International Marketing - Conceptual Frameworks, Negative Publicity Management - Case Study Example

International Marketing of the of the Topic 2 Introduction Negative publi can be defined as the adverse publi that is faced by the top brands of the world due to a particular reason or cause. The negative publicity affects adversely the brand image and reputation of the company. The company is required to control the negative publicity of its brand. Negative publicity spreads due to various promotional activities that are adopted by the company in promoting its product online and during its promotional activity. One single comment or post may hurt the sentiment of the customers and as a result it affects the progress and prosperity of the brand. It affects negatively the growth of the company, since the business cannot progress under negative publicity. Negative publicity reflects the bad image and dishonesty among its customers. The brand equity of the company suffers adversely due to negative publicity. The issues are highlighted more than it has occurred in reality therefore the negative publicity is required to be restricted. Therefore the companies are required to manage the negative publicity of their brand. The companies like BP, Apple and Toyota which experience strong brand equity in the market have faced the consequence of negative publicity which has affected their reputation and image in front of their customers and core competitors. Negative publicity results in the negative brand association and it takes huge amount of time in dealing with the issue. The control of negative publicity is a costly affair for the companies. Negative publicity leads to serious loss and damages to the consumers. The confidence of consumers is also destroyed due to negative publicity. The negative information about negative publicity of the particular brand influences and promotes he brand of some other company. The negative publicity creates a problem for the whole industry. Conceptual Frameworks Publicity can be regarded as one of the promotional tools. There exist some key issues related to promotion such as advertising, sponsorship, public relations, personal selling, sales promotion, cultural negotiations and trade fairs or exhibitions. Every organization encompasses marketing mix elements for appropriate functioning of business operations. Promotion is an important element of marketing mix since it sets forth brand image in the market place. This factor is responsible for driving customer attention and generating desirable profit margins for a company. Communication is a vital aspect of these promotional strategies. The message being broadcasted by sender should be able to reach receiver without any form of disruption. AIDA model as illustrated in Appendix 1 forms the basis of all promotional activities. As per the model, organizations aim at gaining customer attention through promotion. There are alarming features highlighted so that it is retained well within customer minds. Then interest is generated by providing some valuable information to customers. Desire within customers is initiated by associating product or service with any celebrity, interests, etc. It ultimately results into influencing customers so as to opt for the product or service. Global brands in current scenario are undertaking global PR activities. Target group of these events comprises of suppliers, customers, shareholders, employees, regional groupings, general public, government and financial markets. Social media or digital marketing is changing trends of marketing activities, and they sustain brand reputation along with adversely affecting corporate image. WWWOM or wicked worldwide word of mouth can affect brand image to a great extent. Word of mouth spreads at a rapid rate both for good and bad experiences. This facilitates negative publicity and is a major reason behind deterioration of many global brands. Case of Negative Publicity Negative publicity is a common aspect which is witnessed by many global companies. This leads to loss of market share and negative customer perception. Word of mouth publicity also creates negative impact on brand reputation. Negative publicity results when companies are not able to address effectively customer interests. At times it is observed that companies are more inclined towards gaining profit margins and this adversely affects their image in the industry. This condition had occurred in case of BP, Apple and Toyota. These three brands have global presence since many years. However renowned companies like Apple, Toyota and BP have faced challenges in the form of negative publicity and in turn implemented best possible strategies to handle its negative effects. BP has received negative publicity in terms of disastrous oil spills. This event had affected many lives and even created a bad impression about the brand. The company had been accused for Deepwater Horizon oil spill and was forced to pay criminal charges. $3.85 billion had to be paid by the firm as criminal charges. Negative publicity of BP even extended to lawsuit being filed against the firm. Employees of the company were highly annoyed with its operations. There were incidents highlighted by employees when the firm was witnessed to manipulate oil prices. This aspect generated high profit margins for the company but in turn lowered its brand reputation in global market place. BP was even criticized for its casualness towards maintaining safety measures in operational procedure. Senior executives of the firm were blamed for not indulging into safety planning. Media releases even outlined that culture of BP was aligned with gaining high profit margins rather than incorporating safety control techniques. Historical indifference in relation to safety was prominent during oil spill event. Damages were caused by the firm not only in terms of external environment but also within organizational system. News was broadcasted in different media channels stating employees were strictly against lower quality measures adopted by the firm. However negative publicity of civil trial adversely affected the corporate image of BP. The major reasons behind this were lack of concern towards total quality management and increased percentage of workload. Negative publicity of the firm still continued when criminal cases regarding oil spill remained unresolved even after five years of the accident (Oliver, 2007, pp. 92-93). Many people developed a perception that BP is more focused on project completion rather than including superior quality techniques into the system. The customer base of the company was lost by approximately 38% as highlighted in Appendix 4. Toyota is well-known for its innovative and superior quality automobiles, but in recent years the company has received negative publicity due to quality issues. Their negative publicity was associated with vehicles being recalled for quality issues. The company was held responsible for second largest recall announcement. 6.39 million Vehicles of the company across the globe were being recalled, creating negative brand perception in consumer minds. Toyota Motor Corporation had no idea about injuries or crashes being caused by their glitches. This default was observed in 27 models of the company encompassing Yaris and RAV4. There were different faults being portrayed through negative publicity, ranging from seats to steering. The negative publicity of Toyota in context of safety crisis was true since there was three different recalls initiated on the same day by the company (Forbes, 2014). In recent years, the trend of negative publicity has increased because of quality measures. Toyota Motor Corporation, in global context, had witnessed 17% decrease in market share. Bad news revolving around business operations of the firm was responsible for lowering percentage of customer loyalty. Toyota Motor Corporation had been publicized for vehicle recall across the globe. Avalon sedans were being recalled from U.S. market due to flaws detected in steering system. The company in 2010 had also recalled luxury Lexus brand. This occurred because of faulty engine design, where defect was noticed in valve spring and it could lead engines to stall. Quality survey denoted a drastic change in market position of Toyota Motor Corporation. The organization ranked 7th in terms of quality in global market of automakers but wide scale of negative publicity shifted its rank to 21st. There were accidents taking place and car owners filed a lawsuit against Toyota Motor Corporation. The company had to pay an amount of $1.1 billion to all car owners who had suffered from various economic losses. This kind of loss had mainly resulted due to unintended vehicles acceleration. Implications of such negative publicity were so strong that owners of Toyota cars sold their vehicle at much lower price on the basis of perceived devaluation. Customer perception towards the brand has changed to a great degree and it has been highlighted in Appendix 2. During the recall stage, negative publicity has enhanced the percentage of Toyota’s negative brand disposition. Negative publicity has also adversely affected the renowned multinational corporation of America, Apple Inc. This company is criticized for its tightly controlled business operations. Apple Inc. has received wide array of negative publicity over the years for its sweatshop labour, unethical business practices, environmental destruction, etc. The firm in recent years had been majorly criticized for exhibiting tight control on information, in context of new product launch. Misinformation is also passed on to media so as to ensure that new product development of Apple Inc. does not reach target audience. Apple Inc. is subjected to growing scandal of human right problems. The company is inclined towards designing superior quality products for its customers but in turn gets involved into harsh treatment towards employees. Suicide case of Foxconn employee was one of the major negative publicity for Apple Inc. Media reports stated that the employee was interrogated and beaten by departmental heads for loosing fourth generation prototype model of iPhone. Negative publicity of the firm also was depicted in relation to customer service and quality control issues. The company has been criticized a lot of times regarding their unwillingness towards accepting warranties. Apple service centres were accused of not considering warranties or replacing defective batteries in machines. Environmental degradation is one of the primary concerns of real world organizations. This aspect plays a vital role in negative publicity of firms. Apple Inc. is criticized since many years of manufacturing products which are environmental unfriendly (The Independent, 2015). These allegations have affected brand reputation of Apple Inc., to certain extent but it is mainly accused of having human right problems. Safety issues, unhealthy workplace atmosphere, abusing employees, etc., are key factors denoting violation of human rights. The company launches innovative products and acquires high profit margins, but negative publicity has disrupted its corporate social responsibility framework. Examples of negative publicity management The management of the negative publicity of the company is considered as one of the most important aspect of the publicity management. The public issues that are encountered by British petroleum are it faced problem in maintaining of its culture that has occurred due to its cost cutting strategy. The people were well aware of the sound performance of BP. The disaster that occurred in the Gulf of Mexico has led to the emergence of problem of BP. This issue was highlighted and projected publicly. But the management could not control the negative publicity of BP oil spill. The management was not efficient in controlling the issue and maintaining transparency in its performance which outraged the stakeholders of BP (Votola and Unnava, 2006, pp. 196-202). The negative publicity management of BP oil spill can be observed from the fact that due to the negligence and the poor management of BP the issue that could have been mitigated or resolved in the national level have become international and the issue was reflected internationally. The public issue was projected in much higher way than it has occurred in reality. The public issues were required to be minimized and controlled since these issues are not static in nature. With the increase in the negative publicity of the BP oil disaster, the company realized that it not only encountered the problem of technical default but the company also encountered the problem of huge public relation. BP faced the largest problem related to public issue which was not faced by any other oil company previously (Wolf and Mejri, 2013, pp.48-56). With the increase in the issue of the negative publicity management, the responsibility of handling the issues was allocated to Bob Dudley. He adopted various strategic planning in resolving the matter and focussed on the safety of the company. He attempted to retain the reputation and credibility of the company. More information that is related to the disaster of the BP oil spill has created a hazard for maintaining safety and safeguarding the environment. The company faced negative publicity and therefore in order to manage the issue, the company have introduced website for informing the local residents about the various clean up activity adopted by the company. The management of the company in order to protect and safeguard its brand image have focussed on solving the social, community and various environmental issues (Roehm and Tybout, 2006, pp. 366-373.).The brand image and reputation of BP have come to stake due to the negative publicity of its oil spill case. Due to the negative publicity the disaster was projected in a bigger way than it occurred in reality in front of the people. Therefore the chief executive officer of the company along with the other executives was engaged in the management of the issues in order to protect its brand equity. Toyota Motor Corporation had recalled a total of 8 billion cars in a limited time framed and this disrupted their brand image of being a safe automobile manufacturer. However the company had undertaken productive strategies so as to regain their brand reputation. Vehicle recall supported the company to proclaim that they still care for their customers and environment. In few months time the company was able to regain its popularity and overcome negative image in the market place. Swagger Wagon was the new advertisement campaign of the company and it outlined an innovative way of connecting with target audience. Different social media avenues were designed by Toyota Motor Corporation along with initiating re-engagement with target audience. On the basis of digital platform, the firm intended to interact with customers in order to develop a feedback loop. This enabled customer to access company related information and eliminate their fear of quality and safety linked with Toyota vehicles. Toyota sites designed after negative publicity was easy to use and access relevant information. For Latin customers, specific Spanish friendly site was developed which was different from US based site of Toyota. There were typical advertising modes undertaken by the firm to interact with target group and gain their opinion on further improvement (Pringle, 2008, pp. 110-112). These modes were facebook, twitter, YouTube and other additional sites. Apart from customer involvement, there were also new advertisement campaigns launched by the firm to drive customer attention away from negative publicity. In a time span of one year, continuous vehicle recalls of Toyota developed customer perception that this automaker manufactures lower quality vehicles. The company actively indulged into designing of new campaigns so as to manage negative implications of publicity. These campaigns encompassed certain innovative taglines like “everyone deserves to be safe”, “we see beyond cars” and “more committed to quality than ever”. Appendix 3 reflects upon these campaigns which contributed towards building up of positive brand image of Toyota Motor Corporation. AIDA model can be well correlated with these campaigns since their main focus was on driving customer attention in order to persuade them to purchase vehicles. All these campaigns were inclined towards new safety measures being adopted by the company to prevent any such recalls in future years. Star Safety System of Toyota was initially launched in United States and was later implemented in other global markets. This initiative denoted electronic vehicle control of Toyota that facilitates control through individual breaks and manipulation of engine power. Apple Inc., over the years has been able to manage negative publicity to certain extent. Innovative product line of the company is a substitute for its criticism. Customers prefer to utilize branded products since it offers high quality. This organization has set its brand image through innovative product line. The products being manufactured by the company cannot be imitated by other rival firms, and this gives the firm required competitive edge. The company is managing negative publicity through undertaking effective steps and proclaiming it in front of media. Apple Inc. has broadcasted in all media channels that they are well aware about human right allegations. The firm clearly stated that they are trying to work in collaboration with workers so as to ensure there is a safe workplace environment. In recent times, negative publicity revolving around human resource practices was subdued by introduction of overtime payment and increase in pay scale of workers. The top management of the company stated in a media release that they are trying to develop long-term relation through appropriate pay structures. Apple Inc. also broadcasted their waste management principles (Balmer and Greyser, 2003, pp. 82-83). This firm introduced MacBook Pro which was based on recyclable glass and aluminium. Environmental footprint is published by the firm and this is an initiative to manage negative publicity of environmental degradation. In intense competitive market place the company is highly concerned about informing its target audience that their operations are environmental friendly. Mac App store was introduced by the firm across 123 countries along with iTunes cards developed from recyclable paper. Conclusion As per the study, publicity encompasses both positive and negative dimensions. These dimensions are responsible for affecting brand reputation. Organizations in real world scenario need to implement wide array of innovative strategies so as to ensure that they retain market position. Promotional strategies are adopted by firms to outline their unique features or specific contribution towards environment or community. These strategies change over period of time but always play a critical role to strengthen brand image. It has been observed that negative publicity eventually leads to negative customer perception. For instance this particular study reveals negative publicity of three famous brands – Toyota, Apple and BP. All these three brands belong to different market segment but each of them has gone through adverse impacts of negative publicity. BP had mainly suffered for its oil spill event which resulted into loss of market share. On the other hand, quality issues disrupted the entire operational mechanism of Toyota Motor Corporation. Apple even faced similar challenges in the form of report on harsh treatment towards employees, operations affecting environment, customer related issues, etc. This negative publicity was efficiently tackled by firms in order to regain their respective brand image. References Balmer, J. and Greyser, S. A. (2003). Revealing the Corporation: Perspectives on identity, image, reputation, corporate branding, and corporate-level marketing. London: Routledge. Forbes. (2014). Toyota looks strong despite the $1.2 billion settlement payment. Retrieved from : http://www.forbes.com/sites/greatspeculations/2014/03/31/toyota-looks-strong-despite-the-1-2-billion-settlement-payment/ . Oliver, S. (2007). Corporate communication. London: Kogan Page. Pringle, H. (2008). Brand immortality: how brands can live long and prosper. Great Britain: Kogan Page Publishers. Roehm, M. L.and Tybout, A. M. (2006). When will a brand scandal spill over, and how should competitors respond. Journal of Marketing Research.43 (1). pp. 366-373. The Independent. (2015). Apple admits it has a human rights problem. Retrieved from: http://www.independent.co.uk/news/world/asia/apple-admits-it-has-a-human-rights-problem-6898617.html . Votola, N. L. and Unnava, H. R.(2006). Spill over of negative information on brand alliances: Journal of Consumer Psychology.16 (1). pp. 196-202. Wolf, D.D. and Mejri, M. (2013). Crisis communication failures: The BP case study. International Journal of Advances in Management and Economics, 2(1), pp.48-56. Appendices Appendix 1: AIDA MODEL Appendix 2: Brand Disposition Appendix 3: Advertisement campaigns Appendix 4: Impact of BP’s negative publicity Read More