Brands, like companies, are ground-up projects. They begin as remarkable ideas, build strong foundations, and grow, guided by a promise to consumers and a commitment to fulfill this promise. Brands are somewhat human in nature: They're nurtured, fed, led, and directed. Some deliver on their promise, are sought by consumers, become household names, and extend their offerings into other goods and services.
Branding, we're told, is a process. Although some brands seem to be overnight-success stories, that's far from reality. In truth, they struggled for years, first to become known and then to achieve household-name status. Unnoticed, they grew steadily over time. They appear to be instant brands, but only because we weren't aware of them.
Branding, when done correctly, is designed to meet consumer needs; it should be a continuous, ever-evolving system that is fairly rigid while remaining fluid to meet shifting consumer demand and market conditions.
Although time consuming, it's beneficial to grow brands; it allows policies to be developed with brand guidelines, sets operational procedures within brand guidelines, and affords C-level managers the chance to react and respond to crises. Brands gain strength and resilience during the growth years. More importantly, they begin to gain consumer loyalty and trust.
Oddly enough, brands are also fragile. For example, Jack in the Box , a fast-food chain, grew steadily for nearly 30 years. The first restaurant opened in San Diego in 1951, and by late 1989, store sales had reached $655 million. Jack in the Box operated 897 restaurants mainly in Texas and the Pacific Northwest.
The chain, once owned by Ralston-Purina, bought the company back and offered their IPO. While not as prosperous or known as McDonalds or Burger King, Jack in the Box competed with both successfully in numerous markets. Growing at the rate they were, the chain would surely have gone national within a decade.
They were stopped short of this goal in the early '90s when two unrelated events devastated the burgeoning business. The first was the 1990-1991 recession, which reduced the chain's net earnings by a staggering 81 percent. If this fist event caused critical damage, the second was certainly a death blow: E coli.
The E. coli epidemic of 1993 killed three young children and hospitalized hundreds more in the Pacific Northwest. As the outbreak spread, it eventually affected over 400 people, mainly children. Investigators traced the epidemic back to Jack in the Box and their parent company and supplier, Foodmaker, Inc. At the time, it was the deadliest, most widespread E. Coli outbreak in U.S. history.
Already reeling from huge losses in earnings, the outbreak cost Jack in the Box millions in sales and revenue as Americans, once fans of the growing chain, feared to eat at the restaurants. Millions were paid in wrongful-death suits to grieving families, which further complicated the company's financial foundation. Realizing they were at least partially liable for the outbreak, Jack in the Box paid for the medical costs of those who fell ill after eating at one of their restaurants, a goodwill gesture on their part.
Losses in earnings from the recession coupled with millions paid in medical services and court cases left Jack in the Box and Foodmaker in financial ruin. Adding insult to injury, Jack in the Box's future recovery was doomed when Moody's Investors Services downgraded Foodmaker's stock to junk status, a sign that Moody's believed that Jack in the Box would never recover. Bankruptcy, it seemed, was the only option left.
After tracing the outbreak back to Jack in the Box, Foodmaker, and their beef supplier, both the media and public sought answers. Not one of the three parties answered questions or released information for seven days. Foodmaker and Jack in the Box denied any wrongdoing but admitted that their cooking standards played a part in the spread of E. Coli and was culpable for damages. Internally, Foodmaker investigated their procedures, then announced all Jack in the Box restaurants were in the process of implementing changes in the handling and cooking of raw hamburger to prevent the chances of another outbreak.
While taking partial blame, they also deflected blame at the beef provider, who had admitted that they, too, had made mistakes. Jack in the Box also unleashed an attack on the State of Washington's Health Department, deeming them guilty due to their ineffective method of providing food-service companies with regulation revisions.
On Jan. 22, 1993, Jack in the Box released a statement announcing they would do everything "morally right" for the victims and families affected by the outbreak. Then, on Feb. 12, Jack in the Box dropped their criticism of the Washington State Health Department's information distribution procedures and further emphasized their explanation of corrective measures.
Although criticized harshly, Foodmaker, Inc. actually responded to thecrisis rapidly and effectively, immediately suspending all beef product sales and destroying over 20,000 pounds of ground beef. By the second day of the outbreak, the company had dropped their previous beef supplier for one with a better safety record and wrote new policies for all Jack in the Box restaurants that were initiated immediately. The reason Foodmaker was so heavily criticized was due to their lack of communication with the public, failing to highlight the steps they'd taken and reassure the public. Their crisis response, however, was flawless.
As a result, Foodmaker dumped their marketing partners. Foodmaker also replace their ineffective PR agency with President Carter's former press secretary, Jody Powell. He immediately opened the lines of communication and routinely informed the media of company's efforts to make the industry safer. The company started to turn around.
Foodmaker, however, was damaged beyond repair, and Jack in the Box didn't instill much trust, either. However, the two companies consolidated to form Jack in the Box, Inc. and searched for an agency to distance the Jack in the Box name from the E. Coli epidemic.
Santa Monica-based Secret Weapon Marketing was chosen and kicked off the "new" Jack in the Box brand and image campaign in 1995, which continues to present day. It is the only advertising campaign in history to win a Gold Lion for creativity and a Gold EFFIE for ad effectiveness for the same commercial. Secret Weapon humanized Jack in the Box by resurrecting Jack, the CEO. Similar to Ronald McDonald and the creepy King of Burger King, CEO Jack is hip, sarcastic, and in touch with today's trends, sporting a MySpace account.
Today, Jack in the Box has regained their loyal brand following and is the fifth largest national burger chain. The once-doomed chain now operates 2,100 locations and employs 45,000 people. National sales for 2009 climbed to $2.6 billion.
In addition, they're considered the food-safety leader in the fast-food industry. Although the E. Coli story resurfaces from time to time, the company survived, relying on their brand's strength when they entered the crisis, dumping the practices and/or partners that didn't work, and leading the charge to increase food safety on all fronts. Jack in the Box commonly refers reporters to articles regarding now-defunct Foodmaker's safety innovations, allowing the company to regain credibility.
One year after the crisis, Jack in the Box instituted the QSR industry's first comprehensive Hazard Hazard Analysis & Critical Control Points system. Jack in the Box, Inc. recently introduced QDoba Mexican Grill