America’s Nine Most Damaged Brands

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Brand reputations are among the most prized assets major corporations have. A look at relevant surveys shows that brand valuations are often so high that they compare to the market values of the public companies that own them. But brands can fall as fast and as hard as they have climbed.

While a reputation can take years to build, it can be battered or ruined in a very short time. This certainly happened to J.P. Morgan after it reported a $6.2 billion trading loss in its London office. It happened to Hyundai after it overstated the gas mileage for many of its cars. In each case, customers began to worry. Many even became suspicious not only about the company’s ability to manage its business, but also about its candor with the public.

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Reputations do not exist in a vacuum. The value of BlackBerry was undercut not only by its own mistakes and product missteps, but also by the comparative success of Apple’s iPhone and an army of Google Android-based devices led by the popular Samsung Galaxy line. Similarly, Apple’s own reputation has been eroded by, among other things, the wild success of the Galaxy SIII and anticipation of the upcoming Galaxy S4. They are the only two smartphones considered iPhone rivals, based on both features and unit sales.

Ethical lapses can also be a major cause of a brand’s collapse. The damage to Hyundai’s brand was the result of a breach of trust between the company and the public — which was drawn to its products in the first place because of high quality and fuel efficiency. The moment it was revealed that MPG data given out by Hyundai was inflated, the automaker could do little more than damage control. The same can be said for J.P. Morgan. One trader violated rules and regulations, as a result of which the bank lost billions of dollars. The government then blamed the loss on weak risk management.

Occasionally, a brand will be battered by the flawed design of its products. Over the years, that has certainly been an issue for car companies. Recalls have undermined the value of more than one auto nameplate. Boeing has been undone by a similar problem. Not only was its Dreamliner years late, it also had a faulty battery that caused all the planes to be pulled out of service worldwide.

Among the most common causes for brand value erosion and drop in public respect is the absolute failure of a company’s core strategy. BlackBerry is an example. Time after time it created products that led the global smartphone industry. But it never managed to move its reputation from being a successful manufacturer of smartphones for business to one for consumers.

To identify the most damaged brands, 24/7 Wall St. reviewed large, publicly traded companies that offer products or services in the United States. These companies had to be among the largest brands in the world, as measured by Corebrand, or command an especially large amount of media attention in their industry. Companies that made our list severely damaged their brand in one of two ways: by aggressively promoting a product or a business strategy and failing badly, or being involved in a corporate or personal scandal.

These are America’s nine most damaged brands.