ConsumerLoop #7, November 1999

The Importance of Consumer Advocacy

Various ConsumerLoops have mentioned consumer advocacy as an emerging social value, however, only recently in the debacle over genetically engineered foods, has it been seen in its potential strength for the future. If there is one over-riding lesson (amongst many) from the GM foods story, it is that the application and implementation of new technologies needs to be properly managed and communicated to the consumer. Issues of speed of transfer of information and knowledge have also been fully demonstrated on a global basis. In the future, all brand incidents will look like this because of increased consumer advocacy.

A Brief Timeline

In 1990, there were no GM crops in commercial cultivation in the Western World. The first food products started to appear in 1992. Tomato and soya-based products were launched in 1996. The area planted with GM crops jumped from 2 to 28 million hectares worldwide. Consumer disquiet was gently simmering when Monsanto began its information campaign to explain the science behind GM Foods in April. 1998 became the point of escalation and was quickly picked up on a global basis. Initially, European disquiet grew faster than American. However, in turn, American concern has now grown substantially. There is now renewed debate between all parties over various assessment procedures for genetically engineered foods exacerbating consumer confusion.

There are some strong influences underlying increased consumer advocacy. These are:

• Desire for integrity.

• Collapse of trust and traditional forms of authority.

• Need for transparency.

• Speed of information transfer and global impact.

• Successful call to action.

Desire for Integrity

Consumers will look more closely at companies and their brands. They will look at the integrity of production and at other elements of the value chain. The debate is less about quality but rather more about the sanctity and integrity of the processes used to get products to market. The entire supply chain will be included in this. The desire for integrity is expected to increase because of the renewed focus on environmental issues. The environmental issue is not going to disappear, 1999 has seen too many catalysts.

Collapse of Trust and Respect for Traditional Authority

Another driver shaping consumer advocacy is the collapse of consumer trust and increasingly, lack of trust in traditional forms of authority such as governments, many companies and other well worn, formerly respected figures. The role of authority is important as it could represent an anchor for consumers and provide reassurance. Consumers are seeing through the varied statements and policies coming from totally different directions and are realising now that they may have the power to shape market development. Experts always seem to be presenting differing and sometimes, opposing views.

As Alan Mitchell wrote in Marketing Week (4.3.99):

"Finally, and most crucially, we have learned that if we put all these lessons together there cannot be an honest broker rising above the melee of opinion, idealogy, and interest to take a balanced, objective view. After all, the facts the honest broker relies upon, are in the end no better than anybody else's. So deep inside, we feel gnawing, debilitating, confusing waves of doubt. Where once we saw science and the facts as the final arbiter- as a new God - today, we have learned to become agnostic, if not atheist."

Need for Transparency

The need for transparency is a natural consequence from the breakdown of trust and authority. Being genuinely transparent from technology to marketing will become increasingly important. A lack of transparency causes suspicion and consumer confusion.

The Speed of Information Transfer and Global Impact

The speed of information transfer is generating a new timeline shaping markets. Consumers seem to be able to communicate information faster than many companies. The sum of this communication flow is the result of them making individual choices. A message can be posted to a newsgroup in a nano-second, a consumer recommendation that used to reach a handful of friends in days now reaches millions worldwide in minutes. In this way, consumers are actively taking part in the marketing process. There is no doubt that this speedy information transfer has escalated the level of debate.

Call to Action

The old debate about consumer environmental concern was that it rarely led to action. This has been finally laid to rest. Just look at Brent Spar and the invidious position earnt by McDonald's. Also powerful lobbying groups can facilitate consumer action. In this case of genetically engineered foods, the call to action has been seen in the increased sales of organic foods. However, this shift has also been complicated by various other food scares especially in Europe.

Retailers as a Pressure Group

Among other parties, retailers seem to have been the most vociferous and responsive to consumer advocacy, even potentially adding fuel to the flames and becoming a pressure group in their own right. This is should also be seen against the context that retailers seem to have been able to hold on to their perception of trust. Retailer after retailer has foresworn GM ingredients. Across Europe, Greenpeace has now logged 25 major retailers including Delhaize Le Lion, Auchan, Carrefour, Edeka, Esselunga, Migros, Asda, Iceland, Marks & Spencer etc which are taking/ have taken action to eliminate genetically engineered products. One of the latest to react is Aldi, announcing in October 1999 that it would not use genetic engineering in its own label products. Iceland in the UK has almost succeeded in highjacking a range of consumer issues by prompt action. The most recent case has them removing the colouring agent from the chicken feed to turn egg yolks a more natural yellow.

Governments: A Role Model?

Governments are scarcely a role model for communication. According to the Economist, European governments "have a distressingly bad record of suppressing 'inconvenient' scientific data and when that does not work, of simply lying about food safety."

Unlucky Monsanto?

Was Monsanto particularly unlucky with its timing? A spokesman for Monsanto, again reported in Marketing Week (27.5.99) said:

"We were naïve in thinking more information was not needed"

Naïveté now clearly carries a price. In October 1999, Monsanto bowed to external pressure in one regard and made a commitment not to commercialise sterile seed technologies although it would continue to work on other selective GM technologies to protect its investment. Robert Shapiro, CEO of Monsanto, conceded that the company had irritated and antagonised more people than converted to its case.

There are some hypotheses and implications to be taken into consideration when looking at the potential power of consumer advocacy in the future.

• Companies need to examine carefully how the desire for integrity, trust and a need for transparency could impact their brands and their products.

• The overall objective should be to enhance the trust construct in their brands.

• There is a clear need to manage the communications process for new technologies. Consumer advocacy has proven effective in other areas.

• Companies introducing new technologies need to be more consumer-aware and consumer-focused. Naïveté is not an excuse.

• The expectation should be that consumers have the ability to vote with their feet. The growth in organic food has been a case in point as a protest against genetically engineered foods. This call to action can be facilitated by third parties.

• Managing communications channels is a pre-requisite. This means the total range of communications including the various consumer 'hate' sites. Public relations should play an increased role in the mix of communications.

Summary

Increasing consumer advocacy is set to be a powerful force in the market-place in the future as a result of a combination of factors. Consumer power should not be under estimated. For this reason, it would appear that brands will have to evolve ways in which they can enhance consumer trust. Through the Loop has commissioned a multinational business school to look at characteristics of trust, specific parameters which make up trust and cultural associations and linkages across brands. The relationship and the power of the Internet is also being included in this project as a key driver. This is expected to be ready by the end of 1999.