By Ray Trapp, President, Ray Trapp & Associates Worldwide, LLC

It is very difficult to see the silver lining in the eagerly read pages of Business and Economic magazines and newspapers around the world lately, but I know it is out there somewhere. With rapid fire negative announcements coming from every corner of the globe, business executives are reeling. So why should we be optimistic?

The currency devaluation crisis in Thailand started it all in summer, 1997 and the impact was immediate across Asia and the world, first affecting a slow down in future orders, then reduced profit returns from the foreign markets under siege. Even basically sound companies have now started to report staff cut-backs. I don't mean cut-backs in the outlying countries where the problem is most manifest (That happened long ago.); I mean cut-backs in USA labor force as well.

The line management of operating units around the world are hearing the howls from headquarters. "Cut back every expense. Not almost every expense, I mean EVERY expense." The task soon turns every marketing plan upside down; investment in building brands is one of the first things to go because it can easily be postponed or cancelled.

One of my friends, a country managing director marketing multinational brands in Asia, recently told me he was asked to go back and "Do it again" meaning find some more cuts and hand them over. "Show me the money." So he and his Marketing Director sat together for half a day and went line by line, cutting even the smallest items. Don't reorder stationery. Don't add any employees. Don't replace employees who leave. Don't travel on any business trip that can be postponed. Don't do any marketing research. Don't produce any new advertising. Times are tough!

In most cases, this means an immediate moratorium on brand investment and building of brand franchises. This is a dangerous move if you want to maintain brand share and customer loyalty.

Fortunately, some of my recent experiences suggest a trend which allows me to optimistically see the silver lining I mentioned at the outset.

Even in these tough economic times, and maybe because of them, I have seen signs that senior executives are becoming more involved in the strategic and creative development process again. When advertising is viewed as critical to corporate success, the real heavyweights seem to step forward.

Take, for example, my recent experiences with Malek Sarmini, who at the time, was Managing Director of L'Oréal Taiwan. Malek is now transferred back to duties at headquarters in Paris, France, no doubt because of the fine job he did in launching the L'Oréal business in Taiwan between 1994 and 1998.

There is no more discerning and focused advertising client in the world than L'Oréal, the world's largest cosmetics company. L'Oréal got that way because of its pronounced attention to details and consistency in every aspect of its marketing mix. From product quality to packaging, in every promotion and every advertising message, this world renowned company trains its managers to passionately protect the essence of its brands.

When Mr. Sarmini arrived in Taiwan, he brought with him this conviction and never delegated this power away to anyone. He set out to train his staff and the advertising team in the same way that he was trained. With hands-on involvement and training by example.

Even in his position as Country Manager, he personally reviewed all advertising recommendations, the budgets, the media plan, the promotion plan, the display designs, and, most of all, the creative strategy and the creative message.

Initially, Mr. Sarmini chose to use the international advertising materials, using Western models rather than Chinese models, in order to introduce the L'Oréal cosmetics line as "high fashion, up-scale and aspirational" representing the finest of French fashion consciousness and style.

After the first year, he directed us to begin searching for the most beautiful and popular Chinese models in the world, regardless of location. He personally reviewed every submission, every candidate.

When L'Oréal decided to introduce the Maybelline brand cosmetics in Taiwan to fill the popular-price segment below the high-priced L'Oréal line, Malek applied the same intense dedication to its advertising programs. In fact, he was even more passionate about his new assignments because Taiwan was beginning to suffer some of the same economic pressures as the rest of Asia.

He challenged and motivated the advertising and marketing team because he was vitally interested in the success of the creative product.

I have personally participated in similar processes with dozens of companies who rely on advertising to build brand image.

Perhaps one of the most surprising was the intense personal leadership shown by Charles L. F. Lo, Senior Executive Vice President of ChinaTrust Commercial Bank, in the careful positioning of the ChinaTrust credit cards versus the onslaught of international credit cards coming into Taiwan since the mid- 90's.

ChinaTrust is Taiwan's largest bank, and the ChinaTrust credit card had far more CIF (cards in force) than any other bank. But Citibank, Hong Kong Bank, BankAmerica, ABN Amro and other international credit card marketers were now pouring into the market. Promotional offers to steal Taiwanese customers from the established players were extreme.

It was time for a strong defensive move. And sometimes the best defense is "a good offense."

Charles Lo initiated a strategic repositioning assignment for his credit card. I worked extensively with him through more than one year of careful evaluation and analysis with Charles and his management team. We considered at least 15 different positioning concepts. In meeting after meeting, Charles proved his deep insight into the Taiwanese consumer, what they wanted, how they would react, what the bank could mean to them. He was far more than a "financial manager", a "banker"; he proved to be a surprisingly powerful "marketing man".

Not only did I enjoy working with him, I learned a lot about the Taiwanese consumer in the process. As a Leader, he proved that "hands-on" style succeeds in bringing special insights in the credit card industry.

We settled on a positioning statement that strongly differentiated ChinaTrust from the new arrivals, the foreign credit cards. "We are family" became the foundation of a new series of advertisements to help Taiwanese identify with traditional Chinese values, pride and strong local touch at ChinaTrust.

Still another example can be found in FMCG (Fast Moving Consumer Goods). Rafael L. Santos was transferred from Colgate-Palmolive Hong Kong to Taiwan to refurbish the product line of Hawley & Hazel, Colgate's joint venture partner in Taiwan who own Darlie brand, Taiwan's largest selling toothpaste.

Raffy came in as General Manager, but immediately made his presence felt in all marketing areas. His twenty plus years of working as marketing and sales executive for Colgate in the Philippines and Hong Kong gave him the confidence to take the senior executive role to ultimate hands-on decision-making as he created new products, launched new variants, and renovated old brand positionings.

One of his first calls was to me, with a clear message that he intended to get the best and most powerful brains in the business, regardless of location or company affiliation, to work on his assignments.

He paid top dollar for the most senior involvement he could envision ; he valued the advertising strategic process and funded consumer research on the Darlie brand to enable his advertising people to have clear insights into the consumer mindset ; he got involved in every key meeting and enjoyed the give-and-take. He was a true champion of the strategic planning process before any creative development was requested.

These examples prove that opportunities can be created when others are too frightened to move. They prove that personal involvement of very senior people in the planning and strategic development process makes a big difference when the work is actually being developed.

These senior decision-makers also demonstrated to me their belief that advertising, if done well, if directed properly, if carefully targeted to deliver the right strategic message, can become a weapon that gains a competitive advantage. It is good insurance against the loss of brand momentum. And it puts advertising excellence back on track. At companies where advertising really counts, and within business cultures where advertising is viewed as part of the corporate arsenal of weapons, the real heavyweights, the leaders of the company, become involved. They structure organizations that encourage brilliant, targeted advertising. They encourage longevity and continuity of campaigns. They encourage a strong working relationship with the key people in their advertising agencies.

That is an example of true leadership.

As a consequence, they put a lot more fun back in the business of marketing communication. So even though I am saddened and somewhat frightened by the economic malaise that has swept global markets, I still think powerful advertising will have its way...when leaders have their say.

That is the silver lining in today's economic crisis. I see really senior managers reaching back, getting involved again and relying on their personal leadership to guarantee effective marketing solutions in tough times.

Disclaimer

Contact Webmaster

© Ray Trapp & Associates / Through the Loop Consulting Ltd 1998-2000