Latest posts by Jonathan Greenstein (see all)
It’s almost every day that I see new marketing promotions in magazines, newspapers, websites or even my commute. Buy this product and get ‘X’, ‘Y’ and ‘Z’ free or half price or something to that effect. This lead to some surprisingly easy research on spectacular marketing fails that resulted in negative PR and almost bankrupting some firms. I have outlined 3 cases for you to read below.
People took advantage of Hoover’s disastrous marketing ploy
The year was 1992. This was a time before budget airlines like easyJet, Ryanair, Jet2.com, Monarch Airlines, JetBlue or Southwest Airlines offered cheap flights across Europe and America. To those readers who are too young to remember this year, there was once a time where you had to pay more than £79 to fly to destinations across Europe.
To help their ever dwindling sales, two marketing executives at Hoover’s Merthyr Tydfil factory thought they found the answer. Spend more than £100 on a brand new Hoover and get two free tickets to fly to Europe or America. What they didn’t expect was that more than 200,000 people bought Hoovers that they didn’t necessarily need nor want. It was worked out that to satisfy the demand for free flights, Hoover would need more than 500 jumbo jets to fulfil the promotion.
So what went wrong?
Hoover broke the number 1 rule of promotions. They offered a reward that was more valuable than their actual product. It didn’t take long for people to realise that the price of two flight tickets would cost more than a £100 appliance. As such, Hoover had to instigate a 7 day working week to try meet the demand for Hoovers. Newspapers saw a significant increase in ‘free Hoover’ classified ads, around 30% actually.
Hoover tried to hide behind the small print but thanks to the efforts of Harry Cichy and his Hoover Holiday Pressure Group, the rewards were all dished out. So who else benefited? The airlines pocketed a decent amount for the flights sold. It is reported that Virgin Atlantic and British Airways sold roughly 20,000 seats which another 40,000 were sold via various charter airlines. The UK tax man saw an extra £4 million due to the unexpected Hoover sales.
And what happened to Hoover? They saw a tremendous upturn in sales. £30 million of additional revenue was earnt. Unfortunately, the price for the flights came in at roughly £50 million. Top this £20 million deficient with the colossal amounts of negative PR, Hoover paid the ultimate price and its European arm lost its independence.
Jägermeister poisons a pool party
As Jägermeister has the reputation of being the drink for people too intoxicated to know what they are drinking, they thought ‘let’s play to this fact and throw a massive pool party. Girls in bikinis, muscle bound men, an exotic location in Mexico and plenty of Jägermeister.’ Sounds great doesn’t it?
So what went wrong?
Adding to their train of thought, some marketing executive had the bright idea of covering the pool in a cloud of mist. What could be cooler than swimming in a pool with mist coming off it. It would be like living in a music video or movie etc. But how to do get the mist? Let’s pour liquid nitrogen into the water!
So you may ask, “What is wrong with that?” Well, when the chlorine from the pool and the liquid nitrogen combine, the resulting substance is nitrogen trichloride, a toxic gas that is anything but cool to have at a pool party.
Nitrogen trichloride is a fantastic knock-out gas. Almost immediately, people started coughing then passing out (not ideal to do in water). In total, 8 people were hospitalised and 1 person was in a coma and in hospital for 18 days. Jägermeister said in a statement; “We fully support responsible drinking and adhere to the guidelines within each market in which we operate.”
American Airlines lets people fly first-class for free … forever
Way back in 1981, American Airlines wanted to capitalise on the on the rich. Their marketing idea – allow people to pay one super expensive price for unlimited first-class tickets. How much is a super expensive price you may ask? Each unlimited first-class ticket cost $250,000. For this price, customers received the AAirpass and were able to travel for free in luxury for the rest of their lives. Oh, and did I mention that for an extra $150,000, they could get a second seat?
So what went wrong?
American Airlines thought what the rest of us must have thought. $250,000 is a ton of money. Who would ever spend that on this promotion? Well, some people with that level on income realised that if they had free first-class tickets for life, they would ultimately save money in the long run. American Airlines obviously anticipated the AAirpass to be used by companies and didn’t expect the run of the mill rich people to get power mad with their new freedom.
What happened? Well, it is reported that one guy flew to London 16 times … in a single month. Another person flew over 30 million miles on his pass. To put that in perspective, that is over 1000 times around the entire globe or New York to Tokyo 4,500 times. And that buddy pass for $150,000. It was said that one wealthy individual would offer his companion ticket to strangers just so they could experience first-class travel whilst another person offered their frequent flyer miles to terminally ill people so they could see the world.
Whilst the AAirpass holders lived life to the max, American Airlines had to shell out the costs. They realised that people were getting $1 million worth of free flights every year. The company stopped issuing the passes in 1994 and hired a fraud investigator to harass customers to stop them flying.