BOOK REVIEW: BRANDS UNDER FIRE

BOOK REVIEW



Brands Under Fire by Ivan Arthur & Kurien Mathews
Published by Penguin Books India, Portfolio, 2008, 214 pages. Rs. 499/-



Crises of Faith

Brands Under Fire is a reprise of three brand crises in the well-known worlds of Cadbury chocolates, Pepsi & Coke soft drinks and the kalash logo-bearing Unit Trust of India with special reference to their flagship Unit-64 Scheme.

This lucid book composed of three brief case studies, excerpts of discussions, and brief essays on branding and related issues; has been published under the aegis of The Subhas Ghosal Foundation, formed in memory of the Thompson Advertising legend, and the AICAR Business School, founded by Walter Saldanha, the former Chairman and Managing Director of advertising company Leo Burnett, India.

Every single wave of phosphorescent logic from a collection of 13 advertising and marketing gurus assembled at a conclave on the AICAR campus in 2006 crashes down again and again on the conceptual rock of “Trust”.

It is “Trust” that is the adhesive between the company or institution and its consumer. And if this fragile entity is betrayed, then the “Brand” takes an incalculable hit. The only way forward is to restore that trust using multiple tools at the guilty company’s command, including good leadership, advertising, public relations, and swift reparations if not full-fledged restitution.

A brand is defined repeatedly by the conclave. Shekhar Swamy of RK SWAMY BBDO/HANSA calls it a “promise or a pact between manufacturer and buyer assuring (a) product authenticity and (b) product consistency between places over time.” In all three case studies, this compact is temporarily broken and then repaired.

In the first, Cadbury is seen to have sat on its hands despite prior knowledge of the problem, till a “worms infestation” in its inadequately packed and badly stored chocolates, blew up in its face. The “thoughtless worms struck,” as a tongue-in-cheek Gerson da Cunha puts it, when the infestation received the adverse attentions of the Indian Food and Drink Administration (FDA) and a raucous media.
But once placed with its feet to the fire, Cadbury rescued the situation from plummeting sales and a hornet’s nest of bad publicity, by promptly changing its packaging. They also brought in hugely popular celluloid idol Amitabh Bachchan, using the actor in a TV advertising campaign to restore trust.

Commendably, some of the discussion in the book reaches beyond marketing to comment on India’s interminably slow and “weak legal system” that enables international brands like Cadbury to get away lightly without the massive punitive damages they would have had to pay in the West. Nevertheless, Cadbury, being a household brand in India, did act to set things right, to see its sales climbing afresh and all was soon forgiven.

In the Pepsi and Coke case study, both international soft drink giants were accused of selling product with pesticides in them to a strength of 30 times the permissible limits. The whistle-blower was a New Delhi based NGO, the Centre for Science and Environment (CSE). But ignoring the possibility that some of their multiple bottling plants might indeed be using contaminated ground water and less than rigorous process controls; both companies chose to conduct independent tests on their colas and presented their blameless findings in a robust advertising campaign.

They also decided to use their film-star brand ambassadors Aamir Khan and Shahrukh Khan to reassure their consumers. Other back channel efforts yielded a clean chit from the government of the day. The consumers were duly convinced and sales did not suffer beyond an initial dip. The cynical prognosis, in a country where one can certainly not drink even the treated tap-water safely, is that the Coke and Pepsi, not to mention some nine other brands of cola and bottled- water cited by the CSE study; were, “safe by local standards”.

Sunita Narayan, Head of CSE, prominent in water management issues, invokes the big picture of a “failure of government institutions to take the issue of public health seriously,” and concludes, a little helplessly, that we, “care little for standards in India”.

The final case study is about the collapse and resurrection of Unit 64. This was India’s first, indeed its only mutual fund for decades. Set up by the Government of India in 1964, it gave its millions of small investors reliable tax free returns ranging from 6 to 23 per cent per annum for many years.

In 2001, the fund’s net worth was largely eroded and it had to temporarily halt trading. After those responsible for the debacle were removed, a new Chairman, M.Damodaran, later to preside over SEBI, came in to revitalise UTI. Viewed from the perspective of a global financial collapse in 2009, with venerable brands strewn all over the global floor; Damodaran’s rescue of Unit 64 and the “vibrancy” he imparted to the whole company makes for an inspirational template.

Damodaran termed the US-64 problem as a “liquidity issue rather than a solvency one” and the Government of India backed him up with the necessary liquidity. Effectively, the government nationalised Unit-64 and reaped huge profits from the equity holdings over time. For the 20 million or more betrayed unit holders it has not gone quite so well. But, even they did get their money back with a modest return on investment.

(850 words)

Thursday 19th February, 2009
Gautam Mukherjee