After the ban, what can help Maggi regain its brand value

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.

In today’s world of citizen journalism, news goes viral in a flash. And if it is bad news, it acquires a spin and speed that is virtually impossible to stop. Brands, therefore, are more susceptible to a tarnished image today, than in any other day and age. The cocktail of the online and offline world, consumer and shareholder activism, random decisions by government bodies, volatile social groups, and hatchet jobs by competing firms make it all too easy to fall from grace. And the loss of goodwill can play out in the form of decreased revenue, loss of clients or suppliers and loss of market share.

The latest brand to find itself in this quagmire is Maggi, the instant noodles brand from food and beverage company Nestle. One of India’s most trusted brands and perhaps the country’s most favoured comfort food, it has taken a huge knock in terms of brand value and sales ever since the recent controversy broke over allegations that it had lead and monosodium glutamate (MSG) in excess of permissible limits and was, therefore, unsafe to consume. The controversy arose after the Uttar Pradesh Food Safety and Drug Administration ordered the recall of a batch of 200,000 Maggi noodle packs. With more and more states deciding to randomly test samples and banning sales in the interim, coupled with retail chains removing it from their shelves, the company has had no other choice but to retract the product.

Maggi was ranked number 18 in the BrandZ Top 50 Most Valuable Indian Brands study, conducted by Millward Brown and commissioned by WPP last year, with a valuation of $1,127 million. It is expected to have eroded in brand value by at least 30-40%, say brand specialists. Sales have dropped by at least 60-70%, say retail analysts.

Ramanujam Sridhar, founder at consultancy Brandcomm says that he is astounded by the rapid snowballing of the situation. “A recall of some batches of noodles from Uttar Pradesh has assumed nationwide form, leading to complete brand erosion for Maggi, in a matter of days. Nestle India took over 30 years to build this brand in the country,” says Sridhar.

Brands in trouble

Maggi isn’t the first brand to find itself in the dock. Many a brand in India and elsewhere have seen their reputations sullied after one single incident, sometimes for no fault of theirs. Fast food chain McDonald’s has been battling its “unhealthy” image and has seen its share of obesity lawsuits in the US, on account of its unhealthy food. It has seen a 2.3% decrease in global sales in the first quarter of 2015. Sales fell dramatically in Asia (8.3% decrease) after reports of expired meat in China and other quality related problems in Japan. Closer home, a Kalyan Jewellers ad earlier this year invited the fury of activists, who labelled it “racist” and “promoting child labour”. The ad projected Bollywood actor Aishwarya RaiBachchan as royalty, with a dark skinned child holding a red parasol over her head. The jewellery brand had to then clarify that the advertisement was intended to portray “royalty, timeless beauty and elegance”. It expressed regret for any inadvertent hurt caused. This situation is not unlike the Ford Figo ads controversy which displayed images of bondage and brutality, forcing Ford’s global management to issue an apology.

While cola brands Pepsi and Coca-Cola were being investigated for pesticides in their drinks, chocolate brand Cadbury had to face flak because of a worm infestation controversy.

Ambi Parameswaran, chief executive and executive director, FCB Ulka said that all national and global brands have well-laid down guidelines to adhere to. But sometimes they do get caught in a sudden change of laws, consumer activism, or even plain mischief. “The most famous brand crisis and best response is the J&J Tylenol tampering case in the US. No B School education is complete without discussing the Tylenol case and the way the company responded and recovered in six months to an even better place. In India, too, brands have faced such challenges in the past and have managed to recover, be it the brominated vegetable oil (BVO) issue, the pesticide issue or the worm infestation issue. The lessons from Tylenol are clear: do not point fingers, act quickly, put in new safeguards and be frank and open in your response. We should remember the fact that the Tylenol crisis happened before the advent of social media and its own brand of citizen journalism. But still, the lessons are the same.” In 1982, seven people in Chicago died after ingesting Tylenol capsules which had been laced with cyanide by a mentally challenged person. Johnson & Johnson recalled all of its products. The quick response by the company saved the day, and restored  trust. Tylenol was re-launched with a revolutionary tamper proof packaging seal.

Parmeswaran adds that while all the debate on packaged foods and quality standards rolls on, let’s not forget all the food items that are consumed on a daily basis, on the dusty roads of India. “Probably the packaged branded goods are still the safest,” he remarks.

In the wake of the Maggi controversy, all packaged food brands may just come under the radar now. Shailendra Singh, joint managing director of advertising conglomerate Percept, says that the Maggi case could invite attention for 200-plus brands in the packed foods category. “If the Food and Drug Administration (FDA) is serious about cleaning up the foods business, this is an opportunity for it to go after several other brands. Why single out Maggi, or rather, Nestle India alone? That said, this generation thrives on snack foods. Despite many damaging videos on Youtube on the ill effects of colas, they still sell,” he says. There could be more brands in trouble as the Food Safety and Standards Authority of India (FSSAI) plans to test protein powders and energy drinks from across the country for their quality and ingredients. The regulator has already written to many other companies raising concerns and queries on labelling and branding of some of their popular packaged food products.

Mayank Shah, group product manager at the country’s biggest biscuit maker Parle Products, said that the packaged foods business is seeing healthy growth, and the Maggi episode is unlikely to make a dent on sales of other companies. “The ready-to-eat segment is only set to grow and this is a minor blip. The government is very vigilant and is updating standards for packaged foods companies which are a welcome step. Companies must obviously comply with these standards.

There is a need for ongoing conversation with consumers on the safety and quality of products and complete transparency as far as production is concerned,” he asserted.

The ITC Group owns the Sunfeast Yippee brand of instant noodles. An ITC spokesperson said, “It is too early to gauge the impact on the industry as a whole. But ITC’s food products are manufactured in state of the art, world-class facilities. Strict quality and hygiene norms are followed in the manufacture of all products. Stringent checks are undertaken for these products at ITC’s internationally benchmarked Life Sciences & Technology Centre as well as at reputed external laboratories. In all these tests, our food products have consistently been found to be completely safe for consumption and in compliance with all regulations.”

At the same time, both ITC and HUL are voluntarily going in for additional tests on their respective instant noodles brands—Sunfeast Yippee and Knorr respectively—as a means to reassure customers about the quality of their products. HUL is also withdrawing its Chinese instant noodles range from the market. “The discontinuance of manufacturing and sale of Chinese instant noodles is not on account of any safety or quality concerns. The Chinese instant noodle range uses ingredients which are permitted under the FSS Regulation, 2011/Codex and safety of these ingredients is well established. Details of the same have been shared with FSSAI as part of the product approval application. HUL continues to engage with FSSAI to secure the approval of this range so as to make these products available at the earliest for its consumers,” said a HUL statement.

Denial versus acceptance

A statement from Nestle India said that the company will take the product off the shelves, and yet insisted that the quality standards had been met. Speaking at a press conference in New Delhi, Paul Bulcke, global chief executive, Nestle said, “The trust of our consumers and the safety and quality of our products is our foremost priority everywhere in the world. Unfortunately, recent developments and unfounded concerns about the product have led to an environment of confusion for the consumer, to such an extent that we have decided to withdraw the product off the shelves, despite the product being safe. We promise that the trusted Maggi Noodles will be back in the market as soon as the current situation is clarified.”

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. In 2004, Cadbury India, had roped in superstar Amitabh Bachchan announce new packaging for its flagship Cadbury Dairy Milk, following a tenacious worm infestation controversy. Abhijit Avasthi, former national creative director at Ogilvy & Mather who was involved with the campaign, said Cadbury was honest in its approach. “The brand first admitted that there was a problem with some of the packs. It then revamped its entire packaging. They signed up a credible star — Amitabh Bachchan — to communicate that there was a quality issue which it had addressed. It was done with a lot of sincerity and openness, and that greatly helped the brand reclaim its lost ground. One thing that Cadbury enjoyed, which Maggi also shares, is that it was absolutely loved by the people…they wanted to forgive it”. Avasthi said Bachchan had done his share of due diligence before he took up the task of re-assuring the public. “He visited the factory and was assured of the quality standards. Only then, did he agree to be a part of it,” he said.

Nabankur Gupta, founder of Nobby Brand Architects & Strategic Marketing Consultants says that Nestle India needs to get its product right before it goes into damage control. “It’s not enough to say that it’s the same formulation for Maggi globally. Nestle needs to re-formulate Maggi as per Indian standards and regulations, and replace them in stores. The cost could be considerable, but it is not an impossible task. Once you do that, you can build the brand up slowly by investing in corporate social responsibility activities, signing up a credible endorser, effective public relations etc.”

Other brand custodians advocate honestly and reassurance, in the face of sticky situations. HDFC Life senior executive vice president Sanjay Tripathy says in a scenario where there has been a lapse or error on the company’s part, then acknowledgment is the best way out. “During the time of a crisis of such a magnitude, it is imperative for a brand to communicate. Connecting with your stakeholders in order to share a message that helps ease them emotionally is the key to good reputation management. The lapse may or may not be intentional but humility at such a juncture is the least that the consumers expect. Acknowledging the lapse, taking corrective, timely and stringent actions and making a pledge to ensure that no such incidence would ever be repeated is the best way forward.”

Agrees Indranil Das Blah, chief operating officer at Kwan Entertainment and Marketing Solutions, who says, “The only response to an image crisis should be transparency and accountability. If you don’t have something to hide, then don’t. But if you do, come clean with it.”

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.

Does the boss wear a Titan watch today?

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….

https://www.youtube.com/watch?v=ZMT36Ci5Lis

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?

Maggi imbroglio: When star power scorches

In the line of fire: Stars who endorsed Maggi noodles are now staring at punitive action

Is it fair to blame celebrities for the Maggi imbroglio?

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.

Maggi controversy brings other noodle brands under FSSAI scanner

In the wake of the on-going Maggi controversy, The Food Safety and Standards Authority of India (FSSAI) has ordered testing of various noodles, pasta and macaroni brands to crackdown on contaminated food products. According to media reports, the companies whose products have been listed for testing are Nestle India (4 variants of "Maggi Nutilicious Pazzta with tastemakers), ITC (Yippee), Indo Nissin Food Ltd (Top Ramen), GSK Consumer Healthcare (Foodles), CG Foods India, Ruchi International (Koka) and AA Nutrition Ltd.

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.

Brands such as Maggi under fire

The biggest crisis brands face today is the onslaught on social media and an inability to handle it

“Brands are like pieces of fine crystal - they take time to create and are easy to break" - Mike Isaacson

Maggi, the two minute wonder that has been hailed in marketing and business school circles as one of the biggest successes in Indian business history, is suddenly under a cloud. It is alleged to contain MSG and lead beyond permissible levels and its sales have plummeted across the country. See link

http://timesofindia.indiatimes.com/city/mumbai/Maggi-sales-plummet-across-India/articleshow/47507699.cms

Maggi is not the first brand to come into crisis, nor will it be the last. I am sure you all remember the trouble that Pepsi faced in the country and the even bigger problems that Cadburys faced with worms in the chocolate and their elaborate campaign of their new tamper proof packaging featuring Amitabh Bachchan which had the effect of rescuing the tottering brand and restoring credibility.

See commercial.

https://www.youtube.com/watch?v=PH_f6qiH-Xc

Let’s step back a little and study this whole business of crises as brands seem to lurch from one crisis to the other with the same ease with which swift footed batsmen take cheeky singles in T20 matches.

Brands take time to build

One of the things that we must remember is that brands are not built overnight. They take time, effort, strategy and resources to build. Pepsi, one of the brands we spoke about earlier, is a brand that is more than a hundred years old. And yet it does not take much to throw it into a crisis and that crisis can affect credibility and impact sales and market share. And yet there is another twist to the tale today. If you analyze some of the biggest brand crises of those days whether it was Tylenol, Pepsi or Cadburys that we spoke about they were much smaller crises than what brands face today. That was simply because these crises were played out on mainline media like print and TV which though they had tremendous impact, were still restricted to the countries they were circulated in. Today however thanks to the social media and the power of facebook and twitter these crises can really snowball. Look at this on Maggi where in the early days of the crisis they had handled it poorly on social media. The results are already beginning to show.

So what must brands do?

One of the first realities of modern business is the realization that some crisis or the other is inevitable as far as brands are concerned. Maybe the scale of the crisis might vary, but it is probably lurking around the corner. This leads me to the next question and arguably the most important one. What should brands do? Do you remember the old scout motto? Yes it is “be prepared” and brands must really prepare for battle. How do you prepare for battle? You try to predict where and how the enemy will attack. Borrowing the same logic, smart companies have contingency plans for every crisis. What could the possible crisis be? A factory could catch fire, people could die in an accident, there could be a sexual harassment case in your office, there could be a safety or health hazard in the products you make, dangerous effluents from your plant might raise the heckles of the community… The list is endless and savvy companies list out these exhaustively and start working on a damage control plan. Crises can be tackled and their intensity can be reduced. Today one of the biggest challenges is on social media. We have seen enough instances of the crisis that an off the cuff comment or statement can make on social media. Here is a whiff of a future crisis that I read in today’s newspaper about an Uber driver kissing a passenger…

http://timesofindia.indiatimes.com/city/gurgaon/Woman-complains-cab-driver-tried-molesting-her/articleshow/47503028.cms

Damage control is key

I am not sure Maggi has handled this crisis well though it was brewing for some time now. It is important for companies to respond quickly and yet not hastily. It helps to express regret or sympathy particularly where people are involved. The Public Relations company should work overtime to get the company off the headlines and from the tickers in TV channels. If the headline were to read “Taxi driver caught kissing passenger” is better for Uber than to have its name in this condemning headline. The company must have its version ready or what we call as a holding statement. It must have only one spokesperson talk to the media. It must be always available for comments and questions. When there is an accident or trouble at the factory, it would be advised to hold media briefings away from the venue preferably at a neutral avenue. More than traditional media the challenge as stated earlier is manifold in the social media and today more and more companies have full time experts handling their online reputation. Yes brands are like fine pieces of crystal. Don’t be casual about the way you handle them otherwise years of hard work and investment will just go down the tube in “two minutes”.

I love advertising but I am not creative ....

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!

OLX tickles the funny bone with new campaign featuring Kapil Sharma

opular online classifieds site OLX has come out with an interesting mix of digital and TV ads in the last few months. Last week, it rolled out three hilarious digital ads with comedian Kapil Sharma for their campaign ‘Shaadi Ke Funde’- Just Married. The videos take a funny stand on how the overdose of wedding gifts end up becoming used-less. The campaign is conceptualised and executed by the in-house team of OLX. On Twitter, the brand was also running an online #ShaadiKeFunde contest on Wednesday.

Click here for the videos:

The overall brand communication is being managed by Lowe Lintas for the last two and a half years.

Speaking about the brand journey since then, Amer Jaleel, National Creative Director, Lowe Lintas elaborated “When we came on board, the kick-off of the brand had already happened and they had their legendary line ‘Bech De’. The brand was playing on the insight that there are unused items in your house, which consume a lot of space, so why not sell them on OLX. They were in the right space because at that point of time they had just launched their brand. When they came to us, we took on to that premise and made the first set of commercials. While, they were good, but the sort of big happened when we did the app campaign, set to the tune of the popular Bollywood song ‘Womaniya’, where the focus was on how to use the cell phone to sell items on OLX. After this campaign, there was a nice buzz around converting your ‘cell phone to sell phone’ and it made a sort of impression of the work from our side.”

While keeping humour intact, the brand has moved on from their popular ‘Bech De’ proposition to the tagline ‘Keemat Bhi, Kuchh Keemti Bhi’ and the focus is now on building consumer relationships. In January this, year the brand communication was such that it showed buyers urging sellers to post their ads on OLX, emphasising their own need.

Speaking about this, Jaleel cited, “New age brands are very different in their communication and can carry off anything from corny cheap humour to profound and intellectual stuff well. People’s expectation of the brand has changed and now they don’t need any selling proposition, but a unique take to sell things. The brand thus can accommodate every kind of story and that is how we came up with the line ‘Keemat Bhi, Kuchh Keemti Bhi’. We wanted to pitch the site to people, who will need the site tomorrow or sometime in the future. Basically our attempt was to tell people that OLX is not for people who need money and are therefore selling things or for those who don’t have the budget so are purchasing old things. It is basically a convenient way to make your life better.”


According to Ramanujam Sridhar, Founder and CEO, Brand-Comm, OLX as a brand has been doing really good because of its unique concept of selling things online. It is a great boon to consumers who wants to upgrade to a better life. Infact, it is also doing well in smaller towns to those are looking to sell old things.

Today the site is no longer associated with only selling of old things, but has become more personal and is often referred as a colloquial term with people frequently using ‘Isko OLX pe Bech De’ in their day to day lives. “The biggest growth for us is that the brand is now getting into the popular culture, sometimes it is being quoted as a joke or sometimes as a threat. It is a great sign for us, that the brand has become generic and it is best signal which you can get of owing the category. Secondly, getting into the consideration of people and coming naturally to people’s mind is one of the biggest achievements of ours,” added Jaleel.

So from Bech De, to empowering women, to getting Kapil Sharma on board and roping in actor Dhanush and Sudeep to tap the Southern market, OLX has been everywhere. For the record, OLX is a global company and it was founded in the year 2006 and is owned by the global media and digital company Naspers. According to a 2014 media report, the company has grown to 1,200 employees and operates in more than 40 countries. With 11 billion page views, 25 million listings, and 8.5 million transactions per month, it is the largest marketplace in countries like India and Poland.

Click here to watch the other ads:

O Womaniya:\

GenX Nano for 'trendy customer', but analysts sceptical

India's automobile major Tata Motors on Tuesday launched the GenX Nano, a new technologically-advanced hatchback aimed at the "trendy, youthful, bold and stylish customer". Some analysts, however, expressed their doubts about the new entry-level hatchback.

Stressing that the Nano -- originally conceived as a Rs.1 lakh car -- has put India on the world motoring map by demonstrating innovation and frugal engineering, the company's president for passenger vehicles Mayank Pareek said: "It continues to remain an important brand in our passenger vehicle portfolio and we have been constantly evolving the product."

The launch of the GenX Nano is very crucial for the automobile giant, with the Nano sales having dipped over the past three fiscals.

The car has a starting price of Rs.1.99 lakh, and the company plans to sell it across 450 outlets throughout India.

The company said the compact car was aimed at the "trendy, youthful, bold and stylish customer".

The successor to the Nano brand comes with a starting ex-showroom Delhi price of Rs.1.99 lakh for the base model, while three other models are priced at Rs.2.49 lakh, Rs.2.69 lakh and Rs.2.89 lakh.

Pareek said the new car was smart, stylish, efficient and a practical city car which has strong potential in the compact hatch segment.

A section of analysts, however, expressed doubts about the new entry level hatchback.

P. Karthikeyan, research analyst for Cholamandalam Investment and Finance Company Ltd., told IANS in Chennai that the new Nano may log in some numbers during the initial period.

"But in the long run, whether it would succeed is a big question. Nano is generally known as a Rs.1 lakh car and it was launched at that price with much fanfare. Now if the same brand is priced at a minimum price of around Rs.2 lakh, then people may not like to associate with that car that is seen as the Rs.1 lakh car. It is very difficult to erase the Rs.1 lakh brand," Karthikeyan said.

Stating that the Nano was rather a marketing failure than a product failure, Brand Comm founder and CEO Ramanujam Sridhar told IANS: "Car in India is considered a status symbol and the Nano was positioned as people's car. This positioning killed the product at the marketplace even before it was launched."

"It is doubtful if people would buy the new model priced between Rs.1.99 lakh and Rs.2.89 lakh given the brand image that Nano signifies Rs.1 lakh car," he said.

Tata Motors said it thought of the idea of the GenX Nano around two years ago.

Interestingly, the sales of Nano fell by more than 60 percent in 2012-13 - the same time when this idea was projected.

Conceived by the company's then chairman Ratan Tata, the small car was first unveiled at the auto expo in January 2008.

Tata wanted to set up the "people's car" Nano's factory in the rural hamlet of Singur in West Bengal's Hooghly district, but had to abandon the plant in October 2008 following massive protests by farmers led by the then opposition Trinamool Congress against what the party called "forcible land acquisition" by the Left Front government.

Nano got a home subsequently in Sanand of Gujarat, following the personal initiative of then chief minister Narendra Modi.

In April 2009, the car received a historic pre-booking order of 206,703 units.

In 2011, the car faced starter motor issues, which resulted in recall of 14,000 units.

From 2010 to 2012, the company sold 144,959 units of the budget car, with sales peaking during 2011-12 at 74,527 units after which it has steadily declined.

Losing unit sales by 27.7 percent at 53,848 units during 2012-13, the company came up with easy EMI and credit card schemes in March 2013 to boost the dampened market sentiment. It also tried to reposition the car as a smart-city car and introduced power steering in it, but it proved not to be enough.

During 2013-14, the car's sales fell by 60.8 percent at just 21,129 units and the following year, sales went further south.

By that time, Tata Motors realised it needed to come up with something new -- to appeal to the younger generation and the idea to empower the Nano with new technologies was perceived.

As for the fiscal year 2014-15, Nano unit sales accounted for 16,901 units - a drop by 20 percent.

The company said its passenger vehicles business has witnessed a growth in the last four months and in April 2015 has recorded the highest growth at 37 percent and has pinned its hopes high on the new GenX Nano.

"With the addition of the GenX Nano... the company is all geared to expand its sales network from around 450 outlets to 1,500 outlets in the next five years. This year, the company will add 200 outlets, across the country," it said.