A definition of branding that will help you to build a global brand


This article first appeared in the 30/09/2011 edition of The Malaysian Reserve

Over the years, companies have invested phenomenal amounts of money in marketing and advertising activities such as sales calls, direct mail, TV, outdoor, indoor, print and other advertising, brochures, leaflets and more. Indeed, according to Nick Wreden in his book Profit brand, How to increase the profitability, accountability and sustainability of brands, over US$1.5 trillion is spent annually on marketing (including advertising) worldwide and yet according to McKinsey, a management consultancy, up to 90% of products fail to become brands.

With little or nothing to show for these significant investments, companies looked to other disciplines and soon Branding was considered the way forward and the last 10 years has seen a major change in the resources committed to Branding.

As a result of this interest, hundreds of traditional books and ebooks have been written on the topic of Branding. Thousands of newspaper and magazine column inches have been dedicated to the discipline. Workshops and seminars have been held all over the world, all promising to teach business people how to Brand. These presentations are often uploaded to slideshare and Youtube videos have appeared, all with content related to Branding.

Many companies, including I suspect, yours have explored the concept and many have actually embarked on what they thought was a branding or rebranding exercise. Indeed, only recently, Malayan Banking Bhd (Maybank) announced it had gone through a rebranding exercise and even the Prime Minister attended the press launch of the new ‘brand’.

At the press conference, Malayan Banking Bhd President and CEO Datuk Seri Abdul Wahid Omar unveiled a new logo and explained that the bank would be spending RM13 million on the implementation exercise across the Asian region and that it would take about a year.

On the face of it and with the only evidence a new logo, this does not look like a rebranding exercise. This is more like a brand identity makeover or corporate identity reengineering, nothing more.

Another financial institution recently made a similar announcement and stated that it would spend RM15 million on a rebranding exercise. Soon after I received nine emails for a product that I didn’t understand and with a tagline that offered an exclusive deal for MasterCard holders even though I am not a MasterCard user.

Other well-known companies from the transportation, media and distribution industries have recently announced rebranding exercises that have actually been little more than a new advertising campaign.

The reality is that the new Maybank logo and identity will probably not make a difference to the brand and how consumers and organizations view the brand or the profitability of the brand. Think about it, when was the last time you signed up with or changed your bank because of a competitor’s logo?

This confusion is not Datuk Seri Abdul Wahid Omar’s fault. If we have to point fingers, we should probably point them at the marketers and advertising agencies responsible for muddying the branding waters.

It is because they have confused business owners and consumers with their contradictory interpretations that there is still a lot of confusion about Branding, the concept of Branding, what constitutes a Brand, what is Branding and how to build a Brand.

But this article is not about pointing fingers it is about identifying a definition of branding that will help Malaysian SMEs and other companies use scarce funds effectively and efficiently.

So what is a good definition that Malaysian companies can use as a foundation for their branding efforts?

We created this definition in 2004 and it still rings true today:

A brand is a long term profitable bond between an offering and a customer.

This relationship is based on offering economic, experiential and emotional value to those customers.

And it is backed up by operational excellence and consistently evaluated and improved.

 

We have used this as a foundation to build Malaysian brands and all of them have benefited from using this to take their brand forward. But what does it mean and how can Malaysian companies like yours use it as a foundation for their branding efforts? To do this, we need to break the definition down into three parts, as per the paragraphs above.

The first paragraph relates to two key elements, profitability and retention. One of the reasons that advertising, marketing and other traditional communications campaigns are so ineffective is that too many companies spend an absolute fortune getting a customer into their shop or showroom and then after the customer buys something, they just let them walk out the door! Isn’t it incredible that firms let customers walk out the door without attempting to at least try to build some sort of bond with them?

If you don’t why should the customer come back again? Don’t kid yourself that your product (there are some exceptions) is so unique that they will ignore other products and fight off all the attempts to lure them into competitor stores even though you have absolutely no relationship with them.

Profitability is an important branding metric, much more important than reach or awareness. It is estimated that up to 15% of a firms customers are unprofitable. You need to know who are your unprofitable customers and get rid of them.

If you have a car that won’t start and you send it to the garage and the mechanic says the engine is broken so you take the car to the paint shop and paint the body, will it help to fix the engine problem? Of course it won’t. It is the same with a brand. If you are receiving numerous complaints about the quality of your products or the time it takes to be served at a branch and you ask an advertising agency to create a new logo and you put that new logo on all your company materials, it won’t solve your quality or service issues or make your brand any better.

But if you carry out research with your customers and identify what are their requirements for economic, experiential and emotional value and then match your product attributes to those requirements for value you will make sales. And if you’ve laid the foundations for retaining those customers, as mentioned earlier, then you will be on your way to building a brand.

And by developing this emotional connection with your customers in which you deliver economic, experiential and emotional value, which incidentally will be done across multiple touch points such as when they use the counter service, through your correspondence and marketing collateral, the way you handle enquiries, your packaging, in one on one meetings with your representatives and so on, there will be no interest or need for them to take their business elsewhere.

In fact you will be surprised at the effort they will put into returning to you. And provided you keep your product or service relevant and continue to interact with those customers across platforms and channels that they engage with then you will be building a brand.

Operational excellence is a key ingredient in your quest to build a brand. It doesn’t matter how much you spend on marketing, sales, advertising etc if your organization isn’t efficient and effective it will struggle to deliver value and ergo, build a brand.

Finally, it is important to continually improve to stay relevant so you must track, evaluate and improve your brand on a continuous basis.

Instead of looking at branding as a creative exercise or short term tactical communications exercise, look at it as a holistic strategic initiative that requires internal and external research, investment in retention and not just acquisition, investment in the organization and a desire to constantly improve.

Follow these rules and you are more likely to build a global Malaysian brand.

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?

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.

How to build a brand in Asia today


Building brands has evolved from the one dimensional, top down era where the company controlled the relationship and essentially managed that relationship using broadcasts across mass media such as TV, Out of Home, print and radio with messages and content created to tell you what the company wanted you to know into the bottom up, customer economy.

In the bottom up customer economy, brands and their success or failure are defined and determined by customers. Those customers will create content and messages and disseminate that content and those messages across multiple platforms and to communities who are interested in their opinions. Now, how you interact with consumers is on their terms.

This is not revolution, simply evolution in the branding space. Brands are to blame for this loss of control because they have consistently misled consumers or over promised and under delivered. Brands can no longer be built using one-size-fits-all messages broadcast across traditional media channels to anyone who will listen. Basically because no one is listening.

Sure, there is still a place for messages, campaigns, and so on but because there are so many sources of information, so much clutter, these messages don’t have the impact or influence they had 20 or 30 years ago. In the digital age you can spend as much as you want on traditional media and reach everyone in the country but if they are not listening they won’t buy your product or service.

If a brand wants to be successful it must learn to communicate with multiple segments, and messages must be targeted and must be dynamic, using content and channels that resonate with those segments. But brands must move away from the traditional demographic approach to researching those segments. After all, how many 15 – 24 communities are there on Facebook? And content must constantly be revised and updated with new content.

And organizations must ensure that they deliver on promises and that promise must deliver economic, experiential and emotional value to each of those multiple segments. In the consumer business, this is most often done, initially anyway, in the store. Because in the customer economy, no matter how much you spend, if your staff don’t know how to build rapport with your prospects then they may buy once but rarely will they become a loyal customer. And without loyal customers, you won’t have a brand.

So if you are looking to build a brand, forget about reach, awareness, positioning and brand equity and trying to be all things to all people and start thinking about delivering value to specific segments and building customer equity.

Building a 400 year old brand is a strategic initiative


Shepherd Neame, the oldest brewer of beer in the UK was established in 1608 or 402 years ago! An amazing heritage and the brewer likes to play on this heritage with its advertising campaigns for brands such as Spitfire, Canterbury Jack and Bishops Finger.

The brewer allocated its entire 2006 advertising budget, which was about £300,000 (US$450,000) to one of those, Spitfire a real ale, and all of the budget was spent on the London Evening Standard, an afternoon/evening newspaper in London. This was considered a radical change of strategy. As well as print ads, content and sponsored supplements, the brand also sponsored the Evening Standard’s football World Cup special feature in May of that year. The strategic agency was John Ayling & Associates and the creative agency was RPM3. Promotional support such as free pint promotions were also included.

The really well executed and edgy “Bottle of Britain” campaign ran over six months and is one of my favourite campaigns. Here are some samples of the award winning creative work that was considered controversial and was investigated by the advertising watchdog Advertising Standards Authority (ASA) in the UK after complaints about the use of SS insignia. The complaints were later rejected by the ASA. You’ll need to have some knowledge of history, colloquial English as well as WWII jargon to really appreciate the ads.

Spitfire

You can find more examples of their campaigns on the Facebook page here

But Shepherd Neame understands that advertising campaigns are not enough to build and grow a strong brand. As a result, the company continues to invest in state of the art SAP technology and bottling technology, new acquisitions of high turnover pubs and refurbishments of existing properties to create airy, spacious and clean environments.

The company also invests extensively in merchandise including a bottle of Britain book, social media and charity work (Spitfire originated as a charity brew) and will link the brand to the extensive 70th anniversary celebrations of the Battle of Britain due to be held in the UK later this year. Also look out for its campaigns related to the 2010 football world cup.

All these elements ensure the brands offer experiential, emotional and economic value to both new and existing customers.

It comes as no surprise therefore that despite the recession and clouds of uncertainty, red tape and increased taxes and shocking weather in the UK, turnover was up 8.2% to £60 million in the last six months of 2009 proving that investing in brands is not just about edgy and controversial advertising campaigns, but a long term strategic imperative to continue to build on a 400 year heritage!

You cannot build a brand with advertising alone


86% of Malaysians don’t trust advertising. The Star) . 78% of Malaysians trust the recommendations of other consumers. There are more than 1,500,000 Malaysians on Faceboook. 80% of affluent Malaysians (those with a household income (HHI) above RM5,000) use social networking sites. Nine of the Top 20 websites in Malaysia are social networking sites. These consumers are the new world order. They are online for many hours a day and pay little attention to traditional mass media. Despite this, Malaysian companies continue to poor billions (RM6.45 billion in 2008. Adoi) into mass market advertising in the mistaken belief that what they are doing is building a profitable brand.

Advertising was much more relevant in the past when the mass media was limited to only one or two TV stations, few radio stations, a couple of national newspapers and the occasional billboard. Limited leisure time pursuits meant consumers spent a lot of time interfacing with the mass media. Finally, there was little competition so high product or service standards were unimportant. With frequency and timing, mass media advertising generated enough ‘awareness’ to justify the budget.

With limited competition and consumers who were willing to accept low standards or didn’t know any better, such awareness could result in sales and for some, it was enough to build a brand.

Using advertising to build a brand is ineffective
Unfortunately, using advertising to build a brand will not work anymore. Mass media has disintegrated into niches or communities. Consumers have been carpet bombed by so many messages – up to 3,000 a day and for so long, that they have learned to block most of those messages. The favoured reaction of advertising agencies to declining responses and lack of effectiveness is to increase frequency but this doesn’t help because it just adds to the cacophony.

In a media saturated world, awareness is just background noise that means very little. For most companies, and there are very few exceptions, in an age when information on every product and service is widely available, and consumers have more choice, are better informed, and more powerful, creating awareness is not going to build a brand. For instance we’re all aware of Mazda, Alfa Romeo, Eon Bank, Pan Am, Airbus, Ritz Carlton and many other multi national global brands, yet most of us will go through life without ever buying something from these companies.

Indeed, many companies have realized, sadly after spending millions on advertising, that advertising can raise awareness (and even that outcome is not a given), but still fail to transform an offering into a brand. Settling for awareness, when so much more is possible and required is a total waste of valuable funds.

But this doesn’t mean that advertising is no longer important. Advertising is, and will probably always be, important to branding. But its role has changed. Advertising can no longer be a tactical initiative to ‘reach’ as many consumers as possible to ‘get the name out there’.

Advertising
Advertising must do more than try to create awareness. Advertising must work to ensure consumers adopt offerings into their lives. Adoption enables an offering to be seen as the best option. But this adoption also needs organisational excellence and the ability to match offerings to client requirements for value. Advertising cannot be expected to do this on its own. And it is wrong of advertising agencies to give the impression it can but it is also wrong of business owners to expect advertising agencies to be solely responsible because advertising is not a silver bullet.

It may seem like I am stating the obvious, but advertising must also communicate trust. This is the key element in any relationship. Prospects won’t make that critical initial connection without trust. And for trust to grow into loyalty, the key to brand building, companies must deliver on the promises made in the advertising. If you don’t deliver on the promises made, your target market is reduced by 86% and you are trying to sell to the 14% of Malaysians who trust advertising.

Some of the claims being made by property developers, automotive distributors, airlines and others in their advertising are often bordering on the ridiculous. Consumers, already pressed for time and cynical, are doubtful as soon as they see the advertising. If you foster doubt from the moment of the initial contact, you’ve wasted every dollar spent on that campaign. If you are making claims you must follow through with them across every touchpoint. And don’t expect it to happen overnight. It takes time to build loyalty.

Understand that building a brand requires not just advertising but also a significant investment in building loyalty and organisational excellence and the money you spend on advertising may be money well spent. Failure to do so and you may as well pour it down the drain.

Singapore Airlines Suites, branding blunder or recession victim?


There have been numerous branding blunders and you can read about some of them here but rarely does Singapore Airlines feature. Singapore Airlines (SIA) consistently leads the industry in profitability and manages to ride out turbulent times better than most in its class. It has always been aggressive, acquiring aircraft and expanding its fleet quickly, in 1979 it set a record at the time, when it traded relatively new aircraft for an updated version of the B-747 for a then record of S$2.2 billion. SIA also differentiated itself early on with its adoption of the Singapore Girl as the face of the airline and service as the unique selling point.

But the world of today and the world of the 1970s are very different. The 1970s were the halcyon days of the mass economy. In the mass economy, with its mass markets and mass media, perhaps a little bit of help from the government and a large dose of nationalism. And by broadcasting the same message to large audiences who had limited sources of information, it was a lot easier for an airline to establish a brand.

More of this and more of that and better this and better that or bigger this and bigger that coupled with large advertising budgets worked well. As competition increased, consumers became more segmented and media choices fragmented, like many other industries, airlines turned to positioning as a strategy.

Positioning
Positioning consisted of creating a position in prospects minds that reflected the strengths and weaknesses of the offering as well as those of competitors. Ideally, this position was based on being first in a particular category. If someone was already first in a category, then companies attempted to redefine themselves in a new category to be first. In the airline business, this tended to be related to passenger comfort or service. The effectiveness of positioning depended on the ability of advertising to drive branding perceptions in the mind of consumers. To do this, airlines often made promises they were unable to keep (admittedly, often due to third party issues out of their control), failed to meet traveller expectations, often because dynamic competitors moved quickly and so raised the bar, which in turn led to brand disillusionment.

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

Airbus A380
When Airbus announced it’s super plane, the Airbus A380, ever aggressive, SIA was one of the first to sign up and the first A380 delivered was delivered to Singapore Airlines on 15 October 2007. It entered service on 25 October 2007 with an inaugural flight from Singapore to Sydney. Passengers bought seats in a charity online auction paying between US$560 and US$100,000 for seats. Understandably, the new aircraft, a clever publicity stunt and an inquisitive general public, generated a lot of media coverage and by the end of February 2009, a million passengers had flown with Singapore Airlines on the A380.

Suites
But the majority of those passengers are flying economy. The problem has been getting passengers to use the suites, positioned as, “a class beyond first.” When the new A380 service was launched, in the way that has always done, SIA used global TV, print and online advertising and PR campaigns to launch the new A380.

Beautifully executed TVCs were developed for the Suites by a top advertising agency using taglines such as “your own private bedroom in the sky”. Other taglines included “an unprecedented level of privacy” in a “cabin unlike any other”, and sleeping on a “standalone bed that was not converted from a seat”. Givenchy Beddings (and pyjamas) Ferragamo toiletries and Krug or Dom Perignon were also part of the deal.

But despite a unique product, some slick marketing based on a huge investment in a one-size-fits-all message to mass markets using mass media, consumers and corporations haven’t bought into it. Why not?

Lack of research
One of the reasons could be that SIA didn’t talk to customers and prospects about what they might want from such a service, and, more importantly, how much they would be preparred to pay for it. In fact, it appears that SIA didn’t even engage with members of its Frequest Flyer Programme. SIA simply went ahead and developed the product and then, in a traditional 4 Ps (product, price, place and promotion) and positioning strategy, tried to sell it.

To make it even harder for themselves, and despite charging a premium of more than 50% over the first class fare, SIA would only reward loyal members of its Frequent Flyer Programme (FFP) Krisflyer with 10% more miles than a regular first class ticket! Moreover, any redemption of miles could only be for economy, business or first class and not for the Suites!

According to Shashank Nigam, “Several HR departments of companies, including civil service departments in Singapore, issued circulars or directives stating that “Since the Singapore Airlines Suites are a class beyond first, officers who are usually eligible for First Class travel will be ineligible for Suites”. So by now, SIA had upset its two most important customers, its own government and elite members of the frequent flyer programme!

In 2008, as the economic crisis began to take hold and suite sales nosedived, SIA maintained its pricing strategy, making it even harder for financial institutions, already under scrutiny for lack of risk management, to justify such extravagance.

Another reason for the poor response is probably related to the ground experience. Although positioned as a class beyond first, elite passengers were expected to use the same check-in facilities as passengers travelling in first class, the same lounge and essentially, the same food as first class passengers.

Premium revenues drop by 40%
By the middle of 2009, SIA was feeling the heat on a number of fronts. The economic situation gripping the world caused international premium passenger numbers to fall by 18% year on year in the first 10 months of 2009. At the same time, premium revenues dropped by up to 40% over the same period (IATA). Another challenge was from competitors such as Emirates and Qantas who don’t offer Suites but do have exceptional first class experiences including cabins on their A380s that feature a Bar and bathrooms with showers, limousine transfers at departure and arrival (not available to SIA passengers, even those using Suites).

SIA reviews incentives
SIA scrambled to recover some marketshare. The first incentive was a free night’s accommodation at the Raffles Hotel in Singapore for all passengers flying Suite class. Neat, but hardly enough to justify a 50% premium over first class. Then SIA remembered the people who have made it such a success story in the past, first class passengers and lucrative members of Krisflyer. SIA relented on the bonus miles and began offering 300% bonus miles instead of 10%. Definately a step in the right direction but perhaps too little too late as it is rumoured that a significant number of key SIA customers have defected to Emirates and Qantas. If this is true you can be sure these airlines will make it harder for these premium passengers to leave than did SIA.

So what could SIA have done better? Here are 5 things I would have done although, if they had done number one the rest would have been redundant. What else would you have done?

1) Research. Your existing customers are your best source of information. Talk to them, find out what they are looking for and match attributes to their requirements for value. If SIA had talked to its premium passengers and its own government departments, it would have realised that the market could not support the suites product.
2) Mass market branding with a focus on the 4 Ps is no longer effective. Brands today are built on relationships, access, personalisation and relevance.
3) SIA should have focussed on developing more profitable relationships, not a more profitable product. Brands evolve when companies start buying for customers instead of selling to them.
4) Branding is an organisational not a departmental responsibility. And the organisation is the responsibility of the CEO. To expect a passenger to pay a 50% premium over the price of a first class ticket and not offer a limousine service on the ground when all competitors offer it to first class passengers shows a real lack of judgement.
5) Retention is key to brand building. Companies no longer sell a product, customers buy a product. And once they’ve bought the product, companies should do everything possible to hang onto those customers.

SIA is a great brand. As I write this, I am sure SIA is working out what to do with its Suites. If SIA aims to meet customer requirements for emotional, economic and experiential value, then the airline will bounce back stronger and better for the experience and the Suites can be written off as a victim of the recession. If they don’t the suites may become yet another branding blunder.

Does shock and awe advertising still work?


This is a brutally graphic public service announcement from Australia’s Transport Accident Commission (TAC). Viewer discretion is advised.

This is an immensely powerful piece of work beautifully executed. And it had an emotional impact on me. All the characters resonated with me as I imagined myself as many of them at various stages of my life. At the end I was breathless and close to tears.

But the question being asked by Bill Green is “Does this stuff work? Really work?” According to Bill, TAC says yes. According to TAC, “in 1989 the first TAC commercial went to air. In that year the road toll was 776; by 2008 it had fallen to 303”. That fell again to 295 in 2009. However, despite these powerful commercials, 16 people died over the Christmas period.

Topically, I have just spent 10 days in Australia over the festive period and the only TVCs I can recall were for alcohol (beer and hard liquor) and fast food. I was stunned to see so much alcohol advertised on TV. I didn’t see this TAC commercial or if I did, it didn’t register.

Using creativity to communicate
Advertising, and in particular well executed advertising, used to be a great way to reach a great many people over a relatively short period of time. With less competition, more accepting and attentive consumers, such reach could ensure the message was received and absorbed by the right people. Not anymore. Mass media has fragmented into niches and communities. Using creativity to communicate a message is no longer effective because the message is blocked out or soon forgotten because we simply don’t have the interest or bandwidth to absorb all the messages assaulting us throughout the day, every day. Increasing frequency doesn’t help, it makes it worse as it adds to the noise. Even beautifully executed work like this is lost in the fog of products and services.

I wrote an article about a similar approach used toward smoking in the UK and Malaysia. You can read the full article here,

Chilling commercials don’t work
With smoking, the research, carried out over 10 years by the Institute for Social and Economic research found that the warnings on cigarette packets that smoking kills or maims are ineffective in reducing the number of smokers. Likewise, chilling commercials or emotionally disturbing programs are also ineffective. The study also discovered that when a close family member become ill from the effects of smoking, the smoker takes no notice. In fact, according to the study, smokers only reduce the number of cigarettes or sometimes quit when their own personal health is at stake.

In Malaysia, despite nearly US$50 million spent on shock and awe campaigns to create awareness of the dangers of smoking, the number of smokers has practically doubled every 10 years. Whether or not there are parallels between campaigns for smokers and those who drink and drive, I don’t know.

Personally, I suspect that the reductions in fatal traffic accidents since 1989 are due to better safety features in cars, better roads, better lighting, highly visible enforcement measures, increased penalties for offences such as not wearing seatbelts and using mobiles, reductions of speed limits, more drug testing and better educated consumers.

The key then is not to add to carpet bombing of consumers via advertising, but to identify how those consumers become better educated? Was it the commercials or a reaction to the commercials or other initiatives?

Pubs legally obliged to breathalyse patrons
This can be done using qualitative research with consumers and then use that data to forge future strategies. It may be expensive and time consuming, but it will give us the answers we are looking for and determine future strategies. Of course it may be that it is not the commercials but in fact peer pressure at key times such as when consumers leave a pub, club etc. I think this may be the case and I see a time, not too far in the distant future when all bars and restaurants have to, by law, breathalyse all patrons as they leave the premises.

Personally, although this is a powerful TVC, I wouldn’t watch it again. If this commercial came on, I would change channels because if I am watching TV, I don’t want my leisure time to be challenged by issues I don’t want to address at that particular time.

Thanks to Andy Wright for the heads up on this story.

It failed once so let’s try it again


According to a Ministry of Health (Malaysia) survey carried out in 1996, there were 2.4 million smokers in Malaysia. This was a rise of 41% over the number of smokers in 1986. Today the country has about 5 million smokers, about double the number in 1996. One can deduce therefore that the number is doubling every 10 years or so. As of 2003, approximately 49% of all adult males and 5% of all adult females are smokers.

Of most concern is the prevalence of smoking among young Malaysians. 30% of teenage boys aged 12–18 years smoke while smoking among girls doubled from 4.8% in 1996 to 8% in 1999. The prevalence of smokers aged 15 and above has increased from 21% in 1985 to 31% in 2000. This compares with about 21% of the population in the UK who smoke in 2009, down from 45% in 1974.

No data is available on what smoking costs the country but we do know it costs the Canadian government around RM10.5 billion in direct health care and another RM38 billion in lost productivity. Meanwhile revenue from taxes on cigarettes totaled around RM9 billion. Canada is a good benchmark for Malaysia because in 2001 approximately 5.7 million Canadians smoked, about the same as Malaysia.

To combat the rising number of smokers in the country, a number of initiatives have been put into place. These include a rapid rise in the price of cigarettes and a number of health ministry driven initiatives to alert smokers to the dangers of smoking.

The first of these initiatives was an anti smoking campaign launched in 1991, in conjunction with the National Healthy Life Style Campaign. This extensive campaign that ran for over 10 years raised the level of awareness of the hazards of smoking among the general public, both smokers and non-smokers.

The “Tak Nak” campaign was initially launched in 2003 and consisted of TVCs, Radio, print and Outdoor (including school notice boards). Costing almost RM18 million (US$5 million) for the first year, and rumoured to cost in total RM100 million for the 5 year campaign, it was widely lambasted in the media.

This is because although the campaign raised the awareness of the effects of smoking, it did little to reduce the number of smokers. Even the Health Minister Datuk Dr Chua Soi Lek said in 2005 that there was no indication that the number of smokers had gone down since the campaign began.

Despite the ineffectiveness of this campaign, in August 2009, The Malaysia Ministry of Health launched the latest (and most harrowing) installment (see video) of its anti-smoking “Tak Nak” campaign via TVCs. The TVC’s feature gruesome images of mouth cancer and lost limbs due to gangrene caused by smoking.

This campaign follows the legislation, earlier this year that all cigarette packets sold in Malaysia must carry graphic images related to smoking. These include images of the results of neck cancer and a dead foetus. Displaying these graphic images on cigarette packets is a requirement of the World Health Organisation Framework Convention on Tobacco control of which Malaysia is a signatory.

It’s not clear if the latest series of graphic commercials that are obviously designed to shock, and the images on cigarette packets are part of a strategic plan or two independent tactical campaigns.

I’m not sure what the goals of the latest campaign are but I am sure they do not want to simply raise awareness of the dangerous side effects of smoking. I would imagine the goals include reducing the numbers of smokers in Malaysia and discouraging young adults of both sexes from taking up the habit.

If these are the goals then one has to question whether or not this is the best tactic. Certainly evidence from previous campaigns in Malaysia and other countries suggests that campaigns featuring shocking images and graphic descriptions of the consequences of smoking using old economy tools such as TVCs, print ads and outdoor are ineffective.

Malaysia spent RM100 million over 5 years on such a campaign that was inneffective in bringing down the number of smokers in Malaysia. In the UK, after extensive research of more than 8,500 smokers over a ten-year period, the Institute for Social and Economic research found that the warnings on cigarette packets that smoking kills or maims are ineffective in reducing the number of smokers.

Likewise, chilling commercials or emotionally disturbing programs are also ineffective. The study also discovered that when a close family member become ill from the effects of smoking, the smoker takes no notice. In fact, according to the study, smokers only reduce the number of cigarettes or sometimes quit when their own personal health is at stake.

And even failing health may not persuade a smoker to reduce or even stop smoking because smoking is linked to a lack of psychological wellbeing and often failing health results in psychological decline.

I have a hunch that this campaign will not reduce the number of smokers in Malaysia. Data shows that traditional marketing tools are even less effective today than they were 10 years ago.

What is required is a data driven approach to the issue. Specific and comprehensive qualitative research with relevant targeted questions related to each segment (and each segment will be specific and targetted) that are designed to deliver actionable data. It is imperative that the audience is identified and then communicated with using content that resonates with them. It will be a long term effort. That doesn’t mean repeating the same one size fits all commercials or messages, this means developing a relationship with these partners through engagement.

Also critical to the development of the strategy will be the buy in from stakeholders such as doctors, educators, retailers and others. Discussions must be held with these key elements to determine strategies. Once research is completed and analysed, a comprehensive strategy must be developed featuring a fully integrated program to communicate with all stakeholders with specific emphasis on education at kampung level and dynamic, preventative programmes for schools. Existing smokers will be targetted individually through interviews with doctors, rather than one-size-fits all shock and awe campaigns.

Only once the strategic blueprint is ready can the implementation begin. There is no easy way to reduce the number of smokers in Malaysia. It’s going to take a long term investment in time, effort and money. Wasting money on creative driven campaigns that have not worked in the past is not the way forward.

Warning: Viewer discretion advised.

Pitching for a bank name change in Malaysia


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

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

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

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

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

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

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

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

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

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

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