Its the kind of footing that many brands can only hope for to be interwoven into the fabric

c 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 worlds rst 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 echos the companys aim, We want Nescafe to take part in every moment of the Malaysian consumers life. That is why we offer a wide range of products to meet their varying needs. Its undeniable that the coffee business in Malaysia has been abuzz with excitement. But the category hasnt hit that high point yet. 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. 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 beneciaries of aggressive competition. A key contributing factor was the proliferation of on-trade outlets. 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 Malaysias 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.

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.

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!). With all thats happening, the unrelenting Old Town White Coffee has secured a place in Air Asias 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

The Nescafe range has ballooned in the last 10 years. Nestle is delivering its own brand of competitive assaults. We are constantly realigning Nescafes 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. Its 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! Consumers in Malaysia can now enjoy a range of local coffee shop favorites anytime, anywhere, Howat says. Thats 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

And theres 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 ones mood, and even check cavities. Arent we confused? So increasingly, some brands are claiming that coffee can be healthy. Its strategy at work here DRIVE THE MARKET, and let not the market drive the brand entirely. Power Root made successful inroads through coffee mixes fortied 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. 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 Nescafes 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 benets 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.

Right now, any coffee brand has to nd 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. Theres another critical point to note here clever brand builders often will nd ways to stretch the threshold of benets and value propositions a brand can deliver.

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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 its 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 brands core value, the varieties are successfully anking 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

T TOP BRANDS BY ADSPEND

So Source: Nielsen Advertising Information Services. 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.

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CATEGORY SNAPSHOT
Up or down? That depends on the category. The dynamics of product categories are often inuenced 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 its 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 edgling brand came from nowhere, moved f forward at light s speed, and relegated popular brands to an also-ran status. SCAs Drypers s shifted status from never heard of it to challenger to leader with remarkable

brand building, and in three years. That was early this decade. And SCAs almost watertight lead seems to be delivered by encircling the competition with ankers Drypantz and Hey Baby; as well as investing to build and defend. Note SCAs collective adspend. And in the ring are Unicharms Mamy Poko (also well received) and Sofy. Add to the list DSGs PetPet and Fitti. And Kimberly Clarks 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.

Pen Malaysia (PM)

Baby Diapers SCA Kimberly Unicharm DSG Corp Private Label

Sales Value MAT DEC'09

576,391,100.0 207,897,514.0 90,283,323.0 75,774,146.0 72,223,570.0 33,960,141.3

Volume ('000 Pcs) MAT DEC'09

1,069,187.7 386,038.1 149,495.5 83,907.2 149,878.9 88,314.5

VALUE % SHARE MAT DEC'09

100.0 36.1 15.7 13.1 12.5 5.9

Pen Malaysia (PM)

Pen Malaysia (PM) PM Modern Trade PM Trad Trade

VALUE % SHR OF TRADE MAT DEC'09 100.0 67.3 32.7

Top 5 Brands* by Adspend: Year 2009 DRYPANTZ DRYPERS HUGGIES MAMY POKO HEY BABY
Source: Nielsen Advertising Information Services

2,183 2,096 1,715 1,197 655

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Biscuits
Weve labeled Biscuits a crazy category. A hasty analysis at any hypermarts 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. Its 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. Munchys, 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 companys product development team Source: All data furnished by The Nielsen Company (Malaysia) Sdn Bhd. Category data furnished by Nielsen Retail Measurement Services Unit (Malaysia).
Pen Malaysia (PM)

is always working overtime to whip-up new products. Notably, the companys 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, Dlicious. Julies from Perfect Food Manufacturing is closing inHup 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

Sales Value MAT DEC'09

Biscuits Kraft Food Corp Munchy's Hup Seng 633,165,964.0 213,742,548.0 119,379,213.8 74,466,761.8 63,802,515.4 29,530,176.9

Volume (K'Gram) MAT DEC'09

45,876,283.4 13,757,701.5 8,102,771.7 7,250,593.4 5,793,236.1 2,655,170.9

VALUE % SHARE MAT DEC'09

100.0 33.8 18.9 11.8 10.1 4.7

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.

Julie's Hwa Tai Industries

Pen Malaysia (PM)

Pen Malaysia (PM) PM Modern Trade PM Trad Trade

VALUE % SHR OF TRADE MAT DEC'09 100.0 57.5 42.5

Top 5 Brands* by Adspend: Y2009 MUNCHY'S CHIPSMORE TIGER BISCUIT JACOB'S BISCUIT NABISCO OREO

RM '000 10,878 6,002 5,497 3,750 3,690

Source: Nielsen Advertising Information Services

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OF LATE
By Chris Krishna

& MORE ENGAGING

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?

PUDGY, PLEASANT
Yves Pouliquen

[MARKET PENETRATION]

Thats the direction a popular tyre brand has been pursuing lately. And its a pudgy looking icon that looks very much like a man but really is an assemblage of tyres of different sizes. Yup, its the Michelin Man we are talking about (youve just eyeballed the visual). The brand offers tyres for everything thatneeds 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 benets we deliver; such as the lower rolling resistance, fuel saving potential and longevity, says Michelin Malaysias MD, Yves Pouliquen. He claims that these, along with a better environmental footprint can deliver a lower cost of ownership.

ommon sense dictates that a better brand will always ditch convention, and engage consumers in interesting ways.

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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 environmentfriendly tyres. 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 Pacic an enjoyable and unique high performance driving experience.

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 signicant chunk of their revenue. The replacement sector claims a signicantly higher share of the entire market over 75%. 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. Michelin used to be somewhat laidback in Malaysia, but not anymore. Lately the brand has been aunting its assets and telling customers that theres A Better Way Forward; meaning theres better mobility for both people and logistics with Michelin, Pouliquen explains. And its 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 wasnt exactly upbeat for the tyre business. The rst half soured somewhat; but the second

was better. The Malaysian Automotive Association remains optimistic about 2010. 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 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.

Pilot Experience Formula Michelin

Brand Equity Volume 1, 2010

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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. Pouliquen says that Michelin tyres have secured about 10 % share of the local market and 25 % share of the upper segment. We are condent 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 its been around since 1894. BE

TYREPLUS Penang

Point of View!
Every tyre brand claims a better safety prole. 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 tyres lifeinate them to proper levels, check ination every week, avoid speeding, brake and take off gently, dont overload your vehicle, and dont forget balancing and tyre rotation.

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Brand Equity Volume 1, 2010