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Saturday 27 April 2013

Brand suicide broadcast to a mainstream audience


Coming hot off the heels of the Ford/WPP Berlusconi saga you would be forgiven for thinking that car manufacturers across the world had learnt a valuable lesson when it came to their advertising content. However, in the latest edition of unbelievable brand positioning and questionable decision making let’s take an in-depth look at a notorious continuous offender when it comes to controversial marketing.  Hyundai’s latest marketing blunder can be seen below although The Brand Avenger must advise that some impacted by suicide might find the footage distressing.


It is clear to see from the recent content released from Hyundai and their agency Innocean Worldwide Europe that steering clear from controversy was a message clearly lost in this instance. It is hard to believe there was not one person through the creative development, implementation and strategic launch of this content who questioned why they were releasing it or what negative impact it could have on Hyundai’s brand reputation. Seems to me had one person questioned why suicide was an acceptable theme for creating a viral campaign on advances in emission technology maybe Hyundai could have saved themselves the embarrassment of having to remove the advert so soon after they decided to release it.


Hyundai’s latest attempt at brand suicide doesn’t just serve as a valuable lesson on why controversy isn’t always the best tool for awareness but it also once again highlights the power of social media in bringing the corporate culprits to justice.  Holly Brockwell’s open letter to the company deserves a read and can be found below. This served as the catalyst that brought the social spotlight to the issue.


From this point on the social tools at the public’s disposal such as Facebook, Twitter and Tout opened up direct channels of communication and word of mouth buzz across borders to publicly denounce the brand. As Lara O’Reilly covers in an excellent article below both Hyundai or Innocean have continued to do themselves no favours through their muted responses and apparent blissful ignorance demonstrated in their lack of updating their social media tools to apologise.


This isn’t the first time Hyundai have tried to create a stir when it comes to their advertising. Viral marketing can be an effective tool to use for creating awareness of a brand. Viral marketing has to capture the public’s interest so they are encouraged to share within their networks. The end goal should be a successful campaign spread over numerous contacts, which successfully leaves all with a positive perception of the brand or at the very least a level of respect for the message conveyed. Taking this into consideration Hyundai have clearly got it wrong time and time again when it comes to some of the marketing campaigns they have signed off. Most recent examples include the outcry that was created following this advert in Holland.


Prior to this Hyundai were busy creating controversy in the land of the brave and the home of the free. If you can’t give them credit for anything else at least we can give the Korean car manufacturer kudos for continually looking to damage its brand across international markets.


The only thing poorer than Hyundai’s decision making has been its responses on social media. So far there has been little to no response rather than a statement released directly to the media. Hyundai need to understand that releasing a statement to the press and the press alone isn’t going to solve the big issue they have now created themselves. Now is the time for an immediate and strategic damage limitation exercise across their social media. There isn’t one member of the public who is less important than another one in this situation. They need to take the time to listen to what people are saying and create personalised responses which demonstrates a real attempt to right the wrongs they are responsible for. And here is another suggestion Hyundai may wish to consider for the future. The next time the creative agency come up with a crazy idea that will create a stir and raise awareness maybe build an objective into the brief that the campaign has to do more than shock and annoy.

Tuesday 16 April 2013

Is Seattle's global coffee darling Star-chucking it away?


Brand scoring mechanisms such as YouGov BrandIndex put pure and simple are things of beauty. They go a long way to help undercover the perceived value of brands via measuring word of mouth and public perception and help expose the impact bad decision making can have on a brands long term value. Case in point this week is Starbucks UK and its declining brand value following… well let’s just say some interesting tax discrepancies.


Many found it miraculous that a company can make $4.8 billion in sales in 14 years in the UK market and yet only pay $13.8 million in tax? Whereas The Brand Avenger does not earn a wage for keeping the world safe from bad ass brand baddies or fending off questionable marketing content I am quite sure the average % tax rate for those citizens who do work isn’t 0.002%! The revelation was no doubt shocking but the big question was if this type of injustice would be lost on the coffee-drinking customer who for so long has had a strong, loyal and loving relationship with Starbucks?

Well as it turns out that answer to that question might depend on which part of the world you live in. If we look at the UK market for example it is clear Starbuck’s tax avoidance is beginning to have some sort of impact on brand value. Marketing Week covers the impact on Starbucks in a great piece on brand auditing of Starbucks in the UK. There are some key themes in the content of this article that clearly demonstrate the Starbucks UK brand has suffered; take for example Starbucks perception measures via BrandIndex been below the levels where they were several years ago.


Whereas The Brand Avenger would agree that Starbucks has become somewhat of a scapegoat in the tax scandal due to its prominent presence on the high street (especially when compared to other implicated online companies) this was always going to be a complication the company risked taking when it decided to act out this controversial tax strategy. Starbucks has paid the price for unethical business practice through diminishing brand value, which as Marketing Week suggests is taking longer to fix than it did to break. One might even argue that the prolonged bout of discounting Starbucks are currently offering on products such as the Monday morning latte isn’t a viable long term tactic to support a strong and sound brand strategy moving forward. Whereas it may take some pressure of the bottom line in the short term it also gives Starbucks competitors a vital opportunity to build their own brands.

So how have the competitors reacted? In order to determine this we should take a look at one of the other big coffee chains in the UK, notably Costa. You can see from the BrandIndex scoring in the Marketing Week article that Costa has enjoyed a steadily inclining brand perception whilst the Starbucks coffee bean empire has faltered. However is it accurate to suggest that Costa coffee has only benefited due to the tax avoidance issues Starbuck’s has experienced? The Brand Avenger feels this is unfair especially when you consider some of the other measures Costa has taken over the last 6 months to grow the brand.


The fact that Costa has become one of the only high street coffee chains to begin to actively embrace app technology to encourage consumers engagement in its brand as well as investing in a television advertising to create brand awareness is evidence that Costa has benefited from an integrated contact strategy. This combined with other factors now leaves them with a prime opportunity to build a strong brand perception off the back of the Starbucks con-tax-versey (I crack myself up). However the coffee chain will also know they will need to be careful before they decide to write Starbucks off and will continue to look over its shoulders as they know the big green lady from Seattle won’t just disappear into the night.

So what helps Starbucks maintain such a strong position even in the face of adversity? Well for one thing the negative brand perception in the UK isn’t an issue shared across its global markets, especially in its home market of the USA. And if Starbucks begins to build some momentum and take some tips from its US facing operation it could have its UK consumers swooning once again in no time.

One may wonder how Starbucks has gotten itself in this state of confused cross-cultural identity? Can it be possible for Starbucks to enjoy unparalleled growth and successes in the US market while at the same time suffer for its sins in the UK? It is of course no surprise that even in today’s information age where knowledge spreads in a matter of minutes it is still possible for this to happen. Starbucks appear to have got it right in the US through carefully managing sticky PR situations and adapting a strategy of winning its customers loyalty via reward mechanisms as opposed to discounting. This is especially important when you consider Starbucks US appear to be prospering in a market which some have suggested is in overall decline.


These factors combined with Starbucks worldwide results maybe why Howard Schultz was all smiles at the Annual Meeting of Shareholders in Seattle at March. Looking closely at the results you could say there was plenty for him and his Starbucks family in the US to smile about. Highlights include but of course are not restricted to

Ø $13.3 billion record revenues
Ø 38% total shareholder return
Ø 14% revenue growth


There is no doubt Starbucks has paid a hefty price for its dirty tax tactics in the UK. However, fortunately for a global brand the size of Starbucks there are ample opportunities for the brand to make mistakes, learn from them and recover the lost brand equity then there would be for its smaller, local competitors had the counterparts made similar mistakes. It is also clear Starbucks now more than ever need to apply the tools, techniques and mechanics that make its brand so strong in the US to the UK market to strengthen its position. If they can do this it should ensure they continue to gain advantage over competitors and continue to make the big Star bucks as opposed to becoming Grade A Star muck.

Wednesday 10 April 2013

Is EA the worst company in the US or an unfair victim of the current times?


The revelation earlier this week that EA had once again won The Consumerist’s poll for ‘Worst Company in America’ was met with a juxtaposing blend of acceptance and dismissal from its COO Peter Moore. The temporary big cheese went on to comment "Are we really the ‘Worst Company in America?’  I’ll be the first to admit that we’ve made plenty of mistakes" before going on to blame political lobbyists amongst other factors for EA's misfortune


Through releasing a statement pior to the results of the award it is clear EA saw this as unfair criticism when compared to other companies. However, EA have to accept this is in stark contrast to the feelings of the masses and there is little doubt in the minds of many of those who consume the EA brand that the company indeed had a disastrous year. The impact this had on EA was wide reaching and ultimately led to its CEO resignation and brand depreciation through a decline in share value. 

http://www.guardian.co.uk/technology/2013/mar/18/ea-ceo-john-riccitiello-resigns

Whatever your view on the fairness of this ‘Golden poo’ this is a prime example that online polling sites like 'The Consumerist' and 'Which' are fast becoming a double edged sword for brands across the world. On the one hand voting sites such as these can be a brands best friend, giving consumers the ability to shout from the roof tops when they are happy with a branded product or service they receive. There is no better example of this then the brand appreciation generated for Virgin trains in the UK and the eventual impact the consumer voice had in ensuring the valuable Edinburgh to London line continued to be run by this brand over the less popular First Capital Connect. And when online polls begin to shape political opinion you can get your bottom dollar all companies need to stand up and pay attention.

http://www.guardian.co.uk/business/2013/feb/18/first-capital-connect-worst-train-operator

Taking this into consideration it is easy to see why brands are beginning to see the value in brand advocacy and empowering loyal brand users to spread the good word when it comes to their brand reputation. Tapping into my superior super knowledge I can see no better illustration of this than the continued success and increased investment in companies such as BzzAgent and P&G’s Supersavvyme. 

http://www.surveypolice.com/bzzagent

However, unfortunately for brands all over the world consumers don’t just fall into the happy shopper category and a countless number of brands like EA are beginning to feel the wrath of an unhappy, uncommitted or unsatisfied customer base, with consumer opinion polls are a prime weapon of choice across the globe. Consider the case of PC World, a leading supplier of computers and accessories in the UK but a company which is suffering from a cripplingly negative brand reputation fuelled through the mechanic of polling. Two examples of PC World's dire reputation can be found below

http://www.trustpilot.co.uk/review/www.pcworld.co.uk

http://www.themarketingblog.co.uk/2012/10/another-blow-for-pc-world-they-have-been-named-britain’s-worst-online-retailer/

You may have noticed who the big winner is when it comes to customer satisfaction in the second article but in case you prefer to read my words and not those of others the winner of consumer hearts and minds is Amazon. And what has Amazon done? built an experience around the customer which personalises content and builds warmth towards the overall brand. It also of course doesn't have to deal with the issues of human contact in its customer service which can do much much to alter overall brand perceptions but that's a different subject for a different time.

Was EA a victim of its target market?  

Online polls give consumers a voice and readdress the balance of power in the relationship between the customer and the brand of choice. However, there is an interesting counter argument to all of this that we must consider to balance the scales of justice. As EA's audience is primarily computer savvy and have traditionally taken to internet forums to vent their frustrations does this give companies like EA an unfair disadvantage compared to traditional brands where there are far less opportunities to vent frustrations online? Paul Tassi writing for Forbes provides an interesting take on this topic.

http://www.forbes.com/sites/insertcoin/2013/04/09/ea-voted-worst-company-in-america-again/

In essence I would like to agree with Tassi's point of view. Traditionally EA consumers are engaged across many online channels and have greater levels of access and more variety when it comes to opportunities to vent their frustrations more vehemently then say a consumer vexed at their bank for waiting too long in life and receiving sub standard service. However, whereas this may of traditionally acted as a reprieve for some companies it is clear that as the world becomes more connected through mobile capability and app technology society is changing. Sooner or later as access to mobile technology improves and as technological improvements begin to spread to emerging markets there will be no place for a brands poor service to hide. And when it comes to this point the majority of brands across the world will have two options... invest in brand advocacy or lose out to the polls thus increasing negative brand perception. I know which option The Brand Avenger would folllow but how many brands will come along for the journey?