The Powerful Role Of PR In Brand Development

THE POWERFUL ROLE OF PR IN BRAND DEVELOPMENT Case Study, Concepts, and Debatable Ideas Kenny Ong CNI Holdings Berhad www.myCNI.com.my www.OOBEY.com

Problems from the start

No money

Split Objectives: Sales? Share Price? Image?

Difficult to hire

Independent entity

Charity center

MLM image nightmare

Multi-cultural & Multi-lingual

Close Regulatory scrutiny (food act, health act, Jakim, KPDN)

Public Listed

www.myCNI.com.my www.OOBEY.com

About: CNI

19 years old

Core Business: MLM

Others: Contract Manufacturing, Export/Trading, eCommerce

Malaysia, Singapore, Brunei, Indonesia, India, China, Hong Kong, Philippines, Italy, Taiwan

Staff force: ± 500

Distributors: 200,000

Products: Consumer Goods and Services

Branding And what this means to Public and Media Relations www.myCNI.com.my www.OOBEY.com

Components of Branding Positioning Execution Communication www.myCNI.com.my www.OOBEY.com

Positioning

“ Hope is not a strategy”

John Maxwell

Positioning

For who? – Segmentation, Targeting

Your Offer?

Key Differentiator?

Two Typical Types of Segmentation for Branding

Demographic segmentation

Income segmentation

Demographic Segmentation - General www.myCNI.com.my www.OOBEY.com Veterans (Pre-Boomers) 1934-1945 Boomers 1945-1960 Gen X (Cusper, Buster) 1960 - 1980 Gen Y (Millennials, Netster) 1980+

Demographic Segmentation - others

Women, Working Mothers

Youtube generation

Working retired

Social Activists

Work/Life balancers

Industry (ICT, Advertising, Engineer, Accounting, Lawyer, etc.)

Income Groups Expensive, cutting edge, private funds Government priority, high subsidy, rural locations, cheap No money for high-end, no access to low-end www.myCNI.com.my www.OOBEY.com Urban, Affluent Middle Class Poor, Rural

Basics & Differentiators Segments Targets Targets Basics Differentiators www.myCNI.com.my www.OOBEY.com

What needs work? Current Brand Importance to Target Segment High Low Weak Strong www.myCNI.com.my www.OOBEY.com Global Name Friendly Leading Edge After-sales support Convenience Personalization Reliability Pricing Image

The real goal of Marketing and Branding Understanding PR’s role in tne whole scheme of things www.myCNI.com.my www.OOBEY.com

What is the purpose of Marketing & Branding? Ultimate Objective of Marketing: “ Get more people, to buy more things, more frequently, at higher prices.” Sergio Zyman “ Retention and Loyalty are useless if No Conversion is happening.” www.myCNI.com.my www.OOBEY.com

What is the purpose of Marketing & Branding? “ Retention and Loyalty are useless if No Conversion is happening.” “ Comm (PR) is useless if No Conversion is happening.” www.myCNI.com.my www.OOBEY.com

Problem…

“ In business after business, 60% to 80% of lost customers reported on a survey just prior to defecting that they were satisfied or very satisfied .”

HBR March/April 1996 www.myCNI.com.my www.OOBEY.com

What is the Objective? Ultimate Objective of Marketing: “ Get more people, to buy more things, more frequently, at higher prices.” Sergio Zyman “ Retention and Loyalty useless if No Conversion is happening.” www.myCNI.com.my www.OOBEY.com

What is the Objective?

Loyalty is Useless…

Virtual Consumption vs. Real Consumption

Loyalty is misleading…

Heavy Consumption ≠ Loyalty

Loyalty ≠ Heavy Consumption

Comm = Relationship (something like Dating)

Comm ≠ Media glitz

Comm ≠ ATL/BTL/BwTL/ArTL/FTL

Comm ≠ CSR

Comm = Get more people, to buy more, more frequently, at higher prices

PR and Branding Why Public and Media Relations matter in Brand building www.myCNI.com.my www.OOBEY.com

Is PR important to Branding?

Funds

Sales

Intelligence

Customer-shareholders

Importance: Funds

This is the most obvious.

The objective is to keep the paymasters happy so that they will either maintain or increase their funding.

Crisis Management is one small area that falls into this objective

Importance: Sales

Public Relations is a key component of corporate Branding due to its direct influence on:

Multiple parties (inc. Investors)

These parties are either our Branding targets or has influence on our branding targets

Internal/External Communications Communications Internal External Mgmt Distributors Suppliers Proactive Reactive Proactive Reactive COMM Tools COMM Tools www.myCNI.com.my www.OOBEY.com Employees Associations Universities NGOs Investors Media Government Public Authorities

Types of Investors (1/2)

Institutional

Fund Managers Corporations Sovereign Funds VCs NGOs Non-Profit Org Financial (Loans) JV Partners M&A Social VCs Holding Co. HQ (MNC) Gov. VCs Supply Chain Gov. Partnership PFI Competitors Franchisees www.myCNI.com.my www.OOBEY.com

Retail

Investor-Shareholders Employee-Shareholders Management-Shareholders Customer-Shareholders Distributor-Shareholders* Distributor-Entrepreneurs* www.myCNI.com.my www.OOBEY.com

Importance: Intelligence

Two types:

www.myCNI.com.my www.OOBEY.com P.R. Customers CRM Intelligence Deal with… P.R. Management Public Intelligence Deal with…

Intelligence: Types of Investors (1/2)

Institutional

Intelligence: Types of Investors (2/2)

Retail

Intelligence: How do External Parties get their ‘INFO’? (1/2) Institutional Gov./Politics Customers Suppliers Economics AGM Market Research Internet* Annual Report Media Analysts Fund Managers Due Diligence NGOs Newsletter Spokespersons www.myCNI.com.my www.OOBEY.com

Intelligence: How do External Parties get their ‘INFO’? (2/2) Retail Gov./ Politics Customers Public Events Economics AGM Ads Internet* Annual Report Media Analysts Fund Managers Relatives Friends Pasar Malam Employees Employee Bloggers Mgmt Actions Newsletter www.myCNI.com.my www.OOBEY.com

Intelligence: How to Communicate? Self Reliant Need Help Seek Change Seek Stability Searchers Collaborators Streamliners Delegators www.myCNI.com.my www.OOBEY.com

Public Intelligence: What?

Examples…

Record feedback and questions

Competitors’ PR communications

Top 10 Analysts’ views on Company

Top 10 Analysts’ views on Industry

Public Intelligence: Why?

Broad view of market

Less optimistic/review own assumptions

Upgrade IR function to be strategic

Feed Management discussions

Better and more relevant IR communications

Support (buy-in)

Public Intelligence: Why? Revenue Growth Base Retention Share Gain Positioning Adjacent Market New Business Operational Excellence Product Leadership Customer Intimacy Competencies Information Systems Motivation, empowerment, alignment Financial Learning & Growth Internal Process Customers Investment Strategy Productivity Market Value www.myCNI.com.my www.OOBEY.com

Dangers of Intelligence…

Also known as ‘Beware of Benchmarking’:

Big vs. Small company

Selective success stories

Correlation vs. Causal

Survey problems

Actionable vs. For-fun

Intelligence: Survey Problems…

“ In business after business, 60% to 80% of lost customers reported on a survey just prior to defecting that they were satisfied or very satisfied .”

HBR March/April 1996 www.myCNI.com.my www.OOBEY.com

PR and Customer-Shareholders

Retail

Investor-Shareholders Employee-Shareholders Management-Shareholders Customer-Shareholders Distributor-Shareholders Distributor-Entrepreneurs www.myCNI.com.my www.OOBEY.com Affect Sales

Revisit – PR’s Key Roles

Funds

Sales

Intelligence

Communication to bring in the Funds www.myCNI.com.my www.OOBEY.com

Revisit – PR’s Key Roles

Funds

Sales

Intelligence

Communication to bring in the Sales www.myCNI.com.my www.OOBEY.com

The Four Roles of PR in Branding Why we are important to the branding process www.myCNI.com.my www.OOBEY.com

The Four Roles of PR in Branding

Integrate Communications (Consistency)

Feed you, Feed me

External Communications

Bad News

Role 1: Consistency Integration The Four Roles of PR in Branding and why we are important to the branding process www.myCNI.com.my www.OOBEY.com

What to Integrate? www.myCNI.com.my www.OOBEY.com 1. Aligning Organization To the Culture 2. Integrating External & Internal actions 3. Alignment and Consistency to the Strategy 4. Long-term Relationship Building efforts

Communications Integration and Consistency Communications Internal External Mgmt Distributors Suppliers Proactive Reactive Proactive Reactive COMM Tools COMM Tools www.myCNI.com.my www.OOBEY.com Employees Associations Universities NGOs Investors Media Government Public Authorities

Alignment & Consistency

Mamak stall

Alignment & Consistency

"Exactly what I need"

Customized products

Personalized communications

"They're very responsive"

Preferential service and flexibility

Recommends what I need

"I'm very loyal to them"

Helps us to be a success

"They are the most innovative" "Constantly renewing and creative" "Always on the leading edge" "A great deal!" Excellent/attractive price Minimal acquisition cost and hassle Lowest overall cost of ownership "A no-hassles firm" Convenience and speed Reliable product and service Product Leadership Operational Excellence Customer Intimacy www.myCNI.com.my www.OOBEY.com

Alignment & Consistency: Market Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution) www.myCNI.com.my www.OOBEY.com

The McPlaybook*

Make it easy to eat

50% drive-thru

Meals held in one hand

Make it easy to prepare

High Turnover

Tasks simple to learn & repeat

Make it quick

“ Fast Food”

Tests new products for Cooking Times

Make what customers want

Prowls market for new products

Monitored field tests

*Adapted from: Businessweek , Februrary 5 th 2007 www.myCNI.com.my www.OOBEY.com

Product Leadership

New, state of the art products or services

Risk takers

Meet volatile customer needs

Fast concept-to- counter

Never satisfied - obsolete own and competitors' products

Learning organization

Alignment & Consistency: Disciplines, Priorities, and KPIs

Operational Excellence

Competitive price

Error free, reliable

Fast (on demand)

Simple

Responsive

Consistent information for all

Transactional

'Once and Done'

Customer Intimacy

Management by Fact

Easy to do business with

Have it your way (customization)

Market segments of one

Proactive, flexible

Relationship and consultative selling

Cross selling

Operational Excellence

Move know-how from top performing units to others

Benchmark against best in class

Ensure operations training for all employees

Use disciplines like TQM for continuous learning to reduce costs and improve quality

Alignment & Consistency: Market Disciplines www.myCNI.com.my www.OOBEY.com

Alignment & Consistency: Market Disciplines

Customer Intimacy

Capture knowledge about customers

Understand customer needs

Empower front line employees

Ensure that everyone knows the customer

Make company knowledge available to customers

Product Leadership

Reduce time to market

Commercialize new products fast

Ensure that ideas flow

Reuse what other parts of the company have already learned

Ensure there are multiple sources of funding

Alignment & Consistency: Market Disciplines www.myCNI.com.my www.OOBEY.com

Alignment & Consistency: Market Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution) www.myCNI.com.my www.OOBEY.com

The 6 Sins of Greenwashing

Sin of the Hidden Trade-Off

Sin of No Proof

Sin of Vagueness

Sin of Irrelevance

Sin of Fibbing

Sin of Lesser of Two Evils

Study by: TerraChoice, December 2007 www.myCNI.com.my www.OOBEY.com

Role 2: Feed you, Feed me The Four Roles of PR in Branding and why we are important to the branding process www.myCNI.com.my www.OOBEY.com

Integrating Internal/External Internal External Feed Feed www.myCNI.com.my www.OOBEY.com

Integrating Internal/External

Internal

Halal Committee

Social Education (e.g. SCK)

Umrah trip

China Trip

RBOS

CFA/HFA

Coffee Van

External

Sponsorship

Donations

News clippings

Newspaper Ads

MHI

Awards

Corporate Profile

AGM

Gov. Celebrity

Analyst research

Integrating Internal/External

Internal

Entrepreneur Dev.

Health products

Health education

“ Made in Malaysia”

Events

Media Celebrity

External

Website

DSAM

Yayasan

Publish Book

Social Education

Crisis Comm

Children Education

National interest

Analyst BD connections

Role 3: External Communication The Four Roles of PR in Branding and why we are important to the branding process www.myCNI.com.my www.OOBEY.com

Communications Integration Communications Internal External Mgmt Distributors Suppliers Proactive Reactive Proactive Reactive COMM Tools COMM Tools www.myCNI.com.my www.OOBEY.com Employees Associations Universities NGOs Investors Media Government Public Authorities

Institutional

Retail

How do External Parties get their ‘INFO’? (1/2) Institutional Gov./Politics Customers Suppliers Economics AGM Market Research Internet* Annual Report Media Analysts Fund Managers Due Diligence NGOs Newsletter Spokespersons www.myCNI.com.my www.OOBEY.com

How do External Parties get their ‘INFO’? (1/2) Institutional Gov./Politics Customers Suppliers Economics AGM Market Research Internet Annual Report Media Analysts Fund Managers Due Diligence NGOs Newsletter Spokespersons www.myCNI.com.my www.OOBEY.com

How do External Parties get their ‘INFO’? (2/2) Retail Gov./ Politics Customers Public Events Economics AGM Ads Internet* Annual Report Media Analysts Fund Managers Relatives Friends Pasar Malam Employees Employee Bloggers Mgmt Actions Newsletter www.myCNI.com.my www.OOBEY.com

How do External Parties get their ‘INFO’? (2/2) Retail Gov./ Politics Customers Public Events Economics AGM Ads Internet Annual Report Media Analysts Fund Managers Relatives Friends Pasar Malam Employees Employee Bloggers Mgmt Actions Newsletter www.myCNI.com.my www.OOBEY.com

How not to talk to Retail External Parties

“ The holder [of a CAB certificate] may continue to serve regularly any point named herein through the airport last regularly used by the holder to serve such point prior to the effective date of the certificate. Upon compliance with such procedures relating thereto as may be prescribed by the Board, the holder may, in addition to the services hereinabove expressly prescribed, regularly serve a point named herein through any airport convenient thereto.”

Civil Aeronautics Board, 1977 www.myCNI.com.my www.OOBEY.com

How not to talk to Retail External Parties

“It has been determined not to be in the public interest that United Airlines continue to provide air transportation services between San Diego and San Antonio”

“ I forbid United Airlines to fly between San Diego and San Antonio” www.myCNI.com.my www.OOBEY.com

What topics interest External Parties? www.myCNI.com.my www.OOBEY.com Acquisition target Layoffs Cost Cutting New Mgmt Treatment of Profits Consistency Ecology Economics Politics Strategy Alignment CSR- related Crisis Topics?

What Events impact External Parties? www.myCNI.com.my www.OOBEY.com Politics Financial Announcements Shareholding changes Structure Accidents Economic Crisis Competitor Moves M&A New Plans Share- drop Events?

E.g. Long-term relationship building activities

Durian Party

Wisma Tour

Hampers

Umrah

China Factory Visit

Large Events

Donations to Media

Jakim visit

Role 4: Bad News The Four Roles of PR in Branding and why we are important to the branding process www.myCNI.com.my www.OOBEY.com

Challenges of Public Relations

Stake- vs. Share-holder*

Public Opinions

Global operations – difficult to explain

Increasing focus on ecological, social, ethical issues

Diverged expectations for same issue

What to do with Excessive Cash?

Superficial changes vs. Fundamental Changes

Investors depend on ‘hearsay’ vs. ‘facts’

Share Price ≠ Market

R&D/M.S./HR vs. Investor Expectations

Opposing ‘Expert’ views

PR Challenges

“ Good news for stockholders can be bad news for other stakeholders.”

Gregory Miller, Assoc. Prof., Harvard Business School.

Good News vs. Controllability Can Control Cannot Control Internal Attribution External Attribution  www.myCNI.com.my www.OOBEY.com ?  

Bad News vs. Controllability Can Control Cannot Control Internal Attribution External Attribution  www.myCNI.com.my www.OOBEY.com   

Media Options for Brand Building Old media, New media and everything in between www.myCNI.com.my www.OOBEY.com

COMMUNICATION ARCHITECTURE BRAND POSITIONING “ Tagline” KEY SUPPORTING MESSAGES KEY MESSAGES SPECIFIC TO INTERNAL/EXTERNAL SEGMENTS EMPLOYEES Image Development KEY SEGMENTS TARGET GROUPS SPECIFIC SEGMENT

KEY MESSAGES

Who am I?

What do I offer?

Support?

End benefit(s)

Tagline:

Touch Points Candidates/ Employees Gov./ Politics Customers Public Events Economics AGM Ads Internet* Annual Report Media Analysts Ex-employees Relatives Friends Pasar Malam Employees Employee Bloggers Mgmt Actions Newsletter www.myCNI.com.my www.OOBEY.com

Touch Pointsl Candidates/ Employees Gov./ Politics Customers Public Events Economics AGM Ads Internet Annual Report Media Analysts Ex-employees Relatives Friends Pasar Malam Employees Employee Bloggers Mgmt Actions Newsletter www.myCNI.com.my www.OOBEY.com

The Right Tools for the Job Reach of Communication Quality/Intensity of Communication Personal (exp) Personal (info) Impersonal (info) Individual Mass Mass Traditional, In-home, Out-Of-Home Mass Unconventional Mass Online www.myCNI.com.my www.OOBEY.com

The Right Tools for the Job Reach of Communication Quality/Intensity of Communication Personal (exp) Personal (info) Impersonal (info) Individual Mass Mass Targeted Conventional Mass Targeted Online E.g. Annual Reports, Analyst Briefings, IR Roadshows, IR Website www.myCNI.com.my www.OOBEY.com

The Right Tools for the Job Reach of Communication Quality/Intensity of Communication Personal (exp) Personal (info) Impersonal (info) Individual Mass Individual Targeted Conventional Individual Targeted Online www.myCNI.com.my www.OOBEY.com Contests One-on-One

Summary www.myCNI.com.my www.OOBEY.com

“… in the past 18 months, we have heard that profit is more important than revenue, quality is more important that profit, people are more important than profit, customers are more important than our people, big customers are more important than small customers, and that growth is the key to our success. No wonder our performance is inconsistent"

CEO, Anonymous www.myCNI.com.my www.OOBEY.com

Don’t forget…

“ The business of business is Business, not Public Relations”

What is the purpose of Marketing & Branding? Ultimate Objective of Marketing: “ Get more people, to buy more things, more frequently, at higher prices.” Sergio Zyman “ Retention and Loyalty are useless if No Conversion is happening.” www.myCNI.com.my www.OOBEY.com

Thank You. soft copy of slides: http://totallyunrelatedrandomanddebatable.blogspot.com/