MEDIA & MARKETING:Developing Irish products into global brands could boost national morale, writes SIOBHAN O'CONNELL
BUILDING A strong brand is very difficult for Irish companies because branding requires large investment. However, in the view of marketing expert Damian McLaughlin, an academic in UCD’s Smurfit Business School, the Government should realise that strong indigenous brands have an important role to play in boosting national morale.
McLaughlin notes that not a single significant international or global brand or brand-driven business emerged from Ireland during the Celtic Tiger years. He claims that, when you examine how many Irish brands could be regarded as significant, international or global, the answer is the same as it was probably 25 years ago – just one, Kerrygold.
McLaughlin discounts Guinness and Baileys as they are owned by a British multinational and, rather oddly, he also discounts Ryanair. “A brand driven company puts the consumer at the centre of its activities,” said McLaughlin. “Ryanair is not a brand driven company, not in a million years.”
Kerrygold apart, the absence of strong brands in the food sector has resulted in a largely commodity business. Two-thirds of indigenous Irish exports are from the food sector, with 40 per cent going to the UK. Of these, about 20 per cent are beef exports with little or no value added or branding and thus subject to the volatility of the market and the demands of retailers.
Another third is accounted for by dairy exports, including Kerrygold. However, dairy sector exports are mainly comprised of commodity products, which in recent years have seen significant downward pressure on prices.
In McLaughlin’s view: “In a nation with a commitment to brands and creating a set of champion brands, this would never occur. The focus of branding is on what the customer wants to buy, not what the seller is able to sell. The focus of branding is long-term opportunities not short-term sales, and it drives innovation and differentiation.”
Despite the absence of Government support and encouragement, some food firms recognise the importance of branding. Marketing magazine recently named John Noonan, sales and marketing director of Flahavan’s, as its marketer of the year for repositioning the famous porridge oats food brand and for developing a long-term strategy to compete in the Irish market with multinational brands such as Kellogg, Nestlé and Weetabix.
The strategy emphasised the brand’s health credentials combined with the core Flahavan’s values of Irishness and trust. Noonan launched 18 new products in drums, sachets and portable pots, and spent €250,000 on television and radio commercials to drive sales.
McLaughlin applauds Noonan’s efforts but he observes that Government policy undermines efforts by Irish firms at brand building. “If Irish brands are to thrive internationally, they must have a stable domestic environment in which they can practice and develop their brand skills. To achieve this, I would advocate the reintroduction of the ban on below-cost selling of food. This will prevent retailers from shredding Irish brands.”
Current Government economic policy is heavily focused on investment in research and development in universities. McLaughlin believes this will lead to a stream of innovations in the coming years, providing a once in a generation opportunity. He explains: “It is very difficult to build a brand without an innovation, and it is also difficult to add the brand onto an innovation afterwards. So we need to get the issue of branding onto the national agenda immediately. It must be incorporated into the national policy framework and included in the Smart Economy investment process.”
McLaughlin justifies his call for a more robust approach to State-directed branding initiatives on the basis that global champions can lift national morale. He argues: “In Ireland today, many people are gripped by a sense of collective hopelessness. A common refrain is that we can see no way out of it. Would we have the same sense if we had two or three firms with strong international brands? My hypothesis is that brands give individuals an opportunity to identify with economic effort and to have ambition and aspiration. Could a nation shed its national acceptance of economic bust through the creation of a set of international brand champions?”
As a start, McLaughlin contends, the Government could lead by example through its public sector advertising. “I can’t think of any good Government advertising apart from the new advertisements created for the IDA Ireland by McConnells. Although the Government is the largest advertiser in the country, there is no co-ordination. There is no reason why there couldn’t be a central advertising department set up for all public sector advertising and the budgets combined to achieve excellence.”
