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It’s one of the hippest places to hang out in Jakarta. And it isn’t some trendy new French restaurant in a Dutch-era heritage building. Instead， thousands of people in the Indonesian capital spend their evenings sipping coffee or beer on pavement tables at their neighbourhood 7-Eleven， the international convenience store synonymous with anytime， on-the-go shopping in most parts of the world.

Indonesia’s 7-Elevens are， clearly， a long way from the original concept behind the world’s largest convenience store chain. “At 7-Eleven， our purpose and mission is to make life a little easier for our guests by being where they need us， whenever they need us，” says the company’s website. And that’s what it has been doing all over the world since the first convenience store was born after a Southland Ice Co employee in Dallas started selling milk， eggs and bread from an ice dock in 1927.

Today， the chain has grown to about 49，500 stores in 16 countries， more than 10，000 in North America itself， but its core customer remains the same： people on the go who need a one-stop shop to quickly buy everyday products. Typically， most 7-Eleven stores all over the world are conveniently located in office areas and are open around the clock.

Initially， 7-Eleven spread its wings slowly. In its early years， it grew strategically in suburbs in the United States and areas too small for a supermarket： by 1963， it had 1，000 stores across the country. But it began to grow at breakneck pace after it adopted a franchisee model the following year. In 1969， 7-Eleven began expanding beyond US borders and set up shop in Canada. In the 1970s and early 1980s， it expanded to Mexico， Japan and Asian markets such as Taiwan， Singapore and the Philippines. With the increasing importance of emerging Asian markets such as Thailand， the Philippines and Malaysia， 7-Eleven Corporation moved its corporate headquarters to Japan in 2001.

Traditionally， 7-Eleven’s entry strategy is to target urban markets and tailor stores to local tastes. For example， customers in Hong Kong can pay their phone and utility bills at a local 7-Eleven； in Taiwan， they can service their bicycles or photocopy at the convenience store； and in the US they can pick-up their online Amazon shopping there. By offering these services – often exclusively –customer traffic can be increased significantly. To achieve this customer orientation and competitive advantage， almost all stores arfe operated by franchisees， who understand the local environment.

So， when 7-Eleven entered the Indonesian market in 2008， the question was： what was the Indonesian customer looking for and where should the retailer position itself？ The Southeast Asian country was an ideal market for a retailer. It was among the world’s largest growing economies with a population of 240 million and a growing class of consumers.

But Indonesia had some typical traits not found in other markets. For one， just hanging out and doing nothing is so deeply embedded in Indonesian culture， the local language has a special word for it： nongkrong. People traditionally gather at street markets and share stories， eat in local markets and roadside food stalls called warungs or Western fastfood chains such as McDonalds， Dunking Donuts or coffee shops such as Starbucks which entered Southeast Asia a while ago. Moreover， Indonesia is highly plugged-in： the country had an estimated 20 to 30 million Internet users in 2009， a big chunk of them between the ages of 15 and 19.

7-Eleven studied the culture， habits and tastes of the Indonesian population and realised Indonesia lacked places where young people could hang out， eat， drink and follow their new passion： being online. It adopted a unique business model in the country： it blended a small supermarket with inexpensive readymade food and seating to cater to Jakarta customers looking for outdoor recreation space in a city where traffic jams often restrict mobility. 7-Eleven in Indonesia included everything local markets and street vendors offered – and more. The store is open 24 hours， has hasslefree parking， offers leisure activities such as concerts， is air-conditioned and， most importantly， has wireless connectivity. Sixty-five per cent of the Indonesian franchise’s customers are less than 30 years old and love social networking. 7-Eleven also featured local artists or live bands to further attract the nongkrong-ing crowds at its stores.

7-Eleven in Indonesia is more focused on the experience of hanging out rather than the convenience store concept itself. Its valued customer there is between 18 and 35， works in a large commercial area and is happy to pay a premium for food and drinks if he has an enjoyable place to spend some time. He/she is not bound by time and stops by throughout the day and night， which makes it worthwhile to stay open 24/7. In addition， the social network connectivity of visitors to 7-Eleven stores， who tweet and post about their experience， attracts new customers. It is “hip” to hang-out at the local 7-Eleven store.

When it came to pricing strategy， the local franchise followed the company’s traditional model. It leveraged the fact that its stores are open 24/7， even when other food retail competitors are closed， and priced products at the upper end. The placement strategy of 7-Eleven Indonesia was also the same as the US. The stores are located in commercial and office areas， but not public transport stations because they are not seen as premium locations. But unlike the US， the archipelago of around 17，000 islands does not have a 7-Eleven literally at every corner； instead it focuses on big hubs in Indonesia.

7-Eleven Indonesia’s unique customer experience extends to popular local artists and social media websites. Local artists perform in 7-Eleven stores because their fans like to hang out in these areas and 7-Eleven provides the location at low or no costs. Although 7-Eleven has a first mover advantage and has already built up a strong brand name and large customer base， new competitors will come into this market and existing ones are likely to reposition themselves. 7-Eleven should continue to innovate its product range and offer additional services that meet local traditions and customer needs to stay ahead of the competition. ～

（This case study is from the Aditya Birla India Centre of London Business School.）

What can we learn from 7-Eleven’s experiences in Indonesia？ Write to or post your comments at www. businesstoday.in/casestudy-7-Eleven. Your views will be published in our online edition. The best response will win a copy of India Inside by Nirmalya Kumar and Phanish Puranam. Previous case studies are at www.businesstoday.in/casestudy

HOW MUCH TO ADAPT IS A CLASSIC DILEMMA FOR GLOBAL BRANDS

As global brands from Western countries adapt to emerging markets， they face the challenge of different demographics and income patterns. How much to adapt while retaining the brand DNA is a classic dilemma. Adaptation needs to be limited for luxury brands as their target market tends to be the top of the pyramid， where consumption patterns are global. Similarly， for technological products， like software or smartphones， the adaptation needed is relatively small. Retail is one area， especially mass merchandise retail， where global success stories are few and far between. Even the most successful global retailers – Carrefour， Metro and Wal-Mart – have had their share of failures.

Why is global mass retailing so challenging？ The products/brands sold by mass retailers are not unique –and are already widely available in the country. As a later entrant， a global retailer is unlikely to find the best locations available and it is unlikely to have a lower cost of operations than local mom-and-pop stores. To succeed， the global retailer has to offer better customer experience while hoping that savings from state-of-the-art global systems will more than compensate for the higher real estate and operating cost disadvantages.

The 7-Eleven case in Indonesia is an outstanding example of a global retailer having found a unique proposition with its customer experience that taps directly into the demographic differences of the country. For global firms， after China and India， Indonesia has perhaps the greatest potential. Kudos to 7-Eleven for unlocking this.

7-ELEVEN STANDS OUT FOR ITS MARKETING STRATEGY

7-Eleven’s success in Indonesia is an ideal case to study

how a brand redefines its marketing strategy to enter a new market. While other brands are struggling to find their place in the market， 7-Eleven stands out for its marketing strategy. The new local strategy is aligned to the growing demographic opportunity in the Indonesian market， where young people below 30 account for almost 40 per cent of the population. Capturing this important market with the right positioning – a cool， trendy place to hang out with affordable meals， drinks and fast Internet – have been the key success factors. It shifted its core brand proposition from a convenience store in the US to a place where convenience store meets Internet café for young people in Indonesia.

Moving forward， keeping pace with changing customer needs， a fast-moving economy and a competitive environment in Indonesia are the challenges for 7-Eleven. While the entry strategy perfectly captured a strategic position， competitors are adapting their strategy to win back market share. The local 7-Eleven concept is not that hard to copy after all， especially when some competitors have been established in the country for a longer period of time. The size and design of 7-Eleven stores needed to implement its strategy also deters expansion in every corner of the country. It has to carefully chose the right corner to be spacious enough for both the store and Internet café， and strategically located to be viable as a 24/7 concept.

BEST OF THE LOT

BT receives scores of responses to its case studies. Below is the best one on Oreo in the March 31， 2013 issue

J.S. Broca， Retired Chief Manager， Bank of India，

The Oreo case study （Business Today， March 31， 2013） was undoubtedly one of the best in recent times and it throws new light on marketing and brand management strategies of the company. However， had it added a few more insights， especially about its name and Twist， Lick and Dunk（TLD） strategy， I feel it would have connected more with the readers. I had often wondered about the cookie’s name. The people at Nabisco aren’t quite sure. Some believe the cookie’s name was taken from the French word for gold， "or"， which was the main colour on early Oreo packages. Others believe the name is a combination of "re" in cream and the two Os in chocolate — O-re-o. And still others believe the cookie was named Oreo because it was short and easy to pronounce.

All said and done， it is a catchy name and if you pronounce it with breaks as “O” “RE” “O”， it sounds as if you are calling someone’s attention in Hindi. （Hey， You There） I also found its TLD strategy very innovative. The sandwich biscuit， launched in early 2011 with its global Twist， Lick and Dunk communication， had broken across various types of media， including television， print， outdoor， radio and digital. The ritual is about twisting an Oreo cookie open， licking the vanilla cream， dunking it in a glass of milk， before relishing it. The TV commercial depicting a playful prank between a father and his son， centered upon the Twist， Lick and Dunk ritual， was enjoyable and hard-to-miss.