Will the Sun on Sunday fix NewsCorp’s culture and reputation?

Though there’s not much new under the Sun, Mr. Murdoch is hoping to fill a void his defunct News of the World paper left behind, 2 months ahead of schedule.  But will this brand extension succeed — with readers, with advertisers, with journalists?

Advertisers will want reassurance that being associated with a radioactive brand is good for their business, as the UK arrests and ongoing US criminal investigations continue to plague News Corporation;

Sun on Sunday employees, including staff writers, will be concerned with insulating themselves from the serious scrutiny now being placed upon them by the Leveson enquiry, US and UK law enforcement agencies and the public at large;

Readers want to know the corporate culture has been cleaned so the stories they read have been developed legally and ethically.

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Can Carnival Cruises Rescue its Reputation?

As you continue to watch Carnival Cruises respond to its Costa Concordia accident near Italy, you might be wondering how this company — and the cruise industry — can restore trust during this peak season when cash-strapped consumers are booking their 2012 breaks.

Given the infrequent appearances from executives at this world’s largest cruise line (whose brands include Carnival, Holland America Line, Seabourn, AIDA Cruises, Ibero Cruises, P&O Cruises Cunard, Princess Cruises, Costa), clearly Carnival’s current and future revenues are at risk unless they take action now:

  • the “how” – immediate communication by the leaders of the company on its search and rescue efforts is a must. As in any corporate crisis, it’s all about speed.
  • the “who” – fielding top executives from Costa’s parent company, Carnival Cruises, is a must as only they have measurable credibility for reassuring concerned relatives, friends, customers, employees, investors, media and other stakeholders. This is a much more effective way to retain (rebuild) trust rather than leaving it to trade bodies to speculate on why the accident happened.
  • the “what” – demonstrating the actions being taken to all stakeholders that contingency plans are in place and being implemented is the best way to reassure people that your brand can be trusted.
  • the “where” – appropriate rescue operations need to be demonstrated in online and offline media by Carnival Cruises to ensure all its partners and channels are informed and aligned with your activities. This includes travel agents, system partners (airlines, hotels, car rental companies) and others in its ecosystem.

Chinese Find IKEA Is Swede Place for Romance

Ignore local knowledge at your peril: this is the lesson for retailers heading for China in the recent Wall Street Journal article “In China, Ikea is a Swede Place for Senior Romance” which Laurie Burkitt capably details.

Recounted in her revealing piece are educational stories about international retailers — IKEA, Wal-Mart, McDonald’s — that are getting accustomed to Chinese consumers expecting to use them as their home away from home, aiming to spend a great deal of time—if not serious money—at these usually generous sized, comfortable stores.  Examples from the article (below) can spare any business expaqnding there much time and stress:

Ikea: At the weekly IKEA romance session in Shanghai, the elderly arrive in swarms of 70 to 700 to get the free coffee offered to holders of the IKEA Family membership card. Ms. Tang, seated amid the backdrop of Poang reading chairs and Vreta poufs, sips coffee and says she is grateful to have such a meeting place. “I make more senior citizen friends when I come here,” said Ms. Tang. In China, IKEA is planning to up its nine locations to 17 stores by 2015 to meet demand from the nation’s growing middle class, who aspire to Western lifestyles at affordable prices. On a recent Sunday in Beijing, Liu Yunfeng sat in a 3,999 yuan ($625) white leather Tirup chair, watching home videos from the screen of her Sony digital camera while her shoeless daughter jumped on the Nyvoll bed of a mock-up room.

Wal-Mart: Several years ago, some Wal-Mart stores in China set up a children’s camp for summer and winter school breaks. During daily sessions, children are encouraged to try their hands as part-time greeters and announce deals over the broadcast system. “If I go to Wal-Mart I’ll want to go for the day,” said Cui Hongyan.

McDonalds: With its free Wi-Fi and clean bathrooms, is adding more electrical outlets to most of its China stores in hopes that people will actually come and hang around longer. In Hong Kong, the fast food giant is developing a service known as “McWedding” to encourage people to marry in their stores. One proposed feature of the ceremony: When it is time for the big kiss, the bride and groom can each chomp on the end of a french fry until their lips meet.

But did these retailers do their homework? Were they prepared for Chinese consumers expectations?

It seems that the retailer s relied on what worked in their home markets and are now struggling to adapt to consumers wanting to turn the retail experience into a full day social experience – “retailtainment.” Chinese consumers love Western and European brands and generally prefer them to their own Asian options. Retailers need to be educated about the unique demands of customers – they need to be relevant and have personality, which is exactly what Ikea, Wal-Mart and McDonalds have done – just a little too late. IKEA, however, is missing one of the biggest brand lessons – cultural sensitivity – when they propped up a notice board at the entrance of the cafeteria, which stated “IKEA would hereby like to inform this group and its organizers: Your behavior is affecting the normal operations of the IKEA cafeteria,” the notice said.

Comparably, Mercedes called on the local culture by flying over some of its best customers from China to join in a focus group to determine customer expectations in a new market. The brand not only differentiated itself, but it also went through the brand localization process, increasing its brand relevance and image in China. Again the key lesson here is to always challenge your assumptions and be prepared for foreign consumers’ very different expectations, particularly in the Chinese market.

The American-Western European Values Gap

There is a great new report on The American-Western European Values Gap, from the Pew Research Center’s Global Attitudes Project conducted in the US, UK, France, Germany and Spain this Spring as part of a broader 23-nation poll.  It highlights several characteristics we mention in our book (Working with Americans) to help expanding organisations understand how these can impact them and which you shoul find helpful if you work with Europeans and/or Americans:

Views on International Engagement- the USA and Britain

About four-in-ten (39%) Americans say the U.S. should help other countries deal with their problems, while a narrow majority (52%) says the U.S. should deal with its own problems and let other countries deal with their problems as best they can. The British are nearly evenly divided; 45% say their country should help other countries deal with their problems and about the same number (48%) believe Britain should deal with its own problems. Last year, about the same number of Americans said their country should help other countries (45%) as said it should let other countries deal with their own problems (46%).

Cultural Superiority

About half of Americans (49%) agree with the statement, “Our people are not perfect, but our culture is superior to others;” in Britain only about a third or fewer (32% and 27%, respectively) think their culture is better than others. While opinions about cultural superiority have remained relatively stable over the years in the four Western European countries surveyed, Americans are now far less likely to say that their culture is better than others; six-in-ten Americans held this belief in 2002 and 55% did so in 2007. Belief in cultural superiority has declined among Americans across age, gender and education groups.

Individualism and the Role of the State

American opinions continue to differ considerably from those of Western Europeans when it comes to views of individualism and the role of the state. Nearly six-in-ten (58%) Americans believe it is more important for everyone to be free to pursue their life’s goals without interference from the state, while just 35% say it is more important for the state to play an active role in society so as to guarantee that nobody is in need. In contrast, 55% in Britain say the state should ensure that nobody is in need; about four-in-ten or fewer consider being free from state interference a higher priority. Asked if they agree that “success in life is pretty much determined by forces outside our control,” Americans again offer more individualistic views than those expressed by Western Europeans. Only 36% of Americans believe they have little control over their fate, compared with 41% in Britain.

Interestingly Pew, a not-for-profit, publishes these important business insights which I hope leaders take to heart; if not, their geographical expansions will result in lost money, time, brand equity and corporate reputations.

The Perks of the (Business) Trade

Here’s a great article about some California corporate cultures from the October issue of  Vanity Fair (“Best Business Practices: The Perks of the Trade,” by Bethany McLean) — is your company like these?

Never in history has a group of employees had it so good. It all began with Google, which elevated perks—like free gourmet food cooked by star chefs (which reportedly costs the company some $100,000 a day) and free Wi-Fi-enabled coaches that shuttle workers between San Francisco and Google’s Silicon Valley offices—to an art form. Google’s engineers are allowed to spend 20 percent of their normal working hours on Google-related projects that excite them, a practice that led to the development of Gmail, among other things. Google became the gold standard, and in 2008 the perk war began in earnest when Facebook hired away one of Google’s top chefs, Josef Desimone (along with Google executive Sheryl Sandberg, who is now Facebook’s chief operating officer).

Today, free food prepared by gourmet cooks has almost become a cliché at Silicon Valley companies, along with such on-site services as haircuts, dry cleaning, and even medical care. Ditto for taking your pets to work—although there’s always a way to one-up. Game-maker Zynga, for instance, offers pet insurance too.

Some companies have something for everyone—literally. In the Valley, LinkedIn is famous for its Coke Freestyle machine that dispenses 129 flavors of soda, so employees who want, say, an orange Coke can custom-make their perfect fix. Other companies make their product the perk. At electric-vehicle-maker Tesla Motors, employees can take the Tesla Roadster out for a weekend spin. Still others try to appeal to their employees’ better instincts. At Salesforce.com, employees can take six paid days a year to do volunteer work.

Like Google’s 20 percent policy, the perks can offer more than convenience or fun. At Netflix, employees are allowed to customize the mixture of cash and stock in their compensation, and there’s no vacation policy—meaning that employees can take all the time off that they wish. And if you’re a young computer whiz, why not be an intern at online reviewer Yelp, which prides itself on offering its charges the opportunity to do a lot more than fetch coffee? It was a Stanford student named Ben Newhouse who helped invent Yelp’s hugely popular Monocle application, which shows you all the nearby businesses, along with their Yelp reviews, wherever you and your smartphone happen to be.

There’s a logic to all the freebies and flexibility: Companies are willing to offer anything (O.K., almost anything) in order to win the war for talent. Google worries—and rightly so—about how hard it is for a big company to come up with the next hot thing. Thus, the free meals aren’t so much about providing food as they are about providing what Google’s head of people operations, Laszlo Bock, calls “manufactured moments of serendipity,” where a happenstance conversation in the food line might spark an idea. To increase the odds of interaction, Google even measures the length of the lunch line. “We don’t have it down to the decimal point,” says Bock. “But below 3 minutes is not good, and over 10 minutes is not good.”

At Google, all the perks haven’t stopped a number of employees from leaving. The company’s latest strategy to retain employees isn’t just another newfangled perk, though: Last fall, Google gave all of its employees a 10 percent raise, increasing pay to well above the average. Thanks to that, Bock says, Google is now getting and keeping more talent. Cash is still king.

Can brands shore up a company’s share price?

Allyson Stewart-Allen, founder, International Marketing Partners as interviewed by The Marketer blog.

Allyson, as a well-known UK- USA marketing expert, do you think brands can shore up a company’s share price? In a word… yes. And focusing on creating brands in tough times is the right time to do so.

Why bother creating brands at any time? They serve a number of purposes for the business but the main ones, I would argue as one who helps create them for companies, are… 1) to skew markets in your favour by creating products and services that customers want above all others in the category and 2) to secure loyalty, advocacy and subsequently cash flow through understanding and catering to those who value your products and services.

Brands are mostly constructed on customer perceptions and direct experiences with the branded product/service, as well as built on intangibles that influence those perceptions – intellectual properties (copyrights, patents, domain names, trademarks, designs), good corporate behaviour and having local knowledge.

Intellectual Properties

These IPs are legitimate assets which must be actively managed, while corporate diplomacy and conscience (less tangible but still corporate culture assets) are in the power and decisions of the brand owner’s leadership. Think about Apple’s designs, Coca-Cola’s bottle shape, Amazon’s pulling power – all of which are IPs being actively managed and defended.

Good Corporate Behaviour

You’re familiar with the recent stories of executives whose arguably autistic approach has undermined their brands, including Tony Hayward for BP, Irene Rosenfeld for Kraft and more recently Rupert Murdoch for News International.

Local Knowledge

Why has TopShop had so much success in the US while M&S hasn’t? What did they do differently that enhanced or undermined their brands? Simply it’s about brand travel – studying if and how brands can be transplanted and survive in a different clime. Ford has cracked it and many SMEs have, too, by being methodical and good listeners.

There are now many firms helping CEO’s and City analysts value brands on balance sheets to show there’s more than just IT and real estate to the way organisations create and extract value from their markets. These valuations do shore up share prices by using quantitative methods including:

  • Economic income approach: where a brand is valued using one or more valuation methods that convert anticipated economic benefits into a present single amount using discounted cash flow (DCF) analysis
  • Market comparable approach: where a brand is valued by comparison with similar assets which have been sold, for example using P/E ratios or turnover multiples.
  • Cost approach: where a brand is valued using the sum of the individual costs or values of the brand assets and liabilities, for example the cost of building or recreating the brand.

Creating and maintaining brand assets is essential to every healthy business. You know as well as I do that those that don’t end up fighting in the trenches on “price” because they’ve not given customers a reason to differentiate. There’s no profit to be had in the price fight, which some, sadly, learn a little too late.

Bonmarché expands overseas

Why the Bonmarché is playing it safe before opening overseas locations.

On October 20, 2011, Retail Week Magazine announced that budget-price high-street retailer Bonmarché is looking to expand internationally, the first time for this UK brand to make such a big leap as it currently only has one overseas store in Gibraltar.

The retailer is opening up its website to international customers in order to ‘determine demand for the brand and help to decide where to open international stores,’ according to Bonmarché marketing director Katherine Scott. An international ad campaign will support their ecommerce and bricks-and-mortar store expansion which hopefully will account for the different expectations and tastes of their overseas target markets.

Rightly, Bonmarché is doing what many retailers should do before jumping to a new place: their homework. Usually it’s the assumptions about how other countries operate that undermines an otherwise good plan –demographics, shopping patterns, cultural values – and usually ends up costing them time, much money and brand reputation damage.

Checking the BrandTravel potential is a must which we hope Bonmarché has done.