Pepsi Challenge

Introduction

Success rarely happens instantly but failure often does. Organizations face critical moments at some point and time and must be prepared to act quickly and accordingly. How a company handles a crisis creates a lasting impression that will affect both its image and its reputation. 1993 is when Pepsi found itself in the middle of such a crisis. With the company image, integrity, and reputation on the line it was imperative that the PR department act quickly. The intent of this paper is to discuss who was affected the impact of the crisis, and tools used by the Pepsi PR team.

Identify the publics

The publics involved in the Pepsi crisis include anyone working for Pepsi involved in the process of making Pepsi and the loyal consumers who purchase and drink Pepsi. The internal public includes Pepsi employees, management and non-management, involved in the process of making the product. The external public includes anyone who purchased or consumed the product. The internal public is the group that will be viewed as the responsible party for the crisis and the damage caused. The external public will be looking for and demanding answers from the internal group.

Impact of Communications

The media had previously reported several incidents of product tampering. The impact was not as severe because the companies were not “limelight” companies and no harm had come to anyone. However, these cases set the stage for the Pepsi crisis. Although the FDA did not ask for a recall it did release a consumer statement covering five states that were thought to be affected. Reported incidents rose quickly when the Pepsi name was brought into the picture. The choice to release the consumer statement was a good choice but it opened the door to public mayhem because of the decision to not recall. The choice to not recall its products was not in the best interests of the company or its consumers. By recalling the affected products, Pepsi would have been seen as a company that was not admitting fault but was concerned and cared about the public and its consumers enough to not take chances. Instead Pepsi seemed determined to maintain that the crisis was not their fault. To the public this type of behavior made the company look greedy, non-caring, and snobbish. The Pepsi image and reputation took a large hit.

Impact Effective or Not

The first communication of “no fault” was not the best position to take and Pepsi realizing this took quick action to change its position. The campaign became one of “One Voice”, meaning there would be one voice that would speak for the company. Pepsi got on target quickly, putting together assessment and control to teams to handle everything from consumer hotlines to breaking reports of new incidents. It was decided that “public safety” was Pepsi’s primary concern and all else would fall into place. By taking this action the publics were reassured that the company was actively working on finding the root problem and correcting it. The only change that could have brought about this conclusion earlier would have been immediate product recall and the focus being “consumer safety” instead of the initial denial.

PR Tools Used

The first tool used by Pepsi would be the FDA and its administration. Assisting the FDA in its investigation added credibility to the company and its desire to resolve the crisis. The tool of primary focus for getting out its message was news, video, and commercial releases. The intent of the releases was to let the public see the inside of a Pepsi plant and its lines. In showing this release the public would be able to see just how unlikely it was that the crisis had occurred within the plant. Television reached millions of viewers and consumers and so message was gotten out in a “blast”. Pepsi also scored big when it captured people tampering with the product on camera and followed up with prosecuting those