As one failed advertising campaign led to the collapse of the Hoover companyBy Pictolic https://pictolic.com/en/article/as-one-failed-advertising-campaign-led-to-the-collapse-of-the-hoover-company
Sometimes one wrong move can completely destroy acquired over the years. Prime example — once a successful company Hoover, which lost millions because of one unsuccessful promotion.
For a long time the Hoover company holds leading positions on the market of household appliances. The popularity of its products was so high that in many countries the name has become synonymous with "vacuum cleaner".
The company was formed in 1908 and sold vacuum cleaners around the world. In 1923, sales reached $ 23 million And when, in 1926, Hoover introduced the first vacuum cleaner with a detachable bag and a special device to extract dust, the popularity of her products grew even more. Success grew year after year until the economic crisis of the 1990s.
In order to rectify the situation and to increase sales, Hoover launched a rather strange campaign: each client has spent for the purchase of £ 100 or more offered round trip tickets to certain airports in Europe.
The company reserved the right to reject the choice made by the participant. In this case, he again sent the voucher and the procedure was repeated. If the firm rejected the route several times, the buyer either had to accept the terms offered by the company, or to abandon the flight at all.
Not all clients had the patience for these arguments, therefore, only 10% of them received the coveted tickets. Sales of vacuum cleaners were consistently high, but then Hoover decided to play big. The company has extended the special offer on the United States, and it was the biggest mistake in the history of its 80-year existence.
The fact that tickets in the US cost about £ 600, and to receive them, according to the campaign, it was enough to spend 100. As you can imagine, the demand for vacuum cleaners Hoover has increased tenfold. The most popular model was the "Turbopower Total System" cost 120 mentioned currencies. Net profit from the sales of these vacuum cleaners were only 30 pounds.
Don't need to possess special knowledge of Economics to count, what were the losses for each issued prize. And action, for a moment, decided to take advantage of more than 300 000 people. This meant that the potential losses of the company exceed 17O million pounds.Hoping to avoid bankruptcy, Hoover strongly delayed the moment of granting prizes to participants. One was denied because of allegedly incorrectly filled forms, the second offered crazy routes on which few people agree, the third was sent vouchers under the Christmas hope that the festive mood will hurt to stay within the allotted two weeks to complete.
But despite all the efforts of the firm, she was forced to buy tickets for 220 000 clients in the amount of 72 million. This was enough to lead to catastrophic losses, because during the campaign the income from the sale of Hoover vacuum cleaners and washing machines amounted to only 30 million pounds.
People EN masse appealed to the courts, accusing the company of violating the terms of the promotion. The scandal led to the fact that the British Royal family deprived Hoover of the status of Supplier of Her Majesty.It all ended in the dismissal of several managers of the English branch, a bankruptcy and sale of the European division of the Italian manufacturer of household appliances "Candy". So one bad marketing move wiped out 80-year history of a successful brand.