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Brands show their sensitive gay side

July 11, 2012

Pink: it’s the new black. Brands are falling over each other to “out” themselves as fellow travellers in the Lesbian, Bisexual, Gay and Transgender community (hereto after, LBGT).

First we had Kraft, with its Gay Pride rainbow cookie, posted on a Facebook page. Then Google joined forces with Citigroup and Ernest & Young to promote a joint campaign that  is to highlight the privations suffered by LBGTs around the world. And now – improbably enough – a famous Premier League club has joined the throng.

No, not Chelsea attempting to smother the unpleasant odour of racism emanating from the John Terry court case. Or, for that matter, Queen’s Park Rangers. Liverpool is the first Premier League club to be officially represented in an LBGT event in Britain. A banner featuring the club’s crest is to be carried by staff and members of the women’s team at next month’s Liverpool Pride.

According to Liverpool FC managing director Ian Ayre, the initiative is all about ridding football of homophobia. Earlier this year he helped organise a Football v Homophobia tournament hosted at the club’s academy. Good luck to him: it’s an all-too-evident flaw marring the Beautiful Game, and he’s trying to do something about it.

Less clear is what Kraft (and the others) are up to. Is there an identifiable gay cookie sector? Or do LBGTs simply consume cookies like everyone else? The Facebook campaign, which consisted of an image of an Oreo cookie with six layers of rainbow-coloured creams and the caption ‘Proudly Supports Love’, certainly managed to court controversy. Within a few days, there were 38,000 comments on the site, and nearly 250,000 ‘likes’. Most of the comments were positive, but some were decidedly hostile – and within a few days a ‘Boycott Oreo’ page had sprung up on Facebook, fueled no doubt by neat Bible-Belt bigotry.

Was Kraft really standing up to be counted? I doubt it. More likely, Barack Obama’s forthright backing for same-sex marriage has given brands “permission” to go mainstream on the subject.

By way of explanation Basil Maglaris, Kraft’s associate director of corporate affairs, tells us: “As a company, Kraft Foods has a proud history of celebrating diversity and inclusiveness. We feel the Oreo ad is a fun reflection of our values.”  A “fun reflection”, eh? The smile may be on the other side of its corporate face if Kraft visibly falls down on its employment diversity programme any time soon.

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Poor old Diamond Bob – a martyr to Barclays’ brand values

June 28, 2012

BarclaysA lot of people are accusing Barclays Bank and its chief executive Bob Diamond of racketeering. Acting like white-collar gangsters, in other words. They say the bank and its principal directors colluded in serial distortion of the interbank rate, Libor. What this means in plain English is that they beggared us – the saps who are their customers – with artificially inflated interest rates on loans and mortgages  – in order to enrich first themselves, through bigger bonuses, and then their shareholders, through bigger dividends. Barclays has been fined a total of £290m by the regulatory authorities on both sides of the Atlantic. But it’s the thin edge of a very thick financial wedge. Once the lawyers get weaving on behalf of aggrieved customers, who knows where the liability will end up?

Martin Taylor, a former Barclays CEO himself, summed it up best on this morning’s Today Programme. He said that Barclays had engaged in “systematic dishonesty” between the years 2005 and 2009. While he didn’t explicitly link Diamond – who then happened to be head of BarCap, the division most closely tied to the scandal – with the gigantic swindle, he did say that chief executives set the cultural tone of the businesses they run. Implication: Diamond should retire to the discreetest room in his penthouse suite and make good use of a service revolver. Diamond – Taylor implied – may, or may not, have colluded in such corrupt dealing practices; but because they happened on his watch, he was at very least grossly negligent.

Now I know what I’m about to say isn’t going to be popular, but I’ll say it all the same. Was Bob so very wrong in what he did – or rather, for the sake of any legal eagles looking in – er, what he didn’t do? I mean, at least Barclays Bank co-operated with the investigative authorities, whereas other banks did not. Barclays is paying the price of being first to fess up: a media Exocet amidships.

Then again, the bank took not a penny of public money in the wake of the Lehman Bros collapse. All right, it was pretty stupid to allow such an unredacted and inculpatory email trail to get into the hands of the regulators. But at least you won’t hear any trading floor intercepts along the following lines: “Dude, thanks a billion in Treasury credits. I owe you big time. But not as much as I owe the taxpayer. Come over after work and let’s break open the Bollie.”

I’m not sure the same will be said of RBS and Lloyds. Both were big recipients of taxpayers’ bail-outs, and both – along with HSBC, Citigroup, JP Morgan, UBS, Deutsche Bank and others I probably don’t even know of yet – are, so it seems, up to their gills in interest-rate-rigging mire too. Poor old RBS. Talk about reputational damage: it’s not only guilty of systemic incompetence with customers’ direct debits, but of “systematic dishonesty” in charging them higher interest rates as well. Will this publicly-owned company owned by the public ever recover?

But I digress. Bob’s is the head that everyone wants to stick on a pike over Tower Gate. That’s because everything about Bob is Big and Boastful. Biggest salary, biggest bonus, biggest ego. He is, in short, the archetypal arrogant, swaggering, fat cat.

And as such, he has been entirely consistent with Barclays brand values over the years. Do you not remember Barclays brand ambassador Anthony Hopkins telling us how, if you weren’t big, you were nothing in banking circles? You don’t, do you? So, here as an aide-memoire is a superbly-crafted ad by Leagas Delaney, dating from 2000:

Sometimes, you see, advertising really can convey complex, uncomfortable, inner truths – without the client even noticing. Bob did, of course. He’s been a part of Barclays’ cultural furniture since 1996. He took the message very seriously indeed and acted out the part. What a brand martyr the man is!


Reckitt Benckiser chief executive Rakesh Kapoor reshapes the world of marketing

February 9, 2012

Lapac and Rumea sound a bit like those ancient continents Gondwana and Laurea, which straddled the Earth before tectonic plates carved them into the world map we’re all familiar with.

Actually, the parallel is not so very far off the mark. Except, the carving of these new continental landmasses is being done, even as we speak, by Rakesh Kapoor, recently appointed chief executive of healthcare-to-household conglomerate Reckitt Benckiser.

This is part and parcel of his new vision of the commercial world, articulated as a kind of antidote to some not-overly-impressive full year figures which have been announced at the same time.

As Kapoor sees it the motor-force markets of North America and Europe will, at best, stagnate in the years to come, so he’s taken the radical step of downsizing them into a single operation, centered on Amsterdam, in order to cut costs.

At the same time emerging markets, where almost all RB’s future growth is expected to come from, have been recast with new and emphatic importance. Hence “Lapac”, or Latin America and Pacific countries; and “Rumea”, Russia, the Middle East and Africa.

These are no mere geographical expressions either; Kapoor intends to put RB’s money where his mouth is. At the moment, only half the company’s capital expenditure goes into these regions. By 2016 this will rise to 80%. And we can expect little less revolution in the way the marketing budget be allocated: the bias towards emerging markets will shift from 44% to 55% over the same period.

It can hardly have escaped notice that a strategic realignment of this kind was implicit in Kapoor’s appointment as CEO in the first place. He is the first Indian to lead RB’s stalwartly Caucasian board. As such, he is part of a growing trend in multinational companies: the displacement of WASP leadership.

Look around you and you will see Coca-Cola and Pepsi rearming for an all-too-traditional cola war, with greatly increased marketing budgets. But one corporation is now led by a Turkish-American Muslim, Muhtar Kent, and the other by Indian-born Indra Nooyi. They’re not there by historical coincidence. A lot of that money will be spent over the next 4 years encouraging people in emerging markets to drink cola; rather than simply refreshing the palates of jaded North Americans.

We might note the same trend at Citigroup, whose chief executive is Vikram Pandit, and Deutsche Bank, which has picked Anshu Jain as its new co-chief executive. Or even at that redoubtable WASP establishment Harvard Business School, whose dean of two years is Nitin Nohria.

The big surprise is that Unilever did not take this route when appointing a successor to Patrick Cescau, instead plumping for a Dutch outsider with a P&G and Nestlé pedigree, Paul Polman. Maybe appointing a non-European would have been too far ahead of the curve in early 2009.

That said, the two most promising internal candidates for the CEO job, Harish Manwani and Vindi Banga, were – as their names clearly indicate – both Indian. If Polman decides to move on, I’ll wager that the next Unilever CEO will be Indian.


Why Unilever’s Chrysalis was no butterfly

July 5, 2010

“Odd” was how one highly placed Unilever source described the food, toiletries and detergent giant’s decision to scrap its innovative Chrysalis unit after only two years. Odd indeed: its disappearance is as enigmatic as its existence in the first place.

Chrysalis was a kind of wholly-owned incubator, in which Unilever stored some of its most treasured “local jewels”, such as Marmite, Pot Noodles, Peperami, Slim-Fast and Bovril. Altogether, there were 14 of them, stretching across 3 markets: Germany, France and Britain. These brands had one thing in common. Their quirky, national character possessed almost no transborder appeal. On the other hand, put together, they added up to a £500m business – no small change.

Unilever never made the rationale of Chrysalis entirely clear, leaving journalists and City analysts to fill the vacuum with speculation. Unilever’s one categorical utterance on the subject was that the brands were not for sale. Which the City boys (such as Citigroup) took to mean the exact opposite.

Look at the company’s strategy, One Unilever, they said. It’s all about multinational power brands such as Axe/Lynx, Persil, Dove and Wall’s. What possible role could tiddly, if charismatic, brands like Marmite have in this? By way of justification, they pointed to various strategic disposals the company had been making around the world: Boursin in France, a Brazilian margarine company here and an American detergent company there. Second, they pointed to an inherent contradiction in running these highly localised brands out of a central organisation based in Rotterdam; meaning Chrysalis must be a short-term expedient. And third – the clincher – Unilever had deliberately segregated its minor brands into two categories. There were those – like Colman’s mustard and PG Tips – that remained in the main Unilever fold and then the rest – the black sheep so to speak – which had been hived off into Chrysalis.

So much for that theory: all the black sheep have now been herded back into the main fold  – under the name of Incs (Incorporated Businesses) – leading Investec analyst Martin Deboo (for one) to conclude ruefully that rumours of a sell-off were overcooked.

I’m not so sure. The obsession with a brands sale seems to have arisen from a partial misunderstanding of Chrysalis’ purpose in the first place. By the same token, its dissolution cannot be regarded as a guarantee the brands will remain in the long-term ownership of Unilever.

First, the creation and purpose of Chrysalis. Admittedly, in the past, these brands might have ended up in the hands of private equity companies. But by 2008, the date of Chrysalis’ origin, such funding was already becoming very tight. At one level, the unit was clearly intended to keep them financially afloat. It was equally apparent, however, that – put in the hands of semi-detached entrepreneurial managers – Chrysalis would serve as a nifty brand laboratory whose lessons could be imported into mainstream Unilever culture.

The man chosen to lead this alternative operating model was James Hill, who had a considerable track record behind him as first chairman and md of Lever UK, the Unilever detergent arm, and subsequently senior vice-president marketing operations Unilever Europe.

Whether under Hill’s leadership these 14 brands actually made significantly more money for Unilever I have no idea (but some doubts). More evidently, his brands did succeed in making a lot of positive media noise for big, boring Unilever and embarked on some interesting experiments.

Marmite is a good case in point. During Hill’s stewardship, the brand name has finally passed into the English language as a metaphor of sharply contrasted appeal. Marmite led the way (well, co-led it with HMV) in pioneering temporary “pop-shops”. These exploited high-profile retail premises left fallow by the recession to merchandise 100 Marmite-branded products, including food, clothes, art and even Christmas boxes.

I seem to remember Marmite also made skilful use of its brand personality to keep itself front of mind during the late, long-drawn-out, election with a “Love Party versus “Hate Party” campaign featured on a specially devised website, http://www.marmitenewsnetwork.com.

The Marmite campaign soon amassed some valuable political capital when Nick Griffin, leader of the BNP, decided to do some passing off of the “Hate Party” – complete with hijacked Marmite logo – in his own political broadcast. Threat of legal action by Unilever not only forced a humiliating climbdown by Griffin, but caused him to lose his irreplaceable webmeister in the media furore that followed.

Enough of Marmite. Let’s also consider Peperami. The sado-masochistic salami brand created a bit of a sensation last year when its group marketing manager, Noam Buchalter, fired Lowe – its agency of 16 years – and solicited members of the public to come up with ideas for the next ad campaign. Crowdsourcing, as it is called, is increasingly trendy these days – a kind of marketing analogue of social media. Walkers used it to some effect recently when coming up with a new crisp flavour. What’s far less usual is to fire one’s ad agency in the process. This heinous act sparked an explosive debate in creative agency circles, the gist of it being that Unilever is a cheapskate, seeking to circumvent agency fees with inexpensive ideas sourced through the internet which achieve, at best, tepid success. We have yet to judge, in Peperami’s case. More importantly, however, the Peperami crowdsourcing episode was a first for Unilever which succeeded in capturing the attention of new chief marketing officer Keith Weed. One of Weed’s first initiatives on taking over from Simon Clift earlier this year was to approve a crowdsourcing drive for 13 of Unilever’s biggest brands, including Wall’s, Lynx and Dove involving the same $10,000 “bounty” for the lucky winner.

Weed has subsequently felt the need to back-pedal, and reassure agencies, on the issue of crowdsourcing. In an interesting and wide-ranging debate with WPP ceo Sir Martin Sorrell at Cannes (where Unilever was declared Advertiser of the Year) he had this to say:

“In general, I’m not going to use crowdsourcing as a substitute, with the exception of Peperami.” Consumer-generated ideas, he added, are merely a way of allowing Unilever to “pilot and test things”.

Which brings me to why Chrysalis was eventually ditched. At the beginning of this year, James Hill moved to another Unilever job, that of chairman of Italy. Buchalter has also quit, to become a consultant. It would be easy to surmise ‘writing on the wall’ here. I doubt that is the case, however. There is an exactness about Hill’s two-year term that suggests this was a valued Unilever “lifer” taking up a new turn of duty. More likely the closure has come about because the new top management team, led by ex-Procter & Gamble executive Paul Polman, couldn’t see Chrysalis’ long-term relevance. Indeed, Weed specifically referred during the Cannes debate to Polman’s decisive influence in making lines of communication with the consumer simpler and more direct. A complex hybrid operating system, and a business culture licensed to be irreverent, may have had no place in his thinking.

Does the dissolution of Chrysalis matter? In the short term, no. Matt Burgess, formerly managing director of Chrysalis UK, remains in charge of the Marmite, Bovril, Pot Noodle and Slim Fast brands as md of the new “integrated” unit Incs. I suspect, however, that some of the fizz has come out of the laboratory idea, that the future of the brands will be more pedestrian, and their value more meticulously cost-accounted.


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