Three Major Companies that faced Brand challenges
McDonald’s
In April 2014, McDonald’s created a Twitter hashtag for its mascot Ronald McDonald. At first instinct, the company thought this would be a good idea, but it turned out to be an example of the difficulty of having a successful brand campaign on social media.
One main problem is the fact that not everyone is a fan of the McDonald’s food chain or its mascot. The creation of a Twitter account gave an open invitation to the countless “unsupported followers” across the USA to throw negative comments. Some people do not like McDonald’s restaurant chain or its mascot citing such reasons as using the mascot to sell fast food to children, blame for rampant obesity in the USA, and low employee wages.
One preventive solution that could have prevented the lack of success would have been having a Twitter handle (with biography and links to McDonald’s different websites) instead of only a hashtag for its mascot. Another preventive solution would have been to create some clarity and organization on Twitter. Ronald McDonald, in addition to being a mascot, also has a charity, Ronald McDonald House Charities, which provides housing near hospitals to families that have children who are cancer patients. A lot of these locations are on Twitter as well with their own posts, and the mascot appears at a lot of their events. There is confusion on Twitter as to when the mascot posts something representing himself, so it could be better for the charity locations to post under one global Twitter handle and have a separate Twitter handle for Ronald to post something as himself.
A third preventive solution is to incorporate the mascot with the corporate Twitter handle. A fourth solution is to be careful with the social medium, which McDonald’s accomplished after 6 months of unpleasantries on Twitter by going to Instagram. Going to Instagram was a good move since the user base is generally a more positive environment and less susceptible to the many negative comments that the Twitter environment experiences.
Starbucks
In March 2015, Starbucks ran a campaign about the issue of race, by having baristas at 12,000 USA Starbucks locations write the words “Race Together” on customer’s beverage cups as depicted above. Also, a “Race Together” newspaper supplement appeared in USA Today physical copies. This campaign was done with benign intentions about starting conversation among customers about race in the USA and to promote that the idea of success in the USA, the “American Dream”, should be accessible/attainable for everyone. However, unfortunately, the campaign did not work out as planned and got negative feedback.
The campaign received sharp criticism from reporters and social media users. Starbucks needed to have a plan to respond to the negative comments from the reporters and Internet complainers, in order to be able to defend and validate its message and ensure the public of its good intentions. When Starbucks launched the campaign, the increase in discussion about Starbucks was a large amount. However, the distribution of comments did not indicate a positive response: 7% of comments were positive, 60% of comments were negative, and one-third were described as hateful. Overall, the impression ranged from being offensive to misguided.
One reason why the campaign did not work out is because it was not guided correctly. The Starbucks brand is associated with young urban professionals buying a variety of coffee drinks, so this campaign was misguided. So Starbucks appeared to be entering a national conversation but not making a solid connection to it.
Another reason is that the wrong spokespeople were used, the baristas. Baristas make the drinks and serve them to customers and then have to move on to serve other customers quickly, so their conversations with customers are very casual and fleeting. Conversations about race are serious and lengthy, and it’s not feasible for baristas to engage in a serious, lengthy conversation of a topic like this with a customer.
Another reason is that this was not good for business. Again, baristas have to serve customers quickly and allow the line to continue moving. Customers cannot afford to have a lengthy conversations with someone they do not know; they just want to buy their coffee drink, retrieve it when it is ready, then sit down or leave.
A fourth reason is that this campaign did not undergo a field test; it was just suddenly implemented by the company into practice at 12,000 locations. Going into a sensitive issue has to be executed carefully and the rough patches smoothed out before “going all in” as Starbucks did. It would have behooved Starbucks to test out the campaign at a few Starbucks locations in one city, tread lightly, and obtain results on the field test and make adjustments as necessary, not to go full speed ahead right away.
JCPenney
In February 2012, JCPenney and its CEO at the time, Ron Johnson, started a new pricing strategy that involved “great everyday prices” and no more coupons/sales. Their new pricing strategy involved everyday prices, month-long values, and best prices according to the schematic below:
However, Johnson made a serious error with this re-branding, because JCPenney’s core customer base did not respond well to this. JCPenney’s core customer base consisted of price-sensitive shoppers who shopped at the company’s stores often by bringing in coupons published in the newspapers and taking advantage of various sales. JCPenney was known for a long time for their price markdowns. The long-time customers felt that the new pricing scheme was removing their deals that they were taking advantage of, and these customers stopped shopping at JCPenney as a result. They felt that the brand that they had gotten used to and liked no longer existed.
JCPenney’s “JCP” square logo was to align with the company’s new “fair and square” pricing and was designed to emphasize that customers did not have to wait for coupons and sales in order to take advantage of good prices. This policy did not work with its core customer base, who got confused with the JCPenney brand and were tempted to shop elsewhere. Sales had decreased by 28.4% from the previous year, and JCPenney gradually started to reintroduce sales back into their pricing strategy. JCPenney also fired Johnson in 2013, who at that point had been CEO of JCPenney for 17 months, and the company brought Mike Ullman who was their previous CEO. JCPenney has been reestablishing its brand and going back to the coupons and sales, and it has returned to the red “JCPenney” logo that it used before.
One misjudgment that Johnson made is the fact that he got away from JCPenney’s brand and tried to transform it into something it was not. Customers got confused and were chased away during the “fair and square” phase. He made the mistake of overlooking/undervaluing the JCPenney brand. Johnson would have been better off abiding by the old saying, “If it isn’t broke, don’t fix it”. Another misjudgment that he made was his approach was backwards. If changing an external brand was necessary, he should have changed the internal company culture first which is important for delivering the experience of the brand. A third misjudgment he made was failing to do a “field test”. He implemented the “fair and square” pricing strategy at stores nationwide. He would have been better off testing his pricing strategy at one city’s / metro area’s stores for a trial period of between 1 and 3 months, and then measured the success of sales in that 1–3 month period vs. sales of a similar period in a previous year with the old pricing strategy. Also another factor that contributed to this logo misjudgment was that Johnson did not have the necessary support/backing; he tried to create a pricing revolution on his own. In any major marketing/sales overhaul that he attempted, it is necessary to gain support from other important people at the company.
Note: This post is part of a blog assignment for the Social Media Management class 15.S10
