PepsiCo's crisis communication response to the 1993 syringe hoax

¶ … syringe in my Pepsi Can!

The crisis that PepsiCo had to handle in 1993 was a very difficult one because it implied both reality and perception as communication consultant Steven Fink stated. Thus, on the one hand, the U.S. corporation received a blow in its image as a health and safety promoter because of the various and dangerous objects that consumers reported to have found in Diet Pepsi cans, and, on the other hand, it had to tackle the factors causing the hoax for stopping the complaints' chain. Consequently, PepsiCo had to remove both the real crisis by identifying the ones committing such fraudulent acts and the negative perception that began to have a clearer shape in the consumers' minds. Therefore, one could state that PepsiCo's crisis communication was effective because it addressed causes and effects at the same time. If the company had addressed only effects (i.e. consumers' fear to buy Diet Pepsi), the real causes wouldn't have been detected and the reports would have continued to appear. On the other hand, if the company had exclusively focused on causes, the consumers wouldn't have found out about PepsiCo's discoveries regarding the hoax and would have remained loyal to their distorted image of the company's products, an image resulting in significant losses and, eventually, in the company's failure.

The publics involved

In order to manage the crisis, Becky Madeira, the vice president of public affairs decided to focus on both internal publics (employees and Pepsi Cola bottlers) and external ones (the news media and retailers).

First of all, employees represent an important segment that companies must take into consideration when being compelled to handle a difficult situation because they are usually haunted by journalists and relatives for extra information (Gordon, 2001). Therefore, Pepsi kept its personnel up-to-date by providing information with regard to the nature of the crisis and the steps that the company took for removing it. Hence, the personnel were trained to deliver positive speeches when being asked by friends or family about the crisis and the company's responsibility towards it. Moreover, when being interrogated by excessively curious journalists, employees had the right answer at hand: the only persons in charge of responding to media inquiries were the PR staff or/and the company's spokesperson.

Secondly, local Pepsi Cola bottlers were not only informed about but also involved in the PR trajectory aimed at proving that PepsiCo was a health and safety advocate and that the filling lines were perfectly secure. Thus, the Alpac corporation opened its plant and the owner, manager and quality assurance manager were made available to the media and the Food and Drug Administration (FDA) for probating the high-tech parameters at which cans were filled and the absence of any objects similar to those found in the cans. The impact that PepsiCo's initiative had on its associated bottlers was the following: collaborators made sure that they were not at fault (and, in this regard, the FDA played a decisive role), understood the 'sabotage' undergone by PepsiCo and strived to help the U.S. corporation prove its innocence.

Thirdly, the news media were an important public as these had been the opinion builders responsible for the case's significant coverage from the very beginning. Under these circumstances, the company's strategy was a very diplomatic one. Hence, it didn't reject the media as a result of their ironic/unfavorable rhetoric towards PepsiCo highlighted by Jay Leno's talk shows or by famous editorial cartoonists. On the contrary, it opened a permanent communication channel between the organization and the media for promptly conveying up-to-date information. Consequently, the news media have ceased to feel as players fighting on the other side of the battlefield and understood PepsiCo's point-of-view. Additionally, most broadcasts changed the previous 'wind direction' and aligned with the U.S. company's attempt to identify the perpetrators. In conclusion, the news media turned from a potential enemy into an excellent tool that the company could use for providing accurate information and removing the stain that was threatening its reputation.

Fourthly, customers (defined as those who bought Pepsi products for selling them in their retail stores) were another segment that was thoroughly taken care of. These were important opinion leaders as many consumers used to ask for advice when purchasing Diet Pepsi (especially when not buying from supermarkets or hypermarkets). Hence, customers were kept up-to-date due to the information provided by PepsiCo and were encouraged to remain loyal to the soft-drinks provider because this continued to perform its manufacturing and filling processes as safe as ever. Moreover, in this case, FDA's advertisements suggesting that the soft drink should have been poured into a glass before drinking were very useful as retailers could go on selling their merchandise without being responsible for any incident that might have occurred.

Yet, many retailers decided to pull the product from the shelves. Thus, despite PepsiCo's refusal to recall its products, the distributors' decision to give up selling Diet Pepsi might have placed a strong question mark in the consumers' minds. Therefore, for an increased effectiveness of the message communicated to this kind of public, Pepsi Co representatives (for instance, merchandisers) should have personally talked to the retailers and should have offered a procedure that would have allowed selling the controversial cans. Thus, in each store, PepsiCo merchandisers should have placed banners/posters stating that the company continued producing the same safe and qualitative beverage but, because of the recent unfavorable climate, it recommended together with the FDA to pour the content into a recipient before drinking it and use a toll-free number for reporting any potential inconvenience that might have appeared. Moreover, PepsiCo should have lobbied for its "no-recall" policy in front of retailers by stating that such a short-term decision would have affected the company's sales (and, implicitly, the retailer's) in the long run. Retracting products from the market would have implied admitting Pepsi's guilt even though the company was aware of the fact that the entire suite of incidents was part of a hoax. Additionally, it should have pointed out that by continuing to sell Diet Pepsi cans, the surveillance cameras could have recorded the perpetrators and thus the guilt would have been totally assigned to them. In other words, cans could have represented the perfect bait for the 'saboteurs' and would have led to their immediate arrest. Otherwise, the company would have retracted its products and the saboteurs could have appeared when reintroducing them on the market, after a while. Thus, the real causes wouldn't have been removed.

Another observation that could be made in terms of enhancing the communication effectiveness refers to timing. PepsiCo shouldn't have waited for the scandal to become national in order to anticipate the fact that the crisis could spread in a few days. From the very moment that the local crisis broke, the central public affairs department should have drawn up an "in case" plan establishing the major guidelines that must have been followed if the problem was to reach national coverage. As a matter of fact, it could have guessed that its second rank in the diet drinks' hierarchy was being envied by rivals. Even though this appeared to be an improbable scenario, it should have been taken into consideration.

New technologies and globalization

If the crisis were to occur nowadays, a website would be compulsory. As the Internet has become almost a mass medium due to its more than one billion users worldwide (http://www.internetworldstats.com/stats.htm),PepsiCo should build an easy-to-update website (or a crisis center within the framework of the existing one) providing a FAQ list, a chronology of events, Internet links to other useful sites, newsletters, information about the spokesperson, the possibility to receive e-mails when news occurs. Moreover, the company could use the Internet for finding out about consumers' opinions through forums, blogs and so forth (Richardson, 2006). For instance, YouTube (a site acquired by Google in 2006 which displays music, movie and amateur clips) could be an important information provider as posters tend to use their personal camera for recording various incidents with which they are confronted.

On the other hand, due to globalization, the outcome of such a case might be different. Thus, the panic wouldn't remain exclusively on the U.S. territory but it could also be shared by consumers worldwide. Additionally, thanks to global communication, such incidents not only spread the fear of encountering foreign objects in the Pepsi cans, for instance, but can also give ideas to those wishing to 'sabotage' the company's products from their own country.

To conclude with, PepsiCo should build scenarios and corresponding management plans that can be effective antidotes for a crisis breaking in the contemporary Internet and globalization era.