Category: Malaysia

5 branding tips for Malaysia Airlines to save its troubled brand

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Earlier this month, troubled Malaysian carrier, Malaysia Airlines (MAS) reported a staggering RM2.52 Billion (US$850 million) loss for 2011. Despite the tough economic climate, a number of competitor airlines – British Airways, Singapore Airlines and Cathay Pacific all reported a profitable year.

Soon after, Group CEO of MAS Ahmad Jauhari announced that he will implement ‘strong and immediate measures to stem the flow of losses with staff redeployment, improved productivity and efficiency, further cost controls and more route reviews’ whilst at the same time, he also promised ‘an aggressive sales and marketing strategy’.

Marketing budget doubled
Then MAS announced that it has doubled its marketing budget for 2012. The marketing budget is reported to be as much as 2% of revenue which on 2011 revenue of RM13.90 billion (US$4.63 billion) equates to about RM278 million or nearly US$100 million.

So if the marketing budget is doubled, it means that MAS has more than RM550 million or US$190 million to rebuild it’s battered brand. That’s a tidy sum.

Details of what marketing initiatives the company has in mind are sketchy. Although the company has announced it will provide ‘better and more branded customer experience and embark on a major advertising and promotions campaign in 2H/2012’.

This morning I read that the airline has appointed Ogilvy and Mather Advertising as its master creative agency. I also read this comment on the appointment from Al Ishal Ishak the senior vice president for marketing and promotions, “2012 will be a breakthrough year for Malaysia Airlines on our path to recovery. We recognised, however, that we could not achieve financial success without clearly defining our brand positioning.”

He went on to say, “Ogilvy understood this and throughout the pitch process were best able to translate our message into a powerful campaign idea. An idea that is big enough to help us transform our business and truly engage our customers like never before.”

Before I go on, I have a confession to make, I am a loyal Malaysia Airlines passenger and fan of more than 20 years. During that time I have been on the receiving end of more positive than negative experiences with the airline. So I want the airline to succeed.

But if this is the last chance for this iconic brand, Al Ishak and his team have to get it right. Any advertising campaigns will need to reflect the culture of travel and consumers today and not try to use the traditional high gloss beautifully presented images and TVCs so favoured by the airline industry to ‘clearly define our brand positioning’.

How will MAS spend the marketing budget?
I appreciate it is early days but I have noticed a digital campaign selling the new A380. The style would suggest MAS is going the traditional route using glossy images and slick advertising with high production values to attempt to position the company in the minds of its consumers.

The ad features an image of the A380 in the very attractive new MAS livery and a tagline about the journey which I assume is related to the A380 and one about the aircraft being the pride of the nation. Let’s hope Ogilvy improves on that. Anyway, clicking on the ad, you go to the existing MAS site where you are greeted with the same, larger image of the A380 and the same taglines.

Below the fold there are two black and white images with click through options. The one on the left entitled, Behind the scene (sic) links to still images of the making of the new commercials which look very traditional and my first reaction was what a pity they haven’t changed the cabin crew uniforms. The image on the right links to a video entitled ‘The pride of our nation”, a predictable and uninspiring video of an MAS A380 being painted!

Throughout, the copy is uninspiring.

Below the images are social media options. I had a quick look at the twitter feed and it looks very collaborative with plenty of discussions although efforts to build the brand in the social context can be improved.

But I have a sneaking suspicion that the bulk of that US$190 million is going to be spent on advertising. And as Singapore Airlines learnt with it’s A380s, you can no longer rely on developing a position and using advertising to communicate that position in the hope that it will work and consumers will buy.

Positioning
The problem is that positioning is a throwback to the mass economy that no longer exists. What advertising agencies tried to do was create a position that reflected the strengths and weaknesses of the offering. Ideally, this position was based on being first in a particular category.

If someone was already first in a category, then companies attempted to redefine themselves in a new category to be first. In the airline business, this tended to be related to passenger comfort or service. The effectiveness of positioning depended on the ability of advertising to drive branding perceptions in the mind of consumers.

To do this, airlines often made promises they were unable to keep (admittedly, often due to third party issues out of their control), failed to meet traveller expectations, often because dynamic competitors moved quickly and so raised the bar, which in turn led to brand disillusionment.

Positioning was ideal for the mass economy. It was also ideal for advertising agencies and marketing departments because it gave them enormous power without the responsibility of accountability. Al Ries and Jack Trout invented the concept of positioning. The preface to one of their books states, “Positioning has nothing to do with the product,…. (it) is what you do in the mind of the prospect.” So, essentially this means that the consumer can be made to believe, through extensive advertising and PR and via the right conduits to consumers, and other vehicles, what an offering means to them.

Well I’m sorry, this might have been true in our parents day, when consumers were more predictable, more trusting and had less choice but in today’s mean spirited world, a world in which only 4% of Americans and 14% of Malaysians believe what they read in adverts it is going to be very, very difficult. And of course the problem with using positioning to build a brand is, if it doesn’t work, the money is wasted, time is lost and you have to repeat the process again, with a new position!

So how can MAS save its troubled brand?
1) Research. Your existing customers are your best source of information. But they are not all the same. I would be interested to know which, if any customers MAS talked to when they were configuring the aircraft. MAS is talking about flat beds and big TV screens in first and business. Well that is so last year and who doesn’t offer them so why should I change? What about Internet access? I hope the A380 offers it throughout the aircraft.

2) Mass market branding and the old model of developing a position and communicating that position across for mass media repetatively for as long as possible is no longer effective. Brands today are built on relationships, access, personalisation and relevance. Before MAS marketed to segments of 18 – 34 year olds, businessmen and so on. Today, MAS must deliver economic, experiential and emotional value to to everybody and on their terms.

3) MAS must focus on developing more profitable relationships, not a more profitable product. Brands evolve when companies start buying for customers instead of selling to them.

4) Branding is an organisational not a departmental responsibility. And the organisation is the responsibility of the CEO. MAS is charging about a 100% premium for an economy class ticket on its A380 in July over the price of an economy class ticket on a 747 for the same route. Throw in all the other airport fees etc and it’s going to have to be a pretty good product to charge such a premium.

5) Retention is key to brand building. Companies no longer sell a product, customers buy a product. And those customers have plenty of choice, especially in the airline business. Sadly too many companies spend lots of money on acquiring a customer but very little on retaining them. MAS is one such company. Once a consumer buys the product, companies should do everything possible to hang onto those customers, build relationships with them, learn about them and leverage them.

Bonus tip. This is the social era. As I said MAS is working hard on social media but there is room for improvement and integration. It would be interesting to know how they leverage their social media efforts to get more business.

Successful brand building is determined more by customer experiences than by slick advertising campaigns

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Far too many companies, whether Multi National Corporation (MNC) or Small, Medium sized Enterprise (SME) think or are led to believe that the fast track way to branding acceptance is to spend large amounts of money on high quality TV commercials, billboards or print advertising campaigns that showcase their products or services and communicate corporate driven messages to consumers.

But just because telecommunications companies, banks, oil companies, soft drinks firms and others spend considerable amounts of money on advertising doesn’t mean that the advertising is the reason for their success or that it is right for you.

In fact quite often, there seems to be no rhyme or reason to the advertising campaigns initiated by these companies. A case in point is the current Celcom campaign “Ini Wilayah Celcom” prominent on billboards across Kuala Lumpur. With current mobile penetration in Malaysia around 125% of the population, it doesn’t make sense for Celcom to be creating awareness with expensive outdoor campaigns.

Unsurprisingly, at end of many such campaigns, there is often very little change in the fortunes of the brand. Which is why many of these advertising campaigns, do little to build brands and should not be emulated by other companies.

Because a key element of whether or not your brand building is successful will depend not on what you tell consumers through paid media but on the experiences consumers have with your personnel, your business and your products.

Put simply, if you manufacture furniture and spend a lot of money advertising a new furniture range but the furniture breaks all the time, you may make some sales but your brand will suffer as consumers avoid making a return visit and worse, discuss their issues with other consumers on and off line.

Likewise if your staff are slow, rude, inattentive, badly groomed, lack product knowledge, unhelpful and poorly trained, you may make a sale but the customer is unlikely to return and you can be sure they will share their negative experiences with others.

Furthermore, these negative experiences will be spread across the Internet using social media tools and in coffee shops, bars and so on will have a negative impact on your brand. Even sales of previously successful products may be affected negatively.

However, treat customers well and they will remain loyal. In a recent survey by Spherion, 97% of those questioned said a great experience makes them more likely to buy more of a product or repeat a service. However, once they have a bad experience or their trust is lost, it’s very hard to win back. To have a chance of winning back their business, 22% want a simple apology, 10% want a complete refund, and 8% would want incentives or coupons and even then there is no guarantee.

But 46% said that it would take an apology, a complete refund AND coupons or further incentives to have a chance of winning back their business. The implications therefore on your brand, of delivering a bad experience is costly and time consuming.

For the record, 15% said absolutely nothing would atone for their bad experience.

So you can try to shape the perceptions of your products or services with advertising, PR, advertorials, nice brochures and with content across social media and elsewhere but the reality is that the success or failure of your brand will be determined by experiences and how customers discuss your brand after the experiences.

Apple for example charges a premium for its products. It sells the sort of stuff – computers, smart phones, MP3 players – that lots of other people sell yet sells them at a premium. Margins for Apple iPhones are in the region of 50% compared to a meagre 6.2% for Nokia smartphones.

Furthermore, Apple ‘only’ spends US$250 million (2009) on advertising compared with Microsoft US$1.4 billion and Dell US811 million. In terms of a percentage of sales, this equates to 2.4% for Microsoft, 1.3% for Dell and 0.5% for Apple. RIM, manufacturer of the Blackberry spends 3.6% of revenue on advertising.

New technology companies that have sophisticated digital strategies and use email to market themselves spend even less on traditional advertising. Google spends only US$11 million on advertising or 0.05% of revenue. Amazon is a little higher at US$43 million or 0.17% of revenue.

As a general rule of thumb, spending less than 2% of revenue on advertising is considered low. For the automotive industry average advertising spend is nearer 3.5% of revenue. For alcohol it is more like 7% and for packaged goods and most other industries, as high as 10%.

Firms such as Apple, Google, Amazon and others are not successful because they spend huge amounts on short term advertising campaigns to create awareness but on innovative design, quality products and excellent service that is uniformly outstanding across all customer touch points such as in stores, whether bricks and mortar or online.

Consumers will pay more for Apple products because they are guaranteed a quality product (as well as inclusion into a not so unique club of Apple users) that will not fail them. And if it does, customers know they can go back to the store and seek a replacement or have repairs carried out under warranty.

Unfortunately most MNCs and SMEs don’t appreciate just how important the customer experience is. And the increasing popularity of social media means that consumers are voicing their dissent, not just to a few friends over teh tarik at a local Kopi Tiam but now to thousands and thousands of friends and followers and to their friends and followers across communities on Twitter, Facebook and more.

So as you try to build a successful brand, a core component of your strategy must be to build relationships with prospects and customers. You must learn how to manage relationships with customers, not just offline and during office hours but also online and at weekends.

Because unless you have a unique product or service (and few companies have unique products or offer unique services today), customers may buy from you if they have a bad experience but they are unlikely to come back again. And because of increased competition, it is impossible to build a brand on a business model that relies on new customers all the time.

Make sure that at every touch point where consumers interact with your brand, the experience for those customers is a positive one. This becomes a greater challenge as a company grows and if you get it wrong, what was once a nice little niche business with a manageable group of customers who all spoke positively about the company can become, almost overnight a loss making enterprise with fewer customers and a bad reputation for over promising and under delivering.

Ensure that every sales contact, service delivery and customer service interaction that the customer comes into contact with is positive as this will have a positive impact on your brand. Even suppliers need to be treated with respect.

But even if you invest heavily in customer relationships, and even if you keep 99% of your customers happy, there will always be some who are not happy and are dissatisfied with your service. What do you do with them?

The first thing is not to ignore these important customers. Try to get them to explain to you what is the problem. Be prepared to listen and hear stuff that may sound unreasonable. Some customers will be rude, personal and even physical. But you have to make sure your people are trained to listen and empathise. Think KFC!

And where possible solve their problem in a way that is satisfactory for them, not you. I know this might be a problem for you and will certainly cost you money on that particular transaction but in the long run it will offer far greater returns.

If you try to take care of every single customer, both those that are not a problem and those that are you’ll create a positive reputation. Even if customers are frustrated with their experiences with your brand, if you show empathy and provide a solution that makes them happy, there is a good chance they will tell others that they were impressed with you and how hard you worked to solve the problem for them. And with a little incentive, you can probably convince them to come back.

Despite what you may have been told, mass advertising across mass media is not the holy grail to building a brand. Which is fortunate because it means SMEs won’t waste hard earned money on campaigns to compete with large conglomerates. But if you look after the customer and try to make every experience a positive one, you will speed up the process of building a brand.

Thanks to zendesk for the graphic above.

ASTRO makes a small but significant branding blunder

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Rugby is an increasingly popular sport just about everywhere. According to a recent Mastercard report, the overall global growth in the sport is estimated at 15% per year.

The main rugby event is the rugby world cup which is held every four years. The first rugby world cup was held in 1987 and attracted a global TV audience of 300 million. Twenty years later, the 2007 Rugby world cup attracted a global audience of 4.2 BILLION TV viewers, and the Rugby world cup is now the most watched sport after the Football world cup and the Olympics.

The six nations rugby tournament is the second most important international rugby tournament after the rugby world cup. It is held annually between England, Ireland, Scotland, Italy, France and Wales and was watched by over 69 million TV viewers in Europe in 2011.

The six nations, only a few games live on TV in Malaysia

According to Wikipedia, in Malaysia there are sixteen rugby unions, associations and councils affiliated to the Malaysian Rugby Union and more than 300 clubs and 600 schools and universities nationwide that teach the game.

There are 41,050 registered rugby players in Malaysia (I don’t know who they are registered with), and the country is currently ranked 57th in the world.

There are also countless other rugby players and fans who are not registered but have an interest in the game, such as expatriates from rugby playing countries.

When the commonwealth games were held in Malaysia in 1998, it was estimated that over 50,000 people watched the Rugby Sevens part of the tournament live and 20,000 were at the ground to watch the final, won by New Zealand.

It wouldn’t be too far fetched to say there are probably 250,000 to 500,000 people connected to or involved in some way with rugby in Malaysia.

So it has caused somewhat of a storm within the rugby fraternity in Malaysia to discover that ASTRO, the only satellite TV provider in the country has decided to show only a small percentage of this top class global event live on TV.

One corporate subscriber that spends almost RM100,000 per annum subscribing to Astro was stunned to learn of Astro’s poorly thought out decision not to show the games live and said, “I am shock (sic) to learn of this decision. I don’t get it, why would you not show this popular competition live? We know Astro can do it so why don’t they?”

Another domestic subscriber summed the situation up thus, “I’m sick and tired of the crap they show on Astro and then when something I really want to watch isn’t on live, it really makes me angry and I wish I could change provider.”

An audience of 500,000 is relatively small (although it does equate to about 25% of total Astro subscribers) but this is a lucrative segment with influence and with related content, advertisers would have a captive audience. Such an event should be on the radar of destinations, financial institutions, hotels, automotive companies, schools and universities, real estate agents and more.

One potential local advertiser would be Mastercard which supports rugby on a global scale. Credit cards are sold in many ways in Malaysia, including a sort of hijacking of prospects at petrol stations.

Personally, I would be more likely to be influenced by a Mastercard advertisement linked to rugby than I am by the current tactics.

Astro spends a lot of money acquiring customers but spends little on retaining customers. It may be that because Astro is a monopoly, it doesn’t think it has to listen to its subscribers and it may have a point.

But with a new provider due to launch in 2Q2012, the growing penetration of IPTV providers such as Telekom Malaysia and the growing trend for downloading programmes from the Internet, now may not be the best time to alienate a small but wealthy segment.

What do you guys think?

AirAsia brand hits turbulence

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A week ago, AirAsia X CEO Azran Osman-Rani announced to much fanfare, a new service between Sydney and Kuala Lumpur.

Soon after, the Australian Competition and Consumer Commission, (ACCC) an Australian consumer watchdog announced that it has launched a court action against AirAsia, alleging the company is misleading consumers in its advertisements for flights out of Australia.

This follows negative press after AirAsia X recently announced it was ceasing flights to London, Paris, Mumbai and New Delhi and criticism by Neil Warnock, the former manager of Queens Park Rangers football club, owned by AirAsia chairman Tony Fernandes after he was sacked.

Although the company acted quickly and decisively with offers of refunds or alternative travel at no extra cost for passengers who hold tickets for future flights to Europe and India, in terms of customer loyalty, these latest developments won’t do the brand any favours.

Especially as the airline is also copping plenty of flak for it’s opaque charging and poor engagement skills on social media, as seen by this image taken from a disgruntled customer on Facebook.

The former AirAsia fan says the image was taken down after 10 minutes when he posted it on the company Facebook page and he has since been barred from posting anything on the AirAsia Facebook page!

Hidden or extra fees add almost 100% to cost of Kuala Lumpur to London ticket on AirAsia

According to the ACCC, AirAsia’s website did not include all taxes, duties, fees and other mandatory charges when advertising fares on certain routes from the Gold Coast, Melbourne and Perth. In Australia if a company wishes to advertise part of a price, it must also advertise one total price for the product or service.

Brands are defined by the economic, experiential and emotional value they deliver to customers. Fail on any of these counts and your brand will struggle. The disgruntled Facebook customer and customers like those in this article have undone a lot of the work AirAsia has done to build a people friendly brand.

As Low cost carrier brands grow, charging extra for food and entertainment may be acceptable on short or medium haul routes but many consumers see it as unfair on long haul routes so strategic changes need to be made if they really do want to build brands.

Building a brand in the consumer economy is more than the CEO and Chairman tweeting all day. It requires a strategic plan with processes to deal with reputation issues and a willingness to engage with consumers who raise positive AND negative issues on and off line.

The reality is that AirAsia probably had little choice in cutting unprofitable routes to India and Europe.

But what it should have done was have a strategy in place to announce the changes and a plan to communicate with existing ticket holders to inform them and work with them to solve their personal issues in as seamless manner as possible.

A Facebook page with direct access to a community director and suggestions for alternative routes or airlines and how to go about booking flights would have been a tactical initiative to show the airline cared.

Such an effort may be a relatively time consuming and expensive initiative but in the social economy, one that is imperative and one that will pay retention dividends.

The Chinese are coming

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Here’s an interesting thought for all destinations currently writing or reviewing their long term brand plans.

Despite the global economic meltdown, the SARS issue, Terrorist bombings in Bali, Spain, NYC and other places, the UN World Tourism Organisation writes that, “in spite of occasional shocks, international tourist arrivals have shown virtually uninterrupted growth: from 25 million in 1950, to 277 million in 1980, to 435 million in 1990, to 675 million in 2000, and the current 940 million.”

These figures have been helped, on the whole by tourists from emerging markets. Thanks to a booming economy in the 1980s, the Japanese were the first non European/North American country to have an impact of the travel industry. This outbound tourism programme was actually driven by the Japanese government which launched what it called the “Ten Million Programme” to double outbound tourism departures between 1986 and 1991.

Many Koreans also travelled overseas in the 1990s when their economy boomed and we shouldn’t forget the Arabs who have always travelled, especially to Europe and the USA.

But it is the Chinese that are really going to impact the travel and tourism industry like never before. In 2002 ‘only’ 10 million Chinese travelled overseas and those tourists spent US$15 billion.

Between now and 2021, The World Travel and Tourism Council (WTTC) predicts that up to 125 million Chinese will travel overseas and they will contribute US$100bn in overseas spending.

Chinese tourists are already making an impression in Singapore where they spend on average S$1,200 (RM2,880) each, 20% more than the average international traveller. In 1H2011, the Chinese spent S$969mil (RM2.3bil), making them the second-largest spenders behind Indonesians, who spent S$1.33bil (RM3.19bil) in the same period.

At the height of the ‘Ten million programme’, about 17 million Japanese travelled overseas. But it felt like they were everywhere and many newspapers wrote rather negatively about the arrival of the polite, shy and wealthy Japanese.

Imagine what it will feel like with over 100 million mainland Chinese interacting with the local populations in London, New York, Rome, Madrid and other cities not used to the less demure ways of middle kingdom residents!

So as you work on the research for that brand plan, should you be looking to the traditional source markets of the West and investing in 5 star resorts on white sandy beaches or gleaming shopping malls with designer labels and perhaps a casino and theme park?

Despite falling sales, Volvo still trying to use advertising to build its brand

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Sadly, too many firms believe, or are led to believe that the way to build a brand is through advertising or, more specifically a series of advertising campaigns that are ever more creative, cutting edge, out of the box, off the wall or any other cool catch phrase your agency cares to throw at you.

If the budget is large enough, and it seems too many companies have too much money to play with and no accountability as to how it is spent, then the best thing the agency can do is buy lots of expensive TV air time, ‘wraparounds’ for publications, preferably daily newspapers because lots of people read them so the eyeballs will be high, above the fold pop ups on websites and lots of other expensive high profile spots.

Of course no advertising campaign would be complete without a couple of high profile billboards in high traffic areas to create awareness of the product with as many people as possible, irrespective of who they are and whether they are interested in or can afford the product.

Volvo is the latest automotive brand to launch yet another new car with a creative campaign across at least print and digital media. This latest campaign expects us to believe that a Volvo is hiding a beast inside.

Are we really going to believe there is a beast inside a Volvo?
This is no longer safe, now it is wicked. Or maybe it is safe and wicked!

The above the fold digital campaign is being used to launch the new V60, T4 and T5 range and features intrusive hover or pop out ads on The Malaysian Insider and possibly other news sites. Interestingly, once the Volvo ad on The Malaysian Insider closes, there is an expandable ad for BMW beneath it!

Back in early 2010, Volvo ran a new creative campaign for the new Volvo V50 with the tagline, “There’s more to life with Volvo.” Later that same month Volvo ran another campaign featuring a man and a woman wearing parkas sitting in a pile of snow and staring at a snow covered landscape (don’t forget we’re in Malaysia which sits pretty much on the equator!) with the headline, “Volvo owners get more out of life.”

Even more confusingly, at the time there was a Volvo billboard outside my office with the tagline, “Winner of fuel efficiency award.”

In 2011, Volvo launched a new version of the S60. This time they encouraged us to “get naughty with it.” The ad claimed there are ‘naughty cars everywhere’ and that ‘naughty cars go everywhere’. The box ad features the price of the car and two links to either get naughty with the car or test drive it.

You can read more about this campaign in my post of last year which is here.

The fact of the matter is that these campaigns are not working. In 1999 Volvo sold 642 cars in Malaysia. In 2009 Volvo sold 550 cars. In the same year, Peugeot sold 1,258, VW 885, Mazda 1,444, BMW 3,564 and just to put things into perspective, Toyota sold 81,784 in the same period.

In 2010 Volvo sales increased to 839 but this was below the target of 1,100 set by the CEO. And in the same period, VW sold almost 4 times as many cars (2,810) as the year before. Mazda increased sales from 1,444 in 2009 to an impressive 4,325 in 2010. Even Peugeot increased sales from 1,258 in 2009 to 2,562 in 2010. Mazda and Peugeot do very little advertising in Malaysia.

So these creative new campaigns are obviously not working. So what should Volvo do?

1) Develop a plan to identify and target the right consumers
2) Create content that will resonate with your consumers. Better still, get consumers to generate the content.
3) Separare the acquisition strategy from the retention strategy
4) Integrate all activities across all platforms don’t just launch ad hoc tactical campaigns and hope they work. They aren’t.
5) Invest more in sales and post sales communications
6) Volvos are safe, they can’t be safe and wicked. We like the fact they are safe but we appreciate you want to attract new segments but please, keep it real or you will lose existing segments and not attract new ones.

Implementation of any creative campaign should take into account the fact that consumers are no longer impressed with well executed, high quality, brand driven commercials. Because they don’t believe what they read anymore. In Malaysia 86% of participants in a survey said they no longer believe what they read in advertisements.

A brand can no longer rely simply on ads to sell products. An integrated brand strategy is crucial to successful branding. With a recession coming, Volvo needs to get it right and get it right soon.

By the way, whilst Volvo is trying to tell us the Volvo is actually a beast and that a Volvo is wicked, Volkswagen is pushing it’s park assist in Europe. Have a look at this enjoyable <a href="

Volkswagen – Tiguan – Park Assist II (ENG) from AlmapBBDO Internet on Vimeo.

” target=”_blank”>video made for iPad.

2012 must be the year you develop a social media brand strategy

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Saudi Arabian Prince Alwaleed bin Talal has twice been named as one of the smartest and most creative investors in the world by Forbes magazine. He’s also been called the “Saudi Warren Buffet” because of his impressive track record with his investments.

He first came to the fore with a signficant investment in Citibank in 1991 and now has interests in a diverse portfolio that features stellar brands such as Apple Inc, Four Seasons Hotels and Resorts, George V Hotel in Paris, Songbird Estates (Canary Wharf), Time Warner, News Corp., Walt Disney, Euro Disney, PepsiCo, Procter & Gamble, Motorola, Hewlett Packard and Kodak.

So when someone of his calibre announces, as he did just before Christmas 2011 that he was taking a US$300 million stake in Twitter, the world pays attention.

Ahmed Reda Halawani, Executive Director of the Prince’s Kingdom Holdings company said in a statement, “We believe that social media will fundamentally change the media industry landscape in the coming years. Twitter will capture and monetize this positive trend.”

“Fundamentally change the media industry landscape in the coming years.” I’m prepared to go one step further, I believe that social media is the media equivalent of the printing press, the radio and the Television – all arriving at once!

So if you are CEO of a Malaysian SME and you still haven’t invested resources into social media, I suggest you do so and do so quickly.

But before you do what many do which is to copy all the content on your website and paste it onto your Facebook page and think that is a social media strategy, I suggest you also invest some time in learning about how to use these channels.

Because social media is about relationships. And Malaysian SMEs have, on the whole over the last two decades or so, focussed not on relationships, but on selling their products at the cheapest price.

That’s fine when there is significant demand for a product and you can always produce it cheaper than someone else. But unfortunately today, someone somewhere is producing just about everything cheaper than Malaysian firms.

And this places Malaysian SMEs at a disadvantage, especially when multi national corporations are taking notice of Malaysia and beginning to invest significant marketing dollars in the country.

The good news is that social media, used correctly can actually save SMEs a lot of money because firms can create awareness, gain customers and, most critically retain them across social media platforms for a fraction of the cost of investing in traditional media such as TV, radio, Outdoor and others.

But it is important to develop a social media strategy before embarking on the exercise otherwise resources will be wasted, reputations may be affected and you could be worse off than before you started.

Here are 11 elements that must be included in any SME social media strategy

1) Determine your goals and your target market.
Obvious I know, but too many companies are trying to use the same tactics online as they did offline, ie trying to use the same ‘one-size-fits-all’ communications campaign to create awareness via a series of tactical campaigns. This will not work on social media.

2) Raise brand awareness by creating an online game or contest and hosting it on Facebook.
Tourism Malaysia has spent a significant amount of money on Facebook competitions that have generated many online column inches of comment. Despite limited investment in the content, the activities were executed well. However despite hundreds of thousands of new Facebook fans, tens of thousands of engaged users, significant traction in the social-media space, it is unclear what the actual campaign goals were.

3) Give free stuff away!

I don’t know how Tourism Malaysia will use the data it generated from the Facebook campaign, but to build a database that can be turned into brand evangalists in the future, it might be worth offering prizes for content shared with other users across platforms such as Youtube, Twitter and so on. This can be then be leveraged to gain more brand traction.

4) Use crowdsourcing to determine strategy
Back in 2009, Vitamin water wanted to launch a new brand. In an exercise that Gap management should have emulated, they binned the traditional qualitative and quantitative research via focus groups and intercept surveys. Instead the company turned to social networks and sought the opinion of consumers in a real world, real time environment to decide on the name of the new product. Over 1 million people participated in the project and they got close to celebrities employed to spike interest in the project.

5) Don’t delay your decision, you are already being talked about!
Conversations about your brand are already happening on social media. Embrace the conversation and get engaged but a word of warning, don’t try to use the platform as an opportunity to push your products onto consumers.

6) Don’t be afraid to revise your marketing message
Perhaps once, twice, three times and even more to make sure you engage the right consumers with the right content and don’t generate negative feedback from your audience. But if you do generate negative feedback, address it in an honest and transparent manner and see the conversation all the way to the end, no matter how distasteful.

7) Comments are good
One website we were asked to audit recently didn’t allow comments from other users yet increasingly, consumers are looking to comments rather than actual articles for the data that will influence and determine their decision making.

8) Remember your core message and don’t go too far away from it
Being genuine and transparent and sticking to your overall image is very important.

9) Tell the truth
Target Rounders is a subsidiary of the US retail giant. It is an online group that you sign up for & you get points for marketing a product. They come up with new products & then everyone on their list finds fun ways to promote it for “points.” The company launched a Facebook campaign that utilized a lie created to gain more fans and a larger community! Unfortunately consumers spotted the lie and the project died.

10) Creativity is effective in social media
Prior to launching the much anticipated Shark Week, the Discovery Channel sent a jar that appeared to include a death notice to new media types.

The jar included a note that read, “This jar holds a story – the story of a single tragic incident that needs to be unlocked. Dive in, investigate the evidence and discover what lies beneath the surface of frenziedwaters.com.”

The jar also included a large warning sign, shredded swimming trunks (no doubt belonging to someone who was eaten by a shark), and a detailed obituary dated for a future date at the time of the campaign.

Participants were intrigued and as a result spent a lot of time researching online before realising that the Discovery Channel was behind the whole thing. Nevertheless, the right people were soon talking about the show and building interest.

11) Write a social media policy
For most firms, their social media policy consists of restricting access to social media. But this isn’t the way forward. Used properly and by the right people, social media can be a very effective and inexpensive marketing tool for brands. But there are always going to be risks associated with a new tool so the best defense against abuse is to create a policy for usage.

Social media is making companies be more sharing, collaborative and transparent, not just externally but internally as well. Including employees in the policy development process will create internal advocates for the policy and improve morale.

The social media policy should be more about what employees can do and best practices for social media use versus all the things employees can’t or shouldn’t do on social media.

When shrewd investors such as Prince Alwaleed bin Talal are taking stakes in social media you know it is here to stay.

To stay competitive, Malaysian SMEs are going to have to invest more in developing brands. Social media, used correctly will save them large sums of money communicating those brands to consumers and other customers.

Effective use of Twitter to build your brand

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This article first appeared in the 29th November print edition of The Malaysian Reserve

Earlier this week at the launch of the 1Malaysia Social Media Convention, the Prime Minister of Malaysia Datuk Seri Najib Abdul Razak announced that the Barisan Nasional (BN) was developing an army of BN friendly cyber practitioners to engage consumers online.

The PM said at the launch, “As a party that wants to be relevant, we have to change according to the change in time”. The Malaysian Prime Minister should be applauded for his grasp of the importance of Social Media because there are over 12 million Internet users in Malaysia and Social Media is responsible for one third of the web traffic in the country.

The Prime Minister understands that social media has transformed people’s behaviour, their expectations and how they like to express themselves. Unfortunately, although the Prime Minister is aware of the importance of Social Media, most corporations appear oblivious to the impact of Social Media on consumers and the way they learn about and share information on products.

This may be because up until recently companies have been able to manage their communications but this is changing and today, consumers no longer respect or trust slow, opaque, bureaucratic, dictatorial corporations and the structured PR and advertising they like to push out across traditional broadcast media. In fact a recent study noted that a staggering 86% of Malaysians don’t believe what advertisers tell them in traditional ads!

Consumers are fed up with the automated voicemail that greets them when they call with a product or service issue. Especially as many corporations use the inevitable waiting time to try and sell something else to a customer who is often seething at the company and is not in the right frame of mind to be sold to.

Today, consumers expect, no demand to be able to talk to the right person at the right time.

Today, successful organizations are the result of being human, responsive and transparent. And consumers will communicate with these companies across open and transparent social media communities such as Twitter, Facebook and others.

So over the next few months we’ll talk about some of the most likely social media tools you can use to communicate information about your brand and how those tools can be used for businesses such as yours.

This month we look at Twitter, what it is and how you can use it to build your brand.

Worldwide, there are now 100 million active Twitter users and daily Tweets are over 250 million. Most top actors, athletes, politicians, businessmen and artists are active on Twitter.

Every news, current affairs and sports programme proudly displays its Twitter account name. Global events anywhere in the world break first and spread faster on Twitter. While CNN is showing 2 day old sports’ scores on its ticker tape, Twitter is providing those who are interested with ball by ball updates live from the next days play.

Barack Obama has 11.2 million followers, Datuk Seri Najib Razak has 295,000, AirAsia has 245,000, Amazon has 149,000, Firefly has 47,000 and the numbers are growing fast. In Asia, Indonesia has the most subscribers to Twitter whilst there are about 1 million in Malaysia.

It is important to understand that Twitter is not another Facebook. Facebook is best described as a few to a few social network created with a goal of sharing personal information and life related stuff with friends. Only once two people ‘friend’ each other can information begin to flow. Twitter on the other hand, is a one to many social network that allows me to say follow Firefly to keep abreast of their offerings yet they don’t have to follow me back to make the relationship work.

Twitter allows prospects and customers to instantly connect with you. Brands are no longer defined by the campaigns created by marketing and PR departments within companies. In the social economy of today, brands are defined by consumers or more specifically the experiences those consumers have with brands.

Get it right and you’ll build a brand. Get it wrong, and consumers will ensure your brand fails.

One of the reasons for Twitter’s success is because consumers got fed up with the automated responses they were faced with every time they contact a company.

Twitter is a popular platform to disseminate news about your company. If you have set up your Twitter account properly, Twitter is a dynamic and inexpensive platform for you to post information relating to your brand. A well planned Twitter strategy can help keep prospects and existing customers abreast of new developments and engaged. Beware however that it is not a broadcast medium and you must know when to stop. Constantly sending out the same message will have a negative impact on the brand. It’s also important to respond to comments from consumers related to your announcements.

Twitter is an excellent platform for sourcing actionable data. Twitter lets you find out priceless information about your customers – their opinions of your brand, what they like and/or dislike about your brand, what they think of your competitors, recommendations for improvement and much more. Twitter gives you an opportunity to improving your business, often without the need for costly investments.

Twitter helps you to humanize your brand. Twitter allows you to reach, communicate and engage with consumers and match your product attributes to their requirements for value whilst other companies are publishing generic ads in newspapers or attempting to convince consumers with PR.

Twitter lets you send the right message to the right people immediately. By using groups, lists, communities and other Twitter features effectively, Twitter lets you distribute news, make announcements, inform or create awareness of special offers to the right people in real time. No more waiting a month for the magazine to come out or 24 hours for the newspaper (assuming they have the space).

Being active and effective on Twitter communicates a company at ease with technology. Being a part of the Twitter community shows that you are moving with the times, that you embrace technology and are an open and transparent organization.

Twitter case study
A frequent business traveler between Malaysia and the UK was a loyal user of Budget Rent a car. But after a 13 hour flight, the business traveller was forced to wait two hours for a pre booked car. He stayed with Budget until on another occassion he received a bill for £86 because he forgot to pay the £10 congestion charge. So he decided to look for another car hire company for his next trip to the UK.

Using a price comparison site he came across Sixt, a company he had never heard of. The company offered an attractive pick up and drop off within a 5 mile radius of the nearest showroom. But when the businessman was booking the car hire on line he couldn’t find out any information on the pick up service.

So he turned to Twitter and asked for help. Within 5 hours the MD and CEO of Sixt had both contacted him with a request for his email address so that the @Sixt customer service team could get in touch.

Arrangements were made with customer service for the pick up and as a nice touch the car hire company upgraded him to a premium car. The experience was seamless, quick and pleasant. The businessman then shared, across multiple social media platforms details of his experiences and I am now sharing his experience with readers of this Blog and across Twitter, Facebook, Stumbleupon and more.

What was the cost of the positive buzz and acquiring this new, influential customer from a competitor? In terms of time perhaps an hour at most. Financially, next to nothing.

Malaysian SMEs must start to build brands

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This article first appeared in the 28th October 2011 issue of the Malaysian Reserve.

The recent budget and the implications of the budget are still being debated but what is clear is that the government is trying to help SMEs.

As part of the budget, the prime minister announced a RM100 million SME Revitalisation Fund for entrepreneurs who have tried and failed. The goal of the fund is to give those entrepreneurs the chance to get up and have another go.

SMEs are the engine room of countless economies and crucial to the development of many countries. In Malaysia the percentage contribution of SMEs to the nation’s Gross Domestic Product is 47.3%. This compares favourably to the larger economies of China (60%), Japan (55.3%) and Korea (50%).

One of the reasons Malaysian SMEs have stayed relevant is because most of them have been nimble and adaptable, making the change from primary industries such as agriculture and mining up until 1990 to an industrialized economy that saw manufacturing becoming the leading growth sector over the last 20 years.

However, many of those SMEs that made the move from commodities to manufacturing succeeded because they were able to compete on price. And with low labour and other costs, Malaysian made products were attractive and demand was constant. This also encouraged FDI.

But talk to any Malaysian manufacturing SME and you will most likely find that over the last 20 years, with few exceptions, every new contract negotiation with the companies they have supplied clothing or equipment to has resulted in their being forced to lower their price. Margins, with a few exceptions are down to less than 4%.

Despite relationships that may span as many as 20 years, loyalty is non existent and, despite vague promises of long term relationships, business is now being lost to Cambodia, China, Indonesia and Vietnam.

Hardly surprising when average factory wages in Malaysia are 250% higher than in Cambodia, 200% higher than in Vietnam, 160% higher than in Indonesia and even 40% higher than in China. Worse of all, as a contract manufacturer for a third party, Malaysian manufacturers have no knowledge of their consumers and little chance of finding new business.

As FDI and even local investment in manufacturing has dried up as brand owners seek less expensive locations, Malaysian SMEs are now fighting for their survival and whilst the SME revitalization fund is an important step to help those who have failed, Malaysian SMEs will need to develop more strategic ways to differentiate themselves.

One obvious way for SMEs to do this is to build brands. Yet the majority of Malaysian SMEs ignore the importance of branding. But competition, accentuated by AFTA and China’s entry into the WTO means that if they do not begin to brand, they will not be able to compete. The long term reliance on cost to differentiate, driven by historical experience in commodities and the fact that Malaysia was a cheap manufacturing base, will no longer suffice.

The irony is that Many Malaysian SMEs have done the hard part. Malaysian SMEs are already capable but are yet to sell their capabilities to the world. A major investment in branding will allow Malaysian SMEs to leverage substantial advances in quality manufacturing, workforce productivity, logistics and efficiency.

Malaysian SMEs already produce garments for international brands, components for the international aerospace industry, electronics for the global computer industry and numerous personal consumer goods.

In the services sector Malaysian SMEs provide support to banks, airlines, hospitality providers, medical services, insurance companies, and so on.

But these SMEs may lose out to international competition if they do not develop brands. Now is the time for SMEs to learn the importance of branding and the strategies and skills needed to create and maintain market strength through building relationships, providing personalisation and delivering value to customers.

Compounding the problem is that Malaysia is becoming a victim of its own success. As it becomes a more mature economy, global MNCs will start to take notice, as they are already doing and flood the market with international brands using international budgets to buy market share. Unless Malaysian SMEs begin to brand they will not survive this onslaught.

It’s especially important that Malaysian SME’s allocate their (and the Governments) limited resources effectively. The brand promotion grant, launched by the government about six years ago helped some companies advertise but using advertising to build a brand requires deep pockets and leaves too much to chance because it is so hard to stand out from the clutter and be heard over the noise of other advertisers and make an impact with consumers who are permanently distracted.

The good news is that branding today does not necessarily require huge investments in logos, slogans and expensive creative driven advertising campaigns pushed out across traditional mass media, which too often result in at best, a short-term sales spike but have no real long term gains for the company.

By utilizing emerging technologies and trends that are having a major impact on brands and branding and by leveraging these technologies and trends, and by integrating such trends and technologies with the social nature of Malaysian culture, Malaysian SMEs can potentially build global powerhouse brands. And not in the twenty years it has taken traditionally taken to build a brand, but possibly in as few as five to ten years.

But to do this Malaysian SMEs must focus not on price and trying to undercut rivals, both domestic, regional and international, but by identifying prospects, building relationships and understanding customer requirements for value. This will take a significant change on organizational culture but it is one that Malaysian SMEs must make.

It is great news that the government is trying to help SMEs with the SME revitalization fund but it is also important that SMEs help themselves and understand that if they are to survive and thrive, they can no longer compete on price alone.