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09 May 2007

Lessons from Ribena & Subway

 

Public relations is ultimately about building and protecting the reputation of an organisation and its brands.

The basic rules of the game aren't rocket science, so it is often a mystery to many PR practitioners why so many large organisations fail to observe them. After all, in the modern world reputation is everything - take that away and your brand has little or no value.

This is particularly true of products sold in supermarkets. To get space on the shelf in the first place, you need to meet consumer expectations and regulatory standards. In practice this means most products on the shelf are of similar real quality to those of their competitors. Indeed, many are identical products in different wrappers.

Retail success therefore depends on building a perception among consumers that your product is better than the rest. In New Zealand, Ribena has been highly successful in that - selling its cordials at a significant price premium over competitors like Barkers and Baker Hall which have product of similar juice content.

So why didn't Ribena's New Zealand's marketers Glaxosmithkline (GSK) respond when a couple of 4th form students told them in 2004 that their ready-to-drink products contained no detectable vitamin C, despite advertising claims that they contained lots of vitamin C and were healthy for children?

The girls actively publicised what they had found in their science experiments and eventually approached the Commerce Commission, yet GSK failed to respond to the warning bells. Even when the Commerce Commission fined it $227,500 and ordered it to spend $96,000 in corrective advertising, one of the company's UK spokespeople was still in denial. He was quoted as saying the problem was simply due to the testing of old stock on NZ supermarket shelves.

Once the Commission had made its ruling the story was picked up by media world-wide because it was a great news angle -- an international brand being ‘outed' by a couple of school students. There are now more than 12,000 mentions on Google.

As a result, the damage to Ribena's brand in New Zealand and to a lesser extent overseas will have been immense.  NZ sales since the decision have apparently crashed and some supermarkets have had to special the product to move it off the shelves.

Now we have another corporate, Subway, which has allowed a Dunedin franchisee to sack a staff member for sharing a glass of Diet Coke with a distressed friend - an act it deemed to be theft. The employee was on her rostered break, she was entitled to have a glass of Coke ‘on the company' and had an unblemished employment record until that time. To provide an extra human interest angle for the media, the employee has Aspergers syndrome.

Once again, the story has traveled worldwide, leaving Subway New Zealand floundering to pick up the pieces. Its initial response was to wash their hands of the situation, stating that the Dunedin outlet is only a franchise. Did this mean Subway's brand values don't include respect for their employees, let alone employment law?

Hardly. As a response it was about as gormless as the GSK decision to ignore two school students knocking on their door with news they badly needed to know.  

Meanwhile, Otago University students have held a spontaneous protest march and demonstration outside the Dunedin store, and the dismissed worker's trade union is calling for a NZ-wide boycott of all Subway stores. Bloggers have got into the act, giving the story another set of legs.

Ribena and Subway have been powerful brands, but the management of them has been shown to be inept. Like all brands, they carry promises - in the case of Ribena, an explicit promise of high vitamin C content; in the case of Subway, an implied promise that its outlets meet society's expectations of ethical and legal treatment of employees. Yet each company has been seen to break those promises.

Keeping promises and 'walking the talk' are probably the most basic rules of reputation management. How two multi-national corporates could so blatantly breach those rules beggars the imagination. Inevitably it makes you wonder about the level of professionalism in other aspects of their operations.

Based on a speech by WHAM principal Trevor Walton to the 5th Media Relations Conference, Wellington, on 25 September 2007 entitled, "What do Ribena, Subway, Solid Energy and Mercury Energy have to tell us?".


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