I think it was Bill Gates who coined the phrase “Content is King” back in the mid 1990s. He was right then and he is right today, possibly even more so today.
In today’s economic climate, traditional media owners, desperate for content but unable to afford to produce it themselves, are increasingly looking to independent production companies to generate that content.
But ever more cynical consumers are skeptical of content distributed via traditional media channels, especially in Malaysia where the mainstream media is acknowledged as being controlled by the government. Even content on respected platforms such as the BBC, CNN and CNBC has come under scrutiny recently after questions were asked about content produced by UK company FBC media
At the same time, or perhaps as a result of this, consumers are now changing the way they interact with brands, both during the evaluation stage, purchase stage and, critically after the purchase.
In the past, despite the major investment required to attract a new customer, the brand owner would be happy to sell them something and let them go. If they didn’t come back, it didn’t really matter as there were an increasing number of consumers to replace the initial customer and competition was limited. Moreover consumers expected little from the brands they bought.
Now after a purchase, consumers want to be involved with brands and mindful of the lack of genuine information available, want to influence others. Thanks to social media, they can do this and will share information, thoughts and opinions about their acquisition, long after the actual purchase.
Those consumers also believe they have a right to a role in the development of the brand going forward. This means that increasingly we are seeing consumers create content that defines brands and not the brand owner.
So content is still king, but it is now created by consumers. The key is to influence that content in the same way as traditional media once did.
Recently I wrote a post about my experiences when I called the number on a billboard selling a luxury automotive brand. You can read the full article here
Basically I talked about how I rang this brand after seeing a billboard outside my office. I got through to the receptionist who asked for my number and said she would get someone from sales to call me back. Nobody called me back, even though the car costs about RM500,000 (US$166,000)! I thought this was an excellent example of why so many brands fail. But I didn’t think much more about it.
Then today I was sitting at a traffic light outside Bangsar Shopping Complex and I saw the same company had another billboard, this time it was advertising their jaw dropping top of the range V10 sports car that costs over RM1,250,000 (US$420,000) in Malaysia. Now this really is an exclusive motor and in the middle of last year there were orders for about 240 of them in the UK and a waiting list of 12 months. If they are only selling 250 odd in the UK I would expect them to sell no more than 50 in Malaysia. So you have to question why they market such an exclusive product on a billboard.
But this is not a rant about using old mass market mass economy models to sell luxury brands, this is about the fact that it is imperative that marketing campaigns are integrated and organisational excellence is at the heart of any tactical campaign.
And I know it isn’t at the heart of this campaign because whilst waiting for the lights to change I decided to call the number on the billboard and see what sort of a response I would get.
I called the number. No answer. Now it was 5.17pm and perhaps the receptionist has gone home. But I doubt the sales team had gone home. I bet they were sitting around wondering how to drive traffic to the showroom so they can make target this month and get a nice juicy bonus for Chinese New Year. Perhaps at least one of them might have been wondering why the expensive outdoor campaign they’ve been running for some time hasn’t generated any results!
I’ve tried to go and see these guys but the marketing manager tells me they are doing well. Here are some basic principles to abide by when you run an advertising campaign so that when you are doing well, you can do better.
1) You advertise on billboards to stimulate, inform, persuade etc. If you want to inform perhaps a 100 people in the country about a luxury product, spending large amounts of money on billboards or for that matter print ads in daily newspapers, is a complete waste of marketing dollars.
2) Consumers who can afford to spend over 1 million Ringgit on a car are unlikely to keep to your office hours. Make it easy for them to spend money with you.
3) Your advertising copy should appeal to a specific audience – in this case, those who can afford over RM1,250,000 on a car – everyone else is just getting in the way. So create copy that will resonates with that target market. This ad just mentioned the engine capacity and that was it! Ever wondered why mini does so well?
4) Develop metrics for measuring channel effectiveness. A simple metric for outdoor ads is a specially assigned number for that campaign.
5) Outdoor advertising is 24 hours. That’s probably one reason why you bought it in the first place! If you can’t have someone on standby 24 hours a day, install an answering machine or after office hours have calls diverted to a sales manager or sales director.
These are elementary and should be included in any strategy document created by a brand consultant.
Petronas is Malaysia’s state-owned energy provider and it is the only Malaysian company to be listed in the FORTUNE Global top 500 companies.
Its lubricants division, Petronas Lubricants International (PLI) in association with M&C Saatchi has recently launched a global brand campaign for its flagship product Syntium. M&C Saatchi is responsible for the creation and development of the overall campaign.
The campaign features a 30-second TV commercial that is currently being aired across Astro and Malaysian terrestrial TV channels, radio, print ads and digital initiatives although a quick search of ‘Petronas Syntium’ on Facebook and twitter uncovered zero activity.
And of course, as with any traditional creative driven campaign, there will be lots of below-the-line collaterals.
Costing only about US$350,000 (RM1,000,00) which includes production costs and execution, the campaign has launched in Malaysia and will be pushed out across PLI’s key markets including China, Thailand, Italy, South Africa, India and more. It’s not known if that amount includes the campaign execution across all countries.
M&C Saatchi states that ‘the new Syntium brand campaign was produced using state-of-the-art CGI animation with the core message of the ads reflecting PLI’s fresh approach towards knowledge and technology – Fluid Technology Solutions’.
Do consumers still pay attention to traditional campaigns like this one that haven’t really changed since the 1960s? I know it includes social media but there doesn’t appear to be much going on online. So it’s a yet more noise and clutter to add to the deafening noise consumers are ignoring.
Although I haven’t seen any of the TVC’s, print ads or heard the radio ads I’m sure they will be very well executed and the cutting edge CGI animation will blow me away but the question has to be, will it sell more oil?
Right near my office at Phileo Damansara in Petaling Jaya, a luxury German auto manufacturer has two billboards advertising its top of the range luxury autos. One is a saloon and the other is an SUV. I like this particular SUV so much that if I was still putting posters up on my bedroom wall, the SUV would be front and centre.
This company also has a number of billboards at other locations around the city of Kuala Lumpur and in the suburbs featuring a smaller version of the SUV (for which there is a 1 year waiting list) and other versions of the saloon. It also spends a lot of money on print ads and recently advertised their top end coupe in a Malaysian daily and a Malaysian business weekly.
Cars in Malaysia are expensive as import duties can go as high as 300% for luxury vehicles. The full page full colour ad with standard automotive blurb also stated the price of over RM1,000,000 (US$333,000). At that price, there are probably no more than a handful of people in the country who can afford the car. Even if there are a 100 or even a 1,000 people in the country who can afford the car, full page ads in national newspapers are probably not the most cost effective channels to communicate with those people.
Now I’ve actually approached this particular organisation in the past to ask if we can come in a make a capabilities presentation. We didn’t get past the marketing manager who basically said that as sales were very good there was no point meeting us.
Judging by recent reports, the company is certainly doing well after the launch of new models in 2008. In fact, the company claims to have been Malaysia’s fastest growing luxury car brand in that year with sales up an impressive 102%. Moreover, sales continued to climb in the first 6 months of 2010 with sales up 66% over the same period in 2009. Impressive figures and the company now claims to have about 5% of the luxury market in Malaysia.
Anyway, seeing this billboard on a daily basis with the telephone number prominently displayed, was beginning to get on my nerves. So I decided to call the number. After all, if you advertise your products on a billboard and display your telephone number, one can only assume that you want prospects like me to call you.
And if a prospect calls that number you better have the processes and systems in place to ensure that the person receiving the call passes it on to the right department. And you better have the right processes and systems in place to ensure that the next person in the process does what they are supposed to do. In this particular case, call the prospect back. Especially when we’re talking about a luxury product.
So anyway, I called the number and asked for information about the top of the range SUV. The receptionist was very pleasant and explained that she would get someone from the sales department to call me back. I gave her my mobile number and waited for the call. That was last Thursday, today is Sunday and I still haven’t heard anything. Bear in mind this vehicle costs over RM500,000 (US$166,000).
Generally the point of billboards is to create awareness. A telephone number is there in the hope that the keen, desperate consumer who wants the product so much that he will take the time to record the number and follow through with a call. Of course most of us just ignore billboards and the messages on them. Indeed, it’s rare for a prospect to call. But there are always incoming calls that may just result in an easy sale to one person who may become a customer for life so if you don’t have those basic processes and systems in place to take the information and pass it on, what is the point of advertising?
Here are some more tips that will help this company improve its profitability, the most important metric for branding:
1) The era of the global ad buy is over. Different markets require different communications strategies. Whilst it may make sense to create awareness of a luxury product via national papers in relatively wealthy western markets, it is a waste of money in developing markets where the demand for luxury products is limited to only a few.
2) Brand building is about the long term. When you launch new products they will, if you are extremely lucky, fly off the shelves or out of the showroom. But this is the exception, not the rule. And anyway, this doesn’t mean that you can become complacent, sit back, put your feet up and relax. Your competition will soon catch up and your moment in the limelight will soon be over.
3) The whole point of mass market advertising such as billboards and newspaper ads is to create awareness with mass markets. That is why weekend copies of daily newspapers are full of ads for hypermarkets, supermarkets, discount stores, sales and so on. But luxury products require more than a mass market tactic to make a sale. If you must use these old fashioned tools, use them to develop a database of prospects so that you can qualify those prospects and invite them to your showroom if you think they have potential.
4) Many companies will have a system in place to act on incoming enquiries. But who is responsible for ensuring those enquiries are acted on? The system must also ensure incoming enquiries are reported to sales management so that they can follow up with the sales department.
5) Brands are built on offerings of economic, experiential and emotional value. That journey begins with the first contact. It doesn’t matter how much you spend on advertising, if you can’t deliver that value, prospects will go elsewhere.
Now I’m going to call BMW to get more information on the X5.
I’m not sure if this is a genuine ad but it certainly got my attention and appeals to the neanderthal in me! It probably isn’t genuine because the copy is in English and there is limited contact information but I’ll share it with you anyway!
Building a brand in any country requires more than a series of tactical initiatives to create awareness and ‘get the name out there’. It takes a meticulously planned and integrated strategy that incorporates the participation of numerous stakeholders and initiatives, both internal and external. Internally to ensure the whole organisation is on brand and externally to ensure communications and content resonates with target markets and are communicated via relevant channels. There’s more but for the purpose of this article that’s enough for now.
And what if the brand is to penetrate other markets? There was a time when all it took to do this was a continuation of the positioning tactics carried out in the home country, perhaps with a few language changes in print media and perhaps some dubbing of TV commercials (TVCs). An over simplification perhaps, but essentially correct.
But as we all know, the world is very different today.
Building western brands in Asia
To build a Western brand in Asia today, as many international brands are finding out the hard way, takes an even more robust and integrated brand strategy that has at its core organisational excellence. Only once has that strategy been developed can the brand strategy be executed. And part of the brand strategy, a small but critical part, is the communications campaign.
This is particularly true of the automotive industry that has seen a number of well known European and other Western brands find it hard to repeat the successes at home in new Asian markets. There are other issues such as high duties etc but many European brands perform below expectations, despite large marketing budgets.
One of those is Volvo. Despite an extensive presence across most media, in 2009, out of a total industry volume (TIV) of just under 537,000 units, Volvo only sold 600 cars in Malaysia, South East Asia’s largest passenger market. This gives Volvo about 0.15% of the market. Although this is a slight increase over 2008 when Volvo sold 524 cars, it is way below the 2007 total of 752 units. Interestingly, in 1999 Volvo sold 839 cars, giving it 0.3% of the market. So Volvo’s market share of the Malaysian passenger car market has halved in 10 years. I think I know why.
Last Thursday, 28th January 2010, a half page full colour ad in the New Straits Times, (NST) Malaysia’s ‘premium’ newspaper caught my eye. The ad features the Volvo V50 and a headline “There’s more to life with Volvo.” The ad goes on to sell space and luxury using images of a kayak, a windsurfer and a mountain bike. The ad lists, in really small print, a number of dealers in key cities. There is no website address.
Last Friday 29th January 2010, Volvo ran another half page ad in the same publication, this time a spot colour ad. This ad features a Volvo XC60 parked on a snow covered road with the occupants, a man and a woman in warm fur collared winter parkas sitting in a pile of snow staring out at a snow covered landscape. This time the headline is “Volvo owners get more out of life!”
If I’m not mistaken, the traditional rule of thumb has it that you have approximately 3 seconds to grab a readers attention with a print ad headline, perhaps less in today’s noisy, cluttered world. I don’t know how effective the Volvo ads have been but I did notice that the offer in the second ad has been extended, rarely a good sign. I also noticed that there is no tracking mechanism in the copy. And, in case you can’t read it, the tagline in the print ad reads “Volvo owners get more out of life!” So the ad is targetting both existing and potential customers.
Coincidentally, there is a Volvo billboard outside my office, at the busy intersection of a very busy highway. The billboard ad features the Volvo XC90 Diesel. This time the headline is “Winner of fuel efficiency award.”
Sitting in my office in the Malaysian capital of Kuala Lumpur where the recent hot spell has seen the temperature top 40 degrees centigrade on more than one occassion and the humidity is often around 90%, I tried to figure out a couple of things.
1) What was the relevance of these communications to potential and existing Volvo owners in Malaysia?
2) Why are they using images featuring snow to sell a service in the tropics?
3) Why is an ad targetted at existing Volvo owners also trying to get the attention of non Volvo owners?
4) Where is the consistency?
5) Is this part of a planned out, integrated strategy or a series of one off tactics?
6) Why would anyone get out of a nice warm car and sit on wet cold snow to admire the view?
OK, ignore the last one.
Hemorrhoids and Frost bite
Well as far as I can tell, more out of life for the couple featured in the second ad is likely to be hemorrhoids and frost bite. I don’t mean to be fecetious, but what is the relevance to the Malaysian market? There are some marketers who insist that to build a brand you need to be first in a category and perhaps Volvo wants to be first in the frost bite category but I think not.
More confusing is the content. The main copy of the ad is encouraging existing Volvo owners to bring their cars in for servicing, repairs or to buy accessories and be entered into a competition to win vouchers that can be redeemed for more accessories and parts. Shooting off on a brief tangent, the takeaways I get from that copy, as a non Volvo owner are, in roughly equal amounts:
1) you are going to be spending a lot on parts and accessories so here’s a little help or
2) these cars are built so well that you will never actually win anything because nothing needs to be repaired but the model sold is so basic you’ll be spending a lot on accessories. Interestingly Volvo also offers a 3 year warranty/100,000km for cars sold in Malaysia so if you’ve got a new car you may have to wait 3 years to receive your prize!
Seriously though, The Volvo communications are confusing. Furthermore, according to the Star newspaper, 86% of Malaysians don’t trust advertising. So that means the print ads mentioned earlier are targetted at only 14% of Malaysians. Moreover, with an entry level Volvo S40 at around RM170,000 (US$48,000) it is off the radar of the average Malaysian so a mass media approach is a waste of valuable funds.
There are a number of other things Volvo can do to halt the slide in its market share and build a profitable brand in Malaysia.
1) Separate the acquisition strategy from that of the retention strategy.
2) An indifference to retention branding is short-sighted. Michigan State University estimated that US$1 spent on acquisition generates US$5 in revenue, while every dollar spent on retention creates US$60 in revenue. Bain and Co has estimated that increasing retention by 5% can increase profits by 25%. Companies have a 5 – 15% of selling something to a new customer, but a 50% chance when selling to an existing customer. But retention branding requires a completely different strategy to acquisition branding.
3) In the mass economy the brand communications goal was to increase awareness. This evolved into persuasion but the ultimate goal today is adoption. Adoption ensures the brand is seen as the best or, better still, the only choice. But adoption of a brand is not an event it is a process built on the back of organisational excellence and reinforced by the ability to deliver relevant solutions on customer terms.
4) Volvo cannot expect adoption if messaging is inconsistent and fragmented. If print campaigns and billboards are to be part of the brand communications, keep them consistent. Announcing fuel efficiency awards is not going to drive traffic to showrooms.
5) Review communication tools and explore social media options. I believe there is no benefit at all for a luxury product like Volvo to advertise in a daily newspaper in Asia.
6) Understand social media is for communities and those communities must be relevant. The only opportunity for interaction on the Volvo website leads the viewer to an international site. Volvo owners in Malaysia will want to be part of a community here, and learn about issues and opportunities in Malaysia, not in Istanbul.
The purpose of this article is not to embarrass Volvo. So if anyone from Volvo reads this article, please view my comments as feedback, not criticism. There are a number of automotive manufacturers making similar mistakes but Volvo caught my eye!
Chrysler has, like most US auto manufacturers, with the exception perhaps of Ford, seen its market share drop further in 2009. But this time it is down below the psychological 10% barrier at 8.9%, down from 11% in 2008. Sales are down a worrying 40% over the same period. This is not good, especially as the company stated in early 2001 that it intended to have 20% of the US market by 2005.
A restructuring plan in November 2009 introduced a number of initiatives including using models from Europe to mask the fact that Chrysler has made little investment in new products.
In what has become a depressingly familiar process, executives at the restructuring also introduced a number of new positioning strategies for the Jeep, Ram and Dodge brands. According to the executives, new models are to be redesigned or improved in times quicker than ever known to the industry. Ambitious sales figures include global sales targets of 2.8 million vehicles by the year 2014, of which about 60% are projected to be in the US. The firm forecast break even in 2010 and anticipated posting a profit in 2011. Revenues are forecast to be in the region of US$70 billion.
Specific brand initiatives include the biggest marketing budget for the Jeep brand in four years. Showrooms are to be redesigned to reflect off road heritage and Jeep managers will engage more with consumers at events. Meanwhile at Dodge, another new logo has been created to reflect a ‘sporty, youthful, inexpensive’ car. New entry level cars are to be available in different ‘flavors’ or equipped ‘differently’ not ‘expensively’. Are there such words as ‘differently’ or ‘expensively’?
Ralph V. Gilles was appointed President and Chief Executive Officer of the Dodge Car Brand in October 2009, with full profit and loss responsibility for the Dodge car product portfolio. Before this he was VP of design. He is responsible for halting the Dodge slide but to do so he is going to need more than a new positioning strategy, new logos and a one-size-fits-all approach to marketing. Unfortunately the signs are not good as he has appointed Wieden & Kennedy, an advertising agency to build the Dodge brand.
Gilles is on record as saying that Dodge cars are, “Cars that make you feel good, that are niche-like in their demeanor, but have mass appeal.” Well I’m sorry, but that sounds to me like a one-size-fits-all typical mass marketing ad agency driven concept that will, in the end, appeal to nobody.
This is a classic example of how a brand that spends millions on external branding, needs to also look at internal branding.
BMW has a number of dealers in Malaysia however, as far as I can determine, there are only 2 main dealers in the Klang Valley. We bought a BMW 3 series new from one of the 2 main dealers in Kuala Lumpur about seven years ago.
The dealer also has an impressive work shop and so we serviced it at the same dealer for the first six years. There is also a bodyshop and as my wife is the main user of the car, we’ve visited the body shop more often than most car owners. We own three cars but only one BMW so I consider us an ideal customer as there is obviously plenty of opportunity to cross and up sell us.
Indeed we’re intending to sell the 3 series and buy a new car in the next 3 months. However before we do so, the car require needs some attention.
Although we get plenty of generic direct mail and the occasional and predictable after service call asking if we are happy from the original dealer, the original sales person moved on a long time ago and we haven’t got a call from anyone else on the sales floor. Even when the car was 5 years old, an ideal time to sell and buy a new car, we didn’t get a call inviting us in for a test drive.
The original dealer hasn’t tried to build a relationship with us and therefore we don’t have any loyalty to them. So we sent the car to the original dealers main competition in the Klang Valley and asked them to look at the car and quote for the repairs.
Now in my business, if a client who has been with my competition for 7 years, were to knock on my door and offer me the chance of getting his business I would be all over him like the proverbial white on rice! Customers are the source of profits. Without them, brands would not exist. Existing customers are the most reliable source of future revenue. The thought of taking one of those nice profitable customers away from the opposition is, I have to say, a pleasant thought.
After all, we’re in the midst of a global recession that has seen marketing and other costs slashed. Passenger car sales are predicted to be down over 15% this year. In this environment, new customer acquisition is a massive drain on dwindling resources and any prospect is valuable, especially one that walks in the door and has “I’m a genuine prospect’ written all over him.
But no, instead of looking at us as an opportunity. An opportunity to acquire a new customer from the competition, we were viewed as another expense and the mechanic told us that they would carry out the inspection but would charge in the region of RM250 (US60)!
As you can imagine, this riled me. Sure I’m going to compare the quote with a quote from somewhere else but so what. That is a cost of doing business. But surely it is important to look past the issue at hand and the opportunity for future business?
With the right internal brand that includes standard processes for new prospects that are essentially a number of simple questions that lay the foundations for rapport. A dealer, who in this case represents the BMW brand, will be well positioned to acquire a new customer for a minor investment of RM250.
In this instance, I have a negative impression of the dealer and BMW that will require a lot of work and a much greater investment, to undo.