Client Planning verdict: Creative Localization versus Selling in Saturated Markets
Interviewed by Pham Hung Hau – s3360661
Illustrations by Nguyen Thi Thuy Linh – s3309990
In early 2013, Starbucks stirred up Vietnam’s coffee retailing market with its grand entrance. The Seattle-based coffee giant brought with it a yet another massive challenge to the local oligopoly, whose saturation is already troubling the players, most notably Trung Nguyen. Much anticipation heaped up on whether the international agent would strive and if the locals could weave through the increasingly saturated market. While it would take time for the answer to unveil, I am intrigued to make an educated guess on who will struggle more: Starbucks in its localization or Trung Nguyen in their selling effort. This calls for a discursive study of client planning. I was lucky to have come into acquaintance with Ngo Minh Thuan, founder of DNA Digital, in this little quest of mine. Despite my seemingly tactless approach (it’s chronic, ugh) for an interview on this topic, fantastic Mr. Thuan promptly agreed to “inspire” me, personally and professionally.
“I started my career without knowing it would be my career”
I and Thuan met in his “violet-ish” office. DNA is not very extensive; there are only twenty-something people. These digital natives, however, are devoted to bettering people’s experience in the spirit of passion and digital craftsmanship. It took us more than ten minutes to “warm up” with Thuan’s journey into the Communication industry. Entering college, young Mr. Thuan studied Web Design and Programming at Ho Chi Minh University of Polytechnic. His first experience with communication was in 2006 when he was involved in a digital campaign for Heineken. Soon after that, he got caught up into understanding what people think, triggering their excitement, and manipulating the ideas. “In a sense, I started my career without knowing that it would be my career.”
Although primarily a creative guy, he was also often involved in dealing with client, making him a well-rounded service provider – working creatively, logically (planning), and socially (client managing). It was therefore convenient for me to consult Thuan on the topic of client planning.
The client planning verdict
Agreeing that it’s hard to deny the importance of client planning, Thuan noted that the autonomy is not always with the agency. Often, the planning comes from the client and the agency’s job is to make additional comments based on acquired customer insights. “Often,” that is.
“I personally prefer working for international brands trying to localize to consulting local brands striving for sales in a saturated market; the ‘often’ is more frequent and in better quality,” said cheeky Thuan.
He later explained that the global clients have a better grip of what they want and keep clearer alignments of the job. Mr. Gary Woollacott (Casul 2012) of Opus Executive Search also shared a similar client service tip: “Do your own hard work.” This, in my opinion, has to go both ways. In order for client planning to effectively play out, the client must have an established self-awareness (vision, objectives, goals, etc.) and, at the same time, leave room for the agency to “play” with their own “hard work” (i.e. giving them problems, not the solutions) (Solomon 2008).
While, at the other end, not many local clients do a good job in this regard. Thuan described his working with a local telecom company as “painful” and “dull:” “They had their own agenda, which was heavily government-based, and left room for neither creativity nor strategic planning.” In other cases, the clients fail to understand their own business. Let’s talk Trung Nguyen.
Now let’s all agree Trung Nguyen is a coffee powerhouse and they don’t need to worry about making money. But as Starbucks has come in, their market share will surely shrink one way or another. When their cash cows can only be so big, they will need to turn to the question marks/problem children (Morrison & Wensley 1991). It, then, comes back to selling in a saturated market.
“The problem with Trung Nguyen is that they are focusing on the wrong lines of product (a ha, SBU!) and making wrong propositions,” said Thuan. He thinks that it’s ineffective to sell “creative coffee” and try to go global when the domestic sale is not yet optimized. “In essence, Trung Nguyen is not taking the right steps.”
For these reasons, Thuan concluded that selling in a saturated market is tougher than localizing a global brand. I second it. Starbucks 1 – 0 Trung Nguyen.
But what are these steps Thuan is talking about? Why is Trung Nguyen making it wrong?
From a theoretical perspective
To answer the above questions, I consulted the Ansoff Matrix, a key point in the scope of client planning (Watts, Cope & Hulme 1998; Keane & Casul 2010). I believe Thuan was referring to this particular market expansion grid.
For Starbucks (and other global brands trying to enter a local market), the steps they take are more or less in a singular sequence: they take existing products to a new market (market development), develop their products to appeal to the local customers (product development), then work towards optimizing sales (market penetration).
Whilst, for local brands like Trung Nguyen, they have two route options to choose from. Starting with the existing market and products, they can either choose to develop their products or acquire a new market with what they already have. It’s not always good to have options; you can either go with the wrong one, or cannot choose and go with both (what Trung Nguyen does). Even when you choose the right one, there’s doubt that prevents you from fully committing to your choice (Curry, Ringland & Young 2006). This predicament is popular in many markets and thus is highly possible for Trung Nguyen to be caught up into. The predicament also means a more challenging job for the agency when planning, for the client’s preferred route may not be the best one (Solomon 2008). To add, as Thuan noted, it’s hard to go against the client’s agenda, especially local ones.
Starbucks 2 – 0 Trung Nguyen.
All that being said (and scores kept), it is not yet possible to definitively answer whether it is harder to localize global products or to sell in saturated markets. Based on Thuan’s sharing and contextualizing from theories, it is predictable that it is more of a challenge for the agencies to help local clients to strive in saturated markets. This is due to the local client’s lack of self-awareness, failure in prioritizing their SBUs, and dilemma in choosing the right step in their market expansion quest. As agencies, we can only help them with the last two problems, given their collaboration.
What would you suggest if you are to do a strategic planning for Trung Nguyen?
Word count: 1,109
Casul, M 2012, Work Prep for Client Service Managers, video recording, viewed 10 May 2013, < http://www.youtube.com/watch?v=nEtCRTnFh2c&feature=share&list=PLffF0z7scp3wothQixoO0p0tCnz_nJsad>.
Curry, A, Ringland, G & Young, L 2006, ‘Using scenarios to improve marketing’, Strategy & Leadership, vol. 34, issue 6, pp. 30-37.
Keane, A & Casul, M 2010, ‘Client Planning’, course notes for COMM2384 Client Management, RMIT University, Ho Chi Minh, viewed 9 May 2013, Blackboard@RMIT.
Morrison, A & Wensley, R 1991, ‘Boxing up or Boxed in?: A Short History of the Boston Consulting Group Share/Growth Matrix’, Journal of Marketing Management, vol. 7, issue 2, pp. 105-129.
Solomon, R 2008, The Art of Client Service, Kaplan Publishing, New York.
Watts, G, Cope, J & Hulme, M 1998, ‘Ansoff’s Matrix, pain and gain: Growth strategies and adaptive learning among small food producers’, International Journal of Entrepreneurial Behavior & Research, vol. 4, issue 2, pp. 101-111.