Dr M’s way to sustain brand

KUALA LUMPUR: Just having a brand is not enough, the brand has to be backed by a real business that is profitable.

Brands that had shaped the businesses of the world, like financiers Lehman Brothers and Citigroup, had recently collapsed despite having such powerful branding, according to Tun Dr Mahathir Mohamad.

“Today we are seeing how well-known brands can suddenly mean nothing,” he said at the launch of the BrandLaureate Awards 2008-2009 last Thursday.

The award honours brand excellence among the best of brands available locally from multinationals, public-listed and government-linked companies as well as large corporations in the world.

“We thought they were so solid that they would not go into any difficulty, much less bankruptcy,” Dr Mahathir said, adding that businesses should learn to not only manage finances but brands.

What cost RM100 could be sold for RM1,000 because of the success of the brand, he said, adding that when the brand had become well-known worldwide, prudent management was vital.

“When you have a brand, it is important to support it. Quality should always be improved over time, otherwise it would just deteriorate,” said the former premier who is known as Malaysia’s best brand ambassador.

On whether the “Mahathir” brand should be cloned, he said: “In the market, if there is an oversupply, the value would go down. I intend to maintain its value.”

He said Malaysia had come a long way in succesfully branding itself in the eyes of the world and this would propel future investments into the country.

Dr Mahathir said he did not expect the country to fall into a full recession next year, if the economy was well managed.

“The impact of the world recession on our country could be reduced. While we are linked to the world economies via trade, we have not invested that much in the world economy,” he said.

However, he did not foresee the global crisis bottoming in the near future and only expected a recovery in 2010. “This is a very complicated situation unlike in 1997-98 when all that happened was our currency was devalued,” he said.

Dr Mahathir said what had happened was the collapse of the whole banking and monetary systems and no country could act on its own to resolve the crisis.

“The Bretton Woods agreement allowed the (monetary) system to be pegged to gold, and then it went off the system and on fiat money. This then gave the banks the freedom to literally print their own money.

“Banks have been lending out too much money. When you lend billions and the non-performing loans run into millions, you will get into trouble,” he said.

Dr Mahathir said the banking system, which was a free market system, had to be changed.

“We cannot trust the market to oversee the market. Governments must come back and oversee the (financial) market,” he said.

On how he would resolve the issues at hand if he were at the helm today, Dr Mahathir said: “When you are faced with a crisis, you must know what the crisis is about, all the details. What you need to do is sit down and study the data. That is what we did in 1997.

“We studied the economic data on the country. If you know the exact details, you can design a solution to reduce the impact of the global crisis on Malaysia.”

The Star-Eileen Hee-091208