Brand Thinkers Should be Careful about Valuation to Avert Brand Bubble – Gordon D Cook

One of the first registered Chartered Marketers in South Africa, Gordon Cook is the School Navigator of Vega, the Brand Communications School.

He studied Modern Literature before launching his career in Advertising as a Copywriter. His passion for brand building has seen him devote his time and energy to corporate training and lecturing, which has taken him across Africa and the USA. Cook was in Nigeria for the Wisdom With Magic Workshop initiated by Brave Hearts Communications, which held recently in Lagos, and spoke with M2  Excerpts:

Nigeria recently embarked on an image renewal effort. What do you think, coming back to Nigeria after four or five years? Have you seen anything different since you got into Nigeria?

Well, I think the air line – Arik Airline – was really a wonderful experience; globally competitive, and I think it is really a fresh face for Nigeria. I think a lot of light poles have gone up in the streets and I sense there is more communication activity. I have not been here long enough to fairly comment on the state of Lagos. But I am pleased to see that there is debate going on about repositioning or repairing brand Nigeria. Actually, there is an opportunity for Nigeria, which I’m not sure the leaders will take and that’s the 2010 world cup and the soccer team. I think there should be a huge effort to support this team and figure it into a really clear brand idea. In effect, the team should go there early and play with some of the kids in South Africa with brand Nigeria in mind. I think that would do wonders for brand Nigeria.

Do you think this is going to impact positively in terms of perception? It seems there is some kind of psychological attack on Nigeria.

Unfortunately, we call this (in our station) Psychic Course to the Nigerian brand reputation issue, and I think this negative is growing without being managed. I think the world needs to hear the great success stories of great Nigerians which are not showcased. In the absence of that, we just hear about the other kind of the Nigerian entrepreneur. Again, sports is a powerful channel for country branding. The team potentially is going to do well, but I think it can have a real human face by doing some rebranding stuff in South Africa. It will contribute to repair this unfortunate reputation damage being caused by a few.

The Nigerian banking environment recently had a crisis because a France-based magazine, The Africa Report, said that out of the 25 Nigerian banks, only four are very healthy. That caused a huge chaos and opened a debate about the authenticity of these magazines. Does that kind of thing happen in your country? Can a publication in Europe do that to your country’s entire banking industry?

Just before I left, there was a debate around comments made by some Bank Risk Management Committee which said, ‘South African banks are in good shape’. That caused a debate because the people said that for the committee to say that, it means that there is probably a problem. I think the point to make here is that one has to be very careful about making statements about the banking sector because it is a very fragile sector and such statements can cause a run on the banks which could really be negative. Just reading a few articles in Lagos, some of these debates seem to be with too many awards and prizes to Nigerian banks while the truth is, there are a few good ones. I think the only fair comment I would make, which I have seen before, and still see in terms of branding, is that there is a big part of branding that involves communicating the idea. But the bigger part of branding is just fixing it internally and focusing on delivery systems to bridge delivery gaps. Sometimes, quite a lot of the brands, in Africa generally and Nigeria specifically, spend too much time and money on holding the external branding without making sure enough they can deliver; because if they are delivering, then it doesn’t matter what anybody says; they are delivering.

In your lecture you talked about the movement towards mono-branding that is focused on just one brand, a corporate brand, rather than having so many brands. Against the background of the era where we are now talking about small clusters of consumers, and the products targeted at them are supposed to be mass… How do we reconcile this two potentially conflicting scenario? I don’t know whether you get my question?

Yes I do, it is a good question. I think it is too early to tell. The real customer brands, which we all say are where they are going, how sustainable are they going to be? We can all see some of them getting quick attraction in the market. For instance, because I know you very well I can talk to you very successfully; but I need more than few of you to sustain the brand. So I think it is a bit hard to be honest about that trend because you do have to have predicament to sustain a brand in a business. How big is the niche brand? How big is a sustainable niche brand? This is probably the question and that is quite hard to answer. Apple is a niche brand but it is not in the scheme of things; Virgin is a niche but it still needs a big market. So I think that was a bit over-hyped fear for which we were not sure about, but reality is setting in.

I’m happy you just mentioned Virgin and I want us to talk about it. Richard Branson came to Nigeria, invested, teamed up with Nigerian government and some institutional investors and they set up Virgin Nigeria. Now there have been all kinds of issues which have led to him pulling out of Virgin Nigeria along with his people. Already, a Nigerian MD, in the person of a gentle man called Dapo Olumide, has been appointed and Richard Branson is shopping for a buyer for what is left of his own equity in that business. So, Virgin Nigeria is going to be ‘whatever’ Nigeria. The current managers are however upbeat; they believe and claim that it does not matter that they are losing the Virgin brand, that they can still do it well. They are doing a rebranding which is being handled by Interbrand and they say it is going to be a real Nigerian brand. What is your opinion about all this?

I am not really in with all the facts but if Arik was not in the picture, I will be more sympathetic to a possibility. But having had the Arik experience, I don’t see a come-back that will be easy. Aviation is a very difficult sector anywhere to make money in, especially now. To me, if I was the owners of Arik I will just bid my time to raise more and more competitive barriers. And once a brand has such psychic course, it is going to take time, and already margins are thin. So, who is going to fund them? So I’m skeptical; one obviously wishes them success but I’m skeptical.

I don’t understand, people talk so much about the value of the brand which makes it to get bigger every day so…

(Cuts in) Good question. Now, there is a new book which you must get. It is called Brand bubble. It is a brilliant book and it is exactly to your question. How can Interbrand and others claim that these brands are growing in billions of dollars yet market shares are declining, the economy is slowing…? So, is this not a bubble about to burst? In this book the author says it is a bubble waiting to burst. I think the way we measure brands is flawed. And I think we have to really quickly check it. In the book, the author advises brand thinkers on their mistake of over inflating brand value – which I think we are doing; before smearing eggs on their faces and get better measuring instrument that may be more realistic.

So really the contemporary measuring parameters are…

(Cuts in) are incomplete; they are not measuring everything that needs to be measured; there’s too much focus on future financial projection value.

Finally there was a small debate with people claiming they have remained loyal to a brand that has been inconsistent, not just in change of name but also in change in brand values – this one is a joker brand, the other one is serious brand and so on. Does it matter that a business is not making profit and yet the customers are happy?

Of course it does not matter to the customer until the day when it collapses. A brand that is successful by reputation and loyalty, but with unprofitable business, is not in a sustainable state of affairs. So if takes more capital to get it to become profitable, it should strive to do that and be secured because when it collapses, all those loyal customers are going to freak out and want to picket and protest and get really crossed about the brand. So I think brands and business should have a responsibility to share results with customers.

Finally, vis a vis other marketing institutions that do branding in South Africa, rate Vega.

I think the difference in Vega is brand centricity. We have also launched a high grade B.Com and BA degree. So we are trying to bring humanities to business; more ethical, philosophic debates into the boardroom. We introduced the concept of social business. So I think the old capital model of how you do business and how you train business people to do business is fast fading. If business is good, if it makes money, then that way of teaching people is not acceptable any more. I like to think that in some way, we are looking for new kinds of business models and new purpose for business organizations, debating when business becomes greed and what is reasonable profit.  All these debates we are taking on board and I think they are over due.