With question marks raised about the health of the Malaysian economy, the establishment of the ASEAN Economic Community (AEC) in 2015 provides opportunity for the country‚Äôs brands to look at international expansion.
To be successful, Malaysia‚Äôs brand custodians need to recognise the importance of achieving a balance between brand consistency and regional flexibility.
Recent reports suggest that 2015 could be a tough year for the Malaysian economy. The collapse in oil prices and the potential knock on effect has been well documented on the business pages. While Malaysian business can‚Äôt control all external factors the real danger is resignation about 2015 and resultant inertia. Irrespective of domestic issues, this year offers real opportunities elsewhere, brands with vision should be cautiously optimistic.
Compared to its regional competitors, Malaysia is a small market. Its population of 31 million means that it is dwarfed by the likes of Indonesia, Philippines, Vietnam, Thailand and Myanmar. It stands to reason that given its size, the best bet for Malaysia‚Äôs brands is to grow their markets.
The establishment of the AEC provides the framework for growth. The AEC‚Äôs reason for being is to create a singularly competitive market capable of enabling goods and capital to flow more freely. An open, single market consisting of ten ASEAN countries with a net population of some 600 million consumers should be music to the ears of Malaysian brand owners. The AEC offers access to other, rapidly moving Asian economies. The challenge for many firms will be to activate a regionally flexible brand strategy that can also establish relevance with new audiences.
Caution is required, Malaysian firms should not assume that domestic success will simply translate to success abroad. Also, the AEC is a two-way street, while it offers Malaysian brands the chance to move abroad, it also enables foreign competitors to challenge them on home soil, and Malaysian brands must be prepared to defend themselves against new entrants.
Local nuances and significant disparity in consumer preferences mean that a rigid ‚Äėone size fits all‚Äô approach to branding is unlikely to translate to success, abroad. Balancing consistency of branding with bespoke consumer needs in new markets is likely to be a critical factor in determining success for those companies keen to stretch to other Asian markets.
If expansion is on the agenda, brands should first review whether their current brand proposition works in foreign markets. Without a compelling offer and local relevance, new markets will be difficult to penetrate.
The context in which brands exist is becoming increasingly confused. Consumers continue to place less value on loyalty and competition is coming in new forms.¬† Marketers also face a multitude of new communication channels, all promising to counter declining levels of effectiveness that are commonplace for brands slugging it out in the shrinking domain of ‚Äėtraditional media‚Äô.
We are now in a new age of agile branding, therefore brands need to be constructed with flexibility in mind so that they can react swiftly to new opportunities whether home or abroad. Finding the right blend of consistency and adaptability will empower Malaysia‚Äôs brands to move with conviction and speed, allowing them to realise new opportunities in this dynamic region and beyond.
The writer is Dominic Twyford is country director of Landor Associates Malaysia.