Syringe in My Pepsi Can! The Crisis Case Study

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¶ … syringe in my Pepsi Can!

The crisis that PepsiCo had to handle in 1993 was a very difficult one because it implied both reality and perception as communication consultant Steven Fink stated. Thus, on the one hand, the U.S. corporation received a blow in its image as a health and safety promoter because of the various and dangerous objects that consumers reported to have found in Diet Pepsi cans, and, on the other hand, it had to tackle the factors causing the hoax for stopping the complaints' chain. Consequently, PepsiCo had to remove both the real crisis by identifying the ones committing such fraudulent acts and the negative perception that began to have a clearer shape in the consumers' minds. Therefore, one could state that PepsiCo's crisis communication was effective because it addressed causes and effects at the same time. If the company had addressed only effects (i.e. consumers' fear to buy Diet Pepsi), the real causes wouldn't have been detected and the reports would have continued to appear. On the other hand, if the company had exclusively focused on causes, the consumers wouldn't have found out about PepsiCo's discoveries regarding the hoax and would have remained loyal to their distorted image of the company's products, an image resulting in significant losses and, eventually, in the company's failure.

The publics involved

In order to manage the crisis, Becky Madeira, the vice president of public affairs decided to focus on both internal publics (employees and Pepsi Cola bottlers) and external ones (the news media and retailers).Download full Download Microsoft Word File
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TOPIC: Case Study on Syringe in My Pepsi Can! The Crisis Assignment

First of all, employees represent an important segment that companies must take into consideration when being compelled to handle a difficult situation because they are usually haunted by journalists and relatives for extra information (Gordon, 2001). Therefore, Pepsi kept its personnel up-to-date by providing information with regard to the nature of the crisis and the steps that the company took for removing it. Hence, the personnel were trained to deliver positive speeches when being asked by friends or family about the crisis and the company's responsibility towards it. Moreover, when being interrogated by excessively curious journalists, employees had the right answer at hand: the only persons in charge of responding to media inquiries were the PR staff or/and the company's spokesperson.

Secondly, local Pepsi Cola bottlers were not only informed about but also involved in the PR trajectory aimed at proving that PepsiCo was a health and safety advocate and that the filling lines were perfectly secure. Thus, the Alpac corporation opened its plant and the owner, manager and quality assurance manager were made available to the media and the Food and Drug Administration (FDA) for probating the high-tech parameters at which cans were filled and the absence of any objects similar to those found in the cans. The impact that PepsiCo's initiative had on its associated bottlers was the following: collaborators made sure that they were not at fault (and, in this regard, the FDA played a decisive role), understood the 'sabotage' undergone by PepsiCo and strived to help the U.S. corporation prove its innocence.

Thirdly, the news media were an important public as these had been the opinion builders responsible for the case's significant coverage from the very beginning. Under these circumstances, the company's strategy was a very diplomatic one. Hence, it didn't reject the media as a result of their ironic/unfavorable rhetoric towards PepsiCo highlighted by Jay Leno's talk shows or by famous editorial cartoonists. On the contrary, it opened a permanent communication channel between the organization and the media for promptly conveying up-to-date information. Consequently, the news media have ceased to feel as players fighting on the other side of the battlefield and understood PepsiCo's point-of-view. Additionally, most broadcasts changed the previous 'wind direction' and aligned with the U.S. company's attempt to identify the perpetrators. In conclusion, the news media turned from a potential enemy into an excellent tool that the company could use for providing accurate information and removing the stain that was threatening its reputation.

Fourthly, customers (defined as those who bought Pepsi products for selling them in their retail stores) were another segment that was thoroughly taken care of. These were important opinion leaders as many consumers used to ask for advice when purchasing Diet Pepsi (especially when not buying from supermarkets or hypermarkets). Hence, customers were kept up-to-date due to the information provided by PepsiCo and were encouraged to remain loyal to the soft-drinks provider because this continued to perform its manufacturing and filling processes as safe as ever. Moreover, in this case, FDA's advertisements suggesting that the soft drink should have been poured into a glass before drinking were very useful as retailers could go on selling their merchandise without being responsible for any incident that might have occurred.

Yet, many retailers decided to pull the product from the shelves. Thus, despite PepsiCo's refusal to recall its products, the distributors' decision to give up selling Diet Pepsi might have placed a strong question mark in the consumers' minds. Therefore, for an increased effectiveness of the message communicated to this kind of public, Pepsi Co representatives (for instance, merchandisers) should have personally talked to the retailers and should have offered a procedure that would have allowed selling the controversial cans. Thus, in each store, PepsiCo merchandisers should have placed banners/posters stating that the company continued producing the same safe and qualitative beverage but, because of the recent unfavorable climate, it recommended together with the FDA to pour the content into a recipient before drinking it and use a toll-free number for reporting any potential inconvenience that might have appeared. Moreover, PepsiCo should have lobbied for its "no-recall" policy in front of retailers by stating that such a short-term decision would have affected the company's sales (and, implicitly, the retailer's) in the long run. Retracting products from the market would have implied admitting Pepsi's guilt even though the company was aware of the fact that the entire suite of incidents was part of a hoax. Additionally, it should have pointed out that by continuing to sell Diet Pepsi cans, the surveillance cameras could have recorded the perpetrators and thus the guilt would have been totally assigned to them. In other words, cans could have represented the perfect bait for the 'saboteurs' and would have led to their immediate arrest. Otherwise, the company would have retracted its products and the saboteurs could have appeared when reintroducing them on the market, after a while. Thus, the real causes wouldn't have been removed.

Another observation that could be made in terms of enhancing the communication effectiveness refers to timing. PepsiCo shouldn't have waited for the scandal to become national in order to anticipate the fact that the crisis could spread in a few days. From the very moment that the local crisis broke, the central public affairs department should have drawn up an "in case" plan establishing the major guidelines that must have been followed if the problem was to reach national coverage. As a matter of fact, it could have guessed that its second rank in the diet drinks' hierarchy was being envied by rivals. Even though this appeared to be an improbable scenario, it should have been taken into consideration.

PR tools and techniques

When reviewing the PR tools and techniques used by PepsiCo to handle the crisis, the most prominent lever appears to be the video news release (VNR) explaining the filling process. The obvious benefit of such tool was the fact that it counterattacked the enemy by using the latter's own weapons. In other words, the same television that made the crisis known to approximately 100 million households was the one which conveyed the information on PepsiCo's safe filling process. Thus, the credibility assigned to this mass medium was quite high as it was perceived as an objective communication channel. A potential risk still existed. The impact of the first negative message could have been stronger than the second reassuring message. Moreover, viewers could have suspected that the respective VNRs were a nicely wrapped version of the truth for which the company paid in order to ensure their broadcast.

Secondly, the case study mentions that print communication tools were also used. These have the advantage that keep readers informed (especially when daily newspapers are used) and speculate some persons' belief that if it's written in the newspapers than it must be true. The main risk is that the respective publications might not reach the targeted audience as this is too busy to read a newspaper or prefers to watch TV as the latter is more comfortable and offers the opportunity to hear comments or to see effective images (e.g. The image part has been optimally fructified by PepsiCo which used VNRs rather than printed news releases which wouldn't have allowed them to present the filing process).

Thirdly, besides video and printed news releases, the company also resorted to talk shows and interviews. In this regard, the spokesperson (Weatherup, PepsiCo's president) played a vital role as… [END OF PREVIEW] . . . READ MORE

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