‘Should we enter Indonesia and Vietnam with our local OTC brand like Unilab did?’
Q: Our concern is still about branding but different from those you’ve dealt with in the last two or three Fridays.
We’re in the pharma industry and we’re selling OTC [over-the-counter] products, particularly health supplements. We’re not big although our friends say we have become big. To give you an idea without giving away our identity, our revenue is just about equal to that of one of Unilab’s average-size divisions.
We’re seriously considering exporting to Indonesia and Vietnam. One of the major points of contention in our planning is if we should enter either of these markets with our local brand or enter with a new brand in each country.
We know from attending your seminars that you’ve done consulting work and research in Indonesia and in Vietnam. So please help us with this issue.
A: You did not tell us what specific over-the-counter product category or categories you intend to bring into Indonesia or into Vietnam. So we can’t also be that specific about our Marketing Rx.
Instead, we’ll talk about the basic considerations you should take in making your branding choice. But we still would like to speak in concrete terms. So we’ll answer by benchmarking against the practice of the pharma company you seem to measure yourself against, namely, Unilab.
This company happens to be the local pharma company we’re familiar with in their foreign country market forays.
In Indonesia, Unilab’s leading OTC brands are Decolgen and Neozep in the cough and cold category, Enervon C in multi-vitamin, and Biogesic in headache.
These brands retained their local Philippine brand names when they entered the Indonesian OTC market. There was only one exception and that’s Alaxan. It’s brand name in Indonesia is Axalan. According to Unilab, they had to change the name because the Indonesian food and drug board could not register the Alaxan name.
In Vietnam, Unilab is a known market leader in the cough and cold category with Decolgen. The practice of using local Philippine brand names has been maintained. Where there has been a change is in the corporate branding. Unilab in Indonesia is known as PT Medifarma Laboratories Inc. while in Vietnam, the corporate brand is United International Pharma Co. Ltd. But we’re not into the issue of corporate branding and so will set this matter aside.
So, from the foregoing, are we saying that you should do as Unilab has done and retain your local Philippine brand name when you enter Indonesia and Vietnam? This is an incorrect conclusion to draw. We’re just giving the Unilab practice as an example in the two countries you seek to enter.
Inference drawing must await the appropriate diagnosis. We should answer first the question: “Why is Unilab practicing local brand retention? Versus its disadvantages, do they see its advantages as outweighing the negatives?”
When asked to explain the local brand retention policy, Unilab expats talked about their pride and confidence in anything Unilab. This certainly is a good PR one-upmanship reason to give. However, it’s short of or has weak explanatory power.
When asked the same question with regard to each of the brands cited like, for example, Enervon C, we hear something different and more meaningful: “Kasi itong Enervon C is a billionaire brand dito at popular sa mga Asean countries. Ang dami ngang fake na Enervon sa Indonesia and even sa Thailand. At saka alam mo ba na noong mayroong Asean Summit dito, si Lee Kuan Yew naghanap ng naiwan daw niyang vitamin sa Singapore. Nang tanungin kung anong brand, sabi raw Revicon. ’Yang Revicon, second lang ’yan sa Enervon” (Well, this Enervon C is a billionaire brand here and popular in other Asean countries. You know, there’s a lot of fake Enervon in Indonesia and even in Thailand. And do you know that during the Asean Summit here, Lee Kuan Yew looked for his vitamin that he forgot and left in Singapore. When asked what brand that was, he said it’s Revicon. Revicon is only second to Enervon).
Here’s another explanation that’s a source of insight: “If you look around, there’s no multi-vitamin brand including foreign brands that’s as well-known as Enervon.”
So here are your two basic considerations: target segment first, and then competition. Come in with your local Philippine brand if, first, this local brand of yours is popular here and, is also popular or can readily be made popular in the minds of its target market segment in the country market you wish to enter. The other and second basic consideration is competition. If there’s no competitor brand (both local and foreign) that has high enough share of mind, then you should stay with your local Philippine brand.
The choice for coming in with a new brand takes the upper hand when one or both of these two choice rules are violated. So, if your local Philippine brand is not popular nor can be made popular with its target market segment, and there are also no existing well-known brands, then do come in with a new brand.
But make sure you give this brand its required budget for awareness-building and great positioning support. On the other hand, if there’s already a well-known brand or brands, “think acquisition.” See if you can buy that top-of-mind brand especially if it’s local to the country. Generally speaking, a local brand is easier to acquire than a foreign one.