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Brumbys Brand Crisis - Social Media Governance

Brumbys Brand Crisis - Social Media Governance

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Published by iGo2 Group
We wrote previously how brands can adopt the concept of brand resilience and build out their social strengths in order to gain the positive brand value, and to be prepared for brand risks and to be better placed to handle the storm. We also noted that while the good news contributing to a strong brand mostly takes a long time to accumulate, the bad news happens at lightning speed.

One of those firestorms just engulfed the Retail Food Group through the CEO of their franchised Brumby’s Bakeries issuing a “foolish and ill-considered” memo. The memo told store operators to blame price rises on the Federal Government’s Carbon Tax which came into force on July 1 2012.

What we noted in Why building Brand Breadth is important for Crisis Management is that if an organisation is well-prepared in their brand and social architectures then they can not only potentially limit the risk but also have a much more efficient and effective means to respond and to measure the effect of their responses.

What we see in the case of the Retail Food Group is a kind of benign neglect of social. It would appear to be more a case of ignorance than one of understanding, sizing up the options and risks, and then positively deciding on a social media strategy based upon on its full risk management and brand merits for the whole organisation – holistically across the layers of parent, franchise, franchisee and customers.
We wrote previously how brands can adopt the concept of brand resilience and build out their social strengths in order to gain the positive brand value, and to be prepared for brand risks and to be better placed to handle the storm. We also noted that while the good news contributing to a strong brand mostly takes a long time to accumulate, the bad news happens at lightning speed.

One of those firestorms just engulfed the Retail Food Group through the CEO of their franchised Brumby’s Bakeries issuing a “foolish and ill-considered” memo. The memo told store operators to blame price rises on the Federal Government’s Carbon Tax which came into force on July 1 2012.

What we noted in Why building Brand Breadth is important for Crisis Management is that if an organisation is well-prepared in their brand and social architectures then they can not only potentially limit the risk but also have a much more efficient and effective means to respond and to measure the effect of their responses.

What we see in the case of the Retail Food Group is a kind of benign neglect of social. It would appear to be more a case of ignorance than one of understanding, sizing up the options and risks, and then positively deciding on a social media strategy based upon on its full risk management and brand merits for the whole organisation – holistically across the layers of parent, franchise, franchisee and customers.

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Published by: iGo2 Group on Jul 20, 2012
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Brand crisis - Brumby’s burns 50% goodwill- no brand resilience
We wrote previously how brands can adoptthe concept of brand resilienceand build out their so-cial strengths in order to gain the positive brandvalue, and to be prepared for brand risks and to bebetter placed to handle the storm. We also notedthat while the
good news
contributing to a strongbrand mostly takesa long time to accumulate, thebad news happens
at lightning speed
.
You can follow the outbreak of Brumby’s crisisin images at our 
One of those restorms just engulfed the
Groupthrough the CEO of their franchisedBrum-by’s Bakeriesissuing a “foolish and ill-considered”memo. The memo told store operators to
blameprice rises
on the Federal Government’sCarbon Taxwhich came into force on July 1 2012.Brumby’s CEO, DeanePriest, subsequentlyquitciting poor judge-ment.What we noted inWhy 
an organisation is well-
prepared in their brand  and social architectures 
then they can not only
potentially limit the risk
but also have a much more
ecient and effective
 
means to respond and
to measure
the effect of their
responses.What we see in the case of the Retail Food Group isa kind of benign neglect of social. It would appearto be more a case of ignorance than one of unders-tanding, sizing up the options and risks, and then
positively deciding
on a social media strategy based
upon on its full risk management and brand merits
for the whole organisation
holistically across the
layers of parent, franchise, franchisee and customers
.
We draw those conclusions for a number of reasons:
Nigel Nixon the CEO of RFG seems to have
Tracey Catterall, Marketing & InnovationsDirector, Retail Food Group and whopostedan apology on the Brumby’s websitehas an
20/07/2012 02:40
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 Page 1
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Brand crisis - Brumby’s burns 50% goodwill - no brand resilience
media from its website
Donut King on the other hand hasa link toFacebookfrom it’s homepage, but not toTwitter or any other social networks andhasno apparentTwitter presence
Michel’s Patisserie hasno links to any socialsitesfrom its homepage, andno apparentpresence on Facebooknor Twitter
Lastly, the neglect of social strategy hasallowed a rabbit warren of tangled brandand social presences which are a perfectillustration of a
social architecture indisarray
. For example Michelsfranchiseeshave Facebook pages, but no there is nocorporate one, same on Twitter, same forDonut King on Twitter, same for Brumby’son Twitter – not there – andmultiple fran-chisees on Facebook– who are they, how dothey represent the brand, what is their rolein building brand breadth,
how do theyplay a role
in the current brand crisis?Why is all that important? Because just going thatfar makes you stop and
take a breath
if you arethinking of how they could respond to this brand
crisis. No effective social strategy can be developed
without a thoroughsocial assessmentand in thiscase that assessment is
doubly important
.For Retail Food Group, apublic company listed on the ASX, the brand damage does not just stop atBrumby’s. Donut King, and Michel’s are its other
major brands and assets. The RFG website is totally 
and the cashow
depends on ongoing fees paid by franchisees which
in turn
depend on
gross sales
of franchisees. Giventhat things are reportedly not good in other areas of  
this carbon tax social network asco
is extremely serious.Not only are ALL those brands under attack butwe see the public spectacle of Donut King and Mi-chel’s distancing themselves from Brumby’s and
everyone
distancing themselves from “head oce”
with plenty of employee comments to that effect in
social. In a multi-leg franchise system you want the
whole to be offering more value than just the sum
20/07/2012 02:40
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 Page 2
 
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Brand crisis - Brumby’s burns 50% goodwill - no brand resilience
of the parts, whereas in RFG’s case the parts arenow attacking each other. The system as a wholeis
seriously fractured
– and that is not going tobe cured by “hiring a social media expert” as we’llexplain further down.
 By the way the “distancing themselves from head
oce” is part of the 
RFG script sent to franchi-seesfor staff to use in “conversations” withcustomers. Overall a very bad idea to script
this like a political speech and only reinforces
the fracture of the system, the incompetence
of Head Oce, the continuing “facelessness”
of the executives from Brumby’s and Head
Oce, the idea that messages can be “pushed
out” and that staff can be usedas a channel despite
their beliefs
.
If we briey refresh on the components of Brand
Resilience model,
Brand Resilience
is a functionof Brand Promise + Brand Experience (Depth &Breadth) + Brand Friction + Brand Stock.
 Brand Breadth is a new idea which embraces all
the “non-operational” touch-points, and espe
-cially social media and the “ 
social presence
” 
of a brand. This concept of Breadth is cruciallyimportant today for brands, because it has a
signicant impact on Brand Resilience.
SWOT Strengths WeaknessesOpportunities Threats
How would you assess Brumby’s and the RFG’s cur-
rent ability to manage this brand crisis? Here isan assessment, based on a few hours scanning thesocial web. (Note on the right that Brumby’s 100%positive sentiment in social media has plummetedto
47% negative
in the last 7 days.)Strengths1.StrongDonut King presence on Facebook 
and the re from Brumby’s, remarkably,
has not spread there yet – 155,000 Likes.2.Relatively strongBrumby’s Facebook pre-sence– 43,000 fans – but well under attack.3.RFG does have a spread of experienced
brand managers
(according to Linkedin)who may be able to collectively focus on ef-fective ways to mitigate the overall damageto the brand portfolio4.As a public company RFG presumably hasreasonable
funds
to sustain the investmentrequired to recover from this debacleWeaknesses1.Lack of 
Executive presence
in social, andtherefore one assumes lack of experience inunderstanding social, is a key weakness2.Lack of 
social assets
and in particular asocial strategy linked to business goals3.Lack of a
community strategy
and relianceon open social networks4.A
fractured
and disjoint approach to social
20/07/2012 02:40
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