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Image crises in well-known brands – a case study

An image or media crisis – even the most experienced marketers and PR specialists tremble at the sound of these words. It might seem that marketing mistakes are most often made in small companies whose owners work on customer acquisition and advertising on their own. It is visible very well in emerging economies where entities are fighting for every free scrap of the market. However, recent years have shown us that the giants of world markets can also make not entirely right decisions. How can we avoid image mistakes? It is worth closely following the activities of our competitors, especially those that were not very well perceived by the audience.

FROM THE START OR A CASE STUDY

A case study is an analysis of a case that cannot be one of many similar instances. It is therefore a study of a case in a broad context due to its distinctive features. The inquiry might focus on a specific situation or action taken by a company if we are discussing the business sector. Case study marketing makes it possible to understand how companies can be amazingly successful in specific situations, using, for example, new technologies. The first example – the company Pronto which used the so-called heat maps on its website, thus improving the prospects of contact with potential customers by 24 per cent. Case study analyzes may also focus on opposing cases, i.e. emphasize the origins of crises in the company’s image. In all of the above circumstances, a case study is a useful tool to help managers see opportunities and risks and assist them in decision-making processes.

WHAT TO DO IN THE EVENT OF A MEDIA CRISIS?

Asked by “Business & Prestige” about the problem, Dariusz Tworzydło, a University of Warsaw PR expert, said that each crisis is governed by its own rules. On the other hand, the code followed by every good PR specialist has a set of universal rules that should be applied in the event of an unfavourable situation. Admitting that we are to blame is key. Let us remember that nothing is ever lost on the web, therefore deleting posts or comments can only harm us. Lies, arrogance and lack of humility are unacceptable.

THERANOS CASE

All negative patterns were used by the California-based company Theranos, which was initially described as an ambitious start-up, intended to revolutionize the medical market.

Its founder and CEO, Elizabeth Holmes, was portrayed as the female incarnation of Steve Jobs. She created her image by alluding to him: through the tone of voice, preference for black turtle-necks, body language or business management methods similar to Apple’s. She founded Theranos at the age of 19 after she dropped out of Stanford University. The company was shrouded in secrecy on the one hand – its activities were not transparent; but on the other hand, famous people sat on its supervisory board, for example, James Mattis, later US Secretary of Defence in Donald Trump’s government. The shares in the company were also owned by the Australian-American media giant – Rupert Murdoch, or members of the Walton family – heirs of the Walmart retail chain.

Ms Holmes said her company would end unpleasant blood drawing and lengthy lab testing procedures by developing a portable device capable of performing more than 200 tests based on a small fingerstick blood sample.

2015 brought the beginning of the end of the company with an article that appeared in the Wall Street Journal (ironically, the daily is owned by R. Murdoch). It questioned the quality and credibility of the test results performed by the miniLab device and suggested that most of the analyses are performed in traditional laboratories at the back of the premises.

Theranos responded to it by posting on its website a statement asserting that the view presented in WSJ’s article was ‘factually incorrect, scientifically flawed and based on an unsubstantiated claim made by a disappointed former employee.’ Elizabeth Holmes was also active in the media in connection with the crisis, where, apart from her own explanations, she described WSJ as a tabloid. PR experts pointed to her aggressive, attacking attitude and the consequences of such actions: if the CEO is not right, it may have serious implications. At the same time, Holmes directly asked Murdoch to silence the case – but he explained that he had full confidence in the objectivity of WSJ journalists.
Further emerging doubts, which concerned the company’s strategy this time, led to an inspection in Theranos facilities carried out by the Food and Drug Agency. The audits revealed ‘numerous irregularities.’

Theranos, a company valued at around USD 9 billion at its peak, turned out to be a massive fraud, while its founder and CEO was charged with embezzlement and sentenced to a 10-year ban on holding an officer position in a public company for 10 years. For her criminal charges, Elizabeth Holmes faces the prospect of spending 20 years in prison.

WHO DID TIGER SHOW HIS MIDDLE FINGER TO?

One of the most famous mishaps in Polish business occurred on 1 August 2017, on Remembrance Day, when Maspex, producer of dietary supplements and food products, including a wide range of energy drinks, symbolically showed the middle finger to the Warsaw insurgents. The company is also the producer of the Tiger energy drink, which was once advertised by a boxer known in Poland and Germany, Dariusz “Tiger” Michalczewski.
Advertising graphics leaving no room for interpretation appeared on the Instagram profile of the Tiger brand – as Internet users remarked – Tiger showed the Home Army soldiers a “fuck you” gesture. The outrage was significant and severe – despite the ultimate removal of the controversial graphic from the profile, customers began to boycott the company’s products, which, apart from the mentioned Tiger, include such brands as Tymbark, Caprio, Kubuś, Tarczyn or Dr Witt.

Was it a deliberate campaign of the creative department aimed at shocking the viewers with a controversial message? Controversy is a source of emotion; emotions often mean activity, impulsiveness, and action – which energy drinks are supposed to be associated with. However, it could also be a clumsy, ill-considered act that resulted in a marketing mishap. The company’s explanations and its subsequent actions indicate the latter.

MEDIA CRISIS IN A TEACUP?

So what went wrong? Perhaps the joy of creating an “attractive” collage – a combination of a catchy, provocative slogan (“August 1, REMEMBRANCE DAY” with the caption: “Screw what used to be. It matters what will come”) and striking graphics dimmed from the authors of the idea the reservations that potentially more socially sensitive people, people affected by the atrocities of war and insurrection, and all others for whom this date is important might have.
Image expert, dr hab. Dariusz Tworzydło quoted by the portal wirtualnemedia.pl, points to insufficient supervision of Maspex’s communication in social media as the source of the conflict. The media crisis became even more painful when it moved to traditional media – radio and television.

HOW DID THE COMPANY HANDLE THE CRISIS?

The same expert, when asked about the quality of the actions taken by Maspex, points to its textbook professionalism in crisis management. The company admitted its error, apologized for the situation in national newspapers and made a large donation to the World Association of Home Army Soldiers. The next step was the termination of the contract with J. Walter Thompson – a marketing agency responsible for handling Maspex profiles in social media (and the aforementioned agency dismissed employees responsible for posting the Instagram post).
However, the bad taste remained and despite the actions taken – many entities withdrew from cooperation with Maspex: Lotos removed Tiger drinks from their shelves, the company’s products were also boycotted by Polish Radio.

MARKETING AND HISTORICAL BLUNDER OF ŻYTNIA EXTRA

Another case also concerns the food industry. And also in this case, the slip-up is about history (or being ignorant of it). In 2015, the then 28-year-old Marta S., a historian by education, an employee of the Project marketing agency from Toruń, running the Facebook profile of the Żytnia Extra brand, posted a meme consisting of a monochrome photo and a matching slogan found on the website. The photo showed a group of men carrying a friend, the caption was: “KacVegas? Script written by Żytnia” and “When the bachelor party gets out of control. Is Żytnia to blame?”. The whole thing was to be a humorous promotion of the brand by suggesting that a group of photographed men is returning from the event (where Żytnia Extra was used abundantly). However, not all fanpage followers liked it. The graphics did not appeal to those who recognized it as a photo of a man shot by the civil militia as a result of the so-called crime of Lubin during martial law.

The producer of the spirit, Polmos Bielsko-Biała, responded to the wave of criticism that poured out on it, by terminating the contract with Project agency and suspending its presence on Facebook; the agency quickly got rid of the employee, of course blaming her for the incident. However, this does not reflect well on the supervision of young employees in the company, who, without consulting their superiors, can post materials on the profiles of nationwide brands, followed by thousands of people. Marketing failures would probably have been avoided if the quality of services was prioritized over savings on supervision.

AUTOMOTIVE INDUSTRY – VOLKSWAGEN’S DIESELGATE

2015 was marked by at least a few records in the automotive industry: one of the largest car manufacturers in the world had one of the biggest image blunders and probably suffered the biggest losses in its history (the Volkswagen Group had to take out a loan to pay off its liabilities). On 18 September 2015, the US Environmental Protection Agency announced a violation of the Clean Air Act by Volkswagen and Audi diesel cars, which resulted in the initiation of numerous investigations. They showed that the computers of the said cars were installed with software that falsified the results of measurements of the emission of hazardous compounds in the exhaust gases.

The scandal, henceforth known as Dieselgate, affected not only the main stakeholder – the VW company and brand but also the German automotive industry and the entire segment of diesel cars. As indicated in Wolfgang Kerler’s article “You thought Dieselgate was over? It’s not,” published in The Verge, claims against German automotive conglomerates (not only the above-mentioned ones – “problems” with software in Mercedes-Benz cars were also recorded by Daimler) grew to tens of billions of dollars, and German politicians who had been favouring the industry so far began to take less favourable positions.
What impact did the scandal have on the brand’s image? Before 2015, the VW logo was associated, among others, with classic Beetle and German solidity. After this date, Dieselgate has been the main association.

Moreover, the decision-makers in the conglomerate showed that they were not prepared to face the gigantic image crisis. The company lacked an honest admission of fault – the “business as usual” approach and sales of diesel cars were continued, instead of rebuilding the company’s agenda or apologising for unfair practices. This led to a collapse in brand perception.

HOW NOT TO SERVE GUESTS – THE SCANDAL IN WILLA KARPATIA

Willa Karpatia is a guesthouse (or actually a complex of tourist facilities) at the foot of the Tatra Mountains. One of its guests remembered it thanks to the indiscriminate comments of the owners of the establishment, who could not bear the negative comment on the quality of the services offered. A critical comment assessing the quality of the stay as “1” appeared on the Wykop portal in January 2018 and was supported by the woman’s friends. The response of the profile’s manager was at least puzzling: the friend of the woman who wrote the opinion was called “an illegitimate son”, and the aggrieved woman was referred to as a “beggar” and carousal participant.

This exchange of opinions outraged Internet users who supported the guests of the guesthouse. In this situation, the owners published an apology, but as a result of overhearing the conversation on this subject, it became clear that they were apologising insincerely. One might expect that Karpatia will lose customers and disappear from the market, or at best it will struggle with little interest. However, almost a year later, the guesthouse enjoyed almost full room occupancy and positive reviews on booking portals (including Booking and TripAdvisor). So what is the moral of the whole incident? “No matter what they write about you; it is important that they write.” What turned out more important than the content of opinions on social networks was that (thanks to them) the search engine positioning of the place’s website improved.

Summing up, the above review of marketing crises shows that recipients of Internet content still treat opinions (including negative ones) appearing on the Internet with reserve – unless their content penetrates into traditional media considered to be more authoritative.

Sources:

https://www.crazyegg.com/blog/pronto-case-study

https://www.forbes.com/sites/roomykhan/2017/02/17/theranos-9-billion-evaporatedstanford-expert-whose-questions-ignited-the-unicorn-trouble/#24e6638f6be8

https://www.washingtonpost.com/news/wonk/wp/2018/03/14/theranos-chief-executive-elizabeth-holmes-charged-with-massive-fraud/?noredirect=on&utm_term=.4e0757dfee64

http://fortune.com/2019/02/21/theranos-elizabeth-holmes-redemption/

https://www.theverge.com/2018/9/18/17876012/dieselgate-volkswagen-vw-diesel-emissions-test-epa-german-auto-industry-mercedes-benz-bmw

https://spinsucks.com/communication/volkswagen-pr-crisis

In PRESS-SERVICE Monitoring Mediów he deals with information editing and personalisation. He is interested in international politics and broadly understood new technologies.
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