BP: Brand Perfidious?

Perfidious – deliberately faithless, treacherous, deceitful. Of, relating to, or marked by perfidy. Synonyms: false, disloyal, unfaithful, traitorous, faithless.

Perfidious is the word that leaped to my mind when I read this opening paragraph in a post on the Fast Company web site:

“There’s no question that BP has lied extensively over the past few months about the growing Gulf oil disaster. The company has bullied journalists, fudged numbers, and even deployed fake journalists to the Gulf to write about how everything is fine. Now BP may be literally trying to cover up oiled beaches by dumping sand on top of them.”

Over the weekend, the Financial Times (FT) and CNN were reporting that BP is bracing for a shake-up at the top, with both the Chairman and the CEO expected to be replaced within weeks.

However, unbelievably, the CNN story reports that the Chairman is being “singled out for criticism by shareholders for his perceived lack of decisive leadership during the crisis and his failure to support Tony Hayward, the embattled chief executive.”

I guess these shareholders have their heads stuck in the same sand that BP apparently is using to cover up the oil-stained beaches in Louisiana.

Mr. Hayward’s performance before the U.S. Congress, in which he tried to handball blame for this disaster to BP’s subcontractors, did nothing to enhance trust in the BP brand or its leadership. Neither did early reports that soon after this disaster BP was offering US$5000 payments to residents affected by the oil spill if they waived their rights to sue for any damages.

The high-powered institutional investors in the UK that own the majority of the BP shares apparently do not have a clue about Corporate Image Management and the impact of the corporate image on share prices.

Both these investors and the BP Board need to understand this finding from the PriceWaterhouseCoopers report Reputation Assurance: The Value of a Good Name:

A single-minded focus that seeks only to satisfy shareholders may ultimately lead to crises and erosion of shareholder value.

Looks like an updated definition of the word perfidious might need to include “can lead to crises and erosion of shareholder value.”

Brandkarma — the social network on brands

How do your views of brands stack up with those of others?

Now you can find out — through the Brandkarma web site.

Started by the chief creative officer of one of Australia’s largest ad agencies, Brandkarma is a social media platform “on a mission to help everyone make better brand choices and to influence brand behavior for good.”

The site was founded on two important truths:

1) that in today’s world, brands that span national, social and cultural divides can be a greater force for good than governments, and

2) that we all, as consumers with opinions, have much greater power to influence brand managers and their actions than possibly we currently imagine.

Brandkarma was started to help answer two basic (and important) questions:

1) what kind of world do you want to live in?

2) what kind of a world do you want to leave your kids?

Through this site, all ordinary consumers have a chance to make a difference, assuming Brandkarma grows strong enough to get brand managements to listen.

On the Brandkarma web site, you can comment and score hundreds of brands for any of five criteria: planet, customers, employees, suppliers, or investors.

As Alan Webber, founding editor of Fast Company magazine says in his testimonial on the site, “Let’s all come together around Brandkarma and use it as a platform to help businesses / brands become a force for positive change in the world!”

Enter your own evaluations of brands and join the brand conversations at Brandkarma network today, and let us know what you think. Will this network grow powerful enough to influence the future actions of brands?

World’s 30 Hottest Brands

Advertising Age has selected the World’s Hottest Brands, a list of 30 brands succeeding on a global, regional, and local level.

According to the advertising industry’s bible, their goal was “not to create a list of the largest global marketers or rank the brands that contribute the most to their company’s market value.”

Instead, the publication set out to “chronicle the brands percolating at the local and regional level.”

Broken into global, regional, and local categories, the 30 Hottest Brands as identified in this Ad Age Insights report are:

Global

BMW

Coca-Cola

Facebook

H&M

Ikea

McDonald’s

Nike

Nintendo Wii

Pampers

Tesco

Regional

ASOC – As Seen on Screen (Europe)

The Economist (UK, Western Europe, India)

Havaianas (Brazil, South America)

Lenovo (China, USA, Europe)

MercadoLibre (South America)

Nando’s (South Africa)

Natura (Brazil, South America)

Tim Hortons (Canada, USA, Western Europe)

Uniqlo (Japan, Asia)

Local

Azul (Brazil)

Banco Hipotecario (Argentina)

Fullerton Bank (India)

Li Ning (China)

Mama Lucchetti (Argentina)

Manchester United (UK)

Tata Nano (India)

Tencent Holdings (China)

Tsubaki (Japan)

Zipcar (USA)

More details on this report are available from the Advertising Age website.

Also, the report can be viewed online or purchased.

What other local or regional brands do you think Ad Age has missed? Share your thoughts and comments.

Trust Is An Issue For Brands

I don’t put much stock in the annual 100 Best Global Brands report from BusinessWeek for two reasons: the valuations by Interbrand never seem to have any relevance and the list is too U.S. centric to truly be called a global brand ranking.

Nevertheless, there is one interesting and pertinent point made in the BusinessWeek article accompanying this annual listing. This concerns the element of trust, or what the article’s two writers refer to as “the most perishable of assets.”

According to the article, recent polling (in the USA) shows that distrust amongst consumers for business as a whole is growing. Citing a phone survey by public relations firm Edelman, only 44% of Americans say they trusted business, a significant decline from the 58% level recorded two years ago.

This point got me to dust off a posting from The Reputation Garage Blog from October 2008 that I had filed.

In that post, a reprint from an article that appeared in HR Leaders magazine, trust is called “one of the defining issues of the emerging century.”

Public trust in big business, governments, and even non-profit organizations has been declining throughout the 21st century. Here are some “fun” statistics that I gleaned from The Reputation Garage Blog:

* As few as 13% of all Americans place their trust in big business (and it’s not much higher for other mature consumer societies!).
* Only 39% of employees in a Watson Wyatt survey said they trusted senior leadership.
* Some three-quarters of US consumers feel that companies don’t tell the truth in advertising.
* Three-quarters of employees in big companies observed violations of the law or company standards in a 12-month period.

As economies start to rebound, marketers and organizational leaders have an important task in front of them: re-establishing their torn and tattered brands and re-building trust with all constituencies.

Failure to do so is not an option. Unless you want the tombstone for your organization’s brand to read “died of trust-related causes.”

Walmart’s Sustainable Product Index

The world of FMCG manufacturing and marketing may never be the same again.

As highlighted in our previous post Walmart Creates Green-Tag Program, the world’s largest retailer has announced plans to develop a worldwide Sustainable Product Index. The index will establish a single source of data for evaluating the sustainability of products.

In a press release on its corporate web site, Mike Duke, Walmart’s president and CEO said, “Customers want products that are more efficient, that last longer and perform better. And increasingly they want information about the entire lifecycle of a product so they can feel good about buying it. They want to know that the materials in the product are safe, that it was made well and that it was produced in a responsible way.”

Walmart will introduce this initiative in three phases, beginning with a survey of its more than 100,000 suppliers around the world. The survey includes 15 questions that will serve as a tool for Walmart’s suppliers to evaluate their own sustainability efforts. The questions will focus on four areas: energy and climate; material efficiency; natural resources, and; people and community.

As a second step, the company will help create a consortium of universities that will collaborate with suppliers, retailers, NGOs and government to develop a global database of information on the lifecycle of products — from raw materials to disposal. Walmart has provided the initial funding for the Sustainability Index Consortium, and invited all retailers and suppliers to contribute.

The final step in developing the Sustainable Product Index will be to translate the product information into a simple rating for consumers about the sustainability of products. This will provide customers with the transparency into the quality and history of products that they don’t have today.

I heard a quote in a movie while flying between Singapore and Seoul last week that seems most appropriate in this case:  “this is bigger than humungous….this makes humungous look small.” [I'll send an authographed copy of our book Powerful Marketing Minutes to the first reader who correctly identifies the name of the movie from which this line is taken.]

This is a powerful marketing step by Walmart, with implications throughout the world’s consumer products supply chains and with global reverberations likely to impact more than just the retail industry.

The green hues in the corporate image of Walmart continue to be strengthened and become more believable with each passing day.

Google Goes Solar

Google, and its non-profit foundation Google.org, have announced they will invest tens of millions of dollars in R&D and renewable energy investment in 2008.

Longer term, the company plans to actually build its own solar power plants in order to find cheaper, more reliable power to run its gigantic, energy-sucking computer data centers. Some published reports state that Google spends over US$2 million a month on electricity to power its network of some 450,000 servers.

Doping Scandals Chase Away Cycling’s Top Sponsor

T-Mobile, a subsidiary of German telecommunications giant Deutsche Telekom, had reportedly sponsored the T-Mobile cycling team to the tune of around $18 million this year. T-Mobile had been a sponsor of the sport for 16 years, but is now ending its sponsorship two years early. T-Mobile will also end its sponsorship of cycling races.

The question for Deutsche Telekom as a company is, do we want to be associated with cycling and the doping in cycling?

Trouble in Toyland

It couldn’t happen at a worse time for the U.S. toy industry.

As the official Christmas buying season kicks off on Friday this week, following Thursday’s Thanksgiving holiday, the U.S. Consumer Product Safety Commission (CPSC) has launched an initiative to remind parents of a wide variety of toy safety hazards. This initiative is suppose to convince parents and others that CPSC has stepped up its inspection efforts (which led to CPSC recalling 61 toys involving 25 million product units last year) and that the Chinese government has signed new agreements to prevent lead-painted and other unsafe toys from being exported to the USA.

And earlier this week, the California Attorney General’s office announced that it was suing Mattel, KB Toys, Toys “R” Us, and Wal-Mart for knowingly selling lead-tainted products.

Meanwhile, leading consumer advocacy group U.S. Public Interest Research Group (PRIG) just released its “Trouble in Toyland” report, which points out that “hazardous toys are still sold in stores around the country.”

“It’s going to take toy companies a long time to earn back the trust of consumers,” says U.S. PIRG Consumer Program Director Ed Mierzwinski, whose organization claims that toy manufacturers have long fought responsible regulation of the industry.

MediaPost Publications Marketing Daily has a good article on this situation and you can read the whole story here.

Does anyone have examples of consumer fears or government agency actions in other countries that they would like to share? Please send them to us using the comment section below and we will upload these to this blog and also share them with our 1000+ Monday Morning Marketing Memo readers.

For now, however, as the all-important Christmas season gets under way, the toy industry in the U.S. is facing some major branding, corporate image, marketing, and customer retention issues. These folks may not have a whole lot to be professionally thankful for when they sit down to their traditional turkey dinners on Thursday night.

More bad news for China

Now even consumers in China’s own backyard, the Special Administrative Region of Hong Kong, are leery of buying products produced in China.

In a recent study reported this week in MEDIA Asia, 38 percent of Hong Kong cosumers have admitted to reducing their purchases of products made in China, as a result of a series of safety-related product recalls and scandals.

The toy and food sectors are the primary areas being affected by plummeting consumer confidence, according to the study “Made in China” by CSR Asia.

According to CSR Asia, 62% of respondents are now less confident in the safety of food items manufactured in China, while 42% indicated lowered levels of confidence in toys assembled by manufacturers in the Mainland.

As we noted yesterday, this is a marketing and branding problem that needs serious and immediate attention by senior levels of the Chinese government. The brand reputation of China is crumbling on a daily basis and this does not bode well for the country, or the world economy.

Another product recall affects China

Halfway through a two-week trip to the USA, I have become amazed and alarmed at how the numerous product recalls in recent months have impacted China’s reputation as a manufacturing nation.

After all, if China’s manufacturing is stoking today’s economic engine, what will the world do if people stop buying products made in China due to safety fears? And those fears are very, very real.

Last week a child died from swallowing a piece of a highly popular toy made in China – not from choking but from lead poisoning!

Just two months ago, in August, Mattel recalled almost one million toys due to the excessive levels of paint used by their contract manufacturer in China.

According to a Gallup poll in August, more than 70% of consumers in the USA now pay more attention to which country produces what they purchase. According to data from the U.S. Consumer Product Safety Commission, these product recalls are new phenomena.

Last year, half of the 467 product recalls in the USA were products made in China. With 233 product recalls, China had twice the number of product recalls as the number two market (the USA with 114).

With product recalls due to safety issues affecting pet food, toothpaste, toys, and tires made in China, it is no wonder that consumers have become leery of the “made in China