property whatsoever, it is just crushed ice mixed with mixed syrup (this is the not so secret ingredient) and mixed exotic tropical fruits. Speaking of ingredients, I personally like the star product of Es Teler 77, the sweet taste of the syrup (too sweet for my taste though, I occasionally ask for more ice or for less syrup) combined with jackfruit, coconut meat, and avocado combined in a way that it creates a complete combination of taste. None of the specific ingredient has its distinct taste dominate each other.

Es Teler 77 claim itself as the first Indonesian franchisable business available, although I assume they are just one of the pioneers, not the very very first. As a franchisee, one could find Es Teler 77 chain store strewn about in Indonesia most known shopping malls or districts. With the perfect combination of availability and affordable price, Es Teler 77 took Indonesia by storm (or tropical tempest).

Now with the introduction settled, let’s talk about how each actually fails in some aspect of its business life and why we have to take a lot into consideration of franchising even though how well known the brand is. This entry will be a companion entry to the original Franchise or Not To Franchise I did back when I first started this blog. With such a wide spectrum franchising covers, expect to see more of it down the line.

Now let’s talk about Es Teler 77 first shall we? As a franchise company, Es Teler 77 spreaded out throughout Indonesia with vigor, from the far east of Indonesia to the absolute west of it. The nature of the star product or the accompanying products which are cheap and can be considered into side dishes/dessert makes it as impulse goods. In that they are bought without a lot of considerations. On my last trip to Australia many years ago, I saw Es Teler 77 stall opened near… Well I forgot, you guys can check it out around Sydney. This come as a surprise for me because entry barriers for this kind of shop is quite high, considering the exotic goods it uses as the main ingredient.

Through curiosity, I came up to the store and ordered the es teler. As I predicted, the taste was chaotic at best, the jackfruit tasted bitter and occasionally tasteless, a trait commonly associated to unripe jackfruit or packed (not fresh). The syrup tasted too sweet, and basically it taste doesn’t do justice to the original recipe we have back home. When I took a look around, most who ate there are Indonesian’s student.

Now what is the problem with Es Teler 77 in Australia? As I have mentioned above, the problem lies in the availability of suppliers of exotic tropical fruits there. Indonesia as a tropical country is the perfect breeding ground for tropical fruits. Availability of coconuts, jackfruit and avocado are year long, or at least it is abundant enough that the ingredients can be kept with ease even if it’s out of season. Australia with its pseudo reversed tropical season (winter when it is summer around Asia and vice versa) prohibits the specific genus growth of tropical fruits used in Es Teler 77 ingredients.

I can imagine the horror of managing fruit distribution if it has to be imported from Indonesia… Brr… It gives me the chill already. First of all, they need to find grocer who are willing to pack and ship the goods to Australia, mind you though, selecting groceries to send abroad needs skill. You can’t just select random vegetables or fruits, you need to select manually those who are just ripe that it still retain its consistency (fruits gets softer as it ripens) so it can survive the journey. This alone already took quite a lot of resources/money, there’s also more resources involved on keeping the unripe fruits to be used by the store. Distribution actually is no problem if you have resources to spare actually… But the most important thing here is that fruits that ripen on tree tastes different if it’s ripen off the tree.

Now what do we basically knows about franchising in general? Franchising brings about the unique taste of the franchisers to the franchisee, or just basically bringing the unique taste of the trademark throughout the places it opens its business. If Es Teler 77 Australia has a different taste than Es Teler 77 Indonesia where its main HQ are, what is the point of opening up business abroad? I suspect that Es Teler 77 Australia is not a franchisee, but rather a branch therefore the owner is just a district manager acting solely on HQ command.

Es Teler 77 problem lies in the availability of suppliers in the region it opens up is business. Also the problem of Es Teler 77 lies in its product type, it is not a universally consumed goods like an ice cream. Can you imagine ordering up ice cream in Antarctica? Eating ice cream in the coldest place of the world seems like a good idea. The same goes to Es Teler 77, it’s star product basically a cold food, outside of the tropical regions do you think it will manage to be sold well? It’s about habit of eating that is becoming the ultimate barrier to entry for food products, especially if it’s going to be sold internationally.

Do remember, when you took a franchise, always ask where are you going to get the special ingredients of the product if there’s any.

Now what is this habit of eating we are talking about? And where’s that Krispy Kreme entry? Where did Superman go? Does the chicken came before the egg? Will lost goes on and on and on and on and on and on and on? Well, find it out on part dos of this entry, to be concluded later tonight.

Do You Want To Start Your Own Business? Read On…

Starting their own business is a dream for almost every person in this world. You work for yourself, you don’t have the nagging boss behind you, you set your own goal, and if you strike it good, you will get lots of money. Speaking of money, my father and I had a little conversation about setting up a business. We talk about how my friend wants to open up an upscale escort/transportation business with little start up capital.

Now here are some problems we encountered during the conversation. With a small start up capital, does the bulk of the resource goes to the core of the business? And if it isn’t does the core of the business is allowed to expand later in the stages of its life cycle?

Now we know about product life cycle, where a product is devised, introduced, then it matured and then it finally falters. With a small start up capital, will the product/service being introduced has its core business 100% developed? To put it simply, my friend’s idea about starting up the escort/transportation business requires a hefty sum of money. However, because he didn’t have enough start up capital (he does actually, but he didn’t want to put all his eggs in one basket) he wants to introduce the business concept incrementally. Personally I thought that this is a bad idea… And why is that?

Here is the thing, my family ran our own business, and what we learn through the years is that customers only remembers us for the smallest mistake or the slightest lack of feature from our product/service. Here in my country, we have a saying that goes like this (loosely translated to English): a drop of coffee on a glass of milk and you throw away the milk jug. It means that people will judge us for the smallest mistake we made, not how many good deed we had done.

Back to the business part, what that old saying means is that we have to establish the core of the business 100% instead of introducing an incremental increase for a period of time. My friend’s business proposal for example, the escort/transport will first use cheap vehicles that contains only the essence of the true core business, then down the line he will introduce the more expensive vehicle. Now the example seems a bit convoluted, let’s talk about automotive service workshop.

Inside a workshop, we usually finds oil changing service, tire changing/balancing/spooring, engine maintenance, engine repairing, and the likes. How about if we open up an automotive service workshop providing only engine maintenance and engine repairing, but we put up general service workshop sign in front of the shop. People off course will be upset because your core business which is general repair is not fulfilled. If you has only limited start up capital, do make sure that your core business is intact, up and running. Use less man power, provides no-frill waiting room, whatever you do, don’t do the other way around. The waiting room on a service workshop acts as a support for the core business, and that should be the least thought out aspect of opening up a business.

Now people sometimes confuse what is the core business and what is the supporting factor. This is actually basic marketing once again, one of the 4 Ps, product. According to value based management.net, a product must have functionality, quality, appearance, packaging, brand, service, support, and warranty. When I helped a lecturer wrote a book for his professorship he divides product into three separate category, the core, the secondary and tertiary. The core is what defines the product itself, its function. The secondary defines the name, the specific category it places and the tertiary defines the supporting factor of the product such as warranty, after sales service and the likes.

Well, enough for the product description, I will write a separate article for that one. Back on topic, if you open up a business, you need to make sure that the core business is intact and fully running. Do not sell a broom without the whisk that’s for sure, and thus when you open up your business, always starts with your core business intact from introduction phase up to maturity in its life cycle.

Counter Marketing and The Shit That Follows

Okay, I promised back then that I would dig deeper about how two big Indonesian GSM providers are duking out medieval style by throwing stones at each other directly. However, due to my lack of social life, and my lack of interest about local scenes I couldn’t find out more about the advertisements. However, I can give out some examples about counter marketing using the most renowned brand in the world… Coca Cola and Pepsi Co.

In the land of uncle Sam, everything is legal, even making a mockery out of your competitor. The most oblivious of this example is the ongoing battle of Coca Cola and Pepsi Co advertisement where they literally disgrace their competitors product to a high degree. I remember about reading an advertising book where there’s a picture of a kid using Coca Cola cans as a stepping tool to reach and buy a Pepsi from a vending machine… Boy, that was classic! But you know Coca Cola going to retribute right? Well of course they did. How about Pepsi Co, did they just be quiet about it? Of course not! They retaliate again.

Now this is what counter marketing is all about. Usually, to save face, a competitor who’s being targeted as the victim will retaliate, and the evil cycle continues. In the case of Coca Cola Vs Pepsi, they can manage to duke it out for so long because they have the resource for it. One word of advice, don’t get involved in a counter marketing, because the person/group/company/principle who have the most resource will win at the end. So be very careful about derogating your competitor, because once you get stuck inside a counter marketing situation, usually it will involve a lot of money…

Money you say? Yes, money. When you derogating a competitor, it means that you deliberately dragging down its image. Now how do you increase image standing again… Well, you can’t, at least in a short period of time. But what you can do is to counter it, and make the people sees that the person who derogating you is the one who doesn’t have the credibility.

Last Week Weekend Roulade…

Okay, so last week I was feeling a bit under the weather, and I’ve just recently recovered… Although not 100% fit. Last week, I learned that I can put tags that describes the entry better than the categories in this blog, so from now on I will put tags and categories to better describe my entry.

Last week I posted the most debated ad ever (which I know so far) in my country. Well, what do you know, it actually a form of counter marketing… Yes, corny term again, but it is a valid term because the ad is actually countering another local cellular provider which is Xplor. You see, Xplor has this Rp. 1/second call rate, which amounts to Rp. 60/minute. However, it is just as misleading as Indosat’s Rp. o freetalk campaign although not as extreme. Xplor has this Rp. 1/second call rate scheme, in which (after reading carefully the terms and conditions), Xplor users (the postpaid subscribers) when their bill amass to Rp 150.000, they will get the Rp. 1/second call rate.

The clear indication that Indosat is doing counter marketing can be seen on some billboard placement where Xplor Rp. 1 is met with Indosat’s Rp. 0 plus the commentary “anything cheaper?”. Indosat’s Rp. 0 ad even backs up the claim that it is indeed a counter marketing, in which the ad depicts a bidding situation and the announcer said “Rp. 1, going once (1), going once (1)” and then there’s the shining girl walking by with her stupid hair blown out of nowhere while wearing a T-shirt with a text “Rp. 0”. Not being out gunned, Xplor actually returns the favor by making another ad saying that “there’s no such thing as free”… Or something, I don’t know it either, my friend told me that.

So there’s actually an advertising war between this two cellular provider. I’ll try to provide you all with proof of this and dig in deeper.

The most debated ad ever… (which I know so far)

From my previous post of “Please Help Me Decipher This Code“, I’ve quote that an ad suppose to capture the audience intention and convey the benefit of the product. Now let me humbly provides another full of hidden codes advertisement.

The most debated ad

This is a billboard of Indosat latest advertisement oddity, because lots of people misinterpret the meaning of the ad which mentions about free talk, zero money, and a pretty lady which I don’t really care who she is. The billboard ad means that if you spend Rp. 5000 on a conversation, then you will be given another free talk of Rp. 5000. What the billboard mentions about free talk /zero money in particular is that the second Rp. 5000 call is free. But here’s the catch, that second Rp. 5000 is applicable to one condition only in that when the free Rp. 5000 is used up for the day, you pay for regular charge, and that Rp. 5000 free talk use the same call rate of (around) Rp. 1700/minute, therefore only giving you a free talk time of around 3 minutes…

Come on… That’s just stupid and misleading. Furthermore, the writings “Ada yang lebih murah?” literally means in English: “Is there anything cheaper?” Off course there is, there’s Esia, and Telkom Flexi, although both are CDMA base wireless service, it has the same function of telecommunication. After all, the billboard ad doesn’t mention anything about the specifics, ain’t it? Is it the cheapest in CDMA or GSM base wireless service? Is it the cheapest prepaid wireless service, is it the cheapest lie ever in an advertising? Well, you decide. Just for comparison, the half Malaysian owned XL tariff is Rp. 25/second or roughly Rp. 1500/minute to call other operators, while Mentari users pays Rp. 17ooish/minute to call other operators… Now is that the cheapest? I don’t know, perhaps I’m the dumb one.

This Indosat billboard ad further strentghened my opinion about marketing people goes to hell.

By the way, I use Mentari, and there’s a free SMS promo in which you buy Rp. 50000 voucher you’ll get 50 free sms and 150 free sms if you buy Rp 100000 voucher (free sms applicable to own network). For me that SMS promo is more valuable than the trashy Rp. 5000 free talk ad.

Weekend Roulade: Franchising Fiasco

So I’ve start a topic about franchising using Krispy Kreme as its example. Well, in Indonesia currently Krispy Kreme is facing a tough challenge in the form of a local branded donuts chain store, akin to KK. As a franchise, KK chain stores must sell products that is defined by the main headquarter somewhere in America. However, this strong point of franchising becomes KK main disadvantage in Indonesia.

KK looses to J.Co (the local branded donuts chain store) simply because J.Co modifies the recipe which at first tasted similar to KK donuts. J.Co listens to the customers complains about how its donuts are too sweet and changed the recipe to become less sweet… And what do you know, it works. Now KK chain stores in Indonesia couldn’t follow suit isn’t it? How’s that for franchising becoming the easy money people would hope?

I’ve mentioned also about the difficulties of setting up a franchise, especially about location. I ate at Burger King this afternoon, and really wonders about why oh why Burger King closed down so many years ago… Apparently there are lots of people eating there, and I don’t see a reason why they left, considering this must be a franchise, thus taste will not differ that drastically in just a short time. So this short minded brain of mine started to theorize a bit.

Burger King chain stores in Jakarta are available in the best, most glamour shopping place around, the Senayan City and Grand Indonesia. How about back then? Well, back then Burger King was available at Kelapa Gading Mall… Not the most glamorous place then or even now as a matter of fact. So does desirability location affect Burger King so bad it just went out so many years ago? Perhaps, but I need to delve in further with the many resource I have.

Oh about marketers go to hell thing… I really mean it.

Next week! Super Salesman, is there such a thing? Actually it has to do with my recent visit to a Suzuki dealership. With such a keen intention writing about how good Suzuki products nowadays, I was really surprised when I visited one of its dealership… Well, you can guess I’m going to rant.