Re-Branding On Small and Medium-Sized Enterprises (SMEs) for Export A Case Study: Malaysian Food...

Ghazali & Ruslan/CSSR/UiTM’09

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Re-Branding On Small and Medium-Sized Enterprises (SMEs) for Export

A Case Study: Malaysian Food Products

Ghazali Hj Daimin and Ruslan Abd Rahim Faculty of Art and Design

Universiti Teknologi MARA (UiTM)

Shah Alam, Selangor

Tel. 03-5544 4001, Fax: 03-5544 4011

[email protected]

[email protected]

ABSTRACT

The forces of globalisation in business today has pushed Small and Medium-sized

Entrepreneurs (SMEs) of Malaysia to change their mechanism and strategies in order to

penetrate the global market. Business strategy now is becoming more dynamic and

competitive especially at an international level. Due to this, the Small and Medium-sized

Entrepreneurs (SMEs) in Malaysia urgently needs an exclusive approach and creative strategy

to support their business to expand internationally. The SME players also need to be alert that

today’s business environment has changed much compared to the past. Therefore, customers

are becoming wiser in terms of selecting a product that catches their interest in the market.

The demand on product quality and value has always been the main issue.

Though many large Malaysian companies are already established at the international scene,

the big question is how entrepreneurs from the Small and Medium-sized Entrepreneur groups

(SMEs) can be a global-player by exporting their food products in the global market.

This paper aims to study the creative elements of re-branding in realizing a winning formula

for Malaysian Small and Medium-sized Entrepreneur (SMEs) to be global players. As with

other business element like marketing and quality, re-branding is also perceived as an

essential element to pave the way for Malaysia SME food products to be placed globally. In

food product business scenario, it is foreseeable that re-branding will be the major factor for

the Malaysian SME players to place their food products at global scene. With no compromise

in terms of quality of food products together with smart marketing strategy, re-branding is the

real key of success for Malaysian SMEs at the global market scene. Recognizing the

importance of re-branding process for Malaysian SME players, this research paper will be

focusing specifically on Malaysian entrepreneurs from the group of Micro-size Entrepreneur.

Re-branding will see the introduction of the philosophy of re-branding and its relationship

with the Malaysian SMEs food products. There are three elements of qualitative methodology

paradigms such an observation, archival data together in-depth discussion will be used used


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towards finding the essential elements of re-branding to be implemented for Malaysian SME

food products towards global market-place.

Keywords: RE-BRA%DI%G, SMALL A%D MEDIUM-SIZED E%TERPRISES

(SMEs), EXPORT and MALAYSIA� FOOD PRODUCTS.

Definitions for Small and Medium-sized Enterprises (SMEs) in Malaysia.

(Table I)

Category

MICRO-SIZED

E%TERPRISE

Small-sized

Enterprise

Medium-sized

Enterprise

1.

Manufacturing,

Manufacturing-related

services and agro-

based industries

Sales turnover of less

than RM250, 000 or

full-time employees

less than 5.

Sales between

RM250, 000 and less

than RM10 million or

full time employees

between 5 and 50.

Sales turnover

between RM10

million and RM25

million or full time

employees between 51

and 150.

2.

Services, primary

agriculture and

information &

communication

technology (ICT)

Sales turnover of less

than RM200, 000 or

full-time employees

less than 5.

Sales turnover

between RM200, 000

and less than RM1

million or full time

employees between 5

and 19.

Sales turnover

between RM1 million

and RM5 million or

full time employees

between 20 and 50.

Sources:

1-+ational Small and Medium Enterprise (SME) Development Council under Bank +egara of

Malaysia (B+M), 2006

2-Small and Medium Industries Development Corporation (SMIDEC), 2006

Re-branding will see the introduction of the philosophy of re-branding and its relationship

with the Malaysian SMEs food products. There are three elements of qualitative methodology

paradigms such an observation, archival data together in-depth discussion will be used

towards finding the essential elements of re-branding to be implemented for Malaysian SME

food products towards global market-place.


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2) Introduction

Small and Medium-sized Enterprises (SMEs) form a vital part of any national economy.

According to the Organization for Economic Cooperation and Development (OECD),

Malaysian SMEs comprise of about 95 % of enterprises in a nation, and are responsible for

employing 60-70 % of the country’s workforce (OECD, 2002). SMEs are mushrooming in the

country today and they have an important role in contributing to the rapid development of the

country’s economy.

Almost every business whether small, medium or big has a trading name. Customers know

the existence of a product in the market through the product’s name or logo. This name for

products has come to be known as brand. The more creative the brand name, the more people

will be attracted to buy the product or service. Andrew Bradley, a partner at the advertising

agency Bradley, McGurk Partnership, believes that “the role of branding in relation to SME is

firstly to communicate the personality of the business and to build on that” (The Post, 2005).

These experts pointed to the importance of branding in the SME industry and it is felt crucial

for Malaysian SMEs to re-look at their branding strategies and embark on a re-branding

exercise. This investigation embarks on a mission to re-brand the small and medium

enterprise food products in Malaysia because it is strongly felt that the re-branding exercise

will benefit the SME players and benefit the country’s economy.

Deputy Prime Minister of Malaysia, Dato’ Seri Mohd Najib Bin Tun Abdul Razak called for

Malaysia to brand itself. He urged producers to make the country more attractive in an

increasingly globalised arena, to brand Malaysia so that the country can be characterized by a

well recognized competence (Branding Malaysia, LS Sya, p. 11, 2005). That statement

highlights that Malaysian players in any industry are still searching for their own image or

identity as a tool in order to market their food products of an international level. Prior to that,

Malaysians have to accept the fact that, until today, there are only a few Malaysian SME food

products producers (medium entrepreneur category, not from small entrepreneur category),

which are well established and recognized at international level. For example, the Dewina

Food Industries Sdn. Bhd which was established since 1986 (Company Profile: Dewina Food

Industries Sdn. Bhd, 2007) and became a pioneer in the manufacturing of premium quality

convenience food in retort pouch through the brand name of Brahim’s. Amongst the company

food products are from category of Asian foods, Precooked and Gourment, Processed Food

and Sauces (www.brahimsfood.com). Since 1986, this company has been practicing the re-

branding exercise for their food products in order to upgrade its packaging design towards

international market. As Temporal, P. said in his book;


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“Developing an Asian Brand is not easy. Poor image of “Made in

Asia,” coupled with small domestic markets,

have been the source of problematic business growth for many

Asian companies”.

(Branding in Asia, 2000, p. Foreword)

Picture-1 illustrates several examples of local food products from local companies (medium-

category) that have successfully exported their products in the local as well as international

market. This success is contributed through the company’s initiative in practicing re-branding.

Firstly, the researcher presented samples of the food packaging from Brahim’s brand. The

evolution of the re-branding and design of the packaging has clearly transformed the products

into better looking image. Since its development in 1986, Brahim has gone through several

phases of re-branding in order to penetrate global market such as Indonesia and Thailand. The

re-branding process saw improvement in terms of structural design, color and graphics.

(www.brahimsfood.com). The pictures on the next page show the sequence of transformation

that has taken place on the food packaging of DEWINA Food Industries Sdn. Bhd.

Picture-1: TRA%SFORMATIO% OF PACKAGI%G AS A RESULT OF RE-BRA%DI%G

PROCESS O% FOOD PRODUCTS OF DEWI%A FOOD I%DUSTRIES SD%. BHD.

a) Kari Ayam Hijau b) Kuah Masak Lemak c) Malaysian

(1980’s) (1990’s) +yonya Sauce (2000’s)

Another local food products brand, which had practiced re-branding exercise, is called

Munchies Food Products (picture-2). After re-branding process, this brand has been quite

popular in ASEAN countries like Singapore and also Thailand (+ew Straits Times, Saturday,


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April 1st, 2006). Historically this brand was introduced in the food product local scene in

2005. Like DEWINA Food Industries, this brand has also been involved in re-branding

process in order to attract more people to become loyal customers for its products.

Picture-2: Hwa Tai’s Products

The time has come for Malaysian SME small group entrepreneurs to take an aggressive

initiative or appropriate method to re-brand their food products to be internationally accepted

whether in the Middle East, Europe or the United States. In this scenario, the Malaysian

SMEs players need to think of their identity and also the quality of the food products. By

having a good name for the food product or company’s name, together with the quality of the

product, the Malaysian SMEs can then consider to take their food products to the open market

and compete with international food products. Besides that, producers of Malaysian SME

food products need to strategize their branding by studying or searching for a new method in

order to market their food products at international market.

3) BACKGROU%D OF THE STUDY

The Prime Minister of Malaysia, YAB Dato’ Seri Abdullah Bin Haji Badawi in his

speech at the National Branding & Packaging Innovation Exhibition & Conference 2005 at

the LimKokWing Institute of Creative Technology, CyberJaya made a serious comment on

product branding in Malaysia. He said that Malaysia lacks the know-how’s required to

develop and implement successful branding and packaging strategies. The Prime Minister

stressed,

“Branding and packaging are fundamental aspects of successful business, which

large Malaysian companies as well as SMEs must seriously adopt and integrate into

their current business practice. We must work to develop the capacity of Malaysian


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enterprises and enable them to roll out packaging and branding of their products and

services that can compete at all levels”.

(Prime Minister’s Speech, National Branding & Packaging Innovation Exhibition &

Conference, August 11th, 2005, Prime Minister Department’s Press Statement and

http://www.pmo.gov.my/WebNotesApp/PMMain)

The Prime Minister’s comments drove home the point that the branding and packaging

designs of Malaysian Small and Medium-Sized Enterprise (SME) food products are lagging

behind brands from abroad. Brand names like Pizza Hut, Heinz, and Cadbury’s Chocolate

have been imported into Malaysia and they are now mushrooming in this country to meet

demand from consumers. All these international brand names are already established in the

Malaysian market. This is due to the tremendous growth of major international retailers in

Malaysia like Carrefour, Makro, Dairy Farm International (consists of Cold Storage and Giant

outlets), Tesco and also Jusco since 1990 ([email protected]).

Dato’ Seri Mohd Najib Hj. Abdul Razak, the Deputy Prime Minister of Malaysia, during his

speech at the opening of Showcase ‘One Product One District’ (Satu Produk Satu Daerah), at

the Melaka International Trade Center (MITC) on April 6th 2006, cited one instance when he

was travelling on a domestic flight. He expected to be served local products like ‘Seri Kaya’

spread during the flight but instead he was served imported food products like strawberry jam

and a few others. (Local +ews, TV3 Buletin Utama, 8.00 pm, April 6th 2006). It is observable

that, in promoting local food products to the international customers, local carrier companies

like MAS and Air Asia can play their role by serving local food products in their domestic

route and or international route.

Meanswhile, Minister of International Trade and Industry, Datuk Seri Rafidah Aziz cited that

most Malaysian companies are not investing enough in brand building and development.

According to statistics for the period of 2004 to June 2007, a total of RM79.6 million under

the grant had been approved to 45 companies, in which small and medium scale enterprises

(SMEs) accounted for RM28.6 million or 40 percent of the total approved amount. But the

utilisation rate was low at 26.1 percent of the total approved amount (Bernama, July 10,

2007). Investment in brand building and development will enable the firms to create user

awareness and loyalty for their products and services whether local or international

marketplace. She also added that local companies need to rethink about their approach to

branding or lose out in the current competitive market (Business Times Malaysia, +ST, 2004).


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This is very important for Malaysian SME players especially from small and medium group

including micro entrepreneur groups towards becoming a part of global players.

As one of the developing countries in the world, Malaysia has improved in her import and

export ventures. The Federal Agriculture Marketing Authority (FAMA) has projected the

market potential of Malaysian food products for the year 2010 as in Figure 1.

Figure 1: The Market Potential of Malaysian Food Product in the year of 2010 (RM/billion).

(Source: Utusan Malaysia, Thursday, June 29th

2006, p. 14).

It is predicted that potential market for local food products in Malaysia will increase by 2010

based on domestic distributors. For example, revenue from livestock is predicted at 41.21

percent, fishing at 31. 70 percent, agriculture at 11.81 percent, food processing at 11.53

percent and the rest is 3.75 percent. This prediction indicates that Malaysia will export more

food products abroad, thus resulting in higher demand for packaging as packaging is part and

parcel of the export business. This will in turn result in the demand for branding, as

manufacturers need to brand their products for export.


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FAMA has also announced that in 2010, the international market will witness an

increase in the percentage of export based on destinations where Asia has been predicted to be

the biggest contributor at almost 50 percent of the international export business (Figure 2).

Figure 2: Contributors of international export business

(Source: Utusan Malaysia, Thursday, June 29th

2006, p.14).

Almost 90 percent of the Malaysian manufacturing of food product capacity comes

from small and medium-sized enterprises (SMEs) and the bulk of them operate in the rural

areas. Malaysian rural businesses such as producing kerepek (chips), kuih bahulu (mini

sponge cakes) and keropok (crackers) are valuable products but are still being produced using

traditional methods in terms of branding or packaging. These products cannot be sold at

international markets because the packaging does not fulfil the international requirements and

regulations.


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Picture-3: AMO%G THE FOOD PRODUCTS OF MALAYSIA% SMEs

(Small Category).

Brand of Biscuits Keropok Lekor

Packaging for Kerepek Cencalok


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4) REVIEW OF LITERATURE

This paper aims to determine the importance of re-branding Malaysia’s SME food products as

an attempt to meet international standards. The final output of this paper is an actual re-

branding process of a food product that incorporated all the necessary and required features to

penetrate the global market. Thus, this review will trace the historical background to the

introduction of brand, branding and re-branding before exploring in detail the contemporary

understanding of the three concepts. This review also provides the elements and types of

branding currently used in the market before as well as the theory and practice of branding.

Re-branding is as much about changing corporate iconography as it is about changing the way

one communicates with the customers (Morgan, 2006). The corporate iconography consists of

creating a new company logo, new stationery, new website or many other things. In similar

line, (Schley and +ichols, 2005) indicated that re-branding is a process of realignment

whereby the company rediscovers the single unifying principle that aligns the organization

with its customers. It means listening to the customers and identifying what is so special

about the product in the eyes of the customers. Sometimes, re-branding has nothing to do with

re-designing visual assets such as logo and tagline and instead focus entirely on operational or

internal mindset changes. The re-branding exercise has become something of a fad in the last

decade, with some companies re-branding several times. For instance, Telekom Malaysia has

gone through the re-branding process three times in order to meet the customer’s need.

Similarly, Radio Television Malaysia (RTM) had gone for re-branding exercises in 2005 in an

attempt to attract more Malaysian TV’s viewers to watch RTM channels rather than the

private TV channels. The latest local corporate institution undergoing re-branding exercise

was Mayban Fortis in November 2007. This re-branding saw five of Mayban Fortis entities

merging into two anchor subsidiaries, namely Etiqa Insurance and Etiqa Takaful (+ew Straits

Times, +ovember 17th, 2007, p. 45).


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4a) SAMPLE OF RE-BRA%DI%G


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5) RECOMME%DATIO%

STRATEGY OF RE-BRA%DI%G A MALAYSIA% SMEs BLUEPRI%T TOWARDS

EXPORT ORIE%TED:

A Malaysian SMEs need to have a long-term creative strategy in order to embark their food

products at global market. This dream cannot be realized within in short time, it may need

two or three years to make this dream comes true. Whatever it is, developing a Malaysian

SMEs blueprint towards export oriented will bring an inherent strength to the Malaysian SME

food products. It also will be an asset that will last a lifetime, generating income and also

growing in value. This strategy also will comprise of re-branding process and with a clear

strategy, objectives, budget involves and timeframes, the Malaysia SMEs could achieve their

target having a strong brand name of their food products towards export market.

5a) Setting-Up The BRA%D Team

The owner of Malaysia SME’s company director, manager or whatever position name they

call, he or she can contribute enormously to the creative process, successful company owner

has vision, direction and realize the importance of creative professionals to their mission on

brand naming activity. Anyway, the owner of Malaysian SMEs Company cannot work alone

to achieve their mission, they need helping hand from other party. Here, the researcher would

like to suggest that they owner of Malaysian SMEs must be setting up one team called The

Brand Team. This Brand Team of course lead by the owner of Malaysian SMEs entrepreneur

assist by Ministry of Entrepreneur Cooperative Development (MeCD) together with local

Advertising Agency (specialized naming consultancies and packaging) which appointed by

MeCD to assist the Malaysian SMEs entrepreneur. The appointed advertising agency is

responsible to come up or create idea on how to develop for brand naming process. This

agency also needs to have a creative person whether art director, copywriter, strategic

marketing expert to be part of this team. In the process of developing the brand name, all the


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party will be taking in giving their ideas and they must have a consistent voice across all

proposals or ideas.

5b) A MALAYSIA% SMES BLUEPRI%T TOWARDS EXPORT ORIE%TED

• Re-branding based on Type of Brand Names

The research would like to forward reccommandations on brand naming

development,

o Focus on brand name distinguish or distinction.

o Ensure relevance, memorable and creative of brand name

o Acceptable at all level of community locally or internationally

o Earn that a new brand name will be standing in the global marketplace and in

the international customers mind.

• Setting-Up the BRAND Team

• Differentiation of the Brand Name;

o Syllables Combinations

o Combining Words

o Alternate Spelling

• Memorable Brand Name

• Descriptive Brand Name

• Identifiers of Food Products

• Creating A Strong Tagline Or Slogan On Food Packaging

• Informative Principal Display Panel (PDP).

• Packaging Effectiveness

• Symbolism and Logo, Trademark and Brand Signature.


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