‘Think Big’ yes, but first Malaysian business owners must stop thinking cheap

There’s a thought provoking piece in the business section of freemalaysiatoday.com that reports more Malaysians buying Chinese made goods ‘out of economic necessity’.

The article says that Malaysians look past the stigma of Chinese products even though there are concerns that they of inferior quality and possibly even dangerous compared to products from other countries.

The article quotes Mr Yeah Kim Leng, professor of Economics at Sunway University Business School who says, “the open market system brought about by globalisation and increased connectivity was intensifying competition for local businesses.”

The President of a local consumers association supports Mr Yeah’s point of view saying that even though many Malaysians are concerned about the quality and legitimacy of China made products, they are prepared to basically risk their lives because Chinese made goods are readily available and cheaper than Malaysian products.

Another economist and Klang MP Charles Santiago is quoted as saying, “Malaysians were buying food from China out of economic necessity despite their misgivings about the quality of the items.” He went on to say, rather worryingly, “There is no excuse for eating toxic food. We must ensure that the food coming into the country fulfils all international health standards.”

I agree with Mr Santiago, there is no excuse for eating toxic food. And in the last twenty years there have been reports out of China of adulterated baby formula. Factories using industrial-grade salt to pickle vegetables then spraying them with banned pesticides before shipment, soy sauce made from human hair, counterfeit alcohol and fruits and vegetables with unacceptably high levels of illegal pesticides.

In our house we stopped buying any foods and most other things from China more than 10 years ago. I don’t care what it costs, I’m not going to jeopardise the lives of my family in an attempt to save money which if they get sick is a false economy anyway. More on the false economy later. But it seems we’re the exception not the rule.

I think there is a deeper issue here. My theory is that there is a culture in Malaysia of ‘if it’s cheap, its good value.’ I think we’ve lost sight of what constitutes value. There are many reasons for this. We’ve been ripped off or know of people who have been ripped off, time and time again by unscrupulous companies from just about every sector and in particular automotive/property/food/transport/healthcare/hospitality and so on.

One patriotic Malaysian friend of mine (and I won’t be popular for quoting this), suggests some Malaysians have been let down so many times and have become so cynical about what companies promise that they now believe it’s better to pay the minimum amount for something and then if it doesn’t deliver on the promises made, well at least the bare minimum was spent.

At the same time, he believes this has created a stubbornness which in turn has made them unable to make sensible decisions when confronted with difficult scenarios.

He suggests that is why many people will spend 30 minutes stuck in traffic to avoid a RM1 toll charge. The fact that the wear and tear on the car engine, the petrol, the lost productivity and stress cost so much more than the RM1 toll charge is irrelevant. The goal is to avoid the RM1 toll charge.

It’s the same with people (and this is not just restricted to Malaysia) who make a special trip to fill up their petrol tank because the next day, petrol is going up by 2 sen a litre. Much of what is saved, is spent on the extra journey, the fuel used in the inevitable long queue and the time spent away from more important things. In almost all such cases, the action delivers a net loss or at best, an immeasurable gain.

And that’s why Malaysians are now buying toxic food. It’s not deliberate, it’s just a natural progression. How many times have you heard a conversation along the lines of:

Q: ‘How was the nasi lemak?’
A: ‘Good, it only cost RM6.’

Hardly the breakfast of champions but never mind, it only cost RM6

The fact that the dish was 80% rice, included 3 peanuts, two ikan bilis, a tiny serving of sambal, the scrawniest chicken wing and 1/8th of an egg is irrelevant. And that’s before we even discuss the source of the oil used in the cooking, the supply chain and the hygiene of the foreigners who cook the food. What’s become important is that it only cost RM6.

What’s all this got to do with the economy and in particular branding? Well for Malaysian businesses to compete against any foreign firms, not just those from China but also those from Europe, the USA and north Asia, they need to move on from the mentality of competing purely on price.

To move on from a belief that they can only compete if they are the cheapest. To see their business not as a series of transactions, but as building relationships with their customers. Because this approach is unsustainable. There will always be someone out there, who can produce what you produce cheaper. And in this case that someone is China.

The economist Mr Yeah suggests that Malaysian firms should ‘think big’ and he’s right, Malaysian firms or rather the businessmen that run them, need to think big but only after they move away from the belief that what’s cheap is good or what’s big is cheap. And the good news is that it’s not a huge step.

International luxury houses such as Gucci, LVMH, Prada, Georgi Armani and Channel have for years dominated sales of luxury goods in Malaysia. Closer to home, Malaysia has proven it can build brands from scratch. Think of Royal Selangor Pewter, PappaRich, Sime Darby, YTL, Proton and Linghams sauces, probably the first Malaysian brand to go international and now available in 100 countries.

But these are the exceptions, not the rule. And it’s the middle ground that needs to change. To move away from the false economy of cheap is best. The false economy in Malaysia has become so chronically negative that it is having a detrimental effect on decision making across the spectrum. Even though it is now threatening lives.

I find it extraordinary that I am writing a blog post about people willing to risk their lives to save a few pennies. But everywhere I go, my team and I have discussions about brand tactics that are driven not by questions such as “What do we have to do to make our business the number one choice in our sector” but instead by questions like “How much does it cost?”

Recently I had a discussion with the head of marketing at the Malaysian campus of a British school with a unique 150 year heritage. The head of marketing wants a video for the school and he asked us to submit a proposal. He didn’t have a brief (which as head of marketing he should prepare) but wanted us to submit a proposal for ‘a school video’. When we asked the budget, he refused to share it.

So there was no brief and no budget. I explained that there were already a lot of videos of the school online (‘none of which are very good’ according to the most senior member of staff) and how is this one going to be any different? He replied that that was our job.

That we should ‘think out of the box’, to ‘propose something unique’, to ‘do something special’. When we explained that ‘thinking out of the box’ took more time and therefore cost extra and therefore we needed to know the budget to see if was possible, he refused to share it.

I explained that even without the ‘thinking out of the box’ requirement, the budget was crucial because it would determine the type of production. Did he want a script? Did he require a film crew to visit the school? Are we to interview staff/pupils etc? Would he like drone shots? How long does he want the video to be? SD or HD? And so on.

We realised that if we were to go this route, we could be submitting ideas for months before we accidentally created something he liked. We also realised that by not sharing the budget, there was a good chance that even if we created something he liked, he might not be able to afford it (or alternatively, we could propose something that didn’t utilise the full budget, to the detriment of the school) and that his decision would probably be based on price and so we reluctantly walked away from the business.

This mentality of ‘cheapest’ has a negative impact on his brand. Not because he didn’t get to work with us although thats one reason, but also because it makes the video a priority instead of making what the video can do a priority. It’s the business equivalent of buying potentially tainted food from China and ignoring that fact because the main thing is it was cheap.

This culture of cheapest is best has caused him to move from doing what’s best to market the school to getting a video done. It actually becomes a box ticking exercise instead of a useful tactic. And we’re seeing this time and time again.

Once a large percentage of Malaysians get past the ‘cheapest is best’ mentality, then only then can businesses have the confidence to ‘Think big’. It will require a cultural change in both how they think and how they run their businesses. Once they do that then we’ll see more successful Malaysian businesses become brands.

Take control of your ad placement

I’ve decided to make these real time observations of branding blunders/negative brand association individual posts instead of putting them all together. This latest one is a real gem.

Essentially it is an argument between the British meat industry and the World Cancer Research Fund about the the dangers (or not) of red meat. The article is littered with negative words such as confusing, cancer, nightmare, death, bitter, row and more. To the right (and above) the article is an ad selling Dell computers. You can read the full article here but of course the advertisers may change

The execution of the ad is good. Readers can quickly and easily identify the brand and there is a seamless call to action.

But I’d like to know why Dell is advertising next to such a negative article. How does Dell buy these ads? Have they considered where the ads may be placed? Do they book a specific number of spots and choose the location or does the website decide where the ad goes?

If you are a brand and considering advertising online, make sure you determine what sort of articles the ads can be placed alongside otherwise you may be associated with death, cancer, arguements and so on. Probably not what you intended.

Any thoughts?

Does shock and awe advertising still work?

This is a brutally graphic public service announcement from Australia’s Transport Accident Commission (TAC). Viewer discretion is advised.

This is an immensely powerful piece of work beautifully executed. And it had an emotional impact on me. All the characters resonated with me as I imagined myself as many of them at various stages of my life. At the end I was breathless and close to tears.

But the question being asked by Bill Green is “Does this stuff work? Really work?” According to Bill, TAC says yes. According to TAC, “in 1989 the first TAC commercial went to air. In that year the road toll was 776; by 2008 it had fallen to 303”. That fell again to 295 in 2009. However, despite these powerful commercials, 16 people died over the Christmas period.

Topically, I have just spent 10 days in Australia over the festive period and the only TVCs I can recall were for alcohol (beer and hard liquor) and fast food. I was stunned to see so much alcohol advertised on TV. I didn’t see this TAC commercial or if I did, it didn’t register.

Using creativity to communicate
Advertising, and in particular well executed advertising, used to be a great way to reach a great many people over a relatively short period of time. With less competition, more accepting and attentive consumers, such reach could ensure the message was received and absorbed by the right people. Not anymore. Mass media has fragmented into niches and communities. Using creativity to communicate a message is no longer effective because the message is blocked out or soon forgotten because we simply don’t have the interest or bandwidth to absorb all the messages assaulting us throughout the day, every day. Increasing frequency doesn’t help, it makes it worse as it adds to the noise. Even beautifully executed work like this is lost in the fog of products and services.

I wrote an article about a similar approach used toward smoking in the UK and Malaysia. You can read the full article here,

Chilling commercials don’t work
With smoking, the research, carried out over 10 years by 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. The study also discovered that when a close family member become ill from the effects of smoking, the smoker takes no notice. In fact, according to the study, smokers only reduce the number of cigarettes or sometimes quit when their own personal health is at stake.

In Malaysia, despite nearly US$50 million spent on shock and awe campaigns to create awareness of the dangers of smoking, the number of smokers has practically doubled every 10 years. Whether or not there are parallels between campaigns for smokers and those who drink and drive, I don’t know.

Personally, I suspect that the reductions in fatal traffic accidents since 1989 are due to better safety features in cars, better roads, better lighting, highly visible enforcement measures, increased penalties for offences such as not wearing seatbelts and using mobiles, reductions of speed limits, more drug testing and better educated consumers.

The key then is not to add to carpet bombing of consumers via advertising, but to identify how those consumers become better educated? Was it the commercials or a reaction to the commercials or other initiatives?

Pubs legally obliged to breathalyse patrons
This can be done using qualitative research with consumers and then use that data to forge future strategies. It may be expensive and time consuming, but it will give us the answers we are looking for and determine future strategies. Of course it may be that it is not the commercials but in fact peer pressure at key times such as when consumers leave a pub, club etc. I think this may be the case and I see a time, not too far in the distant future when all bars and restaurants have to, by law, breathalyse all patrons as they leave the premises.

Personally, although this is a powerful TVC, I wouldn’t watch it again. If this commercial came on, I would change channels because if I am watching TV, I don’t want my leisure time to be challenged by issues I don’t want to address at that particular time.

Thanks to Andy Wright for the heads up on this story.

It failed once so let’s try it again

According to a Ministry of Health (Malaysia) survey carried out in 1996, there were 2.4 million smokers in Malaysia. This was a rise of 41% over the number of smokers in 1986. Today the country has about 5 million smokers, about double the number in 1996. One can deduce therefore that the number is doubling every 10 years or so. As of 2003, approximately 49% of all adult males and 5% of all adult females are smokers.

Of most concern is the prevalence of smoking among young Malaysians. 30% of teenage boys aged 12–18 years smoke while smoking among girls doubled from 4.8% in 1996 to 8% in 1999. The prevalence of smokers aged 15 and above has increased from 21% in 1985 to 31% in 2000. This compares with about 21% of the population in the UK who smoke in 2009, down from 45% in 1974.

No data is available on what smoking costs the country but we do know it costs the Canadian government around RM10.5 billion in direct health care and another RM38 billion in lost productivity. Meanwhile revenue from taxes on cigarettes totaled around RM9 billion. Canada is a good benchmark for Malaysia because in 2001 approximately 5.7 million Canadians smoked, about the same as Malaysia.

To combat the rising number of smokers in the country, a number of initiatives have been put into place. These include a rapid rise in the price of cigarettes and a number of health ministry driven initiatives to alert smokers to the dangers of smoking.

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.

The “Tak Nak” campaign was initially launched in 2003 and consisted of TVCs, 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, it did little to reduce the number of smokers. Even the 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 latest (and most harrowing) installment (see video) 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 follows the legislation, earlier this year that all cigarette packets sold in Malaysia must carry graphic images related to smoking. These include images of the results of neck cancer and a dead foetus. Displaying these graphic images on cigarette packets is a requirement of the World Health Organisation Framework Convention on Tobacco control of which Malaysia is a signatory.

It’s not clear if the latest series of graphic commercials that are obviously designed to shock, and the images on cigarette packets are part of a strategic plan or two independent tactical campaigns.

I’m not sure what the goals of the latest campaign are but I am sure they do not want to simply raise awareness of the dangerous side effects of smoking. I would imagine the goals include reducing the numbers of smokers in Malaysia and discouraging young adults of both sexes from taking up the habit.

If these are the goals then one has to question whether or not this is the best tactic. Certainly evidence from previous campaigns in Malaysia and other countries suggests that campaigns featuring shocking images and graphic descriptions of the consequences of smoking using old economy tools such as TVCs, print ads and outdoor are ineffective.

Malaysia spent RM100 million over 5 years on such a campaign that was inneffective in bringing down the number of smokers in Malaysia. 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. The study also discovered that when a close family member become ill from the effects of smoking, the smoker takes no notice. In fact, according to the study, smokers only reduce the number of cigarettes or sometimes quit when their own personal health is at stake.

And 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.

I have a hunch that this campaign will not reduce the number of smokers in Malaysia. Data shows that traditional marketing tools are even less effective today than they were 10 years ago.

What is required is a data driven approach to the issue. Specific and comprehensive qualitative research with relevant targeted questions related to each segment (and each segment will be specific and targetted) that are designed to deliver actionable data. It is imperative that the audience is identified and then communicated with using content that resonates with them. It will be a long term effort. That doesn’t mean repeating the same one size fits all commercials or messages, this means developing a relationship with these partners through engagement.

Also critical to the development of the strategy will be the buy in from stakeholders such as doctors, educators, retailers and others. Discussions must be held with these key elements to determine strategies. Once research is completed and analysed, a comprehensive strategy must be developed featuring a fully integrated program to communicate with all stakeholders with specific emphasis on education at kampung level and dynamic, preventative programmes for schools. Existing smokers will be targetted individually through interviews with doctors, rather than one-size-fits all shock and awe campaigns.

Only once the strategic blueprint is ready can the implementation begin. 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 creative driven campaigns that have not worked in the past is not the way forward.

Warning: Viewer discretion advised.