research – Page 2

The top 1,000 brands in Asia – so what!

Published on 05/07/201105/07/2011 by brandconsultantasia2 Comments

Following the completion of a research project carried out in conjunction with TNS, the Asia Pacific edition of the globally respected marketing magazine, Campaign Asia has named Sony as the top brand in Asia.

According to the study the top 4 positions all went to power house North Asian brands – Sony retained its position at number one followed by Samsung, Panasonic and LG with Canon at five. In fact the top 5 were unchanged from 2010.

At six is Apple, HP at seven, Google at eight and Nestle at nine with Nike at ten.

Facebook was the top social networking site at number 17 whilst Twitter leapt from 123 to sixtieth.

HTC, whose stock has tripled in the last year and is now Asia’s second largest maker of smart phones leapt from 532 to 100.

Interestingly no Chinese brands made the top 100 and only one Indian brand (Amul) managed to do so.

Amul, the largest food products business in India and the maker of ‘the big daddy’ of butters and the number one ice cream in India, was the best performing non-Japan or Korea brand, coming in at number 89.

At 123, Louis Vuitton was the highest luxury brand and surprisingly luxury brands fared poorly. Despite listing on the Hong Kong stock exchange recently, luxury brand Prada came in at a disappointing 348th, only two places above CIMB and down from 252.

Although Maggi (22nd) place and Tesco (96th) will be familiar to Malaysians, the top Malaysian brand is Marigold at 131, down from 129. Other Malaysian brands include Malaysia Airlines at 163, Maybank at 172 and F&N at 238. Old Town coffee also deserves a mention at 245, coming in almost 40 places above Maxis at 284. Celcom, Maxis main competitor was further down at 395.

Sticking with Malaysian brands, Boh tea was down at 417, Firefly, a budget airline was at 462, up from 518.

The highest new entry was Hankook tyres of Korea at 246. The highest new entry Malaysian brand was Life, a sauces/condiment maker at 718 followed by Kimball, another sauce/condiment maker at 825. Surprisingly Proton, the Malaysian national car was also a new entry at 916.

The survey was carried out in ten Asian markets: Australia, China, Hong Kong, India, Japan, Korea, Malaysia, Singapore, Taiwan and Thailand. Ages of the respondents were from 15 to 64 and approximately 300 respondents from each country were surveyed.

Participants were asked only two questions:

“When you think of the following (product or service) category, which is the best brand that comes to your mind? By best, we mean the one that you trust the most or the one that has the best reputation in the (product or service) category.”

“Apart from the best brand you entered, which brand do you consider to be the second best brand in the (product or service) category?”

14 major product and service categories were covered in the survey:
Alcohol and tobacco
Financial services
Automotive
Retail
Restaurants
Food
Beverages
Consumer electronics
Computer hardware
Computer software
Logistics
Media
Telecommunications
Travel and leisure
Household
Personal care.

In addition to these major categories, a further 72 sub-categories were included!

The final rankings were determined based on the total number of mentions each brand received across all categories and countries.

Then the data was weighted on two levels: the first to reflect the population composition within the markets covered, and the second to reflect the competitiveness of the categories included in the study.

Now I don’t know about you guys but if there is one thing I have learnt over the years it is that markets such as Malaysia and Japan or Thailand and India have very little in common, especially when it comes to food, alcohol (60% of the Malaysian market is Muslim and therefore alcohol is forbidden) and other culture specific products.

Furthermore, I don’t know how they included all the categories and sub categories but I can only assume the answers were aided. Nevertheless, imagine a questionnaire that lists 14 potential answers and then a further 72 options to those answers! How accurate are the responses going to be?

I also think that the sample size and the demographic – only 300 participants per country and a massive demographic of 15 – 64 is simply too big to provide results that are actionable or relevant.

And we don’t know the gender of the participants yet gender will be crucial in many of the listed categories and in how we communicate with prospects, with what content and across what platforms.

And looking at the brands, someone in India is not going to name Proton as the best (another thought, define best?) automotive brand because the Malaysian national automotive brand has yet to go on sale in India.

Frankly, I don’t really understand what is the point of this survey and what it means? How is it relevant to a consumer or company in Malaysia when it lists brands not available in the country? How can a company leverage its position? What must a company do to move up the list, perhaps to the top? How relevant is the ranking?

If the survey must be done, it would be better if it were country specific and related to each category alone. Rather than asking two (aided) questions, it would make sense to develop questions based on the product needs in that country. Questions will also need to be developed based on the category.

And instead of looking at traditional approaches that rely on demographics, in the social economy, it would be better to work with social media communities. Results could then be correlated and geographic comparisons made although they still won’t offer actionable data to the brands.

What do you think?

Is there a connection between desiring a brand and the profitability of that brand?

Published on 10/03/2011 by brandconsultantasiaLeave a comment

According to this article Apple is the world’s most desired brand.

If you don’t have time to follow the link, here are the basics:

M&C Brand consultancy Clear quote: “took in the views” (what does that mean?) of 17,000 consumers across the UK, USA, Germany, China and Singapore and questioned them about hundreds (how long did that take?) of brands across multiple categories. Respondents were asked to reveal brands they want to hear more about, brands they want to use in future and brands they like to talk about, amongst other criteria. End quote.

Many of the usual suspects – BMW, Sony, Mercedes, Rolex, Nintendo, Microsoft, Amazon, Audi, Gucci, Cartier all got a mention. But what really surprised me was that Google (2nd) and WWF (5th) were also on the list. I’m curious, how can anyone desire Google? I mean in what way can they desire Google? How can Google be a desirable brand? Or for that matter WWF (is that wrestling or nature?).

The report also measured the performance of the top 100 brands against the Standard & Poor’s 500. I don’t know how the comparison was made, but apparently it “showed that desirable brands provide good return on investment and share growth”.

The report states that “The level of desirability is reflected in levels of profitability over the last five years. The top ten brands have grown more than the top 50, and the top 50 have grown more than the top 100 according to the S&P data.”

What is the link between brand desirability of a huge sample size across multiple countries, ROI and share growth? I mean I desire an Aston Martin but I’ll never own one!

17,000 is a huge sample size and I’m not trying to diss the report but it would be helpful if we had more information to determine if the report makes sense and how we can use it to help clients.

Should you measure Brand Equity or Customer Equity?

Published on 08/11/2010 by brandconsultantasia3 Comments

Malaysian and Asian firms can save themselves a lot of effort and resources by focussing on customer equity as they attempt to build brands.

It’s almost 20 years since the launch of the landmark book “Managing Brand Equity: Capitalizing on the Value of a Brand Name” by David Aaker. David Aaker name may not be as familiar as others in his industry, but he is credited with developing the concept of “brand equity”.

The release of “Managing Brand Equity: Capitalizing on the Value of a Brand Name” came at a time when companies were desperately seeking new ways to increase the value of their brands by assigning a value to them or, measuring the intangible assets of the company such as reputation or channel relationships, that were previously ignored by traditional accounting systems. This became known as Brand equity.

On the face of it, “Brand equity” appeared to quantify intuitive recognition about the value of brands that in turn helped to rationalize marketing expenditures. It was also shorthand for a brand’s two key strengths – its relationship with purchasers and mental image among both prospects and customers. And it provided a means to rank winners and losers in branding wars – MAS vs Singapore Airlines, Maxis vs Celcom, Coca-Cola vs. Sarsi and so on.

Brand equity is now considered one of a number of factors that increase the financial value of a brand and the term is used freely to say the least. Nevertheless, despite its popularity, the concept of “brand equity” has numerous shortcomings, especially in an age when customers not organizations, are determining the success or failure of brands. Indeed, the pursuit of brand equity can even warp executive decision making and lead to lost profits and opportunities.

One shortcoming is that although the term is widely used, no common definition of brand equity exists.

In fact, in his book Building, Measuring and Managing Brand Equity, published about seven years after David Aaker’s work, K.L. Keller lists NINE definitions of Brand equity, some of which actually contradict one another. This lack of a definition means that no universally agreed upon measure exists.

Delve deeper into any methodology concerning a “brand equity” calculation, and it quickly becomes apparent that the effort has all the intellectual rigour of a fence post – a dash of corporate history, a gaggle of retail outlet numbers, a touch of stature here and some strength there, a little bit of ‘brand esteem’ topped off with an extra helping of distribution sales, a sampling of questionnaires and so on.

This lack of a common methodology means that two experts examining the same brand come up with widely divergent calculations. Furthermore, it is impossible to compare brands across different countries, industries or perspectives.

This imprecision – at a time of global economic uncertainty when shareholders are demanding more accountability and C level executives insist on both sophisticated measurement and accountability – means “brand equity” lacks validity as a benchmark for executive decision-making. After all, how can executives make effective decisions when it’s impossible to understand – and agree upon – consistent numbers?

As if C level executives didn’t have enough to think about, this imprecision causes other problems as well. If “brand equity” increases by 10%, what caused it? Was it the latest advertising campaign? Or was it a new product launch? Perhaps it was more aggressive sales? Or maybe it was the discounts at critical times to reduce inventory? Better service? “Brand equity” does not provide any insights about cause-and-effect.

Second, “brand equity” does not indicate market or financial success. Look at some companies with great “brand equity” – Pelangi Air, Perwaja steel, Port Klang Free Zone (PKFZ), Kodak, K-Mart, MV Augusta, MAS, – that have either disappeared, faced or are facing financial difficulties. Indeed, “brand equity” as a guiding star leads companies to focus on product maximization at a time when leading companies recognize that a focus on customers is critical to success.

Finally, and most important of all, “brand equity” is irrelevant to customers. Customers buy on value, service, price, convenience or other reasons, but never make a purchase decision based on the relative “brand equity” of two offerings.

Ask yourself, did you ever walk into Cold Storage, Armani or Isetan and buy something based on its brand equity? No, of course you didn’t. Hold that thought, why should you pay attention to an issue that customers ignore? Because everyone else is? Because you were told to in marketing classes that were probably developed in an era before Facebook, twitter, ecommerce and more?

So what should you focus on? The answer is “Customer equity”.

Customer equity has one universally recognized definition – the lifetime value of customers. This value results from the current and future customer profitability as well as such intangible benefits as testimonials and word-of-mouth sales.

Customer equity incorporates customer loyalty to buy again and again, the faith to recommend a brand and the willingness to forgive the inevitable mistakes that every firm makes.

While “brand equity” is impossible to calculate consistently, customer equity can be easily calculated on the back of an envelope. All that’s required are numbers that every company already is – or should be – calculating. These include revenue, customer acquisition (or marketing) costs, costs of goods/services and retention rates.

Ideally, depending on the industry, companies should also track leads and referrals, and be able to determine the profitability of specific products or services. By adding up revenue (or profits), subtracting relevant costs and incorporating retention rates, companies can determine the current – and future – profitability of every customer.

And because customer equity is easy to calculate, it will be understood by everyone from the boardroom to the warehouse, making it much easier to unify personnel behind the brand.

“Brand equity” is all about a product or an organization. But in the customer economy, brands that attempt to push products onto customers that don’t want them will fail. Even if you spend millions creating awareness of your products. Today, building a successful brand requires customers that are profitable.

Customer equity supports and measures the activities that encourage customers to buy more, more often. Increasing “brand equity” does little for a firm and decades of good will can be wiped out overnight (think BP), but increased customer equity reflects increased retention and word-of-mouth sales, key elements of a profitable brand.

Customer equity has other advantages as well. Because retention and customer profitability are tracked, it’s easy to make a direct link between marketing, service and other programs to increases (or declines) in customer equity.

Customer equity also enables the segmentation of very profitable, not so profitable and unprofitable customers. Knowing the relative profitability of customers not only helps promote retention of the best customers but also substantially improves the investment required and effectiveness of marketing as well as reducing marketing costs.

In today’s customer economy, “Brand equity” provides few if any tools for those responsible for attracting and keeping satisfied customers. In The Loyalty Effect, the author Frederick Reichheld wrote, “Customer equity effectively explains success and failure in business…. The companies with the highest retention rates also earn the best profits. Relative retention explains profits better than market share, scale, cost position or any other variables associated with competitive advantage.”

Do brands have value? Absolutely, and David Aaker has left an impressive legacy. But attempting to measure this value provides little benefit and distracts a company away from the critical task of retaining profitable customers.

Because ultimately, it’s these customers – not a fallible calculation of a dated concept – who are responsible for brand value and long-term corporate success.

6 branding lessons from the Gap logo farce

Published on 13/10/201013/10/2010 by brandconsultantasia10 Comments

The Gap logo story has been playing out for almost a week now. At the time of writing the long term impact on the brand is unknown. What is known is that the reengineering of the Gap logo has cost a lot of money that need not have been spent.

In their book Measuring Brand Communication ROI (1997) Don Schultz and Jeffrey Walters describe how marketing now represents 50% or more of a company’s costs, up from roughly 20% after WWII. At the same time, manufacturing and operations have reduced their costs from 50% in the 1950s to in the region of 30% today.

This is hardly surprising when we witness such disasters. Why is it that costs are coming down in all departments except marketing?

Part of the reason is Brand owners believe that although it makes sense to invest in the most cutting edge technology to improve manufacturing and other processes, when it comes to branding and branding activities such as advertising, marketing, identity and so on, they assume that what worked in the past will work today. So, if creativity and a generous advertising budget was enough to build a brand in the 1970s, then surely it is enough to build a brand in the 2010s?

But of course it isn’t. And there are multiple reasons for this but the most dominant reason is the arrival if the Internet. The Internet has transformed supply chains, processes and the way we communicate and more, but most important of all, it has given consumers a chance to play a part in the evolution of a brand.

Last week, to much (Gap generated) fanfare, Gap unveiled and launched a new logo that it described as “a more contemporary, modern expression”. The new logo was designed by Trey Laird of the design company Laird and Partners. Laird and partners has worked with DeBeers, Tommy Hilfiger, Calvin Klein and others.

Gap spent a fortune, in the mass economy way, creating the new logo, developing an advertising campaign and buying airtime to tell the world about the new logo and what a great and cool company Gap is. A Facebook page was created, essentially to broadcast the same message.

Unfortunately customers, consumers, designers and others universally hated it, expressing their feelings via thousands of tweets and, ironically with Facebook messages on the Gap and other often humourous but always derogatory, Facebook pages.

Under immense consumer and other pressure and in a matter of days, Gap vowed to return to the original logo. But the company has spent a small fortune developing the new identity and as a result the company had little choice but to go ahead with its upcoming advertising campaign. This is probably because the company has already booked and/or bought the airtime. Yet further wastage of valuable marketing resources.

What lessons can aspiring retail or other brands learn from this debacle?

1) Carry out research with customers. Even an established brand must carry out research with customers before making a decision that will impact its relationship with those customers, the people who made the brand what it is. The new logo was tested internally but never externally. Big mistake.

2) Social media is not a fad or to be taken lightly. I get the impression, perhaps wrongly that Gap paid only lip service to Social Media. Social Media CAN effect change so learn to work with it. But remember it is not a soapbox. Simple consumer research at the logo development stage on Facebook and Twitter would have saved the company a lot of money and also improved consumer engagement.

3) Have a strategy for your tactics. Not many new Logos are well received initially. But many of them are now very familiar – Pepsi, Citi, Accenture, Qantas etc. Has Gap done the right thing by giving in to consumer pressure so quickly? It’s too early to tell, but one thing is for sure, they weren’t prepared for the reaction.

4) React quickly and positively. Despite initial fumbling, Gap has reacted well to the situation and is seeking suggestions to improve the logo on Facebook. How they manage the responses and implement any recommendations will have a major impact on the brand going forward.

5) Maintain your stand. Again, Gap has reacted well here. They are letting the initial storm die down whilst making it known that they are seeking recommendations for improvement from customers at the same time. Over the next couple of weeks there will be numerous meetings to review social media chatter. Don’t be surprised if the new logo is retained, perhaps with only minor alterations.

6) Brand identity should not be confused with branding. Gap has had a tough time over the last few years will poor sales and a weak share price only gaining support around US$18. Some industry insiders say the company panicked and thought a quick makeover of the logo, if received positively, could raise the profile of the brand and improve sales. Personally, I don’t believe Gap management is so naive but if its true it may prove to be a costly mistake.

It’s too early to tell what will be the impact of this event on the Gap brand. It hasn’t had much of an impact on the share price, even though the financial cost maybe high.

One thing is for sure, it is only a matter of time before boardrooms and business owners get fed up with the profligate attitude of traditional marketing departments.

Branding requires you to get to know your customers

Published on 30/09/2010 by brandconsultantasia1 Comment

This is the start of an ad hoc series of personal experiences I have with brands and some recommendations to help improve the experience.

Running a small retail business is tough, particularly in today’s climate. It’s even tougher in the competitive retail wine business in a small muslim country with high taxes on alcohol. Key to building a profitable business will be the relationship between the company and their customers.

Yesterday evening I walked into my local wine shop where I have shopped off and on for 5 years and was greeted with a “Hi, we haven’t seen you for a long time.” I mumbled a reply and the clerk nodded and carried on reading her magazine. This is not the first time I have gone ‘AWOL’ but the reason for my absense is the same. I haven’t been there for a while because about 3 months ago I was made an offer I couldn’t refuse and bought 5 cases of wine from another company.

Although I got a great deal on the wine there is no reason why my regular wine shop couldn’t have given me the same deal. But of course they didn’t know about it because they don’t make an effort to collect data on me. They just hope that I will come by every now and then and buy something. And if I don’t, never mind, there will be other new customers to replace me. To a certain extent this is true but wouldn’t it make more sense to look at ways to encourage those people who are already customers to come back again? And get to know those that come on a regular basis to increase share of wallet and develop brand ambassadors?

Here are 5 useful tips for any small retail business looking to be more profitable

1) You have a 15% chance of selling to a new customer and a 50% chance of selling to an existing customer. Distribute your resources accordingly.
2) Invest in database software that will allow you to store data about your customers
3) Don’t be afraid to ask for contact information from new and existing customers
4) Invest time in keying in customer data that you can use to determine buying patterns, product preferences and so on
5) Train your staff to get to know your customers.

Case study: Use research to form the foundations of a tourism brand strategy

Published on 09/02/201009/02/2010 by brandconsultantasia4 Comments

A powerful country brand developed from a meticulously planned strategy that has at its heart the concept of providing specific value to specific identified segments and meticulously executed and measured can yield massive benefits for investment, domestic industries and culture.

And for most South East Asian countries, tourism will have a prominent role to play in their country brand strategies. And so it should be as most governments recognize the contribution of tourism to stimulating economic growth across all sectors of society.

It also helps that tourism is also considered to be the world’s largest industry with revenue of over US$500 billion. The World Tourism Organisation (UNWTO) estimates International tourist arrivals for 2009 to be at 880 million. Although this was a 4% drop over the previous year, Asia and the pacific saw the first signs of recovery with positive growth in the last 2 quarters.

Going forward, the UNWTO expects international arrivals to reach 1.56 billion by 2020. Of these, almost 400 million are expected to head for Asia and the pacific.

But because of the tendency of politicians to seek a quick fix, most Asian tourism brand strategies look no further than creative advertising campaigns that look the same as many other destinations and are soon lost in the muddle of messages currently carpet bombing consumers.

One country in South East Asia has recognized the futility of this approach and commissioned us to develop a brand strategy based on trade and consumer requirements for value. Client confidentiality doesn’t allow me to reveal the country involved however I am able to share the methodology and some of the results and findings.

The project took just almost 2 years from appointment to implementation of the strategy however some urgent recommendations were implemented earlier.

The tourism office is tasked with marketing the country both domestically and internationally. Our focus was internationally. They were facing a number of challenges including:

Challenges
1) The increased effectiveness of competitor marketing strategies. All regional competitors are investing heavily in tourism products and developing segment focused branding campaigns.

2) Growing ineffectiveness of mass marketing, especially generic print & TV advertising. Increasingly fragmented media and an increase in leisure time activities are making it harder to reach consumers via traditional channels.

3) The increase in the influence of the Internet on the destination decision-making process, especially the increased influence of peer-to-peer networks. Figures released by The Association of British Travel Agents (ABTA) in November 2004 showed that 19% of holidaymakers booked their holiday online – six times more than in 2000. By 2008, this figure had grown to 67% (Online shopping survey). Only about 13% of those surveyed said they would use a travel agent. The Internet is also growing in importance as a communications medium through P2P networks with 34% of respondents to a Mintel survey choosing their destination on the basis of a face-to-face recommendation

4) Poor repeat visitor rates. Repeat visitors not only represent an increased return on the initial marketing investment but also tend to stay longer and spend more. Additionally, they represent a low-cost source of referrals and other word-of mouth advantages. Currently, the country has a below average number of repeat visitors compared to two main competitors which represents a threat to future growth.

5) Lack of awareness and knowledge of the country worldwide. What has been the impact of the country advertising? Has it been effective in improving the perception of the country? How much is it contributing to tourism in the country?

Our research showed that there were about 600,000 competing communities in Asia and more than 1,000 regional and national economic development agencies, all competing for visitors. This made it easy for even the most compelling messages to get lost amid all the destination claims.

We recommended to the client that in this cluttered environment, effective branding depends on data and knowledge about current and prospective visitors and not simply trendy creative campaigns featuring mass marketing tactics across all major channels.

Moreover, choosing the most effective branding strategy depended on sound market & customer research to determine current attitudes and perceptions toward the country among travel agents, previous visitors to the country and those that had never visited the country.

Measurement
By understanding the sources of those perceptions and attitudes, the client would be better able to evaluate current branding efforts, develop strategies to target high-impact segments with the most potential more effectively, drive internal education and other program development, leverage the emerging medium of Web 2.0, develop benchmarks to measure branding progress and ensure that resources were used cost-effectively.

The research could also be used to pinpoint, prioritise and drive online community-based branding. A core requirement as consumers spend more time in those communities.

Other key requirements included communicating knowledge of current branding and target market imperatives among personnel, as well as ensuring knowledge and data transfer.

After extensive discussions with the research division and others and to provide a 360-degree approach to understanding the brand, FusionBrand developed and conducted a multi-phase, six-month international research project that incorporated multiple research methodologies.

These methodologies included:

• 39 focus groups (FG) in thirteen locations in twelve countries comprised of 3 segments:
o Travel Agents
o Travelers who have visited the country in previous 3 years
o Travelers who have not visited the country but have traveled long haul in last 3 years
• Online surveys
o 12 countries
o Worldwide via client website
• Mystery shops in specific countries plus home country
• Internet CGM (consumer-generated media) monitoring & analysis
o 22 million blogs
o 60,000 usenet forums
o 6,000 discussion forums
o Plus podcasts, web sites etc.
• Internal brand audit in HQ and at tourism offices worldwide
o One-on-one, in-depth interviews with domestic & international staff
• External brand audit
o In depth interviews in specific countries
o 3 segments
o Tourist operators & agencies
o Media representatives
o Local tourism associations
• Communications audit (print)
o Brand analysis of print materials
o Comparative analysis of 11 regional competitor materials
o Framework for evaluation, scoring & future design developed
• Communications audit digital
o Own sites
o Brand evaluation based on Internet & customer relationship best practices
o Social Media initiatives

The countries were located in the following regions:

• Asia
• North America
• Europe
• Middle East
• Australia

The research project completely designed by FusionBrand was not only comprehensive, but innovative as well. For example, the Internet monitoring had yet to be accomplished by any destination, while the digital communications audit looked at what is necessary to advance into the emerging era of Internet 2.0.

Output was comprehensive and extensive and included:

• Recording and analysis of relevant input in complete reports
• County-by-country reports concerning perceptions and experiences with the country, including key influencers on travel destination selection
• Brand workshops for client personnel incorporating research results to ensure a corporate-wide understanding of the country brand strategy
• Analysis of Internet and marketing collateral relevance and effectiveness in segment-based branding
• Review of social media initiatives
• Quantitative benchmarks concerning experiences, perceptions, influencers and preferences of target segments
• Detailed insights concerning five key target segments identified in conjunction with the client

Each report not only included the findings from the research, but also prioritised recommendations for addressing the issues raised by the research.

Over 300 actionable recommendations
More than 300 actionable recommendations were made. These recommendations were incorporated into a comprehensive, segment-based brand plan that was developed over six months. The brand plan had a strong emphasis on the internet and social marketing and included strategic planning for marketing, advertising, both online and traditional, public relations, direct marketing, web and other programmes and outlined goals, messages, target markets, measurements, activities, timelines, responsibilities and budgets.

The benefits include consistent messaging and images among target markets, synergy among multiple programs, and elimination of uncoordinated activities that were wasting resources. Crucially, the brand plan also provides tools to evaluate program results.

In addition, in conjunction with representatives in country, country specific brand plans were developed. The Country Brand Plans are primarily focused on specific marketing activities within those countries. These activities include, but are not limited to, PR, local trade shows, agent recruitment and communications, cultural events, advertising, segment specific publications, promotional events, etc.

Although the brand strategy was for 2009, urgent recommendations such as consolidation and improvements to web sites and the appointment of regional PR companies were implemented immediately.

A key element of branding is consistency and yet, during the communications audit, the lack of consistency was evident. A strong recommendation was made for a corporate identity brand manual to be developed immediately. The manual was conceptualized and completed by FusionBrand in 4 months, during the writing of the 2009 brand plan.

Throughout the research and planning process, workshops were designed and presented to client personnel to keep them abreast of the process and educate them.

The project has been deemed a success with many targets met ahead of or on schedule. Furthermore significant savings have been made in a number of areas such as a reduction in collateral printing and a move to print on demand. Finally the destination has appeared on more than one ‘must visit’ destination for 2010 for the first time in its history.

Organisational excellence required to build global Asian brands

Published on 30/11/200915/01/2010 by brandconsultantasia1 Comment

Not too long ago, the Michigan (U.S.) State Business School reported that every US$1 (RM3.36) invested in marketing earned US$5 (RM16.80). By contrast, for every US$1 (RM3.36) invested in operational excellence, returned revenue was US$60 (RM201.75).

Despite such data, the majority of Asian firms have been slow to grasp the importance of everyday operational excellence that requires a continuing commitment to quality service, as well as processes that are effective from the customer’s point of view and advanced supply chain skills.

Many Asian firms prefer to spend fortunes on tactics to acquire customers yet very little on the operational and other strategic requirements needed to keep them. Sales and marketing growth based on increased awareness are fine and important but they are activities to be embarked on only after the operational foundations are in place. This is because an acquisition only approach is generally unsustainable.

Therefore, once a customer is acquired, it is critical to develop relationships to retain them. Firms cannot simply ‘hope’ they will come back time and time again because, with so much competition, so many alternatives, if you are not communicating with them – and selling to them, someone else will.

Customers build brands
And because customers have the power to make or break our brands, Asian companies must learn to do business on their terms. At the same time, they must become focused on creating PROFITABLE customers (on average, 15% of customers are unprofitable), ensuring those customers become our brand ambassadors, and consistently increasing their share of wallet.

Coca-Cola, Marlboro, Pan-Am, Ford and so on, represent mass-economy brands. These Western brands were successful because they shrewdly used the tools of the mass economy. They positioned themselves by repeatedly advertising in the mass media of one, two or three TV stations, one or two newspapers and knew where consumers were most of the time as there were few leisure time activities to take them away from the home.

Global markets
They also used mass production to achieve economies of scale, and they used distribution to penetrate mass markets. Global markets were opening up, disposable income was increasing, competition was limited. Customer retention didn’t really matter. Markets were growing so fast, and the mass-economy tools were so powerful, that it is was fairly easy to acquire a new customer for everyone that was lost. They also had a large, essentially one segment, ready made affluent domestic market.

But today, the mass economy is dead. The mass economy was killed by the fragmentation of the media, new leisure time activities, the Internet, greater competition, globalization, immigration, increasing number of and power of retailers, marketing segmentation and other forces.

In its place, we now have the “Customer Economy.” Companies no longer have the exclusivity to make the rules and control information by “positioning” products or promoting “brand equity” through advertising and PR like they did in the mass economy. Moreover, where in the past, prospects were segmented by demographics and geography, now they are part of communities. In these circumstances, can advertising and PR be effective to build brands? As part of a comprehensive brand strategy, yes. On their own, no.

For example, in the 10 year period to 2006, the computer manufacturer Acer spent US$10 billion (RM33.6 billion) trying to build a global brand via advertising. The effort failed. Acer withdrew from the retail market and has only recently reentered it with a new strategy focusing on individual segments.

Sony mass market failure
In 2000 and 2001, Sony spent an incredible US$2.5 billion (RM8.4 billion) on advertising worldwide. The result? The first three months of 2003 saw stunning losses, a 25% slide in the company’s share price in just two days and layoffs of more than 20,000 workers worldwide.

Unperturbed, Sony again tried mass economy tactics in 2008, spending an astonishing US$4.9 billion (RM16.5 billion) to position its diverse range of products including televisions, Blu-Ray players, music players, Laptops, PlayStation games, movies from Sony Pictures and new music from Sony Music. The approach failed and Sony is now exploring a more specific product focused niche approach.

Asian companies
Asian companies obsess with using traditional marketing tools such as advertising and PR to acquire new customers. But what good does it do to acquire customers if you have no idea how long they are going to stay and how profitable they will be? Also required are investments in operational excellence and accountability.

There is also a belief by many firms that they just have to ‘participate’ in an activity to get business. One local firm we’re familiar with collected 200 qualified leads from a trade show, yet months later those leads were still collecting dust! They were waiting for the prospects to contact them!

Another Asian company invested over US$50,000 (RM175,000) on a trade show, instructed 3 ‘top’ sales people to represent the company at the trade show and then failed to train the staff on how to behave and sell at the trade show. Moreover, there was zero investment in a lead management programme for leads generated. This meant the company was unable to measure the effectiveness of the trade show.

Finally, within 3 weeks of the trade show ending, two of the sales people manning the booth left the company, taking all the leads generated with them.

As we work to move up the value chain, the goal of every Asian company that wants to build a brand must be profitability, backed by measurement and accountability. Reaching solely for sales or market growth is no longer enough.

Repeat business
Not so long ago, in the US, to reach its sales goals, Ford offered $3,000 in rebates and other special deals off the cost of the Taurus car. Ford maintained its market share – but at the cost of losing money on each vehicle sold. Interestingly, Ford learned from its mistakes. Its next TV ad campaign in the US was based on the following line: “The highest proportion of repeat buyers of any car in its class.” What better testimonial is there? Little wonder then that in a report released by LeaseTrader.com in August 2009, Ford had the highest brand loyalty of any American automotive brand.

Despite the obvious need to invest heavily in retention strategies, ask a typical advertising agency about the branding issues faced by Acer, Sony, Ford and other companies, and what do you think the most common response will be?

Exactly. Recommendations for more ads, in more media across more platforms! They’ll promise a better creative team to provide greater creativity, but what’s really required is accountability for results! The usual agency attitude of “spraying and praying!” may have been the best strategy during the mass economy when there were a limited number of media conduits. But in the customer economy, the proliferation of media outlets and competitive advertisers now makes it practically impossible to build a brand solely based on ‘spraying and praying’.

Strategic approach required
What Asian companies need more than anything else is a strategic approach to branding that is aligned with the new imperatives of the customer driven global economy. Branding in the customer economy requires a fresh look at how the organisation engages with customers, as well as market and profitability requirements.

Rather than a simplistic reliance on logos and creative driven, one-size-fits-all, repetitive advertising, branding today demands research, data, measurement, supply chain effectiveness, customer intelligence, service AND accountability to both customer requirements and resources spent. Only once the company has identified who it should talk to and how, can it start to talk to those prospects.

Because acquisition is so expensive, and existing customers make the best brand ambassadors, branding also requires an emphasis on the identification and retention of PROFITABLE customers. This is especially true as the balance of power shifts from sellers to buyers.

The payoffs from such customer-economy branding can be substantial. British Airways calculates that customer retention efforts return $2 for every dollar invested. The clothing label Zara has thrived against powerhouses like Gap by moving from four collections a year to releasing new styles every two weeks.

So, as Asian firms attempt to move up the value chain, it is imperative companies monitor their retention rates (which fewer than 20% of companies do), because it is the best indicator of future profitability and brand strength.

Track RFM (Recency, Frequency, Monetary Value) because it shows which customers may be prone to defection and which are candidates for up – or cross – selling. Since it is likely 20% of customers are generating 80% of profits, segment customers according to profitability, and develop unique value propositions for the top 1%, 4% and 15%.

Calculate the lifetime value of clients. For instance, Ford calculates that a customer who buys his first car at the age of eighteen, upgrades it every three years and services it at a Ford dealership is worth a six figure sum to Ford over a lifetime. Cadillac estimates the lifetime value to be $300,000.

Revisit dormant customers. And optimize spending by developing marketing ROI based on actual customer profitability.

Other areas of organisational excellence that are key to building global Asian brands include recruitment and training. The retail sector is only realizing a fraction of its potential. This is partly due to the lack of training of staff and subsequent indifference of frontline staff when interacting with customers. If there is no attempt to build rapport with a prospect, why should the prospect return?

This is also true of manufacturing. One company in Malaysia we contacted recently listed 2 markets it wanted to develop as the UK and France. Yet when we called the office, no one spoke English.

Building Asian brands will take much more than basic advertising and PR. Core requirements include research, accountability, operational excellence, data management and customer equity (lifetime value of customers).

In Malaysia, according to research carried out by PriceWaterhouse Coopers, 86% of Malaysian CEOs and their Board of Directors say that they believe in the economic potential of effective brand building. However, almost the same number of CEO respondents admitted that they do not have a brand unit to integrate brand practices within their organisation. Sentiments are similar in Thailand, Indonesia and Vietnam

Until those C level executives take the plunge and invest in their brands by building operational excellence into their brand strategy, the concept of building global Malaysian or other Asian brands will remain just that, a concept.

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It failed once so let’s try it again

Published on 03/09/200904/09/2009 by brandconsultantasia4 Comments

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.

Pitching for a bank name change in Malaysia

Published on 02/08/200902/08/2009 by brandconsultantasia6 Comments

Last Friday we were pitching against 4 advertising agencies to a Malaysian bank. Essentially, the brief was for a name change and to create awareness of the name change in Malaysia. We were invited to pitch despite being a data driven brand consultancy. In fact I had personally discussed this fact with one of the corporate communications representatives at the bank.

He told me that if we went into the traditional FusionBrand pitch (We had presented to them 12 months ago) we would not get very far however, if we presented a ‘traditional re-brand’ pitch and suggest the FusionBrand approach for after the name change then we might generate some interest.

So, much to my chagrin, we pitched in the traditional way and suggested that this was only half the battle and what the bank also needed once the population was aware of the new name was a strategy to get prospects and customers into the branches and to buy product(s) and so on.

As my colleagues presented, I was imagining how the other agencies would make promises based on their new “positioning” of the bank.

I found myself thinking that what sort of a position could an agency offer the bank that would make them stand out from all the other banks? What position would make consumers cast aside their ingrained perceptions (not very good) of the bank? How would a new positioning strategy encourage prospects to walk into branches? And once they had walked into those branches, how well preparred would the staff be to sell to them?

I already knew that one of our competitors was a global agency but because they are very busy they were outsourcing the creative element so it was unlikely (though not impossible) that they would have the best talent in the market working on the creative.

And then I thought how could the bank make inroads into existing markets using the same type of ‘positioning strategy’ that all the other banks are using? Sure, the tactics might be different, then again perhaps not, but the positioning strategy, of finding a space in the consumers mind would be the same.

I also thought of how tumultuous the world is at the moment and how any positioning ‘strategy’ that had been implemented before the global economic crisis would be a worthless (and expensive) waste of money now because the world is a different place compared to even a year ago. What if something similar were to happen in the next 6 months, as this bank’s positioning ‘strategy’ was implemented? Would they too waste their valuable resources?

I also thought about my own issues with my bank and how, despite numerous negative experiences over the last 10 years, I was still with them. And yet during that time, I’ve seen so many ‘re-brands’ of banks or financial institutions, RHB, CIMB, Bank Islam, etc, all of them used positioning to influence me and hope that I would become a client (I didn’t and I wonder how many did. I certainly don’t know anyone who has changed their bank in the last 5 years).

It made me realize that the FusionBrand approach, where we use customised research to deliver actionable data, operational excellence as the foundations for the brand strategy, brand planning to eradicate the hope mentality, and segment specific communications that resonate with those segments alone and meet the economic, experiential and emotional needs of customers and prospects in those segments. Metrics and measurement that ensures valuable marketing resources are not wasted are what is required to build a brand in the customer economy of today.

The issue of course, is whether the bank knows this! I will let you know how we get on!

Branding blunders – updated

Published on 23/07/200904/08/2009 by brandconsultantasia7 Comments

Despite the fact that it is breaking new ground, there wasn’t much interest outside of the energy business when Russian president, Dmitry Medvedev announced in late June 2009 that Russia was entering into a joint gas venture with Nigeria’s state oil company. Perhaps it was because it was in Africa and energy deals are quite common in that part of the world or it could have been because the deal was relatively small, in energy terms at roughly US$2.5bn.

Whatever the reason, the story seemed likely to show up briefly in the trade journals and perhaps as a footnote in the business pages of a few mainstream publications. And then came the name. Naming is, depending who you talk to, ‘a fine art’ (most agency types) or ‘yanking a word out of your butt’ (Nick Wreden).

I don’t know who was responsible for the name of this new organisation. I wouldn’t be surprised if it was a team of industry brains who put their heads together for hours on end to come up with a suitable name that would position Russia as the saviour of African energy. Having been involved in similar naming projects, I suspect they studied the companies and countries involved, as well as others from different parts of the world, the competition, the industry, maps, multiple dictionaries, probably in many languages, the planets, names of extinct animals, disused road names, drilling equipment and so on.

Finally, no doubt after many arguments, late nights eating artery hardening comfort food and tantrums that would shame any precocious 5 year old, and as the deadline loomed, these exhausted creative geniuses eventually made a call and decided to play it safe. They decided to use a combination of Nigeria and gaz. Let’s call it Nigaz!

As you can imagine, Twittizens were onto the story in a flash and are still tweeting about it a month later. Meanwhile, more sophisticated trade publications such as Brand Republic announced that the name had “rather different connotations” for English-speakers. Indeed.

So as this latest branding blunder plays itself out, I thought it would be an opportune time to take a look at some others that have made us chuckle over the years. There are ten of them (including Nigaz) listed below. I’ve created a poll and you the reader can vote and decide who is the winner!

10) One of the most successful taglines for Kentucky Fried Chicken was “finger lickin’ good”. The trouble is, when translated into Mandarin (or is it Cantonese?) it becomes “eat your fingers off”.

9) When UK telecom company Orange launched their tagline “the future’s bright, the future’s Orange” Catholics in Northern Ireland were angry because the term “orange” is associated with Protestantism.

8) The Mitsubishi Pajero won a number of awards around the world for being so robust. For brand consistency reasons, they wanted to use the name in every country. Unfortunately they didn’t do enough research in Spain and after the launch had to change the name because in Spain, Pajero means ‘wanker’. (In the UK a wanker is someone who masturbates).

7) Spain gets another mention for another failed automotive branding story. This one revolves around Chevrolet. Some time ago Chevrolet decided to introduce the Nova to the Spanish market. Sales were poor, why? Because in Spanish Nova means ‘no-go.’

6) No brand mistakes article would be complete without a contribution from Pepsi. My favourite one is the “come alive with the Pepsi generation” slogan, which in Taiwan is “Pepsi will bring your ancestors back from the dead”.

5) And if we mention Pepsi, it’s only fair that we mention Coke. About 5 years ago, Coke wanted to break into the bottled water business. The name chosen was Dasani. OK so far. Coke announced that its “highly sophisticated purification process” was based on Nasa spacecraft technology. Soon after it was discovered to be a reverse osmosis process used in off the shelf domestic water purification tools. To make things even worse, just as the project was about to launch, it was discovered that the UK supply was contaminated with bromate, a chemical better known for causing cancer.

4) Five years ago, Cingular bought AT&T Wireless. AT&T was considered number one in terms of poor service. After the acquisition, Cingular binned the AT&T name. Four years later, Cingular Wireless was rebranded as AT&T Wireless.

I suspect the firm’s customers would have preferred that money had been spent improving operational issues rather than being wasted on a pointless rebranding exercise. Despite the re re branding, in 2007, AT&T Wireless generated the most complaints overall and the most complaints per subscriber, according to the FCC.

3) As personal branding seems to be getting a lot of ink at the moment, one of my favourite gaffs was the one about Lee Ryan (of Blue fame) who gave an interview just after 9/11. During the interview he was quoted as saying, ‘What about whales? They are ignoring animals that are more important. Animals need saving and that’s more important. This New York thing is being blown out of proportion.’ Many industry insiders consider these comments to be the reason for the demise of Blue.

1) One of the greatest naming disasters of all time must be the attempt by Dragon Brands to change the Royal Mail of the UK from a 300 year old domestic mail only (government) institution to a multi dimensional distribution company. Dragon Brands did a lot of internal and external research over a two year period and then assessed the aims of the brand using measures that included ‘the three p’s’ – personality, physique and presentation.

Next they took three circular like shapes and filled them with words such as ‘scope’ and ‘ambition’ and apparently (I’m not making this up) this brought together ‘the hard and the soft aspects of the brand’s desired positioning.’

This remarkable process threw up hundreds of actual words as well as some that were made up. Apparently the brain storming team favoured Consignia because it included consign and the dictionary definition of consign is ‘to entrust to the care of’.

The cost of the new name was £2 million. It lasted approximately 18 months.

Since this article was written we’ve had a couple of suggestions to be included in the poll.

11) When the Citroen C4 was launched in Malaysia (and no doubt elsewhere in the Cantonese speaking world), sales were poor. The manufacturer recruited expensive research companies to determine why. Apparently, C$ in Cantonese sounds like ‘stalled’.

12) Ken Peters reminded me of the fiasco back in the late 1990s, surrounding the sports attire manufacturer Reebok who launched a running shoe for women the ‘Incubus’. According to legend, Incubus was a “male demon who had intercourse with sleeping women.”