Respect The Birthmark

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"It was (is) the best of times, it was (is) the worst of times" As suggested by the creatively adapted quote above, the current marketplace has many of the elements and characteristics of a Charles Dickens novel. Only in this instance it is not a “Tale of Two Cities”, but rather a tale of two paradigms.

In the period since the onset of the Global Financial Crisis (GFC) there is an accumulative amount of evidence that confirms many entities, regions, cities, products and services have suffered from the consequences of the poor "Brand Management". That rather than price discounting, lack of consumer confidence, higher interest charges and globalism is the cause of individual suboptimal performance. 

The images and market presence of numerous former market leaders are fractured, seemingly, because of neglect, ignorance or naivety... I know not which, in most specific circumstances. 

Conversely, in the same marketplace other entities, products and services are enjoying the fruits of "the best of times". 

The case studies are very conspicuous, the lessons telling and all too often the brand names are well known, formerly respected and the inherent integrity valued.

Take Coles and its related brands are as case in point. For the calendar year 2010 and the early months of 2011 Coles supermarkets enjoyed better performance achievements in measures of growth and productivity enhancement than its major competitor, Woolworths.

An initiative to discount the price of housebrand milk to just $1.00 per litre was bold and supported by a well funded, aggressive advertising campaign. The strategy was soon extended to other dairy products. Contemplation was given to including bread and chickens in the marketing thrust.

Significantly, the responses from the Australian and individual regional dairy industries were immediate, voluble and personal. Regional communities and individual dairy farming families were identified and labelled in the mass media as "collateral damage". The term, concept and images did not sit well with the broader consuming public, particularly when young teenagers were interviewed and made references to two, three and four generation family histories in dairy farming. Some things just cannot and should not be discounted. 

Coles quickly became the focus, the message if you will, rather than the messenger of good news for the consuming public.

Let me be emphatic. A time series of national attitudinal research has revealed that from day one of the milk discounting strategies a majority of Australians stated that the image of Coles was not improved or upgraded by the campaign. 

Moreover, a similar percentage of research respondents confirmed that they did not foresee themselves being more loyal to Coles or to being more frequent customers of the branded outlets. 

The most telling findings centred on consumers recognising that they had and would continue to buy the discounted $1.00 per litre housebrand milk "opportunistically". That is, yes, consumers would buy, save and enjoy the personal financial benefits of the cheaper dairy products. However, the brand Coles may well be that which was discounted most.

It is a reasonable and understandable set of emotions, responses and perceptions, reflecting the nature of relationship marketing. Coles could have, or indeed, should have asked the question:

"If you take advantage of me today, will you respect me in the morning?"

The general answer is now self evident. 

Sadly, sometimes, perhaps all too often, lessons are not learnt and are repeated.

More recently, the Coles owned, "1st Choice" and Woolworths' "Dan Murphy" retail liquor outlets have been aggressively marketing, advertising and selling leading brand packaged beer at, reportedly, below cost.

Foster's, one of Australia's two major brewers made the decision to withdraw supply of certain of its beer brands to the two chains, albeit for a short period, as a means of respecting and protecting the integrity of the brands.

It was a bold, courageous decision, because the two major supermarket chains and their retail operations control close to 50% of national retail liquor sales.

The media has been quick to take up the running on this emotional story.

Profiles of family owned, smaller liquor store owners have been prominently featured, along with community based service clubs which are reliant for their survival on ongoing local social patronage.

Harsh judgements have been passed on the two major retailers and endorsements given to the actions of Fosters.

The widespread coverage has put the two retailers on their back feet. How could this happen so close to the milk discounting disaster?

Concepts like "Emotional Intelligence" are laudable. However, the effectiveness of such is dependent on its execution. The word execution is used advisedly. Some people simply kill the underlying principles and values.

All business owners, managers and executives need to recognise and respect the importance of effective, consistent brand management. It has short, intermediate and long term benefits and implications for companies, products, services, sectors, regions and communities.

A tainted brand can be and often is a substantial millstone to bear. It puts to question the integrity of the brand and the degree of trust which can be placed in those who represent it.

Most important, it is intangible attributes, qualities and values of a brand which must be adhered to.

Imagine the competitive disadvantages being endured by the packing brand names of Visy and Amcor following the legal actions taken by the Australian Competition and Consumer Commission (ACCC) on the cartel activities by and between these two dominant forces. The fine paid by Visy was substantial. However, the civil actions by a large number of clients against both entities is a festering sore, which will need extensive and intensive remedial action for some period of time. 

It is doubtful whether the companies of certain individual corporate executives will ever recover their integrity standings.

David Jones is still bearing the costs of the alleged sexual harassment allegations against its former Chief Executive. The brand was noticeably damaged among the company's primary target audiences of females.

On a different tangent, public statements by business owners and senior executives can and do impact on the currency of a brand. The recent concerted efforts of Gerry Harvey of the electrical retail chain Harvey Norman and Bernie Brookes, Managing Director of Myer, among others, about the supposed inequity of Australian consumers buying on-line and not having to pay the 10% Goods and Services Tax did not endear them or their respective brands to most consumers.

There was little sympathy and support emanating from "little Aussie battlers" to billionaires and to executives with multimillion dollar annual salary packages. 

Indeed, one by-product of the highly visible media campaign by major retail groups was the fostering of greater confidence in buying on-line and the education of previous non-users of internet purchases.

The ability and benefits of saving money and not paying GST on purchases were minor and secondary considerations to most Australians.

What was damaged were the brands of a diverse range of entities which participated in the campaign.

There are and were many lessons to be learnt.

"Brand Management" extends well beyond the labelling, graphics and physical presentations of entities, products and services. Consistency and continuity of values, philosophies, beliefs and understandings are unimpeachable attributes.

For those who do and do not recognise and respect those imperative, the consequences can be the difference between the best of times and the worst of times.

Barry Urquhart

www.marketingfocus.net.au


About

Barry Urquhart, MD Marketing Focus, Perth, is the author of Australia's top two selling books on customer service and is an internationally recognised authority on consumer behaviour and creative visual marketing.

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