Brand Fragility
A brand can be defined as "the sum of all the associations, feelings, attitudes, and perceptions that people have related to the tangible and intangible characteristics of a company, product, or service."
The fact is that brands that have taken years of talent and resources to painstakingly build can be drastically diminished or fatally damaged in short order. Such brand catastrophes can be self-inflicted or due to events entirely beyond the brand holder's control.
Hyatt Hotels' Boston debacle is a current, shoot-yourself-in-the-foot example. As a cost-cutting move at three hotels, Hyatt fired their entire housekeeping staff, outsourcing the positions to contractors who would bring in lower-cost workers. Media reports had Hyatt getting the soon-to-be-departing staff to train their replacements, telling them that these were to be "vacation subs." The resulting (surprise?) vilification of Hyatt immediately came from all quarters, even uniting groups and individuals who disagreed with each other in every other conceivable way! As an ironic coincidence, BusinessWeek had just recognized Hyatt as "Best Place to Launch a Career," thus drawing that entity into the unsavory mess. It remains to be seen whether Hyatt will attempt to ride out the storm or opt for some sort of damage control. Either way, their public image is thoroughly trashed, perhaps for a long time to come. [Sept. 28th update: Hyatt has released a statement in which they "recognize and regret that we did not handle all parts of the transition in a way that reflects our organization's values." They put foward a new severance offer, involving temp jobs.]
This isn't an unforeseeable lightning strike, such as Domino's Pizza getting blindsided by employees doing disgusting things. Rather, this is short-term thinking overriding long-term considerations. An example from the past would be Packard, which once thoroughly dominated Cadillac in the premium luxury car category. To boost sales during the Great Depression, Packard introduced a middle-market model. As time went on, buyers came to perceive Packard as just another mid-price vehicle and Cadillac as the top-end choice. By '57, Packard was off the scene and Cadillac reigned. As we speak, Cadillac seems determined to do a "Packard," losing its cachet by diluting its brand.
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