Monday, June 29, 2015
Wednesday, June 24, 2015
Wednesday, June 17, 2015
Regaining customer confidence isn’t easy once consumers have a negative perception of a brand. Crisis management requires more than a hurriedly called press conference.
Winning back the trust of consumers and investors is key to reviving the brand image. The business performance of the company originates from the consumer performance. Nestle certainly recognizes this, as evidenced by the emphasis on rebuilding trust and consumer confidence at Bulcke’s press meet. “With the consumer I mind, we will do everything it takes, are fully engaged with the authorities to clarify the situation,” Bulcke said, adding: “Our priority now is to engage all stakeholders to clear the confusion. Maggi will be back on store shelves soon.” But staging a comeback will be a formidable task.
Friday, June 12, 2015
Brands are not timeless as we'd like to believe
Do you wear a Titan watch? I would be surprised if you did, simply because many youngsters do not even wear a watch much less a Titan. And why is that? The reason is simple. They see the watch as a time keeping device and not as a fashion accessory as Titan would like to believe it is. And how do they see the time? They see it on the mobile which seems a much more integral part of their life than the watch is currently. But why are we digressing and why did the piece talk about the boss. Watch this commercial of Titan first….
Okay I am sure you understand it even better than I did. But here goes. The commercial is set in a restaurant where two former colleagues are meeting - one younger and the other more mature. The older man objects to the younger man referring to him as “sir” time and again. The young man once again thanks the older man for relieving him from his duties earlier on when he had wanted to resign and his blessing to him that “it’s the best decision he has taken”. Clearly the younger man has gone on to promote a very successful start up. The older man asks him what happened to his plans to get a CEO. The younger man shyly tells him that he does not know to recruit a CEO. The older man reassures him by telling him that just identify the person and tell him that he is the right person for the job. The younger man is skeptical. Is that all he asks and the older man says he is sure. He looks at his Titan watch for strength and then taking his heart into his mouth tells his former boss that he is the man for the CEO’s job and hands him the letter of appointment. The older man initially bemused accepts the offer and the tag line says “your time has come”. In the tradition of Titan commercials it is a really nice commercial, but this is not so much about the communication as it is about the stage in life of the Titan brand.
Back to 1987
I am sure you probably were not born in 1987 when Titan was launched in India. Titan was an instant success when it was launched with over 200 models of Quartz watches and soon ensured that HMT who proudly called themselves “timekeepers to the nation” would go out of business.
Titan changed the way the product was made, looked at and sold. It transformed the watch market. It has several credits to its name. It is one of the most admired marketing companies, a great place to work for and a company which most management graduates like you would give an arm and a leg to work for. In 1987 when Titan was launched, I was young (those were the days) successful and upwardly mobile in my profession. I wore a Titan watch with pride as did the Chairman of the advertising agency I worked for. But will today’s bosses wear a Titan as the commercial so cleverly depicts? I wonder. My submission without the benefit of extensive research is that today’s CEO wears an Omega or even a Rolex but not a Titan. Titan is not the aspirational brand it was three decades ago. I am sure the company is aware of this problem and realizes that the answer is not just clever advertising but a whole host of things.
What is our learning?
Let us not worry unduly about Titan’s ability to handle the problem of the brand’s ageing as they know more marketing than all of us put together but focus on our own learning of brands. The first brands are not timeless as we would like them to believe. While some brands like Pepsi have managed to remain eternally young and for the young at heart others have not been as successful. With over 50 per cent of the Indian population being young, brands need to be aspirational for young people as well. Why do I say Titan is not aspirational? I have talked to enough youngsters who say that it is ok to gift a Titan to their parents but not ok to gift it to one’s spouse or girlfriend. All of these are signs that the brand is ageing. I am sure Titan has the capability to understand this and crack the rejuvenation code. But as students of management let us constantly be aware of what brands are facing and learn from their challenges.
And finally can you think of any other brand which is facing this problem?
In the line of fire: Stars who endorsed Maggi noodles are now staring at punitive action
Pullela Gopichand, former badminton champion, is as celebrated for his prowess as a sportsman as he is for having rejected a lucrative offer to endorse a carbonated soft drink after he won the All England Badminton Championship in 2001. He was concerned about the health hazards they posed. ” I don’t drink any colas so how could I endorse them? Celebrities can endorse something if they are confident of the product, but I don’t think they should do it just for money’s sake,” he says, when cat.a.lyst calls him to discuss the role of celebrities in the Maggi noodles controversy.
There are many facets to the Maggi noodles mess. The steaming hot controversy erupted after the Food and Drug Administration (FDA) in Uttar Pradesh found high levels of contamination in a 2014 batch. It raised several issues, which boil down to ethics. One of these ethical conundrums relates to celebrity endorsements. Actors Preity Zinta, Madhuri Dixit and Amitabh Bachchan, who have endorsed the brand, are reported to have been served notices by the government for misleading consumers by starring in advertisements for a product that is now allegedly toxic because of impermissible amounts of MSG and lead.
How fair is it to blame the celebrities for their role? There have been quite a few controversies, both in India and abroad, where celebrities have been blamed and sued for supporting certain brands which failed to deliver on their promises. There is the infamous case of Home Trade, a financial services portal which roped in none less than cricketer Sachin Tendulkar and actors Shah Rukh Khan and Hrithik Roshan to build trust, only to shatter it ultimately. They have also been drafted to restore confidence among consumers when brands failed them, like in the case of Cadbury, which used the Big B in a reassurance campaign.
Walking the talk
Says Ramanujam Sridhar, Founder and CEO of the Bangalore-based brand-comm, a brand consultancy: “The celebrity is not seen as someone who uses the product he is supporting. He’s only seen as an entertainer who comes and goes. But there are several cases cited as successes of celebrity-aided advertising – Santro, which Shah Rukh Khan endorsed, for instance. Who would believe that MS Dhoni really wears a Sonata or that Tendulkar rides a TVS Victor, that too in Mumbai?” He says that in the West, there are fairly stringent stipulations that celebrities cannot advertise a product unless they use it, but that is not the case in India. “That being the case, how can you suddenly hold them responsible?” he says.
Section 24 of the Food Safety and Standards Act 2006 prescribes the general rules that no person can participate in unfair trade practices to promote the sale and consumption of foods or claim they are of a particular standard or efficacy that is not based on scientific justification. In any case where a defence is raised to the effect that such a guarantee was based on adequate or scientific justification, the onus of proof lies on the person who raises defence.
Section 53 says that any person who is a party to the publication of an advertisement which makes false claims and misleads consumers about the food’s nature or quality will be liable to a penalty which may extend to Rs. 10 lakh.
Anisha Motwani, Director and Chief Marketing Officer, Max Life Insurance, thinks it is unfair to drag celebrities into this debate. ”They are experts in their field of work, not in the product/service they endorse. They are picked for their appeal, influence and popularity. Even the people who handle their contracts aren’t experts in products and services being picked. Had that been the case, we would have had scientists and researchers as celebrity managers.”
The need for accountability
Gopichand says that while he thinks it’s unfair to blame celebrities for Maggi’s alleged negatives, celebrities also need to be conscientious when they endorse products that affect people’s health. “There needs to be a balance. People have faith in celebrities’ judgment and from that perspective, I would think there is a certain amount of responsibility that they need to take. How much that is rests with them.”
To what extent does a celebrity’s duty stretch? Says Sridhar: “Even if the celebrity demands to see proof that a brand is safe and is shown it, how would he really know? They wouldn’t sign on the dotted line unless the deal comes through a big, reputed agency.” He also charges celebrities’ managers with relentlessly hawking the celebrity like a consumer product that’s going to go out of fashion. “I hope this issue will make the celebrities more selective and prudent,” he says.
Says Max Life’s Motwani, “You can’t expect a celebrity endorsing a real estate brand to know and approve of the quality of cement used to build houses. Neither can you expect one endorsing a writing instruments brand to know where the ink is sourced from. I think as long as celebrities employ reasonable judgment to decide their picks, it is fine.
For instance, the choice to endorse or not an accessories brand which uses leather for its bags, or a paper brand where environmental impact is obvious, or a taxi operator which has a history of despicable cabbies … these are critical decision-making criteria.
When a popular face falters here, consumers and media have every right to badger him/her in case a negative incident surfaces. But other than that, no.” She says consumers today aren’t naive. “They understand that the celebrity is adding a popular face to a brand, and not responsible for what goes into its making.”
What the aam aadmi says
And what does the person on the street say? Chennai-based AKR Rao believes it’s the consumer’s lookout, solely. “Even if the celebrity gets a quality certificate from the company assuring them that the product is safe, it’s not gospel, nor is its validity permanent.
Quality could suffer later. How can celebrities keep tabs on that?” He says no celebrity will deliberately endorse a harmful product, no matter how greedy. Even if it they do, the principle of caveat emptor(buyer beware) should kick in, he adds.
Yercaud-based Poornima Swaminathan says, “I think they endorse mainly according to the money they get and few really bother about what it does to the millions who follow them. But with Maggi, I feel it’ s really not their fault. Who would associate lead and noodles? However, in products that claim fairness, water-purifying and such, they should really find out.
Maybe Maggi is the beginning. Should they have checked? I don’t know. Maybe in hindsight, yes. We all know that sometimes even we are tempted to buy something seeing the advertisement. How much more then, the guy whose life begins and ends with Madhuri Dixit?”
Swaminathan also thinks the food safety system should be held responsible as it is also their fault those noodles made it past quality control. “Our food safety regulations are not in place. I know companies apply different standards to different countries. People will have to start pushing the standards that we have.”
Others that cat.a.lyst spoke to pointed to how there’s a “willing suspension of disbelief” when celebrities endorse products. And, as AKR Rao says, “Are you going to go check a star’s bathroom and see if they really use that soap? And do you really believe that you hair will grow knee-length if you use that oil?”
It’s as if we, the average Indian, do not take our celebrities seriously. We gush over them, the matches they play in, the movies they act in, take sides, endorse their merits, but when it comes to crediting them with credibility, we are less trusting. One would even go so far as to say our attitude is one of indulgent cynicism. Put aside those fevered debates about whether they should be prosecuted and the answer is invariably: “Look, we know they are in it for the money. We’re not fools to believe everything they say.”
But the reality is that many people, especially children and those with little exposure to information, are impressionable, and celebrities influential. What is the right course then, is the question, the answer to which must come from the hearts and minds of all stakeholders involved. And yes, never forget: caveat emptor.
Tuesday, June 9, 2015
Commenting on this recent development, Pranesh Misra, Chairman & Managing Director, Brandscapes Worldwide said, “From the consumer’s perspective, if there is either a miscommunication or any harmful ingredient in the product, then other brands coming into the scanner is a good thing. But my question is- how accurate are the test protocols which are followed? Therefore, there should be a standardised testing mechanism, which should be used by everyone. Otherwise, the results might differ from state to state or even between bodies.”
Speaking on the same lines, Ramanujam Sridhar, Founder and CEO, Brand-Comm highlighted that the objective of the test is to benefit the consumers and if the product is safe or not. “My views are that every brand should come under the same scanner, and if there are better and stringent rules formed after the tests, then it needs to be welcomed. For some time I had the feeling that Maggi was being witch-hunted, which thankfully is no longer the case now. So it is actually a good move and everybody should conform to it,” he cited.
Lloyd Mathias, Chief Marketing Officer, HP pointed out that the only positive outcome of the Maggi controversy is that it has made everyone more aware about food safety standards and hopefully Indian consumers will be better protected in the future.
Nitin Mantri, President, PRCAI (Public Relations Consultants Association of India) and CEO, Avian Media, elaborated, “After the entire Maggi controversy, interference from the government was bound to happen. There was a need to find out if the other brands are following the guidelines or not. So government had to act and they can’t just single out on one brand, which was happening all this while.”
Things turned worse for Maggi, as the government dragged Nestle to the National Consumer Disputes Redressal Commission (NCDRC) for "unfair trade practices and misleading advertisements" and may seek financial penalties among other actions. To add to this, Mumbai based NGO; Watchdog Foundation has also filed a criminal case against Nestle India and its nine directors. Over the weekend, there were reports of the Swiss giant spending Rs 445 core on 'advertising and sales promotion' last year, while the expenses towards 'quality testing' was less than 5% of such amounts was revealed and was shared on social media.
The company had earlier received lot of flak for its ‘dismissive; approach and ‘incompetency’ in handling a crisis situation.
Therefore, reportedly, as part of the damage control exercise, Nestle has roped in US- based public relation firm APCO World Wide and has also got back Shivani Hedge who was heading the Sri Lankan operations to India to rescue Maggi from sinking further. A press conference headed by Paul Bulcke, Global Chief Executive, Nestlé on 5th June declared Maggi noodles as safe, but still the company decided to take the product off the shelves nationwide.
Mantri from PRCAI explained that it is a very critical phase for Maggi. “Building trust back is a very difficult game, but it is not an impossible one. From now on, the brand should focus on how to regain the lost trust because from here, the entire controversy will only lead to logical conclusion,” he said. There were other reports, that Nestle has replaced all Maggi ads with Nescafe and KitKat commercials.
Sharing his thoughts on the brand revival of Maggi, Misra from Brandscapes Worldwide added, “Initially for the first couple of years, there will be a challenge. The impact will last for some time and the financial effect will also be stronger. But companies do tend to grow out of it and then regain the consumers’ confidence after such debacle. Maggi already enjoys a lot of good-will in the market, so this kind of positivity will help the brand to bounce back. When giants like Coke, Pepsi, and Cadbury have come out of similar crisis situations successfully, my question is ‘why will it be a problem for Maggi?’”
Talking about the international space, Nestle has recently got itself engulfed in a new controversy, where they have been receiving a lot of social media backlash in New Zealand post a recipe change for one of their popular products Milo. The taste is being criticised and is being compared to detergent, soap etc., and fans have also questioned the company that ‘Why change something that wasn’t broken?’ They have also opened a Facebook page titled ‘Change Milo Back to the old recipe’ which has got around 6,000 likes to plead the makers to do the needful.
In response to the growing tension and to manage further social media debacle, Nestle New Zealand came out with a statement saying that the company has removed vitamin A, B1 and magnesium, and added vitamin D, B3, B6, and B12, to "help active kids, and adults, perform at their best". It has also removed added artificial vanilla flavour as part of a move to make Milo as natural as possible. The company has elaborated that the core ingredients -milk powder, malted barley, cocoa and sugar –however, have not been changed. In the statement, Nestle has explained the reason behind the tweak in the original recipe and that the changes are part of their global commitment to make products more nutritious and better.
Tuesday, June 2, 2015
Advertising is not only about being creative but working on brand strategy
Over the last several years of teaching hundreds of management students, I have heard one common statement from students. ”I love advertising, but I am not sure if I will be successful in it because I am not creative.“ Do you think on those lines? Does advertising as a career interest you? What options are there in advertising? What are the career prospects? And who should come into advertising? Let me try to address some of these questions in this column. So hang in there.
Those were the days
Way back in the eighties, I came into advertising from IIM like several others of my time. Do the names Sam Balsara, Madhukar Dev, Santosh Desai, Ambi Parameswaran and Arvind Sharma mean anything to you?
Well they should if you want to get into advertising, because these are the doyens of the advertising industry who hold office in some of the largest advertising agencies and branding companies in India and lead the destiny of thousands. Why did we come into advertising after an MBA? We all came into advertising because the industry fascinated us. We were turned on by the creative ads we saw. All of us came from the major management institutes in the country like Bajaj, XLRI or IIM. Today, I can say with certainty that no one from a top flight management institute will come to advertising and the industry is poorer for it. A person from the lesser known management schools is all the industry can afford today it seems which is certainly hurting the industry.
But why advertising?
MBAs are unlikely to be the creators of advertising but they can certainly manage the advertising for brands and the relationships which come with it. Today after over three decades, I realize why I love this profession. In so many years I have done campaigns for motorcycles, tyres, shampoos, apparel, corporations, whiskey, beer and God knows how many more categories. And that is the greatest challenge of advertising. Every day you learn and unlearn about a new product, their competitors and keep researching different consumers - a house wife one day to someone buying health insurance the next. To sum it up there is never a dull moment in advertising. So do you want different things and never be bored at work, advertising is the business for you.
But advertising does not pay well does it?
You are absolutely right. Advertising despite all its glamour has not kept pace with the others. Today sectors like ecommerce, banking, software, financial services and several others pay more than advertising which means that most MBAs tend to look elsewhere and who is to blame them? While the salary in advertising in those days was certainly not as low as it is now comparatively, I must say in the same breath that the growth prospects are much better. One’s career growth path also can be much quicker. And a thought for the advertising barons of today, you too need to remember that if you pay peanuts as you are currently doing, you will end up only with monkeys. And though it will upset the people in the industry I must tell you that the quality of people overall in advertising is pretty sad. So if you are good, you will end up way ahead of the competition and that is certainly one of the reasons why you should look at advertising as a career.
But I am not creative
Yes let’s take the bull by the horns. What is being creative? It probably means you write poetry, write skits, paint or compose music. I can do none of these things but I owe what little success in life I have achieved to advertising. And why is that? That’s simply because more than being creative, what is required is an understanding of what will work and what won’t. We need an appreciation of creative and the process rather than merely being creative, as remember MBAs don’t write the ads. They are catalysts to the creative process working with the creative people and the clients; they can decide the strategy of brands and the tone of voice of the brands that they handle. And finally I remember what Bob Dylan said “If you get up in the morning and go to sleep at night and in between do what you like consider yourself a successful man .“
And believe me you, I am a successful man because over the last decades I have enjoyed every moment of my working life. So here is my invitation to you. Welcome to the madhouse! You won’t regret it!
Labels: Branding and Advertising