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Case study: PepsiCo

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  1. Do you think Pepsi erred by not immediately volunteering to recall its products?.
  2. How would you assess Pepsi's overall public relations strategy?.
  3. How would you assess Pepsi's overall government relations strategy?.
  4. What were the pros and cons of ignoring print media and focusing instead on electronic media. Could this strategy backfire on Pepsi?.
  5. What were the pros and cons of using Pepsi's president as chief spokesperson?.
  6. What public relations lessons can be drawn from Pepsi's experience for handling future product tampering cases?.

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'

[...] The success of PepsiCo also resided both in its quick responsiveness and in good time management. Pepsi had a plan, which it communicated effectively by using aggressive public relation campaigns, and it was in a constant stage of evaluation. III- How would you assess Pepsi's overall government relations strategy? Close cooperation between the government (i.e. the FDA here) and the manufacturer PepsiCo were essential, so that the message was loud, consistent, clear and persistent. PepsiCo effectively looked to the FDA to provide additional public relations efforts and clues during the weeks of the syringe-in-the-can contaminations. [...]

[...] PepsiCo was sensitive to the fears of the customers involved, even if it knew it was right about this issue, and this showed that it was actively investigating and pursuing all issues and not just assuming that the consumer was wrong. Secondly, PepsiCo was right in picking the right spokesperson immediately, i.e. the C.E.O., and sending him up to the front to communicate. They did not just rely on PR and media. Since the top echelons of the company communicated the same concern and dedication, the consumers, retailers, and wholesalers knew they could turn to the company and ask PepsiCo whenever there was a problem. [...]

[...] PepsiCo chose to focus on electronic media, and both the Internet and personal communication technology were utilized to reach the public. Broadcasted communications? Pepsi focused on one medium, television- had a major impact to display, support and co-ordinating 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 the members of PepsiCo, related people, and the public. Pepsi produced several video footages that would illustrate the company's message. [...]

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