AS IMAGINARY VALUES DESTROY BRAND REPUTATION
When company messages and actions diverge, loyal customers notice this and act.
The founder of Sharaevsky.Marketing, an expert on strategic marketing, Andrei Sharaevsky shared the stories of two clothing brands that fell into scandal due to their inconsistency.
With the consent of the author, we publish cases.
Most brands transfer production to low-wage countries to optimize costs. For example, many people sew products in China, Cambodia or the Philippines.
It’s okay to cut staff costs. The global economy gives such a chance to large corporations. The paradox is that most brands do this, and only some have reputation problems.
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Let’s look at 2 examples: clothing brands H&M and RIP CURL
In 2013–2016, these companies fell into scandals because they used the services of poor countries for the production of clothing.
The Australian brand RIP CURL made clothes in a North Korean labor camp. And the H&M trademark was sewn in Cambodia and Bangladesh, where the average salary is $ 40- $ 70.
For what “poisoned” RIP CURL
RIP CURL is an Australian brand that has been manufacturing clothing and equipment for surfers since 1969. After the successful appearance and development in the homeland, the brand began to conquer global markets: Europe, North and South America, South Africa.
The brand has earned a reputation as a quality manufacturer and has become known as the best choice among surfers. RIP CURL has become a lifestyle. If you are active, young and love surfing, you are like RIP CURL.
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But in 2016, there was a lot of evidence that RIP CURL was being sewn in North Korean labor camps. Loyal customers were shocked.
They did not want to put on the “pain of slave labor.”
Information quickly spread – first in Australia and the USA (and these are the key brand markets). Fans immediately began to boycott him on Twitter. Many negative reviews have been deleted.
They wrote about the scandal in The Guardian. The conflict reached its climax when OXFAM, an anti-poverty organization in the world, called the company to account.
The financial director was fired. Management apologized and promised to transfer production back to Australia. But the brand has already lost direct association with the RIP CURL lifestyle.
Despite large-scale reputation losses, the company did not completely transfer production to Australia. Their factories operate in China, Thailand, India, Bangladesh, Vietnam, Hong Kong and other countries.
Now the position of the RIP CURL on the scandal is as follows: “We entrusted the production to the Chinese, and they all outsourced it to North Korea. This is not our problem, we already condemn it. ”
What “poisoned” H&M
It’s all about ethics. The main value that H&M broadcasts is “fast fashion”. Roughly speaking, their active message: “Take $ 100 and upgrade your wardrobe in our store.
Come back in 2 months and repeat the same. ” Quite normal for the western community, right?
But at the same time, their workers in Asia have been working for 2 months for $ 100 and cannot afford to buy even one thing from what they sew in tons. This discrepancy in messages and actions outraged ethical activists.
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The brand’s reputation has suffered and the company has pledged to pay European salaries to its Asian workers after the scandal. But the Western press wrote that H&M was in no hurry to keep promises.
Although the salary of the workers of the brand factory is higher than in other Bangladeshi companies, it is far from European – $ 0.5 per hour.
These are not just the stories of the big brand fails. Rather, tips for all entrepreneurs: if you translate values into the outside world, follow them within the company.