We asked four in-market experts for their take on the prospects for local versus global brands in Philippines.
- JP Salustiano, chief strategy officer, IPG Mediabrands Philippines
- Divine Gil Reyes, chief creative officer, Perkcomm Inc.
- Juan Manuel De Borja, strategic planning director, Campaigns & Grey Philippines
- Eunice Gan, strategic planning manager, Campaigns & Grey Philippines
How much growth opportunity is there still for international brands in Philippines?
Salustiano: There is a huge opportunity for global brands to succeed here, primarily because of three factors: huge mass market, Filpinos love foreign products and a steady economy.
We are a country of over 100 million people, and more than 80 percent belong to the lower class segment. This gives brands that address the everyday needs of the average Juan a huge upside. As long as a brand is marketed correctly (and has acceptable pricing), it will likely succeed.
Meanwhile, Filipino consumers see global brands as superior. With the exception of some products, a lot of Pinoys generally have global preferences, and are very much open to international brands. We perceive these brands to be “cooler” and with higher quality, and we tend to be accepting, as long as it is affordable.
Despite being a financially-challenged market, the economy has been growing steadily in the past few years. This allows most of us to have greater spending power. Indicators would be the growing penetration of tech, proliferation of casual dining restaurants, and the increasingly urban lifestyle in key cities.
Reyes: I believe there is a huge opportunity for growth. Filipinos are open to trying new brands. Social media makes it easy for global brands to be accepted—and desired—way before they set foot on Philippine markets. Our economy is also growing fast, this is a good time for brands to come in.
De Borja/Gan: In general there’s a lot of upside mostly coming from the positive trajectory of our economy and demographic (a young population). The Filipino penchant for all things “imported” is fuelled by the exposure they get on global trends from media particularly the Internet. But the size of opportunity is highly category dependent. In general, there’s more opportunity for higher value/premium goods.
However, with so many global brands looking to Asia and the Philippines for growth, the opportunity is not necessarily easy to grab. There is much competition. To a certain degree, it will become a buyer’s market where profits are squeezed just to get the sale.
How are local brands trying to take on big brands in this country and what are the key rules / best practices for those trying to do so?
Salustiano: Most of the time, global brands would have a clear advantage here because of the quality and credibility perception. Sometimes though, there would be a few local players who succeed and become leaders of their respective industries. Top of mind would be Jollibee. Aside from knowing the Filipino palate, Jollibee is very much in tune with the Filipino consumers and culture, and it knows how to tug people’s hearts. It hinges on real insights and behaviour and use these to their advantage when creating campaigns.
Reyes: Since the Philippine market is highly nuanced, a brand needs to study every aspect of its target audience. It would be good to complement nationwide brand launches with regional/local marketing efforts. Whether you’re a local brand or a global brand, the same principles apply—know your audience deeply, meet their needs, and create memorable stories and experiences for them.
De Borja/Gan: Local brands, because of their structure (compared with global companies), are much more nimble. While they may have processes to follow, they are quicker and more responsive to the market. Local brands are also more entrepreneurial, and therefore not afraid to take risks. They are more open to pick up small wins—which amount to large ones—compared with global brands. Local brands also speak the local language, and therefore build better brand-consumer relationships versus global brands that have a singular voice across various cultures.
What can global brands learn from global brand marketing?
Salustiano: Amplifying stories of ordinary people works, and the more relatable it is, the better. It’s a given that foreign brands are aspirational for Filipinos, but brands that can transcend the foreign label and create emotional connections would likely have bigger impact.
Then aside from consumer understanding, other functional factors like accesibility and value could go a long way. If a foreign brand can “think local,” price its product at parity and with the same (or better) distribution strength as the big local brands, then chances of success is high.
De Borja/Gan: Jollibee—Filipino face, western guts.
The brand uses the totality of touchpoints to build strong affinity with Filipinos. From its product assortment to their names and taste profiles; festive colours; emotionally nuanced (for the Filipino) communications. Jollibee combines this with a back-end (systems and processes) that is not very Filipino. So it’s a Filipino front end with an efficient (western) back end.
Emperador—Compete from the periphery instead of going head-on against strong brands. Rather than going head to head against the well entrenched San Miguel beer, it created a strong presence in peripheral categories (spirits, RTBs) and in some cases make them more ‘beer like’ (in price, packaging, positioning).
Unilab—Be your own competition. Extensive use of multi branding/brand extensions within the same category; so that when taken together, they dominate it.