Magazine article Marketing

Mark Kleinman on Marketing and the City: BP's Brand Is on the Rocks

Magazine article Marketing

Mark Kleinman on Marketing and the City: BP's Brand Is on the Rocks

Article excerpt

The explosion on an offshore rig is the latest in a long line of brandand industry-damaging crises.

Corporate disasters rarely get worse than the one that struck BP off the US Gulf Coast late last month. Within days, images of the looming environmental catastrophe triggered by thousands of gallons of oil flowing toward the shore were being beamed around the world.

The seriousness of those pictures was commensurate with the stock market's response to the explosion that killed 11 oil workers on the Transocean Deepwater Horizon rig. Needless to say, investors did not like it: billions of pounds were wiped off BP's value as its share price tumbled.

The estimated dollars 22bn cost of the clean-up and legal redress does not begin to include the impact on BP's reputation or the future exploration opportunities it could now lose.

In fact, the outrage in the US is such that the disaster could have profound consequences for the entire industry. Already, California's governor, Arnold Schwarzenegger, has rescinded his support for the deep-water exploration of oil resources close to the coastline.

Transocean, the company responsible for the rig itself, is also in the line of fire, but BP is bearing the brunt of political anger. That has not been mitigated by the fact that Deepwater Horizon is only the latest in a string of major industrial accidents to befall Britain's biggest oil company.

BP's response to the Texas City refinery disaster in 2005 was a significant factor in the departure of Lord Browne, BP's former chief executive, the feted British businessman who had been hailed as 'the sun king'.

It was under Browne that BP's rebranding as 'Beyond Petroleum' was intended to signify its rebirth as a responsible, visionary corporate citizen that looked to a long-term future built on sustainable energy resources. It was an expensive campaign, but only partly successful as a repositioning exercise. Tony Hayward, Browne's successor, has not sought to revive that message since he took over three years ago.

While an accident on an oil rig 130 miles offshore may be geographically remote from BP's retail operations in Britain, the impact on the company's brand and reputation is unavoidable.

According to a BP spokesman, the company considered running an ad campaign to respond to the latest crisis, but opted against it to focus all its efforts on salvaging the situation.

That seems to me to have been an error. Although such a response to any corporate crisis runs the risk of criticism that companies are attempting to spin their way out of it, investors and other stakeholders worldwide tend to benefit from having more, rather than less, information at their disposal. …

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