Lately, a number of marketing somebodies have gotten into serious trouble. Typical reaction in the media: "Whoops! There goes the brand."
Not so fast. Once a brand has a strong position in consumers' minds, it is almost impervious to flak.
Take Tylenol, for example. In September 1982, seven people in Chicago died after taking cyanide-laced Extra-Strength Tylenol capsules. The media jumped on the story with predictions of doomsday for the brand.
"A death blow for Tylenol?" was the headline of a BusinessWeek article.
"The Tylenol scare," was the cover story in Newsweek.
"A flat prediction I'll make is that you will not see the name Tylenol in any form within a year," said a leading advertising executive in a New York Times article. "I don't think they can ever sell another product under that name."
"There may be an advertising person who thinks he can solve this, and if they find him I want to hire him," continued the ad executive, "because then I want him to turn our water cooler into a wine cooler."
Amusing, but not accurate. Today, Tylenol is back bigger than ever. It's the No. 1 drugstore over-the-counter brand.
Take Tiger Woods. It's become increasingly clear that as long as he does well on the golf course, his brand is going to recover quite nicely.
The day before the Masters began, Woods' online reputation, according to Zeta Interactive, a company that monitors social media, was 51% positive and 49% negative.
The day after the Masters began, the positive figure had increased to 69%, and the negative figure had fallen to 31%. A couple more weeks like this, and Tiger would be out of the woods.
I watched him on TV at the Masters and I was struck by the enthusiastic reception of golf fans. It was as if the scandal had never happened.
Take Toyota. Not since Tylenol has a brand taken such a beating in the media. "The humbling of Toyota" reported Bloomberg BusinessWeek in March of this year.
Yet in the same month, Toyota sold more vehicles in America than any other automotive brand: Toyota, 163,133; Ford, 159,009; and Chevrolet, 132,889.
Sure, larger-than-normal incentives helped move the metal for Toyota. But still, consumers voted with their wallets to pretty much ignore the reams of negative publicity about the brand.
Just recently, Toyota halted sales of its Lexus GX 460 after Consumer Reports discovered a problem with the way the vehicle handled on curves. And the company also announced it was testing the safety of all its sport-utility vehicles.
Will Toyota ever regain its leadership perception in consumers' minds? I'm not convinced that Toyota has ever lost it. To many consumers, the unintended acceleration and the other problems were "just one of those things that could happen to any brand."
Take Mercedes-Benz. In a 2007 survey of "predicted reliability," Consumer Reports ranked Mercedes-Benz dead last among 36 major automobile brands. It didn't matter. That year, Mercedes sales went up.
Mercedes has survived a number of devastating articles such as a Fortune story in 2003: "Mercedes hits a pothole. Owner complaints are up. Resale values are down."
There are a host of other examples that demonstrate the power of a strong brand to withstand negative publicity.
There's Bill Clinton, perhaps the best known and most-respected statesman in the world. The same Bill Clinton who was impeached by the House of Representative on Dec. 19, 1998, on charges of perjury, obstruction of justice and malfeasance in office (and acquitted by the Senate on Feb. 12, 1999). No matter. Bill Clinton is an exceptionally strong brand.
Take Martha Stewart. In 2004, she was convicted of lying to investigators about a stock sale and served five months in prison.
No matter. In 2005, she returned to daytime TV with "The Martha Stewart Show," now in its fifth season and set to move to the Hallmark Channel in September. Her magazine, Martha Stewart Living, is doing well and she has deals with Macy's, Home Depot, PetSmart and Michaels.
Take Goldman Sachs. Does anyone really believe the SEC lawsuit is going to hurt the Goldman brand? I don't. Goldman Sachs is the premier investment-banking brand, a position that is unlikely to change.
PR is extremely effective in building a brand. But once a brand is built, PR has little effect on a brand's long-term position.
From a marketing point of view, however, the more interesting issue is actually the opposite of what happens when bad things happen to good brands.
What happens when good things happen to bad brands?
Bad news won't kill a good brand. Nor, unfortunately, will good news resurrect a bad brand. Once a brand is strongly entrenched in the mind, it seems to resist change, either good or bad.
Years ago, we were working with Western Union, a brand associated with an obsolete service, the telegram.
To illustrate the brand's problem, Time magazine once reported that it knew a telegram it received was a fake because the telegram arrived on time and didn't have any typographical errors.
At the time, however, Western Union was a highly technical company, the first American corporation to launch its own fleet of communication satellites which it called Westar. The satellites' transponders were also leased by other companies for relaying video, voice, data and fax transmissions.
Our job was to try to rebuild Western Union's reputation with a substantial corporate advertising program.
We spent endless hours trying to convince the client the job was hopeless. Instead, we suggested it should change the name of the company. Furthermore, it had a terrific brand name it could have exploited.
No sale. Later, we made the same argument when Western Union was preparing to enter the telephone business. Western Union means telegram; you need a new name for your telephone service, we pointed out.
Again, no sale. Western Union did launch a telephone service under its Western Union name and later shut it down, writing off $603 million.
(After a bankruptcy and several restructurings, Western Union today is a highly profitable money-transfer company, a business that bears a strong relationship to its telegram heritage and its "money by wire" service.)
Many companies have faced similar problems. What should we so when our product or service becomes obsolete?
What should Wang have done when the word processor became obsolete?
What should Polaroid have done when instant photography became obsolete?
What should Kodak have done when film photography became obsolete?
In far too many cases, the answer is to launch new products and then try to change existing perceptions in consumers' minds.
That's a very difficult task. Far better, in my opinion, is to start from scratch with a new name.
|ABOUT THE AUTHOR|
Al Ries is chairman of Ries & Ries, an Atlanta-based marketing strategy firm he runs with his daughter and partner Laura.
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