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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Seriously, is #todayishere the new Malaysia Airlines tagline?

According to marketing magazine, the new Malaysia Airlines brand was launched with what they call ‘a new branding campaign’. Now personally I don’t think you can have a branding campaign. In my opinion that’s an oxymoron but let’s not go there for now.

Marketing magazine reported that a new hashtag #todayishere is the new tagline. A hashtag is the new tagline? Is that from MAB or is that an assumption? And besides, what does ‘todayishere’ mean? Does it mean we can simply forget about the past? And what about tomorrow? How does todayishere reassure me that it is safe for me to fly or put my kids on Malaysia Airlines?

And how is todayishere going to improve the experience of interacting with Malaysia Airlines? Does anyone know? How is anyone going to build a brand narrative around todayishere? Perhaps the agency Prophet from Hong Kong can share with us the next stage of their rebrand strategy because I want to know if there is anything else to come?

Are the crew going to be trained to represent this ‘new brand?’ What improvements have been made to the key touchpoints of the brand? How will a first time user be engaged at the booking engine? Has the broken booking engine been fixed? If not, why bother with a new hashtag/tagline/rebrand launch? Why not wait till that key component of the experience is at least working properly?

Although I don’t consider ‘todayishere’ to be a tagline, it is borderline criminal to believe you can rebrand any organisation with a tagline. Just ask the Malaysian government. Almost 2 years ago to the day, they tried to launch the Malaysia nation brand with a tagline.

But you can’t retrofit a brand around a tagline. Branding is about delivering value, at every touchpoint and at everytime and on the customers terms. It’s actually very easy, provided you start from the right place, the organisation because the organisation is the brand. Not a tagline, not a hashtag, not an ad campaign, not a campaign, not a new logo. Please, someone pass the message to the Malaysia Airlines board.

As it rebrands, Malaysia Airlines cannot make mistakes such as this

2 days after sending out termination letters to 6,000 staff, MAS is advertising for new staff
2 days after sending out termination letters to 6,000 staff, MAS is advertising for new staff
There’s a saying in our company that if a client’s employees are happy then that happiness will show in the way those employees interact with prospects and customers, thereby improving their experiences and the reputation of the brand.

When working on an Internal brand audit we’ll take a long hard look at the hiring and firing process and often make small but effective changes to the process. This is particularly so when looking at how firms fire people because unhappy staff often have a grudge to bear when they are let go and in a social media world this can be damaging.

Malaysia Airlines is already a damaged brand which is why it has embarked on a restructuring exercise that includes more than 6,000 job cuts. A lot of effort is being put into helping those staff reintegrate themselves back into the economy but this is not simply about getting them another job.

Keeping all those ex staff after they have left MAS will require very skillful communications and an integrated effort by all departments concerned. The news that 2 days after 6,000 staff were sent their termination letters, the MAS website is still recruiting cabin crew and suggesting there are other vacancies is a huge mistake on the part of those responsible for the brand.

There is no room for error in the restructuring of Malaysia’s finest, most high profile global brand.

Is this where my love affair with the BMW brand ends?

Dear BMW

I’d like to take this opportunity to thank you for letting me be your customer for more than 25 years. During that time I’ve had some amazing experiences with a brand for which I’ve always had a soft spot.

I remember as soon as I could afford a ‘proper’ car, I went out and bought a BMW. I was living in Bahrain, it was 1989 and I purchased a stunning 1982 635csi with a little rubber spoiler on the boot. Black with red leather interior it was a beauty. Of course it was seven years old so always broke down but I was young and didn’t care. Even in the summer, with the temperature hovering around 45 degrees C when I found myself sitting yet again in a pool of sweat by the side of the Shaikh Khalifa highway whilst waiting yet again for Ali (we were on first name terms) to arrive in his tow truck, I felt privileged.

BMW 635csi
BMW 635csi

I saved up and soon purchased a brand new British racing green 525i that was ideal for those long journeys across the desert to Riyadh. At around this time and due to competition from Japanese and American brands, you began to position BMW as a luxury brand (we won’t mention the disastrous acquisition of Rover and the ridiculous belief that you could position Rover as a luxury brand).

I think it was 1992 when I bought the 5 series but I have to say it was tough selling it a few years later, around the time you lost about £700 million in one year (close to £2 billion in today’s money) and your brand was struggling to live up to expectations.

525i ate up the miles between Bahrain and Riyadh
525i ate up the miles between Bahrain and Riyadh

When I arrived in Malaysia after my stint in Bahrain, I couldn’t afford a new BMW and anyway your reputation here was so bad then that I wouldn’t have bought one if I could. But using service and customers to drive the rejuvenation of the brand culture you turned around your poor reputation and kudos to you.

The good news was that by 2012 I was in the market for another new BMW. By now I’m a husband and father and doing well. So my wife and I bought an X1. To be honest that was a mistake but as offloading it would incur a massive loss (it didn’t take off in Malaysia) we decided to sell it to one of our small companies and buy an X3. By the way, what exactly is the X1? Is it a hatchback? Is it a family estate? To be honest I could never figure it out but I’m glad we got rid of it because the plastic on the dashboard buttons was beginning to come off and the door was creaking and the rear window was starting to rattle.

Now the X3 was a hit with everyone in the family and we’ve had some great times in this car. It purred on long journeys to Singapore, Terrengganu or up to Penang. The X3 lapped up the school runs and trips around town and by the end of 2014 we had done close to 100,000 kms. Not huge mileage, especially for your cars but that’s when things started to go wrong. Sure there were similar little niggles to the X1 – rattling window and creaking door but we tolerated them.

In mid 2014 the X3 started to spew grey smoke out of the exhaust. Now remember we live in the tropics so cars are fairly warm when they start so it wasn’t due to a cold engine but I wasn’t bothered as this is a BMW and I’d read on the BMW website that, “Original BMW parts are subject to the same standards of quality as BMW vehicles – from construction planning to quality assurance.”

At BMW it would seem longevity is up to 2.5 years
At BMW it would seem longevity is up to 2.5 years

Of course when I read that before buying a car I felt reassured and it was one reason why I had ignored the fact that BMW only gave a 2 year warranty when competitors were giving anything from 2 – 5 years. But reading it again it suddenly looked like a bunch of words stuck together to make me think the components were solid and reliable. Obviously not.

So I went back to the website and read it again and realized that the copy was hard to understand. I mean read this, “The precision and high-quality construction of each original BMW part guarantees that all components in your BMW work together perfectly – for optimum performance and maximum safety and longevity.” Is it common then for some manufacturers to construct parts that don’t worth together perfectly? And what’s the definition of longevity in Munich? When it comes to certain components is it less than 30 months or does it depend on the component?

As I was considering what to do about the smoke, the airconditioner stopped working and in the tropics you need aircon. So we sent the car to the dealer we bought it from and asked them what was wrong.

They told me that both the compressor and the turbo needed to be replaced. Now I have to say I was taken aback by this. We’re talking about a BMW here and although I’m no petrol head, I was confident these components should last more than 30 months, especially as BMW prides itself on the longevity of its parts (assuming longevity is more than a couple of years). So I scoured the Internet looking for complaints about the X3 turbo unit and compressor and couldn’t find any!

One website http://www.consumeraffairs.com features an astonishing 786 complaints about BMW but as far as I can see not one of them is related to these 2 components. Another site, http://www.bimmerforums.com also has a surprisingly large number of complaints about BMWs but nothing about these components which again suggests to me once more that I was just unlucky and got a car with 2 faulty components. After a great deal of searching, all I could find was one poor BMW user who had to wait 22 years before he could replace his compressor.

As for the turbo issue, most online discussions around the current generation of turbos suggest a lifespan of up to 250,000 miles. I thought that was a little ambitious so I halved it which meant I should get 125,000 miles or about 200,000 kms. My X3 has done less than 100,000 km and the turbo is kaput.

Unless the longevity of your components means no more than 2.5 years, I think you’ll agree that these two bits of hardware should last considerably longer than they have done on my car. I also own a Mercedes C250 and a 5 year old Suzuki and neither of these cars have any problems with these or other major components.

I contacted my dealer and asked them to replace the parts free of charge because it doesn’t take a rocket scientist to realise I was just unlucky and had got a faulty car or at best a car with faulty equipment. And in today’s transparent, human environment and with your focus on the customer as well as our long association, I thought this would be a relatively simple process. After all, all I’m doing is asking BMW to take responsibility for the issue.

At the same time, on December 18th 2014 I wrote to BMW customer service in Munich and received an unsigned email the same day telling me my complaint had been forwarded to the relevant department for assessment. I can only assume that assessment is continuing because as of today, 19th January 2015 I haven’t heard from anyone.

Meanwhile the dealer immediately offered a discount of 20%. I took this as a sign that he agreed with me because logically if it was common for these components to fail so quickly, they wouldn’t have offered me a discount. I wasn’t happy with this discount and realizing the dealer isn’t the manufacturer, I decided to contact the head of BMW Malaysia.

The only way to get hold of Mr Harris is through his secretary. I don’t know if she passed my email to him because he didn’t reply (but she did tell me when I called her that he is very busy) but she did pass the email to staff in customer service (the irony) and for some reason to the after sales area manager who was the only one to contact me, unless you include a variety of automatic ‘out of office’ emails as contact.

The After Sales Area Manager wrote to me (spelling my name wrongly – that really bugs me because it suggests sloppy standards and that’s not good in the automotive industry, ask British Leyland and a host of other dead automotive brands).

In his letter he informed me that BMW cars have a 3 year warranty on paint defects and 12 years unlimited mileage against paint corrosion and a bunch of other irrelevant stuff that just rubbed salt into my wound.

So I wrote back to him suggesting it is only right and fair that BMW takes full responsibility for these defective components and replaces them free of charge. I asked him as the representative of BMW to accept this responsibility and ensure this negative experience doesn’t escalate further.

Later he called me and we spoke for about 10 minutes. I once again explained the problem and when I finished he said it didn’t matter because BMW was not going to replace the parts free of charge and that “You have a contract with the dealer not BMW.” Stunned at this response I asked him to pass me to someone in customer service or management who might be a little bit more empathetic but he refused saying, “I’m not going to escalate this higher.” Shocked I told him that in that case I would take my complaint public and he laughed and said, “I’m going to end this call because you are wasting my time.”

And that’s as far as I got. All I wanted was you to accept responsibility for a couple of substandard parts. To see the bigger picture and give a little bit back after 25 loyal years and numerous positive recommendations. But I didn’t get it. There was no empathy, no demonstration of your customer focused values, despite what you say in your recruitment video and a complete lack of concern over my situation.

So as it stands I really can’t see myself buying another BMW because I’ve lost faith in the brand. I really like the clever way you use a German speaking Chinese lady to communicate your caring and customer focused culture and “reaching out to the individual and speaking to him in a very personal way” but as a customer, I’m not feeling it.

Certainly that culture hasn’t filtered through to the people in your office in Malaysia. Certainly not the one who told me “he was going to end the call because I was wasting his time”. And contrary to what the confident girl said in the video, the culture of your company appears to be very different to what it actually is.

My friends will probably be happy because I’m a very vocal brand advocate so at least they won’t have to listen to me yapping away at how great BMW is. But they do have to listen to me whine about the cost of the repairs.

We’re going to miss those beautifully packaged boxes you send out with the “exclusively for BMW white card owners” on them that include a desk calendar for me to promote you and a brochure with ‘special offers’ that are not as good as I can get myself if I go directly to the company but I know you mean well.

So it looks like it is goodbye from me, your friend and advocate of 25 years.

Marcus Osborne – Kuala Lumpur. January 2015

Brands have a responsibility to tell consumers the truth about their products

Numerous papers have been written on the influence of advertising in developing countries. Most of the papers suggest that historically advertising influences consumers more in the developing world than it does in developed countries.

This probably stems from a ‘traditional suspicion towards the ‘middleman’ as opposed to a belief that manufacturing or production is more ‘honourable’ or ‘respectable’’. Malcolm Harper “Advertising in a developing economy”. The assumption being that the manufacturer’s message has an air of respectability about it whilst the sales pitch of a salesman or middleman should be viewed with suspicion.

Firms, especially Western firms spend a lot of money on advertising in Asia to convince consumers to buy their products. The problem is of course that far too many consumers have been let down by products that fail to live up to the promises made in the advertising. This is one of the reasons quoted for the advertising fatigue across Asia.

In fact many experts suggest this is also why Asian consumers are so obsessed with discount and, perversely Western luxury brands with a clear evidence of a quality heritage. Clearly, if brands want to continue to have an influence on consumers, they must be honest with those consumers.

One firm that always spends big on advertising is Proctor & Gamble (P&G). According to Ad Age P&G spends an incredible US10 billion per year globally on advertising. In the first 9 months of 2014 P&G spent US$48 million on traditional media in Thailand and often its ads are dubbed to be shown across national borders.

The ad above was shown in Malaysia but looks as if it was produced in a different language. The ad shows a family all working together to get the son through his exams. However, the dad appears to have a cold and although the mum stops his sneeze with a pillow, the voiceover tells us that germs can spread through fabrics which the wife complains are hard to wash.

Cue voice over claims that Fabreze Ambi Pur eliminates flu viruses and odours, 99.9% of germs and freshens fabric, leaving a light scent behind”. The ad closes with the son getting an A+ and the line “Odours and flu virus go, freshness stays.”

I think that based on the ad, a lot of possibly gullible consumers are going to think that by using this product they won’t have to wash big items like blankets, carpets and cushion covers.

Air fresheners and in particular Fabreze Ambi Pur are very popular in South East Asia. Get into a car in Malaysia, Singapore, Indonesia or Thailand and the chances are you’ll see a Fabreze Ambi Pur product placed in front of the air conditioning vent.

Many government offices have machines on the wall that squirt out similar products at regular intervals. And the Malaysia Ambi Pur Facebook page has 90,000 Likes and the Thailand Facebook page has nearly 160,000 Likes.

That’s an impressive following. But can Ambi Pur really eliminate flu viruses? Can it really eliminate 99.9% of germs? And what are the effects on humans of the chemicals contained in these products?

According to the sustainable baby steps website, Fabreze is a dangerous product. The site claims it contains a total of 87 chemicals, many of which are supposedly dangerous to humans. It suggests that Fabreze doesn’t clean the air but instead masks the odours with chemicals. The site goes on to provide a number of natural, inexpensive ways to keep a home smelling fresh and healthy.

Another site that claims to ‘set the standards for safe self care’ says that Fabreze contains phthalates which are ‘hormone-disrupting chemicals that have been linked with childhood asthma.’

P&G doesn’t share any of the apparently harmful ingredients in Fabreze. Oddly, the Ambi Pur ad is filed under education on Youtube.

P&G is a global brand and an influential advertiser in South East Asia. It maybe that spraying chemicals on a cushion is not harmful. Whatever it is, P&G has a responsibility to educate consumers properly, truthfully and in a transparent manner. Otherwise, it will lose its respectable tag.

You need to track the reputation of your brand online: Infographic

Recently I was asked to map out a plan to develop some substance around the CEO of a major organization in Malaysia. The belief was that although he heads a hugely successful company, his personal brand lacks gravitas and this may count against the firm in the long run.

And they were right because the reputation of a CEO is inextricably linked to the reputation of a company. Just look at the fortunes of any CEO who had a good reputation then lost it.

Or the fortunes of a business whose reputation was painstakingly built over years, only to fall in a heartbeat because of C level indiscretions or dodgy practices.

Here in Malaysia errant CEOs generally leave quietly so we don’t often hear about such reputational issues but there are plenty of examples of the above. Because of the increasingly litigious nature of society, I’m not going to name names but think of the automotive, aviation, banking, steel and telecommunications industries amongst others and you should be able to work out who I am talking about.

Even in the consumer trenches, a company with a poorly respected CEO or dodgy reputation is going to struggle to find enough customers to build a brand. After all, would you buy from a company with a poor reputation? If a company with a questionable reputation submits a tender to your company, would you consider them? With so many alternatives in the market, there is no need to do so.

Even if the CEO has a solid reputation, he is often the difference between the company and a competitor. If he lacks charisma he may struggle to compete effectively. Tracking his reputation online will enable firms to identify what issues to address, in which channels and where and when. The effectiveness of solutions can be tracked and improved almost immediately.

In today’s social economy, where consumers not companies define brands it is imperative that every organization tracks its reputation online. This is even more important here in Asia where consumers are more likely to take to social media to complain and raise issues rather than connect directly with a company.

Unfortunately many companies still don’t see the benefit of tracking their reputation. Hopefully that will change with this handy infographic from Digital Firefly which shows why companies need to make reputation management a top priority – NOW!

Tracking your reputation online has never been more important
Tracking your reputation online has never been more important

Stop advertising and start branding part II

A fascinating insight into the social media and mobile shopping habits of consumers in the United States, United Kingdom, Australia and Singapore has just been released by SDL in the UK.

The survey size is a little small – 4,000 people in four countries – but the results unearth new data on how social media and mobile are influencing how consumers interact and build relations with brands.

Singapore participant breakdown
Singapore participant breakdown

Findings include:

33% of respondents from all four countries have acted on promotions seen on social media.

58% of respondents have shared positive experiences online and have sought advice from friends and family when talking about brands on social media.

U.K. respondents are more likely than respondents from the other four countries to complain about service on social.

When respondents express feedback, Facebook is the most popular platform to do this.

Showrooming (visiting a physical location to evaluate products and services even when you know you will buy online at another time) is increasingly prevalent as 77% of participants showroom.

Experiential branding key to branding success
Experiential branding key to branding success

62% of the participants use a mobile device when in stores to compare product prices.

69% of respondents from all four countries expect a brand’s online store, mobile app, and physical store to offer the same pricing, discounts and sales.

Pricing consistency is expected in all countries
Pricing consistency is expected in all countries

What can brands learn from this thought provoking survey?

They need to understand their relationship with consumers and what resonates with those consumers.

Brands that ensure parity in pricing and products across multiple channels will have to place greater emphasis on the customer experience and experiential branding if they want to win and retain business. Those that compete on price alone will soon be out of business.

Department stores and other retail outlets that represent multiple brands will have to work harder to engage consumers and ensure a positive brand experience otherwise they face the prospect of losing customers, possibly forever.

Mobiles are changing the way consumers research and learn about brands.

Brands that take the time to build relationships with core fans or brand evangelists will see their brands promoted to thousands of fans for minimal financial investment.

Those brands with digital brand strategies that go beyond tactical campaigns online are increasing sales through loyalty and advocacy.

Brands that try to control content and manage corporate driven messages and ignore consumers are unlikely to last very long in the consumer economy of today.

Telling the brand story online should be done across Facebook and other popular platforms with the ongoing development of corporate and consumer content.

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

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?

How Tourism Malaysia should have approached its social media strategy

Twitter, facebook and other social media communities have been buzzing with comments related to the RM1,800,000 (US$600,000) Tourism Malaysia (TM) is spending on Social Media (SM). Here’s a little background on the story.

Initially, the deputy minister of tourism was quoted as saying that the RM1,800,000 “covers the cost of hosting various activities on the facebook page, including six interactive Flash applications, development and maintenance work and advertising.” He went on to say that, “the ministry spent nearly RM300,000 to develop each of the six applications on their facebook page.” I could only find one (see screenshot below).

This statement was rejected by citizens and government ministers alike with one minister suggesting it was a waste of funds as the facebook site is free and using the ‘Visit Penang’ facebook page as an example (see screenshot below), explained that it was set up for free and had attracted over 100,000 fans.

Citizens were even more incensed, with one enterprising and concerned tax payer setting up a facebook page that parodied one of the official government pages (see screen grab below). Within hours, this page had attracted 5 times as many ‘likes’ as the official page.

A couple of days later, the tourism minister announced that, “the RM1.8 million (is) for a full social media branding campaign, and not just to set up a facebook page.” She went on to say, “”(The money) is for responding, informing, interaction and monitoring (work on the facebook page), evaluation, data collecting, content development and advertising on Google, Facebook, etc…”

With her comments came an official release that stated the costs were for the following:

1. Technical

* Dedicated hardware deployment
* Software licencing
* Front end applications
* Application server engine

2. Development of six campaigns that require the following:

* Flash games engine
* Flash programming and coding
* Creative development and design
* Campaigns ideas and concept
* Front-end Flash design
* Testing and debugging

3. Campaign promotions

* Digital advertising campaigns on Google and facebook
* Contest, page wall and tourism fanpage content management
* Collection and management of database

The tourism minister then went on the offensive, asking reporters, “Do you think it’s cheap to set this up?” And as if to justify the expense, explained, “Tourism Australia is spending RM150 million (US$50 million) for the next three years on social media.”

Most recently, the minister stated that the allocation was to ‘run, manage and monitor a tourism campaign in the social media, including RM360,000 for advertising and over RM500,000 for prizes for the contests organized.’

‘Disappointed and hurt’ she is reported to have invited the Malaysian Anti-Corruption Commission (MACC) to investigate the campaign finances.

It is too early to determine the results of Tourism Malaysia’s first foray into social media but whatever the results, the Malaysian government, the tourism minister and the tourism ministry could have handled the matter more effectively and efficiently.

One would be forgiven for thinking that Tourism Malaysia has some internal communications issues. Because when the deputy minister first explained what the funds were spent on, his statement didn’t make sense. The deputy minister’s statement suggests he was provided with notes written by someone more familiar with the workings of an IT department than the requirements of a social media campaign. This has caused the deputy minister to be embarrassed in parliament and I hope someone has been reprimanded.

In terms of the social media exercise, Dave Duarte MD of South Africa based Huddlemind and a social media expert who was in Malaysia as the story broke stated in his blog that the exercise has already justified its expense.

His rationale is based on his guesstimate that the average conversion rate of a facebook fan to a customer is approximately 3% and because the average domestic tourist spends RM2,500 with 40,000 fans, the facebook page has already recouped its expenses.

This statement may be a little optimistic but it is certainly worth tracking the number of ‘likes’.

In terms of the game itself, it seems OK, leaning heavily on guitar hero. Personally I found the racial profiling of the characters unnecessary. Playing the game requires one to be more dexterous than I and as a result, the score required to qualify for the iPad 2 draw will always be beyond my means! I suspect I’m not the only decision maker in the family who will feel the same and this resulted in me leaving the page rather disappointed. But I digress.

So Tourism Malaysia’s (TM) long overdue foray into social media has not had an auspicious start. In the future, what can this key organization that contributes over RM50 billion (US$16.6 billion) to the national purse do to ensure tax payers get value money for all social media branding initiatives?

Here are 10 key recommendations for future initiatives

1) A social media strategy or any of the tactics within that strategy, is not the responsibility of the IT department. In future, the head of the department responsible for social media initiatives should represent the ministry when talking to the press and his press release should be prepared by him and his department and not by anyone else. Although the minister or his/her deputy must respond to questions in parliament, it is wrong to expect them to be knowledgeable about branding tools such as social media. Ministers do not need to talk to the media about such relatively small activities.

2) Social media requires an ongoing strategy and interactive initiatives such as the facebook pages are merely tactics within the strategy. Successful social media initiatives must be integrated with other branding initiatives.

3) I strongly suspect TM didn’t think through what they were doing when they launched the facebook pages. First of all it is important to develop a plan. Within that plan and before embarking on a social media strategy, it is important to identify what are the goals and how can facebook add value to branding efforts. Facebook is obviously an additional channel to interact with prospects and customers but why do it? To get more fans? Why? To get more participants? Why? How does TM convert those participants in the competition into leads? How does TM put a monetary value on social media activities? What metrics should be used? All of these should be outlined in the social media plan before implementation.

At the moment, registration is only required if participants want to be included in the draw for the iPad or meals. So how will TM optimize interactions with those participants and get them to become customers?

4) It’s also important to get fans to interact with other participants and to interact with participants. Critical to the success of any social media campaign are the conversations. Channels such as facebook are not platforms to broadcast messages about the company or in this case, Malaysia. The cuti cuti 1Malaysia facebook page has generated over 40,000 likes in a very short time and this is impressive. Furthermore, many of the postings on the wall have generated plenty of comments but TM is failing to enter into discussions with those who comment, preferring instead to pass that responsibility to others (See screen shot below). Interacting and engaging with people who comment is what social media is all about and will give TM more visibility, improve reputation and increase trust.

5) This first foray into social media is pretty basic and there is nothing wrong with that. But in future, Tourism Malaysia must look to be more innovative with what it does on social media. Fans will soon get bored of commenting and uploading images, especially if issues raised are ignored. Tourism Malaysia must encourage fans to be more creative. Perhaps by designing trips, submitting and voting for slideshows or setting up sub groups of specific niche related fans.

6) What makes being a fan special? At the moment nothing really which is a good and bad thing. Good because it means more people will become fans but bad because TM doesn’t know how many fans are really interested in the product or just want to win an iPad. In future, TM must look for ways to offer special content to fans or competition participants. Don’t be afraid to ask people to register.

7) This maybe a bit difficult for TM because technically, it isn’t allowed to sell Malaysia, only promote it but that doesn’t mean it can’t turn facebook into a potential profit centre. TM should make it easy for fans to book trips to destinations featured on the TM facebook the way it does on its website.

8) TM is still using mass media tactics on social media channels. This is ineffective and pointless. TM needs to stop thinking demographics and start thinking communities.

9) This applies to everyone and not just TM. Pause before creating a facebook group. Managing a group is difficult, time consuming and requires talent and patience to be able to respond to issues raised and continue a conversation till it’s natural end. TM launched four or five facebook pages at the same time! That requires a lot of talented manpower and judging by the lack of responses to issues raised, TM was ill prepared. Also important is what to do with the facebook group once the contest or event is over. It you want to delete a group, you have to manually delete every member of the group. With 40,000 members and growing, and with at least two clicks required to delete a member, the cuti cuti site will take a lot of manpower to shut down! If TM decides not to close down pages, in five years time, there will be a lot of dead pages that will confuse people.

10) The big question with facebook is what to measure and how to calculate ROI. In 2010 a study stated that fans of the top twenty brands on facebook were worth an average of US$136 each. With 40,000 fans, that would make the cuti cuti page worth over RM16 million! However the study was panned as it was actually a measure of the value of customer loyalty and not a measure of how much facebook had contributed to that loyalty. Moreover, the average of 20 brands like Nokia and Apple bears no relevance to tourism anyway!

As TM doesn’t technically have a product to sell, it is hard to know what to measure. For instance, TM can’t measure the ROI of acquiring a prospect and turning that prospect into a customer via facebook and comparing it with other customer acquisition programmes.

In reality, Measuring the ROI of facebook fans is probably impossible, especially for a national tourism agency such as TM and especially when the facebook page features a competition that allows multiple attempts from the same user and the end product is a future staycation.

As the dust settles on this rather unfortunate event, TM and its agency has a lot of work to do to sort out its social media strategy. It’s not a great start, and a lot of mistakes have been made. The key is not to make the same ones again.

Brand communications is no longer about broadcasting a company position across multiple mass communication platforms.

In today’s always on world, an important part of any brand strategy is the communications strategy but if Asian brands are going to be taken seriously, Asian CEOs must understand that times have changed and that we are living in a new world order. And in that new world order, the success of a brand is in the hands of the consumer not the corporation.

Today CEOs must understand that how consumers source information about brands and where they source that information from, has changed dramatically over the last 5 – 10 years. Where previously they learnt about brands from television commercials, newspaper advertisements and the recommendations of friends, today they learn about brands from Facebook communities, Twitter lists and YouTube channels.

Gartner estimates that mass marketing campaigns now have only a 2% response rate and this is declining annually. Despite this, Asian CEOs, so long in control of their brands and reluctant to lose that control, continue to try and shape brand perceptions by broadcasting positions repeatedly across traditional media via multiple and repetitive campaigns.

But Asian CEOs need to accept that in today’s noisy, crowded, dynamic, mobile market place, a brand cannot be shaped by repetitive communications campaigns that try to appeal to as many people as possible in the hope that someone will buy and communicated across traditional media. And those CEOs must understand that the success of their brands is too important to be left in the hands of marketers and advertising agencies.

According to Gartner, by 2015, at least 80% of consumers’ discretionary spending will be influenced by marketing across social and mobile platforms. And it is imperative that CEOs do not allow marketing departments to continue the mass market model of invasive campaigns that try to push a one size fits all corporate position onto consumers.

So if building a successful brand requires more than a traditional approach to marketing where reaching anyone and everyone and making them all aware of the brand with a generic message broadcast multiple times across multiple channels is not the way forward, what should Asian CEOs do if they want to challenge the global western brands?

The first thing is that this new world order is good news for Asian CEOs because it means they can stop wasting funds on expensive creative driven initiatives that require deep wallets to fund advertising campaigns repeatedly across traditional media in the hope that they will resonate with consumers and lead to a possible sale because the reality is, very few of them are noticed, let alone remembered.

Try this experiment. If you advertise in a daily newspaper or on TV, ask yourself which ads you remember from yesterday’s newspaper or on TV last night. Be honest. I doubt it is many. Personally I remember the ads from the Sunday paper because I was stunned at how many pages featured supermarkets and hypermarkets having a ‘cheap off’ on chicken wings, grapes and cases of beer.

And these are the very same newspapers that featured advertisements for Patek Philipe and Rolex watches, Lexus and Audi cars and other luxury products and services the week before!

And even if you remember newspaper ads or TV commercials, how many of the products or services advertised, have you interacted with? And of those how many have led to a purchase? And even if they have led to a purchase, what did the company do to ensure you come back again? I suspect they didn’t do anything and instead, after they spent all that money getting you into their store or to buy their product, they let you leave without getting some personal information in order for them to start to lay the foundations for a relationship!

In this era of smart phones and the half a million applications that can be used on them; In this era of social media with five hundred million Facebook users (6 million in Malaysia) of whom 50% are active every day and one hundred and forty million daily tweets on Twitter, many of them generated by Malaysia’s 1.1 million members; the proliferation of leisure time activities and abundant choice at malls and more, Asian CEOs must understand that the answer to brand building is delivering economic, experiential and emotional value to consumers and on their terms and across all touch points.

The global economic situation is a golden opportunity for Asian brands to take market share from established Western firms struggling to overcome cash flow issues and poor brand penetration. But it is up to CEOs to understand that they have to review traditional practices and take an interest, indeed responsibility for the brand and ensure brand departments understand that it is no longer enough just to advertise in traditional media and hope a brand will succeed.

CEOs must ensure too that at the heart of any new strategy must be the organization, making sure every brand touch point focuses on delivering value and communications departments must take social media seriously and understand how to deliver more engaged communications. And this will have to be done in a much more integrated, dynamic and fluid manner.

And whereas in the past, a series of the same full page ads repeated in daily newspapers or a number of prime time TVCs was generally sufficient to build brand awareness which would lead to a sale. Indeed, many consumers would actually watch a commercial and take a note of the brand and where they could purchase it. Those consumers would then go to the store, look for the brand and buy it. If the brand was unavailable they would take time out to come back again and again until they could make a purchase.

Today those same consumers don’t bother taking note of the brand names because they’re carpet bombed with messages throughout the day, every day. Many of those messages are making outrageous claims or are totally irrelevant to them. They are also too busy multi-tasking during the expensive commercial breaks. Furthermore, they’ve been let down so many times after believing those claims that they now often ignore them completely. And because consumers have so much choice and so many information channels, they don’t need to pay attention to messages broadcast via mass media any more.

Now consumers use social media and other tools where they inhabit communities that they relate to and trust, to seek information about brands. So it is in these communities where brands must learn to communicate and engage with consumers and deliver value that resonates with those consumers enough to make them want to own the brand.

Don’t get me wrong, I’m not saying don’t advertise but I am saying that if your organization is not on brand and all marketing initiatives are not integrated to allow you to deliver on the brand promise. And if your organization is unable to deliver value across all touch points and if you don’t use every opportunity to engage with consumers and collect data to help you get to know your customer and start to build a relationship with your customer, your advertising efforts will be wasted and your brand will not survive these extraordinary times.

In this crazy, always on, competitive market place it is these relationships that are going to help build a successful brand and not newspaper ads or TV commercials, no matter how cool they are and no matter how cutting edge is the technology used in the commercial.