business news in context, analysis with attitude

by Denise Larking-Coste

Content Guy’s Note: Denise Larking-Coste, a Europe-based business writer and conference moderator, specializes in the analysis of retail and consumer trends. She also happens to be one of our favorite people…and someone we can always count on to have a unique take on industry issues.

Never has business been more efficient. Never has business been more dynamic, persevering. Never has business been more vulnerable, more exposed, more contested.

The retail and grocery industry has just seen two big new names emerge in companies that are undergoing difficult times: Anders Moberg at Ahold, Neville Isdell at Coca-Cola.

Ahold is now headed by a real retailer - albeit not a food retailer. Moberg, a former executive of Ikea, has the retailer's gut instinct for store, product, customer. Knows how product and store should look and how customers feel. For him, one supposes, the game is not that of juggling a bunch of financial portfolios, but that of pre-empting consumers’ expectations.

And so it is with Neville Isdell. He knows the business, he knows the product. His feet are on the ground because he talks of execution and getting the millions of things that need to be done every day right. Right.

Moberg and Isdell have goals that are similar in some ways and different in others. They both need to restore confidence. The confidence of the shareholder, employee and customer. Moberg needs to cut the fat, trim the lean and get Ahold's core supermarket business turning over as it used to: it is about corporate renewal. It involves climbing out of a nasty pit.

Isdell's challenge is different in that it is structural, deep-rooted: he faces a whole new customer attitude toward brands - and that is something else.

Big brands have had some bad press recently. The Olympic Games in Athens was a case in point. Nothing to eat but sponsor-eat: McDonalds. Nothing to drink but sponsor-drink: Coca-Cola or Avra (mineral water). Nothing to wear but sponsor-ware. Could this be true? Could any multinational in today's ethically charged world have drawn up such a policy? Even if these reports were exaggerated by the press, the situations exist. These companies were perceived to be taking advantage of their positions as sponsors to surrealistic degrees – and perception is reality.

Food is becoming political. On top of the domineering brand saga, came the bad brand one. For instance some American products are being rejected by the world's anti-war lobbies; rejected by the world's anti-globalisation movement; rejected by certain vocal elements of the world's important Muslim population. The carbonated soft drinks companies are having to deal with the "coca-colonisation" backlash and the development of the likes of Mecca Cola, Qibla Cola, Cola Turka, Zamzam Cola and Corsica Cola.

Food retailers and manufacturers have been depicted as demons contributing to the developed world's obesity pandemic. Obviously no CEO in his or her right mind would have manufactured or sold the incriminated products if they had foreseen or understood the consequences. Companies in the sector have been quick to see that immediate remedial action is necessary - and they are taking it swiftly as accountable and responsible corporate citizens.

But they must do it fast and communicate - differently. There's the rub. Their communication has to change - and it will be a sea change, no less. Colgate, Kraft, P & G and Unilever have all announced increased expending on advertising, but throwing money at the communication budget is not enough.

Somehow the big multinationals - and private labels - have to find a new path, often through micro-branding or associating the original brand with the region in which it is to be sold. Understanding the mores, the culture that underpin the way different consumers feel and think, could go a long way to creating new, inclusive brand relationships. Certain multinationals are already adopting this type of policy with the development of completely revised advertising schemas for new marketing territories. In some instances the theory needs to be pushed to its limit: the original brand dropped and replaced by a series of strong, local logos.

At the same time indigenous brands are being developed in the transitional economies with surprising speed: domestic will be "cool". Sub-national, ethnic, racial and cultural entities will be becoming an increasing vocal part of the global social landscape. A strong driver of the brand is its "made in" label. It is a highly complex chemistry of product, service, identity and experience. The fragmentation of brands as they are broken down to appeal to more targeted market segments than the mass market is a given. But this will become a constant renewal process because these segments are shifting all the time.

Mental landscapes are evolving as demographic trends and populations move. The world is in a constant state of flux. Immigration will be changing whole regions and nations. The Hispanisation of America could turn it into a Latin dominated culture within 50 years.

This is a challenge. But marketing in general has become one huge challenge. Do we all feel comfortable with the violence, the sexual explicitness that is slowing becoming the norm in movies, on advertising hoardings, TV clips and on the Internet?

Haven't the companies that form part of the western democratic world something new to say about who we are, where we come from, and where we would like to go? A new, different place, surely – at least compared to the one that some of the opinion leaders or manipulators are tailoring for us and that some of us cannot relate to - and that we often do not like. Big brand names can change some of the icons, the logos, the imagery that govern so much of post-modern thinking and give us - and our critical neighbours - a new take.

News, word of mouth, buzz, rumours, Internet and health viruses accelerate at exponential speeds (through the internet, on increasingly fast 'planes). When these bits of information - or microbes - hit their various targets, such is the speed that they explode - and fragment. Fragmentation brings re shaping: messages are charged and changed by the way recipients read them, deal with them, re-distribute them. The result is contagion. That is why the messenger has to deconstruct and decrypt how the message will be used, or manipulated, its possible ramifications, how it will spread - before it is communicated. The messenger has to do everything to ensure that the real story stays true.

So, what's in a name? Moberg, Ahold, Isdell, Coca-Cola? You name it - they've got it. Now they must make sure that it's for keeps, because they know how to re-write a brand, and make it meaningful for the scores of micro-communities that are part of our new, fluctuating world. We are being born again - almost every day.

Copyright 2004, Denise Larking-Coste
KC's View:
If we may offer a coda to Denise’s piece, let us suggest that her “big picture” approach one that more retailers and manufacturers need to adopt. You don’t have to agree with everything she says to understand that the world is changing at a pace that requires business to make big, bold steps in order to keep up with consumers, much less anticipate their needs and desires.

Every once in a while, we’ll read a column or hear a speech in which someone will talk about the fine adjustments that need to be made in the retail environment in order to attract the young or the old or some other demographic group.

But we believe that we live in a world in which fine adjustments are no longer enough. What is required is real vision, a commitment to significant change that is both realistic and idealistic, and an ability to be defined by one’s own strengths as opposed to those of the opposition.

“Born again” is exactly right. While labor pains are never pleasant, they may be the price of doing business.