Creation of a Brand Name

Background


The triangle in the PETRONAS logo represents dynamism, while the solid circle indicates the wheel of progress (Source: OHIM Database)

Petroleum Nasional Berhad (PETRONAS) is Malaysia’s national petroleum corporation. It was incorporated in 1974 under the Companies Act (1965) and is wholly owned by the Malaysian government. The entire ownership and control of petroleum resources in Malaysia rests with PETRONAS through the Petroleum Development Act (1974).

PETRONAS is engaged in the exploration and production of oil and gas: oil refining, marketing and distribution of petroleum products, trading, gas processing and liquefaction, gas transmission pipeline network operations, marketing of liquefied natural gas, petrochemical manufacturing and marketing, shipping, and property investment. The total number of the company’s employees is close to 40,000.

PETRONAS has grown from its role as manager and regulator of Malaysia’s upstream sector (part of the oil industry responsible for the exploration and recovery of oil and natural gas reserves) into a fully integrated oil and gas corporation. At present it has business interests in 37 countries. PETRONAS comprises 103 wholly-owned subsidiaries, with 19 partially-owned outfits and 55 associated companies. The company is ranked among the FORTUNE Global 500 largest corporations of the world.

Research and Development

PETRONAS underscores the added value impact of technology in its business competitiveness and sustained growth. It utilizes sound technology to operate world class plants to create new products or improve existing products. In 1999 the Malaysia pioneer petroleum discovery center – PETROSAINS – was set up to stimulate the public interest in science and technology with the hope of nurturing local scientists and technologists.

The PETRONAS Research and Scientific Services Private Limited Company also undertakes many of the Group’s research and development activities, particularly in fields relating to geo-science, petroleum engineering, facilities engineering, process technology, petroleum products, environmental management, laboratory services and data management.

PETRONAS also develops its in-house technical capabilities through its wholly-owned subsidiary GGP Technical Services Sdn. Bhd., which provides services ranging from basic designs, engineering, procurement and construction management to the oil, gas and petrochemical industries both at home and abroad.

PETRONAS receives grants for commercialization of research and development (R&D), and for developing prototypes or pilot plants. Its R&D partners are universities, institutions of higher learning, government research institutes, private consultants, and other companies that are collaborating with PETRONAS in other areas.


The PETRONAS Twin Towers in Kuala Lumpur. The 88-storey building is a promoter of the PETRONAS brand (Photo: Trey Ratcliff)

Intellectual Property Management

Intellectual property (IP) plays a significant role in the growth and business development of PETRONAS. Although IP issues were addressed on a smaller scale at the initial stage, the increased importance of the need for protecting PETRONAS’ intangible assets motivated the company to establish a separate and well-organized IP division within its legal department. Within PETRONAS IP rights (IPR) have the function of protection against potential competitors as well as preventing infringement, and IP is seen as an important asset that can be capitalized on by selling or licensing.

The IP Division is in charge of everything relating to corporate IP matters such as the development of IP guidelines and IP process flow. One key strategy of the Division is to conduct IP awareness programs, particularly relating to the value of intangibles and the registration of PETRONAS trademarks and patents, for various operational units within PETRONAS. The staff members are well informed on IP laws and IP protection and undergo frequent training courses and seminars on IP-related matters in reputed institutions.

Patents

PETRONAS believes that owning a patent (and other IPR) makes it easier to attract investment. The company is of the firm opinion that strategic patenting can prevent the company from prosecution for patent infringement, and that patents, new designs and new technology enhance its corporate image. R&D activities of PETRONAS are varied, conducted by individual units, and patents are also sought by these individual units. For example, the University Teknologi PETRONAS filed an international application through the Patent Cooperation Treaty (PCT) system in 2010 for one of its inventions relating to analyzing eye diseases.

Trademarks

The PETRONAS logo is registered in many countries including the United States. Additionally, the company has more than 200 trademarks spread out over 65 countries. By 2010, some 2000 registrations have been made worldwide, which again reflects its consciousness in securing protection for its brands. Domestically, PETRONAS has registered 110 trademark applications in 45 classes with the Malaysia Intellectual Property Office (MyIPO).

Branding

PETRONAS has a comprehensive strategy to create the company’s brand impact. The strategy is guarded by the careful protection and monitoring of the use of the company’s and internet domain names. Its brand promotional activities have made customer loyalty the most important target. PETRONAS has carried out well-calculated and concerted efforts to promote its brand, using direct and indirect approaches.

The most direct form of brand promotion consists of the logos that appear on the products themselves combined with a very strong distribution system. In Malaysia, PETRONAS is the most popular brand among gas stations which can be found in even the most remote corners of the country. There are more than 700 PETRONAS petrol pumps in the country. PETRONAS has also become a household name for cooking gas which has found its way into many homes. PETRONAS cooking gas cylinders are easily available in any part of the country, including the most remote areas.

PETRONAS is also very well-advertised through the print and electronic media as well as through billboards and souvenir books. Advertisements appear from time to time in the leading local dailies in the English, Malay, Chinese and Tamil languages in order to cover all the major ethnic groups in the country.

PETRONAS has always been successful in utilizing opportunities to contact the communities through tailor-made advertisements on special occasions of Christmas, the Chinese New Year and other local and religious festivals. These advertisements have created tremendous and indelible impacts in the hearts of the communities concerned.

One other area of brand promotion is through the social-outreach program. PETRONAS offers scholarships to various categories of students, ranging from secondary school students right up to students on degree programs. Together with this, PETRONAS opened a technological university (the Universiti Teknologi PETRONAS) in 1997. Among other outreach programs are the PETRONAS Adventure Teams that organize four-wheel drive and motorcycle expeditions locally and abroad, carrying the PETRONAS logo across the globe. Additionally, in 2005 PETRONAS sponsored the Responsible Care Awards, organized by the Chemical Industries Council of Malaysia (CICM) in order to support the improvement of health, safety and environment protection.

Domain Names

PETRONAS has invested a significant amount of money and time in creating and promoting its brand name, both nationally and internationally. A number of internet websites are operated by the company and its subsidiaries. Some of these website names, such as “aogc-petronas.com”, have the word “PETRONAS” in them, while some others (e.g., “mymesra.com.my”) do not. The Prominence of the PETRONAS name, however, has increased the risks associated with unscrupulous parties registering and using domain names similar to the ones of PETRONAS. The company therefore carries out domain name searches on the internet to monitor such activities. A few such cases have been resolved through the arbitration and mediation services from the World Intellectual Property Organization (WIPO).

IP Enforcement / Arbitration and Mediation

Three consecutive cases, brought by PETRONAS to the WIPO Arbitration and Mediation Center, demonstrate PETRONAS’ commitment to enforce its IP rights. The first case was filed in 2000 against Daniela Naidu with a contact address in the United States. The dispute concerned the respondent’s registration and use of the domain name “petronas.net”, which shared identical or confusing similarity with the complainant’s trademark. PETRONAS convincingly argued that Network Solutions did not have rights or legitimate interests in respect of the dispute domain name, and that the responding company’s domain name had been registered and used in bad faith. The WIPO Panel ruled in favor of PETRONAS and required the registration of the impugned domain name to be transferred to PETRONAS. In similar cases in 2001 and 2002 against Internet Prolink SA of Switzerland and Petronasgas.com, Inc. of the United States respectively, the WIPO Panel ruled for transferring the “petronas.com” and “petronasgas.com” domain names to PETRONAS.

Business Results

PETRONAS started its operations in the domestic market in 1987, and entered the international arena in 1993. The company has continued to progress ever since its establishment. Despite the global depression, the PETRONAS Group demonstrated an impressive performance in 2009; registering revenue of US$ 77.0 billion, which was 16.3 percent higher than the revenue of the previous year. The Group’s profit before taxation standing at US$ 26.0 billion (net profit US$ 19.8 billion). Total assets amounted to US$ 106.1 billion, while the shareholders’ funds were US$ 63.5 billion. Nearly 40 percent of its revenue was generated outside Malaysia.

With an initial share capital of Malaysian Ringgit (RM) 10 million, by 2010 it returned to its sole shareholder, the government of Malaysia, a total of RM 426.7 billion in the form of dividends, taxes, petroleum proceeds and export duties. More significantly, it has become the single largest contributor to the federal government’s revenue, standing at 45% in 2009.

A Unique Brand Promotion Strategy to Get Closer to the Customers

As a large, government-supported corporation, the success of PETRONAS lies in many factors, but what makes it different from many other companies is the unique brand promotion strategy that it pursues. Conventional or direct methods of promotion attract customer loyalty, but PETRONAS has also successfully incorporated the path of promotion through social services, which has led it win the hearts of its customers. Not surprisingly every Malaysian knows the name of, and is proud of, this prestigious organization of international repute.