Brands need a strong identity, not to cling to someone else's. The Balocco and Ferragni affair

The fact: the Italian Competition Authority fined the companies of the famous influencer Chiara Ferragni, along with the confectionery company Balocco, with a total penalty of €1,075,000 for unfair commercial practices related to the Pink Christmas pandoro. The fine for Balocco is €420,000.

The Antitrust claims that the companies led consumers to believe that by purchasing the pandoro, they were contributing to a donation to the Regina Margherita Hospital in Turin, when in reality, the €50,000 donation had already been made by Balocco months earlier. Companies associated with Chiara Ferragni collected over one million euros from the initiative.

How did they get to this point?

First mistake: confusion 

What was the goal of the marketing campaign? 

To improve the company's ethical reputation or to reach the audience that adores Chiara Ferragni? 

They are two different levels: the first is moral, the second is hedonistic. 

Why muddy the waters?

• If the goal was to improve the company's ethical reputation, it made sense to allocate more resources to the hospital, explicitly stating the amount on the packaging (which was not done, who knows why...)
• If the goal was to reach Ferragni's audience, it made sense to make this agreement, but doing the math: do potential buyers and consumers of Balocco coincide with Ferragni's fandom? How many pandoros needed to be sold to return the investment? 

Many, many pandoros: but if Balocco is a consumer brand, why sell the special pandoro for €9.37, confusing their traditional market positioning?

Second mistake: ambiguity 

Many may have thought that the surcharge was justified by charity. But no. 

Quoting from here: all the protagonists - claims the Antitrust - knew that the commercialization would not contribute to finding new cures for children affected by osteosarcoma and Ewing sarcoma because the €50,000 donation had already been made, by Balocco alone, many months before the product entered the market. 

The pandoro was placed on the market at €9.37, even though only the packaging changed compared to the traditional one sold at €3.68. Such a price difference, not justified by higher quality ingredients, reinforced, in the eyes of the consumer, the belief that the higher price of the branded pandoro included a contribution to donations.

In the digital society, news travels like light. It was naive to think that no one would notice this discrepancy: 

• €50,000 to Regina Margherita Hospital 
• €1,000,000 to Chiara Ferragni's companies

A commendable intent used for a marketing initiative that reserves one-twentieth for sick children of what the already wealthy influencer pockets. 

Come on, what could go wrong?

Third mistake (the most serious): subordination

The campaign also went badly on a commercial level: 

Quoting again from here: The outcome of the campaign - Balocco stated in its defense memo - was "disappointing, despite the commercial collaboration" with Ferragni's two companies and "the artist's attractive force." And Fenice and Tbs Crew themselves admitted the "small sales made by branded pandoros." Balocco managed to distribute 362,577, and about 20% remained unsold.

Let's take a look at the packaging of the infamous Pandoro.

Visually almost nothing refers to Balocco. The company logo is tiny and literally invisible. 

The stage is taken by a blonde girl dressed as Santa Claus and the dominant color is pink: all this has nothing to do with the Balocco visual identity. Chiara Ferragni's identity has devoured that of Balocco!

Perhaps, at Balocco, they believed that their brand identity was weak and needed to be relaunched.

Nothing strange: it happens in all organizations.

But, in my view, they sought the answer not within themselves and their market but externally, by collaborating with a prestigious influencer. 

For Balocco and countless other companies, however, the challenge is to build their own solid and recognizable positioning, not to cling to someone else's popularity in an ephemeral way.

How to fix this communication disaster?

The company could admit the mistake and recall its initiatives supporting the local community.

And, above all, they could listen to customers: are they satisfied with their products?

Are prices considered fair?

Are products easily and regularly found in supermarkets?

Is there room for new flavors or other products for the rest of the year, such as breakfast croissants?

Using an AI software, I have summarized this Trustpilot review page.

According to this customer sample, the main strengths are:

• The quality and taste of biscuits, especially Cruschelle and Rusticotte with Chia, Flax, and Sunflower seeds
• The variety and creativity of proposals, such as the Colomba Cuore d'Oro without candied fruits

The main weaknesses are:

• The poor freshness and fragrance of some biscuits, which seem open and old
• The difference between the image on the packaging and the actual product, as in the case of the Colomba with few almonds
• The quality and taste of chocolate in Easter eggs, which is poor and spoiled

Things to improve:

• Quality control and product preservation to prevent deterioration or alteration
• Transparency and correctness in presenting products to avoid disappointing consumer expectations 

As you can see, listening to customers can open up a world. 

And these are just online reviews.

Imagine what can be uncovered with systematic and in-depth analysis.