Background Pepsi-Cola is a soft drink produced by PepsiCo. This soft drink was first introduced on August 28, 1898 by pharmacist Caleb Bradham. This paper is a case study of a hoax perpetrated on PepsiCo on June 9, 1993. It all began when an 82-year-old man, Earl (Tex) Triplett and his wife Mary Triplett said that they had found a syringe similar to that used by diabetics in a can of Diet Pepsi. The can was turned over to their lawyer, which could be the first signs of trouble in this case, then to the county health officials. The FDA then issued regional advisory urging consumers to empty the content of their Diet Pepsi cans before drinking.
This is when the flood gates opened. This warning then prompted national media attention within 24 hours. How PepsiCo handled the crisis With the frightening images of syringes in Diet Pepsi cans and the upcoming July 4th holiday sales period PepsiCo needed to react immediately. The FDA had recommended recall of Diet Pepsi but PepsiCo knew that with the manufacturing process they had established that the syringe could not have gotten into the can during the canning process and would use high-speed filming of this process to prove to consumers that this was not the cause of the contamination by the syringe.
Pepsi relied on their well established crisis response guidelines. In response to other crisis problems that has happened over the years, namely the Tylenol scare, PepsiCo had evolved their crisis plan from a rudimentary product recall plan into a more sophisticated communications network plan. They did this by benchmarking Johnson & Johnson’s crisis plan. This was needed to preserve Pepsi’s trademark and the company’s $8 billion business.
The job of the public relations group was to help established communications to the different publics involved including the consumers, the media, shareholders, employees, bottlers and even regulatory officials. A leading crisis expert Barry McLoughlin writes that communications should include: ? Informing the public and key stakeholders as soon as possible. ?Anticipating and meeting the needs of journalists. ?Creating public input channels such as toll-free phone lines. ?Ensuring organizational visibility. ?Managing the message by keeping the message clear, honest and consistent.
?Ensuring inaccurate reporting is corrected immediately. ?Managing the perception of competence as well as reality (McLoughlin). It was of the utmost importance to get a timely correct answer out to the public. Barry McLoughlin also stated “If a negative perception takes hold early in an emergency response, then it is difficult to shake and becomes an immovable object” (McLoughlin). PepsiCo could not allow this to happen. Even at the time of the crisis PepsiCo was questioned why PepsiCo did not order a recall the first day of the crisis.
I think they acted correctly as the first thing they did was to understand the problem and rule out any issues with the manufacturing process. The team then came out with messages and tools including press releases, employee bulletins, video news release, bottler advisories, interviews, and still photos. I would think that if this were to have happened today PepsiCo would be using YouTube to get the message out to the general public. They would have been able to show the high-speed canning process then the videos of the people doing the tampering to the cans of Diet Pepsi. PepsiCo handled this crisis situation extremely well.
Pepsi immediately opened their doors at the bottling plants to the press. They showed them the line which produced over 2,000 cans a minute. The cans where inverted, shot with water, turned right side up and filled. The cans were open for only nine-tenths of a second so it would be impossible for anyone to insert a syringe into the cans. In all they took out ads in 12 national newspapers and bottlers ran hundreds of ads in local newspapers. Six media relations managers handled most of the calls from newspaper, radio, television reporters which amounted to approximately 2,000 calls a day.
They also provided 24 consumer specialists along with 40 volunteers to manage the consumer calls. Follow-up Press Release After all the dust settled in this case and it was shown to be a hoax I think PepsiCo kept on do the right thing by issuing a press release on the status of the hoax. It showed that the FDA vowed to prosecute all the liars. More than 39 people in 20 states had joined in on the hoax. Within the press release it showed that consumer product tampering is a federal crime, punishable by up to five years in prison and a 4250,00 fine.
This should be enough of a barrier for people who are thinking of trying to pull something like this again in the future to PepsiCo. I did some on-line research and could not find any other product tampering hoaxes against PepsiCo since the demise of this one. I believe this hoax spurred on the start of web sites such as hoax-slayer which now a list of hoaxes to show the general public. Summary How PepsiCo handled this hoax is a textbook example of how exactly to handle falsely spread rumors about a company.
PepsiCo worked with the Food and Drug Administration (FDA) and even enlisted the FDA as an advocate for them in the campaign. PepsiCo’s CEO Craig Weatherup appeared on major network news programs as the face of the company, willing to stand up for PepsiCo and answer the questions himself. An interesting fact that show PepsiCo did the right thing is that even though Pepsi lost $25 million in sale over the crisis period by the end of the summer their sales was the highest in five years and had an increase of 7% over the previous summer.
Just a few weeks after the start of the crisis PepsiCo ran full page ads in a dozen major newspapers. The ad proclaimed: “Pepsi is pleased to announce??. nothing” (Crocker).
References McLoughlin, Barry. “Crisis Communication Series” 6 June 2000 http://www. mclomedia. com Crocker, Catherine. “Pepsi Thanks Loyal Consumers In Ad Campaign. ” Associated Press 19 June 1993 Public Relations Practices: Managerial Case Studies and Problems, Sixth Edition Pg 325- 330.