A look at corporate blunders: From new logos to New Coke

Starbucks is standing by its “Race Together” campaign, which caused an outcry from customers on social media and elsewhere.

N It was a tempest in a coffee cup.

Mega coffee chain Starbucks wanted to spark a conversation about race when it asked baristas to write “Race Together” on cus- tomers’ cups as part of a broader effort. But people in line for their morning java were not amused. Many voiced complaints on social media and elsewhere that they didn’t want a debate with their brew and Starbucks ended the campaign a couple of weeks ago, though it said the campaign was always meant to be brief.

Corporations spend millions to make sure their products, logos, and branding and marketing are top of mind for consumers in a positive way. But that means that when corporate mis- steps happen or marketing cam- paigns flop, they can go viral. Problems usually arise when companies haven’t fully considered the target they’re trying to reach and what could go wrong, says Atlanta-based marketing consultant Laura Ries.

“The problem many companies have is not understanding the customer’s point of view, only ... what they want to accomplish,” she said.

Here’s a look at major corporations’ missteps:

Starbucks CEO Howard Schultz is known for taking on big issues like job creation and education, so the coffee chain’s latest initiative centered around diversity and racial inequality was not a big departure. But having baristas write “Race Together” on cups to get a dialogue on race going, led to an outcry.

Some said it seemed opportunistic and inappropriate at a time of national protests over police killings of unarmed black men. Others questioned whether a coffee line was an appropriate place for productive talks about race.

“You just don’t know what’s going to happen when you get out there and do something like this,” said Paul Argenti, professor of corporate communications at Dartmouth College.

Starbucks is standing by its campaign. It will still hold forum discussions and other initiatives as part of Race Together, says a memo from Schultz. He added: “While there has been criticism of the initiative ... let me assure you that we didn’t expect universal praise.”

Sometimes, Argenti said, what seems like a great idea to the marketing department clearly was not vetted by the communications team.

In 2013, J.P. Morgan & Co. had just been ordered to pay a multibillion-dollar settlement stemming from the financial crisis, and it was seeking to reconnect with consumers via a Twitter Q&A. It launched the hashtag #AskJPM for people to ask career advice questions. But the move underestimated consumer sentiment toward banks.

“When things go good online, companies benefit. But when things go bad, people tend to pile on,” Ries said. “They love to make fun of companies when they do something they don’t approve of or agree with or just don’t like.”

Among the unanticipated responses: “Did you have a specific number of people’s lives you needed to ruin before you considered your business model a success?” and “Did you always want to be part of a vast, corrupt criminal enterprise or did you ‘break bad’?”

But even when a huge company makes a marketing blunder, it doesn’t necessarily make a difference the long term, she said. People tend to remember the flap but not the brand, Ries said.

“Most of these things ... tend to burn out quickly,” she said.

Sometimes, a PR disaster can hurt a brand longer term. Lululemon Athletica made a name with pricey yoga gear, but in 2013 its reputation was shattered after a product defect made yoga pants so sheer they could be see-through. Fixing them cost the firm millions and prompted in- vestors to question quality control. Founder Chip Wilson com- pounded the error by suggesting in a TV interview that fat thighs caused some yoga pants to be too sheer. He later apologized. But the damage had been done. The company’s sales and stock price went into steep decline.

The firm later said Wilson would step down as chairman.

One of the most high-profile missteps ever was New Coke in 1985. After focus groups and testing, Coca-Cola thought the world was ready for an update on the top-selling cola in the U.S. The sweeter formula was marketed as an improved replacement for the flagship soda, but the outcry was instant and sustained. Coke tried to sell both versions, but eventually reverted to “Coca-Cola Classic.”

Argenti says the misstep actually led to greater sales of Coke, so it wasn’t necessarily a bad move, even though people still recall it 30 years later.