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Keep hold of your key brand asset. Firestone’s marketing efforts had always been designed to instil the notion of ‘safety’ into the public’s mind. When it lost this key brand asset through all the hostile publicity, Firestone was in big trouble.

47 Farley’s infant milk

The salmonella incident

When the UK Central Public Health Laboratory made the connection between Farley’s infant milk and salmonella in 1985, the story made the headlines. The product was recalled immediately at a cost of £8 million. Farley’s parent company Glaxo Smith-Kline was forced to put Farley’s into liquidation and sold its two plants to high-street chemist Boots for £18 million.

Boots had an almost impossible task in rebuilding the brand, given the amount of negative media coverage it had suffered. After all, health scares are always damaging for brands, but health scares involving babies are, if anything, even more catastrophic.

Furthermore, while Farley’s had been off the shelves, its two main competitors – Cow & Gate and Wyeth – had stepped up their production leaving little room for Farley’s to squeeze back in. Although Boots ploughed millions into promoting and marketing Farley, the brand’s market share was never able to return to the levels it had reached before the salmonella incident. After years of persistence, eventually Boots sold the business to Heinz in 1994.

Lessons from Farley’s

Keep a lookout for internal threats. The salmonella incident had been avoidable because it had been caused by an employee not following adequate procedures.

Remember that competitors will take advantage. After Farley’s products had been taken off the shelves, its main competitors seized the opportunity and made it harder for Farley’s to make a comeback.

Chapter Six

Culture failures

Brands operate on a global scale. Brand names such as Nike, Coca-Cola, McDonald’s, Gillette, Adidas, Disney, Marlboro, Sony, Budweiser, Microsoft and Pepsi are now recognized across the world. The dismantling of trade barriers, combined with the rise of global communications technologies such as the internet, has meant that companies can expand into new markets faster than ever before.

Trade in international goods and services widen business and consumer choice exponentially. This greater choice is not just about making sports shoes or perfume available in new markets. Often bringing new products and services into markets can have dramatic and often unforeseen beneficial economic consequences giving a brand an unexpected boost. For example, the mobile phone has opened up vast swathes of India and China to rapid communication. In Africa the mobile phone has become an essential part of a micro-credit financial system allowing farmers and those in other businesses to transfer small (by Western standards) sums economically and quickly. No big surprise then to find that three mobile phone brands are among the world’s top 20 most valuable.

Economies grow and contract at different paces at different times. For example, while the US and most of the major European economies were static or contracting between 2008 and 2010, the economies of Australia, China, India and many South American countries were growing, in some cases by near double digit percentages. Even within Europe itself there are sharp differences in growth rates. While Germany and the UK contracted their economies by up to 6 per cent, Poland’s grew by some 1.2 per cent.

Unilever, a big brand business if ever there was one, is a case in point. In April 2010 Unilever surprised stock markets by reporting stronger than expected sales turnover and profits. While analysts were expecting like-for-like sales to grow by 3.2 per cent, they actually achieved 4.2 per cent. Pre-tax profits rose 28 per cent to €1.39 billion (£1.2 billion and $1.84 billion) while total sales rose by 6.7 per cent. What the analysts had failed to recognize was the effect Unilever’s brand penetration in the emerging markets of Africa, Asia and central and Eastern Europe.