Hall of Shame

Recent Inductees

Budweiser and Miller Attack Ads
It didn't necessarily start out as a bad idea on Miller's part to directly challenge Bud Light in its new ad campaign launched in the fall of 2003. After a string of strange and meaningless advertising campaigns, Miller acknowledged its brand meant little to consumers. But instead of harking back to its history as "the champagne of beers," or developing a new reason for being, it launched a still ongoing campaign poking fun of Budweiser. A similar approach worked for Pepsi and Avis, yet those brands also offered a reason to buy—Pepsi was the "taste of the new generation," and Avis "tried harder," to win your business. Other than some occasional references to being low in carbs (a passé concern) and better performance in taste tests, Miller's ads simply mocked Bud.

Anheuser-Busch decided to respond and the whole situation has gotten quite nasty. It announced a companywide "Unleash the Dawgs" campaign, "our strategic response to some of the desperate tactics Miller Lite is using," and aired a spot that referred to Miller as "the queen of carbs" and pointed to Miller's South African ownership. It continued on into the football season in the Fall of 2004, when Miller's ads featured referees penalizing people for drinking Bud Light at the start of the football season. Most recently, AB President August Busch IV wondered aloud how Miller's wholesalers could sleep at night knowing they're "destroying the American beer industry," while portraying his firm as a true patriot.

In the meantime, overall beer sales have continued to decline. Miller did manage to gain a point of market share and has seen 12 months of improving sales, but this likely attributable as much—if not more so—to increased marketing spending and an initiative to improve the effectiveness and efficiency of media buys than the ad campaign. Bud's sales, on the other hand, are falling. And if you ask the average American what Miller and Bud stand for, you'll still get a blank stare.

GM's Pontiac G6
It was supposedly a coup for GM when Oprah Winfrey gave every member of her studio audience a brand new Pontiac G6. What was considered the ultimate product placement and pseudo-endorsement by the beloved talk show host was "heralded in marketing circles for its wide reach and emotional impact," wrote the Detroit Free Press at the time. Media coverage of the massive, first-of-its-kind give-away brought even more attention to the rollout of the new car and had others in the car industry green with envy.

But six months later, industry researchers already consider the G6 a flop, pointing to the steadily increasing rebates GM has had to offer, even as it dropped the price, to stimulate even just modest sales. Ronald Tandross, an auto analysts with the Banc of American Securities brokerage firm listed the dragging performance of the G6 as a "key reason" he suggested investors sell their GM stock and estimated that sales are "at least 30% below" where they need to be. Another auto expert, Art Spinella of CNW Marketing Research, described the performance of the G6 as "awful." "The reality is, this car was supposed to do something, and it didn't do it," Spinella said. "It just hasn't reached the level they had hoped for. It's not doing as well as it should." The numbers appear to back the analysts claims.

Spinella continues, "It's one thing to have that kind of major marketing coup, but you need to back it up." Critics gave the G6 a tepid review pointing to the car's lackluster design and underwhelming options package. The Detroit Free Press' auto critic wrote, "They are attractive, comfortable and competent cars, but a high price, iffy interiors and oddly tuned steering leave them well short of sporty competitors." Even Oprah Winfrey—or really any other splashy marketing communications campaign or promotion for that matter—can't overcome the short-comings of a mediocre product.

Interstate Bakeries
Three years ago, Interstate was loaded with debt, competition was stiff, and concern about childhood obesity and carb-consciousness was on the rise. So it's not surprising that though it held some of the most beloved brands in American baking history, Twinkies and Wonder Bread among them, senior management at Interstate Bakeries had serious doubts about whether it could reverse the annual losses it had been reporting. For some reason, as they considered their options, they didn't consider the significant brand assets the firm held in Twinkies and the like, which had languished in recent years. They didn't think about leveraging their significant competitive advantages in the form of their supply-chain and shelf space in stores to introduce a new bread product (multi-grain bread was the hot new product at the time after all). Instead, they looked around for ways to cut costs.

The best way to get rid of the excess, executives believed, was a program that would extend the shelf life of its products, particularly Wonder Bread, which only lasted for three days. The company ramped up to launch the program by promising factory closures and went ahead and cut the number of deliveries. Messing with a beloved recipe is usually not a good idea (i.e., New Coke), and it certainly wasn't in this case as the enzymes that made the bread stay "fresh" longer made the loaves doughy and gummy and caused many to collapse. With cuts in deliveries, the Interstate shelves in stores looked empty and disheveled because deliverymen weren't visiting stores as often to replenish and neaten-up. Though the enzymes didn't hurt the appearance or taste of Twinkies and Hostess Cupcakes, it didn't add anything to the marketability of the brand to consumers either.

As retailers complained, consumers selected other bread and snack options. The Wonder Bread brand and the Hostess line continued to stagnate, finally forcing Interstate to file for bankruptcy protection.

Krispy Kreme
Krispy Kreme won great acclaim from industry analysts, business gurus, and marketers—Copernicus included—who greatly admired the cult-like following the brand commanded. What jetted the doughnut maker to prominence in the first place was a devotion to delivering a top-quality product in an "event-like" store atmosphere where consumers could watch the famous donuts bake. It was a regional favorite, gaining national attention as celebrities like Madonna sampled its hard-to-get doughnuts and raved. The company slowly expanded to other regions and opened stores and kiosks in high traffic tourist destinations such as New York City and Las Vegas to fuel the fire. It spent virtually nothing on advertising, relying on word-of-mouth generated by grand openings and celebrity interest to spread information about the brand.

Unfortunately, the brand's managers seemed as taken with the brand as we initially did, and failed to adapt the marketing strategy as it expanded into increasingly competitive markets and fears of trans fats and carbs mounted across the country. For instance, it kept the model of using its stores as distribution points to supply doughnuts not just to consumers, but to gas stations, convenience stores, and other retail locations. As folks discovered Krispy Kreme in seedy dairymarts, the brand lost a bit of luster. The company also failed to adapt the store concept—you came to watch the doughnuts, there was nothing else to eat or drink—even though, as it entered more markets, more and more it butted heads with coffee powerhouse Dunkin' Donuts and Starbucks and other fast food alternatives. Further, it also stuck with the same marketing tactic: word-of-mouth. Grand openings generated their fair share of attention, but with Krispy Kreme doughnuts available in the local supermarket and no reminder advertising, there was little reason to go back to stores.

As sales declined, senior management responded by cooking the books, which did the brand no favors. Now the CEO has been ousted and the same turnaround specialist that helped post-scandal Enron is taking over.

Oracle
A company that provides database management software that allows companies to store and access data across platforms and a wunderkind of the New Economy, Oracle from the get-go targeted Fortune 500 companies. The firm worked diligently to win business and get its software systems into every large leading company in the world and met with great success doing so. But there are only so many firms of the Fortune 500 ilk. Instead of cultivating businesses in other segments—particularly among small and medium-sized businesses whose numbers were/are proliferating—Oracle continued to focus on the Fortune 500. Once it had most of these firms as customers, there was nothing left in the new business pipeline. Since the focus of the firm had been on making sales rather than cultivating long-term relationships, the emphasis was on moving existing products. Oracle realized too late that it had nothing new in the works to offer current customers as their needs grew and changed over time. Innovation and R&D had not been a priority.

Oracle had ample time and opportunity to address these glaring marketing problems—a saturated and narrow market target and no new product or service news—but CEO Larry Ellison instead announced the company would focus on acquisitions to spur continued growth. With that, Oracle launched an unsolicited, hostile takeover bid for rival software provider PeopleSoft. Though Ellison admitted he had no clear plan for how he would integrate PeopleSoft into Oracle or how the acquisition would ultimately lead to a better business, he aggressively pushed ahead. PeopleSoft quickly slapped Oracle with a lawsuit and the Department of Justice also filed suit in seven states to block the deal.

Now mired in legal proceedings, Oracle appears even more lost at sea, without a strategy, without direction. Oracle stock price has never fully recovered since June of 2003 when the PeopleSoft debacle began.

Washington Mutual
Not that long ago, Washington Mutual seemed headed for the Business Hall of Fame. With a goal of becoming the nation's leading retailer of financial services, Washington Mutual, known affectionately in its home market of Seattle, Washington, as "WaMu," began its transformation process by buying up other major lenders. In less than a decade, the company went from a small, little-known thrift bank, to the country's biggest mortgage bank.

The company's research showed that when a customer started a relationship with the bank by taking out a mortgage, on average, they maintained $15K in deposits, investment, and other accounts after five years. So WaMu used its mortgage business to enter a new market and generate leads for the other financial services it offered. It opened customer-friendly retail locations particularly in under-served urban markets, offering free checking and other cash incentives. According to Businessweek, "With its customer-oriented appeal to the mass market and its own version of everyday low pricing, the bank…has earned comparisons to retail giant Wal-Mart."

Unfortunately, WaMu didn't share Wal-Mart's obsessions with the systems that enabled it to profitably offer low prices and continue to grow. WaMu's mortgage acquisitions each came with different technologies for communicating with mortgage brokers on approvals and processing. Because of communication problems, there were significant delays in closing mortgages and the company lost business and money maintaining accounts. Though management pledged to diversify—60% of its business still came from mortgages—it relied on mortgages to generate leads for the rest of its business. As interest rates increased and demand for mortgages slowed dramatically, there went the leads.

Today the company is a much-speculated target for takeover as it struggles to make its business model work.

Past Inductees

Abercrombie and Fitch
Abercrombie & Fitch, the Ohio-based clothing retailer targeted to teens with about 700 outlets in the U.S., marketed its stores by testing the limits of consumer tolerance. The Christmas 2003 Field Guide, the cornerstone of the marketing communications program, went way over the top with the teaser headline on the cover, "Group sex and more!" Inside, readers found articles that essentially encouraged sexual experimentation (no mention of the risk of diseases and pregnancy, of course). Add to the Field Guide the company's other decisions to parade around teen models in underwear to promote the opening of a new store in Boston, and stock thong underwear with sexually suggestive slogans sized for 8- and 9-year-old girls, as well as T-shirts with racist caricatures and strange humor ("It's all relative in West Virginia," for instance, a reference to incest). At a certain point controversial is no longer good for business. Ultimately if the merchandise doesn't appeal to teens, it doesn't matter if you're the retailer that your parents don't want you to go to and refuse to pay for the trip—you won't go anyways because there's nothing to buy. This has happened at A&F. After months of declining same store sales, continued fall-out from its various controversies, and mounting pressure from stockholders, the retailer announced it was dropping the Field Guide and rethinking its marketing strategy.

Anheuser-Busch
We didn't think it was possible for a beer company to sink even lower than Miller Lite and Coors Light with their respective "Cat Fight" campaign and "Boxing for Breasts" promotion (you win a boxing match, you win a boob job), but Anheuser-Busch rose to the challenge, hitting new lows with its advertising and sponsorship programs. First, there were the Bud Light spots the company selected to air during Super Bowl XXXVIII. Clearly, the company has an even lower opinion of their target buyers than Coors and Miller, given the absolutely infantile commercial content, consisting of a farting horse and a puppy biting a man's privates. As if the puerile scenes weren't enough, the gassy horse and chomping dog are followed by the strange message, "fresh, smooth, real." Frankly, "fresh" and "smooth" are the last adjectives that come to mind after seeing a horse lift its tail and break wind! These spots are even worse than the talking frogs and lizards that Bud featured in ads a few years ago, and those were pretty bad. Update: While its ads don't feature farts and other bodily functions any more, Anheuser-Busch's recent xenophobic spots directed at Miller continue to do little for the brand.

Chrysler
In November 2003, Chrysler proudly announced its plans for the Dodge brand to sponsor the 2004 Lingerie Bowl, an alternative pay-per-view offering during the Super Bowl's half-time show (which, thanks to Janet Jackson, was more of a humdinger than the Lingerie Bowl). The premise of the Bowl: Teams of seven models each, scantily clad in lingerie and some revealing sort of presumedly protective equipment and coached by former NFL superstars Eric Dickerson and Lawrence Taylor would play full-tackle football at the LA Coliseum. The company explained the program "will attract the Dodge brand's core demographic." Not surprisingly, the Lingerie Bowl sponsorship generated controversy as many wondered what the often family-oriented (think mini-vans) Dodge could have been thinking. As the controversy grew, CEO Dieter Zetsche publicly distanced himself from the sponsorship, claiming he had no knowledge that it was in the works and Chrysler eventually withdrew its sponsorship all together. According to Chrysler, the sponsorship "was diverting media and consumer attention from current products, and the great new products we are preparing to launch next year." That it thought it would have anything other than this effect is just bad decision making.

Frozen Coke
In 2000, Coke and fast-foodie Burger King were in talks to launch Frozen Coke, a new icy dessert drink, in all U.S. stores. The equipment required for mixing the drink cost $30 million and a supporting marketing campaign $10 million, so BK naturally wanted to run a test before asking franchisees to make such a sizable investment. BK selected Richmond, Virginia, as the test market and in a TV ad campaign, promoted getting a free coupon for a Frozen Coke with the purchase of a burger, fries, and drink combo meal. If combo meal sales went up, Frozen Coke was in. When the first few days of the test yielded poor results, BK complained Coke wasn't doing enough to support the test so Coke's sales team went to stores to ensure the coupons were getting distributed and rewarding BK employees with T-shirts and prizes if they sold more combo meals. As revealed by a 2003 audit, the sales team also bought plenty of combo meals themselves and, thanks to Coke's extra efforts, sales went up. Encouraged by this seemingly strong performance, BK went ahead with the new product launch, offering a coupon for a Frozen Coke with the purchase of a spicy chicken sandwich—a totally different promotion than what was tested, highlighting one of the many problems with traditional test markets and marketing implementation. The promotion was disappointing and sales of Frozen Coke have fizzled. Though its efforts to "stuff the ballot box" didn't skew sales dramatically, Coke's syrup contract with BK was on the line, so by way of apology, Coke had to pay as much as $21.1 million to Burger King and the affected restaurants.

Mitsubishi
After years as an also ran to Toyota and Honda, in 2001, Mitsubishi launched an urban-flavored, music-driven advertising campaign, aimed at "slacker type" 20-somethings in the market for "cool", sporty cars. "We were aiming at customers interested in products which are lifestyle oriented and emotional and cool," explained an executive at the company. Mitsubushi refused to let the often $20K+ price tag of its cars and SUVs get in the way of getting its not necessarily financially endowed young target into showrooms, offering easy credit terms including no down payment, no payment for six months, and 0% financing. Young customers did buy up Mitsubishi cars like crazy and after years of steep losses, Mitsubishi was back in the black. Unfortunately, the company didn't account adequately for the financial risk represented by "slacker type" young buyers, many of whom do not have jobs or steady incomes and subsequently defaulted on loans to the tune of $469 million. To stem the loss, the company tightened credit rules, so sales plummeted. Mitsubishi's market share rapidly eroded and demand for its cars shrank. Eventually, it had to spend $432 million to clear out inventories. Plans for a new plant were canceled and an operating loss announced. "I never expected a situation like this," said Rolf Eckrodt who took the reigns of the company in 2001. "You could call it a U.S. business accident." Update: Eckrodt resigned in April 2004 after DaimlerChrysler refused to offer its Japanese partner funding for a turnaround. In early 2005, The Wall Street Journal reported that Mitsubishi was looking for a buyer for its North American operations, though the company denied the story.

PRADA

Prada
In December 2001, at the height of its popularity, Prada announced its intentions to revolutionize the luxury experience with the grand opening of the first of four Prada "epicenter" stores around the world. The 22,000 square foot flagship store in New York City's SoHo was a "marvel of cutting edge architecture and information technology." At least a quarter of the store's budget went towards building an IT infrastructure that included a wireless network to link every piece of merchandise to an inventory database in real-time. Unfortunately, all the bells and whistles weren't conducive to the high-traffic volumes the store wanted to bring in, and many had to be replaced. The inventory database wasn't maintained so lots of the IT gadgets went unused, so it appears the company invested hugely in technology for technology's sake—it enhanced neither service nor the customer experience. While the company maintains the store has been great for the company's sales—it's one of the highest grossing location thanks to the volume of business—and has boosted the image of the firm, we wonder how impressed stockholders are with the failed investment in technology or shoppers are with cramped quarters and gadgets that don't work. Update: A second Epicenter store opened in Beverly Hills, but plans for the third store have been shelved due to financial challenges.

Coors and Miller Brewing Companies
Is Budweiser so superior to Coors and Miller that it has become a moot point for the latter two to even attempt to find any meaningful point of differentiation from the market leader? Apparently, they have so little to say about their light beers that they have to resort to pushing the envelope with advertising and promotional campaigns centered around breasts and catfights. How else to explain Coors Light's "Boxing for Boobs" promotion—where women spar to win a boob job—and "Twins" ad campaign or Miller Lite's recent "Catfight" ad spot? Miller claims men see the "Catfight" ad for what it is: "a hysterical insight into guys' mentality. It's really a lighthearted spoof of guys' fantasies." Coors concurs that it's merely demonstrating its understand of the male psyche. But by pandering to the lowest common denominator, both companies seem to be saying, in the words of Laura Ries, author of The Fall of Advertising and Rise of PR, that, "all men are idiots and all they think about are girls mud wrestling." Even if that were true (which many of our readers may think), the fact that Coors and Miller have embarked upon the same course of marketing action does little to separate the brands from each other or help their fight against Bud.

Goodyear
When Firestone had to issue a massive recall of its tires after a series of fiery accidents and well-publicized problems on Ford Explorers, Goodyear was presented with a once-in-a-lifetime opportunity: one of its biggest competitors was on the ropes facing potential ruin and a surge of consumers needed new tires. The company had the rare chance not only to grab market share, but also to build long-term relationships with customers and distributors who might not ever go back to Firestone. But through a series of missteps, Goodyear squandered the chance to build its brand. First, knowing there was going to be a run on tires, the company—which had traditionally priced its tires lower than competitors—suddenly increased prices without offering buyers a reason to pay more. It didn't position the brand as higher quality or safer or better because of a recent innovation, for instance, to justify the higher price, leaving consumers wondering about price gouging. Second, the company didn't pay attention to meeting the demands from dealers. Many dealers complained that their orders were consistently only partially filled by the company. To avoid alienating their customers, many dealers decided to stop offering Goodyear and start selling other brands. As a result, Goodyear's market share dropped from 31% in 2001 to 28.4% in 2002.

Martha Stewart
When you are the public face of a multi-million dollar corporation and everything is riding on your reputation, you'd think you'd be particularly careful with personal and professional dealings. Even if customers who buy your products don't revolt, your other important groups of customers—stockholders and advertisers—might very well. Martha Stewart, however, decided to take the risk anyway when she sold a measly $225,000 worth of stock in ImClone "coincidentally" one day before the Food and Drug Administration rejected the company's cancer drug. Coincidence or not, her move certainly smacked of insider trading and the Justice Department began to investigate. Whether consumers of her kitchenware or paint colors believe she is innocent or not, stockholders certainly are not as confident in her abilities, and advertisers such as Chrysler have decided not to renew ad deals on her TV show or in her magazine. As a result, Martha Stewart Living Omnimedia's stock has collapsed and the company reported its first quarterly loss since going public three years ago. Chief financial officer, James Follo, predicted more red ink, saying he anticipated further declines in revenue and cash flow. Oh, Martha! Update: In March 2004, a jury convicted Stewart of four counts of conspiracy, obstruction, and making false statements related to the sale of her ImClone stock. After serving "hard" time, Martha returned to her company and plans to participate in her own version of "The Apprentice" TV show instead of focusing on rebuilding her firm.

PricewaterhouseCoopers/Monday
PwC Consulting (formerly PricewaterhouseCoopers), one of the most prestigious management consulting firms in the world, made one of the most questionable business moves of 2002 when it decided to change its name to Monday. CEO Greg Brenneman explained the decision: "Our new name—Monday—is exactly what we want it to be as we create our new business: real world, concise, recognizable, global and the right fit for a company that works to deliver results." Unfortunately, the cutesy and almost comical name—brought to PwC courtesy of branding firm Wolff Olins—was utterly inappropriate for a firm that had built a brand image as a serious, studious, thorough business advisor. It wasn't global either, with linguistic and cultural differences in the spelling and connotations of "Monday." When IBM scooped up Monday at the bargain price of $3.5 billion after Hewlett Packard had offered $18 billion for PwC Consulting just a year before, Big Blue quickly—and wisely—dropped the new name.

Ziploc Table Tops
Billed as S.C. Johnson & Son's biggest new product launch ever, Ziploc Disposable TableTops was a big disappointment. The company described TableTops as semi-disposable cups, plates, and bowls, more sturdy than a paper plate and intended for multiple, but not permanent use. It sounded like a sure thing in a culture obsessed with disposable and limited-use items, but the product had at least three glaring problems from the very beginning—problems that better marketing research could have detected. First, though the product itself was semi-permanent, S.C. Johnson wanted it stocked along side disposable tableware in stores—space which costs twice as much as space in the food storage section where Ziploc is a known entity. Secondly, at $22.99 for a set of four place settings, TableTops not only cost more than the disposable items it was displayed with, it also cost more than the permanent tableware sold at Wal-Mart and Target to which it was supposed to offer an alternative. The biggest issue, however, was, as one retail exec put it, "there are no repeat purchases. The things last forever." By the end of its introductory year, TableTops had sold less than half of what the company had spent on marketing for the brand, never mind the research and development costs.

AT&T's M-Life Campaign
This campaign is a great example of what Businessweek referred to as "mystery advertising," or ads which convey no message. After weeks of teaser advertising, AT&T finally spelled out the "M" in "Mlife" for consumers during Super Bowl XXXVI in a spot the USA Today called, "belly buttons urge callers to go mobile." Featuring a continuous stream of naked bellies and navels, the spot ended with a woman giving birth and a doctor reaching for scissors to cut the umbilical cord. AT&T's closing pitch was to "cut the cord" and lead an "M," as in "Mobile," life. The teaser advertising seemed to be promoting some sort of insurance product and most viewers thought the ad was a new Snoopy-less campaign for Metropolitan Life Insurance. There was as much confusion about who the ad was for as there was about what an Mlife is. What's more, the ad did not specify how AT&T's Mlife would be any better than Sprint's, or Cingular's, or another competitor's.

Kimberly-Clark, Cottonelle Fresh Roll Wipes
Heralded as the biggest breakthrough in the toilet paper market since TP was first introduced in 1890, Fresh Roll Wipes offer a moist alternative to dry paper. Three years and $100 million of R&D went into developing the roll and dispenser of wet paper and Kimberly-Clark believed sales of Fresh Rollwipes would reach $150 million within a year, surpassing $500 million within 6 years. The company budgeted $40 million to market the product in 2001 and planned advertising, on-line, and mobile marketing efforts to build awareness and increase trial. While we don't fault the company for their development of the product—they invested a great deal of time understanding the toilet paper usage habits of consumers and identified a need—their downright gross advertising [different bottoms waggling at the camera with the tagline "wetter is better"] and strange pricing showed they spent very little time developing the marketing for the product. Not surprisingly, according to Information Resources Inc., as of October 2001, sales of Rollwipes had stalled at $509,114—far below the company's expectations.

Kmart
That this retail giant had the biggest bankruptcy filing in U.S. history is not exactly surprising. Kmart never had a clear idea of what it wanted to be—a discounter, yes, but what kind of discounter? Other than selling Martha Stewart products, the company offered no compelling reason for customers to go to a Kmart as opposed to a WalMart or Target. Some of Kmart's problems were built into its operations. Its reliance on weekly and daily specials, for instance, caused inventory management and service problems as store staff struggled to keep store shelves full. But without a clear focus of what it could be to customers that was different and therefore better than its competitors, the chain had no framework on which to build capabilities or focus activities.

Lycos UK
In late 2001, the British-arm of Waltham, Massachusetts based Terra-Lycos, announced it had found a true point of differentiation from the competition: a new yellow color. According to a company spokesperson, "The new color will mean Lycos is ahead of the game," as its rivals continue to, "use red and blue and, according to research, this may not be entirely beneficial." Lycos certainly isn't alone in its belief that visual identity—logos, fonts, color schemes, tag lines—makes a brand. But it wasn't the Apple "Apple" or the Nike "Swoosh" that built those brands—it was all the activities that those companies undertook to build an image and a brand identification for those logos. To survive, Lycos will need much more than a new website color.

0% Financing
Car manufacturers began an outrageous series of financial incentives including 0% financing on cars and trucks to try to stimulate stagnant car sales just weeks after September 11. GM was first to the party, leading the 0% push with the launch of its patriotic "Keep America Rolling" campaign, and Ford, Toyota, and Chrysler "folded like cheap lawnchairs," as one Ford dealer put it, matching the offer. By the end of October, GM's sales were up 31% from the same time a year ago, while Ford, Toyota, and Chrysler saw sales increases of 36%, 28%, and 4% respectively. But even GM et al admit these were unsustainable bumps in sales and market share. At a tremendous cost, car companies convinced consumers who would have paid more later to make a purchase now. Car manufacturers decided to trade short-term gains for long-term profits.

Swissair
Once one of the most trusted brands in the airline industry, Swissair today is in ruins. Until the late 1990s, the company was well-known for being on time and providing exceptionally pleasant service to flyers. Its brand reputation could have sustained it during the post-September 11 travel slump—in fact, many Swissair passengers told reporters the reason they continued to use the airlines was because they could trust the brand—if Swissair had continued to focus on delivering the qualities that had won it so many loyal customers. Instead, at the direction of management consulting firm McKinsey & Co, Swissair started buying stakes in second-tier European airlines in an effort to expand into the EU, spending $1 billion. When losses at these other airlines mounted, Swissair found itself in serious trouble with little hope of recovery.

The XFL
The most inglorious product flop of 2001, the XFL started its season in February with strong ratings, but as its season drew to a close, had to give away about 30% of its advertising inventory as a make-good on its failure to meet promised ratings. WWF chief Vince McMahon accused the NFL of losing touch with fans and promised a new, better game of football in the XFL. In the spirit of the WWF, the games were as much sideshow as competitive sport, and football fans who tuned in to NBC to watch were not impressed—so much for returning football to the fans! Blaming a combination of bad announcers and poor time slot, McMahon shut the league down after its first season.



Accenture Introduction
In a colossal waste of money, Accenture, formerly known as Andersen Consulting, launched a $175 million campaign to introduce its new name, beginning with four spots on the Super Bowl. Plans for the campaign included TV, print, and out-of-home, all with the tagline, "Now it gets interesting." Its global managing director for marketing and communications reportedly explained the company selected the Super Bowl as the program to launch the campaign on because they believed 50% of Accenture's target audience of senior executives of major corporations and new-economy companies watch the Super Bowl. Aside from the bizarre and confusing executions themselves, Accenture's grossly inaccurate estimate of the portion of its target audience watching the Super Bowl managed to raise negative questions about the capabilities of firm—not exactly the kind of awareness Accenture was hoping for.



Boo.com
This e-commerce company burst on the scene in May 1999 with grand visions of becoming the destination for fashion on the Web. The company launched advertising and public relations campaigns in nine countries, spending approximately $25 million of a planned two-year $65 million budget. Boo established relationships with leading fashion retailers and seemed set to launch. But then the company shifted its launch date due to technical and logistics problems, and then to October. On top of these problems, Boo began by positioning itself as a retailer of hip luxury, but started offering discount clothing—a move that alienated its fashion providers. As spending outweighed sales, Boo.com eventually was forced to shut its doors.

Gateway Country Stores
A relatively late entrant to the PC market compared to IBM, Hewlett-Packard, and Compaq, Gateway found great success in selling its less-expensive PCs directly to buyers. Targeting tech-savvy customers, Gateway prospered as it kept inventory and costs low. Its customer base also seemed to grow as buyers became more familiar with the PC-buying process. The emergence of the Internet as a buying channel seemed to offer Gateway even more opportunity, energizing the direct channel even further. Strangely, however, Gateway decided to open Gateway Country Stores in some of the highest-rent locations around the country, offering buyers the opportunity to see and touch computers—something many first-time buyers need to do—but not make a purchase! No, they had to go home and log-on to the Gateway website to place an order—possibly checking out Dell and other manufacturer's prices at the same time. The stores' rental overhead and the slowdown in computer purchases combined to force Gateway to cut 10% of its workforce and announced plans to shutter 10% of it U.S. stores. Update: In April 2004, just after completing a $35 million upgrade of the stores to showcase their growing lines of electronics, such as digital cameras and plasma televisions, Gateway announced it would close its remaining 188 retail locations. About 2500 people will lose their jobs as a result.