Even healthy brands can develop a suspicious cough… and before you know it come down with pneumonia.
In the past couple of months Netflix—which seemed to have muscles coming out of its ears—took off its raincoat to reveal the physique of Mohandas Gandhi on a diet of lime juice. Yesterday, Netflix stock lost 35% of its value.
Netflix's problems are well known—and it’s understandable that the CEO tried his damnedest to adapt his DVD-by-mail business to the emerging world of streaming video. “I messed up,” he wrote at one point. Well, he tried.
Now let’s look at another big, muscular brand—GNC, purveyor of nutritional supplements. GNC promises health—and hair and potency and beauty and... the works. Recent studies show that vitamin supplements actually may do nothin' for no-one no way—and that they might even harm some bodies.
What!!!? Supplementary vitamins might do harm? The Wall Street Journal asked on October 25—“Is This the End of Popping Vitamins?” Seems relevant to the GNC business model, no? Yet this is how GNC responds:
"The thing you do with [reports of studies] is just ride them out, and literally we see no impact on our business," said Joseph Fortunato, chief executive of supplement retailer GNC Corp., according to a transcript of the company's third-quarter conference call last week.
"Consumers believe in our products," a spokesman for GNC said.
I would call this burying your head in the brand.
Dear Mr. Fortunato of GNC: Do not ask for whom the bell tolls. It tolls for thee.