7 Worst Marketing Disasters in human history + 4 Key Takeaways
We know that everyone makes mistakes, even big companies with thousands of employees.
I am going to talk about 7 of the worst marketing disasters in human history and 4 key takeaways that you can learn from.
If you like to learn from other people’s mistakes, you are probably going to enjoy this post.
Without further ago, here’s the first one.
American Airlines: Unlimited first class pass that ended in disaster and lawsuits
This is what I think American boardroom was like.
Boss: We need to do more PR for our airline. Any ideas?
Marketing guy: You know what would make a great PR piece? How about selling a plane ticket where the passenger can use to fly first class for the rest of his life?
Boss: Sounds good!
Boss: How much do you think we should charge them?
Marketing guy: $250,000 a pass and another $150,000 to bring a buddy along. We can use the money to run a marketing campaign for it.
the whole room celebrates*
That’s exactly what American Airlines did in 1981. When you think about it, it’s a lot of money right? But not for Steven Rothstein, left, and Jacques Vroom, right, who bought the pass.
Apparently, one of them would clock 30 million miles and costing the airline at least $1,000,000 a year.
How did American Airlines solve this problem?
They went after them. They would put internal investigators into Rothstein and Vroom and begin to sue them.
American Airlines discontinued the pass in 1994, 13 years later and the lawsuits are still on going.
The story of Rothstein and Vroom is here: http://articles.latimes.com/2012/may/05/business/la-fi-0506-golden-ticket-20120506
Coca Cola: The new coke that people hated
After battling with Pepsi for a long time, and it seemed like Pepsi was gaining market share and as Coke had always been dominant in the market, they couldn’t let that happen.
So executives at Coke thought that the problem was with the taste of the soft drink, maybe it had been the same for a long time and people were tired of it, so they wanted to come up with a new and better recipe.
Introducing, the New Coke.
The coke board of directors were happy and they were more than confident that the New Coke was the real deal and Pepsi better watch out.
Turned out, the public hated it to the point where they took it to the street.
That put the management team of Coke into a frenzy and they didn’t know what to do and within 3 months, they couldn’t take the pressure anymore.
Tropicana: The new design that made them lost market share and millions of dollars
In 2009, younger people joined the management team of Tropicana. With fresh eyes, they think that it was time for Tropicana to re-design its packaging.
So they went ahead and spent $35 million to re-design the packaging and advertise it.
Before and after of the logo
They even changed the lid to this.
You think it would be enough, right? After all, they advertise the new design, there shouldn’t be a problem.
Turned out that people associated Tropicana with the old design where there is an orange with a white-red straw stick in it.
- People created emotional bond with the old design and didn’t want to change. Many hated the new design and publicly criticized it on the internet.
- Their customers thought the supermarkets didn’t restock Tropicana’s juice and they went for the competitor’s product instead, leading to a whopping 20% drop in sales that year.
Within 1 month, Tropicana changed their packaging back to the old one but the fiasco cost the company a whopping $50,000,000 at the time.
Hoover: Promotion that ends in $66 million loss and 6 years in court
At the end of 1992, Hoover had a lot of washing machines and vacuum cleaners laying around and they didn’t know what to do with them.
So they were trying to come up with a plan to get rid of them. And the geniuses from Hoover went to work and came up with an idea!
How about offering free return flight ticket for anyone who bought more than 100 pounds (or $133 at the time of writing) worth of Hoover products?
Albert freaking Eistein! That’s a good idea.
As soon as people saw the ad, they flocked to buy Hoover products and now, Hoover doesn’t have enough vacuum cleaners to sell nor the money to pay for the plane tickets for their patrons.
$66 million loss and 6 years in court that ended in 1998.
Fiat: The love letters that scared the hell out of women
In the year of 1994, the Italian car maker came up with a brilliant marketing idea where they would send 50,000 love letters to women in Spain.
Sounds great, right? Let’s look at the content inside the letter.
“I only have to be with you a few minutes and, even if it doesn’t work between us, I promise you won’t forget our experience together.”
Sounds like what a romantic guy would say to his crush, doesn’t it?
But the marketing team of Fiat were even smarter! They decided to send the letters “anonymously”.
Without a doubt, the campaign created quite a buzz, but a very negative one. Many women reported to the police thinking the letters were sent by stalkers.
Fiat came out to apologize soon after and stopped the campaign. They were forced to pay 15,000 Spanish pesetas (or $105.81) for sending the letter, and 150,000 Spanish pesetas (or $1,058.09) to one woman who took them to court.
Lifelock: Revealing social security number, seriously?
Todd Davis, the handsome CEO of Lifelock, the company that provides identity theft protection.
He walked into the office that day thinking about what to do to get people to trust and use his service.
Upon thinking, he came up with an idea like no others, with full confidence that his service can cover his ass, he decided to reveal his social security number to the public.
Everything was going well and all, and in 2007, shit happened, his company’s security system was breached. Todd and his team rushed to fix the problem and all was good.
One day while his wife was chilling at home, there was a call from a company about an unpaid debt. Puzzled, his wife let Todd know about this and they looked into it.
Turned out, Todd himself was the victim of the identity theft. Someone raked up $500 worth of debt under his name.
Todd’s identity was stolen again at least 12 more times after that. Later that year, Todd’s company was fined $12 million for deceptive advertising.
Electrolux: Nothing sucks like an Electrolux
A Swedish electric appliance company Electrolux was eager to launch their line of vacuum cleaners into the western market.
They hired an ad agency called “Cogent Elliot”, creative director at the time named “Mike Fox” thought it was a good idea to use a pun in the ad.
So they went with it.
The problem was in the old days, the pun didn’t work so well and the ad was the butt of many jokes for a long time.
Now that I think of it, the ad could have worked well if it was published in 2017.
Here are the things we can learn from the marketing fails.
- Change is okay, but not too drastic too soon
Like Tropicana, the change was simply too drastic and their customers felt like it was a new product, not the brand they were familiar with.
Try implementing a small batch of changes at a time and see how people react to it.
Don’t make a drastic change at once.
2. People create emotional bond with the product
Coca Cola underestimated the emotional bond people had with their product. The old coke were with them for almost 100 years at that point, it created a lot of memories and when the company was trying to take away, the customers felt like a part of their memories were being taken away as well.
This case is a bit different than Tropicana’s because Coke already tested the new formula on 200,000 people and the feedback was good — that’s why they were so confident about it.
They just underestimated the emotional bond people had with the product.
3. People like surprises, just don’t creep them out
It’s okay to surprise your customers with gifts but it’s not okay to send anonymous letters to women and scare the Jesus out of them like Fiat did.
However, if it was a PR stunt to get people to know about Fiat then it was indeed successful.
4. Check for loopholes before launching a promotion
Like American Airlines and Hoover, they didn’t do a good job at checking loopholes before launching the promotion campaign and it ended up in financial losses and a series of lawsuits.
People will always look for loopholes.