Tag Archives: brand reputation

Unconscious Corporate Leadership: Short-term results-oriented mindset and strategy with negative consequences

By James D. Roumeliotis

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When you are the top executive of a corporation, you are supposedly quite conscious of your business activities. You are also the chief strategic planner and implementer. The path you take the company through can be one the consumer and public in large will either admire and respect or despise and hold in contempt. Good news! A business can do good for the consumer and the ecological footprint while growing the business and increasing profits methodically. A savvy businessperson and executive know how to do this. A disgraceful and incompetent one either has no clue, does not care, or both.

Small to medium sized businesses owned by a person or a family, often since decades, keep seriously in consideration their business and its reputation as their personal honor. They think long term. Unfortunately, at many big companies, such as publicly traded automobile manufacturers, emphasis is mainly on satisfying shareholders through quarterly share prices…whether organically or artificially. Most of the time it’s the latter growth. That’s tremendous pressure on everyone at the helm.

Despicable companies: Prime examples that make you cringe

  • The Boeing brand reputation bruise following its sprint to launch the 737 Max 8 & 9 commercial passenger jets despite its safety and design flaws.

Following two air fatalities in a short period of time along with constant denials and lack of responsibility by Boeing,  the aircraft manufacturer with pedigree finally admitted its shortcomings of its newest passenger jet.  The company should have known better. They rushed to launch the 737 Max due to competitive pressures. Armchair public people think it was a software problem. It was beyond that. It is a structural problem that affects flight dynamics. Both the center of gravity and the mass moment of inertia (in engineering lingo) are too far forward. This causes the nose to dive. The MCAS is just a make-shift for the problem. A single reliable measurement and display of Angle of Attack (AOA) sensor rather than typically two was an additional negligence on the part of the design. Last but not least, the lack of training and written Airplane Flight Manual (AFM) instructions, along with an unproven useless hazardous algorithm, compounded the risks.

This pragmatic author’s take on this one is; Boycott this jet indefinitely. First and foremost for your safety and second, to make a bold statement that the way the whole matter was handled is despicable for the brand whose paramount responsibility is passenger and crew safety.

Unfortunately, many organizations fall victim to ineptness that Boeing did.

  • Why do you think a company which hires and contracts missionaries changed its name from Blackwater to XE, and then Academi? According to source Wikipedia, “Academi is an American private military company founded in 1997 by former Navy SEAL officer Erik Prince as Blackwater, renamed as Xe Services in 2009 and now known as Academi since 2011 after the company was acquired by a group of private investors. The company received widespread notoriety in 2007, when a group of its employees were convicted of killing 14 Iraqi civilians in Nisour Square, Baghdad for which four guards were convicted in a U.S. court.” Quite the business to aspire to operating. Imagine the amount of exposure to liabilities. How well does Erik Prince, its founder and strategist sleep at night? Not caring a whit as long as he is increasing his wealth, that’s what matters to a sociopath.
  • Monsanto, the company everyone loves to hate (except for its enablers). For some decades, the crop chemical company produced and profited from the chemicals that caused destruction, wiping out millions of species by spreading poisonous agrichemicals, destroying our fragile ecosystems, poisoning our soils and entire web of life, undermining every aspect of our lives for financial profit. It also made users vulnerable to the lethal cancerous ingredients. Monsanto is better known as the company which introduced the GMO on your plate, as well as for the popular weed killer herbicide The Monsanto Bayer merger is a great brand strategy for Monsanto. Destructive conglomerates marry each other. However, “Bayer [does] significantly better public-relations work than Monsanto, but that’s it,” contends Antonius Michelmann, CEO of the Coalition against BAYER-Dangers. “Both, Monsanto and Bayer are poisoning and immediately endangering animals, plants and human life. Both care just about profits and nothing else.” Much said!
  • Johnson & Johnson (J&J), the drug giant, known for its baby products, was accused of deceptive marketing conspiracy, by the State of Oklahoma, to drive up sales of its powerful opioid Duragesic painkillers. The state is claiming that J&J worked to aggressively promote opioids to people who did not need the drugs so as to compete with Purdue Pharma. J&J deliberately ignored warnings about addiction and death.

According to Anti-Media, a non-partisan, anti-establishment news publisher and crowd-curated media aggregator, compiled a list with the 10 worst food companies, with genetically modified faux food. The top five (quoted from the source) are:

#1 ConAgra: Their family of brands include Hunt’s, Marie Callender’s, Orville Redenbacher and many others. The compony was found guilty of “health code violations and bacterial contaminations at its food processing facilities, which have endangered consumers and in some cases been linked to deaths.” They’ve also concealed the use of GMOs in their products and practice unethical factory-farm sourcing.

#2 General Mills: Trisodium Phosphate (also known as TSP) is an additive and flavor enhancer found in thousands of frozen and processed foods, including kids’ cereals. It also happens to be an ingredient that was used in industrial cleaners

#3 Kraft Foods: Their Mac N’ Cheese has a golden looking tone to it thanks to  the artificial coloring agent Yellow No. 6 which it uses. However, it has been linked to hyperactivity, asthma, skin conditions and unsurprisingly even cancer. In 2013, following intense pressure, the toxic food company finally removed the artificial coloring. Kraft also hides the presence of GMOs in their foods

#4 Heinz: It merged with Kraft Foods in 2013 (bought by Warren Buffett’s Berkshire Hathaway and the private equity firm 3G Capital). Both brands instantly became partners in food crime for the sake of cost cutting and higher profits yet at the health detriment of their customers at the kitchen table. What Brazilian 3G Capital has purchased (past and present), it turned into disasters with its aggressive at-any-cost cutting. Speaks volumes of the people pulling the reins at the very top. It doesn’t take a psychotropic individual or anyone with an MBA to simply cost cut to increase profit. Anyone can do that. However, it take a contriver with humility and with a long-term view to increase sales and profit more cleverly.

#5 Campbell’s Soup Company: The brand has been sued for hiding the presence of GMOs and for labeling foods as low-sodium when they contain as much salt as regular products. The average cup of Campbell’s soup contains a staggering 850mg of sodium. Unless that’s your only major meal of the day, consuming it means you’re risking heart attacks, diabetes and high blood pressure. Just as importantly, if not more so, is the fact that for many decades, Campbell’s has lined its epoxy-resin cans with the toxic chemical, bisphenol A (BPA). “BPA has been linked in lab studies to breast and prostate cancer, infertility, early puberty in girls, type-2 diabetes, obesity, and attention deficit hyperactivity disorder,” according to Breastcancerfund.org. Only recently did the company finally bow to pressure and phase BPA out of its production.

Other repulsive processed food and beverage culprits on the list (in chronological order), which shouldn’t be raising any eyebrows, include Coca Cola, Nestlé, Kellogg’s, PepsiCo and Hershey’s.

The only method the above brands are responding to their sliding market share, revenues and much more is by utilizing their available cash to purchase health food and functional beverage young companies. These ships are too big to change course despite their plethora of resources.

Seems it is a prerequisite for success that an established food company ought to actively lie to their customers to retain and perhaps grow their business. That worked in the short term.

Here is something off the beaten path compared to the above businesses but with a huge eye sore in terms of their business practices. True story. An American tourist from NY, during his stay on a popular seaside oyster bar on the Greek island of Mykonos in May 2019, paid 836 Euros (about 938 USD) for Calamari (fried squid), a bottled waters, and a couple of beers. Following this outcome, the tourist trap had a slew of complaints and dreadful reviews on Tripadvisor.
Read at this link: https://www.tripadvisor.com/ShowUserReviews-g659660-d129913…

However, the unmoved owner justified his reasons with audacity. The business will surely not remain open for much longer, thanks to short-sightedness. At this day and age…most notably due to the powerful influence of social media, this business practice will not survive for too long.

How to focus on conscious leadership

Typically, private and family remodeling business in various industries put their name on and behind the business. With privately held companies, they are in no pressure to dumb down the products to calm down investor impatience. Instead, companies such as British company Dyson with its dynamic team of engineers do what companies, private or public, should always be doing: innovating with practical new products and refining existing ones.

It is very common in popular culture to see business owners as greedy, selfish, revenues and profit at any cost with no regard for employees or customers. However, this usually applies to public companies who simply bow to their shareholder expectations. A business should be viewed as a sacred obligation to employees, customers, suppliers and everyone who is directly or indirectly impacted the business and its executives. The internal culture is one which ensures the customers are given superb value and great customer service, and by going to great lengths to ensure employees are well taken care of. In addition, treating all vendors, suppliers, service companies, etc. with respect. While our business directly impacts the lives of several hundred people it indirectly impacts the livelihood of several thousand. Therefore, it is critical that  high standards are maintained as the cost of negligence or failure is too high. Money can be earned doing things with conscience…it may take longer but the impact will remain positive and sustainable.

Sadly, the fabric of today’s corporate world is dominated by considerations on shareholder returns at the detriment to innovation, goodwill, reputation, customer service and quality products. The conscious captains of industries are the heroes. Few and far between.

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How to Blemish Your Brand and Lose Market Share Due to Short-foresightedness: The Trouble with Major Food Brands

By James D. Roumeliotis

Nestle

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Yours truly, who took the audacious dive into the functional food and beverage business as a start-up and has presently taken it into the early stage phase, is having a field day reading about the challenges and frequent plethora of lawsuits brought about by consumers who have had enough of the deceit of the major food and beverage brands.

Once upon a time, during previous generations, renowned household brands such as Kraft, Kellogg’s, Pepsi Co. and General Mills, among many others, who once dominated the supermarket shelves along with loyalty.  Today, through their complacency and/or (as public companies) continuous pressure for quarterly sales and profit results mount, as well as through their cunning practices, we notice a backlash from food shoppers – most notably the more health conscious and finicky Millennials.

What Gives in the New Normal?

Today, consumers are more health conscious. This justifies the constant and extensive growth and popularity of the organic, non-GMO, clean label, plant based, farm-to-table and gluten-free product offerings. A large percentage of food producers of products in those categories are the small and nimble new kids on the block. They have hit hard on the established brands who are scrambling to adjust to this new reality.

Despite their vast resources and capital at their disposal, as large ships, they are not able to swiftly make the necessary reformulations or to introduce a healthier fare. As a result, the pressure from the unceasing decline of their revenues and market share are leaving them with no choice but to react, rather than be proactive.  Their path to least resistance is to acquire small health food and functional beverage brands in large numbers to compensate for their short-foresightedness.

The Permanent Health Craze

Hasty and reactive decisions, conniving strategy and foolish leadership have come back to bite them – serves them right. Use of inexpensive and toxic ingredients to engineer taste profiles and in some cases, make the products addictive, some of which include refined grains, MSG, artificial colors and flavors, high fructose corn syrup, Carrageenan and the other artificial and unfavorable which most of us have a difficult time pronouncing. Add to this GMO corn, soy and…well you get it.  More expensive and healthier options can be used but their fiscal paranoia signifies to them this will hurt their bottom line. The big brands avoid raising prices to compensate for more expensive natural ingredients despite research showing that consumers are willing to pay more for healthier choices.

Lawsuits Galore

The cause of distrust among consumers can be rationalized due to corporations misleading the public as a whole, since most of those public food producers are, first and foremost, accountable to heir shareholders. Deliberate misleading information by food producers in regard to nutritional benefits is akin to the nickel-and-diming by airlines, hotels and banks. But unlike the latter list, when it pertains to food, it is considered more critical as our health is at stake.

As a result, in the last few years, there have been frequent class action lawsuits against food and beverage companies. Everything from Non-GMO claims and the use of a better-for-you sounding ingredient such as “evaporated cane juice” rather than using the simple term “sugar” (one and the same). Such negligence and deceptive practices have made the established food brands vulnerable.

According to a Forbes August 2017 article by John O’Brien, titled “Food Companies Beware: Class Action Attorneys Aren’t Slowing Down”, it describes that  “Plaintiffs attorneys who target food and beverage companies with class action lawsuits are showing no signs of slowing down, according to analysis from international law firm Perkins Coie that also shows California’s lawyers are the most active.” Some of those lawsuits include consumers claiming they were misled into buying the product due to mislabeling.

Here is a small sample list of the shameful established food and beverage brands (click for the link to lawsuit article) with seemingly dysfunctional and old school strategies. They have become a favorite punch bag from the likes of this author along with numerous consumer groups and their hired attorneys.

Why Brand Image and Loyalty Matter

A “Brand” is a promise of something that will be delivered by a business. This promise comes in a form of quality, an experience and a certain expectation in the mind of the consumer. It includes the Unique Selling Proposition (USP). Marketing, on the other hand, is about spreading compelling messages to your target audience while branding is a combination of words and action. Marketing is extroverted and communicates quickly, while branding is introverted and a slow process if it’s to produce any real impact. Effective marketing activities are vital in developing a brand. When combined successfully, branding and marketing create and promote value, trust, loyalty and confidence in a company’s image, products and services.

According to an Edelman’s Trust Barometer, it was revealed that 77% of respondents refused to buy products from companies they distrusted. More disturbing is that 72% said they had criticized a distrusted company to a friend or colleague.

When customers are treated with honesty and delighted by a particular brand experience, they begin to bond emotionally with the brand. They become brand loyalists and advocates – buying the brand more often and recommending it to others. This behavior serves to build the brand’s reputation. This approach is priceless –even though it may take longer to take positive effect.

Brand reputation quote from Benjamin Franklin

Customers first, employees second — investors/shareholders third

In the ivory towers of public corporations, the CEO and board of directors have been programmed to put their stakeholders best interests above all else. Their mission is to do what it reasonably takes to deliver quarterly results ─ in other words, to focus on the short term rather than sow the seeds and do what is most beneficial for the future direction of the company ─ despite any short-term pains. Savvy and considerate top management know better that customers and employees are the two key drivers of corporate success.  The main principle is that if employees have a positive attitude, are passionate, well trained and competent, results will be reflected through positive customer experiences resulting in brand loyalty. Ultimately, the shareholders will reap the benefits through stock performance and generous dividend distributions.

Large well-established companies have several advantages over smaller ones mainly due to their imposing size, their brand recognition as well as for their plethora of cash and human capital. However, despite their deep pockets and plethora of resources, they are risk adverse, bureaucratic in their decision-making process and to some extent, disengaged from their customers. Moreover, if they are a public company, their initial allegiance is to their shareholders.

Start-ups and smaller businesses, on the other hand, have less money and resources at their disposal to grow or even compete in the unapologetic and competitive landscape. Yet, the small business is agile, nimble and creative and possess several advantages such as a clean slate, rather than the baggage many large corporations have been carrying over the years, as well as perceived as more trusting by consumers, further engaged with their customers, and a refreshing alternative to the established brands – provided the products offer unique and attractive characteristics.

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The Authentic Brand: A Precious Asset Developed Through Transparency, Customer Experience and Ultimately, Loyalty

by James D. Roumeliotis

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Honest by ad. A pioneering company launched in January 2012. The company is unique in communicating about the supply chain of its products and pricing.

Honest By ad. A pioneering company launched in January 2012. The company is unique in communicating about the supply chain of its products and pricing.

Trust is a hard thing to come by these days whether between people or between people and brands. When the founders of a start-up build a brand from the ground-up or the executives of an established one are in modus operandi mode, taking a cautious approach to their brand image, in both scenarios, ought to be part of growing and preserving the business with a constant eye on the future.

Sadly, nonsense, and plenty of it from ubiquitous brands, is probably the best noun to describe what consumers are offered by many companies selling their products and services to them. Whether it is advertising, package labeling or an overstated pitch by their sales staff, the information presented may be deliberately misleading. With some brands, it is the tiny print in disclosure statements which defeat what is promised in larger and bold advertising headings. The majority of consumers do not read small footnotes. Think of the worst offenders of this practice: the cellular phone/telecommunication providers, insurance companies, credit card providers, as well as the automobile manufacturer promotional offers and pharmaceutical advertisements – to name a few.

Deception concealed as sincerity: How to chip away at your brand

The key to a successful business growth, along with reputation, is truth in advertising, delivering on promises made, avoiding deceit – and marketing the brand, not the product. Contrary to popular belief, a brand is not a logo, label or product but rather a relationship with customers. It is a promise. Branding, when carefully executed, adds value to a company including brand equity. This is considered intangible brand value. By applying a short-term revenue and profit strategy at the expense of long-term negative consequences, a business’s brand reputation will ultimately lose its luster.

In the 2015 Harris Poll Reputation Quotient®, published the reputations of the 100 most visible companies among the U.S. general public. What appears on the top five, among other notable brands as consumers perceive them, are Wegmans Food Markets, Amazon, Samsung, Costco and Johnson & Johnson respectively.

Consumers have high and explicit expectations from brands, thus anticipate what the brand promises via its marketing material and/or what is stated on the product packaging. What a brand actually delivers and how it behaves in the process is what consumers get to feel.

A brand which utilizes short-term sales and marketing tactics for quick short-term gain fails financially in the long-term by acting in an ethical way. As marketing maven Seth Godin rightfully proclaims, “In virtually every industry, the most trusted brand is the most profitable.” As with our personal lives, trust with branding is based on what one does, not what one says.

Boosting sales and market share via misleading and deceptive tactics

According to a 2013 Harris Poll, regarding the most and least trusted industries, the advertising industry was near the bottom of the list when rated up against many other business sectors. Seemingly, truth in advertising is a misnomer. Misleading and deceptive advertising by many marketing and branding executives, give the entire industry a negative perception.

The food processing domain is no more honest with labels that claim to be healthy but without support with any concrete scientific facts. Food companies tout their devious label claims of organic, nutritious etc. – although an absurd amount of sugar and/or sodium is present in the ingredients along with unnatural artificial ingredients). Kelloggs even went as far as having to be ordered, by the courts, to discontinue all Rice Krispies dubious advertising which claimed to boost a child’s immunity system.

Then there is the “premium” orange juice from popular brands such as Tropicana, Simply Orange and others which are highly processed, and usually stored for several months before reaching consumers at the supermarket fridge aisles. This processing method is used to retain the juice from spoiling. However, during that process, it also strips the flavour which is injected back into the product, once it finally gets packaged, to give the juice its original orange flavour. Not surprisingly, the orange juice producers do not make any reference to this anywhere.

Informative and authentic eye-opener documentaries such as Food Inc. and Tapped have upped the ante in terms of the exposure shared with the public to what is wrong with the food processing/food chain and water bottling sectors respectively. Moreover, the GMO debate with the exceptionally well-connected and deep pocketed Monsanto (the St. Louis-based biotech giant and world’s biggest seed seller) will not be going away any time soon.

Other industries notorious for deceit are banks and cellphone/telecommunication companies with their hidden fees. These blatant revenue generators are sales at any cost – short-term gains, of course. These companies guilty of gouging seem to be testing the limits with consumers – as if the latter are ignorant. Those absurd fees evidently enrage the culprits’ customers.

Employees reflect the brand

First and foremost, trust begins with company employees. If they are well trained and treated with respect and transparency, the employees will trust their employer and radiate their enthusiasm, as well as loyalty to their customers by going the extra mile.

Along with a brand being a valuable asset for any business, people also fit into the equation as an important asset. This is where hiring the right people, on-boarding them, training them adequately and empowering them all create a positive impact on customer satisfaction.

Many brands are myopic to the point that they unintentionally and unknowingly allow their dissatisfied customers to go away without a thought. Front-line staff is either not trained properly and/or lacks the proper attitude to handle clientele appropriately.

During the industrial era, consumers would simply purchase what was produced, shopping where that product was available and paying the price the retailer demanded. In essence, the manufacturer and the store were in position of strength. As products and consumers have changed over the years, the concept of ‘brand loyalty’ and ‘consumer insight’ came about. As we progressed into the new millennium, the transparency and unrestricted information available on the internet has changed all of that. Today consumers are not only better informed but they are also in control. They can make or break a brand through their actions. So what does this say about listening – and acting?

Consumers will no longer refrain from informing companies on what may have gone wrong ─ whether it’s a particular brand or a competitor’s. With the numerous platforms for consumers to make their voices heard online, brands have to be very reactive and not allow anything to chance. In an age when the consumer’s outcries and influences spread quickly, the results can signify lost sales and a deterioration of brand loyalty.

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When all is said and done

Building and nurturing a brand is what makes an enterprise gather wind under its wings. Common intelligence dictates that the way a customer is dealt with reflects on the integrity of the brand, and the image of the company in the mind of the consumer.

A “Brand” is a promise of something that will be delivered by a business. This promise comes in a form of quality, an experience and a certain expectation in the mind of the consumer. It includes the Unique Selling Proposition (USP). Marketing, on the other hand, is about spreading compelling messages to your target audience while branding is a combination of words and action. Marketing is extroverted and communicates quickly, while branding is introverted and a slow process if it’s to produce any real impact. Effective marketing activities are vital in developing a brand. When combined successfully, branding and marketing create and promote value, trust, loyalty and confidence in a company’s image, products and services.

According to an Edelman’s Trust Barometer, it was revealed that 77% of respondents refused to buy products from companies they distrusted. More disturbing is that 72% said they had criticized a distrusted company to a friend or colleague.

When customers are treated with honesty and delighted by a particular brand experience, they begin to bond emotionally with the brand. They become brand loyalists and advocates – buying the brand more often and recommending it to others. This behavior serves to build the brand’s reputation. This approach is priceless –even though it may take longer to take positive effect.

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