Creative destruction necessary to re-brand8

Creative destruction necessary to re-brand

Can an old brand that is in decline be rescued and revitalised?

It is possible but it won’t be easy.

When sales fall and profits disappear, it means erosion of the brand’s appeal has set in.

Rebuilding the brand profile will be tedious. The problems that caused the decline must be fixed before rebuilding can take place.

That means creative destruction. Tough decisions must be made to cut out parts that have failed or are no longer performing to expectation.

The difficulty of the task can be compared with reconstructing an old, decaying building whose parts are worn out instead of constructing a new building. Or launching a new brand which comes with no baggage, no negatives.

An example of a major global brand that underwent creative destruction and then reconstructed with a new management creative team is Gucci.

It had lost its exclusive appeal after it went into wholesaling. Family quarrels in the 1980s further tarnished its name. Today, it is back as the biggest-selling Italian brand in the world and the pinnacle of chic.

BurberryBritish luxury fashion brand Burberry suffered image problems after it changed designs to appeal to a wider market in the 1990s but rebounded under new management.

jaguar carJaguar is making headway in restoring its reputation for building prestigious and sporty cars after Indian investors bought over the British carmaker from American owners who were more familiar with mass production cars.

But the demise of giant British retailer Woolworth and Arthur Andersen, once one of the world’s “Big Five” accounting firms, is evidence that the destruction of brands goes on all the time, regardless of how dominant they were.

Some brands disappeared through self-destruction, especially during the dot-com boom in the early 2000s when companies inflated their value to ridiculous heights and imploded with the burst bubble.

Self-destruction, however, is more common with political parties because of the nature of competition in such organisations.

Their leaders fight each other all the time to climb to the top of the pile. In the process, they abandon good sense to expose the poor decision making and character flaws of their rivals until no voters in their right mind would want to vote for them again.

In Japan, the Liberal Democratic Party (LDP) that ruled nearly uninterrupted for half a century imploded over policy failures and factional rivalry. In Malaysia, Parti Bersatu Sabah (PBS) disintegrated in infighting after winning an unprecedented fourth consecutive state election.

Several other political parties in Malaysia are at risk of breaking up because of intense internal leadership tussles, replete with police reports of corruption and other wrong-doings.

Today, these once-powerful political brands are struggling.

They are like soiled white paper which some may find easier to discard than to clean it up.

Ironically, politicians are the very ones who build their individual brand images on public declarations of upholding integrity, delivering performance and ensuring commitment.

For corporations, creative destruction happens continuously. They close down or sell off businesses that lose market share; they create new businesses to stay in step with market shifts. The objective is always to grow their revenue and maintain their leadership position in the market.

Political parties are no different. They are all about leadership.

They must continually reconstruct to put in place appeal elements that are stronger than the competition, consistently and all the time.

Countries are no different. They brand themselves to strengthen their appeal to compete for tourists, trade, foreign investments, skilled workers and technology which ultimately translate into economic growth, jobs, income and a better standard of living.

Country branding thousands of years old

The idea of country branding and imaging is as old as advertising, which dates back thousands of years, and first used by ancient empires to cultivate a common identity among their people and promote patriotism. The stakes are much higher today as globalisation expands trade and investment, and escalates competition between economies.

Products made in countries that have created a strong brand identity for themselves carry an extra aura. Goods they produce are perceived to be the best in the world, gaining worldwide acceptance quickly, and commanding premium pricing invariably.

Resulting from that, these countries have become synonymous with quality which, in turn, reinforces the perception that whatever they produce must be the world’s best.

Thus, mention the United States and you will think of cutting-edge information technology. Germany to most people means high performance cars. Italy stands out for unmatched lifestyle artistry; France for the world’s most expensive perfumes, Switzerland the world’s best watches, Japan the most innovative consumer products.

Malaysia has earned an image as a modern and progressive country.

We are a middle-income country with a vision to achieve fully developed nation status. We are known for many products and services that have enhanced our image. We are admired as the most developed of the developing countries.

We have modern skyscrapers, airports, seaports and highways.

We have many five-star hotels and world-class conference facilities that have hosted high-level international gatherings and attracted major world leaders. F1 races are staged at Sepang.

With more than 22 million tourists annually, Malaysia is a prominent destination on the international tourism map.

The country’s multicultural diversity offers a unique experience for foreign visitors.

This ethnic mix immediately distinguishes Malaysia’s brand identity from the rest of the world, and it is one of the country strengths constantly mentioned by foreign students who enrolled at Limkokwing University of Creative Technology. The campus in Malaysia hosts 9,500 students from 145 countries, the majority non-Malaysians.

Overall, Malaysia has 70,000 international students, according to the Higher Education Ministry, which make the country an important regional tertiary education hub.

With about 350,000 foreigners who seek medical treatment at our private hospitals, Malaysia is also gaining a reputation for quality healthcare.

People visit countries they feel are safe. People do business with countries they admire. People go to study in countries they trust. People admire people who achieve things.

All these say something about this country.

Brand strategy must keep pace with changes

On the flip side, however, is Malaysia’s declining competitiveness. We are behind all the important East Asian economies in global competitiveness rankings.

In the World Bank’s Doing Business Report 2010, covering the period from 2008 through May 2009, Malaysia emerged at 23rd placing, below even Thailand which was ranked much higher at 12th.

Foreign direct investment fell from RM46 billion in 2008 to RM4.2 billion between January and May this year.

If we are losing market share as a country, we should be honest enough to admit that some things are not right and then look for the solutions.

Is this country seen to have lost its way? Or still clinging to outdated ways of doing things?

malaysia truly asia

The current Malaysia – Truly Asia theme used in the overseas advertising campaign has generated interest and facilitated recall by tourists planning a choice of vacation destinations.

The kicker has communicated Malaysia as a melting pot, with diverse cultures, delectable cuisines and friendly people who originated from all over Asia. To Westerners, Malaysia is a microcosm of Asia.

However, the Truly Asia theme has increasingly been blurred by similar messages promoted in tourism campaigns mounted by other Asian countries, such as India, Singapore, Hong Kong and the Philippines. The exotic mix of diverse ethnicities, food and cultures is everywhere in Asia.

Moreover, the emerging economic powerhouses of China and India now dominate the media and public consciousness in the West, which has further eclipsed Malaysia’s distinctive branding as an Asian holiday destination among international tourists.
 
We need to move on. Otherwise, every time we talk about Truly Asia, countries like Singapore will get a free ride.

Is the administration seen to be progressive, innovative, efficient, productive, fair?

If the government is perceived well, automatically a lot of things would fall into place and turn out well.

Beyond that, Malaysia needs to design a national brand strategy that provides for an integrated approach to position the country positively in the minds of people around the world.

The strategy will show Malaysia moving forward very quickly, very efficiently, very purposefully.

It should identify products that we will use to promote overseas aggressively and creatively. These products will give us the right profile and the right imagery, and carry the right message, be they surgical rubber gloves or budget air travel services or the Malaysian brand of education. They will show Malaysia as a sophisticated, an innovative country.

A lot of our characteristics already are those of a developed country. But any national branding strategy, to be successful in the long-term, must be dynamic.

If creative destruction is needed where the characteristics are no longer working or have lost their appeal, then it must be made.

Outdated structures, rules, control systems and decision-making processes must be abandoned. Revamp and reconstruct are the only ways to beat the market in a competitive global environment.

tansri photo

About Tan Sri Lim


Tan Sri Dato’ Sri Paduka Dr Lim Kok Wing, the Founder and President of Limkokwing University of Creative Technology, does not fit into any ordinary mould that would describe most entrepreneurs.

His journey has been closely linked with the economic and social development of Malaysia.

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Comments

K. Tikhot
2009 September 29

Tan Sri, I marvel at the artful way you give advice to the powers-that-be. I guess that’s why you are recognised as a communications expert.

If the powers-that-be don’t get it, then they might very well soon become powers-had-been.

Sugumaran
2009 September 29

Tan Sri, in country branding, what always comes to mind is high quality. Look at countries like Sweden, France, UK, US, Japan, New Zealand or even Singapore. The best in the world want to migrate to these countries. The worst in the world also want to go there, usually the illegal way.

Here in Malaysia, only the lowest category of workers wants to come. That says a lot of the image of our country abroad.

Awtar Singh
2009 October 1

Tan Sri, I heard the government has engaged an American PR firm to give it and the country an image makeover. I think it’s money down the drain. Whatever good the PR people are doing is negated by the follies of the Malaysian Anti-Corruption Commission. The MACC is a terrible destroyer of good branding.

It doesn’t matter what the government or the Prime Minister do that are good. MACC would destroy it every day, and right there on the front pages of newspapers for everyone to see.

Datuk Dzul
2009 October 1

Much of the public perception of the government is shaped by the media. For the government’s own good, it should ban all the local mainstream media.

Why? Because nobody believes the media’s excessive spinning. Either they think Malaysians are idiots or they are idiots to think that of Malaysians.

They are so one-sided that most Malaysians have already written them off. If the people don’t believe what is reported in the media, automatically the people won’t believe what the government is saying through the media.

Siewhar
2009 October 1

You are spot on about political parties choosing self-destruction. The Pakatan Rakyat parties in Selangor seem to be going down that road.

But the party that has definitely pressed its self-destruct button, and waiting for vaporisation, is MCA. The leaders of the two factions keep saying each is doing the right thing. Actually, the right thing to do is for both to go. But no, each one must make sure he knocks the other guy off the horse first, even if he himself is finished in the fight. It is completely unproductive.

Datuk TTZ
2009 October 2

Malaysian politicians who fight tooth and nail and cangkul as well to cling to their posts remind me of an experience I had in Sweden some years ago.

My group was brought to an event where the presentation of government policies was to be made.

First, some elderly fellows played a piano, cello and violin in front of us, then took a bow and walked off. It was very elegantly done.

Then two men walked in and sat down just a little ahead of us. I found out one was the king and the other the prime minister. There was no announcement preceding their entrance. The king sat on a chair that was the same as ours.

I realised later that several ministers sat behind us. Not in front of us, mind you. It was quite different from what we are used to here.

If our politicians have the same mentality as those I saw in Sweden, they would know that they hold their positions only temporarily and would one day have to move on. They would also know that many others had held the same positions before them.

But no, it won’t happen like that in Malaysia in the medium future. Here, the politicians believe strongly that they own the positions they hold. So, how can they possibly vacate them voluntarily without a fight?

EducationRealist
2009 October 2

Tan Sri, we must not be fooled by the fact that Malaysia is on the way to become a great destination for foreign students just because of the 70,000 who are already here.

Foreign students come here because they are attracted to an English-medium education and we deliver Commonwealth university degrees under the 3+0 programme at a fraction of the cost compared to studying in the UK or Canada. This formula would not work forever.

Universities in other countries would in time also offer the 3+0 as the western universities would continue to expand the programme wherever they could. They won’t remain loyal to Malaysia.

amirreza pour soltan
2010 November 16

Tan Seri, Branding has always been a difficult pursuit in Asia. Based on Interbrand statistic in Business Week 2010 on Best Global Brands (top 100) there are less than ten brands originating from Asia. On top 25 brands, only Honda, Toyota and Samsung made up the list.
Obviously Malaysia is not yet a significant global brand player (brand value has to be more than US 2.7 billion to be part of the list) but the country is a proud owner of many internationally penetrated brand such as Petronas, Air Asia and Royal Selangor. The local scene has been filled with many offering brands resulting from the creative mind of entrepreneurs starting as new comers in their chosen industries. However the nation is still struggling in identifying the right formula(s) in building brand and consequently developing successful entrepreneurs with strong and sustainable brand identity. i think The focus would be on the entrepreneur role in managing branding activities, the influence of the entrepreneur’s personality towards branding performance and the branding challenges. As businesses become more competitive due to the influx of new players and fast changes in terms of technology and business offerings, entrepreneurs started to realize that effective brand management allows
them to have a consistent influence capacity. In fact, branding is a “significant competitive factor” that contributes to the intended projection of their firm’s and represents “immutable assets” that are difficult for competitors to imitate.

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