Business

Wednesday April 18, 2012

Nestle focused on branding

By M. HAFIDZ MAHPAR
hafidz@thestar.com.my


Company to continue investing in its brands despite global uncertainty

PETALING JAYA: Local companies should look at the long term by investing in their brands rather than just doing price discounting and promotions, said Nestle Products Sdn Bhd communications director Khoo Kar Khoon.

“You should not treat your product as a commodity.

“If you continue to just do price discounting, it will hurt your margins and won't benefit either your brand or the product category,” he told StarBiz.

Nestle, which is headquartered in Switzerland, is celebrating its 100th year in Malaysia, where its products are in more than 90% of households.

Khoo: ‘If you continue to just do price discounting, it will hurt your margins and won’t benefit either your brand or the product category.’

Its market-leading brands include Milo, Nescafe, Maggi and Nestle Bliss.

With the global economic situation, Nestle is cautious in spending; but Khoo said as a market leader, it would continue to invest in its brands and strengthen its brand equity.

“For food products, in a challenging period, we still need to continue our marketing efforts to remind the consumers of the values they can get from our products,” he said.

“If you are a market leader and do not do any communications, it will affect the category.

“For instance, if you are the leader in the soya drink category and do not advertise, the second and third-tier leaders also will follow. The whole category becomes quiet and there's no excitement, causing consumers to go to other categories like tea or carbonated drinks.”

Nestle has consistently been among the top advertisers in the country in terms of spending.

Khoo is also president of the Malaysian Advertisers Association, which is supporting the upcoming Putra Brand Awards to be held in Petaling Jaya next Tuesday.

He said he hoped that more local companies would undertake brand building to sustain the brand equity over the long term, such as what Nestle had done.

“You have to stay relevant in people's lives.

“In the old days, you could just show a TV commercial but now, with the proliferation of media, people are spoiled for choice and the consumers are getting more discerning.

“In today's environment, brand building is no longer just a 30-second commercial. You have to do activities to engage the consumers such as events and product sampling,” he said.

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