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The Worst Business Decisions Ever
Finding the right way to attract consumers has always been tricky. As the following examples show, even some very well-known and successful companies can make hilarious gaffes that leave them vulnerable to mockery. Here are four of the most infamous marketing errors in history.
The Ford Edsel’s hype led to its downfall. The company released the Edsel in 1958, hoping to make inroads against General Motors and other competitors. Instead, the Edsel cost the company millions. In the months before it was released, Ford unleashed an ad campaign to drum up anticipation for their new model. Advertisements were light on specifics, but proclaimed that “the Edsel is coming!” Car dealerships that were stocking the Edsel were under strict orders not to let customers see them before their release date. The ad campaign succeeded in increasing interest in the new model, but many people were unimpressed once they had the chance to see the vehicles for themselves.
Most consumers felt that the Edsel was ugly and overpriced. Its oddly shaped “horse collar” grille and strange name didn’t help matters. Neither did the economic recession that began around the time that it was released. The Edsel quickly became an infamous symbol of failure. On the bright side, it is now a highly sought after collector’s item for vintage car aficionados.
A Commercial for the Edsel
M&M’s and E.T.
Anyone who has seen Steven Spielberg’s 1982 film “E.T.: The Extra Terrestrial” will likely remember the scene where E.T. is lured out of hiding by a young boy named Elliot with help from some Reese’s Pieces candies. Originally, the candy Elliot was going to use was to be M&M’s. However, Mars Inc., the company that produces M&M’s, would not allow their candies to be featured in the film. After being rejected, E.T.’s producers turned to Mars’s rival candy makers. Hershey agreed to allow their Reese’s Pieces to be featured. Sales of the relatively obscure candies skyrocketed after E.T. became a huge box office hit. Unfortunately, this success led to the rampant and obnoxious product placement that now exists in many contemporary films.
Mars Inc.’s reasoning has never been made clear. Perhaps they thought that the premise of the film was too weird or that the movie would not be widely seen. There could also be a more prosaic explanation, such as feeling uncomfortable with promoting their product in a movie (something that is commonplace today, but was rare at that time) or not having sufficient money in their advertising budget.
The year was 1985. Despite several decades of using the same formula for their flagship soft drink, Coca Cola felt that they needed to do something drastic because of steep competition from archrival Pepsi. The company introduced New Coke in April of that year and simultaneously ended production of their original formula.
New Coke had a sweeter taste than the old version. It had tested well in secret focus groups that the company had conducted. Most of the people that participated in the taste tests told Coca Cola executives that they preferred the New Coke flavor over both the original Coke and Pepsi.
However, the reaction was very different once the soft drink was released to the general public. Many Americans, especially southerners (Coca Cola is based in Atlanta) considered the original Coke to be an iconic part of Americana. They despised the concept of jettisoning it in favor of something new. The extreme step of having New Coke introduced as a replacement for original Coke, instead of merely another variety, also bothered many consumers. Why would Coca Cola intentionally deprive its customers of a product that they had been drinking on a regular basis for decades?
Despite surveys indicating that many people liked the new flavor, the controversy over New Coke damaged the company’s reputation and opened it up to a hurricane of ridicule. Coke was caught off guard by the visceral negative response, but they acted quickly to minimize the damage. Within three months of New Coke’s introduction, the company reintroduced the original beverage, now called Coca Cola Classic.
In a strange way, New Coke was a success because it allowed the company to successfully re-launch the original Coke. Coca Cola Classic quickly became a huge sales juggernaut, outselling both New Coke and Pepsi. This turn of events has spawned conspiracy theories that suggest Coca Cola orchestrated the entire fiasco in order revitalize Coke sales. No proof has ever been offered to support this, however.
New Coke was quickly deemphasized, and it gradually became difficult to find, although the company continued to sell it for many years (New Coke was labeled “Coke II” during the early ‘90s). After spending years with one foot in the grave and another on a banana peel, it was officially discontinued in 2002. The company also phased out the “Coca Cola Classic” name and the original beverage returned to simply being called Coca Cola.
Bill Cosby Promotes New Coke
Netflix’s mailing and streaming services have changed the way that millions of people rent and watch movies. The company’s success was partially responsible for the demise of brick and mortar video rental store companies such as Blockbuster (who ironically turned down the opportunity to buy Netflix in 2000) and Hollywood Video.
Although its history has been mainly characterized by success, Netflix went through a rough period during 2011. In September of that year, founder and CEO Reed Hastings announced that Netflix would be splitting its streaming and DVD by mail services. Those who wanted to continue to receive movies in their mailbox would now have to log into a new website called Qwikster and pay a separate monthly fee.
The company had already faced the wrath of consumers earlier that year because of a price increase, but that turned out to be minor compared to the furor over Qwikster. The ridiculous name and unnecessary complication of forcing customers to use two different websites led to widespread ridicule. Media pundits, business journals, and even late night comedy show hosts mocked Netflix over Qwikster.
To the company’s credit, it quickly realized its mistake. Less than a month later, Hastings announced that they were canceling plans for Qwikster and that streaming and mailing services would both remain on Netflix.com. The Qwikster website never launched.
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