Management homework help

Management homework help. Crisis Reflection 3: Pepsi’s Big Scare
Author(s): Keith Elliot Greenberg
Source: Public Relations Journal. 49.8 (Aug. 1993): p6.
Instructions:
o Write a short 2-3-page essay reflecting on the article. You will want to reflect on
the issue at hand using facets of crisis communication you have learned in the
course.
o You will be graded on content and how well you understand the course material,
reasoning and how well you amalgamate the material.
o Proper grammar and mechanics are crucial and will be a part of your grade.
o You will submit your paper through Canvas.
Abstract:
Pepsi-Cola Co was enmeshed in deep public relations trouble when allegations that its
products contained syringes and other foreign materials surfaced in the media in Jun
1993. The problem was further exacerbated when the company failed to immediately
present its arguments refuting the reports. Contrary to the expectations of Pepsi-Cola’s
PR department, news coverage of the situation became more extensive as time wore
on, thus, fueling public alarm. To address the situation, Pepsi released via satellite four
video news releases on television providing evidence against the validity of the claims.
The media was also invited to the regional bottling plants of Pepsi to conduct
investigations. CEO Craig E. Weatherup did his part by appearing on several television
programs. The support of both the FBI and the FDA was also crucial in calming down
public concern.
Full Text:
Syringes in Pepsi cans? The allegations seemed so absurd, some journalists wondered
whether the story was worth covering at all. “I had the impression when this first
came out that this was something TV did for sweeps week,” recalled Don Smith, city
editor at the Seattle Post Intelligencer. “That’s how cynical I was.”
But, as the country quickly discovered, this was the story that wouldn’t go away. First,
Earl and Mary Triplett, a couple from Tacoma, WA, said they’d found a syringe in a soft
drink can. Then, reports from everywhere else began flooding in: a wooden screw, a
broken sewing needle, a crack vial, and a bullet were among the items alleged to have
been mixed into Pepsi-Cola products in more than 20 states during a two-week period in
June.
A potential catastrophe
The fact that Pepsi-Cola’s bottling process was not limited to one location–thus,
decreasing the likelihood of sabotage on a national level–seemed irrelevant to the
general
public. And FDA Commissioner David Kessler’s assurance that a recall wasn’t necessary
was hardly enough to calm the hysteria. Pepsi-Cola was in the throes of what promised
to be its worst public relations crisis ever, and quick thinking was crucial.
“This was a crisis without precedent,” said Rebecca Madeira, Pepsi-Cola’s vice
president of public affairs. “This was the only case I knew of where there was a crisis
without a recall. If you’re not going to recall the product, you have to be able to
reassure the public that this is absolutely the right move.”
And working with a press corps dubious about tampering claims isn’t necessarily enough
either. At the Post Intelligencer, Smith hesitated about reporting the claims even after
local television stations and its direct competitor, the Seattle Times, had started running
with the ball. “Then, tampering reports popped up all over the place, and this became a
story on the reports rather than the tampering,” he said.
First-day blues
While Pepsi-Cola’s vocal arguments against the probability of wedging syringes into cans
at bottling plants all over the United States were convincing, Smith believes the
company should have spoken louder from the very outset of the crisis. “I don’t
understand why Pepsi didn’t explain everything on the first day,” he said.
In retrospect, Madeira agrees that Pepsi-Cola should have acted sooner. “At first, we
didn’t expect that this would be a national story,” she said. “We have things that
happen locally, and you do your job locally, and it’s over and done with.”
Although Pepsi bottling plants in other parts of the country swung open their doors to
the media, Smith was frustrated that the branch in the Seattle area was not as
accommodating. “When we wanted to photograph the bottling plant, it was as if they
were tired of the story and hoped it would go away,” he said. “Actually, it was getting
worse.”
“Time was the enemy”
Said Madeira, “Time was the enemy. It took us time to get the information together to
answer all the questions.
“The dynamics changed every hour,” she continued. “It wasn’t like a standard public
relations strategy where you come up with a plan and implement it. This wasn’t a
public relations crisis, this was a media problem. The more you saw that visual of the
can and the syringe, the greater the concern became.” The challenge, therefore, was to
convince the public that the image wasn’t possible unless somebody opened the can
first.
TV gets message out
Television was the means of getting the message across. For three days, Pepsi-Cola
produced a separate video news release and sent it up via satellite. With panic at a
peak, the first segment was viewed by 182 million people on June 15, more than the
audience of the last Super Bowl.
The third VNR–seen by 95 million–is the one credited with truly turning the tide in
Pepsi’s favor. Gail Levine, 61, a woman with 16 aliases as well as a lengthy record for
forgery, fraud and larceny, was caught by a surveillance camera at an Aurora, CO,
supermarket, apparently inserting a syringe into a can of Diet Pepsi.
Meanwhile, the company’s personable North American Chief Executive Craig E.
Weatherup was spreading the word on such programs as “Larry King Live” and “The
MacNeil/Lehrer Newshour.” Weatherup and FDA Commissioner Kessler appeared
together on “Nightline.”
The FDA’s participation was invaluable. At one stage, Madeira said, Pepsi-Cola was
considering releasing information that could have led to more hysteria. But the FDA
advised them to keep the waters calm, and the company agreed. “Their vast experience
in copycat crimes helped us,” Madeira said. “They were our crisis counselors, among the
many roles they played.”
In this type of situation, she added, “you have to cooperate with authorities because
they’re going to be valued as the neutral third-party, protecting consumer interest.”
The tone of the headlines began to change. “Initial reports are simply the allegations,”
Madeira said. “Over the next few days, the media pushes to understand why and how.
That’s the company’s opportunity to show how we’re working in the public’s
interest.”
Of course, the FBI’s pursuit of tamperers was an added bonus. By the end of the crisis,
20 people were arrested–facing five years imprisonment and $250,000 in fines–for
making false claims.
With public sentiment finally in their favor, Pepsi-Cola used the opportunity to pitch its
planned summer promotions. On June 21, the company ran full-page advertisements
in 12 national newspapers, and bottlers targeted between 300 and 400 local
publications.
“Pepsi is pleased to announce…nothing,” read the headline of the Pepsi-Cola ad. It went
on to proclaim, “As America now knows, those stories about Diet Pepsi were a hoax. …
There’s not much more we can say. Except that most importantly, we won’t let this hoax
change our exciting plans for this summer.” The details of those plans followed in the
copy.
Smith’s overall accessment of Pepsi-Cola’s performance: “They did fine.”
As for Madeira, the experience taught her that a “crisis can only be in your control if you
cooperate with the media, invite them in, and furnish them with facts. Your only defense
when your company is on trial is to be a participant in that trial.”
VNRs are the right thing, Uh huh!
Who says video news releases are fake news? Certainly not executives at Pepsi-Cola
who were able to reach 365 million viewers with four VNRs during the syringe
tampering scare in June. If these preliminary usage figures supplied by Medialink, the
firm that distributed the VNRs, are even close to being accurate, then it appears that
Pepsi did do the right thing, Uh huh!
“Because the story was breaking so quickly in electronic media, we needed to speak
quickly and in headlines,” said Andrew Giangola, manager/public affairs for Pepsi-Cola.
“We knew that Americans are essentially fair and would make a rational judgment based
on the facts. The VNRs enabled us to share facts each night on the evening news, and
ultimately prove that the so-called Pepsi scare was merely a vicious hoax.”
Two of the four VNRs, which were produced by New York-based Robert Chang
Productions, set new viewership records for Medialink. The first VNR, produced on June
15, was the record-setter. It contained exclusive B-roll of Pepsi bottling procedures and
was seen by 182 million viewers, said Medialink, which based their figures mainly on
Nielsen Media Research’s electronic coding system. Medialink’s previous record was set
in 1990 when 82 million viewers saw Star Kist’s “Dolphin-Safe Tuna” VNR. The other
record-breaking Pepsi-Cola VNR, produced two days later and which contained
surveillance camera footage of a suspect allegedly tampering with a can of Pepsi in
Colorado, was seen by at least 95 million viewers.

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