Arena builders

More branding activities on cards

PETALING JAYA: Companies are increasing their brand budgets amid the upsurge in economic activity despite looming challenges, which can dampen brand spending.

Malaysian Association of Brands Honorary President Datuk Eric Chong said he expects more branding activities this year given the improving economy.

He told StarBiz that the brand’s market outlook this year is better than last year.

As the pandemic becomes rampant globally, he added there was optimism in the air.

“Branding activities always reflect the current state of the economy and its future prospects.

“Most of the companies that have held up until today are coming back, and naturally they need to increase their brand budgets as they shape perceptions and reach their target audiences.

“Tourism, food and beverage or catering and retail have been the sectors hardest hit by the pandemic. As restrictions ease, these sectors will most likely experience robust growth.

Prashant Kumar, Founder and Principal Partner of Entropia

“Government should continue to help those sectors which have been hit hard by Covid-19 and provide them with special branding and promotion incentives through soft loans, grants and tax incentives. .

“It will help these industries recover at a faster pace,” said Chong, who is also the founder of Erican Education Group.

However, there are headwinds that could hold back branding activities. These headwinds include the Russian-Ukrainian conflict, escalating oil prices and impending global inflation, etc.

He said that if the Russian-Ukrainian war were to escalate into a regional or global war (the latter is likely but unlikely), market dynamics would change and a different set of threats and opportunities would present themselves to brand builders.

Entropia founder and senior partner Prashant Kumar said the world is witnessing a “revenge economy” with people planning their travels, shopping and socializing with vengeance. This, he said, would drive spending and strengthen branding activities.

“If you look closely, there is a clear polarization of demand, as people make a clear distinction between the utility need state and the self-image need state, sometimes buying different brands in the same category for two different occasions.

“The growth of e-commerce in the post-pandemic phase has only turbocharged this decoupling.

“And therefore, the need for brands to step up marketing investments is becoming increasingly critical in order to boost self-image.

“It’s so that they continue to dominate and cement their shares and margins against all OEMs and commodity players.

“We expect 2022 to be a better year than 2021 in terms of brand spend, especially in Malaysia, which has been slow to open up compared to the western world,” he noted.

Prashant said global events like the FIFA World Cup will drive brand investment. He added that the advent of 5G in telecommunications, new licenses for digital banking, as well as the opening up of tourism and the growth of new e-commerce verticals should catalyze brand investments.

Datuk Johnny Mun, senior adviser to the Association of Accredited Advertising Agents (4As) and managing director of Oxygen Advertising, said brand spend is expected to see a slight rebound this year compared to last year.

He felt that this should be fully in line with the government’s projected economic growth. Bank Negara’s forecast for gross domestic product (GDP) growth is between 5.3% and 6.3% this year.

This expected improvement, he said, was largely due to the easing of containment measures and the reopening of businesses.

However, Mun doesn’t believe ad or brand spend would rise by double-digit growth as many marketers are still looking to recoup lost revenue from sales declines and slowdowns over the past 20 months. approximately.

“Foreseeable speed bumps that could curb or slow down brand or advertising spending could be due to the general lack of financial fluidity.

“While it is true that domestic spending is set to increase, a very large part of our population may already be living on borrowed money. The trail of destruction from the pandemic has left a lot of uncertainties – the main of which would certainly be security. employment and general well-being.

“This part of the population forms a significant market and the impact is certainly significant,” he said.

Regarding branding trends over the next few years, Chong said branding is becoming increasingly dynamic for businesses as technology advances and consumer behavior changes.

He said that a decade or two ago, branding was not an option for SMBs because branding was considered expensive and out of reach.

However, with social media being within everyone’s reach, he said branding has become less relevant to budget and more to creativity.

“Finally, small but creative players are able to out-compete their larger but less creative counterparts.

“The next trend, which is definitely coming sooner rather than later, is, of course, the era of virtual reality.

“Who will thrive and who will fade will depend a lot on how their brands are perceived and positioned in this new world,” Chong said.

Prashant said the biggest trend is a slew of e-commerce brands looking to build credibility and loyalty in their respective fields.

They are similar to retail brands in some ways, but offer very unique challenges and opportunities and require different brand thinking.

The other big trend, he said, is the demand for 4.0, he said, adding that people’s adoption of Industry 4.0 technologies is creating a whole new blue ocean of opportunity. in this space.

The third trend he predicts would be the centrality of sustainability to many corporate brands.

For Malaysian brands to further penetrate the overseas market, Chong said, “Malaysian brands need to look beyond the country’s borders.

“In a world that is currently online and in the near future, virtual, we compete with the best players around the world, in everything we do.

“The best way to protect our territory is to play attack and not just defense.

“In Asean, a number of member countries are on the rise – Indonesia, Vietnam, Thailand, etc. If Malaysia is to maintain its position as the second most competitive economy after Singapore, the government must work closely with businesses to create Malaysian brands that are internationally competitive, especially in sectors where the country enjoys strategic advantages.

Mun said that for Malaysian brands operating internationally or even regionally, assistance from government agencies such as the Malaysia External Trade Development Corp or Matrade and the Ministry of International Trade and Industry was essential.

“While many small and medium-sized local industries are capable of or are already producing quality goods, financial issues remain the biggest challenge for exporting and branding overseas,” said- he noted.

For Malaysian brands to have an impact, Prashant believed that the next generation of locally born global brands is the unique aspect of Malaysian identity and national culture that these brands can reflect.

“The other way to look at it is what these brands can say about Malaysia as a society that elevates the notion of Malaysia in the eyes of the world, and how it can be different from others in its benchmark group.

“For example, global Japanese brands as a whole reflect its national culture in many ways and the same could be said for Nordic or French brands,” he said.

Elaborating on likely trends in the brand space, Mediabrands Content Studio (MBCS) CEO Stanley Clement said that channels like Tik Tok or gaming and even esports have created global platforms where people are able to generate massive followings just by being themselves and pursuing what is important to them.

However, it was important to assess these strategic partnerships to make sure they matched your brand personality and promise, he noted.

He added, “Building a brand with a strong content strategy that is not ad-driven. It’s important to identify channels that can generate better resonance and relevance while still being able to deliver the brand’s message.

“Brands can be part of consumer communities, invest in creating sustainable initiatives, or be socially responsible to gain consumer trust.”

The rise of on-demand streaming services across Asia is a boon for domestic brands to make further inroads in the overseas market, Clement said.

“This provides huge opportunities for Malaysian film and content production, and for brands to leverage the local content ecosystem through meaningful collaborations and original content.

“The Ministry of Communications and Multimedia recently developed an ‘Oscars Roadmap’ to further strengthen the local creative industry and start performing on the global stage.

“These incentives and grants will encourage local industry players to cultivate local talent to produce, publish and distribute highly creative content and hopefully gain exposure in international markets,” he said.