Effective communication between an organization and its publics is key component of crisis management. Organizations must see the importance of releasing the right information to both internal and external publics to minimize negative publicity and negative public reaction. In today’s marketplace organizations have to make a concerted effort to manage a crisis situation or inevitably the media will. A crisis such as the Pepsi Case Study: There’s a Syringe in My Pepsi Can! can and will interrupt the flow of an organizations business.
The intent of this paper is to evaluate the effectiveness and impact of communication between the PepsiCo and the organizations intended publics, differentiate between those internal and external publics, evaluate the benefits and risks of the communication tools used, and determine the impact of new technologies were this crisis to happen in today’s global environment. Case OverviewIn June of 1993, PepsiCo found itself facing a widespread news story claiming that foreign objects were being found in unopened cans of Diet Pepsi.
On June 9, 1993, a couple from Tacoma, Washington claimed they found a used syringe in a half-empty can of Diet Pepsi. The can was turned over to their lawyer, whom promptly contacted the health department. The story, initially picked up the following day by one local news station confirmed no reports of injury but did cite the Sudafed tampering case from a few years ago and that needles aroused concerns of AIDS.
On June 12, 1993 another claim of finding a needle was made in Washington. Local media picked up the story and on June 12, 1993 the FDA issued a five-state consumer alert. The FDA did not recommend a recall, but did advise consumers to pour soft drinks, particularly Diet Pepsi, into a cup prior to consumption. Next, another claim of a syringe in a can of Diet Pepsi was made in New Orleans; by June 16 multiple claims had been filed in 24 states.
In a week’s time, more than 50 allegations of foreign objects being found in Pepsi products, including one from a reporter for the Milwaukee Journal, had been reported to the police, media and FDA (Center & Jackson, 2003, p 325). Publics InvolvedCrisis coordinator, PepsiCo Vice President of Public Affairs Becky Madeira, identified the four primary publics to be addressed. These publics included the news media, customers who purchased the product for retail sale, consumers, and the organizations employees and bottlers (p. 328).
Internal and External PublicsFraser Seitel (2004) defines internal publics as those publics that, “…are inside the organization: supervisors, clerks, managers, stockholders, and the board of directors” (p. 9). In the PepsiCo case study the internal publics included the organizations employees, bottling employees, stockholders, and the board of directors. The author further defines external publics as, “…those not directly connected with the organization: the press, government, educators, customers, suppliers, and the community” (p. 9).
Impact of communicationPepsiCo’s constant communications, including video news releases, print and broadcast media, television appearances, and perhaps most important communication of the Federal Drug Administration’s (FDA) third party opinion that the contamination could not have happened on the filling line, had a positive impact on both internal and external publics. The impact of PepsiCo’s communications on the public was indeed positive when one considers that, “The week of the hoax, sales dipped only 3 to 4 percent . . . ” (p 326).
Effective CommunicationSome claim that the message could have been communicated more effectively. Initially, believing that the incident was local and would not become a national story, PepsiCo allowed the local bottler Alpac Corporations to handle the subsequent communications and investigation. Alpac and the FDA determined that the tampering could not have happened on the production line, however, these findings did not stop the media frenzy surrounding the reports and as the alleged contaminations began to materialize outside of the Washington area PepsiCo became involved on a national level.
Some critics claim that the organization should have been involved from the first day while others believe that there should have been an immediate recall of the product. Madeira herself admits that “…things might have been handled better, but points out “time was the enemy. It took us time to conduct the investigation in the plants, await FDA conclusions, and then get the information together to answer all the questions” (p 330).
PR communication tools and techniquesThe PR communication tools and techniques used by PepsiCo to inform influence and motivate the publics included print and broadcast media, video news releases (VNR), press releases, charts, diagrams and video of the filling line production process, public affairs, consumer relations hot-lines, and executive television appearances. The public affairs department included a team of six media relations specialists whose responsibility was to respond to media inquiries and provide regular updates of facts and developments.
The team’s responses were based on the key theme One Clear Voice. Another team wrote and produced video news releases (VNR), audiotapes, press releases, charts, and diagrams of the production process and photos for external and internal distribution. Consumer Relations had 24 people manning the 24-hour toll-free hotlines, taking calls from consumers, hearing reports and comments, and monitoring public opinion as it developed.
Scientific and Regulatory Affairs assigned technical and quality assurance to monitor and track each complaint while sales and marketing personnel were charged with maintaining rapport and relationships with the organizations customers. Manufacturing experts assisted the FDA and developed simple, easy to understand explanations of the filling line process for the news media and the public. The legal department was involved in every stage of the communication process. This approach ensured that each of the organizations publics were communicated to in a way that has the most effect on their questions and concerns.
The organizations response centered on four principles. First put public safety first, the organization had to examine the issue through the eyes of the public and address their concerns. Second, find the problem and fix it, convinced that the problem was a hoax PepsiCo worked with the FDA and regulatory authorities to communicate to the public the safety and security of the organizations bottling plants while investigating and responding to all complaints.
The scientific and regulatory affairs department assigned technicians to work with the FDA and local health departments to track and evaluate each complaint while manufacturing experts assisted the FDA and developed explanations of the filling line process for both the news media and the public. Third, the organization began to communicate frequently and regularly with all publics. Using broadcast media and print communication tools PepsiCo portrayed themselves as honest and available company interested in meeting with the media and addressing the hoax in a manner that would ensure safety for all involved.
Sales and marketing professionals went to work maintaining relationships with external customers such as grocery stores, restaurants, convenience stores and other venues where Pepsi was sold. Finally, the organization communicated acceptance of full responsibility for the issue while portraying PepsiCo as an organization willing to help resolve the issue. This communication tactic shows the organizations willingness to address the issue while constantly communicating and reassuring the public, “…that this was not a manufacturing crisis…What was happening was not occurring inside our plants” (p 329).
New Technologies and Globalization of MarketsNew technologies and globalization of markets would have an immediate impact on PepsiCo should the same incident be repeated today. PepsiCo is a global force in the soft drink and convenient food and beverage industry with much more at stake for the organization today than there was 15 years ago. New technologies introduced since 1993 would increase the speed at which the crisis could be communicated across the world, necessitating communication crisis control across the global marketplace.
The Internet, cell phones, e-mail, blogging, Wikipedia, YouTube and other social networking Internet Web sites would play a large part in crisis communications for the organizations and their many publics. On a positive note communication technologies of today would allow the organization not to have to depend solely on the media to get their message to the public. Corporate statements and videos could be uploaded to company Web site and blogs. Communications to employees, consumers, customers can be quickly and effectively sent through company e-mail or corporate satellite.
Conversely, bad news, speculation and outright lies can also be put on the Web for review with little to no repercussions, leaving the organization with few resources to control content. The crisis communication that PepsiCo undertook in 1993 would still be practical in today’s global environment. Happily, advances in technology would allow more immediate distribution of the organizations position, while the organization continues makes use of tried and true public relations steps such as VNR, television, print and broadcast media.
Based on the case facts the outcome of this case would likely be the same if these events were to occur today. ConclusionThe effectiveness and impact of PepsiCo’s communication between the organization and the various publics proved positive; the organization communicated effectively through the public relations campaign. Addressing the crisis as a perception crisis rather than an actual product crisis was an effective approach.
The turning point in the campaign may have been the compelling video news release showing the actual can filling line and how difficult it would be for a foreign object to be put in the can. Finally, in newspapers across the country “…Pepsi ran a clever ad stating “Pepsi is pleased to announce . . . nothing. ” (Center et al, 2003, p. 329)PepsiCo’s public relations team had presented a compelling communication strategy which led to the presentation of the coveted “Best of Silver Anvils” in the 1994 Public Relations Society of America Competition (p.325).
ResourceCenter, A. H. , Jackson, P. (2003). Public Relations Practices: Managerial Case Studies and Problems, (6th ed. ). Upper Saddle; New York Prentice-Hall Retrieved July 24, 2008 from University of Phoenix, rEsource, MKT438-Public Relations Web site. Seitel, F. P. (2004). The Practice of Public Relations, (9th ed. ) Upper Saddle; New York Prentice-Hall Retrieved July 24, 2008 from University of Phoenix, rEsource, MKT438-Public Relations Web site.