March 9, 2015

Can Rams Head Tavern Survive Voyeurism?

SMITH BRAIN TRUST -- Voyeurism charges can never be good for a company's reputation, but can Rams Head Group come back from allegations that its president secretly recorded women in the restroom? To assess the damage, marketing experts at the University of Maryland's Robert H. Smith School of Business draw comparisons to the BP oil spill in the Gulf of Mexico and the ValuJet crash into the Florida Everglades nearly 20 years ago. Speaking to the Baltimore Sun, Smith professors Roland Rust and Hank Boyd cite the historical cases as potential points of reference for solutions for the disgraced firm, which operates restaurants and entertainment venues around Maryland. Rams Head president Kyle Muehlhauser is charged with videotaping women in the restroom of Rams Head Tavern in Savage Mill. The case also has drawn a $3 million class action lawsuit against Muehlhauser and the tavern.

Rust, a Distinguished University Professor and David Bruce Smith Chair in Marketing, says potentially long-term damage to the Rams Head brand could prompt the company to follow ValuJet’s strategy to reorganize and rename itself as AirTran following the 1996 crash of Flight 592 that killed all 110 passengers and crew. "Without turning over management and turning over the brand itself, it's probably going to be difficult to recover," he says. "It's just too serious a breach of confidence and trust. So, I think without people really totally dissociating the old brand and the old name, I don't think they're going to trust this place again."

Taking such a step, Rams Head founder Bill Muehlhauser, father of Kyle Muehlhauser, announced his son would take an extended leave-of-absence among other staff changes. The company also operates concert venues in Annapolis, Baltimore and at Maryland Live Casino in Hanover, plus additional restaurants in Crownsville and Stevensville.

Boyd, a clinical associate professor of marketing, said BP represents another point of comparison as the company has been recovering from the stigma of producing one of history’s worst manmade environmental disasters via an aggressive PR campaign and passage of time. According to Boyd in the Sun/Gazette report: “BP airs so many commercials about its cleanup efforts in the Gulf Coast, consumers without prior knowledge may think it is a company that simply cares about the environment.”

"(Rams Head) has a lot of work ahead of them," Boyd says. "Time is the thing that heals most wounds. But you've got to do it in a systematic, smart way going forward, at every point where (the company) can regain trust."

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About the University of Maryland's Robert H. Smith School of Business

The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and flex MBA, executive MBA, online MBA, business master’s, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.

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