Navigating Indonesia’s New Marketing Landscape
The investment board gave you positive economic indicators. The chamber of commerce connected you with local partners. The expensive marketing agency you hired prepared a wide-reaching, cross-platform campaign. But, sales number show a sharp drop after your initial launch. What’s going on?
Before you chuck it to “cultural difference”, note that plenty of local companies in Indonesia are also struggling. The market is changing so fast that even the traditionally strong players are stumbling just to keep up.
The problems is that while most people have a notion of Indonesia’s new marketing landscape, many are still lost. They operate the latest tools and methods using incorrect assumptions.
So, lets revisit the 3 challenges marketing experts in Indonesia often talk about and check whether you’ve addressed these challenges properly.
Challenge #1: Indonesia is a young country
FACT: 55% of the population is under 30 years old
FALSE ASSUMPTION: You need to be “hip” to win – think skateboarding, breakdancing, graffiti, tattoos, slang, social media, music festival, flashmobs, skinny jeans, selfie, K-Pop, and other “latest trend” that you don’t understand and secretly find slightly ridiculous
REALITY: You’re looking at a mix bag of young people. Some tasted what it’s like to live under Soeharto regime. These older youth experienced what it’s like to only have one television channel. They experienced how exciting it was when their neighbourhood finally got a phone they can share. Contrast them with the younger group of youth who never experienced life without internet. While it may seem that both groups are busy Instagramming their food and taking selfies, they are by no means identical. Their media choice, expectations of customer experience, typical customer journey are all different. You can’t sell them a wholesale version of cool, because each of them has a different idea of what “cool” actually is.
I actually wrote a whole book about this. If you speak Bahasa Indonesia, look for it in your nearest bookstore.
IMPLICATIONS: If you don’t have any other solution than “identify the latest trend, ride it until it runs out of steam, identify the next trend, and repeat” you’re in trouble. You need interest-based segmentations, influence map of relevant communities, Discrete Network outreach programs, online-to-offline Earned Media strategy, and more (we can help). Or, you need a boatload of money to burn until all your competitors run out of funds, and you better hope it happens before the next disruptive tech obliterates existing opportunities.
You can’t sell “cool” to youth because no one really knows what that means anymore (tweet this)
Challenge #2: Media bottleneck
FACT: 80% of television in Indonesia is controlled by 7 conglomerates
FALSE ASSUMPTION: Marketing is won in TV Land
REALITY: While total media ad spend is still showing double digits growth, it’s growing at a slower pace. Decision makers are waking up to the fact that the dollars they’re throwing at television ads are showing diminishing returns. Going into the two horse race 2014 Presidential Election, Joko Widodo was the early favorite. That said, the Jokowi camp still spent 72% more than the Prabowo camp on ads. One would expect a landslide results, but Jokowi won by a mere 6.3% majority. Small enough to create a confusing scenario where both parties claimed victory. Marketers are waking up to the fact that it’s time to consider other marketing venues than television. They’re spending more of their budget on digital channels, though whether they’re spending it in the right manner is another question.
IMPLICATIONS: While it’s good that by 2018, 21% of ad spend in Indonesia will be going to digital, we need to make sure the money’s going to the right places. Even the most obvious opportunities seemed to be overlooked right now. Indonesia is #3 in terms of mobile app download share (behind US and China), but only a scant of of digital budget is going to apps.
Of course, the ideal situation is if you can look beyond advertising. It’s not a question of whether you need to be battling it out on TV or in the digital sphere. The future is not in ad placement. The future is in corralling organic influence across platforms.
The future is not in ad placement. The future is in corralling organic influence across platforms. (tweet this)
Challenge #3: Pasar Mentality
FACT: Indonesians are highly entrenched in pasar (traditional market) behaviour, where transactions are cash-based and require personal touch
FALSE ASSUMPTION: Pasar Mentality is all about price haggling. That must mean Indonesians really only care about getting the best deal. That in turns mean the only way to win the market is to give deep discounts.
REALITY: Yes, of course discounts will attract buyers, but don’t be surprised if the buyers you attract won’t buy anything else from you that’s not on discount. Pasar is actually less about getting the best price and more about the social interaction. Part of the charm of traditional market is that you get special treatment if you’re a regular at one of the stands. The modern urban equivalent would be going to a coffee shop and having the barista calling you by name and preparing your regular brew without you having to ask. Whether or not you actually like going to a traditional market, if you’re an Indonesian (especially if you’ve spent your whole life here), you’ve come to expect that level of service as the minimum standard.
IMPLICATIONS: To borrow Naisbitt’s term, Indonesia is a high-touch market. To e-commerce companies, this means you need to expect that customers will contact your customer service to ask whether a product is in stock, even when it clearly states so on your site. To banks, this means you need to understand that the reason that Indonesians have a high preference toward ATMs is not because they love the machines but because they hate the branch experience. Winning the Indonesian market is less about having the right strategy and more about having the right people, system and culture at your frontlines.
The best frontliners are the ones who empathise with their customers. Look for local talents and develop them. Yes, I know a lot of industries complain about the lack of local talents in the market, but the same industries are often guilty of not bothering to seriously develop the talents that are available. Whether you end up hiring local or importing expats, make sure you look beyond their technical background and consider their ability to empathise with your market.
The ones complaining lack of talent in the market are usually the ones that don’t even bother developing them (tweet this)
image courtesy of Martin Fisch