A letter I penned today to Prof Grant Guilford, Vice-Chancellor of Victoria University of Wellington. I support the official adoption of a Māori name (I thought it had one?) but removing Victoria is daft, for numerous reasons, not least the University’s flawed research, dealt with elsewhere.
Wellington, August 8, 2018
Prof Grant Guilford
Vice-Chancellor Victoria University of Wellington
PO Box 600
Wellington 6011
New Zealand
Dear Prof Guilford:
Re. Name change for Victoria University of Wellington
There have been many arguments against why Victoria University of Wellington should change its name. Count me in as endorsing the views of Mr Geoff McLay, whose feedback the University has already received.
To his comments, I would like to add several more.
First, since I graduated from Vic for the fourth time in 2000, branding—a subject I have an above-average knowledge of, being the co-chair of the Swedish think tank Medinge Group and with books and academic articles to my name—has become a more bottom-up affair. In lay terms, all successful brands need their community’s support to thrive. Not engaging that community properly, and putting forth unconvincing arguments for change when asked, fails ‘Branding 101’ by today’s standards. I don’t believe those of us favouring the status quo are a minority. We’re simply the ones who have engaged with the University.
As an alumnus, I have a great deal of pride in ‘Vic’, so much so that I have returned to support many of its programmes, namely Alumni as Mentors and the BA Internships. The University’s view of market-place confusion is, to my mind, a defeatist position, one which says, ‘Oh, there’s confusion, so let’s cede our position to the others who lay claim to “Victoria”.’ That’s not the attitude that I have toward our fine university.
The alternative is to stand firm and build the brand on a global scale, something that is more than possible if the University were to adopt some lessons from international marketing and branding.
I have done it numerous times professionally, and for New Zealand companies with strictly limited budgets, and the University has an enviable and proud network of alumni who, I suspect, are willing to help.
Vic has told us for years it is ‘world-class’, and I expect it to stand by those claims—including confidence in its own name, not unlike the great universities in the US and UK. A lot of it is in the way the brand is positioned. Confidence goes a long way, including confidence in saying, ‘This is the real Victoria.’
Kiwis are adept at being more authentic, something which a strong branding campaign would highlight.
As alumnus, and fellow St Mark’s old boy, Callum Osborne notes, if there is to be a geographic qualifier, New Zealand has far more brand equity than Wellington, so if a change is to occur, then ‘Victoria University of New Zealand’ is an appropriate way forward.
‘University of Wellington’ says little, and there are Wellingtons elsewhere, too.
This isn’t about apeing others, but being so distinct in the way the University communicates, symbolizes and differentiates itself to all of its audiences. To be fair, I have only seen pockets of that since graduating, yet I believe it is possible, and it can be unlocked.
Facebook’s woes over Cambridge Analytica have only prompted one reaction from me: I told you so. While I never seized upon this example, bravely revealed to us by whistleblower Christopher Wylie and reported by Carole Cadwalladr and Emma Graham-Harrison of The Guardian, Facebook has shown itself to be callous about private data, mining preferences even after users have opted out, as I have proved on more than one occasion on this blog. They don’t care what your preferences are, and for a long time changed them quietly when you weren’t looking.
And it’s nothing new: in October 2010, Emily Steel wrote, in The Wall Street Journal, about a data firm called Rapleaf that harvested Facebook information to target political advertisements (hat tip here to Jack Martin Leith).
Facebook knew of a data breach years ago and failed to report it as required under law. The firm never acts, as we have seen, when everyday people complain. It only acts when it faces potential bad press, such as finally ceasing, after nearly five years, its forced malware downloads after I tipped off Wired’s Louise Matsakis about them earlier this year. Soon after Louise’s article went live, the malware downloads ceased.
Like all these problems, if the stick isn’t big enough, Facebook will just hope things go away, or complain, as it did today, that it’s the victim. Sorry, you’re not. You’ve been complicit more than once, and violating user privacy, as I have charged on this blog many times, is part of your business practice.
In this environment, I am also not surprised that US$37,000 million has been wiped off Facebook’s value and CEO Mark Zuckerberg saw his net worth decline by US$5,000 million.
Those who kept buying Facebook shares, I would argue, were unreasonably optimistic. The writing surely was on the wall in January at the very latest (though I would have said it was much earlier myself), when I wrote, ‘All these things should have been sending signals to the investor community a long time ago, and as we’ve discussed at Medinge Group for many years, companies would be more accurately valued if we examined their contribution to humanity, and measuring the ingredients of branding and relationships with people. Sooner or later, the truth will out, and finance will follow what brand already knew. Facebook’s record on this front, especially when you consider how we at Medinge value brands and a company’s promise-keeping, has been astonishingly poor. People do not trust Facebook, and in my book: no trust means poor brand equity.’
This sounds like my going back to my very first Medinge meeting in 2002, when we concluded, at the end of the conference, three simple words: ‘Finance is broken.’ It’s not a useful measure of a company, certainly not the human relationships that exist within. But brand has been giving us this heads-up for a long time: if you can’t trust a company, then it follows that its brand equity is reduced. That means its overall value is reduced. And time after time, finance follows what brand already knew. Even those who tolerate dishonesty—and millions do—will find it easy to depart from a product or service along with the rest of the mob. There’s less and less for them to justify staying with it. The reasons get worn down one by one: I’m here because of my kids—till the kids depart; I’m here because of my friends—till the friends depart. If you don’t create transparency, you risk someone knocking back the wall.
We always knew Facebook’s user numbers were bogus, considering how many bots there are on the system. It would be more when people wanted to buy advertising, and it would be less when US government panels charged with investigating Facebook were asking awkward questions. I would love to know how many people are really on there, and the truth probably lies between the two extremes. Facebook probably should revise its claimed numbers down by 50 per cent.
It’s a very simplified analysis—of course brand equity is made up of far more than trust—and doubters will point to the fact Facebook’s stock had been rising through 2017.
But, as I said, finance follows brand, and Facebook is fairly under assault from many quarters. It has ignored many problems for over a decade, its culture borne of arrogance, and you can only do this for so long before people wise up. In the Trump era, with the US ever more divided, there were political forces that even Facebook could not ignore. Zuckerberg won’t be poor, and Facebook, Inc. has plenty of assets, so they’re not going away. But Facebook, as we know it, isn’t the darling that it was a decade ago, and what we are seeing, and what I have been talking about for years, are just the tip of the iceberg.
Interesting to get this perspective on ‘Big Tech’ from The Guardian, on how it’s become tempting to blame the big Silicon Valley players for some of the problems we have today. The angle Moira Weigel takes is that there needs to be more democracy in the system, where workers need to unite and respecting those who shape the technologies that are being used.
I want to add a few far simpler thoughts.
At the turn of the century, our branding profession was under assault from No Logo and others, showing that certain brands were not what they were cracked up to be. Medinge Group was formed in part because we, as practitioners, saw nothing wrong with branding per se, and that the tools could be used for good. Not everyone was Enron or Nike. There are Patagonia and Dilmah. That led to the original brand manifesto, on what branding should accomplish. (I was generously given credit for authoring this at one point, but I was simply the person who put the thoughts of my colleagues into eight points. In fact, we collectively gathered our ideas into eight groups, so I can’t even take credit for the fact there are eight points.)
In 2017, we may look at Über’s sexism or Facebook’s willingness to accept and distribute malware-laden ads, and charge tech with damaging the fabric of society. Those who dislike President Trump in the US want someone to blame, and Facebook’s and Google’s contributions to their election in 2016 are a matter of record. But it’s not that online advertising is a bad thing. Or that social media are bad things. The issue is that the players aren’t socially responsible: none of them exist for any other purpose than to make their owners and shareholders rich, and the odd concession to not doing evil doesn’t really make up for the list of misdeeds that these firms add to. Many of them have been recorded over the years on this very blog. Much of what we have been working toward at Medinge is showing that socially responsible organizations actually do better, because they find accord with their consumers, who want to do business or engage with those who share their values; and, as Nicholas Ind has been showing in his latest book, Branding Inside Out, these players are more harmonious internally. In the case of Stella McCartney, sticking to socially responsible values earns her brand a premium—and she’s one of the wealthiest fashion designers in the world.
I just can’t see some of the big tech players acting the same way. Google doesn’t pay much tax, for instance, and the misuse of Adwords aside, there are allegations that it hasn’t done enough to combat child exploitation and it has not been a fair player when it comes to rewarding and acknowledging media outlets that break the news, instead siding with corporate media. Google may have open-source projects out there, but its behaviour is old-school corporatism these days, a far cry from its first five years when even I would have said they were one of the good guys.
Facebook’s problems are too numerous to list, though I attempted to do so here, but it can be summed up as: a company that will do nothing unless it faces embarrassment from enough people in a position of power. We’ve seen it tolerate kiddie porn and sexual harassment, giving both a “pass” when reported.
Yet, for all that they make, it would be reasonable to expect that they put more people on the job in places where it mattered. The notion that three volunteers monitor complaints of child exploitation videos at YouTube is ridiculous but, for anyone who has complained about removing offensive content online, instantly believable; why there were not more is open to question. Anyone who has ventured on to a Google forum to complain about a Google product will also know that inaction is the norm there, unless you happen to get to someone senior and caring enough. Similarly, increasing resources toward monitoring advertising, and ensuring that complaints are properly dealt with would be helpful.
Google’s failure to remove content mills from its News is contributing to “fake news”, yet its method of combatting that appears to be taking people away from legitimate media and ranking corporate players more highly.
None of these are the actions of companies that want to do right by netizens.
As Weigel notes, there’s a cost to abandoning Facebook and Google. But equally there are opportunities if these firms cannot provide the sort of moral, socially responsible leadership modern audiences demand. In my opinion, they do not actually command brand loyalty—a key ingredient of brand equity—if true alternatives existed. Duck Duck Go might only have a fraction of the traffic Google gets in search, but despite a good mission its results aren’t always as good, and its search index is smaller. But we probably should look to it as a real alternative to search, knowing that our support can help it grow and attract more investment. There is room for a rival to Google News that allows legitimate media and takes reports of fake news sites more seriously. If social media are democratizing—and there are signs that they are, certainly with some of the writings by Doc Searls and Richard MacManus—then there is room for people to form their own social networks that are decentralized, and where we hold the keys to our identity, able to take them wherever we please (Hubzilla is a prime example; you can read more about its protocol here). The internet can be a place which serves society.
It might all come back to education; in fact, we might even say Confucius was right. If you’re smart enough, you’ll see a positive resource and decide that it would not be in the best interests of society to debase it. Civility and respect should be the order of the day. If these tools hadn’t been used by the privileged few to line their pockets at the expense of the many—or, for that matter, the democratic processes of their nations—wouldn’t we be in a better place? They capitalized on divisions in society (and even deepened them), when there is far more for all of us to gain if we looked to unity. Why should we allow the concentration of power (and wealth) to rest at the top of tech’s food chain? Right now, all I see of Google and Facebook’s brands are faceless, impersonal and detached giants, with no human accountability, humming on algorithms that are broken, and in Facebook’s case, potentially having databases that have been built on so much, that it doesn’t function properly any more. Yet they could have been so much more to society.
Not possible to unseat such big players? We might have thought once that Altavista would remain the world’s biggest website; who knew Google would topple it in such a short time? But closer to home, and speaking for myself, I see The Spinoff and Newsroom as two news media brands that engender far greater trust than Fairfax’s Stuff or The New Zealand Herald. I am more likely to click on a link on Twitter if I see it is to one of the newer sites. They, too, have challenged the status quo in a short space of time, something which I didn’t believe would be possible a decade ago when a couple of people proposed that I create a locally owned alternative.
We don’t say email is bad because there is spam. We accept that the good outweighs the bad and, for the most part, we have succeeded in building filters that get rid of the unwanted. We don’t say the web is bad because it has allowed piracy or pornography; its legitimate uses far outweigh its shady ones. But we should be supporting, or trying to find, new ways to advertise, innovate and network (socially or otherwise). Right now, I’m willing to bet that the next big thing (and it might not even be one player, but a multitude of individuals working in unison) is one where its values are so clear and transparent that they inspire us to live our full potential. I remain an optimist when it comes to human potential, if we set our sights on making something better.
Above: The Mitsubishi eK Wagon, one of the cars at the centre of the company’s latest scandal.
One thing about creating and running Autocade is that you gain an appreciation for corporate history. Recently, I blogged about Fiat, and the troubles the company is in; it wasn’t that long ago that Fiat was the designers’ darling, the company known for creating incredibly stylish vehicles for all its brands and showing how you could use Italian flair to generate sales.
That was the 1990s; by the turn of the century, Fiat had lost some of its mojo, and by the time I got to Milano in the early 2000s, the taxi ranks had plenty of German and French cars. Once upon a time, they would have been nearly exclusively Italian. Today, a lot of Fiat’s range is either made by, or on platforms shared with, Ford, GM, Chrysler (which it now owns), Peugeot, Mitsubishi and Mazda. Sharing platforms isn’t a sin, but a necessity, but Fiat seems to have taken it to a new level, looking like a OEM brand whose logo is freely slapped on others’ products.
Mitsubishi is the other car company to find itself in trouble in recent weeks. The company admitted that it had lied about the fuel economy figures for its kei cars, the micro-cars that it sells predominantly in Japan.
It wasn’t as troublesome as Volkswagen’s defeat device which fooled the US EPA, running differently when it knew the engine was being tested. Mitsubishi kept things simple, and overinflated tyre pressures.
It would have got away with it, too, if it weren’t for Nissan, a company to which Mitsubishi supplied, under an OEM deal, kei cars. The customer started to ask questions and tested the cars for itself.
Mitsubishi had supplied 468,000 cars to Nissan, all of which are affected. It had only sold 157,000 under its own marque. Production of the cars, from the eK range, and the OEM equivalent for Nissan, the Dayz, is now suspended, while Mitsubishi’s shares plunged 15 per cent on the news last week. Sankei, the Japanese newspaper, believes that Mitsubishi used the wrong test method on the I-MIEV electric car, RVR (ASX), Outlander, and Pajero, which are exported.
You have to wonder what the corporate culture must be like for these matters to recur so regularly. But then, collectively, people tend to forget very rapidly, and companies like Volkswagen and Mitsubishi must bank on these.
VW isn’t the first to cheat the EPA—US car makers have attempted less sophisticated defeat devices in the latter half of the 20th century—though it has had a chequered past. Just over 10 years ago, there was a scandal involving VW colluding with a union leader to keep wage demands down, and a few low-level employees took the rap. Go back to the 1980s and the company found itself in a foreign exchange scandal. But these were known mainly among specialist circles, principally those following car industry news.
Mitsubishi’s scandals, meanwhile, were more severe in terms of the headlines generated. Last decade, when the media called Mitsubishi Japan’s fourth-largest car maker—these days they call it the sixth—the company was implicated in a cover-up over the safety of its vehicles. Japanese authorities raided the company in 2004, and revealed that Mitsubishi Motors Corp. hid defects that affected 800,000 vehicles, and had done so since 1977. Nearly a million vehicles were recalled. Affected vehicles were sold domestically as well as in Europe and Asia. Top execs were arrested that time, including the company president, although it was hard under Japanese law to punish Mitsubishi severely. There was no disincentive to conducting business as usual. The company was ultimately bailed out by its parent, the giant Mitsubishi Group, when it found itself facing potential bankruptcy.
People were killed as a result of Mitsubishi’s cover-ups, and at the time it was considered one of the biggest corporate scandals in Japan.
Go back a bit further and Mitsubishi Materials Corp., a related company, had used slave labour in World War II, including US troops—something the company did not apologize for till 2015, even though the Japanese government itself had issued apologies in 2009 and 2010. While it was a first among Japanese corporations, and US POWs got what they had long awaited, descendants of Chinese slave labourers still have a lawsuit pending against a connected Mitsubishi subsidiary.
The other major difference between Volkswagen and Mitsubishi is that the Japanese marque is relatively weak in terms of covering its market segments. It’s SUV- and truck-heavy, and its kei cars had sold well (till now), but it has little in the passenger car segments, which it had once fielded strongly. The Mirage (and the booted Attrage) and the Galant Fortis (exported as the Lancer to many markets) are what’s left: the latter is now nine years old, though still fairly competitive, and in desperate need of replacement. Its only other car is its Taiwan-only Colt Plus, still selling there as an entry-level model despite having been withdrawn from every other market. In the big-car segments, Mitsubishi is actually supplied by Nissan in Japan, but doesn’t make its own any more. ‘Sixth-largest’ is shorthand for third-smallest, at least among the big Japanese car companies.
Mitsubishi looks set to quit the C-segment (Galant Fortis) since neither Renault nor Nissan, which it had approached, wanted a tie-up. And the company survives on tie-ups for economies of scale, and there’s now a big question mark over whether potential partners want to work with it. Automotive News’s Hans Greimel questions whether the Mitsubishi–Fiat truck deal will go ahead (though I had thought it was an inked fait accompli).
But, most seriously, Mitsubishi hasn’t completely recovered from its earlier scandal.
It is within living memory, and the timing and nature of the latest one, tying so closely to what rocked Volkswagen, ensured that it would get global press again, even if the bulk of the affected cars were only sold domestically. And when consumers see a pattern, they begin wondering if there’s a toxic corporate culture at play here.
We’re too connected in 2016 not to know, and while Mitsubishi is likely to be bailed out again, it will face the prospect of shrinking car sales—and sooner or later one will have to question whether the company will stay in the passenger-car business. Isuzu exited in the 1990s, focusing on SUVs, pick-ups and heavy trucks, forced by an economic downturn. Since Mitsubishi’s own portfolio is looking similarly weighted, it wouldn’t surprise me if it chose to follow suit, its brand too tarnished, with too little brand equity, to continue.
I’ve always been surprised when I see Google or Facebook appear on any “top brands” lists. It’s branding 101 that a strong brand must have loyalty, awareness, positive associations, perceived quality, as well as proprietary assets, based on the model from David Aaker, and implicit in this, I always thought, was trust. You can neither be loyal to something you don’t trust, nor can you have positive brand associations toward it, nor perceive an untrustworthy thing to possess quality. According to a survey from a consultancy, Prophet, which looked at over 400 brands across 27 industries, polling nearly 10,000 customers, we don’t trust either Google or Facebook. Neither makes it into the top 50; those that make it into the top 10 are Apple, Samsung, Microsoft, Netflix, Nike, Chick-fil-A, Amazon, Spotify, Lego, and Sephora. Google slots in at 55th, and Facebook at 98th.
To me, the Prophet approach makes far more sense, as for years—long before Edward Snowden revealed the extent of us surveillance under PRISM—I had been blogging about privacy gaffes and other serious issues behind both companies.
People may find Google and Facebook to have utility and enjoyment, yet we willingly volunteer plenty of private information to these sites. We do not trust what they do with this information. Adweek notes that in a separate survey, Facebook was the least trusted brand when it came to personal information, making it worse than the US federal government. There have been so many occasions where users have found certain privacy settings on Facebook altered without their own intervention; and I’ve constantly maintained that, with the bots and spammers I encounter daily on the social network, its claims of user numbers are difficult to accept. In fact, if you have Facebook’s advertising preferences set to reject tracking, the site will not stop doing so, compiling a massive and sometimes inaccurate picture of who you are. What it does with that, given that you have told the site that it should not use that information, is anyone’s guess. It makes you wonder why that data collection continues. At least Google (now) stops tracking advertising preferences when you ask it to.
These surveys indicate that consumers are wising up, and it opens both Google and Facebook up to challenge.
Google dethroned the biggest website and search engine in the world when it was released, so no one’s position is guaranteed. Duck Duck Go, a search engine far better at privacy, has chipped away at Google’s share; and I find so much Facebook fatigue out there that it could follow Myspace into irrelevance. When I hear those speak of these two companies’ positions as being unassailable, I take it with a grain of salt.
We already have seen peak Facebook (and Twitter, for that matter), for when it came to Super Bowl stats this year, there was a massive 25 per cent drop in activity. Interestingly, despite the trending #RIPTwitter hashtag last week, I don’t agree with those who think Twitter is heading into oblivion, for the simple fact that the site is less invasive and seemingly more honest than Google and Facebook. Those same experts, after all, said that Google Plus would be the Facebook-killer, while I consistently disagreed from day one.
The Medinge Group predicted correctly in the early 2000s when it was stated that consumers would desire greater integrity and transparency from all their brands, something reflected in our book, Beyond Branding. I don’t believe that we are so different when it comes to dealing with online brands.
This is, then, a welcome challenge for all businesses, to ensure that they demonstrate transparency to their audiences. We have remained very constant in our treatment of private information: for the most part, unless you’ve agreed to it, we don’t store it at our company. There is some information that goes to our advertising networks through cookies. We admit we could have a clearer privacy policy. But for us, we don’t want to lose your trust, because in bad times, it’s the one thing we can hang on to. It’s not something Google or Facebook seem to be aware of as they tend to ignore users’ demands and queries.
In the last 24 hours, author Holly Jahangiri found an illustration depicting child pornography on Facebook that had been reported by many of her friends—only for Facebook to deem it constantly acceptable, despite what it states in its own terms and conditions. It was only when she Tweeted about it that Facebook finally responded publicly; and only when she involved a US government agency did the page disappear. The pressure of accountability like that against dishonest companies tells me Twitter will be around for a while yet.
@facebook apparently, hardcore digital kiddie porn doesn't bother you at all. In spite of this section in your "Community Standards."
The trend this year, I believe, is the ongoing rise of challengers to these two brands. When the tipping-point against them occurs, I do not yet know. But now, I sense that it’s closer than ever.
This blog post is an adaptation of the editorial in issue 35 ofLucire.
In an age of social media, you would think it was the most stupid thing to try to shut down the biggest online community you have.
Ikea has done just that, on IP grounds, against Ikea Hackers, by getting their legal department to send Jules Yap, its founder, a cease-and-desist letter after her site had been going for eight years. In that time she had sent customers to Ikea, after they were inspired by the new ideas her community had on doing new things with Ikea furniture.
There are arguments that Ikea could have been liable for any injuries sustained from the “hacks”, but that’s daft. Are we really that litigious as a society, prepared to blame someone for something we ourselves freely chose to do? Ikea has instructions on how to build their furniture, and it’s your own choice if you are prepared to go against them.
And eight years is an awfully long time to bring a case against someone for trade mark usage, rendering this claim particularly weak.
There are other Ikea-hacking websites and Facebook pages as well—so it’s even dumber that Ikea would go after one with such a huge community, a website that has an Alexa ranking currently in the 20,000s (in lay terms: it has a huge audience, potentially bigger than that of Ikea’s corporate site itself in Jules’s country, Malaysia). Jules says that she has to take down the ads as part of her settlement for being able to retain the site—ads that simply paid for her hosting, which she might not be able to afford to do any more. (Some fans have offered to host for free or provide new domain names.)
The Ikea Hackers logo doesn’t look remotely like the Ikea one, which would readily imply there was no endorsement by the Swedish company.
Therefore, Ikea’s statement, on its Facebook, holds very little water.
Vi är glada för det engagemang som finns för IKEA och att det finns communities runt om i världen som älskar våra produkter lika mycket som vi gör.
Vi känner ett stort ansvar mot våra kunder och att de alltid kan lita på IKEA. Det är viktigt för oss att värna om hur IKEA namnet och varumärket används för att kunna behålla trovärdigheten i varumärket. Vi vill inte skapa förvirring för våra kunder om när IKEA står bakom och när vi inte gör det. När andra företag använder IKEA namnet i kommersiellt syfte, skapar det förvirring och rättigheter går förlorade.
Därför har Inter IKEA Systems, som äger rättigheterna till IKEA varumärket, kommit överens med IKEA Hackers om att siten från slutet av juni 2014 fortsätter som en fan-baserad blog utan kommersiella inslag.
Essentially, it uses the standard arguments of confusion, safeguarding its trade mark, and—the Google translation follows—‘When other companies use the IKEA name for commercial purposes, it creates confusion and rights are lost.’
This can be fought, but Jules elected not to, and her lawyer advised against it. It’s a pity, because I don’t think she received the best advice.
On Ikea’s Swedish Facebook page, some are on the attack. I wrote:
I would hardly call her activity ‘commercial’ in that the ads merely paid for her web hosting. I doubt very much Jules profited. But I will tell you who did: Ikea. She introduced customers to you.
While your actions are not unprecedented, it seems to fly in the face of how one builds the social aspects of a modern brand.
The negative PR you have received from this far outweighs the brand equity she had helped you build. It was a short-sighted decision on the part of your legal department and has sullied the Ikea brand in my mind.
This won’t blow over. It’s not like politics where people are disinterested enough for all but the most impassioned to retain memory of a misdeed. (For example, does Oravida still mean anything to anyone out there?) Ikea is a strong brand, and mud sticks to them. Some years ago, I met a woman who still had a Nestlé boycott in place after the company’s milk powder incidents of the 1960s. And all of a sudden, Ikea’s alleged tax fraud (see here for the SVT article, in Swedish) or the airbrushing of women out of its Saudi Arabian catalogue come to mind. They’re things most people forget, because they go against the generally positive image of an organization or Ingvar Kamprad himself, until there’s some misstep from within that shows that things are rotten in Denmark—or in Sweden, as the case is here. Or is it the Netherlands, where its company registration is?
Brands are, in particular, fragile. I have maintained for over a decade that brand management is increasingly in the hands of the audience, not the company behind it—something underpinning my most recent academic paper for the Journal of Digital & Social Media Marketing. We all know that there must be as much consistency between the views of the brand held by the organization and those held by the public. The greater the chasm, the weaker the brand equity. Here, Ikea is confirming the worst of its behaviour done in the name of its brand, all for the sake of some euros (I won’t say kronor here)—meaning the consistent messages are not in clever Swedish design, but between what it’s doing in this case and what it allegedly does in Liechtenstein.
And since the foundation that controls Ikea is technically not for profit, then it’s a bit rich for this company—accused of tax avoidance by calling itself a charity—to be calling Jules’s activities ‘commercial’. It is hypocritical, especially when you bear this in mind:
In 2004, the last year that the INGKA Holding group filed accounts, the company reported profits of €1.4 billion on sales of €12.8 billion, a margin of nearly 11 percent. Because INGKA Holding is owned by the nonprofit INGKA Foundation, none of this profit is taxed. The foundation’s nonprofit status also means that the Kamprad family cannot reap these profits directly, but the Kamprads do collect a portion of IKEA sales profits through the franchising relationship between INGKA Holding and Inter IKEA Systems.
The tax haven secret trust the companies use is legal, says Ikea, which is why it pays 3·5 per cent tax. I have little doubt that the complex structure takes advantage of laws without breaking them, and Kamprad was famous for departing Sweden for Switzerland because of his home country’s high taxes. The cease-and-desist letter probably is legal, too. And they show you what mentality must exist within the organization: forget the Swedishness and the charitable aspects, it’s all about the euros.
I have to admit I get a bit bored of those crying foul now that MG will launch an SUV, one which seems to have some parallels with the Ssangyong Korando C (left).
They say that MG should have made sports cars as part of its revival, and that the brand should not adorn a bunch of Chinese-made saloons and an upcoming SUV.
Let’s look at a few hard facts.
MG did make a sports car when NAC, and later SAIC, took over. It was the British TF design. And they sold fewer than 100 cars per year in the 2007–11 period, despite it being the cheapest roadster on the market in China. It wasn’t just Chinese buyers who ignored them: the TF was the first model revived at Longbridge, with very keen pricing, and hardly any Britons touched them, either.
So if you were a business and you were confronted with decent sales of your saloon cars and dismal sales of your sports car (after building a whole new factory for them), where do you place your efforts?
You give the people what they want.
What’s surprising is that this is hardly unprecedented in MG history. There have been MG saloons for a good part of its existence, but right now, there are parallels with the 1980s. Then, the MGB had died in 1980, and Austin Rover decided it would launch a range of sporting saloons based on the humble Metro, Maestro and Montego. That’s no different to today’s MG range of the 3, 5 and 6—there’s even a 7, based on the old MG ZT.
And globally, but more importantly, in MG’s domestic and key export markets, SUVs are selling strongly.
Again: you give the people what they want.
I was one of the very few people who wrote that I believed the Porsche Cayenne would be a huge hit at the turn of the century, and that the Porsche brand could survive such an extension. I was right.
MG’s brand can easily be extended, given that it has had a less focused history than Porsche. At two points during its British ownership, it sold estates, for goodness’ sake—once in New Zealand, with the Montego-based MG 2·0 SL, and toward the end of the Phoenix Four era, with the MG ZT-T.
A good deal of estate buyers now eye up SUVs, and that is simply a trend that SAIC is following.
A sports car may follow in time. There will be a fastback based on the Auris-like MG 5, and not a moment too soon. A “proper” sports car could come if the rest of the range does well. SAIC isn’t run by mugs, and they know the heritage of the MG brand.
MG sister brand Roewe has been voted the best in service and customer satisfaction among car dealerships, beating even the foreign-branded competition in China, while the Roewe 350 topped its class for customer satisfaction, according to the China Quality Association. The MG 3 came second in its segment.
We’re talking about the most competitive car market on earth, and the Chinese equivalent (as far as I can make out) of the J. D. Power survey.
Those accolades are things that BMC, BL, Austin Rover, Rover Group and MG Rover could only dream about, especially through the 1970s.
I’d rather people give SAIC the acclaim it deserves for giving MG a decent go where the British and the Germans had failed—and for putting money where its mouth is.
I walked into the National Bank yesterday to sort out something for Dad—years ago, we gave each other signing authority on our accounts. They had misplaced that authority—a bit worrying if a bank doesn’t hold on to things over 10 years old—but, with the transition of the National Bank branding to ANZ, it reminded me of an interesting phenomenon.
Most folks know that ANZ has owned the National Bank since the early 2000s. There were always rumours that the Lloyds horse would be retired as the licence would expire, and that eventually, everything would bear the ANZ brand collateral. ANZ had sent out letters in the past talking about the acquisition, but that everything would stay the same—until last year, when it said that it would finally take the best of both organizations and combine them under a single ANZ brand.
Fair enough. It might mean the closure of branches where both banks existed, for cost savings, but it was inevitable.
The surprise was this: the announcement of the rebranding of the National Bank brought mass defections to other banks. Westpac, Kiwibank and TSB mounted campaigns to attract departing National customers. My friends at TSB, where I have banked happily since the late 2000s, said potential customers came in, with at least one commenting (ironically to the Australian-born staff member there), ‘I hate Australians.’
But to those Aussie-hating National Bank customers: you have been banking with Australians for the good part of the past decade, and the only thing that will be changing is the logo on the façade.
There was no ownership change, no change on the board of directors, nothing.
It brings home that people can be loyal to an organization simply of how it looks to them outwardly, even if, inwardly, it’s owned or run by people they might “hate”.
There’s nothing wrong with this behaviour, but it’s something for branding consultants and advisers to bear in mind: never underestimate the effect of brand loyalty even in an age where we advocate transparency. There are some that opt not to peer behind the corporate veil.
This is the reason that certain publications are still seen as locally owned even when their share holding in the Companies’ Register says differently, or that no one seems to mind that the vast majority of our New Zealand fruit juice brands are in the hands of Japanese and American companies. Just Juice and Fresh-up aren’t really competitors, just as ANZ and the National Bank have not been for years.
At the end of the day, does any of this matter? A little, if “Aussie-hating” stems from an opposition to profits heading offshore rather than, say, TSB’s community trust. It’s not very ANZAC of anyone to hate our neighbours, but if folks truly think this way, it’s worth understanding just whom owns what, and do your business or shopping accordingly.
The same rule, I might add, applies to political parties: does “your party” actually stand for the values you think it does? Or, for that matter, does your preferred political candidate?
Once again, I posted a Tweet (which went on to my Facebook) about Apple messing up (this time, about Mail with disappearing attachments). There were no replies.
Interestingly, whenever I post about a Windows bug, the Mac evangelists all swarm on to it, usually with the sentiment, ‘Get a Mac.’
They all disappear whenever I post a problem about the Macintosh.
Yet, the Windows users don’t swarm all over and say, ‘Get Windows.’
While through most of the 1990s, I would agree with the Mac sentiment, since around 1998, I’ve been able to crash Apples as regularly as Windows-based machines. (I do not have enough Linux experience to make a judgement of that platform.)
I’m not sure where this supposed superiority complex comes from any more, other than the Mac buyer being financially better off and paying more.
But paying more, as a 1990s Rolls-Royce owner might attest, does not get you something better.
However, as Rolls-Royce knows, perceived quality plays an awfully big part in brand equity.
The reality is I’ve had everything from font embedding errors and missing icons to corrupted file transfers and programs crashing on opening on the Macintosh.
They are every bit as serious as what I experience on various Windows platforms.
And while I get fewer Mac viruses, the ability for an average Joe like me to troubleshoot is severely diminished because of the smaller user base—and, consequently, the dearth of support pages out there.
Or, the conspiracy theorist must ask: is it due to the brand being so hallowed that users don’t post information about their supposedly perfect computers?
It’s all the same to me: computers are computers, and they all crash at some point.
Volvo has announced that it will build a plant in China, and seeks approval for a second, in what it calls its second home market.
It was inevitable, though for the long-term survival of the brand, it’s not a bad idea.
Through Geely’s acquisition, it can potentially leapfrog other foreign car brands inside China by having more than a domestic partner: a domestic owner.
There won’t be much toing and froing as Geely can call the shots with Communist Party authorities.
The company already has a technology centre in Shanghai to deal with design, purchasing and manufacturing decisions.
The new Chengdu plant, says Volvo, will only build Volvo cars—there will be no Geelys going through there.
Volvo also says it will not affect jobs in Europe, which can be believed at this stage: the plant should be sufficient to deal with growth in China and the eastern hemisphere, where Volvo could be a lot stronger.
While Volvophiles won’t be upset about most of the developments above, there will be one that will concern them.
The company says that Volvo Car China’s new-product development will be done in Shanghai, not Göteborg. Göteborg will take the lead on hybrid and electric cars globally.
Given the volumes involved—Volvo is targeting 200,000 cars per annum by 2015 in China—I’m not sure if it means that China will get its own range of cars. The likely scenario is that there will be a single, global range at these numbers.
So how will the balance of global Volvo NPD be shared between Göteborg and Shanghai?
Volvo suggests that HQ remains in Sweden on one hand, but, according to Freeman Shen, senior vice-president and chairman of Volvo Cars China Operations, says, ‘The Volvo Car China Technology Centre in Shanghai will develop into a complete product development organization on an international level. It will have the competence and capacity to work together with the HQ in Sweden, participating in Volvo Car Corporation’s work process for developing entirely new models,’ says Freeman Shen.
I’m not criticizing Geely’s competences because if you look at its latest models, the company has certainly come a long way. Chinese designers, if nothing else, are fast learners, and knock-offs are becoming things of the past if 2010’s new models are anything to go by.
And as a Swede is heading over to China to help set up the plant, one envisages that similar training in the Volvo design and creative process will be in the offing.
Otherwise, there won’t be much separating Volvos from other car lines with the exception of a grille with a diagonal bar.
But the press conference still leaves questions unanswered about how the NPD process will work.
Nevertheless, allowing Volvo to pursue innovation is good news. Ford permitted it to happen but so much platform development was done elsewhere. Volvo remained in charge of global safety for Ford models, and gave the old S80 platform to a variety of cars, including the current and previous Taurus.
The difference is, the parent company’s platforms weren’t half bad to begin with. I’m not so sure about Geely’s.
I do, however, like the idea of an innovative, world-first Volvo that can get its new developments in safety and alternative energies out to the market before the competition. No more will the firsts be moderated by Dearborn.
Innovation has not deserted the company—it has announced a V60 diesel plug-in hybrid—but we will not know what the new Volvo will look like till a model, with no Ford heritage, surfaces in a few years. That will be an interesting development.
Geely chairman Li Shufu says, ‘We continue to uphold our principle that Geely is Geely and Volvo is Volvo. A more globalized, more focused luxury brand will turn our vision of a growing and profitable Volvo Car Corporation into reality. The company will continue to contribute to the development of the global automotive industry by introducing world-first innovations that make an outstanding brand win in the market-place.’
That doesn’t really settle it though.
I have some concerns with Mr Li’s market positioning, because there are Swedes, indeed many Europeans, who don’t see Volvo as a luxury brand.
Thanks to Ford, Volvo was edged upmarket to avoid competition with its own models—but it means its market share at home has been severely reduced.
Earlier this century, most Swedish taxicabs were Volvos—today Mercedes-Benz and Toyota serve a proportion of the local market as Volvo could not offer the smaller models it once did.
And if its home market share continues to decline, never mind how China goes: Volvo will be increasingly inaccessible to first-time car buyers in Sweden. Its need, then, to retain brand values might be weakened.
Speaking hypothetically, if these world-first innovations are created merely for luxury models, then how long will they take to get to the everyday market?
I remember an era when Volvo didn’t skimp on safety and innovations for even its lowliest models. And Volvo-as-luxury seems to fly in the face of that.
The reality is, if Volvo is going to find more volume in the orient, then the luxury positioning will be more dominant.
It’s going to be easy to foresee Volvos going all over the east from the Chinese plant, to allow for greater profits. Renault and Peugeot are sourcing from plants in Korea and Malaysia to serve the eastern hemisphere, and as far afield as eastern Europe, at more reasonable prices. It would not be a bad idea for Volvo to follow suit: it’s not in the hallowed realms of BMW, and its pricing needs to reflect that.
I have to admit I get a bit bored of those crying foul now that MG will launch an SUV, one which seems to have some parallels with the 
