Philip Kotler Day – 75th Birthday Celebration presented by Philip Kotler Center For ASEAN Marketing. (August 7 , 2006)
Kotler’s Day at Philip Kotler Center for ASEAN Marketing
On August 7, 2006, Kellogg School of Management celebrates Kotler’s Day on the occasion of Philip Kotler’s 75th birthday. On the same day, Philip Kotler Center for ASEAN Marketing organizes Kotler’s Day Celebration at its Secretariat in MarkPlus Institute of Marketing, Jakarta. To give a special tribute to the man who has raised the awareness of marketing in Asia, Philip Kotler Center for ASEAN Marketing writes a special column about his influence in the world’s largest continent which he dubbed the “hot spot” of the world.
Philip Kotler, the world’s foremost marketing authority—is famous for his books, so we can list the ones related to Asia—besides his international authoritative textbooks—and find his three levels of influence in Asia. Level 1 influence is how Kotler encourage Asian marketers to contribute their knowledge to the world of marketing. There are many Asian marketers who become his co-authors for international books: Hermawan Kartajaya of Indonesia (4 books), Ned Roberto of the Philippines (2 books), Somkid Jatusripitak (2 books) and Suvit Maesincee (2 books) of Thailand. Surprisingly, Kotler’s most active Asian co-authors are from Southeast Asia.
Level 2 influence is about how Kotler drives the marketing practices in Asia. His authoritative textbooks have been adapted into Asian version with the assistance of Asian marketers such as Swee-Hoon Ang, Siew-Meng Leong, and Chin-Tiong Tan of Singapore. Level 3 influence of Kotler in Asia is when how he set how Asia should be marketed through books such as Marketing Asian Places and Repositioning Asia.
From so many books he wrote at three levels influence, Google will “sort out” the top one: “Repositioning Asia”, which has the Level 3 influence. Recent Google Web Search with keywords of “Kotler Asia” yields 151,000 results. Amazon.com web pages that features “Repositioning Asia” book topped the list of results.
Repositioning Asia, published in 2000, is a book that applies principles of marketing to reposition Asia from bubble to sustainable economy after the 1997-1998 crisis, written by Kotler and Hermawan Kartajaya. Both are the co-founders of Philip Kotler Center for ASEAN Marketing.
In the book, Kotler-Kartajaya boldly predicted and tried to influence the outcome of the Asian crisis. A quote by Dr. Johny K. Johansson of McDonough School of Business, Georgetown University best describes the weight of this book: “It writes of history in the making and, simultaneously, attempts to INFLUENCE THE OUTCOME.” Besides trying to reposition Asia as a whole, the book also attempted to reposition the Asian Nations. It also tried to offer the best way for Asian companies to reposition themselves during the crisis.
The influence of Kotler in the book can be summarized into the five “truths” of Repositioning Asia. First, the book was the blueprint of Asia 2000 and beyond. In the book, Kotler-Kartajaya proposed a new strategic architecture, which will position Asia as “the world’s largest emerging sustainable economy”. Evidently, the positioning hypothesis proved to be right. Today, Asia is truly the world’s largest emerging sustainable economy, especially with the rise of China and India.
Second, Kotler-Kartajaya also revealed the myth and the reality of Malaysia’s controversial capital control policy. Many analysts believed that the capital controls will hurt Malaysia’s economy badly although Dr. Mahathir, the then Prime Minister, believed capital controls saved Malaysia from the severe social and financial upheaval that its neighbors experienced.
To Kotler-Kartajaya, the debate was just a myth. The reality was far deeper than that. Capital controls were less of a financial strategy to save Malaysia’s economy than they were a political ploy to preserve it. Real recovery—which would safeguard the economy from similar future shocks—would require the fundamental remaking of Malaysia’s corporate and financial sectors.
Evidently, their statement proved to be right, especially with the case of Proton. According to Malaysia Today, Proton has long enjoyed government protection in the form of high tariffs on imported cars. But as tariffs are phased out under a regional free trade pact, its market share dwindled to around 30% in 2005 from 57% in 1993. The one thing that Proton needs at the end of the day is foreign technology. The message is clear for Proton: it needs a foreign alliance to survive.
Third, Kotler-Kartajaya predicted that the Asian crisis was transforming Asia from the “flying geese” structure into a regionalized structure. Before the crisis, Asian economy was best described in a flying geese formation. Flying in a “V” formation, the geese highlight the differences between the economic levels of the various Asian countries. As what the name implied, the formation resembled flying geese, headed by Japan as the leader in front, while the rest of the group followed. Countries toward the front tend to transfer “older” industries to countries at the back. This process is continuous because of the changes in comparative superiority.
Japan’s failure to position itself as “group leader” after the crisis gave the opportunity for other Asian nations to formulate a regional model without having to rely on the vision and guidance of others. Kotler-Kartajaya predicted that the shape of geopolitical landscape in Asia would mainly be influenced by the squadrons (SAARC, Greater China, Korea, Japan, and ASEAN) of the former flying geese, who increasingly drive regional integration. As a result, they predicted that the East Asia of the future would develop as one of the world’s most influential regions. Evidently, their hypothesis proved to be right.
Fourth, Kotler-Kartajaya proposed the Asian companies to reposition themselves by aligning their competitiveness and financial soundness. Using market competitiveness and financial soundness as variables, Asian companies may fall into a bubble or a sustainable one. The term bubble reflects state of companies that show high growth rates but are not substantiated by sound investments, good governance, and strong economic fundamentals. Kotler-Kartajaya argued that Asian bubble companies need to start making some kind of shift either in competitiveness or financial soundness in order to sustain. Evidently, their proposed approach proved to be the right move for Asian companies. One of companies that applied the principle was Samsung.
South Korea’s Samsung Electronics is an example of a bubble company that is focusing on improving its financial soundness first, prior to improving its competitiveness. As an initial step to restructure its business, Samsung Electronics has performed cost-cutting efforts. CEO Yun Jong Yong acknowledged that “restructuring is only the first step, since cost reductions will no longer produce big profits.” Thus, while the cost-cutting efforts continue, it strengthens the company’s competitiveness by focusing on innovation and improving its research and development.
Fifth, Kotler-Kartajaya proposed the MNCs in Asia to reposition themselves by empowering their Asian Regional Headquarters to coordinate the regional strategy. Most of MNCs in Asia before the crisis were using top down approach from the global head office. The strategy, tactic and value are directed from the global office. The local office only serves as the operator and the regional office as supervisor.
Kotler-Kartajaya proposed the MNCs in Asia to maintain consistent value globally and at the same time coordinate the strategy at the regional level and customize the tactic locally. With more and more power given to many regional offices, their hypothesis proved to be right.
Yamaha Motor, for example, is using this approach for marketing its motorcycle. For every regional target market, Yamaha Motor is equipped with one unique respective strategy. In ASEAN, growth is used as the foundation of a strategy. It is because ASEAN still has large unexploited growth potential. In the USA as well as in Europe, profitability is used as the foundation of a strategy since growth for both markets is literally very small. Despite the differences in strategy for these three markets, Yamaha Motor brand is sustained equally at a global level while customizing the tactic locally.
The five “truths” are just a glimpse look at the influence of Kotler in Asia. The guru has increased the popularity of marketing in Asia through seminars and consulting projects as well. We should all thank him for all his endless dedication for marketing knowledge discovery. Happy birthday to Philip Kotler!