This is not a piece about the latest technological advances, gimmicks toys or 5G, 8K, robotics, foldables, AI and other buzz words. It’s about preparing your business to compete in 2020 and beyond!
So what will be the big branding shifts in Malaysia in 2020? Here are ten developments that will help you take your company from innocuous business to sustainable brand:
1) Seismic shift away from using traditional media to create instant sales to relationship branding to ensure long term success: In 2014, in a global attempt to unseat Apple at the head of the consumer electronics table, Samsung spent a heart stopping RM50 billion, yes RM50 billion on marketing with a large chunk of it on advertising. It failed.
For twenty years Proton spent in the region of RM10 – RM25 million annually on traditional creative driven marketing. During that period, Proton’s market share fell from 85% to 16% and it had to be bailed out by the Chinese.
In 2018, Unilever slashed RM1.2 billion dollars from it’s annual marketing budget. The impact on sales? Zero.
And then there’s Malaysia Airlines. In the lead up to the tragic events of 2014, Malaysia Airlines spent over RM1 billion on traditional media telling us about Malaysian Hospitality. In fact it is still using hospitality to sell seats but lost nearly RM800 million in 2018.
Everywhere you look, businesses that have spent hundreds of millions of dollars on a traditional, creative driven approach to marketing are struggling to stay competitive, repeatedly bailed out by the government or have already gone out of business.
In 2020, the old rules of marketing will no longer apply. Replaced instead by relationship branding. Relationship branding focusses the organisation on establishing a personal relationship at every touch point with every customer, all the time.
Based around a business with a deep understanding of the organisations’ abilities (and limitations), relationship branding will seek to build deep, meaningful relationship with prospects and customers by delivering outstanding individual value and memorable experiences at every touch point throughout the customer journey and beyond.
2. Co-creation is the new innovation:Fusionbrand, one of Malaysia’s most established and respected brand consultancies is working with a local fashion house to build a community around it’s best customers. Each customer is encouraged to participate in the design process by voting for designs online.
Designs that ‘win’ will be developed and marketed in the same way as designs developed in house. This simple but effective example of co-creation will help build relationships with prospects and customers while encouraging participation in the success of the brand and at the same time, generate discussions that will be far more effective than traditional advertising.
This more collaborative and transparent approach to branding is nothing new but it’s rarely done properly. Yet ask yourself, if you are in a positive, fulfilling relationship, where your partner treats you as a partner, are you likely to end it? Of course not. In 2020, successful businesses will look to build relationships not sell products.
3. Develop social media strategies to leverage its power, not treat is as a tactical after thought: 2018 was the year Malaysians finally understood the power of the internet and in particular, consumer generated media (CGM) when they used it to peacefully topple an authoritarian government that had ruled for more than 60 years.
In 2019 Malaysians experimented further by repeatedly challenging the newly elected government while flexing their muscle on numerous issues such as the economy, education, immigration, transportation and taxes.
The taxi industry, utilities providers and other monopolies incurred the wrath of the increasingly confident Malaysian consumer. They and many others are under increasing pressure to perform and will come under further pressure throughout the year.
One Malaysian property developer saw its reputation practically destroyed because of the power of social media and more importantly, its inability to represent its brand effectively online in a crisis.
This provides an outstanding opportunity for businesses that understand social media and how to develop a strategy to leverage its power. To do so, firms will need to be more genuine, authentic, accessible, transparent and human. One way to do this is by creating and managing online communities where customers interact with each other, often to the detriment of the brand. Attributes that don’t come easy to Malaysian CEOs but they really don’t have a choice.
The irony is that such transparency and collaborative approach is beneficial to the brand. The Ogilvy Loyalty Index found that such customers are worth six times the value of a “typical” customer while a McKinsey study found that these customers accounted for two-thirds of online sales.
4. Enhanced customer connectivity: With consumers increasingly choosing to shut out the more than 5,000 messages they receive every day, companies must accept that they need to look for more innovative ways to engage with and stay connected to customers if they are to stay ahead of the competition in 2020 and beyond.
The good news is that consumers are more willing than ever to share information and this, coupled with the increasing affordability of tools that provide better capabilities for segmented messaging mean there is no longer the ‘no budget la’ excuse for not integrating technology into any brand strategy.
Moreover, advances in geolocation collection and activity-tracking, mean that companies can provide personalised, custom content and offerings as well as anticipate needs and potentially prevent potential issues at a fraction of the cost of even 5 years ago.
A word of warning though. Enhanced connectivity means more interactions so personnel need to know how to represent the company and what tone of voice to use. Marketing automation and chatbots are not a solution on their own. It’s how you use them that matters.
5. Social branding: Increasingly, companies will understand that brands have social as well as economic value. This is a lesson that companies such as the Body Shop, Patagonia and Ben & Jerry’s have long recognized. Think #MeToo, Black Lives Matter and Movember for examples.
In 2020, companies will increase sponsorships of a wider variety of social movements. Sights like RankABrand are sharing information on how sustainable brands are. Expect Malaysian companies to pay greater attention to corporate governance, recognizing the strong effect that transgressions can have on their brands.
6. Product placement will not go away: As advertising becomes less effective, better enforcement of the PDPA act, do-not-call lists and more robust spam filters, companies will have to work smarter to get their products in front of consumers. Look for an expanded emphasis this year on product placement, not only in TV and movies but also in songs.
7. Blogs will get the recognition they deserve in 2020: Blogs are hardly new but they aren’t used properly in Malaysia or rather they weren’t up until 2018 when they helped bring down the government. An online tool powerful enough to help influence and change the voting habits of Malaysians while making obscure Swedish gamers international superstars and multi millionaires will be used extensively in 2020 to move product.
While there are many bloggers in Malaysia, not many of them are consistent. In 2020, we’ll see blogs begin their rise as a cost effective tool for internal and external community relationship builders.
Smart brands will recognise the power of good blogs such as syedoutsidethebox, Bangsarbabe and of course this one! The power of Blogs to fuel word-of-mouth, which accounts for 30-50% of all brand switching will be truly recognised.
8. Training and upskilling: 2020 will be a tough year economically, making competition even more intense. Moreover, international brands are now targetting Malaysia making it harder to find talent willing to join Malaysian businesses.
This means Malaysian companies will have to invest more in their personnel, treating them as an investment not a cost.
9. Brand audits will become fashionable: In 2020 smart companies will invest in hard hitting brand audits that identify what is right (and wrong) with the brand and provide a benchmark for future strategies.
Understanding where is the brand today, providing a clear vision and mission as well as making sure everyone within the organisation understands what is the brand, its values, what is its purpose and what their role is in delivering memorable experiences will be the key to moving from price driven businesses to brands so expect to hear a lot of talk in 2020 about brand audits [LINK].
10. Fast-forward to the end of 2020: Keep an eye on immersive communications. Talked about since 2005 or so, immersive communications has struggled to cut through the noise, mainly because businesses don’t want to make the investment, preferring instead to try and shout louder than everyone else because everyone else is shouting.
Branding is often not about new stuff, it’s about doing the fundamentals better than anyone else. Get that right, while delivering on promises made and you’ll see your brand succeed where others fail in 2020.
If you’d like to learn how to make your business a brand, contact us today
The Skytrax awards are based on the responses of 21 million participants from 100 nationalities. It is touted as the largest annual airline passenger satisfaction survey in the world.
I have a number of issues with satisfaction surveys, the primary one being that they don’t really provide any actionable insights. J.D. Power, a research company carries out an annual satisfaction survey of US airlines and their 2019 survey shows travellers are more satisfied than ever with airlines.
Yet high levels of satisfaction don’t translate into increased profitability as airline stocks underperform most markets, mainly because as capacity continues to grow, prices continue to fall.
And many of those surveyed probably travel once a year in economy. Business class passengers’ account for only 5.4% of international travel, yet are responsible for 30% of airline revenues. On some flights business class passengers account for 75% of profits.
Little wonder then that Malaysia airlines, Qatar Airways and Emirates are going all out to attract premium class passengers as we head into the lucrative end of the year holiday season. But which one of them flying to the UK deserves your hard earned money?
We compare the business class offerings of these three of the main carriers.
Online airline booking experience
If you want an easy to navigate, seamless experience with an online booking engine that is clear and transparent with an intuitive interface then Emirates clinches this important part of the process as all the information is clearly laid out, allowing you to make changes without too much effort or repetition.
The Qatar Airways sites is easy to navigate although the font is a bit small. They lose a point for the outrageous ‘no show’ penalties while Malaysia Airlines loses a point for the limited number of flights offered but wins it back for being the only one to offer direct flights, shaving at least 3 hours off the journey time. Emirates 4. Qatar 3. Malaysia 4.
Check in at Kuala Lumpur International Airport
There’s nothing to choose between the three, which is a massive lost opportunity for MAS because KLIA is its home airport and should be used to really make a powerful first impression.
Check in staff for all three carriers also need to be trained to have more enthusiasm for their jobs and be constantly reminded they represent the brand at the start of the relationship with passengers.
It may be a process for them but it isn’t for the brand or the customer. It’s a key touch point in the relationship building process and shouldn’t be underestimated, especially by Malaysia Airlines. Emirates 3. Qatar 3. Malaysia 2.
Emirates, Qatar Airways & MAS lounges at KLIA
All three lounges are on the ‘mezzanine’ level at KLIA and are all harder to find than they should be, especially the Plaza premium lounge. This is not unique to KLIA as most airports appear to hide their lounges.
When flying Qatar and Emirates I took the early morning flights that left around 0200hrs. Qatar doesn’t have its own lounge at KLIA so uses the Plaza Premium lounge. Which is anything but premium.
From an experiential branding perspective, this is a massive fail on the part of Qatar Airways. I don’t know why they haven’t invested in their own lounges, not just at KLIA but at other airports around the world.
Emirates lounge is small and intimate with a limited but superior range of hot and cold foods and beverages including premium non vintage champagnes. The lighting is calm and the environment relaxing. Staff are attentive and knowledgeable.
Understandably the MAS lounge is the largest but it wasn’t the most impressive. The first thing that hits you is the smell. It’s the unmistakable smell of Malaysian food.
It reminded me of walking into a food court. Nothing wrong with that perhaps but the Emirates lounge in Dubai doesn’t smell of Mandi while the Qatar Airways lounge at Doha don’t smell of Machbus.
While some business class lounges around the world are creating daylight boosting zones, ‘Hue lighting’ rooms and amber or blue lighting throughout, The Malaysia Airlines lounge at KLIA was rather dull and uninspiring. Emirates 4. Qatar 1. Malaysia 2.
Lounge to gate experience at KLIA
Walking from all the lounges to the respective gates should be straight forward but it isn’t due to a lack of effective way finding. While this isn’t the fault of the carriers, they should be able to influence the airport operator. Walking out of the Malaysia Airlines lounge, there is no sign directing you where to go or even how to get down to the ground floor.
The main security checks for all flights are at the departure gates. I think this is unique to KLIA and absolutely bonkers. At Dubai, Doha and Heathrow, by this stage it’s just a passport check.
So as a business class passenger on the national airline you queue with everyone else. This should be at an earlier stage of the journey where there are fast track lanes for business class passengers.
National carriers need to leverage every opportunity they can and home advantage is supposed to work for them, not against them. Malaysia Airlines really needs to get on top of this by working with stakeholders such as Malaysia Airports to create a memorable experience, for the right reasons. Malaysia Airlines loses another point here because KLIA is its home airport. Emirates 3. Qatar 3. Malaysia 2.
Business class environment on MAS, Qatar and Emirates
My Emirates flight was a Boing 777 while the Qatar flight was an Airbus A330 and the MAS flight an Airbus A350. So not exactly ‘apples to apples’ but close enough.
Emirates business class is bling central. It’s shiny, bright with huge TV screens and thousands of movies, TV shows, games, flight information and more. It’s world class and has won numerous awards.
The Qatar cabin is less ostentatious and a little more refined with equally impressive TVs and movies, TV shows, games and flight information. It’s also won many awards especially with Skytrax.
The Malaysian Airlines cabin is functional. It’s more Toyota than the Porsche of the others. The TV is smaller, of poorer quality and there are less new movies. Overall entertainment options are significantly less than the others.
I’m not comparing seats because that would only make sense if I compared exactly the same seat on each aircraft.
Wifi is free on Emirates and Qatar and costs US$2 – US$25 on MAS, depending on the package. Bearing in mind the quality of Wifi on flights is still patchy, charging business class passengers is not a good idea and MAS would be better offering it free. Emirates 4. Qatar 4. Malaysia 2.
Comparing inflight service on MAS with Qatar Airways & Emirates
I’ll focus on key experiential points here and not do a food review! The mix of passengers on all the carriers was essentially the same – Westerners, Arabs, Malaysians and a mix of others so they need to cater to all tastes.
Order a pre meal drink on Emirates or Qatar and it’s served together with a variety of warmed premium nuts in a bowl.
On MAS the nuts are the same as economy class and are served in the bag. Another bag of nut mix is also served the contents of which was a serious disappointment.
On Emirates and Qatar, every pre dinner drink order was a personal event and served by a ‘waiter’. I saw a number of passengers order cocktails, champagne and other drinks and the glassware is elegant and the whole experience is similar to a 5 star hotel cocktail bar.
The pre dinner experience on MAS is functional. It isn’t bad, it’s just not in the same league as the competition but it is competing with them for the same passengers so it really needs to be.
While the food is comparable, MAS really lets itself down with the way it serves the food. Emirates and Qatar prepare meals in the galley and serve them individually, MAS pushes the food trolley along the aisle, like in economy.
I was sitting in the back row so had to put up with the trolley clanking every time it went over a ‘lip’ on the floor next to me.
Oh, and on the MAS drinks trolley were some heavily flavoured and hugely sweet ‘juice drinks’ popular in Malaysia and other parts of SE Asia but not really anywhere else.
Watching MAS cabin crew peel back the seal on one of those containers didn’t make me feel like I was in an exclusive cabin. Pedantic perhaps but paying attention to these little things is what differentiates great brands from the rest.
MAS did deliver the main course personally so I didn’t have to put up with the trolley!
MAS losses a point over its coffee. The world loves good coffee. Arabs have been drinking coffee since the 15th century. Europeans have had a coffee culture for 400 years. There are 700 Starbucks stores in South East Asia, 140 of them in Malaysia. 75% of Australians drink fresh coffee every day.
Order a coffee on Emirates and you’ll receive a freshly brewed mug of Ethiopia’s finest beans. Same on Qatar, on MAS it’s Nescafe. Now I know Malaysians like Nescafe but the typical international business traveller from the East or West is more likely to enjoy a freshly brewed cup of java.
At the end of the meal on MAS, out came that bloody trolley again. And this time there was a rubbish bag on top and as the steward cleared plates, he emptied left over food and rubbish into the bag. Sorry but that’s simply not good enough on business class and another point lost.
All three offer a ‘mattress’. Qatar gets a special mention for providing The White Company pajamas. I didn’t use them but I took them home!
Like I say, it’s not that MAS business class is bad, it’s just that the other carriers have raised the bar when it comes to service. So it’s inevitable passengers will compare experiences. Emirates 4. Qatar 5. Malaysia 2.
Cabin crew attitude on MAS, Emirates & Qatar Airways
Cabin crew are some of the most underrated and under appreciated people in the aviation business. They need a wide variety of skills. They need to be professional yet friendly, polite and caring, have great communication and customer service skills while at the same time an empathetic nature.
They need to be flexible enough to deal with multiple cultures, have high levels of tolerance, be organized, firm and calm while managing multiple activities and all at 38,000 feet!
Little wonder then that cabin crew can make or break an airline brand. And it takes real talent to become good cabin crew. Asians have a natural charm and historically, Asian carriers have led the world in providing memorable experiences and it’s no surprise that Emirates and Qatar hire mostly Asian cabin crew from at least 15 Asian countries.
Emirates cabin crew lead the field in terms of professionalism. They are attentive and yet unobtrusive. The crew member looking after me introduced herself at the start of the flight and made herself visible without interrupting me. She made me feel special and important.
The service, personalization and ‘nothing is too difficult’ attitude was bang on the money.
There isn’t much to choose from between the Qatar cabin crew and Emirates, perhaps a little more refined but really nothing much in it.
MAS staff were professional and attentive if a little hurried. I felt they wanted to get the meal over with while the others seemed to actually enjoy their work.
When I complained about not being able to have a proper cup of coffee on MAS, the crew member – who was senior and obviously experienced – dealt with me sincerely, sympathetically and professionally. Emirates 5. Qatar 4. Malaysia 4.
Arrival in London
Most airlines seem to be happy to be rid of you the moment you leave the aircraft. However, flying Emirates business class entitles you to a limousine to any destination within about 70 miles of Heathrow or Gatwick.
This limousine option is outstanding value and ensures the last leg of the journey leaves a lasting, positive impression. I’ve lost count of how many times I’ve mentioned this service to people. Neither MAS or Qatar offer a limousine and for some I know it’s a deal breaker. Emirates 3. Qatar 0. Malaysia 0.
The post experience experience
None of the airlines try to build a personal relationship with you. I was travelling Qatar for the first time and yet there was a lack of personalisation in follow up communications. It was my first flight to London on MAS for about 5 years and I had mentioned it on social media but again, no attempt was made to build rapport with me although I was sent an email asking me to complete a questionnaire. Emirates carpet bombs me with numerous emails containing special offers but doesn’t do anything to build rapport with me. This a missed opportunity for all the airlines. Emirates 0. Qatar 0. Malaysia 0.
Malaysia Airlines comes in a distant third and that’s a pity because in the mid 1980s, before The Emirates or Qatar even had their own airlines, three airlines – Singapore Air, Cathay Pacific and Malaysia Airlines – invested heavily in their people to make the experience of flying with them memorable.
It worked and those airlines became the ‘poster boys’ of the commercial aviation business.
MAS began to lose sight of what it is in the 1990s and stumbled along until the twin tragedies of 2014. In the months and years after 2014, costs were slashed and it became nothing more than a low cost carrier masquerading as a national airline.
There is no doubt that it has made significant headway since those dark days but it still has a long way to go. To make the transition, management has to understand they are not selling flights they are selling experiences.
Looking at the MAS staff behave, my gut feeling is they are trying their best but the MAS training is inadequate in the face of such dynamic competition. And how the management react to the recent FAA ruling will be key to the next stage of the carriers evolution.
Splitting Emirates and Qatar isn’t easy. Qatar’s rise as a global carrier of repute has been meteoric and it is winning awards almost every day. Loads out of Kuala Lumpur are impressive but it isn’t investing as heavily in the experience as Emirates and that’s why it came in second.
Emirates is the benchmark for all airlines. The crew really seems to be in touch with the company values and living those values on board. Having said that, I hear there are rumblings of discontent amongst frequent flyers.
Emirates has undoubtedly reached the top but in many ways, that’s the easy part. Staying there and continually improving will be tough, especially if competitors up their game.
Emirates is a clear winner.
If you’d like to know how Fusionbrand can make your business a world class brand, please contact us on +60192233090.
I opened my LinkedIn this morning and had this message in my inbox. Now my trials and tribulations with BMW are well known to anyone who reads my blog on a regular basis.
But in case you are new and interested, you can read an example of why I detest this brand with a passion here.
Let’s go back to that message in my inbox. This is a relatively new channel for brands, especially here in Malaysia where most business owners think a billboard is the height of marketing sophistication.
So why would you use this channel? Well in theory it allows you to get in front of the right kind of people. Ideally, that is people who are interested in your industry and potentially although not in my case obviously, your actual brand and even a particular product.
The idea is to work with LinkedIn to target users who have shown some interest previously in a similar product or even better are perhaps engaged in related communities.
Best of all would be members who are engaged and want to know about the product. I’m none of these but that didn’t stop BMW messaging me.
Look at that message. What does “Athletically muscular and aesthetically uncompromising” juxtaposed with ‘its full-on racing DNA is visible from the get-go” even mean?
In the era of Mad Men this meant something. Today it shows a complete lack of understanding or appreciation of the customer journey.
Hopefully they are being charged per click because in the course of writing this post, I’ve clicked on the call to action many times.
And once I get to the site, I’m bombarded with even more powerful verbs, adverbs, adjectives and prepositions. Uncompromising power. The Perfect Gentleman. Design. WTF? I guess by now I’m supposed to be frothing at the mouth, desperate for the opportunity to own this beast, which incidentally costs more than RM1,000,000.
But perhaps most galling of all is that when I click on the link, I go to the main BMW site. So I’m being targeted as someone with the potential to spend RM1,000,000 on a car, yet now I’m supposed to mix with the hordes of BMW 1 and 3 series wannabe owners.
There should an exclusive, seamless way for me to engage with the dynamic 8 team waiting for someone like me keen to learn more about the 8 series!
But anyway by now, instead of frothing at the mouth, I’m doing what every potential customer does these days. I’m seeking out the opinions of people that matter to me.
And when it comes to buying a car, my first stop is Top Gear. BMW describes the interior of the 8 as “More irresistible with every detail. The elegant ‘CraftedClarity’ (note the nifty use of capitals and joining together of two words) glass application gives the sporty interior an exquisite appearance…It embellishes the insert of the gear selector…The result is an interplay of sporty flair and exclusive design that combines athleticism and grace like never before.”
Obviously as a jaded consumer who has been let down so many times by brands over promising and under delivering, I need to visit the Top Gear site to get a third party unbiased opinion.
Top Gear describes the interior as, “the new TFT- screen instrument cluster is a mess. There’s a big area in the centre that shows navigation diagrams, which can’t be used for anything else if you know where you’re going.” Hardly ‘CraftedClarity’!
Top Gear goes on, “Alongside is a near-unreadable rev-counter. In compensation you get a tach in the HUD when in sports mode. The new climate controls are a bit fiddlier than BMW’s previous efforts too, and the silver buttons are impossible to read when backlit. And while Apple CarPlay-over-Bluetooth is a convenient idea, it was glitchy in the test cars. That’s a nitpicking paragraph, but more nits than you expect.”
It’s a million Ringgit car! You nit pick away lads!
However, Top Gear isn’t done. They end the interior review with, “…The front seats are a good place to be, poly-adjustable and supportive. The back ones aren’t. They’re horribly cramped, for knees and heads. At least the boot is biggish, and folding the useless back seats extends it some more.”
That’s a long way from, “interplay of sporty flair and exclusive design that combines athleticism and grace like never before.”
The Top Gear verdict is seven out of ten and the very underwhelming, “It’s very competent across the board, but not greatly different from the rest of the BMW range.” Hardly a compelling reason to spend RM1,000,000. And that’s before the astronomical insurance, road tax and running costs.
So how can you make sure your brand doesn’t make the same mistakes? Well here’s a few ideas
1) LinkedIn messaging isn’t a tool for creating awareness. Don’t be lazy and treat it as one.
2) Branding is no longer about transactions. It’s about building relationships. Don’t try and sell anything to anyone at the first attempt.
3) Know your target market. How many people in Malaysia are likely to be able to afford or want a BMW 8 series? No more than a handful. There are better ways to reach out to them.
4) Have an integrated brand strategy based on robust brand, market and customer data to make informed tactical decisions. No more of this ‘spray and pray’ approach.
5) Understand the customer journey before making any tactical decisions.
6) If you are selling an exclusive product, make every step of the experience exclusive.
7) Brands can no longer expect consumers to believe what they say and not seek 3rd party confirmation of the claims. The days of flamboyant corporate driven advertising with ‘power words’ are over. Accept it. Be real and human in your content.
8) For an automotive company, the right way to use LinkedIn messages is to create personalized invites for a test drive or invitation to an exclusive and I mean exclusive, event.
9) Don’t use new tools in old ways.
10) Collect and use customer data.
It is inevitable that you will lose customers although preferably not the way I was lost to BMW.
Have a recovery plan for lost customers, especially those lost in an acrimonious way. But once lost, don’t include those customers in your marketing as it may negate your marketing efforts significantly.
But most important of all, branding today is about building relationships, not selling stuff. Use new tools properly to build relationships. The stuff will then sell itself.
This morning, I read with interest Sarawak Deputy Chief Minister Datuk Amar Douglas Uggah’s comments about the price of pepper.
You can read the full article here but the crux of it is that he’s talking about the dramatic price drop and appears upset (rightly so) that the solution offered by the Primary Industries Ministry and the Malaysian Pepper Board (MPB) was to plant more pepper.
He said that he had asked for the Federal government to provide subsidies for pepper farmers but no allocation was included in the Federal budget so the State government would have to provide the bail out instead.
Unfortunately the Minister’s solution isn’t right either. Sure, it may assuage the farmers in the short term but in the long term, the problem will return every time the price drops.
And with pepper production rising in many countries, the price is likely to remain depressed which means the farmers will require more handouts next year.
This leads to a dependence on the government because farmers will grow used to being bailed out. This is not effective use taxpayer’s hard earned cash and will slow the state growth, let alone build a globally competitive industry or for that matter a self sufficient industry.
Mature economies look to add value to their commodities. So that when the price of the main ingredient fluctuates, they have a buffer. One potentially lucrative way of adding this value is building global brands.
Sarawak Pepper is acknowledged as the best in the world and 90% of Malaysia’s pepper comes from Sarawak yet it is basically sold as Malaysia Pepper. Sarawak pepper still has some existing brand equity but it is rapidly being eroded.
The commodity business is a zero sum game. It’s like the Original Equipment Manufacturing (OEM) business, whereby firms manufacture equipment for other firms who then use their branding skills to sell the product at a premium.
This has proved to be a popular business model in Malaysia but as the country is now finding out the hard way, you can make money in the short term, but in the long term OEM is little more than a commodity business with very low margins and little growth potential.
But the biggest drawback is that there is always a competitor somewhere who can produce the same thing as you at a cheaper price and who can get it to market quicker.
Because the only relationship is a contract based on a cheap price, customers have few qualms about moving to those competing companies or countries offering cheaper deals.
We’re already seeing how Malaysian commodities such as Palm Oil, Rubber, Timber and Pepper, as well as OEM, especially in the electronics sector are finding it ever harder to compete in the face of competition from aggressive challenger economies such as Vietnam, Indonesia and Myanmar.
The time has come to start adding value to the commodity and OEM sectors in Malaysia. Companies in more mature Asian markets, such as Japan and Korea saw the lack of a future in competing on price.
In the late 1990s, when Eric Kim was executive vice president of global marketing at Samsung, he saw the writing on the wall, “We were nobody. We were down at the commodity level.” Samsung understood that they had to make the move from OEM to Original Brand manufacturer (OBM) and make it fast.
Moving from a commodity grower or Original Equipment manufacturer to a grower of ingredients for a global brand or becoming an Original Brand manufacturer (OBM) has huge benefits not only for the company but the country as well.
Today, Korea is admired and Samsung is imprinted on consumer DNA as one of the world’s leading brands. In flat-panel screens, Samsung is the market leader. In smart phones, Samsung sold 300 million units in 2017, compared to Apple’s 200 million.
Huawei, Haier, LG Electronics, BenQ, Lenovo and other firms have accomplished what many Malaysian firms need to do – make the jump from OEM (original equipment manufacturer) to OBM (original brand manufacturer).
The motivations are clear. Brands are more profitable. According to one report, the world’s top 100 consumer goods and retail companies generated sales of US$3.6 trillion recently and profits of US$228 billion.
Meanwhile, the top 100 OEMs in the Asia Pacific region that supplied products to those top 100 companies reported a relatively meagre US$85bil in sales, with total profits of US$4bil in the same year.
Making the move to OBM will also help with Malaysia’s bold attempts to move the country up the value chain to developed status. Other advantages include greater national employment and influence, increased opportunities for strategic alliances and leverage to open new markets.
Compared to the brutally competitive world of OEM, OBMs also have greater control over their destiny. How many Malaysian OEM’s have folded in the last 10 years after a major customer has sought lower costs elsewhere?
What happens to Sarawak’s pepper farmers if the Koreans and Japanese confectionary manufacturers source from Vietnam?
The good news is that thanks to long-established relationships with such major Western brands as Motorola, Dell, Texas Instruments, Ralph Lauren, Airbus, Tommy Hilfiger, Marks & Spencer and many more, Malaysian OEMs have the manufacturing, logistical and quality control potential required to compete in world markets.
But more Malaysian firms have to take the plunge otherwise they will lose out. And the government needs to focus not on bailing out farmers but showing them how to build brands that can conquer the world.
However, making the jump from commodity producer, the global branding dominance or from OEM to OBM is not as simple as spending millions on advertising.
It requires a substantial commitment of time and resources to establish channel relationships and share-of-mind in target markets. And the move is not without risk. Remember when Acer tried to breach the US market but had to withdraw, wasting an investment of almost $10 billion.
Key success factors include:
Change government & corporate thinking: Although Asian consumers are the most brand-conscious in the world, Asian Ministers and business owners devote much more time to advertising and discounting than branding.
Branding is seen as a cost, not an investment, and branding initiatives don’t get much further than billboards, TV commercials and annual sales (4 times a year).
Think long-term: There is no quick fix. It took Samsung five years to move from commodity to brand. Five years is a minimum, although specialty B2B markets may only require three.
Understand branding: Many Asian leaders believe that a new logo, large discounts and heavy advertising is branding. Actually, branding requires the ability to develop emotional and experiential as well as economic relationships with customers.
Ensure execution: Quality is a given. But is the distribution broad enough to support a national branding campaign? Where do consumers call for support? Are staff trained to deal with unhappy customers? How are returns handled?
Commit the resources: Consumer branding doesn’t come cheap. In 2016, Samsung spent US$10 billion on marketing its brand and products to consumers all over the world.
Bertolli, the global Virgin Olive Oil brand regularly spends US$10 million on advertising in the USA where its brand holds a dominant share (37%) of all the olive oil consumed in America and a market worth over US$1 billion. You do the maths.
Start with niche markets: Haier tried to break into the US market using a traditional advertising campaign. After a fortune in advertising driven branding was wasted, they carried out a brand audit as recommended by Fusionbrand.
After the audit, Haier spotted a gap in the hospitality and student markets and started selling small refrigerators to college students and hotels in the US. Now it sells all types of white goods, and in 2017 paid US$5.6 billion for GE Appliances.
Understand targeting and segmentation: The mass market is dead. Now there are as many markets as there are satellite TV channels, ranging from Chinese, Malay, English to Islamic. As a result, one-size-fits-all branding campaigns will not work.
Learn from failure: Honda’s first effort to export motorcycles to the U.S. ended in failure when Americans didn’t like the design. It carried out a brand audit, incorporated the feedback and successfully re-entered the U.S. market.
Invest in design and innovation: Copying existing products is a ‘strategy’ destined to failure as it faces pricing and branding obstacles. We all know how Apple became the biggest company in the world but it didn’t invent the smartphone or for that matter the tablet. But it made them good through innovation and design.
Malaysia is at a monumental cross roads. It has to move from grower and exporter of commodities and from OEM to producer of some of the world’s greatest brands.
The Deputy Chief Minister of Sarawak could save the tax payer a lot of money, make the Sarawak farmers very rich and do his government a big favour. Not by giving hand outs to farmers. But by helping them make Sarawak pepper a global brand.
Marcus Osborne is CEO of Fusionbrand, Asia’s leading data driven brand consultancy headquartered in Kuala Lumpur.
Taxis are ubiquitous in Kuala Lumpur, just as they are in most cities in around the world. Unfortunately, years of poor public transport, viable alternatives, ineffective regulation and little or no oversight has created an industry that is a Frankenstein monster that has lost sight of it’s actual purpose. In other words, it has grown fat and lazy.
Generations of visitors to Kuala Lumpur have put up with a terrible product. Drivers would stop at taxi ranks and ask each person in the queue where they wanted to go.
Once the driver found someone going where he, the driver wanted to go he would quote an (inflated) fare and the potential passenger could take it or leave it.
If none of the waiting passengers wanted to go in his direction or refused to accept the quoted fare, he would drive off, only to sit in traffic with an empty cab. (That particular stunt always baffled me.)
Getting a receipt for a journey was an exercise in futility. Meter rules were flouted, tourists and residents ripped off and on more than one occasion, this writer was driven by a Pakistani native who’s long beard and salwar kameez did not match the clean shaven, tie wearing Malay in the id on the dashboard identification.
There were exceptions but they were few and far between. A vast majority of the drivers appeared oblivious to the concept of customer service or for that matter, safety, personal hygiene, honesty, integrity and warmth.
To celebrate this accolade, taxi drivers complained to the government and rioted in the streets, attacking the vehicles of Uber drivers and in some cases dragging customers out of Uber cars and into taxis. Who needs customer service when you’ve got brute force and violence?
Citizens voted with their feet and despite being more expensive, Uber became the preferred mode of transport for most KLites.
All it took for this revolution was a taxi business that did what it said on the tin – ie picked people up when they wanted to be picked up and sent them to where they wanted to go at the agreed price in a nice, pleasant environment, normally delivered with a smile.
Recently there has been talk of rebranding the KL taxi business? Can this issue be fixed with a rebrand and if so, how? The short answer is that done properly, a rebrand has a very strong chance of success but if the wrong approach is taken, it’ll be an expensive and futile exercise.
And why is that I hear you ask. Well we need to first understand what constitutes branding. Only then can we appreciate what constitutes a rebrand.
To answer this, we first need to look at what isn’t a brand. In a nutshell, a brand is not a new logo or brand identity. Imagine the Apple logo. Would changing the logo from an Apple to say a sausage change anything about the brand? Of course not.
And rebranding is not launching the new logo or brand identity with a new website, new tagline and new advertising campaign that makes outrageous claims that are almost impossible to live up to and more importantly will be viewed with scepticism by consumers.
A rebrand is a three stage process that begins with a comprehensive review of the business. In this case, it will probably be painful but it needs to be done to benchmark future effectiveness of the brand strategy.
It’ll look at processes and systems related to the brand. What’s good and bad about it, explore segment specific perceptions, the technology used, communications, experiences and much more while identifying areas for short, medium and long term improvement.
Once this brand audit is completed, the findings are used to develop the internal and external brand strategy.
The internal strategy will improve dated systems and processes related to hiring, training and firing of drivers, define driver rules, develop codes of conduct and develop best practices for key touch point linked to customer requirements for value.
The adoption of technology will play a key role in providing a better product and in due course, contributing to the process of changing the perceived professionalism of the taxi industry. Tools are already on the market that allow the sharing of the resources of Grab and taxis to the benefit of both businesses and users.
The external strategy will focus on activities around 6 core attributes necessary for the success of any brand. Those attributes are warmth, humility, integrity, competence, accessibility and transparency.
Disruption is the scourge of every business today and actually has been for many years. Think how the hospitality, banking, aviation and retail industries have had to keep reinventing themselves.
KL’s taxi drivers shouldn’t be frightened of change. By using these attributes as the pillars of their industry, they have a lot going for them.
The external strategy will also leverage weaknesses in the Grab model. A narrative needs to be developed around what taxi drivers contribute to the economy, as opposed to what Grab doesn’t contribute to the community.
If there are questions about how much tax Grab pays, the taxi model will be extremely transparent and the amount of tax paid by taxi drivers will be developed as a societal narrative.
If insurance and safety are key concerns when it comes to using Grab, the taxi industry can use this to it’s advantage by inculcating a culture of safety with the drivers (instead of the often blatant abuse of traffic rules) and water tight insurance policies that cover passengers.
If Grab has a weakness when it comes to passengers with disabilities, the taxi industry will specialize in working with such groups. If the Grab pricing models are contentious, the taxi models will be clear, fair, transparent and impartial. At all times, taxis will be well maintained.
Some European cities have used regulatory vetoing to block disruptors. But in KL there was a serious market failure when it came to the needs of the customer.
So with the damage done, the free market has already decided so such action won’t work in Malaysia and the taxi drivers should stop trying to force the government to take the same approach or for that matter by trying to force the government into action with random acts of violence.
However, KL’s taxis can rebuild trust and belief in the brand. But they’ll need to adopt an organizational approach to a rebrand. If they do so, over time, perceptions of taxis and taxi drivers will improve.
A service driven culture will increase the revenue of taxi drivers while making KL a better place to live.
Ironically, taxi drivers have the potential to become the disruptors they fear, to influence cultural and political change in KL, Malaysia and possibly the region.
So yes it does make sense to rebrand KL’s taxi business. And just like the Malaysian people have proven to the world there is still some mileage left in democracy, Kuala Lumpur’s taxi drivers can prove to the world that this ancient industry has plenty of miles left in it.
Fusionbrand is Malaysia’s only Strategic Brand consultancy. You can reach the author Marcus Osborne on marcus (at) fusionbrand (dot) com or call 03 7954 2075 and ask for Gurmeet.
Q. THE BARISAN NASIONAL INVESTED HEAVILY IN TRADITIONAL COMMUNICATIONS BEFORE & DURING THE ELECTION CAMPAIGN. WAS THAT THE RIGHT WAY FOR TODAY’S BRANDING ENVIRONMENT?
A: As the dust settles on the extraordinary 14th General Election, the well known brand guru who allegedly ran the Barisan Nasional (BN) advertising campaign, the advertising agency involved and a number of other communications executives must be scratching their collective heads at what went wrong.
No one knows for sure how much Barisan Nasional spent on marketing in the lead up to the 14th General Election. I’ve heard RM20 million to RM2 billion with the reality probably somewhere in between. I did hear from a reliable source that RM20 million was spent online which is a lot of money for a short campaign period.
We’ll probably never know because there aren’t really any fund disclosure laws in Malaysia but we do know GLCs were asked to and did contribute.
So with so much money, a high profile brand guru, global advertising agency resources and total control of the mass media, what went wrong?
I will try and answer that question by putting it into some sort of historical marketing context.
The years from 1950 – 1995 can be characterized as the mass marketing economy. It was the golden age of advertising and the early days of branding.
During this period political parties could define, or “position,” themselves and use the mass media to reach and influence mass markets of relatively ‘docile’ citizens.
Don’t forget, up until the mid 1980s, Malaysia only had 2 TV channels and only one of them showed commercials. There wasn’t much to do after a hard day of work and so most citizens were watching those 2 channels. And both of these channels were owned and controlled by the government.
Limited satellite TV came to Malaysia in 1995 but there were no more than 5 channels. Reaching as many consumers as possible was still achieved through mass marketing tools such as TV, radio, billboards, newspaper advertising and the Bas Mini – provided you weren’t too worried about brand association!
Over the next 20 years things got exciting as media evolved quickly and today we have more than 300 TV options. Throughout this communications revolution, Barisan Nasional used mass media to push its messages to the public. And as history shows, it was very successful.
Then came the Internet and Malaysians took to this new platform very quickly. But the real turning point was social media. Social media radically changed the way brands communicate with citizens.
But crucially, from a political perspective, for the first time Malaysians had a platform that wasn’t government owned and that they trusted enough to use to voice out their concerns and frustrations about how the country was being administered.
Q. BUT DIDN’T BN USE SOCIAL MEDIA EXTENSIVELY?
A: Yes they did. But Barisan Nasional seemed to be under the impression it could simply move it’s broadcast message online and continue using this new media in the same way as they used the mass media they controlled.
In the lead up to GE14 BN went on Twitter in an aggressive, controlled approach using infographics, memes, images justifying government policies and lambasting the opposition’s promises.
The Digital Forensic Research (DFR) Lab of the Washington-based Atlantic Council think tank was quoted by Reuters as saying, “over 17,000 bots tweeted content related to the Malaysian election” immediately after the election date was confirmed.
According to the DFR lab, anti Pakatan tweets with the hashtags ‘#SayNoToPH’ and ‘#KalahkanPakatan “were used around 44,100 times by 17,600 users from 12th – 20th April 2018 and 98% percent of the users appear to be bots.”
Soon after, Twitter suspended 500 accounts posting spam or malicious content about the election. Salleh Said Keruak was contacted by the media but he did not respond to text or calls asking for comments, despite his official position as the communications minister.
Other social media images included well attended ceramah and of course ‘random’ individuals carrying “I love PM” signs and waving UMNO flags. While it made sense for BN to be on Twitter because the site is the most active platform for political debate in the country, and at times the approach was well structured but it didn’t understand the basic rules of voter engagement.
Consumers behave differently on social media. They are part of communities populated by people just like them who were just as unhappy as them. BN thought they could beat them into submission the way they had in the mass media environment.
Q. SO YOU ARE SAYING THEY USED SOCIAL MEDIA BUT THEY DIDN’T USE IT PROPERLY?
A: Exactly. Malaysians are not confrontational but push them into a corner and they come out fighting. Social Media provided that corner. This required a new, more collaborative approach to engagement but Barisan Nasional carpet bombed social media the same way it had carpet bombed traditional media for more than 60 years.
Barisan Nasional put a huge amount of resources into mass media techniques that were successful when the mass media yielded power over passive audiences willing to accept the word of the politician as final. However, Malaysians proved that mass media tactics don’t work on social media and they are no longer passive when it comes to politics.
Q. BUT CERAMAHS AND OTHER EVENTS WERE WELL ATTENDED. DOESN’T THAT SUGGEST THEY WERE POPULAR?
A: I think we all know that a well attended Ceramah or BN events doesn’t necessarily equate to popularity. Sure voters attended the events and listened politely to political messages at Ceramah while nodding appropriately. And of course candidate visits to constituencies were on the whole, well attended but they always are, especially when there is free food.
As matters became desperate towards the end of the campaign period, many of these visits came with blatant cash handouts, some of which were filmed on smartphones and shared across social media and whatsapp groups.
In the past these cash handouts were often enough to sway those on the fence but this time citizens sought third party verification on social media before making decisions or forming opinions.
And that verification came from people like them. Whether that be in Facebook communities of like minded individuals, in the comments section of articles about election related issues or in whatsapp groups.
For the first time ever, voters were informed and opinionated and social media was awash with people like them. It was like a wave the country has never witnessed.
Barisan Nasional was oblivious to these developments partly because their controlled media online such as The NST, Berita Harian and The Star were pushing out the government message but didn’t allow comments from readers at the end of the articles.
It showed a huge lack of appreciation for how the landscape was changing. But also meant the ruling party was unable to gauge less partisan feelings and address issues important to voters.
Barisan Nasional was basically stuck in 1985. It believed that all it had to do was create a party driven message and position that message in the minds of citizens.
Q. SO YOU ARE SAYING BARISAN NATIONAL SPENT FAR TOO MUCH ON ADVERTISING?
A: Far too many creative companies are given responsibility for building brands. And a recent ‘brand consultant of the year’ award went to an advertising agency! That’s like a car winning ‘motorbike of the year’! It’s confusing for everyone.
Branding today is much more than cool ads, cool logos, cool design, a great tagline all communicated using beautiful advertising. And this election proved that beyond a doubt.
Barisan Nasional put a lot of emphasis on logos during its time and for GE14 created the tagline “Utamakan Yang Perlu, Hebatkan Negaraku” which was soon shortened to the Trumpesque “Make My Country Great”.
It was extremely naive of the BN President or those advising him, to believe that an artificially contrived message, created without consultation of major stakeholders and retrofitted around an elitist party was going to make Barisan Nasional instantly acceptable, recognizable, trusted and voted for.
Some in the industry have questioned the advertising campaigns that focused on the achievements of the BN government and yet more often that not, featured a larger than life image of the Prime Minister.
The campaign was almost presidential yet didn’t seem to talk to anyone particular. For all the discussions about the impact of the youth in this election campaign, the reality is they aren’t going to vote for someone who, as one 22 year old told me, “looks like a friend of my dad’s.”
One industry veteran said the campaign looked really attractive and professional, but he didn’t know who they were talking to. It looked to him like the ads were created to please the Prime Minister.
Another industry professional thought that the campaign was, “run like an Obama campaign but in the style of Clinton with its heavy dependence on contrived messaging and negative comments about the opposition.
Q: SO BARISAN NASIONAL DIDN’T UNDERSTAND WHAT IT TAKES TO BUILD A POLITICAL BRAND?
A: Branding today requires a product that is fit for purpose. Internally, everyone within the organization must be ‘on brand’ so that they are all pulling in the same direction.
BN should have known through a brand audit what were the issues that were affecting the voters and how to address them. I think some research was carried out and there were also suggestions that the disgraced political consulting company Cambridge Analytica was involved.
But when research is managed internally or with those close to the ‘CEO’, the results may be influenced by the short term goals of those involved.
And of course participants don’t always provide truthful information if they don’t trust the source of the questions or what the data will be used for. And just to ram home this point about the flaws in internally carried out research, if the findings are not good, there is a temptation to sugar coat the results or present them in a less than legitimate manner.
BN’s messages had all the hallmarks of the contrived, ‘they’ll listen to what we want them to hear’ approach to branding. They spoke to everyone while saying nothing to anyone. There was a real lack of empathy for the audience.
When asked about the economy, 1MDB, GST, education in other words, the issues important to voters, they kept quiet or gave stock, pre prepared responses.
Arul Kanda was sent out to talk a lot without saying anything with his one man monologues on 1MDB but he changed nothing. BN could not gather feedback through neutral or semi neutral channels because it had closed them all off. And views of citizens through comments in Malaysiakini were dismissed as the ramblings of a few opposition planted extremists.
But citizens are not stupid and the majority of people saw straight through much of what BN was saying. BN has a track record of over promising, especially at election time, and under delivering afterwards. Many others were caught blatantly lying and in this day and age people will not put their trust in liars to run the country.
Q: SO DO YOU THINK BARISAN NASIONAL HAD A STRATEGY?
A: Barisan obviously had a narrative determined in advance. But instead of being based around issues that matter to the voters and tested first, it was very much based around how wonderful is the president and what they have done for the country.
As former Trade and Industry Minister Rafidah Aziz said, “the old objective was to “present a picture much rosier than it really is”. However, what was needed now are transparency, responsibility and honesty.”
That may be stating the obvious but as was patently clear during the campaigning period, BN was only ready to present a picture it wanted to present around it’s own narrative. BN only had a push plan and no pull plan. It seemed there was no real interest to address the many elephants in the room.
It was as if BN thought it could buy voters whereas they should have been trying to win their trust. And when it got really difficult, and BN was losing ground to the opposition there was no Plan B and instead, BN fell back on paying out cash, the demonization of the Chinese, the age of the opposition leader and numerous other petty, often personal matters to try and boost support.
BN made mistake after mistake. Initiatives such as weaponising Sungai Besar Umno chief Jamal Yunos and demonizing the DAP were perceived as negative and backfired.
The Barisan Nasional leadership, on the whole a wealthy elite, many of whom ‘inherited’ their positions and have never even worked in the private sector, were completely out of touch with their core voters.
If you spoke to any hard core UMNO members in the 6 months before the election, many of them were edging towards the fence because they were losing confidence in the leadership and it was easy to see the disparity between what BN said and what they did.
In the election campaign, some of the senior Barisan Nasional representatives would turn up for a Ceramah, spend 10 minutes screaming at the audience and then leave. This drove a bigger wedge between them and the people.
And throughout the whole campaign, there seemed to be nothing holding all these tactics together, except a old fashioned approach of presenting a fake picture of success.
Q: SO WHAT SHOULD BARISAN NASIONAL HAVE DONE TO BUILD ITS BRAND?
A: Political branding today is about six key attributes – warmth & humility, integrity & transparency and competence & accessibility. None of those attributes can be communicated with logos, advertising, taglines etc.
These attributes require engagement and interactions, the building of trust through legitimacy and a real, human side that can’t be faked. It might be flawed, that’s fine but it can’t be faked. BN was a million miles away from these attributes.
The opposition party, a fragile coalition of fragmented parties under the Pakatan Harapan banner and led by a 92 year old man, was prohibited from using a common logo and constantly under threat from the authorities.
Their events were disrupted, election posters defaced and their supporters were even threatened. Throughout the whole campaign however, they maintained their dignity, showed an approachable naturalness, campaigned on a ticket of integrity and transparency, were always accessible and came across as competent and knowledgeable, especially in matters of fiscal importance.
Their communications resonated with small, niche segments and because of that it had it’s own organic legs. According to one source, Pakatan Harapan spent a mere RM800 on Social Media during the entire election campaign. All that content you saw and probably shared got to you organically.
Compare that with the alleged RM20 million spent online by Barisan Nasional during the campaign period. Most of which was spent on passive content such as banners or negative content against the opposition with only a small amount assigned to branded content and native advertising.
Q. WHAT LESSONS CAN BE LEARNED FROM THIS BRANDING DISASTER?
A: The main lesson has to be that political parties can no longer construct a brand around a party driven strategy and expect voters to embrace it because the party tells them to.
Trust is more important than ever. And now that voters have got a taste and better understanding of their power, they will be more inclined to use it. Underperform and you will be out of office.
The attributes above take time to be absorbed by voters. Those who you want to convince may want to be convinced but it won’t happen immediately. For people to believe what you tell them you must first connect with them on an emotional level.
And this will inevitably happen through various touch points with your brand. And remember the success of everything that you say online will be defined by what you do offline.
Governments are going to have to deliver. Ministers will have to know what they are doing, tenders will have to be open. If political parties aren’t providing the value diverse voter segments require, you aren’t going to stay in power for long.
Sure you may win some votes but you won’t get to the stage where you have a political brand that doesn’t require huge investments in marketing. You’ll always be struggling to get votes (or in this case offering more and more desperate incentives, many of them financial) and always be discounting, always wondering if today will be your last.
Another lesson that all brands can learn from this is to understand that branding is relational not transactional. It is no longer about selling one idea to as many voters as possible but instead is about building and nurturing relationships with communities of like minded individuals.
There has to be significant substance to the political party brand. And it has to be truthful with its point of view on issues. And this applies to Pakatan as well. Malaysians have flexed their muscles and seen how powerful they can be. Right now Pakatan is riding a wave of popularity but already citizens are asking questions.
Brands cannot be manufactured. They have to be real, they have to have substance and they have to be legitimate. The always on world that we live in doesn’t take kindly to liars.
The Barisan Nasional campaign was deconstructed every day in social media. For the first time in Malaysia, an election was fought not in the coffee shops of the Kampungs of the rural heartland but in the virtual coffee shops of Facebook and Twitter.
Historically, children from the kampungs went home and were influenced by their parents when it came to voting. This is no longer the case as many children living in the cities and overseas and returning home to vote, explained to their parents the extent of the apparent rot in Barisan Nasional and the hope for the future that Pakatan seemed to offer.
Moving forward, there is no question that political branding is moving through unchartered waters. Not just in Malaysia but around the world.
It’s no longer enough to just say ‘we are the best choice and if you vote for the opposition you will bring doom and gloom to you, your family and the nation.’
And we can expect to see a lot more Malaysians registering to vote as they realise they can make a difference. Millennials, with their fluctuating loyalties will become the power brokers in the next two elections.
These citizens are oblivious to the noise of the election billboard, are unlikely to see the party political broadcast on TV3 and don’t have the time, interest or concentration span for a 60 year old giving them a lecture at a Ceramah.
Q. ANY OTHER BRANDING TAKEAWAYS FROM THIS ELECTION?
A: A key branding takeaway from this election is that more substance, less communication will resonate with voters. One of the reasons Tun Dr Mahathir is so popular is because he comes from an era when politicians were seen as patriots, who were passionate about their country and made personal sacrifices for the nation.
He’s also popular because he’s a diminutive, old ‘doctor’ who is hardly threatening. And when he does bring up the opposition, he does it in a seemingly unconfrontational, more human manner, with a bit of humour.
Some of the BN representatives appeared almost bitter and aggressive when they spoke about him. And of course when a young person attacks an old person, there’s only going to be one winner. It was all very shallow and personal.
Another takeaway is that from now on, the political battleground is digital, it actually helped Pakatan because it meant they didn’t need to reach every corner of the country.
While BN created an arms length, slick, PM driven campaign with a lot of chest thumping, Pakatan was embracing voters, or more importantly Pakatan supporters were embracing voters in the digital coffee shops with informal, instantaneous responses to issues.
Trust and loyalty are the foundations of every brand and they always have been. Malaysians are smarter and better informed than they have ever been. They have shown they will no longer tolerate patronizing, incompetent politicians.
Politicians will have to earn the voters trust. They will have to be at the heart of every political party’s approach. Fail to learn that lesson and your days in power will be numbered.
Q: FINALLY, WHY DID YOU WRITE THE CONTROVERSIAL BOOK: STOP ADVERTISING, START BRANDING?
A: I got the idea for the book when I saw a print ad for Singapore from 1971 and then a week later I saw another one from 2016. Except for some minor changes such as the addition of a website in place of a tear off strip, they were virtually identical.
And soon after I read an article from Ernst & Young about how US$1.5 trillion was spent annually on marketing yet 80 – 90% of products failed to become brands.
I realised that even though the competitive environment and consumers are very different today than they were 50 years ago. That management, manufacturing and distribution have made substantial advances in the same period and we’re moving towards Industry 4.0, branding initiatives were still based around tactics from the Industry 2.0 era, even when used on new platforms.
The more I researched the topic, the more it appeared that reliance on outdated tactics from the past were the reason behind so much wasted money and so many branding failures.
So I decided to write a book about how to move away from the traditional style of trying to build a brand and save a lot of companies, and political parties, a lot of money.
Marcus Osborne is CEO of Fusionbrand Sdn Bhd headquartered in Kuala Lumpur and can be reached on marcus at fusionbrand dot com
We had a great time today with creative writing, advertising and journalism students at the International Islamic University Malaysia. The discussion revolved around “Branding in the era of industry 4.0” and we talked about what Malaysian brands must do to to thrive in new economy and more relevant perhaps to these guys, how the advertising industry is changing and what they need to do to help those brands stay relevant.
Fusionbrand would like to thank you for having us over & thanks for the lunch too!
So I’m checking in online for a flight on Malaysia Airlines and I noticed that my Enrich membership (that’s the MAS Frequent Flyer Programme (FFP)) has been downgraded from gold to silver.
That in itself is hardly a surprise because I rarely fly with them anymore (the 3 – 4 business class business trips I take to the UK from Malaysia each year are now on a competitor carrier where I’m a gold card member) but what surprised me is the way my demotion was, or in this case, wasn’t communicated to me.
After going through old emails, I don’t think I received any communications telling me I would be or had been downgraded. No gentle nudge or reminder to travel to retain the gold status. No email to ask what could MAS do to help me remain a gold card holder. Nothing. Just a stealth like downgrade. And I presume that’s standard operating procedure for anyone downgraded?
I can’t remember how long I’ve been a gold member but I suspect it’s around 10 years, maybe more. But as I’ve documented extensively elsewhere in this blog, I’ve been flying with Malaysia Airlines for more than 30 years and was one of the few to fly MAS in the days after MH370 went down. So I feel, perhaps wrongly that I have some relational credits in the bank.
Now I’d like to reiterate that I’m not complaining about being downgraded because I knew it was coming. I’m just reminded how few brands understand the concept of loyalty, of retaining a customer once they’ve acquired them. Of doing what they can to salvage a customer before they leave.
Harvard Business Review would argue that not all customers are worth keeping. And Malaysia Airlines most probably would argue that I’m definately not worth keeping. Even though I manage the travel budget of my family of five as well as my company and influence a number of other business owners.
According to Harvard Business Review, “acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.” Meanwhile Accenture reports that 80% of ‘switchers’ feel the company could have done something to retain them.
I switched my long haul allegiance to another carrier years ago and am definately one of the 80%. Malaysia Airlines has done nothing to stop me switching. And has done nothing to try and win me back once I have switched.
They put a lot of effort into encouraging travellers to join Enrich, the Frequent Flier programme. But once a member, communications are fairly standard and lack personalisation. Even a customer experience email sent to me after a flight was addressed ‘Dear Sir/Madam’.
The email was written in an old fashioned style (who says ‘we will duly respect your style?”), littered with grammatical errors and despite stating the survey was only valid for 7 days, the link which was sent to me on 8th October 2017, was working today 10th April 2018. The email offers me an opt out option if I don’t want to receive the surveys but there isn’t a link to make this happen.
The email signed off ‘We are professional, progressive, connected and open‘ That’s a bold, ambitious statement, very hard to measure and almost impossible to live up to.
I get a lot of emails from the frequent flyer programme and they are almost always trying to sell me flights, packages, destinations, discounts on third party products and services and I get that but these are all transactions. The airline is simply carpet bombing the database with offers and hoping that enough of them will stick.
The focus seems to be about selling enough of everything to as many people as possible and in the shortest period of time. There is zero attempt to build a relationship with the recipient despite the fact that it’s the FFP. It simply reduces MAS to nothing more than an object or a commodity.
But as Malaysia Airlines should have realised post MH370, objects can’t be differentiated emotionally and besides consumers have no emotional connection or loyalty to objects.
I am sure MAS understands this because that’s why it has a FFP programme. Unfortunately, it’s stuck in the past when it comes to using the FFP. Malaysia Airlines needs to stop looking at members as customers and start to see them as partners.
What are the lessons for MAS and other brands? If you collect customer data, store it and use it properly. Instead of trying to sell something to everyone, use the data base properly. Link offers to customer value requirements. Preempt negative situations. Don’t simply downgrade members, find out how to keep them happy. Personalise correspondence. Encourage participation.
Instead of selling to them, collaborate with loyalty programme members. Build relationships by providing solutions to members’ needs. Successful brands are built on openness and Malaysia Airlines says it’s an open company. Prove it.
Yes it looks like an irresponsible adult allowed a petulant child with a grudge against the creative fraternity loose on a very old software programme and yes, it should never have made it past the idea stage. It’s the creative equivalent of a train crash featuring trains carrying toxic chemicals or nuclear weapons. But does it matter? In the short term, perhaps. Long term, maybe. But it never have happened.
I’m talking of course about the Tourism Malaysia VMY2020 logo (see pic) launched at the end of January 2018 by Datuk Seri Nazri Aziz, the Malaysia Minister of Tourism and derided by much of Malaysia, graphic designers worldwide and respected media organisations such as the Daily Telegraph, the BBC and the South China Morning Post.
Despite the negative reaction of, well everyone, I’m going to stick my neck out and say that the reality is the new logo (if it survives and I don’t think it will) won’t have an effect on visitors contemplating whether or not they should visit Malaysia in 2020 (and the years before and after 2020).
In fact after being featured on social media and a host of international news channels and publications, it may have provided Malaysia with yet more free publicity.
Admittedly not the kind of publicity Malaysia really wants but it’ll take more than negative publicity about a crap logo to attract or stop foreigners from visiting the country.
Nearly every business/school/institution and many individuals have a logo. We see logos on business cards, buildings, billboards, buses, lamposts, food packets, print ads, TV ads and just about everywhere else you can stick one.
And they sell computers, clothes, cars, cosmetics, finances, food, schools, fashion and fags, alcohol, appliances, airlines and holidays, and just about anything else in between.
There are good logos and bad logos, some change on a regular basis, think Google, others stay pretty much the same for years, think Apple or Nike. We’re told logos must be unique yet instantly recognisable.
They must have colour because certain colours convey certain meanings yet they must be instantly recognisable and have the same impact in black and white.
We’re told that each element of the logo has meaning. A logo designed with sharp, straight lines communicate a strong, trustworthy brand.
Curved lines on the other hand communicate a caring and supportive product or service. The rationale for combining curved and straight lines is an ambitious company.
And we’re told that everyone should have a logo because they represent the brand and make you stand out from the crowd. But crowds behave differently today and are influenced in different ways.
The illustrative style that we recognise as logos today is nearly 150 years old and harks back to a time when Western civilisations moved out of the fields and into the factories. Most of those factories are now here in Asia where we’re living our lives a little differently today than we were back then.
The main role of the logo, traditionally anyway, has been to create awareness about a business or in this instance, a destination (and not the country) and help to build a positive image about the business/destination.
Logos evoloved to become a symbolic reflection of what the busines/destination wanted to communicate to audiences. And when logos changed, it was meant to be part of an overall strategic shift in direction for the brand and would be one of many elements of that new brand strategy that had to be communicated in a joined up, integrated manner.
But over the last 20 years, businesses have got lazy or perhaps greedy. Too many businesses have changed logos in isolation, without incorporating the change into a new strategy.
They’ve updated the brand identity and called it a rebrand without making any improvements to the organisation. And then they’ve watched, surprised when nothing changes.
Sometimes when a logo changed slightly and the reaction was negative, the brand got away with it. Remember the London Olympics logo? Other times, such as the GAP logo change in 2010, the consumer response was deafening and GAP had to backtrack quickly. But overall, because these changes were ad hoc or tactical, they made little difference to the business delivery.
Another classic example is oil behemouth BP. Back in 2000 the firm decided they wanted a new logo that communicated ‘green growth’. Despite spending over US$200 million it was considered a massive failure because the opinion of most people was that there was nothing green about the business of oil. No matter what the company tried to make us believe.
And then in 2010, the largest offshore oil spill the history of the oil business put paid to the concept of the green growth oil company communicated via its logo. For many, that’s when logos lost their relevance.
With the proliferation of countries competing for the same visitors, too many destinations play safe and compete with the same look and feel, making it difficult for potential visitors to differentiate them.
Add to this mix the powerful impact of social media on the travel industry and visitors now use the Internet for research purposes and get most of the information that influences their decision making from content generated by people like them and not logos.
The focus has shifted away from the identity of the destination to the experiences of other like minded people in that country. Against this backdrop, it’s hardly surprising then that the importance of a logo will not be what it was.
According to the World Travel & Tourism Council (WTTC), global tourism generated $7.6 trillion for the global GDP. More than 105 million international visitors arrived in South East Asia in 2015 and that figure is growing at an average of 8% every year.
Many of those visitors will visit Malaysia not because of the logo but because Kuala Lumpur International Airport is an increasingly important hub for low cost carriers servicing destinations such as Vietnam, Cambodia, Thailand, Myanmar and more. And any trip to SE Asia will include visits to other countries in the region.
So in terms of the impact the logo will have on visitors to Malaysia, it will be negligible. However, it will help shape perceptions of Malaysia as a country and much of the debate across social media was how embarrassing the logo is for Malaysia.
So in terms of the reputation of Malaysia, there will be a perception impact and that will probably add to the negativity about the country. If most of the content consumers read about Malaysia is negative, then perceptions will become negative. And those perceptions can only be influenced and changed with a brand strategy that includes all stakeholders and not with tactical activities such as a new logo, advertising or events.
For Malaysia, what’s done is done. What can other countries, states, regions, cities or towns do to ensure their efforts aren’t ridiculed in the same way?
Here are 6 lessons that can be learned from this fiasco. They should be applied to any destination branding initiative.
1) Set up a nation branding task force.
Every country or state/city/place should have one. Malaysia used to have one and in 2008 the task force commissioned Fusionbrand to develop the Malaysia nation brand but the plans were canned when a new administration took over and a new department was set up under the new Prime Minister’s Office. This department embarked on a badly researched project about 5 years later that revolved around a tagline and a logo and not a strategy and as a result, lasted little more than a month.
2) Nation branding is strategic not tactical.
Nothing related to the nation brand can be done in isolation. To avoid similar failures, anything related to the nation/state/region/city brand must go through the nation branding task force. And that includes important ministries such as the Tourism ministry. Even state tourism boards and other stakeholders must share with the nation branding task force.
3) Test identity concepts before launch.
No man is an island. But sadly in Malaysia, if a senior person proposes something it is rarely challenged internally, even by marketing professionals hired supposedly for their knowledge. Anything creative should always be tested internally and with multiple consumer segments and the task force. I know it’s time consuming and expensive but which is worse, a delay in the launch or becoming the laughing stock of the world?
4) Have a plan for your identity launch.
Don’t expect to wing it. And be prepared for serious back lash from consumers because most of us hate change. Not many new logos were well received initially. But many of them are now very familiar, think Pepsi, Citi, Accenture, Qantas. After a certain amount of fumbling, the Minister stated, “I have launched it. Nazri Aziz never backtracks. This is what will be used for the world, only one logo, no other logo.” Would a clearly defined, sensible rationale have been a better way to announce the new logo? Absolutely.
5) Social media is your friend not your enemy.
I get the impression, perhaps wrongly that Tourism Malaysia was completely unprepared for the reaction to the logo. Especially on social media. Social Media CAN effect change so learn to work with it. But remember it is not a soapbox. Simple consumer research at the logo development stage on Facebook and Twitter would have saved Tourism Malaysia and the country, a lot of embarrassment.
6) Logos / taglines etc should not be confused with branding.
Malaysia has had a tough time over the last few years with the country struggling to stay relevant in an increasingly competitive environment. It’s hard to find current arrivals figures but the general consensus of opinion is that visitors from wealthy countries or high spending tourists are not visiting as they used to. A lot of this is because there is confusion over what constitutes branding and the Malaysia tourism brand has little differentiation. Brand identities / taglines / positioning statements / advertising campaigns and other marketing tactics are not branding. They may create awareness but that rarely convert to arrivals.
As I’ve stated already, I don’t think this farce will have much of a positive or negative impact on arrivals. But it’s impact on Malaysia’s brand? That worries me but that’s a discussion for another day.
Fusionbrand is Malaysia’s premier strategic brand consultancy. For more information on how we can help you get your branding right the first time, please call +60379542075.
I’m sorry I haven’t posted for a while (I’m sure many of you are happy I’ve been quiet!) but we’ve been very busy with other brands, not to mention our own. We’ve had a crazy couple of quarters at the end of 2017 and 2018 has started off much the same way.
However, after seeing the new visit Malaysia logo launched last week, I realised that it’s not only our existing clients that need help from Fusionbrand. So I’ll be working on a blog post about the new logo over the next couple of days.
In the meantime, I wanted to share with you this example of why Chairmen, CEOs, Managing Directors and even CMOs, shouldn’t get involved in the development of advertisements and why it is in any agency or consultancy’s best interests to stand up for what they believe in and not simply do everything the client asks.
The ad for what I think is a Japanese noodle began life like this
After it was sent to the client it came back like this
It went back and forth from the agency to the client and back again until the final version looked like this
Actually, I rather like the final version. In a sort of trippy 1970s Yessongs kind of way!