Defense

Chick-fil-A’s Branding Fiasco

27 Jul , 2012  

Chick-fil-A has a significant and growing branding problem.

The company has long been grounded in religious beliefs. It is owned by a Baptist family and embraces traditional ideals. The company donates to conservative causes. The restaurants are closed on Sunday.

Recently, however, Dan Cathy, the company’s president, gave a series of interviews where he strongly opposed same-sex marriage. In a radio interview, for example, he said “As it relates to society in general, I think we are inviting God’s judgment on our nation when we shake our fist at him and say, ‘We know better than you as to what constitutes a marriage.’ “

The interviews have led to a rather significant backlash, with people attacking the company for its beliefs. People protested in LA at a Chick-fil-A location. A Chicago alderman announced that he would prevent Chick-fil-A from opening in his ward.

In response to the attacks on Chick-fil-A conservative leaders have rallied to the brand’s defense. Mike Huckabee decided to call August 1 Chick-fil-A Appreciation Day. Rick Santorum is tweeting from Chick-fil-A locations.

The entire issue is generating a massive amount of publicity and attention.

The controversy is becoming a huge problem for Chick-fil-A. The core issue is that the brand is quickly getting associated with a particular issue. This will have an impact on business, as some people decide not to visit the chain. But it goes far beyond this; it could make it difficult for Chick-fil-A to recruit employees, open new locations and secure promotional partners. Chick-fil-A is a private company, which gives it a bit more flexibility, but the risk remains.

What should Chick-fil-A do now?

This is a very difficult question. The company can’t just announce that it has changed its position on the matter; this would be insincere and would cause a backlash among its supporters. Continuing to promote its point of view will just fuel the controversy. Saying nothing, its current approach, seems weak.

My sense is Chick-fil-A needs to respond to the situation. First, however, the company leaders need to make a choice: stand by its beliefs despite the business impact or draw a line between the beliefs of its owners and the value of the brand?


19 Responses

  1. Chris says:

    Interesting to read the posts. It seems that many liberals are not tolerant. I am very conservative and recently took my family to San Francisco. I enjoyed many restaurants, frankly not caring what the political views of the owners/employees were. I can enjoy a person’s services or products and not agree 100% with every viewpoint. If I limited all my interactions and commercial transactions to carbon copies of myself I would have no interactions or commercial transactions.

  2. Chris says:

    Please cite evidence of the branding problem based on numbers or something objective. Does Virgin have a branding problem because founder Richard Branson espouses political viewpoints?

    • Tim Calkins says:

      Chris—Thanks for the comment.

      I think we know the CFA leaders see this as a problem because they are no longer making controversial comments. If the owners thought it wasn’t a problem, then they might simply say, “This is what we believe and we live in a country where people can freely voice opinions.” They aren’t doing this.

      The fact that they have changed course fairly dramatically at least suggests they see this as a branding issue.

      Tim

    • Chris says:

      Thank you Prof Calkins for your thoughtful response. Living in the Bible Belt it was difficult to understand why this was a fiasco but now I understand your viewpoint. In our local paper there was a story and photo of a store manager out in the parking lot encouraging the protesters to come inside. Here locally the CFA employees have shown only graciousness and customer service to all — protesters and supporters alike.

  3. René says:

    Dear Professor Calkins,

    I live in Brazil and I do not know this company or the owners, however, here from time to time similar situations happen because the largest Brazilian companies are private, I myself work for a multibillionaire private company. Therefore despite the companies are private, the owners are public people and their opinions are frequently wrongly misunderstood with their business activities. In these cases, a serious and long term PR strategic planning helps a lot, in order to certify that the audiences can divide the personal opinion from the brand values. The brand can stands for principles that are aligned to any Christian or non-Christian religion since these principles preserves what western world considers “right” and at the same time the owner can have his personal opinion that should not transcends to the brand. This not rocket science, and any damage could be solve in two or three years since PR is taken seriously

  4. Antonio Shappley says:

    If you find yourself thinking CFA’s brand will be damaged for taking what you are assuming is an “unpopular stand”… You should first ask “Unpopular to whom?” The data currently shows more support for Mr. Cathy’s basic premise than for any alternative, as witnessed by votes bought about in at least 23 states of the union, and by the fact that most of humanity was born from and raised by parents of opposite gender, even if those parents are increasingly members of separate households themselves.

    While Mr. Cathy’s discourse has been respectful and substantive, the reactions have clearly crossed into the realm of emotion, intolerance, and bigotry. What is alarming in this case is the willingness of elected officials to trample the rights of a business to apply for operating licenses based on the business’s perceived “bigotry” and intolerance. Yet they react by showing more intolerance and deploying threats to restrict access to public process to opposing views.

    This was the same type of faulty logic used at the beginning of very dark periods of mankind across history.

    My prediction, based on all the above, is that CFA sales will increase since it has strengthened brand loyalty among its base, and broadened its base, while alienating a smaller segment of the population (studies are needed, to show how many in the LBG community would not purchase at CFA due to the statements of management, and correlate the size of that community versus CFA customer base). The broadening of their base is likely to come as a by-product of the extreme reaction by those on the left of the issue. They have lit a fire on the right that will not soon die down, and moved the issue away from LBG rights to one of first amendment rights. If there is one thing behind which Americans will stand united, it is freedom of speech.

  5. William Hauser says:

    I teach marketing for a local college and I have used Chick-Fil-A’s marketing strategy in class for some time now. Ironically, the decision to be closed on Sunday was not a marketing strategy but has evolved to be one of the best strategies they accidentally deployed. Since, their customer base has grown and being closed on Sunday has become one of the biggest reasons for their success (Perrault, Cannon, & McCarthy). I believe the statement made is targeted perfectly with the customer base they already have and will probably help their business even more. I believe they need to stand behind what they said and run with it. As noted in an earlier thread, they do not discriminate against employees or customers and treat everyone with respect. Reversing it will only make them lose credibility from what they have always believed.

  6. Jon says:

    I’m trying to separate personal beliefs from smart marketing but here goes. My hunch is their business will be just fine as long as conservative evangelicals are sufficiently large to meet their business needs. Not everyone should try to market like McDonalds. Segmenting by image, values and beliefs rather then recipe is an interesting twist to the fast food race. In any case nothing works better then finding a highly motivated target and doubling down. Slowly move the conversation away from gay and back to “old time family values.” and claim ” freedom of speech” everytime criticizes you and your fortune is secure. Advertise on Limbaugh, Fox, Huckabee. If your business is strong enough to be closed on Sunday, you can certainly weather a political season. If not.. sellout to CrackerBarrel.. they have the same political philosophy, but with less heat.

  7. Susan Silver says:

    Having lived in the South for a long time, I’ve known for many years that Chick-Fil-A did not share the same values as I do. Because I did not want to contribute to the funding of these opposing views, I long ago sadly gave up their sandwiches, waffle fries and lemonade.

    That said, to my knowledge they do not discriminate about who they serve or employ. If that is the case, then this is a free speech issue to me. While I strongly disagree with their position, I do believe that they are free to express their opinions (even if I don’t think it’s the smartest business strategy) and practice their religion as they see fit.

  8. chick fil a had record sales wednesday, I think this is actually going to help them as I never even heard of chick fil a prior to this and now I am looking to find one and eat some chicken. I think it actually created awareness for them some negative some positive depending on where you are on the issue but it’s still not going to stop people from eating a chicken sandwich. There is a short memory in the public consumer.

  9. Tim Calkins says:

    That is a terrific review of their options. This will be interesting to watch.

    Tim

  10. KPChicago says:

    The problem in Mr. Cathy’s statement is that
    a) It implies that anyone who disagrees with him on the issue is not a “real Christian” – and yes there are many Christians who believe “God loves all creatures great and small.”
    b) he’s sponsored groups that aren’t just anti-gay marriage, but understood as simply anti-gay anti-abortion and anti-feminist; by admitting to “guilty as charged” he’s buying in on those terms.

    b2) Because of that, I can forsee EEOC lawsuits in their future from any non-christian, any gay person, or even any woman not hired; or from those already employed, a “hostile workplace” suit.

    c) It’s easier to stop going to any place as a retailer than for supporters to consistently double purchases.
    d) He’s made it the restaurant’s position with it’s donations in kind to events only on one end of the spectrum. Not just his.

    Also, one can run a clearly Christian-values restaurant without offending customers – See In ‘n’ Out for example. This is not the only way.


    What to do:

    Ostrich – shut up, let it die down.

    Crazy Uncle/Muddy the Waters – Other family members with ownership stakes come out that they don’t agree with him on issue
    (See also the lesbian sister in the Chicago Cubs ownership after dad considered hit ads on Obama)

    Crazy Grandpa – no official national position, but local franchisees in selected markets make balancing donations to gay-friendly churches with no retribution from HQ

    Wash the dishes – state that no more donations will go to groups with political positions. Focus “charity” elsewhere: children’s groups, Police/Fire, etc.

    ———
    I grew up in the Carolinas. When CAF came to Chicago, it was a guilty pleasure. I tried to ignore this behavior that hurts my friends. But Cathy’s statement was the final straw. Instead of smelling smoke, I saw fire.

    • Lady Gill says:

      KPChicago,
      You obviously have never gone to an CFA. It is the farthest thing from a hostile work environment you can get. 99% of the people go there because they have good chicken sandwiches. The other 1% go there because they have nice playgrounds for their kids. People who go there respect the fact that it is a Christian place. They don’t protest and threaten lawsuits because it is closed on Sunday and every other place is open. They accept it and get good food and a nice place to eat a meal. That’s all they want. I expect this will neither increase nor decrease their sales.

      • pll says:

        To the hostile work environment issue: it is not for customers to judge that based on playing on a “nice playground”. It is for employees to judge. I agree with KPChicago that the company has opened itself to EEOC lawsuits.

  11. Doug says:

    Prof. Calkins,

    I noticed some time ago that you posted about Procter & Gamble doing its first set of advertisements for P&G as a company (rather than for its individual brands). I thought it was an interesting topic to hear you address.

    I’d love to hear your thoughts on a similar topic. I’m sure you remember the ads run through USDA’s “checkoff” programs for milk (“Got Milk?”), eggs (“The Incredible, Edible Egg”), beef (“Beef. It’s What’s for Dinner”) and pork (“The Other White Meat”).

    Today, the Organic Trade Association is pushing to do the same thing for organic food. (This time it would be for all organic products, not for an individual commodity.) It looks from the Senate version of the 2012 Farm Bill that this may well happen.

    I’d think organic has an additional reason to be running this sort of ad, i.e., most people still don’t know what “organic” means (whereas they know quite well what dairy, eggs, beef and pork are) and often (mis)attribute its benefits to the less substantial “natural’ label. But I’m not sure prior “checkoff” programs’ ads were effective (sales for at least 3 of these commodities have continued to decline since the ads were launched). And they would cost organic producers money to fund.

    I’d love to hear your thoughts on this prospective program, its wisdom, its pluses and minuses, and whether you think they should carry it out.

    Will keep an eye on your blog as always and would be delighted to see this come up.

    Best regards,
    Doug

  12. I find this to be a fascinating topic. While I disagree with Mr. Cathy’s opinion on gay marriage, he’s placing his values center stage and allowing people to either line up in agreement or get out of his way. He’s speaking his truth and for that I respect the openness of his values. In the long run, he’s going to alienate those who disagree with him, while also making raving fans out of those who share his views. It will be interesting to see if this bolsters sales, or if they drop as a result of him sharing his opinions.

  13. Bob Eames says:

    It is impossible to dispute the “problem” that Dan Cathy’s comments have caused for the Chick-Fil-A brand. By clearly articulating what his Christian beliefs mean with respect to a controversial social issue, Dan has placed himself and Chick-Fil-A directly in the crosshairs of any opposing point of view or values that might be held by say, the alderman in question or even the mayor of Chicago who said that these (Christian) values are not Chicago values and are unwelcome in that community. I guess that means that not only is Chick-Fil-A in trouble in the “community” of Chicago but apparently so is anyone who openly practices a religion that does not agree with the mayor’s social viewpoint on marriage. My understanding has always been that our society embraces differences of opinions and guarantees religious freedom. What has always puzzled me is that this apparently means that we are free to believe whatever we choose as long as we are willing to keep it a closely guarded secret and are willing to work and do business by a set of public values that may in fact be incosistent with our true values.

    The marketplace can and certainly will sort out the question of what CFA’s owner’s religious values mean for the long term perception of and ultimately the value of the brand. I’m sure it will have a negative effect in many communities where politicians such as Rahm Emmanuel can freely take aim at a religious viewpoint expressed by a businessperson and declare them unwelcome. I wonder if other brands such as food companies or retail establishments owned by members of any other religious groups will experience the same scrutiny and harassment about their religious values and beliefs? And if so, is it always better business for brands and the businesses that own them to “keep quiet” about what they truly believe by creating a brand image that is politically correct or value neutral? While I may or may not agree with Mr Cathy with respect to gay marriage, I certainly respect his commitment to his faith and his willingness to make his values central to how and why he does business. I also
    hope that he is given a fair chance to share what a Christian view of how to treat someone with different beliefs looks like…that might just be good for the brand and for the community of Chicago.

  14. Y. Shaban says:

    They do face a very tough decision. That’s why C-level execs shouldn’t talk about controversial issues in public at all. Howard Schultz trying to “rock the vote” at Starbucks is one thing…that doesn’t favor any sides, even though it’s definitely outside business norms to get people to vote. But this is quite another issue.

    But like you said, at least they’re not a public company. And time does solve a lot of things. If they just keep quiet then maybe they’ll lose some sales, but people go their to eat chicken, not to voice their opinions. I think it will fade away over time. The damage is already done, I don’t think they can do much to mitigate it, but they can still do a lot to worsen it.

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