Should brand is of significant in offering superior customer value, why do you

think the Malaysian market is prone to switch brand when came to products of
alcoholic and tobacco based?

Introduction

Brand itself is a product or service that adds dimension that differentiate them from
other competitors. According to The American Marketing Association, it is a name,
term, sign, symbol or design, or a combination of them intended to identify the goods
or services of one seller or a group of seller and to differentiate them from those of
competitors. Brands are valuable intangible assets that need to be managed carefully
and offers number of benefits to a customers and firm. Brands plays different
function within the brand portfolio where it may expand coverage, provide
protection, extend a image, or fulfill a variety of other roles for the firm.

In other perspective, customer value defined in terms of satisfaction, use value,

retailing practices, price and quality. Customer value has been largely recognized
over time by the firm as instrument towards stimulating market shares and profit
optimization (Rajagopal, 2006). Customer are value-maximizers (Kotler et al.,
2009). They created an expectation of value and act upon it. They tend to buy
products or service from the firm that they perceived to offer the highest customer
delivered value where it defined as the difference between total customer value and
total customer cost.

Should brand is of significant in offering superior customer value?

Offering superior customer value can be, by delighting your customer against their
most important dimension of value. It is more than the product satisfaction, price,
quality and use value itself ( Case Strategy : Driving Superior Customer Value ,
http://www.casestrategy.com /Case_Briefs /Case_Brief. php?id=4).
Taking for example, Air Asia is currently one of the leading low cost air carrier in
Malaysia. They established their brand well and come up with the tagline “Everyone
Can Fly”. In general, their brand projected as what the customer perceived toward
their product, which is giving the lowest airfare among other competitors. Somehow,
I had this experienced in uncomfortable delay and poor service by the air carrier
leaving me frustrated and displeased. What I can see is that, the airline had failed to
meet my minimum or “threshold” requirement.

If I had a choice, a competitor airline on the same route and airfare as Air Asia, I
probably choose the other airline. This is because Air Asia had failed to meet my
threshold of basic customer service delivery, which is the most important in my
dimension of value. Considering this fact, the brand itself not significantly can offer
any superior customer value.

For Air Asia, they should look beyond what their brand function for. They should
focused more on total customer satisfaction, which is delivering the performance or
service exceeding customer expectation. Considering this option may provides
security of demand for the firm and creates barriers for other firms to enter the
market thus creating brand loyalty to Air Asia customer.

Malaysian market is prone to switch brand when came to products of alcoholic

and tobacco based?

Switching brand sometimes known as brand jumping and it is referred as the process
of choosing to switch for routine use of one product or brand to steady usage of
different but similar product (http://www.wisegeek.com/what-is-brand-
switching.htm). To convince consumer to switch brand is something difficult for
marketer to achieve.

Building brand loyalty can be influenced by few factors such as price, quality and
availability. To encourage switching brands, advertisers will often target these three
areas as part of the strategy of encouraging brand switching
(http://www.wisegeek.com/what-is-brand-switching.htm).

Price is often an important factor to consumers who are in tight budgets. For this
reason, advertisers will often use a price comparison model to entice long time users
of one brand to try a new one. The idea is to convince the end user that it is possible
to purchase the same amount of product while spending less money. Ideally, this
means that the consumer can use the savings for other purchases, possibly even a
luxury item. The idea of more discretionary resources in the monthly budget can be
an effective in the encouragement of jumping brands.

Referring back to the survey conducted by the leading global market intelligence
firm Synovate, the survey revealed that 10% of Malaysians planned to switch to
cheaper alcoholic beverages while 5% have already made the change and about 7%
of Malaysian smokers planned to change to cheaper brands and close to a quarter had
already made the switch.

This survey indicates that, in Malaysian market, brand switching to be more

prominent when it come to alcoholic beverages and tobacco products (Malaysian
Remain Brand Loyal : Survey.(2009,January 15).The Borneo Post, p.A2.)

According to Steve Murphy (The Managing Director of Synovate Malaysia), the

possible reason for a high potential of switching brand due greater thought on the
rising cost as both category of product (Alcohol & Tobacco) seen as premium
segments and highly taxed by the government. Currently the government imposed
about 15% excise tax on Alcohol and 5% excise tax on Cigarette
( http://www.customs.gov.my).

Somehow, I have noticed that most Malaysian who drinks alcohol and smokes
cigarettes were choosing to smoke and drink cheaper, rather than smoke and drink
less. The product brand itself has less significant in giving them much different in
getting high on drinking alcohol or the pleasure of smoking. However, this
statement needs to be studied further for meaningful data.
The survey also highlighted that, Malaysian still loyal to the brand bought regularly,
especially fast moving consumer goods such as dairy products, staple food items,
soft drinks, canned food, healthcare and cosmetics products (Malaysian Remain
Brand Loyal : Survey.(2009,January 15).The Borneo Post, p.A2.).

Steve Murphy of Synovate Malaysia reported that, the scenario is partly due to the
Malaysian personality of being relatively loyal, while markets like USA and Britain
have greater diversity of brands and products within most categories, as well as
higher level of marketing and advertising, which can induce higher switching
between brands.

However, Malaysians are spending less on various product with reduction of 30% for
dairy products, 48% for soft drinks, 43% canned products and 28% cosmetic and
beauty goods while expenditure for staple food items, on the other hand, has stayed
consistent.(Global Economic Survey Looks At Confidence or Not Money Habits,
Fears and Attitudes.html, http://www.synovate.com/news/article/2009/01/).

The survey may shown Malaysian remain brand loyal, but in fact Malaysian is
actually spending less on some product. This spending pattern most probably due to
the global economic downturn. If the economic conditions were to deteriorate
further, consumer sentiment to switch brands would intensify and maintaining brand
loyalty would be even more difficult.

Conclusion and discussion

Brands perform valuable function for firms. It identify the source or maker of a
product and allow consumer either individuals or organization to assign
responsibility to a particular manufacturer or distributor (Kotler et.al., 2009). Brands
itself somehow doesn’t guarantee in offering superior customer value. Firm should
focus more into total customer satisfaction which creating genuine brand loyalists.
But again, the tendency for consumer to switching brands sometimes determine by
factor such as price of the product. Customer willing to switch brand for cheaper
product available especially product that they cannot live without it.