Angst Over a Brand That Lets You Down

Posted by Menachem Lubinsky on July 1, 2010 under Brands, Out of the Box | View Comments

I read with interest several articles and comments by marketing executives who were assigned the task of branding British Petroleum (BP). There seems to be a sense of betrayal and disillusionment that a brand that they thought could never fail actually let them down. It seems that many marketing executives look at branding as more than a professional exercise. It isn’t just that they built a brand that was highly successful economically. It is an affirmation of perfection and even of doing good for the broader society. BP no doubt touted its multi-faceted programs at helping communities, the environment, cleaner energy, and helping the disadvantaged, all of which made the marketing professionals look good as well.

The stakes for the marketer in a branding effort are extremely high, particularly if the brand becomes a national and international icon. Those who worked on Exxon prior to its disaster and more recently on BP are asking themselves how they could possibly protect themselves from a brand that falls from the highest summit.

If you think that this discussion is well out of reach of common everyday business practices, think again. As marketers, we are always subject to the assurances of the client despite our own due diligence that their product or service is brand-worthy. In fact, many agencies today demand proof about a claim of a product’s quality. The fact that they will be paid well may not be enough to persuade the agencies to take on the account. They may be concerned about the long-term viability of the brand, but they will also want to be assured that the brand will live up to its name.

The power of branding is such that it is much more than a name, symbol, or logo. Customers actually become emotionally attached to the extent that they really do wear it on their sleeves. Wearing a brand is to many consumers not an ancillary item. It becomes very much a part of their persona. They really do take “you are what you wear” to a different level. But oddly this emotional attachment is not reserved for customers only. Officials at marketing agencies become equally as attached. Working on a brand account is somehow not only a sign of success, but it also becomes part of their persona.

So whether it was Exxon, BP, Toyota or Tylenol, the professionals working on branding pondered the key question of “how could it have happened?” Mistakes and accidents are simply not supposed to be a part of the branding effort, which is what makes them the brand. But as we have all learned in the recent past, brands are not invincible and when they fall it is from a much higher plain.

But brands are said to have yet another advantage which is why they are so coveted. They most often have the ability to recover when other products and services faced with the same calamity simply fold. BP presumably designated $20 billion for amongst other things compensation and damages to people living in the Gulf area. It obvious takes a BP to commit that kind of money to survive, but not only to survive, to resurface with the brand intact.

Over the past half century, several airlines have either had to fold, merge, or change their names after an accident. Safety is so paramount in the psyche of consumers that recovery is difficult unless the public is lead to believe that the brand is no longer a factor, one way or another. Or, as Tylenol did when its product was tampered with, create a tamper-proof bottle to essentially promise consumers that the calamity cannot repeat itself.

It will take a lot more than the $20 billion for BP to prove that they have taken the necessary steps to assure the public that an off-shore drilling accident like what happened in the Gulf of Mexico will never happen again.  Toyota is still busy trying to convince its customer base that its automobiles are safe. They are on an intense campaign to convince the public that gas pedals will not accelerate on their own and that brakes will stop when prompted.

Marketers agree that the public expects nothing short of perfection when it comes to brands. The professionals too want to feel that they are working on a product that exudes success. It is perhaps the dream of many entrepreneurs to develop a product that turns out to be a brand. Needless to say, the rewards can be enormous.

In the late ‘90’s a young man with an electronic testing gadget for physicians (and for home use) was convinced that he had the ultimate new product. He had an exclusive with the producers in Asia and had managed to raise a considerable amount of capital to market the product. As a first step, I suggested distributing the product (retailing at $249) to at least 10 physicians to make sure that the product lived up to its hype. The entrepreneur thought that it was a waste of time since it already had been tested and marketed in Belgium.  He wanted this gadget to become a national brand or the “next Apple,” as he termed it. Seven out of the 10 physicians reported problems with the device including not working properly in sunlight.  Needless to say, his dream fizzled.  Like the marketers involved with BP, I was glad that I did not become emotionally involved with a product and potentially a brand that was less than perfect.

The Toyota Fiasco: Lesson # 1 – The Product

Posted by Menachem Lubinsky on February 9, 2010 under Out of the Box, Quality Control | View Comments

By Menachem Lubinsky

The recent Toyota debacle is already becoming a textbook case for marketers on how not to handle a crisis. Surging gas pedals and faulty brakes are not necessarily what are preoccupying the marketers. They are obsessed with how the company handled the crisis and there is a great deal to learn from their mistakes, but I chose to focus on the pedals and brakes.

There is sufficient evidence that the company knew about some of the problems with the gas pedals and with the brakes. In fact, sources say, that Toyota officials were told months earlier of safety issues with the gas pedals.

The Japanese appear to have a history of sweeping such problems under the rug. Sources say that they often simply delay in the hope that either the problem will go away or some solution will surface in time as opposed to American companies that know that delay will not augur well for them in the long run.

Ironically Toyota had always positioned itself as a model of quality and reliability. It almost single-handedly took on the American auto manufacturers and possibly contributed to the decline of the auto industry in this country. Toyota’s problems had an immediate impact on Ford which took advantage of the silenced Toyota showrooms to make some instant profits, something that had failed them in recent years.

There is an important lesson here that perhaps takes precedent over the crisis management issues that we will no doubt discuss in the weeks ahead. There is no excuse for an inferior product, and certainly if it also involves health and safety. The consumer can forgive many flaws in a company but not when it produces a product that is not up to standard.

Nearly a year ago, a young man asked for my marketing advice on a new food product that he promised would be a “big hit.” It was a dietetic product that seemed to mimic the “real thing,” as he put it. He invested considerably into the packaging and on the surface I agreed that the product might be a winner.

The initial launch seemed to go well as the product made it into many stores including several supermarkets. But soon the problems began. Although the shelf life was approximately 6-7 weeks, customers complained of spoilage well before the date. Several stores called to say that a few of the customers complained of severe stomach cramps after they had eaten the product.

It wasn’t until two weeks had passed that the entrepreneur reached out to me for advice on how to handle the crisis. It seems that at least three of the stores had cancelled orders and worse, a Letter to the Editor appeared about the spoilage issue. I advised him to issue an instant product recall and to quickly deal with the quality issue, with an analysis by a lab and a review by a food technologist that I had recommended. The culprits were found and the product was reformulated. While the taste was slightly off from the original, it still was superior to a competing product. But it was too little too late. The stores would not give him another chance. Despite large ads of the reformulation, customers abandoned the product in droves and the venture died a slow death.

Of  course, the ideal scenario would have been if the product were properly tested in the first place. The entrepreneur admitted that he had tried to save the cost of the additional testing. He also agreed that he thought that the initial complaints of the spoilage were isolated and not a reflection on the product.

There can be no compromise when it comes to quality, either in a product or service. Investing in marketing is naturally a good thing but not if it comes at the expense of product perfection. There are indications that the Toyota pedal issue may in the end turn out to be a software issue. Early on, Toyota said that it was not a problem for cars manufactured and sold in Japan because those parts appeared to be working well. All not very comforting to the average consumer in the US.

Too often a manufacturer will attempt to cut corners when it comes to quality, feeling that the consumer would accept the product as being more than adequate. It was perhaps the beginning of the problems with China when that country was more bent on churning out volume at cheap prices than to deal with quality issues. It too was caught with its severe shortcomings in quality.

I suspect that Toyota will get it right in time, but its road back to respectability and reliability will be long and arduous. The first lesson that we can all learn from the Toyota fiasco is that there is no replacement for quality; quality that is tested and retested, to avoid what one of the world’s largest auto manufacturer went through.