2001 Willmott - Citizen Brands

CITIZEN
BRANDS
Putting society at the
heart of your business
MICHAEL
WILLMOTT
JOHN WILEY & SONS, LTD

Chichester · New York · Weinheim · Brisbane · Singapore · Toronto
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CITIZEN
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9 Putting society at the
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6 MICHAEL
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3 JOHN WILEY & SONS, LTD
4111 Chichester · New York · Weinheim · Brisbane · Singapore · Toronto
1111 Copyright © 2001 by John Wiley & Sons, Ltd,
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91111 For my friends at the Future Foundation
20111 without whom this would not have been possible
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CONTENTS
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ACKNOWLEDGEMENTS ix
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6 INTRODUCTION 1
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8 1 THE CASE FOR CITIZEN BRANDS 11
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The Evidence 12
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Governance 15
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Values, Ethics and Culture 17
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Employment 19
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Community 22
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Environmental Issues 23
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Investors 25
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Putting Society at the Heart of Business 27
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Citizenship is not Enough 28
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2 BRANDS, CITIZENSHIP AND
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CONSUMERS 33
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2 Altruism and Self-interest? 34
3 Citizens, Consumption and Companies 40
4111 Mapping Corporate Brands 46
vi CONTENTS
1111 The Impact on Consumers 52

2 The Relationship Between Loyalty, Trust and
3 Corporate Citizenship 55
4 Brands, Citizenship and Consumers 60
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6 3 BEYOND PHILANTHROPY – SEARCHING
7 FOR A NEW CONSENSUS 65
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9 Forward to the Past 66
10 The End of Philanthropy? 68
1 The End of the Argument? 74
2 Back to the Future? 78
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4 4 A MODEL FOR CITIZEN BRANDS:
5 WHY IT WORKS 83
6 Direct Impacts 85
7 Environmental Initiatives 85
8 Employment Issues 85
9 Suppliers 86
20111 Community Involvement 87
1 Broader Social and Ethical Issues 87
2 Intelligent Business 91
3 Indirect Impacts 93
4 Citizen Brands and Models of Advertising 98
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5 PEACE AND PLENTY: UNDERSTANDING
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THE IMPACT OF THE NEW POLITICAL
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ECONOMY 103
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30 Welcome to the Doomsayers 104
1 Peace and Plenty 107
2 Never Had it so Good? 111
3111 The New Threat – Globalization 119
The Impact on the Political Economy 121
CONTENTS vii
1111 6 BEYOND ‘ENDISM’ – THE SOCIAL

2 SIDE OF TECHNOLOGY 129
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4 A Runaway World 134
5 A New Concept of Time and Space 136
6 Small World, Big World 140
7 Responding to the Technological Revolution 141
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9 7 COPING WITH CHOICE 145
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1 Explosion of Choice? 146
2 Do People Want Choice? 153
3 Coping With Choice 156
4 Values, Ethics and Choice 158
5 Advisers as Choice Managers 159
6 Brands as Choice Managers 160
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8 8 SURVIVING A CULTURE OF FEAR 165
91111
20111 Culex pipiens and the New York Concert 165
1 Welcome to the Precautionary Principle 170
2 The New Fear – Genetically Modified Foods 172
3 The Dangers of Mobile Phones 176
4 The Politicization of Science 178
5 Time to Say Goodbye to the Precautionary
6 Principle? 179
7 Welcome to a Culture of Fear 181
8 Culture of Fear and Citizen Brands 185
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9 SO-SO LOGO – THE INCREASING
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CYNICISM OF CONSUMERS 189
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3 Brands, Government and Globalization 190
4111 Declining Faith in Companies 192
viii CONTENTS
1111 Why is it Happening? 195

2 Who Hates Companies? 197
3 Surviving the Cynical Consumer 201
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10 BUTTERFLY CONSUMERS 205
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7 Welcome to Anarchy 208
8 The Evidence of Change 210
9 Decreasingly Loyal, Increasingly Mercurial 212
10 New Models for Analysing Market Dynamics
1 and Market Share 213
2 Word-of-mouth and PR Disasters – An Example 215
3 Butterfly Consumers and Citizen Brands 219
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11 BECOMING A CITIZEN BRAND 225
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7 Focus is Not Cynical 227
8 Values and Reputation 228
9 Transparency 229
20111 Employees 229
1 Keep Executive Pay Under Control 230
2 Competition is Good 232
3 Who Should Develop and Manage the Citizen
4 Brand Strategy? 233
5 Citizen Brand is Not a Sufficient Condition 234
6 Who Can Be a Citizen Brand? 235
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NOTES 237
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INDEX 251
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ACKNOWLEDGEMENTS
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5 I am deeply indebted to many people who have helped in various
6 ways in the development and production of this book.
7 First are all my colleagues at the Future Foundation who have
8 helped to create the intellectual environment and cauldron of ideas
91111 that this book has so heavily drawn upon. These include Charlotte
20111 Grimshaw, who co-authored The Responsible Organisation with
1 Melanie Howard and myself, and whose research and writing for
2 that title contributed greatly to the historical perspective discussed
3 in Chapter 3. In a similar vein, Sarah Graham worked with me
4 and contributed to the analysis of the research on corporate
5 citizenship conducted jointly with Richmond Events and Con-
6 sumers’ Association, to which I refer in a number of places in the
7 book, particularly in Chapter 2. In a different area, Billy Nelson
8 and Charlotte Cornish have been deeply involved in the work at
9 the Future Foundation on choice and complexity that helped
30 inform my analysis of these issues in Chapter 7.
1 Ben Hourahine worked as my editorial assistant in the final
2 stages of the project, while Alexandra Denye has provided emo-
3 tional and management support throughout. Finally, amongst my
4111 colleagues, a special mention must go to Michael Campbell who
x ACKNOWLEDGEMENTS
1111 has not only helped me to understand complex system models, but
2 also provided the simulations that are produced in Chapter 10.
3 Future Foundation associate Jim Murphy has shown me the
4 need for, and benefits of, always questioning the status quo and
5 received wisdom. A classic example is Jim’s idea of ‘peace and
6 plenty’ – which refutes the proposition of social and economic
7 decline – that I discuss in some depth and give my own personal
8 views on in Chapter 5.
9 Paul Ormerod introduced me to the whole area of complex
10 system models and ‘butterfly economics’ and provided many of
1 the research references in Chapter 10. Deborah Parkes from
2 Richmond Events initiated the project on corporate citizenship
3 mentioned above and provided objective comment and criticism
4 throughout. She also suggested involving Consumers’ Association
5 as research partners and joint funders. In the two years that the
6 programme ran, Paul Flatters and Leslie Sopp, who were at the
7 time both at Consumers’ Association, were fellow researchers and
8 analysts whose contribution was extremely helpful.
9 The most instrumental person in the evolution of this book
20111 was my commissioning editor at Wiley’s, Claire Plimmer. It was
1 Claire who approached me with the idea that a book on this
2 subject might be worth doing, and who has encouraged me
3 throughout. Without her, this book would not have happened –
4 I hope her judgement, and faith in me, were right.
5 Equally, without Bob Tyrrell’s and David Darton’s faith in me,
6 and their invitation to join them at the Henley Centre, it is unlikely
7 that I would ever have got into the forecasting and trend analysis
8 business. But their influence on me over the years has been much
9 more than that. They showed me how to look at and analyse
30 consumer and other trends, how to assess their impact on busi-
1 ness, and, most importantly, how to think creatively about the
2 future.
3111 I always received good advice from my father, Peter. He taught
me the importance of objectivity in analysis. ‘Where are the facts?’
ACKNOWLEDGEMENTS xi
1111 he would always say when I had put some new analytic conclu-
2 sion before him. As he did for many others, he helped me to
3 improve my writing tremendously and I am sure would have made
4 many useful comments on this book had he been alive. My mother,
5 Phyllis, has been of similar help over the years, not least in
6 commenting on my prose. An author and social historian, she has
7 been hugely influential on my views on, and analysis of, the world.
8 But there are two people to whom I am most indebted for
9 the opportunity to write this book. First is Melanie Howard, my
10 co-founder of the Future Foundation. I have worked with Melanie
1 for over ten years and many of the ideas that are put forward in
2 this book have developed as a result of our joint work and her
3 creative input into that. She unselfishly encouraged me to take on
4 the task of writing the book and supported me throughout the
5 process.
6 Last, but not least, is my wife, Marianne. She has endured my
7 late nights, uneven moods and much else, both over the years and
8 during the course of this project in particular. And most of the
91111 time she has done it with good humour, while always being a
20111 pragmatic, realistic and intelligent critic.
1 All these people have helped me greatly and, without them,
2 I could not have completed this book. I hope it does not dis-
3 appoint them.
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INTRODUCTION
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9 bout ten years ago, I became interested in the broader
20111 role and responsibilities of business in society – what was then,
1 and still is, referred to as corporate social responsibility. Over the
2 years, my views developed and I began to recognize that it was
3 more than just about companies ‘doing good’ – it also impinged
4 on key strategic and marketing issues like reputation and branding.
5 It was with this in mind that I first coined the phrase ‘citizen
6 brands’ in a 1997 report on corporate responsibility for British
7 Telecom.1 Since then, whenever I have used it in conference
8 presentations or at client meetings, the term has proved to be a
9 popular one – for many people, it seems it epitomizes a new and
30 different approach to business.
1 Yet, during the course of writing this book, my ideas about
2 what exactly citizen brands stands for and why it is import-
3111 ant have been shifting subtly. Whereas originally I used the term
to refer to the responsibilities that companies had in the wider
2 CITIZEN BRANDS
1111 society, now I use it more broadly to describe the relationship 2

2 between a company and society. I now believe it to be even more
3 important than I previously thought – indeed, given the trends in
4 the world, one of the most critical issues facing business.
5 Yet, ask business leaders and management consultants what
6 they think is the most important challenge facing companies today
7 and they are unlikely to highlight this issue. Rather, they would
8 identify globalization, new technology, supply chain management,
9 e-commerce, regulation, core competencies, staff retention, price
10 competition or the now popular innovation.
1 Important though all these are – and to different degrees to
2 different companies in different sectors – they need to be consid-
3 ered alongside a new issue, a new dimension, which is emerging
4 in the technological, globalized, knowledge economy ahead. This
5 concept of citizen brands is one whose importance arises because
6 it embodies not just one, but three crucial strategic issues for the
7 business world: branding, core values and corporate citizenship. I believe
8 that companies that understand and embrace this idea will be the
9 ultimate winners in the future; those that do not face the risk of
20111 a bleak time ahead.
1 This book describes what I mean by citizen brands and presents
2 the ever-mounting evidence that it is a vital aspect of business
3 success, the processes at play that make it so important and what
4 it implies for business behaviour and strategy.
5
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7 M O R E T H A N C O R P O R AT E
8 RESPONSIBILITY
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30 This book is not, however, just about corporate responsibility.
1 Indeed, I believe there are good reasons for getting away from the
2 traditional way that corporate responsibility has been defined and
3111 discussed. For a start, the term conjures up a vision of paternalism
or ‘do-gooding’. Corporate responsibility is therefore often viewed
INTRODUCTION 3
1111 as an add-on to the core business strategy that companies are

2 exhorted and expected to do simply because there are problems in
3 the world and because companies have a responsibility, an obliga-
4 tion, to contribute, to give something back to society.3
5 While I am sympathetic to this view (there are indeed prob-
6 lems in the world that companies just should not ignore), we
7 should recognize that this can be viewed as a sort of politiciza-
8 tion by stealth. Certainly, proponents of corporate responsibility
9 often do believe there are social, economic or environmental prob-
10 lems that companies should (with the perceived retreat of the
1 welfare state) help to combat. Well-intentioned as this undoubt-
2 edly is, it clearly irritates some people in the business world, not
3 least because there is often a self-righteousness about it which
4 bears a resemblance to the philanthropic, paternal and moral cor-
5 porate responsibility of Victorian industrialists that I outline in
6 Chapter 3.
7 Many may disagree with my interpretation, but it results, at
8 least in part, from my conversations and interviews with business
91111 leaders (and those advising business leaders) over the last few years.
20111 Rightly or wrongly, corporate responsibility has come to be seen
1 by a significant number of people, including corporate managers,
2 business analysts and political commentators, as self-righteous,
3 politically motivated, do-gooding. The reaction from many is to
4 re-emphasize the purpose of companies as being principally to
5 generate profits for their shareholders.
6 I think we need to get away from this rather sterile debate.
7 Three things are needed. First, I suggest the use of the term
8 ‘corporate citizenship’ in place of corporate responsibility when
9 describing the role of companies in society. Some might feel this
30 a semantic point but it is in fact important. The very phrase ‘cor-
1 porate citizenship’ suggests a more reciprocal and less philanthropic
2 relationship – something that is certainly consistent with the more
3 general notion of citizen brands.
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4 CITIZEN BRANDS
1111 B E Y O N D B E N E FA C T I O N
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3 Second, it is important that corporate citizenship is recognized as
4 being more than benefaction. Again, there is nothing wrong with
5 benefaction. From the beginning of time people have acted char-
6 itably. Many give time or money to individual people, or to causes,
7 on the basis of their moral or ethical beliefs. There is no reason
8 why companies should not do the same (although companies as
9 collections of individuals and work units may have more compli-
10 cated decisions to make about what causes to support). It is likely
1 that corporate benefaction will increase in the future as people
2 become more aware and more concerned about a range of issues.
3 But it seems to me wrong to equate benefaction with corporate
4 citizenship, which is deeper, more involved, more reciprocal.
5 Corporate citizenship is not so much about a company ‘giving’
6 to charity (benefaction), although, of course, it might do that; it
7 is much more about a company showing that it understands soci-
8 etal issues and cares about them.
9 Thus the distinction I am making between benefaction and
20111 citizenship is that the first is about responsibility, the second about
1 a relationship; the first about ethics, the second about (social) values
2 and interdependence.
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5 R E A P P R A I S I N G VA L U E S
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7 The third imperative is a reappraisal of the link between corpor-
8 ate citizenship, values and branding. In Built to Last4 James Collins
9 and Jerry Porras not only produced one of the best business books
30 of the last decade but also highlighted the importance of core
1 values to corporate success. How does the concept of citizen brands
2 differ? It does so in two ways. First, I specifically link core values
3111 to corporate citizenship. For example, Collins and Porras argue
that Phillip Morris is successful because it has a deeply embedded
INTRODUCTION 5
1111 core ideology, even though the authors themselves do not (as they
2 understatedly put it) see ‘Philip Morris as working altruistically
3 for the good of humankind’! They add:
4
We concluded that the critical issue is not whether a company has
5
the ‘right’ core ideology or a ‘likeable’ core ideology but rather
6 whether it has a core ideology.
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8 While this may have been true in the past, I argue that it is
9 becoming increasingly unsustainable as the consuming public
10 becomes more aware of social and ethical issues and more
1 demanding of companies (see Chapter 2). For example, research I
2 conducted in Britain5 shows that when asked what adjectives (from
3 a list of 30) best describe Marlboro, Philip Morris’s main brand,
4 the top six chosen by respondents were cynical, ruthless, heartless,
5 secretive, deceitful and greedy. Philip Morris may have a strong
6 ideology (the right to personal freedom and choice) but such nega-
7 tive views suggest a position that may well be unsustainable in the
8 long term.
91111 My second point of difference over Built to Last is that, whereas
20111 Collins and Porras’s book concentrates on the internal impact of
1 core values, I look specifically at the external impact – how the
2 social values and behaviour of a company affect its branding
3 and the way it is perceived by those outside the organization,
4 particularly its customers. This is significant because branding is
5 becoming more important in the high-tech, interconnected
6 world of the future (the ‘network society’ as Manuel Castells has
7 labelled it).6
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30 THE MEANING OF CITIZEN BRANDS
1
2 Thus, three critical issues facing business today – corporate citizen-
3 ship, core values and branding – come together in an integrated
4111 way to form the concept of citizen brands. Each is an important
6 CITIZEN BRANDS
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Corporate
3 Core values
citizenship
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5 Citizen brands
6 Embody social values that
7 define the company’s
relationship with society,
8 customers, employees, investors etc.
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2 Branding
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5 Figure I.1 Citizenship, values and branding.
6 Source: Michael Willmott/Future Foundation.
7
8
9 topic in its own right worthy of serious consideration by manage-
20111 ment. Together, they define a company’s relationship with its
1 customers, workers, owners and society in general (see Figure I.1).
2 And in the emerging networked, post-industrial world, managing
3 this relationship is surely the most important challenge facing
4 companies.
5 My argument is predicated on two interrelated views. First,
6 that citizen brands will become more commercially successful in
7 the future. If this is not so, it will be extremely difficult to persuade
8 companies to embrace the concept. Second, that wider concerns
9 and ethical awareness are going to increase affecting people’s views
30 of companies as suppliers of goods and services, as employers and
1 as owners of their capital (through direct share ownership or
2 through indirect means like pension funds).
3111
INTRODUCTION 7
1111 STRUCTURE OF THE BOOK

2
3 The book is structured with these points in mind. In the next
4 chapter I present some of the case study and other evidence to
5 support the thesis that citizen brands are successful brands. I follow
6 this in Chapter 2 by considering consumer research, and specific-
7 ally some of the Future Foundation’s own surveys in this area.
8 The aim here is to clarify why the issue is becoming more
9 important in society (to people as consumers, employees, share-
10 holders, suppliers and voters) and the ways in which it contributes
1 to improved corporate performance. In Chapter 3, I discuss some
2 of the barriers to current business action in this area and argue that
3 there is less of a difference of opinion than people sometimes believe
4 – based, in part, on an old-fashioned view of corporate responsi-
5 bility. At the end of the first part of the book I describe the
6 process by which being a citizen brand feeds through into com-
7 mercial success – no mean task, as it is extremely difficult to prove
8 definitively why and in what exact ways this process works (much
91111 as it is, for example, to prove that advertising works).
20111 Whereas the first section of the book looks at the present –
1 case studies of best practice, examples of successful action, evidence
2 of the current debate and business and consumer opinion, and the
3 process by which it all works – the second section looks to the
4 future. A crucial part of my argument for the importance of citizen
5 brands is that a number of social, technological, economic and
6 consumer trends point to it becoming even more important in
7 the future.
8 Chapter 5 looks at the emerging political economy and
9 two aspects in particular: growing affluence in a post-cold-war
30 environment (‘peace and plenty’) and the seemingly unstoppable
1 process of globalization. In subsequent chapters I consider five
2 specific trends that are particularly important:
3
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8 CITIZEN BRANDS
1111 ■ Technology and the implications for transparency, communi-

2 cations and network effects (such as word-of-mouth),
3 ■ The role of branding in a world where consumers’ choices
4 are expanding to the extent that they are almost ‘drowning’
5 in choice,
6 ■ The growth in scares, hysteria and the emergence of a ‘culture
7 of fear’7 – a specific consequence of ‘peace and plenty’, that
8 exposes all companies to shocks, panics and crisis management,
9 ■ The increase in consumer cynicism and towards multinational
10 companies in particular,
1 ■ The development of more volatile and unpredictable consumer
2 behaviour – the emergence of ‘butterfly consumers’.
3
4 The final chapter of the book summarizes the key issues from
5 earlier chapters and also considers the implications for business in
6 terms of the challenges ahead and the broad strategies to adopt.
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THE CASE FOR
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91111 hat do Hewlett Packard, Richard Branson’s Virgin
20111 and British retailer Marks and Spencer have in common? Not a
1 lot one would have thought. They operate in different industries,
2 on different scales, with different geographical coverage and with
3 different current levels of commercial health.
4 Hewlett Packard is an IT company that is currently ‘reinventing’
5 itself under new CEO Carly Fiorina. Its stock has underperformed
6 the market since 1999 and in November 2000 it had to call off the
7 prospective acquisition of PricewaterhouseCoopers’ consulting arm
8 following disappointing fourth quarter results. Richard Branson’s
9 Virgin Group operates in a range of sectors including airlines, trains,
30 music, mobile telephony and financial services. In December 1999
1 it sold a minority stake in its Virgin Atlantic airline to Singapore
2 Airways for £600 million – a figure ‘far more than most analysts
3 had thought it worth’.1 At the moment Virgin appears to be going
4111 from strength to strength.
12 CITIZEN BRANDS
1111 Marks and Spencer, the best known name in British retailing,
2 is on the other hand having a torrid time. The last two years have
3 been riddled with profit warnings, disappointing results and a
4 collapse in share price.
5 So what do these three companies have in common? Well, in
6 their different ways they are examples of citizen brands. They are
7 not perfect examples, but then I am not sure that any company
8 yet is. But the values they encompass explain Virgin’s current
9 success, why HP will continue to prosper in the hi-tech sector in
10 the twenty-first century and why Marks and Spencer is likely to
1 once again be a leading player in the British high street (unless
2 it is acquired by another company that fails to embrace, and build
3 on, its core values).
4 Their stories are all different but they all have one thing in
5 common – a strong set of core values that relate to their roles in,
6 and relationships with, society. And the reason for being optimistic,
7 rather than pessimistic, about their future prospects is strong
8 evidence that those values and those relationships provide a sound
9 base from which to build success. For a whole range of studies
20111 has shown that, on the whole, being a good citizen does, indeed,
1 equate to commercial success.
2
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4 THE EVIDENCE
5
6 Organizations like Business for Social Responsibility and The
7 Business Enterprise Trust in the United States or the Centre for
8 Tomorrow’s Company and Business in the Community in Britain
9 have summarized some of the studies in this area. Their conclu-
30 sions are clearcut.
1 For example, the Centre for Tomorrow’s Company – whose
2 own particular formulation of corporate responsibility initiatives it
3111 calls the ‘inclusive approach’ – has argued that:
THE CASE FOR CITIZEN BRANDS 13
1111 At the very least, the research supports the view that the inclusive
2 approach, while serving shareholders’ interests, particularly in the
3 long-term, does lead to business success as a result of improved
customer satisfaction, greater commitment on the part of employees,
4
a more effective supply chain, and an enhanced reputation in the
5 community at large.2
6
7 While, in the United States, Business for Social Responsibility has
8 noted that:
9 Over the past decade, a growing number of companies have recog-
10 nized the business benefits of CSR [corporate social responsibility]
1 policies and practices. Their experiences are bolstered by a growing
2 body of empirical studies which demonstrate that CSR has a posi-
3 tive impact on business economic performance, and is not harmful
4 to shareholder value.3
5 A Committee of Inquiry that reported to the British Govern-
6 ment, came to the same conclusion (as have others who looked
7 at the evidence):
8
91111 The evidence [stacks up] to the point where any reasonable person
must begin to ask what more might be required to demonstrate a
20111
binding cause and effect relationship between increased competi-
1 tiveness and environmentally and socially responsible behaviour.4
2
3 Although there is no reason to doubt the conclusions of these
4 bodies, it was necessary for the purposes of this book to consider
5 some of the specific studies themselves not least because the
6 umbrella title of citizen brands includes such a diverse range of issues.
7 But before discussing the specifics, there are some general observa-
8 tions to make as a result of my analysis of the research:
9
30 1. A number of these studies and research projects are, in fact, con-
1 sumer surveys, many of them attitudinal. These are notoriously
2 difficult to interpret particularly when they are of the form
3 ‘I would pay 10% more for an environmentally friendly product’
4111 or ‘other things being equal, I would choose a company that is
14 CITIZEN BRANDS
1111 socially responsible’. This does not mean that they should be
2 discarded as such but rather that they should be treated in a
3 different way and separately from studies based on more
4 direct commercial measures such as share price performance or
5 profitability. For example, some researchers have looked at
6 the correlation between environmentally friendly practices and
7 profitability; others at the relationship between executive pay
8 and share price. It is for this reason that I consider the con-
9 sumer research in a separate chapter.
10 2. When you take out these consumer research analyses, there
1 are fewer direct attempts to assess the impact of corporate
2 citizenship on business performance than might be imagined.
3 However, as I show in this chapter, when the results of these
4 studies are considered together, they do provide a consistent,
5 and I believe persuasive, argument in support of the citizen
6 brands thesis.
7 3. Interestingly, and importantly, there are very few studies that
8 show the converse – that is, that being a citizen brand is bad
9 strategically and commercially. Given the opposition that exists
20111 in some quarters to the idea, I believe this, in itself, lends
1 support to the citizen brand argument. Where there is criti-
2 cism of some initiatives in this area they tend to be of the
3 values and motives involved (altruism versus self-interest) rather
4 than the effect (that citizenship is good for the company). An
5 example is a paper by Joel Schwartz of the Hudson Institute5
6 where he argues that corporate philanthropy is acceptable if
7 it is driven by self-interest but not if it is the result of altruism
8 (‘corporate philanthropy cannot really be justified unless its
9 motive is “impure” ’).
30 4. All the studies that have been conducted are, inevitably, back-
1 ward looking. Some of them, limited by the availability of
2 data, have been forced to look at relationships existing in the
3111 early 1990s or even the 1980s. Since part of my argument is
that the concept of citizen brands is becoming more important
1111 it is likely, therefore, that the relationship between citizenship

2 and commercial success will strengthen in the future (and
3 perhaps be easier to measure and prove). This is why I devote
4 the second part of the book to looking at this aspect.
5
6 With these points in mind, what exact evidence is there of a
7 relationship between citizenship and commercial success? Here, I
8 summarize the results of over 30 different studies on a variety of
9 different aspects.
10 For sake of clarity I have classified the research projects into
1 six different categories, some more general, others more specific:
2
3 ■ governance
4 ■ values, ethics and culture
5 ■ employment
6 ■ community
7 ■ environment
8 ■ investors.
91111
20111
1 GOVERNANCE
2
3 The starting point for assessing how well a company is likely to
4 manage its relationships with the rest of society, is how well it
5 manages itself. That this is an issue not only for the wider popu-
6 lace but for business too is evident from the string of Committees
7 set up to address corporate governance issues in Britain in the
8 1990s. First Cadbury, then Greenbury (specifically on executive
9 pay) and finally the Hampel Committee in 1997/98 all recog-
30 nized that there were areas where companies could do better in
1 corporate governance. But, as far as I can tell they have had little
2 impact. (Indeed, some argued at the time that Hampel in partic-
3 ular missed a ‘golden opportunity’ to be bolder.6) A recent PIRC
4111 report presented, according to the Financial Times, ‘a grim picture
16 CITIZEN BRANDS
1111 of the state of corporate governance in boardrooms. Just 17 per

2 cent of companies were found to be fully compliant with the
3 City’s own combined code of best practice, introduced two years
4 ago.’7 This is strange as a number of studies have demonstrated
5 the importance of good corporate governance. A study in the
6 McKinsey Quarterly8 found that three-quarters of the 200 institu-
7 tional investors asked felt that board practices were at least as
8 important as financial performance when evaluating investments.
9 More than this, the respondents said they were prepared to pay
10 around 20 per cent more for shares of a well-governed company.
1 It seems that good corporate governance helps to support the
2 share price.
3 Nowhere is the issue of corporate governance more topical
4 than in the area of executive pay. Excessive executive pay has
5 achieved unfavourable headlines on both sides of the Atlantic. It
6 is an emotive issue and one that is likely to continue to be so. In
7 the United States, Chief Executives of top companies earned 106.9
8 times more than the average worker in 1999. In 1965 it was 20.3
9 times. As The State of Working America put it ‘In 1999, a US CEO
20111 worked half a week to earn what an average worker earned in
1 52 weeks. In 1965, by contrast it took a CEO two and a half
2 weeks to earn a workers’ average annual pay’.9 What is surprising
3 though, is that paying your executives excessive amounts is not
4 only questionable on ethical grounds but on commercial ones too.
5 Research at the Wharton business school comparing CEO
6 compensation and financial performance over one, three and five
7 years, showed that companies that pay their chief executives too
8 much typically perform badly in terms of profits and share price.10
9 Good governance, good Board conduct, should, therefore, try to
30 ensure that boardroom pay is kept within reasonable bounds.
1 One final point on executive pay is the link between it and
2 being a citizen brand. A study by Ahmed Riahi-Belkaoui11 found
3111 that in America in the 1980s there was a negative correlation
between ‘external perceptions of social performance’ (rating of a
1111 company by fellow industry specialists on its responsibility to

2 community/environment) and managers’ pay. This led the author
3 to conclude that it ‘suggests that executives may be penalized for
4 such activities’. There is another possible interpretation though.
5 If, successful companies are, as I will show in this book, more
6 likely to have a higher social performance (as Riahi-Belkaoui puts
7 it), and successful companies do not provide excessive pay, as the
8 Wharton research found, then you would expect a negative corre-
9 lation.Whether this was the explanation for the result in the 1980s
10 remains to be seen – I am sure it will be the case in the future.
1 Excessive executive pay and being a citizen brand do not sit happily
2 together.
3
4
5 VA L U E S , E T H I C S A N D C U LT U R E
6
7 The debate about governance leads naturally on to the issue of
8 values, ethics and culture. Here, a whole host of studies have shown
91111 the link between a culture that embraces citizenship in some form
20111 or other and commercial success. In terms of values, the critical
1 thing seems to be having those that are clearly defined and partic-
2 ularly those that are inclusive. As I noted in the Introduction,
3 James Collins and Jerry Porras, in their book Built to Last, found
4 clear values and inclusiveness to be among the common qualities
5 of long-lasting US companies, and that there was a clear correla-
6 tion between these qualities and above average stock market
7 performance.
8 Kotter and Heskett studied 200 companies over 20 years and
9 also found superior long-term profitability was associated with
30 corporate cultures that express the company’s purpose in terms of
1 all stakeholder relationships.12 A recent Harvard University study
2 showed that ‘stakeholder-balanced’ companies generated four times
3 the growth rate and eight times the employment growth of
4111 companies that are focused solely on shareholders.13
18 CITIZEN BRANDS
1111 Similarly, an attention to ethical principles and behaviour has

2 benefits. Business for Social Responsibility14 has noted for example
3 that ‘a recent 1999 study, cited in Business and Society Review,
4 showed that . . . companies which made a public commitment to
5 rely on their ethics codes outperformed companies that did not
6 do so by two or three times, as measured by market value added’.
7 And, that in ‘a 1997 DePaul University study companies with a
8 defined commitment to ethical principles do better financially
9 (based on annual sales/revenues) than companies that do not’.
10 A good example of a company with strong, inclusive values
1 is Hewlett Packard. In 1949, David Packard, co-founder of HP,
2 made the point clearly:
3
I suggested that . . . management people had a responsibility beyond
4 that of making a profit for their stockholders. I said that we . . . had
5 a responsibility to our employees to recognize their dignity as human
6 beings.15
7
8 Another part of HP’s core values as defined by Packard was that
9 the company existed ‘first and foremost to make a contribution
20111 to society’.16 This Hewlett Packard ‘way’ is alive and well today.
1 Although, of course, she puts it somewhat differently, new Chief
2 Executive Officer Carly Fiorina makes the same points 50 years
3 later:
4 A leader’s greatest obligation is to make possible an environment
5 where people’s minds and hearts can be inventive, brave, human and
6 strong, where people can aspire to do useful and significant things,
7 where people can aspire to change the world.
8 At Hewlett-Packard we call this way of thinking, this set of
behaviors, the rules of the garage. You see the garage is a special
9
place to us; it is where we began. But these rules are about the way
30 we compete and the way we work.17
1
2 Note that this company competes, but it does it in a way that
3111 is built around and on the skills of its people and with the aim
of changing the world. Compare that to Britain’s Barclays Bank
1111 which faced a barrage of negative publicity as it closed branches

2 during 2000 while running an advertising campaign that empha-
3 sized its size and international credentials. According to an internal
4 report leaked to the Sunday Times newspaper, Barclays was seen as
5 having a ‘culture of greed’ and that being big was equated with
6 ‘not caring’.18
7 The impact of a company’s ethics and values is apparently very
8 important for recruitment. In a recent KPMG survey four out of
9 five employees who thought their managers would keep to ethical
10 standards would recommend the company to potential recruits
1 compared to only one in five who did not have this faith in their
2 managers.19
3
4
5 EMPLOYMENT
6
7 How companies treat their people – their employees – is an
8 important part of being a citizen brand. Here again, all the research
91111 shows the commercial benefits of being a good employer.
20111 A number of recent studies have reinforced the intuitively
1 obvious point that employee-focused companies are more prof-
2 itable. In Frontiers of Excellence, Robert Waterman concluded:
3 ‘Companies that set profits as their No. 1 goal are actually less
4 profitable in the long run than people-centred companies’.20
5 A 1999 Watson Wyatt Worldwide survey of 400 companies found
6 that those with more ‘employee friendly’ policies had higher
7 returns for shareholders: 103 per cent over five years for the best
8 employers to 53 per cent for the worst.21 And another study found
9 that the companies people would most like to work for outgrew
30 others by a four to one margin, were more profitable and created
1 more jobs.22
2 The point is reinforced by the experience of UK Investors in
3 People companies who outperform the national average on a range
4111 of financial measures (see Table 1.1).23
20 CITIZEN BRANDS
1111 Table 1.1 Investing in people works

2
Performance measure National IIP
3 average average
4
5 Return on capital employed 9.38% 18.93%
6 Pre-tax profit margin 3.03% 4.67%
Sales per employee £77 447 £122 108
7
8 Source: RSA Inquiry Tomorrow’s Company, 1995.
9
10 Good employment strategies have an impact on the share price
1 too (see also investors below). In Germany, Linda Bilmes, Konrad
2 Wetzker and Pascal Xhonneux’s analysis of more than 100 com-
3 panies revealed a strong link between investing in employees and
4 stock market performance. Companies that place workers at the
5 core of their strategies produce higher long-term returns to share-
6 holders than their industry peers do.24 At the other end of the
7 scale, getting rid of staff – the downsizing that was so prevalent in
8 the 1990s – is not associated with a better stock market perform-
9 ance, according to a Watson Wyatt study. And, a University of
20111 Colorado research exercise showed that downsizing does not lead
1 to increased profits either.25 Indeed, as Gary Hamel and C.K.
2 Prahalad noted in their influential book Competing for the Future,
3 share prices might even lag behind competitors after a downsizing:
4 The study concluded that a savvy investor should look at a restruc-
5 turing announcement as a signal to sell rather than buy.26
6
7 Perhaps one reason why downsizing fails to improve the
8 commercial performance of companies is that it undermines staff
9 spirit (‘the inevitable result of downsizing is plummeting employee
30 morale’ as Hamel and Prahalad put it) and this feeds directly
1 through to customer satisfaction.
2 The work of Bain & Co shows that those companies that
3111 have the highest employee retention have the greatest customer
retention (Figure 1.1). Since those companies that have the best
1111 Customer
retention
2
100%
3
90%
4 80%
5 70%
6 60%
50%
7
40%
8 30%
9 20%
10 10%
0%
1 Low Medium High
2 Employee retention
3
4 Figure 1.1 Employee and customer retention. Branch banking in
Europe.
5
Source: Bain & Co.
6
7
8 customer retention also have the highest profitability it is clear
91111 how the connection is made.
20111 Eli Lilly’s research among its own staff indicated, as CEO
1 Randall L. Tobias put it, ‘very clearly and very convincingly that
2 employee and customer satisfaction are strongly and positively
3 linked’.27 Lilly is a company that takes its employees (and indeed
4 its relationship with all society) very seriously. So too does Hewlett
5 Packard which, according to a new book, has built up a ‘bank of
6 emotional resilience’ among its people.28 This is one reason why,
7 HP epitomizes a citizen brand more than most.
8 With the process of globalization, companies increasingly have
9 to be attentive to employment practices throughout their supply
30 chain particularly where these involve developing nations. This is
1 important because it can be much harder for companies to monitor
2 standards and because (as I discuss in subsequent chapters) it can
3 be the focus of considerable media attention (and consumer
4111 reproach). For example, British retailer Marks and Spencer, which
22 CITIZEN BRANDS
1111 is recognized as having a particularly inclusive and supportive

2 approach to its staff, was accused by Indonesian workers’ leaders
3 of selling clothes made by child labourers at ludicrously low rates
4 (50p for a 10 hour day).29 The company denied the charge and
5 now has a set of ‘Global Sourcing Principles’ and seems to have
6 ridden out the storm. The reason it has done so, when others like
7 Nike arguably have not, is I believe because it has built up a bank
8 of goodwill by its past activities in a range of citizenship areas.
9
10
1 COMMUNITY
2
3 Marks and Spencer has a long tradition not only of being employee
4 focused but, like a number of other retailers, of being heavily
5 involved in local communities too. This helps to build its reputa-
6 tion and connectedness to society that is so crucial to being a
7 citizen brand. But it has a direct and measurable impact on
8 company performance as well. According to the Independent news-
9 paper, Marks and Spencer’s secondment of its staff to community
20111 projects ‘produced an average competency gain of 29% over a
1 range of skills, with greatest improvements in communication,
2 project management, customer focus and decision-making’.30 So
3 this sort of community activity not only helps to build rapport
4 with local people and reputation with it, but has human resource
5 benefits too.
6 This result is mirrored in American research where a Council
7 of Foundations report noted that employees involved in a busi-
8 ness’s community activities were 30 per cent more likely to
9 continue working for the company.31 British retailer Woolworths
30 has invested heavily in local community initiatives with, to date,
1 very promising results particularly in terms of staff motivation.32
2 Of course, in a global economy community initiatives can
3111 be global too. In October 2000 Hewlett Packard announced a
$1 billion package of partner products and services under its World
1111 e-Inclusion programme. This aims to help the poor in the devel-
2 oping world benefit from new technology and e-services.
3
4
5 E N V I R O N M E N TA L I S S U E S
6
7 Closely related to community initiatives are environmental ones.
8 These too can either be local or global. This is an area where a
9 lot of work has been carried out with nearly all of it showing
10 the commercial benefits of environmental awareness.
1 For example, in May 1997 the Guardian reported that new
2 research had shown that companies taking environmental issues
3 seriously had better financial performances than that of their non-
4 green rivals. The study from Imperial College and Jupiter Asset
5 Management had ‘found that a large sample of greener companies
6 did as well as or better than competitors in the same business over
7 a four year period.’33 At about the same time, the Financial Times
8 ran a headline ‘Green is the colour of money’ on a report about
91111 the 1997 Queen’s Awards for Industry. It went on to say that ‘the
20111 Queen’s Awards for Environmental Achievement this year provide
1 ample support for the thesis that helping the environment can
2 help company profits too.’34
3 More specifically, ICF Kaiser, one of the United States’ largest
4 engineering consulting groups, discovered that companies that
5 ‘green’ their corporate practices can make their shareholders up to
6 5 per cent richer. According to Kaiser, when risks are reduced by
7 the introduction of responsible corporate environmental practices
8 – and the improvements are communicated to Wall Street – com-
9 panies become more attractive investments. The study found that
30
Adopting a more environmentally proactive posture has, in addition
1
to any direct environmental and cost-reduction benefits, a signifi-
2 cant and favourable impact on the firm’s perceived riskiness to
3 investors and, accordingly, its cost of equity capital and value in the
4111 market place.35
24 CITIZEN BRANDS
1111 In the same vein, Dow Chemical is one of a number of

2 companies that has realized the commercial benefit of environ-
3 mental policies.
4
5 When Dow Chemical announced recently that it planned to invest
$1bn (£645m) in new environmental equipment and programmes
6
during the next ten years, the real news was not the size of the pro-
7 posed expenditure but the company’s prediction that it would make
8 a return of between 30 and 40 per cent on its investment.36
9
10 Perhaps the most comprehensive analysis has been that of the
1 US-based Alliance for Environmental Innovation which reviewed
2 all the available studies in this area. They concluded:
3 That out of the 70 studies, not a single one found a negative corre-
4 lation between superior environmental performance and financial
5 performance. These studies suggest that environmentally superior
6 companies command a market place premium of 150 to 250 basis
7 points.37
8 One final example comes from a rather different source.Ahmed
9 Riahi-Belkaoui is a Professor of Accounting at the University of
20111 Illinois-Chicago. In his book Corporate Social Awareness and Financial
1 Outcomes he takes a detached accountant’s view of these issues.
2 Here are his conclusions from the penultimate chapter of the book
3 where he looks at pollution control and stock market perform-
4 ance by analysing data from 100 US companies:
5
6 In fact, on the basis of these results, managers may be advised to
allocate a proportion of their resources to pollution control and to
7
report these expenditures to stockholders.38
8
9 In other words, the market on the whole rewarded the com-
30 panies that spent money on pollution control mechanism and,
1 importantly, disclosed this to stockholders. Being environmentally
2 friendly made business sense.
3111
1111 INVESTORS
2
3 For investors then, whether a company is a citizen brand is a crucial
4 piece of information. This raises two questions. What evidence is
5 there that good corporate citizenship is related to an increased share
6 price? And is this recognized by investors?
7 Clearly on the first point there are some specific examples
8 where being a good citizen is not enough to maintain a company’s
9 position in the stock market – Marks and Spencer being a current
10 high profile example of this. But, as I discuss below, this partly
1 reflects other business issues – being a citizen brand on its own
2 is not enough to guarantee success. But, evidence from specifically
3 focused social, environmental or ethical funds – which by defin-
4 ition cover a broader range of companies – does suggest a link.
5 The Social Investment Forum analysed the performance of socially
6 responsible mutual funds and found that they had done well on
7 both a one year and three year basis.39 It quotes Wiesenberger, a
8 Thomson Financial company, as finding that 25 out of the 46
91111 social and environmental mutual funds were in the top quartile
20111 of their investment categories over three years (so over 50 per
1 cent are in the top 25 per cent of all funds). Nine of the funds
2 (20 per cent ) are in the top 10 per cent.
3 In 1997, US academics Robert D. Klassen and Curtis P.
4 McLaughlin assessed what happened to companies that won
5 environmental awards and those that were involved in disasters like
6 oil spills.40 They found the positive news produced an average rise
7 in share price of nearly 1 per cent, while a problem produced a fall
8 of 1.5 per cent.
9 It is perhaps not surprising, therefore, that investors are increas-
30 ingly taking account of citizenship issues, although there is clearly
1 some way to go before it becomes universal. Critical in this will
2 be the actions of investors themselves and their advisers. Evidence
3 from both suggests a keen awareness of the issues. There is now,
4111 too, an obligation in Britain for pension fund trustees to define
26 CITIZEN BRANDS
1111 their attitude to ‘socially responsible investment’, as a result of the

2 1995 Pensions Act that came into force in July 2000.
3 A survey for the Prince of Wales Business Leaders’ Forum
4 sought the views of 100 institutional investors, regulators, parlia-
5 mentarians, business journalists and non-governmental organizations
6 in three European countries. Three-quarters felt that responsible
7 social and environmental behaviour would increasingly affect a com-
8 pany’s share price and only one in seven disagreed (presumably one
9 in ten were undecided).41
10 As long ago as 1996, Kleinwort Benson was claiming that in-
1 clusive companies outperform the market – ‘earnings per share is
2 no longer the key measure . . . investors are more intent on finding
3 out the sources of value’ – and set up a new investment fund focus-
4 ing on ‘inclusive’ companies. The Financial Times commented:
5
Even accountants have begun to talk of adopting a ‘balanced score-
6
card’ in performance assessment and to describe relying on financial
7 measures as ‘driving while looking in the rear-view mirror’.42
8
9 And for a variety of reasons, pension funds are increasingly
20111 active in this area. As Will Hutton notes, in Britain ‘there are now
1 £2.6 billion of savings funds explicitly mandated to invest in com-
2 panies who demonstrate social, environmental and ethical responsi-
3 bility in their business policies’.43 He goes on to point out that
4 Britain’s third largest pension fund – the Universities Superannua-
5 tion Scheme – has made it clear it will confront poor environmental
6 and ethical behaviour when managing its £20 billion of assets.
7 Clearly managers have a responsibility to take note of the wishes
8 of the company’s owners. If shareholders increasingly want com-
9 panies to be better citizens then it is their duty to follow that
30 instruction. It does not matter whether the motivation is an
1 ethical/altruistic one (as might be the case with certain pension
2 funds or individual investors) or a commercial one (where the share-
3111 holders recognize it is just good business practice) or a combination
of the two.And you would have thought that investors will increas-
1111 ingly support citizenship initiatives as they recognize that being a

2 good citizen is actually good for business.
3
4
5 P U T T I N G S O C I E T Y AT T H E H E A RT O F
6 BUSINESS
7
8 The concept of citizen brands brings together the three issues of
9 values (what the company stands for), corporate citizenship (playing
10 an active role in society) and branding (the tangible and intan-
1 gible attributes that are encompassed in a name or trademark).44
2 Taken together these define a company’s relationship with all the
3 relevant people and institutions it has to deal with.45
4 In an era when management consultants talk about putting
5 the customer at the heart of the company, perhaps another way
6 of describing the concept of citizen brands is of it being about
7 putting society at the heart of the company.
8 If brands encapsulate values, intangible attributes and the rela-
91111 tionship between a company and its customers (and society as a
20111 whole), then they are in effect social constructs. This is important
1 for the companies and organizations that build and manage brands.
2 Companies through their direct actions (for example employment)
3 and through their intermediaries – brands – are an integral part
4 of the social and economic world they operate in, needing to
5 reflect the values and aspirations that exist; the differences and
6 similarities. This is why corporate managers need to bring society
7 into the company; why they need to turn their brands into citizen
8 brands. At the most basic level, this is why all the research has
9 found that good corporate citizenship is so strongly related to
30 commercial success.
1 Companies like Body Shop, Ben and Jerry’s, The Co-operative
2 Bank, British Telecom or IBM all in different ways, and to different
3 degrees, recognize this. So too do Hewlett Packard, Marks and
4111 Spencer and Virgin.
28 CITIZEN BRANDS
1111 CITIZENSHIP IS NOT ENOUGH

2
3 People may be surprised by my choice of Hewlett Packard and
4 Marks and Spencer as examples of citizen brands as they are both
5 under something of a cloud at the moment. But this helps to
6 emphasize an important point: being a citizen brand alone is not
7 enough.
8 Just because a company is a good corporate citizen does not
9 mean it can ignore some of the basic principles of sound man-
10 agement. Three things in particular are important: efficient
1 production; superior quality; and customer focus. The point is that
2 the most successful companies will combine citizenship with all
3 these aspects.
4 Arguably, this is where Marks and Spencer went wrong and
5 it demonstrates some of the conflicts that can arise from being a
6 citizen brand. Marks and Spencer had always sourced much of its
7 clothing range from British suppliers. But these were more expen-
8 sive than foreign producers. For a while, Marks – as a good
9 corporate citizen – kept with its local suppliers, but eventually,
20111 as its products fell behind on a value for money basis, it had to
1 do something. The company only really had two options. First,
2 which was suggested by some pundits, it could have made a point
3 of its good citizenship credentials: ‘pay a bit more because you are
4 supporting British workers’. But, as a potential global player in a
5 global economy, Marks decided (quite rightly in my view) that
6 this was unsustainable and opted for the second option. This
7 was to do what every other major clothing manufacturer does –
8 source the product from overseas. This, of course, helps to create
9 jobs in other, mainly developing, countries and, despite the criti-
30 cism it sometimes receives, can in the right circumstances be seen
1 as a positive act of corporate citizenship.46
2 Marks and Spencer’s attachment to its local, British suppliers
3111 was an indication of a complacency within the company that arose
out of its success. But it was also complacent about its customers
1111 – it lost touch with what its market wanted. And if there is one
2 danger that can arise from corporate citizenship it is that it can
3 turn into paternalism and arrogance when the company is partic-
4 ularly successful. So, despite being a good corporate citizen Marks
5 and Spencer lost the plot. But, and this is the important point, its
6 behaviours and actions in the past, its inherent values, mean it
7 retains a special position in British consumers’ hearts. It has that
8 bank of goodwill. Despite its poor recent performance it still has
9 very high consumer ratings on critical citizenship issues as I show
10 in the next chapter.
1 With a new management team in place that is taking a more
2 proactive approach to its customer base and yet which retains the
3 fundamental values that have been part of the business for many
4 years the chances are that the company will re-establish itself.
5 Hewlett Packard’s position is a more puzzling one. Having
6 grown revenues and earnings every year for the last five years, its
7 main problem seems to be that it is not as successful as some of
8 its hi-tech competitors. In November 2000 it announced year-on-
91111 year revenue growth of 17 per cent yet disappointed the market
20111 by missing its earnings per share target. But this is a solid company
1 and a good corporate citizen – it will be a surprise if it is not
2 still a major player in years to come.
3 My final example – Virgin – is rather different. It does put its
4 employees first and is very consumer focused but it does it in an
5 unorthodox way. Richard Branson himself makes the point: ‘Virgin
6 Direct illustrates one of the great strengths of the Virgin Group:
7 we thrive on mavericks [ my emphasis]’.47 It thrives on being differ-
8 ent. ‘To some traditionalists . . . the fact that Virgin has minimal
9 management layers, no bureaucracy, a tiny board and no massive
30 global HQ is an anathema’.48 But most important of all in my view
1 is the way Virgin positions itself so clearly as a consumer champion.
2 It is one of us, it is a citizen, it is a citizen brand.
3 This positioning of Virgin, and its success, highlights an im-
4111 portant point about being a citizen brand. As I show in the next
30 CITIZEN BRANDS
1111 chapter, the ideal citizen brand is not only sympathetic, trustworthy
2 and friendly but also dynamic and innovative. Virgin’s success –
3 its connection with society – is based on its understanding of
4 consumer needs, its innovation in addressing those and its deter-
5 mination to take on monopolistic or complacent competition. As
6 I also show later, it is much easier to gain the benefits of being
7 a citizen brand in more competitive markets than in less compet-
8 itive ones. If Virgin has thrived on its dynamism in competitive
9 markets, Marks and Spencer’s current plight demonstrates the
10 dangers of complacency that follow from market domination and
1 the lack of innovation that can ensue.
2 Hewlett Packard, Marks and Spencer and Virgin are all brands
3 that have something about them that is more than just an offer of
4 good quality or service or value for money.That something comes
5 from their internal values and their views about their roles and
6 positions in the world. HP wants to make the world a better place,
7 M&S wants a cohesive and prosperous community,Virgin to cham-
8 pion the consumer.They all, in their own different ways, epitomize
9 some aspect of citizen brands. It is not a guarantee that they will
20111 succeed in the future, but it certainly gives them a head start.
1
2
3
4
5
6
7
8
9
30
1
2
3111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
91111
20111
1
2
3
4
5
6
7 BRANDS,
8
9
30
CITIZENSHIP AND
1
2
CONSUMERS
3
4111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
20111
1
2
3
4
5
6
7
8
9
30
1
2
3111
1111
2
3 CHAPTER 2
4
5
6
7
BRANDS, CITIZENSHIP
8 AND CONSUMERS
9
10
1
2
3
4
5
I
6
7
8
91111 f the last chapter provided case study and other evidence of
20111 the strategic and financial importance of being a citizen brand,
1 this chapter concentrates on a range of consumer research studies.
2 The aim here is to:
3
4 ■ Understand the wider concerns of consumers and citizens,
5 ■ Assess the extent to which this affects (if at all) their consumer
6 decisions and their perceptions and expectations of companies,
7 ■ Investigate the process or relationship between the two.
8
9 In particular, I am going to draw on three pieces of research
30 carried out by myself and my colleagues at the Future Foundation.
1 The first was a project commissioned by British Telecom in 1997,1
2 the second was some work conducted jointly with Richmond
3 Events and Consumers’ Association in 1998 and 1999,2 while the
4111 third involves a special analysis of the Future Foundation’s annual
34 CITIZEN BRANDS
1111 monitor of consumer attitudes carried out as part of its nVision

2 service.3 To supplement this I call on other pieces of relevant
3 consumer research as necessary.
4
5
6 A LT R U I S M A N D S E L F - I N T E R E S T ?
7
8 My starting point is a fairly fundamental question – why are people
9 concerned or worried about certain issues? Here, the research
10 suggests that there are two, on the face of it contradictory, aspects
1 to people’s interest in issues like poverty, child welfare or the
2 environment – one more self-centred, the other more altruistic.
3 Unsurprisingly, people will inevitably have some worries about
4 those social and economic factors that might affect either them-
5 selves personally or those who are close to them, be they family,
6 friends, work colleagues or acquaintances in the local community.
7 Indeed, throughout history personal fears have arguably been the
8 most important factor in the development of a whole range of
9 political initiatives and particularly during the last two centuries
20111 as democracy has developed. The range of legislative, institutional
1 and welfare mechanisms introduced from the middle of the nine-
2 teenth century to protect against, and counter, hardship, reflected
3 the personal concerns that were evident during that time in such
4 areas as basic health standards, poverty and working conditions. I
5 discuss this further in the next chapter. Equally, I believe that a
6 real fear about how global warming might directly affect people
7 (or their descendants) was a major factor in the growth of environ-
8 mentalism in the 1980s and 1990s. Current concerns and political
9 responses show the same tendency (see, for example, my discus-
30 sion of genetic engineering in Chapter 8).
1 Second are more altruistic concerns that are, or at least appear
2 to be, born out of ethical or moral beliefs. For example, people
3111 may be worried about human rights or third world poverty, even
though they, or people they know, are unlikely to be personally
BRANDS, CITIZENSHIP AND CONSUMERS 35
1111 affected by them. An interest in animal rights or conservation in

2 far-off lands is likely to be driven by a set of beliefs about what
3 is right or wrong rather than a fear that these pose a direct threat
4 to people’s lives in the industrialized world.
5 Although these would seem to be clearly separate issues, they
6 are, in fact, quite difficult to disentangle. The Future Foundation’s
7 1997 research for British Telecom asked about both general concerns
8 on a range of broad issues (which might be prompted by moral,
9 ethical or political convictions on issues like third world poverty)
10 and personal worries that people currently had (for example, local
1 crime or losing their job at some point in the future). When
2 compared to each other, there is a correlation between personal
3 concerns and altruistic ones, as Figure 2.1 illustrates. Those aspects
4 that people were most personally worried about were also the
5 ones that they were generally concerned about too. So, for
6
7 4.4
Note: the higher the score, the
8 more concerned
Crime
91111 4.2 Education (those
with kids)
20111
Health service
1 4.0
2 General
concern
3 about Unemployment
3.8
issues
4
5 3.6 Homelessness
Poverty in UK
6 Discrimination Global environment

7 3.4 Local communities Local environment
8 Consumer exploitation
9 3.2
30 3.5 4.0 4.5 5.0 5.5 6.0 6.5
1 Personally worried about
2 Figure 2.1 Altruism and self-interest. How concerned people are about
3 different issues – mean scores.
4111 Source: The Responsible Organisation, BT/Future Foundation.
36 CITIZEN BRANDS
1111 example, in their day-to-day lives it is things like crime, the health
2 service and education that most people are worried about. These
3 also get the highest ratings as issues facing society generally.
4 To illustrate the point further, an analysis of different groups
5 in society highlights how people’s own specific circumstances will,
6 not surprisingly, condition the issues that they are personally
7 concerned about. For example:
8
9 ■ Women who are not working are more concerned about the
10 local community (50 per cent higher than the total popula-
1 tion) clearly because they spend more time in it (and are more
2 likely either to have children or be elderly making them more
3 dependent on local amenities and services).
4 ■ Parents with school age children are more concerned about
5 education.
6 ■ Those in society who have suffered most from redundancy in
7 the last few decades are more concerned about unemploy-
8 ment. The proportion of middle-aged manual workers who
9 are worried about this is nearly a third higher than the popu-
20111 lation as a whole.4
1
2 This is not to say that altruistic concerns do not exist. The
3 British Telecom study found that a significant minority of the
4 population (around 10 per cent ) was extremely concerned about
5 specific ethical issues like human rights, fair trade or third world
6 poverty. (These issues are not included in Figure 2.1 as respon-
7 dents were not asked whether they were worried that they might
8 be personally affected by them – for the simple reason that very
9 few people in Britain are likely to be so. Most people do not, for
30 example, have relatives living in the third world, let alone suffering
1 from poverty or exploitative labour practices. Nor do many have
2 friends or family living under human rights abusing regimes.
3111 Certainly, there are not enough to generate sufficient responses in
a standard sized sample survey.) The study also found that slightly
1111 more than a third of the population could be classified as having

2 a generally ethical outlook on life. These people say they are very
3 or extremely concerned about a whole group of broad issues
4 ranging from animal rights, to third world poverty to global and
5 local environmental problems.While, in part, this is clearly a conse-
6 quence of personality and outlook on life it is also the case that
7 those in professional and managerial occupations and in higher
8 income groups are more likely to have an ‘ethical’ stance. Personal
9 circumstance, in terms of greater affluence and higher occupa-
10 tional status, plays its part too it seems.
1 The conclusion from the British Telecom research was that
2 although there is a complex interaction making it difficult to deter-
3 mine how much an individual’s concern about an issue is driven
4 by personal fears or more broadly-based altruism, these two under-
5 lying dimensions do exist. And, important though both dimensions
6 are, it is the personal, non-altruistic aspect that is currently the
7 most influential. Two further conclusions arising from the impor-
8 tance of personal circumstances and fears are, in the context of
91111 this book, perhaps more important.
20111 First, this ‘personalization of altruism’ creates a potential
1 volatility in the perceived importance of issues – any given one
2 might move up or down the agenda as individual circumstances,
3 expectations or concerns change. For example, if global warming
4 is seen as less of a personal threat today than it was in 1997, then
5 general concern about it might have declined too – which, indeed,
6 there is some evidence of happening. (Staggeringly, in the United
7 States the proportion of people who are very or somewhat satis-
8 fied with ‘the state of the nation in terms of protection of the
9 environment’ went from 52 per cent in 1993 to 69 per cent in
30 1999, according to Gallup.5) Or, as unemployment continues to
1 decline in Britain, then personal fears about it may do so too,
2 with a consequent decline in its importance as a general issue.
3 Again, there is some evidence that this is, in fact, happening (see
4111 Figure 2.2).
38 CITIZEN BRANDS
1111 70% Strongly agree Agree

2
60%
3
4 50%
5 40%
6
7 30%
8 20%
9
10%
10
1 0%
1986 1999
2
3 Figure 2.2 Declining sympathy for the unemployed. Proportion who
4 agree that ‘there is too much emphasis on the unemployed and they
could get jobs if they really wanted to’.
5
Source: nVision, Future Foundation.
6
7
8 Second, social and economic trends point to an increase in
9 concern among consumers along both dimensions.You might have
20111 thought that if issues like crime, poverty and educational standards
1 can be addressed and the effects mitigated, then we would expe-
2 rience a decline in those general concerns that are driven by
3 self-focused fears. The reality though is more complex as people’s
4 analysis of their own situation is often a relative rather than absolute
5 one. For example, although most people are better-off, income
6 polarization is increasing the downside risks and implications of,
7 for example, failing to keep up in the job market. Although
8 spending on health care and education may be rising (as it has in
9 real terms in the UK) expectations are increasing at an even higher
30 rate, making the delivered service seem inferior. Although we live,
1 in general, in a safer and healthier world, we are more concerned
2 – even paranoid – about a range of issues likely to affect us person-
3111 ally.This is all part of one paradox of a world of ‘peace and plenty’
that I discuss more fully in Chapters 5 and 8.
1111 And, on the ethical dimension, there is every reason to believe

2 that as more people become better off financially, so they will
3 have the discretion to be concerned about broader issues – to put
4 it crudely, to have the income to be able to afford to be altru-
5 istic. Already, as I noted earlier, those in higher income groups and
6 those in professional and managerial occupations are more likely
7 to be concerned about more general, ethical issues. As people move
8 up Maslow’s hierarchy of needs (see Chapter 5), so they will become
9 more concerned about less material (to them) aspects as well.
10 These two trends may seem contradictory. While it is true that
1 they apply differentially to different groups in society they are not
2 necessarily in conflict with each other. Consider, for example, a
3
4
5
6
7
Growth in wider
8 concerns within
‘Fear’
91111 – society
increased
20111 concern
1 about
personal
2 ‘risks’
3
4
5
6
7 Altruism – growing concern about
8 ‘ethical’ issues
9
30
1
2 Figure 2.3 The factors driving growing concern. Schematic repre-
3 sentation of trends.
4111 Source: adapted from The Responsible Organisation, BT/Future Foundation.
40 CITIZEN BRANDS
1111 middle-class, well-off, middle-aged couple. Irrespective of their

2 political persuasion they may be concerned about the global envir-
3 onment and endangered species and also third world poverty and
4 famine. But, despite their own comfortable situation (with good
5 pensions and insurance as they approach retirement) they may
6 also be concerned about the risks and lack of a safety net that
7 threaten their daughter’s job security, their grandchildren’s educa-
8 tion and the lack of access for all their family to the best possible
9 health care.
10 So, for both altruistic and not so altruistic reasons, we can
1 expect to see a growth in wider concerns among the population
2 (Figure 2.3). To repeat, the paradox of economic growth and
3 improved social conditions for the majority in the developed world
4 is that it stimulates a growing concern about the perceived wider
5 problems of life.
6
7
8 CITIZENS, CONSUMPTION AND
9 C O M PA N I E S
20111
1 What evidence is there from consumer research about how this
2 trend might impact on companies? Here, the evidence is not as
3 definitive as it might be, but I still believe some tentative conclu-
4 sions can be drawn.
5 First, there is some suggestion in the data that concerns about
6 wider issues might increasingly be influencing consumer choice.
7 I do not want to make too much of this, since it is clear that many
8 consumer decisions are still dominated by basic issues such as price,
9 quality and convenience. (I include under convenience the process
30 of habit-driven purchasing where, to make life easier, people buy
1 the same product week in week out – see Chapter 7.) But, in certain
2 cases these can be overridden by non-functional factors – think for
3111 instance of the boycotting of genetically modified foods in Britain
in 1999. In other instances, when consumers have to choose
1111 between two otherwise identical brands within a given product

2 area, the final decision may be based on specific ethical concerns
3 (whether the cosmetics were tested on animals, for example) or a
4 general perception of the overall ethics of a company.
5 So, for example, seven out of ten people agree that they would
6 be prepared to pay a little more for products and services from a
7 company if they knew it did a lot for the wider community, with
8 over a quarter agreeing strongly.6 Now, I accept that questions like
9 these are misleading if taken at face value. They are, after all, easy
10 statements for people to agree with (it costs them nothing after
1 all to answer a market research question). However, it does at least
2 highlight that this is an issue in consumers’ minds, even if it does
3 not necessarily prove that it will in reality affect their purchase
4 decisions.
5 More persuasive are the findings of an exercise that gave more
6 realistic and specific, if still hypothetical, trade-offs to consumers.7
7 In four specific products or service situations (a 1.20 kilogram
8 pack of automatic washing powder, a 200 gram jar of instant freeze
91111 dried coffee, the weekly grocery shopping and the regular tele-
20111 phone service supplied to the home) the respondents were
1 presented with different formulations for that product or service.
2 This involved not only price, quality and service but also various
3 potential aspects of a company’s broader corporate role (environ-
4 mentally friendly, donates to charity, good employer, helps local
5 community, has a fair trade policy). Unsurprisingly, the results
6 showed how sensitive consumers were to price and quality aspects
7 but it also highlighted that other factors could have an influence
8 too. For washing powder, environmental friendliness was important
9 (in 1997), for coffee it was fair trade (there has been significant
30 campaigning activity in this area including the launch in 1991
1 of Cafédirect that works in partnership with small-scale coffee
2 producers, guaranteeing fair prices).
3 When the price differentials were increased in this exercise,
4111 these wider issues became less important. This lends not only
42 CITIZEN BRANDS
1111 credibility to the exercise (as people were clearly thinking about
2 the specific formulations being presented to them and making
3 considered opinions on the basis of that) but also reinforces the
4 fact that such concerns are, in effect, ‘nice to have’ rather than
5 ‘must have’.
6 Another example of how consumer decision making might be
7 influenced in this way is the boycotting of goods or companies.
8 Again, the evidence here is not as clear as might be hoped but
9 certainly a range of questions asked in the 1990s points to an
10 increasing willingness of consumers to pursue such action. Figure
1 2.4 shows a compilation of survey questions from various sources
2 on the issue of consumer boycotts. Some relate to ethical issues,
3 some to specific environmental ones. Some ask about whether
4 people have at some point engaged in a boycott, others whether
5 they would consider it. As all the questions are slightly different,
6 it is difficult to draw clearcut conclusions but there is certainly an
7
8 70%
Were prepared to I would not deal with
9 boycott over ethical a company if I disliked
20111 60% standards ^ its ethics ^^
Operating some
1 boycott *
50%
2
3 40% Had boycotted over
ethical standards ^
4 Had seriously
30% considered doing so **
5 Avoid products
6 20%
damaging
Had boycotted
the ozone
product on
7 layer *
environmental grounds
8 10% **
9
0%
30 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
1
Figure 2.4 A growing readiness to boycott? Percentage agreeing to each
2 statement.
3111 Source: Who are the Ethical Consumers?,8 Co-operative Bank; *Daily Telegraph;
**Research 2000; ^Gallup; ^^GGT.
1111 indication that the acceptability or desirability of boycotts has

2 increased (a statistically fitted trend line points upwards). This, if
3 you think about it, is not surprising as choice increases (see Chapter
4 7) and economic discretion grows (see Chapter 5). It is just less
5 costly now for people to boycott a product or brand.
6 The second main conclusion from consumer research that
7 relates to companies is that people are increasingly cynical about
8 corporate motives and activity. I discuss this again in Chapter 9
9 and restrict myself here to describing some specific data from
10 consumer studies and how it relates to purchasing activity.
1 The first set of data on this subject relates to the degree to
2 which consumers trust companies. In a survey9 respondents were
3 asked how much they trusted specific, named companies on a
4 number of dimensions ranging from being environmentally careful
5 to being honest and truthful in its advertising. Apart from showing
6 huge variations in the degree of overall trust in different com-
7 panies (with ones like Marks and Spencer, Virgin and Body Shop
8 doing specially well and some, like Nike, Sky and Marlboro, doing
91111 particularly badly) it also showed that companies in general are
20111 more trusted for some things than others. Companies do best in
1 those areas of basic service delivery like ‘providing a good and
2 consistent service’, being ‘honest and fair in its dealings’ and
3 ‘treating its customers fairly’. This is to be expected, although
4 arguably the ratings achieved by many companies still leave a lot
5 to be desired. On these three aspects the proportion of people
6 saying they trust the company a great deal or mostly, is around
7 60 per cent averaged across the companies covered (see Figure
8 2.5). But should not companies such as these (remember they are
9 all big national and international businesses) be achieving trust
30 levels of 70, 80 or even 90 per cent ? Of the companies in the
1 survey, only Marks and Spencer – with ratings in the 80s in all
2 three areas – consistently reached this sort of level.
3 But companies do much less well on some of the broader
4111 issues that are the focus of this book. So, for example, being good
44 CITIZEN BRANDS
1111
Provide good & consistent service
2 Honest & fair
3 Treat customers fairly
4 Good at handling complaints
5 Honest & truthful advertising
6 Use information responsibly 1999
7 Competitive pricing 1998
8 Treat employees fairly

Environmentally careful
9
Treat suppliers fairly
10
Open in providing details
1
Overall trust
2 0% 10% 20% 30% 40% 50% 60% 70% 80%
3
4
Figure 2.5 Consumers’ trust in companies. To what extent do you
5 trust (company) to . . . ‘a great deal’ or ‘mostly’?
6 Source: Future Foundation/Consumers’ Association/Richmond Events.
7
8
9 employers, treating suppliers fairly and being environmentally
20111 careful all achieve trust ratings of under 50 per cent. Bottom
1 comes being open in providing details about the company. In fact,
2 as I show later, this is an important component in determining
3 people’s overall trust in a brand. Interestingly, being competitive
4 on price also comes fairly low down illustrating, among other
5 things, the continuing price aggressiveness (if I can put it like
6 that) of consumers despite many years of income growth (see
7 Chapter 5).
8 Two other points come out of this analysis. First, when the
9 research, initially carried out in 1998, was repeated in 1999 we
30 recorded a small decline in trust between the two surveys. In the
1 course of just under a year there had been a minor, but statistically
2 significant, increase in cynicism among consumers. Second, the huge
3111 difference between companies on specific aspects of trust is very
noticeable.
1111 For example, take two particular, and very important, issues:
2 trusting companies to be ‘honest and truthful in their advertising’
3 and to be ‘open in providing details about the company’. Figure 2.6
4 shows that the best companies have twenty times more consumers
5 trusting them (a great deal or mostly) on these aspects than the
6 worst do.
7 As far as individual companies are concerned, on these dimen-
8 sions Nike, Sky and Marlboro are towards the bottom of the British
9
10 Marks and Spencer
1 Body Shop
2 BBC
3 Kodak
4 Tesco
5 Cadbury
6 Virgin
7 BT
8 Disney
91111 Nestlé
20111
Shell
1
British Airways Open in providing details
2 about the company
Coca Cola
3
Barclays Honest and truthful in
4 advertising
Microsoft
5
Dixons
6
Nike
7
Sky
8
Marlboro
9
30 0% 20% 40% 60% 80% 100%
1
Figure 2.6 Whether company trusted to be ‘honest and truthful in
2 advertising’/‘open in providing details about the company’. Percentage
3 saying a great deal or mostly.
46 CITIZEN BRANDS
1111 consumers’ league. Beyond this, it is noticeable how poorly

2 Microsoft and Coca Cola also fare particularly on being ‘open’.
3 British readers may not be surprised to see British Airways, Barclays
4 Bank and high street electrical retailer Dixons not doing so well
5 either.
6 One reason for looking specifically at these questions on trust
7 revolving around advertising and openness is that a statistical
8 analysis of the data suggests that these two aspects are important
9 ones in determining overall levels of trust in a company, along-
10 side honesty and fairness and consistent service. The conclusion
1 from this study was that trust is built on three core components:
2 honesty, fairness and openness. Another way to describe this last
3 element is the concept of ‘transparency’ something that in the new
4 media age is becoming more important.
5
6
7
M A P P I N G C O R P O R AT E B R A N D S
8
9
20111 Another exercise using the same piece of research adds further light
1 on the issue of consumer cynicism. It is useful because
2 once again it looks at how specific companies are perceived by con-
3 sumers. The approach was to ask respondents to choose from a list
4 of 30 adjectives, the six that they most associated with individually
5 named companies. The adjectives ranged from the positive (like
6 honest, trustworthy, innovative) to the not so positive (like cynical,
7 greedy, heartless). People were also asked what six adjectives they
8 would associate with their ideal company.
9 To try to summarize all these data succinctly a correspondence
30 analysis10 of the companies and adjectives was carried out. The
1 results are shown in Figure 2.7 and are based on all consumers’
2 views of companies whether they use them or not. Interestingly,
3111 the results are almost identical when restricted to regular users of
the company suggesting that these perceptions are broadly based,
1111
2
3 Old
4 Conventional
Rover
5 WH Smith Boring
Lazy
6 Cadbury
Kodak
Marks and Spencer Superdrug NatWest Bank

7 B&Q Nestl
Safe
BBC
8 Sainsbury
Barclays
Asda Shell
9 Friendly
Tesco Inclusive
Fair Helpful
10 Trustworthy Sympathetic BT Greedy
Generous Honest Secretive
1 Ideal Open Dixons Difficult
Coca Cola
Body Shop British Airways
2 Adventurous Happy
Ambitious Aggressive Deceitful
Heartless
Marlboro
Innovative Channel 4
3 Dynamic
Exciting Exclusive
Cynical
Disney Ruthless
4 Nike
Sky
Virgin Young
5 Microsoft Company
6 Adjective
7
8
Figure 2.7 Mapping brands and adjectives. Analysis of adjectives asso-
91111 ciated with certain brands.
1
2
3 robust and represent real feelings about the businesses in question.
4 If you look at the ‘map’ you can see, in effect, two dimensions.
5 One is an old/conventional versus dynamic/innovative axis (top
6 to bottom), the other a sympathetic/trustworthy versus ruthless/
7 greedy one (left to right).
8 On this basis, what people want in their ideal company is a
9 sympathetic organization they can trust but also one that is dynamic
30 and innovative. None of the companies in the survey achieved this.
1 The companies that did best were, to a greater or lesser degree,
2 either conventional, safe and sympathetic (like Marks and Spencer,
3 Cadbury and Kodak) or exciting, innovative and dynamic (like
4111 Virgin and Body Shop). The direct comparisons are interesting:
48 CITIZEN BRANDS
1111 Body Shop is seen as more sympathetic than Virgin but less
2 dynamic; Tesco is seen as more dynamic than Sainsbury but less
3 trustworthy.
4 What is perhaps most interesting are the companies occupying
5 the area in the bottom right-hand corner of the map. The adjec-
6 tives respondents associated with these companies are not ideal
7 brand attributes: ruthless, deceitful, greedy, cynical and the like.
8 Some of the world’s biggest brands are here – Marlboro, Nike, Coca
9 Cola and Microsoft – as is British satellite broadcaster Sky. To
10 reinforce the point, listed in Table 2.1 are the top five adjectives that
1 were associated with three of the world’s best-known brands.They
2 are set alongside the adjectives for Virgin, a brand that if not as
3 ‘famous’ still has significant global brand awareness and certainly
4 was better placed on the map. The contrast is stark.
5 However, many of these poorly ranked brands (in terms of
6 adjectives) have been highly successful in commercial terms over
7 the last few years. On one measure of this, seven of the companies
8 included in the survey rank within Interbrand’s top 60 world
9 brands by brand value.11 But Figure 2.8 shows how many of these
20111 fall in the ‘nether’ zone of the adjectives map.
1 This raises some important questions. If these companies have
2 such a strong brand valuation and if some are highly successful
3 commercially, why do they have such negative associations in some
4 customers’ minds? More importantly, does it therefore matter
5 whether consumers think you are greedy or ruthless or cynical if
6 they keep buying your products?
7 I believe it does for the simple reason that past or current
8 commercial success is no guarantee of success in the future.
9 Moreover, the chances of a company or brand failing in the future
30 depend in part on current perceptions of it. In any case, some of
1 these companies have been successful in part because of the market
2 conditions under which they operate. An obvious example from
3111 those businesses included in this survey is British satellite broad-
caster Sky.
3
2
1
9
8
7
6
5
4
3
2
1
8
7
6
5
4
3
2
1
9
8
7
6
5
4
3
2
30
10
4111
1111
20111
91111
Table 2.1 Adjectives associated with certain companies
Marlboro % Nike % Coca Cola % Virgin %
Cynical 68 Ambitious 48 Aggressive 44 Innovative 60
Ruthless 59 Aggressive 44 Ambitious 44 Dynamic 51
Heartless 58 Greedy 39 Greedy 39 Ambitious 50
Secretive 58 Exclusive 33 Secretive 35 Adventurous 46
Deceitful 54 Cynical 31 Ruthless 33 Exciting 40
Souce: Future Foundation/Consumers’ Association/Richmond Events.

50 CITIZEN BRANDS
1111
2
3
4
5
6 Kodak
16
7
8 49
Shell
9
10 Greedy
1 Ideal 1 Difficult Secretive
Coca Cola
2 Ambitious Aggressive Heartless
Deceitful Marlboro
3 Cynical
Disney
Exclusive
Ruthless
10
4 Nike
6 Young 28
5 Company
Microsoft
6 Adjective
2
7 10 World ranking on
brand value
8
9 Figure 2.8 Brand value – do we have the right measures? Brand and
20111 adjective ‘map’ and ranking on Interbrand’s brand value.
1 Source: Interbrand, Future Foundation/Consumers’ Association/Richmond
Events.
2
3
4 Thanks to a benign regulatory environment Sky has, until now,
5 been the only satellite broadcaster in Britain. Of course it does
6 have multi-channel competitors in the form of cable companies,
7 but cable is still being rolled out across the country. Sky also now
8 has a terrestrial digital television competitor in ONdigital but for
9 many years benefited from first mover advantage. Through its own
30 skill and audacity, Sky also bought film and sports rights giving it
1 a huge advantage in content too. (Again, these are available through
2 the cable operators but are heavily branded as Sky and the
3111 revenues, of course, go to Sky.) Thus, many people had little option
but to subscribe to the Sky service, either directly or through
1111 cable operators. The same continues to happen with Sky’s new
2 digital offer.
3 Consider some of the other companies in that quadrant of the
4 map. Microsoft too is in a near monopoly position with its Windows
5 products and although Coca Cola has a major competitor in Pepsi
6 Cola, between them they account for the vast majority of cola sales
7 around the world. Marlboro, although it has many competitors, sells
8 an addictive product that has no alternative – the market may not
9 be a monopoly but the product certainly is.
10 Indeed, the only brand in that quadrant of the map that
1 stands out as not having some special market factors in its favour
2 is Nike. The poor perception of Nike is almost certainly linked
3 to the bad publicity it has received over the claimed ill-treatment
4 of its workers in its third world factories (see Chapter 9). To
5 date, that does not seem to have affected its commercial success
6 but whether that will still be the case in the future remains to
7 be seen.
8 What is clearly true is that if any of these companies were
91111 asked whether they were happy to have themselves perceived in
20111 this way, the answer would be a resounding no. This is not an
1 ideal positioning to have and most businesses in this situation,
2 whatever their current commercial fortunes, would seek to address
3 it. Some already have.
4 Sky, perhaps in part because it is starting to face real compe-
5 tition for the first time, has tried to rid itself of its old aggressive,
6 ‘macho’ image. Mark Booth, CEO from 1997 until 1999 made a
7 start in June 1998 when he said ‘BSkyB has been aggressive with
8 its pricing in the past, and there is a trust issue we are committed
9 to turning round’.12 Recent indications from the company suggest
30 that the initiative is being maintained.
1 Coca Cola too has had a change of heart – this, though,
2 prompted by a poor set of results. As new Chairman and Chief
3 Executive Douglas Daft baldly put it: ‘After 15 years of consistent
4111 success, [in 1999] we endured a year of dramatic setbacks’.13 Daft’s
52 CITIZEN BRANDS
1111 response has been to develop a new strategy that tries to recon-
2 nect the company with society. This is built around three strands:
3
4 1. ‘Think local, act local’ – the aim here being to reconnect to
5 the local communities where, after all, local people drink indi-
6 vidual bottles in local settings.
7 2. ‘Focus as a pure marketing company’ – since, as Daft notes,
8 Coca Cola’s ‘success flows from the strength of our brands,
9 and our ability to relate to people’.
10 3. ‘Lead as model citizens’ – because ‘in every community where
1 we sell our brands, we must remember we do not do busi-
2 ness in markets; we do business in societies.’14
3
4 It is clear that Douglas Daft recognizes that the way Coca
5 Cola is perceived across the globe leaves much to be desired –
6 and, more importantly, that it is unsustainable. In his mind, although
7 he has not put it exactly in this way, it needs to have a better
8 understanding of, and relationship with, society – to be, in other
9 words, a citizen brand.
20111 All this suggests that many large, multinational companies not
1 only recognize that there are negative feelings about them but also
2 recognize they should do something about it. Whether they are
3 doing enough is another matter.
4
5
6 T H E I M PA C T O N C O N S U M E R S
7
8 If we take two of the key points from this chapter and think of
9 their combined impact, then the potential effect on companies is
30 profound.
1 First, I have shown that as affluence increases consumers
2 become more likely to change their purchasing patterns as a result
3111 of wider concerns – they are more likely to be ‘ethical’ consumers.
Second, people are becoming increasingly cynical of companies’
1111 behaviour. Taken together, this suggests that the public’s percep-
2 tion of a corporation’s attitude to and understanding of broader
3 social issues and, indeed, that company’s behaviour in society at
4 large, is becoming more influential in determining buying patterns
5 and brand choice.
6 Analysis of consumer survey data covering the last twenty years
7 certainly seems to support this thesis. The surveys initially
8 conducted by market research company Taylor Nelson (now Taylor
9 Nelson Sofres) and now continued by the Future Foundation
10 investigate a range of social values and consumer attitudes.15 I have
1 re-analysed some of the questions to consider these two aspects
2 of ‘ethical’ consumption and cynicism towards companies. For the
3 first dimension – how wider concerns might be influencing
4 consumer behaviour – I created an index by combining each
5 respondent’s responses to two questions:16
6
7 ■ how people felt about ‘companies that do things which are
8 profitable but not morally right’ (and, in particular, whether it
91111 made them angry);
20111 ■ agreement with the statement: ‘I would be willing to pay as
1 much as 10 per cent more a week for grocery items if I could
2 be sure that they would not harm the environment’.
3
4 To assess the question of cynicism towards companies I used agree-
5 ment (and disagreement) with the statement:
6
7 ■ ‘most companies in this country are fair to consumers’.
8
9 As before in this chapter, these questions are far from ideal.
30 If we were seeking to specifically research these issues today we
1 would ask different and more direct questions. But, these ques-
2 tions do allow us to get a feel for the issues under consideration
3 and do at least allow us to compare change in consumer attitudes
4111 over a long period of time.
54 CITIZEN BRANDS
1111 Specifically, I wanted to assess whether the proportion of

2 consumers who were potentially influenced by wider or ‘ethical’
3 concerns and were cynical about company behaviour had
4 increased. These, after all, are those consumers most likely to be
5 aware of, and interested in, citizen brands. Two definitions were
6 used. A stricter one required respondents to have a score of eight
7 or more out of ten on the ‘ethical’ index and to have actively
8 disagreed that companies are fair to consumers. A less restrictive
9 definition was based on a score of seven or more on the index
10 (in other words, a strong or reasonable strength of feeling on at
1 least one of the questions) and a lack of agreement (as opposed
2 to active disagreement) that companies are fair.17 The results, as
3 set out in Figure 2.9, make interesting reading.
4 Three main points can be drawn from this analysis. First, the
5 proportion of the population likely to be influenced by a busi-
6 ness’s wider actions and roles in society (and therefore likely to
7 support the citizen brand concept) has increased. Second, the
8
40%
9
Strict definition
20111 35%
Wider definition
1 30%
2
25%
3
4 20%
5
15%
6
7 10%
8 5%
9
0%
30 1980 1999
1
Figure 2.9 Seeking citizen brands? Proportion of consumers who are
2 potentially influenced by wider/‘ethical’ issues and who are cynical about
3111 companies – defined in two ways.
Source: nVision, Future Foundation.
1111 proportion of ‘hard nuts’ – those with the most strongly held
2 ethical and anti-corporatist views – is much smaller than those
3 with a still concerned but more equivocal outlook. This is consis-
4 tent with other research studies in the area of ethical consumption.
5 Third, it still affects only a minority of the consuming public.
6 This last point is an important one since at this rate it might
7 take perhaps 20 years before the majority of the population could
8 be characterized as caring about citizen brands. It would, however,
9 be a mistake in my view to interpret it like this. For a start, few
10 companies can ignore even 15 per cent of their consumers let
1 alone 35 per cent. Then, there is the fact that, as I showed earlier,
2 those consumers who many companies most cherish – those in
3 higher social grades and with most discretionary spending power
4 – are more likely to have these wider concerns and, research shows,
5 more likely to pay a price premium for products embracing them.
6 Then there are the dynamics within society. As the nature of work
7 changes, so more people are entering managerial, professional and
8 administrative occupations – moving into higher social grades.
91111 Society is ageing too and, as I show in Chapter 9, it is the ‘new’
20111 old – those who are passing their 50th birthday now or during
1 the next 10 years – who are the most cynical about companies.
2 Finally, it is clear that attitudes towards companies, their operating
3 practices and their relationship with society has suddenly become
4 a hot and potentially disruptive issue as I discuss also in Chapter
5 9. Whether this is just a flash in the pan remains to be seen. I
6 suspect it is not, but in any case, surely it would be foolish for
7 the business world to dismiss it as such.
8
9
30 T H E R E L AT I O N S H I P B E T W E E N L O YA LT Y,
1 T R U S T A N D C O R P O R AT E C I T I Z E N S H I P
2
3 The final piece of analysis of consumer research that I wish to
4111 draw on involves using multivariate statistical techniques to look
56 CITIZEN BRANDS
1111 at the relationship between some of the issues I have considered

2 in this chapter. In particular, I want to investigate how perceptions
3 of a company relate to actual consumer behaviour (or at least the
4 behaviour claimed in the survey). The survey,18 provides a unique
5 opportunity to do this because it asks about people’s views
6 on specific named companies on a range of dimensions as well as
7 their usage of those companies and their products. Thus, questions
8 were asked not only about different aspects of trust (as shown in
9 Figure 2.5) but also about: satisfaction with the company; whether
10 it was viewed as a good corporate citizen;19 whether it was seen
1 as open and accessible; and whether its advertising and press
2 coverage had been good over the past year. The companies asked
3 about were those listed in Figure 2.6.
4 From the analysis, a picture emerges of the processes by which
5 some of these factors are linked. We cannot prove that these are
6 causal relationships – that, for example, increasing consumers’ access
7 to a company will lead inevitably to an increase in trust – but we
8 can, in my view, develop a plausible model that implies causality.
9 It goes like this.
20111
1 ■ Not surprisingly, the most important factor determining
2 customer loyalty is customer satisfaction. A consumer who is
3 satisfied with a company and its services is more likely to
4 continue to buy its products. Or, more importantly, and to put
5 it the other way, consumers who are dissatisfied are likely to
6 change to different suppliers. This is not only an intuitively
7 obvious point but has been proven in numerous studies. Its
8 significance here is in emphasizing the importance to commer-
9 cial success of the basic aspects of any offer – providing good
30 quality products and services, offering competitive prices and
1 ensuring a good purchasing experience and after-sales service.
2 This will obviously continue to be the case in the future.
3111 ■ But the analysis also showed that trusting a company is im-
portant to loyalty too. Satisfaction with a company and trust
1111 in it are closely correlated. So, in part, you trust a company

2 because it provides a satisfactory service. In this sense, a measure
3 of trust and a measure of satisfaction are, in fact, measuring
4 the same thing.20 But, the statistical analysis shows that they
5 are not exactly the same thing – that there is something else
6 about trust that has the effect of increasing customer loyalty.
7 So, for example, some respondents were loyal to a company
8 despite relatively low satisfaction because, as far as we can tell
9 from this survey, they trusted it. Overall then, satisfaction is
10 the main factor determining brand loyalty with trust having
1 a separate and secondary impact too.
2 ■ Beyond providing a satisfactory service what else causes people
3 to trust a company? Here the results of the analysis get inter-
4 esting. Of the factors covered in the survey the most import-
5 ant determinant of trust is whether the company is seen to
6 be a good corporate citizen. The second is whether it is seen
7 as being open and accessible to consumers (for information or
8 complaints, for example) – a ‘transparent’ organization as I
91111 described it earlier. Again, these two factors are in themselves
20111 related: people are more likely to think a company is a good
1 corporate citizen if they believe it is a transparent organization
2 and vice versa.
3 ■ The other, albeit much weaker, aspect that appears to be associ-
4 ated with higher trust (and hence increased loyalty) is
5 communications activity. Interestingly, good press coverage
6 appears to be more important than good advertising. Figure 2.10
7 illustrates this by plotting for each company in the survey the
8 proportion of respondents saying they trusted the company a
9 great deal or mostly against the proportion saying they felt the
30 company had received very or fairly good press coverage in the
1 last year. This is the left-hand diagram in the figure. The right-
2 hand diagram does the same exercise but plots trust against
3 whether the company was felt to have produced excellent or
4111 very good advertising. In each diagram a line of best fit is
2
1
9
8
7
6
5
4
3
2
1
9
8
7
6
5
4
3
2
1
9
8
7
6
5
4
3
2
30
10
3111
1111
20111
% feeling company % feeling company
has had very/fairly has had excellent
good press or very good
coverage advertising
90 70
80
60
70
50
60
50 40
40 30
30
20
20
10
10
0 0
0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100
% trusting a great deal/mostly % trusting a great deal/mostly
Figure 2.10 The relationship between communications activity and trust. Does press activity have more of an impact?
Source: Future Foundation/Consumers’ Association/Richmond Events.
1111 included to show the direction of the relationship between the

2 variables. It can be seen that the line for press coverage is much
3 steeper than that for advertising – good press coverage appears to
4 be more strongly related to trust than good advertising does.
5
6 To summarize this, Figure 2.11 provides a simplified repre-
7 sentation of the relationships, together with my interpretation of
8 how the process works. The main factor driving customer loyalty
9 is satisfaction with the company, product or service. Satisfaction
10 tends to lead to increased trust in the company or brand, but trust
1 in its own right, and independently, makes the customer more
2 loyal. As well as satisfaction helping to increase trust, so do some
3 general perceptions about the company and specifically whether
4
5 Importance in
determining loyalty Loyalty
6
Higher
7
8
Satisfaction
91111 with product or
20111 service
1 Trust in
company/brand
2
3
4 Whether perceived
as good citizen
5
6 Whether seen as
7 open/transparent
8 ?
?
9
30 Communications
activity
1 Lower
2 Figure 2.11 A model of citizenship and loyalty. Schematic represen-

3 tation of the process.
4111 Source: Future Foundation.
60 CITIZEN BRANDS
1111 it is felt to be a good corporate citizen and to be open and acces-

2 sible to consumers. Again, although these two factors are related
3 – a perception of being accessible is likely to enhance the belief
4 that the organization is a good citizen – they also have their sepa-
5 rate impact on trust. This implies that to maximize trust a business
6 needs to be both a responsible citizen and a transparent organi-
7 zation. Finally, good communications activity can increase trust
8 too. The full process by which this works cannot be deduced from
9 this particular survey, but at least part of the explanation is surely
10 that good communications help to generate a perception of
1 citizenship and transparency.
2
3
4 BRANDS, CITIZENSHIP AND
5 CONSUMERS
6
7 So, what have we learned from this chapter and its analysis of a
8 range of consumer surveys?
9 First, that people’s concerns about wider issues are the result
20111 of both personal fears and more altruistic feelings. This is neither
1 new nor contentious. But the potential implications are. For a
2 start, the strength of feeling about specific concerns and the level
3 of support for specific ethical issues could well become increas-
4 ingly volatile. This will make it harder for companies to keep up
5 with the consuming public’s agenda. At the same time, I have
6 argued that the overall range and extent of such concerns will
7 grow over time.
8 Second, is that consumers’ concerns about wider issues are
9 increasingly impacting on their perceptions of companies and their
30 purchasing decisions. This is important because it is happening at
1 a time when consumers are becoming more cynical about
2 companies themselves. The effect is an increasing number of
3111 consumers who are not only sceptical about companies’ aims and
actions but are also happy to boycott their products.
1111 Third, and related to this, the adjectives some consumers most
2 associate with some companies are, to say the least, far from ideal
3 as far as those companies, presumably, are concerned. Some of the
4 world’s biggest brands may be ubiquitous, ‘famous’, have great
5 brand recall and be commercially successful but underneath that
6 there are some negative connotations in consumers’ minds. This
7 suggests that current measures of brand ‘value’ may be missing
8 something. Certainly, some brands should be feeling rather uneasy.
9 Finally, the importance of trust – and through that, of citizen-
10 ship and transparency – on customer loyalty has been demonstrated.
1 So, being a good corporate citizen (and being open and accessible
2 is surely, in itself, a component of that) is already important for
3 corporate and brand success. For a variety of reasons that I discuss
4 later it seems likely that it will become more so in the future.
5 These are all important points and I pick up and develop a
6 number of them in later chapters. I also consider the implications
7 for business strategy and behaviour. But first, I want to consider
8 some of the philosophical objections to corporate citizenship and
91111 do that by looking at the historical development of it.
20111
1
2
3
4
5
6
7
8
9
30
1
2
3
4111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
20111
1
2
3
4
5
6
7
8
9
30
1
2
3111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
91111
20111
1
2
3
4
5
6
7
8
9
30
BEYOND
1
2
PHILANTHROPY
3
4111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
20111
1
2
3
4
5
6
7
8
9
30
1
2
3111
1111
2
3 CHAPTER 3
4
5
6
7
BEYOND PHILANTHROPY
8
9 Searching for a New
10 Consensus
1
2
3
4
5
6
D
7
8
91111
20111 espite all the evidence that good corporate citizens are
1 more commercially successful, there continues to be a vigorous
2 argument about the roles and responsibilities of companies. On the
3 one side are those who believe that a company’s main (and some-
4 times sole) responsibility is to its owners/shareholders. On the other
5 are people who argue that companies have a moral and ethical
6 responsibility to consider a wider range of stakeholders.
7 At one level, the existence of this debate seems strange. You
8 would have thought that given the evidence from the previous
9 two chapters shareholders would be clamouring for companies to
30 be better corporate citizens. They would actively want the com-
1 panies they invest in to have a better awareness and understanding
2 of society’s concerns, sometimes even taking a more active role in
3 directly helping to address social and economic problems. They
4111 would want a company to be open and transparent and to be great
66 CITIZEN BRANDS
1111 employers.They should, according to the survey quoted in Chapter

2 1, take a strong view about excessive executive pay.
3 And you would have thought that managers, wishing to maxi-
4 mize shareholder returns, would want to follow these strategies
5 too (including keeping their own remuneration within reasonable
6 bounds).
7 Yet on the whole shareholders and business managers do not
8 think or act like this. In part, this reflects the overly short-term focus
9 that seems to dominate Anglo-American capitalism in particular.
10 But this cannot be the whole story and it remains surprising that
1 supposedly pragmatic business managers ignore the overwhelming
2 evidence on the relationship between corporate citizenship and
3 commercial performance.
4 Part of the problem, it seems to me, is a corporate culture
5 rooted in the 1980s and 1990s (which in itself was a reaction to
6 previous times) that fails to appreciate the changes in the social,
7 economic and cultural environment. Part is the result of ideo-
8 logical positioning within a debate that I believe is, in fact, sterile
9 and meaningless. And, part is an understandable reluctance to
20111 accept an idea that is less than fully understood – why should
1 corporate citizenship initiatives be a profitable use of a company’s
2 resources? The first two points are discussed in this chapter, the
3 last in the next one.
4
5
6 F O RWA R D T O T H E PA S T
7
8 At least since the advent of industrialization (and probably even
9 before then) some business leaders have taken a philanthropic view
30 of their responsibilities to society. In Victorian Britain, awareness
1 of the terrible living conditions that many people experienced,
2 particularly in urban areas, led employers like Joseph Rowntree
3111 and George Cadbury to take positive steps to address the prob-
lems. In many ways this was driven by their religious convictions.
BEYOND PHILANTHROPY 67
1111 With the onset of industrialisation in Britain . . . the Puritan ethic

2 was one of the major ideological alternatives available to aspiring
3 and successful industrialists. Though diluted by the economics of
Adam Smith, the secular self-help notions of Samuel Smiles, and the
4
social Darwinism of Herbert Spencer, the Calvinist code morally
5 and spiritually energised English capitalism through the decades of
6 Victorian prosperity.1
7
8 George Cadbury felt he had a duty ‘to seek continuously to
9 improve the material conditions of men’.2 His construction of a
10 new ‘village’ for his workers at Bourneville was in part his con-
1 tribution to solving the wider housing problems of the working
2 class created by industrialization.
3 Though Cadbury and Rowntree are probably the best known
4 for the provisions they made for their employees, other manu-
5 facturers preceded them. For example Titus Salt – in building
6 800 model dwellings – was ‘the first great British manufacturer
7 to recognise that the requirements of [his] employees should be the
8 first charge on the profits from the firm’.3 The creation of Saltaire
91111 went on to include the building of a Congregational church, factory
20111 schools, baths, a public wash house, alms houses, an infirmary and
1 a club house . . . and the presentation to the inhabitants of a park.
2 The main motivations for these philanthropic attitudes were
3 not dissimilar to, and perhaps in part inherited from, those of the
4 landed gentry in the agricultural economy:
5
6 ■ a moral or ethical view on social justice (often built around
7 religious convictions),
8 ■ and a paternalistic approach to workers’ needs and rights.
9
For example, William Lever regarded his building of Port
30
Sunlight as a form of profit sharing, but with a firmly paternal-
1
istic tone to it. He said:
2
3 Frankly, £8 is soon spent, and will not do you much good if you
4111 send it down your throats in the form of bottles of whisky, bags of
68 CITIZEN BRANDS
1111 sweets, or fat geese for Christmas. On the other hand, if you leave
2 this money with me, I shall provide for you everything that makes
3 life pleasant – viz, nice houses, comfortable homes and healthy recre-
ation. Besides I am disposed to allow profit sharing in no other form.4
4
5 In America, similar, but slightly more pragmatic, attitudes were
6 being espoused by the likes of Henry Ford:
7
8 I don’t believe we should make such an awful profit on our cars.
9 A reasonable profit is right, but not too much. I hold that it is better
to sell a large number of cars at a reasonably small profit . . . I hold
10
this because it enables a larger number of people to buy and enjoy
1 the use of a car and because it gives a larger number of men employ-
2 ment at good wages. Those are the two aims I have in life.5
3
4 Ford was responding to criticism over his high wage rates
5 (roughly double the industry standard) and aggressive pricing
6 policies that had seen a more than 50 per cent reduction in prices
7 between 1908 and 1916, even though demand for his cars ex-
8 ceeded supply. Although now, we might view this as pragmatic
9 business decision-making, at the time it caused a furore in the
20111 business world. The Wall Street Journal claimed Ford had a ‘naïve
1 wish for social improvement’ and had injected ‘spiritual prin-
2 ciples into a field where they do not belong’, while two share-
3 holders took legal action against him to stop such ‘philanthropic’
4 activity.6
5
6
7 THE END OF PHILANTHROPY?
8
9 As the twentieth century progressed though, the state became more
30 involved in welfare provision, the regulation of corporate behav-
1 iour and the conditions under which people worked. Across
2 Europe, welfare state systems were initiated, most notably in Britain
3111 in 1946. At the same time, many industries were brought under
state control.
1111 % (war years

excluded)
2
60
3
UK
4 50
USA
5
40
6
7 30
8
9 20
10
10
1
2 0
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
3
4 Figure 3.1 Government spending as a proportion of GDP.
5 Source: Office of National Statistics, Bureau of Economic Analysis (US
6 Department of Commerce).
7
8 The involvement of the state hit a peak in the UK in the
91111 mid-1970s when government spending reached nearly 50 per cent
20111 of Gross Domestic Product. A similar, but less extreme pattern
1 occurred in the United States too, with the total of federal and
2 state spending peaking, at a bit under 25 per cent, also in the
3 1970s (Figure 3.1).
4 The rise in state involvement in welfare is illustrated by the
5 legislation that was enacted during the course of the industrial-
6 ization process. In Britain in the hundred year period between the
7 middle of the nineteenth and twentieth centuries, a whole host
8 of welfare related acts of parliament were passed, ranging from
9 those covering poverty, to health, to workers’ rights.The immediate
30 post-war era represented the height of this activity, with the Labour
1 government’s launch of the National Health Service (and, wide-
2 spread nationalization).
3 A look at the legislation during this period suggests three dis-
4111 tinct phases (see Figure 3.2). First, to counter the worst problems
70 CITIZEN BRANDS
1111 of the industrial revolution were initiatives to alleviate the basic

2 problems of acute poverty and public health issues – what might
3 be called the social protection era. As workers began to organize
4 themselves better (and as the ideologies of Marxism and Socialism
5 developed), the legislative programme moved towards aspects of
6 mutuality and representation. In the twentieth century the focus
7 changed to more universal benefits and rights: pensions, education
8 and health care. Taken with the privatization of key industries and
9
1949 Housing Act
10 1948 Natonal Assistance Act
1947 Town & Country Planning Act
1 1946 National Insurance Act
1946 National Health Service Act
2 1945 Family Allowance Act
1945–51 Labour govt. implements nationalisation
3 Welfare and 1944 Education Act –
4 corporatism era – universal secondary 1968 Prescription charges
education 1980s Independent City
5 education, health, 1942 Beveridge Report Tech. Colleges,
nationalisation 1925 National Pensions Scheme industry funded TECs
6 1918 Education Act – leaving age
raised to 14
1980s welfare reforms
1980s privatisations
7 1918 LP adopts nationalisation
1911 National Insurance Act
1982, 88–92 NHS reforms
1990 Student loans
8 1908 Old Age Pension introduced 1996 Nursery vouchers
1902 Balfour Act – LEAs established 1996 Labour ditches
9 1891 Free elementary education clause 4
1880 Education Act – compulsory elementary education 1997 Student
20111 1870 Education Act – primary education fees
1913 Trades Union Act – 1980 Employment
1 Mutuality and political levy legalised Act restricts
representation 1906 Trade Disputes Act limits union picketing
2 era
Late 1800s – mass unionisation liability for losses 1982 Employment
– Emerging Labour Party 1918 Universal franchise Act outlaws
3 1875 Conspiracy Act – peaceful picketing legal
1871 Trades Union Act – legal status 1921 TGWU formed
political strikes
4 1868 TUC founded

1824/5 Combination (anti-union) Acts repealed
1926 General Strike
1852 Co-operatives legalised

5 1872–5 Public Health Acts
6 1871 Vaccination Act
1868 Artisans & Labourers Dwellings Act
7 1867 Factory Act
1866 Sanitary Act Social protection
8 1845 Public Health Act era – health, safety
9 1844 Hours of Labour in Factories Act
1844 First co-operative store
and poverty
30 1842 Children’s Employment Commission First Report
1834 Poor Law Amendment
1
1850 1900 1950 2000
2
3111 Figure 3.2 The rise and fall of state influence.
Source: The Responsible Organisation, BT/Future Foundation.
1111 the centralized organization of many public services this could be

2 labelled as the corporatist welfare era.
3 By the 1970s, however, the welfare state was coming under
4 increasing strain and criticism. From that point on, the legislative
5 programme changed – away from universal benefits and towards
6 targeted benefits, means testing and payment for certain items or
7 activities (for example, prescription charges – introduced, perhaps
8 ironically, by a Labour government). It is perhaps no surprise that
9 government spending started to fall at this time and the fact that
10 this has been experienced in other countries suggests the change
1 in mood was not restricted to Britain.
2 It is my contention that the development of the welfare state,
3 universal benefits and adequate ‘safety nets’ had a profound influ-
4 ence on the way business and others viewed its role in society.
5 If the state was ensuring that citizens and workers would be
6 provided for in moments of need, then why did companies need
7 to be philanthropic? If a reasonable safety net existed for those,
8 say, without work (although in the 1950s and 1960s there was
91111 effectively full employment in Britain), then why would employees
20111 care about or expect employers to provide philanthropy? Equally,
1 having secured a whole range of rights as workers – and, along-
2 side that, become less deferential to their bosses – why should
3 people want or accept paternalist hand-outs or moralistic exhor-
4 tations from corporations?
5 The enlightened self-interest that was a key factor in the pater-
6 nalistic, philanthropy of the earlier industrialists (see below) was
7 no longer relevant. Philanthropy was neither needed nor wanted.
8 The only reason why companies might engage in socially respon-
9 sible behaviour was therefore for purely ethical reasons. But this
30 too, was under threat.
1 In Britain, Margaret Thatcher was elected in 1979 on a plat-
2 form which, among other things, set out to reduce the influence
3 of the state on people’s lives. Ronald Reagan closely followed her
4111 in the United States and later, and to varying degrees, so did most
72 CITIZEN BRANDS
1111 other developed countries. The privatization of previously publicly

2 owned corporations, for example, continues unabated across the
3 world.
4 If the culture of the state was in decline, the result appeared
5 to be the ascendancy of the cult of business. Business, once a dirty
6 word in many social democracies, was now lauded (and continues
7 to be so) by politicians. Capitalism and the law of the market were
8 seen as the correct way to run economies. Profits were ‘cool’ and
9 by the end of the 1980s even ‘greed was good’ (according to
10 Gordon Gekko).7 All this was reinforced when European commu-
1 nism collapsed in 1989. It was, so some argued, ‘the end of
2 history’.8 Capitalism had won.
3 The impact on corporate citizenship was interesting. Because
4 business was now seen as the saviour of all things, it was encour-
5 aged to get involved in ‘social’ activity. But in reality, business itself
6 was concentrating on the bottom line. As one business leader
7 admitted in an interview with the Future Foundation:
8
Businesses were definitely expected to do more in the Thatcher
9
years, plus in a general sense business success was seen as the answer
20111 to everything. But a lot of corporate social activity in the 80s was
1 a sham.9
2
3 But, by the early 1990s, as recession swept the world some
4 started to question the impact of unrestrained capitalism and the
5 cult of shareholder value. As income polarization increased in many
6 countries (see Figure 3.3), politicians and business people alike
7 began to ponder the implications. One result was the develop-
8 ment of a new political philosophy, as personified by Bill Clinton
9 and Tony Blair, which emphasized the twin goals of entre-
30 preneurial, market economies and social justice. Another, was
1 the anti-capitalist, anti-multinational movement as typified by the
2 writings of Naomi Klein10 and George Monbiot.11
3111 Business people were starting to worry too. John Banham,
then director general of the Confederation of British Industry,
1111 £
500
2 Richest
450
3 Median
400
4 Poorest
350
5
300
6 250
7 200
8 150
9 100
10 50
1 0
2 1961 1966 1971 1976 1981 1986 1991 1996
3 Figure 3.3 Increasing income polarization.Weekly income before hous-

4 ing costs by income group (UK).
5 Source: The Acheson Report, 1998.
6
7 emphasized in 1991 the need for corporate involvement in helping
8 with social and economic problems:
91111
20111 It is a chilling prospect, as any visitor to the South Bronx or parts
of Lambeth will confirm. An increasingly affluent majority will live
1
uneasily alongside an increasingly deprived, resentful and repressed
2 minority, who will not be able to use the ballot box to secure a
3 redistribution of wealth to their advantage.12
4
5 The fear was, and remains, that if the prosperity and cohe-
6 siveness of society were threatened, then business itself would suffer.
7 As Andrew Wilson of Ashridge Management College noted in
8 1995: ‘Today, there is growing acceptance of the view that if busi-
9 ness is to prosper, the environment in which it operates must
30 prosper, too’.13
1
2
3
4111
74 CITIZEN BRANDS
1111 THE END OF THE ARGUMENT?

2
3 This is the context in which the current debate about corporate
4 citizenship takes place and I think it helps to explain the nature
5 of the heated dispute about the role of the company in society. I
6 believe it also offers the prospect of conciliation between the
7 opposing points of view.
8 On the one hand there are those who believe that there is a
9 whole range of social and economic problems in the world that
10 need addressing. Given the triumph of market capitalism and the
1 increasingly dominant role of business in both national and global
2 economies, and given the reduction in the scope and scale of what
3 the state can do, business has a responsibility, an obligation, to do
4 more. In the context of growing income polarization, and partic-
5 ularly the excessive, ‘fat cat’ pay of senior executives (particularly
6 in the Anglo-Saxon economies – see Figure 3.4), this is seen as
7 nothing less than a moral obligation.
8
9 Ratio
30
20111
1 25
2
20
3
4 15
5
10
6
7 5
8
0
9
Australia
Belgium
Canada
France
Germany
Italy
Japan
Netherlands
Spain
Sweden
Switzerland
UK
USA
Non-US ave.
30
1
2
3111 Figure 3.4 Chief Executive Officer pay in advanced countries. Ratio
of CEO to worker pay.
Source: The State of Working America, 1999.
1111 A recent example of this sentiment is contained in Will Hutton’s

2 pamphlet Society Bites Back:14
3
It is a moral obligation.The new centrality of business in contemporary
4 life means that business must acknowledge that it too has citizenship
5 responsibilities.Victory in the ideological battle means that paradox-
6 ically it has never had greater obligations to act with integrity and wider
7 social purpose. [My emphasis]
8
On the other side of the argument are those who believe that
9
those running businesses have one main responsibility – to maxi-
10
mize shareholder value.They do not believe it is the role of business
1
to get involved in other activities, as famously summarized by
2
Milton Friedman’s comment that ‘a corporation’s social responsi-
3
bility is to make a profit’.
4
Proponents of this view, worry that attention to corporate
5
citizenship issues will divert business managers from their main
6
responsibilities. Financial Times journalist Samuel Brittan echoed
7
this fear in 1996:15
8
91111 Everyone is supposed to promote the interests of everyone else and
20111 no-one is really accountable for anything. Management is theoretic-
ally responsible not only to shareholders or even to workers, but to
1
suppliers, customers and the public at large. This has no operational
2 meaning. In practice it is simply a charter for management to do what
3 it likes without accountability to the owners of the business.
4
5 The debate between the two sides has become increasingly
6 heated and, it seems to me, pedantic. An exchange of letters in
7 the Financial Times in the summer of 1999 makes the point. Samuel
8 Brittan (who had noticeably softened his stance since his 1996
9 piece) had written an article with the sub-heading: ‘An indepen-
30 dent committee is trying to find a route through the minefield
1 of rival ideas about the duties of directors’.16 In it he discussed
2 whether directors should be permitted or required to take account
3 of the interests of non-shareholders and the distinction between
4111 who and what directors took into account when making their
decision and who they were responsible for. It drew a smart
76 CITIZEN BRANDS
1111 response from Alastair Ross Goobey, chief executive of Hermes

2 Pensions Management:
3
Sir Samuel Brittan . . . quotes Jonathan Charkham on the distinction
4
between ‘taking account’ and being ‘responsible to’; an encapsula-
5 tion of this, agreed by Lord Haskins and Mark Goyder of the Centre
6 for Tomorrow’s Company, leading ‘stakeholder’ advocates, is that a
7 company’s board is responsible for its relationships with employees,
8 customers, suppliers, the environment and society, but it is respon-
9 sible to its shareholders.17
10
Mark Goyder replied:
1
2 Directors are accountable to shareholders. They owe their duty to
3 the company. They are bound to have regard to the interests of
4 shareholders, but that obligation is not confined to the current body
5 of shareholders.That is a matter of law now, although too few direc-
tors and too few of their legal advisers understand it. Too many
6
seem to imagine that they are doing their duty if they serve the
7 interests of current shareholders at the expense of the future well-
8 being of the company.18
9
20111 This is what the debate had come down to: the prepositions
1 ‘to’ and ‘for’. Who a company is responsible to and who is it
2 responsible for. And, as Mark Goyder points out, whether the
3 responsibility is to/for current or future generations.
4 In fact, I believe behind this there is a growing consensus of
5 sorts. On the one hand, many business people recognize that there
6 are problems (as I noted earlier) and that it is in their own inter-
7 ests as citizens and business managers for companies to be more
8 ‘engaged’ in society. On the other hand, an increasing number of
9 those on the other side of the debate are recognizing that the
30 profit motive is a legitimate and primary concern of business. John
1 Elkington and others, for example, have emphasized the import-
2 ance of profits while campaigning for improved social and
3111 environmental awareness and activity – often referred to as the
‘double’ or ‘triple bottom-line’ approach.19
1111 The narrowing gap between the two sides suggests that a subtle
2 shift in the analysis and position of each side could lead to agree-
3 ment.This requires two things. First, as I argued in the introduction
4 to this book, it would be better to view corporate citizenship
5 not as an obligation but as something of mutual benefit arising out
6 of the interdependent relationship between business and society.
7 Second, companies need to get away from an overly short-term
8 focus and be bolder in promoting good citizenship as being in
9 shareholders’ longer-term interests.
10 This suggests that those campaigning for business to be more
1 ‘engaged’ with society might do better not to suggest that this is
2 a moral, ethical or philanthropic issue and should certainly avoid
3 sounding righteous or political. Business activity in this area is not
4 a substitute for the state. Rather, it is about getting business to
5 engage in citizenship because it is good for society and good for
6 business. Realistically, we must recognize the pressures on com-
7 panies in today’s global economy and their justifiable need to make
8 profits. The focus therefore needs to be on the business case for
91111 any initiative, emphasizing that decisions about citizenship are legit-
20111 imate business decisions. It is important to make clear that this is
1 not, as Samuel Brittan feared, ‘a charter for management to do
2 what it likes without accountability’ but rather a pragmatic analysis
3 for the benefit of shareholders.
4 Those on the shareholder-is-supreme side of the argument
5 should see this as a straightforward business issue. They might do
6 better to forgo pedantic debates about who responsibilities are to
7 or for and just get on with making the correct strategic choices.
8 Here, the evidence is overwhelming. In the long run, being a good
9 corporate citizen is a sensible strategy because:
30
1 ■ As I have shown in the past two chapters, it is correlated to
3 ■ It is just plain good business sense. Management gurus implore
4111 companies to be great employers – this is accepted as a
78 CITIZEN BRANDS
1111 perfectly sensible strategy. They exhort the need to put the
2 customer at the centre of the company and this is embraced
3 without question. Citizenship – a company’s relationship with
4 society and the people (including customers and employees)
5 and organizations within it – is just another aspect of this.
6 ■ As I argue throughout this book citizenship is important
7 because increasingly it impacts on corporate and product brand-
8 ing. If corporate citizenship is an integral part of branding, and
9 branding is a major responsibility of the marketing function,
10 and marketing is recognized as an increasingly important strate-
1 gic issue, is not corporate citizenship a strategic issue?
2
3 Crucially then, this is not about benefaction or philanthropy.
4 Importantly, as the business case becomes increasingly accepted,
5 being a citizen brand will not be seen as a ‘nice-to-have’ add-on
6 but as a crucial aspect of corporate strategy. Indeed, I suspect that
7 the nature of the criticism that corporate managers worry about
8 will change. At present, I get the feeling that a number of exec-
9 utives fear castigation for wasting time and resources on ‘fluffy’
20111 citizenship activities rather than concentrating on hard-nosed busi-
1 ness problems and shareholders’ needs. In the future their concern
2 is more likely to be the charge that they are jeopardizing share-
3 holder needs by ignoring such citizenship issues.
4
5
6 BACK TO THE FUTURE?
7
8 Some might dismiss my arguments as nothing new. It sounds very
9 similar to the ‘enlightened self interest’ that Robert W. Johnson Jr,
30 of Johnson & Johnson, referred to as long ago as 1935:
1
In 1935 Johnson . . . echoed these sentiments in a philosophy that he
2 called ‘enlightened self-interest’ wherein ‘service to customers [his empha-
3111 sis] comes first . . . service to employees and management second, and
. . . service to stockholders last’. Later (in 1943), he added service to the
1111 community to the list (still ahead of service to shareholders) . . .

2 ‘When these things have been done,’ he wrote,‘the stockholders should
3 receive a fair return.’ Although J&J has periodically reviewed and
lightly revised the wording of the credo since 1943, the essential
4
ideology – the hierarchy of responsibilities descending from customers
5 down to shareholders and the explicit emphasis on fair return rather
6 thanmaximum return – has remained consistent throughout.20
7
8 Similar though this might sound, there are in fact some
9 important differences. First, of course, is that Johnson & Johnson
10 was fairly unique in those days. There were other companies that
1 held similar views, Ford who I mentioned earlier being one. But
2 most companies did not follow and have not followed this credo.
3 Nowadays though, this sort of ethos should, in principle if not yet
4 in reality, resonate with a much wider range of companies.
5 Second, the tone is one of ethical obligation that has to be
6 balanced against profitability (or level of return as Robert W.
7 Johnson Jr put it). Shareholders can only have a ‘fair return’ rather
8 than a ‘maximum return’ because of responsibilities to others. The
91111 way I would rewrite this in the current climate would be to talk
20111 about managing relationships with relevant parties (rather than
1 responsibilities) in order to maximize returns. I would also stress
2 Mark Goyder’s point that the company’s managers need to manage
3 not only for today but for tomorrow too. (Of course, there will
4 always be businesses that are run in an exploitative manner to
5 maximize the short-term rewards for their shareholders and exec-
6 utives, but this book is not intended for such companies or their
7 managers.)
8 Some readers may feel I am making a semantic point. Is there
9 much difference between being a good corporate citizen because
30 you believe in it and because shareholders will benefit from it (the
1 Johnson approach) and my alternative that to maximize share-
2 holder returns you need to be a good corporate citizen? At one
3 level, I suspect not – the outcome is much the same in terms of
4111 what any individual company might actually do in its corporate
80 CITIZEN BRANDS
1111 citizenship activity. But, I would argue that my formulation will

2 be more attractive to a broader range of companies as it retains
3 the primary importance of shareholders and long-term profitability.
4 In that way it would have a bigger impact on society at large,
5 ironically better meeting the demands of corporate responsibility
6 campaigners themselves.
7 So, in the first two chapters of this book I have provided real,
8 and I hope persuasive, evidence that being a citizen brand is a
9 commercially sound strategy. In this chapter I have addressed the
10 political and philosophical arguments against being a citizen brand.
1 But one philosophical barrier remains. It might work, it might be
2 politically OK but why does it work? Until that can be explained
3 persuasively there is the danger that some may remain uncon-
4 vinced about the value of corporate citizenship. The final strand
5 of my argument for the validity of the citizen brand concept there-
6 fore requires a theory of the processes by which it works. I touched
7 on one aspect of this in the last chapter when analysing one of
8 the consumer research studies. The next chapter considers it in
9 more depth.
20111
1
2
3
4
5
6
7
8
9
30
1
2
3111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
91111
20111
1
2
3
4
5
6
7
8
9
30
A MODEL FOR
1
2
CITIZEN BRANDS
3
4111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
20111
1
2
3
4
5
6
7
8
9
30
1
2
3111
1111
2
3 CHAPTER 4
4
5
6
7
A MODEL FOR
8 CITIZEN BRANDS
9
10 Why it Works
1
2
3
4
5
T
6
7
8
91111 he previous three chapters have discussed, and I hope
20111 demonstrated, the correlation between citizenship, branding and
1 business performance and then some of the historical baggage that
2 restricts objective analysis of it. But there remains an outstanding
3 question: Why does being a citizen brand result in greater busi-
4 ness success?
5 A major criticism of corporate citizenship as an issue has always
6 been that there is no coherent ‘model’ of why it is linked to
7 commercial success. Without a ‘model’ – a concrete explanation
8 of the processes involved – citizenship appears in the boardroom
9 as a fuzzy, woolly, ‘nice-to-have’, rather than a pragmatic, sensible,
30 ‘must-have’. This chapter aims to redress that by describing the
1 process by which I believe it works. I touched on this in Chapter
2 2 when discussing some of the consumer research studies but here
3 I expand on the model to provide an integrated explanation of
4111 how the process operates.
84 CITIZEN BRANDS
1111 This is no easy task for two reasons. First, a broad range of
2 diverse issues is involved. How, for example, can you have a model
3 that includes such factors as environmental consciousness, work-
4 life balance, fair trade policies and concerns about third world
5 poverty? This all-embracing approach not only tends to ‘clutter’
6 the argument – as it includes so much – but it tends to under-
7 mine it too through the breadth of its claims. How can one process
8 achieve all these things?
9 It also raises the spectre of political agendas being pursued
10 underneath the banner of corporate citizenship. For example,
1 different advocacy or pressure groups might be tempted to promote
2 their own specific aims under the more general, larger, and there-
3 fore legitimizing, umbrella of corporate responsibility. So, environ-
4 mentalists rub shoulders with employment rights activists, art
5 supporters with human rights campaigners.1
6 Second the process is complex and difficult to track and the
7 direct impact hard to measure, raising similar problems to those
8 encountered in the analysis of advertising. Thus, the breadth and
9 complexity of the issue potentially undermines its credibility.
20111 But, in fact the whole process can be described more simply.
1 There are, I believe, two specific factors that explain why corporate
2 citizenship leads to improved commercial success: one that incor-
3 porates all those activities that lead to direct and measurable impacts;
4 and one that involves indirect and less easily measurable impacts.
5 The term citizen brand incorporates both aspects although in the
6 context of this book it is the indirect element that is most im-
7 portant as it goes to the heart of my contention about the relation-
8 ship between citizenship and branding. Being less direct and harder
9 to measure does not mean that it is any less important.
30 For this reason I will limit my discussion of the direct impacts
1 to an overview and some brief examples, in order to concentrate on
2 the indirect component. In reality the distinction between the two
3111 is not as clear cut as I would like, as I point out later, but I do believe
it helps in understanding and describing the processes involved.
A MODEL FOR CITIZEN BRANDS 85
1111 D I R E C T I M PA C T S
2
3 What do I mean by direct impacts? Here I am referring to specific
4 initiatives, that can be categorized as environmentally or socially
5 responsible behaviour, that have been implemented precisely for
6 their environmental or social impact but which also result in
7 tangible commercial benefits.The major components are as follows.
8
9
10 Environmental Initiatives
1
2 There are at least three reasons why taking account of environ-
3 mental concerns is linked with commercial success. First, it can
4 be a catalyst for change, leading to innovative and more produc-
5 tive solutions. Here, there is considerable evidence that taking a
6 more environmentally conscious approach leads to improved effi-
7 ciency. An example is Dow Chemicals’ new environmental
8 equipment and programmes that had an expected return on invest-
91111 ment of between 30 and 40 per cent, as I noted in Chapter 1.
20111 Second, in today’s climate (no pun intended) companies that are
1 environmentally aware are deemed to be less risky to investors.2
2 In part, of course, this is an indirect impact too as it relates to the
3 overall perception of the company and its brand equity but I
4 include it here as there is a documented direct correlation. Third,
5 there is the direct impact on consumer behaviour. The most
6 obvious example of this is when consumers seek out or reject a
7 company or product because of its environmental credentials.
8
9
30 Employment Issues
1
2 Many studies have shown the direct benefits – in terms of greater
3 commitment, motivation and productivity – to be gained from an
4111 investment in human capital. Whether it be a clear set of core
86 CITIZEN BRANDS
1111 values that workers can relate to (Collins and Porras),3 an atten-
2 tion to basic working conditions or looking more broadly at how
3 work fits in with people’s lives outside work, all can directly impact
4 on a company’s success. Sometimes, as in the case of allowing, or
5 even encouraging, flexible working, it might appear that initiatives
6 like these generate costs with no consequent payback in produc-
7 tivity and profitability. But this has been shown to be a simplistic
8 and incorrect analysis – example after example has shown that
9 flexible work hours, job sharing and the like produce real bottom
10 line benefits. Helping workers to get a better work–life balance
1 invariably helps the company too.4
2
3
4 Suppliers
5
6 In a world of outsourcing and ‘just-in-time’ processes, the role of
7 suppliers is crucial. As with employees, understanding supplier
8 needs and concerns and developing an open, mutually beneficial
9 relationship often leads to a more fruitful and productive associ-
20111 ation. Trust is a critical issue here and those companies that
1 maintain long-term trusting relationships with their suppliers are
2 likely to be rewarded with better, more flexible service.The success
3 of Japanese car companies in the 1980s was in part the result of
4 their close links with their suppliers. Talking to suppliers about
5 their own corporate citizen behaviour can have its benefits too.
6 For example, they might be persuaded to install a more environ-
7 mentally friendly production process that is, in fact, more efficient
8 and hence more profitable for them, while reducing costs for you.
9 In this way, companies can push corporate citizenship and good
30 business practice down the supply chain to mutual advantage.
1
2
3111
1111 Community Involvement

2
3 Companies can gain from investing in the communities in which
4 their offices or manufacturing plants are based. Clearly, through
5 employment they can impact directly on the well-being of not only
6 individuals but the community as a whole, particularly where they
7 are the major employer. But through other broader initiatives (for
8 example, links with, and support for, local schools) they can gener-
9 ate goodwill that not only improves the motivation and loyalty
10 of their employees but encourages the support and help of the wider
1 community too. It can also have the direct impact of improving the
2 physical environment for local employees and their families and the
3 skill and the cultural base from which future workers can be drawn.
4 For example, Ford Motor Company has not only built a new man-
5 ufacturing facility at its Maraimalai Nagar plant in India, but a new
6 local school too. By doing this and providing teachers as well, it is
7 investing in the future well-being and cohesiveness of the locality
8 and moreover in the future pool of human resources. Of all the
91111 areas of direct impact this one is most like the enlightened, self-
20111 interested philanthropy of the past, particularly where it is applied
1 to developing economies.The parallels, for instance, between Ford’s
2 activity in India in the twenty-first century and Cadbury’s in
3 Birmingham in the nineteenth are pronounced. The difference is
4 that nowadays not only is the local community concerned about
5 what the company is doing in these localities, but so is part of the
6 wider consumer base too. Companies like Nike (and other manu-
7 facturers accused of exploiting the third world’s labour force) have
8 found this out to their cost.
9
30
1 Broader Social and Ethical Issues
2
3 Even an interest in broader social and ethical issues like animal
4111 welfare and fair trade can have a direct impact on a company’s
88 CITIZEN BRANDS
1111 commercial performance in at least two ways. First, as with the

2 specific issue of environmental concern, consumers may favour or
3 boycott companies as a result of their activities in this area. So,
4 for example, some people choose Body Shop specifically because
5 of its stance on animal testing. This can work the other way too,
6 and for companies who do not even deal directly with consumers.
7 The sorry tale of the British pharmaceutical research company
8 Huntingdon Life Sciences makes the point.Thanks to animal rights
9 activists sending bomb threats to Philips and Drew, the fund
10 manager sold its 11 per cent stake in the company at a cut-down
1 price and Huntingdon’s share price remains depressed.5 A recent
2 MORI survey for the Co-operative Bank6 illustrates the poten-
3 tially positive (people actively buying) and negative (people
4 deliberately boycotting) impact on consumer behaviour.While this
5 may overestimate the real effect, it suggests that a significant
6 minority of consumers are regularly (in this case at least four times
7 a year) buying or not buying on the basis of perceptions about
8 the company’s ethical behaviour (Figure 4.1).
9
20111 60% At least once
1 Four or more times

50%
2
3 40%
4 30%
5
20%
6
7 10%
8 0%
9 Chosen product or service Avoided products or services
on basis of company’s because of company’s
30 responsible reputation behaviour
1
Figure 4.1 Impact of social and ethical issues on consumer behaviour.
2 Proportion agreeing to each statement.
3111 Source: Research conducted by MORI for the Co-operative Bank’s report, Who
are the Ethical Consumers?, 2000.
1111 Ethical investment as % of total

1.50% funds under management
2 Organic sales as % of household
3 1.25% expenditure on food
Fair trade sales as % of household
4 1.00% expenditure on coffee, tea and cocoa
5 UK sales of Forest Stewardship Council
certified wood products
0.75%
6 as % of total sales
7 0.50%
8
0.25%
9
10 0.00%
1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
2 Figure 4.2 Growth in sales of ethical products. Each product’s share

3 of its market.
4 Source: Research conducted by New Economics Foundation for the Co-operative
5 Bank’s report, Who are the Ethical Consumers?, 2000.
6
7 Work by the New Economics Foundation, also for the Co-
8 operative Bank,7 shows how consumer interest in such issues is
91111 translating into real sales, as opposed to stated opinion in market
20111 research surveys. Specific ethical products currently only take a
1 small proportion of any market. For example, fair trade sales as a
2 proportion of household expenditure on coffee, tea and cocoa
3 accounts for only just over 1 per cent. But, as the Foundation
4 notes ‘in certain key areas, market share is considerably higher’ to
5 the extent that ‘Cafédirect fairly traded roast and ground coffee
6 now has 5% of the market . . . and is growing at 9% a year’.
7 Importantly, as Figure 4.2 shows, although still small in market
8 share terms, they are growing rapidly.
9 The second reason why business should take an interest in
30 broader social issues is that companies, and the larger ones specific-
1 ally, benefit from a thriving, stable and cohesive society.To take one
2 example, lower crime rates are likely to mean not only less direct
3 crime against business (like shoplifting) but also a more secure high
4111 street and shopping environment for customers and employees.
90 CITIZEN BRANDS
1111 This is the point John Banham was making when he talked of
2 ‘an increasingly deprived, resentful and repressed minority’8 as I
3 noted in the last chapter. Do companies like BT want their tele-
4 phone kiosks vandalized or Marks and Spencer their shops? Does
5 McDonalds want rough sleepers begging outside their restaurants
6 or Starbucks to have bricks thrown through its windows? Of course
7 not. And for large companies with a mass market appeal the more
8 people who can afford their products the better. Reduced poverty
9 can lead directly to increased sales. Indeed, in mature, saturated
10 markets it may be the only way to growth. Some business execu-
1 tives understand this point:
2
it is in our company’s interest that we have thriving inner cities,
3
and that people have a healthy diet.
4
5 if we work in a healthy, prosperous, growing society, we’re going to
6 do better.9
7
British Telecom, which has a dominant position in the UK
8
market for fixed line telecommunications services recognizes this
9
in particular:
20111
1 BT’s continued success depends on the skills and the resources of
2 our people, the loyalty of our customers and the health and pros-
3 perity of the communities of which we are part. Successful companies
need successful communities.10 [My emphasis]
4
5 So too does Marks and Spencer:
6
7 By supporting those communities where we operate we bring added
8 value, create safer living and working environments, better educated
young people, more effective small businesses, an enriched cultural
9
life and a healthier nation. In turn, this creates a more prosperous
30 and self-sufficient society, which is obviously good for business. Put
1 simply, healthy back streets lead to healthy high streets.11 [My emphasis]
2
3111 Meanwhile, Jac Nasser, president and chief executive officer of
Ford sees one of his most important jobs as being to ensure that
1111 the company is ‘doing good in the communities that we are in,
2 be it the environment, education or helping out the society that
3 we’re doing business with’.12
4
5
6 INTELLIGENT BUSINESS
7
8 All these factors also have one other direct impact on companies,
9 one that is, if anything, the most important of all – the provi-
10 sion of business intelligence. By engaging in these issues and
1 activities, businesses inevitably develop a broader, more outward-
2 looking view of their operating environment. They understand
3 better the world they operate in and their relationship with it.
4 There are many benefits from this: better market research;
5 faster anticipation of potential problems and quicker reactions to
6 them; to name but a few. In this sense, corporate citizenship
7 becomes another form of market intelligence. This is, in effect,
8 a reconfiguration of a standard exhortation of management gurus:
91111 inwardly focused companies struggle; outwardly focused ones
20111 thrive.
1 All of these initiatives are consistent with basic good manage-
2 ment practice. They all contain elements of some of the major
3 themes of current management theories as espoused by some of
4 the most respected commentators and ‘gurus’ of today. The likes
5 of Tom Peters and Robert Waterman,13 or Gary Hamel and C.
6 K. Prahalad14 and, of course, the giant of them all Peter Drucker15
7 all highlight the importance of one or more of:
8
9 ■ innovation
30 ■ employees as most valuable assets
1 ■ customer focus
2 ■ supply chain management
3 ■ flexibility
4111 ■ and being an externally focused company.
92 CITIZEN BRANDS
1111 Citizen brands

2
3
4
5 Direct impacts Indirect impacts
6
7
8
9
10 More motivated Active purchasers/ More efficient
workforce fewer boycotts processes
1
2 Better/more Improved
3 trusted supplier market/business
relationships intelligence
4
5
All aiding greater
6 innovation
7
8 Figure 4.3 Direct impacts on commercial success. Schematic repre-
sentation.
9
Source: Michael Willmott/Future Foundation.
20111
1
2 Being a good corporate citizen in the way that I have described
3 it, and in the examples I have given, is an aid to all these. In that
4 sense, the concept of citizen brands encompasses, and is consistent
5 with, the very best of current management thinking.
6 These factors and their direct impacts are illustrated in Figure
7 4.3. Note, though, that the commercial implications do not end
8 there. These issues also feed into the less clearly defined, but no
9 less important, indirect impact of citizenship – the core concept
30 of citizen brands itself.
1
2
3111
1111 I N D I R E C T I M PA C T S
2
3 Corporate citizenship feeds indirectly into commercial success via
4 the mechanism of branding. In many ways, this is the most
5 powerful aspect of citizen brands but is, at the same time, the most
6 difficult to prove. In this, it is much like advertising.
7 Debate has raged for years about how and why advertising
8 works and continues to do so. Yet, it is not only an integral part
9 of commercial activity that is almost universally used by business
10 but expenditure on it has also been growing in real terms for
1 many decades. But people are far from clear why, and even
2 whether, it works and thus whether the expenditure is justified.
3 The old adage ‘half the money I spend on advertising is wasted,
4 and the trouble is I don’t know which half ’ has as much reso-
5 nance today as it did when it was first espoused many years ago.16
6 In fact, there is now a body of research that does allow a plau-
7 sible model of the advertising process to be developed. From this,
8 we can begin to understand why some advertising works and some
91111 does not. Mike Hall, former planning director at Leagas Delaney
20111 in London and now Group Chief Executive of Hall and Partners
1 has developed a theoretical model of how advertising works.
2 Initially based on research among practitioners and users of adver-
3 tising in 1990,17 Hall has developed the model further over the
4 ensuing years through his own experience in providing advertising
5 research services.18 The success of his company in that time is a
6 testament to the plausibility and relevance of the model – certainly
7 in the eyes of his clients. Put briefly, Hall proposes that rather than
8 there being one model of how advertising works, there are in fact
9 four major ones (and a number of sub-models that I will not elab-
30 orate upon here). These are:
1
2 ■ The sales response model – this is where advertising seeks short-
3 term changes in consumer behaviour. It stimulates direct
4111 interest in (and hence sales of ) a brand but does little in terms
94 CITIZEN BRANDS
1111 of brand building. Advertising in this vein might be price-led

2 or involve a special offer; it might just be reminding people
3 that now is a good time to buy a product. Hall argues that
4 in terms of chronology this was the first model of advertising.
5 ■ The persuasion model – here, the role of advertising is to persuade
6 consumers about the brand’s functional superiority. It assumes
7 that people will not buy the brand unless they believe it will
8 solve a problem or that it performs better than others. A typical
9 ad here would be ‘this washes whiter’ or ‘this goes faster’. This
10 model evolved as brands and mass consumer markets devel-
1 oped from the 1950s onwards.
2 ■ The involvement model – the purpose here is to get consumers
3 to buy into the brand values. This is not that the product
4 necessarily performs better but that it stands for something
5 that the consumer wants to be associated with. As Hall notes,
6 these values could be ones such as ‘pride, male bonding, caring,
7 fun, excitement and contemporaneity’ so the advertising would
8 be about what the brand stands for or who uses it. This model
9 developed from the mid-1960s onwards.
20111 ■ The salience model – this is the newest and most radical model
1 according to Hall and dates from the 1980s and 1990s. The
2 attempt here is to get consumers interested in the brand not
3 because it performs better, nor because it has complementary
4 values but because it stands out: it is radically different, it is
5 big, it is self-assured. Barclays Bank’s advertising campaign in
6 Britain in 2000 was an example of this. We are big it said.19
7
8 Hall argues that although the different models have developed
9 at different times in response to different needs, all four remain
30 relevant today. It is worth quoting him at length, not least because
1 it helps to clarify further the difference between the models:
2 just because there are four different models of how advertising works,
3111 you don’t have to choose just one of them. Not even for the same
brand. Because a brand has different objectives for different targets
1111 at different times. BA [British Airways] wrote ads to a Persuasion

2 model for its First Class seat that turns into a bed, to an Involvement
3 model based around Club World, and to a Salience model to raise
its overall status. But it also uses Sales Response ads even if you
4
can’t clip a coupon to take up the offer.20
5
6 This also explains why some advertising does not work. If you
7 use the wrong advertising for the wrong purpose then you will
8 not achieve the success you expected.
9 More important for the concept of citizen brands (as I discuss
10 later) is that even though all the advertising models are still rele-
1 vant, the balance is moving from the sales response and persuasion
2 ones (the traditional perception of advertising) towards the ‘newer’
3 models of involvement and salience. Certainly, all the social and
4 economic trends that I discuss later would be consistent with this.
5 To this model of how advertising works, I would add two
6 more general points which help to explain how it indirectly bene-
7 fits a company. First, a company that can afford to advertise, and
8 certainly those that can advertise on television, must be reason-
91111 ably big, so the very fact they are advertising sends a certain
20111 message to the market. Indeed, some people have argued that this
1 is the main reason why advertising works. For instance, economist
2 John Kay, who was Dean of Oxford University Business School,
3 suggested that advertising is seldom informative or persuasive but
4 works because it tells the consumer that the advertiser is committed
5 to the product and the market – why else would they spend so
6 much money?
7
8 Much advertising – indeed all of the most conspicuous and costly
9 advertising – is neither informative or persuasive . . . the only infor-
mation such advertising conveyed was that the advertiser spent a lot
30
of money on advertising. But . . . this is useful information. It tells
1 you that the advertiser is committed to the market and the product
2 . . . And if [the advertiser] is committed to the product and the
3 market, it also makes sense to devote resources to ensuring the quality
4111 of the product.21
96 CITIZEN BRANDS
1111 This may seem like Hall’s salience model but in fact it is differ-
2 ent. Here, the advertising itself is not saying the company is big;
3 it is the very fact that advertising has taken place (which might be
4 directed towards a persuasion model, for example) that is.
5 The second, more general reason why I believe advertising
6 benefits business is that it encourages companies to take a more
7 external focus on their business. Since the development of advertising
8 planning in the 1960s, trying to understand potential customers’
9 needs and the environment they operate in is now an explicit part
10 of the development of the communications strategy.
1 This might be the theory of how advertising works but what
2 evidence is there to support the thesis? Certainly, my own expe-
3 rience in this area – having observed a number of econometric
4 projects that sought to develop sales forecasting models – is mixed.
5 More often than not the level of advertising expenditure had no
6 discernible impact on sales. But two criticisms can be made of
7 this. First, as I have just noted, not all advertising should be, or is,
8 focused directly at immediate sales increases. Second, the impact
9 of advertising may not be direct but, instead, indirect – and the
20111 indirect process may be rather complex.
1 Recent research by the British Institute of Practitioners in
2 Advertising (IPA) not only confirms this but also provides persua-
3 sive evidence that advertising works.22 The study involved a special
4 analysis from the celebrated PIMS database23 of over 200 com-
5 panies mainly operating in branded consumer products in Europe.
6 There were two main conclusions from the research. The first was
7 that it is not absolute advertising but relative spend compared
8 to competitors that is most important. Second was that ‘the correla-
9 tion between advertising and profitability is not direct but
30 indirect’.24 Both points again help to explain the failure of some
1 econometric analyses in this area.
2 The indirect process by which advertising works is through
3111 the mechanism of superior customer value. Previous analysis of
the whole of the PIMS database has shown this to be ‘a prime
1111
Advertising expenditure relative to competitors
2
3
4
5 Product image and company
reputation
6
7
8 Relative quality of
Relative price
9 offering
10
1
2
(Relative) Customer
3 value
4
5
6 Commercial success
7
8 Figure 4.4 How advertising indirectly affects sales and profits. Schem-
91111 atic representation.
20111 Source: Adapted from How Advertising Impacts on Profitability. PIMS
1 database/Institute of Practitioners in Advertising.
2
3
4 driver of growth and profitability’.25 Customer value is a function
5 of perceived quality and price relative to others. Advertising can
6 affect both of these: price through the sales response model and
7 quality through the persuasion model. But the IPA analysis also
8 showed that perceptions of quality could not only be affected
9 directly by advertising but also indirectly via perceptions of product
30 image and reputation. Advertising would influence these through
1 the involvement and salience models. The relationships are shown
2 in Figure 4.4.
3
4111
98 CITIZEN BRANDS
1111 CITIZEN BRANDS AND MODELS

2 O F A D V E RT I S I N G
3
4 Readers may wonder why I have spent some time discussing the
5 processes by which advertising impacts on a company’s reputation
6 and commercial success. The reason is that there are extraordinary
7 parallels with the concept of citizen brands.
8 For a start, we can see that the idea of citizenship relates
9 specifically to the involvement model. That model stresses the
10 values of companies and brands and the desire of consumers to
1 associate with them. Hall argues that the importance of this model
2 is increasing as such values become more important to consumers.
3 I argue that some of the most important of these values will be
4 those surrounding citizenship.
5 Then, both advertising and corporate citizenship help busi-
6 nesses by encouraging, indeed even forcing, them to take a more
7 external focus.
8 Finally, there are striking similarities between the model of
9 the process by which advertising works and the one that I devel-
20111 oped independently for corporate citizenship (see Chapter 2). The
1 IPA model provides evidence that advertising can improve product
2 image and company reputation which in turn influences percep-
3 tions of quality. This then leads to a perception of increased value
4 and hence higher sales and profitability. My model of citizen brands
5 presents evidence that corporate citizenship (as well as transparency
6 and, to a lesser extent, communications activity) helps to increase
7 trust in the company.This is related to higher satisfaction and leads
8 to enhanced customer retention and, implied by that, greater
30 It can be seen that in structure the models are incredibly
1 similar. Exchange a few phrases – trust for reputation, satisfaction
2 for perceived value, loyalty for market share – and the two have
3111 effectively the same form. The difference is that one is looking at
advertising, the other at corporate citizenship. The activities are
different, the processes the same.
1111 Citizen brands

2
3
4
5 Direct impacts Indirect impacts
6
7
Builds
8 reputation/trust
9 More motivated Active purchasers/ More efficient
10 workforce fewer boycotts processes
1 Better/more Improved
Increases Creates ‘goodwill’
perceived quality bank
2 trusted supplier market/business
relationships intelligence
3
Greater loyalty =
4 All aiding greater higher value
5 innovation customers
6 Figure 4.5 A coherent model of citizen brands. Schematic represen-

7 tation.
8 Source: Michael Willmott/Future Foundation.
91111
20111 So, alongside the direct impact that corporate citizenship has
1 on business success, we can now see how it generates an indirect
2 impact. If we return to the figure on direct impacts we can add
3 the indirect model as well (Figure 4.5).
4 Beyond the direct effects, being a citizen brand helps to build
5 reputation and trust. This has two impacts. First, as in the adver-
6 tising model, this has the general impact of increasing perceptions
7 about the quality of the company’s products and service. Second,
8 it creates what you might call a ‘goodwill’ bank – a depth of
9 feeling for the company that will make customers more disposed
30 towards it, even to the extent that they might overlook occasional
1 lapses. Both of these lead to increased loyalty and higher value
2 and more profitable customers.
3 This is my interpretation of the results shown in Chapter 2
4111 where trust was correlated to satisfaction (that in the context of
this chapter I have taken to mean the same as ‘perceived
100 CITIZEN BRANDS
1111 quality/value’) but also, and independently, to loyalty itself. To put

2 this another way, the relationship between corporate citizenship,
3 trust and loyalty is important in two ways. First, because customers
4 trust you, they are less likely to look elsewhere in the first place
5 (satisfaction/quality). Second, if you do make a mistake they are
6 more likely to forgive you (goodwill).
7 All this reinforces the idea that, in fact, corporate citizenship
8 is becoming a crucial part of branding: citizenship is an integral
9 part of brand equity. Furthermore, all the evidence is that it is
10 likely to grow in importance as a branding issue. As differentia-
1 tion on basic factors becomes harder (the satisfaction element)
2 then differentiation will focus more on the other aspects affecting
3 loyalty: trust, citizenship and transparency. This is certainly consis-
4 tent with the changing emphasis of advertising over the last few
5 decades that has seen a shift from the persuasion model to those
6 of involvement and salience.
7 This raises the important question of why companies embrace
8 advertising but are less enthusiastic about corporate citizenship?
9 This is not true of all businesses though. One major British retailer
20111 that I interviewed has already recognized the importance of this
1 by diverting some of the existing marketing expenditure to this
2 new aspect of branding:
3
4 We think it [corporate citizenship] is so important we’ve devoted a
significant part of our marketing budget to it.26
5
6
But this remains a minority view. As far as I can tell, few
7
companies are currently investing in, or even recognize, the impor-
8
tance of corporate citizenship to branding and commercial success.
9
I hope this chapter has done something to change that because
30
the concept of citizen brands is going to become more important
1
in the future. The evidence to support that proposition is what I
2
turn to next.
3111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
91111
20111
1
2
3
4
5
6
7
8
9
30
PEACE AND
1
2
PLENTY
3
4111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
20111
1
2
3
4
5
6
7
8
9
30
1
2
3111
1111
2
3 CHAPTER 5
4
5
6
7
PEACE AND PLENTY
8
9 Understanding the Impact of
10 the New Political Economy
1
2
3
4
5
6
I
7
8
91111
20111 f I have shown that the concept of citizen brands is already
1 an important one for companies, why has the issue emerged in
2 the way it has? What are the social, economic, political and tech-
3 nological factors that have made this more important than it was
4 ten, twenty or thirty years ago? And will these factors continue
5 to exert an influence in the future increasing the importance of
6 citizenship to companies?
7 In this section I consider these questions to assess not only
8 why these new citizenship pressures on companies are developing
9 but also to contemplate what sort of future society business will
30 be operating in. In this first chapter I describe the new political
1 economy that is emerging as a result of the twin forces of glob-
2 alization and economic growth. In the next chapter I look at the
3 technological revolution before turning in subsequent chapters to
4111 specific aspects of consumer change: coping with discretion and
104 CITIZEN BRANDS
1111 choice; increasing hysteria and cynicism; and greater volatility in

2 consumer behaviour.
3
4
5 W E L C O M E T O T H E D O O M S AY E R S
6
7 It is very fashionable nowadays to decry modern society. Every
8 week, in newspapers, magazines, on television and on radio
9 someone is bemoaning the loss of a world where people were
10 happier, communities were stronger, families were more united,
1 the pace of life was more relaxed and so on. You name it, and
2 some pundit will claim that life was better in the past. What is
3 staggering about these claims is that there is so little firm evidence
4 to back them up.
5 For example, on the front cover of Oliver James’ book Britain
6 on the Couch1 is the question ‘why are we unhappier than we were
7 in the 1950s – despite being richer?’ Yet, there is no objective
8 evidence that we are, in fact, any less happy (whatever that means)
9 than we were in the past. Happiness, of course, is a very difficult
20111 thing to measure. What exactly does it involve? Is it not a rela-
1 tive concept, with people judging their happiness by reference to
2 their contemporaries, therefore making comparisons over time
3 difficult? Despite these problems, there has been an attempt to
4 assess whether happiness levels have changed. Professor Andrew
5 Oswald at the University of Warwick has analysed cross-national
6 data covering the last 30 years in Europe and 50 years in America.2
7 His conclusions are that:
8
9 Happiness with life seems to be increasing in the USA.
30 Since the early 1970s, reported levels of satisfaction with life in
1 European countries has on average risen slightly.
2
3111 Oswald notes that there is no evidence that growing incomes
increase happiness, supporting the idea that happiness is, inevitably,
PEACE AND PLENTY 105
1111 relative. But equally there is no support for the contention that
2 people despite being richer are generally more miserable.
3 Another doomsayer example is the work of American econo-
4 mist Juliet Schor, famous for her two books The Overworked
5 American3 and The Overspent American.4 Schor’s argument in the first
6 book is that Americans are working longer hours, leading to a range
7 of detrimental impacts. However, in a rather damning critique of
8 her analysis, John Robinson and Geoffrey Godbey assert that Schor’s
9 claims ‘are not supported by diary data’. This would not matter
10 so much except that Schor’s analysis was based on their own
1 time-diary data and it was, they claim, selective and partial use:
2
Schor uses our time-diary data only for 1975, and then mixes those
3 data with time-estimate data – a step we question . . . She does not
4 use our 1965 time-diary data – the major benchmark year for our
5 analyses . . . She also does not take into account our time-diary data
6 and published articles from the 1985 study.5 [My emphasis]
7
They conclude, in a rather understated way, that ‘our results and
8
conclusions about trends in hours spent at work are notably differ-
91111
ent from Schor’s’.
20111
Robert H. Frank effectively repeats Schor’s contention in his
1
book Luxury Fever: Why Money Fails to Satisfy in an Era of Success:6
2
3 All of us, rich and poor alike . . ., are spending more time at the
4 office and taking shorter vacations; we are spending less time with
our families and friends; and we have less time for sleep, exercise,
5
travel, reading and other activities that help maintain body and soul.
6
7 Yet, there is no evidence from the United States or Britain
8 that people are sleeping less: ‘sleep data show the least variance
9 across time. While many people claim they are so busy that they
30 forgo hours of sleep, little evidence of decreased sleep appears
1 [from the data]’.7 Professor Jonathan Gershuny’s data on sleep high-
2 lights a similar conclusion for Britain,8 while at the same time
3 showing that parents are spending more time on child care than
4111 they have ever done9 (Figure 5.1).
106 CITIZEN BRANDS
1111 Minutes per

day Men Women F/T
2
160 Women P/T Other women
3
140
4
5 120
6 100
Approx. 85 minutes on
7 80 average per child
8
60
9
Approx. 25 minutes on
40
10 average per child
1 20
2 0
3 1961 1975 1985 1995
4 Figure 5.1 Child care time. Men and women with children under 16
5 (UK).
6 Source: Jonathan Gershuny with special analysis by Michael Willmott.
7
8 Of course the world has changed and not for the better in
9 every single case. But, by and large and by most objective measures
20111 things have improved. The refusal to accept these objective facts
1 and to search with fervour for some sign of decline or impending
2 doom may be an underlying human trait. As Brown and Duguid
3 note:
4
Since the nineteenth century when the economist Thomas Malthus
5
gloomily predicted that the geometric growth of population would
6 outstrip the arithmetic growth in resources, predictions appear regu-
7 larly that humanity is on the verge of destroying itself.10
8
9 Unfortunately, even respected British forecasting organizations
30 are prone to this. Here were some typical comments that marked
1 the end of the millennium:
2 Although the economic outlook was bright, the problems facing
3111 society at the end of the second millennium were likely to deteri-
orate by the start of the third.
1111 The ageing population and increased mobility, together with the
2 increase in single-person households and rising stress levels at home
3 and at work, have all led to increasing isolation for many people.11
4 This last point is a highly contentious one as all the research
5 shows that people are going out and socializing more, have more
6 people in their homes and to dinner and, thanks to the new tech-
7 nologies (see next chapter), are communicating more than ever
8 before.
9 Although doomsayers have been around throughout history
10 the discrepancy between the reality and the hype has probably
1 never been greater (certainly in the advanced economies of the
2 developed world). Thus, the critical issue for business and polit-
3 icians alike is not really people’s unhappiness or poverty or
4 ill-health but rather, it is in understanding the impact of a stable
5 and prosperous society on people’s values and behaviour. This
6 includes understanding when and where the misplaced perception
7 of decline is relevant and when and where it is not.
8
91111
PEACE AND PLENTY
20111
1 This phenomenon of ‘peace and plenty’ – as Jim Murphy12 has
2 described it – is, I believe, a crucial one in the development of
3 citizen brands because it does impact on consumer values and the
4 political environment. The argument goes as follows.
5 Despite the doom and gloom suggested by many commenta-
6 tors we currently live in unprecedented times. The end of the
7 cold war and the collapse of communism – hailed at the time as
8 a momentous event – has turned out to be just that. Diverted,
9 almost as soon as it happened, by an economic slowdown in the
30 western world (and recession in some countries like the United
1 States and Britain) it is my view that we have underestimated
2 just what impact this has had on the economics and psychology
3 of today. The peace dividend is a reality: military spending dimin-
4111 ished from 11 per cent of UK government spending in 1987 to
108 CITIZEN BRANDS
1111 7 per cent in 1998,13 releasing money for increased spending on

2 social security and health.This is a very real and measurable impact.
3 But more important in my view, but less quantifiable, is the psycho-
4 logical impact it has had. Speak to children under the age of 10
5 or 15 even and they have no comprehension of the underlying
6 fear that accompanies the idea of nuclear war. In the 1999 film
7 Blast from the Past a government scientist builds his own bunker
8 and, believing a missile attack to have started during the Cuban
9 missile crisis takes his family down into it, to re-emerge 30 years
10 later. A colleague’s 10 year old daughter on seeing the film said
1 she had no idea that there had ever been that sort of threat or
2 fear – it was the first time she had been confronted with the idea
3 of mass destruction.
4 I think we forget how pervasive and deeply ingrained our con-
5 cerns about nuclear war were. Since the 1970s social and market
6 research company MORI has asked the general public what they
7 think is the most important issue facing Britain. Even in the 1980s,
8 disarmament/nuclear war nearly always ranked in the top three
9 issues with sometimes as many as 40 per cent saying it was the most
20111 important problem the country faced. From 1988 the numbers
1 choosing this option began to decline dramatically. Now, it is the
2 most important worry for only 1 per cent of the population.14
3 The Future Foundation has repeated part of a survey carried out
4 by the market research firm Taylor Nelson Sofres during the 1980s.15
5 One question gave respondents a list of five ambitions and asked
6 them which one they would choose if they had one wish. In the
7 1980s the population’s first choice by a long way was ‘less fear’,
8 selected by around 45 per cent. By 1999 it was down to a mere
9 15 per cent, now only the third choice (see Figure 5.2). At first, I
30 could not understand this result given the increasing neuroses about
1 crime and safety (see Chapter 8). But now I believe it merely reflects
2 the removal of the biggest threat of all – nuclear war.
3111 What has been the reaction to this? Well, arguably one has
been either to substitute other fears for the old ones or to discover
1111 50% 1983 1986 1996 2000

2 45%
3 40%
35%
4
30%
5
25%
6 20%
7 15%
8 10%
9 5%
10 0%
To be more To have To be able To fulfil To have more
1 highly less fear to afford yourself friendship
2 esteemed something
3 Figure 5.2 Less fear more fulfilment? ‘If you had just one wish, which
4 one of these would you choose?’
5 Source: nVision/Future Foundation.
6
7 new ones. So, people worry more about crime and disease and
8 about community and family. We now have a new global threat
91111 too – environmental degradation and global warming. I am not
20111 saying there are not legitimate environmental concerns – indeed,
1 I think there are – but rather that, with the threat of nuclear war
2 diminished, there is a natural tendency to concentrate on other
3 potentially catastrophic events. An important point though is that
4 these new threats are longer-term ones. Global warming is not
5 going to bring disaster literally tomorrow as nuclear war could.
6 But if these are conflated concerns with a less immediate effect
7 then surely the importance of them to people, and people’s behav-
8 iour, will be more variable? And that is exactly what has happened
9 – concern about environmental issues has fluctuated, often in tune
30 with the economic cycle. Concerns they may be, but they are less
1 deeply ingrained and, importantly, less immediately personally
2 threatening.
3 Look again at Figure 5.2. If the response ‘less fear’ has gone
4111 down, what has increased? A number of areas have gone up: ‘to
110 CITIZEN BRANDS
1111
To be well groomed
2
3 More excitement
4 Involvement in
community
5
Better way of evaluating 1999
6 quality of products
1983
7 To differ in way to
express tastes
8
9 To learn more
10 To be more creative
1
2 New experiences
3 0% 10% 20% 30% 40% 50% 60% 70% 80% 100%

4
Figure 5.3 The growth of individualism. Proportion feeling a strong
5 or moderate need for . . .
7
8
9 be more highly esteemed’, for example. But the two big gainers
20111 are ‘to be able to afford something’ and – now the number one
1 wish – ‘to fulfil yourself ’. A separate question from the same survey
2 found more people wanting new experiences, more excitement
3 and to fulfil oneself by being more creative (Figure 5.3). In the
4 absence of cold war concerns people have become more worried
5 about their own personal development – about what threatens
6 them as individuals or what they, as individuals, can do to improve
7 their life. The reduction of solid global threats has helped to boost
8 the growth of individualism.
9 Of course, military conflicts still exist. But nowadays these are
30 against less powerful, less well-equipped regimes like Iraq or Serbia.
1 Although much was made at the time of the potential use of
2 biological weapons in the Gulf War, the reality was a military
3111 mismatch – Iraq never had a chance against the might of the
Western military machine. This, as we saw in Kosovo, has now
1111 become a new type of war – at least for us in the West. Laser
2 guided bombs and cruise missiles weave their way precisely to
3 their military targets. While some innocent civilians ‘over there’
4 may be casualties as the odd missile goes astray or intelli-
5 gence wrongly identifies targets and while huge, and long-term,
6 hardship is caused by the destruction of infrastructure, civilians
7 at home are not threatened at all. Indeed, if the past few ‘wars’
8 are any-thing to go by, the risks faced by our military personnel
9 are pretty slim too, and the potential for public outcry limited.
10 This is a sanitized version of war for the West – more an enter-
1 tainment (as we receive round the clock, live news coverage) than
2 a threat.
3 For the developed world, Vietnam was the last serious ‘body
4 bag’ war where not only regulars, but conscripts were involved.
5 But in the 1970s and 1980s the threat of nuclear war remained.
6 Only now, and for the first time in history, do we in the West
7 have a generation of people who have never experienced the fear
8 that accompanies the prospect of them or their loved ones going
91111 to war or of their country being decimated by it. That is unprece-
20111 dented indeed.
1
2
3 NEVER HAD IT SO GOOD?
4
5 If the threat of major wars and nuclear destruction has receded,
6 are there not broader economic problems facing people, and specif-
7 ically that of poverty? Certainly, one of the more obvious economic
8 trends in a number of western economies over the last two decades
9 has been the increasing polarization of incomes. This is most
30 noticeable in some of the Anglo-Saxon economies that have most
1 readily embraced free market capitalism, like the USA and Britain.
2 Although most people view this as a bad development, with
3 increasing numbers wanting a fairer distribution (see Figure 5.4),
4111 the argument is not quite as simple as it might seem.
112 CITIZEN BRANDS
1111 80%
2 70%
3
60%
4
5 50%
6 40%
7
30%
8
20%
9
10 10%
1 0%
2 1980 1983 1986 1999 2000
3 Figure 5.4 Support for a fairer division of wealth. Proportion who agree
4 that ‘there should be a fairer division of wealth and money’.
6
First, although incomes are undoubtedly being distributed less
7
equitably, practically everyone is better off in real terms – it is just
8
that the richer are getting richer, faster. So the question is one
9
about relative, rather than real poverty since more people can afford
20111
some of the basic, and not so basic, items of life. A passage from
1
Melvin Bragg’s novel The Soldier’s Return emphasizes the point:
2
3 the inhabitants of the Rabbit Warren at the very centre of town
4 were to be sent almost a mile away, to the south, into houses with
5 three, sometimes four, bedrooms and an indoor lavatory and even a
6 bath, with gardens front and back and no damp, no TB, no rats, no
cockroaches, no chesty coughs, no beatings and worse, no stench of
7
beasts and excrement in the street.16
8
9 Compared with the past the living conditions of nearly
30 everyone are much better now. The ‘problem’ is that as living stan-
1 dards improve, so expectations increase. In the post-war period
2 that Bragg was writing about many people did not have an indoor
3111 toilet and to have one was deemed, if not a luxury, then certainly
a movement away from poverty, deprivation and misery. There was
1111 no mention then of a refrigerator, but nowadays this is consid-

2 ered an essential item to have according to a recent study by the
3 Joseph Rowntree Foundation.17 Indeed to not have one, is consid-
4 ered a measure of deprivation. This is the paradox of growth:
5 although people’s material conditions compared with the past
6 improve; their condition relative to others might not. They are on
7 one measure better off, but they might not feel it.
8 This is not to say that the concept of relative poverty should
9 be dismissed – it is clearly an important aspect of social well-being
10 and cohesion (although, there is an argument that to achieve cohe-
1 sion there needs to be a recognition of the individualism and
2 diversity in modern culture).18 If the gap in financial terms
3 between different groups in society becomes too great then alien-
4 ation and social unrest might result – something that would not
5 be in the interest of the corporate sector. But the idea of relative
6 poverty also has its problems. For a start, one measure of relative
7 poverty – the proportion of people with less than 50 per cent of
8 average incomes – tends to decrease in a recession. The reason is
91111 that if, as you would expect, the average income declines as the
20111 economy turns down, then the level at which you are deemed to
1 be in poverty goes down too. The result can be that fewer people
2 are below the threshold – fewer people are deemed to be poor.
3 This is misleading as we know that recessions always cause greater
4 hardship and particularly for those on lower incomes.
5 There is another question about relative poverty: relative to
6 what? Most measures concentrate on comparisons with other
7 people in the same country. But, as globalization continues and, in
8 Europe, the integration of markets grows then is this the best
9 measure? For example, the poor in Britain could in theory fall
30 further behind the better-off citizens in their own country but
1 become less poor in relation to Europe as a whole.This is import-
2 ant because your views about this could directly influence national
3 economic policy.This can be shown by way of illustration. Assume,
4111 for simplicity’s sake, that a government has two policy options:
114 CITIZEN BRANDS
1111 1. provides reduced income growth in comparison to global

2 competitors and a worse relative position for the poorer groups
3 compared to poorer groups in other countries but with decreased
4 income polarization within the country;
5 2. provides greater growth than in other countries which means
6 on a global scale the poorer groups are better off than similar
7 groups in other countries but with increased income polarization
8 within the country.
9
10 In posing this question to people, I have been surprised how
1 many have chosen option 1 – they would rather people are poorer
2 (in global terms) but more equal nationally, than better off and
3 less equal. In other words in the western world this is as much a
4 debate about inequality as it is about poverty. In an era of peace
5 and plenty it is relatives not absolutes that matter.
6 My point here is not to belittle the fact that poverty still exists
7 in what are, in world-wide terms, very rich countries – nor that
8 strenuous efforts should not be made to help those in such straits.
9 It is not that excessive executive pay (and pay-offs to corporate
20111 managers who are sacked for failure or incompetence) is accept-
1 able.These are important problems that any civilized society should
2 address. However, despite this, it is an inescapable fact that the
3 majority of citizens in industrialized economies are much better
4 off in real terms than their parent’s generation and – and this is
5 the critical fact – have reached a level of discretionary spending
6 that has taken them on to a new level. Of course, despite real
7 income increases most people still do not have as much money
8 or possessions as they might like. If they recognize that they cannot
9 be as rich as Bill Gates or Richard Branson, or Michael Jordan
30 or David Beckham, they would certainly not mind those posses-
1 sions or lifestyles just beyond their current means. And, as the
2 income distribution stretches, more people will aspire to goods or
3111 services they cannot afford. It is noticeable, for example, that the
proportion of people wishing they were able to afford something
1111 60% To be able to afford something

2 To fulfil yourself
50%
3
4 40%
5
30%
6
7 20%
8
10%
9
10 0%
<£12 500 £12 500–£17 499 £17 500–£24 999 £25 000–£34 999 £35 000+
1 a year a year a year a year a year
2
Figure 5.5 Income and aspirations. Proportion choosing certain aspects
3 as main wish by income.
5
6
7 has gone up and is specially high, not surprisingly, for those on
8 lower incomes. Those on higher incomes meanwhile are most
91111 likely to seek more fulfilment (Figure 5.5).This, then, is the impact
20111 of polarizing incomes: a growth in the search for fulfilment at the
1 same time as, if not yet a growing ‘culture of envy’,19 then at least
2 a maintenance of aspirational consumption. (Although some have
3 argued that a mood of anti-materialism is developing, there is
4 precious little evidence of such ‘downshifting’ – as it is called –
5 actually taking place.)
6 But all this discussion about aspirations is within the context
7 of a great deal of discretion already available to most people. In
8 much of the developed world, the majority of the population can
9 buy a new car, holiday abroad or own their own home. Effectively
30 every home in Britain has a telephone and a television, nearly all
1 have a washing machine, fridge, video recorder and central heating
2 (see Figure 5.6). New appliances reach high penetration levels in
3 relatively short periods of time nowadays. It took over 50 years
4111 for telephones to reach more than 50 per cent of UK homes;
116 CITIZEN BRANDS
1111 1970 1985 1998–1999

2 100%
3 90%
4 80%
5 70%
6 60%
7 50%
8 40%
9 30%
10 20%
1 10%
2
0%
3 Car Central Fridge Phone Washing
4 heating machine
5 Figure 5.6 Ownership of various household goods. Percentage of

6 households with selected items.
7 Source: Family Spending, National Statistics.
8
9 mobile phones have reached 50 per cent of the population in just
20111 12 years. When colour television was launched in 1968 it was 10
1 years before it reached more than half of households; digital TV,
2 launched in 1998, is forecast by the Future Foundation to get to
3 that point in six years. That is why new concepts like paid for
4 television or the launch of the National Lottery in Britain in 1994
5 can suddenly appear and devour billions of pounds of consumer
6 expenditure.The majority of people now have an increasing degree
7 of economic discretion.
8 People are not only better off in income terms but in wealth
9 too. Considerable assets are held by the public in pension funds,
30 housing, share ownership and saving or deposit accounts. The total
1 net financial wealth held by British households is now over £2000
2 billion, having increased fourfold in real terms over the last twenty
3111 years.20 More people have a safety net and the typical size of it
is larger. Perhaps this is one of the reasons why – despite the
1111 general problems and worries that are supposedly so endemic in

2 society – the ownership of life insurance is declining.21 Do you
3 need insurance when you have sufficient assets to cover the ups
4 and downs of life?
5 This degree of affluence for the majority has led some to
6 suggest that we are reaching a new stage in society’s development.
7 In particular, that we are reaching the self-actualization phase of
8 Maslow’s hierarchy of needs.22 Others have talked of the emer-
9 gence of a post-material society.
10 To remind readers, Maslow suggested that as societies develop
1 so people move up the hierarchy from the basic sustenance required
2 just to live of primitive societies through security to socializa-
3 tion, and then through self-esteem to self-actualization (see Figure
4 5.7). The stage of self-esteem is associated with lifestyles focus-
5 ing on status driven consumption (‘what I have’). Self-actualization
6 is less concerned with appearance and more with personal
7
8
91111
20111 Self-
1 actualization
2
3 Self-esteem
4
t
en
m
5
ve
Socialization
mo
6
of
on
7
cti
re
8 Security
Di
9
30
Sustenance
1
2
3 Figure 5.7 Maslow’s hierarchy of needs. Schematic representation.
4111 Source: The Responsible Organisation, BT/Future Foundation.
118 CITIZEN BRANDS
1111 development, quality of life (‘how I am’) and, importantly, with

2 wider concerns.
3 Whether materialism, as such, has been banished is, as I
4 suggested earlier, debatable. But, it seems to me that there clearly
5 is something in the argument that other, wider concerns, are
6 influencing people in their attitudes and behaviour. Certainly,
7 long-term studies have suggested that more and more people can
8 be categorized as self-actualized or post-materialists.23
9 There is evidence that this does feed through into consumer
10 behaviour and particularly that related to corporate citizenship. For
1 example, Environics24 developed a survey of attitudes to the role
2 of large companies in society. The 23 countries included ranged
3 from Argentina to Kazakhstan to the United States. When the
4 results are plotted against the GDP per capita a correlation can
5 be see (Figure 5.8). On the whole, the richer a society becomes
6 the more its inhabitants believe that companies have a role in
7 setting ethical standards and in helping build a better society.
8
9
GDP per capita
20111 30 000
1
25 000
2
20 000
3
4 15 000
5 10 000
6
5000
7
0
8 –40 –30 –20 –10 0 10 20 30 40 50
9 –5000
Whether companies should be engaged in setting ethical standards and building a better society
30 (a positive rating = yes – see note 25)
1
Figure 5.8 Companies, society and affluence. Belief about the role of
2 companies by Gross Domestic Product per capita.25
3111 Source: Environics/The Prince of Wales Business Leaders Forum/The Con-
ference Board/Future Foundation.
1111 ‘Impact on the environment’ important when

2 thinking about purchase of a product or service
3 ‘Impact on the environment’ would persuade to

buy if two products were otherwise similar
4 ‘Treatment of employees’ important when
5 thinking about purchase of a product or service
6 ‘Treatment of employees’ would persuade to buy

if two products were otherwise similar
7
‘Support of community’ important when thinking
8 about purchase of a product or service
Post-materialists
9 ‘Support of community’ would persuade to buy if
two products were otherwise similar Materialists
10
0% 10% 20% 30% 40% 50% 60%
1
2 Figure 5.9 Post-materialism and consumption. Proportion saying factor
3 is important when making a purchasing decision/would be persuasive in
final choice if price and quality of two products were comparable.
4
Source: Co-operative Bank/MORI.
5
6
7 Research by MORI in Britain for the Co-operative Bank26
8 looked directly at whether people who could be characterized as
91111 at the top of the Maslow hierarchy – ‘post-materialists’27 – had
20111 different attitudes to corporate behaviour. The results are shown
1 in Figure 5.9 and clearly also suggest that as societies develop,
2 more and more people will be concerned about the citizenship
3 credentials of a business.
4
5
6 T H E N E W T H R E AT – G L O B A L I Z AT I O N
7
8 Within all this discussion of a prosperous industrialized world with
9 fewer real threats and justifiable fears there is one area where people
30 not only feel threatened but where they are clearly directly affected
1 – globalization. Some commentators see globalization as an inher-
2 ently negative development (see, for example, John Gray,28 Faux and
3 Mishel29 and Vandana Shiva30 ). Personally, I feel less strongly about
4111 globalization. Indeed, I believe it does ultimately promote economic
120 CITIZEN BRANDS
1111 growth and can be a force for improved social and economic con-
2 ditions around the world (see, for example, Dollar and Kray).31 But,
3 at the same time it clearly does impact upon companies, countries
4 and citizens.
5 The steady deregulation of world trade – through GATT and
6 WTO, as well as within regions such as the European Union or
7 NAFTA – is forcing businesses in all sectors to reassess their oper-
8 ations and cost bases in the face of greater competition in
9 previously protected home markets. Since the Second World War,
10 there have been really three distinct periods of trade growth. From
1 1950 until the early 1980s trade was steadily growing at an annual
2 rate of one and a half times world output. But it accelerated in
3 the 1980s in a new phase of growth, growing between 1984 and
4 1993 at nearly double the rate of output. But from the early 1990s
5 it quickened its pace again and since 1994 has been growing at
6 three times world gross domestic product (Figure 5.10).
7 As markets open ‘globally’, so supply in virtually any sector
8 can be much better organized and any kind of protective price
9 regime is left vulnerable. We are experiencing this today in the
20111
1
2 2300
2100 World trade
3 1900 World GDP
4 1700
5 1500
1300
6 1100
7 900
8 700
500
9
300
30 100
1 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998
2 Figure 5.10 The relentless progress of globalization. The growth of

3111 world trade versus that of world gross domestic product (index: 1950=100).
Source: World Trade Organisation.
1111 ‘crisis’ of the British farming industry. Price premiums in a number

2 of farming subsectors have been completely eliminated by foreign
3 producers even to the extent that some products cost more per
4 unit for British farmers to produce than they cost the consumer
5 to buy in a supermarket. Similar kinds of pressure are already being
6 felt in drinks retailing, cars, air travel and the like. Globalization
7 allied to low inflation progressively makes unjustified price
8 premiums impossible, in the long run, to protect.
9 Thus in most market sectors there is a growing need to create
10 and sustain competitive advantage through focusing on core
1 competencies, building strong and valued brands, and keeping costs
2 under control. This is having a major impact on employment and
3 working practices. Down-sizing and the restructuring of corpora-
4 tions, both multinational and national, has resulted in ever more
5 functions being contracted out and a range of more flexible
6 working techniques introduced. Not surprisingly, this has raised
7 concerns about job security.32
8
91111
20111 T H E I M PA C T O N T H E P O L I T I C A L
1 ECONOMY
2
3 This, then, is the backdrop to the emerging political economy and
4 a funny mix it is too. Never had it so good, but worried about
5 a range of issues, some unnecessarily and wrongly so.The majority
6 of the people well-off but perhaps feeling less secure in their jobs
7 and increasingly concerned about polarization in society. Global-
8 ization driving growth and lowering consumer prices but in a
9 seemingly brutal fashion.
30 This strange mix has been critical in the emergence of a new
1 political philosophy. First, the reality and seeming inevitability of
2 global competition has forced governments of all political persua-
3 sions to adapt in their economic policies to embrace free market
4111 competition. At the same time, concern about increased job
122 CITIZEN BRANDS
1111 insecurity and income polarization has been felt to threaten social
2 cohesion and hence has fed the need for policies to address that.
3 This reflects the two poles of the new political economy: full-
4 hearted acceptance of the global market economy while at the
5 same time searching for mechanisms to protect individual citizens
6 from the ravages of it.
7 Begun by Bill Clinton and recreated by Tony Blair in Britain
8 as ‘the third way’, it is being adopted in varying degrees by other
9 politicians throughout Europe, most notably Lionel Jospin and
10 Gerhard Schroeder. This is not only a left-of-centre phenomenon.
1 A right-of-centre administration in Spain has followed similar poli-
2 cies and, as Charles Leadbeater has pointed out,33 George W. Bush
3 presents a similar credo under the guise of ‘compassionate conser-
vatism’. Now, Michael Portillo is doing the same from a
4
Conservative perspective in Britain.
5
This has thrown up some interesting paradoxes. Not least is
6
that those on the left have embraced stable, business friendly, free
7
market economic policies to such an extent that they are seen –
8
at least in Britain and the United States – as safe guardians of the
9
economy in the eyes of Wall Street and the City of London,
20111
perhaps even safer than their right-of-centre opponents.
1 What this new political philosophy is attempting to do is to
2 marry the principles of individual rights, social cohesion and basic
3 welfare with the economic necessity of enterprise and capitalism.
4 What this represents, as American political analyst Mark Lilla34 has
5 proposed, is the confluence of the economic credo of the 1980s
6 with the social credo of the 1960s – two generations and two
7 political persuasions brought together.
8 According to Lilla this phenomenon – the ‘politics of fusion’
9 as he puts it – explains the general consensus that exists in polit-
30 ical debate today. An acceptance of the global market economy
1 (1980s economics) together with support for individual rights and
2 a concern for a degree of social justice (1960s morality). Philip
3111 Stephens when discussing Lilla’s New York Review article summa-
rizes the argument succinctly:
1111 Today’s politics, we now know, belongs to conservative liberals and

2 liberal conservatives. These are the politicians who have made their
3 peace with the two big upheavals of the post-war era, the social
revolution of the 1960s and its economic counterpart in the 1980s.
4
To win elections in the 1990s you have to be as tolerant of hippies
5 as of yuppies. I hate the phrase, but it is called the politics of inclu-
6 sion. And it has proved as powerful in the hands of Britain’s Tony
7 Blair and Germany’s Gerhard Schröder as it has for Mr Clinton.35
8
9 This may be interesting, but why is it relevant? It is so because
10 this new political economy represents new challenges and new
1 opportunities. Companies and organizations do not operate in a
2 vacuum. To understand some of the implications let us return to
3 Maslow’s hierarchy of needs.
4 It seems to me that this new political philosophy born out of
5 the combined effects of peace and plenty and globalization can
6 be seen as a development of – a step up from – the free market
7 mantra of the 1980s. It is free market, but combined with 1960s
8 style social justice and a concern for individual rights (as Mark
91111 Lilla suggested). As a political philosophy, then, it is consistent with
20111 the self-actualization phase of Maslow’s hierarchy.
1 An analysis of the predominant corporate structure at times
2 in history suggests that the way business behaves can be linked in
3 a similar way. Thus, in a less developed society, a company’s first
4 priority is to provide basic products that people can afford. As
5 society develops, the company takes more notice of its employees,
6 helping to provide security of employment where possible. In
7 British history, this would be reflected in both the development
8 of labour regulations and paternalistic employers (see Chapter 3).
9 As society moves into the socialization phase, then companies begin
30 to produce products and brands that express inclusiveness – in
1 effect the mass market brands of the 1950s and 1960s. The search
2 for status and the development of positional consumption is
3 consistent with the development of designer labels and upmarket
4111 brands – arguably, most typified in the 1980s. The movement to
124 CITIZEN BRANDS
1111 Political ideology

2
Consumer/employee Corporation
3
4
5 Self- Third way/ Wider concerns
actual- compassionate conservatism (and citizen brands)
6 ization
7 Self-esteem Thatcherism/Reaganism
Targeting and
status brands
8
9 Socialization Welfarism
Mass market
focus and brands
10
Paternalism
1 Security Paternalism (and paternal brands)
2
3 Sustenance Feudalism Basic product
4
5 Figure 5.11 Maslow, political economy and corporations. Schematic
6 representation.
7 Source: Future Foundation.
8
9 self-actualization – which, I argued earlier, the more affluent in
20111 society are currently engaged in – suggests companies, products
1 and brands should start to embrace a wider perspective, adding to
2 people’s personal development and quality of life. To be, in other
3 words, citizen brands.
4 So, the combined impact of peace and plenty and globaliza-
5 tion has profound implications not just for government but for
6 companies too. It may not seem like it yet, but this is potentially
7 a very different political climate to be operating in. This is post-
8 material politics. It is free market economics and, yes, governments
9 are on the whole pro-business but there is a sting in the tail.
30 Governments, and others in society, will expect far more from the
1 corporate sector in the future – companies will be expected not
2 only to be good businesses but good citizens too.
3111 The importance of peace and plenty and globalization is not
restricted to its impact on the political economy. It directly affects
1111 consumer attitudes and behaviour and through that has clear impli-
2 cations for companies. I have already discussed the impact of increas-
3 ing affluence on what might be called ‘ethical’ consumption. But
4 there are other outcomes too.
5 First, and perhaps surprisingly, this new environment makes
6 consumers more demanding. The mix of never had it so good and
7 increasing concerns and worries makes people expect more. But
8 most importantly, consumers also feel empowered because most
9 of them do have a significant degree of discretion. This may seem
10 strange since I made the point earlier that there has been an
1 increase in the proportion of people whose main wish is to be
2 able to afford something. But look at consumer spending growth
3 in Britain over the last thirty years (Figure 5.12). Those areas
4 reflecting the basic needs of subsistence and security – food,
5 housing and energy – have grown but at below average rates. The
6 more discretionary areas, and the ones that reflect individual
7 choices – like leisure, clothes or household goods – have grown.
8 Thus the concern that some people express is – in the termi-
91111 nology I used earlier – not so much about absolutes but about
20111
1
Household goods
2
3 Clothing and footwear
4 Transport and communication

5 Recreational and cultural activities
6
Housing
7
Fuel and power
8
9 Food
30 0 50 100 150 200 250 300 350

1 Increase 1971–1998 (%)
2 Figure 5.12 Household spending in different sectors. Percentage growth

3 in real terms, 1971–1988 (all household spending = 200 per cent growth).
4111 Source: National Statistics, author’s analysis.
126 CITIZEN BRANDS
1111 relatives – being able to afford aspirational goods and services

2 rather than necessities. We may wish we could have them but we
3 know we can get by without them. The affluent majority know
4 they have some discretion and they know that they can pick and
5 choose. And thanks to the increasing competition that globaliza-
6 tion brings, they know that they can shop around for the best
7 price too.
8 This is the irony of prosperity: people are price conscious not
9 because they need to be, but because they know they can be. Add
10 to this the unfortunate minority for whom searching for the
1 cheapest price is a necessity and it becomes understandable why
2 there is increased price awareness across, and within, all markets.
3 So peace and plenty and globalization do not make it any easier
4 for companies, indeed they make life harder. Consumers are more
5 confident (in their dealings with companies), more demanding,
6 more price conscious, while also expecting companies to be good
7 citizens.These trends, together with fears about the negative aspects
8 of globalization, are resulting in an increasing cynicism about busi-
9 ness and how it behaves and about multinational companies in par-
20111 ticular. This is the reason why the concept of citizen brands is so
1 important. But I discuss this issue of cynicism, and some of the other
2 consumer impacts of peace and plenty in a world of globalization
3 – fear, excess choice and increasing volatility – in later chapters.
4 First I want to consider the other major driver of change in the
5 world at the moment: technology.
6
7
8
9
30
1
2
3111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
91111
20111
1
2
3
4
5
6
7
8
9
30
BEYOND
1
2
‘ENDISM’
3
4111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
20111
1
2
3
4
5
6
7
8
9
30
1
2
3111
1111
2
3 CHAPTER 6
4111
5
6
7
BEYOND ‘ENDISM’
8
9 The social side of technology
10
1
2
3
4
5
N
6
7
8
9 o book about business, and certainly one that looks at
20111 future trends, would be complete without a chapter on new tech-
1 nology.1 But the hype about the technological revolution is now so
2 great that there is a danger that both the direction and strength of
3 its impact – the when, where and how quickly – is being exag-
4 gerated. Certainly, some respected commentators are warning of the
5 perils inherent in an uncritical analysis of the implications of digital
6 technology. John Seely Brown, head of research at the world famous
7 Xerox PARC2 no less, has in his recent book with Paul Duguid3
8 cautioned against the ‘endism’ inherent in much of contemporary
9 analysis. This is where new technology is predicted to bring
30 about the end of mass media, intermediaries, high street retailers
1 and so on.4 Seely Brown and Duguid go on to describe the myopia
2 of what they call 6-D vision, where the D stands for all those
3111 ‘futurist-favored’ words beginning with de- or dis-, such as demassifi-
cation, disintermediation or disaggregation. It is not that these two
130 CITIZEN BRANDS
1111 authors deny that there are important developments taking place.
2 They accept that ‘particular institutions and particular organizations
3 are under pressure and many will not survive’ and that ‘none of the
4 D-visions is inherently mistaken or uninteresting’. But, they argue,
5 the analysis and application of it is too linear, too uni-dimensional,
6 too simplistic. They make two specific points: that other ‘revolu-
7 tions’ in the past – like the industrial revolution of the last century
8 – have been as dramatic and fast as this one; and that the effects of
9 those revolutions were critically shaped by social forces and that this
10 revolution will be no different. In order to understand the true
1 impact of new technology, they argue, we need to look beyond
2 technology itself and consider social aspects.
3 There is a lot of sense in what John Seely Brown and Paul
4 Duguid say.5 The argument that previous revolutions have been as
5 dramatic is a popular and legitimate one. Is the pace of change really
6 any greater now than that experienced in the major historical
7 revolutions involving science (in the sixteenth and seventeenth
8 centuries), agriculture (in the late eighteenth century in Europe)
9 and industry (predominantly the eighteenth and nineteenth cen-
20111 turies)? The American sociologist Daniel Bell has pointed out, for
1 example, that around a hundred years ago there was a period of
2 intense and rapid technological innovation and change, including
3 the invention or mass deployment of electricity and light, the motor
4 car and the telegraph/telephone.A visit to Thomas Edison’s summer
5 home and laboratory in Fort Myers, Florida – now a museum – is
6 a reminder of the spirit of invention and change at the beginning
7 of the twentieth century. Not only was Florida itself opened up for
8 the first time by the railway, but Edison was revolutionizing the
9 world with, among other things, batteries, phonographs, light bulbs
30 and electricity generators. His great friend and neighbour Henry
1 Ford was also doing his bit at that time to change the face of travel.
2 But valid though this argument is, to some extent it misses the
3111 point – the fact that rapid change has happened before in history
does not diminish its impact or significance now.Those revolutions
BEYOND ‘ENDISM’ 131
1111 caused significant change and sometimes over a relatively short

2 period of time.
3 It is my belief that this one will too but to assess the potential
4 impact we do need to understand the social context of any tech-
5 nological innovation. In particular, there is the question of what
6 technology might mean for the ‘relationships’ that companies have
7 with the world, with society. It is this aspect that I want to concen-
8 trate on in this chapter rather than general technology predictions,
9 because it has, I believe, important implications for how businesses
10 conduct themselves.
1 In any case, other authors have already given excellent accounts
2 of technological prospects and the broader implications of the in-
3 famous laws of Moore and Metcalfe.6 Briefly, to remind readers
4 – if any need doing so – Moore’s Law states that processing power
5 doubles every 18 months.7 This means that computer speeds will
6 continue to increase at an ever-faster rate, while costs reduce too.
7 In the context of this book, this is not that important except
8 that computer chips, and hence computer intelligence, will be em-
91111 bedded in more and more ‘appliances’. More important for my
20111 overall argument is Metcalfe’s Law for the social and commercial
1 implications that I outline below (and consider again in Chapter
2 10).Again briefly, Metcalfe’s Law focuses on the fact that the power
3 (or value) of a network increases disproportionately to the number
4 of connected users. Although it is usually presented as ‘the value
5 of a network rises at a rate equal to the square of the numbers
6 using it’ this is, in reality, an approximation.8 The important thing
7 about Metcalfe’s Law is that it explains not only why the Internet’s
8 importance and reach is growing rapidly but also why people are
9 attracted to it. As Stewart Brand notes: ‘Metcalfe’s Law explains
30 why 50 million people had to get on the Internet in just a few
1 years. The aggregate value of other users was so great that they
2 could not afford to miss the boat.’9
3 Because of this, my own view – based on our work at the
4111 Future Foundation – is that ubiquitous access to interactive services
132 CITIZEN BRANDS
1111 is now inevitable and could happen quite quickly. In North

2 America, across Europe and in other parts of the developed world
3 we are already witnessing very fast uptake of Internet-based tech-
4 nologies. Much of this Internet access is currently via PCs and
5 the proportion of households connected in this way will continue
6 to grow for a few years yet. But it is not just PCs that will provide
7 interactivity, so too will digital televisions, mobile phones and
8 games consoles. At the Future Foundation, we expect 50 per cent
9 of British homes to have a digital TV by 2002 and, in principle,
10 all of these could have interactive capabilities. Within five years, a
1 substantial majority of the population will have Internet access in
2 some form or other (Figure 6.1).
3 But potentially the most important development is the new
4 generation of Internet-enabled mobile phones and other portable
5 devices.10 In European terms, Britain has by no means the highest
6
7
8 100% Mobile devices only
9 TV and not PC
90%
20111 PC and not TV
80% TV and PC
1
70%
2
3 60%
4 50%
5 40%
6 30%
7 20%
8 10%
9
0%
30
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
1
2 Figure 6.1 Access to interactivity via various platforms. Forecasts for
3111 the UK.
Source: nVision/Future Foundation.
1111 penetration rates and usage of mobile phones – the Scandinavian

2 countries hold that honour. But even in Britain, 50 per cent of
3 those who are teenagers or older now own a mobile phone and
4 the Future Foundation estimates that this could be 90 per cent
5 in five years’ time. Many of these will be Internet-enabled, allowing
6 people to get news, shop and access information databases when
7 and where they like.
8 In the less advanced economies the new media environment
9 is, of course, less developed. In Latin America, for example, in
10 1999 PC penetration was below 10 per cent, while Internet
1 penetration was between 1 and 2 per cent in most countries.
2 This compares with television penetration in these countries of
3 90 or more per cent. If the Internet becomes as ubiquitous as the
4 television – as it surely will – then this suggests high degrees of
5 penetration eventually across the globe. Unfortunately, the problem
6 in such countries is the lack of fixed telephone lines into people’s
7 homes, with between 10 and 20 phones per 100 people in Latin
8 America compared to around 70 per 100 in the United States.
91111 A solution may be on hand, though, with mobile telephony which
20111 can bypass the need for heavy fixed line infrastructure investment.
1 Already the continent is rapidly embracing mobile technology with
2 the number of mobile phone users growing during the course of
3 1999 by 83 per cent in Mexico, 66 per cent in Brazil, 34 per cent
4 in Venezuela and 31 per cent in Argentina.
5 But if we can be reasonably certain that interactive capabili-
6 ties will exist for the majority of people in the developed world
7 within five or ten years and for the whole world at some time
8 after that, what is less certain is what impact this will have on the
9 way companies do business. There are, though, already some indi-
30 cations of how this might develop. Three aspects – a perception
1 of a faster pace of change, a revolution in time and space and
2 increased ‘connections’ within an ever more networked society –
3 are leading to a new form and set of relationships for companies
4111 to deal with.
134 CITIZEN BRANDS
1111 A R U N AWAY W O R L D
2
3 The technological revolution clearly helps to promote the idea that
4 the pace of change in life is getting quicker.The time scales involved
5 in new product launches are now so short that it is hard to know
6 exactly when to buy, as a better product is likely to appear tomorrow.
7 Nowhere is this more true than with computers as they get faster and
8 faster (and cheaper and cheaper) on a regular basis.Whole new tech-
9 nologies appear overnight.The result, according to Anthony Giddens
10 (who is Dean of the London School of Economics), is that it ‘feels like
1 a world out of control; a runaway world’.11 Whether people actually
2 feel less in control of their own lives and less secure as a result of this
3 is uncertain.What we do know is that the desire to be in control is
4 high (Figure 6.2).
5 But despite the lack of evidence to support or refute the thesis
6 of a ‘runaway world’, there clearly is something in the idea even
7 if it can sometimes be over-embellished.Things can, and do, change
8 rapidly; people have a wider range of choices; fewer employees
9 have (and, it should be said, want) a job for life. If things are not
20111
1 0% 10% 20% 30% 40% 50% 60% 70% 80%
2
Being in control of my life
3
4 Having enough money to do what I
want to do
5
6 Making the world a better place
in some way
7
8 Being recognized for my individuality
9
30 Having access to the best and
latest information
1
2 Figure 6.2 Desire to be in control. Proportion rating each element as
3111 ‘very important’ in their lives.
Source: nVision/Future Foundations.
1111 completely uncertain and out of control, they are less certain, less
2 given than in the past.
3 This creates a seeming paradox in that it promotes the rise of
4 short-termism (you are only as good as last quarter’s results) while
5 simultaneously focusing attention on the future (as demonstrated
6 by the plethora of books on futurology). The problem is that if
7 things are moving so fast it becomes all the more important to
8 anticipate change but harder to do so accurately. As Stewart Brand
9 points out in his book The Clock of the Long Now:
10
If taking thought for the future was essential in steady times, how
1
much more important is it in accelerating times, and how much
2 harder? It becomes both crucial and seemingly impossible.12
3
4 It is not just IT, but scientific innovation – aided, of course, by
5 technology – that in general is speeding up, affecting people’s lives
6 more directly. There are more scientists at work today than in the
7 rest of human history13 and thanks to information technology they
8 work much more closely together than in the past.This accelerates
91111 the process of innovation. As Sir Alec Broers, the vice-chancellor of
20111 Cambridge University, noted in his study of the innovation process:
1
The innovation matrix extends across groups of researchers and, in
2
many cases, across nations and the world. . . .This is perhaps the area
3 of greatest change [in scientific research] over the last 100 years.14
4
5 One result of this perception of a quickening pace of change
6 is the development of what I call a culture of immediacy. Because
7 people feel the world is moving so fast – because new technology
8 like mobile phones allows them to do it – people increasingly
9 want, and expect, things to happen or be done immediately.
30 For example, in some research conducted by the Future Founda-
1 tion, people were asked how they would like to order a holiday
2 if they had chosen it one evening, either after watching a tele-
3 vision programme or reading a brochure. Respondents were given
4111 a variety of options that included going to a travel agent, or
136 CITIZEN BRANDS
1111 45% Book the holiday immediately

using the Internet
2 40%
Visit the travel agent
3 35% immediately
4 30% Telephone the holiday
company immediately
5 25%
6 20%
7 15%
8 10%
9 5%
10 0%
Internet users All
1
2 Figure 6.3 A culture of immediacy? Most likely method of ordering
3 a holiday after choosing from a brochure/TV programme etc.
5
6 ordering via the telephone or the Internet. They were also asked
7 whether they would do the ordering immediately or would wait
8 until the next day (or later). Even though, in this instance, it does
9 not really matter when it takes place, Figure 6.3 shows that a
20111 significant minority – a quarter – would want to order there and
1 then. More importantly, four out of ten Internet users would do
2 so, although many of these would use the telephone rather than
3 the Internet (suggesting that in these initial stages of the Internet
4 there remain some barriers to usage). Access to technology has an
5 impact, it seems, not just on, say, the channels of distribution (the
6 how people order) but on the psychology of it (‘I want it now’).
7 Technology enables people to do things more quickly – it allows
8 immediate response.
9
30
1 A N E W C O N C E P T O F T I M E A N D S PA C E
2
3111 So, new technology is influencing how we perceive time. But it
is also affecting our sense of space – where we want to, or feel
1111 able to do things. This is one of the reasons why the digital revo-
2 lution is potentially so disruptive. Space and time – the where and
3 when – are critical aspects of not only social and economic life
4 but even of our sense of identity. As sociologist Manuel Castells
5 has noted:
6
the new communication system radically transforms space and time,
7 the fundamental dimensions of human life.15
8
9 Of course, the current phase of technological innovation is
10 not the only one that has impacted on time and space. Railways
1 and cars opened up countries in the last century and electricity
2 opened up the night. More recently, the telephone allowed imme-
3 diate real-time conversation between places miles apart. The
4 washing machine allowed laundry to come into the home and the
5 television created, in effect, a home cinema. All these inventions
6 affected the when and where, as well as the how. And all of them
7 were hugely successful, to the point that they are now largely
8 ubiquitous, exactly because they transformed time and space.
91111 The importance of this particular revolution in terms of time
20111 and space is twofold. First, as I discuss in the next section, it is
1 impacting on communications – both personal and with and
2 between businesses. Second, the new technology is liberating
3 because it is mobile. Think about those previous inventions that
4 I have already mentioned – it is only the motor car that, as an
5 ‘appliance’, was truly mobile; and look at the importance and
6 success of that. A more recent example was the Sony Walkman,
7 or before that the transistor radio (and look too at the success of
8 those). But the difference this time is that the technology is not
9 only mobile but is potentially interactive too.
30 People are spending more time on the move – a trend that
1 is likely to be aided and abetted by the new technology. Analysis
2 of time diary data shows that the amount of time the average
3 Briton spends neither at home, nor at work has nearly doubled
4111 over the course of the last forty years (Figure 6.4). The reason is
138 CITIZEN BRANDS
1111 16%
2 14%
3 12%
4 10%
5 8%
6
6%
7
4%
8
2%
9
0%
10
1955 1960 1965 1970 1975 1980 1985 1990 1995 2000
1
2 Figure 6.4 Space – the new frontier? Percentage of waking hours spent
neither at home nor at work.
3
Source: Author’s analysis of data contained in Leisure in the UK Across the 20th
4 Century, Institute for Social and Economic Research.16
5
6
7 that we are spending more time on out-and-about activities like
8 going to bars, restaurants and other leisure pursuits and on shop-
9 ping and non-work travelling (Figure 6.5).
20111 What the new interactive mobile technology will allow is the
1 ability to access information anywhere and communicate with
2 companies in any location. People could look at holidays, and even
3 order one, while having a drink in a bar with friends. They could
4 change their supplier of car insurance after being recommended
5 to another company by a friend who is driving them to a foot-
6 ball match. They could choose a restaurant while on a train or
7 watch a sports event while sitting in the park.
8 So, the technology has the potential to revolutionize when and
9 where things are done. Wherever and whenever something is
30 currently done (one’s banking, or the purchase of insurance,
1 for example) may in the future be done somewhere else and at
2 a different time. Understanding and anticipating this revolution
3111 in space and time will be a critical factor in business success in
the future.
1111 Minutes per

day
2
80
3
4 70
5 60
6
50
7
8 40
9 30
Other women
10
20 Women P/T
1
Women F/T
2 10
Men
3 0
4 1961 1975 1985 1995
5 Figure 6.5 Time spent on shopping and domestic travel. Minutes per
6 person per day.
7 Source: Jonathan Gershuny.17
8
91111
20111 There are two major caveats to make about this, however.
1 First, note from Figure 6.4 that the proportion of time currently
2 spent neither at home nor at work is only 15 per cent of waking
3 hours. Despite the increase in time spent on out of the home
4 leisure and related activities, the largest part of people’s lives are
5 still spent in their house or apartment. This suggests to me that a
6 lot of digital entertainment consumption, product information
7 gathering and purchasing will still take place at home. Second,
8 because people have the technological capability of doing some-
9 thing does not mean they will inevitably embrace it. The offer of
30 being able to receive information or carry out a transaction, for
1 instance, in a different place will only be taken up if it offers some
2 benefits to the consumer. It is the interaction between the tech-
3 nology and people and their needs that will define the success of
4111 any initiative.
140 CITIZEN BRANDS
1111 SMALL WORLD, BIG WORLD

2
3 Perhaps the most important aspect of the new technology is the
4 transformation it is having on communications, both social and
5 business.
6 As more people link up to the Internet, as more people have
7 more fixed-line and mobile telephones, so not only are more
8 connections possible, but more ‘conversations’ in fact take place.
9 Human beings are, after all, social animals and it seems that if we
10 are given tools that aid communication then we will communicate
1 more. Data from Britain show that communications traffic contin-
2 ues to grow (Figure 6.6).
3 This increased number of connections and the communications
4 that flow from it – be it fixed or mobile phone calls, e-mail, SMS
5 messages, bulletin boards, chat lines or even just accessing web sites
6 – has important implications for business. First, it empowers
7 consumers by providing them with much more information. This
8 ranges from the ability to compare prices (and performance) via the
9 Internet to the increasing importance of word-of-mouth. It is much
20111
Million minutes
1
250 000 Mobile
2 Fixed line
3 200 000
4
5 150 000
6
100 000
7
8
50 000
9
30 0
1 1995/96 1996/97 1997/98 1998/99 1999/00
2 Figure 6.6 Growth in communications traffic. Fixed line phone calls

3111 (including Internet) plus mobile calls – minutes.
Source: OFTEL.
1111 easier for one consumer to tell another or a whole group of others
2 that a product is a ‘must buy’ or a ‘must avoid’.
3 Second, these new communications channels provide advocacy
4 groups an easy outlet for their campaigns. This can vary from
5 the anti-capitalist or anti-advertising ‘culture jammers’18 to the
6 free market fuel price activists who mounted an e-mail campaign
7 against fuel taxes in the United States and Europe in the summer
8 of 2000.
9 All this not only has some direct impact on how companies
10 need to operate and behave, as I outline below, but it also inher-
1 ently increases the chances of volatile behaviour as I discuss in a
2 later chapter. More connections and more communications mean
3 good and bad news can travel further and faster than it has ever
4 done before.
5
6
7 RESPONDING TO THE TECHNOLOGICAL
8 REVOLUTION
91111
20111 The implications of this quickening pace of change, the new land-
1 scape of time and space and the increase of connectivity and
2 communications are profound.
3 At a more mundane level, it raises some important operational
4 issues. For instance, as people communicate more via electronic
5 media, so they leave a trail of information about themselves.
6 This might be unbeknown to them, as their web site visits are
7 tracked for example, or even when information is consciously pro-
8 vided on registration or application forms. All this will increase the
9 importance of data protection as a consumer concern.Those com-
30 panies that abuse the information provided to them by consumers
1 are unlikely to be forgiven, something that a number of proponents
2 of new media marketing sometimes forget. (The so-called ‘one-to-
3 one’ marketing, for instance, only works if a company has sufficient
4111 information about consumers to properly target offers at them.
142 CITIZEN BRANDS
1111 That information will not be provided to companies with a bad

2 reputation or who are not trusted.) Clearly, being a citizen brand
3 involves taking data protection issues very seriously.
4 At the same time, the emergence of a culture of immediacy
5 will mean that faster and faster responses will be expected from
6 companies. Businesses need to be operationally organized to be
7 able to respond to consumer requests for information, complaints
8 and orders promptly. The Internet suggests immediate response –
9 companies will need to deliver it.
10 As important as these points is the more strategic issue of how
1 technology will impact on the relationship between businesses and
2 their customers.
3 As I have already argued, digital technology empowers con-
4 sumers by providing them with more choice and reduced barriers
5 to changing brands. It also encourages and enables the customer to
6 have far greater access to a company, allowing the checking of
7 ethical policy for example (although, in reality few consumers are
8 likely to do so on a regular basis). More worryingly, it offers major
9 opportunities for consumer ‘terrorism’ – for individuals or organi-
20111 zations to mount campaigns against companies or brands they have
1 some complaint or grudge against.
2 This is where Seely Brown and Duguid’s point about under-
3 standing the social context of technology becomes important. The
4 new technology is an equalizer in the relationship between busi-
5 ness and consumer and an individualizer – as consumer tastes
6 fragment, so people expect individual offers and treatments. In this
7 environment the social aspects of the exchange (whether the actual
8 exchange itself involves information, money, product or service)
9 becomes more important,19 as does the role of technology in that.
30 So, to understand the relevance of this, we need to understand
1 more about consumer attitudes to choice, the factors influencing
2 it and the rationality of the behaviour and attitudes to companies,
3111 brands and consumer ‘terrorism’. This is what I turn to next.
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
91111
20111
1
2
3
4
5
6
7
8
9
30
COPING
1
2
WITH CHOICE
3
4111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
20111
1
2
3
4
5
6
7
8
9
30
1
2
3111
1111
2
3 CHAPTER 7
4
5
6
7
COPING WITH
8 CHOICE
9
10
1
2
3
4
5
T
6
7
8
91111 he trends that I have been discussing in the last two
20111 chapters – growing affluence for the many, globalization and the
1 technological revolution – are leading to a number of important
2 developments beyond those I have already outlined. But three –
3 the explosion of choice, a reappraisal of authority and trust and
4 attitudes towards companies – are specially relevant for the way
5 companies themselves operate. The next few chapters are devoted
6 to these themes beginning, in this one, with the issue of choice.
7 Increased choice for consumers is clearly a relevant matter for
8 companies as it reflects two important trends in markets – one to
9 do with demand, the other with supply – which I have already
30 discussed. In terms of demand, there is clearly a growing frag-
1 mentation of tastes as affluence rises, discretionary income increases
2 and consumers become more cosmopolitan in their outlook and
3 confident in their own individual choices. There are fewer
4111 economic, social and institutional constraints to what people can
146 CITIZEN BRANDS
1111 and cannot do; fewer peer group or value-based barriers to choice.
2 On the supply side, the inevitable outcome of globalization and
3 deregulation has been more open and competitive markets, often
4 leading to a greater range of goods and services available to
5 consumers. Some have argued that globalization can reduce choice
6 as an ever smaller number of large (multinational) companies push
7 a standardized (and often Americanized) offer into previously
8 diverse markets. While there is something in this argument, in my
9 view the net effect of globalization has been to increase choice.
10 Just look at the range of goods that are available from around the
1 world in British or American or French supermarkets that previ-
2 ously have not been there. As I show later, this is not restricted
3 to supermarkets. In a range of areas, there are more products and
4 services to meet a broader range of consumer tastes and needs
5 than ever before.
6 But why is increasing consumer choice relevant to the concept
7 of citizen brands? It is because it raises a number of questions that
8 are critical to branding itself.What happens to branding in a world
9 of greater choice? How does a company or product differentiate
20111 itself? Is increasing promiscuity inevitable?
1 I will come back to these questions but first I want to consider
2 the degree of choice and the different areas of people’s lives where
3 it is most noticeable.
4
5
6 EXPLOSION OF CHOICE?
7
8 I have already mentioned the increased choice in grocery stores
9 and it is perhaps the clearest area where the range of products
30 available to consumers has grown. As local shops have closed in
1 favour of first supermarkets, then superstores and finally hyper-
2 markets, so, inevitably, the array of produce available to people on
3111 their regular shopping trips has increased. Some may bemoan the
closure of local stores, catering to local needs and with personal-
COPING WITH CHOICE 147
1111 45 000 Sainsbury’s

2 (average lines
40 000 per store
3 35 000 Tesco (total
4 30 000 lines across
all stores)
5 25 000
6 20 000
7 15 000
8 10 000
9 5 000
10 0
1 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000
2 Figure 7.1 Increasing choice in supermarkets. Number of different

3 products available.
4 Source: IDG Account Management series.
5
6 ized service1 but surely no one can dispute that there is literally
7 more available now. For example, British grocer Tesco had in total
8 5000 lines across its stores in 1983. By 1998 this figure had
91111 increased to 40 000. Another grocer, Sainsbury’s, had an average
20111 of 10 500 lines in each store in 1988, a figure that had increased
1 to 23 000 by 1999 (Figure 7.1).
2 In part this is due to goods being available that were just not
3 obtainable before. Exotic fruits and vegetables from around the
4 world are flown in fresh every day. French cheese, Indian spices
5 and Japanese sauces are there to cater for the growing interest in
6 a wider set of multicultural culinary experiences. New, ready-
7 prepared chilled meals are presented to not only whet appetites
8 but to make life easier at the same time. Even for more mundane
9 products the array of choices is bewildering. A large supermarket
30 will carry a huge range of shampoos, conditioners, cooking oils,
1 beers and breakfast cereals. On a recent trip to a local store I
2 found 14 different types of dental floss!
3 Not only are shops large enough to carry this range and,
4111 thanks to globalization, able to offer produce from around the
148 CITIZEN BRANDS
1111 world, but it seems that consumers welcome the choice too. The
2 individualization of consumption means that products are not
3 bought for the family, but for individual members within it. This
4 complicates the shopping process, as one middle-aged female
5 shopper noted in some research conducted for British retail bank
6 Abbey National:
7
8 I have to get different sorts of cereal for everyone, different sorts of
shampoo, different sorts of coffee.2
9
10 Consumer research reveals that the average British household
1 now has six different types of cleaning products, three different types
2 of shampoo and three different breakfast cereals, with a general ten-
3 dency for younger people to have a greater range of these products
4 than older people3 (Figure 7.2). In part this reflects the fact that
5 people expect to have their own choices in a number of areas, but
6 it also demonstrates how products themselves are moving away from
7 the general purpose to the more specific. There are now different
8
9
20111 Mean number
1 of items
8 Breakfast cereals Shampoos Household cleaning products
2
7
3
6
4
5 5
6 4
7 3
8 2
9 1
30 0
1 18–25 26–35 36–45 46–55 56–65 66+
2 Figure 7.2 Number of different kinds of product in the home. Mean

3111 scores by age.
Source: Complicated Lives, Abbey National/Future Foundation.
1111 types of hair care products for different occasions. In terms of house-
2 hold cleaning there are different formulations for different purposes:
3 creams, mousses, wipes and sprays; for use on floors, windows,
4 bathrooms, toilets, kitchens, ovens (and, of course, in a range of
5 scents and finishes).
6 Another interviewee in the Abbey National research – a
7 woman in her 70s – summed up how much things have changed
8 over the last fifty-odd years:
9
In my day, we just had roast on Sunday, rissoles on Monday, a shep-
10
herds pie or something on Tuesday, fish on Fridays – every day you
1 knew what you were going to eat.You didn’t eat things like chicken
2 – that was a luxury, there was less choice.4
3
4 This is another example of the benefits of prosperity that we
5 sometimes fail to realize. People now have much more choice
6 about what to eat, about what to drink and about what personal
7 care products to use, for example. Of course, they can also choose
8 to have someone else prepare their food for them. The home
91111 meal replacement market (those chilled, ready to cook prepara-
20111 tions that I referred to earlier) is now worth £200 million in
1 Britain5 and is growing rapidly; market research company A. C.
2 Nielsen expects it to be worth £600 million by 2003. Spending
3 on meals bought away from home has risen from 11 per cent of
4 UK food expenditure in 1968 to 24 per cent in 1998. In the
5 United States, the ready meal/take-away market is currently worth
6 a staggering £44 billion.6
7 Another example of the impact of a more connoisseur atti-
8 tude towards food and drink and the implications for choice is
9 that of the new breed of coffee shops that have sprung up. In a
30 local one near my office there are a number of different styles of
1 coffee (ranging from espresso, through macchiato, to latte and
2 cappuchino), three different types of milk (normal, semi-skimmed
3 and skimmed), the option of brown or white sugar or sweetener
4111 or none at all and a choice for most styles of three different cup
150 CITIZEN BRANDS
1111 sizes. When you add in the options for different toppings and
2 flavourings, of decaffeinated or not, and whether you want extra
3 cream there are over 6000 different permutations from which one
4 can choose. If you tried one a day for every day, it would take
5 over sixteen years to try them all. It is no wonder that I need a
6 written note of different colleagues’ choices when I do the coffee
7 run – the orders are too varied and too complex to memorize!
8 But it is not just in grocery or multiple retail stores or even coffee
9 shops that consumers have experienced an explosion of choice.The
10 same has been happening in a range of service sectors too ranging
1 from media to telecommunications to energy suppliers.
2 Watching television – the activity that we spend so much time
3 on that it dwarfs any other leisure pursuit – is being affected by
4 the explosion of choice. In Britain there are now around 160
5 channels to choose from if you subscribe to Sky’s digital service.
6 Twenty years ago there were only three (Figure 7.3) – choosing
7 which programme to watch has become more complex. The
8 same is happening with other media. There are now nearly 250
9 commercial radio stations compared to three in 1973 (Figure 7.4).
20111
1
180
2
160
3
140
4
120
5
100
6 80
7 60
8 40
9 20
30 0
1 1923 1952 1964 1982 1994 1999
2 Figure 7.3 Choice of television channels in the UK. Channels avail-

3111 able to UK consumers, 1923–1999.
Source: ITC.
1111 Licences at end of year AM and FM frequencies licensed together AM and FM licensed separately
250 as one IBA contract – ‘simulcasting’ of by Radio Authority
2 one station on both AM and FM
3 200
4
5 150
6 100
7
8 50
9
0
10
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
Jun. 99
1
2
Figure 7.4 Growth in commercial radio stations. Independent local
3 licences on air since launch.
4 Source: 1974–1990: IBA Archive; 1991–present: Radio Authority.
5
6
7 The number of consumer magazine titles continues to grow. And
8 then there is the new media. With the number of web sites having
91111 grown exponentially in recent years it is becoming increasingly
20111 difficult to find your way around the world wide web.
1 Telecommunications is another sector where choice is grow-
2 ing. In Britain there is a choice of at least three suppliers in the
3 fixed-line market and four mobile operators. But, it is in the mobile
4 market when you mix the choice of operator, with the choice of
5 phone manufacturer and then the different payment methods that
6 the decision becomes complex. The different types of tariff offered
7 by the high street phone shop Carphone Warehouse has grown
8 rapidly over the last few years (Figure 7.5).
9 Privatization in Britain has opened up not only the fixed line
30 telecommunications market to competition and choice but other
1 utility services too. During the 1990s gas and electricity were
2 privatized and under a regime that encouraged competition in the
3 market. The result has been yet more choice for consumers – and
4111 some have clearly been quite confused by it.
152 CITIZEN BRANDS
1111 45
2 40
3 35
4 30
5 25
6 20
15
7
10
8
5
9
0
10 1992 1993 1996 1999
1
Figure 7.5 Growing complexity in the mobile phone market. Number
2 of different tariffs available from the Carphone Warehouse.
3 Source: Carphone Warehouse, reported in Complicated Lives, Abbey National/
4 Future Foundation.
5
6 Taken together, these government initiatives to provide choice
7 for consumers in the utilities market and to promote rivalry
8 between operators has had a major impact. In 1980, British con-
9 sumers had no choice at all in the four utility areas of gas,
20111 electricity, water and telecommunications.There was just one oper-
1 ator in each. Currently, there are 16 electricity suppliers, 22
2 companies providing gas, and at least seven telecommunication
3 operators (if you include the mobile companies).7 As a result of
4 this, whereas consumers had, in 1980, no choice of utility suppliers
5 there are now nearly 2500 permutations across the three areas.
6 And it is likely to get worse. Although currently only large volume
7 water users (those who use over 100 megalitres per year) can
8 choose between different suppliers, the introduction of consumer
9 choice of water supplier is likely within the next few years adding
30 greatly to the permutations across all the utilities. The temptation
1 for some consumers to buy all four services from just one supplier
2 must be strong.
3111 If there is almost too much choice now, technological devel-
opments are likely to exacerbate the problem. The Internet allows
1111 specialist outlets who cannot justify high street overheads a chance
2 to market to a broader audience without incurring crippling costs.
3 Equally, without the physical constraints of a retail outlet, a much
4 wider range of stock can be offered as Amazon has shown for
5 books and CDs. This is true for exisiting retailers as well as new
6 Internet start-ups like Amazon. British multiple retailer Woolworths
7 carries many more lines in its ‘virtual’ site on the interactive Open
8 service than even its biggest stores can provide. And then there
9 are the search engines and intelligent ‘bots’ that can look across
10 the web by category, brand name, product specification and/or
1 price to provide an almost unlimited selection of goods.
2
3
4 D O P E O P L E WA N T C H O I C E ?
5
6 This all raises the question of whether consumers really want so
7 much choice. Here, the evidence is far from conclusive. At a broad
8 level, there is no suggestion that people are getting more concerned
91111 about the complexity of life in general. For example, research by
20111 the Future Foundation8 shows that the proportion of the popu-
1 lation agreeing to the statement ‘I don’t mind living with the
2 increasing complexity of life’ has, at just above 40 per cent, changed
3 little between 1983 and 2000. The only real difference has been
4 a small increase in acceptance for those aged under 35, with around
5 50 per cent now agreeing with this view. So, if anything, rather
6 than being concerned about living in a more complex world,
7 society is coming to expect it as a fact of life.
8 But, choice in consumer markets is only one aspect of
9 increasing complexity and it might be one that people are, in fact,
30 less happy about. Equally, the fact that people accept complexity
1 does not mean that they actively enjoy it, nor that they would
2 not welcome help in solving some of the problems it brings. So
3 an acceptance of complexity does not necessarily equate to a desire
4111 for the huge expansion of choice that I have outlined above.
154 CITIZEN BRANDS
1111 A few alternatives A lot of alternatives

2 100%
90%
3
80%
4 70%
5 60%
6 50%
7 40%
30%
8
20%
9
10%
10 0%
1 Total 15–24 25–34 35–44 45–54 55–64 65+
2 Figure 7.6 Preferred range of choice. In general, when making choices,
3 do you like to have a lot of alternatives or just a few alternatives?
4 Source: nPower/Future Foundation.
5
6
7 Some research conducted by energy provider nPower9 suggests
8 there are limits to the amount of choice people want. When asked
9 the broad question ‘In general, when making choices, do you like
20111 to have a lot of alternatives or just a few alternatives?’, nearly six
1 out of ten respondents opted for just a few, with older consumers
2 more likely to say this than younger ones (Figure 7.6).
3 When asked specifically about the energy sector itself, eight
4 out of ten people said they felt there was a point at which the
5 number of alternatives becomes confusing rather than helpful –
6 most want a limited range to choose from.The difference between
7 what consumers say they want in terms of choice and what they
8 believe to be available certainly suggests an over-abundance of
9 options.When asked to put a figure on the ideal number of energy
30 suppliers to be able to choose from, the average response is six or
1 seven. But consumers believe that the actual number of alterna-
2 tives available to them is 12. In reality, the choice is even greater
3111 with the typical British consumer having some 28 different energy
suppliers to select from (Figure 7.7).
1111 Number of suppliers

2 30
3 25
4
20
5
6 15
7 10
8 5
9
0
10 Consumer’s preferred Consumer’s perception Actual number of
1 number of suppliers of the number of potential suppliers for
to choose from suppliers the average consumer
2
3 Figure 7.7 Actual, perceived and preferred number of energy suppliers.
How many suppliers consumers would prefer to have, how many they
4 think there are and how many there actually are.
5 Source: nPower/OFGEM/Future Foundation.
6
7
8 This certainly suggests that consumers currently have more
91111 choice than they feel they want.Yet against that, I wonder whether
20111 people would really be happy to go back to the days when there
1 was less to choose from. In the Abbey National research quoted
2 above, a grandmother described the limited range of clothes avail-
3 able to her:
4
In my wardrobe, I had my everyday clothes, skirts, sweaters and
5 blouses, and my Sunday clothes, one coat, two pairs of shoes and a
6 best dress.10
7
8 In the 1950s she had a small selection of clothes for everyday
9 wear, only two pairs of shoes and one overcoat plus, of course,
30 one smart set of clothes for Sunday. It was quite clear she felt her
1 granddaughter was lucky, and privileged, to have the choice she
2 had. But the granddaughter viewed things differently. For her:
3 I have so many clothes, I’ve got nowhere to put them . . . but I’ve
4111 still got nothing to wear!11
156 CITIZEN BRANDS
1111 It is difficult to know how exactly to interpret this statement.

2 Despite having so much, did she still not have enough? Or, was it
3 that she just did not have the right things? But it certainly suggests
4 to me someone who welcomes choice and, indeed, someone who
5 would go out and continue to buy more and more clothes.12
6 From this quick overview of some quantitative and qualitative
7 data and from other research I have done in the area, I draw three
8 conclusions. First, the degree to which consumers welcome choice
9 depends very much on the sector involved and their own individ-
10 ual interests. In an area – energy – that is not particularly exciting
1 and where it is moving from a single public supplier to a multitude
2 of private operators there is little demand for a huge range of choice.
3 In other areas, such as clothes, which are more individualistic and
4 where many people gain real pleasure from the purchasing and con-
5 sumption process, there can never really be too much choice.
6 Second, suppliers of goods and services are providing a wider
7 and wider range because it is commercially viable; there is
8 consumer demand for it. People are buying different products and
9 different formulations because they want them. This is, after all,
20111 what we would expect with the move towards individualism and
1 the fragmentation of tastes that it implies.
2 Third, although in some areas people welcome the explosion
3 of choice that has occurred, and even though they might not
4 always explicitly recognize this fact, it clearly does add complexity
5 to their lives – for example, the poor young woman with too
6 many clothes and nothing to wear. This then raises the question
7 of how people are coping with this.
8
9
30 COPING WITH CHOICE
1
2 The problem with choice is that it can be not only time-
3111 consuming but stressful too. It is not surprising, therefore, that
there are a number of different strategies that consumers employ
1111 to deal with it. At one extreme, some people clearly use price as
2 a selection tool.
3
4 I shop in the supermarket on Monday, the lady goes around with
the machine marking everything down and I walk behind her
5
picking up the bargains.13
6
7 Where this is the result of poverty, it is not really a strategy
8 for choice – the individual probably does not have much discre-
9 tion in the first place. But, there is some anecdotal evidence that
10 even those not weighed down by poverty, indeed even some people
1 who are really quite well-off, use price as a selection tool – partic-
2 ularly in areas where they have little intrinsic interest. But beyond
3 price, Figure 7.8 shows the other major options open to people
4 faced with the problem of choice.
5 The first strategy – and again this applies particularly to those
6 areas of least interest – is to relax the search and selection criteria
7
8 Faced with too much choice
91111
20111 What strategies do
consumers adopt?
1
2
3
4
Brands as Values/
5 Independent Relax search
choice ethical Price
advisers criteria
6 managers concerns
7
8
9
30 Depends on
1 Profit-making Not for profit interest in
category
2
3 Figure 7.8 Strategies for coping with choice. Schematic representation.
4111 Source: Michael Willmott.
158 CITIZEN BRANDS
1111 in the choice process. In a way, using price is one variation of

2 this, certainly when buying the cheapest and ignoring other ques-
3 tions like performance or value for money. Or, at the opposite
4 end of the scale, and for those who can afford to act like this,
5 price might be effectively ignored. An example of this would be
6 when people just bought what was most convenient. Another
7 example would be where the more affluent did not worry about
8 reliability as they could always just buy a replacement product. At
9 its most extreme, people may deliberately put themselves in posi-
10 tions where their options are limited, as is the case with one
1 middle-aged man:
2
I shop on Friday nights, they’ve sold out of most things . . . saves
3 me having to decide – I just get what’s available.14
4
5 In markets which are not only uninteresting but where the
6 specific choice is unimportant to the consumer or in areas where
7 there is little product differentiation, shoppers may just buy habit-
8 ually – the same brand as they always choose. Inertia like this, is
9 what produces much of the loyalty that brand managers mistak-
20111 enly think of as a deep-rooted attachment to the product. But,
1 because this inertia is driven by habit in undifferentiated, unin-
2 teresting markets, loyalty is, in fact, skin deep. So, if the product
3 disappoints in any way, or if it is more convenient to buy another
4 brand, the consumer might easily change. Or it could be just
5 through impulse – a desire for a change. Increased choice is, there-
6 fore, one of the reasons why loyalty is decreasing. People have the
7 financial discretion, there is a lot of choice and they just do not
8 really care whether they pick one brand or another.
9
30
1 VA L U E S , E T H I C S A N D C H O I C E
2
3111 But three other strategies are perhaps more interesting in the
context of this book. The first is where people positively choose
1111 a product or service because of the values it, or the company

2 providing it, embodies or conveys. And here, ethical concerns can
3 be particularly important, as I have already argued in previous
4 chapters. The data I presented in Chapter 2 demonstrated that for
5 some people this could be an important issue in the consumer
6 decision-making process. For some, it provides a way to negotiate
7 the problem of too much choice, as one middle-aged woman in
8 the research already mentioned highlighted:
9
I only eat organic food – that makes it a bit easier – at least I don’t
10
have to think with that . . . I used to end up with a trolley piled
1 high with things, now if I just go for organic I buy less.15
2
3 You can see how this strategy might work in other sectors.
4 People might use the fact that a producer has used organic methods
5 to help them in the hugely fragmented and complex area of wine.
6 (Indeed, ‘organic’ could be as much a ‘brand’ to assist choice – see
7 below – as Chardonnay, Sauvignon Blanc, Cabernet or Merlot.)
8 Or, in the area of energy, where in the United Kingdom with its
91111 large and confusing degree of choice (as I showed earlier) people
20111 might choose a ‘green’ supplier like Unit(e).
1 In an era of peace and plenty it seems likely that values-based
2 selection will become more important.
3
4
5 ADVISERS AS CHOICE MANAGERS
6
7 But an excess of choice clearly provides opportunities for the
8 direct delegation of the decision process, or aspects of it, to others
9 – to what I like to call ‘choice managers’. Independent advisers
30 are one example of this; brands are another. Both open up a whole
1 range of new opportunities for potential suppliers.
2 Already in some sectors like financial services the indepen-
3 dent advice market is growing. Here, people pay – either directly
4111 or through commission – for specialist advice on what products
160 CITIZEN BRANDS
1111 and services would best suit their needs. But, this could develop
2 in other areas too. Examples would be holidays (where it does
3 exist in a fashion with travel agents but, to my mind, is currently
4 very poorly executed in most cases), electrical appliances, com-
5 puting or home décor (where there is already some activity in
6 this area with, apparently, a growth in interior design consultants).
7 There has been much talk recently, as well, of personal shoppers
8 who will buy clothes, ornaments and even Christmas gifts for the
9 (presumably) money rich and (presumably) time poor.
10 So, despite all the talk of disintermediation, this is why we
1 might in fact see an increase in intermediation – others who help
2 us navigate the plethora of choice we face in the modern world.
3 These advisers also include the media: magazines, newspapers
4 and television programmes with their own ‘named’ experts who
5 will recommend this product or that service. And increasingly, of
6 course, new media channels as well. Also, not all of these indepen-
7 dent advisers will be commercial. Non-profit consumer organiza-
8 tions with a tradition of helping their subscribers and readers
9 choose the best and safest in a given field should be well placed to
20111 take advantage of the explosion of choice. Consumer Reports in
1 America, Que Choisir in France or Which? in Britain all have many
2 years’ experience of providing independent consumer advice.
3
4
5 BRANDS AS CHOICE MANAGERS
6
7 But in some markets perhaps the most important ‘choice manager’
8 for many future consumers will be brands. This may seem a
9 strange assertion given the increasing cynicism towards companies
30 that I discuss later and the decrease in loyalty that I have already
1 alluded to in this chapter. Yet, the fact remains that brands can
2 provide a very efficient shortcut for people who have neither the
3111 time nor the energy to devote much effort to choosing products
and services. This has always been an important role for brands
1111 and is likely to continue to be so just because of the increased

2 complexity of life. Although, as a brand consultancy it is hardly
3 impartial in its views on this, I think Interbrand has got it right
4 when it states that:
5
In an overloaded, over-communicated and over-informed world,
6
trusted life-editing and life-simplifying brands will be even more
7 critical.16
8
9 But it could extend too. Some companies will be able to take
10 on new responsibilities for guiding consumers through the quick-
1 sand of choice. This could be the intermediaries I mentioned
2 earlier or retailers, who can either offer guidance across a range
3 of manufacturers or can provide a limited, ‘edited’ choice. (The
4 idea of edited retailing that first arose in the 1980s remains a
5 successful concept in sectors like clothing.) But service providers
6 can fulfil this choice manager role too (‘we’ll help you choose
7 the best package for your total financial services needs’) as could,
8 of course, manufacturers (‘I need a transport solution – I’ll go to
91111 Ford’; ‘I need some new electronics – I’ll go back to Sony’).
20111 This role of brand as guide and choice manager will be
1 specially important in the new media environment. The prospects
2 for established and new brands in cyberspace are potentially huge
3 – cyber guides and cyber brands to help you through the quag-
4 mire of the World Wide Web.
5 At one level, this suggests a great future for brands. But this
6 has to be countered by the fact that at a general level there is an
7 increasing indifference to companies and brands. They are seen as
8 too powerful and, despite the pleadings of management gurus and
9 the subsequent mission statements of most major companies, too
30 little concerned about their customers. This is one reason why the
1 concept of citizen brands is important. A citizen brand is more
2 likely to be accepted as a choice manager because it embodies a
3 range of values that suggest responsible behaviour and (as I showed
4111 in Chapter 2) engenders trust.
162 CITIZEN BRANDS
1111 Increasing affluence (peace and plenty) and growing access to

2 goods and services (globalization and new technology) have helped
3 to accelerate to an almost endless degree the amount of choice
4 people have in their lives. But this, in turn, creates problems: there
5 just is not the time, nor the inclination, to devote unlimited energy
6 to the process of making choices. So, people have to adopt a range
7 of strategies to cope with this proliferation of consumer products
8 and services. I have argued that there are two main ones: changing
9 the search and selection criteria; and relying on choice managers.
10 For the affluent majority, I believe that value-based selection –
1 that it is a good company, is ethical or is a consumer champion
2 – will be increasingly important. And although there is a range of
3 opportunities in the area of choice managers, it is brands (retailers,
4 manufacturers, specialist advisers) – trusted, reliable brands – that
5 are almost certainly going to be most important.
6 So in this area of choice, it is citizenship, values and branding
7 that are likely to become more important. And as I noted in the
8 introduction, it is the combination of these three that defines the
9 concept of citizen brands. It seems that too much choice is yet
20111 another factor in the development of citizen brands.
1
2
3
4
5
6
7
8
9
30
1
2
3111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
91111
20111
1
2
3
4
5
6
7 SURVIVING
8
9
30
A CULTURE
1
2
OF FEAR
3
4111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
20111
1
2
3
4
5
6
7
8
9
30
1
2
3111
1111
2
3 CHAPTER 8
4
5
6
7
SURVIVING A
8 CULTURE OF FEAR
9
10
1
2
3
4
5 CU L E X P I P I E N S A N D T H E N E W Y O R K
6 C O N C E RT
7
O
8
91111
20111
1 n Monday 24 July 2000 tens of thousands of New
2 Yorkers were looking forward to attending a New York
3 Philharmonic concert in Central Park. Little did they know that
4 they were about to be disappointed.The stage was built, the weather
5 was fine and the orchestra was ready to play but, at short notice,
6 the evening concert had to be postponed. It eventually took place
7 two days later on Wednesday.
8 The reason for the postponement was mosquitoes. Or more
9 correctly, it was not the mosquitoes as such (the species concerned,
30 Culex pipiens, is the most common mosquito in New York City
1 during the summer) but what they might be carrying – the deadly
2 West Nile virus. The virus had apparently returned, creating alarm
3 among New Yorkers, as it had done the year before when seven
4111 people had died from the disease.
166 CITIZEN BRANDS
1111 For Mayor Rudolph Giuliani the risk to human health of

2 what Reuters noted was ‘the virus that causes potentially deadly
3 brain diseases’ was too great. ‘We would be pushing the odds if
4 we brought that many people into the park’ Giuliani declared.
5 ‘The concert brings about 30 or 40 thousand people [in] and
6 Health Commissioner Neal Cohen thought it was advisable to
7 cancel that’.1 So the concert was postponed, the park shut and
8 the whole of it (all 840 acres (340 ha)) sprayed that evening with
9 pesticide to kill the offending mosquitoes.
10 It was an easy decision for the mayor to make. Mosquitoes with
1 the virus had just been found in Central Park and in the borough of
2 Staten Island. Indeed, following the ‘outbreak’ in 1999, testing had
3 been taking place across New York during the Winter and Spring
4 to see whether the virus would survive. These tests had identified
5 West Nile in a number of birds (who carry the virus that can then
6 be transferred to humans by mosquitoes) and in ‘overwintering’
7 mosquitoes in a number of city boroughs and suburban counties.
8 It seems certain that the mayor and his health department
9 were aware of these facts and ready to take immediate action at
20111 the first sign of significant danger. (It is commonly accepted that
1 pesticide spraying had occurred too late the year before – after
2 the virus had peaked and was already in natural decline.) The posi-
3 tive identification of mosquitoes in Central Park was all they
4 needed to trigger the quick and firm response. Of course there
5 were potential side effects of spraying in an urban area, not least
6 to some of the non-human habitants of the city. But Mayor
7 Giuliani had to protect the health of his citizens. As the New York
8 Post reported2 Giuliani’s line was clear:
9
I’m sorry, but if it kills animals, it kills animals.. . . My job . . . is to
30 help protect human life as much as possible.
1
2 Rudolph Giuliani was the person who had introduced zero-
3111 tolerance policing to New York – now he was applying the same
principles to the insect world.
S U R V I V I N G A C U LT U R E O F F E A R 167
1111 Not only was this an ideal opportunity for the mayor to
2 demonstrate his dynamic and tough credentials but also one where
3 he could show his compassion and concern for his people’s well-
4 being. Politically, therefore, this was almost certainly a good move.
5 But was it a rational decision?
6 A day or so later, I saw the story about the potentially deadly
7 brain disease on television news in Britain. Since I was about to
8 travel with my family to New York I was naturally concerned
9 about the possible dangers of West Nile-carrying mosquitoes. So
10 I decided to do some research into the subject. In these days of
1 the Internet this was not difficult and within a few minutes I was
2 starting to form a different view of the situation.
3 The Florida Medical Entomology Laboratory – a specialist
4 unit at the University of Florida – told me some of the history
5 of the West Nile virus. It is closely related to St Louis encephalitis
6 a mosquito-borne virus that has been around in the United States
7 for many years with epidemics occurring in Florida in 1959, 1961,
8 1962, 1977 and 1990. This was not making me feel any better.
91111 After stopping off in New York for a few days, we were flying
20111 down to Florida for a month. If West Nile did not get us in New
1 York, perhaps St Louis encephalitis would get us in Florida.
2 I read on with the history. The first reported epidemics of
3 West Nile were in the 1950s in Israel. Subsequent epidemics
4 occurred in the Rhône delta in France in 1962, 1963 and 1964,
5 South Africa in 1974, 1983 and 1984 and in Romania in 1996
6 and 1997. I had been in southern France in 1962 as a child and
7 travelled through the Rhône delta but until now I had been bliss-
8 fully unaware of the epidemic (as too had my parents). And, I’d
9 subsequently been or stayed in the Rhône delta on numerous
30 occasions since. If it was so dangerous why had I not been warned
1 of this before? Why were people not worried about going to
2 South Africa or Romania? Why had my travel agent not warned
3 me about St Louis encephalitis when he knew I was going to
4111 Florida? Perhaps it was not as dangerous a disease as it seemed.
168 CITIZEN BRANDS
1111 Further investigation, including a lot of information made

2 available over the web by the New York City Department of
3 Health3 and the US government’s Centers for Disease Control and
4 Prevention (CDC),4 revealed more telling statistics. In a medical
5 study in the Queens borough of New York, which had been the
6 centre of the virus outbreak in 1999, tests on a sample of individ-
7 uals suggested that about 2.5 per cent of the population were
8 infected with the West Nile virus during the epidemic. Of these,
9 around 20 per cent developed mild influenza type symptoms as a
10 result of the infection – that is 0.5 per cent of the population of
1 Queens where the virus was most prevalent. According to Dr Ian
2 Lipkin, director of the emerging diseases laboratory, University of
3 California at Irvine, only around 1 per cent of those infected
4 develop encephalitis, the inflammation of the brain that can be
5 life threatening.5 Given that in the Queens sample of 677 people
6 only 19 were seropositive, it was not surprising therefore that none
7 had developed encephalitis if the chance was only one in a
8 hundred. If you are unlucky enough to develop encephalitis, the
9 Centers for Disease Control and Prevention estimates the mortality
20111 rate to be between 3 per cent to 15 per cent.
1 So, it turns out that even in a ‘hot spot’ like Queens (as the
2 CDC described it), the chances of being infected are pretty low
3 (1 in 40), the chances of developing mild flu-like symptoms as a
4 result of an infection even lower (1 in 200) and the chances of
5 developing encephalitis, ‘the potentially deadly brain disease’ even
6 lower still (perhaps 1 in 4–5000). The likelihood of developing a
7 serious illness or worst of all dying is very small indeed which is
8 why, in New York – a city, including its suburbs, of twelve million
9 people – the number of deaths during the epidemic in 1999
30 was just seven. To put that into context, for the space of time
1 that the West Nile virus was a threat in New York (two to three
2 months) there would typically be 120 to 150 murders even
3111 though the crime rate has come down so dramatically over the
last few years.
1111 Furthermore, it turns out that the virus is much more

2 dangerous for the very young (who have yet to develop fully their
3 immune system), the elderly and those with immune deficiencies
4 (for example, people with cancer, HIV or AIDS). Of the seven
5 people who had died in 1999, all were elderly, three were receiving
6 immunosuppressant drug therapy as part of a cancer treatment and
7 a fourth was HIV positive. It seemed like the chance that I, or
8 any of my family, might be in danger from the disease was very
9 small indeed.
10 More than that, for those outside the high risk groups it might
1 even have some benefits to be bitten by a West Nile-infected
2 mosquito as it helps to develop immunity to subsequent infec-
3 tion. This could prove useful in further travels around the world
4 as the New York City Department of Health suggested on its
5 web site:
6
Does past infection with an arbovirus [West Nile Virus] make a
7
person immune? Yes, infection with an arbovirus can provide immu-
8 nity to that specific virus and perhaps to other related viruses.6
91111
20111 Perhaps I had already been infected when as a young child,
1 but with a fully developed immune system, I had travelled through
2 the Rhône delta in the early 1960s?
3 This all raised the question as to whether spraying had been
4 necessary at all. The pesticides themselves have potentially harmful
5 side effects, not only to the environment and wildlife but to
6 humans too. Pressure groups like the ‘No Spray Coalition’ argued
7 that more environmental and human health harm was done by
8 spraying than not.
9 I would not want to dismiss out of hand concerns about West
30 Nile virus. It clearly is a dangerous disease; it did kill seven people
1 in New York in the summer of 1999; it remains a potential killer
2 around the world and does need constant surveillance. But I have
3 some sympathy for the view that widespread pesticide spraying
4111 (it continued after Central Park into other parts of New York City
170 CITIZEN BRANDS
1111 and outlying suburbs) was not a rational response. But, at the same
2 time, I accept that Mayor Giuliani faced a difficult choice. He would
3 be attacked for spraying (as it was far from clear that it was neces-
4 sary) and he would be attacked if he did not spray for not taking
5 sufficient caution. I think most politicians would have taken the
6 same decision as Giuliani. As I said before, it appeared to be a
7 positive, responsive and concerned approach. To have not sprayed
8 would have been politically riskier – Giuliani took the maybe not
9 so rational, but certainly the more precautionary approach.
10 Why is this relevant to the concept of citizen brands? It may
1 not be immediately obvious but it is, in fact, potentially very
2 important. This is because it raises questions about citizens’ trust
3 in institutions, how rational consumers really are and the degree
4 of volatility that might be experienced in consumer markets and
5 political arenas in the future.To explain why, our story comes back
6 across the Atlantic to England.
7
8
9 W E L C O M E T O T H E P R E C A U T I O N A RY
20111 PRINCIPLE
1
2 In mid-July 2000 a conference took place at the Royal Institution
3 in London, England. Entitled The Precautionary Principle its aim was
4 to discuss the seeming increasing nervousness of society about
5 scientific development, innovation and new ways of doing things.
6 The idea of the precautionary principle has been promoted by
7 environmentalists and conservationists in particular and it argues
8 that unless we can prove that something – a new drug, a new
9 scientific procedure, a new invention – is safe, then we should
30 treat that development with extreme caution. Indeed, in its extreme
1 it argues that we should reject any new development until it is
2 proved to be safe. The principle has increasingly been incorpo-
3111 rated into international law and is recognized by bodies like the
United Nations and the European Commission.7
1111 The conference turned into a heated debate between conser-

2 vationists arguing for the precautionary principle and scientists
3 arguing against it. The difficulty for the scientific side is that, on
4 the whole, science cannot prove that something is safe. What
5 science can do is search for any evidence that something is unsafe
6 – a similar, but subtly different concept.
7 Over the centuries science has been built on the idea of the
8 ‘null hypothesis’. A hypothesis is developed from the starting point
9 that there is no (‘null’) difference between two groups within a
10 population, two medical procedures or two lifestyle activities,
1 for example. A test is then carried out to assess whether the null
2 hypothesis – that there is no difference – can be rejected. The im-
3 plication of a rejection of the null hypothesis is that there may,
4 in fact, be a difference between the samples, treatments, behaviours
5 or whatever. For example, the null hypothesis might be that there
6 is no difference in lung cancer rates between those who smoke
7 cigarettes and those who do not. A large-scale test of smokers and
8 non-smokers might then show that the null hypothesis should be
91111 rejected because it is unlikely that the observed differences (that more
20111 smokers have lung cancer) could have happened by chance. In other
1 words, we have to reject the idea that there is no difference in lung
2 cancer rates between smokers and non-smokers. This is taken to
3 mean that smoking is almost certainly harmful to people’s health. As
4 more studies take place repeating this conclusion then it becomes
5 clearer that on the balance of evidence smoking is dangerous.
6 This is the basis on which science works. The great philoso-
7 pher of science Karl Popper made this point many years ago when
8 he emphasized that hypotheses cannot be proved, only refuted; if
9 we fail to falsify a hypothesis then it may be accepted cautiously.8
30 From this, Popper argued that no scientific theory could there-
1 fore be conclusively established. Note, though, that on this basis,
2 we cannot prove that something is not harmful.
3 There is a related and important point. These hypotheses,
4111 tests and conclusions take place within our current framework of
172 CITIZEN BRANDS
1111 knowledge. That means that we can never be absolutely certain

2 about anything. Our understanding might change and new tech-
3 niques and procedures might be developed that allow us to look
4 at issues afresh. Then we might discover evidence that leads us to
5 change our opinion. But, at any given point in time, the scien-
6 tific, rational approach is to say that given our current knowledge
7 and given the evidence this is safe and this is not.
8 The precautionary principle changes all that because in its
9 extreme version it says we should not develop anything, make any
10 innovations or change anything at all. By definition, any new thing
1 cannot be proved to be completely safe – so nothing new can be
2 allowed to happen. This undermines the whole scientific basis
3 under which things are tested and decisions made. It undermines
4 the fundamental basis of rational thought and replaces it with deci-
5 sions based on non-rational ideas (certainly in the way that
6 rationality has been defined for the last few hundred-odd years)
7 and even irrational fears.
8 Two recent British examples demonstrate the point well:
9 genetically modified foods/organisms (GMOs) and mobile phones.
20111 In both, there is no clear evidence that they are harmful to
1 consumers – either eating GMOs or from making calls with mobile
2 phones or being near mobile transmission masts. Yet in the case
3 of GMOs, they have been taken off supermarket shelves; in the
4 case of mobile phones a government report9 has recommended
5 that the phones themselves should be used with caution while the
6 placing of the transmission units should be restricted.
7
8
9 T H E N E W F E A R – G E N E T I C A L LY
30 MODIFIED FOODS
1
2 With GMOs there are some legitimate concerns about possible
3111 unintended impacts on the natural world via cross-pollination, for
example, of genetically modified organisms with the resident flora
1111 or fauna. Against this, there are some very real potential benefits
2 from GMOs like the reduced use of toxic pesticides or the devel-
3 opment of new strains of food products that could dramatically help
4 hunger and disease in the third world. The rational, scientific
5 response to this is controlled tests to assess the potential impacts but
6 this is rejected by conservationists who, applying the precautionary
7 principle, have gone to great lengths to stop all trials.10
8 More understandable in my view are concerns about the power
9 that genetic technology might provide to multinational companies.
10 Monsanto, for example, is accused of deliberately developing
1 ‘terminator genes’ so that farmers have to buy new seeds from
2 the company each year. In this way, it is suggested, Monsanto has,
3 effectively, complete control over the market. Although Monsanto
4 would of course deny this and some people suggest that the
5 company is, in fact ‘a good corporate citizen’,11 for a variety of
6 reasons that I discuss in the next chapter there is increasing distrust
7 of multinational companies.
8 But, what I have trouble understanding or finding sympathy
91111 with is the attitude towards currently available genetically modi-
20111 fied foods themselves. To repeat, there is no evidence that, for
1 example, genetically modified soya is harmful to humans at all.
2 Yet, research by the Future Foundation shows that four out of ten
3 British consumers are ‘concerned about eating GMOs’ and six out
4 of ten agree that they ‘try not to buy foods containing geneti-
5 cally modified ingredients’ (Figure 8.1). Around 40 per cent of
6 people who say they are not concerned about consuming GM
7 foods would still not buy them – a clear demonstration of the
8 precautionary principle at work!
9 It is for this reason that all the major supermarkets withdrew
30 all genetically modified foods or ingredients from their shelves.
1 They had little choice given the strength of consumer opinion.
2 It is little wonder that the British government had to retreat
3 too, eventually taking an extremely cautious (if less than rational)
4111 attitude towards GMO field trials.
174 CITIZEN BRANDS
1111 70%
2 60%
3 50%
4 40%
5 30%
6 20%
7 10%
8 0
9 I am concerned about I try not to buy food Proportion of those not
consuming, eating or products containing concerned about consuming
10 drinking genetically genetically modified genetically modified foods
modified foods ingredients but try not to buy them
1
2 Figure 8.1 Concerns about genetically modified foods. Proportion
3 agreeing.
5
6
7 The most worrying outcome from all this is the impact that
8 it has had on perceptions not so much of science as of scientists.
9 Thus, the Future Foundation’s research shows that over the last
20111 20 years there has been no change in the majority view of the
1 benefits of science to progress (see Figure 8.2). Even in the year
2 2000, in the midst of the genetic engineering furore, the medical
3 potential of that specific technology was acknowledged (Figure
4 8.3). But, as the chart also shows, many more people agree than
5 disagree that ‘you can’t trust scientists’ in this particular field of
6 science.
7 We can now see what might be going on in people’s minds:
8 ‘We hear there is no evidence that GMOs are damaging to your
9 health, but who produces this evidence? Scientists, and we do not
30 trust them. So we do not believe their tests – maybe GMOs do
1 damage your health. Let us be precautionary and not eat geneti-
2 cally modified foods.’ Put like this, it seems a rational reaction but
3111 ultimately it is not – unless, of course, you believe that the scien-
tists really are not telling the truth.
1111 80%
2 70%
3
60%
4
5 50%
6 40%
7
30%
8
9 20%
10 10%
1
0%
2 1980 1983 1986 2000
3 Total
4 Figure 8.2 Science is still seen as the best hope for progress. Proportion
5 agreeing that ‘scientific breakthroughs are our main hope for a better life’.
7
8 0% 20% 40% 60% 80% 100%
91111
20111 Genetic engineering
1 offers the best hope
of curing some
2 serious diseases
3 Agree
4 Disagree
5
We can’t trust what
6 scientists say about
genetic engineering
7
8
9
30 Figure 8.3 Lack of trust in science and genetic engineering. Proportion
agreeing/disagreeing with statements – June 2000.
1
Source: Future Foundation.
2
3
4111
176 CITIZEN BRANDS
1111 Part of the problem here, it seems to me, is not so much scien-
2 tists but their paymasters. In any discussion of the subject of
3 genetically modified organisms ultimately the issue arises as to
4 who has funded the research.The strong implication is that corpo-
5 rately funded research is not completely independent and objective.
6 It is not so much science that people distrust as scientists who
7 work for large multinational companies. I return to this point later.
8
9
10 THE DANGERS OF MOBILE PHONES
1
2 The second example is mobile phones. In May 2000 the British
3 government-backed Stewart Committee reported on its analysis of
4 the potential threats to human health from the use of mobile
5 phones. The committee found no evidence of any harmful effects
6 but recommended that phones and transmission masts should be
7 handled with caution and made a number of recommendations.
8 Here, now, were not environmentalists or individual consumers
9 applying the precautionary principle, but a government-backed
20111 committee of experts. The Financial Times brilliantly highlighted
1 the potential damage to rational analysis. It is worth quoting most
2 of its leader on the subject:
3
There is no evidence that eating strawberries in moderate doses is
4
hazardous. But anti-strawberry lobbyists claim they can cause
5 headaches, loss of memory and cancer. Studies do not support this
6 but they do show interactions with the body’s chemistry. On the
7 precautionary principle, therefore, children should not eat strawber-
8 ries unless absolutely necessary, and never with cream.
9 Substitute ‘mobile telephones’, and this gives the general drift of
30 yesterday’s report by a committee of experts on the dangers of phon-
ing on the move. Because there is much ignorance about the hazards
1
of radiation, the report’s ambivalence will spread unnecessary confu-
2 sion.The National Radiological Protection Board has said simply that
3111 mobile phones are safe. The report criticises the board for insensitiv-
ity, but fails to offer good evidence to challenge its conclusion.
1111 Several simple points emerge. First, the radio waves transmitted
2 by mobile telephones have thousands of times less energy than
3 needed to create harmful ionisation effects, such as those of X-rays.
Second, the power of radiation from mobiles is too low to raise the
4
temperature of the brain by more than its normal fluctuation. Other
5 forms of damage are speculative.
6 Third, when telephones are close to a base station they auto-
7 matically reduce output, perhaps to a thousandth of full power.
8 Fourth, the heating effect of radiation emitted by base stations is
9 5000 times smaller than that from mobile phones.
It therefore seems perverse to recommend that the erection of
10
base stations should be restricted by tighter planning controls. This
1 change would inhibit competition and require mobiles to transmit
2 at higher power than would otherwise be necessary.
3 The possibility of danger to children is no more than a possi-
4 bility, with no firm evidence to support it. Even if proved, it would
5 probably be far less than the danger from eating sweets or going to
6 a disco.
The report makes some sensible, if obvious, conclusions, such
7
as the need for more research, for the monitoring of transmission
8 equipment and for clearer public information. But it has gone over
91111 the top in adopting the precautionary principle. This is too often
20111 used to justify inchoate fears of the unknown, and should be treated
1 with the greatest caution by scientists. In responding, the govern-
2 ment should stick to the facts and apply the strawberry test to
everything else.12
3
4
5 Quite likely the committee was taking a political view. It has
6 now become too dangerous to give new innovations a completely
7 clean bill of health. By being cautious, you not only are less likely
8 to get a media or pressure group grilling but are also covered if
9 something ever did prove to be wrong. Here, the Stewart Com-
30 mittee was acting in a similar way to Mayor Giuliani in New
1 York.
2
3
4111
178 CITIZEN BRANDS
1111 T H E P O L I T I C I Z AT I O N O F S C I E N C E
2
3 Some supporters of the precautionary principle welcome this
4 politicization of science. Brian Wynn, Professor of science studies
5 at Lancaster University and adviser to the British government has
6 argued that political and social concerns should be explicitly
7 considered when assessing scientific evidence.13 But this is surely
8 exposed for what it is: a means of legitimizing the rejection of
9 rational and objective analysis for political gain.
10 At the Future Foundation we ran an opinion poll just after
1 the Stewart Committee report was published. Not surprisingly,
2 perhaps, we found the precautionary principle had been embraced
3 wholeheartedly by the British public. On the specific issue of
4 mobile phones, nearly three-quarters agreed that ‘because of the
5 possible health effects mobile phones should carry a government
6 health warning’ with, amazingly, two-thirds of current mobile
7 phone users agreeing.Three-quarters of the respondents also agreed
8 with the more general statement ‘the government has a responsi-
9
20111
0% 20% 40% 60% 80% 100%
1
2
3 The government has a responsibility to
warn people of the possible dangers in
4 using new technology even when there is
no scientific evidence that it is harmful
5
Agree
6
Disagree
7
8 Because of the possible health effects
mobile phones should carry a government
9 health warning
30
1
2 Figure 8.4 Welcome to the precautionary principle. Proportion of the
3111 population agreeing that . . .
Source: Future Foundation.
1111 bility to warn people of the possible dangers in using new tech-
2 nology even when there is no scientific evidence that it is harmful’
3 (Figure 8.4). On the face of it, this is a ludicrous suggestion and
4 a potentially costly one for companies too. Every new innovation
5 or technology (why not set-top decoders for digital TV, for
6 example) would have to carry an unspecified health warning.
7 I’m not saying that GMOs have been proven to be safe or
8 that new GMOs in the future might not pose some threats. We
9 need to remain vigilant and continue objective and rigorous test-
10 ing. It might possibly be true that at some point in the future
1 mobile phones are proved to be unsafe.
2
3
4 T I M E T O S AY G O O D B Y E T O T H E
5 P R E C A U T I O N A RY P R I N C I P L E ?
6
7 But, at this point in time and on the balance of evidence, I am
8 happy to eat genetically modified soya and use my mobile phone
91111 (and let my children use it too). A new panic might arise and I
20111 might, as I did with the New York West Nile virus, have to research
1 the subject. But my decision on that issue will be based on a
2 balancing of the evidence available. To do otherwise would leave
3 me hostage to irrational fears and concerns – perhaps those dreamt
4 up by others in pursuit of their political goals. It would leave me
5 hostage to a backward-looking, anti-innovation, no-change view
6 of the world. Ultimately, the precautionary principle is a desper-
7 ately anti-progressive tool since it can be used to argue against
8 any new development without the need for any real evidence or
9 proof. As the Social Issues Research Centre warns:
30
The narrow philosophy which surrounds the precautionary principle
1 is fundamentally conservative in both political and literal sense.14
2
3 I agree with Freeman Dyson on this who, in his book Imag-
4111 ined Worlds, spells out the dangers of both blinkered, free market
180 CITIZEN BRANDS
1111 enthusiasts (who presumably would reject the idea of citizen

2 brands) and backward-looking conservationists:
3
4 The public dialogue of our era is mainly a debate between free-
market economists and conservationists, conservationists trying to
5
preserve the past, free-market economists devaluing the future at a
6 discount rate of seven per cent per year. Neither side of the debate
7 speaks for the future.15
8
9 The irony, of course, is that the principle could be used against
10 some of its supporters. A report in Nature Neuroscience, for example,
1 has suggested that the ‘natural’ pesticide rotenone that is used in
2 organic farming may have the potential to cause Parkinson’s
3 disease.16 A precautionary principle approach might suggest the
4 banning of organic foods as a result, or the banning of rotenone
5 at least.17
6 Some in the scientific community have, quite rightly in my
7 view, suggested that the precautionary principle be applied to itself.
8 Here, we would say that although we cannot be certain that using
9 the precautionary principle is fundamentally dangerous, the prospect
20111 that it is means it should be abandoned immediately. This demon-
1 strates how quite quickly any debate can become completely con-
2 fused. Both sides could apply the precautionary principle – one side
3 arguing that you cannot prove something is safe, the other that you
4 cannot prove not doing that thing is safe – and with no rational
5 base to arbitrate (as science has provided in the past).
6 If we go back to the New York West Nile crisis, what was
7 the precautionary course of action? I imagine conservationists
8 would say not to spray but, as I indicated earlier, I suspect Giuliani
9 saw spraying as the precautionary approach. Both could equally
30 and legitimately apply the precautionary principle but what was
1 needed was an objective analysis of the evidence to decide what
2 was best for New York.
3111 Thus, the precautionary principle can be seen for what it is:
a political tool to further environmentalist, conservationist and
1111 other lobbyists’ aims. But the side effects of it: a reduction in faith
2 in science; a rejection of a rational approach to analysing available
3 evidence; and an increase in hysteria and paranoia are ones that
4 are very important for society and companies.
5
6
7 W E L C O M E T O A C U LT U R E O F F E A R
8
9 The New York incident and the development of the ‘precaution-
10 ary principle’ are symptomatic of the rise of what Kent University
1 sociologist Frank Furedi calls the Culture of Fear.18 If one paradox
2 of a world of peace and plenty is the ‘burden’ of choice that
3 increased affluence enables and the complications this adds to
4 people’s lives (as I discussed in the previous chapter) another is
5 people’s assessment of risk. It seems that despite being richer and
6 healthier, there are heightened concerns about a range of life issues,
7 be it health, the environment, drugs or crime. Safety, as Furedi points
8 out in his 1997 book on the subject, became ‘the fundamental value
91111 of the 1990s’. The paradox is that by most measures we live in a
20111 safer world.
1
Most serious contributors have to accept that in real terms people
2
live longer than before, and that they are more healthy and better
3 off than in previous times.19
4
5 Furedi notes that in answer to a Gallup question about whether
6 people need to take special care in what they eat (for health
7 reasons) the proportion agreeing doubled between 1947 and 1996.
8 Despite people’s health and diet improving, more are worried
9 about what they do eat. This worry about our health is also
30 demonstrated by data that show that the proportion of people in
1 Britain self-reporting longstanding illnesses increased from 21 per
2 cent in 1972 to 35 per cent in 1996.20
3 People are more concerned about their children too. The age
4111 at which people let their children play in the street or walk to
182 CITIZEN BRANDS
1111 Age allowed to . . .

2 10 Walk or play in the street without adult supervision
3 9 Go to school without an adult
4
5 8
6 7
7
8 6
9 5
10 66+ 55–65 46–55 36–45 26–35 18–25
1 Current age of respondent
2 Figure 8.5 Worries about children. Age at which respondent was

3 allowed to . . .
4 Source: Complicated Lives, Abbey National/Future Foundation.
5
6 school has increased considerably as parents have worried more
7 and more about the potential dangers facing children (Figure 8.5).
8 But it is far from clear that the streets are any more dangerous
9 now than they were in the past.
20111 Over the last five years crime rates have fallen significantly in
1 Britain as Figure 8.6 shows. Certainly, criminal activity is still high
2 by historical standards, but this quite dramatic reduction has not
3 been mirrored in the public’s perception of crime with two-thirds
4 of the population in 2000 believing the crime rate was increasing.21
5 Presumably spurred on by politicians and the media the propor-
6 tion believing this had actually increased since 1998.
7 American sociologist Barry Glassner published a book two years
8 after Frank Furedi also called The Culture of Fear.22 In it he charts
9 exactly the same paradox in the USA – an objective and measur-
30 able improvement in many aspects of people’s lives alongside an
1 increase in concerns, fears and hysteria – the same predominant
2 pathology that Furedi identifies in Britain.
3111 Why are so many fears in the air, and so many of them unfounded?
Why, as crime rates plunged throughout the 1990s, did two-thirds
1111 260 Index 1981 = 100

2 240
3 Reported
220
4 Recorded
5 200 All BCS
6 180
7
160
8
9 140
10 120
1
100
2 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999
3
Figure 8.6 Crime rates in Britain. Index of crimes reported to, and
4 recorded by, the police and those identified by victims in the British
5 Crime Survey.
6 Source: British Crime Survey, Home Office.
7
8 of Americans think they were soaring? How did it come about that
91111 by mid-decade 62 per cent of us described ourselves as ‘truly
desperate’ about crime – almost twice as many as in the late 1980s,
20111
when crime rates were higher? . . .
1 In the late 1990s the number of drug users had decreased by
2 half compared to a decade earlier; almost two-thirds of high school
3 seniors had never used any illegal drugs, even marijuana. So why
4 did a majority of adults rank drug abuse as the greatest danger to
5 America’s youth? Why did nine out of ten believe the drug problem
6 is out of control, and only one in six believe the country was making
progress?
7
Give us a happy ending and we write a new disaster story.23
8
9 Barry Glassner goes through a long list of scares ranging from
30 road rage to ritual child abuse to violence in the workplace and
1 demonstrates that there is little real evidence to support any of them.
2 Glassner argues that three forces are stoking up people’s irra-
3 tional hysteria: politicians who win elections by heightening fears;
4111 advocacy groups that improve their fund raising capabilities by
184 CITIZEN BRANDS
1111 exaggerating concerns; and the media, conscious that fear and
2 scaremongering sells. Although he doesn’t initially include them
3 in the list Glassner does later identify companies as a further agent
4 of the culture of fear. He quotes an example of a hospital in New
5 York that at the height of a scare about child psychiatric prob-
6 lems ran a TV advert that showed a teenage girl with a gun at
7 her head: ‘As the screen cut to the hospital’s name and phone
8 number, a gunshot rang out and parents were urged to call if they
9 worried about their own children.’
10 In a different way, a report from a British mutual retailer the
1 Co-op provides another example. Its Food Crimes24 report accused
2 big business of committing seven crimes: blackmail (‘the insidious
3 targeting of the public by global big business’), contamination,
4 grievous bodily harm, vandalism, cannibalism, pillage (‘the careless
5 exploitation of countries’) and fraud. While the Co-op was oper-
6 ating from the highest of principles – it really does want to improve
7 food and animal welfare standards – and had no specific desire to
8 increase a culture of fear, the effect was to increase concern about
9 a range of issues and the behaviour of multinational companies
20111 specifically.
1 And, as the New York Times put it in an article on 30 July
2 2000, an environment of scare and hysteria provides ample oppor-
3 tunities for making a noise.The article entitled ‘The Things People
4 Choose to Fear’ was prompted by the West Nile crisis and finished
5 with the following tale:
6 And some players just want a piece of the action. Howard
7 Rubenstein Associates, for example, the big New York public rela-
8 tions firm better known for representing high-gloss celebrities, began
9 calling reporters last week with a whispered tip about a new turn
30 in the virus story: a mosquito, infected with West Nile, that appar-
ently feeds during the day, had just been discovered by researchers
1
at Fordham University. The researchers themselves were a bit more
2 circumspect; they are not quite sure yet how common their new
3111 mosquito, Aedes japonicus, is, how well it transmits the virus, or
whether it even bites people.25
1111 Both Furedi’s and Glassner’s books are a rallying call for a return
2 to rationality (as is the argument against the precautionary princi-
3 ple) but I wonder whether this will happen. As Stuart Sutherland
4 showed in his book Irrationality:The Enemy Within,26 we are already
5 a pretty irrational society. How else can one explain the changes
6 that people make to their behaviour as a result of very low, or
7 effectively zero, risk exposure (many food, health and crime scares,
8 for example) and the increase in participation in high risk areas
9 like dangerous sports? And the combined force of politicians,
10 campaigners and the media is likely to mean we are going to stay
1 that way or even get worse.
2 In defence of people’s attitude to risk it is clear that an
3 important issue is the perceived control that people have over any
4 activity or event and the choices that are available to them. So,
5 driving in cars is more dangerous than travelling by plane or train,
6 yet the driver feels ultimately in control of events. With BSE or
7 genetically modified foods, part of the problem was not having a
8 choice – not knowing whether a food product contained genet-
91111 ically modified soya or whether the beef you were eating was
20111 from an infected herd. It is only when they have this choice and
1 this control that people may then weigh up the benefits that accrue
2 from an activity against the risk. They will use a mobile phone
3 even though they believe it is dangerous or go skiing in the know-
4 ledge that it is a dangerous sport.
5
6
7 C U LT U R E O F F E A R A N D C I T I Z E N
8 BRANDS
9
30 Why is the phenomenon of a ‘culture of fear’ important to the idea
1 of citizen brands? It is so for three reasons. First, a climate of fear
2 tends to reduce trust in a range of institutions. If there are scares,
3 claims and counter-claims it is difficult to know who to believe and
4111 who to trust.Worryingly, companies seem to fare particularly badly
186 CITIZEN BRANDS
1111 on this count. Second, with the potential volatility in markets

2 that scares imply, it is much harder for companies to plan, and the
3 potential disruption could be great.Take the mobile phone example.
4 Some of the most successful and currently highly valued companies
5 in the world like Nokia or Vodafone could be devastated if the
6 scare about mobile phones turned into full-blown panic.
7 Third, companies must get away from the idea that consumers
8 necessarily act as rational beings – fed as they are by misinforma-
9 tion from a variety of sources. Of course, rationality is not always
10 in a company’s interest and, dare I say it, it might suit a com-
1 pany in the short-term to play on the back of irrational hysteria
2 (as the hospital example showed).
3 Ultimately, though, the culture of fear is not good news for
4 companies. Consumers are less likely to trust companies generally,
5 less likely to analyse objectively information about companies and
6 more likely to over-react to scare stories.
7 But, being a citizen brand might be one way to smooth out the
8 ups and downs inherent in a culture of fear. Being an open and
9 transparent organization, that offers real choice and full information
20111 to consumers, that is trusted, has a reputation for honesty and a
1 bank of goodwill is a defensive manoeuvre that will be increasingly
2 important for companies to follow.
3
4
5
6
7
8
9
30
1
2
3111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
91111
20111
1
2
3
4
5
6
7
8
9
30
1
2
SO-SO LOGO
3
4111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
20111
1
2
3
4
5
6
7
8
9
30
1
2
3111
1111
2
3 CHAPTER 9
4
5
6
7
SO-SO LOGO
8
9 The Increasing Cynicism
10 of Consumers
1
2
3
4
5
6
I
7
8
91111
20111 n No Logo, Naomi Klein produced one of the most significant
1 business books of 2000. Its importance lies in the fact that she iden-
2 tified and articulated a disturbing trend for companies – an increase
3 in cynicism about businesses, and multinationals in particular, and
4 the way they operate in the global economy. Although, as I discuss
5 later I believe some of her analysis is misguided, the book’s huge
6 success reflects the fact that it clearly touched a nerve – there was
7 something in it that mirrored people’s own view of the world; their
8 fears and concerns.
9 Well written and beautifully presented, the book is a seriously
30 researched critique of global companies and their brands. Much
1 of Klein’s analysis is sound and, as I show later, some of my own
2 research supports the central thesis that consumers are becoming
3 more wary of business, its motives and its practices. But the tone
4111 is nothing less than revolutionary. Klein believes that corporations
190 CITIZEN BRANDS
1111 and their marketing and branding strategies have only themselves
2 to blame:
3
4 By attempting to enclose our shared culture in sanitized and
controlled brand cocoons, these corporations have themselves created
5
the surge of opposition described in this book. By thirstily absorbing
6 social critiques and political movements as sources of brand
7 ‘meaning’, they have radicalized that opposition still further. By aban-
8 doning their traditional role as direct, secure employers to pursue
9 their branding dreams, they have lost the loyalty that once protected
10 them from citizen rage.1
1
Klein overtly sympathizes with activist organizations like
2
Reclaim the Streets and expects citizens and consumers to rise up
3
in protest:
4
5 a different agenda has taken hold, one that embraces globalization but
6 seeks to wrest it from the grasp of the multinationals. Ethical share-
7 holders, culture jammers, street reclaimers, McUnion organizers,
8 human-rights activists, school-logo fighters and Internet corporate
watchdogs are at the early stages of demanding a citizen-centered
9
alternative to the international rule of brands. That demand . . . is to
20111 build a resistance . . . that is as global, and as capable of co-ordinated
1 action, as the multinational corporations that it seeks to subvert.2
2
3 This is heady stuff, and together with the trendy catchphrases
4 – ‘brand bombing’, ‘cool hunters’, ‘oppression nostalgia’, ‘market
5 marsala’, are just some examples – explains, in part, the attraction
6 of the book to many readers.
7
8
9 BRANDS, GOVERNMENT AND
30 G L O B A L I Z AT I O N
1
2 Naomi Klein is not alone in her criticism of the role of business
3111 and its insidious involvement in everyday life. British journalist
George Monbiot’s book Captive State3 is another attack on modern
SO-SO LOGO 191
1111 capitalism. Monbiot’s main anger, however, is directed at the

2 governments – both national and local – that are pandering to
3 corporate demands. He rails against the way public authorities have
4 allowed themselves (he argues) to be corrupted by big business,
5 effectively ceding power to them. As such, Monbiot does not spend
6 much time on businesses themselves apart from the odd occasion
7 when he picks out particular villains (as when he intriguingly
8 claims that grocery retailer Tesco is ‘widely blamed for shattering
9 communities’). But the major emphasis is on the democratically
10 elected bodies that embrace the anti-democratic ways of big busi-
1 ness. Ultimately, though, the conclusion is the same as Naomi
2 Klein’s but if anything even more cataclysmic:
3
The struggle between people and corporations will be the defining
4 battle of the twenty-first century. If the corporations win, liberal
5 democracy will come to an end.4
6
7 Both authors fundamentally believe that globalization is bad.
8 They are particularly concerned about the loss of manufacturing
91111 jobs in developed economies and the exploitation of workers in the
20111 developing world. But this can be questioned in two ways. First, can
1 globalization be stopped? Second, is it, in fact, bad for the rich, devel-
2 oped world to export jobs to the third world? I must say that on both
3 points I tend to agree with the more pragmatic views of Claire
4 Short (a renowned left-winger) who as International Development
5 Secretary in Tony Blair’s government made the point that:
6 Globalisation is a set of economic and technological developments
7 in the world which are a fact of history.The job is to manage history
8 not to oppose it.5
9
30 She went on to highlight the idealistic view that some have of
1 third world life, suggesting that there was:
2 ‘a small but dangerous’ group of people who romanticise poverty in
3 developing countries and hold a visceral opposition to the mere idea
4111 of economic development.6
192 CITIZEN BRANDS
1111 Another pragmatist about globalization is United Nations

2 secretary general Kofi Annan. In a speech to the Davos World
3 Economic Forum in 1999 he said:
4
5 It would be tragic if local or national communities react to the chal-
lenge and shortcomings of globalisation by repeating the mistakes
6
of history, and turning in on themselves.Why? Because open markets
7 offer the only realistic hope of pulling people in developing coun-
8 tries out of abject poverty, while sustaining prosperity in the
9 industrialised world.7
10
1
2 D E C L I N I N G FA I T H I N C O M PA N I E S
3
4 It would be easy to dismiss the views of writers like Klein and
5 Monbiot as the rants of old-style anti-capitalists who have modern-
6 ized their analysis, tone and presentation but not, in fact, their
7 underlying beliefs. Certainly, it is true that Klein, almost inevitably,
8 is dismissive of new ‘third-way’ politics. New Labour is apparently
9 ‘right-of-centre’ and an insult to its name:
20111
Blair . . . changed the name of his party from an actual description
1
of its loyalties and policy proclivities (that would be ‘labour’) to the
2 brand-asset descriptor ‘New Labour’. His is not the Labour Party
3 but a labor-scented party.8
4
5 But to dismiss these two out of hand would miss the point.
6 Klein and Monbiot are clearly expressing, if in extreme form, a pop-
7 ulist view. For, throughout the developed world (and in other parts
8 too) citizens are becoming increasingly concerned about the power
9 and veracity of companies. A recent Harris poll in Business Week9
30 found generally negative views about America’s corporations.Two-
1 thirds of respondents agreed that ‘having large profits was more
2 important to big business than developing safe, reliable, quality prod-
3111 ucts for consumers’, while only a quarter felt that business was excel-
lent or pretty good in ‘being straightforward and honest in their
SO-SO LOGO 193
1111 dealings with consumers and employees’. Echoing my point in

2 previous chapters about excessive executive pay, three-quarters
3 believe that the top officers of large US companies get paid too
4 much. Large brand-name companies are seen as ‘squeezing out local
5 business’ and ‘reducing local variety and culture’ (87 per cent and
6 75 per cent agreeing respectively), although they are seen as offer-
7 ing more consistent quality and lower prices than local businesses.
8 Most worryingly for the corporate sector, there is a perception of
9 an increasing dislocation between the interests of business and
10 society generally. Figure 9.1 shows that the proportion of US
1 citizens agreeing that ‘what is good for business is good for most
2 Americans’ declined significantly in the late 1990s. It seems there
3 is little evidence to date of businesses following my suggestion in
4 Chapter 1 that they should put society at the heart of the company.
5 A similar picture of a decreasing degree of faith in companies
6 is found in Britain. Research by the Future Foundation shows that
7 the proportion of the general public who agree that most
8 companies are fair to consumers has declined over the last twenty
91111 years while those who actively disagree has increased (Figure 9.2).
20111
1
80% Strongly agree
2
70% Agree
3
4 60%
5 50%
6 40%
7 30%
8 20%
9 10%
30 0%
1 1996 2000
2 Figure 9.1 Business losing touch with society? Proportion agreeing

3 that ‘In general, what is good for business is good for most Americans’.
4111 Source: Business Week/Harris.
194 CITIZEN BRANDS
1111 70% 1980

2 1986
60% 2000
3
4 50%
5
40%
6
7 30%
8
20%
9
10 10%
1
0%
2 Agree Disagree
3
Figure 9.2 Decreasing trust in companies? Whether agree or disagree
4 that most companies are fair to consumers.
5
6
7
8 British social and market research company MORI has noted
9 the same trend. Since the mid-1970s the proportion agreeing that
20111 ‘the profits of large British companies help make things better for
1 everyone who buys their products and services’ has declined
2 steadily, falling from around 50 per cent in the 1970s to less than
3 half of that in 1999 (Figure 9.3).
4 None of these on their own are ideal measures of consumer
5 cynicism but together they provide powerful evidence that over
6 time, and on both sides of the Atlantic, consumers are indeed
7 having fundamental doubts about the way companies are oper-
8 ating.This is supported by more research carried out by the Future
9 Foundation in 2000.10 When asked a range of questions about the
30 globalization process and the behaviour of multinational companies
1 the response is not very positive. Nearly half of consumers agree
2 that ‘you can’t trust large multinational companies nowadays’ with
3111 only one in five disagreeing11 (see Figure 9.5 later). Only around
a quarter agree that ‘overall global capitalism benefits all’ while
SO-SO LOGO 195
1111 Per cent

60
2
3
50
4
5 40
6
30
7
8 20
9
10 10
1
0
2
1970 1975 1980 1985 1990 1995 2000
3
4 Figure 9.3 Cynicism about business in the UK. Proportion agreeing
that the profits of large British companies help make things better for
5 everyone who buys their products and services.
6 Source: MORI.
7
8 nearly four out of ten disagree. And, when asked directly about
91111 the amount of power that multinationals have, seven out of ten
20111 believe that they ‘have too much power and should be stopped
1 now’ or that they ‘need to be policed and controlled more than
2 they are at present’ (18 per cent and 52 per cent respectively –
3 see also Figure 9.4). Clearly, there is a good deal of unease about
4 the role, power and actions of multinational companies in the
5 global economy.
6
7
8 WHY IS IT HAPPENING?
9
30 So, if consumers are indeed losing faith and confidence in
1 companies why is this happening? The reasons can be found in
2 some of the previous chapters.
3 In a world of ‘peace and plenty’ where many of our tradi-
4111 tional sources of fear and loathing have disappeared, it appears that
196 CITIZEN BRANDS
1111 new ones are required to take their place. Add in the unstoppable
2 force of globalization and who now is most powerful; who most
3 threatening? Enter multinational companies – the new villains, the
4 new bogeymen of our times.
5 Part of the problem, arguably, is the shear size of these corpo-
6 rations. Many multinationals now have a turnover that exceeds
7 those of some countries themselves. Of the world’s hundred largest
8 economies, fifty are corporations, while the turnover of the ten
9 biggest businesses is more than the total of that of the world’s
10 hundred smallest countries. Shell owns 400 million acres of land,
1 making it larger than 146 countries. The largest 500 companies
2 in the world – many of which are American – are now respon-
3 sible for over 40 per cent of global wealth and control two-thirds
4 of global trade. Fewer than ten transnational corporations control
5 virtually every aspect of the worldwide food chain.12
6 Inevitably, this raises some questions. If companies are so
7 powerful do we not need to worry about the mechanism for
8 controlling them? As Charles Handy has noted: ‘when corpora-
9 tions are bigger than nation states you have to ask who governs
20111 them, and for whom.’13 Anthony Giddens (Dean of the London
1 School of Economics) has made the same point:
2
3 I think for better or for worse you do have to see this as a busi-
ness civilisation. Most of us did not see the degree to which it
4
would become a business civilisation, because I think certainly a lot
5 of people in the centre and on the left underestimated the power
6 and the significance of markets. In this world, the corporations do
7 have a central role to play, alongside government, and they are, if
8 you like, a kind of secondary invisible global government.14
9
30 Invisible? Government? No wonder citizens are worried.
1
2
3111
SO-SO LOGO 197
1111 W H O H AT E S C O M PA N I E S ?
2
3 But, who is most worried about this development. Here, the
4 evidence, certainly from Britain, seems to go against Naomi Klein’s
5 supposition that it is young people who are leading the anti-
6 capitalist crusade.
7 For example, only just over half of 16–24 year olds think global
8 corporations need to be controlled or stopped compared to nearly
9 three-quarters of other adults (Figure 9.4).
10 I carried out an analysis of this question and the others about
1 multinationals to see what individual characteristic – age, social
2 grade, income, for example – was most associated with different
3 responses. Age emerged as the most important factor in explaining
4 difference with the young being the least likely to hold anti-
5 corporate views. To make the point, another example, Figure 9.5,
6
7
8 100% Multinationals have too much power –
they need to be stopped now
90%
91111 Multinationals need to be policed and controlled
80% more than they are at the moment
20111 70%
1 60%
2 50%
3 40%
4 30%
5 20%
10%
6
0%
7 16–24 25–34 35–44 45–54 55–64 65+
8
Figure 9.4 Do multinationals have too much power? Some people
9 say that multinationals are too powerful nowadays – which one of these
30 statements comes closest to your own view? (Other statements offered
1 were: ‘Multinational companies are ultimately for the good – we need
to encourage their continued growth’ and ‘The power of multinational
2 companies is at about the right level – they should be left to them-
3 selves’.)
198 CITIZEN BRANDS
1111 60%
2
50%
3
4 40%
5
30%
6
7 20%
8 10%
9
10 0%
16–24 25–34 35–44 45–54 55–64 65+
1
2 Figure 9.5 Many do not trust multinationals. Proportion agreeing that
‘You can’t trust multinational companies nowadays’.
3
4
5 shows that twice as many 45–54 year olds agree that you cannot
6 trust multinationals as do 16–24 year olds.
7 In order to understand these issues better, I carried out a cluster
8 analysis of the data – a statistical technique that groups people
9 together on the basis of their responses to different questions.
20111 The results suggest that there are five different groups of consumers
1 based mainly on two issues: whether globalization is seen as a good
2 development or not;15 and whether multinationals are seen in a
3 generally positive or negative light.16 The different segments are
4 illustrated in Figure 9.6. One group is pro globalization and pro
5 global corporations (top right-hand quadrant of the figure) while
6 another is pro globalization but more ambivalent about companies.
7 Both groups have a higher incidence of under 35s, and under 25s
8 in particular, in them. There are three segments that are less happy
9 with globalization. The first, in the lower right-hand section of
30 the figure, contains people who are generally rather positive about
1 multinationals but the other two might be described as the core
2 anti-globalization, anti-multinational brigade. Together they repre-
3111 sent a bit over a third of the population. They split, however, into
two distinct groups – those that are prepared to ‘demonstrate if a
SO-SO LOGO 199
1111 Pro globalization

2
3
4
5 22%
21%
6
7
8 Pro
9 21% multinationals
10 21%
1
2
16%
3
4
Figure 9.6 Globalization and multinationals – clusters of opinion.
5 Representation of different segments of the population based on responses
6 to a range of attitude questions.
8
91111 large multinational company had done something wrong’ and those
20111 that are not.The radical activists – those that say they are happy to
1 demonstrate – represent around one in six of the population.
2 Importantly, the 16–24 year old age group are underrepresented in
3 both these segments. Interestingly, those aged 16–24 who are con-
4 tained in that radical, protesting, activist group represent just 1 per
5 cent of the population and 10 per cent of 16–24 year olds. It is
6 from this group that protesters at World Trade Organisation and
7 other similar meetings presumably come and from whom organi-
8 zations like Reclaim the Streets gain their members. They may be
9 highly vocal, visible and disruptive, but they currently represent only
30 a small minority of young people.
1 This analysis shows that, if anything it is the sixties genera-
2 tion – those who were born in the 1950s and the 1960s – who
3 are the most cynical about global corporations and the youth of
4111 today who are least so. Why should this be?
200 CITIZEN BRANDS
1111 I believe there are two plausible explanations. First, the radi-
2 calism of the sixties generation clearly lives on. Research at the
3 Future Foundation shows that this generational cohort is carrying
4 through all of its liberal attitudes and anti-establishment inclina-
5 tions as it gets older. But, with the onset of ‘peace and plenty’
6 and many of the ‘battles’ for individual freedom of action and
7 expression won, there seems less need for subsequent generations
8 to ‘revolt’ in a similar way.
9 Second because of the increases in choice (see Chapter 7) and
10 the development of consumption-based individualism, new entrants
1 into markets – that is the young – find brands, and international
2 ones specially, a very useful mechanism for negotiating their way
3 through the morass of complexity that life now offers. More than
4 that, consumption and the purchase of brands can be an important
5 part of self-identity. As Laura Oswald puts it: ‘The subject of
6 consumption is nothing if not an actor in search of an identity’.17
7 Wendy Gordon and Ginny Valentine make the same point:
8
The 21st century consumer is post-modern to the core. She shifts
9
identities and uses a vast wardrobe of brands to create herself into
20111 whoever she wants to be.18
1
2 My own view is that this is particularly true of younger
3 consumers. But, as they get more experience in the consumption
4 process they become more confident – they still use brands but,
5 if you like, in a more cynical way. So, people grow into their
6 concern about multinational companies and their behaviour –
7 questioning companies is part of becoming middle-aged. This is
8 different from the ideologically-based anti-capitalism of the sixties
9 generation.The small group of young anti-capitalist agitators aside,
30 protest has become less of a generational phenomenon and more
1 of a life stage one.
2 Interestingly, this progression from youthful acceptance of, and
3111 indeed need for, brands followed by a growing cynicism matches
Klein’s account of her own life experience.
SO-SO LOGO 201
1111 S U RV I V I N G T H E C Y N I C A L C O N S U M E R
2
3 So, to recap on the analysis in this chapter, we see that consumers
4 are becoming more concerned about the behaviour of companies,
5 and multinationals in particular, and more cynical about their
6 intentions. But it is not so much young people as the middle-
7 aged and older consumers who most exhibit these attributes.
8 There is not much evidence of a large-scale anti-capitalist
9 movement as such but rather an increasing readiness on the part
10 of consumers to expect more of companies (as I have shown earlier
1 in this book) and a willingness to punish them if they do not.
2 This manifests itself in the unsurprisingly much higher proportion
3 of consumers who would boycott a company rather than demon-
4 strate against it (Figure 9.7). I am not saying people will not
5 demonstrate over political, economic or social issues but, if they
6 do, it is more likely to be on a single issue basis rather than a
7 revolt against the system as such. The result is likely to be more
8
91111
20111
1 70% Agree
2 60%
Disagree
3
50%
4
5 40%
6 30%
7 20%
8
10%
9
0
30 Would demonstrate if a large multinational Would not buy from a large multinational
1 company had done something wrong company that had done something wrong
2 Figure 9.7 Consumer terrorism. Whether would boycott or demon-

3 strate against a multinational that had done something wrong.
202 CITIZEN BRANDS
1111 of a roller-coaster ride for companies with more brand volatility

2 as consumer cynicism increases and loyalty declines. (Governments
3 might see the same too, as I discuss in the next chapter.) It will
4 not be so much ‘no brands’ as an ever-changing pastiche of brands
5 as people switch in and switch out on the basis of ethical or other
6 concerns.
7 There is another issue too – consumers need brands, either as
8 ‘choice managers’ (see Chapter 7) or as a source of identity. Put
9 simply, brands are too useful for consumers to give them up. This
10 is particularly true of younger people.
1 No Logo is an influential book and makes some very important
2 points, not least the dangers facing poorly run, exploitative and
3 irresponsible companies. But, at the moment it seems unlikely that
4 we are entering an anti-capitalist, anti-branding world. Rather,
5 what seems more likely to emerge is an era where consumers are
6 ever more critical of companies and increasingly happy to change
7 loyalties.
8 The solution for business is to be more in touch with society,
9 to develop more responsible marketing and employment policies
20111 and, importantly, to be more open and transparent. It is here that
1 some of the cynicism can be countered. Companies and brands
2 will survive in the twenty-first century, but the winners will be
3 citizen brands.
4
5
6
7
8
9
30
1
2
3111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
91111
20111
1
2
3
4
5
6
7
8
9
30
BUTTERFLY
1
2
CONSUMERS
3
4111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
20111
1
2
3
4
5
6
7
8
9
30
1
2
3111
1111
2
3 CHAPTER 10
4
5
6
7
BUTTERFLY
8 CONSUMERS
9
10
1
2
3
4
5
A
6
7
8
91111 fter winning the British general election in May 1997,
20111 the Labour Party maintained a significant lead over its rivals, the
1 Conservatives, for the next three years. Nothing, it seemed, could
2 stop Labour being re-elected for a second term at the next elec-
3 tion expected in 2001. That was until September 2000 when its
4 poll ratings suddenly took a dive. A dispute about the price and
5 high rate of taxation on fuel brought Britain to a halt. Farmers
6 and road hauliers blockaded oil refineries stopping fuel being
7 distributed and within a week, 90 per cent of filling stations had
8 run dry, hospital medical procedures were being postponed and
9 businesses were warning that they would imminently have to shut
30 down operations until fuel supplies resumed.
1 The protest had begun with an Internet e-mail chain letter
2 campaign in June following a similar movement in the United
3 States. Soon after, the press picked it up and the populist tabloid
4111 the Sun ran a campaign calling for people not to visit petrol
206 CITIZEN BRANDS
1111 stations on the first day of each month, starting on 1 August.

2 On the day, though, little happened with few people actually
3 participating in the ‘boycott the pump’ protest. It seemed to have
4 died.
5 But in September, French lorry drivers and farmers (renowned
6 for their readiness to take direct action) started blockades in France.
7 Within a week, the French government had conceded to some
8 of their demands and the dissent began spreading to other coun-
9 tries across Europe. Spurred on by the success of the French
10 protesters the campaign on fuel prices (and tax especially) was
1 re-ignited in Britain, organized by a loose network of farmers and
2 truckers who coordinated their actions via mobile phones, CB
3 radios and in-cab fax machines. Within a week the nation was on
4 the brink of serious collapse of vital services.
5 Suddenly, the protest stopped as quickly as it had started – the
6 campaigners recognized that public support was beginning to
7 waver in the light of the severity of the protest’s effects. But by
8 then, the impact on the government’s popularity had been
9 dramatic.
20111 From around 50 per cent support throughout 2000, in a week
1 this had dropped to the mid-30s (Figure 10.1). This was, in the
2 history of voting intentions, unique as Britain’s best-known
3 psephologist David Butler noted:
4
Two weeks ago, national opinion polls were indicating, on average,
5
a 15 per cent Labour lead. Today, they put the Conservatives 4 per
6 cent ahead. This is the sharpest change ever recorded.1
7
8 After that, Labour slowly recovered its position but it had learnt
9 its lesson: another crisis could happen at any time, seemingly out
30 of nothing, and threaten its political prospects. It understood that
1 voters are more volatile now than they ever have been.
2 The same is true of consumers and consumer markets.
3111 Consider the points I have made about different aspects of atti-
tude and behaviour in the second half of this book. I have argued
B U T T E R F LY C O N S U M E R S 207
1111 60%
2
3 50%
4
5 40%
Labour
6 Conservative
7
30%
8
9
20%
10 Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec.
1 97 97 97 98 98 98 98 99 99 99 99 00 00 00 00
2 Figure 10.1 The collapse and recovery of Labour support. Likely

3 voting intention.
4 Source: MORI.
5
6
7 that when consuming – that is when choosing or purchasing prod-
8 ucts and services – people have:
91111
20111 ■ more discretion
1 ■ a greater number of ‘connections’
2 ■ a wider range of choice
3 ■ less institutional ‘direction’
4 ■ increasingly irrational concerns and fears
5 ■ and greater cynicism towards those providing the goods and
6 services.
7
8 Little wonder then that consumer behaviour appears – and,
9 indeed, I would argue is – more volatile. Little wonder that voting
30 behaviour is too. One of the great philosophical and mathemat-
1 ical advances of recent years has been the development of chaos
2 theory. Everyone is aware of the apocryphal example of a butterfly
3 beating its wings in China and causing a storm on the other side
4111 of the world. But now we have the prospect of a similar process
208 CITIZEN BRANDS
1111 at work in consumer and political attitudes and behaviour – the

2 development of what one might call ‘butterfly consumers’.2
3
4
5
WELCOME TO ANARCHY
6
7
This is scary stuff, and particularly for large multinational com-
8
panies. From seemingly nowhere, and fast, tastes can change, brand
9
attractiveness can wane, company profits can soar or plummet.The
10
increasing economic discretion and confidence of consumers added
1
to the communications power of new technology makes for a
2
potent and explosive mix. This is consumer anarchy as sociologist
3
Manuel Castells notes:
4
5 The network society restores some level of power and initiative
6 to individuals and networks of individuals through movements of
7 information. In that sense, in terms of the classical philosophies, the
8 one that is most relevant to our world is anarchism.3
9
The anarchic impact of the information economy is some-
20111
thing that I first became aware of in 1997 when researching
1
the issue of Intranets and information exchange within companies.
2
It seemed clear to me, and co-author Melanie Howard, that the
3
information revolution was of little use unless people were
4
provided with access to that information and empowered to use
5
it. Yet, this had implications:
6
7 Arguably, the price of allowing access to information that empow-
8 erment implies is a less controlled, even anarchic, environment too.4
9
30 The volatility implicit in the new economy has also been
1 discussed by Carl Shapiro and Hal R. Varian in their book
2 Information Rules: A Strategic Guide to the Network Economy.5 Shapiro
3111 and Varian ‘explore the underlying economic forces that deter-
1111 mine success and failure in the Network Economy’ explaining

2 why such aspects as positive and negative feedback and network exter-
3 nalities are so important in shaping the economy of the future.
4 The interconnections of the network economy make markets less
5 stable. As they put it, markets are more ‘tippy’ – a factor that is
6 probably enhanced by the inherent cynicism and disloyalty (in the
7 form of readiness to change brands) of modern day consumers.
8 Another reason why markets are potentially more tippy is that the
9 popularity of a product and service can, in the network economy,
10 be dependent on the number of users. As more people use the
1 product so, in some markets, the value of the product increases
2 (see Metcalfe’s Law in Chapter 6).They argue that the rapid decline
3 of Apple in the 1990s was an example of this phenomenon.
4 More recently, the ‘tipping’ theme has been picked up by
5 Malcolm Gladwell in The Tipping Point6 who analyses further how
6 and at what time the critical moment is reached when an idea,
7 fashion or behaviour suddenly takes off. His examples range from
8 consumer goods, through criminal activity (the rapid improvement
91111 in crime rates in New York in the 1990s) to the popularity of
20111 children’s TV programmes. But Gladwell’s most important contri-
1 bution is to highlight the major underlying factors that influence
2 the growth of an ‘epidemic’. He identifies three ‘agents’ that are
3 critical in the development of a tipping point: those individuals
4 whom for whatever reason, are specially important in passing on
5 news, information or whatever; what he calls the ‘stickiness factor’
6 – how memorable a ‘message’ is; and the environment at the time
7 that the process starts – which may encourage it (as in the fuel
8 protests in September) or discourage it (as in the lack of action
9 on fuel in August).
30 How can companies operate and plan in an environment like
1 this? Certainly, it is not easy and the temptation might be to give
2 up now. But it might not be quite as bad as it seems, as there are
3 some strategies that can be employed to mitigate the effects. First,
4111
210 CITIZEN BRANDS
1111 within all this chaos there is, in fact, some order of sorts and
2 thanks to the growth of computing power (and thanks to Moore’s
3 Law – see Chapter 6) there is now the ability, if not to predict
4 the exact direction of the chaos, at least the potential scope of it.
5 Second, citizen brands offer the prospect of managing better the
6 inherent volatility in markets. Understanding this process and the
7 role of citizen brands in a world of butterfly consumers is what
8 this chapter is about.
9
10
1 THE EVIDENCE OF CHANGE
2
3 Beyond Britain’s petrol crisis, what other examples of this pheno-
4 menon are there?
5 First, are examples of technology products where network
6 effects (as outlined by Shapiro and Varian) have led to technically
7 superior products losing out to inferior ones. These include Sony’s
8 Betamax video recorder that failed in the marketplace despite
9 being technologically superior to the eventually triumphant
20111 VHS competitor standard. It also includes, as I have already noted,
1 Apple’s Macintosh computer that obtained market dominance in
2 the desktop PC market with its innovative graphical user inter-
3 face but lost out to the technically inferior ‘Wintel’ alliance of
4 Intel processors and Microsoft Windows software. More import-
5 antly, when Apple started to lose market share it did so at an
6 astonishing pace.7 Other examples include Steve Jobs NeXT work-
7 station and Digital’s Alpha microprocessor chip which were,
8 according to the Daily Telegraph, ‘dramatically superior to their
9 potential rivals’.8
30 Second, are fashion and related items. Malcolm Gladwell
1 describes the way Hush Puppies changed from being a ‘classic’ but
2 dying shoe brand to a hip fashion item in New York, all in the
3111 space of a very short time.9 He also describes how a book by
1111 Rebecca Wells – Divine Secrets of the Ya-Ya Sisterhood – having done
2 moderately well in 1996 suddenly saw exploding sales growth a
3 year later. Paul Ormerod in his book Butterfly Economics10 discusses
4 the processes by which one film stacked full of box office stars
5 bombs out, while another is a huge success.
6 The third category is where new products, or new service
7 delivery methods enter the market. Financial services currently
8 provide some good examples here. In the early 1990s direct sales
9 of motor insurance accounted for about 10 per cent of the total
10 UK market. Some commentators claimed it was a niche segment
1 and was unlikely to grow much further. Yet, direct channels now
2 account for a significant proportion of motor insurance sales and
3 other insurance is being affected too. By 1998 over two-thirds
4 of consumers had bought their last new insurance (home, car or
5 medical) via direct channels.11 The change in market share by dis-
6 tribution channel had taken place over a relatively short (in tradi-
7 tional terms) period of time. In 1998, one of Britain’s large and
8 established insurance companies, Prudential, launched an Internet
91111 banking offer – one of the first independent on-line banks. In less
20111 than two years it had over a million accounts and was challenging
1 for leadership in the on-line banking market.
2 Another obvious area where this phenomenon is noticeable is
3 when there is some catastrophe that hits a company.This might be
4 a physical incident like Exxon Valdez, when an oil tanker ran
5 aground in Prince William Sound in 1989, causing huge environ-
6 mental damage or when Coca Cola had a problem in its Belgium
7 bottling plant resulting in the contamination of some of its product.
8 Or, it could be the result of other actions or proposed actions. Shell,
9 intended to dump its Brent Spar oil exploration platform in deep
30 water but after a vigorous campaign by Greenpeace had to scrap
1 the plan. In all these cases, the companies were commercially
2 affected and the impact on them was very quick and almost impos-
3 sible to manage. Sometimes these ‘catastrophes’ can be self-imposed.
4111
212 CITIZEN BRANDS
1111 In the 1980s Ratners was a successful and growing high street jew-
2 ellery retailer in the UK.Then Gerald Ratner, who ran his family’s
3 firm, made some now infamous comments12 during a public speech
4 about the quality of his company’s products and the business’s for-
5 tunes plummeted.
6 While it can be argued that in each of these instances special
7 circumstances were at play, it is all consistent with the idea that
8 consumer markets are becoming less stable, less predictable and
9 more prone to wild fluctuations in fortunes.
10
1
2 D E C R E A S I N G LY L O YA L , I N C R E A S I N G LY
3 MERCURIAL
4
5 Part of the problem, is that it seems that consumers are less loyal
6 than they were in the past. Although difficult to prove definitively,
7 research at Cranfield in the early 1990s suggested that shoppers
8 were more fickle than they used to be.13
9 This might seem strange at a time when companies are invest-
20111 ing more and more in loyalty programmes. But the vast majority
1 of consumers are experienced – having been born or raised in the
2 post-war consumer society. They are much richer too – with far
3 higher degrees of discretion in what they can and cannot buy.This
4 mix of experience and growing affluence (see Chapter 5) provides
5 consumers with the psychological and financial ability to change if
6 necessary – a factor further encouraged by the greater choice now
7 available to them. In fact, few consumers are inherently loyal in the
8 sense of having a deep degree of attachment to a company or brand.
9 As many as 50 per cent change their degree of loyalty over the
30 course of a year (see Figure 10.2) and most people are promiscu-
1 ous in at least some markets – fewer than a fifth nearly always buying
2 the same brand in the majority of markets they operate in.14
3111 Although many people may, in fact, tend to buy the same brand
1111 More loyal

25% Same loyalty
2 48%
3
4
5
6
7
8
Less loyal
9 27%
10
Figure 10.2 Less loyalty, more churn. Change between 1998 and 1999
1 to individuals’ claimed loyalty to named companies (for example Coca
2 Cola, Marks and Spencer, Barclays).
4
5
6 out of routine, boredom, lack of time or because they are over-
7 whelmed by choice (see Chapter 7), they can change as a result of
8 a negative experience or comment or through serendipity (seeing
91111 a new brand advertised, for example).
20111
1
2 N E W M O D E L S F O R A N A LY S I N G M A R K E T
3 DYNAMICS AND MARKET SHARE
4
5 How then do we cope with all this volatility? How do we under-
6 stand it?
7 Here, we can draw some help from the combined impact of
8 new computing power and mathematical techniques developed for
9 the fields of complex systems and biology. These allow us to
30 develop models that are based upon the behaviour of individual
1 firms and consumers and on the interactions that take place between
2 them. Intuitively it is obvious, for example, that consumers in every
3 market learn from each other’s behaviour, learn from advertising,
4111
214 CITIZEN BRANDS
1111 learn from events. These new models can be based on an accep-
2 tance that behaviour is not fixed, but is, rather – as I pointed out
3 earlier – increasingly fickle thanks to increasing consumer experi-
4 ence, discretion and cynicism and the development of the network
5 economy. More network connections make for more interactions
6 and hence for more mercurial behaviour.
7 Paul Ormerod, in his book Butterfly Economics,15 brilliantly
8 demonstrates how such techniques can be applied to economic
9 analysis. The core of the book focuses on how the learning from
10 simulations of simple ant colonies can be applied highly success-
1 fully to social and economic situations. Ormerod argues that by
2 using these techniques we can understand and explain a variety
3 of outcomes that have consistently caused problems to classical
4 economic theory. But the techniques can equally be applied to
5 consumers and markets as Ormerod explains:
6
7 Within the computer, an artificial world is created, populated by
individual consumers. These individuals are given rules of behaviour
8
which specify the conditions under which they become more likely
9 to switch in and out of various products. Individuals need not be
20111 alike. All that is needed are some rules about how they behave.16
1
2 This new technique has been applied in a number of studies
3 that have been able to explain otherwise less than obvious out-
4 comes. Examples include the video recorder market I have already
5 mentioned,17 why financial markets are so volatile,18 the inherent
6 difficulty in predicting a film’s success,19 again as already mentioned,
7 and why the business cycle is so impossible to anticipate.20
8 Roger Lewin and Birute Regine in their acclaimed book The
9 Soul at Work21 show how complexity science can be applied to
30 the management and structure of organizations to improve under-
1 standing and performance.
2
3111
1111 WORD-OF-MOUTH AND PR DISASTERS –

2 AN EXAMPLE
3
4 A simple example, from a deliberately simple model, helps to
5 explain why ‘epidemics’ develop so much faster now, but also starts
6 to provide clues as to the strategies companies can adopt to either
7 exploit or counter the phenomenon.
8 In this example,22 we start with a population of 250 people
9 who are placed at random in a geographical space.These are shown
10 as the circles in Figure 10.3 and the position of the circles can
1 be considered to be, for this exercise, the home of the individual.
2 Each person then has a number of ‘connections’, all with nearest
3 neighbours – the lines in the figure. The idea here is to represent
4 a past era where most people’s friends, neighbours or colleagues
5 would be geographically close by.
6
7
8
91111
20111
1
2
3
4
5
6
7
8
9
30
1 Figure 10.3 A network of the past: simulation.
2 Source: Future Foundation MathMatters.
3
4111
216 CITIZEN BRANDS
1111 What then happens when someone communicates with

2 someone else – a word-of-mouth recommendation about a brand
3 or new product, for example, or a warning about a health risk or
4 the irresponsible or unethical behaviour of a company? We assess
5 this by saying that an individual who has this knowledge has a
6 certain probability of passing it on to all those she might be
7 connected to and that the recipient has a certain probability of
8 accepting or rejecting that advice. Another assumption is that over
9 time people might ‘forget’ the piece of knowledge unless it is rein-
10 forced by hearing it again from someone else. Now we have a
1 dynamic community where a piece of information will pass
2 through it at varying degrees of speed depending on our assump-
3 tions about how likely someone is to pass on and positively receive
4 the piece of information.
5 Figure 10.4 shows what happens over 20 time periods assuming
6 that a small number of people in a particular geographical area
7
8
100
9
20111
80
1
2
60
3
4
5
40
6
7
20
8
9
0
30
1 0 5 10 15 20
Time
2
3111 Figure 10.4 Old network – cumulative impact. Typical simulation.
Source: Future Foundation MathMatters.
1111 are ‘seeded’ with the initial item of knowledge. It can be seen that
2 it grows slowly and steadily until after 20 time periods (it could
3 be days or weeks or months) over 50 per cent of the population
4 have the ‘news’. It should be noted that these simulations, as they
5 are dynamic, will produce different results each time they are run
6 but the figure represents a typical one for this situation.
7 But what happens if we increase the number of connections
8 – as has happened in the network society – or the distance of
9 the connections? The latter is important because now people are
10 less bounded to a particular locality and will have friends, family
1 and acquaintances who are more widely dispersed.
2 If we increase the number of connections by just 40 per cent
3 but still keep these connections local we can see the effect on the
4 spread of the ‘epidemic’. Although it is hard to measure, it seems
5 plausible that this sort of increase might match the increased
6
7
100
8
91111
80
20111
1
60
2
3
4
40
5
6
20
7
8
9
0
30 0 5 10 15 20
1 Time
2 Figure 10.5 The impact of more connections. Simulations with

3 different numbers of local connections.
218 CITIZEN BRANDS
1111 number of connections that have arisen over the last 20 years or
2 so as a result of changing social and work networks. If anything
3 it is an under-estimate. Figure 10.5 then shows the impact of this.
4 Just by increasing the number of contacts people have by 40 per
5 cent we get a dramatic quickening in the spread of the rumour,
6 recommendation or whatever. Now it takes only about 10 time
7 periods before it reaches 40 per cent of the population.
8 But, it is not just that people have more connections in the
9 network society, it is that they can also occur across great geograph-
10 ical distances – the radical transformation of time and space that
1 I discussed in Chapter 6. Of course, such connections did exist in
2 the past, but there are more of them now and news travels faster
3 between them (an e-mail is a bit quicker than sea mail). As with
4 biological epidemics which are known to spread much more
5 quickly around the world with the advent of more and faster
6 travel, so is the case with these word-of-mouth epidemics. It just
7 requires one electronic connection to set up a new ‘seed’ of
8 opinion on the other side of the world, which can then start
9 spreading there. So, if we add just a few connections to those
20111 shown in Figure 10.3 but ones which link geographically distant
1 points (like San Francisco to London) it has a big impact on the
2 spread of the information.
3 Figure 10.6 shows what happens with just 14 additional
4 connections – a very small number compared to the hundreds of
5 links between the original 250 sample. Just by adding those extra
6 few, but long, connections you get an even quicker spread of the
7 ‘epidemic’. Now it takes around seven time periods to reach 50
8 per cent of people. Whereas, increasing the number of local links
9 by 40 per cent had a major impact, adding under 1 per cent of
30 links, but making them long distance, has almost as dramatic an
1 effect. This explains why it is an increasingly volatile consumer
2 world but also provides some pointers on what to do about it.
3111
1111
100
2
3
80
4
5
60
6
7
8
40
9
10
20
1
2
0
3
4 0 5 10 15 20
5 Time
6 Figure 10.6 Small world – faster and less predictable. Simulations with
7 different assumptions.
91111
20111
1 B U T T E R F LY C O N S U M E R S A N D C I T I Z E N
2 BRANDS
3
4 While the arrival of butterfly consumers and butterfly economics
5 poses real challenges for companies these new techniques for
6 modelling these network systems do at least allow us to under-
7 stand this uncertainty and plan for it.
8 An illustration of the use of the technique is contained in
9 Lewin and Regine’s book.23 They show that by using complexity
30 science you can understand why the management systems of some
1 companies work and others do not. More importantly, they argue
2 that embracing the concept of complexity, and implementing or-
3 ganizational systems that recognize it, leads to more successful
4111 companies. As Tom Peters says of the book:
220 CITIZEN BRANDS
1111 Translate ‘chaos theory’ into usable business practice? Roger Lewin
2 and Birute Regine do it!24
3
4 Equally, these new models can be used to develop scenarios
5 of likely outcomes given a range of possible strategic choices. By
6 helping strategy development and providing a tool for rapidly
7 analysing new situations as they arise, these techniques potentially
8 offer significant competitive advantage. In this sense, uncertainty
9 creates opportunity.
10 But being a citizen brand can help too and in three ways in
1 particular. First, because a citizen brand is closer to society it is
2 more likely to pick up signs of disruption earlier than other
3 companies. Being a citizen brand is a bit like having an early
4 warning system.
5 Second, as ethical consumption becomes more important, a
6 citizen brand is more likely to get positive word-of-mouth recom-
7 mendations. Finally, because of the bank of goodwill that has been
8 built up (as I discussed in earlier chapters) these brands are likely
9 to be ‘stickier’ – consumers are more likely to stick with them in
20111 the face of adverse publicity and the like.
1 These points relate to the general model of complex, network
2 system as outlined in this chapter. From my discussion of this and
3 the simulations I have shown, it is clear that there are a number
4 of strategies to deal with the development of a butterfly economy.
5 First, are those that affect the speed that information travels around
6 the network. Already some organizations recognize this and use
7 key opinion formers and/or new technology to promote the distri-
8 bution of a product by word-of-mouth. This would include the
9 currently popular idea of viral marketing. Second are those strate-
30 gies that try to dampen network effects by decreasing brand
1 switching. Here, most interest has been in loyalty programmes that
2 increase the switching costs for consumers (by for example,
3111 providing monetary or other rewards to remain loyal which would
be forgone if they took their custom elsewhere). The problem
1111 with the former is that you are continually trying to run faster
2 to stay ahead of your competitors and, of course, it is inherently
3 unpredictable – playing the chaos game can produce chaotic results.
4 There is also the danger that you might be appealing to the most
5 volatile set of consumers. The problem with the latter is that it
6 has been shown not to work, or at least not to increase stickiness
7 except in the very short term.
8 What are needed are more robust strategies for both sales and
9 retention. For the first, reputation is critical – good product or
10 service (as ever) is most important but increasingly there is likely
1 to be an ethical or citizenship element too. For the second also,
2 it is reputation, rather than loyalty gimmicks, that is likely to
3 provide the brand stickiness that I discussed in earlier chapters as
4 well as this one. For both, again, citizen brands are well placed.
5 In an increasingly whirlwind, helter-skelter environment being a
6 citizen brand will help provide smooth, lasting progress and a
7 defence mechanism against the ups and downs of an ever more
8 volatile consumer world.
91111
20111
1
2
3
4
5
6
7
8
9
30
1
2
3
4111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
20111
1
2
3
4
5
6
7
8
9
30
1
2
3111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
91111
20111
1
2
3
4
5
6
7
8
9
30
BECOMING A
1
2
CITIZEN BRAND
3
4111
1111
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
20111
1
2
3
4
5
6
7
8
9
30
1
2
3111
1111
2
3 CHAPTER 11
4
5
6
7
BECOMING A
8 CITIZEN BRAND
9
10
1
2
3
4
5
I
6
7
8
91111 n this book, I have considered the overwhelming evidence
20111 that being a good corporate citizen is linked to commercial success
1 and the reasons why this might be so. I have also discussed some
2 of the history and the political and business backgrounds that have
3 restricted a general and serious acceptance of this fact. Perhaps
4 more importantly, I have also shown that for a whole range of
5 reasons, citizenship is likely to become more important in the
6 future. Thus, although it makes commercial sense to embrace it
7 now, it is also a critical strategic issue.
8 Balancing short-term developments and long-term possibili-
9 ties has always been one of the greatest challenges facing business.
30 The dangers are obvious: look too closely ahead and you miss the
1 long-term strategic developments you should be planning for now;
2 look too far out and too strategically and you can become so
3 blinkered that you miss the everyday, tactical decisions that are
4111 crucial for maintaining momentum, competitiveness and market
226 CITIZEN BRANDS
1111 share. Many corporate failures/disasters can be explained by errors

2 in time-scale focus: too short, or too long.
3 Therefore, getting the balance right is critical to business
4 success. Sometimes, it is appropriate to place more emphasis on
5 the longer-term, strategic time frame; at other times, circumstances
6 dictate a focus on a shorter time period. But the importance of
7 citizenship is that it is not only a long-term strategic issue, but it
8 can help when short-term tactical problems arise, as I have argued
9 in the last three chapters.
10 So, what does being a citizen brand involve? At a general level
1 it means placing society at the heart of the company, as I put it.
2 This involves understanding not only the values, but also the
3 concerns of employees, customers, investors and suppliers. But, in
4 addition, it entails taking an active interest in local and wider
5 communities and society at large – monitoring how well they are
6 doing and the problems they face, and demonstrating that the
7 company takes these issues seriously. Apart from just monitoring
8 these issues – being outwardly focused, as I put it – what a
9 company actually does will depend on the individual circumstances
20111 of the business: its history and previous activities and associations;
1 the sector it operates in; and the particular concerns and interests
2 of its people. Thus, some companies may focus on their workers
3 and their families, others on the problems – like poverty, health
4 or education – that face many third world countries. Some busi-
5 nesses may take an active interest in inner city poverty in the
6 developed world, others in the environment.
7 A concern for environmental issues and animal welfare is part
8 of The Body Shop’s heritage, for example, and these areas are
9 therefore an obvious focus for it. Cadbury’s tradition of taking an
30 interest in the local communities in which its workers live, means
1 it has a historical link with helping to solve urban community
2 and housing problems. Ford invests in education in the developing
3111 nations in which it is an employer, while Hewlett Packard has a
community initiative aimed at helping the poorer countries of the
BECOMING A CITIZEN BRAND 227
1111 world to benefit from new technology. Diamond producer De

2 Beer has backed a campaign to eradicate polio – still a serious
3 health problem in some of the areas of the world where it mines.
4 Marks and Spencer, as a retailer, has a long tradition of working
5 with the local communities in which its shops are based, and
6 British multiple store Woolworths has provided money to staff to
7 devise their own local community initiatives. Oil companies, not
8 surprisingly, often focus on environmental matters, with BP’s new
9 logo and tagline ‘beyond petroleum’ underpinning its commitment
10 to environmentally friendly technologies.1
1
2
3 FOCUS IS NOT CYNICAL
4
5 Although this focusing of citizenship activity could come across
6 as a cynical exploitation of a company’s market position, I do not
7 believe it is. Rather, it highlights the complementarity and synergy
8 between a given business and society that legitimizes the initia-
91111 tive and therefore improves the chances of its likely effectiveness.
20111 Looked at another way, there are some areas where it would be
1 entirely inappropriate for companies to get involved. So, while
2 Coca Cola can promote activities to help children, an alcohol or
3 tobacco company cannot.
4 A particularly contentious area is involvement in sports and
5 the arts. Research has shown that, when asked where they think
6 companies have a role in helping out, the general public puts
7 supporting the sports and arts at the bottom of a long list that
8 includes education, the environment, working practices, fair trade
9 and human rights.2 Too often in the past corporate investment in
30 these areas has reflected individual executives’ interests rather than
1 the broader concerns of their employees and customers. Sponsoring
2 an opera company may be beneficial for its impact on opinion
3 formers, the media and the intelligentsia, but it has little to do
4111 with corporate citizenship. The same would be true of investing
228 CITIZEN BRANDS
1111 in football teams in order to have your company or brand name

2 displayed at the stadium or on shirts. This is pure marketing – a
3 form of advertising – and not about being a citizen brand. The
4 exception is, of course, where the initiative uses sport or art to
5 reach or address a specific social or economic problem. Examples
6 would include investment in inner city football pitches or spon-
7 soring a performance arts programme for deprived children.
8 Although the emphasis of any citizenship activity may vary
9 from company to company, it is important to recognize that a
10 broader appreciation of, and concern about, what is going on in
1 society will be important too. Only in this way, can companies
2 reap all of the benefits of being a citizen brand that I have outlined
3 in this book.
4
5
6 VA L U E S A N D R E P U TAT I O N
7
8 In my introduction to this book I said the concept of citizen
9 brands concerned three issues: corporate citizenship, core values
20111 and branding. My contention throughout the book is that, increas-
1 ingly, companies will gain strategic advantage by building brands
2 that embrace and encourage core values that have a citizenship
3 component (in the broad sense in which I have described this).
4 This does not just mean feeling guilty about a particular issue or
5 problem, or giving money or some other form of benefaction. It
6 means understanding society and the problems and issues that are
7 engaging people – be they your customers, employees, share-
8 holders, or whoever – around the world. It is about being
9 outward-looking, not inward-looking; it is about actively partici-
30 pating in society rather than passively ignoring it.
1 By concentrating on consumer attitudes and behaviour, I have
2 tried to demonstrate the importance of citizenship to branding.
3111 My argument is that the brand – and brand equity – will increas-
ingly incorporate a feeling, a sense, of how in touch with the
1111 world a company or product is. And in a world where, perhaps

2 paradoxically, I believe branding could become more important,
3 this is clearly critical for the future success of a company.
4 But for citizenship to have an impact on reputation, for it to
5 become truly part of the brand – its values and its equity – it
6 must be honest. By that, I mean that the belief in citizenship and
7 the activities associated with it must be sincere and exist in all
8 parts of a company from top to bottom. For your employees, for
9 your customers, for your investors, it’s not just what you are saying
10 or who you are saying it to, but whether the company really
1 believes it too. As one chief executive said to me once, the ‘drum-
2 beat of values’ needs to resonate throughout the organization.
3
4
5 T R A N S PA R E N C Y
6
Related to this point is the very crucial issue of transparency. In
7
the new media environment, and in a world of a culture of fear
8
and butterfly consumers, this is becoming ever more important.
91111
By transparency I mean being as open and honest as possible. This
20111
involves not only telling people what you are doing but, more
1
importantly, providing transparent links to the company’s beliefs,
2
values, activities and behaviours – something that is now easily
3
done with the new interactive technologies.
4
Transparency generates trust – since if you are not transparent
5
it just looks like you have something to hide. More than that,
6
transparency also means you have already established communica-
7
tions channels and mechanisms for better dealing with any public
8
relations crises, for example, that may occur.
9
30
1 EMPLOYEES
2
3 Of course, one particular group of people who will expect an
4111 open dialogue are employees. They are a critical starting point for
230 CITIZEN BRANDS
1111 any business striving to be a citizen brand. For a citizen brand to

2 succeed, employees at all levels must not only be aware of, and
3 buy into, the values of the company, but feel validated and valued
4 by it too. This is important for two reasons. First, as I showed in
5 Chapter 1, employee satisfaction, and hence retention, is closely
6 linked to customer retention and thus profitability.
7 Second, employees operate, in effect, as a company’s ‘window
8 on the world’ – a fact that is lost on some businesses. Workers
9 have their own problems (childcare, low wages, concerns about
10 crime, education or health) but they have their own ethical views
1 as well. I showed in Chapter 2 that the confluence of these two
2 factors determines the degree of concern individuals have about
3 different issues. Knowledge of this is potentially very helpful for
4 companies. Grocery retailer Tesco, for example, has grown to
5 number one in the UK market as a result of a strategy focused
6 on the customer. But in doing this, and in seeking greater flexi-
7 bility from its employees to match changing customer needs, it
8 then recognized that it needed to know more about its employees
9 and their lives. This not only raised a whole range of work–life
20111 issues involving its staff, but also provided useful intelligence about
1 society, family behaviour and shopping needs.3
2 As such, human resource departments can no longer be seen
3 as stand-alone departments in the way they have sometimes been
4 in the past. They need to work with both the marketing and
5 strategy departments in the maintenance and development of the
6 citizen brand concept.
7
8
9 K E E P E X E C U T I V E PAY U N D E R C O N T R O L
30
1 The most obvious place where there could be a dissonance
2 between the values and practices of a business is in executive pay.
3111 Put simply, as I said in Chapter 1, excessive pay for senior managers
does not sit happily with the idea of citizen brands. This is not
1111 because research suggests, as it does, that excessive pay is linked

2 with poorer commercial performance (although you would have
3 thought that would be a sufficient reason to keep pay under
4 control). Nor is it, as such, because of some moral outrage at the
5 obscene gap that is emerging between those at the very top of
6 companies and most of its employees. The reason is that it is just
7 not consistent with the concept of a company understanding, and
8 being sympathetic to, the concerns and needs of society at large.
9 It just grates.
10 An example makes the point. In the early part of 2000, Barclays
1 Bank decided to close a number of its branches in rural areas.
2 Personally, I can understand the pressure on high-street banks to
3 do this as consolidation in the industry and the potentially disrup-
4 tive impact of Internet banking will completely undermine
5 previously-held cost and revenue assumptions about running a
6 branch network. The problem was, as I noted in Chapter 4, that
7 Barclays was doing this while it was advertising its ambitions and
8 credentials as an international bank in its ‘a big world needs a big
91111 bank’ TV campaign. But worst of all, it also emerged at the same
20111 time that the company’s senior executives were awarded massive
1 remuneration packages. This created a huge amount of adverse
2 publicity. At the bank’s annual meeting, there was ‘unusually high
3 attendance and several demonstrations outside’4 according to the
4 Financial Times. One of the bank’s senior managers, John Varley,
5 received a grilling from John Humphries, one of the BBC’s top
6 current affairs presenters. Humphries started in a combative tone:
7
It is an extraordinary way to run a bank, isn’t it, Mr Varley? You
8
close all these branches and then you award yourself potentially
9 massive, massive amounts of money.5
30
1 Humphries continued in the same vein, always coming back to
2 the huge amounts of money that Varley, and particularly Matt Barrett,
3 chief executive of Barclays, were potentially going to receive. The
4111 estimated £15 million spent on an advertising campaign was being
232 CITIZEN BRANDS
1111 undermined by the minute.The money that was going to the senior
2 executives was probably eclipsed by the loss of brand equity that
3 the furore caused.
4 The problem is that it is unlikely that an executive who seeks
5 a huge remuneration either understands or cares about those values
6 that are embodied by the term citizen brands. My simple advice
7 to companies and investors is to question whether prospective
8 managers who want excessive remuneration packages (and this
9 includes excessive share option schemes too) are really suitable to
10 run a citizen brand company.
1
2
3 COMPETITION IS GOOD
4
5 Companies should also look at their strategies for market domi-
6 nation. Of course, it is a big temptation to work towards an
7 effective monopoly in a market. And, for companies that would
8 rather take the roller-coaster ride of regulatory investigation that
9 it implies, this is an understandable strategy. But, if your ambition
20111 is to be a citizen brand, this is much harder in an oligopoly than
1 in a competitive arena. Part of Virgin’s success reflects its desire to
2 attack cosy cartels and monopolies and it is rewarded with a great
3 reputation among consumers. As I showed in Chapter 2, people
4 are unlikely to view you as open, honest, truthful and trustworthy
5 – key components of being a citizen brand – if you effectively
6 control a market.
7 This creates huge problems for established companies in domi-
8 nant positions who seek to soften their image and develop better
9 relationships with the different communities they operate in as,
30 for example, Coca Cola does (as I note in Chapter 2). How to
1 execute that strategy for companies in this sort of position is a
2 real challenge.
3111
1111 WHO SHOULD DEVELOP AND MANAGE

2 T H E C I T I Z E N B R A N D S T R AT E G Y ?
3
4 The issue of corporate citizenship is of such great importance in
5 terms of the vision, culture and strategy of a company that it
6 should be the responsibility of the chief executive or someone (on
7 the board) who reports directly to her or him. For all the reasons
8 that I have outlined in this book, this is so important an issue and
9 so critical to future success that it has to be at the heart of the
10 company. Apart from all the other benefits I have outlined, it is
1 an implicit part of the reputation-management function – an area
2 of management that is increasingly being recognized as crucial.
3 Charles J. Fombrun has summarized the importance of this nicely:
4
5 Corporate reputations are strategic assets. Reputation management
6 is an emerging discipline whose central tenet is that strong reputa-
tions result from conveying the genuine, distinctive values and
7
personality of a company. The essence of building reputations does
8 not lie in posturing, spin-doctoring or puffery. Rather, it presents
91111 reputation management as a source of competitive advantage – which
20111 makes it nothing less than enlightened self-interest.6
1
2 The fact that citizenship will not only increasingly be a part
3 of branding, but that it also acts as a form of market intelligence
4 (the ‘window on the world’ I referred to earlier), suggests that the
5 citizen brand project would sit comfortably in the marketing
6 department. This, however, would require marketers to embrace a
7 more strategic role than some currently do and to look beyond
8 short-term sales targets and fancy, awareness-raising advertising
9 campaigns.This is a strategic marketing role, which is why it really
30 should be the responsibility of the CEO.
1
2
3
4111
234 CITIZEN BRANDS
1111 CITIZEN BRAND IS NOT A SUFFICIENT

2 CONDITION
3
4 One final, and crucial, point is that being a citizen brand is an
5 increasingly necessary, but not on its own sufficient, condition for
6 business success. I made this point in Chapter 1 and I make no
7 apologies for making it again, even though it is so obvious.
8 Companies should not be diverted from everyday good busi-
9 ness practice by the citizenship project – as a process it has to run
10 alongside, often integrating with, the other aspects of management.
1 Products and services have to be produced efficiently and to good
2 quality and be cognisant of customer needs. Some of the commer-
3 cial problems companies have had are not the result of their
4 citizenship activities, but because they took their eye off the ball
5 in one of these other areas.7
6 One of my own experiences with a client company makes
7 the point. It involved a company that had a consumable product
8 that was doing badly against its main competitor.8 After sitting
9 through a long presentation from the brand team about the adver-
20111 tising strategy and the core values to be promoted to the target
1 market that had been identified, we were still at a loss as to why
2 it was continuing to lose market share. Finally, I asked whether
3 there was any taste difference between the two brands. Yes there
4 was, in fact, I was told. In taste tests people preferred the competitor
5 brand! My client’s product was just not as good.
6 While this example does not relate specifically to corporate
7 citizenship, the message remains relevant. If you do not have a
8 good product, being a citizen brand in itself will not make many
9 people buy it.
30 The other important area that companies need to concentrate
1 on is innovation. Innovation is the ‘big’ management topic at the
2 moment.9 Being a citizen brand can help innovation as the com-
3111 pany is less detached from society, culture, its customers and their
values. And the combination of being a good citizen and being
1111 innovative is a winning one – indeed, these two factors represent

2 the ideal attributes of a company in consumers’ minds as I showed
3 in Chapter 2.
4
5
6 WHO CAN BE A CITIZEN BRAND?
7
8 When I first started researching this book I was not at all clear
9 that all companies would benefit from becoming a citizen brand
10 – surely, some would not have the resources or inclination to
1 embrace the concept. Others might have too much historical
2 baggage to do it – a corporate culture that was just too dissonant
3 with the idea. But, in the course of writing the book, I have
4 formed the view that, as a concept, or perhaps more as a metaphor,
5 it can apply to all businesses.
6 It is because it is not about benefaction and the use of resources
7 that could be applied to other areas of business operations that
8 it is generally applicable. It is because it is about an investment
91111 in the future, in stability, in research, in customers and employees
20111 that it has relevance for all. Some will do it more comprehen-
1 sively and better than others (and reap the rewards accordingly),
2 but there are elements that all companies can embrace. It is as
3 much a frame of mind as a specific set of actions that can be
4 implemented.
5 It is reasonable to suggest that given the tremendous financial
6 struggles they often face, small and medium-sized businesses should
7 be exempt from acting as good citizens. However, such firms are
8 arguably closer to the environments they work in and the people
9 (employees or suppliers) they work with. For them, therefore,
30 corporate citizenship – particularly that with a local focus – may
1 be very important. Not least, this is because it impacts on the
2 reputation of the company in the local area, and hence word of
3 mouth recommendations, which for many small businesses are an
4111 essential ingredient of success.
236 CITIZEN BRANDS
1111 So, the prospect of being a citizen brand is open to every

2 organisation. But it can only be obtained by those businesses who
3 want not only to be successful but who also care about the state
4 of the world they operate in.
5 A company may be tempted by the potential commercial bene-
6 fits that being a citizen brand offers. But, if its managers do not
7 care about excessive executive pay or child poverty or depriva-
8 tion in the third world or the work–life balance of their employees
9 – if they do not really care about any of these things at all – there
10 is no point in pursuing the idea. The insincerity of any citizen-
1 ship initiatives, the fact that they are not embedded in the core
2 values of the organization, will nullify any potentially positive
3 effects.Worse, it might even create increased cynicism and a reduc-
4 tion in brand equity. Companies that do not care cannot be citizen
5 brands.
6 If, on the other hand, the corporate leaders accept that
7 companies have wider roles and relationships with society; if they
8 are concerned about their employees having a life outside work,
9 the lack of opportunities for inner city ghetto children, the impov-
20111 erishment of the third world, the environmental future of our
1 planet; if they are concerned about any one of these or other
2 social and economic issues, then they have a wonderful oppor-
3 tunity. Their company can become a citizen brand. It is not only
4 the smart business call, but it is no less than their duty. They owe
5 it to their shareholders, to their employees, to their customers, to
6 society.
7
8
9
30
1
2
3111
1111
2
3 CHAPTER 6
4
5
6
7
NOTES
8
9
10
1
2
3
4
5 INTR ODUCT I O N
6
7 1 The Responsible Organisation, the Future Foundation/BT, 1997 (available from
the Future Foundation).
8 2 Just because I use the term ‘relationship’ does not mean that consumers,
91111 for example, feel they have a ‘relationship’ as such with a company. Indeed,
20111 research shows that it is one of the least likely words consumers would use
when talking about companies they buy from, even ones where they do
1 so on a regular basis. (See, for example, The Loyalty Paradox, Brann, 1995.)
2 Therefore, I use the term not in that personal way that individuals might
use it, but rather to describe the broad links that exist between companies
3 and individuals and other organizations, and the areas of mutual interest.
4 3 See, for example, Will Hutton’s Society Bites Back, quoted in Chapter 3.
5 4 James C. Collins and Jerry I. Porras, Built to Last, Century Books, 1996.
5 The research was carried out jointly with Consumers’ Association and
6 Richmond Events and is discussed in more detail in Chapter 2.
7 6 Manuel Castells, The Rise of the Network Society, Blackwell Publishers, 1996.
8 7 A term first coined by sociologist Frank Furedi in his book The Culture of
Fear, Continuum Publishing Group, 1997.
9
30
1 1 THE CA S E F O R C I T I Z E N B R A N D S
2 1 Financial Times, 17 October 2000.
3 2 The Inclusive Approach and Business Success, Centre for Tomorrow’s Company,
1998.
4111
238 NOTES
1111 3 Introduction to Corporate Social Responsibility, Business for Social Responsibility

web site, www.bsr.org
2 4 A New Vision for Business, Committee of Inquiry report to the British
3 Government, Summary Report, 1999.
4 5 Joel Schwartz, Corporate Philanthropy Today: from AP Smith to Adam Smith,
Hudson Institute Working Paper, 1996.
5 6 According to McIntosh, Leipziger, Jones and Coleman,‘PIRC, pensions con-
6 sultancy, said [of the Hempel report] that there were “many questions unan-
7 swered”, and the Centre for Tomorrow’s Company said that the committee
had “missed a golden opportunity to broaden the approach to governance of
8 British Companies”. . . . It is clear that the Hempel Committee failed to meet
9 the mood of the times.’ Corporate Citizenship, Financial Times Pitman Publish-
10 ing, 1998.
7 Corporate Governance 2000, PIRC, report in Financial Times, 20 November 2000.
1 8 ‘Three surveys on corporate governance’, The McKinsy Quarterly 2000:
2 Number 4. Asia Revalued, 2000.
9 State of Working America 2000–2001, Cornell University Press, 2001.
3 10 John E. Core, Richard W. Holthausen and David F. Larcker, Corporate
4 Governance and Firm Performance, The Wharton School, University of
5 Pennsylvania.
11 Ahmed Riahi-Belkaoui, Corporate Social Awareness and Financial Outcomes,
6 Quorum Books, 1999.
7 12 Kotter and Heskett, Corporate Culture and Performance, The Free Press
8 Macmillan Inc., 1992.
13 Quoted in Introduction to Corporate Social Responsibility, op. cit.
9 14 Introduction to Corporate Social Responsibility, op. cit.
20111 15 Quoted in Collins and Porras, Built to Last, op. cit.
1 16 David Packard, A Management Code of Ethics, speech presented to the American
Management Association, 1958 – quoted in Built to Last, op. cit.
2 17 Carly Fiorina, Commencement Address, Massachusetts Institute of
3 Technology, 2000.
18 Sunday Times, 8 October 2000.
4 19 Financial Times, Mastering Management Part Seven, 13 November 2000.
5 20 Robert Waterman, Frontiers of Excellence – Learning from Companies that Put
6 People First, Nicholas Brealey, 1994.
21 Business for Social Responsibility, op. cit.
7 22 Bill Catlette and Richard Hadden, Contented Cows Give Better Milk, Saltillo
8 Press, 1998 – quoted by Business for Social Responsibility.
9 23 RSA Inquiry Tomorrow’s Company, Centre for Tomorrow’s Company, 1995.
24 Financial Times, 9 February, 1997. See also, Linda Bilmes and Konrad Wetzker,
30 People Factor: People Factor, Financial Times Prentice Hall, 2000.
1 25 Business for Social Responsibility, op. cit.
2 26 Gary Hamel and C.K. Prahalad, Competing for the Future, Harvard Business
School Press, 1994.
3111 27 Randall L.Tobias, The Best Days, Address to shareholders at the annual meet-
ing, Eli Lilly, 1995.
NOTES 239
1111 28 Lynda Gratton, Living Strategy: Putting People at the Heart of Corporate Purpose,
Prentice Hall, 2000.
2 29 Guardian, 27 October 1999.
3 30 Independent, 30 June 1999.
4 31 Business for Social Responsibility, op. cit.
32 Author’s personal discussions with the company.
5 33 Guardian, May 1997.
6 34 Financial Times, 21 April 1997.
7 35 Does Improving a Firm’s Environmental Management System and Environmental
Performance Result in a High Stock Price?, ICF Kaiser, 1997.
8 36 Financial Times, 3 July 1996.
9 37 Quoted in A New Vision for Business, op. cit.
10 38 Ahmed Riahi-Belkaoui, Corporate Social Awareness and Financial Outcomes,
op. cit.
1 39 The Social Investment Forum, www.socialinvest.org
2 40 Quoted in John Hancock, The Ethical Investor, Financial Times Prentice
Hall, 1999.
3 41 Financial Times, 27 June 2000.
4 42 Ibid., 24 November 1996.
5 43 Will Hutton, Society Bites Back, Industrial Society, 2000.
44 In The Future of Brands, Macmillan Press, 2000, Rita Clifton and Esther
6 Maughan of Interbrand define a brand as ‘a mixture of tangible and intan-
7 gible attributes, symbolised in a trademark, which if properly managed,
8 creates influence and generates value’.
45 Interestingly, Clifton and Maughan note how many of the contributors to
91111 their book ‘talked about the increasing importance of brands as relation-
20111 ships’, ibid.
1 46 I briefly discuss this issue further in Chapters 4 and 8.
47 Richard Branson, Losing my Virginity, Virgin Publishing, 1998.
2 48 The Virgin Story, company web site, www.virgin.com
3
4
2 BRA NDS , C I T I Z E N S H I P A N D
5 CONSUM E R S
6
7 1 For fuller details of the project and its conclusions see the published report
The Responsible Organisation, op. cit.
8 2 Richmond Events is an international conference and events organizer.
9 Consumers’ Association is the leading UK consumer organization and
publisher of Which? magazine. The results of the research were presented at
30 various Richmond Events conferences during 1998 and 1999 and a report
1 of the research is available from the Future Foundation. See too, Michael
2 Willmott, Why Corporate Citizenship Pays, Market Leader, Autumn 1999
and Michael Willmott and Paul Flatters,‘Corporate citizenship: the new chal-
3 lenge for business?’, Consumer Affairs, volume 9, no. 6, November/December
4111 1999.
240 NOTES
1111 3 nVision is a subscription service from the Future Foundation that combines
an extensive on-line data and analytic resource with workshops and brief-
2 ings about future trends.
3 4 The Responsible Organisation, op. cit.
4 5 Gallup, 1999.
6 The Responsible Organisation, op. cit.
5 7 Ibid.
6 8 Background report available from the Co-operative Bank web site (www.co-
7 op.co.uk) or Future Foundation.
9 Richmond Events, Consumers’ Association, Future Foundation, op. cit.
8 10 Correspondence analysis is a statistical technique used to represent the results
9 of a cross-tabulation in a two-dimensional map. The
10 dimensions are statistical ones chosen to show to maximum effect the simi-
larities and differences between the companies and adjectives. The way to
1 read the map is by looking at which adjectives are closest to which brand
2 – on the whole these are the adjectives that scored relatively more highly
for that company rather than others.
3 11 The Future of Brands, Interbrand, Macmillan Press, 2000. Interbrand define
4 brand value as the net present value of the economic profit that the brand
5 is expected to generate in the future.
12 Financial Times, 17 June 1998.
6 13 Ibid., 27 March 2000.
7 14 Ibid.
8 15 nVision, Future Foundation, op. cit.
16 In fact, I developed an index by scoring the responses to each question
9 and adding them together. The result for each respondent was a score from
20111 2 to 10, where a high score indicated a more ‘ethical’ stance.
1 17 In this instance, not only those agreeing but also those saying they could
neither agree nor disagree were included. It seems to me that it is accept-
2 able to interpret a lack of positive agreement with the statement as a degree
3 of reticence about corporate behaviour. Certainly, the use of the word ‘most’
in the question may have made it harder for respondents to disagree directly
4 since, for example, they might hold the view that many smaller, local
5 companies are fair. Certainly, there is evidence that what antagonism there
6 is, is directed towards larger, multinational companies who, with global
consolidation, are likely to represent a smaller proportion of the total number
7 of firms (see Chapter 9).
8 18 Richmond Events, Consumers’ Association, Future Foundation, op. cit.
9 19 Respondents were given the following text and then asked whether they
felt the named company operated in this way:
30
Nowadays some people argue that companies need to recognise that
1 they have an important role in society beyond just providing goods and
2 services and employment for people. Indeed, it is suggested that it is in
3111 a company’s own interest to be a good ‘citizen’: that is to recognise that
it has a role to play in maintaining a happy and cohesive society. This
NOTES 241
1111 could be through being a good employer, helping with social problems
or actively participating in debate and analysis about social and eco-
2 nomic issues (by, for example, getting its executives to work with gov-
3 ernment).
4 Although nearly 70 per cent of respondents thought companies generally
5 should ‘definitely’ behave like this (and a further quarter ‘possibly’) only 13
per cent felt specific named companies did act ‘a great deal’ like this at
6 present, with an additional 30 per cent saying they mostly did.
7 20 This is the classic statistical ‘problem’ of multicollinearity.
8
9
10 3 BEY OND P H I L A N T H R O P Y
1
1 David J. Jeremy Capitalists and Christians, Clarendon Press, 1990.
2 2 Ibid.
3 3 Gillian Wagner The Chocolate Conscience, Chatto & Windus, 1987.
4 4 Wilson, C. The History of Unilever, vol. 1, 1954.
5 Detroit News, 14 November 1916, cited in Collins and Porras, Built to Last,
5 Century, 1996.
6 6 Robert Lacey, Ford – The Men and the Machine, Ballantine Books, 1986.
7 Gekko was the main character played by Michael Douglas in Oliver Stone’s
7
1987 film Wall Street.
8 8 Francis Fukuyama, The End of History and the Last Man, Penguin Books,
91111 1993.
9 Interview with a business leader, The Responsible Organisation, Future
20111 Foundation, 1997.
1 10 Naomi Klein, No Logo, Flamingo, 2000 – see also Chapter 9.
2 11 George Monbiot, Captive State: The Corporate Takeover of Britain, Macmillan,
2000 – see also Chapter 9.
3 12 Policy Studies, Policy Studies Institute, 1991.
4 13 Andrew Wilson, Director of Ashridge’s Managing Corporate Community
5 Involvement programme, writing in Ashridge’s journal, Directions, October
1995.
6 14 Society Bites Back, Will Hutton, The Industrial Society, 2000.
7 15 Samuel Brittan, Financial Times, 1 February 1996.
16 Samuel Brittan, Financial Times, 8 July 1999.
8
17 Alastair Ross Goobey, Financial Times, 14 July 1999.
9 18 Mark Goyder, Financial Times, 23 July 1999. See also the Tomorrow’s Company
30 Inquiry report (mentioned in Chapter 1) which noted that ‘For directors
not to give appropriate weight to all the company’s key relationships may
1 well be a breach of their fiduciary duty’.
2 19 See, for example, John Elkington, Cannibals with Forks: The Triple Bottom
3 Line of 21st Century Business, Capstone, 1997.
20 James C. Collins and Jerry I. Porras, Built to Last, Century, 1996.
4111
242 NOTES
1111 4 A M OD E L F O R C I T I Z E N B R A N D S
2
1 In reality, of course, many people are sympathetic to all or most of these
3 causes – and there is an undeniable left-of-centre stance to all this. But,
4 the broad citizenship canvas does still bring together conservatives seeking
5 corporate help with, say, animal rights or local arts funding and left-wingers
campaigning to improve pay and conditions for workers or to counter
6 human rights abuses.
7 2 ICF Kaiser report noted in Chapter 1.
3 Collins and Porras, Built to Last, op. cit.
8 4 See, for example, Work-life Strategies for the 21st Century,The National Work-
9 Life Forum, 2000.
10 5 While I am an animal lover myself, I have to admit that given the choice
of whether new medicines or cosmetics should be tested on animals or
1 humans, I would choose the former. Perhaps, the protesters would prefer
2 that the new products and treatments were not tested at all but this would
3 lead either to potentially unsafe products being foisted on the public or no
new developments at all – a form of extreme conservatism embodied in
4 the Precautionary Principle that I discuss in Chapter 8. Whatever one’s
5 views on this, I could not condone the use of violence, either real or threat-
6 ened.
6 Who are the Ethical Consumers?, Co-operative Bank, 2000.
7 7 Ibid.
8 8 Policy Studies, op. cit.
9 Executive interviews with business leaders quoted in The Responsible
9 Organisation, op. cit.
20111 10 Sir Iain Vallance and Sir Peter Bonfield in BT’s Community Partnership
1 Programme Report, BT Cares, 1997.
11 Why do we have a Commitment to the Community?, Marks and Spencer web
2 site, www.marksandspencer.com
3 12 Autocar India, January 2000.
4 13 See, for example, Peters and Waterman’s In Search of Excellence, HarperCollins,
1995; plus their individual works.
5 14 Gary Hamel and C.K. Prahalad, Competing for the Future, Harvard Business
6 School Press, 1994.
7 15 Drucker is a prodigious writer and many of his texts are relevant here. For
example, Post-capitalist society, Butterworth-Heinemann, 1993.
8 16 Viscount Leverhulme, quoted in David Ogilvy, Confessions of an Advertising
9 Man, Atheneum, 1980.
17 Mike Hall, How Advertisers Think Marketing Works, British Market Research
30 Society Annual Conference, 1991.
1 18 See, for example, Mike Hall, ‘How advertising works: new steps on the
2 advertising timeline,’ Paper given to the APG Conference – Boston, 1998.
19 Whether this was the right advertising model to use when you are being
3111 accused of being insensitive to customers needs (because you are closing hun-
dreds of local branches) is, to say the least, a moot point.
NOTES 243
1111 20 Mike Hall, ‘How advertising works: new steps on the advertising timeline,’
op. cit.
2 21 John Kay, Financial Times, 14 March 1997.
3 22 ‘How advertising impacts on profitability,’ Leslie Butterfield, IPA, Advalue
4 Issue One, September 1998.
23 The PIMS database was established in 1972 and now covers more than
5 3000 companies. It contains a range of data on each company covering
6 financial, marketing and market characteristics. More details about PIMS
7 are contained in The PIMS Principles, R. Buzzell and B. Gale, Free Press,
1987.
8 24 ‘How advertising impacts on profitability,’ Leslie Butterfield, op. cit.
9 25 Ibid.
10 26 Alan McWalter, when Marketing Director at Woolworths.
1
2
5 PEA CE A N D P L E N T Y
3
4 1 Oliver James, Britain on the Couch: Why are we Unhappier Compared to the
5 1950s – Despite Being Richer?, Arrow, 1998.
2 Andrew Oswald, ‘Happiness and economic performance’, Economic Journal,
6 107, 1997.
7 3 Juliet Schor, The Overworked American, Basic Books, c 1991.
8 4 Juliet Schor, The Overspent American, Basic Books, c 1998.
5 John P. Robinson and Geoffrey Godbey, Time for Life, Penn State Press,
91111 1997.
20111 6 Robert H. Frank, Luxury Fever: Why Money Fails to Satisfy in an Era of
1 Success, Free Press, 1999.
7 John P. Robinson and Geoffrey Godbey, Time for Life, op. cit.
2 8 Jonathan Gershuny and Kimberly Fisher, Leisure in the UK Across the 20th
3 Century, Institute for Social and Economic Research, Essex University,
4 Working Paper, 99-3, 1999. Also published in A.H. Kalsey (ed.), British Social
Trends: the 20th Century, Macmillan, 1999.
5 9 Jonathan Gershuny, first published in Prospect magazine, but similar patterns
6 are observable in Jonathan Gershuny and Kimberly Fisher, Leisure in the
UK Across the 20th Century, op. cit. See also Complicated Lives, Abbey
7 National/Future Foundation, available from the Future Foundation, 2000,
8 and The Millennial Family, Boarding Education Alliance/Future Foundation,
9 1998. Note that Robinson and Godbey do not find any increase in child
care time in the United States but that ‘contrary to popular belief . . . both
30 employed and non-employed women in 1985 spent just as much time in
1 child care as those in the 1960s’.
2 10 John Seely Brown and Paul Duguid, The Social Life of Information, Harvard
Business School Press, 2000.
3 11 Out of politeness for those in my fellow profession I will not name the
4111 specific organizations involved.
244 NOTES
1111 12 Jim Murphy is Director of Model Reasoning and an Associate of the Future
Foundation and has developed the idea of Peace and Plenty for both his
2 own work and for the Future Foundation. All the main tenets of the argu-
3 ment as outlined here were first developed and articulated by him. I,
4 however, take responsibility for this particular description and some of the
interpretations.
5 13 Source: National Statistics.
6 14 MORI, www.mori.com
7 15 The survey is carried out as part of the Future Foundation’s nVision service.
16 Melvyn Bragg, The Soldier’s Return, Hodder and Stoughton, 1999.
8 17 David Gordon et al., Poverty and Social Exclusion in Britain, Joseph Rowntree
9 Foundation, 2000.
10 18 For example, Ulrich Beck believes that ‘Any attempt to create a new sense
of social cohesion has to start from the recognition that individualism, diver-
1 sity and scepticism are written into Western culture’. If cohesion is
2 dependent on diversity and individual needs, then is a search for unifor-
mity in income distribution a suitable strategy? Ulrich Beck, in On the
3 Edge, edited by Anthony Giddens and Will Hutton, Jonathan Cape, 2000.
4 19 I see little evidence as yet of the development of a ‘culture of envy’ but it
5 clearly will develop if income polarization continues unabated.
20 Source: National Statistics.
6 21 James Banks and Sarah Tanner, Household Saving in the UK, Institute of
7 Fiscal Studies, 1999.
8 22 Abraham Maslow, Motivation and Personality, Harper, 1954.
23 Ronald Inglehart, Modernization and Postmodernization, Princetown
9 University Press, 1997.
20111 24 The Millennium Poll on Corporate Social Responsibility, Conducted by
1 Environics International Ltd in cooperation with The Prince of Wales
Business Leaders Forum and The Conference Board, 1999.
2 25 Respondents were asked to define a company’s role: (a) ‘Focus
3 on making a profit, paying taxes and providing employment in ways that
obey all laws’ or (b) ‘Do all this in ways that set higher ethical standards,
4 going beyond what is required by law, and actively helping to build a better
5 society for all’ or (c) ‘Operate somewhere between these two points of
6 view’. The figure plotted in the graph is the proportion giving answer (b)
minus those choosing (a).
7 26 Who are the Ethical Consumers? Co-operative Bank, 2000. These data are
8 from the background report available from the Co-operative Bank website,
9 www.co-op.co.uk
27 MORI defined ‘post materialists’ in the same way as Inglehart (op. cit.) did
30 in his study that found increasing numbers of them over time.
1 28 John Gray, False Dawn – the Delusions of Global Capitalism, New Press, 1999.
2 29 Jeff Faux and Larry Mishel, in ‘Inequality and the global economy’, in On
the Edge, edited by Anthony Giddens and Will Hutton, Jonathan Cape, 2000.
3111 30 Shiva uses particularly strong language labelling globalization as ‘environ-
mental apartheid’ and blaming it for ‘the piracy of third world biological
NOTES 245
1111 and intellectual wealth’.Vandana Shiva, ‘The world on the edge’, in On the
Edge, op. cit.
2 31 David Dollar and Aart Kray, Growth is Good for the Poor, World Bank, 2000.
3 32 Interestingly, research studies differ on whether employees actually feel less
4 secure in their jobs. Recent analysis of British Household Panel Study data
by the Institute of Social and Economic Research at Essex University
5 suggests that during the course of the 1990s there has not been an increase
6 in the proportion of workers feeling insecure in their jobs. Data available
7 from the Future Foundation or ISER.
33 Charles Leadbeater, Living on Thin Air, Viking, 1999.
8 34 Mark Lilla, ‘A tale of two reactions’, New York Review of Books, 14 May
9 1998.
10 35 Philip Stephens, Financial Times, 6 November 1998.
1
2 6 BEY OND ‘ E N D I S M ’
3 1 In this chapter I concentrate on digital technology but, of course, there is
4 another technological revolution around the corner – bio-technology and
5 genomics. The impact of these could be even more important but the exact
extent is far less clear at present. I do, tangentially, address some of the
6 potential problems of bio-technology in Chapter 8.
7 2 Xerox’s Palo Alto Research Center (PARC) is renowned for its research
8 and development work. Seely Brown and Duguid note in The Social Life
of Information, Harvard Business School Press, 2000 that it ‘developed the
91111 elements of the personal computer’ and specially, but not only, the concept
20111 of the ‘graphical user interface’ (GUI). The story of how Xerox was unable
1 to exploit the GUI idea, allowing Steve Jobs from Apple to license it from
PARC, incorporate it into Apple’s Macintosh computer and change the
2 face of the PC ‘desktop’, has now entered folklore.
3 3 John Seely Brown and Paul Duguid, The Social Life of Information, Harvard
Business School Press, 2000.
4 4 To be honest, I have myself occasionally lapsed into such simplistic pro-
5 nouncements. To be fair to myself and others, though, and
6 although it is not always made clear, there is often an implicit, if
not explicit, ‘as we currently know it’ qualification to these state-
7 ments.
8 5 Although I couldn’t agree with the general admonition of futurologists per
9 se.
6 A particular favourite is Stewart Brand’s book, The Clock of The Long Now,
30 Phoenix Press, 1999 which, although it has a broader theme, provides a
1 very coherent and compelling analysis of the importance of both Moore’s
2 Law and Metcalfe’s Law. A good history of the microchip is provided in
George Gilder’s Microcosm, Simon and Schuster, 1989, while Bill Gates’ take
3 on the early days as described in The Road Ahead, Viking Books, 1995 is
4111 also interesting. Some of Gates’ prognostications are not too bad either.
246 NOTES
1111 7 What became known later as Moore’s Law was first postulated by Gordon E.
Moore in a paper in the technical journal Electronics on 19 April 1965.Then
2 head of electronics at Fairchild Camera and Instrument Corporation (later he
3 was co-founder of Intel), Moore’s paper noted that between 1959 and 1965
4 the number of components (transistors) that could fit on a chip had doubled
every year. He predicted that this would continue, a prediction that was
5 amended to doubling every 18 months following what in fact happened
6 between 1965 and 1975.The prediction has remained remarkably accurate up
7 to the present day. The impact is astounding, particularly as the acceleration
continues. (Source: Stewart Brand, The Clock of the Long Now, op. cit.)
8 8 In mathematical terms, if V equals value and N equals the number of network
9 users then the Law can be denoted as V = N 2. In reality, the real formula is V
10 = N (N ⫺ 1) since in a net of ten users, each has nine others they can connect
to – the total number of connections is 10 × 9 = 90. But if you double the
1 number of users (to 20) each has 19 possible connections equalling a total of
2 380. A doubling of users has led to around a fourfold increase in connections
(and hence value).Ten times the number of people equals roughly a hundred
3 times the value; a thousand times the people gives around a million times the
4 value. (Source: ibid.)
5 9 Ibid.
10 Throughout the rest of this chapter, when I refer to the uses of ‘mobile phones’
6 I sometimes use it as a generic term that includes other small portable devices
7 – in other words including personal digital assistants or portable ‘tablets’.
8 11 Anthony Giddens, The Runaway World, BBC Reith Lectures, 1999.
12 Stewart Brand, The Clock of the Long Now, op. cit.
9 13 Anthony Giddens, op. cit.
20111 14 Quoted in Charles Leadbeater, Living on Thin Air, Penguin Books, 2000.
1 15 Manuel Castells, The Rise of the Network Society, op. cit.
16 Jonathan Gershuny and Kimberly Fisher, Leisure in the UK Across
2 the 20th Century, Institute for Social and Economic Research, Essex
3 University, Working Paper, 99-3, 1999. Also published in A.H. Kalsey (ed.),
British Social Trends: the 20th Century, Macmillan, 1999.
4 17 Jonathan Gershuny, first published in Prospect magazine, but similar patterns are
5 observable in Jonathan Gershuny and Kimberly Fisher, Leisure in the UK Across
6 the 20th Century, op. cit.
18 See, for example, www.adbusters.com
7 19 I am thinking here specifically of the sociological theory of social exchange
8 first proposed by Peter Blau in Exchange and Power in Social Life, John Wiley,
9 1964. Interestingly, the theory argues that trust is the critical element in social
‘exchanges’, reinforcing the importance of this in consumer and business
30 exchanges too.
1
2 7 COPI NG W I T H C H O I C E
3111 1 I wonder how much this view is – as in the discussion about ‘peace and plenty’
– a romanticized memory of the past. My own recollection from the 1960s is
NOTES 247
1111 of a sometimes poor, certainly inconsistent and occasionally even grumpy, ser-
vice. Perhaps, though, my experience in London, where I was living, was not
2 typical of the country at large, or, indeed, of other countries.
3 2 Complicated Lives, op. cit.
4 3 Ibid.
4 Ibid.
5 5 Source: A.C. Nielsen.
6 6 Ibid.
7 7 OFTEL suggest that you can assume that the average consumer now has
at least three suppliers to choose from in the fixed line market. This is an
8 absolute minimum, because issues arise about how to classify card opera-
9 tors who offer international discounts, re-sellers, etc. To the three fixed line
operators, we add the four mobile suppliers. Source: From Doormat to Digital:
10 the Future for Bill Payments, nPower/Future Foundation, 2000.
1 8 The research was conducted for the Future Foundation’s nVision service,
2 op. cit.
9 From Doormat to Digital: the Future for Bill Payments, nPower/Future
3 Foundation, 2000.
4 10 Complicated Lives, op. cit.
11 Ibid.
5
12 I am perhaps not completely objective on this point as one of my teenage
6 children is a constant clothes shopper and continually complains about the
7 lack of suitable clothes to wear.
13 Complicated Lives, op. cit.
8 14 Ibid.
91111 15 Ibid.
20111 16 The Future of Brands, edited by Rita Clifton and Esther Maughan,
Interbrand/Macmillan Press, 2000.
1
2 8 SURVI V I N G A C U LT U R E O F F E A R
3
1 Reuters, 24 July 2000.
4 2 New York Post, 25 July 2000.
5 3 www.ci.nyc.nc.us
6 4 www.cdc.gov
5 Associated Press, London, 5 May 2000.
7 6 New York City Department of Health web site, www.ci.nyc.ny.us/
8 html/doh/
9 7 See, for example, the European Commission’s statement of its approach to, and
guidelines for the use of, the principle in Communication from the Commission
30 on the Precautionary Principle, Commission of the European Communities, 2
1 February, 2000.
2 8 Karl Popper, The Logic of Scientific Discovery, Hutchinson, 1959.
9 Stewart Report, Independent Expert Group on Mobile Phones, c/o National
3 Radiological Protection Board, 2000 (also available at www.
4111 iegmp.org.uk).
248 NOTES
1111 10 See for example the well-publicized case of Lord Peter Melchett,
Greenpeace campaigner, who led a group of activists to destroy a GMO
2 test site. He and his fellow protesters were subsequently, and amazingly,
3 acquitted of an illegal act.
4 11 Norman Levitt, Professor of mathematics, Rutgers University; author,
Prometheus Bedeviled: Science and the Contradictions of Contemporary Culture –
5 Author’s notes from the Precautionary Principle Conference, op. cit.
6 12 Financial Times, 12 May 2000.
7 13 Author’s notes from the Precautionary Principle Conference, op. cit.
14 Social Issues Research Centre, http://www.sirc.org/articles/beware.html
8 15 Freeman Dyson, Imagined Worlds, Harvard University Press, 1997.
9 16 ‘Chronic systemic pesticide exposure reproduces features of Parkinson’s
10 disease’, R. Betarbet,T.B. Sherer, G. Mackenzie, M. Garcia-Osuna,A.V. Panov
and J.T. Greenamyre, Nature Neuroscience, volume 3, no. 12, December 2000.
1 17 Interestingly, those who have argued against GMOs have not suggested this
2 course of action as they are, on the whole, great supporters of organic
farming. This points again to the political agenda underlying the debate
3 about the precautionary principle.
4 18 Frank Furedi, The Culture of Fear, Cassell, 1997.
5 19 Ibid.
20 General Household Survey available from National Statistics.
6 21 British Crime Survey 2000, Home Office.
7 22 Barry Glassner, The Culture of Fear, Basic Books, 1999.
8 23 Ibid.
24 Food Crimes, Co-operative Wholesale Society, 2000.
9 25 New York Times, 30 July, 2000.
20111 26 Stuart Sutherland, Irrationality: The Enemy Within, Constable, 1992.
1
2 9 SO-SO LOGO
3
1 Naomi Klein, No Logo, Flamingo, 2000.
4 2 Ibid.
5 3 George Monbiot, The Captive State: the Corporate Takeover of Britain,
6 Macmillan, 2000.
4 Ibid.
7 5 Claire Short, quoted in the Financial Times, 26 September, 2000.
8 6 Attributed to Claire Short in the Financial Times, 26 September, 2000.
9 7 Kofi Annan, quoted in Responsible Business, The Prince of Wales Business
Leaders Forum and the Financial Times, 8 November 2000.
30 8 Naomi Klein, No Logo, op. cit.
1 9 Business Week, 11 September 2000.
2 10 nVision/Future Foundation.
11 The remainder, around a third of respondents, said they neither agreed nor
3111 disagreed. In the rest of this chapter, where I quote agree and disagree figures,
the remainder will always be in the ‘neither’ category.
NOTES 249
1111 12 John Vidal, McLibel: Burger Culture on Trial, Macmillan, 1997; David C.
Korten, When Corporations Rule the World, Earthscan, 1996.
2 13 Charles Handy, Empty Raincoat, Arrow, 1995.
3 14 Anthony Giddens,Analysis Programme, BBC Radio 4, February 1997.
4 15 The exact question wording here was ‘Overall I think global capitalism
benefits all’.
5 16 This was based on four different questions about attitudes to multinationals.
6 17 Laura Oswald, ‘The place and space of consumption in a material world’,
7 Design Issues, Volume 12 (1), 1996.
18 Wendy Gordon and Virginia Valentine, The 21st Century Consumer, Market
8 Research Society Annual Conference Proceedings, 2000. See also the work
9 of the French school of sociology – for example, Pierre Bourdieu, Roland
10 Barthes and Jean Baudrillard.
1
2 10 BUTTERFLY CONSUMERS
3 1 David Butler, Financial Times, 29 September 2000. Butler’s figures represent
the average across a range of polls so do not tally exactly with the MORI
4 figures shown in the chart.
5 2 This term is derived from the title of Paul Ormerod’s book Butterfly
6 Economics, Faber and Faber, 1998.
3 Manuel Castells, Wired Magazine, November 1998.
7 4 Inside Information, a report for BT by the Future Foundation, 1997. Available
8 from the Future Foundation.
5 Carl Shapiro and Hal R. Varian, Information Rules: A Strategic Guide to the
91111
Network Economy, Harvard Business School Press, 1999.
20111 6 Malcolm Gladwell, The Tipping Point, Little, Brown and Company, 2000.
1 7 Carl Shapiro and Hal R. Varian, op. cit.
8 Bosses must learn from boffins, Daily Telegraph, 27 October 1999.
2 9 Malcolm Gladwell, The Tipping Point, op. cit.
3 10 Paul Ormerod, Butterfly Economics, op. cit.
4 11 Future Foundation, Shopping Futures Study – Diary Study, 1998.
12 He described some of the jewellery as ‘crap’.
5 13 Knox and Dennison, Profiling the Promiscuous Shopper: Evaluating Shopper
6 Loyalty, Cranfield University, 1993.
14 The Loyalty Paradox, Brann, 1995.
8 16 Personal correspondence with the author.
9 17 W.B. Arthur, ‘Competing technologies, increasing returns and lock-in by
historical processes’, Economic Journal, September 1989 is one of the very
30 earliest pieces of work in this whole area.
1 18 A. Kirman, ‘The behaviour of the foreign exchange market, Bank of England
2 Quarterly Bulletin, 1995.
19 A. De Vany and W.D. Wallis, Economic Journal, November 1996.
4111 21 Roger Lewin and Birute Regine, The Soul at Work, Orion, 1999.
250 NOTES
1111 22 I am indebted to my colleague Michael Campbell who heads up the Future

Foundation’s MathMatters subsidiary who not only built these models but
2 who has spent many hours discussing the concepts and issues with me.
3 23 Roger Lewin and Birute Regine, The Soul at Work, op. cit.
4 24 As quoted on Amazon’s web site – www.amazon.com
5
6 1 1 B EC OM I N G A C I T I Z E N B R A N D
7 1 Some of these examples are also covered in either Chapter 1 or Chapter
8 4.
2 The Responsible Organisation, op. cit.
9 3 Work–life strategies for the 21st century, The National Work–Life Forum, 2000.
10 4 Financial Times, 27 April 2000.
1 5 Extract from BBC Radio 4’s Today programme, published in the Guardian,
8 April 2000.
2 6 Charles J. Fombrun, ‘The value to be found in corporate reputation’,
3 Financial Times Mastering Management series, 4 December 2000.
7 I gave the example of Marks and Spencer in Chapter 1.
4 8 For obvious reasons of confidentiality, I cannot identify either the specific
5 product or the category.
6 9 See, for example, Gary Hamel’s latest book Leading the Revolution, Harvard
Business School, 2000.
7
8
9
20111
1
2
3
4
5
6
7
8
9
30
1
2
3111
1111
2
3
4111
5
6
INDEX
7
8
9
10
1
2
3
4
5 Abbey National 148, 149, 155 aspirational consumption 115, 126
accountability, company directors
6 75–6 B&Q 47
7 advertising backward-looking principles
8 consumer trust 45, 57–9 179–80
corporate citizenship process Bain & Co 20
9 98–100 Banham, John 72–3, 90
20111 models 93–7 Barclays Bank 18–19, 45–7, 231–2
see also marketing BBC 45, 47
1 affluence, corporate citizenship Ben and Jerry’s 27
2 attitudes 118 benefaction 3, 4, 78, 228
3 age, consumers 197–200 see also philanthropy
aging population 55, 107 Benson, Kleinwort 26
4 Ahmed Riahi-Belkaoui 16–17, 24 Betamax video format 210
5 Alliance for Environmental Bilmes, Linda 20
6 Innovation 24 Blair, Tony 122–3
altruism 34–40, 60 Body Shop
7 anarchy 208 consumer attitude 43, 45, 47–8
8 animal welfare 88 environmental focus 226
9 Annan, Kofi 192 Boots 47–8
anticipating change 135 boycotts 40, 42–3, 201
30 anti-materialism 115 BP 227
1 Apple Macintosh 209, 210 brands
appliances, penetration 115–16 choice managers 160–2
2 arts funding 227 corporate citizenship 78, 100
3111 Asda 47 cynicism 189–90
Ashridge Management College 73 importance 5–6, 200, 202
252 INDEX
1111 loyalty habit 158 clothes 155–6

social constructs 27 Coca Cola
2 Brand, Stewart 247–8 citizenship strategies 51–2
3 Branson, Richard 11–12, 29 consumer attitude 45–6, 47–9
4 British Airways 45–6, 47 market conditions 51
British Telecom (BT) product contamination 211
5 consumer attitude 45, 47 code of best practice, corporate
6 local community 90 governance 16
7 Brittan, Samuel 75 coffee 41, 149–50
BT see British Telecom Collins, James 4–5, 17
8 businesses commercial success see financial
9 consumer attitudes 40–51, 189–202 performance; stock market
10 external focus 91–2, 96, 98, 226 performance
external relationships 77–8, 86, 193 communications
1 fear culture 185 company activities 57–9
2 good business practice 234–5 consumer volatility 208, 215–19
government corruption 191 networks 131, 208–9, 214–19, 248
3 intelligent 91–2 technology 132–3, 140–1, 208
4 small and medium sized 235 telecommunication choices
5 social problem effects 73, 89–90 151–2
Business for Social Responsibility 13, community involvement
6 18 attitudes 68, 90–1, 226–7
7 business intelligence 91–2 corporate citizenship 22–3, 226–7,
8 butterfly consumers 205–21 235
direct corporate impacts 87
9 Cadbury 45, 226 companies
20111 Cadbury Committee 15 consumer attitudes 40–51, 184,
1 Cadbury, George 66–7 189–202
Cafédirect 41 culture 17–19
2 campaigners 141, 211 executive pay 16–17, 74, 193,
3 capitalism 67, 72 230–2
Castells, Manuel 208 management 15–17, 91–2, 233
4 caution, precautionary principle 170–2 see also businesses; multinationals
5 Centre for Tomorrow’s Company ‘compassionate conservatism’ 122
6 12–13, 76 competition 30, 121, 146, 232
CEOs see chief executive officers competitive advantage, globalization
7 change, increasing rate 134–5 121
8 Channel 4 47 complexity, attitudes 153
9 chaos theory 207–9, 220, 221 complexity science 214, 219–20
charity see benefaction computer models 214–20
30 chief executive officers (CEOs) computer technology, market share
1 pay 16–17, 74, 193, 230–2 210
2 responsibilities 233 Confederation of British Industry
children 36, 105–6, 181–2 72–3
3111 choice see consumer choice conference, The Precautionary Principle
Clinton, Bill 122 170–2
INDEX 253
1111 connections 215–19, 218 Consumers’Association 33, 240

conservationists control
2 genetically modified organisms 173 markets 50–1, 232
3 precautionary principle 171, 180 risk assessment 185
4 spraying 169 state 68–72
see also environmentalists The Co-operative Bank 27
5 Conservative governments 71–2 Co-op stores 184
6 consumer choice core ideologies 4–6, 12
7 advisers 159–60 corporate citizenship
brands 160–2 advertising process models 98
8 ethical issues 40–6, 88–9, 158–9 affluence effects 118
9 genetically modified organisms 173 direct impacts 85–92
10 historical perspective 149, 155 honesty 229
increased availability 146–53 importance 5–6
1 limiting options 158, 159 indirect impacts 97–100
2 perception of companies 46–52 limitations 28–30
social issues 88–9 model 83–100
3 strategies 156–8 research results 12–27
4 taste fragmentation 145–6 responsibility contrast 3
5 trends 52–5 strategic development 52,
usefulness 153–6 225–36
6 values 158–9 trust 57
7 consumer goods, penetration 115–16 corporate culture 17–19
8 consumer research corporate governance 15–17, 29
attitudes to companies 40–52, corporate responsibilities
91111 192–5 attitudes 1–3
20111 limitations 13–14 moral obligations 74–5
1 loyalty 55–60 ‘to and for’ 76–7
multinationals 197–200 corporate social responsibility (CSR)
2 social and ethical issues 52–5, 88 13
3 worries and concerns 34–40 corporations see businesses; companies;
consumers multinationals
4 affluence effects 118 crime
5 age effects 197–200 business detriment 89–90
6 attitudes to companies 187–202 consumer concern 35–6
butterfly economics 205–21 food 184
7 cynicism 52–5, 189–202, 236 rates 181–3, 209
8 data protection 141–2 CSR see corporate social
9 empowerment 125–6, 141, 142 responsibility
identity 200 culture
30 loyalty 55–60, 98–100, 158, 202, corporate 17–19
1 212–13, 220–1 of fear 181–6
2 scare stories 186 of immediacy 135–6, 142
terrorism 142, 201 customer value, advertising 96–7
3 volatility 206–21 customers
4111 see also customers importance 77–8
254 INDEX
1111 satisfaction 56 corporate citizenship 23–4, 226–7

see also consumers direct corporate impacts 85
2 cynicism, consumers 52–3, 189–202, personal threat 34, 37
3 236 environmentalists 211, 250
4 ‘epidemics’ 215–19
Daft, Douglas 51–2 ethical issues
5 data protection 141–2 concerns 17–19, 36–7
6 De Beer 227 consumer choice 40–6, 52–5, 88–9,
7 delivery methods 211 158–9
demonstrations 199, 201 evidence, safety 171–2
8 deregulation, world trade 120–1 executive pay
9 diary data citizen brands 230–2
10 out of home activities 137–8 company performance 16–17
working hours 105 consumer attitudes 193
1 digital TV 116, 132 international comparison 74
2 disarmament 107–8 external focus, business 91–2, 96, 98,
disintermediation 160 226
3 Disney 45, 50
4 Dixons 45–6, 47 fair trade 41, 89
5 Dow Chemicals 24, 85 farming 121
down-sizing 20, 121 ‘fat cats’ 74
6 drugs fears
7 illegal 183 changing threats 108–9
8 medical 170–2 culture 181–6
Duguid, Paul 129–30, 142 genetically modified organisms
9 172–6
20111 economic discretion 115–16 innovation 170
1 edited retailing 161 mobile phones 176–9
education personal 34–7
2 company investment 87 precautionary principle 170–2
3 consumer concern 35–6, 38 responses 165–70
Eli Lilly 21 threat perception 178–9, 181–5
4 employment issues financial performance
5 citizen brands 229–30 advertising models 93–7
6 corporate attitudes 85–6 community involvement 22–3
corporate citizenship 19–22 corporate citizenship model
7 employee importance 77–8 83–100
8 job security 121 corporate culture 17–19
9 motivation 20, 22 corporate governance 15–17
philanthropy 67 employee relations 19–21
30 recruitment 19 environmental practices 24
1 ‘endism’ 129 ethics codes 18
2 enlightened self-interest 78–9 executive pay 16–17
environmental issues good business practice 28, 234–5
3111 changing threats 109 market conditions 50–1, 232
consumer choice 41 financial services 159–60
INDEX 255
1111 Fiorina, Carly 11, 18 globalization policies 121–4

flexible working 86 health warnings 178–9
2 Fombrum, Charles J. 233 popularity 205–7
3 food spending 69
4 genetically modified organisms welfare state 68–72
172–6 Goyder, Mark 76
5 health concerns 181 Greenbury Committee 15
6 increased choice 147–9 Greenpeace 211, 250
7 scares 184 grocery products 147–9
Ford, Henry 68
8 Ford Motor Company 68, 87, 90–1, habits, consumer choice 158
9 226 Hall, Mike 93–6, 98
10 forecasting see prediction Hamel, Gary 20
Forest Stewardship Council 89 Hampel Committee 15, 224
1 free market policies 121–4 happiness, measuring changes
2 fuel taxation crisis 205–6 104–5
Furedi, Frank 181 health concerns 165–70, 178–9, 181,
3 Future Foundation 33–4 184
4 health service 35–6, 38, 69
5 genetically modified organisms Hewlett Packard
(GMOs) 40, 172–6 core values 18
6 genetic engineering 174–5 corporate citizenship 11–12, 30
7 Giddens, Anthony 196 employee relationship 21
8 Giuliani, Mayor Rudolph 166–7, 170 performance 29
Gladwell, Malcolm 209, 210–11 World e-Inclusion programme
91111 Glassner, Barry 182–4 22–3, 226–7
20111 globalization hierarchy of needs, Maslow 117–18,
1 attitudes 190–2, 198–9 123–4
consumer influences 125–6 historical perspective, networking
2 employment practices 21–2 215–16
3 perception of threat 119–21 home, technology use 139
political philosophies 121–4 honesty 229, 236
4 relative poverty 113–14 Howard, Melanie 208
5 supermarkets 147–8 Howard Rubenstein Associates
6 young people 197–200 184
see also multinationals human resources
7 GMOs see genetically modified citizen brands 230
8 organisms community involvement 22
9 Godbey, Geoffrey 105 corporate impact 85–6
good business practice 91–2, 234–5 employment strategies 19–22
30 ‘goodwill’ bank 99, 100, 220 recruitment 19
1 governance see also employment issues
2 corporate 15–17, 29 Humphreys, John 231–2
see also management Huntingdon Life Sciences 88
3 governments Hush Puppies 210
4111 cynicism 191 Hutton, Will 26, 75
256 INDEX
1111 IBM 27 John Lewis, consumer attitude

ICF Kaiser 23 47–8
2 identity, brands 200 Johnson & Johnson 78–9
3 immediacy culture 135–6, 142 Johnson, Robert W. Jr 78–9
4 inclusive approach 12–13 ‘just-in-time’ processes 86
income
5 altruism relationship 37, 39 Kay, John 95
6 polarization 72–3, 74, 111–15, 121 Klein, Naomi 72, 189–90, 192, 197
7 independent advisers 159–60 Kodak 45, 47, 50
individualism 110
8 individualization 147–9 Labour governments, legislation 70–1
9 individual rights 122–3 Labour Party
10 inequality 112–14 popularity 205–7
information ‘third way’ 122, 192
1 communication trends 140–1 legislation, welfare state 69–70
2 data protection 141–2 leisure time, out of home activities
technology 129–142, 208 137–8
3 word-of-mouth 215–19, 220 Lever, William 67–8
4 innovation Lewin, Roger 214, 219–20
5 acceleration 135 life insurance 117
importance 30, 91–2, 234–5 Lilla, Mark 122–3
6 precautionary principle 170–2 limiting options 158, 159
7 insecticide spraying 166, 169–70 local community
8 insincere citizenship initiatives 236 attitudes 68, 90–1, 226–7
Institute of Practitioners in consumer concern 35–6
9 Advertising (IPA) 96 involvement 22–3, 87, 226–7
20111 insurance sales 211 small and medium-sized businesses
1 intelligent businesses 91–2 235
interactive services 131–3, 138 long-term strategy 225–6
2 Interbrand 48, 50 loyalty
3 Internet brand switching 202
access 22–3, 131–2, 226–7 consumer choice 55–60
4 banking 211 corporate citizenship 98,
5 culture of immediacy 135–6, 142 99–100
6 cyber guides 161 decrease 212–13
increasing consumer choice 152–3 habit 158
7 mobile services 132–3, 138 rewards 220–1
8 investors 25–7
9 involvement model, advertising 93–5, McWalter, Alan 100
98 management
30 irrationality 185 corporate citizenship 233
1 see also rationality good practice 91–2
2 isolation 107 pay 16–17, 74, 193, 230–2
market control 50–1, 232
3111 James, Oliver 104 market dynamics models 213–14
job security 121–2, 246 market instability 208–9, 215–19
INDEX 257
1111 market intelligence 91 mosquitoes 165–70, 184

market research see consumer motivation 14, 34–40
2 research motor insurance 211
3 marketing 100, 228, 233 multinationals
4 see also advertising consumer attitudes 189–90, 194–5
Marks and Spencer consumer volatility 208
5 community involvement 22, 90, genetically modified organisms 173,
6 227 176
7 consumer attitude 43, 45, 47 power 196
corporate citizenship 11–12, 28–9, Murphy, Jim 107
8 30 mutuality 70
9 employment practices 21–2
10 Marlboro Nasser, Jac 90–1
consumer attitude 5, 43, 45–6, National Health Service 69
1 47–51 nationalization 69–70
2 market conditions 51 NatWest Bank, consumer attitude 47
Maslow, hierarchy of needs 117–18, Nestlé, consumer attitude 45, 47
3 123–4 ‘network economy’ 208–9
4 media networks 131, 214–15, 218
5 bad press 211–12, 215–19 New Labour 192
choice advisers 160 New York West Nile crisis 165–70,
6 increased choice 150–1 180, 184
7 scare stories 184 Nike 43, 45–6, 47–51
8 Metcalfe’s Law 131 nuclear war, threat perception 108
Microsoft null hypothesis 171
91111 consumer attitude 45–6, 47–8,
20111 50–1 oil companies 227
1 market conditions 51 ‘one-to-one’ marketing 141–2
mobile phones open markets 192
2 choice 151–2 openness
3 dangers 176–9, 186 perception of companies 45, 46
interactive services 132–3, 138 trust 57, 59–60, 229
4 penetration 116, 132–3 opinion polls 205–7
5 mobility, technological impact 137–8 see also consumer research
6 models organic foods 89, 159, 180
advertising 93–7 Ormerod, Paul 214
7 citizen brands 83–92, 98–100 Oswald, Prof. Andrew 104–5
8 market dynamics 213–14 outsourcing 121
9 Monbiot, George 72, 190–1 outward focus 91–2, 96, 98, 226
monopolies 232
30 Monsanto 173 Packard, David 18
1 Moores’s Law 131 parents, social concerns 36
2 moral obligations, corporate paternalism
responsibility 74–5 attitudes 71
3 MORI research 194, 195, 207 historical 67–8
4111 Morris, Philip 4–5 ‘peace and plenty’ 107–26
258 INDEX
1111 penetration privatization 70–2, 151–2

consumer goods 115–16 products, image perception 97
2 interactive services 132–3 profits
3 pension funds 25–6 consumer attitudes 192, 194
4 people-centred companies 19 management attitudes 68, 76
perceived quality/value 97, 98, political attitudes 72
5 99–100 proof, harmlessness 170–1
6 perceived threats 178–9, 181–5 protests 199, 201, 205–6
7 personal fears 34–7 Prudential 211
personal shoppers 160 public health
8 persuasion model, advertising 93–5 mobile phones 176–9, 186
9 philanthropy West Nile virus 165–70, 180, 184
10 corporate responsibility 3 see also health
historical 66–8 public relations disasters 51, 211–12,
1 welfare state 71 215–19
2 PIMS database 96–7
PIRC reports 15–16 quality, importance 234
3 political economy 121–6
4 political motivations 3 radical activists 199, 201, 205–6
5 political philosophy 121–4 rationality
political scaremongering 183–4 approach to evidence 171–2
6 politics of fusion 122 decisions 167, 169–70
7 Popper, Karl 171 scare stories 185, 186
8 popularity, ‘tipping points’ 209 Ratners 212
Porras, Jerry 4–5, 17 ready meals 147, 149
9 post-material society 117, 118, 119, recruitment 19
20111 124 Regine, Birute 214, 219–20
1 post-modernism 200 representation, trade unions 70
poverty reputation 98–9, 221, 228–9, 233
2 effects on businesses 89–90 research see consumer research
3 relative 112–14 revolutions, historical 130–1
third world 191–2 Richmond Events 33, 240
4 Prahalad, C.K. 20 risks
5 precautionary principle 170–2, 174, assessment 181–6
6 176–81 precautionary principle 170–2
prediction rational decisions 165–70
7 anticipating change 135 see also threats
8 computer models 214, 219 Robinson, John 105
9 forecasting doom 104–7 Ross Goobey, Alistair 76
technology effects 129–30 rotenone 180
30 press coverage, consumer trust 21–2, Rover, consumer attitude 47
1 51, 57–9
2 price safety
consumer choice 40, 41–2 precautionary principle 170–2
3111 protection 120–1 scare stories 184–6
selection tool 157 Sainsbury 47–8
INDEX 259
1111 sales response model, advertising 93–5 see also human resources;
salience model, advertising 93–6 shareholders
2 Salt, Titus 67 state controlled welfare provision
3 satisfaction 98, 99–100 68–72
4 scare stories 184–6 Stewart Committee 176–7
Schor, Juliet 105 stock market performance
5 science 170–2, 174–5, 178–9 corporate governance 16
6 see also innovation employee strategies 20
7 scientific proof 171 environmental practices 23
scientists 174–5 investors 25–7
8 search criteria, managing choice 157–8 strategic development, time scale
9 Seely Brown, John 129–30, 142 focus 225–6
10 self-actualization 117–18, 123–4 ‘strawberry’ test 176–7
self-interest 34–40 Superdrug 47
1 Shapiro, Carl 208–9 supermarkets 146–9
2 shareholders 3, 65, 75–80 suppliers 86
Shell 45, 47, 50, 211 Sutherland, Stuart 185
3 Short, Claire 191
4 short-term focus 76, 77, 225–6 take-away food 149
5 ‘sixties’ generation 199–200 Taylor Nelson Sofres 53
Sky technology
6 consumer attitude 43, 45–6, 47–8 business responses 141–2
7 market conditions 50–1 communications 132–3, 140–1,
8 sleep, variance across time 105 208–10
small and medium-sized businesses computer models 214–20
91111 235 computer rivals 210
20111 social concerns 34–6, 73, 89–90 data protection 141–2
1 Social Investment Forum 25 historical impacts 130, 137
socially responsible investment 25–6, immediacy culture 135–6, 142
2 25–7, 89 interactive services 131–3, 138,
3 social protection legislation 70 161, 211
social trends 38, 55 mobility 132–3, 137–9
4 society pace of innovation 134–5
5 business relationship 77–8, 193 precautionary principle 170–2, 174,
6 company understanding 228, 230 176–81
development hierarchy 117–19, predictions 129–33
7 123–4 product promotion 220–1
8 increased connections 217–19 revolution 129–42, 208–10
9 innovation fears 170 World e-Inclusion programme
perceived changes over time 22–3, 226–7
30 104–7 telecommunications, choice 151–2
1 role in companies 27, 226 television 116, 132, 150
2 South America, technology 133 ‘terminator genes’ 173
space perception 136–9 Tesco
3 sports funding 227–8 consumer attitude 45, 47–8
4111 stakeholders 17, 75–6 employees 230
260 INDEX
1111 Thatcher, Margaret 71–2 Virgin

‘third way’ politics 122, 192 competition 232
2 third world labour 41, 87, 89, 191 consumer attitude 43, 45, 47–8
3 threats success 11–12, 29–30
4 changing fears 108–9 volatility, consumers 206–21
perception of 178–9, 181–5
5 see also risks war, changing threats 111
6 time perception 136–9 Waterman, Robert 19
7 time-diary data Watson Wyatt Worldwide surveys 19,
out-of-home activities 137–8 20
8 working hours 105 wealth trends 72–4, 111–17, 121
9 ‘tippy’ markets 208–9 welfare state 68–72
10 trade union legislation 70 West Nile virus 165–70, 180, 184
transmission equipment, mobile Wetzker, Konrad 20
1 phones 176–7 WH Smith, consumer attitude 47
2 transparency 46, 57, 229 Wharton business school 16
see also openness Wilson, Andrew 73
3 travel trends 138–9 women, social concerns 36
4 trust wood products, Forest Stewardship
5 choice managers 161 Council 89
in companies 43–6 Woolworths
6 consumer choice 55–60 corporate citizenship importance
7 corporate citizenship 98–100 100
8 culture of fear 185–6 local community 22, 227
transparency 46, 57, 229 word-of-mouth 215–19, 220
9 work–life balance 86
20111 unemployment 36, 37–8 workforce see employment
1 utilities 151–2, 154–5 working hours, perceived increase 105
World e-Inclusion programme 22–3
2 values world trade, trends 120
3 citizen brands 17–19, 228–9
consumer choice 158–9 Xhonneux, Pascal 20
4 core ideology 4–5
5 Varian, Hal R. 208–9 young people 197–200
6 video formats 210
viral marketing 220 zero-tolerance 166
7
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CITIZEN

JOHN WILEY & SONS, LTD

2 Other Wiley Editorial Ofﬁces

1 Typeset in 11.5/15 Bembo by Florence Production Ltd, Stoodleigh, Devon

1111 The Impact on Consumers 52

1111 6 BEYOND ‘ENDISM’ – THE SOCIAL

1111 Why is it Happening? 195

1111 society, now I use it more broadly to describe the relationship 2

1111 as an add-on to the core business strategy that companies are

1111 STRUCTURE OF THE BOOK

1111 ■ Technology and the implications for transparency, communi-

1111 it is likely, therefore, that the relationship between citizenship

1111 of the state of corporate governance in boardrooms. Just 17 per

1111 company by fellow industry specialists on its responsibility to

1111 Similarly, an attention to ethical principles and behaviour has

1111 which faced a barrage of negative publicity as it closed branches

1111 Table 1.1 Investing in people works

1111 is recognized as having a particularly inclusive and supportive

1111 In the same vein, Dow Chemical is one of a number of

1111 their attitude to ‘socially responsible investment’, as a result of the

1111 ingly support citizenship initiatives as they recognize that being a

1111 CITIZENSHIP IS NOT ENOUGH

1111 monitor of consumer attitudes carried out as part of its nVision

1111 affected by them. An interest in animal rights or conservation in

6 Discrimination Global environment

1 Personally worried about

1111 more than a third of the population could be classiﬁed as having

1111 70% Strongly agree Agree

1111 And, on the ethical dimension, there is every reason to believe

1111 middle-class, well-off, middle-aged couple. Irrespective of their

1111 between two otherwise identical brands within a given product

1111 indication that the acceptability or desirability of boycotts has

7 Competitive pricing 1998

8 Treat employees fairly

1111 consumers’ league. Beyond this, it is noticeable how poorly

Marks and Spencer Superdrug NatWest Bank

Marlboro % Nike % Coca Cola % Virgin %

Cynical 68 Ambitious 48 Aggressive 44 Innovative 60

Ruthless 59 Aggressive 44 Ambitious 44 Dynamic 51

Heartless 58 Greedy 39 Greedy 39 Ambitious 50

Secretive 58 Exclusive 33 Secretive 35 Adventurous 46

Deceitful 54 Cynical 31 Ruthless 33 Exciting 40

Souce: Future Foundation/Consumers’ Association/Richmond Events.

1111 Speciﬁcally, I wanted to assess whether the proportion of

1111 at the relationship between some of the issues I have considered

1111 in it are closely correlated. So, in part, you trust a company

1111 included to show the direction of the relationship between the

2 Figure 2.11 A model of citizenship and loyalty. Schematic represen-

1111 it is felt to be a good corporate citizen and to be open and acces-

1111 employers.They should, according to the survey quoted in Chapter

1111 With the onset of industrialisation in Britain . . . the Puritan ethic

1111 % (war years

1111 of the industrial revolution were initiatives to alleviate the basic

4 1868 TUC founded

1852 Co-operatives legalised

1111 the centralized organization of many public services this could be

1111 other developed countries. The privatization of previously publicly

3 Figure 3.3 Increasing income polarization.Weekly income before hous-

1111 THE END OF THE ARGUMENT?

1111 A recent example of this sentiment is contained in Will Hutton’s

1111 response from Alastair Ross Goobey, chief executive of Hermes

1111 community to the list (still ahead of service to shareholders) . . .

1111 citizenship activity. But, I would argue that my formulation will

1111 Community Involvement