Tuesday, April 04, 2006

Malaysian Companies and Marketing

NOTE: This blog post was not meant as a personal attack on accountants and engineers. I too am from a non social-sciences background (I have an educational background in biological sciences) and the first time I heard about the 4 Ps was during my MBA. However, over time I specialised in Marketing and came to understand it's importance. I know a lot of accountants and engineers who are extremely creative, this includes you too Jules. I just wanted to make those people on the top realise the importance of marketing and put it into their head that
UPDATED: 3 July '07.

Read on

I have a theory why many Malaysian companies are not innovative.

It is probably because accountants and engineers run many of them. If you don't believe me, just check.

Both of these professions train people to be methodical, logical and use reasoning, which doesn't leave much room for creativity or artistic expression (unless of course, you count creative accounting). Add to that, the 'budaya suap' or spoon fed culture existing in our educational institutions starting from the primary schools where questioning the teacher/lecturer is frowned upon and students are tested based on how much they have memorized from a few select books.

However, this post is not about accountants and engineers but about marketing.

I remember one time I was discussing what Marketing was all about with some MBA students, which included managers of a few companies. And yes! Many of them had engineering and accounting backgrounds. To gauge their understanding of the topic, I simply asked each of them to define marketing, according to their understanding.

I received so many definitions but I could classify them into two broad categories:
1. Selling the product/ service and
2. Advertising.

It was shocking for me because some of these guys were marketing managers in their respective companies.

Looking at it from the perspective of a marketing historian (is there such a thing), it is clear that the concept of marketing (as practiced by many Malaysian companies) is still in the production or selling era.

From talking with friends and acquaintances in various industries, I learnt that the Research and Development (R&D) guys (mostly composed of engineers) rarely consult with other departments (or customers) before coming out with a product. Many companies don't even have an R&D dept. and it is up to their head guy (often the CEO) who comes up with the ideas.

They would then pass it to the production/ operations people to "build" the product and finally leave it up to the sales and marketing department to "sell" it to the customers.

If the product fails, it is due to bad marketing (blaming the sales and marketing dept.). In a way it's true but not because of the marketing guys (some of whom don't know what marketing is all about). Rather it was doomed right from the start. The customer didn't need it nor do they want it and any amount of marketing won't help.

The concept of marketing has undergone drastic changes over the past three decades, evolving from the production era: produce products fast and cheap.

Remember Henry Ford's “Any customer can have a car painted any color that he wants so long as it is black."

It then moved through the sales and marketing era - the concept that many companies in Malaysia are following now: "If you have a good product, then everyone would buy it. You only have to let the customers know".

The change in marketing focus from the product to the customer occurred during the marketing era, which appeared around the 1960s in the west. Effectiveness and efficiency in meeting customer demands, needs and wants were identified as the key elements in determining companies' long-term success. Now it has moved beyond market segmentation of customers based on their demographics. Researchers are now looking at the attitude or lifestyles of consumers- psychographics. However, this field has been largely unexplored in Malaysia.

Why do companies carry out such studies?
It is because companies need to understand the customers before coming out with a product or service. It would eventually help them in framing their marketing strategies including advertising campaigns (which is actually only a small part of promotion).

Consider that companies have done everything right. Carried out extensive research. Consulted the experts, the customers and the suppliers. Had a grand launch in a expensive hotel with representatives from the media taking down every optimistic forecasts sprouted by the CEO and of course the VIP. This was preceded and followed by attractive promotions including some very memorable and convincing ad campaigns. But is that enough.

I am sure that all of you have at least one personal experience, where you were treated like a King or Queen BEFORE you bought the product are service. And then treated like dirt afterwards.

The relationship era, which emerged during the 1990s in the west, shifted the focus to the establishment and maintenance of mutually beneficial relationships with existing customers and suppliers. Now, we are not talking of just making a sale. We want loyal customers who would come back for more and bring along others with them at the same time. We are now talking about long-term relationships.

Now are Malaysian companies in the relationship era?
I hear people involved in Multi level marketing (MLM) raising their hands. I hate MLMs.

Can we have the cake and eat it too?

Oh Yeah! What's my definition of Marketing?
I think the best one was that given by the Chartered Institute of Marketing (CIM) in the UK: "management process of anticipating, identifying and satisfying customer requirements profitably".

Other related links:
- 4 Ps of Marketing
- AIDA concept



Lrong said...

Many Japanese companies are/were headed by people with an engineering tradition and some are successful global players...

Could it be the humid weather in malaysia?

binx said...

i should be offended by this post coz i'm an accountant by profession.. hehehe.. but what u've said is quite true..

*the choc cake looks very tempting ;)

BabyPink said...

hmm, i learned a lot from this post. thanks a lot.:)

Adam said...

Lrong: They must have done something right ;-) there are always exceptions.

Binx: Oops. No offense to all the engineers and accountants out there.

Babypink: Glad to hear that.

Anonymous said...

interesting entry. I think there is that imbalance in co. heads.

novemberbloom said...

nice entry about marketing. I am currently siting for CIM exams

terenceg said...

cool adam :)

just gotten to read your entry via my blog. but marketing is not everything from books and articles.

Dependable highly on market segment as such also highly dependent on cultures and religions.

Asia market especially in malaysia needs specialized marketing strategy to firstly satisfied consumer/customer relationships and then u move tad bit on selling your products. Eg. Pizzahuts giving free pizzas every tuesdays to 100 loyalty customers in Pyramid. but to be entitle for this you must eat above RM 100 in a single receipt within the week :)

But i have to agree with you, alot of marketing maneger, stretegic planner, business development manager have no idea what they are doing.

for them is plain and simple: Boss say sell with this plan/product/ Marketing will just cover basic advertisement and do some on ground promo, salesman hard sell and meet quota !
end of story everyone happy..except consumer


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