Management Concepts - CIA 2 - Crisis Management - Final

8/8/2019 Management Concepts - CIA 2 - Crisis Management - Final

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Management is the art of knowing exactly what you want your people to do andseeing that they do it in the best and cheapest way.

- F.W. Taylor

Management is the art of getting things done through and with people in formally

organized groups.- Harold Koontz

Management is the art and science of decision-making and leadership.- Donald J.C.

Management is the force that integrates human and non-human resources into aneffective operating unit.

- Keith & Gubelini


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Crisis management is the process by which an organization deals with any majorunpredictable event that threatens to harm the organization, its stakeholders, or thegeneral public.

Types of Crisis-

Natural Crises

Technological Crises

Confrontation Crises

Crisis of Malevolence

Crisis of Organizational Misdeeds

Workplace Violence

Rumors


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Started in the year 1824 by John Cadbury in Birmingham, selling tea and cocoa.

In 1969 Cadbury merged with Schweppes to create Cadbury Schweppes.

Schweppes demerged from Cadbury in 2008 to form Cadbury and Dr. Pepper Snapple Group.

Cadbury now operates in over 60 countries and employs more than 45,000 people.

Second largest confectionary group in the world after Mars-Wrigley.

Listed on DAX 30, Dow Jones, FTSE 100 and FTSE 250.

Has had two major cases of product infestation. One in UK and Ireland, where minute traces ofsalmonella were found. Another, in which claims of pesticide infestation were received.


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On October 3rd Food and Drug Administration received claims about two infested Cadburydiary milk bars. FDA launches an inquiry and goes directly to media.

Huge and adverse media attention meant that the companys reputation was under fire.

Sales volumes fell drastically during the festive season.

Retailer stocking and display dropped, employee morale - especially that of the sales team -was shaken.


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A focused and intense communications program achieved these results

Convincing the media that the problem was a storage-based problem, and notmanufacturing related.

Recovering sales volumes to pre-crisis levels.

Improving the brand image by responding quickly to the crisis and restoring publicconfidence in the company.


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Graphic nature of media presentations resulted in the consumer perception that every barwas infested.

Political parties blamed Cadbury as an irresponsible MNC.

The challenge was to restore confidence in the stakeholders, employees and salespersons.

And build back credibility for the corporate brand through the same channels (the media)that questioned it.


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The immediate objective was to get they following messages across

The infestation could never occur at the production stage and that the production line wassecure.

The problem was storage related, this without alienating the trade channels.

That Cadbury Diary Milk was safe to consume.


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Problem started of in Mumbai, but it became a nationwide crisis since national media coveredit.

The following were the target groups that had to be convinced

Media Both electronic and print media,national and local.

Trade partners - As their confidence was shaken.

Finally, as intense media coverage continued, it became important and critical to include the

employees, especially salespersons as the third group.


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Building relationships with the media.

Set up a media desk to answer all queries.

First media briefing- Issues like storage problems and safety in eating chocolates wereaddressed.

Second media briefing - Addressed the steps taken to ensure consumer confidence, introduce

Project Vishwas (Trust).

An Editorial Outreach program with 31 media editors across 5 most affected cities wasconducted.


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The trade, and consumers, were reached nationally through a press ad, Facts about Cadbury.

A series of town hall meetings were held with senior managers addressing employees, toensure that they were updated on the proactive actions being taken by Cadbury to manage themedia.

Gained respect by acknowledging the problem rather than skirting it.

Published shots of the packing and production line on news channels to convince the public

about the purity of the product.


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Launched a new purity seal packaging in January 2004, consisting of double wrapping for

protection.

Organized media conferences to launch new packaging.

Announcement of the new pack was done through a testimonial advertisement on TV calledSincerity.

Brought in Amitabh Bachchan as the brand ambassador to restore credibility, with an AV Ad .


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Media Coverage - The media relationship effort clearly helped in making clear that the

problem was storage-based. Cadbury got a total of 378 clips in over 11 languages covering thenew packaging, and its benefits, in January 2004.

S

ales -S

ales volumes, which declined drastically between week 1 and week 10 of crisis,recovered to those during the pre-incident period. This clearly reflects restoration of consumerand hence trade confidence, in the corporate brand.


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Image - There was significant upward movement in ratings amongst consumers onparameters like company image, responsiveness of company and behavioural parameters likeintention to buy Cadbury chocolates.

While the new product introduction and advertising had their role to play in thechanging consumer perceptions, the medias positive coverage and the trades positive pre-

disposition played a huge part in helping Cadbury regain its reputation in the market.


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Management Concepts - CIA 2 - Crisis Management - Final

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