Dow Chemical shareholders escaped significant capital loss in the 1960s when it sold a dietary suppressant called Ayds to Purex and then Jeffrey Martin, Inc. It was a multi-million dollar business that had become one of the leading weight loss products in the early 1980s. That strong brand, however, witnessed an 87% decline in sales between 1983 and 1988 as the HIV scare created a mental model connection with acquired immunodeficiency syndrome. Anytime you are trying to build brand equity, you must be aware of associational risks that trigger the horns and halo effect.
Previously, we have discussed how an individual person is able to generate a halo effect. Because Warren Buffett has amassed a lot of money, doesn’t engage in ostentatious displays of wealth, and has a lively sense of humor, he is able to receive the benefit of doubt in many other areas of life (people assuming his … Read the rest of this article!