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Reputation Matters: Reasons why Trusted Brands Fail

The Hollywood entertainment industry is still grappling to resurrect from the blockbuster s.ex scandal featuring jailed film producer Harvey...

The Hollywood entertainment industry is still grappling to resurrect from the blockbuster s.ex scandal featuring jailed film producer Harvey Weinstein.

Before his documented downfall which premiered in October 2017, Weinstein had established a niche in the cutthroat film industry, receiving an Academy Award for producing Shakespeare in Love.

Among his other notable productions were the 1989 production, S.ex, Lies, and Videotape, Heavenly Creatures in 1994, Flirting Disaster in 1996, among other chart-toppers.

His errant sexual escapades, dating back to the 80s was revealed by The New York Times, launching his two-year drawn-out trial. And on 11 March 2020, his fate was sealed with a 23-year jail term.

Goodbye Harvey

An appearance in a wheelchair by the 67-year-old could not solicit the lenience of the judge, with prosecutors arguing that he should be given the maximum sentence for his “lifetime of abuse” towards women and “lack of remorse” for his actions.

Company investigations have not spared the rich and famous.

In 2019, the U.S. FBI was reported by Reuters to investigating corporate giants Johnson & Jonson, Siemens AG, General Electric Co, and Philips for allegedly paying kickbacks in a deal involving medical equipment sales in Brazil.

The demise of Enron Corporation necessitated by the investigation over its illegal dealings illustrates that when it comes to courts and investigations, no one is immune. But does it mean the end of the company or something can be done to resurrect or it is game over?

According to a study, The State of Corporate Reputation 2020, “As global business markets head into a new and undoubtedly pivotal decade, business leaders must be prepared for the unpredictable and unknown,” the report said. “Reputational opportunities and threats lie in wait everywhere, internally and externally.”

The Buffet’s wisdom

Billionaire businessman Warren Buffet’s overused quote remains relevant. “It takes 20 years to build a reputation and five minutes to ruin it. If you think about it, you will do things differently.”

Even with such a glaring caution, known brands and celebrities continue to fumble. Weber Shandwick President and CEO revealed that reputation management is getting a lot of attention.
Kodak had little or no competition in analogue photography, since its establishment in 1892, dominating the photographic film business in the 20th century.
“It has been widely accepted that reputation makes a meaningful contribution to business success," Shandwick said. 

“Our study quantifies the remarkably high value assigned to reputation today and shows how it takes a fierce level of attention to an unprecedented suite of reputation drivers – nearly two dozen deemed significant – to remain highly regarded and prevent reputation erosion.”

Remember who you are

With all the free, requisite information at hand, why do brands continue to falter? Well, according to Brand Strategy, “Beloved brands forget who they are and what it was that made them famous.”

For instance, Benneton was once a leading fashion brand in the 1980s and 1990s. in 2000, it ranked 75th Interbrand recognized it as the 75th best global brand, sadly, by 2002, it had lost its lofty ranking on the prestigious list. A decade later, Benetton Group was delisted from the stock exchange.

Once regarded as a must-have brand, they neglected their core business. “Their colorful and stylish fashion was the desire of the core teenage crowd.

Benetton’s brand promise was providing European fashions at an affordable price,” Brand Strategy observed.

“But the arrogance of the “can do no wrong” brand quickly faded. While they were so busy creating shock-value advertising and arrogantly talking of their brand as it were art itself they forgot about the fashion part of the business.”

Failure to capture changes

As you parents, and they will gleefully tell you about their Kodak moment. This was an era when Kodak had little or no competition in analogue photography, since its establishment in 1892, dominating the photographic film business in the 20th century.

Sadly, the Kodak moment started to deem in the 1990s, with declining sales of photographic film and its hesitance to move to digital photography, despite developing the first self-contained digital camera. They were slow to appreciate the takeover of the market they had dictated for generations by the digital camera.

“They did cut their prices, but couldn’t lower their cost of goods fast enough to keep up with the Japanese manufacturers,” Brand Strategy revealed. “Kodak was losing $60 for every camera sold at the same time as their traditional film business was dying.”

In January 2012, Kodak filed for bankruptcy.

False marketing

When it comes to business, it is easy to say what you don’t mean in a bid to impress. Smaller brands might get away with it, but for bigger brands, that could be the final nail in the coffin. As a brand, you represent a promise. 

When that promise fails to deliver, you don’t have anything.

“For example, when Harley Davidson introduced perfumes, the brand was severely affected. Because Harley Davidsons promise to its followers is for the ride that they are going to get on their bikes,” Marketing 91 said. 

“However, when Harley came with a commercial product like a perfume, it was received negatively by the HOG group because Harley broke its promise.”

Failure to monitor the brand

“To many, “brand” is an ephemeral concept, hard to define and hard to pin down. So many companies don’t try to measure it,” Bottomline Marketing said. “Yet, a brand has metrics that need to be measured and monitored just like sales, profits, operating costs and other key business metrics.”

Notable brand metrics are brand perception, consumer confidence, and trust in the brand, customer loyalty and engagement, and how a brand ranks versus competing brands and why. 

Do consumers know what you stand for and are you delivering on that promise? Failure to address these questions means your brand might be slowly sliding into oblivion.

Investing in turning a dying brand

“Trying to revitalize a struggling brand in a situation where a new brand could achieve a greater visibility and acceptance among customers in a shorter time and at a lower cost,” according to LinkedIn.

This, according to turnaround experts can be attained by recruiting new people to revive operations and try and bring new and innovative ideas. Marketing, rebranding, and financing are other notable avenues to resurrect a brand, sadly, these maneuvers need money, and sometimes huge amounts can go down the drain if it is not properly strategized.

Being stationary

Choosing to remain stagnant or fail to act is a recipe for disaster for any brand. A brand that experiments will fail in other avenues, but it will gain some important lessons for the future.

“One of the best qualities of a strong brand is consistency. But too often consistency meets with complacency, which leads to one of the worst qualities a brand can embody: stagnation,” said Ignyte Brands.

“Now, more than ever, the marketplace waits for no one. Your brand must be nimble, dynamic, and relentlessly abreast of current trends. Avoiding failure means avoiding irrelevancy.”

Controversial products and messages

Often, some brands and celebrities who had invested years to become recognized may make one mistake, that may sink them into oblivion. Some brands elect to associate with the wrong crowd, including controversial political statements.  

“Companies must ensure the branding strategies they use don’t endanger others, both for ethical and public-image reasons. For example, conventional brand strategies might appear unethical if you are promoting products that cause or seem to cause societal problems,” noted Dotugo.

Position amnesia

Feeddough says “position amnesia is when a brand forgets what it is and what it stands for and tries to experiment with its identity and positioning to an extent that it takes a totally different route.”

One of the notable brands to suffer from position amnesia was Coca Cola in the 1970s and early 1980s when it seemed Pepsi was overtaking it. Their response was catastrophic. Instead of innovative marketing strategies, they introduced ‘New Coke’. The outcome was a dismal failure.

“By launching New Coke, Coca-Cola contradicted its previous marketing efforts where it spent more than 50 years to attach an emotion (happiness) to their original product,” opined Feeddough. 

“This being the only reason the new coke was boycotted and the company was left with no option but to bring back the original product.”

Roll with the times

For the benefit of the younger generation, bottom jeans, afro hair, disco, among others, once ruled the world in the 70s, but with time, they became extinct. Then, Cadillac was the premium luxury automobile., with sales peaking in 1973 just as gas prices began to rise.

Brand Strategy observed: “It no longer fit the desires of the Yuppies of the 1980′s who were now opting for sleeker luxury with Mercedes and BMW. The Corvette brand had done a nice job transitioning from the 50′s of James Dean through the 60s and 70s, always remaining as an icon of sophisticated American cool.”

From the 80s onwards, consumers preferred smaller and sleeker sports cars. 

“General Motors failed to keep up in design and failed to change as gas prices rose dramatically. They found themselves attacked on the lower end from the Japanese cars like Toyota and Honda and at the higher end from German brands like Mercedes, Porsche, Audi, and BMW,” Brand Strategy added.

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