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!
Recent reports have put the circulation as low as 35,000 copies a day towards the end of 2016. It’s hard to find current figures which suggests things are not going well.
Back in January 2017 we encountered what may be a global first when we opened a copy of the New Straits Times, and with the exception of a 1/8th of a page ad, didn’t see any significant paid for advertising!
Meanwhile the Star newspaper isn’t fairing quite so badly with a circulation around the 250,000 mark. In the 22nd April 2017 edition there were a number of full page ads and even a double page spread.
These ads were selling everything from grapes to fridges to laptops and detergents and not forgetting the out of place table in the Tesco ad.
I presume these hypermarkets and discount stores are using these low end, low value products to lure housewives to stores in the hope they will buy higher margin goods once there.
Nothing wrong with that and they’ve been a feature of The Star on Saturday for many years. But if that’s the case, and the readership of The Star on a Saturday largely consists of housewives getting ready to do the weekly shop, why is there an ad for the BMW 7 series in the middle of all these ‘cheap as chips’ ads?
The BMW 7 series starts at RM600,000 (US$136,000) while the top of the line model is a few pennies under RM800,000 (US$182,000). Not really the housewife segment. Either the hypermarkets are in the wrong place or BMW is. What do you think?
In an ongoing attempt to reduce the growing use of cigarettes in Malaysia, the price of a typical pack of 20 is now more than RM21 (US$5). Still way below the US$15 in the USA or US$10 in Singapore but way up from about RM3.20 in 1996.
In a survey carried out by the Ministry of Health (Malaysia) in 1996, there were 2.4 million smokers in Malaysia. Despite such price hikes, tens of millions of dollars spent on advertising and numerours articles about the dangers of smoking, there are reported to now be nearly 5 million smokers in the country, about double the number in 1996.
Globally, according to WHO, tobacco deaths cost the world US$1 trillion while revenues from tobacco taxes generate US$269 billion (2013 – 2014).
According to WHO, smoking kills six million people annually, more than HIV/AIDS, accidents, homicides, and suicides combined.
No data is available on what smoking costs Malaysia but we do know it costs the Canadian government around RM10.5 billion in direct health care and another RM38 billion in lost productivity.
Canada is a good benchmark for Malaysia because in 2011 approximately 5.8 million Canadians smoked, about the same as Malaysia.
Locally revenue from taxes on cigarettes totaled around RM9 billion in 2015. However, one of the biggest problems in Malaysia is the black market in cigarettes.
According to the Confederation of Malaysian Tobacco Manufacturers (CMTM) 57% of cigarettes sold in Malaysia are bought on the black market which according to the Star newspaper makes Malaysia number one in the world when it comes to trading illicit cigarettes. This costs the treasury at least RM2 billion a year.
The recent price hike is the latest in a series of initiatives that are supposed to stem the rising number of smokers in the country as well as increase revenue for the country.
In addition to the rapid rise in the price of cigarettes, a number of Health Ministry driven initiatives about the dangers of smoking have also been tried.
The first of these initiatives was an anti smoking campaign launched in 1991, in conjunction with the National Healthy Life Style Campaign. This extensive campaign that ran for over 10 years raised the level of awareness of the hazards of smoking among the general public, both smokers and non-smokers. But the numbers continued to rise.
Then came the “Tak Nak” campaign in 2003, consisting of TV Commercials, Radio, print and Outdoor (including school notice boards).
Costing almost RM18 million (US$5 million) for the first year, and rumoured to cost in total RM100 million for the 5 year campaign, it was widely lambasted in the media.
This is because although the campaign raised the awareness of the effects of smoking, once again it did little to reduce the number of smokers.
Even the then Health Minister, Datuk Dr Chua Soi Lek said in 2005 that there was no indication that the number of smokers had gone down since the campaign began.
Despite the ineffectiveness of this campaign, in August 2009, The Malaysia Ministry of Health launched the next (and most harrowing) installment (see video – viewer discretion advised) of its anti-smoking “Tak Nak” campaign via TVCs. The TVC’s feature gruesome images of mouth cancer and lost limbs due to gangrene caused by smoking.
This campaign followed the legislation, earlier that year that all cigarette packets sold in Malaysia must carry graphic images related to smoking. These included images of the results of neck cancer and a dead foetus.
Throughout the years, the Ministry of Health has tried its best to reduce smoking in Malaysia and the fact that it wants to do something should be applauded.
But it’s not having the desired effect. I can’t help but think the efforts seem to be independent tactical campaigns based on the fact that there is a budget, rather than elements of a strategic approach to a clearly defined goal. And these campaigns rarely have the frequency required to make an impact.
We see this a lot in the private sector. A budget for advertising is approved and an advertising agency is appointed and the board sees the ads and the billboards and thinks that’s job done.
But unless the goal is to put out ads it isn’t job done. And if the ads don’t resonate with the target markets, and research shows anti smoking ads don’t resonate with target markets, then the job is far from done.
Evidence from previous campaigns in Malaysia and other countries suggests that campaigns featuring shocking images and graphic descriptions of the consequences of smoking using Television commercials, print ads and outdoor ads are ineffective.
Malaysia spent RM100 million over 5 years on such a campaign that saw an increase in the number of smokers in Malaysia. To put it bluntly and despite best intentions, that’s a fail.
In the UK, after extensive research of more than 8,500 smokers over a ten-year period, the Institute for Social and Economic research found that the warnings on cigarette packets that smoking kills or maims are ineffective in reducing the number of smokers.
Likewise, chilling commercials or emotionally disturbing programs are also ineffective. In fact, the study also discovered that when a close family member become ill from the effects of smoking, the smoker takes no notice!
According to the study, smokers only reduce the number of cigarettes or sometimes quit when their own personal health is at stake.
But even failing health may not persuade a smoker to reduce or even stop smoking because smoking is linked to a lack of psychological wellbeing and often failing health results in psychological decline.
So how can a country like Malaysia reduce the number of smokers and why should it involve a brand consultant?
The problem with using an advertising agency to solve a complicated issue such as this is that if all you have is a hammer, everything looks like a nail.
Advertising, no matter how creative isn’t going to reduce smoking. What is required is a data driven approach to the issue. Specific and comprehensive qualitative research with relevant targeted questions related to each clearly defined micro segment must be developed to deliver actionable data.
These segments will be ex smokers, existing smokers, those who have smoked all their lives and tried hundreds of times to stop.
Celebrities, doctors, educators, retailers (especially retailers) coffee shop owners, customs officers, even smugglers and the police and other enforcement officers as well as others will need to be interviewed.
The data from this research will form the foundations of the blueprint to reduce the numbers of smokers in the country. It will be a long term initiative. Solutions may include communications campaigns but they won’t be based around one size fits all commercials or messages.
Instead they will be developed to resonate with each specific segement. And they will require consistent implementation over a long period of time and the commitment of the authorities.
They will require collaborative efforts that look to improve the psychological wellbeing and confidence of smokers. Environmental changes must be made to ensure it is more difficult for smokers to find an amicable environment.
Existing smokers will be targetted individually through interviews with doctors, rather than one-size-fits all shock and awe campaigns. It’ll also require a triage like approach that ignores the 35 year veteran smokers and instead targets their children and their grand children.
Talking of which, there must be a specific emphasis on education at kampung (village) level and ongoing, dynamic, preventative programmes for schools.
Laws banning the sale of cigarettes to minors must be strictly enforced. Other solutions will include more investments in and better enforcement by customs and enforcement officers rewarded for contraband seizures. Rewards (and protection) for whistleblowers should also be offered.
They will also require the buy in of all stakeholders. On a recent visit to a Police station following a traffic accident, I was interviewed by a Policeman in his office while he chain smoked his way through half a box of Gudang Garam.
Outside his office was a no smoking sign. Civil Servants must not be allowed to flout laws that forbid smoking in Government buildings.
There is no easy way to reduce the number of smokers in Malaysia. It’s going to take a long term investment in time, effort and money.
Wasting money on increasing prices will only see more contraband sold. Creative driven campaigns that have not worked in the past will not work in the future.
But the rewards are considerable. Not only in a reduction of the amount spent on smoking related healthcare, but also in a healthier, happier nation.
Advertising agencies haven’t solved the problem. It’s time to give the responsibility to a brand consultant. I have one in mind!
There are rumours however that Proton or rather parent company DRB-Hicom wasn’t comfortable with the deal despite the automaker’s desperate situation. We’ll probably never know but what is known is that only Groupe PSA, owner of Peugeot, Citroën and recently, Opel and Vauxhaul is left in the frame.
My gut feeling is PSA will drop out which means Proton will have to go it alone or pull the plug. I don’t think that’s a viable proposition because of the social and political implications of putting 10,000 direct employees out of a job.
Proton is in big trouble. Its market share has dropped from over 80% to 12% in little more than 20 years. It’s plants were operating at 30% capacity at the end of 2016.
Service centres have a reputation for over promising and under delivering and despite the firms best efforts, many consider the cars to be inferior to the competition and over priced.
The previous CEO, Abdul Harith promised to “reform and rebrand.” And initially anyway, he appeared to be on the right track as he carried out a comprehensive audit of service centre operations and customer service at after-sales operations.
During his time there were some minor cosmetic changes made to the logo and some fairly predictable new communications campaigns and then before he could complete his work, he was replaced in 2016 with Datuk Ahmad Fuaad.
Abdul Harith didn’t have a chance to address the negative perceptions surrounding the national car maker. And to be fair that was always going to be a tough ask because Proton doesn’t have the lean manufacturing skills of the Japanese competition, or for that matter their heritage.
So what’s next for Proton and can it survive? It will have a better chance of surviving if it gets into bed with a global partner such as PSA but that is no guarantee of survival. And with Geely out of the picture, Proton is desperate and PSA will be well aware of that during any negotiations.
And let’s be honest, the main reason for any acquisition is not to save Proton but for the foreign partner to gain access to the lucrative Asean markets and their low trade tarrifs.
If a foreign partner does come in, there’s a very good chance the Proton brand would be phased out because right now it’s a weak brand with a poor perception in its domestic market, let alone any international market, even a regional one.
The other option will be to go it alone. If it is to do so, it’s going to require an even more brutal turnaround that the Malaysia Airlines project. That will mean laying off workers, cancelling supplier agreements and rebuilding the brand from the ground up, probably with tax payers money. Or rather with more tax payers money.
So if Proton does go it alone, how can it salvage the brand and avoid another kick in the teeth for the ailing Malaysia nation brand?
Here are 5 things Proton must do to save its brand
1) Proton has had more leadership changes than you can shake a stick at but if they can’t find a partner, they may have no choice but to get a new CEO. The next CEO must understand that customers not companies define brands and integrate the concerns, perceptions and needs of target markets into your strategy.
2) Proton and the unions need to wake up to reality and appreciate that market conditions are such that unless you layoff staff and renegotiate supplier agreements, the brand is doomed.
3) The organization is the brand. Dealerships may not be Proton owned but they are the first touchpoint every prospect and customer has with the brand. Every negative interaction, every unfulfilled promise, every delayed delivery or extended service time defines the Proton brand and not what you say in your advertising. From the get go, there must be a zero compromise on quality of customer service, investments in staff training and better internal and external communications based on stakeholder requirements for value and not what you want to tell them. The company is failing miserably in many customer facing activities and needs to carry out a comprehensive review and overhaul of current practices and service providers in these critical areas.
4) Current middle management systems don’t seem to be working. Fix them.
5) Stop wasting money on ego advertising built around a big idea. In the social economy, when consumers not companies define brands and those consumers are spoilt for choice and rarely believe what advertisers tell them, the one size fits all ‘clearly defined’ brand positioning campaign is a futile exercise that does nothing more than waste valuable funds.
This may be hard for many to stomach, but Proton needs to forget about being a fully fledged automotive brand. It will never have the clout to do this. Instead, it needs to find the automotive blue ocean and take ownership of it.
Personally I think this is the taxi and/or MPV space because Asian families are large and they spend a lot of time in their cars. Furthermore airports are often not well served by public transport. A large, electric, prestigious, efficient, clean well built MPV and taxi can rescue the Proton brand. It may not be glamorous but it’ll work.
Moreover, shared platform vehicles reduce engineering and other costs. I have a hunch this may have been why Geely wanted to buy Proton.
Because four years ago Geely bought Manganese Bronze, the maker of the iconic London black cabs (a missed opportunity incidentally for Proton). The Proton plant in Malaysia would be a perfect place to build electric taxis and MPVs.
Proton is at a critical stage of it’s life. It can be saved but it’ll take guts and a few risks to make it happen. I for one hope it happens.
This morning I was feeling sorry for Malaysia Airlines CEO Peter Bellew, see my earlier post. He’s in the papers again today and understandably bullish whilst reporting load figures for last year.
“We had 90% load factor in December 2016 and we are whacking Singapore Airlines (82.9%, Garuda (77.4%) and Cathay Pacific (85%). We are doing pretty good,” Bellew told the Business Times Malaysia as he did backflips around the office.
OK I made that last bit up but he’s obviously pleased as punch. So I thought I’d have a quick look at the industry to see how the carriers’ performance stacked up.
According to the International Air Transport Association (IATA) Air Passenger Market Analysis report, revenue per passenger kilometer (RPK) increased 6.3% in 2016, way above the 10 year average of 5.5%.
International passenger traffic rose 6.7% in 2016 compared to 2015. This in turn took the average load factor to a record full-year average high of 80.5%.
In Asia Pacific demand was even better with carriers seeing demand increase 8.3% over 2015, which was the second-fastest increase in the world. Average load factors are at 78.6%.
The good news for the industry has continued into January 2017 as the RPK rate rose 9.6% year on year and load factors above 80%. This should help Malaysia Airlines should continue on the path to profitability.
So Malaysia Airlines is carrying more passengers than competitors but we don’t know by how much they are undercutting those competitors because we don’t have their RPK figure.
Malaysia Airlines did report that average fares dropped 3% in 2016, despite a 5% increase in passengers in the last quarter. This would suggest then that those improved figures are coming at a cost. The key once those passengers have flown with Malaysia Airlines is whether or not they will fly again, once fares have increased.
It’s common knowledge that Malaysia Airlines has slashed it’s fares to grow market share. The problem is the brand and offering is a shadow of it’s former self so those flying the airline are getting little more than a LCC product.
Service may have improved but once fares go up, that may not be enough to hold off the competition.
Perhaps that’s when the Malaysia Airlines brand retention strategy will kick in. Probably built around the frequent flyer programme. I don’t see much happening in that area at the moment but I’m sure it’s only a matter of time.
The National Union of Flight Attendants (Nufam) represents all cabin crew at Malaysia Airlines. As we all know they’ve had a tough few years as the carrier let go of more than 6,000 staff. So they need to get their teeth into a worthy cause.
Recently the Muslim MP Ghapur Salleh who is the MP for Kalabakan constituency in Sabah, suggested Malaysia Airlines start charging for alcoholic beverages on all flights. I’m not sure where he got the inspiration for this suggestion but surprisingly Nufam took umbrage and said its not right for him as a Muslim to encourage Malaysia Airlines to charge for selling alcohol.
Try to stay with me.
Nufam’s justification for this statement was that it is a highly sensitive matter for Muslim workers who make up the majority of cabin crew at the airline. According to Nufam, many of the Muslim crew previously objected to the serving of alcohol on flights and that the matter was even raised with the government.
Nufam went on to say that MAB is a fully fledged airline and can’t charge for drinks. Nufam said the real discussion should be about discouraging or even excluding the drinks list from in flight menus because the alcoholic drinks were listed alongside halal food.
Seriously? Is Nufam suggesting that having a list of alcoholic beverages next to halal food will make the food non halal?
Large financial sacrifices have been made by the tax payer to bale out Malaysia Airlines. Thousands of people have lost their jobs and families have been torn apart as a result of job losses.
Despite a lack of funds and resources, employees are working desperately hard, often with old equipment to turn Malaysia Airlines around and the people who represent the cabin crew are focussing on taking a list of alcoholic drinks off a menu because the food listed on that menu is halal?
But that’s not the end of it. This article reports that Nufam suggested Malaysia Airlines start charging for water, even though it has already said that being a full fledged airline, it can’t charge for products the way LCCs do.
One can only assume the lunatics have taken over the asylum! I genuinely feel sorry for Peter Bellew!
This month they’ve asked a number of brand consultants in Asia about Asean@50 about the state of nation branding in the region and the potential of Asean countries to work together to drive tourism and investment to the region. You can read the full article here
As I was one of the consultants interviewed, I thought I’d have a look at what Asean is doing to drive visitors to the region as part of the Asean@50 celebrations. The primary goal of the campaign is to encourage visitors to look at visiting more than one ASEAN destination.
As part of the celebrations for its 50th anniversary, ASEAN has created a theme “Partnering for Change, Engaging the World”. There is also a collaborative tourism campaign: “Visit ASEAN@50: Golden Celebration”.
I’m yet to see this campaign in Malaysia or Singapore but a new website has been created however it doesn’t seem to feature too much information. On the events page, there were no events for Malaysia in March and none till October.
There’s also another tagline for South East Asia “Feel the warmth”. This is featured on the Asean Tourism website. I couldn’t find a Facebook page however the hashtag #visitasean50 has appeared on Facebook but there doesn’t appear to be any structure to any of the communications.
There are a couple of videos on YouTube, one of which has been shared about 40,000 times on Facebook but again there doesn’t seem to be any strategy behind any of the postings.
A Twitter page was created in July 2014 but it appears inactive.
I don’t have the full details on the project and we are only at the end of the first quarter of 2017 so the strategy maybe to start later in the year although many in the northern hemisphere will be planning their holidays now so the digital representation needs to be improved and improved quickly.
Mass tourism is barely forty years old. I can still remember family discussions back in the seventies about how a British traveller was only allowed to take a maximum of £50 out of the country which meant few people could travel. With a father based in Malta and Gibraltar, as well as Hong Kong and Singapore, I was lucky enough to see more of the world than many.
Anyway, a few years ago we were hired by Malaysia’s tourism ministry to carty out what was at the time, and probably still is today, the most comprehensive brand audit ever done for a country’s tourism board. You can get a copy of a case study on the project by sending me your email address.
Due to client confidentiality rules, I can’t disclose all of our more than 300 recommendations but I can say that one of the recommendations was for a comprehensive overhaul of the incentives offered to the private sector to encourage more investment in the stagnant tourism sector.
During the brand audit discussions with visitors who had visited Malaysia, an often repeated comment was that they loved the country but didn’t think there was enough here to make them come back again. Yet to build a successful destination brand, you need that repeat visitation. This requires ongoing investment in products.
One of the problems in Malaysia is that property development is essentially risk free because of the sell then build model used here. What this means is that projects are often sold before work on them begins. Compare that to an investment in a hotel than has no guarantee of success and even if it is successful, can take 10 – 15 years before the developer sees a return on investment.
To my knowledge there have been few changes made to major tourism related policies because outside of Kuala Lumpur, there has been very little investment in the tourism sector. In fact, one frustrated operator complained recently that there are more 5 star hotels in Hua Hin Thailand than there are in the whole of Malaysia, excluding Kuala Lumpur.
This has to change and it has to change soon before this opportunity is lost. Because the next 10 years are expected to see a travel and tourism boom.
Which is why South East Asian countries are investing heavily in their tourism products. After years of rising room rates and high occupancy, Australian investors and developers are increasing hotel development from Perth to Sydney and Hobart and up to Melbourne and Brisbane.
Australia’s hotel supply is growing 2.5 times faster than its long term average rate and 12,000 rooms will be added to the inventory by 2020. Tourism related investments are now close to A$30 billion, up from $17 billion in 2014.
Tourism investment is a priority for Indonesia as the government aims to attract 20 million visitors by 2019 and is revamping it’s tourism incentive programme to encourage investment.
According to the Saudi Gazette, the King of Saudi Arabia will spend 12 days in the country from March 1st as part of his Asian tour, and tourism development will be high on the agenda as the country targets over US$25 billion investment from Saudi.
Confident of positive long-term growth prospects for Thailand’s tourism industry, institutional investors from Hong Kong and Singapore accounted for around 45% of the total transaction volume in the country.
In Malaysia, according to Pemandu, the organisation set up to oversee the government’s transformation programme, RM24.5 billion (US$6 billion) of private investment was made in the tourism sector in Malaysia in 2015, making it the second highest private investment contributor, despite an alarming fall of 6% in arrivals in that year.
During the King of Saudi Arabia’s tour of Asia, he will also spend 3 days in Malaysia but the country’s ailing O&G industry appears to be the main topic on the agenda. Other figures for investment in tourism in Malaysia are hard to come by. However, outside of the capital, anecdotal evidence suggests investment is minimal.
Malaysia also suffers from a weak international image as well as a lack of buy in from stakeholders such as taxi drivers, travel and tour operators, hoteliers and retailers.
This needs to change otherwise Malaysia may miss out on the increased arrivals into the region as evidenced by the image above that shows the fastest growing flight routes around the world.
According to this chart, outside of India and China, the fastest growing routes will be to SE Asia. If Malaysia wants a bigger piece of this dynamic industry, it needs to make some significant policy changes to encourage more investment in the tourism sector.