In case 9-1, PepsiCo, the makers of Pepsi-Cola and Diet Pepsi, was a target of a scam that created a crisis for the company. PepsiCo was blamed, in multiple claims, for selling cans of Diet Pepsi with foreign objects inside. The issue first arose as only a local problem but soon escalated into a widespread, national news story and became a crisis in the “point of no return” stage for Pepsi. The first case of a foreign object found in an unopened can of Diet Pepsi was reported on June 9, 1993 in Tacoma, Washington.
Washington residents reported finding a used syringe in a half-empty Diet Pepsi can
(325). Only one local television station reported on this story. The following day, another claim was made in Washington, and in the course of one week, more than 50 incidents of foreign objects, including sewing needles, screws and a bullet, being found in Diet Pepsi cans were reported in 24 states. The issue was now on the national level, and news media all over the country were reporting on the widespread claims. Adding to this obstacle was the pattern of claims, some of which were fatal, regarding product tampering.
Pepsi could not see any rational reason for the reported incidents and decided against recalling the product. By insisting that its high-tech production lines produce cans of soda too fast to allow for the entrance of a foreign object, that the objects being described were not those commonly found in a factory, and that the canning factories of the reportedly damaged cans were not the same, Pepsi was able to defend its position and activate a crisis communications plan that upheld its reputation and even won an award.
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Pepsi needed to develop a plan that would curtail the news reports, show the safety of its products and win back customer loyalty (327). The FDA became an intervening public for Pepsi in this case and gave factual and reliable answers to the most important consumer questions, specifically those related to health risks. The FDA found that there were no health hazards related to the claims and that it was impossible, because of the high speed of the filling process, for foreign objects to find their way into a can at a bottling factory. The FDA’s assistance was crucial for Pepsi because Pepsi’s targeted publics were able to receive answers from a trustworthy and knowledgeable third party.
When the crisis spread to the national level, Pepsi knew it needed to do more than let the local bottler handle the situation. First, Pepsi, along with the FDA, conducted investigations of the bottling companies. This formal research was necessary for Pepsi to perform in order to proceed with any further plans because it concluded that its production operations were not at fault and could therefore take action to defend its position. Next, Pepsi created an in-house crisis communications plan, which identified four primary publics to target: the news media, the customers who purchased the product, consumers, and employees and local Pepsi-Cola bottlers. Pepsi’s response focused on four principles—put public safety first; find the problem and fix it; communicate frequently, quickly and regularly; and take full responsibility for resolving the crisis— and included the expertise of six departments. The public affairs department, with six media relations specialists and operating under One Clear Voice, responded to all media inquiries and provided frequent updates of facts and advances. Consumer Relations handled the reports, comments and questions from consumers using its 24-hour toll-free hotlines. Scientific and Regulatory Affairs assigned specialists to work with the FDA to
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track and evaluate each claim. The sales and marketing department maintained relationships with Pepsi’s customers (those places or people who sold Pepsi products to consumers), while the manufacturing department developed easily comprehensible explanations of the filling line process for the four-targeted publics. Pepsi’s legal department also played a big role in the reporting and communication process.
Pepsi’s most important tool in refuting the claims and winning back customer loyalty was a video news release that showed the exact process of a can filling line; the consumers who had seen and heard the news stories regarding the findings of syringes in
Diet Pepsi cans now saw these cans zooming by (at the rate of 1,200 per minute) in bottling factories. The video news release was picked up by the same news media that had reported on the first claims and gave Pepsi’s stance credibility.
Because Pepsi took immediate action to create a crisis communications plan that involved several departments and focused on four key principles, it was able to resolve the crisis while defending its position and upholding its reputation. Pepsi’s plan included specific goals and objectives, targeted four precise publics and was the result of valuable research, all which helped it to be successful. The support of the FDA as an intervening public was also crucial for Pepsi’s success in this case. Although there is no mention in the text of Pepsi performing any formal evaluation of its plan, it is clear that the company’s actions were successful in turning it from a victim to an award winner.