Pepsi Syringe Case Study Analysis

The public relations industry is gener­ally impressed with Pepsi-Cola's handling of one of the more bizarre crises of the past few years: a week­long series of apparent hoaxes alleging the discovery of syringes and other foreign items in cans of Deit Pepsi.

The first case was reported by an elderly couple in Tacoma, Washington, who had left a can of Deit Pepsi overnight, and the next morning claimed to have found a syringe inside. Their first call was to their lawyer, who promptly called the press and local health officials, who then notified the police. That was on Thursday June 10.

The second case was reported by a woman in Federal Way, Wash., just ten miles away from Tacoma, the next day. The Food & Drug Administration, noting that both cases involved a company bot­tler in Washington state, warned con­sumers in the Pacific Northwest to pour their soda into a glass before drinking. Pepsi was puzzled, and made executives from its local bottler, Alpac Corporation, available to the media.

No recall was ordered by the FDA, because there were no reports of injuries, nor any indication that the syringes con­tained any harmful substance. The com­pany considered a voluntary recall but decided against it, according to public affairs manager Andrew Giangola, because "the FDA told us there was no need, that there wasn't a health risk."

Within days, however, reports were pouring in to Pepsi headquarters from media outlets all around the country: one woman in Portland said she found two syringes in a single glass; in New York a man claimed he accidentally swallowed two pins that were in a Pepsi bottle; in Beach City, Ohio, a woman said she found a sewing needle in one can; in Jack­sonville, Fla., a man reported a loose screw in his soda. The ultimate list of items recovered from beverage containers in the week or so the crisis lasted included a bullet, a crack vial and a blob of myste­rious brown goo.

The company rec­ognized the magni­tude of the crisis when the first report from outside the Washington area became known, and pulled together a team of 12 company executives who would form the core of the crisis team for the duration of the story. By the following Tuesday, company presi­dent Craig Weatherup was making the rounds of TV newsrooms, and a company video news release and press release—with graphics—were being circulated, explain­ing the mechanics of the production process and the impossibility of inserting foreign objects during that process.

"We've gone through every can line, every plant, numerous records," said Weatherup in an interview. "All th evi­dence points to syringes going into the cans after they were opened."

Pepsi also worked closely with the FDA. Commissioner David Kessler was at least as visible as Weatherup and in some cases being even more explicit about his belief that the tampering claims were hoaxes, charges Pepsi was not in a posi­tion to have made as long as there was even a fraction of one per cent doubt that it was blameless.

The FDA's assistance was also impor­tant in reassuring retailers, and in ensur­ing that while one or two smaller, less sophisticated supermarkets did pull Pepsi off the shelf, not a single larger supermar­ket chain did so. Early research shows that the tampering claims had little or no impact on sales, although the company's share price did drop almost a dollar in the first few days of the crisis.

On Tuesday, shortly before Craig Weatherup and Kessler were scheduled to appear together on ABC's Nightline to explain why they believed the media was in the grip of a major hoax, the FDA announced the first arrest on charges of filing a false report, a federal offense that is punishable by five years in prison and a $250,000 fine.

Then the company caught a break. A sur­veillance camera in a supermarket in Aurora, Colo., cap­tured a woman shop­per apparently insert­ing a syringe into a can of Diet Pepsi. The company copied the tape and included it in a video news release package that was sent to television stations around the country.

The company also faxed daily morning updates on the crisis to its 600 offices, dis­tribution centers and bottlers nationwide, asking them to reassure retailers that the products were safe. An 800 number was established to take consumer calls.

Kessler called a press conference to insist that the notion of a nationwide tam­pering with Pepsi product was unfounded, and to suggest that "the complains of the past week follow the classic pattern of copycat hoaxes." By the end of the week, there had been more than 50 tampering claims and more than a dozen arrests for filing false claims.

On Thurday, Pepsi's ad agency, BBDO Worldwide, had put together a print ad that was the company's only paid place­ment in response to the crisis. The head­line read: "Pepsi is pleased to announce.... nothing." The text explained that: "As America now knows, those stories about Diet Pepsi were a hoax. Hundreds of investigators have found no evidence to support a single claim." It concluded by thanking "the millions of you who have stood with us." It ran in USA Today, The New York Times and about a dozen other major newspapers on the following Monday, by which time the crisis was effectively over.

Experts point out that since the Tylenol crisis of 1982, claims of product tamper­ing have been considerably more common, but that most turn out to be false alarms. Says Park Dietz, a forensic scientist and consultant to the FBI: "More than 90% of reports of product tampering turn out to be false alarms."

Dietz says that each nationally publi­cized tampering incident typically gener­ates 30 more claims. He would like to see news organizations limit their coverage of tampering until a responsible agency believes there is a genuine health risk. Some of the claimants were obviously pranksters; others seemed to believe that they could gain financially, perhaps by suing the company; others apparently wanted nothing more than their 15 min­utes of fame, and realized that the media would be willing accomplices.

According to N.G. Berrill, a psycholo­gist with the New York Forensic Mental Health Group who was quoted on the subject in Time magazine: "Many Americans are generally angry at large conglomerates and believe that a corpora­tion can afford to pay a few injury claims."

Certainly, public relations executives at Gerber can testify to that tendency. In 1986, the company faced an epidemic of charges—which spread according to a pat­tern strikingly similar to the one in this case—that its baby food products con­tained ground glass. Some parents appar­ently went so far as to feed slivers of glass to their infants in order to strengthen their case against the company.

The public relations industry generally has nothing but praise for the way Pepsi handled the crisis. The comments of Ron Rogers, president of Rogers & Associates in Los Angeles and an expert in crisis management, were typical: "The most important thing was to keep every­one up to date and to show concern. It's a logistical nightmare but they did it, and I think they did it very well."

Some, however, say the company should have responded more firmly when the first two reports in Washington state became national news stories. "They were a little late in getting out in front of it," says Bill Southard, president of Earle Palmer Brown in New York. "Initially, they tried to low key it. But once they got the president out there in the media he came across as very sincere, very con­cerned, and that was good."

The strongest criticism came from Jack Levin, a professor of sociology and crimi­nology at Northeastern University in Boston, who said the company had not persuaded the public "that it cared as much about customers as money" and who suggested that Pepsi should have ordered a recall. Such comments, made before it became apparent that the story was a hoax, look less than brilliant with hindsight, and show the dangers inherent in commenting on such cases while they are still being played out.

In the long term, the way the company handled the crisis may actually benefit sales, according to some observers. Doug Hall, president of research company Richard Saunders Inc., says the incident has made consumers more sympathetic towards the company: "There's a lot of sympathy I'm sensing from consumers. People are cheering for Pepsi. It helps that Pepsi is a very friendly company. Its advertising is hip, it's a solid company."

Effective Communications Case Study: There's A Syringe In My Pepsi Can!

Case Study

Effective Communications Case Study: There's a Syringe in My Pepsi Can!

Malinda Chambers, Chrissy Brock, Sarah Harris,

Walter Walker, and Anthony Walton

University of Phoenix

MKT / 438

Sandra Ferguson

May 21, 2007

Introduction

When a crisis occurs in most situations the responding organization is not ready prepared. These crises can affect the financials, political, legal, and have government (FDA) intervene, when not handle with immediate resolve. Also the media can portray to public and emphasize the issue at hand in repeat so many times that the public will raise concerns. In this case study "There's a Syringe in my Pepsi Can" a system could have been in place to detect early on so no other issues are added to the crises. Effective communications is the solution to Pepsi's management crises.

In this case study a consumer made a report and claimed to found a syringe in an unopened Pepsi can. This took place on June 9, 1993 in Tacoma, Washington. After that report many more reports of objects in Pepsi cans surface. Within weeks this issue reached national level. Pepsi immediately activated there crises management plan and showed information that it was impossible for a syringe to enter a Pepsi can. The CEO and managers explained there safety procedures in the process of canning to the media. When public fears was settled the crises was over. Pepsi defended there position from the very beginning that put the company back to good standing. The Pepsi's crises management team expressed effective communication throughout this ordeal which earned the respect of customers/public.

Part B

The Publics

The interesting thing about this case study was how easily they were persuaded to believing that a reputable company would compromise their public standing by not securing the safety of its customers. The case study mentions many of PepsiCo's publics, some internal but most were external. The case study defined four of the key publics that PepsiCo needed to address in this crisis situation. The publics were the news media, the customers who purchased the product, consumers, and employees and local Pepsi-Cola bottlers. Based on the case study, the customer public had complete control over the attitudes and state of mind of the nation. Statements made by 54 customers who purchased diet pepsi were considered to be truthful before investigation was underway. PepsiCo experienced disloyalty among a select few of its customers who chose to risk prosecution for personal gain. The 54 customers who were prosecuted may not have had a prior understanding of the magnitude of...

Loading: Checking Spelling

0%

Read more

Illustration and Characterization in There's a Monster Under My Bed

920 words - 4 pages Illustration and Characterization in There's a Monster Under My Bed Children are drawn to picture books that allow them to feel some sort of elementary emotion such as fear or happiness. Of course all children are different and the types of books they will enjoy depends mostly on their age and their stage of cognitive development, but common to all children is the need for both visual and auditory stimulation. In There's A Monster Under...

Case Study on Coke versus Pepsi

1106 words - 4 pages The case study "Cola Wars Continue: Coke and Pepsi in the Twenty-First Century" focuses on describing Coke and Pepsi within the CSD industry by providing detailed statements about the companies’ accounts and strategies to increase their market share. Furthermore, the case also focuses on the Coke vs. Pepsi goods which target similar groups of costumers, and how these companies have had and still have great reputation and continue to take risks...

Effective Communication Case Study

1171 words - 5 pages In October of 1982, Johnson and Johnson’s suffered one of the worst corporate crisis in modern history when some unknown person or persons laced Tylenol Extra-Strength capsules with cyanide. The cyanide-laced capsules killed seven unsuspecting people in the Chicago area. The news media quickly reported that people were dying from poisoned Tylenol (Berge, 1990)....

'The Cola Wars Continues: Coke and Pepsi in the 21st Century': Competitive Strategy Case Study

4581 words - 18 pages Table of contentsExecutive Summary…………………………………………………...……………….3Identify Corporate...

Case Study: Effective Managerial Leadership

1225 words - 5 pages Case Study: Effective Managerial Leadership The successful implementation of a public policy to solve a social problem will greatly depend on the abilities of a public administrator. Furthermore, numerous case studies can show examples of how a successful public agency administrator can achieve goals through dedication and commitment. The following discussion will present a thorough analysis of main political, social, and economic forces that...

Effective Communication Case Study Analysis

1123 words - 4 pages Communication can be described as a highway in which information travels in both directions between two or more targets. In Public Relations, those targets are usually an organization and its internal and external publics. During October in the year 1982, Tylenol, whom at the time was the nations leading pain killing medication, seven customers of the company died in Chicago after taking Tylenol's Extra Strength medication. Due to the...

Effective Communication Case Study Analysis

1422 words - 6 pages Effective Communication Case Study AnalysisAll organizations at some point most communicate to its external publics, but effective communication often is truly the best way to have an effective impact on the public. Communication is a process and method that allows us to exchange information, share ideas, and receive feedback and a process of interaction between a company and public. Most companies must interact with the public to increase...

XEL Communications Inc. Group Study Case.

3114 words - 12 pages XEL Communications was founded in September of 1984 by Bill Sanko. XEL designs and manufactures more than 300 individual products that enable network operators to upgrade existing infrastructures and cost-effectively enhance the speed and functionality of their networks while reducing operating expenses and overhead costs....

Take Two of These and Call a Coroner in the Morning: Tylenol PR's Effective Communication Case Study Analysis

1712 words - 7 pages Take Two of these & Call a Coroner in the MorningIn 1982, American consumers were gripped with terror and fear. 12-year-old Mary Kellerman of Elk Grove Village just wanted to cure a morning headache, not knowing that the drug she sought to relieve her would send her to her death. It was the same case for the 27-year-old postal worker Adam Janus of Arlington Heights and his brother Stanley and his brother's new wife, Theresa, who, returning...

This is an ethical case study that I made up to provoke discussion in class. I wrote it for a leadership communications class.

1590 words - 6 pages Hanson PAGE 1 Andrew HansonCOM 320Ethical Case StudyNovember 13, 2007Diversity Not "Gelling" at Gunner GelChad Willit was a passionate man who loved his work. He was the CEO of Gunner Gel Inc., a company that made all sorts of foods, fuel, and energy primarily for competitive bikers, runners, and all around long...

This is a case study for my organizational ethics class

1200 words - 5 pages Case Study # 2 For my case I have decided to pick a topic that really interest me. That would be standardized testing in schools. I am hoping to graduate this May with a bachelor's degree in human services and then to go on and do my masters in education, therefore this topic will play a role in my life and career. Many people may not be familiar with...

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *