Saturday, August 7, 2010
Brand Management in Malaysia
Saya ingin berkongsi satu paper yang pernah saya hantar sebagai tugasan semasa MBA semester 1. Diharap kita semua dapat baca dengan profesional dan segala komen (jika ada), amat saya hargai. Tq.
Brand Management in Malaysia
Ir. Bakri Bin Zamri, P.Eng, MIEM
College of Business
Universiti Utara Malaysia
The current scenario of Branding is one of the most important matter that Malaysian’s concern. Very few articles can be found about Brand Management in a context of Malaysia. In marketing strategy, brand management is one of the most important things. Brand protection is essential in the creation of brand value. Brand in the perspective of people in Malaysia is just like an ‘icon’ for a synonym product. For example, when we talk about instant noodle, automatically we remember one brand namely Maggi. When we talk about toothpaste, we remember to Colgate. When we talk about electricity supply in Malaysia, automatically we relate it to TNB. In spite of the synonym brand can make the product become popular, but it cannot guarantee the higher level of customer satisfaction into the product. Some journalist theorist, branding management can create a kind of Trust or Loyal from a customer or consumer. When we talk about Brand, I think we cannot deny the important of a perception management in branding. In this paper, I may outline some critical review from my opinion throw some alerts to be thought and discussed among a business intellectual after getting some information from a newspaper headline, journal, article, magazine, blogs etc. There are also some statistics on Malaysia’s most valuable brand and Malaysia’s top 50’s brand, some of the best practices to be shared and also about a brand management such as TNB, Air Asia and Digi. In Malaysia, brand is a sensitive and subjective issue and we should act more professional and realistic to overcome the brand issue in Malaysia.
The definition of Brand is a mark under the Trade Marks Act 1976 includes a ‘device, brand, heading, label, ticket, name, signature, word, letter, numeral or any combination thereof’. Malaysia Registry held that a combination of colours can be accepted as distinctive upon evidence use by the traders and that consumers associates the products bearing the colour combination as theirs. The Malaysian Trade Act provides an expansive definition of the word mark, but the registrability of sound marks remains controversial.
Brands, branding and brand management are amongst the most frequently discussed topics in the boardrooms and business schools. Companies that can master the science and art of branding stand in good stead to improve shareholder value, since brands represent a sizeable portion of intangible assets. (The book of Malaysia’s Performance on Intangible Assets: How Hard do Malaysian Companies Work at their Brands?- 2008)
Internationally, companies wishing to market their brands regionally or internationally are advised to pursue trade mark registration in countries where there is a potential for the growth of the brand. Malaysia is not a member of the Madrid protocol, companies in Malaysia might choose to apply for trade mark protection through the community Trade Mark (CTM) prosecution.
For Brand developing, Malaysia is no different. To support its vision of developing a knowledge-based economy, Malaysia has embarked on a series of Intellectual Property (IP) reforms to improve the country’s IP-related international ties, enhance Intellectual Property protection via legal and procedural changes, and to raise the awareness of IP management. These efforts will yield long term benefits for the Malaysian economy. (David Haigh, Chief Executive Brand Finance plc)
Although the USTR (United State Trade Representatives) placed Malaysia on a blacklist due a curtail piracy and counterfeiting of goods/brands and the number of cases reported as keep increase on the free of pirated and counterfeited goods, but Malaysia still remains a big partner in the global company which Malaysia is the US’s 10th biggest trading partner and about USD11 million worth of exports and USD 28 million worth of imports are transacted every year.
If we read on marketing management’s book, we can see some theorist has been outlined. Brand exploitation is due to a brand can never be stagnant in increasingly demanding world, which runs parallel with the challenging consumer. There are many ways to reach out to costumers domestically, regionally or globally. In terms of licensing, a company might wish to divest the responsibility to manufacturer or market its brand through a licensing arrangement.
In today’s globalized business, the environment of marketing strategies cannot compromise in term of managing a ‘Brand’. Brand takes on different roles for customers.
Y.A.B Prime Minister of Malaysia, Dato’ Seri Mohd Najib Tun Razak said, at the opening of the International Conference on Meeting of Minds on 28 June 2008: Developing the Malaysia Master Brand: “To effectively position Malaysia in this globalised arena, we must be characterized by a unified core of competence and unique selling proposition that fits all levels of economy and society.” At a press conference, Dato’ Seri Mohd Najib said Malaysia needed a strong image and brand so that people would have a positive perception of the country.
“In today’s world, it is all about perception. And of course, it should not depart much from reality. “Whatever tag we have for Malaysia, it has to be a credible tagline. Something that people will find they can accept when they come to us and engage with Malaysians locally and abroad,” he said (The Star 28 June 2008).
The Brand Perception
I really interested what Prime Minister’s said. “In today’s world, it is all about perception!’. People are willing to pay more for a better perception. Brand plays many roles. We can take an example of Malaysians Proton cars. At the early stage of production in early 1980’s, it made a super record of very popular vehicles due to the highest demand from Malaysian to the cars. It has successfully run their market control in terms of Red Ocean Strategy. Nowadays, the brand became one of the most unreliable products from a most Malaysian perception. The issue became so sensitive. Why is this happened? So many comments such as criticize from a journalist, politicians about the issue.
Some people relate the brand with a quality problem and some people said it was due to a top management problem. Nowadays, Malaysian consumer or customer has a revolution in quality of brands. But eventually, as Malaysians become more exposed and educated, they will be able to discern what is true and what is being fabricated. They will face the future with more confidence.
The Brand Issue in GLC
For an easy thought, we can look back from the fundamental character of a product. There is a person who bought a new Honda ‘Stream’ car with a cost of RM140,000.00. This person already knows that, with that amount of money, he or she can buy two units of MPV’s Proton Cars manufactured by PROTON one of the GLC (Government Link Company) which is cheaper. Partly, the quality is better, but there is actually something else that can drive the person to buy the ‘Honda’ instead of Proton Brand.
A complex relationship exist between the individual who purchasing the car and the brand. Why do Honda and other manufacturer display their logo or brand on merchandise? The answer is because people who buy those products want others to know who manufactured the products. Similarly, the manufacturers want everyone to see the logo or brand. The brand or logo itself can explain and create expectation and perceptions of services or products.
Tenaga Nasional Berhad, the monopoly electricity utility company is one of the GLC (Government Link Company) that must be ready for brand competition since the license of the company will be expired on 2011. The Government has an intention to open the electricity market to the others just like what was happened to Telekom Malaysia Berhad in today’s Malaysia’s Telecommunication of Industries. Besides being among the top 10 most valuable brands of Malaysia,
TNB is fast becoming an internationally respected and recognized company. Its recent achievement in becoming 1 of the top 5 finalists for the “Power Company of the Year” in the 2007 Platts Global Energy Awards has made it the only Asian company shortlisted. TNB Brand is also recognized for its contribution to its country when it celebrated Malaysia’s 50th Independence Anniversary by sponsoring a national patriotic song and video clip, specially created to celebrate the occasion. TNB has increased its efforts in enhancing its brand image by improving the image and quality of its service outlets, currently known as “Kedai Tenaga”. Meanwhile, new corporate uniforms have been introduced and initiatives undertaken to train its front line staff to improve service quality. TNB has also extended its branding through its higher education vehicle, Universiti Tenaga Nasional. (The book of Malaysia’s Performance on Intangible Assets: How Hard do Malaysian Companies Work at their Brands?- 2008)
Customers of electricity in Malaysia have no choice and have to become of the TNB’s consumer because so far, the distribution division TNB is the only main electricity provider except in Kulim Hi Tech and Gebeng, Pahang. Previously, the generation division has split to IPP (Independence Power Producer) while Transmission division still runs by TNB.
In spite of TNB has a monopoly business in a Distribution, but there is still a need for brand management in order to remain a loyal customers in TNB. TNB has received many an outstanding grand awards from Malaysia Government and International bodies. One of best awards received is ‘Prime Minister of Industrial Quality Award / Anugerah Kualiti Industri Perdana Menteri – 2007’.
TNB also listed as the 4th best company in Asean which put the TNB in line with the international utilities such as TEPCO (Tokyo Electricity Company) and Singapore Electricity Utility Company. TNB Brand owned the awards but there is still a need for perception management for people in Malaysia. The awards will give no meaning if at the same time; there is a breakdown and poor customer services.
The ISSUE: Perception Management versus High Technology.
In order to measure the level of brand acceptance, survey is the best method used so far to the customers of the brand. Customer Satisfaction Index (CSI) surveys usually conducted by a credible third party international agency. Here, I like pick up one of the brand survey done Taylor Nelson Sofres Sdn. Bhd., a London-based company with over 200 branches world wide, has conducted 8 of the CSI surveys since 1998.
Survey has done to a Brand of Tenaga Nasional Berhad in 2008. The bi-anuual survey is one of the TNB’s initiatives to measure a customer’s satisfaction and perception on TNB’s Brand. Overall score for TNB was 7.1 (out of 10). From the survey shown, I like to compare the result gained by TNB Kedah with TNB Selangor. TNB Kedah achieved 7.5 which is among the highest score in TNB and this score prove that perception management was giving a high impact to the company. TNB Kedah score has beaten the TNB Selangor which only gained 6.9. TNB Selangor has a very sophisticated technology used in the electricity such SCADA (Supervisory Control and Data Acquisition) and DA (Distribution Automation System) compared to TNB Kedah was just begin to enter the project of the SCADA technology. TNB Kedah however has jumped from score of 6.3 in 2006 to 7.5 in 2008.
Customers in Selangor have a different perception compared to the customers in Kedah. The approaches done by the management of TNB Kedah is different with TNB Selangor. The activities done by TNB Kedah to get close relationship with public such as CLOP (Community Leader Outreach Program), LPC (Large Power Consumer) Dialogue have prove that managing a people’s perception on brand is the most important factor to have a loyal customer instead of on having sophisticated technology. TNB placing at 5th rank in the top 50’s Brand. With an ISO9001 certified, TNB also recognized as a Best Practices Companies in Management & Engineering Audited by Energy Commission and International Third Party Consultants. (Source: TNB Livewire)
The research done by Rui Vinhas Da Silva, Manchester Business School (West), University of Manchester, the customers view company name as a person has been commonly used to understand corporate brand image. His studies in the past using this approach were conducted, however, in the 'bricks and mortar' environment. The research addresses explicitly whether a company that exists only in a virtual environment could indeed be seen as a person. The research investigates the corporate brand image of a book retailer that sells exclusively online.
The findings show that while the 'Informality' dimension is a weak factor in an offline context in the past, it has been indicated as a strong dimension in the present research setting. Furthermore, the previous research has consistently shown that the corporate brand image in a bricks and mortar environment is more likely to relate to consumer behavior (loyalty) via consumer satisfaction. Interestingly, the present research discovers that corporate brand image can also have a direct positive relationship with consumer loyalty.
Brand Image Consultation
In Malaysia, some consultant focuses the branding & marketing services in terms of Corporate Image Branding, Digital Marketing Strategies, Training and Organizing & Marketing of Events. The consultant has a main objectives develop SMI (Small Medium Industries) to brand and rebrand themselves in order to stay competitive in the market. There exist severe alterations of brand portfolios in favor of global brands by several multinational corporations (Seetharaman et al., 2001, Steenkamp et al., 2002 et al., 2005)
The brand consultants also quite often to offer a promise to help organizations to have maximum impact in their Branding effort with minimal investment, compared to traditional media and will implement new age marketing strategies together with Online Corporate Branding Strategies which as today branding is all talking about technology & Innovation. Some of them have deep experience in a wide range of marketing and brand building services that help marketers focus on what works in the marketplace, and what needs to be renewed in their brands.
A FEW OTHER SUCCESFUL BRANDS IN MALAYSIA
In Malaysia, a few brands have been found as successful companies that rapid changes in Brand Management strategies. Here I like to refer two of the companies such as Air-Asia and DIGI.
Brand Management in Malaysia (Air-Asia)
‘’Fun, affordability and convenience’’. By making three magic words come true, AirAsia gives wings to a nation and opens new gateways to the world. The CEO of Air Asia, Dato’ Seri Tony Fernandez, has his own management style in creating an external and internal brand in his company. Sometime he just clad in T-Shirt (not tucked in) and yellow safety vest and he was working with his staff "at the ramp". For the first few years especially, he scheduled himself to work alongside the low level staffs, to gain first hand knowledge of the issues out there and able to get in touch with reality.
The Air Asia story started in 1996, when Tony & Co bought over an ailing airline, with two 737 Boeings. They formally launched in 2001. Now, they have some 170 planes including A320's.
The Brand logo, uniforms are actually designed by their own staff. This saves money, and also builds a sense of ownership among staff. Some of the Air Asia items are designed by a hand of management team. When they started, they only had 200,000 passengers in the 1st year. Now they get 80 million. The Air Asia staff increased from 250 to 5000 in 6 years and they have the lowest operating cost for airlines in the world. Staff turnover (in a competitive business) is minimal. According to Tony, 50% of his job is "cutting through bureaucracy", there are no uniforms nor ties. Many employees wear the red cap, and proudly too. The head office is open plan. Tony himself doesn’t have a private room. His open office is at a corner of the floor. Thus, anyone can drop by. On building teamwork, at first, he realized that pilots see the engineering staff as "backroom boys", 2nd class. He forced the pilots to have photos of their respective engineers in their wallets, and vice versa.
They won't change their brand for other countries (where Air Asia is operating). Branding is done to motivate staff as much as to promote to customers and stakeholders. For example is by Sponsoring Manchester United. It was one their agenda to promote the brand so that international bankers give them lower rates, but also to make the staff proud of Air Asia, to be associated with an elite football team. On regulators, they bring the regulators to their place, again and again. They need to impress on them the challenges that they face, only then will they be on your side. On hiring people, they put the best 3 people, define their qualities, and use them as the template. In other words, the best qualities and performance becomes the standard. Now, Air Asia has known as one of the most reliable and valuable Brands in the world. (Realizing of Benchmarking of TNB Kedah’s Dream’: Department of Productivity and Quality Management, Tenaga Nasional Berhad)
In terms of Brand Recognition, although presently a small carrier, AirAsia is expected to emerge as a winner from airline industry deregulation in the region. Serves 80 routes and operates in 10 countries. It has taken delivery of 16 A320s and has 134 on order for delivery up to 2013. Brand Valuation prove that sales were up 27% in 2006. Market capitalization in 2006 was at rm3,764 million. Despite only commencing operations in 2001, the brand has generated strong levels of awareness in its key countries, carrying over 40 million customers to date. Brand Future for AirAsia has grown rapidly from operating just two Boeing 737- 300s in 2001 to commanding a fleet of 56 aircraft today. In 2007, Government of Malaysia announced that AirAsia will take over 96 non-trunk routes, in addition to 19 domestic trunk routes from Malaysia Airlines. (The book of ‘The most valuable brand in Malaysia’)
Brand Management in Malaysia (DIGI)
In marketing itself as being “Always the Smarter Choice”, this maverick is not only clever in its branding strategy, but also doggedly effective at reminding the competitors’ subscribers that there’s always an alternative — and that its name is DiGi. (The book of ‘The most valuable brand in Malaysia’)
Digi started out as a small player among the big guns like Maxis and Celcom, serving a predominantly Chinese market (as opposed to Celcom with predominantly Malay market). They had about 640 staff with 270 of them being managers. Then Digi got sold to Telenor (Norwegian) who now own about 60% of the company. Things took a drastic turn after that. They have improved dramatically in the first 4 years. Market share went from 16 to 27%. Staff size is now 1800 employees, with only 200 managers. Revenue gained is about RM3.7 billion with RM15 billion market capital.
Their motto: "People make a difference". The CEO is quite often wearing Dockers and short-sleeved shirt. The dress code is casual. In fact, we won’t know the rank of any Digi staff and their agenda is to break down class barriers. Such a dramatic transformation, from a "chinaman" company (Digi was owned by Berjaya before this) to what is described above.
They did away with status-linked aspects. Staff doesn’t have job titles like GM, Executives etc. No staff cars, no secretaries, not even your own office! All floors are "open-plan". You come in, get yourself a chair and hook up to a communication line, that's your office for the day. Even the CEO, Morton Ward, doesn't have an office.
There are no fixed lines, only 016 numbers. Almost everyone has a notebook (mobility). Meetings and discussion can be done in many places. There are small meeting rooms with glass walls, meeting rooms with "writable walls" and white boards that occupy the whole wall. Chill out areas (there are 28 of them), sitting areas like in spa resorts, with little ponds/cascades etc and very peaceful. They are allowed to have meetings in the canteen.
Their customer service center is centralized, on the ground floor of the head quarters building. There are two shifts of up to 200 pax serving 6 million customers. Big LCD screen communicates latest updates to the operatives. There are 'stress-relieving rooms, quick training rooms, gadget rooms (operatives can play around with hand phones, to get familiar). 60% of the operatives are on contract: turnover is high in this activity, naturally.
Everyone has same set of benefits (eg medical, hotel, travel etc). When they realigned their benefits structure, 95% of the staff had increased benefits, but the top 5% (senior management) lost some benefits. This was a show of management's commitment. You can opt for general management or expert scheme. Team members can thus earn more than the team leader.
Another internal brand motto that they follow is ‘Comfort the Disturbed, but Disturb the Comfortable’. All this, done over the last few years, has now made Digi the Third Most Admired Company in Malaysia. The DIGI advertisement also is unique and they always thinking out of the box to convince and attract public to use their Brand. (Realizing of Benchmarking of TNB Kedah’s Dream’: Department of Productivity and Quality Management, Tenaga Nasional Berhad)
In terms of Brand Recognition, present mobile subscriber base of 5.3 million in Malaysia represents a market share of 23%. 90% of the Malaysian population is covered by DiGi.
Brand Valuation shown that sales were up 27% in 2006, with a markedly improved operating margin at 29% of revenue. Market capitalization in 2006 was up 101% at rm11,850 million. The Brand Future of DiGi grew faster than the market in 2006, growing market share from 18% in 2003 to 23% in 2006. Failure to win a 3G license forced DiGi to launch an alternative offering, EDGE, and market itself using a range of innovative approaches. (The book of ‘The most valuable brand in Malaysia’)
Businessman always has their own strategy in the ‘brand equity’. As refreshment, we can see the five dimensions of brand equity. In Malaysia, these are the things that should be the most basic form of brand equity is simply being brand awareness that signals a familiarity and potential commitment to the brand. The loyal customer enables the company to reduce marketing costs, leverage trade relationships, and speak to competitive threats with greater success. Perceived quality is important differentiate the product and create higher price points. Brand association can be a reference to improve customer services because it can be looked at every angle of customer’s emotional, psychological and performance association with a brand. The brand asset can be patent and trademark in order protect the copyright reserved to the company. Brand in Malaysia is protected by a trade mark registration.
Malaysia’s Most Valuable Brands
There is one agency that celebrates annual Malaysia’s most valuable brands. Companies in Malaysia have to diverse and competing brands because Malaysians are themselves diverse, competitive people with complementary qualities and capabilities.
In Malaysia, two leading local insurance brands and that comprises almost one-third of the list coming from the financial sector alone. The collective success of these brands reveals a society that is also increasingly savvy about wealth management and protection.
The award is important to protect and recognize our local manufacturer or Malaysian Brand. Malaysia has almost several of the products and services. With competition and choice, too, come wider options to define who we are and what we appreciate in life. Brands like Giant, Padini, Parkson and Bonia offer a snapshot of how the Malaysian shopping experience has transformed itself.
The Malaysia’s media role should provide creative media solutions have helped improve the results of brands for which they provide a brand building platform. With their expansive influence, varied interests and staggering capital, they literally move mountains, provide energy and make roadways in the wilderness, laying vital infrastructure for the development of brand Malaysia.
Source : Malaysia Top 50’s Brand (2008)
DISCUSSION AND RECOMMENDATION
From the theory, experiences, and justifications above, we can conclude that there are many methodology can be used in brand management. However, the issue in Malaysia is different environment and culture occurs.
There is also some limitation relating to the government decision. For example is TNB is only to be licensed for retailing only on electricity supply. Even though the company is an energy supply utilities, but it cannot run the telecommunication or petroleum businesses. The TNB brand is limited to the electricity supply.
Some issue regarding to the integrity was not fully eliminated and less of professionalism compared to the US style of brand and business. The corruption cases still the main problem and the Malaysian Government has initiatives such as SPRM to overcome the problem so that brand in Malaysia can develop more holistic.
We also can see some researchers’ not very consistent in definition and different methodology in managing the brand perception. However, the benchmarking will be the best way to adopt several successful practitioners in Malaysia.
Brand management is all about a perception. Supporting elements can be parallel administrated but the strategy in perception management is the most important in today’s business.
We also can see the critical networks in Malaysia in terms of using a virtual environment, Malaysia still have a broadband issue and this is the subject to a enhancement of Internet Technology that should be first priority in order to sustain and support of brand management in Malaysia.
Rewards and awards are to encourage healthy competitions among the business practitioner and image of branding in Malaysia. The awards such as ‘The Most Valuable Brands in Malaysia’, ‘Top 50’s brand’ are one of the prestige’s recognition and should be enhancing to recognize more valuables and potential brands in Malaysia. We also cannot deny the important factor behind the successful of Brand in Malaysia sometimes relates with a quality of leadership of CEO or MD the company. In this case, we can refer to the CEO of the Air Asia and DIGI that successfully place the brand in line with other companies all over the world.
Foods for thought
‘’Customers don’t care about the management issue;
They only care about the products/brands.’’
‘’Customer don’t care how much we know about them;
But they really want know how we care about them’’
Greg W. Marshall & Mark W. Johnston, ‘Marketing Management’, McGraw Hill International Edition.
Supplement Brand Management Focus – 2005, http://www.managingip.com
Nzuki, Kitzhung’a Peter, Brand Associations and Consumer Perceptions of Value of Products, University of Nairobi, Japan.
Tuan Hj Ali Mungai’s Presentation (2008), Realizing of Benchmarking of TNB Kedah’s Dream’ : Department of Productivity and Quality Management, Tenaga Nasional Berhad.
Taylor Nelson Sofres Sdn. Bhd, Customer Satisfaction Index Survey (2008), Customer Services Division, Tenaga Nasional Berhad.
The Star Newspaper. International Conference on Meeting of Minds on 28 June 2008: Developing the Malaysia Master Brand.
Sujana Adapa, (2008), Discrimination Analysis of Adopters and Non Adopters of Global Brands: Empirical Evidence From India and Malaysia, Research Scholar, School Of Business, Economic and Public Policy, Faculty of the Profesion, University of New England.
The book of Malaysia’s Most Valuable Brands : Brands that define Malaysia today 16th November 2007.
Jez Frampton, Group Chief Executive, Interbrand.
Tony Savarimuthu, Vice President, The Association of Accredited Advertising Agents.
The book of Malaysia’s Performance on Intangible Assets: How Hard do Malaysian Companies Work at their Brands?- 2008.
TNB Livewire (TNB’s Internal Portal)