Based in Knoxville, Tennessee, I have watched the University of Tennessee Volunteers football team enter the national argument over which teams deserve to be in the National Championship and whose quarterback deserves the Heisman Trophy.
The controversy spilled over at the Country Music Awards show last week. Volunteers Football Alumnus Paton Manning introduced Rocky Top, the Volunteers fight song, as his favorite country song while sharing the stage with notable Georgia Alumn and country star Blake Shelton.
On repeat 🎧🔂 pic.twitter.com/9F0DDxbcdx
— Tennessee Football (@Vol_Football) November 10, 2022
Controversy, if appropriately handled, increases brand awareness and improves brand equity. As marketing genius PT Barnum once famously said, there is no such thing as bad publicity. Below are six companies embroiled in controversies that they ultimately managed in their favor.
1. The Pepsi Challenge
In 1975, Pepsi launched the "Pepsi Challenge," a marketing campaign that pitted Pepsi against Coca-Cola in a blind taste test. The taste test results were surprising, with many people choosing Pepsi over Coca-Cola. This controversy resulted in a significant increase in sales for Pepsi and increased brand awareness.
2. Red Bull
In 2014, Red Bull was embroiled in a controversy. Reports revealed that the company had been using an ingredient in its energy drinks that had been banned in several countries. The ingredient, known as DEHP, is a plasticizer that has been linked to health problems such as cancer. After the controversy broke, Red Bull announced that it would reformulate its energy drinks to remove DEHP. The company also ran a series of ads apologizing for the situation and reassuring customers that its products are safe. As a result of its handling of the problem, Red Bull's reputation was enhanced, and the company's sales increased by 9% in the following year.
Nike found itself at the center of a controversy in 1991 when media outlets revealed that some of the company's Asian factories were using child labor. Nike was accused of exploiting workers in developing countries and putting profits ahead of people. The company responded by publicly committing to improving factory working conditions and increasing transparency around its supply chain. As a result of Nike's handling of the situation, the company's reputation was enhanced, and its sales increased by 27% in the following year.
4. Ben & Jerry's
Ben & Jerry's became embroiled in a controversy in 2009 when the media revealed that the company was sourcing milk from cows fed genetically modified corn. Some consumers were concerned about the safety of consuming GM foods, and they called for a boycott of Ben & Jerry's products. The company responded by switching to milk from cows not fed GM corn. As a result of its handling of the situation, Ben & Jerry's reputation was enhanced, and its sales increased by 11% in the following year.
Starbucks found itself at the center of a controversy in 2015 when media reporting showed that the company had been paying fewer taxes than smaller businesses. Some consumers accused Starbucks of tax avoidance, and there were calls to boycott the company's products. Starbucks responded by voluntarily paying more taxes than it was legally required to pay and investing in small businesses in disadvantaged communities. Starbucks handled the situation well, enhancing its reputation. Sales increased by 13% in the following year.
6. Volkswagen and Dieselgate
In 2015, US Federal Regulators caught Volkswagon cheating on emissions tests for its diesel vehicles. The scandal, which came to be known as "Dieselgate," resulted in billions of dollars in fines and settlements for Volkswagen. Despite the negative publicity, Volkswagen's sales increased in the wake of the scandal.
The bottom line? Controversy, if managed correctly, can be good for a brand -- but only if management handles the situation appropriately. Be careful. It can take vast commitments of corporate resources to weather a storm like the ones identified above. To get through, tread lightly and seek the most ethical path possible. A brand that did something wrong but moves swiftly to do the right thing can win consumer support in the end.