NFL's Image Problem

The NFL's image is further damaged by a New York Times article today titled, "N.F.L. Shows It Doesn't Really Care About Domestic Violence." The piece starts by highlighting declining viewership, for which the league blames the current election. Certainly, people are sensitized to sexual assault incidents, but the NFL isn't helping itself:

"Yet again, in the case of Giants kicker Josh Brown, the league has shown that it could not care less about women and really, really doesn't want to call out its players for doing bad things to them."

Tough words. But the Times explains that Brown "was charged with assaulting his wife" "more than two dozen times." After investigating the case for 10 months, the NFL decided to suspend Brown for only one game.

The Times also said the league blamed the victim: "Brown's wife had failed to cooperate, the league said, and that's why its investigators couldn't get to the bottom of what he had done."

People are voicing their dismay on Twitter, with the second tweet here retweeted almost 2,000 times.

Image source.

Discussion Starters:

• What's your view of the Times' headline: overstated, unfair, spot-on, or something else?
• To what extent do you think these assault issues are causing declining viewership?
• What should the NFL do to restore its image?

Communications About the Outage

The latest cyberattack left Netflix, Spotify, Amazon, Etsy, and other sites spinning and apparently deciding how much and what to communicate to users. Issues at Dyn, a host company, affected the others, and Dyn was communicating regularly during the outage.

Amazon, for example, seemed to communicate nothing at all in its press releases, on its blog or on its Twitter feed: all highlight company activities and products for Halloween.

Discussion Starters:

• Why would Amazon not communicate about the outage? Do you think this was a good decision? Consider the technology impact and responsibilities.
• Assess Dyn's communication. This isn't the traditional apology. How well does it work? Consider the audience and communication objectives in your response.

Samsung Trying to Control the Damage

Samsung is dealing with a tough situation: batteries in the Galaxy Note7 have been causing fires. Warnings to turn off Samsung phones are heard on many flights, including mine to Denver this weekend. As the BBC reports, "that sends out a negative message about your products beyond even your own customers."

The company handled the initial reports well but lost favor when its replacements overheated or burned. The BBC article explains the growing issue for Samsung:

"The trouble is that even one phone which catches fire makes for startling pictures and a whole heap of consumer anxiety. Samsung may soon have to decide whether to cut its losses and abandon the Note 7 before it does more damage to its brand."

The New York Times also reported on Samsung's poor crisis communication:

"But for people to see those words, they had to click a link at the top of Samsung's home page with the not-so-urgent label 'Updated Consumer Guidance for the Galaxy Note 7.' As of Tuesday afternoon, the instructions had not been posted to Samsung's Facebook page or the company's Twitter account.

"For some who work in crisis management, it was a baffling and overly passive way for the South Korean electronics giant to deal with a prominent problem that has worsened in the last month."

On its website, Samsung posted this message: 

Samsung Will Ask All Global Partners to Stop Sales and Exchanges of Galaxy Note7 While Further Investigation Takes Place

on October 11, 2016

 

We are working with relevant regulatory bodies to investigate the recently reported cases involving the Galaxy Note7. Because consumers' safety remains our top priority, Samsung will ask all carrier and retail partners globally to stop sales and exchanges of the Galaxy Note7 while the investigation is taking place.

We remain committed to working diligently with appropriate regulatory authorities to take all necessary steps to resolve the situation. Consumers with either an original Galaxy Note7 or replacement Galaxy Note7 device should power down and stop using the device and take advantage of the remedies available.

Discussion Starters:

• Look at Samsung's recent news statements about this situation. How well has the company handled communication on its website?
• How, if at all, do you see this issue potentially reflecting poorly on the mobile industry? What should other phone manufacturers do?

Nestle Recalls Ice Cream Cones

Nestle is recalling Drumstick ice cream cones because of Listeria concerns. The company posted a recall notice on its website:

After the introductory paragraph and explanation of product types recalled, the press release provides a Q&A. Questions include where Listeria was found (on equipment, not on the product itself), symptoms of Listeria, how the problem will be prevented in the future, etc.

The list includes two bold questions:

• "Why did it take so long for you to find this?"
• "This sounds like another Blue Bell situation with listeria in ice cream. Is your situation the same as theirs was?"

In response to the first question, the company wrote, "Unfortunately, an error occurred in logging receipt of the test result. We discovered the error during a subsequent review of records. As soon as we identified the error, we notified FDA and initiated the recall."

To the second question, the response is, "No. Each recall has its own unique facts. Except for the coincidence that our recall involved both ice cream and listeria, our situation is much different from Blue Bell's in a number of significant ways, including: (1) we have no listeria findings in the ice cream itself (just the equipment); (2) we have only one product line affected; (3) we have only one facility affected; and (4) we self-identified this event and took precautionary steps to recall product."

Discussion Starters:

• The two questions identified here are risky. Explain the risks and why the company may have chosen to include the questions.
• How do you assess the question about Blue Bell? How does the response help, instead of hurt, Nestle's image?

Iowa State President Used University Plan for Personal Trips

Iowa State President Steven Leath apologized to the university student government for using the school's airplane for personal reasons. Although university administrators said it wasn't true, an Associated Press investigation found that he used the plan to travel to his mountain home in North Carolina, take fundraising trips with a celebrity bowhunter, and send family to NCAA games. The plane was damaged during a landing, and Leath paid $15,000 to cover the expenses. Some reports say Leath traveled with his wife and others for personal reasons on the school's larger plane as well.

Leath told the student government, "I'll be different. We will be very mindful of what we do going forward. I've learned my lesson." The student newspaper also reported an interview with Leath: "I regret all of this," he said. "I don't like to bring any negative image to the university. The fact that there has been all kinds of articles written about this makes me sad."

The news got out when Leath's trips were inadvertently posted on the school's website. They have since been taken down. 

Image source.

Discussion Starters:

• Leath maintains that he didn't violate school policy. Read the school newspaper report and discuss your opinion.
• Leath did reimburse the university for some of the travel. What else, if anything, should Leath do?
• What should the university trustees do?

News Conferences About Hurricane Matthew

After wreaking havoc in Haiti and Cuba, Hurricane Matthew is making its mark on Florida, and politicians are encouraging people to leave the area. One day apart, Florida Governor Rick Scott and Florida Senator Marco Rubio were in front of the press.

Governor Scott emphasizes the potential loss of life and discourages people from focusing too much on the storm path. He wants people to evacuate: "We are preparing for the worst, hoping for the best, and not taking any chances." 

Senator Marco Rubio echos a similar theme: "Don't focus so much on the cone as you should on the fact that here, over the new few hours, the winds are going to pick up, the rain is going to come in, and you need to be prepared for what that means."

Discussion Starters:

• Why don't people leave when they're told to evacuate during a storm?
• How well are Scott and Rubio making their points? What else could convince people to leave a vulnerable area?

How Naked Is Naked Juice?

Is Naked juice really "healthy" and worth the money? A lawsuit filed by the Center for Science in the Public Interest says Pepsi is misleading consumers with some of its claims.

On the packaging, Pepsi promotes the juice as having "no added sugar" and repeats words like kale, when the truth tells a different story. A 15-ounce bottle of Naked contains eight teaspoons of sugar; compare that to a 16-ounce soda, which has about 12 teaspoons. The company's Kale Blazer certainly emphasizes kale on its label, but the primary ingredients are apple and orange juice, cheap products that don't justify the price consumers pay, according to the lawsuit. 

In addition to these misleading statements, the CSPI is faulting Pepsi for not labeling the drinks, "not a low-calorie food," which is required by the FDA when consumers could think otherwise.

Pepsi has responded to the lawsuit:

"Any sugar present in Naked Juice products comes from the fruits and/or vegetables contained within and the sugar content is clearly reflected on label for all consumers to see. Every bottle of Naked Juice clearly identifies the fruit and vegetables that are within."

This isn't Naked's first challenge. In 2013, Pepsi paid $9 million for calling the product "all natural." 

Discussion Starters:

• Do you agree more with the lawsuit or with Pepsi's response?
• What's the difference between sugar from fruit and added sugar? How much does this distinction matter?
• If the lawsuit is successful, how should Pepsi change the labels on its Naked products?

More Trouble for Wells Fargo

In what The Wall Street Journal called "another round of blistering criticism," Wells Fargo CEO John Stumpf faced the House Financial Services Committee on Thursday. If Elizabeth Warren didn't challenge Stumpf enough last week during the Senate Banking Committee Hearing, Chairman Jeb Hensarling stated early on, in his opening statement, "Fraud is fraud. Theft is theft."

He also said, "All culpable individuals must be held accountable." Earlier in the week, Stumpf was criticized for firing low-level employees but retaining managers. For the first time, Stumpf said that "10% or more" of the 5,300 employees fired were branch managers, but that didn't seem to soothe the committee members. Others expressed enthusiasm for the $41 million clawback (money recovered from Stumpf's compensation), said he should be fired, and encouraged the break-up of Wells Fargo.

Jeff Sonnenfeld, A Yale University School of Management professor, called Stumpf "completely unprepared" and called the scene "political theater."

To make matters worse for Wells Fargo, the bank will pay $24 million in settlements for "allegedly improper repossessions of cars belonging to members of the U.S. military."

Discussion Starters:

• How well did Hensarling introduce the hearings? Did you find him too harsh, right on target, or something else?
• Sonnenfeld also says Stumpf wasn't prepared for questions. Do you agree with his assessment?
• What were Stumpf's strongest and weakest points?

Italy Can't Seem To Get "Fertility Day" Ads Right

Italy has stepped into another quagmire of controversy with its second "Fertility Day" ad. To encourage births, the first ad showed a woman with a timer, implying that her child-bearing days are numbered. The caption read, "Beauty has no age. But fertility does." People took offense: some felt it was insulting to people who had trouble conceiving; others felt it encouraged people to procreate regardless of their situation (e.g., no partner or job). The latter may particularly sting because Italy was a high youth unemployment rate: 35%.

The newest ad is deemed racist. Two white couples are featured at the top of a brochure photo, looking happy and healthy. Below this picture is a group of people, including a Black person, smoking marijuana.

Oddly, the bottom photo is similar to one used by Maricopa County Attorney's Office to discourage heroin use in Arizona.

Contrasting people of different races is never a good idea. In a public service announcement earlier this year, the American Red Cross was similarly criticized for showing White people behaving well and people as color behaving badly around a swimming pool.

At first, the Italian health ministry denied the criticism: "The photos represent a homogeneity of people, as is the multi-ethnic society in which we live. Racism is in the eye of the beholder." But the group has since come around: the pamphlet has been removed, as had the first ad.

Italy has the lowest birth rate in the EU, so having a campaign is understandable, but the approach isn't working.

Discussion Starters:

• What's your view of the ad? Do you find it offensive? Can you see how others might?
• Compose a different ad that might help Italy meet its fertility goals.

New Trouble for Christie on the Bridge Closings

After years of denying knowledge about wrongdoing, New Jersey Governor Chris Christie may have a tough time maintaining his stance. In 2013, members of Christie's administration were accused of intentionally closing lanes on the George Washington Bridge to cause problems for the mayor of Fort Lee, who didn't support Christie's re-election. Christie denied the allegations for himself and his senior staff:

"I've made it very clear to everybody on my senior staff that if anyone had any knowledge about this that they needed to come forward to me and tell me about it, and they've all assured me that they don't."

But now the truth comes out: in court filings, text messages between two staffers, Christina Renna and Peter Sheridan, during Christie's news conference in 2013 have indicated otherwise, according to a Wall Street Journal report:

"Are you listening?" Ms. Renna texted Mr. Sheridan, according to the filing. "He just flat out lied about senior staff and [campaign manager Bill] Stepien not being involved."

"I'm listening," Mr. Sheridan replied. "Gov is doing fine. Holding his own up there."

According to the filing, Ms. Renna replied: "Yes. But he lied. And if emails are found with the subpoena or ccfg [Chris Christie for Governor] emails are uncovered in discovery if it comes to that it could be bad."

Mr. Christie, encountering reporters outside a Manhattan radio studio after a guest-host stint on a sports-talk program, called the text-message matter "ridiculous."

"There's nothing new to talk about," he said, according to a video of the exchange posted by the Associated Press. Asked about Ms. Renna's remark that he had lied, Mr. Christie said "yeah, and she was wrong."

Discussion Starters:

• Do you believe Christie's defense? Why or why not?
• Big picture: What is most relevant in this situation? Let's not lose perspective.
• Christie was making a run for president in the 2016 elections. Could this hurt his candidacy for 2020? Also, Trump didn't choose Christie as his running mate, although Christie expressed interest. To what extent do you think his decision was tied to this situation?

Offensive 9/11 Mattress Company Ad

What were they thinking? Miracle Mattress in San Antonio, TX, produced a commercial advertising twin mattress prices for 9/11. At the end of the ad, two employees fall into "towers" of mattresses, and the lead actor says, "We'll never forget."

Understandably, people were outraged. This reminds me of the golf club that used a similar promotion in 2013. Also, this year, Coca-Cola took down a display of soda cartons at a Florida Walmart.

The company owner posted an apology and announced the store's closing on Facebook. He said elsewhere that he was unaware of the ad created by his employees.

Discussion Starters:

• How are these promotions different from, for example, Memorial Day sales?
• Assess the owner's apology. What principles of persuasion does he use? What recommendations do you have for improving the message?
• In this post, the owner didn't mention that he was unaware of the ad, as he did in other sources. What's your view of this choice?

Wells Fargo Reaches Settlement Agreement

Wells Fargo is taking action after the discovery that bank employees opened millions of fake checking and credit card accounts. Employees opened accounts in unsuspecting customers' names so they could earn credit for the sale. The bank benefited from fees people paid on accounts they never used.

In addition to paying a $100 million settlement fee to the Consumer Financial Protection Bureau, the bank has fired 5,300 employees over the past few years.

The company issued two major communications related to the situation: 

• A press release
• An email to employees

In addition, Jim Cramer interviewed CEO John Stumpf on Mad Money:

Image source.

Discussion Starters:

• Compare the two Wells Fargo statements. How well does the company tailor these messages to primary and secondary audiences?
• How can customers miss paying fees? What is their responsibility, and what is the company's? Consider visual displays of bank statements in your response.
• How well does Stumpf respond to Jim Cramer's questions? Which are his strongest and weakest arguments?

Wells Fargo Apologizes for Ads Targeting Teens

Wells Fargo made the news twice this week. In addition to a big settlement for creating fake accounts, the company has apologized for an ad targeting teens.

Several actors and other artists have expressed their disappointment in the company's promoting science over the arts. The Irregular Times was one of many critics of the company's campaign:

Wells Fargo will teach teens that the path to financial prosperity just so happens to come through the financial services offered by Wells Fargo itself. That's no coincidence. Teen Financial Education Day is really just a sales gimmick, at which Wells Fargo will teach the children of working Americans that they can't have the privilege of careers in the arts.

Wells Fargo posted an apology on Twitter.

Discussion Starters:

• A Forbes article reminds us that science isn't something you just do; it's good to have "talent and ability" for the field. How do you see this factoring into the ad's logical failure?
• The Forbes writer also insults the "marketing guru" who developed the ad campaign. What's your view? Should the company have known better, or is this a good attempt to advertise to teens, even if the results were appreciated?

JetBlue Temporarily Loses a Child

A woman paid $100 for JetBlue to safely escort her five-year-old son from the Dominican Republic to JFK airport in NYC. But her boy was sent to Boston, in exchange for another boy who landed in JFK., according to The New York Times. JetBlue issued a statement:

"On August 17, two unaccompanied children of the same age traveling separately from Santiago, Dominican Republic - one to New York JFK and one to Boston - each boarded a flight to the incorrect destination. Upon learning of the error, our teams in JFK and Boston immediately took steps to assist the children in reaching their correct destinations. While the children were always under the care and supervision of JetBlue crew members, we realize this situation was distressing for their families."

The JetBlue representative also said, "We are also reviewing the incident with our leadership and Santiago airport team to prevent similar situations from occurring in the future." The company refunded the child's ticket and gave the family $2100 is vouchers for future flights.

On a webpage, Families in Flight, JetBlue gives parents tips for traveling with children, including a page with pick-up and drop-off requirements for "kids flying solo."

Image source.

Discussion Starters:

• How did JetBlue handle the situation? Consider the statement and compensation. Should the company have said or done something differently?
• Since this writing, we haven't heard anything about the other boy, which may start a new round of news stories. What, if anything, should JetBlue say at that time? The company should be preparing for it.

Sponsorships Getting Less Clear

The Federal Trade Commission has guidelines for celebrities and bloggers to reveal their sponsorship ties, but they are not consistently followed, and some say the guidelines could be clearer. Companies shell out thousands of dollars for people with large numbers of followers to mention their brands on social media. But what's the difference between testimony and an ad?

Mary K. Engle, the FTC's associate director for advertising practices told The New York Times that, although an endorsement has to be clear, they are not "prescriptive" about what's included in a social mention. The FTC guidelines suggest starting a post with something like "#Ad." According to the Times, "For example, simply saying 'thank you' to a brand or adding '#sp' or '#spon' probably isn't clear enough, while saying a brand is a 'partner' probably is," Engle said.

The organization Truth in Advertising wrote a letter to the Kardashian/Jenner family about recent posts they consider to be deceptive marketing. On her Instagram account, Kylie Jenner displays Fit Tea but fails to mention that this is a paid endorsement.

Discussion Starters:

• Should the FTC create more specific guidelines for what to include in social media posts? Or should celebrities know better?
• What's the value of disclosing that a celebrity is compensated by a brand? How, if it all, would a clearer marking affect your decision to buy a product?

Mylan CEO Defends EpiPen Price Hike

Fighting critics who call the price hike "greedy" and "outrageous," Mylan CEO Heather Bresch makes no excuses for running a for-profit company. Yet the cost of an EpiPen has increased from about $165 in 2011 to more than $600 today. 

In a CNBC interview, Bresch stressed that "everybody who needs an EpiPen, has an EpiPen." She focused the costs involved in making the product widely available.

Trying to deflect blame, Bresch said, "This is a healthcare issue. . . . The system incentivizes higher prices." Pharmacy, retailers, and wholesalers are all taking a cut and are raising their prices. 

Discussion Starters:

• Twice, Bresch said, "As a mother..." How effective is this strategy as part of her argument?
• How well does Bresch convey her points? Which arguments do you find most and least convincing?
• CNBC's chart is effective because it shows the dramatic increase over time. What's your view of the caption about skiing? 

Costco Credit Card Transition Causes Problems

Costco is doing its best to resolve continued problems after transitioning from American Express to Visa credit cards. The decision was announced in June: 11 million customers would now have Citi and Costco co-branded credit cards, and American Express would no longer be accepted. Issues started early with Citi CEO Michael Corbat addressing questions on an earnings call in June. On the call, Corbat admitted that Citi received a high volume of customer calls:

"We're working through that. We're gaining on it. We're very focused on it. We've got a lot of resources deployed against it, and it's something we can fix in the short order."

Today, customers still have trouble getting through to the call center, and the situation has worsened. One customer posted a screenshot of his phone showing a call that lasted 1 hour and 43 minutes. Others complained that they received an incorrect card or none at all, and automatic payments were stopped.

To make the situation worse, Citi sent emails to some Costco members by mistake. The email should have gone to people who let their memberships expire, so customers thought their accounts had been hacked. Citi spokesperson Jennifer Bombardier focused on the size of the conversion:

"With a conversion of this magnitude - one of the single largest portfolio conversions in history (11 million cards) - and a brand as beloved as Costco, call volumes were unprecedented," Citi  told Business Insider. "With a portfolio of this size and eight months of pent up demand during which time we couldn't address questions on the new product or existing accounts as the portfolio was with a different issuer, the call volume was groundbreaking as of June 20th."

In an FAQ on its website, Costco answered common customer questions.

Discussion Starters:

• Who should take the blame for these problems? How can each company explain its role without damaging the partnership and the other's brand? 
• Review Costco's FAQ. How helpful do you find the answers? What else could the company include on this page?

Critics of Under Armour's Decision to Cancel a Sponsorship

Under Armour has cancelled its relationship with hunter Sarah Bowmar after reports that her husband, Josh, speared a bear and bragged about it. The Human Society called the spearing "giddy and ruthless." 

Although spear hunting is legal, some believe it is inhumane. An Under Armour spokesperson said, "The method used to harvest this animal was reckless and we do not condone it."

According to a Reuters report, Josh Bowmar defended the practice as a quicker, more humane cause of death than bullets or arrows.

On Instagram, Sarah Bowmar expressed her disappointment:

"I love and care about all of you and wanted to let you know that due to recent circumstances and media attention of a LEGAL hunt, @underarmour and @uahunt have terminated their relationship with us due to international social pressure from anti hunters. It really breaks my heart, we lived and breathed the brand for years and gave them everything that we had. We will never speak ill of the company. Just wanted to let everything know our current situation and how heartbroken we are when we did nothing wrong. Receiving that phone call was one of the hardest things I've ever went through. Don't be silent in this. If this bothers you- please reach out to UA and let them know."

This may be a lose-lose situation for Under Armour. Now, people are petitioning for the company to reinstate her contract.

Image source.

Discussion Starters:

• Did Under Armour make the right decision in cancelling Bowmar's contract? Read more about the public reaction. Should the company reinstate her now?
• How well did Under Armour communicate the decision? Other than the short statement, I don't see any posting on Twitter from the company or its affiliate, @UAHUNT. Should they post something, or let it go?

McDonald's Pulls Kids' Fitness Trackers

After a sizable backlash, McDonald's is pulling fitness trackers for kids. People complained that worrying kids about their weight could cause more problems than good. Brian Cuban, who writes and speaks about his history of an eating disorder and addition, posted the tweet shown here.  This story reminds me of the teen magazine that showed girls what type of bathing suit they should wear for their body type.

Chicago Tribune noted the "apparent hypocrisy of McDonald's encouraging children to exercise while also serving them high-fat foods":

Indeed, the paradox of a fitness monitor wedged in a Happy Meal box alongside chicken nuggets and french fries is hard to ignore. Even the healthiest Happy Meal combination will have kids ingesting 410 calories and 19 grams of fat, according to the company's online nutrition calculator. That's a lot of steps.

In announcing the decision to pull the bands, a McDonald's spokesperson said the company had received "limited reports of potential skin irritations that may be associated with wearing the band." No mention of the controversy was mentioned.

Discussion Starters:

• Should McDonald's have been more forthcoming about the controversy? What could have been the positive and negative consequences of admitting the issue about kids' weight? 
• Articles about the story say that people can distinguish between what companies do for the social good and what companies do for themselves. How does that play into the reaction in this case? Are those goals mutually exclusive?

Embarrassment for the Olympic Athletes and an Apology

U.S. Olympic swimmer Ryan Lochte concocted a story about being robbed in Rio de Janiero and later apologized. Lochte said he and three other swimmers were robbed by people claiming to be police officers. Turns out, other U.S. swimmers said Lochte was drunk and unruly, and we learned later what actually happened: he vandalized a gas station bathroom, and armed guards approached him.

Lochte posted an apology on Instagram. But the damage extended far beyond the gas station. Rio officials are angry about the hit this incident may have on the city's reputation, and the Olympic's committee is trying to distance itself from Lochte's behavior.

Lochte's statement hasn't satisfied many people. Quoted in The New York Times, sports commentator Rodrigo Mattos said, "Lochte apologizes but doesn't admit lying. He's still portraying himself as a victim. So much arrogance."

Discussion Starters:

• Why did Lochte lie? How believable was the story, and what role did the other swimmers play?
• Another approach, of course, is to come forward with the truth even before the story got out. What could have been the consequences of this approach?
• Should Lochte have said something different in his apology? What is at stake?
• Do you agree with Mattos's views that Lochte is arrogant? How would you define arrogance, and how does Lochte show this trait?