This week: marketing on the defensive; or how Kraft, the food company, and Orange, the mobile telephone network, tried to make the best of a bad situation.
There is no doubt Kraft has acted smartly in coming out with a public mea culpa on the issue of obesity. By doing so, and by proposing remedial measures such as downsized portions, a healthiereating programme and an end to marketing in schools, it has seemed to position itself ahead of events. Note that it is not the first food major to move in this direction: Mars and PepsiCo have already announced cuts in hydrogenated fat content (the symbolic obesity ingredient). But the comprehensive response, careful timing and – key point – partial admission of responsibility mark Kraft’s initiative as a turning point.
Need it have gone this far? Despite growing medical evidence in its favour, the anti-fat brigade still has a long way to go before achieving satisfying results, as recent litigation against McDonald’s seems to prove. But, as part of Philip Morris, Kraft will have no wish to see a repeat of the legal circus surrounding the group’s tobacco interests, with all its catastrophic financial and PR repercussions. Kraft sees the way the wind is blowing.
Besides, in acting ‘responsibly’, Kraft is itself achieving a PR coup. Huge in the US, its brands are not so high-profile elsewhere. Yet here it is stealing a march on the likes of NestlÃ©, Unilever Bestfoods and Cadbury Schweppes. Nor need its espousal of ‘healthy portions’ be financially burdensome. Just as margins can be fattened by ‘supersizing’ products, so it must be possible to go the other way, reducing the retail price by less than the saving in ingredient costs.
Unhappily for marketers – an all-too-easy scapegoat for baying lobbyists – obesity will not be solved by marketing alone. Stripping aside for a moment the more holistic issues of exercise, television consumption and a lack of education, the obesity problem goes to the heart of company culture: shareholder value. It is shareholders, with their unrealistic expectations of growth in a mature market, who are ultimately responsible for the cost-saving degradation of food ingredients. Quality will be a more abiding problem than ‘portion control’.
Quality, or the perceived lack of it, is also at the heart of Orange UK marketing supremo Jeremy Dale’s eccentric decision to defend his strategy in public last week. In a way, it’s flattering that his brand attracts such critical attention: Orange seems still to be regarded as a national treasure – even though it’s now owned by the French. But that will be small recompense to Dale if he doesn’t pull a rabbit out of the hat soon.
The problem facing Orange is not of Dale’s making. Once, its brilliant branding carried everything before it; now its competitors have learned their lesson and caught up. They have done so at a time when it is difficult to find advantage in other aspects of the market. The land-grab phase is over, yet the public is distinctly underwhelmed by the Next Big Thing, 3G. In the circumstances, Dale’s attempt to add value to second-generation technology and to enhance the consumer-friendliness of Orange’s salesforce appears entirely reasonable. No: it’s the advertising, stupid. The brand icons devised by Mother are, in short, less than iconic. Where Monkey engaged us in a fundamentally flawed product, the rebarbative hard-nosed businessman and precocious pipsqueak Dylan achieve the opposite effect.