Crisis management: How Companies respond to different crisis situations with 7 cases

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when negative media hits a company and their sales starts declining how should they respond to gain their credibility back.

Transcript of Crisis management: How Companies respond to different crisis situations with 7 cases

  • 1. Take away lessons Agree with your communications strategy and respond quickly. The brand reputation is being attacked, not the business area. Think globally. Convince individual customers when necessary. Think about the impact of Google on the reputation. Formulate a solid strategy to ensure your side of the story gets heard.
  • 2. CRISIS COMMUNICATION #DEEPAK AJITH #NIRMAL #ROHIT #SREEKANTH
  • 3. Introduction A crisis is any situation that threatens the integrity or reputation of your company, usually brought on by adverse or negative media attention Crisis management involves the best ways to mitigate this effect.
  • 4. Classification Technological crisis Confrontational crisis Crisis from malevolence Crisis of managerial failure
  • 5. Examples of crisis Sudden change in public perception Sudden market shifts Product failures Management succession Cash drain Labour strife External attack Adverse international events Regulation and deregulation of industries
  • 6. 5 Steps for effective Crisis communication 1. Establish the crisis team 2. Identify and prepare the spokesperson 3. Develop processes and protocols 4. Prepare for media impact on crisis communication 5. Design away risk
  • 7. Effective audience Customers Survivors impacted by the incident and their families Employees and their families News media Communityespecially neighbors living near the facility Company management, directors and investors Government elected officials, regulators and other authorities Suppliers
  • 8. Johnson & Johnson's cyanide-laced Tylenol capsules (1982) The crisis: Seven people died after taking extra-strength Tylenol capsules that had been laced with potassium cyanide, a deadly poison. How J&J responded: The company put customer safety first. It quickly pulled 31 million bottles of Tylenol -- $100 million worth stopped all production and advertising of the product. got involved with the Chicago Police, FBI, and FDA in the search for the killer, and offered up a $100,000 reward. Post-crisis, the company reintroduced Tylenol with new tamper-resistant packaging and $2.50-off coupons. The result: Tylenol's response to the tragic 1982 Chicago murders is regarded as one of the most successful sequences of crisis management in history. The media appreciated the lengths J&J went to and its concern for the public interest, so the company was portrayed generally in a good light, helping the Tylenol brand to recover.
  • 9. Pepsi can tampering rumors (1993)
  • 10. 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 Likewise many cases followed
  • 11. PEPSIS response: They defended against accusations. company produced four videos throughout the crisis a comprehensive report on its soda canning process a surveillance tape John Sedwick of St. Petersburg, a Prozac-taking arrested can tamperer, told the world : "It just doesn't pay to tamper with cans. You're going to get caught eventually. I'm asking everybody not to do what I did."
  • 12. The result: The rumors fizzled out following multiple arrests by the FDA for filing false reports. Sales fell 2% during crisis but recovered within a month
  • 13. Texaco's racial discrimination lawsuit (1994) The crisis: Six of Texaco's African-American employees sued the company for racial discrimination. Damning conversations between Texaco executives that were secretly recorded seemed to confirm the issue. How Texaco responded: CEO Peter Biljur started off with a public apology and admitted embarrassment. The executives involved were suspended (with pay but without benefits), pending the result of the investigations. Texaco execs went on tour, visiting all branches and sites of the company in person to apologize to the employees, company hired African-American owned advertising agency Uniworld Group to run an ad campaign to help douse the flames. The result: Texaco settled the suit, agreeing to pay $176 million. Additional discrimination checks for executives and managers put in place by Biljur have prevented the problem from sprouting up again.
  • 14. JET BLUE: The Valentine Crisis
  • 15. The Crisis: JetBlue's operations collapsed after an ice storm hit the East Coast of the U.S leading to 1,000 cancelled flights in just five days
  • 16. Response: CEO David Neeleman never blamed the weather He came out in a late night interview to apologize 131,000 customers introduced a customer's bill of rights, and presented a detailed list including Monetary compensation voucher for a free round trip flight
  • 17. The result: JetBlue managed to quash much of the uproar by being as public and straightforward as possible Though there was much reputational damage done, JetBlue's comeback allowed it to regain some of its lustre
  • 18. Toyota's recall fiasco (2010) The crisis: Toyota recalled a total of 8.8 million vehicles for safety defects, including a problem where the car's accelerator would jam, which caused multiple deaths. How Toyota responded: Toyota sent out PR teams to try and stop the media backlash. The company offered extended warranties and pumped up marketing, leveraging its long-term track record and reassuring consumers about safety. Its ads in the following months were more thoughtful and sincere, showing the company's dedication to fixing the problem. Toyota's executives -- especially in the US -- became more visible, speaking to the media and becoming active in the investigations. The result: The Toyota brand showcased its resiliency, with its positive reputation built up over decades of good performance. NASA exonerated Toyota of the blame for most of the accidents in 2011 and the company's brand equity leapt 11% this year, according to WPP.
  • 19. The Coca-Cola Company
  • 20. the Centre for Science and Environment (CSE)
  • 21. Coke contained 30 times above the EEC standards No standards for soft drink contamination in India
  • 22. Cadbury's worm infested candy bars (2003) The crisis: Two Cadbury chocolate bars were found infested with worms in Mumbai, India. The Maharashtra FDA quickly seized the chocolate stock at Cadbury's closest manufacturing plant in Pune. How Cadbury responded: released a statement claiming that the infestation was not possible at the manufacturing stage Cadbury took its advertising off the air and launched an educational PR project that targeted retailers. It kept the media updated through press releases on the specific measures it was taking to correct its manufacturing and storage processes. The company also imported new machinery and changed the packaging of its Dairy Milk bars. The result: Within eight weeks of the introduction of its new packaging and advertising campaign, sales had almost reached pre-crisis levels. Cadbury has maintained its position at the top of the Indian chocolate industry ever since.
  • 23. Conclusion You never need it, but you'll be glad its there when the need arises