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Thursday, August 11, 2016

Three Ways Discredited Brands Remain Durable





"The value of a brand...is ultimately determined by consumers' perception." - Investopedia
Coco Chanel (1883-1971) was a Jew-hating Nazi collaborator. Yet in May 2016 Forbes ranked her namesake company, Chanel, #80 among the world's most valuable brands, with a net worth of $7.2 billion.





The company is privately owned, by the Jewish grandsons of Chanel's original business partner. But the name is her name, and the logo is her signature crossed "C." By purchasing her signature clothing or perfume, the consumer is clearly channeling her image.


Why would anyone want to be associated with a Nazi?


The answer has to do with Chanel's brand immunity. Not only do customers continue to purchase her products in droves, but even posthumously the designer is popularly viewed as a "personal branding legend."


Understanding what keeps a brand resistant to criticism is important today, as companies operate in the minefield of the digital age. For between the Internet and social media, consumers quickly mobilize to express outrage about anything that offends them. Even Starbucks, recognized as one of the world's most ethical brands, came under heavy fire for its (obviously) well-meaning "Race Together" diversity initiative.


High-profile CEOs find themselves under the microscope as well - recall how Reddit users orchestrated the exit of former CEO Ellen Pao in 2015 for firing a popular discussion moderator.


Maybe some kinds of offenses just don't have a negative impact on brands. Many have wondered why anti-Semitism is somehow socially acceptable (even as it is both deadly and widespread).


Perhaps this argument is true. But in the case of Chanel, even the stigma of being branded a "Nazi" hasn't gotten in the brand's way. Consider "Godwin's Law," which specifies that the longer an online disagreement continues, the more likely it is that someone will be insulted as either "a Nazi" or "Hitler," a phenomenon which I have personally experienced.


There must be some other factors that are propping up the Chanel brand, and other brands which would normally be subjected to declining brand equity due to their offensive nature.


Here are three plausible possibilities, all of which clearly apply to Chanel:
  • They are totally unique. As marketing strategy firm Vodori.com points out, brands that have "no competition" in the customers' mind are hard to dislodge. They offer the examples of LeBron James (for his talent) and Apple (for its design). In the realm of fashion, Chanel is clearly one-of-a-kind. Another example of this type of brand is Coca-Cola. 
  • They are unnecessary to the average person's life. Vodori.com also points out that LeBron James and Apple are luxury items, meaning that "you can ignore them, and it won't make a difference in your life." Their "cache" that insulates them from the ordinary bumps and bruises of other brands. Chanel, obviously, is a luxury purchase. 
  • They ignore the critics. Kim Kardashian is famous for her skill at laughing off criticism by incorporating it into her television show, laughing at herself and even turning the tables. Similarly, Chanel does not waste time discussing a reputational matter that only has the potential to drag it down. 

At the end of the day, relying on a clever "immunity strategy" is obviously not the first line of attack when it comes to defending your brand's reputation. But the methods described above have clearly been helpful to Chanel and other brands confronted with negative publicity, well-deserved or not.

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All opinions my own. Photo of Coco Chanel via Wikipedia. Logo via Wikipedia.