A couple of weeks ago, we caught up over dinner at an Australian friend's place in Mumbai. Inevitably, the discussion veered to whether Indians were safe in Australia. About five years after the spate of attacks on Indian students, especially in Victoria, anxieties persist with regard to safety standards and whether there is an inherent animosity that many Australians feel towards Indians.
It may be argued that these fears are unfair, grossly exaggerated and without any credible basis, and are not reflected in the increasing number of Indians going to study in Australia. However, despite these statistics, perceptions matter. They came to rise not just because of the attacks that occurred but also because of the manner in which they were portrayed on 24x7 news channels in India and the fact that they were poorly handled by Australian authorities. This created misperceptions that were, over time, ingrained in Indian minds about Australians. In other words, they came to be perceived as the truth.
The Australian case is an example of brand damage and a failed attempt at brand repair. According to management guru, Peter Drucker, perceptions are formed not necessarily based on fact but rather on "shared experiences". Word of mouth, media focus, and some seriously cavalier statements by persons in authority in the Australian state of Victoria, created misperceptions and reinforced them. A brand already under attack was opened up to further assault.
"Unless Nestlé reframes its strategy to counter the attack they are under, they are not likely to win back the market share and confidence they enjoyed."
Take, for example, the recent Nestlé brouhaha. For decades, a favourite, dependable, inexpensive and easy-to-prepare snack enjoyed by millions of Indians, Maggi noodles was alleged to contain lead and the flavour-enhancer monosodium glutamate in excess of permissible limits. It was removed from the shelves in India, and the action by Indian agencies triggered investigations by food safety authorities in other countries as well. The ban has now been lifted for the time being at least, but Nestlé has suffered huge brand damage as well as significant financial loss.
So far, there are no publicly visible interventions by the company for effective brand repair. The company's claims that the product is safe and that criticisms are based on flawed results do not provide the customer with confidence. Nor indeed, do news reports that the market is flooded with equally harmful products. For the customer, a product they relied upon had let them down.
Such perceptions can be hugely damaging. Indeed, jokes have now started to appear on social media, such as the one suggesting that Maggi noodles be converted into pencils because of its high lead content. This is clear evidence of customer discontent. Unless Nestlé reframes its strategy to counter the attack they are under, they are not likely to win back the market share and confidence they enjoyed.
Two recent reports -- one with regard to a customer complaint that KFC served fried rat and another of an in-flight meal on Air India that contained a lizard trapped under the clingfilm -- are also examples of brand damage and attempts at brand repair. In both cases, management denied the allegation. KFC handled this much better by claiming that it was in fact an unusually shaped chicken piece. This, immediately, triggered doubts as to whether the photograph, as alleged by the customer, was, indeed, that of a fried rat.
The Air India rebuttal, however, despite being swift and issued by none other than the civil aviation minister failed to convince customers. This is because the wide-spread perception about the airline is negative. The public expects Air India to make mistakes.
A great example of brand repair is the manner in which Cadbury addressed the worm controversy. In October 2003, just before the festive season in Maharashtra, some Cadbury chocolate bars were found to have worms. This triggered an FDA enquiry and adverse media coverage that saw the brand's sales plummet. Through a series of brand repair interventions, the company not only managed to climb back to pre-crisis levels but also built consumer confidence in its products. What it did was not to skirt the issue but to acknowledge it and take corrective action. But more importantly, it visibly demonstrated that the manufacturing process was not flawed and that the problem lay with the storage facilities of retail outlets.
"Advertising does not build or protect brands. Word of mouth and shared experiences are the publicity that make or destroy brands."
Another outstanding example of brand management is that of Germany during the 2006 World Cup. For several decades, after the Second World War, Germany evoked images of Hitler, Nazi Germany, concentration camps, gas chambers. This was a terrible negative image to have as a constant companion. For young Germans, who had nothing to do with the war years, it was naturally humiliating and unfair. By sheer dint of hard work, Germans assiduously built the image of a hard-working people, who produced quality products and a robust economy. Mercedes Benz was not only perceived as a car but as a standard other cars aspired towards.
In 2005-06, the German economy went on a slide downwards. This was traumatising for most Germans. From an engine of growth, it was dubbed by many as "the sick man of Europe". Extraordinarily, the then German President extolled fellow Germans to come together and combat the image crisis.
In 2006, Germany hosted the World Cup and made it the turning point for shifting perceptions. A huge exercise was put together not only to counter negative images held by non-Germans but also of the perceptions Germans had started having of themselves. It ranks today as among the most successful brand-building exercises ever undertaken. When the games ended, it was said, while Italy won the world cup, Germany won the world's heart.
Brands are not built overnight. However, brand damage can be rapid and devastating. Advertising does not build or protect brands. Word of mouth and shared experiences are the publicity that make or destroy brands. Brands define a product and need constant attention. The repair and recovery of a brand, therefore, must be based on swift, visible, credible and effective intervention strategies. It is a pity that we don't seem to learn the basic lesson that perceptions matter.