A major change is gripping the world of branding: the public's growing impatience at unethical behavior. The evidence is mounting from all sides: if consumers are willing to accept the advertising-games that rely on suggestion and imagination, these techniques that make brands so much more than just a product, they are no longer prepared to accept the hiding of unpalatable and unspoken practices behind such fanfare, even if these actions are carried out in faraway countries by sub-contractors to our now 'factory-less' companies such as Nike. The public no longer feels that business development can be carried out to the detriment of the environment, or without due regard to the sustained development of countries in which products are assembled.

But will the idea of the 'ethical brand' be taken up, and even become essential to brand management?

To be sure, this is no passing trend. Because brands have stolen the clothes of ideology, and dress themselves up with moral values and behavioral orders, they also expose themselves to contradictions between their words and their actions. Certainly it's always been said that a brand must never promise performance which it cannot deliver. But what's new is the fact that the company and its actions are now perceived as part of the brand. Brands cannot hide the company behind them anymore.

For years management drew careful distinctions between the company and the brand to the point where there was a director of corporate communication and directors of each brand. For the public, however, there is an undeniable link between the two, especially if a company has taken its name from its most successful brand to bask in its reflected glory. The brand therefore acts as a company 'window'. But if the press or word of mouth suggests that a company is neglecting in its corporate offices the values it's demonstrating in its showrooms, the benefits of this approach can be reversed.

To be a major brand doesn't just provide greater exposure to the world of media, it also requires the company to check that none of its internal practices will later come back to haunt it and destroy public confidence, that carefully woven relationship based on mutual values. In short, the new key words are: "not bigger brands but better brands".

It's this new sensitivity and public impatience that explains the conflagration that has engulfed Buffalo Grill last month. Families who confidently took their children to the chain were informed by a minister that inappropriate practices were noticed during his tenure. In addition there are mounting charges from Buffalo Grill's own employees who had been fired.

In France, Naomi Klein's book "No Logo" was never taken seriously enough. Everyone was talking about it, but very few had actually read it. Yet the global success of this book, well documented nevertheless,
should have made brand directors sit up and take note. It's wrong to see this book as a simple critique of branding. In fact, it attracts attention to the behavior of companies themselves and to their misdeeds. Nike is a typical example of the denounced double standard: at the same time as Nike sells sweatshirts bearing the famous swoosh around the world at $50 a piece, "sweatshops" are spreading around the developing world; the insalubrious factories of the company's sub-contractors where children work without rest.

As soon as a company believes in 'immaterial' factors as its only base for long-term financial value, that's to say patents, design, communications and brands, it will cease to continue production. It's clear then that the exclusive 'cult of the immaterial' can have structural consequences, those that rupture the organic link with production, which is relegated to distance, to visible and audible frontiers in the developing world.

So companies can no longer hide behind their brands. Because the brand is the 'immaterial', and the corporation the body (from 'corpus'), it's impossible in this era of transparency to divorce creed from actions practiced.

In the eighties Nestlé was brought to account. Its brand, ‘the little nest', is maternal, loving and warm. But Nestlé appeared to be none of these when it coldly marketed baby milk in the developing world in the knowledge that customers in these countries would mix the product with improperly boiled and therefore impure water. Recently Nestlé's request for compensation from Ethiopia, one of the world's poorest countries, has raised eyebrows.

Some sections of the public bristle at the presence of TotalFinaElf in Burma. The fact that all inspections of the sites reveal that the company has always behaved in an exemplary fashion has had little impact. Rumors persist. Indeed it's the very presence in Burma of the largest French company where the political and humanitarian situation is so well known that raises moral questions among the public.

The public's recognition of the link between the company and its brand has another sizeable consequence. Globalization must be accompanied by genuine acts of integration by the company itself in the country. It's revealing that, in Mexico, Danone took up an exemplary social policy which, though it was not their express intention, contributed significantly to the public confidence necessary for its brand to become successful. By so acting companies can give physical and social roots to their brand at a local level. This success will be complete when Mexicans get the feeling that Danone is Mexican. This will be the mark of real integration in the host country. L’Oréal does the same: they produce 94% of their products in the consuming countries themselves.

In future, paradoxically, the ideal of the global brand will to be perceived as local, no matter where it is found in the world?


Jean-Noël Kapferer,
HEC Professor



kapferer@hec.fr


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