Mastering Noon Nopi

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Dae Ryun Chang

Dae Ryun Chang is Professor of Marketing at Yonsei School ofBusiness. He received his Doctorate from Harvard University,and his MBA from Columbia University. He has held visitingfaculty appointments at Helsinki School of Economics, HongKong University of Science & Technology, Australian NationalUniversity, Singapore Management University and NanyangTechnology University. He is a contributing blogger at Harvard

Business Review Online where he opines about marketing,branding, entertainment, sports, and Asian business-relatedissues. He has launched a MOOC course, InternationalMarketing in Asia on Coursera.org.


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Foreword

Where is Asia? That’s a question Ithrow at my audience when I lectureabout Asian brands in non-Asianplaces like Europe, North America orSouth America.

It is meant to be a stupid question.To make it even more banal, I thenproceed to show my audience atypical map of the world. Guess whereAsia is? It is, of course, in the “FarEast.” South Korea, where I live, canbe found in the extreme right side ofthe picture.

Well folks, I have some news for you.Asia’s position in the map is likely tochange very soon. That’s because

Asian countries, most notably China,named that way to connote its “CentralKingdom” status, are becoming thefocal hotbed of global business. Ipredict therefore that global maps inthe future will have Asia positionedsquarely in the middle.

This book brings together two topicsthat have shaped my professional life

–Marketing and Asia. I began studyingmarketing as an undergraduate at theUniversity of British Columbia. I’d liketo say that it seems like yesterday, butit feels more like in my past life. That’sbecause many facets of marketinghave changed so much. That changeis so much more evident here inAsia where I have spent most of myteaching life. Marketing has brought me not only acareer but a perspective on life itself.For me there is no such thing as lifework balance. Instead, my work hasbeen my life and vice versa as theyboth help each other.

I attempt in this book to bring apersonal touch to the concept andpractice of marketing in Asia. Assomeone who was brought up asa child of diplomats, I was forced tolearn how to adapt quickly to newsurroundings and new languages.

That skill has helped me to value thephilosophy of marketing because it too


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is about understanding new marketsand consumers. As an Asian whofrom early on has lived many years inmany countries, I can safely say thatI have a deep appreciation for culturaldifferences.

That said, I have low tolerance forpeople who overuse that factorto explain international marketingsuccesses and failures. Thereforeone of the key aims of this book isto debunk the notion that culturalunderstanding is the overridingconcern in marketing in Asia.

The tone of the book is deliberatelyinformal as I want to adopt the style

that I prefer when I teach –make thetopic approachable and allow theuser to personalize it. An importanttenet in marketing is that people arealso products. Any reader of this bookshould think in that way. They mustask themselves how they can becomebetter products through marketing. The target audience for this book is

students and practitioners who areinterested in marketing in Asia. Anyonenew to the marketing discipline canfind value in learning its underlyingphilosophy. Readers who have alreadystudied marketing can benefit fromunderstanding how marketing practicehere can differ.

I make it a point of explaining laterthat marketing in Asia can be bothin-bound and out-bound. Thereforestudents and practitioners coming toor out from Asia can gain knowledgeof how that can be done better. As a marketer I do not want “NoonNopi” to be labeled a niche book not

just because it limits its readershipbut more so since the concepts andpractices that I introduce here aremeant to be useful beyond just asingle region. Let me gently remindyou that Asia is becoming centralagain, and Asian marketing ultimatelyshould equate to global marketing.

July, 2015


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Contents

WHAT IS MARKETING

8

PART I

CHAPTER 1. WHAT IS MARKETING 10

CHAPTER 3. Big-time Noon Nopi Failure and Comeback: Walmart in Asia 30

CHAPTER 5. The VSA Framework: a company

navigational system 61

CHAPTER 4. Marketing Strategy: Dinosaurs,Monkeys and Cockroaches 54

MARKETING STRATEGY52

PART II

CHAPTER 2. INTERNATIONAL MARKETING & NoonNopi 21


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Contents

CHAPTER 7. VSA and Transing with Starbucks:Beyond Coffee 90

CHAPTER 6. TRANSING 68

CHAPTER 8. PERSONAL VSA and TRANSING 97

CHAPTER 9. Marketing CSI: Marketing ConsumerScience Investigation 108

CHAPTER 10. Business to business Marketing 129

CUSTOMER CATEGORIES inAsian Marketing 106

PART III

MARKET SELECTION142

PART IV

CHAPTER 12. Market Landing Strategy Matters 151

CHAPTER 11. MARKET SELECTION 144

CHAPTER 13. Final Market Segment Selection 164


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Marketing Action in Asia182

PART V

CHAPTER 14. Complete the VSA 184

CHAPTER 15. The 7Ss of Innovative Marketingin Asia 209

HBR BLOGS & READINGS234

PART VI / APPENDIX

CHAPTER 16. In Asia, Marketing 101Doesn’t Work 236

CHAPTER 17. THE ‘‘WE-ME’’ CULTURE: MARKETINGTO KOREAN CONSUMERS 279

CHAPTER 18. THE GOLD MISSES IN SOUTH KOREA:ICONS IN MARKETING TOGANGNAM 302

INDEX 320


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Mastering Noon Nopi: The Art & Science of Marketing in Asia


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PART I

WHAT IS

MARKETING


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10Mastering Noon Nopi

The Meaning ofMarketing is…Noon Nopi

What is marketing? For more than halfmy life, I have lived with that questionever since I first learned of this strange wordas an undergraduate student. But now afterall these years, it has become almost likeasking “what is life?” Marketing has becomemy life but like life itself, I am still searchingfor its true meaning.

To be honest, I have never been a big fanof wordy definitions. That is because I believedefinitions should be like brands –short andsweet. Think about it, how many brands doyou really remember that are long?

WHAT IS

MARKETING

CHAPTER 1


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word for marketing management as well as for filmmaking.

In addition to being a professor of marketing I have also had alifetime passion for studying film and of late I am even endeavoringto make documentaries and fictional shorts. In fact, with professionalindependent movie makers I have developed and teach a filmmakingcourse for my MBAs at my school. Yes, my MBAs are taught how to

script, shoot and edit film using a professional video camera.

I would recommend that all marketing managers try to make a film,a documentary or even a fictional narrative, about their consumers andthe world they live in. This process forces managers to see how theirconsumers view them and perhaps their competitors. A warning isthat the picture that they eventually see about themselves may not be

entirely a flattering one.

Marketing, in both a literal but more importantly in a figurative sense,is trying to match the Noon Nopi between parties. Most often that wouldbe between a seller and a buyer but the two parties can be any two oreven more entities.

Let’s think about why matching the “Eye Level” between a seller anda buyer is harder than we might think. Unlike in economics where thereis usually only a single type of buyer, in reality there is much more varietyamong consumers. What these different consumers expect from a sellercan indeed be significantly varied.

In other words, for some consumers their Noon Nopi may be quitehigh whereas for others that Noon Nopi can be much lower. It would bea mistake for a seller to assume that one Noon Nopi will fit all whetherwe are talking about a product or a service.


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13PART I . WHAT IS MARKETING

A simple example of Noon Nopi is Starbucks that has for many yearstried to spread the Coffee House experience imported from Europe to

other regions in the world including to Asia.

At Starbucks one can order different types of coffee or tea and alsotry to customize them in terms of size, water, additional flavoring or thestyle of service and delivery. 1 They have also tried to customize thestore interior and exterior going as far as writing the brand name in thelocal language. You might argue that it is a higher order of Noon Nopi.

The differences among sellers may not be as extreme butnonetheless exist. For consumers, they too have to go out and try toselect the product that is appropriate for them. For high school students,the selection of the right college can be a daunting task as now in theglobal age, it’s not just the hundreds of schools in their native countriesbut also the tens of thousands schools abroad. Against this backdropwhere you have many consumers here and many sellers there, in theend, to solve the problem of finding that right consumer for that rightseller requires a “meeting of the eye,” i.e. Noon Nopi.

Fig. 1.1 Modern Coffee House in Asia


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Marketing is both a business concept and a business practice. Theconcept explains the essence of what businesses have to pursue to besuccessful. The practice, in turn, spells out the executional details ofhow it can be done. So for marketing, the Noon Nopi is both a conceptand a practice, i.e. we have to match the “eye level” between theseller and the consumer and we have to determine exactly the ways toachieve that.

The Marketing Mix

This book will get into some details, especially in Part V, aboutthe various tools that a company has at its disposal to executeits marketing concept. These elements are often referred to as theMarketing Mix and this term stems from the right cocktail of theingredients that need to be added to make the marketing strategyeffective. The primary elements are typically separated into four maincategories, product, price, place and promotion. Since all of them startwith the letter P, they are collectively called the “four P’s.”

We can think about the 4 P marketing mix of Starbucks as withthe following diagram. At the top of the diagram we see the guidingprinciples for the specific execution which is Starbucks’ marketing andbrand concept –A Third Place.

This refers to creating a space that is not home nor work but a“haven” to which a user can feel comfortable and relax. To make surethat this does not remain just an abstract motto, it has to be made realin a number of different ways. The product is to offer not only the bestcoffee available but also customized service as that is where the brandobjective of differentiation is achieved.


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For pricing, Starbucks has premium prices that are aligned to the

high quality of the coffee beans and the service. It is sensitive, however,to the recessionary pressures that inflict many countries and thereforethey make sure that the most affordable size is always available.

Place, which means distribution, is very important for Starbuckssince, after all, providing “A Third Place” is their Brand Mantra. Theymake sure that these stores are accessible and as discussed abovefit into the style of the neighborhood both from the inside and out. Theinterior layout is designed to heighten one’s mood for relaxation and ishelped by consistent lighting and music –invariably jazz.

What is perhaps the most unconventional marketing mix execution forStarbucks’ is promotion or the lack of it. To make their brand feel moreindividualized they avoid mass outlets such as television or newspapersand instead rely on word of mouth between consumers.

Fig. 1.2 The marketing mix of starbucks


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Brand Concept and Brand Management

An integral component of both the concept and practice of marketingand Noon Nopi is the brand. What is a brand? It is well known thatthe term originates from the practice of branding cattle in the UnitedStates to identify ownership. In many respects that function still holdstrue today. The only difference is that instead of using a branding iron

we use other tools like great advertising to imprint positive associationsthat act as locations in the perceptual maps of people.

These locations, real or imagined, may last a very long time suchas the famous misconception that existed of California being an islandthat is explained in the related MIX (short for Marketing Info eXample)below. Perceptual maps become like physical maps where a company

or a person’s images function as locations, and once they are firmlyingrained they may be hard to change.

A key authority on brands is Kevin Keller and he refers to them (usingthe Amercian Marketing Association’s definition) as follows:

… a name, term, sign, symbol or design, or a combination of them,intended to identify the goods or services of one seller or group ofsellers and to differentiate them from those of competitors. 3

This definition helps us to understand why brands are so importantfor marketing both as a concept and a practice. As a concept, brandshelp companies achieve the key objective of marketing which is tocreate preferential demand for their products.

As a practice, we see that a brand is more than just a name. As istrue with people, a name is important but when integrated with otherelements a company, or an individual, is much better able to create a


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California IslandMarketing Info Example

As far fetched as it may sound, when Spanish explorers first “discovered”

California they had to cross a seemingly endless “sea” stretching all along the

coast line. Therefore they called California an “Isla,” meaning an Island and drew

their maps accordingly.

Of course now it is clear that the long Baja Pennisula of California prompted these

early visitors to commit that misconception but what is much more surprising is

that, despite evidence collected to the contrary, it lasted for a few centuries. 2

Johannes Vingboons, California Island Vinckeboons 5, 1650, Library of Congress,

Wikimedia Commons,


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stronger personality.

A well-accepted principle in marketing is that brands developpersonalities with whom people enter into and try to maintainrelationships. 4 Like with the California map, these perceived brandpersonalities sometimes endure for a long time.

For companies to become like that they need to not only establish thereasons why consumers should believe their brands are the right choiceat the outset but also keep or even enhance those beliefs. It boils downto precise Noon Nopi management since customer expectations maychange over time.

Again the brand as a person analogy helps us to understand

that relationships often evolve whether it is between a couple, familymembers, or friends. Relationships can only last as long as the partiesinvolved mutually agree that they are worth keeping. In the case ofincumbent brands, consumer loyalty is tested by the lure of challengerbrands. If their loyalty is not rewarded consumers then may be swayedto shift allegiances.

The three key questions that companies need to ask regarding theBrand Noon Nopi are the following:

1. Is the Brand Concept still relevant?

2. If the existing concept is outdated, what then is the renewable

concept?

3. What are the key Brand Associations needed to communicate

the new Brand Concept?

The first two questions deal with the conceptual aspect of the BrandNoon Nopi whereas the third one involves the practical and detailed


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Brand Noon Nopi management.

Many companies are often too quick to experiment with various

new branding elements even when there is nothing about the brandconcept that needs to be fixed. In essence they are flipping the orderof questioning that I recommend above. The danger with that kind ofbrand management is that consumers may become confused about thebrand’s personality.

Let’s imagine that without any notice your parents suddenly anddrastically change their appearances in order to look much younger.This transformation could be welcomed by some children but for othersthey may prefer the familiarity of the older version of their parents.

For some brands, consumers enter into a life long relationship thatis built on images that are conveyed by key dependable brandingelements such as the name or logo. It could be McDonalds if that wasyour favorite fast food restaurant as a child. As an adult you may earnmore money but you may still take your family there even though you canafford much more expensive restaurants. The McDonalds brand remindsyou of all those pleasant memories about yourself, friends and family.

The GAP Logo social backlashMarketing Info Example

GAP, the giant apparel company found out how powerful social media can be

when they unintentionally encouraged a viral campaign to withdraw their new

logo. Ten of thousands of consumers loyal to the old GAP logo tweeted and

Facebooked their friends to demand that GAP go back to their familiar logo. After

about a week after the launch, GAP retracted and restored their logo much to the

relief of their faithful customers.


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When I attended primary school in New York City, our family’s “go to”restaurant was Howard Johnson’s. There were certain menu items that Ialways liked such as the “Roast Beef Set”, with a Coke of course. I canrecall even to this day what my parents and siblings ordered and I foundit interesting that this whole “eating out” process became a predictableroutine and family tradition.

That is the power of a brand whether it is McDonalds for someconsumers or Howard Johnson’s for our family –it involves many peoplewho are happy in a very set patterns of life. Thus, by changing a brandthere is a danger that you will make them very unhappy because theyhave to break that pattern.


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As we learned in Chapter 1, marketing isa concept and an execution. The NoonNopi or the matching of the eyes is achievedwhen the two levels are the same as wesee in the diagram below. Even within acountry (here labelled “A”) that is not alwaysguaranteed but achieved through experienceand insight into the market. If there is amismatch, then a company has to adjust itseye level downward to level 2 (or upwarddepending on the situation) to the originallymismatched level to then see “eye to eye.”

CHAPTER 2INTERNATIONALMARKETING &

Noon Nopi


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We can reapply this paradigm to understand the essence ofinternational marketing. If Noon Nopi for one country (e.g. the homemarket) is the baseline, then international marketing is determining howto achieve Noon Nopi between the conceptual and executional eyelevel across multiple countries.

The age-old debate about international marketing has alwaysbeen whether it is really any different from your regular (i.e. domesticconsumer oriented) marketing. The question is not a fair one sinceit doesn’t preface whether one is talking about the concept or aboutthe execution of marketing. This is an important issue as you can besimultaneously similar at the conceptual level but in terms of how theNoon Nopi matching is executed, many differences, small or large, maybe needed across countries.

In the diagram below, we see a derivation of Noon Nopi but insteadof one country market we have four that are labeled from “A” to “D.”For some countries, their level matches ours, that country being here

ExecutionalEye Level

ConceptualEye Level

Fig. 2.1 Noon Nopi matching in One Country


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labeled “C.” Therefore, we can hope that, many environmental factorsbeing relatively equal, the marketing between countries “A” and “C” canbe standardized. If you are starting from “A” it allows an extension to “C.”

In this diagram, however, we also see that some of the countries aredifferent from the home country in terms of their executional eye level.For example, an Asian brand that is well known and positively regardedin the Asian region may carry negative associations in Europe. That isbecause the “Made in…” may infer lower quality to some consumers. Inessence, the country is acting as another brand.

If a company wants to attain a better response there the implication isthat a “localized” adjustment to that eye level is needed. The consolationhere is that since country “B” and “D” are similar in their mismatch, thislocalization strategy can be scaled across a group of similar countries.I will explain at length the importance of scalability of internationalmarketing strategies and executions later in Chapter 11.


ConceptualEye Level

Fig. 2.2 Noon Nopi matching in multiple countries


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it would be arguing that all four countries, despite superficial differences,are becoming similar. A key proponent of that business philosophy was

legendary marketing guru Theodore Levitt of whom I will talk about morein Chapter 4.

As expressed in a realignment of the original diagram, we can seethe advantages and potential disadvantages of global marketing. At theexecutional level since there is just one approach it makes life simple formarketers. This can lead to operational efficiency such as in reducingproduction costs. Enormous economies of scale can be created thatresult in significant cost competitiveness for a company.

The disadvantage of a global marketing perspective is that the NoonNopi may be somewhat off for each of the individual country markets.Even though the disparity between countries has been reduced, theyhave not been completely eliminated. The offering of a global company(e.g. level 1 in the diagram above) is like the “average” matching to theindividual demand levels of the target set of countries. This averagebrings it closer to some countries (e.g. B and D) as compared to beforebut takes it farther away set against a completely localized strategy. The


ConceptualEye Level

Fig. 2.3 Noon Nopi with Global marketing


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global marketing company may leave itself vulnerable to competitors,both foreign and local, that are able to match the local Noon Nopi betterand use this as their point of difference (POD).

In some markets high quality and competitive prices, two of thehallmarks of global marketing are becoming necessary conditions butdo not sufficiently create a competitive advantage. In marketing terms

they are merely points of parity (POP). More is demanded by consumersin the individual markets.

That is why I have decided to write this book, to concentrate more onhow marketing can be more customized to deal with companies comingto or out of Asia. The timing is right because not only is Asian businessnow big and growing, the various functions of business such as finance,

production, and yes, marketing is becoming more sophisticated there.

I think the softer business disciplines such as Human ResourceManagement and marketing have been treated as less important in Asiaby Asians. Maybe I can say that as an Asian myself without soundingpatronizing, and I hope, not overly self-critical. Here I will use my statusas an academic to suggest that it has been my “objective” observationthat the less quantitative business fields have been regarded as beingtoo “subjective” by managers and even students alike.

If that “stepchild” treatment of the marketing department was true inthe past, I think over the last decade or so, it is changing for the better.The financial crises that Asian countries suffered in the late 1990ssignaled the frailty of finance-only business and country success. Asiancompanies, many of them Korean like Samsung and Hyundai, startedinvesting in intangible assets such as brand equity. As we will see later,other Asian companies have followed suit.


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The importance of marketing has been driven home because Asianmarkets, like elsewhere, with more open markets face intensifiedmarketing competition from global companies coming in but also localcompanies who use it to gain an edge.

Marketing, also like its supposedly more quantitative rival functionshas become itself more data-driven. Companies are using marketing

research, analytics, and finance-interrelated metrics to make marketingdecisions in more objective ways. Marketing in Asia is hardly justtouchy-feely anymore but is now quite geeky. How ironic! No wonderthen that I recommend to my marketing students that if they want tosucceed in marketing, the key is to study finance and accounting.

“The Nairobi-via-London syndrome”

O ne of my father’s diplomatic posts was in Ethiopia during themid 1970’s. I was still in high school then and so my attention atsuch an age was not as worldly as it would later become. Even so, Iwas struck by the natural beauty of the country and the kindness of itspeople despite how desperately poor they were. Also having movedthere from our last post, Canada, the comparison in terms of the socialinfrastructure was stark. Yet, after a few months, in many ways for aforeigner, I could see life was actually not that inconvenient. The NoonNopi was definitely different but not necessarily worse.

One of the surprising, almost shocking facts that I learned while livingthere was that intra-continental air travel in Africa was relatively new. Forsomeone to travel from Nairobi Kenya to Lagos (now Abuja) Nigeria,they had to take a transfer in London as in London, Great Britain. Asridiculous as this may sound, if you factor in the total air travel time (let’s


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assume it can be 2 days with no layover) of the trip involved, this makessense when compared to the many more days that traveling on land,such as by train, would require.

When I talk about Asian marketing outside of this region, I mentionthis old way of “intra-continental” travel as an analogy of how Asiansregard marketing in Asia. We have had, and still do in some measure,

a “Nairobi via London” syndrome. We assume that a marketing bestpractice has to be vetted and acknowledged in the U.S. or in Europebefore it can be accepted here at home or in the region.

There can still be global marketing in Asia that looks like Figure 2.3above where only one type of marketing exists for all regions. The bigdifference that I expect to see, however, is that rather than having Asia

follow the lead of other regions, Asia can be in the driver’s seat and bethe initiator of innovative marketing, whether it is by companies or byconsumers.

Like Marco Polo and Columbus coming to Asia oh so many yearsago, marketing in Asia can be not just about western companiescoming here to tap the fast growing consumer demand for theirproducts and brands, it should also be about learning business andmarketing from Asia. So instead of describing Alibaba as the “Facebookof China” or the “Google of China,” in the near future we may see morewestern companies being called the “Alibaba of the U.S.” or of someother western country. 5

From an international marketing perspective, the branding becomesvery important since it affects both the concept and practice of NoonNopi and how a company adapts to a new market. The three simplesteps outlined above about branding can and should be re-appliedin new markets such as Asia or by Asian companies contemplating


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Mastering Noon Nopi

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