Gerald Ratner was a second generation owner of an very successful publicly traded jewelry retailer Ratner Group. Ratner Group succeeded by discovering a niche in surprisingly cheap jewelry which resulted in rapid opening of hundreds of stores across the UK. In 1991 he had the honor to give a speech to the Director’s Annual Convention. Just before the speech he was advised to add few jokes and make it more interesting, so he added a few. One of them was:
“People say to me: How can you sell that for such a low price? I say: Because it is total crap.”
The jokes worked well at the moment, but the next day Ratner Group stock dropped by 500 MM GBP and the business was devastated. This is a unique example of how only few words can destroy the brand equity of a business. This business blunder became well known in UK and introduced a phrase “doing a Ratner” in the English language. Read more.
We can learn two things from this case:
1) Content has the power to drastically change the brand equity and business performance. In Ratner’s case the change is negative, but this is a proof of content power. Just as it works on the negative, it has the power to support the business if an equally strong positive idea is communicated. For example: Stepe Jobs presentation of Apple iPhone 1.
2) There should be a control of impulsive decision making, especially in top management. If business performance depends only on a single person, possibility of an impulsive error increases, especially in content. This is why important processes should include at least one or more checks by various positions in the organization.
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