WHEN this reporter first interviewed Trax Associates Sdn Bhd founder and managing director Yasmin Merican a decade ago, she was concerned about Malaysian companies’ lack of investment in brand building.
A 2003-2004 survey conducted by her brand strategy consulting firm, in collaboration with the Malaysian Institute of Management and the Federation of Malaysian Manufacturers, had found something that appeared paradoxical.
Most of the CEOs and board directors interviewed said they believed in the economic value of branding. However, more than 60% of the respondents were also aware they did not invest enough in brand building.
The survey findings were compiled in a fairly thin book called The Malaysian Brand Practice Report 2003.
Fast forward to today, and Yasmin has another book to share − a 754-page tome she wrote titled The Right to Brand − Levelling the brand playing field: Lessons from an emerging market.
The book, one of the few on branding that takes an emerging market perspective, was launched earlier this week by Kedah Mentri Besar Datuk Mukhriz Mahathir, who also contributed the foreword.
The intervening years since the 2004 interview have seen more companies investing in brands and the rise of a more developed brand ecosystem comprising advertising firms and other agencies.
Unfortunately, according to Yasmin, a disconnect continues to exist between the leadership belief in brand building and the creation of a strong and sustainable brand.
In the latest interview with StarBizWeek, Yasmin starts off by referring to The Malaysian Brand Practice Report 2003. The study’s findings had suggested that knowledge was the barrier to brand building.
“We didn’t conduct a sequel to the study, but one of the questions we asked after the research was, ‘If lack of brand knowledge was the key issue, what’s the solution?’ Trax went on to develop a solution that we continued to test through the years with Malaysian companies, because we wanted to understand where the barriers were and what was causing the disconnect between brand commitment and brand realisation,” Yasmin says.
“After 10 years of doing this, unfortunately the situation is still the same even though more companies today have effectively invested in brands, especially those in financial services and telecommunications.
“If you were to look into the brand-building capabilities as well as processes within the majority of (Malaysian) companies, brand-building is not sustainable.”
She says her book, which “evolved” over three years, was written from this perspective − why it is not so, what are the issues, and what Malaysian companies can do to build brands as effectively as the world’s top brands.
On the barriers to better branding, Yasmin says it is systemic, with both strategic and operational barriers.
“The strategic barrier is that brands do not enter the agenda of most boards mainly because of the financial reporting standards − branding is not a line item in the books. They only say marketing, advertising, promotion, public relations, corporate social responsibilty and customer management. What you don’t see, you don’t measure. And what you don’t measure, you don’t do.”
She says brand building is not sustainable in most companies.
Branding suffers from lack of immediacy in returns on investment. Another factor is the lack of continuity in brand building when a CEO leaves the company.
“Without the function and commitment to drive branding as a corporate policy, the value of brands rises and falls depending on the passion of the CEO or the board,” she says.
Yasmin believes the great brands of the world have survived through many CEOs by having institutionalised the brand process and brand building knowledge.
“The original brand builders could be the founders, but that learning is integrated into the way they work, the way they invest, the way they train. It’s in their standard operating procedures,” she explains.
The lack of continuity is also discussed in The Right to Brand, in which Yasmin says: “Emerging brands tend to suffer from the lack of institutional knowledge where brand action is dependent on external capabilities from advertising, public relations and design to other expertise offered by a fast-growing and increasingly sophisticated brand ecosystem.
While this external support is essential to better branding, such knowledge cannot replace brand-related business decisions which only organisations can make.”
Yasmin says the mature market model for branding cannot be implemented the way it has been adopted because of the country’s stage of readiness. “If we had turned around the way we plan and brought brand thinking into the way we invest and the way we move forward, we would’ve had a better chance of using the mature market model (successfully).”
She draws a diagram showing the mature-market customer management process. It kicks off with customer acquisition, moving to customer retention and then customer growth.
“What drives this is business strategy,” she says, jotting “business strategy” at the start of the whole process.
“What anchors it is customer knowledge. Once you know enough about the customers through continuous research, you will align the organisation through the structure, the process, the people and the technology. The thinking is that when you do that, the brand will result.
“Coca-Cola, BMW and Nestle can operate on this model mainly because they are able to decide what people to recruit, what training programmes to put in place, what markets to attract, what process to develop, and even what information to obtain, because they know exactly how they want their brand to come out at the end.
“The difference between the mature market experience and our market is that they have brand thinking within strategy and we don’t. Since we don’t have this brand blueprint, we don’t really think about what research we need. We don’t have the clarity of brand vision to direct all the decisions towards the brand.”
Yasmin draws a line starting from point A to point B. She labels the first half of the line as “upstream” and the next as “downstream.”
“If you were to build a brand from point A to point B, the downstream processes in branding are marketing, advertising, design − all the operational stuff. That is actually functioning well. The quality of advertising and production in Malaysia is First World.
“What we don’t have is the upstream processes where we talk about knowledge, investment and commitment, without which the people who are operating downstream cannot give their best towards the brand. While we spend billions of ringgit every year in advertising, design and customer management, it is not able to connect with the decision-makers that will keep it sustainable. Sustainability can only come from decision-makers.”
She says many companies only think of branding as an afterthought. “But because we’re competing against the best in the world, not just in foreign markets but also in the home market − as the foreign brands are already here − the brand imperative is today. We have to do it now or we’ll lose our competitiveness.
For me, it is an interesting phenomenon: we had the means and we had the capabilities of a very mature brand ecosystem (advertising and world-class consultants), but we were not able to integrate all these capabilities through stronger brand policy, which I hope The Right to Brand will help change.”