The current societal climate has placed a significant amount of pressure on companies to keep a reputable brand identity. The ethics of companies is taken into consideration heavily for brand loyalty. Corporate social responsibility is increasingly important amongst consumers, specifically in the rising social media era. Generally, Generation X and Generation Y are both actively choosing to support only brands they find are ethical and socially responsible. The lack of responsibility made by companies has deemed the term “brand baggage”– It is when companies have a negative situation being held against them by society and holds them to their corporate responsibility. This term identifies that when companies are in a scandal and under high levels of scrutiny for either minor or major occurrences, the scandal can deteriorate their brand image. When the brand identity of a firm is tarnished and people decide to remove their business, protest, or even sue the company this is thought of as “brand baggage” for companies.
All companies go through trials and tribulations, especially as they grows in size and popularity. Companies deal with these incidents every single day; however, with social media and the current climate of what some call “outrage culture,” companies can lose thousands of customers from one simple viral video. The traction gained on most tweets and social media posts in general has become an unknown pattern that has the potential to ruin companies. Currently, there are a few large companies in hot water that are losing customers and increasing protestors to demand results. For example, there was a recent unfortunate incident involving brand baggage at Starbucks. Within the past week, Starbucks has been under a microscope at every instance since a video went viral of a Philadelphia, PA. The basis of the incident was, two black men were sitting at a table at the Starbucks retail location without purchasing anything yet and then one of them used the restroom. A barista approached asking if they were planning on purchasing anything since using the restroom was for customers only. The men had responded they were waiting to start a meeting with a third member that was en route. This caused the barista and manager to call local police to escort them due to excessive loitering. The video was seen by millions (combined from various reposts of the original video is hard to get solidified numbers) of the two men being arrested by police and being escorted out of the building. This profiling scandal has lead to massive backlash amongst customers; most demanding boycotts.
The patronizing behavior of the two workers at one location has completely deteriorated and has potential to permanently ruin Starbucks’ national reputation and brand image. Since the incident, more claims have come to attention of recent profiling cases but have not gained as much media attention since. Starbucks CEO, Kevin Johnson, has claimed responsibility and has taken a hard look at the brand image and purpose in order to recover from the incident. Starbucks needed a reputation boost since the incident; therefore, they have come forward with a public relations crisis management team and formulated an idea to close every single retail location on May 29th, where every single employee will have mandatory discrimination training. The response was to guarantee to the public and shareholders that Starbucks is not taking this issue lightly and will intentionally not only fix past situations but prevent future occurrences as well.
Starbucks is a well-known and vastly loved company prior to this situation. It had a high reputation for having one of the most loyal and dedicated customer base especially within recent years. In 2017, Starbucks was elected one of the World’s Most Ethical Companies for the 11th consecutive year. Fortune also named Starbucks the third most admired company in the world in 2017. In most scenarios many American consumers demand moral consciousness from companies, in order to successfully do business with the companies so these scandals severely impacted Starbucks’ reputation causing for a large brand baggage issue following them currently. Starbucks has yet to reach the US RepTrak Top 100 Reputable Company list but was predicted to accomplish this goal by the end of 2018. However, after the scandal broke, The Reputation Institute, that scientifically measures the reputations of 7,000 global companies, has stated that Starbucks’ current score is 66.6 points while the minimum requirement to be considered is 72.5 points.
This crisis demands a huge response from not only the CEO of Starbucks but the company as a whole in order to regain their reputation and respect amongst consumers. The ideology of brand image and identity is to keep the consumers satisfied; brand baggage has the opportunity to ruin that even with one incident. Today, social media has changed the game of public relations– every incident can potentially gain views of upwards to millions and can ruin a company within minutes. Companies are held to a higher level of ethics and responsibility to obtain consumer loyalty. However, in incidents such as Starbucks, even brand loyalty can be impacted with social media viral scandals.
Abulhawa, Susan. “Starbucks’ Epic Fail After an Epic Fail.” Alijazeera.com. 23 Apr 2018. Web Accessed 1 May 2018.
Danziger, Pamela. “Starbucks Needs A Reputation Boost: Will Closing For Racial-Bias Education Do It?” Forbes.com. 25 Apr. 2018. Web Accessed 1 May 2018.
“Fortune Names Starbucks 2017’s Third Most Admired Company in the World.” Starbucks.com. 16 Feb. 2017. Web Accessed 1 May 2018.
“Starbucks Named One of the World’s Most Ethical Companies.” Starbucks.com. 13 Mar. 2017. Web Accessed 1 May 2018.