Today's Mighty Oak


This article was published internally, describing how the American Medical Association and Sunbeam refused to incorporate Behavioral Differentiation, resulting in a loss of brand equity.

American Medical Association and Sunbeam refuse to share valuable knowledge, destroy reputations

 The Good Housekeeping seal is almost universally known to be adorned on quality products, as deemed by the Good Housekeeping Institute.  This symbol is visible to consumers to allow them to easily identify products that have been thoroughly tested and deemed of the highest quality.

            In quite the same manner, the American Medical Association (AMA) seal also signifies the same: that the association made up of about 300,000 physicians stands behind a product or practice.

            The AMA entered a partnership with Sunbeam Corporation, stating that it would affix its seal of approval to Sunbeam home health products without any testing.

            The board of the AMA did not know of this deal and when they found out they were infuriated.  Working to stop the damage however proved too late, as Sunbeam then sued the AMA for 20 million dollars and the right to affix their approval seal on their home health products, creating a losing situation all around: the AMA has lost credibility while Sunbeam’s products will now be endorsed by a seal that is only there because of a major lawsuit.

            A former member of the AMA board, Dr. Raymond Scaletar, spoke out about the situation, stating, “The board and the staff have to be much more forthright about what business relationships are planned or are under development.”  Scaletar continued, “We need to know—in what direction is this organization heading?[i]

            It also came to light that the AMA pursues many of these types of ventures each year, working with Procter & Gamble, Hoffmann-LaRoche and Minnesota Mining and Manufacturing Co.

            By sharing valuable knowledge, Westinghouse can put forward a Customer 1st attitude through its behavioral differentiation.  As the Westinghouse Behaviors state, we should “Proactively provide pricing transparency by sufficient breakdown and explanation for the customer to understand cost drivers and develop budgets without requiring additional information.  Keep customers informed regarding Westinghouse industry status, performance and direction.[ii]

            “The Sunbeam – AMA scandal teaches us the importance of reputation when it comes to credibility – how hard it is won and how easily it is lost.[iii]

[i] “How Reputations are Won and Lost.”  Consumer Behavior and Managerial Decision Making.  2nd ed.  Prentice Hall, Upper Saddle River, N.J.  2002.  Pp 141.

[ii] Westinghouse Behavioral Definitions

[iii] “How Reputations are Won and Lost.”  Consumer Behavior and Managerial Decision Making.  2nd ed.  Prentice Hall, Upper Saddle River, N.J.  2002.  Pp 141.

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