Some time ago I launched a new book Beat the Giant in the annual event of Indonesia Brand Forum (IBF) in 2013 at the JCC Jakarta. In general, this book offers ideas on Indonesian local brand strategy in the face of global giants in the market motherland. In the book I offer four strategic positions that can be taken by local players in the face of a global player by referring to the resources (resources) that they have.
Results of my research over the last year to 30's local brand that successfully hosted in their own country found the recipe for success is very interesting. Namely that the most valuable capital is owned by a local player to win the competition against global brands are the advantages of local (local advantages) that can be used as a point of distinguishing (point of differentiation) them.
The question is, what are the benefits of local (local advantages) they can build? Once again, based on research on the cases companies are written in the book, I divide the local advantages into several groups as follows.
Understanding the Local Market knowledge of the situation, the conditions and characteristics (industry structure, regulatory, competitive landscape, etc..) In the local market. Wardah is local players in the category of cosmetics are gaining considerable market share blessing following the market menggeliatnya Muslim women. In recent years emerging trends in Indonesia where wearing the hijab into a new lifestyle that is in demand among Muslim women. The veiled women look more beautiful, fashionable, and modern.
This trend will then generate the need for customized cosmetic veiled woman. By chance did Wardah position themselves in this market. Once the market is still a niche market, but following the trend, it is now a mainstream market segment is quite large in size. And Wardah able to take advantage (riding the wave) of the developments.
Local Customer Knowledge is an understanding of the sociocultural conditions, values and behavior of local consumers. Sido comes to dominate the market for cold medicine because these companies understand the conditions sosiokulutral Indonesian society in finding solutions to cure diseases like colds's subscription.
Sido Appears know very well that Indonesian consumers unwilling to use solutions with drugs such as paracetamol west for their colds complaints. While traditional solutions such as scrapings assessed painful, inconvenient, and less practical. Sido then comes out with a liquid herbal drug solution in sachet packs. Such insight is difficult to obtain if the player does not have an understanding of the cultural background and values of the local
Local Culture-Local Wisdom which means the use of resource management (production, operations, marketing, sales, etc.) based on culture (local culture) and local knowledge (local wisdom).
Dwi Sapta IMC, an integrated communications agency, able to build loyalty to his clients for a dozen years and even decades of use of emotional approach to client relationships (relationship accounts) that originates in the Indonesian culture is full of familiarity, understanding and empathetic, relying on flexibility, familiarity , confidence, and helpful. Typical approach accounts Indonesian relationship has proved very difficult to imitate by competitors that rely on global account relationship is formal-rational.
Local Relationship: the ability to build a unique relationship closeness (unique relationship) with consumers or local pertner be a potent source of competitiveness in facing global brands. Pawnshops able to dominate the mortgage market in Indonesia for decades owned company already has a cultural connection with its customers, particularly consumers grassroots (bottom of the pyramid).
This unique relationship is formed because Pawnshop could be a solution for consumers in the face of financial problems they face. Pawnshops culturally capable of being a hero for consumers grassroots in solving their financial problems.
In addition to the emotional connection with consumers, the benefits that come from the local relationship can also be in the form of close relationship with the company throughout its channel partners such as distributors, agents, retailers. This close relationship is usually formed due to a business relationship that has lasted long enough to tens of years. This close relationship became a kind of social capital that is difficult to imitate by competitors globally.
Emerging players such as Sido, Kalbe, Djarum, and many other local players have a close relationship with its distribution partners throughout not only a business relationship, but also the closeness of family ties. This relationship is usually established business networks and friendships are unique and would not be owned by global players who have sex with distributor partners formally.
Local Ingredient that use ingredients sourced from local natural resources. Keep in mind that Indonesia keep a very large biodiversity, which can be a raw material products are highly competitive. Since initiated by Martha Tilaar more than 40 years ago, Martha Tilaar Group (MTG) leaned competitive advantage by harnessing the ideas sourced products from local knowledge and natural wealth of Indonesia.
To compete with global brands that dominate the market for skin whitening (whitening) for example, MTG using cosmetic ingredients derived from olive fruit in Kalimantan. Excavate material from the wealth of Indonesian biodiversity is a key factor of competitive advantage MTG.
Messages for local brands: Lets build your local advantages, and beat the giant!!!