It’s the kind of footing that many brands
can only hope for – to be interwoven
into the fabric of an entire nation, and
secure a defensible position in a coffee
consumption culture that has taken
hold in Malaysia of late.
And way back in time, it was a problem
that opened the window of opportunity
for brand owner Nestle. In the 1930s,
the company produced the world’s first
fully soluble coffee extract to help the
Brazilian Coffee Institute preserve its
huge coffee surpluses. Nescafe was
born then, and entered Malaysia in
the late 1950s. It is now manufactured
locally.
Don Howat, Executive Director of the
Coffee & Beverages Business Unit
echo’s the company’s aim, “We want
Nescafe to take part in every moment
of the Malaysian consumer’s life.
That is why we offer a wide range of
products to meet their varying needs.”
And hanging-out has made consumers
more aware of the product itself, and
the variety they can savor.
Consumers have taken that variety
into their homes, opening a large
window, fuelling relentless product
development, and growing the
category.
With all that’s happening, the
unrelenting Old Town White Coffee
has secured a place in Air Asia’s
menu; an opportunity missed by every
player in the category.
“The market is highly competitive,”
admits Howat. “While there are many
choices available in the market,
we are always looking for ways
to ensure we are preferred by our
consumers by giving them good
value.”
Don Howat
It’s undeniable that the coffee business
in Malaysia has been abuzz with
excitement. But the category hasn’t hit
that high point yet.
The Nescafe range has ballooned in
the last 10 years. Nestle is delivering
its own brand of competitive
assaults.
“We are constantly realigning
Nescafe’s proposition in line with
local needs. A good example is
Nescafe Menu which is a product
of extensive on-trade as well as
consumer research and therefore,
a very Malaysian product offering,”
Howat says.
Explains Howat, “Coffee is relatively
under developed in Malaysia with a
consumption rate of 120 cups per
capita per annum. Our objective is to
increase that number.”
“It’s the new Malaysian thing,”
Howat insists. The aggressively
sampled Nescafe Menu carries a
selection that includes the foamy
Nescafe Menu Tarik (akin to the
pulled tea experience Malaysians
are so accustomed to); the aromatic
Nescafe Menu lpoh White Coffee
and Nescafe Menu Neslo (coffee
and chocolate malt). And the target?
Every consumer in Malaysia!
And for years Nescafe has been a
staple, leaving consumers with no real
alternative.
But the landscape changed in the
last 10 years, driven largely by
local companies with an innovative
streak. And consumers are now
the real beneficiaries of aggressive
competition.
A key contributing factor was the
proliferation of on-trade outlets.
“Consumers in Malaysia can now
enjoy a range of local coffee shop
favorites anytime, anywhere,” Howat
says.
Chained specialist coffee shops such
as Old Town White Coffee, Starbucks,
Coffee Bean and trendy mom-n-pop
cafes have had an enormous impact
on Malaysia’s coffee consumption
culture with their brand of retro and
contemporary marketing.
These establishments have become
a place for people from all walks of
life to hang-out – the young, families,
students, professionals and business
people.
production of some 800,000 sachets
of coffee daily; the company offers
an extensive range of coffee mixes
as well. Many others offer 5-in-1
and 6-in-1 coffee mixes (Credible or
ridiculous? You decide!).
That’s the idea – any occasion,
whatever time of the day and
any place! And the category
accommodates the basic type, premixed variants and increasingly,
fusion as well.
And just for bites; Super Coffeemix
Manufacturing claims a head
start in the 3-in-1 coffee category.
Aik Cheong from Melaka claims
Innovation and extensions often help
expand category size and sales; and to
complement that – clever insights plus
segmentation.
Brand Equity Volume 1, 2010
9
And there’s a related development
to note. The experts elsewhere have
offered some evidence that coffee
may help control asthma attacks when
medication is unavailable, stop a
headache, boost one’s mood, and even
check cavities. Aren’t we confused?
So increasingly, some brands are
claiming that coffee can be healthy.
It’s strategy at work here – “DRIVE
THE MARKET”, and let not the market
drive the brand entirely.
Power Root made successful inroads
through coffee mixes fortified with
rainforest herbs; the range targets
health conscious women. Its coffee
with Tongkat Ali remains a welcome
alternative for many consumers
in Malaysia. Others come with
Collagen. Logical or otherwise,
consumers are delighted anyway.
Right now, any coffee brand has to find a defendable slot in
the hearts of an increasingly discerning younger generation;
and the below-40s accounts for about 70% of the population
in Malaysia.
There’s another critical point to note here – clever brand
builders often will find ways to stretch the threshold of
benefits and value propositions a brand can deliver.
Not wanting to be left behind, Nestle has joined the
battle with a range called Nescafe Body Partner (in 2006).
Anchored by its commitment to deliver a better life, the
assortment includes 4 variants; one includes Tongkat Ali and
Ginseng, and the other Kacip Fatimah and Collagen. And the
target? Consumers yearning for a healthy lifestyle!
And to further entrench itself, Nescafe Classic is wagering
on a particularly attractive health proposition – that coffee
has antioxidants. The target? Coffee drinkers aged 20+.
Explains Howat, “The proposition is being delivered by
Malaysian celebrity Maya Karin, as Nescafe’s brand
ambassador. We supported the integrated
campaign with strong media investments
that included television, radio,
billboards, point-of-sale and press
advertisements.”
“In addition, a strong PR campaign
was initiated through the sponsorship
of the Polyphenol Symposium
organized by the International Life
Sciences Institute. We also took
the opportunity to collaborate with
the Nutrition Society of Malaysia to
publicize the benefits of drinking
coffee,” he says.
But there have been
developments along other
fronts as well. Not wanting
to erode its equity in the
space, Nestle designed the
package for Nescafe Gold
3-in-1 in black and gold to
give it a premium feel. It
also refreshed its other 3-in-1
variants with a dash of yellow, red and
green, making them more attractive.
10
Brand Equity Volume 1, 2010
And the canned drink variants – original, mocha, latte and
kopi-o are for those on the go, and the young in particular.
Re-sealable packs are in the line-up as well.
While it’s relatively easy to stimulate the senses of the
younger generation with attractive packaging, they need to
be engaged actively.
“We foresee alternative media to grow in importance
in the future, especially when engaging the youth
segment. Several years ago, we started engaging our
youth consumers through Nescafe Kick-Start. The digital
environment played an important role here,” Howat says.
A youth community project that kicked off as a TV program,
Nescafe Kick-Start is now entirely online. It targets the youth
between the ages of 18 to 25, and invites them to participate
in a competition designed to educate and equip participants
with basic business knowledge.
And to restate, Nescafe has its job cut out for it. Its strategy
to maintain leadership has delivered to date. The number of
SKUs the brand fronts is thus far closing available gaps.
Despite the risk of diluting the brand’s core value, the
varieties are successfully flanking one another on the
shelf. It is a category captain; its in-store visibility and retail
penetration is the highest in Malaysia. To top that it is way
ahead of any challenger in adspend.
But brand regardless, continued success hinges on the
resiliency of coffee consumption. Will it decline in the future?
“There will be enormous opportunities for soluble coffee in
Malaysia given that convenience is a growing trend,” Howat
believes. BE
TOP BRANDS BY ADSPEND
T
Source: Nielsen Advertising Information Services.
So
Pe
Period: Y2009.
1.Nielsen measures advertising spending
based on published rate cards except outdoor
advertising.
2.The brand level adspend above covers
Terrestrial TV, Print, Radio and Posad.
Brand Equity Volume 1, 22010
11
CATEGORY SNAPSHOT
Up or down? That depends on the category. The
dynamics of product categories are often influenced
by key players that front a plethora of brands. And
most players pack a punch with the usual: product
innovation, brand identity rejuvenation, uplifting
packaging, aggressive A&P, sponsorships and of late,
increasing forays into new media. But itʼs the mix of product
variants, investment and timing that differ though.
The Nielsen Company (Malaysia) presents this opportunity
to examine and digest top-line numbers showcasing the
dynamics of two product categories. Please note that
interpretations have been supplied by Brand Equity.
Baby Diapers
It has been an ordeal for some brands.
P
Pointedly,
a fledgling
brand came from
nowhere, moved
fforward at light
sspeed, and
relegated popular
brands to an
‘also-ran’ status.
SCA’s Drypers
sshifted status
– from ‘never
heard of it’ to
challenger to leader with remarkable
brand building, and in three years. That was early
this decade. And SCA’s almost watertight lead
seems to be delivered by encircling the competition
with flankers Drypantz and Hey Baby; as well as
investing to build and defend. Note SCA’s collective
adspend.
And in the ring are Unicharm’s Mamy Poko (also well received) and Sofy. Add
to the list DSG’s PetPet and Fitti. And Kimberly Clark’s Huggies is holding its
position thus far. Interestingly, private brands are giving a shot at the category.
And given that consumers are training their eyes on price tags may open an
opportunity to grow; but perceived quality will be an issue. And we wonder what
Pampers is doing these days.
The category has been experiencing growth; around
15% year-on-year over the past three years.
Interesting category, lots of activities and the bulk of
the business is delivered by the modern trade.
Sales Value
Volume ('000 Pcs)
VALUE % SHARE
MAT DEC'09
MAT DEC'09
MAT DEC'09
Baby Diapers
576,391,100.0
1,069,187.7
100.0
SCA
207,897,514.0
386,038.1
36.1
Kimberly
90,283,323.0
149,495.5
15.7
Unicharm
75,774,146.0
83,907.2
13.1
DSG Corp
72,223,570.0
149,878.9
12.5
Private Label
33,960,141.3
88,314.5
5.9
Pen Malaysia (PM)
Pen Malaysia (PM)
VALUE % SHR OF TRADE
MAT DEC'09
Pen Malaysia (PM)
100.0
PM Modern Trade
67.3
PM Trad Trade
32.7
Top 5 Brands* by Adspend: Year 2009
DRYPANTZ
2,183
DRYPERS
2,096
HUGGIES
1,715
MAMY POKO
1,197
HEY BABY
Source: Nielsen Advertising Information Services
12
Brand Equity Volume 1, 2010
655
Biscuits
We’ve labeled Biscuits a ‘crazy’
category. A hasty analysis at any
hypermart’s aisle says a lot about
the frenetic levels of competition on
shelves. The crazy numbers of brands
waiting to be eye-balled are many, but
the companies behind them are few. It’s
a case of master or corporate brands
fronting plentiful product variant brands.
Kraft Foods has a clear lead, its position
seems impregnable for now with
success delivered by popular brands
such as Tiger, Oreo, Chipsmore and
Jacobs.
Munchy’s, the obvious challenger is
investing to play catch-up. Their ‘Bite
Me’ tagline infuses the element of fun
into consumption, and it looks like the
company’s product development team
is always working overtime to whip-up new products.
Notably, the company’s brand building investment seems
more all-encompassing whilst Kraft Foods is decisively
brand-specific.
But contender Hup Seng may be closing in.
Among the many individual brands the company
has, their ubiquitous cream crackers is
undeniably a delight for the masses. Others
include Hwa Tai with brands such as
Choice, Marie, D’licious. Julie’s from
Perfect Food Manufacturing is closing
in…Hup Seng better move it high on
its watch-list!
And in the past three years, the
category has almost doubled
its turnover. Both the modern
and traditional trade can claim
significant contribution to category
growth though. BE
Source:
All data furnished by The Nielsen
Company (Malaysia) Sdn Bhd.
Category data furnished by
Nielsen Retail Measurement
Services Unit (Malaysia).
Sales Value
Volume (K'Gram)
VALUE %
SHARE
Pen Malaysia (PM)
Top Brands by Adspend
furnished by Nielsen Advertising
Information Services (Malaysia).
Others:
Modern Trade includes
Supermarkets, Hypermarkets,
convenience stores, drugstores
and pharmacies. Traditional
Trade includes Provision stores,
Chinese medical halls.
MAT DEC'09
MAT DEC'09
MAT DEC'09
Biscuits
633,165,964.0
45,876,283.4
100.0
Kraft Food Corp
213,742,548.0
13,757,701.5
33.8
Munchy's
119,379,213.8
8,102,771.7
18.9
Hup Seng
74,466,761.8
7,250,593.4
11.8
Julie's
63,802,515.4
5,793,236.1
10.1
Hwa Tai Industries
29,530,176.9
2,655,170.9
4.7
Pen Malaysia (PM)
VALUE % SHR OF TRADE
MAT DEC'09
Pen Malaysia (PM)
100.0
PM Modern Trade
57.5
PM Trad Trade
42.5
Top 5 Brands* by Adspend: Y2009
RM '000
MUNCHY'S
10,878
CHIPSMORE
6,002
TIGER BISCUIT
5,497
JACOB'S BISCUIT
3,750
NABISCO OREO
3,690
Source: Nielsen Advertising Information Services
Brand Equity Volume 1, 2010
13
[MARKET PENETRATION]
PUDGY, PLEASANT
& MORE ENGAGING
OF LATE
A tyre can choose to be more affectionate and deliver
engaging experiences - like any fmcg brand. But will
that be unusual given the nature of the category?
By Chris Krishna
Yves Pouliquen
C
ommon sense dictates
that a better brand will
always ditch convention,
and engage consumers
in interesting ways.
That’s the direction a popular tyre
brand has been pursuing lately. And
it’s a pudgy looking icon that looks
very much like a man but really is an
assemblage of tyres of different sizes.
Yup, it’s the Michelin Man we are
talking about (you’ve just eyeballed
the visual). The brand offers tyres for
everything that…needs a tyre; from
trucks to aircrafts to passenger cars.
But it is a global brand with a glitch in
its identity – many assume that it is
expensive.
‘This is a misconception. We have
reviewed our pricing and informed
customers know that it is now only
marginally higher than other brands.
They recognize the benefits we deliver;
such as the lower rolling resistance,
fuel saving potential and longevity,’
says Michelin Malaysia’s MD, Yves
Pouliquen.
He claims that these, along with a
better environmental footprint can
deliver a lower cost of ownership.
14
Brand Equity Volume 1, 2010
‘We recently introduced TYREPLUS,
a ‘one-stop car service centre’ that
offers renowned tyre brands and
professional maintenance expertise.
Five TYREPLUS outlets have been
opened nationwide since September
2009. We hope to establish 50 outlets
by 2014,’ he adds.
And the message about the
brand has been getting out
through on-ground events.
Dubbed ‘Michelin Diaries’, its aim
– educate car owners about the
importance of choosing the right
tyre, its impact on fuel bills, longterm tyre maintenance cost and
environment–friendly tyres.
Global Ad Campaign
Tyres are a two-track kind of a
business – the OEM portion is directed
at auto manufacturers; the other is the
replacement market which Pouliquen
says accounts for a significant chunk
of their revenue. The replacement
sector claims a significantly higher
share of the entire market – over
75%.
was better. The Malaysian Automotive
Association remains optimistic about
2010.
In Malaysia, every 2 liter Honda Civic
is delivered with Michelin tyres. Rival
Toyota (in trouble elsewhere) offers
Michelin as replacement tyres though
their service centers.
Explains Pouliquen, ‘We want to
develop a strong distribution network
and provide professional services to
consumers. We have more than 168
Michelin passenger car centers, and
7 truck centers nationwide. We intend
to increase our network to more than
250 Michelin branded stores within the
next 3 years and to 500 within the next
5 years.’
Michelin used to be somewhat laidback in Malaysia, but not anymore.
Lately the brand has been flaunting
its assets and telling customers
that there’s ‘A Better Way Forward’;
meaning ‘…there’s better mobility
for both people and logistics with
Michelin,’ Pouliquen explains.
But Michelin Malaysia is consolidating
its position, and getting ready to
ramp up sales in order to penetrate
the market. They want to be where
consumers are.
Explains Pouliquen, ‘We held the
‘Michelin Diaries’ roadshow at
designated tour sites, R&Rs and
major shopping centers in Penang,
the Klang Valley, Malacca and Johor
Bahru from April 10 to May 16 last
year. In addition to participating in fun
and educational activities, the public
received limited edition premiums and
learned more about our products.’
‘The campaign managed to boost the
sales of the new Michelin Primacy LC
tyres, exceeding its sales target by
50% since its launch in March 2009,’
claims Pouliquen.
And one event with a tinge of
exclusivity is now an annual affair.
Since 2005, the Michelin Pilot
Experience (MPE), a ‘by-invitation only’
event held at the Sepang International
Circuit offers Michelin consumers
and tyre dealers across the Asia
Pacific an enjoyable and unique high
performance driving experience.
And it’s doing what many run-of-themill consumer brands do – getting
media exposure and organizing road
shows as well.
Explains Pouliquen, ‘Malaysian
drivers are passionate about their
vehicles. They are becoming more
discerning, knowledgeable and will
patronise service centres that offer a
variety of high quality services. We
have to respond to that need.’
And last year wasn’t exactly upbeat
for the tyre business. The first half
soured somewhat; but the second
Pilot Experience – Formula Michelin
Brand Equity Volume 1, 2010
15
Michelin Diaries in Penang
Explains Pouliquen, ‘Activities include
the once in a lifetime opportunity to
drive a Formula Michelin single-seater,
partake in racing simulations, an
interactive quiz, a Go-Kart race, the ‘Pit
Stop Challenge’ and drive a GT5 car
as well as being driven by professional
drivers in a Formula 2-seater and a
Porsche Carrera Cup race car.’
And to top that a global advertising
campaign features the Michelin Man in
an animated world, coming to the aid
of motorists in trouble, replacing their
faulty tyres with Michelin tyres that he
pulls from his body, enabling them to
continue driving.
TYREPLUS Penang
Pouliquen says that Michelin tyres
have secured about 10 % share of the
local market and 25 % share of the
upper segment.
‘We are confident that our high quality
products will deliver customer loyalty
and attract new customers who are
looking for the best tyres to unleash
their vehicles’ fullest potential,’ says
Pouliquen.
And the Michelin Man does have
heritage value! In 2000 it was voted
the ‘Greatest Logo in History’ by an
international jury of 22 advertising
executives, designers and branding
gurus. And it’s been around since
1894. BE
16
Brand Equity Volume 1, 2010
Point of View!
Every tyre brand claims a better safety profile. But that depends
very much on the driver. Tyres respond better when drivers know
their limits. And safety diminishes when it rains. First hydroplaning,
then skidding and after, belly-up! And how environment friendly can
hundreds of millions of discarded tyres be? Burn them, the smoke
is a toxic cocktail. Leave them and you have a breeding ground for
mosquitoes. Here are some tips if you wish to extend your tyre’s
life…inflate them to proper levels, check inflation every week, avoid
speeding, brake and take off gently, don’t overload your vehicle, and
don’t forget balancing and tyre rotation.