Brands and Crises

by Evódio Kaltenecker 

Translation: Albany Estrela Herrmann*

In an interview to a business magazine, I was asked about the impact on the brand of a company when a defective batch of products reaches the consumer market. The interviewer had in mind a recent event: a multinational, traditional in the food and personal hygiene sector, was under the media spotlight due to defective products that caused harm to consumer`s health. The question was well founded and the interviewer asked such issues in order to check the viability of the product in the market and which impacts (both tangible and intangible) were caused by this event viewing both sides: the brand side and the organization side itself.

Before sharing my opinion, it is necessary to define firsthand what is “brand”. In the broadest sense, a brand is a symbolic representation of an entity (whatever it is), which allows identifying it as an immediate way, for example, a sign of presence, a simple footprint. In terms of the communication theory, it can be a sign, a symbol or an icon. The definition of the American Marketing Association adds a legal element: “A brand is a name, a term, a sign, a drawing or a combination of these elements, in order to identify products and services from one seller or a group of sellers and to differentiate them from competitors”. According to Kotler, “perhaps the most characteristic ability of marketing professionals is the ability to create, to maintain, to protect and to enhance a brand”. For marketing professionals is the establishment of a brand the essence of art.  In other words, a brand is something that creates an identity, a differentiation. Finally, a brand can bring to the minds some attributes, emotional benefits and even more than that: values.

What happens to the value of a brand when such a disastrous event happens? One answer is that the reputation of the company can be ruined. We have examples of crises that destroyed companies (Union Carbide and the Bhopal accident in 1984) and others that negatively impacted the brand in a short term (Tylenol, 1982). It all depends on the correct way companies deal with as managing a crisis period.

History shows us the answer to the interviewer´s question: a brand impact and an acceptance of a product will always occur, but the duration and intensity of this impact will depend on how the company:

(i) deal with the causes of the problem;
 
(ii) supports those who suffered from the disaster;
 
(iii) solves the problem and
 
(iv) communicates the brand attributes to the market

So far, we have seen that the mark of a company, a product, a person or a country, is really an important issue. We also saw that a brand can die. Consequently, it is natural to think that a brand may be born, just look at how the segment of consumer goods brings frequent examples of new products. However, it makes sense to ask how to realize the “power” of a brand. There are several tools that allow product managers to monitor how their products are perceived. Some techniques are quantitative and statistical methods, while other tools are qualitative, for example, focus groups and market research.

A very interesting example of brand repositioning occurred right here in Brazil with the Havaianas sandals. In the past, this product was seen as having an inferior quality, the brand did not catch the attention from customers and the message that was passed to the public was just: “no warp, no smell and no loosing strips”, a motto that only highlighted sandal´s functionality only. After an impressive job of product repositioning, the brand shows a well-being feeling, “casual sophistication”, relaxation and fun (showing aspirational and emotional aspects). Undoubtedly, this is an example of change of brand attributes, which in this case, passed once a message focused only on the functional aspects and now passing currently signals of “Brazilianness” and relaxation. In my opinion, this case was one of the most interesting examples of brand repositioning that I could see, either in Brazil or abroad.

Finally, may I say that in case of the event that struck the multinational sector of hygiene  and food, the company seems to have a consensus in the specialized media and that company was unable to manage the situation appropriately. It was expected a much faster reaction as a more convincing placement during the crisis. Because it is a large company with decades of experience, the quality of the response to the crisis should have been proportional to the availability of resources and according to the experience acquired over the years.

As I am used to, I would like to provoke restless minds with two own questions:

What will be the end of this story? Will the product survive the crisis or will be discontinued by its manufacturer?

* Professora de Português para Estrangeiros na VHS de Stuttgart,  Licenciada em Letras Português e Alemão pela Universidade Federal Fluminense do Rio de Janeiro e Mestre em Filologia Românica pela Eberhard Karls Universität de Tübingen, Alemanha.