Case study: PepsiCo

Résumé du document

PepsiCo, the manufacturer of Pepsi-Cola, Diet Pepsi and related products, discovered the value and necessity of accurate and consistent communication in 1993, when multiple claims all around the USA reported that syringes and other hazardous products were found in Diet Pepsi cans. From the beginning to the end, this hoax only lasted for two weeks, and yet, it was an unprecedented crisis situation for PepsiCo. The company focused on reaching all its audiences quickly and accurately in order to provide correct information, so as to comfort and reassure them, and to eliminate all inaccuracies and wrong assumptions. Not only did the company of world renown handle the major crisis properly, it also became an example analyzed by others firms and independent Public Relations professionals.

One of the major decisions of PepsiCo which was overemphasized and instantaneously criticized by crisis experts, media professionals and observers, was the choice to not recall the products.

Since PepsiCo is a major well known brand which is bought worldwide, recalling the products would have had a dramatic immediate global impact. Moreover, this would have had persistent long-term consequences, severely damaging PepsiCo's brand image and marking it with indelible deep scars. It would have had amounted to Pepsi admitting three things that were not right: firstly, that the company WAS responsible of putting the syringes in the can in the plant, secondly, that the company was not sure if it was responsible or not and that it assumed that the cans were possibly unsafe, and thirdly, that in all cases the company was not confident but overwhelmed by the panic rush and was not able to handle the problem correctly.

PepsiCo immediately determined the foremost problems and worked on a solution on how to stop the reports/copycats and reduce their effect, how to emphasize the safety of its products, and how to retain its customer's confidence and loyalty. The bottom line of the strategy was to convince the public that this was NOT a manufacturing crisis. What was happening was occurring outside the plants, due to un-related individuals. The CEO, Weatherup said "A can is the most tamper-proof packaging in the food supply. We are 99.99 percent certain that this didn't happen in Pepsi's plant." In fact, by mid-June, more than 10 claims in 24 different states had been registered. Some consumers claimed to have found syringes, needles, pins, screws, and so forth in Diet Pepsi cans. However, the geographic spread of the claims was random and there was no connection between the reports, except that the brand was Diet Pepsi, and the packaging was in cans.

Tags: 'PepsiCo', 'Crisis Management', 'Communicating in a crisis'

Extraits

[...] By doing so, the company was able to react quickly and efficiently to changes in the situation. The public relations department was already familiar with the inner systems of the organization. There was no lag or misfit between Pepsi and another company; all information was coming directly from the corporation. Pepsi understood the public and political environment, and it reacted accordingly. It has been able to anticipate, analyze and interpret public opinion, attitudes, and issues that influenced the operations and plans of the company. [...]

[...] In effect, Pepsi's management was in constant communication with the FDA, so that he knew exactly what was happening, when and why. The FDA, possessing all the necessary information could then be in a position to see the situation through the lenses of PepsiCo, and knew that the incidents could not come from a malfunction within Pepsi's organisation or plant. There was too many non-senses in the needle crisis, and Pepsi's communications were comprehensive, clear and logical. The government's agency chose to support PepsiCo, and started to communicate in favour of the company. Dr. [...]

[...] Some consumers claimed to have found syringes, needles, pins, screws, and so forth in Diet Pepsi cans. However, the geographic spread of the claims was random and there was no connection between the reports, except the Diet Pepsi brand and the can packaging. The Food and Drugs Administration first supported the company by deciding not to ask for a product recall because the FDA knew from its own inspections and experience, and from the discussions with PepsiCo's management, that the incidents "defied logic", they determined then that there was no health risk (they 1st analyzed that the syringes were clean), and PepsiCo confirmed its position not to recall Diet Pepsi. [...]

[...] Broadcasted communications –Pepsi focused on one medium, television- had a major impact to display, support and co-ordinate the message. Pepsi relied on television news to reach the broadest audience as quickly as possible. Pepsi's great idea was to issue videos news release (VNR) to inform both PepsiCo members and related people, and the public. Pepsi produced several video footages that would illustrate the company's message. This included a VNR that quoted the C.E.O. saying, can is the most tamper-proof packaging in the food supply. [...]

[...] They did not just rely just on PR and media. Since the top of the company communicates the same concern and dedication, the consumers, retailers, and wholesalers knew they could turn to the company and ask PepsiCo whenever there is a problem. Third, PepsiCo did not turn back on its suppliers, employees and partners. Pepsi worked together with its stakeholders, to solve the problem and to re-establish the credibility for Diet Pepsi cans. They showed they were ultimately responsible for the brand. [...]