‘I Say It’s Spinach ...’
This past week, the tally of Sony-supplied laptop batteries being recalled reached 10 million, because they overheat and catch fire. While the financial hit to Sony may well reach $500 million, buyers of laptops will certainly steer clear of the affected brands—Dell, Apple, Toshiba and Lenovo (née IBM ThinkPad)—until this mess is resolved, knocking sales projections into a cocked hat. What did Sony know, and when did it know it? Why were the technical people at these affected brands asleep at the switch? Or were they all told to shut up and hope the problem would remain under the radar screen?
Loss of Control Can Damage a Brand
This past week another brand took a hit. TV icon Dr. Phil McGraw—himself a brand just like Oprah Winfrey and Martha Stewart—settled $10.5 million in claims that he defrauded buyers who didn’t lose weight after using his Shape Up! diet supplements and candy bars. Dr. Phil entered the business in 2003, putting his name on products manufactured by CSA Nutraceuticals, of Irving, Texas. The program was sold in supermarkets, Wal-Mart and Target stores. In 2004, CSA ceased to manufacture the products in response to Federal Trade Commission allegations of false advertising.
Was it greed, ego, stupidity or altruism that caused him to get into the Shape Up! diet supplement and candy bar business? In a television studio, Dr. Phil has control of what’s going on. Working with his book publisher, Hyperion or Free Press, he can see the product in every step of its development. But when he signed over his name, his imprimatur and his photograph to a pill maker in Texas, he relinquished control and put his reputation and his business at risk.
For example, data enter into Google “Dr. Phil McGraw” AND “Shape Up” (using the quotation marks, so that only those exact words are searched), and in two-tenths of a second Google will come up with 90,800 pages in English, including all the dirt on the lawsuits and settlement.