Address by : Mr VU Kumar
Date : 6 February 2004

Yang Berhormat Dato' Seri Kerk Choo Ting, Deputy Minister of International Trade and Industry
Fellow survey partners
Distinguished guests
Ladies and Gentlemen

Good morning and thank you so much for taking time to attend this CEO Annual Brand Practice Review.

I will not belabour the profound value that is ascribed to well developed and built brands.  Your presence here and indeed the presence of the Honorable Deputy Minister attest to this fact.

There are primarily 4 reasons why we, PricewaterhouseCoopers, embarked on this Review.

Firstly, it has been our long held view that Malaysia must get premium for its goods and services.  It cannot get this premium if its goods and services do not have global recognition or if it continues contract manufacturing for a global player.  More alarmingly, global brands have deep penetration in local markets affecting Malaysian companies.  The time thus is right to take stock as Malaysian companies and indeed the Government are putting efforts to build brands - globalisation leaves us no choice.

Secondly, to build a brand requires pain and effort.   It is not a case of just spending on Advertising and Promotion, hoping that this will provide emotional value to the customer.  Building a brand requires focused strategy, detailed implementation and robust risk management.  And, more importantly, it requires an organisation which has a cohesive culture; one that lives and breathes its values; where these values are consistently recognised by all stakeholders.

As I look around, I notice a number of you that have built powerful brands.  I am sure you have been through many trials and tribulations to build brands in terms of strategy, process implementation and culture inculcation.

But then again, many of you have seen that, put in the wrong hands and not maintained properly, some of the powerful Malaysian brands can be damaged or destroyed very quickly.

Some have held the view that perhaps Malaysian companies should short cut the process by purchasing global brands.  Again we believe that this is only possible if you have an infrastructure that can maintain these brands.

Which comes to the third reason.  Focused strategy, detailed implementation and cohesive culture require corporate governance in substance rather than form.  Not corporate governance merely to meet KLSE (or rather MESB) requirements.  It requires internal judicious spending with fastidious monitoring and supervision of spend.  And it requires transparent communication of brand building activities to all stakeholders.  Even in Malaysia, we have seen how trusted names have been rewarded by capital markets.  They have done so by communicating their good governance activities; what we call Value Reporting in a disclosure based reporting regime.

Finally, as Advisors we are not only interested in the processes but, in the ultimate, on how Brand investment decisions are made, how returns on such investments are measured and how brands are valued.  Balance sheets are historical.  Intangible values ascribed to brands far supercede, in many cases, net tangible asset values.  More recognition by Malaysian corporates of brands' tremendous intangible value will accelerate initiatives in brand building.

It is for these 4 reasons that our Review was directed to CEOs.  Brand management requires the specific involvement and attention by the CEO.

Thank you indeed CEOs as your response was tremendous.   We hope that the Report you will receive today and the questionnaire we used for the survey will assist you in your brand management.   You will find that the Report confirms that Malaysia has a long way to go in brand management.

When my old friend Datin Yasmin mooted this Review idea, it brought forth something we at PricewaterhouseCoopers always wanted to do.  Trax is a brand specialist which has in-depth methodology in brand building processes, and so were most appropriate to partner with us.  And with the significant support from MIM, I am indeed pleased that we have together reached, if I may say, a successful product - The Malaysian Brand Practice Report 2003.

Thank you.

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