McDonald's supply chain leaves brand with a bad taste

It was only a matter of time before I turned my attention to one of the daddies of the world’s brands, McDonald’s, in perhaps the daddy of all markets, China. 

 

In fact this week’s big brand public relations issue extends beyond just the one brand into the fast food industry as a whole. Competitors from Yum! Brands, Pizza Hut and KFC, plus others such as Burger King and Papa John’s are also involved.

Last week it was revealed that in south-east Asia these companies had been using meat products, primarily chicken and beef, that had passed their expiry date. They were, to all intents and purposes, rotten. Shanghai Husi Food, owned by US-based OSI GROUP, had supplied the meat to them. In Shanghai, the local Food and Drug Administration raided the supplier, seizing more than 5,000 boxes of expired meat and arresting five employees.

Following this discovery, the fast food companies apologised to consumers in China and pledged to remove the products concerned. McDonald’s was one of the hardest hit brands, because it had to stop selling products in Japan and Hong Kong, as well as in China.

By the beginning of this week, OSI recalled all products made by its Shanghai facility, and apologised in a news conference. However, according to a Reuters report, their action did not stop criticism for McDonald’s from disappointed diners.

Nevertheless, according to The Wall Street Journal on Monday, whilst Yum!’s brands have stopped using OSI, McDonald’s said it would continue to work with them. The Journal speculated that this is because MacDonald’s feels it can address the problem quicker than finding a reliable new supplier, and because in reputational terms, it would not do them any favours to sacrifice the supplier.

Keeping faith with this errant supplier is an interesting strategy by McDonald’s, particularly bearing in mind that its business and its reputation have already been dented by this incident. McDonald’s is no stranger to taking a public bashing for its products and policies, and it has proven to be a big enough behemoth to absorb such blows. Nevertheless, it has to balance the damage caused from maintaining such a stance, with the risk of seeming ruthless if it were to fire its supplier and source product elsewhere. What is clear from this situation is that when the supply-chain goes bad, the consumer brand bears the brunt of public opprobrium, even if the fault lies elsewhere. The South China Morning Post highlighted this lose-lose scenario. McDonald’s not only suffered a product shortage, which irritated diners, but it also seemed reluctant to acknowledge that it had a problem, at least in the eyes of Hong Kong residents.

Arguably, the company should have applied more stringent inspection and due diligence standards to its suppliers. However, in this instance, the fact that a number of other separate companies were affected suggests that McDonald’s due diligence was no weaker than anyone else’s, and it perhaps mitigates the fault that lies with them. Nevertheless, this isn’t the first time that multinational food-service brands have suffered from such supply-chain incidents, and it certainly won’t be the last.

In fact, as I write, turning my eyes from east to west, McDonald’s is enduring another storm in Russia, where its cheese is being investigated for excessive levels of antibiotics. The cheese itself is produced further west, in the Czech Republic and Germany. Just last week, the Russian consumer protection agency announced that it will be taking the company to court for selling foods that contain more fats and carbohydrates than national regulations allow.

And so the company’s battles go on.

• Can it continue to fend off the brickbats that come its way?
• How do you feel it has handled this latest controversy?
• Can it continue to thrive, even under such criticism, or, like all empires, will it inevitably fall?
• What do you think?

Has Airbnb made a branding “balls-up”?

After the grave subject-matter of my previous post, I thought it would be fun to turn my attention to a lighter story. Lighter though it may be, it’s still a fascinating branding, marketing and PR case-study and a source of serious consideration, once you’ve stopped sniggering.

It concerns last week’s launch of Airbnb’s new branding. The popular holiday-apartment-rental website revealed a radical departure from its original light-blue and white script style logo, to a red and white livery with a new insignia. 

Airbnb’s old logo

Problem is, nobody seems to know what the logo stands for,. Techcrunch went as far as describing it as “a Rorschach test for everyone who saw it,” and this very lack of definition is giving rise to some rather mischievous suggestions.

Airbnb’s new logo

So, is it . . .

• An inverted heart?
• Peter Griffin’s (Family Guy) chin?
• A bum
• A pair of breasts?
• A pair of balls, or a vagina?

Amid much hilarity online, Gizmodo proved to be fond of the last suggestion, as was the Valleywag blog on Gawker . A Tumblr site rapidly appeared with a bunch of other recommendations, some more salacious than others.

The designers stressed the new logo’s simplicity to replicate and remember. They call it the Bélo and they’re keen for it to be as ubiquitious as the Wi-Fi symbol. Apparently, according to Airbnb, it combines elements of a person with their arms outstretched, preparing to hug you; a map location marker, a heart and the A from the Airbnb name. It’s supposed to indicate a sense of belonging, and this is to be enhanced with the logo’s ability to be customised by users, according to Airbnb. 

 

Another imaginative suggestion for what the new logo stands for.

So has the brand re-boot been a success, or, in rather apposite Cockney argot, a great big “balls-up”?

This is a difficult one to call, in my opinion. I don’t suppose that the good people at Airbnb anticipated becoming the butt of so many jokes. (I’m sorry, I just couldn’t resist a cheeky pun myself) and certainly they’ve been initially dismayed by the giggles to which they’ve given rise. In the UK, the Daily Mail reported a rather po-faced and peevish defence of the re-branding by Airbnb founder and CTO Nathan Blecharczyk, who said: “It’s just like: Go ahead, laugh all you want, guys. We wouldn’t want to design a logo that caters to the lowest common denominator.” The newspaper even suggested that Airbnb claims the new logo will become as recognizable as the Nike swoosh.

Top marks for ambition, Mr. Blecharczyk and team. Thing is, it would be all too easy to be dismissive of them except for a couple of important considerations. First, consumers are notoriously bad at handling change. We cling to the familiar. After all, isn’t it always that case that, “they don’t make things like they used to.” Nevertheless, once change happens, we are remarkably adaptable, and before long we’ll forget how things really used to be, unless we’re reminded of them. So the chances are the same thing will happen with this re-branding. 

Secondly, if the top brass at Airbnb play this situation correctly, they could really make it work in their favour. 

I’ve just Googled “new Airbnb logo”. In only 39 seconds, it says it has identified 13,400,000 web search results, and in 22 seconds, 25,900 news results. That’s a fantastic amount of noise for a story about a brand’s new logo and typeface. I hazard a guess that Airbnb would have been hard-pressed to generate this much discussion, PR coverage and brand recognition so rapidly.

This word-of-mouth is something on which Airbnb can build, providing they show a bit of humility and a big sense of humour. Globally, people are talking about Airbnb’s re-branding. Who’d have thunk it? They should embrace the amusement they’re providing, and use the laughs, and the fascination to explain their brand, and show that they’re a fun, transparent, “human” company.

There’s a lesson here. Things might look messy at the beginning, but with the right positioning and attitude, there’s often an opportunity, and a way to make things work. It remains to be seen whether it will in this case.

• What do you think of the logo and the re-branding?
• What does it remind you of?
• Can Airbnb can make it work? How?

I’d love to hear what you think.

Is this a terminal crisis for Malaysia Airlines?

It has been impossible to ignore this week’s dreadful news of the loss of Malaysia Airlines flight MH17.

A lot has already been written about the tragic circumstances behind the shooting down of the aircraft over the Ukraine with 298 people on board. Much more has yet to be discovered about why this terrible thing occurred.

What is doubly shocking is that such a massive tragedy has struck the same airline in quick succession, following the still unsolved disappearance of Malaysia Airlines flight MH370 in March, with 239 passengers on board.

Although it’s a minor consideration compared to the grief of the passengers’ families, another issue is what this means for Malaysia Airlines. How well has it responded to this terrible situation? Can the brand and the company survive this second tragedy, or is this a crisis too big and one too many? 

A question of scale

The first thing to consider is that no brand, certainly in the aviation industry, has suffered two such big tragedies in such quick succession. It’s unprecedented. And it’s already pretty certain that the loss of MH17 is not Malaysia Airlines’ fault. So arguably this affords the company sympathy, but one must wonder whether an intangible feeling of bad luck will now be attached to the brand, and how willing will passengers be to use the airline.

A question of response

The mysterious disappearance of MH370 led to a reaction from Malaysia Airlines that received considerable criticism. Unfortunately for Malaysia, it lacked information about what had happened in March, and this led to a confused response. It still remains unclear what happened and whether the airline bore any responsibility for MH370’s loss. Many people felt that what little information was available was poorly communicated to the families of the passengers, and this added to their distress.

This time, MH17 was shot down. This time, Malaysia Airlines is the victim, because the incident is so extreme. By the start of this week, Malaysia Airlines had already announced that as a mark of respect it would retire the route’s number. There will be no more MH17 flights. They are communicating more on Twitter and Facebook and getting out on the media. These may seem like small gestures, but they have been decisive, and consequently the airline’s immediate response seems to be more caring and consistent than before.

In crisis situations, decisive, clear and fast responses are important. They demonstrate that an organisation is open, transparent and responsible. This communicates a lot about their business and their competency, and can win or lose them sympathy depending on the quality of response. In this case, the airline has clearly learned a lesson from their indecision in March.

A question of best practice

However, a question mark exists over why Malaysia Airlines allowed MH17 to use the flight-path that put it at risk. It remains to be seen just how frequently it, and other airlines, take this route, and to what extent passengers have been put at risk since the escalation of hostilities in the Ukraine. It may be the case that Malaysia has unfortunately been the fall guy for an industry that hasn’t taken seriously enough the situation in the region. In which case, at least it can’t be singled out for having a particularly cavalier attitude to passenger safety.

A question of trust

Ultimately, Malaysia Airlines will survive or fold depending on how much trust passengers will continue to have in the company and the brand. Presently, this is difficult to gauge. In spite of the airline winning the Skytrax “World Best Cabin Crew” award as recently as 2012, and having won this title eight times since 2001, the loss of the two Malaysia planes and such a massive loss of life may be too much for the company to bear.

A lot may also depend upon how much trust its partners in the oneworld airline alliance have in the company. If partners such as American Airlines, British Airways, Qantas, Cathay Pacific and Japan Airlines feel that their association with Malaysia detrimentally affects their brands’ reputations, their actions could have serious consequences for the future of the brand.

The possibilities

It might be the case that the tragedies have made it impossible for Malaysia Airlines to continue in its current incarnation. Perhaps a re-organisation, a new leadership and even a re-branding will be necessary. These suggestions may sound like superficial solutions to grave problems, but they would send the message to consumers that Malaysia’s national airline is a different entity than that which suffered so much. It might represent a new start that could ultimately save the thousands of jobs that the airline currently supports. For these to be lost too would be an additional misfortune that I’m sure we would all be glad to avoid.

Adidas smashes record kit deal with Manchester United after winning World Cup brand battle

Giant sports brand Adidas announced the largest team kit deal in history with Manchester United, yesterday.

Starting in the 2015/16 season, the 10 year deal is worth $1.3billion (£750m), at $130million (£75m) per year, smashing the previous record deal set earlier this summer by competitor Puma with Manchester United’s rivals Arsenal, which will see the London team take $51m per year for the next five years.

This new deal currently blows out of the water the richest club deal, also negotiated by Adidas with Real Madrid for $41m per year, and is streets ahead of Nike’s deal with the NFL. Nike pays an average of $18m for this sponsorship deal.

The announcement comes hot on the heels of Manchester United’s seven-year, $559m shirt sponsorship deal with Chevrolet, and a triumphant World Cup for Adidas, which saw two of its marquee national teams, Germany and Argentina, contest the final, with the world’s highest profile player, Lionel Messi, sporting Adidas gear, and the world’s most exciting emerging talent, James Rodriguez from Columbia.

The deal revives Adidas’s association with Manchester United, which last saw the club supplied by the German brand in 1991-92. Many football fans will fondly remember the Adidas days of, Gary Pallister, Brian McClair, Steve Bruce, Mark Hughes, Gordon Strachan, Captain Marvel Bryan Robson et al.

 Adidas makes aggressive gains in the war of the sports brands.

After many years of intensified competition from American giant Nike in the football arena, European behemoth Adidas has come striking back with this bold deal.

Adidas chief executive Herbert Hainer said the deal would help the firm "to further strengthen our position in key markets around the world".

He added: "We expect total sales to reach £1.5bn during the duration of our partnership."

Notably, as the incumbent kit supplier, Nike was given first refusal on an extension with Manchester United and had the right to match any offer. They chose not to move forward.

This is a clear statement of intent by Adidas that it is taking the fight against its competitors to a new level. Last night the BBC reported that in trading on the German stock exchange on Monday, the firm's shares closed up by 2.73%.

Adidas also supplies Bayern Munich, Chelsea, AC Milan and Flamengo. From the 2015-16 season, they will also provide kit for Juventus. 

The Manchester United and Premier League brands also come out winners

The deal also acts as a massive boost for Manchester United, following the turmoil of its worst ever season in the English Premier League. 

It is a renewed vote of confidence in the club’s brand as the world’s leading internationally supported football team, and will serve to reinforce the club’s pre-eminent position.

Coupled with this, the fact that this huge agreement has been signed with one of the EPL’s leading teams will shore up the image and reputation of the league as the best and the most competitive in the world. In spite of England’s disappointing early exit from this summer’s World Cup finals, the deal ensures that English football remains centre stage.

With Nike supplying the losers in the World Cup, and England’s ailing national team, what will their next move be?

Getting the content right for marketing with the newest technology.

Is it all just a case of “the Emperor’s new clothes”?

Do the more things change; the more they stay the same?

And what has Ryan Gosling got to do with all of this?

The other day, during a moment of reflection, it occurred to me how fast and how drastically my world has changed, thanks to technology, how I’ve adapted to it, and how those reaching out to me as a reader, customer, or consumer, have had to sweat blood to keep up with the pace of change.

In danger of sounding like a grandfather pointing across the city and saying to his grandchildren, “I remember when this was all fields,” it seems only a heartbeat ago when my consumption of media, advertising and marketing was considerably different to what it is today.

Six years ago I had a Blackberry – the old blue one with the grey screen, and I thought I was cooler than Ryan Gosling, because I could get my emails on the move, and even check the internet . . . slowly . . . very slowly.

Forgive the reference, and the wafer-thin excuse to include a picture of the ridiculously talented and unfeasibly handsome actor. I’m hoping it will help get your attention ;-)

Before this, my mobile phone could call and text people, and that was it. And if we go back into pre-history, I finished a PhD without having access to the Internet. To get my information I visited large dusty buildings called libraries that held thousands of terabytes of data in individual packets called books and journals, made of an ancient tree-pulp called paper.

I consumed news by reading newspapers and magazines . . . hard copies, each purchased separately. My consumption was limited to what the editors of these publications chose to publish and it was limited to when it was feasible to read it, at home, at my office desk, or on public transport.

In the last five years, I’ve been dragged kicking and screaming into the 21^st century and the world of smartphones, mobile Internet, and apps. My consumption of information has increased, and comes from a wider and wilder variety of sources, shared often through social media. These sources are text, audio and video and are often interactive, inciting my comments and responses, encouraging my participation. I write my blog and consume others, so I have become more than a consumer. I am part of what I consume.

I’m pretty certain that my experience is quite typical, and it’s something that savvy marketers have sought to keep pace with. With the introduction of Google Glass and the imminent arrival of smart watches, a new evolution is upon us. Whether these technologies will be widely adopted remains to be seen, but what is certain is that if they don’t, others will soon follow in their place, and marketers must keep up with change. 

 

Raj from "The Big Bang Theory" with his Google Glass, proving that moving with the times isn’t rocket science

 

New media are constantly being dreamed up to deliver messages, and messages are being tailored to these new means of delivery. Brands are now just as likely to create compelling promo mini-movies for sharing on social media rather than typical adverts. Just think of the amazingly creative output that the likes of Adidas, Nike and Beats by Dre released for the World Cup.

Arguably the march of technology makes real Marshall McLuhan’s famous maxim, “The medium is the message”, because changing media changes the shape of messages. Twitter vindicates his thinking. The imperative of publishing something significant in 140 characters or less barely existed before Twitter, outside of tabloid newspaper headlines.  Now look at its power and reach. And consider the salutary tale of Kodak, who failed to move sufficiently with the times, and who suffered as a result.

Furthermore, we are bombarded with information 24/7 on increasingly personalised devices. This deluge of information seems to require ever shorter and punchier sound-bites, in what some would see as a reductio ad absurdum that has resulted in a never-ending torrent of banal tweets. However, is this really the case?

When it comes to the crunch, as much as we’ve become information junkies, whether it be for political news, sports results, celebrity gossip or the newest, most cutting-edge product and entertainment releases, we want to know that what we’re getting is the real deal. In short, we want good quality content from the best sources. But with this proliferation of information and sources of information, how can we be sure that we’re getting it? Is the stuff we’re seeing, hearing and reading from all over the place often insubstantial hearsay, rumour and nonsense,  just like the Emperor’s new clothes?

Example: As a fan of Tottenham Hotspur FC, I have seen numerous online sources throughout the late spring and early summer, that claim to have leaked pictures of the club’s new football shirts for the 2014/15 season, produced by Under Armour. The official release isn’t until the end of this week. I have no way of knowing if what I have seen is the real product or not, or whether the sources of these leaks are reliable. Consequently, I crave the real thing. Yes, this might be a cunning guerrilla PR tactic by Under Armour, in order to raise fans’ interest (who knows?), but it still leaves us wanting the authoritative release.

So, those soothsayers that have endlessly rung the death-knells of traditional media may be mistaken, providing that traditional media continue to heed the warning to adapt or die and providing they continue to provide the best quality content. Why? Because these media themselves, (such as Time Magazine, The New York Times, the Financial Times, CNN, the BBC to name just a few) are brands in their own right. Alongside “big” newer names, like Mashable, The Huffington Post, TechCrunch and Venture Beat, to name but a few, they have built up a reputation and a level of trust amongst audiences for the content that they provide. Nowadays, reputations can rise and fall faster than ever, for sure, but it remains true that they must be earned, so through the cacophony of noise, these names can continue to have a larger influence than most, providing they remain nimble and providing their content remains good. So, the more things change, the more they stay the same. What’s important is that good content is King.

Brands can learn a thing or two from this lesson. By becoming sources of great, reliable and authoritative content that’s flexible for all devices, and that adds real value to their customers' experience, they can remain front of mind with consumers, and maintain their value with their precious target audiences.

 

Google, the Right to be Forgotten, and Digital Freedom

In this blog post, I’m going to attempt to address a complex issue. I do so with some apprehension, but I’m giving it a shot anyway, because I’m here to raise questions and a bit of debate. So I figure that even if I receive a chorus of disagreements and corrections, it will be a useful and educational experience.

  

Google recently got a lot of attention when it informed publications that some of their stories had been removed from its search results after it had received “right to be forgotten” requests. Publications like The Guardian newspaper in the UK protested bitterly, and Google restored some links.

For those that haven’t been following this, the situation arose from a European Court of Justice ruling. A Spanish man brought a case against Google. He demanded that a link be removed to an article in a newspaper published in 1998, about an auction for his foreclosed home, because he subsequently cleared his debt. Notably, there was no argument about the legality and accuracy of the story. The ruling focused on the effect its continued visibility in search results was having on the gentleman’s life and work. The court ruled that search engines like Google are responsible for the content to which they link and so they were required to comply with EU data privacy laws.

Already Google has received tens of thousands of requests to have information removed. However opponents feel that this is censorship by the back door.

So who was right? Was Google right to remove search results so quickly, or were its critics right for requesting their reinstatement?

It seems to me that Google got caught between a rock and a hard place. When European law comes knocking, it’s difficult to ignore it. Indeed, it would look arrogant to do so, and it could be potentially costly, both reputationally and literally for the company. So, from the point of view of protecting the company’s reputation, taking swift action seemed to be a sensible thing to do.

Nevertheless, this didn’t take into account that the object of this action would be the very people that would be its biggest critics, namely the media. Google put itself in danger of aiding censorship.  Plus, it didn’t seem to tackle the fact that EU jurisdiction is just that – Europe only – and its laws and guidelines don’t necessarily apply in other jurisdictions. Media freedom in the UK and the USA for example is arguably greater than in Continental Europe, and the media in these nations fiercely resists legislative regulation and restrictions of its freedom to publish.

Furthermore, much of what Google does is simply to list information that is published elsewhere. To de-list it would be to effectively deny its existence. That seems somewhat sinister and Orwellian.

 

So in a nicely fudged outcome, equilibrium appears to have been maintained. Google was responsive both to the European Court and its critics.  The court itself has emerged as a rather blunt object, whose judgement could need sharpening, but I’ll leave that argument for the legal experts.

When do clients go bad?

• Do agencies have a moral responsibility to the public as well as their clients
• Which comes first: client loyalty, or the public interest?
• Where and when should agencies draw the line and “fire” client
• What do you think?

Just this week, these questions have arisen in a surprisingly understated way during an otherwise high-profile case in London.

To the shock of the UK public, the 84-year-old children’s television personality, Rolf Harris, was found guilty on Monday (30 June) of multiple counts of sexual assault on young girls, in incidents dating back decades. He will be sentenced on Friday (4 July).

The Guardian, The Independent and The London Evening Standard newspapers, among others, included in their reports the detail that the PR and communications agency, Bell Pottinger, had been employed by Harris and his defence team, for media representation and media monitoring.

Following the verdict, this fact makes for quite uncomfortable reading from a PR and marketing professional’s point of view, and raises some equally uncomfortable questions:

• Did Bell Pottinger know all the facts of Harris’s defence prior to the trial, and were they convinced of his innocence when they took on their task?
• Or did doubts about Harris’s innocence exist, and did they take on the task anyway?
• Did Bell Pottinger only become aware of Harris’s guilt during the proceedings, and did they have an option to pull out of the task?
• Were there any members of the Bell Pottinger PR team on the Harris account who had reservations about it, and were they able to articulate them, and choose not to work on it, as details emerged?

I don’t know the answer to these, and it would be wrong to speculate, but they show that sometimes clients’ conduct can raise difficult issues for agencies, and it makes me wonder whether agencies should make the difficult decision to stand a client down.

With the benefit of hindsight it would be easy to express disquiet at Bell Pottinger’s involvement, but that would be a wrong and lazy judgement. Until the verdict was handed down, Harris was innocent until proven guilty. No agency of any kind has the qualifications or the right to hand down a legal judgement of their own. That is the court’s imperative. Innocence must be presumed, and so arguably, from a company perspective, they have been working for an innocent man. This being the case, there is no moral double-standard.

Besides, this is simply an extreme example of the type of potential conundrum that agencies face all the time.

Agencies across the globe are employed at great expense (for clients, and at huge profit for the agencies) by businesses that others find morally distasteful for a variety of reasons. Campaigners against big pharmaceutical companies argue that they manipulate the market and manufacture demand for their drugs, and their agencies help them achieve this. The fast food industry is accused of encouraging our children to eat junk and of threatening the health of nations. Food and drink companies are berated for pushing us a harmful diet of fats and sugars. The spotlight is turned on big retailers for exploitative employment practices. International clothes manufacturers are taken to task for using slave labour in developing countries. Even the tobacco companies employ their lobbyists, PR and advertising people. The list goes on, and in all cases, opponents of these companies can accuse agencies of being complicit with them. Just watch the movies “Thank You for Smoking” or “Fast Food Nation” for a couple of great examples.

But the companies themselves have counter-arguments. They are meeting a demand. They have corporate social responsibility policies and manifestos. They create jobs. Their list also goes on. They believe that they are providing customers and consumers with benefits (many people would say the tobacco industry is an exception to this), and they employ agencies to communicate these benefits.

Having worked in a number of agencies, I feel sure that any agency worth its salt does not knowingly and wilfully take on a client whose business practices are questionable. But standards change, laws change, suppliers and practices change, and what was once acceptable or ignored can become unacceptable and contentious.

In these cases, is it the agency’s role to encourage the client to change?

What if the client refuses and a line is crossed?

When do clients go bad, and what should agencies do when it happens?