UPS AND DOWNS ON THE GLOBAL “BRANDSCAPE”
UPS AND DOWNS ON THE GLOBAL “BRANDSCAPE”
Wednesday, 29 November 2006 09:31
Congratulations to 98.4 Capital FM on their tenth anniversary! The radio station brand remains the oldest independent FM radio brand in Kenya. As it grows its audience and expands its reach it is now being forced to rethink its brand name. The 98.4 in the name is slowly but surely being pushed to the fringes of irrelevance. “98.4 Capital FM” is known as “93.0 Capital FM” in Western Kenya for example, wrecking havoc to what should be a consistent brand name. It begs the question, “Is 93.0 Capital FM a different brand from 98.4 Capital FM”? Including the frequency in the brand name did have a role to play in getting listeners to know which frequency to tune into and hopefully make sure their radio doesn’t “shika” anything else. Progress and the relentless march of time have turned the strength into a weakness and in the process turned what was a headline into a mere footnote. Remember KTN Channel 62?
Still on Capital FM, for a few days several weeks ago, the radio station had something interesting going on. Marcus Kwikiriza and Seanice Kacungira, both of Ugandan origin got a change to rule the Kenyan airwaves as co-presenters on the morning show and did a great job of it! That got me wondering; is this is a sign of things to come? Is Brand East Africa already here with us while the politicians continue to spend months and scarce shillings negotiating “Brand East Africa”?
Nairobi now has another radio station. It’s called HOT 96FM.
“Toyota to overtake GM as world's top car firm in 2008”, declared a headline on The Independent newspaper. In the article penned by the UK based newspaper’s Business Editor, Michael Harrison wrote of how Toyota unveiled plans to add sufficient new manufacturing capacity over the next two years to build an extra 1 million cars and overtake General Motors as the world's biggest car company. The Japanese manufacturer forecast it would sell 9.8 million cars in 2008 compared with 8.85 million this year. GM sold 9.17 million cars and trucks last year and sales are not doing too well. The relentless rise of the Japanese company is in stark contrast to the turmoil which has engulfed Ford and GM, both of which have embarked on drastic rationalisation programmes involving tens of thousands of job losses and widespread plant closures in the US. Toyota, already the world's most profitable car maker, now outsells Ford in its own domestic market. This turn of events in the car market is a testament to everything positive about competition among brands. Al Ries, the father of positioning once wrote, “The best thing that ever happened to Coca-Cola was Pepsi-Cola”. Brand choice stimulates demand. GM will probably live to say the best thing that ever happened to them was Toyota. They, like Coca-Cola then, probably don’t see it that way.
GM is not taking its downturn and Toyota’s fortunes lightly. In an unprecedented move, the troubled firm reached out to Nissan-Renault for a possible alliance that would have seen the group control a quarter of the world’s car market. "Nothing!", is the answer veteran analyst Maryann Keller had when asked what Renault, Nissan or GM would get out of creating a three-language, three-culture entity. In terms of brand building, I see no benefit either and neither did the GM board when it eventually unanimously voted against the move. Remember the Adidas-Reebok boardroom marriage? All it did was create a sportswear cartel that is making more money for both brands at the expense of competition and not building the industry as great world class brand rivalry should do.
Meanwhile, on the local supermarket shelves (Uchumi thankfully now included), the toothpastes are at it again with their endless line extensions. And the names are getting even more interesting. The new grandkids on the Close Up block include Close Up Flavalicious, Tangerine Burst, Flavalicious Luscious Lychee and Flavalicious Choco Loco. The line extension saga just doesn’t stop. My bet is it shall not be long before the competition shadows these moves almost blow for blow.
Elsewhere on the globe, life doesn’t seem to be so flavalicious for the chocolate brand, Smarties. Nestle plans to axe a total of 645 jobs at the Rowntree chocolate factory in York, United Kingdom. Several brands are also set to “die” with fifty percent of the brand portfolio being culled.Nestlé is axing one in four jobs at its Rowntree chocolate factory in York and halving the number of brands made in the city in its biggest shake-up of the iconic plant since the Swiss food giant bought the UK company in 1988.Its decision to cut 645 jobs at the York site heaps further misery on a city that has already endured more than 1,000 job losses in recent months and seen Kraft close down the Terry's Chocolate Orange site. Nestlé has already cut 234 jobs at its Rowntree site this year.
The Swiss group is cutting the city's ties with some of Britain's best-known chocolate brands, including Smarties, which will be made in Hamburg in the future. Four other brands will disappear from York, including Black Magic and Matchmakers.
In a further insult to York's chocolate heritage, Nestlé plans to sell off the oldest parts of the Victorian factory, putting almost half of the 170-acre site on the market. It will invest £20m of the proceeds on improving the slimmed-down plant, which will remain home to Kit Kats, Yorkies, Aeros, Polos and Milkybars.
Paul Grimwood, the new managing director of Nestlé Rowntree, said the restructuring would "safeguard" the future of the York site, which has been plagued by rumours that it also faced closure, and provide job security for the factory's remaining 1,800 staff.
Union bosses attacked the proposed redundancy plan, which they blamed on a lack of past investment by the Swiss company. John Kirk, the GMB organiser, said: "Nestlé took the profits from the brands year in and year out, and Nestlé themselves failed to invest adequately in the plant and building in York. To use this neglect as the reason to move heritage brands to plants overseas where Nestlé did invest is not acceptable. The move will be fiercely resisted."
Nestlé said it hoped at least half the job losses, which start next year, could be achieved through voluntary redundancy or early retirement.
The losses come a week after Aviva, which owns Norwich Union, announced 450 job cuts in York and follow losses at British Sugar and Terry's. City of York Council said it would seek to attract jobs to the area through initiatives such as Science City York.
There was uproar when Nestlé bought Rowntree, which at the time was the biggest-ever foreign takeover of a British company at £2.5bn. Despite intensive lobbying, the competition regulator waved through the deal.
In a further insult to York's chocolate heritage, Nestlé plans to sell off the oldest parts of the Victorian factory, putting almost half of the 170-acre site on the market. It will invest £20m of the proceeds on improving the slimmed-down plant, which will remain home to Kit Kats, Yorkies, Aeros, Polos and Milkybars.
Cigarette brands worldwide are in trouble as usual – this has become a way of life with market share and survival being protected by lawyers rather than marketers. One might ask the cigarette brands, “What do you expect when you always play with fire?” A class action suit filed in the United States threatens to wipe out billions of dollars from the books of tobacco companies. The legal suit which is being dubbed the Schwab case alleges that tobacco companies, among them, Philip Morris, R.J. Reynolds and British American Tobacco are defrauding smokers when they sell “light” cigarettes as a “healthier” option when they are in fact just as deadly as regular cigarettes. Some skeptics are even seeing this as “organized crime” which could see the $200billion lawsuit become a $600 billion whitewash!
The Mel Gibson and Disney brand now appear to be strange bed fellows following the actor’s summer drunken exploits which came with an anti-Semitic outburst topping. The Disney brand portrays a family friendly orientation while Mel, not for the first time has acted in a less than family-friendly manner. Mel Gibson’s latest production, “Apocalypto” is set to be released by Disney and it shall take millions in PR to attempt to repair the damage of one too many bottles of unholy spirits. What this highlights to our brands is the issue of brand association. Any brand with links to your brand can cause positive or negative impact on your brand. As the old adage goes, you are judged by the company you keep. Keep your friends close and your enemies even closer will need to be re-written to read “keep your brand’s competition close and keep your brand associates even closer”. They can potentially cause more damage than your fiercest competitors.
© Brandscape
First published in SOKONI magazine
