Is Malaysia Airlines serious about rebuilding its brand?

I’ve been looking forward to the new Malaysia Airlines (MAB) brand from both a professional and a personal perspective. Professionally, I’m eager to see what direction a global company with a huge reputation proposes for the carrier. Personally, I’m a big fan of Malaysia Airlines and have been for over 20 years. I also believe a national carrier is a critical component of any nation brand and building a nation brand is harder without a national carrier.

Right now, despite a new CEO and one presumes new management, the brand seems to be directionless. I think 3 launch dates for the new brand have come and gone and each time the date passes, there is a deafening silence from management.

Meanwhile corporate driven messages tell us the new brand focus will be on ‘making the customer experience change.’ In mid 2015 we were told that in December 2015 the airline “will begin installing new cabin seating and improving inflight entertainment, customer service and on time performance. New technology, lounge concepts and catering would be introduced and the uniforms may change.”

This is not the new cabin seating I was expecting
This is not the new cabin seating I was expecting

But I can’t find anyone who has witnessed the ‘new cabin seating and improved inflight entertainment.’ I hear complaints about the poor state of aircraft and have witnessed it myself. Delays are inevitable when launching a new brand but in a social world, these delays must be explained. There is nothing wrong with being normal.

Poorly thought out announcements are made regarding long haul flights that result in global condemnation and humiliating U turns but management remains silent. Days later, as if nothing happened, a press release is sent out about the new beginning at MAB and how the CEO will ‘boost product offerings and rebuild confidence in the carrier.’

What does ‘boost offerings’ mean? Does it mean make it cheaper? The lines between Low Cost Carrier (LCC) and Legacy Carrier have become blurred. The low cost carrier (LCC) model is familiar to just about everyone who travels. Basically you purchase the use of a seat on a (very cramped) plane and then pay through the nose for anything else such as luggage, food, drinks and even the location of the seat.

The alternative is Legacy carriers but I’m not really sure what they are. The term came out of the USA but today, seems to apply to any national airline not making money. With a legacy carrier or national airline, you pay one fee that covers everything including what should be a postive, even memorable experience.

Nowadays, a lot of so called legacy carriers mimic the low cost carrier model. Many of them do it quite well, others not so well. Malaysia Airlines seems to bounce between the two. It recently offered business class seats to London at the ridiculously low return fare of RM3,400. However, just like LCCs the rate excluded GST (6%), taxes and fees and added a caveat that additional baggage and fees may apply. I didn’t check but I suspect this would have bought the figure to the same level as competitors.

MAB needs to focus on delivering on the promises it is making not slashing prices
MAB needs to focus on delivering on the promises it is making not slashing prices

This is a dangerous game because if Malaysia Airlines cannot compete on price with the Middle East carriers, it won’t be able to compete with LCCs like Air Asia. According to the Economist newspaper reporting on a KPMG study, “a legacy airline operating an Airbus A320 between London and Rome spends US$12,000 more on each round-trip than a low-cost airline.” Whilst the amounts may be different, the additional perceptage is no doubt the same in SE Asia.

Malaysia Airlines should focus more on improving its product than trying to discount its way through low seasons. Instead of trying to match the LCCs with their basic services and expensive add ons, Malaysia Airlines should seek to improve its relationships with its customers and offer a premium service rather than discounts, especially to its passengers at the front of the aircraft.

And it needs to start communicating with the public. Successful brands today are built on accessibility, transparency, collaboration, retention, personalisation and integrity. And consumers not companies determine the success of brands. Corporate driven press releases are not as effective as positive comments shared across social media. Malaysia Airlines needs to get its head around this.

And it must do it now because Air Asia, once the poster boy of LCCs is struggling to stay relevant and is looking to innovate. If it looks to Europe or Australia for inspiration, it will see the likes of Easy Jet and Virgin Australia morphing into legacy carriers. According to the Economist, this may leave legacy airlines “in a perilous state, regardless of their location and size.”

And before anyone says Malaysia Airlines is a private entity and doesn’t need to explain anything to anyone. Just remember that this is the 21st century not the 20th century. Consumers are smarter and acquire knowledge not from brands but from those who use them. And besides, Malaysians have invested billions in the carrier and they have a right to know what is happening and why deadlines are not being met.

If Malaysia Airlines is serious about its brand, someone needs to take charge of the communications and take charge now because I for one, don’t want to see this once great airline continue to make these elementary mistakes. Otherwise the only thing serious about the rebrand will be its inneffectiveness.

Why you should start building your Brand today

This article first appeared in the Friday 29th April 2011 edition of The Malaysian Reserve/International Herald Tribune

Does this statement sound familiar? “I know I need to start thinking about building my brand but I don’t know where to start so it can wait.”

I’ve heard this statement a lot recently and if it is a general feeling throughout the business community, then we’ve got a problem.

We’ve got a problem because as Malaysia becomes an increasingly wealthy country it will increasingly become a target for global brands that have seen their penetration in more traditional markets reach saturation point.

Moreover, free trade agreements and stagnant manufacturing or services based economies are also encouraging global brands to take notice of countries like Malaysia.

In the last twelve months, major global brands from the agriculture, automotive, aviation, biotechnology, education, fashion, food, hospitality, logistics, property, transportation and other sectors that in the past have barely considered Malaysia, are now establishing offices here.

Even Unilever owned brand Marmite, a quintessentially British savoury spread most often used on toast, now has sales in excess of RM20 million in Malaysia, mainly because it makes a bowl of congee a little more interesting!

And as these global brands take note of Malaysia they will invest substantial funds to establish their brands here and once those brands are established, it will be difficult for Malaysian products and services to compete with them. Unable to compete, over time, these Malaysian brands will fail.

So Malaysian firms really must begin the process of building brands now, rather than later. The good news is that beginning the process of building a brand or revamping an existing company has many benefits. Some of the most significant include the ability to charge more for products and services as well as a reduction in costs. Furthermore, changes in technology and communications mean that Malaysian firms might not have to invest significant funds into mass communications.

A word of warning though. Any branding initiative should begin with a careful analysis of the organization, its processes and systems, especially those that are customer facing and whether or not it has a customer centric culture, what it stands for and whether these elements are relevant today. Be ready for bad news but see it as feedback and an opportunity to improve not as criticism.

And once the brand is ready, communications should focus not on broadcasting how wonderful the brand is across traditional mass media channels, but on engaging prospects with content that resonates with them and delivering economic, emotional and experiential value to consumers and across all touch points.

Here are six more reasons why you shouldn’t wait to start to build a brand.

Reason No 1: Branding unifies your organization & motivates staff
Your people will want to be part of a respected and recognized brand because personnel who can identify with and support a brand’s culture, values and behaviour are better motivated, more loyal and engaged, both internally and externally.

As a result, your people will have pride and an interest in the company they work for and what they do for that company. Morale will improve, productivity will rise and resignations will be reduced. Moreover, a culture that strives to deliver value to customers and on customer terms will prevail. This in turn will lead to increased sales.

Reason No 2: Branding integrates & enhances brand touch points
This is really important. Organisations with weak or non-existent brands more often than not, make promises they cannot keep, focus on acquiring customers but pay little attention to existing customers and underestimate the importance of the customer experience. By developing a brand and building processes and systems into the brand delivery system, every single touch point between your organization and the consumer will be geared towards delivering a positive experience. Positive brand experiences will go a long way towards building customer loyalty, key to profitability.

Reason No 3: Branding reduces costs
What better incentive can there be for building a brand? Branding requires a brand strategy and a strategy will anticipate multiple scenarios and prepare the organization for outcomes, reducing the likelihood of expensive cost over runs or unexpected expenses.

Furthermore, a well recognized and well respected brand attracts talent, reducing the need for time consuming recruitment campaigns and expensive head hunters. A brand also reduces marketing costs. Less established products or services can spend up to 10% of revenue on marketing, brands often spend as little as 0.8% up to 2% on marketing.

Reason No 4: Branding justifies a price premium
Yet another major incentive for anyone still not convinced they should be building a brand. Branding allows you to charge more for your product or service because people will pay more for a name they can trust and have confidence in.

Reason No 5: Branding shortens the sales cycle
A strong, well respected and recognized brand creates trust and an emotional attachment to the product which also helps to make purchasing decisions easier. Over time, this influences the speed at which a prospect or customer makes that purchasing decision. This in turn allows a company to build customer loyalty and create brand ambassadors to sell the brand on their behalf, shortening the process further.

Reason No 6: Branding blocks competition
By focusing on building a brand rather than carrying out a series of transactions, you will ‘ring fence’ your brand and stop the competition from poaching your customers. As interactions with your brand increase, customers will automatically think of you when thinking of your category, thereby ignoring competitors.

In an increasingly competitive and noisy environment where better established global brands with deeper pockets are starting to flex their muscle, it is imperative that Malaysian firms, large and small start to build their brands now, before global brands get a foot hold in the country and it is too late.