The Hindu Business Line : When brands come under fire

The Subhas Ghosal Foundation, set up to commemorate the great adman of yesteryear, conducts an annual event that brings together the stars of the marketing and advertising fraternity. As with most such organisations, the format would usually be an evening of speeches or a memorial peroration by a distinguished figure. Being a group with some claim to being creative, this year, however, they chose to be different. What was organised was in effect a weekend away from the oppressive congestion and frenetic pace of Mumbai, and yet just about two hours away on the Pune-Mumbai highway, at Neral. It was called a "write-in" and it took place on the green, quiet and beautiful grounds of the Asian Institute of Communications and Advertising Research (AICAR), a new kind of B-school, founded by Walter Saldhana of Chaitra advertising. The moving forces behind the programme included Ivan Arthur (former national creative chief of JWT), and Titoo Ahluwalia, founder of Marg, and Kurien Mathews of TBWA India. The idea of engaging the top echelon of advertising practitioners and writers along with an academic institution was the brainchild of Anant Rangaswami, former editor of Impact. It was thoughtful of the group, in assembling the 13 participants, to have insisted on looking for people who have shown a marked interest in putting their thoughts down in writing and not necessarily go only by the professional status.

The chosen theme was Advertising in Adversity, which was changed after some discussions to a broader theme of Brands Under Fire. The purpose of the day-and-a-half, which was brilliantly and tastefully orchestrated by the host teams of students and faculty, was to make some useful and lasting contribution to the profession, something more than a TV chat style discussion. This effort would enable the foundation to bring out a book presenting the different points of view of the same issues from a number of people with years of experience. So a group of us (led by such august figures as the former head of Lintas and Mumbai's theatre veteran Gerson Da Cunha) had to actually sit down and write up our analyses of three specific cases that had been sent beforehand, and which were discussed at the event. That proved to be the hardest working part of the weekend, as it had to be done against the clock, which was perhaps not so new in a sense, to either advertising people or to journalists.

The cases themselves varied in their level of detail as well as interest. The cola companies facing the threat of being taken off the market - twice in three years - because of the reports of pesticide residues was one of them. The others were of UTI staging a comeback after the US 64 scheme went under, and took thousands of salaried people's lifetime savings and pensions with it; and of the storm over the discovery of worm infestation in bars of Cadbury's chocolates in the peak selling season of 2003. Students and faculty had taken some pains to put together the cases with material available from published sources and the companies themselves, of course to the extent they were willing to reveal them. On the whole the data presented to us was balanced and where it represented a company's special pleading of their case, it was quite obviously so. Thus one could draw one's own conclusions and play the sceptical enquirer.

What were the key lessons from the disasters and the recovery, although to varying degrees, from the precipice? What came through loud and clear first was that these examples were, in each case, a catastrophe waiting to happen. It was well known, for instance, in the Cadbury case, that in the humid conditions of the Indian bazaar and the unhygienic standards of storage and display, chocolates were bound to be affected by things stored nearby - the sort of grains and fresh produce that attract all sorts of insects and pests. In the case of UTI, everyone knew that to pay dividends as if one could defy all laws of economics and the market, quite independent of the net asset value of the units, was to court a certain disaster. Any professional would have known perfectly well that the NGOs that target foreign companies would find the much advertised and glamorised cola brands, giants both of them, sitting ducks anytime they chose to take pot shots at them. It was immaterial that almost everything what we eat and drink daily in India is contaminated to some extent, from milk to drinking water.

The second common feature was that in the end, advertising by itself could never be fully blamed for the damage caused by any brand. It was all down to the product, the company and its policies. Equally, since advertising is (and has always been) a paid and professional advocacy on behalf of the client, any amount of protestation of the seeking of the public good will not cut much ice with an audience that is getting more and more aware of the possibilities of all sorts of self-interest-driven actions in the corporate world, as each day passes.

Therefore, only owning up to the mistake, even if it was inadvertent, and saying sorry was by far the most effective way out of a tight situation. This is usually unpalatable to the captains of industry, particularly because they have been so accustomed to seeing themselves as the dominant partner in the relationship with the customer and the public.

Clearly, of course, no amount of abject apology alone would suffice in a case like the US 64 scheme where many people lost a big chunk of their lifetime earnings — with no recourse, despite all the efforts of the UTI to recycle the obligations through bonds and so on. Having chosen to come clean, apologise and make amends, what seems essential (from many other cases, elsewhere in the world too), what distressed brands need for survival, is quick and sincere action regardless of cost.

The Tylenol case in the US is a much-quoted one. When a few capsules were found injected with poison and caused deaths in the Chicago area, due to some terrorist-type attack on the company and its reputation, the brand owner Johnson & Johnson retaliated by pulling the entire trade stock all over the US, off the shelves at one go. Compensation was paid and a major effort taken up to make the packaging tamper-proof. The cost ran into hundreds of millions of dollars but in the event, proved a redeeming feature to the company.

Of course, it would be wrong to suggest that media has no role in a disastrous situation. On the contrary, all forms of media are essential. One has to broadcast the recovery and restitution campaign and support public education - and, of course, counter the inevitable spread of rumours and fears. Direct face-to-face contact by the top management of the companies, however, works best of all. Alongside such repair and clean-up efforts, it gives a clear message of earnestness, that one is serious, and that it is not a case of crocodile tears or reeling off press releases full of clichés. Visible actions, in the end, are the best and do indeed speak louder than words.

This lesson may seem rather simplistic and unoriginal to some, but it is amazing how "corporate hubris," to use the phrase Robert Heller used in describing the fall of IBM, blinkers and blinds companies at the worst possible moment. And it is the reputation, embodied in the brands, that bears the full brunt apart from the poor consumer.

(S. Ramachander is the former director of the Institute for Financial Management and Research, Chennai, and a management consultant.)

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