Final Thoughts

     I would like to take this final learning journal entry post to communicate my thanks and gratitude to Mr. Dennehy for making the Marketing Management course a unique and gratifying learning experience. The structure of the course suited my learning style almost perfectly. Throughout the discussion and lecture segment of class I would record topics discussed that I wanted to learn more about or expand upon and utilize this learning journal as the platform to do so. Prior to this course, I was not aware of the learning journal, but have since come to appreciate it as a meaningful academic and professional tool. In gathering research on how to construct my learning journal I also learned how popular this method of learning is with other graduate programs. I appreciated the time allotted for working on the simulation; however, it seemed that most of the participants in the class did not require the time as they anxiously had their decisions prepared in advance. I believe this is the case because all of the students in the class were fully engaged in the simulation and each had the desire to be successful. Perhaps not all classes are the same. The sequence of the simulation seemed appropriate with the content outline in the course module. The lecture content was expansive, but absorbable. The content was carefully correlated with the stage at which the class was in the simulation. In summary, the Marketing Management course provided tools and learning techniques that I will be able to utilize for the remainder of my academic and professional career.

Principles of Brand Building: P&G

Principles of Brand Building: P&G

                In the Marketplace Live simulation, one of the important concepts learned was the establishment of a brand and building on it. As chronicled in previous posts, Procter & Gamble has a remarkable history of building brands. From Ivory soap to Tide laundry detergent, Proctor & Gamble learned early on that, in the consumer goods industry, it is the brand that makes the company and not the other way around. In over 165 years, Procter & Gamble established ten principles (noted as “tried and tested”) of brand building. I am using this post as a place to summarize and analyze the principles as outlined in the book, Rising Tide: Lessons from 165 Years of Brand Building at Proctor & Gamble.

1.       Do the Right Thing

From the beginning, the company conducted itself in a manner of responsibility and integrity, but it took over 140 years for P&G to put those principles to paper. The company continues to operate with the highest standards. Today, the company’s corporate social responsibility report chronicles such actions.

2.       Cultivate a Passion for Winning

P&G has cultivated a culture of being ‘number one’, especially with the core brands. Should one of the brands fall behind that of a competitor, there arises a determination to not only recapture the lead but have the brand surpass itself.

3.       Sustaining Brands is a Never-Ending Challenge

One of the more popular stories at P&G is with Ivory soap, the product that helped the company gain global notoriety. During the mid-twentieth century, the brand was essentially neglected and became perceived as “old-fashioned”. P&G revitalized the brand, which remains strong today. An important lesson was learned in which the company established an internal promise to never allow such brand erosion to happen again.

4.       The Consumer is Boss

The company’s commitment to market research and test marketing is never-ending. The reason for this is that P&G wants to know what its customers want, and the needs of the consumer are constantly changing and evolving. As with the Marketplace Live simulation, understand what the customer wants, make something to suit the customer’s needs, and then market the product to make the customer aware that you have what they need.

5.       Individuals Make a Difference

A common thread within the book that chronicles the history of P&G is that of a single individual or small team of individuals who remained committed to an idea long after executives had decided to shelve it. More often, those are the ideas that would eventually evolve into one of the company’s ‘billion dollar brands’. Often cliché in today’s world, the motto ‘your people are your most important asset’ has never applied more.

6.       Discipline Counts

In this principle, the term ‘discipline’ has a wide range of application. Discipline must be executed everywhere. In everything from research and development, to marketing, to production, to financial controls, discipline must be present in all the components that make up the company.

7.       Innovate Constantly, Everywhere

Product innovation not only leads to the creation of new brands, but leads to sustainability of existing ones. Innovation is the key to existence. In 165 years, Proctor & Gamble saw many of its competitors simply fall by the wayside just with the passing of time. P&G did more than win a battle of attrition; they ‘innovated’ their way there.

8.       Lead Change

Stagnation is a disease in many organizations. Resistance to change is a pestilence. Alongside lack of innovation, it is a major destroyer of brands and companies. Forward-thinking leadership in an organization should be the largest proponent of change. The concept of change is one that is best communicated from the top down. When leaders embrace change, it soon becomes part of the culture.

9.       Alliances Create Advantage

Procter & Gamble developed many of the brands that have become household names, but getting a brand to that point did not come without some assistance. Such assistance comes in the form of advertising agencies who provide expertise in marketing a product, contract manufacturers who assist in specific phases of production of the product, and distributors who timely deliver the product to the outlets that connect the product with the end user, the consumer. Strong alliances, such as these, are imperative to establishing and sustaining the success of a brand as well as the company as a whole.

10.   Partner with Customers

As a continuation of point #9, P&G’s customers are the retailers and distributors who channel the products to the consumer. Strong alliances/partnerships with these channels are critical. One story chronicled in the book was P&G’s location in Arkansas to work with the mass-merchandiser Wal-Mart. Through experiences gained, P&G has developed many best practices in the arena of supply chain management.

Some of Proctor & Gamble's most popular brands (note: the Pringles brand was sold to Kellogg's in February 2012) source: http://www.pg.com/



While none of the principles listed above are new, they are often overlooked and thus become the reasons why many entities fail to succeed. Time and again, these principles were tested and have passed the test.

Excerpts extracted from:

Dyer, Davis et. al., Rising Tide: Lessons from 165 Years of Brand Building at Procter & Gamble (Harvard Business School Press: Boston) 2004. 405-412.

Share of Voice

               One of the most popular and traditional measures of a brand’s popularity amongst its peers is market share, but another unit of measurement that is gaining ground in this ‘age of media’ is share of voice (SOV). Share of voice refers to a brand’s “advertising weight expressed as a percentage of defined total market or market segment in a given time period”[1]. Share of voice is becoming easier to quantify due to the availability of data to the marketplace. Companies like Dow Jones market research tools, such as Dow Jones Insight, that utilize techniques such as text mining to help “gauge the effectiveness of (advertising) campaigns, optimize media budgets, identify strengths and weaknesses of corporate presence in the media landscape and demonstrate the impact of media efforts”[2].

                Share of voice is an indication of how much should be expensed on a brand to improve its market share. In essence, it is a measure of how much the brand is seen or heard. In his text, Marketing Communications: A Brand Narrative Approach, author Micael Dahlen provides an illustrative example of share of voice by revealing “if total advertising expenditure in the soft drink category amounts to $100 million, and the company spends $15 million then its SOV is 15/100 = 15%.”[3] Per Dahlen, equilibrium is attained when share of voice equals share of market (or SOV = SOM).

                The process towards the purchase of consumer goods, arguably, begins online. If this is true, then share of voice has never been more important. In an observation for brand ratings firm Millward Brown, market analyst Nigel Hollis writes that “brands with a larger share of media awareness are more likely to grow their share, and that growth is amplified if the brand also has a higher digital share of media awareness”. He continues that recent studies indicate that brands “that are able to increase their digital share of awareness, while simultaneously increasing their total media awareness, will almost double the likelihood of increasing their share of awareness compared to increasing total media awareness alone”[4].

source: http://www.millwardbrown.com/

                At hand with raising digital awareness and share of voice is the ever-present is issue of cost and perhaps never more so than in this difficult economic climate. Nielsen UK’s Nikki Clarke says that the time has never been more ripe to grab market share through share of voice. She challenges firms that this is not the time to cut back on advertising, rather “short-term reductions to media investments will likely damage a brand in the long-term”[5]. Among Clarke’s guiding principles, one of the most important for a difficult economic environment is that “Excess SOV delivers growth,”[6] where excess share of voice or ESOV = SOV-SOM. So in a complex landscape, Clarke argues that it may not be enough to attain equilibrium but exceed it in such a manner that SOV > SOM. Clark also notes that larger brands will have a greater likelihood of success due to the fact that their “distribution, range, and pricing” all help to maintain and increase share.

                An example of a firm trying to gain share of voice in a difficult environment is the global real estate firm, RE/MAX. The company recently launched a nationwide advertising campaign designed to communicate the competency of RE/MAX agents to assist when a life changing event (e.g., marriage, baby, or job) necessitates a move. Labeled ‘For All the Things That Move You’, the campaign “includes a full schedule of TV, radio, internet, print, and outdoor ads that are scheduled to run through 2012”[7]. In addition, there will also be an extensive utilization of social media outlets. The firm boasts that it is “one of the few companies in the industry to maintain a national advertising presence despite the changing market place” and such national campaigns “have produced a share-of-voice greater than all competitors combined”[8]

'For All The Things That Move You' 2012 campaign by RE/MAX source: remax.com



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[1] http://en.wikipedia.org/wiki/Share_of_voice

[2] http://www.dowjones.com/info/share-of-voice.asp

[3] Dahlen, Micael, Fredrik Lange, and Terry Smith, Marketing Communications: A Brand Narrative Approach (John Wiley & Sons Ltd: West Sussex, UK, 2010), 478.

[4] Hollis Nigel, "So what is your brand's digital share of voice?" MillwardBrown, February 2, 2012 (accessed February 21, 2012) http://www.millwardbrown.com/global/blog/Post/2012-02-02/So-what-is-your-brand-s-digital-share-of-voice.aspx

[5] Clarke, Nikki, "Budgeting for the Upturn - Does Share of Voice Matter?" Nielsenwire, August 6, 2009 (accessed February 21, 2012) http://blog.nielsen.com/nielsenwire/consumer/budgeting-for-the-upturn-does-share-of-voice-matter/

[6] Ibid.

[7] "Real Estate Ads Use Personal Motivations" PRNewswire, January 24, 2012 (accessed February 21, 2012), http://www.prnewswire.com/news-releases/real-estate-ads-use-personal-motivations-137998403.html

[8] Ibid.

Finding Your Cues: Target

For the most part, the modern Target department store has pretty much everything someone would need – at least the essentials. While anyone who shops at the stores would probably acknowledge my statement, few individuals designate a Target as their sole shopping destination. For instance, if we need groceries (even the staples such as bread and milk) we’ll go to the grocery store even after stopping at a Target. Target has bread and milk. Why didn’t we purchase the bread and milk while we were there? Typically the answer to that question is that we need a myriad of other items exclusive to grocery stores and the rationale is that we will get the bread and milk while we are there. This is an example of an ingrained consumer shopping habit and it is one of the major challenges for Target’s marketing team. Market analysts seek to find are the moments in life where consumers are taken out of their routines and their shopping habits are disrupted. It is those moments where carefully placed advertising (or “cues”) could be inserted that have a very good potential to alter one’s shopping habits for good.

                The way to find out when such moments occur is to collect as much data you can about the individuals who shop at your store. While nearly all department stores have some elaborate data collection in place, Charles Duhigg gave readers of The New York Times this week a glimpse into Target’s Guest ID system this week via an article entitled “How Companies Learn Your Secrets”. Per Duhigg’s article, the Guest ID is a system that attaches a unique code to every Target shopper. Data is then funneled from various collection points (i.e., credit card purchase, e-mail viewing, survey completion, and coupon or refund claims) to the shopper’s personal repository. Such data is then collaborated with key demographic information (i.e, age, sex, ethnicity, place of residence, distance from store, education, job history, etc.) to develop a profile of the shopper. That profile is tediously analyzed by Target’s ‘Guest Marketing Analytics department’, a group of essentially marketers and mathematicians, to find out the shopper’s product preferences and where the store can meet those needs. As a results, seemingly tailor-made advertisements, mailers, promotional e-mails, and coupons (all “cues”) seem to find their way to the attention of the shopper. The hope is that the shopper will unconsciously respond the cues by shopping at Target for specific items of need, and while they are in the store they can pick up everything else on their list as well. The whole goal is forming new habits. Taken to another level, Target’s marketing analysts believed that at no other time is a shopper more vulnerable to such cues than major life changing events, most notably pregnancy. It is at this point where Target’s analysts embark on some major, yet controversial, marketing innovation.

                At some point in the not so distant past, marketer’s at Target discovered that expecting mother’s are the most susceptible to marketing cues primarily because of the course of their lives has been altered to an extent never before experienced. Expecting moms have to purchase all sorts of things from lotions, to vitamins with specific supplements, to sanitizers and cotton balls (lots of them). Obviously, Target sells all of those things so the objective proposed was to find all the expecting mother’s within distance of a store and pull them in. Of course, that is easier said than done. Most expecting mothers aren’t easy to identify early in their pregnancy, but Target figured out an ingenious way to do so. Using existing data like the baby registry and Guest ID Target formulated a new data collection repository that identified potential expecting mothers by their shopping patterns and products they purchased. From the moment they were identified, Target would begin sending specific advertising, promotion, and coupons to that individual for products that they would likely need at that point in the pregnancy. The system became so advanced that Target alleges that they could estimate a pregnant woman’s due date “within a small window”. Sound creepy? Seem borderline wrong? Sure, but representatives of Target quoted in the article maintain that they remained “very conservative about compliance with all privacy laws”. The process allegedly generated Target millions in additional sales. However, the program did receiving criticism when the department store seemingly “identified” a pregnant high school girl before her parents knew through their algorithms and targeted advertising. While a huge success, executives quickly realized that this approach could turn into a public-relations nightmare overnight so such specific marketing has been toned down dramatically, but not eliminated.

Bullseye! source: Forbes.com



                So thus we have come to the modern age of marketing. Stores are collecting data on shoppers so that they can provide them with the cues tailor-made to suit your needs and wants and essentially change their behavior, hopefully forever. Is this wrong? Is this an invasion of privacy? Or is this innovation? Maybe my Father-In-Law isn’t that far off the mark by not having the Internet and always paying for items with cash. Would I mind being a ‘Targeted’ shopper? I think it is nice to have the coupons come to you rather than digging through a cluttered Sunday newspaper to find them. Regardless of how one feels about the issue, I think it is fascinating reading.

Sources:

Duhigg, Charles, “How Companies Learn Your Secrets” The New York Times, February 16, 2012 (accessed February 16, 2012) http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html?pagewanted=all

Hill, Cashmir, “How Target Figured out a Teen Girl Was Pregnant before Her Father Did” Forbes.com, February 16, 2012 (accessed February 17, 2012) http://www.forbes.com/sites/kashmirhill/2012/02/16/how-target-figured-out-a-teen-girl-was-pregnant-before-her-father-did/

CMO vs. CIO

                This morning I came across an article published in the November 1, 2011 issue of CIO magazine entitled “The Odd Couple: Why your CMO hates you and what you can do to improve the relationship”.

The article is very brief, but I wanted to utilize a learning journal post to pull some of the key points gleaned in the article.

                The premise of the article, penned by freelance writer Stephanie Overby, is that there could not be a more opposite relationship within a corporation’s structure as that between marketing and IT. While marketing is focused on quick and creative, IT is focused the back-end and long-term and neither department seems to have any appreciation for what the other does. This creates a challenge for the CIO who, according to research analyst Nigel Fenwick of Forrester Research “is forced to plan technology into the future, and this long view can be at odds with the need to make a market impact this quarter”. The article strongly encourages CIOs to more or less get over this hurdle and strive to build a strong relationship. The strength of that relationship is in itself a long-term strategy. Firms who can make it work increase their chances for success down the road. Robert Urwiler, CEO of Vail Resorts, calls out to all CIOs stating that “Enabling the market agenda could not be more important to your future success”.

                For organizations already experiencing an either contentious or non-existent relationship between IT and marketing, Ms. Overby proposes the following eight steps (with my summarization):

1.       Make the case for collaboration: Find mutual goals. For instance, if you can get IT involved in a technological aspect of a marketing campaign, then that frees the marketing department to focus on their strength – marketing.

2.       ID rogue IT groups: This could probably be step #1 in my opinion. If your company’s IT budget is stretched thin in terms of budget and manpower, collaboration with any other departments probably won’t happen. This problem must be addressed first before anything else.

3.       Become A+ students in marketing: Because of their tasks, IT departments rarely have any interaction with or understanding of the end-user (i.e., the consumer or whomever is being marketed too). An appreciation of the marketing aspect and understanding consumer needs could bring IT into sharper focus as to their tasks and department goals.

4.       Get flexible: IT needs to understand how marketing thinks (i.e., next week not next year).

5.       Master customer data: Marketers need to understand how customer data is captured and then use that understanding as part of a “go-forward strategy”. There is power in data, but you need to understand it so you know how to harness it.

6.       Drop the jargon: IT personnel speak a language all their own. This lexicon is useless to virtually everyone else in the company. IT professionals need to bridge the gap by dropping the technical speak, so to speak.

7.       Share your expertise: Part of the collaboration effort. Both the CIO and CMO should examine each others’ budgets and see where they can help to trim.

8.       Respect boundaries: Basically, know where you belong and where you don’t. Both departments have their core strengths, policies, and procedures. Understand which ones not to try to overhaul if you are not a member of the department.

For the entire article, please see

Overby, Stephanie, “The Odd Couple: Why your CMO hates you and what you can do to improve the relationship” CIO: Business Technology Leadership (CXO Media, Inc.: November 1, 2011) 58-60.

'Get Well' Soup

                The H.J. Heinz Company’s history with soup production in the UK is rich at over 100 years old! Heinz Cream of Tomato soup was once voted the UK’s ‘most comforting soup’[1] Soup has been often viewed globally as a remedy in easing the symptoms brought about by the cold & flu season. With this in mind, Heinz UK is reviving a social media promotion that was well received in the fall of 2011. Know someone who is under the weather? Instead of sending them a card or flowers, how about sending a can of soup? The company has established a Facebook page that allows residents of the UK to buy a can of chicken, potato & leek, or the famous cream of tomato soup, complete with a label that states “Get Well Soon” along with the individual’s name and actually send it to that person. “Thanks to Heinz’s latest limited edition labeling, you can now show support and lift the spirits of a sniffily friend, family member or colleague, by sending a thoughtful limited edition personalized ‘Get Well’ soup can,” states Nigel Dickie, director of corporate and government affairs for Heinz UK & Ireland[2].

                Over 1,000 cans were purchased within hours of the re-launch of the site. The goal of the promotion is to drive deeper engagement with an already loyal Facebook fan base[3]. Nigel Dickie further enhances the goal in stating that “Social media provides a platform for our fans to engage with the brand and with each other, and gives us a valuable source of insight and engagement”[4].

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[1] http://www.heinz.co.uk/ourfood/soups/Didyouknow

[2] Conley, Mikaela “’Get Wellhttp://abcnews.go.com/blogs/health/2011/10/21/get-well-heinz-soup-cans-sent-through-facebook/’ Heinz Soup Cans Sent Through Facebook” ABCNews.com, October 21, 2011 (accessed February 14, 2012.

[3] Heinz corporate communications, February 13, 2012

[4] Conley, Mikaela “’Get Wellhttp://abcnews.go.com/blogs/health/2011/10/21/get-well-heinz-soup-cans-sent-through-facebook/’ Heinz Soup Cans Sent Through Facebook” ABCNews.com, October 21, 2011 (accessed February 14, 2012.

Self-Service Technology

     It’s late and I have had a long day at work. I just want to get home, but I know I promised to pick up some much needed items at the local grocery store on the way home. As luck would have it, the grocery store is packed and nearly every manned checkout line is three to four customers deep with shopping carts filled to the brim. I have three items in my hands. The express line extends through the health and beauty section. This is a nightmare. My only option seems to be the much loathed self-service checkout. I am not a fan of these machines primarily because every time I use them, the machine rejects some item I attempt to scan through which halts all other transactions and activates a revolving red lamp above my head like I just scored a goal in the Stanley Cup final. This light prompts the arrival of a human being (ironic) who must use his or her credentials to resolve the situation so that I may continue. Ultimately, this process takes more time than if I would have stuck it out in the longest of the ‘human’ cashier service lines. Whether bad luck or bad karma with machines, this is more often than not my experience. What I just described is one of the greatest challenges in implementing self-service technology (SST) – customer value. But it is not just customer value, it is perceived customer value and that perception lies with the individual interacting with the SST and their experience and how the results of that experience will lead to repeat visits.

Does this thing really add value? source: codinghorror.com



                Before looking at published strategies on effective implementation of SSTs, here presents a brief overview of exactly what an SST is and the primary reasons for use by businesses. Self-Service Technology empowers a user to perform a qualified transaction without human interaction. In his paper, “Implementing Self-Service Technology to Gain Competitive Advantages”, author Chang-tseh Hsieh identifies four primary types of SSTs:

1.       Telephone & interactive voice response (IVR) systems (example: customer survey over the phone)

2.       Interactive freestanding kiosks (example: stations at airports that allow you to print your boarding pass)

3.       Internet based or other on-line connection systems (examples: pay-at-the-pump gas and ATMs)

4.       Video/DVD/CD based technologies (example: the Marketplace Live simulation used in this class)

      A business chooses to implement an SST to fulfill one of three primary goals: customer service, enabling direct transactions, and education. SSTs have essentially turned the marketing services triangle (the interaction between the customer, the employee, and the company) into a marketing services pyramid. A research document article entitled “Technology Infusion in Service Encounters” states that the triangle becomes a pyramid because of the insertion of a “very important end point”, technology. Furthermore the authors state that “the service encounter is now seen as the dynamic relationship between employees, customers, and technology”. So with this SSTs have a lot of upside potential – customer demand, cost reduction, improved customer satisfaction, etc., but taking this conclusion and pairing it with a hasty implementation can bring a lot of problems. This is where we come back to my statement about perceived customer value. For certain the grocery store had the best intentions by implementing the self-service checkout, but my perception as the customer was a little different. It is my perception that firms must be sure not to overlook. Enough repeat visits like the scenario I described in the opening paragraph and I will be happy to purchase my bread and milk elsewhere.

                Mary Jo Bitner, Amy Ostrom, and Matt Meuter have recently published six important lessons for firms to consider when implementing SSTs. Following each lesson I offer a point or two as my observation of the lesson.

1.       Be very clear on the strategic purpose of the SST

a.       As with my personal experience, if your goal is customer value make sure that your customers see the value.

2.       Maintain a customer focus

a.       See my observation in lesson #1.

3.       Actively promote the use of SSTs

a.       Bitner calls this “Marketing 101” - Firms must go to any and all lengths to communicate this service to the customer along with all the benefits that come from using it.

4.       Prevent and manage failures

a.       Yes, it’s a machine and someday it will fail. The point here is to go to the greatest, most cost-effective effort to mitigate those failures, especially the ones that happen when a customer is using the machine.

b.      When a failure does happen, the concept of service recovery here cannot be overstressed. Bitner comments that “customers demand and expect effective service recovery when failures occur”. Firms need to make sure they empower ‘front line’ employees with the ability to ‘make things right’ when they go wrong.

5.       Offer choices

a.       This is my favorite. The machine may be the easiest most efficient piece of technology to use ever, but my father will go his entire lifetime without getting near one. He isn’t interested in using it either, but he likes shopping at your store. Keep him happy by offering a choice, namely traditional human interaction.  

b.      In other words, make service alternatives readily available.

6.       Be prepared for constant updating and continuous improvement.

a.       As firms enter the arena of SST production and distribution, the rate of evolution of the technology will continue to accelerate. With that in mind, firms need to have a ‘continuous improvement’ (CI) strategy in place from the beginning so as not to be stuck with an outdated SST.

     Without question, SSTs are the way of the future and are destined to become a permanent part of the purchasing transaction for many generations to come. Firms choosing to embrace this new technology must be aware of the pitfalls that come with such an endeavor. Proper implementation will lead to the attainment of the number one goal – customer satisfaction and loyalty.

Resources:

Bitner, Mary Jo., et. Al “Implementing Successful Self-Service Technologies [and Executive Commentary] The Academy of Management Executive (16:4, 2002) 96-109.

Bitner, Mary Jo, et. Al. “Technology Infusion in Service Encounters” Journal of the Academy of Marketing Science (28:1, 2000) 138-149.

Hsieh, Chang-tesh, “Implementing Self-Service Technology To Gain Competitive Advantages” Communications of the IIMA (5:1, 2005), 77-83.

Lessons from Belgium

                 In 1999, the Coca-Cola Company (CCC) and its subsidiaries manufactured, marketed, and distributed concentrated syrups and beverage bases for over 230 brands worldwide. Coca-Cola Enterprises (CCE) along with other bottlers around the world produced and distributed the final beverages that bear the CCC trademark. At the time, the European market accounted for 23% of worldwide sales for CCC and CCE was the sole licensed bottler in Belgium, Great Britain, Luxembourg, The Netherlands, and most of France.

                It is worth noting that, at the time, much of Europe was reeling from a Mad Cow Disease and dioxin poisoning in animal food. With that in mind, on June 16, 1999 the Belgian Health Ministry withdrew all CCC trademarked products from stores due to two “unrelated” seemingly simultaneous, incidents. First, consumers reported an irregular taste and odor from bottled products and second, approximately 100 students and six schools became ill after reporting an unpleasant odor emanating on the outside of CCC-branded products.

                In the wake of the unprecedented recall, CCC went into action . . . sort of. The company devoted significant effort into uncovering the causes that lead to the recall, which led to the conclusion that the beverages produced and distributed were of “highest quality”. It was determined that the elements leading to the unusual taste or odor were not presents in amounts significant enough to lead to illness. Studies conducted on the student illnesses later concluded that illness was likely a “psychosomatic” reaction likely sparked from recalling the recent Mad Cow and dioxin scares.

                CCC launched an aggressive marketing campaign and by August of 1999 research indicated that the company had recovered nearly all of its “core” Belgian users.  But to this day, many have a bad taste (no pun intended) for the Coca-Cola Company with respect to how they handled the entire incident. The story has become part of business management case study lore, not for what CCC did, but what CCC didn’t do. The 1999 Belgian crisis places a spotlight on the significant failures of the Coca-Cola Company in the following concept areas:

1.       Crisis management

2.       Business continuity planning

3.       Political, legal and socio-cultural environments in international business

4.       Leadership and decision-making

5.       Marketing

                History teaches that the more time it takes to respond to a critical incident, the more long-term damage is likely to be done. Given the Belgian public was extremely skittish given the resent crises; CCC should have made themselves aware of the sensitive social and political environment in which they were operating. At the time, CCC had no significant local decision-making presence in Belgium, and thus crisis management strategies were not developed or revised to address such incidents. Due to this seemingly blatant ignorance, CCC failed to issue any kind of public statement until nearly a week after the initial incidents were reported.  It took ten days after the initial incidents were reported for a top executive from Atlanta to bother to show up in Belgium. Overall, this gave the appearance that CCC had little concern for its product quality and customers. The after-effects of this incident prompted executive resignations and the company has subsequently worked to flatten the organization, including establishing a decision-making presence in significant local markets.

                The Belgian crisis is a lesson in the importance of brand image. “Brand image is created in the minds of the consumers and convinces them that the products have value-added components above and beyond products offered by the competition” (Johnson, 21). The value-added components include, but are not limited to:

1.       Quality

2.       Price

3.       Design

4.       Status (intangible)

5.       Nostalgia (intangible)

6.       Confidence in company leadership (intangible)

7.       Positive record of corporate social responsiveness (intangible)

With this in mind, a plan must be developed that its sole purpose is protection of the brand. The plan identifies potential threats and expeditious solutions. The plan could be constructed similar to a SWOT analysis. At a minimum, the plan should consist of emergency response plans, quality assurance systems, effective communications processes, and an ongoing reinforcement of the company’s commitment to the community. Bottom line: The brand is your company’s most valuable asset. It should represent everything that your company stands for. Do everything to protect and uphold it.

Resources:

“Coca-Cola Executive Says Firm Mishandled Scare” Los Angelis Times June 28, 1999 (accessed February 10, 2012) http://articles.latimes.com/1999/jun/28/business/fi-50859

Hays, Constance L., “A Sputter in the Coke Machine; When Its Customers Fell Ill, a Master Marketer Faltered” The New York Times, June 30, 1999 (accessed February 10, 2012) http://www.nytimes.com/1999/06/30/business/sputter-coke-machine-when-its-customers-fell-ill-master-marketer-faltered.html?pagewanted=all&src=pm

Johnson, Victoria and Spero C. Peppas, “Crisis Management in Belgium: the case of Coca-Cola” Corporate Communications: An International Journal (Emerald Research Register: 8:1, 2003) 18-22.

Suitable for the Louvre?

                When I last visited the Interbrand 2011 rankings (see 2/3/2012 post), the firm commented that the Heinz brand (ranked #49 of the top 100 global brands) needed to better leverage the use of social media. From where I stand it seems the company took this to heart. For one, the H.J.Heinz Company is on Twitter, there are several Facebook sites, and multiple YouTube channels. To launch its new Tomato Ketchup with Balsamic Vinegar, Heinz first established a Facebook page devoted to the product and made the product only available through the site before the retail rollout in December 2011 (you even received a free Keinz Dip & Squeeze packet with purchase)[1]. My wife was one of the first to purchase a few bottles. My opinion? The balsamic ketchup is excellent on roast beef and French fries. I believe fans of the product will enjoy the variation.

Heinz Ketchup with Balsamic Vinegar Facebook Page Source: www.nytimes.com

      And speaking of French, I want to devote this journal space to comment on a promotion currently being conducted by Heinz France to introduce a new type of cap for the popular “top down” bottle”. Known as the “Grand Slam”, the cap is the most significant innovation to the top down bottle since the introduction of a ‘stay-clean’ cap in 2004. Per Peter Boterman, Heinz France Corporate Communications, “the cap provides the user greater control over quantity of ketchup squeezed and the direction in which they squeeze it”. To best illustrate the control that the new cap provides, Heinz France launched a Facebook page dedicated to an art challenge inviting fans to submit artwork done in ketchup with the new bottle and cap. To kick it off the marketing team produced a live performance with the Heinz Ketchup squeeze bottle. Two French graffiti artists used 15 bottles and achieved the masterpiece below within 4 hours and there were no special effects.



Done entirely in Heinz Ketchup! (courtesy: HeinzWeb, Heinz France)



To watch a video clip of the “ketchup artists” at work, check out http://www.youtube.com/watch?feature=player_embedded&v=HPSJxf-cfEE or search “Heinz Art Challenge” if the link does not take you directly there.

For more information about Heinz France or the Heinz France Art Challenge, check out http://www.heinz.fr/

source: Heinz France

               

[1] Newman, Andrew, “Ketchup Moves, Upmarket, With a Balsamic Tinge” New York Times October 25, 2011 (accessed February 10, 2012) http://www.nytimes.com/2011/10/26/business/media/ketchup-moves-upmarket-with-a-balsamic-tinge.html

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