Crisis Communication: Business Disasters from Which Brands Managed to Smartly Escape

Last week, the public had the opportunity to witness a rather bizarre story in which Coca-Cola played the leading role, whose beverages, according to many testimonies, left a bitter, not to mention caustic, taste in the mouth. After two confirmed cases of poisoning from Römerquelle water, dozens of citizens rushed to the emergency room because they too felt symptoms of burning and irritation in their throats after drinking from the portfolio of this well-known global brand. Meanwhile, the rest of Croatia eagerly followed the unfolding of the story and read alarming messages that even hardened realists managed to turn into conspiracy theorists. Who is poisoning the Croatian people? Who is sabotaging Coca-Cola? Is it the mafia? Pro-Palestinians? Russians? Maybe it’s the government, maybe the Serbs or the Freemasons, as Vojko V sings? Are tens of thousands of bottles with caustic soda in circulation or ‘just’ a few? Did the mishap occur in the domestic plant or is it due to ordinary fools who decided to store dangerous substances in a mineral water bottle because… why not?

This last option was offered as the only logical solution to the puzzle. Although part of the public is not satisfied with this because they believe that much more is unknown, it is definitely known (besides the two confirmed cases) that no one among the players involved in the story knows how to communicate. In communication terms, the State Inspectorate, the relevant ministry, and Coca-Cola itself have all failed, as the latter showed with a terse statement that it does not know how to deal with concepts that do not fit into its happy communication strategy.

Textbook Cases

Namely, its marketing strategy in the Balkans, but also beyond, is based on emotional storytelling, and all communication revolves around key themes of happiness, joy, and togetherness. In this case, happiness was absent, so the company, not knowing what to do in its absence, addressed the public quite late and rather tersely, which only added fuel to the fire of various conspiracy theories. Instead of calming the audience (and this would, for example, have been best done by a face from Coca-Cola like the CEO or the executive director), the company left the impression that it was in panic and hiding something. Even if it did not have relevant facts, a faster, more concrete, and ‘human’ reaction was expected. Crisis communication is undoubtedly the most demanding part of the job for public relations professionals, but even in the greatest disasters, it can save a company and a brand.

Unfortunately for consumers and fortunately for professionals, there are dozens of examples of PR disasters that were salvaged by good communication, and this is an excellent opportunity to repeat those lessons. One of the most famous and tragic PR crises is that of Johnson & Johnson and its brand Tylenol. In 1982, seven people died after consuming a cyanide-laced capsule hidden in a Tylenol package. Although the mass murderer was never found, the management of Johnson & Johnson, or Tylenol, did everything in its power to find the culprit, save the brand, and calm the public. At that moment, it pulled 31 million bottles of tablets from the shelves, valued at one hundred million dollars at the time, halted production and all marketing activities, and then connected with the Chicago police, the FBI, and the FDA, offering a hundred thousand dollars as a reward for anyone who finds the murderer. After the crisis, the company resumed production of Tylenol, but at a discounted price and with an innovation – a sealed bottle of tablets, which later became a safety standard.

Pepsi Played Better

As Business Insider once noted, this case study has entered the curriculum of many business schools around the world, and the company’s response is considered one of the best examples of crisis resolution in history. The media were unanimous in their stance that Johnson & Johnson excellently addressed all public concerns and managed to leave the impression that public interest was more important than its own brand, which, of course, helped it recover. The case of PepsiCo in 1993 is quite reminiscent of the domestic story, but unlike Coca-Cola, its global competitor was much more open and precise in communication. In Washington, one person reported finding a needle in a can of Diet Pepsi. By the following week, about fifty consumers reported the same thing. However, it turned out that all of this was a hoax.

PepsiCo and the American Food and Drug Administration (FDA) knew it was a hoax, but the public did not, so the company had to work hard to convince them otherwise. Instead of statements asking the public to trust them, they produced four videos and launched a massive report on how the beverage is packaged in cans. Additionally, they managed to obtain footage showing a woman in a store in Colorado planting the needle. The CEO of PepsiCo stepped out of the shadows and was available to all media, appearing in news on national channels with the support of FDA experts. Due to the scandal, sales of Diet Pepsi fell by two percent, but within a month, thanks to the management’s determination to prove that the company was not at fault, it fully recovered.

It Doesn’t Matter Who is to Blame

And while PepsiCo greatly benefited from having the FDA on its side, Cadbury did not have such luck. This candy brand found itself in serious trouble in 2003 when Indian customers found worms in two of its chocolate bars. As reported by Business Insider, Cadbury immediately jumped to defend itself, claiming that such a thing was impossible during the production phase. This proved to be a bad move as the FDA claimed otherwise, and the media pounced on the brand. Fortunately, it quickly wriggled out of the problem. Instead of continuing to defend its colors, it launched an educational PR project aimed at retailers and made itself available to the media for all questions. It provided detailed reports on all measures taken, corrections in the production process, and storage methods. The company also imported new machines into its Indian factory and changed the packaging of the chocolates, and then, four months later, began launching advertising campaigns again.

It is worth mentioning that the scandal erupted at a time of year when the company usually recorded a sales increase of about 15 percent, and due to the worms in the chocolate, it lost as much as 30 percent. However, after it managed to prove to the media that it genuinely cares for customers and the brand, and then presented a new campaign and new packaging, sales, as well as customer trust, managed to return to pre-crisis levels. Since then, Cadbury has remained one of the strongest chocolate brands in India. Of course, these are not the only examples of major global PR crises, but they somewhat resemble the domestic case. What they have in common is that they did not approach the public modestly or quietly, but opened up completely to the audience and the media and did everything in their power to prove that they were ready to resolve the crisis regardless of whose fault it was or who caused it. And, in fact, the biggest criticism of Coca-Cola is that it did not do the latter.