11 Brand Reputation Crisis Examples

Brand reputation is likely the most valuable thing that a company can own. It’s what customers, clients, and the general public think about a business and its services or goods.

A good reputation can lead to loyal clients, increased sales, and a superior market share. But reputation is also fragile, and one mistake or slipup can initiate a crisis.

When such an incident occurs, it can lead to disastrous economic and psychological harm for the involved company.

Here, we’ll explore some of the brand reputation crisis examples among leading brands, the manner in which such incidents unfolded, the eventual long-term harm to the affected brands, and how companies can recover from the said crises.

We’ll also discuss the impact of brand crises on consumer behavior, trust, and profitability.

What is a Brand Reputation Crisis?

Brand reputation crisis may be defined as one event or chain of events that hurt the public image of the company in a negative light.

These crises usually arise from acts or actions that are deemed unprofessional, insensitive, or unethical.

A crisis to a business firm’s brand reputation could happen very fast, especially at present times when information disseminates very rapidly on the Internet and other social media.

The significance of a brand reputation crisis is that it has the power to redefine customers’ perception of and relationship with a brand.

Consumer trust can be as fragile as glass; once shattered, it is challenging to mend over a span of years. Marred companies have to contend with a myriad of problems ranging from lower sales to difficulty in acquiring new customers or high-quality talent.

Common Causes of Reputation Crises

Brand reputation crises can be triggered by a variety of causes, including but not limited to:

• Product failures or recalls
• Customer service scandals
• Corporate mismanagement
• Public relations mishaps
• Social media blunders
• Controversial advertisements or marketing campaigns
• Corporate social responsibility (CSR) failures
• Legal issues (lawsuits or regulatory violations)

A brand crisis can arise from a single mistake or a culmination of smaller issues that go unaddressed.

Notable Examples of Brand Reputation Crises

Pepsi’s Kendall Jenner Ad Controversy

The Crisis

In 2017, Pepsi launched an ad featuring supermodel Kendall Jenner, where she joins a protest and hands a police officer a can of Pepsi, seemingly resolving the tension between protesters and police.

The commercial was blamed for making light of social justice uprisings, specifically the Black Lives Matter protests.

The critics believed that the commercial hijacked serious political causes for profit, and the response was swift and damning.

The Impact

The commercial was yanked in under 24 hours, and Pepsi made a public apology. But the damage was done.

The company’s effort to associate a product with social justice was controversial, and it alienated a lot of its loyal consumers, particularly those in socially-responsible audiences.

The reputation of Pepsi to associate with good causes was ruined, and the scandal introduced discourse on “corporate activism” and whether it is real or not.

United Airlines’ Passenger Removal Incident

The Crisis

United Airlines was at the center of an international controversy in April 2017 when a video of a passenger being forcibly removed from a flight that was overbooked went viral.

The event outraged people because of the violence involved in the removal and the fact that the passenger, who was bloodied during the ordeal, had already paid for his seat.

The video was viewed millions of times, with people questioning the treatment of the airline’s customers.

The Impact

The event hurt United Airlines’ reputation badly. The initial reaction of CEO Oscar Munoz, which seemed to justify the airline’s behavior, only fueled the outrage.

Although United later apologised and committed to changing its overbooking practices, the bad publicity persisted for weeks.

The airline saw a decline in stock prices and consumer confidence. It took years for United to restore its image and mend its relationships with customers.

Facebook and the Cambridge Analytica Scandal

The Crisis

In 2018, Facebook was at the epicenter of a huge scandal when it was discovered that the political consulting company Cambridge Analytica had harvested the personal information of more than 87 million Facebook users without their permission.

The data was subsequently employed to sway voters in several political campaigns, including the 2016 U.S. presidential election.

The Impact

The revelation harmed Facebook’s image, which led to immense criticism of the privacy policies on Facebook.

It left many feeling cheated, and #DeleteFacebook went viral internationally.

Facebook’s CEO, Mark Zuckerberg, was summoned to give testimony before the U.S. Senate, and he was relentlessly grilled regarding Facebook’s management of users’ information.

The incident saw a breakdown of user confidence, with a number of users and brands going so far as to abandon it completely.

Volkswagen’s Emissions Scandal

The Crisis

In 2015, Volkswagen was found to have installed “defeat devices” in its diesel vehicles to defraud emissions tests.

The software in the vehicles would sense whether the vehicle was being tested and change its behavior to meet emissions requirements.

The revelation caused an worldwide uproar, with millions of cars recalled and billions of dollars in fines.

The Impact

The Volkswagen brand, whose reputation was based on engineering supremacy, was significantly tarnished.

The credibility of the brand had been questioned and customers lost their trust in it. Sales dwindled, most notably in established markets like America.

The firm was sued, subject to regulator action, and a multi-billion-dollar financial liability.

The problem was also escalated by the years it took to fully address it, and for some customers still associating Volkswagen with dishonesty.

BP’s Deepwater Horizon Oil Spill

The Crisis

The BP Deepwater Horizon oil rig experienced a tragic collapse in 2010, pouring millions of barrels of oil into the Gulf of Mexico during several months.

The ecological calamity killed 11 employees and left irreparable harm to wildlife and the seashore.

The incident developed into one of the worst ecologic catastrophes in the world’s history.

The Impact

BP’s reputation was badly hurt. The company had to pay billions of dollars in fines, cleanup expenses, and compensation payments.

Public outcry increased because of BP’s perceived slow response, fueled by then-CEO Tony Hayward’s now-famous statement, “I’d like my life back.”

The spill severely damaged public confidence in BP, and even though it has attempted to restore its reputation and invest in renewable energy, the company is still unable to recover from the reputational harm linked to the disaster.”

Nike’s Colin Kaepernick Ad Campaign

The Crisis

Nike was at the center of controversy in 2018 when it introduced an advertisement campaign with Colin Kaepernick, the then-former NFL quarterback who had become a divisive figure after kneeling during the national anthem to protest racial injustice.

The commercial created both support and criticism. Critics, including conservative organisations, claimed that Nike was unpatriotic and insensitive toward veterans, whereas others commended it for speaking against social injustice.

The Impact

Nike’s move was a two-edged sword. While the company gained sales and brand interaction, particularly among younger, more socially aware consumers, on the negative side, it faced criticism, protests, and boycotts.

At the same time, it encountered vehement opposition from more traditional segments and sparked calls for boycotts as well as demonstrations in public areas.

Although controversial, Nike was able to confirm its status as a socially responsive brand that could represent the cause and values of its target consumer base.

Tylenol’s 1982 Poisoning Crisis

The Crisis

In 1982, Johnson & Johnson’s Tylenol brand was the center of a major crisis when seven individuals in the Chicago area died after consuming Tylenol capsules that had been tampered with cyanide.

This tragic incident resulted in a nationwide panic and an outright loss of consumer confidence in the product.

The Impact

Johnson & Johnson, Tylenol’s parent organisation, was commendable for recalling 31 million Tylenol product bottles quickly and firmly from retailers.

Still, the crisis damaged the reputation of the brand very much. But the firm’s open acknowledgment of the crisis and assurance regarding the safety of customers helped the company eventually get the trust back of the general public.

The incident is often cited as an example of how to handle a crisis effectively and is credited with changing corporate crisis management practices.

When Kentucky Fried Chicken Ran Out of Chicken

What happens when the iconic chicken chain Kentucky Fried Chicken (KFC) runs out of the very product it’s known for? Surprisingly, it turned into a moment of humor.

In February 2018, KFC in the UK found itself facing a surprise chicken shortage when one of its suppliers experienced a problem. This blunder resulted in the temporary closure of nearly 900 stores nationwide.

On the surface, this could have been a huge disaster for the brand, but KFC flipped the situation on its head with a quick-thinking move. Rather than doing the hide-or-blame approach, KFC was creative in taking out a public apology notice in top British newspapers.

A plain picture of a KFC bucket with “FCK” instead of the usual “KFC” captioned the announcement.

The apology, which recognised the disruption to customers, was light-hearted and open.

The company thanked employees and franchise owners, reassured customers that action was being taken to rectify the situation, and even included a website address where customers could look for news on their local KFC.

The outcome? Pure genius.

KFC’s brand is so beloved in the UK that even fans reported calling their local police stations complaining about the closure.

The supply chain slipup had the chance to long-term hurt KFC’s brand image in the UK, yet instead, the company adopted the theme of self-awareness and humor.

The fun attitude shifted the negative momentum to a comedic experience people today recall with enthusiasm.

The Lesson Learned: When your company encounters a major faux pas or supply chain glitch that impacts customers, being able to laugh at it can diffuse the anger.

Don’t forget to apologise for the problem and do so genuinely, without blaming. Keep customers informed on your path to a solution, and let your brand’s personality come through even in the rough stuff.

Chipotle’s E. Coli Outbreaks

The Crisis

Chipotle had a string of E. coli outbreaks in 2015 across several states, and the company was linked to its food supply.

Hundreds of people became ill from this outbreak, and Chipotle came under extreme criticism for its food safety procedures.

The Impact

The crisis caused a dramatic decline in Chipotle’s reputation, leading to a significant drop in sales and stock prices.

The brand struggled to regain consumer trust despite implementing new safety measures and initiatives to improve food sourcing and handling.

Even after the immediate crisis was resolved, many consumers were still hesitant to return to the chain, resulting in a prolonged period of recovery.

Samsung’s Exploding Galaxy Note 7 Phones

In 2016, Samsung experienced one of its largest reputation and market value hits—when its flagship phone, the Galaxy Note 7, began catching fire. Many of these devices didn’t simply overheat—they exploded.

The end result? A gigantic brand crisis threatening to level the company’s well-earned trust with consumers.

The Crisis Unfolds: Following the launch of the Galaxy Note 7, several incidents were reported of the phone’s batteries overheating and catching fire.

The problem soon snowballed, prompting Samsung to recall the phones and halt production entirely.

The company acted swiftly by providing customers with replacement phones, but the crisis was far from over.

Aside from the recall, Samsung also suffered a blow to its stock price, which fell a whopping $26 billion.

Even worse, the original Galaxy Note 7 as well as the replacements were prohibited from air travel because they were prone to bursting into flames in mid-air.

The US government intervened, formally recalling the products nationwide. Estimates had indicated Samsung had lost a staggering $17 billion in sales during the crisis, and the brand’s reputation was hit hard.

The Initial Mistakes: Samsung’s initial response to the crisis wasn’t ideal either.

Samsung at first released additional devices with the same battery malfunction, without being transparent with their customers about the possible risks involved. This moved many people and fueled the situation (pun meant).

The non-transparency by the company along with its slow response to correcting the issue triggered negative press headlines and extensive mistrust from customers.

Turning the Crisis Around: Even with the bumpy beginning, Samsung eventually demonstrated remarkable resilience and dedication to winning back public confidence.

The company dedicated 120 days to working day and night on a solution, like a nascent startup. Samsung North America CEO at the time, Tim Baxter, characterised the work as an all-out, all-hands-on-deck initiative.

The company mobilised 700 engineers to test over 200,000 devices and 30,000 batteries. Additionally, three separate third-party safety auditors were hired to ensure thorough investigation and verification.

After months of extensive research and testing, Samsung pinpointed the issue: some of its factories had been using batteries that were jammed into ill-fitting cases, leading to overheating and explosions.

A Strategic Recovery: After the root cause was found, Samsung did not only address the immediate issue; it reformed its entire process to ensure that future tragedies would not be repeated.

Samsung created a battery advisory board, implemented tighter safety protocols, and began new testing procedures.

In order to guarantee that any other Galaxy Note 7 devices left in the world were made inoperable, Samsung issued a software update that would completely shut down the devices.

With all these efforts, Samsung was successful in regaining some of the lost credibility.

The company didn’t stop with the apology or the recall alone; it fully took responsibility, found the source of the problem, and changed its ways so that it could prevent such crises in the future.

The anticipatory action ultimately paid off because Samsung’s sales recovered, and the brand eventually mended its reputation.

The Takeaway: When your service or product has a serious defect, it’s crucial to move fast and openly.

Admit the fault, apologise to your customers, and most importantly, go deep to figure out the cause.

Correct the root cause, implement new controls to avoid repetition, and monitor those changes so that customers can regain confidence.

Samsung’s power to examine itself, confess its mistakes, and rectify itself is an textbook lesson on how a business may live—and flourish—after enduring a humongous brand meltdown.

Crockpot’s Reputation Crisis After “This Is Us” Fire Incident

Occasionally, a brand can experience a crisis despite being utterly innocent. Crockpot, the slow cooker brand, found itself in that situation after the devastating 2018 episode of NBC’s This Is Us.

The incident points to how a moving TV moment can suddenly make shockwaves throughout a brand’s reputation—without the company doing anything wrong.

In one especially emotional episode, fans saw the sad passing of Jack Pearson, a favorite character.

A defective old Crockpot caused a fire in the Pearson house, resulting in Jack’s death from smoke inhalation.

Although the scene was staged, the emotional response from viewers was strong, and the public didn’t shy away from expressing their reactions. Crockpot was in the middle of the maelstrom, hit with a tsunami of anger and fear from consumers who saw the brand as risky.

Social media went wild with thousands of posts, with fans promising to get rid of their Crockpots or saying that they now feared using them.

The emotional backlash created a public relations crisis for a brand not involved in the drama.

In such a scenario, the question being raised is whether Crockpot needs to apologise. Although the fire was a result of a fictional, defective model, the emotional outburst demanded some response.

Dan Fogelman, the creator of the show, went to social media to explain that the Crockpot shown in the series was an old one, asking the audience not to judge the brand due to a fictitious storyline. But this explanation wasn’t sufficient to stop the mounting negativity.

Crockpot took matters into its own hands. They created an official Twitter handle, @CrockPotCares, where they answered with sympathy and humor.

Sympathising with the hurt of This Is Us viewers, they assured consumers that contemporary Crockpots are safe. In a smart marketing strategy, they partnered with Milo Ventimiglia, the actor who played Jack, for a humorous commercial where he cooked chili in his own Crockpot.

This advertisement sent a lighthearted message about forgiveness and reduced the tension associated with the brand.

Crockpot’s innovative reaction changed the story in their favor. Rather than avoiding controversy, they created a negative moment into a promotional opportunity.

The #CrockPotIsInnocent movement took off on social media and restored the image of the brand as safe, trustworthy, and even funny.

The lesson of this event is obvious: even when a crisis is beyond your control, tackling the issue directly is essential.

Crockpot weathered a difficult PR fiasco by acting with openness and creativity. Brands should accept the challenge, take advantage of the publicity, and remain authentic in their voice when confronted with challenges.

With some creativity, a possible PR nightmare can become an unforgettable and positive experience.

What’s Next?

In digital age, brand reputation crises can arise from bad situations, such as the infamous incident involving David Dao, which significantly impacted public opinion. Companies must have a robust crisis plan in place to navigate these challenges effectively.

A genuine response is crucial for rebuilding customer trust, especially when social media users amplify negative sentiments. Legal action may follow, further complicating the public image of the brand.

The negative impact of a crisis can be profound, affecting millions of users and necessitating effective brand reputation crisis management strategies.

To protect your brand, Bytescare’s Reputation Management services use advanced technology and expert strategies.

From scanning for defamation to removing harmful content, we ensure your brand’s integrity stays strong. Contact us today to safeguard your reputation.

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