Beyond Borders: Brands behaving badly
by Craig Page-Lee (@cpl_ignite) The African Business Review’s “Top 10 most valued African brands 2014” report a year ago listed MTN as the no. 1 most-valued African brand in the Top 10. Looking at Ask Africa’s Kasi Star Brands benchmark study 2015, Koo Baked Beans came first, All Gold Tomato Sauce second and Coca-Cola third; MTN came in at no. 10 and was the only mobile operator brand in the Top 10 ranking.
You will probably have noted that the common denominator in all examples cited above is the brand “MTN”.
The woes continue
All of these accolades and achievements mean absolutely nothing at all when a brand starts behaving badly, especially in the case of MTN Nigeria. The unfortunate events that unfolded the past several weeks have obviously had a disastrous effect not only on the brand in Nigeria, but also back in South Africa, home of the brand. The woes continue as brand value declines and consumers begin to beg for answers on what went down, how this was allowed to happen, what are the implications for the brand on the continent and what the brand is going to do to rebuild the extensive trust and loyalty lost due this wrongful business decision?
A question I ask, though, is does this matter at all to the pay-as-you-go consumers, as there is perceived lower levels of loyalty in this segment, much higher levels of churn as cost-conscious consumers migrate for the best deal, and the majority of this segment operates from a multi-sim approach, which in essence means “no loyalty”?
While brands are spending millions a year on advertising and vying for consumers attention in this ever aggressive and competitive sector (mobile operators/telecommunications), a business indiscretion of this magnitude will, and does have an impact upon brand loyalty.
This example is only one of the many indiscretions by major brands across the globe. Two other very important and severe brand-damaging examples that I would like to reference are:
- the most recent situation where VW has been caught out for manipulating readings of carbon emissions across a broad range of its’ vehicles, which has impacted upon its share price, and
- an incident from 2014 when Tesco, the world’s third largest retail, was caught out for inflating financial performance and overstating income and profit.
In all three examples noted above, the nett result was carnage within the respective organisations, a major downward shift in shareholder value, a barrage of negative commentary across all media channels and the consequential loss of trust and diminishing loyalty from consumers. Again, in all three, a major reshuffle of the respective top management teams has been implemented, with some senior executives either being suspended, or removed from the business.
In the case of MTN Nigeria, MTN CEO Sifiso Dabengwa has resigned; Tesco suspended its UK boss, Phil Clarke, as CEO, along with three other senior executives; and Volkswagen CEO, Dr Martin Winterkorn, was reportedly removed from his position as the man in charge of the world’s largest automaker.
Will we ever know?
Will this be enough and will consumers ever know what the real extent of manipulation and exploitation is, and will brand loyalty ever reach the same levels that were in place prior to such indiscretions? While brands freely discuss consumer fickleness and the ease with which consumers flip between brands, it obvious that much effort is needed upon the side of brands to pull their act together if they want more entrenched loyalty and commitment from consumers.
What is ever apparent in these examples is that “[c]orporate brands often forget that they are judged by their customers on every level and on every touch point. How they handle themselves when things don’t go to plan is where every brand has an opportunity to shine and show their true colours. An authentic brand’s reaction is to put themselves in the shoes of the customer. How would you feel if the company treated you a certain way?” (Reference: Brand Audits Update x by Christine Moody.)
Another critical point is that there seems to be a flaw, or failure, in the organisational culture of these brands – something that defines how individuals behave, act and work and how the brand lives in the hearts and minds of staff. If this is flawed and not delivering internally what the brand projects to the external world, internal attitude will be affected and risk-taking will find a way into the organisation — something that seems ever apparent in all three examples provided. This behaviour erodes brand reputation, share price and company value.
What millennials think
So what do millennials think of these events, and will it make any difference to them at all in Africa and will smaller niche brands gain the upper hand when the mega global brands behave badly, or will consumers soon forget the level of error and eventually migrate to conscious consumption of those very errant brands again?
With Vodacom winning the “Coolest Telecoms Provider” title in the 2015 Sunday Times Generation Next Brand awards, it seems as if the MTN brand may well be experiencing some wheel-spinning in the South African local market, too. Whether on the back of negative press associated with the prolonged strike by MTN employees during the months of May and June 2015 or not, the reality remains that the brand is under pressure and only time will tell on what the real impact of the fine will be, both in terms of share performance and in terms of consumer trust and loyalty.
It’s great, however, to see that MetropolitanRepublic’s client MTN Uganda was a multi-award winner at the Digital Impact Awards Africa, held in Kampala, Uganda, on 21 August 2015, winning across five categories, including that of “Digital Brand of the Year.” Maybe there is still some hope for this incredibly powerful brand on the continent and that the negativity from recent events will not detract from the marketing and communications efforts of all working on it.
Brand South Africa
In the end, though, if brands of such significance behave so badly, what is the impact upon our most-valued and -cherished brand, namely, Brand South Africa?
Craig Page-Lee (@cpl_ignite) is the group managing director of Posterscope South Africa. He has over 21 years of working experience across the disciplines of architecture and retail design/brand communications and marketing management/advertising and media, across 11 pan-European and six pan-African regions. Craig’s monthly column on MarkLives, “Beyond Borders”, focuses on doing business in various African markets. Don’t forget to tune into his #eBizRetail slot on www.ebizradio.com.
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