Following a corporate scandal, managers who acknowledge they have problems and launch communication programs to repair their tarnished reputations stand the best chance of rehabilitating a tainted brand or corporate image, according to Wharton faculty and branding consultants.
Martha Stewart, accounting firm KPMG, insurance broker Marsh & McLennan, and Merck, manufacturer of the troubled painkiller Vioxx, are among the most recent examples of companies that face the challenge of restoring damaged reputations.
Depending on the nature of the scandal, says Wharton marketing professor Barbara Kahn, companies can take a slow and steady approach to brand repair, or a swift "silver bullet" solution. McDonald's, she says, could take the slow road in addressing charges that its fast food contributes to the nation's rising obesity. "What you would do is associate McDonald's with more nutritious offerings and slowly move the image in a believable way."
For example, the company might begin by focusing ads on its use of high-quality beef, then continue by promoting its salads. "Each leap you are making extends the brand's meaning, but it is small enough that the consumer is willing to make the jump. This takes a long time," says Kahn, adding that the fast food giant went too fast when it introduced its McLean sandwich in 1991. "It didn't work. It wasn't credible. You have to do it in a slow, reasonable way that doesn't test the consumer's belief system."
Marsh & McLennan is taking a quick, clean-sweep approach to restoring its corporate image after running afoul of New York's attorney general Elliot Spitzer. In January, the firm agreed to pay $850 million to settle charges that it took kickbacks to recommend insurance providers to clients. Meanwhile, the company has tapped former prosecutor Michael Cherkasky, head of its Kroll investigative firm, as chief executive.
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