Lewis Lazare
Lewis Lazare

Expert Picks Biggest Branding Gaffes

January 1, 2004


In case you weren't paying attention, branding has been the big buzz word in the marketing world for the past couple of years. And attention must be constantly paid to a brand, or its all-important image can be easily -- and perhaps irreparably -- tarnished.

Kelly O'Keefe, a branding guru with Emergence, a Richmond, Va.-based branding consultancy, has been keeping a watchful eye on a lot of brands during 2003. And he witnessed much that disturbed him. "We saw companies make colossal mistakes, largely driven by misjudgments, carelessness or downright arrogance," O'Keefe said. "Some of these errors will have serious long-term consequences."

And just for you, dear readers, O'Keefe has compiled a branding hall of shame for 2003. So, without further ado, here are O'Keefe's top five branding blunders of the year:

1. Chrysler. The automaker gambled $14 million on pop diva Celine Dion, thinking she could do for Chrysler what the chanteuse did for the movie "Titanic." But the Chrysler campaign got an icy reception, and sank faster than that ill-fated ship. "Chrysler built an expensive brand essence campaign on a celebrity who clearly did not embody its brand values. There are not that many American consumers who say to themselves 'I want to drive what Celine Dion is driving.'" O'Keefe said. "Building a brand around a celebrity does not work. It is typically the tactic of companies that can't build a brand otherwise."

2. Wal-Mart. Surprise. Surprise. A perennial brand favorite, the mega-retailer had some of the glow rubbed off the brand this year. Wal-Mart's commitment-turned-obsession with low prices has put so much pressure on various parts of its business that the strain is beginning to show. Employee turnover among first-year employees stands at a reported 70 percent. The Playboy magazine pictorial of comely associates didn't help Wal-Mart's image among its core consumer base. "For a long time Wal-Mart could no wrong, and while it still has a dominant brand position, the bloom is off the rose," said O'Keefe. "Wal-Mart needs to refocus on the customer experience."

3. Martha Stewart. Guilty or innocent, a modicum of contrition would have gone a long way for Stewart. A few well-placed mea culpas would have ratcheted down the hostility her alleged transgressions prompted, and helped the company and her focus on the more tasteful topics of cooking, decorating and party planning. "Martha Stewart is a case study in how not to respond to a corporate crisis," O'Keefe said. "This was a self-inflicted wound and a telling example of how personal behavior can have a tremendous impact on a brand -- perhaps as much as $1 billion in market cap in this instance."

4. Wall Street. The symbol for high finance and the American dream of wealth, Wall Street has an indelible brand, though it was badly tarnished during 2003. Revelations about former New York Stock Exchange Chairman Richard Grasso's compensation package raised significant concerns about the Big Board's capacity for self-regulation and oversight. More recently, disclosures about irregularities within the mutual fund industry have sullied not only the reputation of Putnam and other specific fund companies, but also the category as a whole. "People have a 'What next?' mentality, and overcoming that skepticism about these institutions will require a concerted and collective effort," O'Keefe said. "The Wall Street brand has become synonymous with greed."

5. KFC. Last but certainly not least, a branding blunder that cast an unflattering light on one of Chicago's very own ad agencies. O'Keefe suggested KFC might be suffering from some "Subway envy," given that chain's successful effort to position itself as a healthy version of fast food. But no one believes you can improve your diet munching on deep-fried chicken thighs and breasts, a brazen assertion made in a KFC campaign from Foote Cone & Belding/Chicago that launched in the fall. Health advocacy groups immediately complained about the campaign, which also attracted the attention of the Federal Trade Commission. The troubling ads were quickly pulled from the air. "A common transgression among marketers trying to grow market share is to make a product into something it is not," said O'Keefe. "Nobody is losing weight or lowering cholesterol inside a bucket of KFC."

Happy New Year! And here's hoping 2004 is more branding blunder-free than last year.

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