Andersen gets tarnished as Raleigh gets on its bike and leaves the UK
Things got worse for Andersen, BP answered charges of fat cat-ism and Raleigh bikes left the UK for good, writes Jennifer Whitehead in this week's Brand Watch.
The week went from awful to dire for Andersen, as the fallout from the Enron scandal continued. It started with major clients Ford Motors and FedEx sacking the accounting firm and ended with its whole future being questioned, as the news came on Thursday that the US government had charged Andersen with obstruction of justice over the shredding of Enron documents.
While the charges against Andersen are not as serious as it feared, the brand has been tarnished, perhaps irrevocably. The least worst scenario is more clients sacking the firm. The worst -- that it could be broken up and taken over.
BP was recently praised for its corporate governance policies as it announced, in the wake of the Enron scandal, that it wouldn't be making any more political donations. How quickly opinion can turn -- by this week, the oil giant was facing criticism over its decision to award chief executive Lord Browne a 58% pay rise. He now earns over £6m in salary and benefits annually.
BP defended the move, saying that Lord Browne is "worth every penny". But the timing couldn't have been worse, as petrol prices rose over concerns about a war in the Middle East.
Tobacco companies under fire -- nothing new, but this week they were accused of marketing low-tar cigarettes as the healthy alternative to the real thing, despite knowing they are no safer, according to an article looking at tobacco marketing from the 1970s and 1980s.
A report in industry journal Tobacco Control, went on to reveal deals between tobacco firms and Hollywood to place products in films. Philip Morris was said to have spent some $10,000 (£7,000), for example, to have Sean Connery smoke its brands, including Winston and Camel, in the Bond outing 'Never Say Never Again' -- money the studios accepted, despite a voluntary code to reduce the amount of paid-for indirect advertising in the movies.
Marketing may be able to sell products that are dangerous to our health, but it works both ways. A British cartoon that encourages children to eat fruit and vegetables has proved to be a resounding success. Research showed that 'Food Dudes', a programme created by psychologists that sees characters gain special powers after eating vegetables, saw young viewers double their consumption of fruit and vegetables after watching the show. However, it should come as no surprise -- apparently US children ate 33% more spinach after 'Popeye' was first screened in the 1930s.
Job ads sent via text message made Sainsbury's look like a sexy, new media-savvy company, but in the wrong way. "I WNT U, I NEED U, I CNT GET ENUFF OF U" read a message it sent out.
Sadly, recipients who thought they had secret admirers were disappointed to discover they were merely being asked to apply for a position at Sainsbury's new store in Stockport. The company hastily issued an apology, after the store found that more people were complaining than applying for jobs.
A wave of nostalgia today as Raleigh, the maker of the bicycles of kids' dreams, announced it was ending production in the UK at the end of the year. Sadness at the thought of 300 jobs disappearing, cynicism at the announcement that production would be continued in the Far East, and sudden remembrances of Choppers past.
Two American brand giants teamed up this week to bring the world the product it never knew it needed. Starbucks has used its coffee, erm, expertise, and Pepsi its skills in canning things to create Starbucks DoubleShot -- what it describes as "the consummate 'get-you-going' morning beverage".
Whether or not you wish to start your morning with a can of cold espresso "mellowed by a touch of cream" is up to you, but Starbucks is targeting cutting-edge young adults and will be backing up the US launch with TV, print and poster ads.
Travel brands in trouble -- the Youth Hostel Association, which has aided many a backpacker in seeing the world, revealed that it had suffered after last year's foot-and-mouth outbreak. It said that it would close 10 UK hostels, some in remote areas of natural beauty, as it sought to stem losses.
And 'Lonely Planet', which has also aided many a backpacker, was in trouble for being too truthful and not truthful enough. Hong Kong tourist officials are upset that its latest guide to the territory shows its famous skyline shrouded in smog -- even though this is the most likely state it is to be found. On the other hand, its New York guide book, written before September 11 and featuring the World Trade Centre on the cover as well as a less-than flattering write-up of former Mayor Rudolph Guiliani, will remain on sale until the next edition is out in November.
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