By: Richard King
How do we successfully penetrate the Pacific Rim markets? This is the question most often asked when companies are looking to establish themselves in this large and growing market. It seems so tempting, doesn’t it? Haven’t we all heard the pitch “if I can just sell my widget to one out of one hundred people in the Asian market…” But how realistic is this? The question should be: How can we better relate to Pacific Rim customers and their tastes? How do we do a better job of researching markets to find customers? How can we be better partners and competitors?
First of all we must adopt a different attitude towards the Pacific Rim markets to be more competitive – one based on the competitive realities of the marketplace. We have to look at our competitive position from the standpoint of what each market needs now, not what we are currently producing. We have to think about new marketing strategies which involve investment in product R&D, better promotion and packaging of products, working with greater knowledge of the Pacific Rim distribution systems and consumer tastes.
We also need to approach that market from a longer-range perspective. I know you may have heard a lot about this, but based on my own experiences of over thirty-five years advising companies trying to penetrate Pacific Basis markets, I believe that we must look at a step-by-step process and gain acceptance in the market through this process. I believe that once you have a foot in the door, you can widen the opening.
Now let’s talk about the Pacific Rim consumer and how we address the needs and taste of that consumer. How do we present and package our products in a way that would make us more effective competitors? Some businesses new to the Pacific Rim market still feel that the market is opened only by government negotiations, which we know isn’t true. There is no guarantee that US producers will capture anything in the Pacific Rim market by government negotiation. There will be stiff competition from other producers in the global market such as Europe, Canada and Australia.
To capture our share of the market we must look for products which will best serve the needs of Pacific Rim consumers. They look for quality, delivery, price, and consistency. Most Asian buyers place more emphasis on quality than price. They are willing to spend a high percentage of their income on specialty foods or high-tech electronic equipment because they are an affordable luxury item.
Another area where there is room for improvement is understanding the distinctions in this market. The Chinese economy has certainly become a leading force in the world. However when we look closely at the effects on the population overall, there have been improvements, but there are still many areas where there is sporadic electricity, medical care and transportation. In Korea, a much smaller country in population and size, we see the style of business as very competitive and savvy. The population is highly educated and driven. In Singapore the GDP is 10th in the world above 11th ranked US. (To give a comparison, China ranks 86th.) Japan also has a high GDP, 13th in the world, with a large population on a small landmass. Other Pacific Rim countries such as Taiwan and the Philippines each have unique cultures, geography and languages.
In order to be competitive we will need to work more closely with Pacific Rim trading partners in the specific regions we want to target. We are going to see the evolution of multi-ethnic companies – companies which make products here for export abroad; companies which sell research and design to foreign partners; companies which invest with foreign partners in operations and production facilities in offshore markets. The possibilities are indeed exciting for Southern California firms.