Category: Thailand

Sabah criticised for low growth in tourist arrivals, is it justified?

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One of the less mainstream online newspapers carried a scathing attack on Sabah Tourism Board today. You can read the article here

The paper carried extensive comments from a local activist who slammed the State government for recording what he called a ‘paltry’ 1.1% growth in arrivals for 2012 and blames this growth on a lack of planning.

I’ve worked to develop the tourism brand in Malaysia at both the federal level and with some of the State tourism boards and I have to say that although I have not worked with Sabah, from a distance, I think Sabah tourism is one of the most accomplished State tourism boards in Malaysia.

I do know that the State has invested in Tourism infrasture and although it has made some mistakes (name me a country, State or region that hasn’t), the Sabah Tourism Board appears to have worked hard to develop the industry and attract visitors to the State.

However, I do agree that a well thought out short, medium and long term plan that is flexible enough to react to the dynamic world today that focusses on delivering economic, experiential and emotional value (and not ‘me too’ advertising campaigns that do nothing more than waste valuable funds) is key to delivering a destination that not only survives but thrives. And as far as I know, not one State in Malaysia has a clearly defined brand strategy going forward.

One other issue that Sabah and Malaysia in general face is the lack of new products in the state and indeed in the country. Many of the visitors to competitor destinations return year after year because there are new products, opportunities and more.

In the face of growing regional and international competition and the changing tourism demographics that will see tourists from India and China looking for more than a beach resort with a well stocked bar, States such as Sabah and countries like Malaysia will have to invest in new products otherwise any growth, however low will soon turn into a decline.

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Some good news for Toyota

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Japanese automotive brand Toyota, has had a tough couple of years. Natural disasters in Japan and Thailand caused parts shortages that curtailed vehicle production. The company gained and then lost the crown of top selling car brand in the world.

But one of the company’s many brands has managed to bring a smile to the face of executives at the aggressive automaker that is building factories in Thailand, China and Brazil to catch up with other manufacturers and gain market share in developing markets. The Toyota Corolla has now chalked up global sales of 37.5 million units since production began in 1966 and it is now the world’s best selling car ever.

The first Corolla was sold in 1966
The 2012 version of the top selling car of all time

That means that roughly one Corolla has been sold somewhere in the world, every 40 seconds for the past 40 years. The Corolla’s success can be put down to the fact that it has always been inexpensive to buy, run and service and was always reliable.

Such basic principles are a recipe for a successful brand.

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

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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?

Destination branding requires innovation and integration

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About 300 kilometers south of Bangkok on the gulf of Thailand, lies Hua Hin once a quaint fishing village that was transformed in the reign of King Rama VI when it became a stop on the Southern Railroad route.

In the reign of King Rama VII a Summer Palace was constructed for the royal family. Despite the many political and social changes that Siam experienced during this period, the Palace gave the Royal Family and their friends an escape from court life and 100 years later, Hua Hin is still a popular destination for high-society and the Royal Family still resides at the Palace for part of the year.

Hua Hin is also a popular location with five star resort hotels, luxury boutique residences and private beach front homes offering unprecedented levels of luxury. In Hua Hin alone, there are roughly 200 hotels, including 30 five star hotels in an area no more than a few square miles. Hua Hin has struggled for years to attract tourists and fill rooms. Throw in a global economic meltdown, the on-going domestic political crisis and civil unrest and the business of building a hospitality brand gets rather complicated, even in a country with such a reputation for fun.

And with Asia’s hospitality business looking good in these troubled times – over US$1.3 billion was invested in hotels in Asia Pacific in the first six months of 2010 – destinations such as Hua Hin have to be innovative to compete. And to do this, the town and tourism related businesses must work together, not compete, to ride out the storm.

Intercontinental Hua Hin Resort has come up with one creative idea to differentiate itself by offering a private air service to shuttle guests from Bangkok’s Suvarnabhumi International Airport or Don Muang Airport to the beachside city. For anyone who has had the misfortune to experience the drive from Bangkok to Hua Hin, this is certainly an attractive offer! But it won’t be enough to raise Hua Hin’s profile, increase interest and ultimately drive traffic to the resorts that will allow room rates to rise and profits increase.

Intercontinental needs to work with other products within Hua Hin to offer a complete experience to guests taking advantage of this service. A personal discussion with those using the service will allow the hotel to get to know their interests and allow the sales person to offer suggestions, not from a worn brochure at the service desk in the lobby, but in the comfort of a pre flight lounge or even in flight.

Other hotels are offering free days or more traditional tactics such as large discounts. Whilst these may increase sales in the short term, they will do little to build profitable brands. These hotels need to innovate in the same way as the Intercon, to work with other destination stakeholders to ensure Hua doesn’t become a quaint fishing village for the next 100 years.