Marketing and crisis management

IMAGINE this scenario: you are the boss of a company making infant milk powder. One day, your marketing head and product quality head come to you with grave news: a hospital has contacted the company informing it that 10 babies in the hospital’s ward have contracted kidney stones, and that the one common factor in all of them is that they had been consuming your brand of infant milk powder.
Your product quality head cannot explain why and he needs time to investigate.
Your marketing head, after having faced a mounting number of angry calls from customers, wants to know what to do next, as, every day, your company is shipping out 90,000 tins of milk powder to retailers and exporters. What do you do?
We should be fortunate if we, in the course of our lifetimes, are never put in such quandaries.
"Tough" armchair marketers who like to talk about strategy and grabbing market share can freeze and wilt during times like these.
Chances are, however, that a problem of this nature is bound to hit sooner or later, especially in mass consumer market food companies.
Crisis management 101
How a company’s manage-ment and its marketing and communications department react to it can effectively determine its fate.
The important elements of crisis management are:
1) recognising a crisis early and dealing with it swiftly;
2) establishing regular and daily communications with customers and the public, through media sources;
3) updating the public on the company’s response and steps being taken to arrest the crisis;
4) not focusing on blame, or culpability, and just doing all that can be done to protect its customers and, hence, its brand, its reputation, its very future.
In the case histories of crisis management, these are the best practices that have pulled companies through difficult times – examples include the Tylenol poisoning crisis of 1982 and, recently, the Mattel lead paint crisis of 2007.
Nothing is more important than item 1 – acting early. As in the case of an earthquake or a tsunami, it is worthwhile imagining a countdown clock starting the moment it happens … every second that ticks away without anything being done means more lives lost.
In the case of Sanlu, it seems it had plenty of chances to start managing the crisis – as early as December 2007, some report.
But by ignoring or burying its bad news, it actually sealed its fate. Doing this tells the public that your management would choose its own image and reputation over that of the lives of its customers.
Its probably fair to say that from being the No. 1 market leader in China, Sanlu is now quite finished.
As for steps 2 to 4, the various Chinese companies affected should borrow a leaf from their own political leaders.
From the winter storm crisis to the Sichuan earthquake of 2008, Chinese leaders at the highest levels had been perceived to be actively involved in doing their best to solve the problem, with even Premier Wen Jiabao making appearances in crisis hit areas and addressing victims directly.
Crisis management 201
Another scenario: you are the local country head of a global, billion-dollar investment bank.
Through weekly conference calls and updates, you know your company is facing a cash crunch due to a worldwide seizure in the credit markets, and you are nervous about the company’s future.
Business, however, must go on. One day, your regional boss instructs you to market a new series of financial products, to be distributed through local banks to retail investors.
The products are themselves quite complicated and, in your view, rather risky, as they are linked to financial derivatives such as Credit Default Swaps.
However, looking at the prospectuses and marketing material, you see they are couched in investor-friendly phrases designed to give the impression they are safe, as they are backed by the full faith and guarantee of your own bank.
Your regional boss tells you to launch the products ASAP and is breathing down your neck every day for sales.
Meanwhile, your own questions about the health of your company are swatted away. What do you do?
Unlike the first dilemma, where doing the ethical thing – responding quickly – helps save the company, this second is a lot harder, as doing the ethical thing actually harms the company. Resolving this problem is not covered in this post..!

Interactive PR and Your Online Brand

Chances are if you are a company, you have an online presence - even if you’re not the one that has created it. Consumers are alive and active online and are, in all likelihood, talking about your company. Companies need to be proactive in managing their online presence and a vital component of this is an interactive PR campaign.
Interactive PR is the use of online tools and technologies like: search engines, social bookmarking, new media relations, and blogging, to disseminate information about your company online. Allowing you to communicate directly with the general public, consumers, and potential prospects.
The following are key elements of any successful interactive PR campaign:
Promotion of content through social networking sites
To launch a successful social networking site campaign, you need to have something to promote on these sites – social media content. This content can take any number of formats, including but not limited to; videos, photos, and blog posts.
What content gets read is no longer decided by an editor, social networking sites, including news sharing sites, democratically allow users to choose which news stories will make it to the popular pages and get in front of readers eyeballs. Aside from the initial traffic that you receive from hitting the front page of these sites, there are other benefits, including: increased subscribers and highly targeted valuable inbound links.
If you get an article, picture, blog post etc to the front page of digg or the other news sharing sites, you can expect to get well over 40,000 unique visitors. Having your social media content succeed at one social networking site, greatly increases the chances that it will become popular on the other sites - multiplying the effects of the campaign.
Blogger Outreach
An integral component of any interactive PR campaign is to get influential bloggers to talk about your product or service. A blogger outreach campaign will connect you to leading relevant bloggers in your niche to have them review your product honestly in their blog. The 3 main benefits of a blogger outreach campaign are: branding and WOM review from a thought leader in your industry; targeted relevant traffic to your site from the blogs; and natural inbound links that will help with your sites search engine rankings.
Corporate Blog Integration and Podcasting
In the open and transparent age of social media, blogs and podcasts are vital for reputation management and consumers have come to expect them. Companies and brands should consider employing blogs and podcasts to create open and honest dialogue.
Proper blog integration, distribution, and strategy is vital to the success of any corporate blogging initiative. Any blog that spins the truth will be found out - in a world of social media, transparency is the only option. The proper implementation of a blogging and podcasting strategy for your company company blog is vital to ensure that your company is aware of and follows corporate blog conventions. Without a proper strategy in place, companies may be better off not blogging at all and will end up missing out on all of the benefits derived from a corporate blog.
Online Media Center
Once you have driven traffic to your website and have started to create an online community around your brand, you need to ensure ease of coverage from both traditional and online news sources. Building an online media center on your site that provides these writers with ease of access to your marketing and brand collateral. You need to ensure it is as easy as possible for people to cover you as possible. The harder you make it for them to get collateral to insert into their coverage, the less likely it is that they will cover you.
Social Media Monitoring and Brand Management
Your brand no longer lives in a corporate environment where you can control your message; everyone with a stake in your brand now controls the message. Your brand lives everywhere online, from blogs and forums to twitter and youtube.
Monitoring your brand across all online channels to determine where your brand conversations are taking place and their tone is critical when undergoing an interactive PR campaign. This reporting will allow you to make strategic decisions with your online and offline marketing and advertising initiatives and provide you with a real time snapshot of your current brand landscape.
With this information, you can: adjust, on the go, your online marketing initiatives to capitalize on or respond to customer feedback; evaluate the effectiveness of both online and offline advertising initiatives with greater accuracy allowing for better targeted campaigns in the future; and deal with situations as they occur online, increasing brand loyalty.

How are big brands made on small budgets?

Unilever spent Rs 800 crores in 2007 on advertising and marketing. Reliance ADAG spent Rs 600 crores.

It's a daunting task to break through the clutter of brands without advertising budgets like these to lean on! But it doesn't always take big bucks to make an impact.

So what's the magic formula to do that you would ask?

Rupin Jayal said, "Find other ways to communicate to your self, to your people and to your audience. Don’t use the tried and tested, because sometimes that is the most expensive way to go about it and does not give the required return."

R Balakrishnan, National Creative Director, Lowe India said, “When you're small and you want to be big, don't follow the rules of the big. Even if I take mass media advertising, when you have less money lot of small people make that mistake.

But often a successful marketing strategy is about not having any campaign at all.

Perfect positioning is, quite literally, all it takes.

Take for example, the case of Jumbo King Wada Pav. What started as one Vada Pav store in suburban Mumbai 7 years ago with a 1000 rupees marketing budget is now a 45 store network across Maharshtra & Gujarat.

Stores that compete with cheaper hawkers on one side and large food chains like McDonalds on the other.

It has taken the dependability of hygiene and quality of McDonalds and offered it in a product that many others can enjoy and that is the humble wada pav.

What have they done? Perfect locations! They have located their shops bang outside railway stations.

Dheeraj Gupta, Managing Director,Jumbo King Wada Pav said that after understanding the railway commuter’s needs , he realized that he does not want air-conditoning, he wants a hygienic wada pav, which is what we want to deliver to him consistently. So ‘it’s not what we wanted to give to the customer. It is what the customer wanted out of that product.’

And it seems that this strategy works just as well for high end products.

Take for example the case of Delhi-based herbal product brand Biotique.

It's now a household name in upper middle class India. 16 years ago it was just another cosmetic brand launched by aspiring entrepreneur and housewife Vineeta Jain.

A small brand that carried a hefty price tag. And so it was made available only in up market stores across the country and in luxury hotels. Today the company has a turnover of about 500 crore rupees without any designated advertising or marketing budget.

Vinita Jain, MD,Biotique said “I wanted to put the products where consumers could use them and see their benefits.”

There are many such examples across products and services. And standing out in an over crowded marketplace with little money means starting out by asking yourself the some basic questions like -

Do I really have anything different to offer?

Who am I talking to?

How am I going to position my product?

And how different is my positioning strategy?

112 year old Godrej logo gets a make over

The 112- year old Godrej brand has finally unveiled its revamped logo with new colours, featuring red, blue and green. Aiding the re-branding exercise were U.S based inter-brand, Indian agency JWT. Godrej says the re-branding exercise was undertaken as it felt the old brand was not as relevant to young India.-->

Adi Godrej, Chairman Godrej Industries said that the brand repositioning will help them grow the topline very considerably and grow the bottomline. If the topline grows the bottomline will grow despite the additional expenditure.

Tanya Dubash, ED & President Marketing, Godrej Industries said that it had essentially started about a year ago when they decided, that they want to strategically manage the Godrej brand as an asset more effectively than they had been doing in the past because they saw a big opportunity there.

The group has set aside Rs 100 crores to communicate the new look. To spearhead the repositioning the group has also launched a new business called "Hero" that with include grooming, property, furniture and home appliances.

Contributed by -
Mohit

Adidas, Reebok kickstart integration

Global sports goods companies, Adidas and Reebok, have kickstarted the process of integrating their resources in India, with Adidas’ $3.8 billion acquisition of Reebok in 2005 beginning to pay off. All back-end functions such as sourcing, transportation, information technology, human resources, warehousing, as well as managing and setting up factory outlets, are in the process of being integrated. At the front end, however, both brands will remain independent and will be distributed and marketed separately. Adidas will continue concentrating on high-performance footwear, and Reebok’s focus will remain on lifestyle sports goods. The integration process is expected to take a total of three-four years. Anne Putz, team leader, Corporate PR, Adidas AG, Germany, told ET: “We will generate synergies in areas such as sourcing, transportation costs, warehousing, back office functions and other similar areas. This also takes place on a global basis.” Putz added that both Adidas and Reebok will maintain separate brand identities, with independent marketing strategies and products all over the world. Meanwhile, speculation is rife that Adidas is keen to acquire the roughly 7% stake Phoenix India, a distribution and trading firm, has in Reebok India. When contacted Putz said: “We do not comment on market rumours.” Sources at Phoenix maintained it would not sell the stake, and that there were no active discussions on with Adidas on the matter. Though India remains a small market for Adidas globally, with its share at under 1%, it has chalked out an aggressive expansion plan for this market. The sports goods company, which has 200 single-brand franchisee stores, plans to take up that number to 900 by year 2010. “Our revenues are balanced between footwear and apparel, and we have plans to be the No 1 player in India,” Hartwin Feddersen, director, marketing, said. Reebok, which leads the Indian premium sports goods market with a 51% share, plans to add close to 150 new stores by end of this year, up from the existing 400 franchisee-owned stores. It has recently released its global Go Run Easy campaign across television and print, and is bolstering the campaign with below-the-line marketing efforts. Globally, while Nike is the world’s largest sports goods maker, in India it trails behind Reebok and Adidas. Adidas AG, which reported a 3% rise in Q1 sales to, 2.538 billion euros ($3.46 billion), last month, said it has begun realising the revenue and cost synergies of the acquisition, with the quarter seeing Reebok’s sales surge 15%. Analysts say that Adidas’ acquisition of Reebok has helped the German sportsmaker consolidate its position in key markets such as the US, since Reebok enjoys strong brand equity through its lifestyle and fashion positioning, a slot which Adidas’ German rival Puma has occupied successfully.

Is a CMO a Temp Job?

As has been discussed far and wide, the average tenure of a CMO is somewhere around 21 months. Rarely is it the incompetence of the CMO. Most of them are bright, accomplished people. In most cases, it is because the CMO was set up to fail with unreasonable revenue expectations or asked to market a bad product. What is interesting is that this trend doesn’t seem vary much with great companies v. poorly run companies or good products v. bad products. It appears that the modern CMO may be the most transitional executive position. Why is this?
Effective CMOs are typically big idea people. They tend to be strategic marketers not tactical marketers. Rare is the person who can excel at both the big idea and in the minutia of the execution. As such, the execution of the tactics is handled by Brand Managers, Marketing Managers, etc. - in essence, the “assembly line supervisors” of the marketing system.
Speaking of “system”, the execution of marketing is a commodity. Once the idea is created and the execution system is in place, it is natural to drive costs out of the system. In short, it is cheaper to pay several tactical people than to pay one CMO.
If the big idea and strategic marketing are successful, what does a CMO do? After the launch, most of the details will be handled by managers. Unless the company has other initiatives, there are really only a couple of places to go - out or up; either leave the company or get promoted to CEO. The latter is actually occurring more frequently.
CMOs typically get one shot to be right. If they are brought in and their strategic marketing/branding plan doesn’t work, they are typically shown the door. It is a bit like being a football coach at a big time college - win now or die. There is not a lot of patience to build a brand internally by focusing on quality control, creating employee evangelists, opening up the marketing to allow customers to participate, etc. Most Boards and CEOs want results NOW. Unfortunately, sometimes greatness takes time.
The biggest issue that creates the “temp” feeling of the CMO role is that the marketing rules have changed. When done properly, modern marketing is about creating a large enough customer base to reach word-of-mouth critical mass. This means an initial outlay of external marketing dollars, but only to reach the point where your customers become your primary marketing driver. At this point, almost all marketing should turn inward. As such, the CMO must evolve to a role of something more like “Chief Branding Officer” or “Chief Experience Officer” (CXO?) - someone who obsesses about the customer experience, customer feedback, product quality, etc. Unfortunately, in most corporate hierarchies, these are Department Head-type roles, not executives.
In light of all this, it is no coincidence that the CMOs with the longest tenure, that have overcome the “temp” curse, are in innovative, forward-thinking organizations. In fact, they may not even be called “CMOs”. It is likely that they started with a strategic marketing role, but because of their own flexibility and the innovative culture of their organizations they have continued to evolve their role to provide value to the over-all brand. This follows the “Good to Great” philosophy of the “right people on the bus, in the right seats”. Who says they can’t change seats?

Ads of FMCG firms under ASCI’s scanner

Advertisements from FMCG companies were in the limelight as complaints against them were upheld by the Advertising Standard Council of India (ASCI) for the period between July and September.
HUL, Henkel and P&G had their respective dishwash and detergents ads under the scanner. For HUL, its Vim dishwash liquid’s claim of “Just one drop is enough, New Vim drop has 10 times more lime power than the bar, even the grease you cannot see, it gets out”, needed proof and was not adequately substantiated, according to ASCI. HUL has been asked to modify its ad.
In the case of Henkel, its Pril dishwash liquid’s claim of “Each drop of Pril has active ingredients which removes grease better than the bar”, lacked proof and needed to be substantiated, felt ASCI. The advertiser has subsequently conducted the cleaning efficiency test with an independent lab, for which it has provided a copy of the report.
For P&G’s Tide detergent powder, ASCI felt the advertiser has contradicted its own statement in its television commercial (TVC). It mentions one spoon being required to clean clothes, when actually it is one scoop that is required as mentioned on its pack, leading to misinterpretation by its consumers.
The advertiser has assured ASCI appropriate modification of the claim in its TVC.
For Coca Cola India, its Thums Up TVC which showed an actor flicking a bottle from a speeding truck was not approved by ASCI as it would encourage youngsters to emulate criminal and dangerous acts. The company has since modified its ad.
Perfetti Van Melle and its Alpenliebe ad which shows a celebrity feeding a crocodile the chocolate was found to be violation of the Wildlife Protection Act. The TVC has now been modified by the company.
Liquor brands from United Spirits were also asked by ASCI to withdraw or modify its ads. For instance, its Royal Mist brand which claimed that “100 per cent premium grain means 100 per cent smoothness” appeared to be surrogate in nature. The advertiser has assured appropriate modification of the ad.
Again its Mc Dowell Signature brand which stated ``Success is very demanding, Success is good fun,” was found by ASCI to be misleading due to its ambiguity and was suggestive of a liquor brand. The ad has been subsequently withdrawn by the company.