Malaysian companies are currently disadvantaged in the building of strategic brands. This was revealed in the findings of a pioneering survey on brand practices published by survey partners Trax Associates, the Malaysian Institute of Management (MIM) and PricewaterhouseCoopers (PwC). YB Dato' Seri Kerk Choo Ting, Deputy Minister of International Trade and Industry, Malaysia representing YB Dato' Seri Rafidah Aziz, the Minister of International Trade and Industry Malaysia, officiated at the launch of the survey.

YB Dato' Seri Kerk Choo Ting delivering the keynote address at the launch.

The survey, the first ever conducted in Malaysia, focuses on the brandbuilding practices of Malaysian companies in the area of brand perceptions, commitments, investments, structures, business process alignments and competencies. Targeting CEOs, the survey delves into the hidden or invisible drivers of effective brand or brandbuilding practices.

YBhg Datin Yasmin (right), YABhg Tun Haji Mohd Hanif Omar(centre) chatting with YB Dato' Seri Kerk Choo Ting after the launch

Unlike other brand surveys, the focus of the Malaysian Brand Practice Review is not centred in the traditional aspects of brandbuilding in marketing, communications and/or design. Instead it investigates into the sustainable power behind the brand; the level of organisational knowledge, commitment and investment a company makes in the building of competitive brands as a strategic market growth lever.

150 CEOs from public and private-owned companies from around the country responded to the brand practice review in the last quarter of 2003, where results from the survey were further `tested' through a detailed dialogue with 10 CEOs at a CEO Brand Forum. The survey explores the challenges of brandbuilding within Malaysian companies at the structural levels of organisation both for the larger public and the smaller private companies.

Perspectives from more than 150 CEOs illuminated some answers as to why Malaysian companies may not be similarly equipped as the globally-branded to accelerate brandbuilding to defend and grow their markets.

• On brand commitment and structures, 86% of CEOs and their Board of Directors say that they believe in the economic potential of effective brandbuilding. However, almost the same number of CEO respondents admitted that they do not have a brand unit to integrate brand practices within their organisation. Many consider the economic value of effective brandbuilding to be in the ability to sustain customer loyalty and charge a premium price for products and services.
  
  
• On strategic investment decisions, although 68% of respondents are aware that the globally-branded builds their businesses around their brands, almost the same number (70%) disclosed that their investment decisions are driven by business rather than brand needs - an opposite response to what is perceived to be a best practice in brandbuilding by the CEOs.
  
  
• On brandbuilding competencies, only 33% said that they had sufficient inhouse competencies to build brands, whereas 40% said "no" and 27% were unsure. The majority (49%) said that the problem in brandbuilding is not so much in competencies but brandbuilding experience where 41% said that their brands are still at the early growth phase relative to the overall growth of their business.
  
  

• In summarising the results of the review, Trax Associates Founder and CEO, Datin Yasmin Merican, said that the key impetus for brand growth in Malaysia would reside in the ability to audit and review the stage of brand development organisationwide as the benchmark upon which strategic management decisions on the brand delivery structure, investment and commitment levels can be made.
  

She continued by saying that as global brands are built through proprietary corporate and industry knowledge, Malaysian companies will need to accelerate the building of these support infrastructures to start the integrated process of brand learning and commitment. However, she acknowledged, that until and unless our Malaysian CEOs can track and measure the economic value of their brands and unless they believe and invests in the sustainable power of branding as a competitive market advantage, brandbuilding as an enterprisewide business process cannot easily be sustained. Datin Yasmin reiterated that "this is what it will take for Malaysian companies to leap into the world of the globally branded."

PricewaterhouseCoopers Advisory Leader, Mr. V.U. Kumar stated that there is a perception that delayed responses in brand investments within Malaysian companies or for many companies in this part of the world, is that the existing accounting framework does not permit the capture of brand "investments" on the balance sheets. Only acquired brands are capitalised are capitalised under "goodwill".

The uncertainties surrounding brand valuations and their financial treatment have, however, not prevented the globally-branded from investing strategically in their brands, an indication that Malaysian companies may similarly want to build their own proprietary knowledge and processes in brand investments. Never let historical accounting implications drive your investment decisions.

"Best practice global companies regularly communicate their brand building activities via Annual Reports, analyst briefings, websites and the various media conduits available to corporations, stakeholders, be it investors, customers, bankers and suppliers. These stakeholders then have sufficient information to appraise the value of your brand. Malaysian companies should not under estimate the value of communications nor the ability of stakeholders to value your brand," said Mr. V.U. Kumar.

In concluding, Tun Hanif Omar, the President of MIM, or the Malaysian Institute of Management remarked that MIM was proud to be a part of this Malaysian first with Trax Associates and PricewaterhouseCoopers, which has surfaced leading-edge thinking in competitive marketing and branding for companies within a certain stage of brand growth, and for spearheading the inquiry of brand support infrastructures and practices in the country. As the national management institute, MIM's main responsibility is to support the building of management competencies in the country. It is therefore the hope of the three survey partners (MIM, Trax and PwC) that the publishing of the report would offer Malaysian companies important and timely insights as to where and how to invest in the global and strategic future of Malaysian brands.

For further information, please contact:

• Ms. Aziah Abu Bakar or Ms. Adele Chow at the Malaysian Institute of Management at 03-21654641 or visit MIM Website at www.mim.edu.
  
• Ms. Zu Mian at Trax Associates at 20948266 or visit Trax Website at www.trax.com.my
  
• Ms. Haniza Taufik at PricewaterhouseCoopers at 26931077 or visit PwC Website at www.pwc.com/my

Related links:

Speech by Yang Berhormat Dato' Seri Rafidah Aziz, Minister of International Trade and Industry

Speech by Yang Amat Berbahagia Tun Haji Mohd Hanif Omar, President of Malaysian Institute of Management

Speech by VU Kumar, Advisory Leader, PricewaterhouseCoopers Malaysia

The Edge Online: CEOs See Potential In Integrating Brand Practices

The Star: Most CEOs Believe In The Power Of Brand Building

New Straits Times: Malaysian Firms Not Spending Enough To Build Brands

The Star: Bridging the Branding Divide