Dayton Hudson Less Than Aggressive In Crisis Handling
All hope abandon, ye who enter here. All hope abandon, ye who enter here. hope abandon, ye who enter here.
That was Dante's warning at the gates of Hell. And there are probably a great many marketers who consider the shores of a foreign country just that. At every international marketing conference I attend the stories abound. From a small toe stub, (i.e., HP's European Touchscreen computer launch used the same "butterfly" ad program it had used in the US, it discovered that butterflies are considered very effeminate in France); to a full fledged flop on the face, (i.e., Ansett Airline's discovered, while attempting to enter the Asian market, that the name of the airline translated into "Peaceful Death" - sales have never recovered). Handled correctly, entering a new city or a new country can be a boost to your image. Witness the brilliantly clever and invariably well-received entries of Southwest Airlines. Each launch is tailored to the local community. For example when they inaugurated flight service in Providence, "the Ocean State" they threw out an anchor from the first plane that landed.
But as exciting as a launch may be, it's what happens after the launch that really matters. Are your products accepted? Is your image consistent? Do the customers keep coming back?
Turmoil in Teletubbieland
This month we'll tackle two cases of geographic crisis. The first: Teletubbies, the British television series that launched a year ago, and has taken by storm American toddler-dom. After a very successful launch, Teletubbies came up against Jerry Falwell who accused Tinky Winky (the purple one) of being gay. The media latched onto the story with ill-disguised amusement, suggesting that based on Falwell's criteria everything from professional basketball to the Three Stooges could also be considered "gay." But most recently, Teletubbies ran smack into the might of American mass marketing, filing suit against Wal-Mart for copyright infringement. Thus far it's Teletubbies 2, opponents 0. In both cases, Teletubbies have claimed the higher ground, generated tons of positive ink for themselves, and seen sales skyrocket.
Frango Fracas
Our second case is very domestic, but the rhetorical furor it created was worse than your average day in the Duma (Russia's parliament). When Dayton-Hudson, the parent of Marshall Field's departments stores in Chicago, decided to move production of the famous Frango Mints from downtown Chicago to Pennsylvania, pickets, letters to the editor, boycotts and even a Mayoral press conference were held. The problem: never once in the key media did Dayton Hudson express the slightest concern or understanding of local sensibilities.
Lessons learned learned
It may be obvious, but lesson No. 1 is listen to and understand your local audience. Don't rely on transplants from corporate headquarters. Use local people who know the ropes.
Lesson number two is to pick your battles. Teletubbies correctly chose not to engage Jerry Falwell, but when it came to copyright infringement, that was something to fight over. Dayton Hudson should have known that the fate of 157 workers and the cities favorite mint would cause a furor.
Teletubbies
Criteria:
Extent of coverage
Grade: A-
Comments: I'm not sure that Teletubbies wanted all the exposure they got, but most of it was pretty positive.
Advice: Follow the media preferences of the country you're in. We may not like to admit it, but filing a lawsuit is one of the tried-and-true ways to garner publicity in America.
Criteria: Effectiveness of spokespeople
Grade: B
Comments: Teletubbies relied on a local spokesperson, Kenn Viselman, of Itsy Bitsy Entertainment Co, exclusive marketer of Teletubbies in the US. While Viselman pretty much stuck to a consistent "its not flattery, it's illegal" theme he had more credibility than Wal-Mart who couldn't comment because they hadn't seen the complaint.
Advice: Whenever possible, use local spokespeople that are familiar with the predilections of the local media.
Criteria: Communication of key messages
Grade: C
Comments: Unfortunately, every story about the lawsuit started with "First it was Jerry Falwell" and generally referred to the Teletubbies as "beleaguered"
Advice: Its always better to be beleaguered and evoke sympathy, than to be the bully.
Criteria: Management of negative messages
Grade: B-
Comments: Any negative messages concerned Teletubby difficulties in the American market, but generally the positive outweighed the negative.
Advice: As we see time and time again, one memorable bad event will always be recalled in subsequent articles, until you give them yet another topic to write about. Eventually they'll run out of room, and with luck will drop the ancient history.
Criteria: Impact on customers
Grade: A
Comments: None. As far as I know Teletubbies was a total hit, and sales of Tinky Winky, went through the roof as soon as Jerry Falwell's comments went public. A couple of stories noted that sales at Wal-Mart stores were not effected.
Advice: Bad news doesn't always mean bad sales, and the ultimate proof of the successful handling of a crisis is customer response.
Criteria: Impact on investors
Grade: A
Comments: N/A
Advice: N/A
Criteria: Impact on employees and prospective employees
Grade: B
Comments: Probably not much, but I guess it's nice to know that your employer is protecting your marketing rights.
Advice: It is always hard to judge what impact a lawsuit has on employees. But generally they rally around.
Criteria: Overall score
Grade: A-
Comments: They followed the rules, thought locally, picked their battles and the end, and the customers were loyal.
Advice: Be sensitive to the local market in which you're courting the media.
Dayton Hudson/Marshall Fields
Criteria:
Extent of coverage
Grade: B-
Comments: The good news is that the worst coverage was local. The bad news is, so are most customers.
Advice: Never dismiss negative coverage because it is mostly local. Investors regularly read local newspapers to find the true dirt on companies, and anything your customers read is important.
Criteria: Effectiveness of spokespeople
Grade: D
Comments: The local Marshall Fields spokesperson put up a relatively weak front compared to the Mayor's publicity, but the real anger was directed at Dayton Hudson, the parent company, and they were nowhere to be seen.
Advice: In order to persuade people to change their mind, you have to lead them from where they are to where you'd like them to go. Spokespeople repeating that "the decision has been made" enraged Chicagoans because it made them feel powerless and didn't empathize at all with their feelings. Make sure every spokesperson from the CEO on down expresses caring and concern.
Criteria: Communication of key messages
Grade: F
Comments: If they had a key message, it was nowhere to be found. Marshall Fields and Dayton Hudson were positioned as uncaring corporate monoliths. The mints themselves got some nice positioning, but the only message that came across from the company was, we don't care, we've made up our mind.
Advice: The only way to get a key message across in the middle of a crisis the likes of this one is action. Providing jobs for laid off workers, considering alternatives, just listening, would have all been good actions to take to try to get across the notion that the company cared.
Criteria: Management of negative messages
Grade: F
Comments: Because the media became obsessed with the issue, every story referred to the big, heartless, out-of-town corporation. Just the image you do NOT want when you're an outsider in a big market.
Advice: In this case, the negative messages may not be avoidable since Dayton Hudson's history includes large layoffs, and occasional closings of popular local stores (i.e. Lechmere).
Criteria: Impact on customers
Grade: D-
Comments: When customers start writing letters to the editor calling for a boycott, you know you're in trouble. It is too soon to judge the impact on sales.
Advice: When making cost accounting decisions in this day and age of brand value, you must look at the cost savings of moving an operation vs. the cost to the brand, the cost of lost customer loyalty and the reputational cost of a facing a hostile media and political environment.
Criteria: Impact investors
Grade: C
Comments: No doubt the stock soared, as it always does when layoffs are mentioned.
Advice: Ditto.
Criteria: Impact on employees
Grade: F
Comments: The mayor, the newspapers and the people on the street all expressed more concern for laid off employees, than did Dayton Hudson.
Advice: Always express care and concern for your employees, or you'll never be able to attract and keep the ones you want.
Criteria: Overall
Grade: D-
Comments: It's a classic tale of outsiders vs. locals. Effective crisis communications starts by listening, listening to your employees, and listening to your customers. Maybe if Dayton Hudson had spent more time listening to people rather than looking at spreadsheets, this might have been avoided.
Advice: Hard to imagine a worse scenario, made worse by some very out of touch out of towers. Again, lesson No. 1: when you're a stranger in a strange land, listen to the locals.