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ASIA PACIFIC: NEW ZEALAND

HOW IMPORTANT IS YOUR BRAND?
Author: Liesel Knox, Hesketh Henry

“Not important enough” might have been the impression given by GlaxoSmithKline when two 14 year old girls approached them with the results of their school science experiment.

What started as a query from the two girls about the findings of their experiment on the vitamin C levels contained in Ribena resulted in GlaxoSmithKline pleading guilty to 15 charges of breaching the Fair Trading Act, a fine of NZ$227,500, and an order to undertake a nationwide campaign of corrective advertising.  Much worse, however, was the international damage to the GlaxoSmithKline name and its brand "Ribena" after international media coverage of the case.

Since the Enron and WorldCom trials in the US, large corporations all over the world have scrambled to introduce robust compliance programmes and comply with the Sarbanes-Oxley Act.  The compliance programmes introduced by such corporations, however, have generally fallen short of grass roots checks and balances.  If, for example, GlaxoSmithKline had robust testing and quality assurance systems in place that were carried out at regular intervals, any deficiency in the products should have been picked up and acted on immediately.

In addition to good testing and quality assurance programmes, companies need good communication between those responsible for testing and those responsible for marketing and advertising. Free flow of information between different departments is a pre-requisite to getting it right.  It is insufficient to approach a marketing agency with a good idea or image of how you want your product to be perceived and work forward.  All marketing campaigns must work backwards as well.  In particular, any claim made in an advertisement must be true and not misleading, it must be capable of being substantiated at all times, and proof of any such claim must be held and tested periodically.  The point being, you must be able to work back from the claim to the proof which supports that claim.  In the GlaxoSmithKline case, the results of the girls science experiment was that there was no detectable level of Vitamin C in ready-to-drink “Ribena”.  This in itself is not an issue.  The product however was advertised on television with a claim that the “blackcurrants in Ribena have four times the Vitamin C of oranges”.  The result was that GlaxoSmithKline admitted that this claim was liable to mislead consumers.

In this case, the brand damage was intensified by the fact that when the two girls first approached GlaxoSmithKline about their findings they did not receive a reply.  When they followed this up by telephone, the girls found that GlaxoSmithKline "… didn't even really answer [their] questions".  It is entirely possible that had GlaxoSmithKline immediately responded to the girls, taken them seriously and worked with them to identify where the issues were, utilizing a good "crisis management" programme, the situation that resulted may have been avoided or at least mitigated.

Terms such as “compliance” and “crisis management” are often seen as catch-phrases and without substance – that is, until a company experiences an episode such as the GlaxoSmithKline experience where it becomes apparent that such practices are a necessity.  If your brand is important to you no complaint can be ignored, and modern day business tools such as “compliance” and “crisis management” programmes are a must.