BP s Brand Image: The Past, the Deepwater Horizon Disaster, and the Future

Transcription

1 BP s Brand Image: The Past, the Deepwater Horizon Disaster, and the Future Rachel Mercer and Carlee Murphy, Fall 2010

2 Brand History

3 How it All Started

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5 Early Executives

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7 Early BP Advertisement

8 Advertising with a wider appeal

9 WWII

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11 Petrol Crisis

12 Exploring

13 Engineering Feats

14 Let the Oil Flow

15 Mergers

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17 Evolution of the Brand

18 The BP Logo

19 BP s Brands

20 Better People, Better Products, Big Picture... Beyond Petroleum

21 Developing a New Identity In 1998, British Petroleum merged with Amoco and wanted a new identity. The helios mark was developed to symbolize the newly formed company. The new brand launched in July BP became Beyond Petroleum

22 The Helios

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28 Deepwater Horizon Explosion and Spill

29 Deepwater Horizon Explosion and Spill Macondo Prospect Deepwater Horizon Rig Involved Parties Explosion & Spill Possible Causes Immediate Response Consequences

30 Macondo Prospect

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33 Deepwater Horizon Rig Built by Hyundai Heavy Industries Fifth Generation deepwater rig Owned and operated by Transocean Generation Water Depth Dates First About 600ft Early 1960s Second About 1000ft Third About 1500ft Early 1980s Fourth About 3000ft 1990s Fifth About 7500ft Sixth About 10000ft

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35 SEMI SUBMERSIBLE DRILLSHIP

36 Involved Parties INVOLVED PARTY Hyundai Heavy Industries Transocean BP America Production Company Halliburton Company Cameron International Corporation Anadarko Petroleum Corporation MOEX USA Corporation Manufactured the Rig ROLE Owned & operated the Rig Operated & owns the Well; Owns 65% of the Prospect Provided cement services to the Well s cap Manufactured the blowout preventer Owns 25% of the Prospect Owns 10% of the Prospect

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38 APRIL 20, :45 PM

39 Committee on the Analysis of Causes of the Deepwater Horizon Explosion, Fire, and Oil Spill to Identify Measures to Prevent Similar Accidents in the Future November 16, 2010 Preliminary Report

40 The failures and missed indications of hazard were not isolated events Numerous decisions to proceed toward abandonment suggest an insufficient consideration of risk and a lack of operating discipline. The decisions also raise questions about the adequacy of operating knowledge on part of key personnel. [I]nsufficient checks and balances for decisions involving both the schedule and considerations for well safety. The various failures mentioned in this report indicate the lack of a suitable approach for anticipating and managing the inherent risks, uncertainties, and dangers associated with deepwater drilling operations and a failure to learn from previous near misses.

41 4/20/10 Explosion occurs 4/22/10 A oil leak is discovered 4/26/10 BP s shares fall 2% 4/27/10 Joint investigation announced 4/28/10 5,000 bpd are leaking; control burning; named responsible parties 4/29/10 a state of emergency; Obama pledges every single available resource 4/30/10 Oil a washes ashore; will pay all legitimate claims & costs 5/2/10 beginning of acceptance of claims 5/7/10 Massive domes fail TIMELINE

42 5/9/10 junk shot 5/11 12/10 BP, Transocean and Halliburton executives at U.S. Congressional Hearing; cascade of errors 5/12/10 BP releases first public video of the leak 5/13/10 BP : the oil spill is relatively tiny in comparison with the size of the ocean 5/14/10 ridiculous spectacle 5/19/10 First heavy oil reaches Louisiana's marshlands 5/21/10 BP begins live underwater video broadcast of the leak 5/26/10 top kill commenced 5/27/10 six month moratorium on new deepwater oil drilling permits TIMELINE

43 5/28/10 BP s current cost $930M 5/29/10 top kill failed 6/1/10 BP shares drop 17%, wiping $23B of its market value; U.S. launches a criminal and civil investigation 6/8/10 BP releases high resolution images of the leak 6/16/10 BP agrees to fund a $20B escrow account 7/12/10 three ram capping stacks are installed 7/27/10 Bob Dudley will replace Tony Hayward as BP CEO 8/4/10 static kill procedure completed 8/6/10 BP establishes $20B trust 8/14/10 U.S. First Family vacation in Panama City, FL 9/19/ days since the explosion, BP confirms permanent plug of the well 9/30/10 We don t believe we have been grossly negligent in anything we ve seen in any of the investigations. TIMELINE

44 Clean up Efforts

45 Strategies for Oil Removal 1. Contain it on the surface, away from sensitive areas; 2. Dilute and disperse it in less sensitive areas; and 3. Remove it from the water.

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51 CONSEQUENCES

52 June 18, 2010 BP p.l.c.

53 June 18, 2010 BP p.l.c.

54 September 25, 2010 BP p.l.c.

55 September 25, 2010 BP p.l.c.

56 September 25, 2010 BP p.l.c.

57 Habitat

58 We may not be perfect every time, but we re going to be here as long as it takes to make it right. BP p.l.c.

59 Wildlife

60 Consolidated Dead Mammals: 97 Oiled but alive: 9 Cleaned and released: 3 Fish and Wildlife Collection Report Last Updated October 14, 2010 Dead Birds: 6,104 Oiled but alive: 2,080 Cleaned and released: 1,245 Dead Sea Turtles: 605 Oiled but alive: 535 Cleaned and released: 362 Relocated nests: 278

61 GRI +

62 Economy

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65 Affect on BP s Brand & Public Relations Corporate Response Print and Broadcast Ads Relief Fund Tony Hayward New Face of BP Social Media Platforms Boycotts Brand Alterations & Dilution

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67 I like the ad, but I m skeptical about the company s ability to keep the promises made in [it]. I also want more information about how they intend to keep this from happening again. I very much distrust the oil industry as a whole, given past experiences around the world with other oil spills. Respondent from Ace Metrix poll regarding June 3, 2010 video ad

68 Relief Fund

69 Tony Hayward

70 "Whether it is fair or unfair is not the point. I became the public face and was demonised and vilified. BP cannot move on in the US with me as its leader," he said, adding that like many aspects of everyday existence "life isn't fair... sometimes you step off the pavement and get hit by a bus Hayward

71 New Face of BP

72 Social Media Presence

73 Boycotts

74 Who is Really Getting Hurt?

75 Brand Alteration

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78 15 U.S.C (c) Dilution by Blurring; Dilution by Tarnishment. (1) Injunctive relief. the owner of a famous mark shall be entitled to an injunction against another person who, use of a mark or trade name in commerce that is likely to cause dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury. (2) Definitions. * * * * (C) For purposes of paragraph (1), `dilution by tarnishment' is association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark.

79 (3) Exclusions.--The following shall not be actionable as dilution by blurring or dilution by tarnishment under this subsection: (A) Any fair use, including a nominative or descriptive fair use, or facilitation of such fair use, of a famous mark by another person other than as a designation of source for the person's own goods or services, including use in connection with-- (i) advertising or promotion that permits consumers to compare goods or services; or (ii) identifying and parodying, criticizing, or commenting upon the famous mark owner or the goods or services of the famous mark owner. * * * * (C) Any noncommercial use of a mark

80 Buzz and Impression Scores of BP May 5, 2010

81 Buzz Score June 4, 2010

82 What we do know is that when you properly design wells for the range of risk anticipated; follow established procedures; build in layers of redundancy; properly inspect and maintain equipment; train operators; conduct tests and drills; and focus on safe operations and risk management, tragic incidents like the one in the Gulf of Mexico today should not occur.

83 US and UK Impressions of BP

84 US and UK Impressions of Barclay

85 The Economist/YouGov Survey [mid June] How much trust they have in BP to do the right thing in stopping the oil spill and cleaning it up? 6% not sure 6% a great deal 13% quite a bit 24% only some 24% very little 27% none at all

86 NBC News/ Wall Street Survey [late September] How would you categorize your feelings about BP? 3% very positive 9% somewhat positive 24% neutral 20% somewhat negative 30% very negative 14% declining to choose

87 Unique Branding Issues for Oil Companies Extensive vertical integration Pricing that is political Increased competition due to mergers Product high in demand, but higher environmental costs Brands in crisis, and a crisis of brands

88 Brand Strategies 1. Sell BP 2. Hide BP behind its subsidiaries 3. Become British once more 4. Make BP really stand for Beyond Petroleum

89 Recommendations for Company Strategies 1. Establish a $15 billion dollar escrow account 2. Reduce & donate key executives salaries for the next decade 3. On site compensation offices with large staffs 4. Financial compensation to each killed and injured worker 5. Wildlife rescue 6. Stop all PR efforts designed to mitigate BP responsibility 7. Cease and desist from influencing government officials and offices 8. State and University programs in the Gulf 9. Improve technologies and safety regulation for off shore drilling

90 Key Functions of the the Brand The brand will need to receive a more prominent and strategic role within the firm The brand will be defined by the firm s mission and values and will act as an agent of change and inform all activities of the firm. The brand s performance in the market (as measured in line with the vision and values of the perception in the various stakeholder groups) will form a key performance indicator for those employees that are including the company s future.

91 We can do better than simply damning BP or damning the oil industry or damning technology and our (lack of) ability to regulate it. Mark Zoback