It’s Time for The Nuclear Industry to Consider Brand Management as a Long-Term Strategy

For 87 days starting in April 20, 2010, America’s attention was transfixed on the massive BP oil spill disaster. The Deepwater Horizon’s explosion killed 11 and resulted in the spill of 135 million gallons of oil — equivalent to 3.1 million barrels [7]. The damage to the environment, business and human life has cost BP and the U.S. government billions of dollars to cover cost of cleanup and compensation to those affected. For years BP had built a brand of “beyond petroleum” and as a result would spend hundreds of millions of dollars to rehabilitate its brand. One report stated that in the wake of this disaster, over the next few years BP would spend $500 million to portray itself as “efficient and cost-effective for consumers of its retail locations” [1].

The BP disaster provides several lessons to the nuclear industry. First, it is important to develop a brand that is accurate and reflective of one’s activity. Second, once developed, its ongoing management are critical for an industry’s success in the face of a crisis. Third, industries view brand management as a strategic objective, i.e., it is not a one-off activity that one performs. It is no secret that the nuclear industry has an image problem. This is self-inflicted and it is high time that the nuclear industry put its money where its mouth is and started viewing branding as a strategy.

Public opinion on nuclear power has not been durable. “According to Gallup polling…the high point was in 2010, when 62 percent favored its use….but in 2015 a slim majority — 51 percent were in favor” [4]. Customer-based brand equity occurs when the consumer is familiar with the brand and holds some favorable, strong, and unique brand associations in memory [3]. When nuclear power is measured against these criteria, it fails. “A high equity brand gives its owner many advantages. In addition to the obvious benefit of driving market share, a strong brand can command a price premium, augment customer relationships, ensure successful line extensions, help an organization attract talent , and boost stock prices” [7]. It can also be claimed that brand equity can help blunt criticism and increase credibility. Respect, recognition, and credibility are earned through clear communication of achievements. “It is hard to imagine an industry that has been more elitist, and that has done such a lousy job of engaging with the public” [4]. Consistently, people that have concerns about nuclear power say that they prefer safer methods of energy production. This is not close to the reality: nuclear has proven to be safer than all forms of energy production. This is a perception issue. This idea of brand equity is not abstract; it can be quantified. The company with the highest brand value is Coca Cola with $69 billion [1] and it’s obvious why. Consumers are bombarded by Coca Cola’s advertisements on a daily basis.

It is no secret that the nuclear industry did not put weight on the value of public relations, marketing and branding. It focused on maintaining a strong record of operational excellence and safety and failed in communicating these achievements to stake-holders. The nuclear industry faces an uphill battle in public perception and public relation partly due to its own fault. However, there is also another big factor: civilian nuclear power is historically linked to nuclear bombs. A study performed in the 1980s makes it clear: “public acceptance of nuclear power cannot be expected to increase substantially until the two nuclear technologies are separated in people’s minds” [3]. One immediate action that can be taken is to separate professional organizations who tackle proliferation concerns from civilian nuclear activity. For instance, the opening plenary of 2013 American Nuclear Society (ANS) Exhibition and Expo included a speech by a Senator about nuclear proliferation concerns. Without a doubt, nuclear proliferation is a concern and we should continue to pursue a world free of nuclear weapons while mitigating proliferation. The claim here is that organizations that support and promote civilian nuclear technology should focus on civilian nuclear technology in order to ensure brand consistency.

Let’s say that everyone agreed branding, marketing and public relations are important as a strategy and concluded that something can be done about it. The question is then who in the nuclear industry is responsible to execute it in a business environment where the next quarter’s results are the most important metric? Many utilities whose energy production portfolio includes natural gas and coal would not view new nuclear construction as a priority even though it should be pointed out that marketing efforts for natural gas have been consistently strong. So who does this responsibility fall on? The vendors and their contractors.

Intel Corporation, in 1988, faced with slow adoption of its new processors discovered that the cause was that end users weren’t aware of the capability of its new products’ as its main marketing focus was the design engineer [5]. Consequently, it performed a direct-to-consumer market research and campaign in a single market that resulted in a shift in buying plans by customers [5]. What Intel did is simple: it recognized that its immediate customer was not performing the desired marketing and was content with the status quo. Therefore, it became proactive, selected one market as a sample, spent a few hundred thousand dollars and expanded the campaign based on the results. Nuclear vendors can perform a similar marketing campaign. For example, an issue with nuclear technology is that radiation is not salient to the general public even though it is part of daily life — background, microwave, physical exams etc.… Imagine a marketing campaign to make the public be more aware of radiation. Design a set of high quality and attractively packaged detectors and place them in strategic locations in a city with various messages. Specifically the detectors would be designed to make certain noises or light up depending on the kind of radiation it encounters — gamma, neutron, and alpha-particles. An immediate impact of such a campaign would be to connect people with what they cannot see but still exists — background radiation.

The construction and operation of nuclear power plants is a multi-billion dollar, multi-year proposition. As a result it has inherent risks regardless of any external forces. Marketing, branding and public relations can reduce the impact of these external forces by ensuring public support and holding dogmatic opponents at bay. In the past, public awareness campaigns have been self-fulfilling prophecies of failure as the industry tried small campaigns and concluded that they are ineffective or changed priorities. Brand management is not an option. It is as important as operational excellence and safety.

References:

  1. Hague, Paul, “Measuring Brand Value — How Much Brands are Worth?”, B2B International, 2015.
  2. Hoffman, Damien, “BP to Spend $500M to Restore Its Brand”, Yahoo Finance, February 3, 2012.
  3. Keller, L.K., “Conceptualizing, Measuring, and Managing Customer-Based Brand Equity”, Journal of Marketing, January 1993.
  4. Koerth-Baker, Maggie, “Can America Turn Its Nuclear Power Back On?”, Popular Mechanics, January 21, 2016.
  5. Moon, Youngme, “Inside Intel Inside”, Harvard Business Review, October 12, 2005.
  6. Nuclear Power in an Age of Uncertainty, (Washington, D.C.: U.S. Congress, Office of Technology Assessment, OTA-E-216, February 1984).
  7. Rockbridge, “A Brand Development Model: How to Define and Measure Brand Equity”, Rockbridge Case Studies and Sector Articles, December 9, 2013.
  8. Schleifstein, Mark, “BP Oil Spill: 5 Years Later, Many Environmental Effects Remain Unclear”, NOLA.com, April 17, 2015.