Marketing the right way

MyDin Business strategy

2012-01-10T08:55:00.001-08:00

Overall the approach taken by MyDin is simple - target the Muslim market only and flank for the others. Focus on cost control and cost leadership where possible.

The reason why they have been successful is linked to their ability to stay focused on the Muslim market, whereas the others are catering for all the markets. The strategy used here is the same one that allowed PowerRoot, Ali Cafe to beat the likes of Nescafe. When a niche player appears in the market, it will always beat the others. In the Malaysian retail marketing scenario - it is obvious that MyDin has a clear advantage over the others. It also has strongly entrenched markets in East coast states that allows it to generate capital to pump for the war over at the central market.

Proton encirclement attack on Perodua{

2012-01-10T08:39:00.000-08:00

It seems that Proton has launched an encirclement attack on Perodua, by creating a variety of offers around the Myvi 1.5, most of it at a lower price. This allows the marketeers to learn the "tactical move" from one of the industry experts - a well known marketing general from Chacko.

If one had noticed the actions taken to date
1. PR campaign in winning awards by Proton cars in number of competitions
2. Launch frequency and update frequency for the cars has increased significantly
3. The increase in the level of choices available for the user

All of this seems to indicate that their marketing is heading in the right manner, with clear vision on what to achieve - a niche in the hearts and minds of the people.

At this rate, turnaround would be easily achieved for the national car, which is why it has been targeted for take-over. If only Mahathir had thought about this before, tapping the talent of Malaysian irrespective of race, this would have paid of the national car manufacturer earlier.

On the other hand, in the case of MAS and AIRASIA, the technique being used by AA to kill of MAS is dirty and possibly underhanded. This is especially since there is an intention by AA to come up with a premium class niche player in the future. This would imply that they intended to bleed MAS until it become a cheap takeover target that the government (which may be cash strapped) might have to unload

This will lead to Malaysian paying a bigger price since it will eliminate the local competition significantly and could result in major issues in international travel markets. If only MAS was allowed to implement their turn-around strategy correctly, rather than just unbundling of their non-core assets to survive. FireFly by the way was a success story which possibly led to AA taking drastic actions to reduce the threat.

The above are just my opinion and not real facts.

Managing the marketing budget

2011-12-23T14:43:00.000-08:00

In the current period of turmoil and international challenges, the one budget that will always get hit is the marketing budget. The marketing manager or director must be able to convince the finance people that it is important to maintain the budget rather than slash the budget to save cost.

This has been the recent study of marketing due diligence which was recently introduced by the British Marketing guru. He has recognised the impact of cutting the budget on shareholder value and proposes the latest analytics to determine the impact of reducing the budget.

When times are hard, I would suggest that Marketing managers and directors not to immediately cut the budget or setting arbitrary sales targets for the sales team to achieve, but rather to evaluate the segments that are being taken care off and decide which segment can do with less attention and which segment requires more attention. For this to be done - push the finance department to come up with customer profitability analysis and market segment profitability analysis, which would allow the marketing department to focus their attention where it matters the most - resulting in a higher yield for the company.

The steps being recommended here is a simple consolidation strategy, which implies that you must have data to tell you where you are making money and where you are wasting efforts.

HARD TIMES ARE ABOUT TO HIT IN JANUARY AND FEBRUARY 2012, BE READY FOR THE WORST ECONOMIC TURMOIL TO STRIKE THEN WITH BOTH IMPACT FROM THE EURO AND US AT THE SAME TIME.

Companies that have a high dependence on US and EURO market, it would be wise to develop a back-up plan for the decline

MARKETING IN MALAYSIA

2011-12-03T22:28:00.001-08:00

It would appear that Malaysian companies are actually clueless when it comes to marketing. They are willing to place any one that is good in SALES as the person in charge of marketing.

That is the equivalent of putting a sniper or a really good foot soldier in the position of general of the army. This would imply that the marketing person would then start to convert the whole approach around their understanding of a narrow aspect of the battlefield rather than looking at the bigger picture.

This is not the worse part - some of the companies have actually hired production managers, HR staffs, and anyone who was a bit extrovert into the position of marketing manager.

That is the equivalent of of a hospital promoting a nurse to become a doctor because she was successful in treating a few patients with flu and fever. This will never happen in the medicine world but it always happens in the business world - nurses are actually running the whole surgery department.

WHY IS THIS HAPPENING IN MALAYSIAN MARKETING SCENE?
Simple - everyone believes that marketing can be done by everyone and anyone who can talk and write. WRONG ! The profession of marketing is still in its infancy in Malaysia, this is a sad case, given the need for development nation quickly. We need to ensure that marketeers in Malaysia start putting their foot down and state that they have a specialist knowledge that others cannot easily get.

Best case for marketing in action in recent times - PROTON

I had never supported PROTON, for a long time and this was because they were extremely weak in terms of marketing, but recently they manage to recruit a competent general from overseas. He has already 1 up PERODUA, with the PR ATTACK - winning the REEV awards in UK and also the FIA Asia Pacific Awards - using it to gain the maximum PR advantage as possible = will allow the target audience to be a bit proud about the car that they are considering to buy.

Even if PERODUA has a good marketing team, it would appear that one of the most important element in marketing is innovation in the manner in which you approach the market. In this case PERODUA and NOKIA both have the same problem - decreasing returns to scale in terms of marketing activities. BOTH of the companies have not made any changes in the manner in which they have approach to market - only using incremental increases in their product and services - which initially would result in increasing returns to scale, but as time goes on, it will reduce to constant return to scale and the current state - decreasing return to scale.

I know you are thinking about the return to scale theory is a production theory, but I think it can be cross applied to the marketing world too. In this case, if a company follows the same marketing approach - it will sooner or later become tasteless to the target audience. - Constant search for new ideas to attached to the marketing message should be the key element of marketeers.

2011-06-25T22:12:00.000-07:00

Is the 1 Malaysia idea being overused? It would appear that we have so many 1 ideas that sooner or later it will be lost in confusion. This aspect of putting 1 infront of everything would keep reducing the overall value. If the 1 is the key to the next election, it would appear that there are so many 1's leading to a confused idea.

2011-04-22T03:02:00.000-07:00

Kopitiam wars - THE OLD TOWN STORY

The world of Kopitiams have become very confusing in recent times - with many copycats around that are all aiming for the same solution. Lets consider the first mover - OLD TOWN, which was the more well known for franchising the Kopitiam outlet approach, then there was the STATIONONE, PAK LI, JUNCTION ONE...........and so on.

The key aspect of the whole Kopitiam market
Good coffee/tea/milo + Roti bakar
Nasi Lemak + Mee Siam

Then this organisation started to aim for the lunch, dinner, tea, breakfast segments of the food market - initially with some success but later those that invested in the franchise would have done better putting their money in PUBLIC BANK.

The market for kopitiam ar so saturated that it would be better for a person to open their own shop without the need of a franchise brand and sell only the matters above. Keep the service in good order and the food tasty and you will be able to win the war in your own area.

How do you know whether there is a problem with the business model for the Kopitiam? Look at the discounts that is given by OLD TOWN to compete for the breakfast segment against McD - it will kill the profit margins earned by the franchiser significantly. OLD TOWN has to discount heavily to attract people to go to their outlets (bit too late) since value breakfast deals is owned by McD. Even KFC cannot own that word for now (no matter how cheap they make their product) - it tells you that OLD TOWN marketing mix has got a problem - SINCE they did not position themselves as a value location, more like a premium location in between traditional shops and starbucks (the tengah jalan approach).

The problem with tengah jalan approach - copy cats and it can easily be bulldozed by seriously large players. What was OLD TOWN USP and ESP?

USP = their coffee which can be purchased very cheap of the shelf therefore no longer considered to be unique
ESP = nothing yet
Therefore their positioning in the market will be contestable since the Brand really does not own anything

What is McD USP and ESP?
USP = their burgers and the speed in which they serve their products. Standard food quality with value pricing
ESP = Children fun place - happy place (added by their link to disney toys)

THEIR USP IS HELD IN PLACE BY THEIR PRICING STRATEGIES, PRODUCT STRATEGY, SERVICE PROCESS & FINALLY THEIR PROMOTIONS

2011-04-22T02:29:00.000-07:00

Breakfast wars McD vs KFC

It would seem that McD had entered into the fastfood breakfast segment before KFC ventured into it. Both have dropped their prices significantly low - McD was already offering free breakfast for some people and massive discounts for their products - Weekday specials, which KFC has responded with their SMART meals.

Now lets compare the 2 players head to head

McD - Strengths

1. Premium brewed coffee

2. Unique breakfast offering - muffins & hotcakes

3. Fast and efficient service (due to their production line manufacturing process)

4. Free coffee/tea refills

5. Lowest pricing - RM4

6. First mover advantage

McD - Weakness

1. Lack of distribution (not that many outlets)

2. Poor location for some outlets

KFC - Strengths

1. Strong distribution - many outlets

2. Can bank on their fried chickens to attract

KFC - Weakness

1. Basic products (competes with normal mamak shops)

2. Using Nescafe

3. No refills

4. Whats so SMART about their products?

5. Slow service

6. Poor product taste - I have tasted both the burgers - McD wins hands down even though theirs is only the sausage

Overall in the case of BREAKFAST WARS, I would bet that McD would easily beat KFC. But wait, Subway has also joined in the battle with their breakfast offering - which is atleast RM 2.30 higher.

Wonder if Baskin and Robbins will join the battle.

In terms of 5 forces analysis, it would appear that the entry of Big boys into the breakfast market will probably hurt the traditional breakfast outlets significantly

- Mamak shops

- Kopitiam

- Nasi lemak sellers

Especially since their pricing is much higher compared to the big boys who have the ability to leverage on their economies of scale.

This I believe would be a good thing in the end, since most of the other outlets have been increasing their prices without hesitation - leading to the attraction of the big boys. This holds the basic economics theory true - when firms make supernormal profit, it will always attract big boys to enter the market.

Now if the small businesses complain about this - its their own fault -Why did they start charging so high - it is bound to attract attention sooner or later.

2011-04-21T22:05:00.001-07:00

Marketing Due Diligence

The latest development in marketing from the British Guru of marketing - Malcolm McDonald. It would appear to be a marriage between marketing and financial, but I bet the audit firms cannot provide this service yet.

Level of Marketing Effectiveness	Areas considered	Outputs
Level 1 Marketing Due Diligence	The marketing strategy ( i.e. the choice of target customers and value proposition)	An objective assessment of whether or not the marketing strategy will create of destroy shareholder value, together with the identification of how the strategy may be improved
Level 2 Marketing Effectiveness	The marketing tactics (i.e. the full range of products, pricing, promotional and channels) employed for each segment identified and targeted by the marketing strategy	The likelihood of the marketing tactics creating the necessary competitive advantage in each segment
Level 3 Promotional Effectiveness	The marketing communications activity (i.e. advertising, sales team etc) employed to communicate with each segment	The effectiveness of the communications activity in achieving marketing communications objectives such as awareness recall etc

2011-04-21T20:44:00.000-07:00

Uphill battle for BN in the upcoming elections for Malaysia

From my reading of the recent Sarawak elections, it would appear that the Marketing strategy that BN has been using is not really paying it dividends. My view is that it lacks the integration and there is too much noise within the communication to clearly get a positioning in the heads of the voters. Lets look at the initiatives that BN has pulled out in terms of winning over the hearts

1. 1Malaysia initiative

2. KPI

3. Crackdown on Anwar

4. Money based campaigning

Well all of the above has been possibly drowned by the following

1. Success of DAP in Penang

2. MACC issues

3. Interlok

4. Corruption

The volume of noise cancellation effect that the negative news has is significant. This could lead to possible loss of communication relevance and reliability of the source.

One of the interesting things to note is the successful use of the Obama approach by DAP in Sarawak election - TIME FOR CHANGE

This is going to be hard to beat, since it targets the younger generation who are always rebels at heart and willing to go the other way just to be different from their parents.

2010-08-26T04:46:00.001-07:00

J Pro update
The interest for P3 and F8 was sufficient for me to initiate a class for the 2 papers

The current schedule for p3 and f8 class is as follows:

P3 - Monday and Tuesday (10.00am - 1.00 pm)- RM1,000 (includes revision)

F8 - Wednesday (10.00 - 2.00 pm)- RM800 (includes revision)

The class will start on 6 th of September for P3 and F8 will start on 8th of September.

Both classes will cater for students that have some background in the paper, studied before but need some form of clarity in handling the exam questions. I will still do a re-cap of the theories and models for each paper, higher emphasis will be on exam techniques.

Please make your registration by sending an sms with your name and paper to 0178786074. The class size is limited to 18 only (maximum that I want to tutor), confirm early.

P7 classes will be starting this Saturday 28th, those that have confirmed your seats please take note, there is still some room for others to join in (8 more seats only)

2010-06-06T09:29:00.000-07:00

Marketing made easy

What is marketing for most people - 4P that they studied in some text book?

Well I think that most people are getting lost in the world of P's when it comes to marketing, from my point of view, marketing is the activity that you should be doing to attract your customers only when you know what you are offering to them.

Most of the companies that are around are beginning to miss this point, they seem to be offering something that they themselves do not believe in. Tony Fernandez of AirAsia knew what he was offering to the customers when he started his idea that "everyone can fly", it was the same idea that was used by Henry Ford when he had sold the model-T ford - "everyone can own a car"

To make a product so cheap that it was affordable by all was the goal, the rest is marketing.

Ferrari started of with building cars for racing, not for customers. He only built cars for customers - production cars to raise money for his main interest - racing. It was the love for his racing that had made his brand name successful. He also made fewer cars but made them well, which allowed him to price it high.

To make a product only to support the main interest, but the product is made with such technology that street cars could only dream about - the rest is marketing.

In other words - you must be clear about what you want to achieve before the customers can understand what you are selling to them.

2010-04-03T18:33:00.000-07:00

The art of war in marketing

Using principles rather than rules of marketing is more appropriate manner in dealing with the art of war. Al Reis and Jack Trout did mention about Marketing Warfare, discussing simple warfare terms such as flanking, frontal attack, position defence, encirclement and other simple war strategies applied in marketing context.

The 12 essential principles for winning the war for customers was written by Gerald A Michaelson and Steven W Michaelson provided a list of principles to follow:

1. Honor the Customer
Never piss of the customer, try to keep them happy as long as you are happy. If they piss you off, consider if they are worth the effort to keep, if not, let them go politely and show the your competitor (let the bad ones go the competitor and the good ones stay with you)

2. Organization of intelligence
Understanding the market and the opportunities and threat are vital for correct plans to be executed.

3. Maintenance of objective
One clear objective is what is needed to ensure that all troops within the camp can support. If each division has different objective, the victory will be costly. In this case, Winston Churchill had one clear objective during WW2, ensure that the German will be beaten back. This was the same with Komatsu,their mission was "Kill Tractor"
4. A secure position
This implies the idea of using unique selling proposition and emotional selling proposition, such as the case of Volvo - safety and KFC - chicken and finally Proton - failed power windows.

5. Offensive Action
Keep the pressure on the your strong point, reducing emphasis in your strong point enables the competitors to catch up. In this case, KFC keeps highlighting their chicken all the time in their ads, ensuring that no other occupies that location in your mind - no wonder they have about 40% of the market for fast food and McD only has about 25%.

6. Surprise
Pop up a product when they are not expecting any moves from you, this could be seen in the manner in which Sony entered into the console market using Play Station, neither Nintendo nor Sega was prepared for the entry, on the other hand when Microsoft tried to enter the console market, Sony was ready for them.

7. Maneuver
Understand the competitors strong points and weak points, engage them where they have no presence or not aware of - Honda and how it captured the American market in the early 1950's - going after the 50cc to 150cc market, where Harley Davidson did not have any products.

8. Concentration of Resources - Knowing the critical success factor in the business is important, since focusing your resources there should increase the chances of success.

9. Economy of force - Understanding your resource base and think about ways to be resourceful - how the Japanese beat the British in Singapore in 1942

10. Command structure - have the soldiers trained and have them supervised by the correct captain and generals.

11. Personal leadership - Leader must walk the talk and show the people that he is in it not for the money only, but the spirit and meaning of progress, a mission that should improve the world and people around him.

12. Simplicity - keep the plans for marketing sinple and easy to apply within the organisation and people that you have - focusing on the specific actions and work to be done rather than measures, vague objectives.

2009-03-31T06:25:00.000-07:00

Recent war in the world of LCCI and AIA in KLANG.

The market leader ALC was badly damaged in the actions of a new player in the market IPAQ, which only started operations in end of 2008.

Within a 6 months period, the new player smashed up the market size of the leader to bits and pieces with a well executed marketing campaign that sent the clear message to the potential customers.

Here, the formula that is well known for marketing SOM = SOV x SOP x SOD appears to have shown its head.

The first part, SOM Share of market will be determined by the level of AD spending, level of spend on the quality of the service delivery and finally the level of distributions available.

In this case the new player outspent the leader $5 to 1 on ADs, which clearly killed the SOM for the leader. The next point was the SOP, the message that was sent by IPAQ, clearly created an impression of quality delivery, with movie star type marketing.

All this indicates that usage of marketing is effective

2008-11-05T07:18:00.000-08:00

Old definition of marketing by CIM

"The management process responsible for identifying, anticipating and satisfying customer requirements profitably"

New definition of marketing by CIM

"The strategic business function that creates value by stimulating, facilitating and fulfilling customer demand. It does this by building brands, nurturing innovation, developing relationships, creating good customer service and communicating benefits. By operating customer-centrically, marketing brings positive return on investment, satisfies shareholders and stake-holders from business and the community, and contributes to positive behavioural change and a sustainable business future."

Why can't they just say that marketing is about "the process of building and projecting an image using innovative segmenting, targeting and positioning solutions that provide sustainable value improvement for stakeholders in a strategic capacity"

Kotler has the following circular definition that loops on the "value" word

Marketing is the process by which companies create value for customers and build strong customer relationship in order to capture value from the customer

Now back to the latest news regarding the development of CIM in Malaysia

From what I know of since I had left the lecturing circuit for CIM and joined the ACCA circuit completely (sort of like a rally driver moving into F1 racing), the number of students that have left CIM but still want to continue is high.

Many students left CIM after trying out level 1 or some way thru level 2 due to the difficulty of the examination (most probably the biasness of the markers who kept on failing them)

The latest development for those students that are still keen in completing this prestigious course is that CIM has now made the Level 1 and 2 assignment based. This is more controllable since the language is now no longer a barrier (you have spell check and can get some one to proof read your assignment for language problems)

Marketing Essentials - 3 hours exam

Assessing the Marketing Environment - 3 hour exam based on a pre seen case study (SWOT & PESTEL analysis done - 4 pages and bring to exam and apply)

Marketing Information Research - research based project

Stakeholder Marketing - work based project

Marked by UK examiner

2008-09-18T22:23:00.000-07:00

Marketing in the new media age

Is it possible that media fragmentation is occuring at faster paces than before?

Well looks like in Malaysia, there is one major problem with the media and advertising scene.

The TV channels and newspapers seem to be suffering from diminishing trust factor - hence reliability and credibility.

Reliability and credibility is one of the most important aspects of the JOURNALISM, its one of the corner stone of reporting news

The above is built by NEWS REPORTING having independence and objectivity.

Lets review the current sad state of news reporting in Malaysia.

Independence of the news - it is impacted by the following threats:
1. Familiarity
2. Advocacy
3. Self-interest
4. Self-review
5. Intimidation

In this case our media suffers from 1,2,3 and 5

Familiarity - long association with an ad paying client makes them familiar with the party and will be willing to trust them more, giving them more than needed praise in articles and reviews.
Advocacy - since the ad is being paid for, there is a need for the articles to be written out for them
Self-interest - the articles are only being written because there is an ad spend by the client, in other words: AD spend = PR Coverage, this undermines the idea of PR being actually news worthy material that editors are suppose to review objectively
Intimidation - articles are being biased so as not to loose the ad client.

Due to the lack of independence and objectivity of the newspaper, it starts to loose out its credibility in the eyes of the readers. That is the start of the demise of the most profitable business they have.

Other media is quickly taking advantage of this fact, hence the growth of blogger based ads, google based ads as well as billboards and even radio.

Yes, since radio does not provide much news reporting, its credibility was not affected by the above.

The current environment is going to make it hard for the marketeer to choose the correct media to hit the targeted segment.

As a professional marketeer, you will need to keep yourself updated with the trends in media credibility and reliability, which changes with the editors that are in charge of the news.

Independent editors = high trust = good media for sending messages out

2008-02-24T23:56:00.000-08:00

Its been some time since the marketeer has updated the blog.

RICE MARKETING IN MALAYSIA

Have you ever wondered about the Malaysian market for RICE, there are so many brands out there, there is not one single clear leader in the market. The kind of positioning used by the primary player - Bernas. is a value degeneration activity for the original principal.

I was looking at the ads they were playing in the supermarket, 2 came into my view. I decided to spend some time and see what is happening in the ads.

Scene 1.
Lady in night gown arrives for dinner in luxury car
Man in suit escorts here to the dining table

Scene 2
Lady seated at the dinner table
Man seated beside her

Scene 3
View of dishes being served

Scene 4
Animated aroma (smoke) moves to seated lady
She is pleasantly happy (smiles slightly)
Guy nods his head in approval (as if he is going to get lucky today)

Scene 5
Rice is shown

Scene 6
Closing out with the rice bag - indicating the brand name - its a fragrant rice

The end

I guess they paid a bomb to get the ad done, I wonder which idiot in the ad agency came out with the ad creative ideas and the whole production, plus the bigger idiot that approved it?

Next thing you know they will try to equate beer ads and rice ads, eat rice and get lucky with the ladies, all you have to do is cook some rice at the house and bingo, the ladies are craving to get at you for the food.

The ad does not do much to impress the audience on the ESP as well as the USP of the rice. It fails in its communication dramatically.

The second Ad uses a well known celebrity - "anda pasti" guy from who wants to be a millionaire

Scene 1
Its dinner time and the family is gathering in the dining table

Scene 2
Daddy (anda pasti guy) seats and eats (if I am not mistaken)

Scene 3
He is very happy with the rice and compliments his wife.....sorry he compliments the rice

Scene 4
He hard sells the rice to the audience - its the best

The end

Now, does that look like an ad for any food product?, I could switch the product to even a plate, you get the same idea same ad. End of the day - you have a situation where the message does not mean much for the audience - lacks connection with the grass roots.

In the case here, we can illustrate the lack of commitment of license holder of the rice (AGENT) in terms of pushing the product to the mass markets. It also illustrates that giving your product to be managed by some one who is overly stretched in terms of product ranges causes confusion and lack of attention.

BERNAS - is just carrying to much products for it to be able to serve each product effectively or even efficiently.

Another note that can be made here is the lack of co-ordination of efforts. It seems there is a loss of focus on the customer and segments. This can be attributable to a centralised / functional marketing department that is not being measured in terms of performance. Traditional structures that have long outlived their usefulness.

Talking about performance measures - its seems that most of the companies that I know of, seriously lack appropriate measures and objectives. Most of them are just pouring down good earned money into activities that are more of show rather than value generation. In fact most tend to do the opposite - value degeneration.

So here it come - Mr. Jay's Value Degeneration Action Equation - VaDAE

Devalued by customer x Devalued by employees x Devalued by shareholders x Devalued by other stakeholders = Total value degeneration actions

The above concept needs refinement, but the general idea to assess the devaluation created by each action by management starting from 1 to 5 ranking. 5 being extremely devalued activity initiated by management, whereas 1 mildly devalued activity.

Let me illustrate the application of the model to you.

CEO of the company is changed due to unknown reasons.

CEO comes in and starts to create new policies and procedures that fit his style, not paying attention to the system that was left by the past CEO, cause he is too arrogant to see it

This might have the following impact:
C = Customer : 1
E = Employee : 5
S = Shareholders : 1
O= Other stakeholders : 3 (Suppliers and trade unions)

Overall the changes in policy and procedures will not affect the customers and shareholders, since they can't feel the impact yet. Suppliers start to feel the changes as some are made to bend over, and some are made to leave. Employees will feel the pressure the most since new leadership is the hardest changeover for most.

Total value degeneration = 1 x 5 x 1 x 3 = 15% overall value

Now that there employees are not happy, they start to leave, and the CEO starts to bring in his cronies "knights" to help establish his KINGDOM (I call this the Knights of the round-table syndrome). Overall since employees leave (taking with them human capital) and the know-how, the customers may start feeling the difference in the way the company deals with its customers. The other stakeholders may be irritated since the knights will now move in their own personal group of suppliers - the larger table syndrome. The profitability will take a strain due to combine impact of 1. loss of knowledge and 2. loss of goodwill 3. New supply chain learning cost

C = 3 (feeling the difference)
E = 4 (some of the old staffs have been replaced)
S = 3 (reducing profits)
O = 4 (irritated old friends / some new ones)

Total value degeneration = 3 x 4 x 3 x 4 = 144% of overall value

Now this model is useful in explaining why most companies overall value starts to decline after the euphoria of the new management cease in the stock markets.

So what is the worst case scenario = 5 x 5 x 5 x 5 = 625% decline in value.

Note that the following ideas will be active in this model.

The decline will be compounding.
There is an accelerator and multiplier theory in action.

Comments about the model?

2008-01-04T07:59:00.000-08:00

Malaysian Marketing News

Real estate markets?
I am currently providing training for a company that seems to have made it big in the world of real estate investments.

The modus operandi for the company is quite interesting:

The company sells membership to real estate investment club

The have 3 product categories

Class - Small - Medium Investor
Class - Big

They charge an entry fee of 1850 and followed by a 7.5% annual charge on the investment values

So far they have 20,000 - 50,000 and 100,000 annual investment limit

They allow the members that come in to bid on houses that they have obtained and sell it of to the open market within 6 months giving a minimum return of 25% on the investment.

But there is a catch, in a month you can only invest a maximum of 20% of your investment, and there is no investment in February and December.
That gives you a room of 10 months to invest your cash.

The other catch is say if you take the 20,000 has your choice, you will have to fork out annual 1,500 to keep your membership alive.

The company has managed to centralised all the necessary players for the members - mainly you need to have
1. An auction house
2. A lawyer
3. A real estate agent
4. A repair crew for the homes purchased
5. A research team to review the properties for the members
6. A member care team
7. A member recruitment team

How do they generate the minimum 25% return? Well they get an auction property from the banks, normally will go below the market price.
Next they review the market price and decide if they can make money from the property
Once they have decided that there is money to be made, next they put up the property in the members review
Members then allocate thier funds to buy the property
Once they have sufficient capital, they buy the property (auction house makes some money)
The lawyers dealing with the members make some money
Next the repair crew repairs the property to a saleable level (some additional charges for repair team)
The real estate team sells the property and takes a cut from the profit too.
Balance now ranges from a 25-30% return based on investment.

The reason for me to be telling all this stories about a single company is not because I want you to join in, but rather taking a marketing angle to the whole deal, tell me if PORTER's VALUE CHAIN can be applied to this company and what are the problems in using the value chain outside the traditional domain of manufactuing?

Question - do you believe that this business model is sustainable?

What do ou think is the strategy used by the company in terms of PORTER's GENERIC strategies?

2007-11-26T05:08:00.000-08:00

Preparing for the coming CIM exams

Notes for the following papers:

CIM DIPLOMA - MARKETING RESEARCH INFORMATION (MRI)
CIM PG.DIPLOMA - MANAGING MARKETING PERFORMANCE (MMP)
CIM PG.DIPLOMA - STRATEGIC MARKETING DECISION (SMD)
CIM PG.DIPLOMA - STRATEGIC MARKETING IN PRACTICE (SMIP)

CIM DIPLOMA - MRI

In this paper you will get a case study with some brief research objectives provided to you.

In the first part try to understand the type of business that you are trying to handle, each will have thier own problems.

B2B
B2C
SERVICE
FMCG
DURABLE

The 10 marks will be awarded for some clarification question that needs to be asked by the marketing research agency to the client.

Questions should related to making the OBJECTIVE given in the case study into more SMART level. Focus on generating 3 -4 marks from this area.

Another 3-4 marks can be generated from discussion on the resources for the research, internal database / use of internal staffs

Another 3-4 marks generated from the general items that will need to be clarified, timeline, budget composition, PEST, 3C, Stakeholders (don't over write here, pick the most critical ones and talk about them

1 mark can be generated for bringing in Ethical discussion

There ends the Part A

When you reach part this is what you need:

Make some assumptions and state it on the start itself.

The begin writing out the items that have been discussed in the class.

Remember that you need to decide on the research mix before you proceed.

RESEARCH MIX
Internal / External
Secondary / Primary
Qualitative / Quantitative

Once you have decided on the mix then move on to the tools that need to be used

SAMPLING - RANDOM / NON-RANDOM
QUALI - FOCUS / INDEPTH / OBSERVATION / EXPERIMENT
QUANTI - SURVEY / OBSERVATION / EXPERIMENT
ANALYSIS - Hypothesis testing, Chi-square, Estimation, Descriptive statistics, Correlation, regression, time series. (If you don't really know this let it be you have just lost about 5 marks max)

Make sure you give a justification on why you have selected a specific method of mix and tools for each objective

Therefore (O-M-T)
OBJECTIVE #
MIX - justify
TOOLS - justify
REPEAT the above again.

CONCLUSION - back to standard answer.

You have 40 marks, most of it is in the O-M-T about 30 marks.
The rest is for the format.

CIM Pg.DIPLOMA - MMP

This paper is one of the worst papers in the CIM Pg.DIP stable with its counterpart SMD.

The focus of the paper is implementation of strategy, which normally means that it is focused on internal issues rather then external issues.

Hence the paper has been critical on approaches in implementing the strategies and the problems that usually crop up during implementation and how to solve those problems.

In this case that paper has asked alot of questions in the following areas:

1. Change management and internal marketing

2. Customer care, CRM and KAM

3. Service quality management

4. Financial evaluation and resource issues to be faced in implementation

5. Innovation and the development of creative cultures

6. Establishment of controls and the use of Balance Scorecard (be critical)

7. Marketing team development and staff management issues

8. Implementation of strategy (Ensor - Chapter 13 and 14)

9. CSR and ETHICAL issue****

Now when you have reached this level, the issue is to be able to argue the need of something at the Board of Director level, it is no longer MANAGER level.

I suggest that the first thing to do in all case is to breakdown the marks so thatt each area could be targeted correctly with the right amount of work (Work allocation)

Next decide the THEORY that may be relevant for each area

DO NOT START WRITING OUT THE THEORY (examiner is not interested in your ability to recall the theory only)

Decide on how you can relate the theory to the exam question and then move on to the answering part. CONTEXTUALIZE the THEORY

Make a decision that this is the problem in the company and the right way to solve it is:

Consider the

6M

7S

pick up 3-4 items and expand on it based on marks allocation.

What are the THEORIES THAT IS NEEDED?

1. TEAM MANAGEMENT (Don't write out!)
2. MOTIVATION (state the idea in the business context)
3. LEADERSHIP (no point writing out the Blake and Mouton model, state what is appropriate and where there is a problem and how to train the manager)
4. SERVICE QUALITY - state the RATER in the business context, state the problems faced by the customer and the implications of the problems to the bottomline as well as the brand image, next suggest how to solve it.(Measure and rectify - 2 major points)
5. SERVICE QUALITY GAPS - do not state the MODEL unless you can write it in CONTEXT.
Go on and say the problems exist in which gap and state that from the information it can be assumed that other gaps are not causing a problem. THe explain how this gap could have occured in the company, the its implication to the company and finally how to close the gap.
6. INNNOVATION AUDIT and IMPROVEMENTS to NPD - do not start by writing out all the known theory here, especially the matrix. All you have to do is to decide, why there is no innovation here, its implications to this company, how will the company find out abouts its creative levels, next what it should do to create an innovative culture as well as improvement in NPD (Chapter 5 and Chapter 10 of ENSOR)
7. Branding - Types of branding approaches and how to go about measuring its value?
The valuation approaches available was covered in the class - someone please put it in the comments by referring to your notes.
8. CSR Approaches - why is it needed, how does it link to value creation and what is the ways in measuring its performance?

2007-10-13T22:54:00.000-07:00

HYPERMARKET WARS

Been away with loads of work recently and did not have the time to do postings

It seems that the WORLD of MARKETING in MALAYSIA just got exciting. I just heard that Wal-mart is coming to Malaysia. Now that is a site to watch as the T-rex of low cost retailing is coming to town to meet the smaller creatures that have been terrorising the Malaysian population.

Now each of the players have already taken a piece of the market, with both top players in Malaysia GIANT and TESCO head to head with each other.

With the entrance of WAL-MART, it would add the triangular war pattern that was similar to the legendary Chinese WAR of the THREE KINGDOMS

This time, is indeed a time for enemies to get together and plot the destruction of the T-rex else all is lost. If the T-rex makes a landing in Malaysian lands, it is definitely a matter of time before the strongholds are overwhelmed. This is what happened in Japanese attack of Malaya, where, once they made land, it was a matter of time before the strongholds of the British was overwhelmed.

Question now is how are two mortal enemies going to sit down and fortify themselves to a defensive position. Loyalty cards are no longer seen as a strong bastion of defence against price cuts and improved services.

Since both players were using the COST LEADERSHIP route of competition, they are now suffering the limitations of such a strategy, that is that there will always be a bigger and more resource rich entity that can out price them due to larger economies of scale. THIS is the same threat that AIRASIA is going to face very soon.

The profitability indicators that are being watched by the big boys are such that once a market is attractive, it begin to move in the SHELL DIRECTIONAL POLICY MATRIX. Once the market enters the secondary target or prime target zone, then it is a matter of time before the BOD decides to enter into it. Sort of like an alien creature that watches out for fertile planets to take over using advance scanners.

In this case I believe that MALAYSIA was on the watch list for some time, but WAL MART decision making system had classified it as potential only. Recent changes in the demographic indicators and the amount of money being sloshed around the market by the government billion dollar projects may have increased the markets attractiveness. Marketing decision making system must have upgraded the market to either a prime or secondary target.

With the ability to kill TESCO and GIANT already in their skill bank, they would consider the market as easy pickings.

Now the question for professional marketeers:
What do you suppose TESCO, GIANT and CARREFOUR management should be doing of this immediate threat?
In marketing terms what kind of response should you be planning for ? (Refer marketing warfare notes in the P&C book)

The Shell Directional Policy Matrix is another refinement upon the Boston Matrix. Along the horizontal axis are prospects for sector profitability, and along the vertical axis is a company's competitive capability. As with the GE Business Screen the location of a Strategic Business Unit (SBU) in any cell of the matrix implies different strategic decisions. However decisions often span options and in practice the zones are an irregular shape and do not tend to be accommodated by box shapes. Instead they blend into each other.

Each of the zones is described as follows:
Leader - major resources are focused upon the SBU.
Try harder - could be vulnerable over a longer period of time, but fine for now.
Double or quit - gamble on potential major SBU's for the future.
Growth - grow the market by focusing just enough resources here.
Custodial - just like a cash cow, milk it and do not commit any more resources.
Cash Generator - Even more like a cash cow, milk here for expansion elsewhere.
Phased withdrawal - move cash to SBU's with greater potential.
Divest - liquidate or move these assets on a fast as you can.

2007-08-07T10:52:00.000-07:00

The world of marketing is getting harder day by day =why?

Well there is a continuous trend of defragmentation of the markets that you are serving

No.2 technology convergence and miniturization is making it hard to see where the next competition is going to come from

No.3 media is getting to cluttered and the entertainment industry itself is moving from tell to join concept. (Instead of media owners telling what the audience should be watching, now the audience are deciding for themselves what they want to watch - Youtube explosion)

No.4 The economic forces that were stable are no longer there - they seem to have gone into a dynamic overdrive format.

No.5 CIM is Malaysia is know an elitist program, where only the elite group of people are doing it, thus there will be few real professional marketeers out there to help our companies

No.6 The old designs are getting popular again and the new designs are dying for now. Its the same story for all the companies and businesses -

2007-08-07T10:28:00.000-07:00

Preparing a report for the industry

Executive Summary
Category Definitions
Market Size
- Market Size by Volume (1999-2003)
Market Segmentation
- Market Segmentation by Volume
Market Shares
- Market Shares by Volume / List of main players
Company Details
- Company Details (Main Players)
Distribution
- Distribution Channels by Volume
Market Forecast
- Market Forecast by Volume (2007-2012)
Socio-Economic Data
- Socio-Economic Data for Malaysia
Further Sources
- Sources for Further Research

The following report can be sold for USD 250.00 and is usually within 20 pages only.

This is a typical purchased secondary data (MRI students take note)

2007-07-24T11:45:00.001-07:00

Coffee brews a future in China?
Author: Hope Lee
Date published: 13 Sep 2004
Source:
http://www.euromonitor.com/Coffee_brews_a_future_in_China

Coffee marketers are working on transforming China – the homeland of tea – to a coffee drinking nation. Coffee remains a statement of fashion although consumption is growing rapidly. Hope Lee from Euromonitor reports.

Starbucks is suing a rival local Chinese chain (Shanghai Xingbake Co) whose name in Chinese characters is virtually identical to that of the U.S. giant that introduced coffee culture to a nation of tea lovers. The global spread of coffee-houses is touching down in China, with coffee consumption increasing year after year. Euromonitor, the world’s leading market intelligence provider, reports on the latest trends in coffee consumption in the homeland of tea.

Domestic production expands
Total volume sales of coffee in China grew by nearly 90% between 1998 and 2003, to 6,504.5 tonnes. Domestic production of coffee beans also expanded rapidly. China Agriculture Yearbook reports that China produced a modest figure of 3,573 tonnes of coffee beans in 1997, but by 2000 this had risen to 11,568 tonnes. The United States Department of Agriculture (USDA) estimated that this figure had risen to 13,000 tonnes by 2001.
The expanded local production of coffee beans coupled with the low price of green coffee in international markets has contributed to the reduction of the retail price of coffee in China. This situation encouraged investment in coffee, which in turn resulted in a higher visibility in the retail market, particularly in large cities. The level of publicity and media interest in coffee also notably increased.

Coffee consumption - a cosmopolitan lifestyle
Coffee is a Western concept to most Chinese consumers, who associate it with Western lifestyles. Unsurprisingly, coffee consumption in China is highly concentrated in large cities such as Beijing, Shanghai and Guangzhou. Coffee appeals to adventurous, open-minded, young, affluent, urban consumers. These consumers are more exposed to Western influences and tend to look up to Western lifestyles. Manufacturers have targeted Westernised young professionals as the main target market for coffee. The key issue is how to convince these consumers that coffee is a beverage to be drunk regularly rather than just a passing fad.

Another large consumer group, which influences the coffee consumption, is returnees. China has seen an influx of returnees (mainland Chinese students returning from Western countries) over the last five years. Many of these returnees have lived in Western countries for a decade and they have become accustomed to the coffee culture. Upon their return to China they have carried on living in this fashion. Visiting cafés and drinking coffee at breakfast is not a novelty for these consumers. Their strong earnings mean that they can afford to pay a premium price for a lifestyle to which they aspire.

Foreign ex-pats also comprise a large proportion of coffee consumers in China. China’s high growth economy and improved investment has attracted substantial foreign direct investments, which has led to rapid increases in the number of ex-pats. Shanghai’s official statistics show that the number of Taiwanese living in Shanghai for short periods (at least three months) is estimated at 230,000. The figure is expected to increase each year. Ex-pats are at the high-end of coffee consumption and are also regular patrons of cafés. It is reported that Westerners and businessmen from Hong Kong and Taiwan represent 30% of customers at chained cafés such as Starbucks.

Instant coffee leads the way
In terms of market composition, instant coffee dominates the Chinese coffee market. In this tea-drinking nation, coffee culture is just starting to touch down. Most Chinese do not fully appreciate the taste of coffee and they are content with the taste of instant coffee.
The popularity of instant coffee can also be attributable to its convenient preparation. This appeals particularly to white-collar workers who have busy lifestyles and cannot afford the time to prepare fresh coffee. Price-wise, fresh coffee is expensive when compared with instant coffee. Additionally, the availability of fresh coffee is highly limited. It is found only in select stores and expensive foodservice establishments and hotels.
The convenience of 3-in-1 instant mixes (coffee, milk powder and sugar) has resulted in robust growth in volume sales. However, coffee mixes do not contribute much to overall value growth due to their low price.

Starbucks: a representative of on-trade channel
China doubled its on-trade coffee consumption between 1998-2003. This is a mostly urban phenomenon with most rural areas largely untapped. On-trade sales of coffee mainly go through three types of establishments: coffee shops/cafés (independent and chained), Internet cafés and fast food restaurants.

Euromonitor’s figures show that chained coffee shops, such as Starbucks and Manabe (Japanese style café), saw spectacular growth in unit sales, up by 814% between 1999 and 2003. Starbucks stands as a statement of modern lifestyles and affluence in today’s China. The company has opened over 90 outlets in the country.

However, Starbucks faces increasing competition from other foreign players. China’s accession to the WTO has led to the gradual relaxation of the policy governing foreign owned retail outlets, and will lead to more foreign investment and new market entrants. The reduction of import tariffs on coffee will also encourage foreign investment in coffee. Canadian chain Blenz Coffee for example, plans to open 50 outlets by the end of 2004 in China, where consumers can smoke on the premises. China, reportedly, has at least 200 million smokers. Blenz Coffee’s move obviously serves to differentiate itself from Starbucks.

Local coffee shops seem unable to compete with Starbucks directly. While the local players are busy cashing in on the café trend, some imitate Starbucks’ operations, which has caused uneasy experience. This is highlighted in the high profile lawsuit between Starbucks and Shanghai Xingbake Co. Starbucks is suing Xingbake (whose name in Chinese characters is virtually identical) for trademark infringement after the two sides failed to settle out of court. The court has yet to make a ruling. Starbucks cannot afford to lose the lawsuit, as Shanghai is the core market for its mainland Chinese operation. To gain a firm management control in China, Starbucks increased its stake in President Coffee Co. (a joint venture between Starbucks and the Taiwan based company Uni-President) from 5% to 50% in the middle of July 2004.

Nescafé has the first mover advantage
The Chinese coffee market is highly consolidated, with multinationals controlling the market. Nestlé was the first multinational to establish a coffee processing plant in China. Nestlé’s Nescafé brand is a long-running favourite in the instant coffee sector in China and Nescafé has now become a generic name for coffee. In 2002, Nestlé accounted for 46% of retail value sales. The company runs continuous above-the-line and below-the-line marketing and promotional campaigns in the country. Kraft is trailing Nestlé considerably, holding a 20% share in 2002.
Multinationals have made a positive contribution to the development of the Chinese coffee industry with both Nestlé and Kraft utilising domestically grown coffee to supply the local market. Nestlé also sent technical staff to the Yunnan province (one of the major coffee-producing provinces in China) to help growers produce coffee beans which meet their own production requirements.

Exciting potential but a lengthy transformation period ahead
The Chinese coffee market is expected to grow by 70% in total volume sales between 2003 and 2008 to reach 11,073 tonnes. Euromonitor findings show that, within Asian countries, affluent consumers with a high degree of Western influence are more likely to accept a coffee culture.
Coffee consumption in Japan (1.4 kg per capita) and Singapore (1.9 kg per capita) are far higher than that in the UK (1.2 kg per capita). In the Greater China area, Hong Kong stood at 0.8 kg per capita, higher than the world’s average at 0.7 kg. This is positive news for the Chinese coffee industry and coffee marketers are now working on persuading Chinese consumers to increase their coffee consumption significantly in the next two decades.

Concerted efforts have been made to promote coffee consumption within China. In 2001 the International Coffee Organisation organised coffee festivals in both Beijing and Shanghai. Some coffee marketers believe they can eventually persuade every Chinese citizen to drink a cup of coffee a year. If they succeed, this would translate into substantial market demand for coffee, thus benefiting local and international coffee manufacturers.

Despite the potential of a 1.3 billion population base, coffee marketers are wary of the difficulty in transforming a tea-drinking nation into a coffee-drinking nation. Tea is the Chinese national drink and will continue to be an integral part of Chinese daily life in the next two or three decades. Further to this, tea is seen as a drink, which has health benefits, while coffee is marketed as no more than a lifestyle drink. The price of coffee is still out of reach for the average Chinese consumer, while tea is a cheap indigenous product. Most Chinese consumers still have little or no knowledge about coffee. Therefore, the transformation hoped for by coffee marketers is not impossible, but it will not be easy and will not be rapid despite the recent growth

Questions - by Mr.Jay

Do you think it is possible for the local brands to enter the China market? If yes how would you suggest they enter the market and what are the problems you foresee for Aik Choong to face when they enter the market?

What about reverse entry, the Chinese player decides to enter the local market, how, when, why, where and who will they be after?

Answer in the comments and you will get some feedback

This articles is an add on to the Coffee war article.

Mr. Jay FCCA Pg.Dip Marketing (UK)
Malaysian Marketing Expert

2007-07-23T10:17:00.000-07:00

Managing Marketing Performance

In the latest class, we discussed the development of the management thinking styles that had evolved over time.

Here we have the Schhols of Management taking lead with Henri Fayol and Max Weber for the Administrative School (Rules) as well as FW Taylor for the Scientific Management School (Procedures)

Overall they were characterised by the need to organise and control the organisation.

The other School of Management is the Human Relations one that was discovered by Elton Mayo during the Hawthorne experiment.

This provided the SOFT and HARD view of management.

Over time the debate over which was the best solution raged on with some researchers making a conclusion that there is no best solution that fits all problems, they concluded that the solution should be flexed to the problem - The birth of the Contingency School.

2007-07-07T20:07:00.000-07:00

The story of a CIM student

A long time ago, in the jungles of Malaysian concrete building, there was a student in need of a marketing qualification. He considered the options -

An internal marketing diploma from any of the colleges
An externa marketing diploma from a few colleges
A 3+0 degree programme from the local colleges
Enter into the local university for a marketing degree
Enter into the foreign university in Malaysia for a marketing degree
Apply for a foreign university in overseas for a marketing degree/diploma

After seriously considering the options hard, he decided to do the most easiest route = The Chartered Institute of Marketing (CIM) course in the local college (Sunway).

Now he had heard that the course is very easy since:

1. First 6 months - internal
2. Next 6 months - external
3. Next 6 months - external
4. Next 6 months - external

So he embarks on the journey, and the first 6 months was a breeze, it was easy.

Now when he enters the next 6 months - the CIM Professional Certificate level - culture shock !
He could not understand the level of comprehension required to do the paper. He struggles to sit for the exam and the worst part, the results will be out only in 2 months time.

Now the next 6 months of his life was even more miserable - the knowledge jump required was tremendous, CIM Professional Diploma stage. At this level the most of the lingo was alien and the lecturers kept talking about many different companies and how they did their marketing.

The results came out for the first 4 papers - utter disaster - fail all of the papers. At this junction the student decides that is better to work for a while and then try again later.

This is probably a better strategy - since a professional paper is designed for a person that is in an industry and not for some freshie students.

Now years later, the student is back in the class with a new view of life and a better appreciation for the laws of marketing.

2007-06-27T09:27:00.000-07:00

COFFEE WARS

The art of segmentation - Ali Cafe / Power root

It would seem that a Chinese company has managed to corner the Malay coffee market indicates the power of segmentation. The Power root company has used a powerful marketing mix that decided to focus on the Malay (largest segment in Malaysia) by introducing a host of products that uses the Tongkat Ali and Kacip Fatimah ingredients to differentiate themselves from the Market Leader - Nestle with thier flagship product Nescafe.

It would seem that the promotional mix was also a key factor that allowed Ali Cafe / Power Roor to catch up with the market leader and establish itself as a true Malay based company - it used the celebrity endorsements (local stars and singers - very very cheap). The had also decided to FOCUS on 2 segment only - Malay Male and Malay Female - excellent move.

Now if we look at the market leader - what is their approach to the situation:

The have a one now one nescafe campaign - very catchy but then it tells people to drink coffee since nescafe is another name for coffee now.

The kickstart campaign - aimed at catching the teens - lost cause since the cost involved does not generate the loyalty required, especially since the younger generation now consider Nescafe is an older generation drink (same situation faced by Coke-Cola when Pepsi attacked it)

The range of new products that have been launched under the nescafe brand name

- coffee powder

+ original

+mocha

+gold

+premium

- can coffee drink

+host of others that just to complicated to go on with

- 3 in 1 coffee mixes

+rich

+light

+ breakfast +++

Now this is getting pretty confusing to the customers already.

What else is happening to our leader?

They are being beaten by tradition - Aik Choong Coffee is using tradition to win back the Chinese market segment in a big way

From my point of view the marketing guys in Nestle are really hoping that the Brand is the power behind thier success - NOPE its the marketing peoples skills in promoting an idea that is important not the brand - the brand is the car, the driver is the marketeer.

You don't take a Ferrari to race in the Paris-Dakkar championship - you get the right car for the the right road = Get the right brand for the right segment.

I suppose that in the long run, Nescafe is going to loose thier leadership in the market as the smaller players break the market into smaller chunks and eat away.

You know why this always happen to the leader - EGO based decisions rather then using PURE MARKETING KNOWLEDGE.

Mr. Jay

Malaysian Marketing Expert

2007-06-17T02:21:00.000-07:00

The issue about value creation or destruction.

It is the current theme for Chartered Institute of Marketing UK - Marketing and its role in value creation.

How does a company create value?

Value is created when the customers needs and shareholders needs are balanced by the management. It is the balancing act that causes the main problem.

If the balance sways towards the customer too much, shareholders suffer (short term failure) (long term success)

If the balance sways towards the shareholder too much, customers suffer (long term failure) (short term success)

How can the management sway too much towards to shareholder?

Spending too little on market research

Increasing the price of the products beyond that of competitors without any main changes

Reducing the need to innovate by using the same brand for everything

Managing the people of the organistion worse then thier capital assets

Building a culture that thrives on cost reduction based on the ideas of quality control.

How can the management sway too much to the customer?

You give me the comments on this.

2007-05-24T22:35:00.000-07:00

Proton pays it price - MALAYSIAN DISTRIBUTION CHAIN SUFFERS

It was obvious from the STAR article that PROTON is bleeding badly. This can be seen from the fact that 93% of their distributors made losses.

Breakeven sales is 40 units per month and they are only achieving 10-15 units. That means that 25-30 units = about a 75% negative margin of safety.

The distributors are already offering the following to survive:

Free laptop

3 months free installment

Discounts up to RM20,000

Let us consider product range and price ranges

PRODUCT RANGE

ISWARA - 27 k now

before 31 k to 36 k

JUARA - no longer in production so it should be sold below the cost at Net Reliasable Value (somewhere around RM15,000) but then again I think you cannot get one now days - it is now considered a classic car

SAVVY - 39k to 42k

WIRA - 42k to 51k

SATRIA NEO 43k to 54k

GEN 2 - 47k to 56k

WAJA - 56k to 61k

PERDANA - 106k to 141k

The cluster is extremely focused in the mid range pricing segment of 40k to 55k which in terms of of a 9 year loan causes a variation of RM150.00 per month. In most peoples mind RM 150 is quite an insignificant amount.

PRICING

Reality is not in the absolute price in the case of consumer durables like cars, its in the monthly price and the down payment. In this case the payments can be made to be the same for almost each car - where the problem actually starts. if the difference in the final price is not sufficient, it causes a minor change in the monthly price - hence the problem with PROTON - all the cars are pricing themself at the same monthly spend level of the customer, hence not really causing a significant change in thier perception about each car.

If you compare buying a Toyota

Vios - Altis - Camry. The gaps a large enough that it is an obvious difference in the final monthly payments. But even the giants have the same problem - look at Toyota Yaris - a failure in terms of sales in Malaysia because it was perceived to be similar value to a Vios and yet smaller.

The case above is an excellent illustration of how not to PRICE your PRODUCTS. It also illustrates that effect of discounting by your channels. Sends the wrong message to the market - the company is in trouble and there will be more discounts if you wait a bit longer.

Product discounting by channels if done as a concentrated effort by the principal will be easier to control. It is also and excellent example of how not to manage your CHANNELS.

What do you think is going to happen to the channels very soon? Will they defect to a more lucrative offer by Toyota or Perodua?

Will they ask the government to bail them out - since most of the channels are owned by quite illustrious Datuks and Tan Sri's.

And what will happen to the many second hand car dealers in the market? Will they have to bear the brunt of the actions taken by the new car dealers market?

Overall - 2008 is just around the corner, this is the time when the extension granted to PROTON for AFTA comes to an end and the market goes thru another shake-up. The future is very difficult to predict now that regulations are about to be loosened.

Here is a possible scenario of the future:

2008 - tariffs are brought down to 5% - Industry sales slump to the lowest point in history. PROTON management scrambles to do last minute methods to halt declining sales -massive promotion and discounting campaign -Trade in at the highest rates

Mid 2008
Most of the channels for Proton bail out. Market share declines to 15%. Surge in sales for Honda and Toyota who now can price much lower.
PERODUA launches 1.5 and 1.6 DVVT Sedan for thier drivers to upgrade - keeping thier share of the market.

GM and VW try to break in to Malaysian market but have a hard time

End 2008 - Share prices for Proton shoot up on the news that GM is considering to buy it up, but this is short lived as GM is under heavy pressure to rationalise themselves. NAZA motor emerges as the last person to offer a final solution to the GOVERNMENT. GOVERNMENT approaches PROTONs younger brother for HELP and PERODUA gives it freely.

PERODUA and PROTON merge and a NEW car company is born but it is 49% Malaysian and 51% Japanese. With the help of TOYOTA proton begins its new journey in the world of AUTO MANUFACTURES.

(Why did TOYOTA buy into PROTON? - Corporate Social Responsibility) Being a concerned citizen of the world - you help your smaller enemies out so that you can destroy the larger one -GM and HONDA.

Conclusion:

Pricing is critical for success - mess up and pay the price later
Channels need to be managed else they mess up your brand name
Scenarios are necessary to create a plan - Importance of Forecasting
Stakeholders need to be understood - Second hand car dealers, New car dealers, Customers, Competition, Investors, Government, Management.

Mr. Jay Malaysian Marketing Expert

Marketing Trainer/Lecturer with 11 years experience in Professional Marketing Management Development.

2007-05-19T00:36:00.000-07:00

Malaysian marketing news update

Have anyone noticed the new bottle for Spritzer - it is a smart way to increase the consumption of the mineral water with very little advertising - make the bottle mouth bigger marginally and the sales of water increased dramatically.

Sometimes you need to be a bit creative to get the business. This was the case of Artic Monkeys - they decided to use net based branding as a means of increasing thier popularity before going into main stream.

It worked and they made a lot of money. Now we have the FURZE who is another english band that sounds like Beetles.

How do Malaysian music marketing challenge in this case? Well can they benefit from the lesson of the Artic Monkeys?

Using the rules of marketing - STP is the most important way of getting things done.

Know your audience first

Satisfy thier needs

2007-05-10T20:55:00.000-07:00

What was unthinkable not too many years ago has finally happened -- Toyota is now the No. 1 automobile company in the world, surpassing General Motors in sales in the first quarter of this year. Toyota announced Tuesday that it had sold 2.348 million vehicles worldwide in the January-March quarter, surpassing the 2.26 million vehicles GM sold during the same period. Yes, it's only one quarter, but the momentum has been building for years now, and I don't expect Toyota to lose its lead anytime soon.

To a lot of people here in Detroit, it's a sad day. And not just for GM old-timers, either. General Motors wasn't just the largest U.S. automaker, it was the largest business enterprise in the world, a glittering showcase of American industrial might that mirrored the upward trajectory of this country in the blue sky '50s and go-go '60s. GM was a source of pride for Detroiters of all stripes, because along with Ford and Chrysler, the center of the automotive universe was right here in the Motor City -- and we liked it that way.

GM's heyday was a time when giants roamed the earth -- with larger-than-life characters flaunting larger-than-life egos running the most dominant industrial enterprise in the world. Back in the day, it was often said that a divisional general manager for GM had more power than some heads of small countries. And it was true. GM dictated to the market in terms of design, engineering, vehicle content, pricing, segments -- even down to the paint colors offered.

GM was the New York Yankees of the auto business with the best players, the top salaries and profit championships won, year after year. GM was so dominant at one point that there was actually talk in Congress of "breaking up" the company when its sales approached 48% of the U.S. market. Now? GM is clinging to a 24%-25% share of the U.S. market, with clinging being the operative word.

A corner never turned GM's long slow slide to second-tier status and Toyota's meteoric rise to the top went hand in hand. While GM continued to bask in the arrogance that came with being the most dominant player in the automotive world, it became complacent and mired in yester-think -- which went perfectly with its obsolete organizational structure and burdensome divisional lineup -- and the mediocre, yester-tech cars and trucks that they unloaded on the American landscape beginning in the late 70s and that continued all the way to the mid '90s.

Meanwhile, Toyota never wavered from its path of focused consistency, with each product offered better than the previous one, each bristling with a level of durability, quality and reliability that was light years beyond anything GM and the rest of what was formerly (and now quaintly) known as the "Big Three" was offering. And along with building better cars and trucks,

Toyota built its dealer network from the ground up, too, offering up high-caliber, enthusiastic dealers who weren't stuck in the past and who were hellbent on pushing Toyota to the top.
And when the inevitable criticism of Toyota and the other Asian manufacturers became the hot topic in Detroit and Washington, with Detroit's market share slipping and jobs being impacted, and the cry came from auto executives and sympathetic legislators to "let them build factories over here and we'll see how they do" -- they proceeded to do exactly that. And while Toyota (and Honda) were building sparkling new factories in regions of the country free of the crushing costs associated with union labor contracts, GM and the other Detroit automakers were collectively crafting the most egregiously overinflated and overwrought labor contracts in history with the United Auto Workers union -- which ultimately led the domestic automakers to the brink of oblivion in just 20 years.

GM plodded along, talking to themselves in an endless loop of "It won't be long now!" and "The good stuff is just around the corner!" -- only the corner was never turned and the turnaround never came. Instead, its market share continued its inexorable march downward.
And like a cautionary tale straight out of Hollywood, by the time the alarms went off and GM finally got religion and decided to radically change its approach and get the company off of its ass, Toyota's momentum could not be stopped.

It was too late.

Due to a series of dramatic product missteps, strategic blunders, managerial incompetence and flat-out arrogance confined to a crucial period over the last 30 years, GM is waking up today for the first time in, oh, let's just say history for all practical purposes (1930 to be exact), as the No. 2 automaker in the world.

So now what?

Hope -- and a lot of work to do Ironically, despite this historic upheaval to its place in the automotive pecking order, GM has a lot to tout right now. It is the No. 1 automaker in China -- the fastest growing market in the world -- and its inroads in the Pan-Asian markets are gaining momentum.

And GM's product renaissance, led by the legendary Bob Lutz, whose energy, gut-level instincts and sheer will to succeed have literally pulled the company up by its bootstraps, is showing signs of coming to fruition -- big time. There's no question in my mind that GM has some of the most distinctive and forward-thinking products either in-market or due to arrive shortly -- competitive entries in terms of quality, content, design, engineering and detail. But three crucial problems remain for GM that will continue to vex the company going forward:

1. It needs a favorable labor contract with the UAW in the upcoming negotiations this summer. Without major concessions from the union, all bets are off.

2. GM's divisional structure here in the U.S. is still constructed around an era when they controlled almost half the market. It's a no-win dance that is simply untenable with the current and future realities of their situation. With too many models, too many dealers and too many divisions, GM is flailing away trying to prop up a system that was obsolete 25 years ago at least. And it's killing the company.

3. But the most difficult challenge facing GM? Trying to convince the American consumer just how good the new products it's offering are. It does absolutely no good for GM's new products to be great in every respect if the American consumer public doesn't believe it or buy it. The negativity in the market that's eating away at GM is fueled by a 20-year period of mediocrity when GM built crappy cars with poor quality, uninspired designs and dismal reliability. And now that GM has seen the light and is finally building first-rate cars and trucks, it's finding it extremely tough to make inroads with American buyers -- in households where there has never been a domestic-sourced car or truck in a generation. If GM can't make inroads with these consumers -- and can't change their negative perceptions -- then its market share threatens to plummet even further.

GM employees at all levels will find that their new No. 2 ranking in the automotive world will not go away or be swept under the rug quickly. Instead, this historic moment will stick in their craw and linger over everything they do going forward -- as well it should, because after all, GM has squandered one of the great industrial legacies of all time. In 30 short years, a phalanx of GM managers has presided over the biggest swoon in the history of corporate America. They took their eyes off of the ball and just assumed that everything would be as it always was, only to wake up and find that they're No. 2.

Could it have been avoided? Absolutely. But it's all over but the hand-wringing now, and as I said earlier in this column, GM better get used to its new world ranking, because unless Toyota abandons its "way" and just slacks off, GM will never see the top spot again.

A sad day indeed.

Article by Peter M. DeLorenzo's from MSN

Now Mr. Jays input on the above:

Is there a similarity between GM and Proton - yes.

GM had to fight with Toyota, in Malaysia, Proton had to fight with Toyota's baby - Perodua.

GM was loved by the politicians in America cause it supported thier election campaigns with donations. Proton is loved by Malaysian politicans because it supports thier extra income needs.

Both had dominant position in the markets - GM 48% of American market and Proton - 70% of Malaysian markets

Both screwed up the hears and minds of the locals that supported them in search of glory elsewhere. GM - Europe, Proton - UK, Australia and so on.

Both were well known for low quality products that had not much done in terms of innovation and creativity.

Both had launched a string of failures - GM - (uncountable), atleast Proton we can count (Tiara, Savvy, Juara, Arena)

Both lived with too much pride and too little modesty (which is a virtue that Muslim companies should thrive in)

Issues from the case that is worth paying some attention.

Notice the aspect of 7S being brought into the case - highlighted in red

The marketing communications issues are highlighted in green

Stakeholders involved highlighted in Blue.

Prepared by: Mr. Jay Malaysian Marketing Expert

2007-05-05T00:38:00.000-07:00

STRATEGIC MARKETING DECISIONS - CIM POST-GRADUATE DIPLOMA IN MARKETING

The paper is designed with the following theme in mind

The company that you are going to be a consultant will have the following characteristics:

A long long time ago..............

A company was in a pile of shit

The pile of shit was due to some silly decisions made by the BOD as regards to the product/market, brands, approach to competition.

The job of the consultant is: (the knight in a shining armour)

Tell the company that they are in a pile of shit by using evidence of available statistics such as
1. declining profitability
2. declining market share
3. lost of relevance of brand name
4. decline in overall sales
5. product failures
6. brand failures

This is quite the story for Proton right now in Malaysia.

Next the consultant will need to tell the management what is the cause of all this shit in the company:

1. Poor 7S - Strategy / Structure / Style / System / Staff / Skills / Shared values
2. Poor value chain
3. No sense of direction
4. Poor information used to make decisions
5. Misguided management team
6. Inability to re-act to market changes

Once the cause is identified, the next is for the consultant to paint a future picture if the events are not changed. Here the consultant will use the environment and internal issues to create a dramatic story of how the future will be - something like the "night before christmas"

The picture will scare the management to accept the next item - solution on how the company will be able to get out of the shit.

1. Revise the marketing strategy - focusing
2. Developing the brand
3. Highlight the new measures
4. Internal marketing to get buy in by key stakeholders

Now the consultant will paint the new picture that will indicate a great picture of the future because consultant advice was used.

And they lived happily ever after.........

THE END

Prepared by: Mr.Jay Marketing Expert

2007-04-05T02:49:00.000-07:00

Positioning for Malaysia

This was a question that was posted by a student in the class to me. How would you promote MALAYSIA to the world?

This is a tourism based question but with a marketing twist.

Now lets consider what is the view of the tourist from different countries.

The current approach for the TOURISM BOARD is "Truly Asia"

What is the meaning of this word? Being truly asia, means that you have multi-cultural,religion, ethnic group.

Now consider the difference between Malaysia and Singapore - it is the same multi-everything.

So what is the difference between them - nothing, so telling that you are truly asian is a waste of time, simply because people do not talk like that. Consider this conversation between people who want to go for a holiday.

A:I feel like going for a holiday, where would you suggest?

B: Well what do you want to do? Shopping, Adventure, Relax, Food?

A: I feel like Shopping and a bit of sight-seing.

B: Hong Kong would be the place.

NOW CONSIDER, would anyone answer, Well what do you want to do? Feel like a European, Asian, or African?

You should go to Capetown cause it is truly African.

You should go to Greece cause it is truly European.

You should go to America cause it is truly American.

The best way to check if the positioning works is to try it out on reverse on the others - Singapore is a Asian country, so is Thailand and Indonesia. Therefore saying that you are truly asian means that the others are Falsely Asia / Untruly Asia / They are not asian, we are the only real thing.

So now you can understand that the idea of truly asia sounds nice as a song and a slogan but it really does nothing to position the country in the minds of the prospective tourist.

Lets consider the competitors

THAILAND - wins on RELIGION/SEX/BEACHES/HISTORY

INDONESIA - wins on BRANDED BEACHES (Bali)/SEX/HISTORY

SINGAPORE - wins on No.2 for SHOPPING/SEX/MODERN

HONG KONG - wins on No.1 for SHOPPING/ GATEWAY to DISNEY / GATEWAY to MACAU

MACAU - wins on GAMBLING

So where does that put Malaysia?

1. It has a rich history - Occupied by most of the Western powers - Dutch/British/Portugese

2. Its has beaches that are safer

3. It is an Islamic country

4. It has a strong Chinese and Indian presence

5. It has a rich forest

6. Excellent weather (hopefully)

This can mean that Malaysia needs to follow a multi-positioning approach

The Westerners belief that Malaysia is a jungle - so go for the strong point -ECO-Tourism

The Westerners have a fear of tsunami - so go for the Tsunami free beaches approach (especially since there is negative publicity for BALI and PHUKET after BOMBINGs and EARTHQUAKES and TSUNAMIs

The Westerners from Dutch/Britain - heritage positioning

The Chinese can easily experience other cultures in a safe zone - Language positioning / Similarity positioning

The Indian can easily experience other cultures in a safe zone - Language positioning / Similarity positioning

The Islamic countries can shop and enjoy the beaches in an Islamic based tourist destination plus it lets them avoid their hot weather.

This approach requires the marketing people for the TOURISM board to use a different message strategy for different segments.

It also indicates the benefits of understanding the context of the communication in general.

Mr. Jay Marketing Expert

2007-03-29T10:13:00.000-07:00

Why DAP is unsuccesful in Malaysian Politics

DAP has been around for a very long time and thier last known success in Malaysia was in 1969. That is the time when they won big time and ever since that time they hae yet to come close to repeating thier victory.

Now lets looks the whole idea of DAP using the marketing lenses of analysis. Why is it that they are yet to have won the hearts and minds of the Malaysian people?

Its a game of perception. Lets look at the main enemy of DAP, Barisan Nasional. What does the Barisan symbol stand for - balance and stability. Have they managed to live up to that promise all this while? Yes, they have been reasonably succesful though they are not perfect.

What is a DAP? Its the opposition party with a bad history/image that it hs yet to have shake. Lets go back in time, when DAP actually did win quite a bit of the seats. The re-action of the party members caused so much tensions with the MALAY community that it ended up in complete disunity and chaos. This lead to the 1969 Curfew - Darurat. What is the association that DAP is made up at this time - chaos and disunity.

NOW in year 2007, after so many years, DAP has yet to do any campaign to remove the image that they have been carrying aound for so long. The party leaders are still trying to highlight the racial difference in the country.

They have yet to embrace the ideas of Marketing.

The mass market has yet to forget the most critical incident in Malaysian history, so that means as long as DAP avoids tackling the primary issue, it will only get most of its support from the niche markets. In politics - you need the masses to support you, not the niches.

One more major mistake that DAP could do -and did - A minority interest party which predominantly has non-muslim supporters makes an alliance with a muslim party (PAS) - bad idea. Most of the supporters lost faith in the DAP stand.

A marketing communication campaign for DAP should start with history, 1969 and then move DAP to the modern age. Its best to start with the truth and then ove on to the actual message, this way you create less cognitive dissonance.

Angles that DAP can use for thier political positioning includes:

The modern progressive party that young people can relate to. (PEPSI manuever)

We are full of lawyers so we will fight for the minority interest (Avis manuever)

The opposition that will make your tax dollars be spent wisely (COST manuever)

The positioning of the DAP party is critical in its approach to the future election.

Prepare by Mr. Jay Marketing expert CIM lecturer for A&E, SMD, MMP, ME & MIP.

2007-03-26T17:37:00.000-07:00

PERCEPTION

The world of marketing is one where, the rules of psychology is practised on a daily basis. I asked this question in the class to see how the response of the marketing students will be.

Imagine your friend opens up a restaurent in a location where there are 2 established players offering the same menu of food. He has already tasted the food in the 2 outlets and knows for a fact that the food taste bad. This was further confirmed by the friends that he had taken to the 2 outlets.

He also knows for a fact that his food is tastier since he hired the more qualified cooks and uses the most fresh ingridients, but the problem is that ever since opening his shop, the number of visitors that keep coming in to the shop is significantly smaller then the 2 others. He comes to you for help.

In this case, lets assume that price is similar, promotion is similar and location is not a factor. The product is the only difference.

In this situation the reason why the customers may not be coming into the outlet is
1. Since there is no one there, it should be expensive or poor quality
2. Its new, I am already used to this one, after all I have built up some form of preference to this current oullets
3. The shop claims to be good so why is it empty?

This is the perception of the customer on the new shop. This causes most of the customers to stay away from the outlet and it is the main problem that marketeer will need to solve before the revenue starts flowing in.

The outlet owner had wrongly believed that the best quality food prepared by the best cooks and the best ingridients will be sufficient to get customers in. This is why, most outlets that open because some people say you can cook normally fails. Its never about the taste.

So how to change the perception?

Mr. Jay Marketing Expert

2007-03-22T10:53:00.000-07:00

BRANDING

What is a brand? It means something to the person who hears the name of the brand. Like a Rolex, people know it is an expensive watch that has the potential to increase in value over time made by the Swiss.

What is a iPOD? People know that it is the leading MP3 player in the market that is made by the creative company called Apple which is currently being runned by the most creative guy around - Steve Jobbs.

What is a SUNWAY? Its a town built by the Sunway group. What is a SUNWAY UNIVERSITY COLLEGE? Its a college that runs courses in education.

Notice how bland and unexciting the whole SUNWAY idea is. The brand name is being used on too many items for it too mean anything.

You know one thing about building a brand - is quality important?

Sure lots of people will tell you that you must be the BEST then you will be No.1 in quality and therefore No.1 in the market.

But is that really true? I have seen that the word quality is a subjective idea that is very ellusive. If you think about it, is a HONDA a higher quality car then a TOYOTA. Is a NISSAN a lower quality car compared to a HONDA?

Actually since most people have a perception of quality rather then an exact definition of the word quality, Quality is what you tell them it is. In this case most people use the best indicator of quality - amount of customers that are in the location.
Quality is a function of customer patronage and customer volume, with some relationship with the service or product being delivered.

In the 1980s this was the problem that was faced by Audi5000 series, it was known to be high quality products, but a problem with sudden acceleration made the customer base lose the belief of quality, and has numbers came down in sales so did the perception quality. This was also the case for STAMFORD college, look at its glory days, even as far back as 10 years ago, it had a formidable student count, and the market did have some perception of quality. But now it is all but gone. As the numbers of student gradually declined, the market perception also declined. This was not helped by the fact that the mangement did not engage in a marketing campaign to bolster thier brand, they kept on doing what they do best - advertising for the courses.

In Malaysia, if you were to go to a restaurent, the one that is packed with people is the one that serves the best quality food whereas the one that is not packed is the one that serves the worst quality food. The number of customers a business has the ability to increase the perception of quality.

So in the business world today in Bandar Sunway, we have SUNWAY college trying to make the best quality product by controlling the staffs it has - All PhDs, and associating it self with Lancaster Uni of UK, which was ranked 15 http://www.careerdynamo.com/uk_mba_school_links.html

NOW compare that with the KDU strategy of associating itself with the UNIVERSITY OF WARWICK, which by the way ranked no.4 in the same list. Did KDU get more students, become the biggest MBA school in Malaysia? NO, it was not even close. Sure they got some business, but it was not a grand success that they can brag about.

Now lets compare, KDU, with the No.4 player could not get very far, what does that do for Sunway?

Another problem with brands today. The management perception of the brand is normally skewed compared to what the market thinks about the brand. Really haven't the Malaysian business man heard of the word RESEARCH? Most of them seem to have a belief that since they are Malaysian, they can think on behaf for all Malaysians. What do you think the management thinks about the SyUC brand name?

It stands for excellence, prestige and quality. (theres the quality word again)

What do most of the students think about the college? - Expensive, a place to meet rich people and get some decent studies done as a byproduct.

Some smart alec did some number crunching and found out that Sunway PJ seems to have a large number of IPOH students coming into its venue. This means that if you open in IPOH, the brand will sell itself, and all the students will go there rather then come here. They did the same for JB.

Lets be practical here, JB students would rather get out of the town and stay there and study. After all it is about 3.5 hours away by car, that is really a short distance. Ipoh by the way is only 2 hours away. Lets think about it, where would you study, in a campus with 200 students or in a campus with 6000 students. Ofcourse quality is where all the student are.

Another problem with the strategy of opening colleges near your location of business, you end up cannibalising the current target market as well as confusing the customers. If you look at SUNWAY IPOH, you will know that it is a SHOP LOT COLLEGE with a reasonable number of students, on the other hand SUNWAY PJ is a CAMPUS COLLEGE. Sunway JOHOR is also a CAMPUS COLLEGE, but few number of students.

Now is SUNWAY a campus college, as the marketing material says or is it a shop lot college?

Confusing the brand identity it has this move as YODA might say

Here is my prediction, if the JOHOR and IPOH branch do not position themselves differently from the PJ one, they will surely sink to the bottom, sucking the profits from PJ.

What would have been the best place for the college to have opened? PENANG, its far enough and it has all the serious competitors situated in the same place.

Mr. Jay Marketing Expert

2007-03-02T23:58:00.000-08:00

The latest development in American Economy - Old Age and its impact on the economy

Ben Bernanke says that the future for the American economy is bleak with more older people living and fewer younger people to support their needs.

The changes in the world population could lead to
1. More development of products for the older generation - Viagra / Botox / Fitness
2. Changes in the employment scenario with more older people working past the retirement age
3. The need for medical breakthroughs to support the older generation needs
4. The development of services that are focused on older generation relations

The government economic advisers are having a large problem in dealing the situation and marketer need to improve thier ability to integrate business intelligence at a higher level.

This implies the need for marketer to use advance forecasting and scenario building techniques to manage the complexity involved in the marketing environment.

Mr. Jay Marketing expert

2007-02-20T03:01:00.000-08:00

The ingredients of success?

What makes a product/service successful?

Well we need to understand the process in which the product is developed.

Idea generation
- this is the time the idea for the product is brought out.
Lets consider the process done in KFC for thier fish burger - it would have started out with the development of bird flu. IN this case - the managers would have panicked and said "WE DID TO REDUCE DEPENDENCY ON THE CHICKEN"

The ideas that could have been on the table would have included

- Fish and Chips
- Fish burger
- Fish sticks
- Fish teppanyaki
- Lamb chop
- Lamb burger
- Lamb satay
- Veggie burger
- Prawn burger
- Prawn sticks
- Crab burger
- Crab sticks
- Beef burger
- Egg burger

Idea screening
At this junction the ideas for the products above would need to be filtered by reference to current abilities and resources, including the image of KFC, current distribution ability, current supply capacity, current production ability, current market segments.

Concept testing
At this junction the concept of a FISH BURGER is tested using Marketing Research techniques to confirm whether there is actually acceptance by the potential buyers. At this junction to the whole concept is designed - product, promotion, price, place, people, process and physical evidence. In this case the packaging is also considered.

Business evaluation
The forecast for the burger sales will be made, including the cost and price. Any future promotions in terms of price are also taken into account. The impact on business cash flows and
profitablity is considered. Investment appraisal techniques like DCF, NPV, IRR, Payback and ARR will be used by management to assess the prospects for the FISH BURGER.

Product development & testing
At this junction the organisation spends its resources developing the whole product, in this case, testing the patties, burgers, sauces and variations in the packagings design. The thematics are also developed. The advertising agency might be involved in the campaign design. Once all the items have been finalised, the whole concept and product can be tested by means of test market. But then again in MALAYSIA the results can be very skewed.

Launch
The product is official launched with the launch event and the promotions are launched while the sales is monitored and marketing research tells them if they got the formulae correct.

Now the whole process is designed to ensure that failure products are not launched. But still many companies end up launching products that fail. This could be because of

1. Not following the process
2. The data used in the process is skewed
3. The management are hell bent on getting the products out for "SAVE SKIN"
4. Poor positioning against the competitors
5. Never consider the competition actions

So why did the KFC Fish Burger fail?

2007-01-16T00:47:00.000-08:00

FISH WAR VERSION 2

As if it was not enough, the Kan Fish Company (KFC) launches thier next fish burger. I was full of anticipation to try out the burger, waiting for about 10 minutes for the staff at the counter to get the Alaskan fish burger and preparing it for me, already made me loose all my interest.

Taking the first bite, I was thinking, will this be the one that beats McD? The taste was some what mixed, with some Tomyan type flavour sauce and the fish being very soggy. After eating it, guess what was i craving for - McD Fillet o Fish.

It seems that KFC has just launched a big flop into the market. Lets analyse thier competitive advantage

1. Bigger (30%)
2. Alaskan fish

Any other reason for you to keep on eating this burger - NONE.

So now we have to assess whether 30% more would actually make customers who go to KFC to buy thier FISH BURGER?

We also have to assess whether ALASKAN fish is a reason to buy the burger?

2006-12-26T10:27:00.000-08:00

UNDERSTANDING THE BUSINESS SITUATION

When you look at a case study situation, which is basically a problem that a company is facing, you will need to go thru the following exercise to uncover a solution. Case studies are there to help you put into context what you have studied in your theory.

In this case, the first thing to find out is

WHERE ARE WE NOW & WHAT IS THE PROBLEM?

This is what we call a situational audit. It involves identifying the following items
1. The internal environment
1.1 Value chain
1.2 Resources available
1.3 Current product portfolio
1.4 Current customers
1.5 Current suppliers
1.6 Current 7S

2. External environment
2.1 General environment (PEST)
2.2 Industrial situation (5-Forces)
2.3 Product lifecycle
2.4 Industry lifecycle
2.5 Competitor Analysis
2.6 Stakeholders
2.7 Porters National Diamond
Based on the 2 issues above, we should be able to

3. Identify what is causing the problem - internal or external
4. What are the current SWOT

The next stage is to decide

WHERE DO WE WANT TO BE?
At this state it is coming down to selecting a course of action.
FAS test would be useful here to identify the correct objective.
Feasible - Acceptable - Sustainable
Setting the objectives are difficult - since it is future orientation and one that is clouded with uncertainty.
Objectives should have quantitative and qualitative characteristics. It must be SMART.

HOW DO WE GET THERE?
At this junction we will decide on strategic course of action that will get us to the spot that we have decided.
Concepts that are required here include
5.1 Porters Generic strategies
5.2 Ansoff matrix
5.3 Selective functional methods

MOST OF THE TOOLS ABOVE CAN BE FOUND IN http://www.quickmba.com/strategy/

ENSURE ARRIVAL?
To ensure that we achieve our objectives, we need to set up performance indicators that will tell us if we have reached our target
This includes the use of financial ratios and the concept of Balance Scorecard.

Now obviously there are many smaller issues that will need to be tackled once we have decided on the overall plan for the organisation. One of the main issues being one related to the idea of change management.

Concepts that are important to change management include the following
-Force field analysis
- 3-step change method

2006-12-25T10:57:00.000-08:00

THE IMPORTANCE OF INTELLIGENCE

In war, we can learn the lesson on why intelligence is important. The 2 lessons that intelligence can teach us is when it fails completely to detect an obvious threat to the organisation.

In this case, lets look at the Japanese occupation of Singapore during WW2.

All the intelligence had already indicated the following information
1. That Japanese will have a high chance of attacking from MALAYA rather then the SEA facing into Singapore
2. The ART of NAVAL combat had been changed with the existence of AIRCRAFT carriers and the existence of AIR SUPERIORITY
3. The existence of torpedo bombers

With the intelligence that was available, why did the BRITISH EMPIRE SURRENDER to the JAPANESE in WW2 at SINGAPORE?

Well it all boils down to the BELIEF SYSTEM that had been ingrained in the minds and souls of the BRITISH TOP COMMANDERS.

The had believed that

1. The Japanese is an inferior army that did not have the resources to pull of the attack from the top.
2. The Battleship can withstand an attack from the air

Based on this believes, the BRITISH scrapped the defence of MALAYA and focused all thier energy on SINGAPORE and also sent out the most advance BATTLESHIP they had - The PRINCE of WALES and the destroyer HMS Repulse

At the end of the day it was the belief system that brought down the mighty British empire to its knees.

This story is very similar to the American Motorbike Industry that had a similar belief system when the Japanene Honda bikes entered the market.

Belief system is part of the organisation culture, if the culture is not right, no amount of resources and energy will bring the company success.

2006-11-21T08:30:00.000-08:00

Internet marketing

I just attended a seminar that was sopposed to be educate us on internet marketing. The company that they were using to sell the idea - is a singaporean company that keeps small video clips of 3-4 seminars of well known speakers and allows you to subscribe to the service to view the so called speakers deliver the gist of the talk.

In return you get to collect people and recruit to build up your network of sales that will grow - a typical MLM scam is it?

Well the next time some you know ask you to come for a talk that is suppose to help you make some money

Ask the following questions-
1. Does it involve buying a product that you have very little or no use at all at a high price
2. Does it involve you hearing how so many people became rich because of this one time investment
3. It is so easy to make the money that even a donkey could be rich
4. You have to have legs, 2 to that, and they have to grow for you to make money

Yup, the presentation that I went to had all the above. They keep talking about the money that could be made d was made by so many other people over time

They try to pass of luck based marketing as real marketing
They change ideas involved in the management terms - Peter Drucker suddenly becomes a marketing guru

I was actually tempted to sign up, I thought the site had some good speakers - Peter Drucker, Kotler, Porter. Instead the best they seem to have is some crap motivationa speakers like Anthony Robbings and Robbery Kiyosaki. - Notice thatboth of them seem to have the word ROB in thier name.............isn't that telling you something.

Nowdays - everybody seems to be a marketing expert. I have been teaching it so long and I am yet satisfied with my own knowledge, and we already have experts giving us advices.

My conclusion on MLM - if the speaker was funny and can get his idea across - sales done 80% but if the speaker was crappy - sales done - 20%

The one that I went today - 20%

2006-08-22T02:00:00.000-07:00

They have done it again – Petronas wasting precious marketing resources on a useless defensive manoeuvre

Have you seen the latest defensive ads by Petronas – it is defending the attack from SHELL on the area of fuel efficiency

Lets analyse the ad from the view point of a common reader:

SHELL – WE HAVE WON THE GUINESS RECORD FOR FUEL ECONOMY

PETRONAS – SO WHAT? WE HAVE 10 PEOPLE HERE THAT SAY THAT OUR PETROL IS BETTER THEN YOURS

SHELL – WE HAVE CREDIBILITY – OURS IS AUTHENTIC

PETRONAS – OURS ARE MALAYSIANS PEOPLE ON THE STREET THAT HAVE BEEN HIRED BY US TO TELL THE OTHER THAT OUR PETROL WORKS – INFACT THIS WAS ALREADY DONE BY CALTEX BEFORE

SHELL – EXCELLENT NO WONDER CALTEX IS STILL IN THE BACK OF THE PETROL RACE.

The issue above only highlights the importance of SOURCE CREDIBILITY that is one of the key elements that is taught in MARKETING COMMUNICATIONS module of CIM (UK). It is also taught in the MARKETING ENVIRONMENT as well as MARKETING PLANNING module of CIM (UK) – that you need to understand your competitors, whether they are a tiger, selective, laid back or stochastic.

SOURCE USED – GUINESS vs. SOME MALAYSIAN USERS (paid to appear on TV/PHOTO by agency to say that they believe that PETRONAS petrol works)
Who would you belief?

So my guess is that the way in which this could have happened in PETRONAS

PETRONAS – Oh No! Shell is retaliating to our PRIMAX 3 launch. In fact their attack is already moving some of our fuel economy sensitive group into their stations. What do we do? We did not anticipate this move by SHELL when we launched the product, after all we did nothing to them when the launched the blue petrol, so why are they attacking us?

PETRONAS – Ah, we will call our advertising agents for some ideas for a defensive position

AGENCY – Call came in from PETRONAS, they want us to quickly come up with a campaign to counter the attack by SHELL on their product PRIMAX 3

- what are the options
o We can do what CALTEX did before (put some people and say that PRIMAX works)
o We can ……I think we don’t have to be too creative, the PETRONAS people are desperate.
o We will sell that idea that didn’t work for CALTEX and then we can up-sell a better and more creative idea which will finance our award for best advertising later. Lets make them desperate enough.
AGENCY – We have our idea, it will be a maximum blitz campaign that will send the message that your PRIMAX 3 ROCK and that SHELL is bluffing.

PETRONAS - Wow. We love the idea, just do it and bill it to us. So I can say that I had thought of a response to my bigger bosses.

Get realistic – is this really a defensive move or just an knee-jerk reaction that PETRONAS is creating. You decide.

2006-08-13T01:13:00.000-07:00

VS

Airasia has countered the advertising done by MAS in one bold statement.

MAS advertisement is about:

MAS in an ad stated 25 reasons why travellers should fly “a truly Malaysian airline.” Its reasons ranged from MAS being “a five-star airline with world-class service, 50% off for the blind and disabled, refreshments on board, on-time departures, 20kg baggage allowance for economy class to availability of aerobridge facilities.”

AIR ASIA COUNTERED

“You don’t need 25 reasons to fly. Only one reason why you should upgrade to AirAsia. At AirAsia, no one gets treated like a second-class citizen. For a few ringgit, you’ll get a comfy leather seat and a fun and friendly crew who treats you the way you like to be treated.”

It is interesting to note that AIRASIA talks about a fun and friendly crew - cause that is a rip-off idea from Southwest Airlines, but really can this actually be achieved considering the MALAYSIAN CULTURAL DILEMMA as stated by Geert Hofstede.

It is obvious that the 2 divisions are going to fight over the market, but should AIRASIA respond to the so call attack by MAS
1. The segment that MAS targets is the business class segment - which do actually value the add-ons stated by the ad, especially the part of leaving on time

2. AIRASIA it seems does frequently have its plane going into maintenance, now lets be practical - maintenance is a planned event not something done suddenly.

3. AIRASIA should be realistic and not waste money defending the business segment, since it already has FLIGHT CANCELLATION DEPARTMENT

2006-08-10T22:50:00.000-07:00

PETROLEUM WARS - SHELL vs PETRONAS - MALAYSIAN MARKETING

The current situation in the Malaysian petrol market is very interesting. PETRONAS launched its latest product - PRIMAX 3 which it claimed to be superior in terms of engine efficiency, fuel economy and cleaning power.

It made a huge deal about the new product - launch was conducted according to the plan but there was one unanticipated event - A REACTION from COMPETITORS. This is always the problem with static planning approach, where the planner ignores a reaction from the stakeholders.

This is where WAR GAMING approach would have helped PETRONAS to see the possible re-actions that might have occured and the contingency plans could have been made ready.

SHELL responded to the new product with a blitz of advertising using thier standard product but re-affirming thier position as the leader in the fuel efficiency department. They are pumping in the dollars in advertising to combat the new product launch.

If PETRONAS wants to respond - Do exactly what PEPSI did to COKE - blind test promotion. They can prepare a blind test using the two petrols and see which one could outlast in terms of running an engine. This promotion should be conducted in the Malls and other locations to ensure that there is coverage.

NEXT they should consider the vehicle used by SHELL to win the award and conduct thier own test to see if thier product out-performs SHELLS.

To make sure PETRONAS paralyze the SHELL marketing attack, they should launch a double attack, on one front - the blind test campaign. Here is the other attack - emphasis on the ownership of PETRONAS - a campaign that highlights the true value of buying Malaysian petroleum - profits go back to the government to support growth and at the same time keep the burden of high petrol prices away from the consumers.

The management should plan out what the counter strategy would be for SHELL, since they will not sit down quite. But with a 2 prong attack, it would be very difficult to counter both at the same time.

The ATTACK that SHELL is launching on PETRONAS should be seen as a blessing in disguise, and PETRONAS marketeer should grab it before SHELL actions take hold in the consumer mind. For one -I was using SHELL first then shifted to PETRONAS and now back to SHELL due to the ads and promotions.

MALAYSIAN MARKETING WARFARE

2006-08-02T21:33:00.000-07:00

Implications of business struture on marketing

Orgnisation structure can be an asset or a liability to the marketing department. It can be an asset if facilitates the marketing department by providing quick information, helps by generating innovative ideas, allows fast execution of plans and ideas. On the other hand, if it is slow, conforming, standardised, then it will slowly kill of the marketing function.

By reference to the concepts indicated by Burns and Stalker - a dynamic environment requires an organic structure - one that is adaptable, responsive, flexible, whereas a mechanistic environment requires one that is stable, specialised, standard. Lawrence and Lorsch in thier research indicated that in a dynamic environment the business functions should have high levels of integration whereas where the environment is stable, high levels of differentiation within the functions is accpetable.

Marketing departments will always face a dynamic environment all the time, there is no stable environment - why?

Because the stakeholder environment keeps changing all the time, competitors will move, customers always want something better, suppliers will want to adjust the deals, pressure groups might suddenly be interested in your business.

So I can be concluded that where the marketing department of any organisation is tightly controlled, not given the freedom to move around, always needing to refer to mangement for every move made, asked to justify ROI on each move, filling up tons of paper work to get one marketing activity of the ground, severe limits in the budget setting process - this organisation will be facing:

1. Losing market share to more aggresive players
2. Waiting for a slow death of the loyalty of its customers
3. Foreign companies are waiting to buy them out and restructure the marketing function,
4. Is profitable but this is only 20% of thier real potential - balance 80% is still waiting to be made by someelse.

Next big question, how many Malaysian companies are facing this situation? 90% of Malaysian Public listed companies are more than likely to have this. Most Malaysian companies still treat marketing as a tactical advantage used to boost sales when thing are bad or to introduce new products to the market.

Really lets look at the new products that have been launched by Malaysian companies recently
1. Satria Neo - well looks successful but compared to the results of MYVI and AVANZA - poor.
2. Savvy - disaster
3. Gen-2 - disaster
4. Ali Cafe - disaster
5. I- whatever - disaster
6. Khind - disaster
7. KFC Fish burger
8. KFC Chicken Chop
9. KFC Garden salad
10. WangUtama 2
11. Sunway Pyramid 2
12. Lost world of tambun - really lost in the terms of ROI

What can we say, all this companies have what I call constipated marketing department - in other words the structure does not suit the environment anymore

2006-07-16T23:47:00.000-07:00

Winning at Home before Outside
Malaysian Companies that never learn

It would seem that most of our local Malaysian companies don't seem to be very interested in taking care of home-ground. The saying "The grass is greener on the other side " seems to hold true for Malaysian companies.

Lets look at the cases -
Telekom is investing heavily overseas - when local Malaysians have to wait 8 months to a year to get a local line
MAXIS is busy building overseas partners - because they are afraid that they will loose out on the growth overseas - but locally their service is going downhill - call drops are frequent now with them.
Proton was more interested in winning the hearts of the British and Australians compared to the Malaysian - hence the UK versions were always better built and had more technology in them.

Is it sad, that the basic law of marketing is to entrench yourself in your home market before your attack others - since the war chest will always be filled up by the home market. But if the home market is poorly defended, then when you move to attack overseas - you loose the local market - and you loose everything.

Why is this happening to Malaysian companies?

HERD MENTALITY

If one Malaysian company goes overseas, the CEO of another Malaysian company will ask his management team to consider going overseas.

If there are many foreign companies that are moving outside off thier home country, the CEO will say, if they are doing it, so can we.

Being international is more glamorus then being local - which CEO wants to be called the CEO of a local company vs. CEO of an international company.

Well it would seem that McKinsey identified that Style was one of the important aspects that could explain the success or failure of a company

2006-07-16T23:28:00.000-07:00

Marketing Environment - very volatile NOW

Well looking at the development in the international arena, it would seem that the marketing world just got harder to navigate.

As Kotler would define the marketing environment - the forces and actors external to the marketing process.

In this case the forces seem to be the geo-political unstability that seems to impact on the most fundemental aspect of business - power and transportation. This 2 elements drive the economy forward and keeps the social currents in check.

It would seem that Isreal and Lebanon are heading to a war which may bring in the Syrians and the Iranians into the picture. This means only one thing - oil prices will double from the current levels - $78 per barrel to maybe $150 per barrel. With the increase in oil prices and the war risk that insurers will charge on moving cargo around the world, it would seem that we will be heading into a world of hyper-inflation, driven by raw material cost and transport cost.

What will be the impact on Malaysian consumers and companies?

1. Consumers will begin spending less - since their energy cost will double. Interest rates will be increased by Bank Negara due reduce the impacts of imported inflation - unfortunately, this will not solve the problem, but rather make it worse - since consumers will reduce spending some more.

2. The reduction in overall demand in the economy (world-wide) will result in the local producers to reduce thier spending and probably start a cycle of downsizing exercises. This would then result in sudden growth in the unemployed numbers (no thanks to the 60,000 local graduates that are already not employed)

3. We have the recipe for the perfect recession in our hands. In this case the economy will start contracting downwards, and most of the banks will take a cautious approach to the situation.

Bang - just about this time - if there is any other strike by the terrorist organisations on the world economic nations - investor confidence which is already at a breaking point will be pushed over the top. A real pull out of the equity markets will occur and GOLD prices will start to shoot up as the only safe location.

If you are a Malaysian company that is facing this environment - it would do well to understand the impact of
1. Oil prices
2. Geo-political tensions
3. Decline in overall global demand

would have on your business bottom-line. If you have a strategic plan, it would be wise to revise it with the new sets of assumptions and facts, since it may be out-dated.

The only way a Malaysian company would be able to survive the upcoming environmental volatility would be to invest a bit in getting some trend analyst/ marketing analyst to sit on thier information hub.

Well for the most - it would seem that the wors is yet to come!

2006-06-09T03:39:00.000-07:00

HOW TO MAKE YOUR PRODUCT GO TO NO.1
Malaysian Marketing Insights

Well there are many ways to get your product/service to No.1, but before talking about the product - do you know what is your product and how customer and consumers see them?

If you are clear about that - which means that you had invested some amount of time in conducting market research on your current customers as well as potential customers thats a good start. If not get started here first before going to the next part.

Right - you are clear on how your product is seen by the customer - the real solution to the real problem. (Like buying a drill - its a solution for a hole)

Next, do you really know what others are offering to the same customers or are you just guessing what they are offering to the customers from adhoc sources of information. Can you really place your product or service in comparison with then with reliable data to support that comparison or are you just making yourself feel happy with poor comparisons.

Well the Japanese have these done correctly - they only ask for one item when they compare -data,data,data. If you already have this, then you should be able to decide where your product/service is stronger and weaker.

Yup, there is always a weakness, consider McDonald -it is fast but it offers standard product. Standard product is a weakness. Consider HERTZ, its the biggest car rental company, weakness of being big - long que, more hassle.

Next, what about your intentions, are they just for this product or are you thinking about all the products that you have and will have. Right now you need to get all your thinking and braining around only this PRODUCT not all the products.

RIGHT lets re-cap
1. You know exactly why people buy your product
2. You know exactly what is also offered to your customers by others
3. You have decided to back this one product all they way and willing to go all the way

NOW, all you need to do is to get the resources to start working for you. All you have to do is invest your resources in a well designed marketing plan.

That will get you to the top.

Where to get a good marketing plan?
Get a marketing consultant - its cheaper then you thinking about it - cause you don't have the time.

2006-05-24T01:33:00.000-07:00

Sales in Malaysia

When we talk about a sales job, well in Malaysia, everything is a sales job, there is no marketing jobs. Don't be fooled by the ad - its says Marketing Executive, but when you go for the job - its a sales job.

I personally feel that not everyone is cut out for the sales job - though there are many kinds of sales jobs

- the typical salesman
- the order taker
- the information gatherer
- the relation maintainer
- the co-ordinator
- the tele-sales person
- the direct mail sales staff

And then you could break them down to

- consumer services sales - visiting clients and doing the presentations
- business services sales - visiting clients and doing the presentations
- business goods sales = visiting clients and doing the presentations
- consumer goods sales = retail type selling environment -just wait for the victims

Ofcourse you must understand that I Malaysia they have so many variations of the consumer sales that it might be confusing a bit.

We have the - open a booth and asking customers to come there
We have the - seminar selling types that offer free or subsidised training then put you in for sales
We have the - free gift attraction offer for sales

Now there are so many type of sales, I think I need some Malaysians to help me out here

2006-05-24T00:49:00.000-07:00

Malaysian students - looking for an excellent career?

Well I have been noticing that most students seem to be in the impression that if you take a good qualification = good salary = rich.

This probably explains why so many are doing accounting courses and IT courses or even medicine - so as to earn big money.

Well the true reason for selecting a course of study should not be motivated by money, but rather passion and interest. Because if it was money that you are interested in then here are some statistics

The richest man made his money by getting into business not into a career
The highest paying jobs in the market are usually sales related

So if income is the guide - well you better do your research before studying any courses

2006-05-24T00:22:00.000-07:00

Are you in the E-bay business?

Well it looks like everyone I know seems to be in. Its like a multi-level-marketing program that actually works. So far within the MALAYSIAN STORIES for E-BAY, this is what I have heard.

STORY 1
A Malaysian guy about the age of 22, dropped out from college, started an e-bay business selling memory cards, chips. He is buying them from CHINA and selling them in UK. He is currently earning an average RM30,000 profit per month from a sales of RM100,000. It seems he is already booking his mini-cooper now. He already has bought 3 houses and has a BMW.

STORY 2
A Malaysian is selling Tongkat-Ali, and related sexual product thru Ebay and Lelong. He seems to be the expert in the area. He is earning about RM8,000 a month on average in profits just buying leeach oil products and so on from MYDIN and selling it in EBAY. He charges USD for packaging but pays in RM the same amount.

STORY 3
A Malaysian guy has made about RM 100,000 over 1 year selling Malaysian Junk food bought from the local GIANT outlet to AMERICANS thru EBAY

Story 4
A Malaysian guy has amassed about RM 150,000 by selling Chinese plates bought from China, packed in Malaysia and sent to US

All these stories do point to one simple fact - if you focus on one area, sooner or later it will pay of.

So what advice can I give the would be E-bay marketeer

1. Have sufficient cash reserves -it is costly to open a shop - around USD 20/month
2. Have sufficient cash reserves -it is costly to advertise
3. Advertise
4. Be focused on your product - don't offer everything under the sun - like GIANT, be like BODYSHOP - only specific products
5. When you enter the market - there will be hostility - your competitors will attack you, complaining to EBAY that you are illegal and so on. YOU MUST not give up
6. Make sure you have excellent communication skills - you need to reply to many emails
7. Keep doing many promotions - sales/price/advertising/listing/auctions
8. Try to keep a knowledge site - like this one, to provide some evidence that you are trust worthy.
9. Try your best to build up your trust ratings
10. Make sure your product is unique and different, else it must be the cheapest

Well you will be thinking - why hasn't Mr.Jay started an EBAY business?
1. Well crappy Telekoms has yet to install a line in my place
2. I am lecturing so many hours that I hardly have time to focus on anything else (I am teaching ACCA- Auditing, CIM- Marketing Environment & Marketing in Practise, UOL - Financial Management and Auditing, AIA - Audit and Tax, CAT - Managing People and Systems)

So if I can't start it myself, no point holding the knowledge to myself. Sharing is always better then hording.

2006-05-23T23:55:00.000-07:00

PROTON & PERODUA AT THE BOTTOM OF MALAYSIAN CAR MARKET

The results are out, Taylor Nelson Sofres just released thier finding about the Malaysian car market survey. Sales for PROTON and PERODUA is expected to head down the day its a level playing ground.

According to the survey, the 2 National car manufacturers did not do anything to ensure there is brand loyalty from thier customers. They seem to have lost out in the ESP (emotional selling proposition) department. It seems that most of the other car manufacturers seem to own some aspect of emotional aspect of the car buyers.

It would appear that Mercedes, BMW are leading the luxury segment whereas HONDA and TOYOTA are leading in the non-luxury segment.

The survey indicated that most of the foreign brands seem to have high emotional appeal in the following areas -

COMFORT
POPULARITY
SAFETY
CONTROL
APPEAL
STATUS

The survey also indicates that 85% of the buyers in the car market will look at the brand when buying a car.

THE END - referenced from PORTAL USAHAWAN
MINISTRY OF ENTREPRENEUR AND COOPERATIVE DEVELOPMENT

Now for my take of the article.

I have always said that Positioning is the key for winning the marketing battle. If the questionnaire had asked them a relative question, how much $$ would you want to pay for the extras, then you would have had a different answer.

Ofcourse all CAR BUYERS want to buy a BMW or a MERZ, but when it come to the purchase, the final factor will be the BUDGET and the MAINTENANCE aspect. In this case, we can now understand the results better.

If we were to take the same survey to airlines, everyone would want to fly with the best airline, SIA, QATAR and so on......but in reality the purchase is decided by the wallet. So back to the situation in hand.

I believe that if everything remains constant, Perodua should emerge the leader in the CAR INDUSTRY in MALAYSIA because of

1 - It is backed up by Daihatsu and Toyota
2 - It is still a national car
3 - It makes cars that are small and fuel-efficient
4 - It has a clear focus {SMALL}

What about PROTON? Well has time goes on, it will lose all its sales to the newer engines, not newer models. It has very little to hold the customers with them. Lets be practical

SAVVY vs. MYVI - MYVI outsells by 6 to 1.
Since the launch, it seems that only 10,000+ SAVVY was sold, whereas MYVI has 60,000+ sales.

What about the GEN-2?
Complete failure

What about the strong PERDANA?
Well its getting whacked by KIA OPTIMA, HYUNDAI SONATA, and the lower CC CIVICS and SENTRA, ALTIS

Well people still love the ISWARA right?
Well I believe that is the last bastion of hope for PROTON.
If they are going to be succesful they should just focus on ISWARA as thier core product, improve the technology ABS, AIRBAGS, NEW ENGINE from MITSIBUSHI, CLIMATE CONTROL, LOTUS ENGINEERING FOR RIDE HANDLING and still sell it at the SAME PRICE.

THIS will hold the product as the NO.1 car for Malaysian.

PROTON needs to increase thier sales first, not focus on profits only, its time to engage in the war.

2006-04-29T04:17:00.000-07:00

Marketing in Malaysia - A lesson in beverage marketing

Well if you live in MALAYSIA, you should have heard about BOH. This is a TEA company that made its name stand out for TEA. Well everybody knows that BOH's got UMPPH. When they say that, it refers to TEA, nothing else.

But did you know that BOH also has a COFFEE, on top of that it is a premium range of COFFEE. Guess what name did they spend all thier marketing assets on: BOH COFFEE.

Isn't that just pure waste of cash and marketing resources. Trying to convince the buyer that BOH is more than just a TEA.

Well that the problem with brand extensions, mindless marketing managers recommended that the name could be used just because everybody knows it.

BOH should have just called the COFFEE - HOB that would have saved them the humilation and cost of not having any product sold.

2006-04-24T21:22:00.000-07:00

Malaysian Marketing - Specialist marketer vs. MBA based marketer with other technical qualification - Which is better?

Everyone knows that in Malaysia B2B marketing is just based on one concept

1. Relationship marketing

But is this true? Its what most of the smaller businesses belief, some medium size businesses also have the same perception.

If this was the case people like IBM, Microsoft and the others should not be getting the businesses the ought to be getting. Same goes for the ABB, TRACTOR, MAYBANK. Most of this organisations are in MALAYSIA and have successfully marketed thier products.

The sad part of Marketing in Malaysia is that only
10% of the companies practise it, the rest belief it is based on relationships or sales.
Of the 10% I mentioned in there, 90% are MNC.

Lets look at our case studies. We had "I" Bhd which was launched with so much ethusiasm, but what happened.
Simple no marketing - just advertising and hoping that customers will change thier mind.
We have the local boys like FAJAR, latest casualty in Marketing war - they are being attacked by GIANT and TESCO. If they had used marketing techniques, it would have been easy to forecast the situation and taken up a military angle to the situation, as recommended by Al Ries and Jack Trout in Marketing warfare. Source :http://www.quickmba.com/marketing/ries-trout/marketing-warfare/

If you look at the Malaysian companies - they seem so preoccupied with making sure that the company is being runned by
1. An accountant
2. An engineer
3. A technically qualified person

All of whom have a MBA

Well I have got news for you.

First time training sticks into you like a leech that has just found a fresh victim. The second training that you get well it just does not hold up.

I know, I was a qualified Accountant, and when I took my marketing course after that, everything made sense, but I never got out of thinking like an accountant. I took it as a personal challange to teach marketing when it came to me as an offer.

3 years of teaching marketing and I can say one thing - its hard to get rid of your primary training and adopt your secondary training. But now I am completely balanced. Marketing and Accounting are complementary.

So do you think a guy that studied an MBA, where the marketing module is just 3 weeks can actually understand anything. Its more like reading the newspaper 4 months ago and trying to explain what happened. It just does not stick.

So at the end of the day, you need a massive change in the hearts of our local CEO to ensure that marketing gets its due recognition. Hopefully there are some local companies that will make it out there in the global place.
One good example is ofcourse Selangor Pewter.

I would also say that the Chartered Institute of Marketing does produce some of the better marketers that I have seen. Teaching that programme itself is a challange, cause its so hard to get the Malaysians students to pass them. But things are changing, pass rates are improving.

2006-04-24T20:47:00.001-07:00

Marketing in Malaysia 2

Well has anyone seen the CELCOM campaign. It is obvious that they belief that the hand-phone should be in your hand. I thought that the hand-phone should be used via the leg or maybe the stomach.

Isn't a waste of shareholder value by putting money in this campaign:
THIS IS CECLOM TERRITORY
Its in your hand

Come on think about it for a while...........
If this is your territory, what is the other guys doing in it. Imagine the animal kingdom, all the animals mark thier territory and if anyone dares to enter into it.....bang the whole fireworks come out, until one backs down.

So telling people that THIS IS CELCOM TERRITORY IS A BIG LIE. Plus does this campaign communicate the strengths of the company, NO it DOES nothing. That probably explains why CELCOM is losing its market share growth rates.

QUOTE
Last year, Malaysia saw an addition of 3.5 million new users, bringing the total to 14.6 million from 11.1 million in 2003. Of those 3.5 million new subscribers, 1.55 million were signed up in the final three months of the year, the highest-ever addition for a quarter since mobile phones were introduced in the country more than a decade ago.

And of the 1.55 million, Maxis Communications Bhd accounted for 745,000, bringing its total subscriber base to 6.02 million or a 41% market share. Celcom (M) Bhd signed up 369,000 new subscribers during the same period to boost its total to 5.33 million and now has a 37% market share, while DiGi.Com Bhd gained 436,000 new subscribers to expand its base to 3.2 million and its market share to 22% at the end of last year.
Source:http://biz.thestar.com.my/news/story.asp?file=/2005/2/26/business/10272476&sec=business

Lets think about the customer who is buying the hand-phone service and see whether the message strikes a cord.

I am thinking of which service to take
MAXIS
DIGI
CELCOM
thats it.

QUOTE
In Malaysia, advertising by the telecommunications sector grew 11% during the first six months over the same period last year. The four carriers - Celcom, Digi, Maxis and Telekom Malaysia - were all listed among the 10 biggest advertisers. Digi led all advertisers in increased advertising investments, spending 48.5% more than in the first half of 2000.
Source: http://www.marketing.org.nz/cms/News/464

Well its obvious DIGI seems to spend the most shouting to people and telling them that they are the best.....especially when it come to new innovative and cheap service. They seem to have 1st to market concept.

Lets look at MAXIS, well there is someone who can say that they are technologically advance - why cause thier sister company has a satelite in space. And lately they launched 3.5G as a indicator of thier technological superiority.

So what does CELCOM have that makes it different from the rest?

Basic law in marketing
Share of market = Share of voice x Share of distribution x Share of preference
DIGI is stronger here ? MAXIS is stronger here

According to Jack Trout in his book Differentiate or Die

1. Be First. A good strategy, if you've got a really good idea. If you're there first, anyone copying you later will just reinforce your value. Takes a lot of stamina to pull off and sustain.
DIGI and MAXIS

2. Own an Attribute. Things like speed (H&R Block's fast refund) and the "experience" (a spa environment in a cosmetic dental practice) are attributes. The key is to keep it simple and focus on one or two words that describe your differentiating attribute. If someone else in your niche owns it already, it's not yours to claim.
DIGI - PREPAID LINES - CHEAP

3. Lead. If you really are #1, proclaim it! Being number one can take many forms?you can lead on sales (#1 on your local business journal's list of top firms), you can lead through technology (the fastest digital printer in town), and you can lead through performance (ranked #1 by satisfied customers for five straight years).
MAXIS - 3.5 G

4. Use Heritage. Having a long history makes people feel secure. If your firm has been in business for 10 years, celebrate it! Likewise, "locational" heritage can make you stand out. Think perfume and wine from France. Government contracting expertise from Washington, DC. Safari travel planning from a long-time resident of Africa.

5. Pick a Specialty.Focus on one issue only like Ferrarri.
DIGI - Prepaid

6. Be Preferred. Do moms prefer your daycare services over others? Does the federal government prefer to work with you because you offer a discount? Does your local city magazine rank you as a preferred pediatrician? Third-party endorsements are worth their weight in gold ? if you can get them, they're a great way to stand apart.

7. Use a Different Approach. Do you make house calls? Does your firm offer untraditional hours of service? Think about what your ideal client really needs that others aren't offering, then do it.

8. Be the Latest. Technology companies have this nailed ? every year a faster chip or bigger system replaces last year's model. Can your salon offer the newest advances in skincare? What about the latest approach to data security? Whatever it is, make sure it solves a real problem, doesn't mess with tradition, and truly is a better solution.
MAXIS

9. Be Hot! If you just got a great review, an industry award, or your story covered in the press, leverage it. This also works if you're solving a problem or aligned with a good cause. The key is to be truthful and to spread the word quickly.
Source: Trout, J. (2000). Differentiate or Die. New York: John Wiley & Sons.

At the end of the day, whats the solution for CELCOM.

Form years of teaching marketing, the only difference that cannot be imitated that CELCOM has is the tie in with TM

From this a powerful positioning statement comes out:

The most biggest network of lines (fixed plus mobile)
All businesses are using TM and therefore CELCOM has a stronger link with Businesses
It has the ability to generate synergies - mobile fixed - cheaper and better.
They have the experts in land line behind them

The positioning statement should be:
TM + CELCOM = Widest and Largest Coverage with Synergistic Opportunities.

Well there, I have left the idea behind, hopefully somebody picks on it to make it stronger.

Well the market players are already moving overseas for growth just as Ansoff predicts - Market development and Product development

How many spend time doing the most basic thing - market penetration and consolidation.
I belief that the Hand phone service providers should begin consolidating thier service range and increase the value on a narrower range. This will enable the customers to be targeted better.

2006-04-23T22:50:00.000-07:00

Chartered Institute of Marketing

Marketing Environment

Run down on the paper.

Section A
Question 1
Case studies - 40 marks

Section B
5 Question
Select 3 - 20 marks each

The areas that have been asked:
MACRO ENVIRONMENT
Political environment - how laws are passed / implication of change in political situation
Legal environment - laws and how they affect the marketing process
Economic Environment - interest rates/ unemployment/ inflation/ GDP/ Business Cycles
Social environment - Demographics/ Aging population/ Cultural changes
Technological environment - Internet/ Communications/ Product development/ Diffussion
Natural environment - Depletion of resources/ Sustainable development
International environment - IMF/ AFTA/ EU/ NAFTA/ GATT/ Globalisation

MICRO ENVIRONMENT
Stakeholders
Porters' Five Forces
Organisation as a system
Mission and Objectives
Competitive Analysis
Customer Analysis

COMMON to BOTH
Forecasting
Marketing Information System
Impact to Marketing tools

2006-04-04T23:09:00.000-07:00

FISH WARS - MALAYSIAN SYTLE

Ever since the bird flu issue came up FISH has been getting a lot of attention - especially the fat food arena.

In the leading corner we have, no other than the incumbent champion of fish burgers - FILLETOFISH - McDonald. Then there was the runner up which is heavily contested by BURGER KING and A&W. Of course there are other players in the market - TOMYAM FISH, FISH-HEAD CURRY, KLANG SEA FOOD, KELANA SEA FOOD but this are a different set of players.

Finally we have the latest enterant in the FISH BURGER market - Kan Fish Company - KFC.

So we thought the battle is over, but new waves of fish are entering the market on a daily basis - ever since KFC launched thier FISH SANDWICH, there has been
A&W relaunching thier fish burger - as MARINA FISH BURGER
Burger King - not only do they have BK FISH now they have BK SALMON FISH also
McD - relaunching thier Double Fillet o Fish

Jeez the war is already heating up, most of the players are fighting it out at the product levels so far, but soon they will have to engage in the next level. I am predicting that they will be doing it at either price or promotion, where they will
a) Start to package a REAL FISH VALUED MEAL
b) Buy a FISH and stand a chance to go FISHING in GOLD COAST AUSTRALIA

Merry Brown has just launched its very own FISH BURGER - BURGER IKAN BILIS
In short it is called BIB, you will find it to be very crunchy and tasty, plus it is priced at 50% of the normal fish burgers in the market. They have also thrown in a contest - buy buying 2 BIB you have a chance to participate in an Ikan Bilis fishing expedition in Pulau Pangkor, the contest is called IBFEPP contest. Valid for 3 months from the start.

Don't you think that will be very exciting to eat ????

Latest news - RAMLY burger will be launching it own SIAKAP BURGER to counter the loss in CHICKEN BURGER

2006-04-04T22:30:00.000-07:00

Marketing problems faced by Malaysian Companies 1

This topic is so big that 1 blog will never cover the whole spectrum.

Lets start with my favourite company in the list of marketing failure experts:
PROTON
- facts : they lost about 20% of market share ever since AFTA implementation started.
- facts : they have invested in 3 extremely successful product failures - JUARA, ARENA, TIARA
- facts : they are still clueless why so many customers preferred to buy MYVI vs. SAVVY
- facts : they are still clueless why they have not been able to sell the targeted volume of GEN-2

So with so many issues that faces the company, how is the management going to turn around the company to become a leader in the market.....I am sorry how is the company going to take back the title of "jaguh kampung" without the governments help?

Well for starts - lets look at the companies focus:
They plan to develop a international brand
They plan to become a leader in the automobile industry
They plan to make PROTON into a FORTUNE 500 company

This is where the problem with Proton starts, thier plans are too ambitious for a national car manufacturer that has yet to win the hearts and mind of the locals.

Everybody knows that each of the succesful companies in FORTUNE 500 started by winning at HOME BASE first before they venture into foreign bases and fight with the entrenched players there.

You need to be entrenched in your home base first before going overseas, no matter how important the volume game can be, you must have a loyal following of customers in HOME BASE.

If your HOME BASE is secure from attack, then it might be wise to consider the other countries like Thailand, Indonesia, UK and Europe.

PROTON's biggest mistake was ignoring the HOME BASE in search of building a brand overseas. One of the common problem with this is that the management has a right to marry 4, which means that when they gat married with the 1st wife, the are already looking for the 2nd wife.

On top of that, the investment strategies of the companyis all over the place, it does not seem to stand up for any one of the attributes that make a car stick in the mind of the customer

VOLVO is know for safety, therefore thier R&D is heavy on safety issues
BMW is know for performance, therefore thier R&D is heavy on performance issues
But they will still have sufficient R&D on other aspects of the vehicle, so VOLVO will still have R&D on performance, just not as much as BMW and vice versa.

Consider PROTON
Years of R&D to make an engine that is behind time, CAMPRO. At the time most car manufacturers are quickly moving into hybrid engines, PROTON has just made its first combustion engine. Plus they invested in LOTUS for its "handling" engineering, won't it be cheaper if they had outsourced the "handling" aspect to CITROEN, who is well known for road handling?

Then there is the investment in buying "AGUSTA" for euro 70million and selling it for EURO 1, making a loss of 69.999Million euro, for what? Just so that some cool engineers that can make a good bike help make a cool car engine? Hasn't anybody considered the football club strategy, just buy the players, don't buy the whole damn club to get one or two good players. JEEZ MAN, decisions made after deliberation, yeah elitiest form of deliberation

So what is my suggestion for PROTON - follow the airline industry model

When a customer buys a plane, he chooses what he wants -engine, systems. The body is the same but the parts are different. HONDA is already in this direction, with the choice of allowing the customers to choose their engine - VTEC or IDSI, performance or fuel efficiency.

I would suggest that PROTON take the lead in the market by being the first to allow choices of engines in the hybrid market - performance/fuel - PROTON need only focus on building an extremely good body.

The rest should be outsourced and assembled in MALAYSIA by PROTON staffs.
Optional mix should be provided for the following areas:
Brake system
Handling and suspension system
Engine system
Cooling system
Gear system

combonitions should be tested by PROTON so as to meet required safety specs.

Its a BOLD MOVE, but one where PROTON can take the lead in MALAYSIA, and refine its business model to take it elsewhere.

The focus on the model would be efficiency in integrating systems and building an extremely good body. R&D would be spent on Body design and materials.

Now there is a solution for a PROTON that requires some guts to follow, since it needs significant collabaration with other partners.

Well now you now about the marketing problems faced by malaysian companies. The Malaysian companies marketing seems to be based on thier belief that everything will be taken care by the Malaysian Government - in this case look at MAS and PROTON, government bailout for poor marketing approaches.

The biggest obstacle for Malaysian marketeer is thier fixation on following what others are doing. Lets be real, what AIRASIA did was not a new idea, it was a duplicate idea of Ryan Air which followed Southwest Airlines. Malaysian marketing has a significant low content of creativity. This is evident in the volume of new product development that has been produced by the Malaysian companies to date.

So little that it seems that the whole nation lacks the ability to be creative. This is probably due to the education system that focuses on passing exams rather then cultivate thinking abilities. Kiasuism is on the rise.

Malaysian marketing is not an easy thing to understand for some, the word in the market is that in Malaysia it is all based on relationship. B2B that might make sense, but B2C, with that idea - it will be a lost game. B2C you must have a strong position, else its a complete waste of time, look at what happened to I-Berhad. It had the relationship but failed miserably in the electronic marketing in Malaysia.