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CIC & Ogilvy PR China released the latest whitepaper “2013 Crisis Management in the Social Era”
 

CIC & Ogilvy PR China released the latest whitepaper “2013 Crisis Management in the Social Era”

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To help companies better prevent and manage potential crises on World Consumer Rights Day, CIC and Ogilvy Public Relations ("Ogilvy PR") China launched their latest white paper "2013 Crisis Management ...

To help companies better prevent and manage potential crises on World Consumer Rights Day, CIC and Ogilvy Public Relations ("Ogilvy PR") China launched their latest white paper "2013 Crisis Management in the Social Era" that analyzes the top 20 crises on Chinese microblogs last year. Advising companies to refrain from publicly jumping to conclusions at the outbreak of a crisis, the study recommends companies to immediately communicate their awareness of the crisis at hand and to promise a thorough investigation. The white paper serves as a guide in helping brands to better organize and fine-tune their crisis communication, especially on social media.

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    CIC & Ogilvy PR China released the latest whitepaper “2013 Crisis Management in the Social Era” CIC & Ogilvy PR China released the latest whitepaper “2013 Crisis Management in the Social Era” Presentation Transcript

    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013© 2014 OgilvyPR • CIC 2 China social media landscape has been increasingly dynamic and diversified with emerging significant social media platforms other than Microblog ( Weibo). In the context of communication, the nature of Microblog as a medium has made it highly influential in information spread . Microblog is STILL the main platform for rapid spread of crisis and disseminating information. Microblog also plays a vital role for a company when managing a crisis. In March 2014, Ogilvy PR and CIC have jointly released white paper titled “2013 Crisis Management in the Social Era,” which focuses on analyzing top 20 crisis management cases, studying the correlation between crisis management and purchase intention. It gives support to companies to better understand the use of social media platforms in crisis management. This is the third year since the first white paper was released in 2012. We hope that our research thoroughly explores how companies can better organize crisis preparedness planning and how to leverage social media platforms in times of crisis. Preface
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013© 2014 OgilvyPR • CIC Chapter One: Review of Major Crises in 2013 Chapter Two: Purchase Intention and Crisis Management Chapter Three: Crisis Management Case Studies in 2013 Chapter Four: Implications and Recommendations Contents P3 P8 P19 P29 P35 3
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 Chapter One Review of Major Crises in 2013
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013© 2014 OgilvyPR • CIC 1.1 Top Ten Brand Crises in 2013 1.2 Brand Crisis Trends in 2013 1.3 Conclusion of Brand Crises in 2013 Chapter One Review of Major Crises in 2013 5
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 1.1 Analysis of Microblog Tweets on Top Ten Brand Crises in 2013 The average number of brand crises tweets has slightly declined compared to 2012. However, crisis cases such as Starbucks’ high pricing and Fonterra’s botulism scandal, indicate Microblog still is critical in crisis spread and has become a key platform for netizens to partake in heated discussions on crises. Microblog still plays an important role in monitoring brand crises, following their development, optimizing strategies and taking corresponding measures. 2012 Crises Microblog’s Role Microblog Tweets Jiugui liquor found to contain plasticizers Spread quickly, hot topic of discussions 1,686,641 Guizhentang’s IPO plan was blocked after being exposed for extracting bile from live bears First exposed at Microblog, hot topic of discussions 1,234,486 KFC involved in instant-grow chicken scandal Spread quickly, hot topic of discussions 843,937 Traditional yogurt exposed for adding industrial gelatin Exposed by CCTV host Zhao Pu at Microblog 784,448 Pesticide residue found in Lipton tea Spread quickly, hot topic of discussions 764,672 Mao Tai involved in plasticizers scandal First exposed at Microblog, hot topic of discussions 669,758 McDonald's exposed by CCTV on 15 March for selling expired food Make apologies at Microblog, causing heated discussions 388,995 Fang Zhouzi questioned 360 on invasion of customers’ privacy Exposed by Fangzhouzi at Microblog, hot topic of discussions 376,272 Mengniu exposed for tampering with production date of milk Spread quickly, hot topic of discussions 232,368 Xiuzheng Pharmaceutical Industry Group involved in drug capsules scandal Spread quickly, hot topic of discussions 176,336 2013 Crises Microblog’s Role Microblog Tweets Starbucks criticized for higher prices and fat profits First exposed at Microblog, hot topic of discussions 675,680 KFC’s ice cubes found containing more bacteria than allowed Spread quickly, hot topic of discussions 654,256 Apple’s 8:20 incident Spread quickly, hot topic of discussions 626,240 Volkswagen’s DSG gearbox problem Spread quickly, hot topic of discussions 568,560 Abbott affected by Fonterra’s botulism scare First exposed at Microblog, hot topic of discussions 426,832 Nongfu Spring’s water quality problems disclosed by Beijing Times Spread quickly, hot topic of discussions 423,536 GSK’s bribery scandal First exposed at Microblog, hot topic of discussions 410,352 Coca-Cola using Fonterra’s contaminated dairy ingredients Spread quickly, hot topic of discussions 280,160 Dumex’s dairy products containing Fonterra’s toxic milk powder First exposed at Microblog, hot topic of discussions 237,312 Yoshinoya using dirty dishes, stale rice Spread quickly, hot topic of discussions 166,448 Note: The above data are collected from January 1, 2013 to December 31, 2013. The top ten brand crises in 2013 are ranked based upon the total number of replies at Sina Weibo. This report ranks and selects top twenty brand crises in 2013, upon which, in-depth analysis is conducted. The incidents marked in orange are the crises originated from Microblog. 6
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 1.2 Analysis of Microblog Duration of Top Ten Brand Crises in 2013 The average duration of top ten brand crises on Microblogs in 2013 was longer than that of 2012 by 14.5%. Despite declining tweets numbers, Microblogs still serve as a key platform for crisis fermentation and dissemination. Leveraging the platform’s communicability and timeliness , proactive handling of crises is still an important topic to brands. 2012 Crises Outbreak Time Duration Jiugui liquor found to contain plasticizers November 2012 12 days Guizhentang’s IPO plan was blocked after being exposed for extracting bile from live bears February 2012 28 days KFC involved in instant-grow chicken scandal December 2012 16 days Traditional yogurt exposed for adding industrial gelatin April 2012 18 days Pesticide residue found in Lipton tea April 2012 28 days Mao Tai involved in plasticizers scandal December 2012 10 days McDonald's exposed by CCTV on 15 March for selling expired food March 2012 6 days Fang Zhouzi questioned 360 on invasion of customers’ privacy October 2012 24 days Mengniu exposed for tampering with production date of milk August 2012 32 days Xiuzheng Pharmaceutical Industry Group involved in drug capsules scandal April 2012 12 days Average duration of crises 18.6 days 2013 Crises Outbreak Time Duration Starbucks criticized for higher prices and fat profits October 2013 13 days KFC’s ice cubes found containing more bacteria than allowed July 2013 9 days Apple’s 8:20 incident March 2013 6 days Volkswagen’s DSG gearbox problem March 2013 14 days Abbott affected by Fonterra’s botulism scare August 2013 29 days Nongfu Spring’s water quality problems disclosed by Beijing Times April 2013 27 days GSK’s bribery scandal June 2013 44 days Coca-Cola using Fonterra’s contaminated dairy ingredients August 2013 29 days Dumex’s dairy products containing Fonterra’s toxic milk powder August 2013 29 days Yoshinoya using dirty dishes, stale rice March 2013 13 days Average duration of crises 21.3 days Microblog duration = finish time of negative buzz of a crisis (the proportion of negative discussions keeps lower than 0.1% of crisis discussions for three consecutive days or above and no rebound is recorded for three consecutive days or above) – start time of negative buzz + 1 The incidents marked in orange are the crises originated from Microblog. 7
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 1.3 Conclusion of Brand Crises in 2013 Microblog is still the key platform for public opinion monitoring. It is also an important battlefield for crisis PR and brand protection, as well as a vital channel for delivering a brand’s voice. According to the 33th Statistical Report on Internet Development in China (link) issued by CNNIC (China Internet Network Information Centre), the number of Microblog users hit 280 million in 2013, down 27.83 million since 2012. Meanwhile, netizens who cut down their time spent on Microblogs accounted for 22.8% of the total, while the netizens who expanded their time spent accounted for 12.7%. However, compared with other platforms, Sina Weibo ‘s buzz volume on brand crises were 2.6 times higher than the coverage by news platforms in 2012 and it further expanded to 4.1 times in 2013. In terms of Microblog’s role of exposing and spreading brand crises, the average duration of crises in 2013 extended by 13% over the previous year. Microblog continues to serve as a key platform for public opinion and plays a significant role in brand crisis monitoring and crisis PR. Buzz volume fluctuations signals warning of potential brand crises. Tracking crisis development and adjusting crisis management strategies by monitoring impact on brand purchase intentions. A fluctuation in buzz volume for brand crises directly reflects the degree of concern for brand crises. When the buzz volume of a brand crisis reaches or exceeds the critical value (or the warning level set by the brand), the brand and its orgnaization will always respond leveraging various measures including making announcements and initiating recalls. Appropriate responses reduce the influence of the crisis on the brand, such as recovering the brand’s reputation, and rebuilding consumers’ trust in the brand. However, buzz volume (including negative buzz) alone cannot fully reflect the true influence of crises or response measures upon consumers. Therefore, we need a more comprehensive crisis monitoring mechanism with evaluation methods to make further analysis of crisis issues. 8
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 Chapter Two Purchase Intention and Crisis Management
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013© 2014 OgilvyPR • CIC Chapter Two: Purchase Intention and Crisis Management 2.1 Significance in purchase intention 2.2 CIC Baseline Value in purchase intention in Brand Crisis 2.3 Review of Brand Crises in 2013 10
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 2.1 Significance in purchase intention Purchase intention refers to the customer’s intent to purchase a product. This information is based upon information obtained at the evaluation stage. According to Dr. Philip Kotler in his book Principles of Marketing, a consumer’s buying decision process consists of 5 stages: need identification, information search, evaluation of alternatives, purchase decision, and post purchase behavior. The buying process begins before purchasing behavior and continues well past the actual purchase. The buying process begins when a customer identifies a certain problem or need. When a consumer becomes interested in a product, more information would be searched for. The information would then be processed and brands would be selected. During the stage of evaluation and selection, consumers rank brands and form purchase intentions. After the product has been bought, consumers would express their satisfaction or dissatisfaction with the products. In reality, a brand with a good reputation can win trust from consumers and receive a good ranking during the evaluation stage. On the contrary, a brand with negative buzz and, in particular, a brand crisis, would cause distrust and thus negatively influence the ranking in the brand repertoire and purchase intention. In today’s world, with social media rapidly developing, consumers not only show their preferences and opinions about brands and products; they also demonstrate purchase intention towards products. As a stage in the buying decision process, purchase intention is tightly linked to real purchasing behavior. Thus, in situations of crisis management: will crisis issues influence purchase intention? how will purchase intention change before, during and after crisis? how crisis response strategies will affect and influence purchase intention during the process of crisis handling? We expect to discover some guidelines through case research and analysis so as to help brands better understand the characteristics of consumers’ purchase intention, to help brands handle PR crises more effectively, and to better evaluate the appropriateness of response measures . Need Identification Information Search Evaluation of Alternatives Purchase Decision Post-purchase Behavior Purchase Intention Note: Dr. Philip Kotler is renowned as Father of Modern Marketing. He is the S.C. Johnson & Son Distinguished Professor of International Marketing at Northwestern University’s Kellogg School of Management. He has authored or co-authored dozens of books and many have been translated into over 20 languages. His books have been considered to be the bibles of marketing by marketers of 58 countries and regions. 11
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 Methodology in purchase intention According to the definition in purchase intention, we calculated the differential value between netizens’ buzz for the possibility and impossibility of buying a certain brand during a certain period of time, and then compare the differential value with the total buzz about the brand during that time. With CIC text mining technologies, we first identified netizens’ buzz about their purchase intention to a brand, including all of the buzz regarding if they are likely or unlikely to buy a brand, and then made calculations. For example: Buzz about possibility of buying a brand: Brand A has released new products. I would love to try ~~ I cannot help but buy a bag of Brand B. No matter what, I would still buy Brand C. Buzz about impossibility of buying a brand: I’ll no longer eat Brand D. I won’t drink Brand E in future. I will give up Brand F from now on. We analyzed the crisis development and the effects of crisis management by studying the level of the impact on brand purchase intention as well as its trends during a crisis, in contrast to 30 days before the crisis. A brand’s purchase intention changes at different times. The variance is measured by percentage changes in a brand’s purchase intention. 2.1 Significance in purchase intention 12
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 2.2 CIC Baseline Values in purchase intention in Brand Crises  Observe the changes in purchase intention continuously for seven days after a crisis erupts and adjust crisis response strategies based upon the monitoring results. By creating an in-depth analysis and study on the PR crises of 20 brands in 2013, we find that a crisis can influence purchase intention. Furthermore, purchase intention can change over different stages of crisis development. Which time periods deserve our special attention, then? We found some common features from these brand crises. Purchase intention starts to witness significant impact on the first day after a crisis breaks out. Within four days after the crisis outbreak, the buzz reaches a peak level. Most brands would make responses within this period of time, so this is when purchase intention is the most sensitive . Within seven days after the crisis, different crisis responses could lead to recovery in purchase intention at various levels. If there is not a second crisis erupting, a brand’s purchase intention would gradually return to a stable level. By selecting these three representative time periods, we make further analysis upon the detailed characteristics and trends in purchase intention.  On the first day after a crisis breaks out The buzz volume in Microblog surges and consumers start to discuss the crisis. Although most brands are capable of developing a response within one day after a crisis has erupted, the purchase intention always declines sharply compared to the average level of purchase intention 30 days before a crisis.  Within four days after a crisis breaks out This time period is a turning point. Within four days after a crisis has erupted, an abundant amount of Microblog discussions would occur and the buzz would continue to surge and hit a peak level. Consumers would have discussions involving the crisis and the brand’s response and handling of the issue. The purchase intention would drop to its lowest level within four days after the crisis.  Within seven days after a crisis breaks out Within seven days after a crisis has erupted, a brand’s average purchase intention would rise again compared with the previous two time periods. After this, the purchase intention would gradually reach a comparatively stable figure, indicating that the effects of the brand’s crisis handling has entered a steady state in terms of purchase intention. To some brands, the rebound of their purchase intention could be more stable, but to others, it’s rather difficult to return to the level before the crisis. Therefore, a brand needs to make continuous observations upon the changes in purchase intention within seven days after a crisis breaks out and make adjustments in their strategies in dealing with the crisis. 13
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 2.2 Baseline Values in purchase intention in Brand Crises in 2013  Observe the changes in purchase intention continuously within seven days after a crisis has erupted and adjust crisis handling strategies based upon the results. Purchase Intention Falls First Day after Crisis Outbreak Four Days after Crisis Outbreak Seven Days after Crisis Outbreak Poor: Drop by a big margin* Decrease >221% Decrease >203% Decrease >157% Fair: Drop by a fair margin Decrease 169%~221% Decrease 121%~203% Decrease 82%~157% Good: Drop by a small margin Decrease <169% Decrease <121% Decrease <82% Note: The changes in purchase intention refer to the average percentage changes in purchase intention within one day, four days, and seven days after a crisis erupts in contrast to the 30- day average purchase intention before the crisis. The comparison is based upon the review of 20 cases in 2013 with statistical methods. Comparison of Baseline Values in purchase intention in Brand Crises 14
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 2.3 Review of Brand Crises in 2013 During the process of handling a crisis, the response time should be as quick as possible. Response attitudes and handling measures are also very important as they can also impact on the consumers’ purchase intention. We categorize the attitudes and methods of crisis handling into three types:  Type One: Denial (deny crisis) A brand claims it has nothing to do with the crisis after it breaks out and completely denies it.  Type Two: Admission (admit problems and make apologies) A brand admits its own problems related to the crisis with solutions proposed.  Type Three: Investigation (immediately release a response indicating an investigation is underway before making any conclusions, release statements and corresponding measures after finding out the truth) After crises have erupted, brands show their proactive attitude to find out the truth and investigations are conducted. Well-performing brands would build communication channels with consumers, such as hotlines, post investigation results promptly, explaining the details of issues, propose plans for further actions, including the details of product recall and the recalling process. All measures, such as recall and refund, would be carried out effectively so as to win back consumers’ confidence. 15
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 2.3 Review of Brand Crises in 2013 (Case 1-10) No. Brand Crises of 2013 Buzz Volume (Tweets) Duration (Days) Proportion of Negative Buzz(%) Res- ponse Time Response Attitude* Changes in purchase intention% (within One Day) Changes in purchase intention% (within Four Days) Changes in purchase intention% (within Seven Days) 1 Starbucks criticized for higher prices and fat profits 675,680 13 48% >24 hours Denial -127%(good) -84%(good) -66%(good) 2 KFC’s ice cubes found containing more bacteria than allowed 654,256 9 67% <8 hours Investigation -171%(fair) -122%(fair) -80%(good) 3 Apple’s 8:20 incident 626,240 6 64% <8 hours Denial -454%(poor) -238%(poor) -166%(poor) 4 Volkswagen’s DSG gearbox problem 568,560 14 77% <8 hours Investigation -408%(poor) -352%(poor) -253%(poor) 5 Abbott affected by Fonterra’s botulism scare 426,832 29 99% 8–24 hours Denial 2%(good) -725%(poor) -572%(poor) 6 Nongfu Spring’s water quality problems disclosed by Beijing Times 423,536 27 79% <8 hours Denial -383%(poor) -333%(poor) -327%(poor) 7 GSK’s bribery scandal 410,352 44 98% >24 hours Admission -133%(good) -116%(good) -97%(fair) 8 Coca-Cola using Fonterra’s contaminated dairy ingredients 280,160 29 93% >24 hours Investigation -196%(fair) -167%(fair) -126%(fair) 9 Dumex’s dairy products containing Fonterra’s toxic milk powder 237,312 29 83% 8–24 hours Investigation -180%(fair) -182%(fair) -166%(poor) 10 Yoshinoya exposed of using dirty dishes, stale rice 166,448 13 97% <8 hours Admission -562%(poor) -486%(poor) -371%(poor) Response attitude*: Denial – deny any issues; Admission – admit problems and make apologies; Investigation – immediately release a response indicating an investigation is underway before making any conclusions. Changes in purchase intention%: the average percentage changes in purchase intention within one day, four days and seven days after a crisis erupts in contrast to the 30-day average purchase intention before the crisis. Note: The above data are collected from January 1, 2013 to December 31, 2013. The Microblog tweets number refers to the total number of the replies at Sina Weibo. 16
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 2.3 Review of Brand Crises in 2013 (Case 11-20) Response attitude*: Denial – deny any issues; Admission – admit problems and make apologies; Investigation – immediately release a response indicating an investigation is underway before making any conclusions. Changes in purchase intention%: the average percentage changes in purchase intention within one day, four days and seven days after a crisis erupts in contrast to the 30-day average purchase intention before the crisis. Note: The above data are collected from January 1, 2013 to December 31, 2013. The Microblog tweets number refers to the total number of the replies at Sina Weibo. No. Brand Crises of 2013 Buzz Volume (Tweets) Duration (Days) Proportion of Negative Buzz (%) Response Time Response Attitude* Changes in Purchase Intention% (within One Day) Changes in Purchase Intention% (within Four Days) Changes in Purchase Intention% (within Seven Days) 11 Youkadan said to harm kids’ livers and kidneys 143,376 28 99% >24 hours Denial -432% (poor) -365%(poor) -497%(poor) 12 Strange odor reported by CCTV in BMW cars 115,360 8 84% 8–24 hours Investigation -186%(fair) -138%(fair) -83%(fair) 13 Strange smell reported by CCTV in Benz cars 113,712 8 99% 8–24 hours Denial -246%(poor) -222%(poor) -148%(fair) 14 Huiyuan exposed of producing juice with rotten fruit 72,512 29 83% 8–24 hours Denial -530%(poor) -450%(poor) -306%(poor) 15 Live worm found in Dove chocolate 70,864 6 66% 8–24 hours Investigation -566%(poor) -320%(poor) -231%(poor) 16 Beijing Hyundai Motor’s brand ambassador Sun Yang arrested for driving without license 52,736 7 99% >24 hours Investigation -60%(good) -10%(good) -7%(good) 17 Air China’s expired food causing passengers’ diarrhea 44,496 13 99% >24 hours Investigation -162%(good) -68%(good) -12%(good) 18 Erroneous McDonald’s deal offered at group-buying website Dianping 42,848 9 56% >24 hours Investigation -87%(good) -54%(good) -50%(good) 19 Dead rat found in Uni-President instant noodle 23,072 7 99% >24 hours Investigation -178%(fair) -145%(fair) -118%(fair) 20 PepsiCo exposed of containing cancer-causing chemicals 12,998 20 88% 8–24 hours Denial -650%(poor) -544%(poor) -414%(poor) 17
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 2.3 Review of Brand Crises in 2013 – Response Attitude and Purchase Intention  Comparing these three methods of crisis response, we found that Denial brings bigger impact upon a brand’s purchase intention. Upon finding out a crisis is untrue, a brand needs to understand consumers’ perspective, allow consumers to know about and accept the facts with appropriate explanation, and prevent customer misunderstanding about the brand. Simply denying the issue and responsibilities cannot benefit the recovery of purchase intention. In addition, brands should pay special attention and avoid contradictory attitudes. If a brand denies the issue at the beginning, but later admits to problems after investigations, it would leave the worst impression upon consumers. The recovery of the brand’s purchase intention could be even more difficult.  The response of “immediately releasing a response indicating an investigation is underway before making any conclusions” is better than the other two response options , in terms of a recovery in purchase intention. It is obvious on the first day after a crisis outbreak when the decline in purchase intention is far smaller than the other two response options. After investigations reach a conclusion, brands could further share information on developmental stages with consumers and take corresponding actions. This kind of response can be accepted by consumers more easily. At the same time, it can help to speed up the recovery in purchase intention. Data Source: Top twenty brand crises in 2013. The data are collected from January 1, 2013 to December 31, 2013. Changes in purchase intention %: the average percentage changes in purchase intention within one day, four days and seven days after a crisis erupts in contrast to the average purchase intention 30 days before the crisis. Response Attitude Changes in purchase intention% (within One Day) Changes in purchase intention% (within Four Days) Changes in purchase intention% (within Seven Days) Deny issues -403% -370% -312% Admit problems and apologize -348% -301% -234% Immediately release a response indicating an investigation is underway before making any conclusions -219% -156% -113% 18
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 Data Source: Top twenty brand crises in 2013. The data are collected from January 1, 2013 to December 31, 2013.  In addition to purchase intention, we find netizens can more easily accept the option of immediately releasing a response indicating an investigation is underway before making any conclusions. In showing an honest attitude, taking active actions in follow-up execution, and making comprehensive reports on crisis development, the crisis duration becomes shorter and the buzz volume becomes lower compared to the other two response option. 2.3 Review of Brand Crises in 2013 – Response Attitude and Purchase Intention Response Attitude Average Buzz Volume (Number of tweets) Average Duration (Days) Average Proportion of Negative Buzz (%) Deny issues 312,273 20 82% Admit problems and apologize 288,400 28 98% Immediately release a response indicating an investigation is underway before making any conclusions 208,966 13 82% 19
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 Data Source: Top twenty brand crises in 2013. The data are collected from January 1, 2013 to December 31, 2013.  Don’t make any conclusions about issues too early, but immediately conduct investigations and follow up. This can effectively help the recovery of a brand’s purchase intention. Let’s observe the influence of response attitude on purchase intention from the case of Coca-Cola botulism scandal. On the first day after the crisis broke out, Coca- Cola’s purchase intention suddenly dropped by 196%. The decline slightly expanded on the second day (with the brand’s purchase intention down). The brand responded to the issue on the second day and promised to make comprehensive investigations, traced back the production and delivery records of affected products, and allowed consumers to know about details via hotlines. The brand’s purchase intention thus rebounded a little from the second day to the third. On the third day, the brand continued to make responses by stating that affected products had been identified during investigations and a corresponding recall was underway. The trend chart shows the brand’s purchase intention started to rebound more visibly from the third day and on the seventh day, the brand’s purchase intention was only 35% lower than the level before the crisis. 2.3 Review of Brand Crises in 2013 – Response Attitude and Purchase Intention -196% -210% -194% -67% -91% -92% -35% -300% -200% -100% 0% Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7 Decline in purchase intention in Coca-Cola’s Crisis in Contrast to Pre-crisis Level Decline in purchase intention in Coca-Cola’s Crisis Compared to Pre-crisis Level First response: conduct comprehensive investigations, trace back the production and delivery records of affected products, allow consumers to know about details via hotlines. Second response: continue to make responses regarding the issue and state that affected products have been identified during investigations and a corresponding recall is underway 20
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 Chapter Three Crisis Management Case Studies in 2013
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013© 2014 OgilvyPR • CIC 3.1 Abbott, Dumex, and Coca-Cola Affected by Fonterra’s Botulism Scandal 3.2 Starbucks Criticized for Fat Profits 3.3 Volkswagen DSG Gearbox Problems Chapter Three: Crisis Management Case Studies in 2013 22
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 3.1 Abbott, Dumex, and Coca-Cola Affected by Fonterra’s Botulism Scandal Main course of Fonterra’s botulism scandal August 3, 2013 Fonterra alerted eight of its customers, including three in China, to a quality issue involving three batches of its whey protein concentrate product (WPC80), which were manufactured at a Fonterra processing site in New Zealand in May 2012. link The dairy giant also confirmed the products under its consumer brands were not affected by the quality issue. link The General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) announced that Clostridium Botulinum was detected in the whey protein concentrate product manufactured by Fonterra in May 2012 and requested importers to recall possibly affected products immediately. link August 4, 2013 AQSIQ listed the names of the four enterprises that might be affected by Fonterra’s botulism issue, which included Dumex, Coca-Cola, Wahaha and Karicare. link August 5, 2013 Fonterra CEO Theo Spierings held a press conference and made further explanations about the questions of consumers’ common concern. At the same time, the eight enterprises that bought the contaminated products were disclosed, including NZAgbiz, two Australian livestock feed companies, Vitaco, Wahaha, Coca-Cola, Dumex and a customer who declined to be named. link August 6, 2013 A responsible executive of Fonterra unveiled that the customer who declined to be named at the previous press conference was Abbott. link Fonterra CEO Theo Spierings met with the officials of related government authorities in China, reported the causes to this issue and reached agreements on the next work. link August 7, 2013 Fonterra CEO Theo Spierings held a media briefing in New Zealand, making apologies to the public, especially to the parents worldwide. link August 8, 2013 Fonterra chairman John Wilson announced that an independent review would be conducted upon the production of contaminated whey protein concentrate powder and the group’s behaviors after the incident. link August 12, 2013 Fonterra started to investigate into the details of contaminated whey protein concentrate product and key decision processes. link August 14, 2013 Fonterra’s managing director of NZ Milk Products Gary Romano resigned. link August 19, 2013 The New Zealand government announced its plan to investigate Fonterra’s botulism contamination. link August 21, 2013 Fonterra put in place a quality assurance programme at the Hautapu site and it would be rolled out to other nutritional plants. link August 22, 2013 Foreign Affairs Minister of New Zealand Murray McCully visited China and announced at the press conference that the investigation result would be released within ten days. link August 26, 2013 China Consumer Council talked with affected enterprises and learned about their recall schedules and follow-up work. link August 28, 2013 The additional testing authorized by the New Zealand government confirmed Fonterra’s whey protein concentrate product and the infant formula milk powder containing this ingredient didn’t contain Botulism. link August 30, 2013 Fonterra chairman Johnson Wilson announced he would pay another visit to China with the aim to rebuild China’s trust in and respect to Fonterra and New Zealand’s dairy products. link September 4, 2013 Fonterra announced the review results and explained about the major causes to the contamination. It said it would take improvement measures and make action plans to prevent these kind s of incidents from happening again. link 23
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 3.1 Abbott, Dumex and Coca-Cola Affected by Fonterra’s Botulism Scandal: Respond Actively, Speak Frankly VS Inconsistent Statements Causing Questions Fonterra’s quality issue finally proved to be a false alarm, but it still brought negative influence to downstream milk powder brands after the crisis. Among the affected enterprises, Dumex, Coca-Cola and Abbott responded to and dealt with the crisis in different ways, which led to different results in terms of the influence. Compared to Abbott who declared its non-involvement at the initial stage of the crisis, but finally identified as being one of the affected enterprises, the active response from Dumex and Coca-Cola brought positive effects to the rapid reduction of crisis influence and the recovery of consumers’ confidence and purchase intention. Fonterra issued a quality warning 8/3 9:10 8/4 6:00 13:0317:31 Abbott declared it had nothing to do with the issue 8/6 Confirmed as affected enterprise, Abbott announced product recalls Dumex and Coca-Cola promised investigations and product recalls Although Abbott responded right after the crisis, its inconsistent responses were questioned by netizens. In the first response, Abbott denied the connection with the issue, but later it was identified as one of the affected enterprises and then product recalls were initiated. The inconsistent claims and measures caused doubts and impacted the brand’s reputation. At present, we have learned from the third-party supplier Fonterra that the concerned dairy ingredients were not provided to Abbott’s Chinese market. We also confirmed the milk powder available in China was not affected. Product quality and safety, as well as consumers’ health, have always been the priority of Abbott. The company has provided science-based top-quality products for worldwide consumers in the past 125 years. #Announcement# #Abbott Voluntarily Initiates a Precautionary Recall of 112 Cases of Products # All the products Abbott has provided to the Chinese market were not made using Fonterra’s contaminated whey protein concentrate powder, but for consumers’ maximum benefits, Abbott has separated and sealed most products of two batches that were possibly affected by the package line. Abbott has also voluntarily initiated a precautionary recall of 112 cases of concerned products that were already sold. Please see the attached diagram for the details and information about the concerned batches. A formal announcement would be released at the official website later on. 33.7% of consumers replied they still trusted in Abbott with worries allayed I’m truly relieved to know that it’s not affected. Link 7.1% of consumers said they would pay continuous attention or questioned Abbott’s statements. I’ll continue to pay close attention. Hope Abbott won’t let me know. link 54.0% of consumers criticized Abbott for hiding facts. They expressed their frustration and doubts, expecting Abbott to make clear explanations. It’s cheating consumers. It denied any problems at first, but announced recalls after being identified. A conscienceless brand. link 10.0% of consumers acknowledged Abbott’s recall and showed their support. It’s just a precautionary recall. Believe in Abbott. link 2013-8-6 01:22 Quotes(555) Comments(810) 2013-8-3 17:31 Quotes (189) Comments (259) 24
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 3.1 Abbott, Dumex, and Coca-Cola Affected by Fonterra’s Botulism Scandal: Insincere Responses Cause Questions and Reduce Confidence With consumers’ alertness to food safety and crises being strengthened and social media platforms increasing transparency, evading crises would not only harm the reconstruction of brand image, but it could bring contrary effects to restoring of consumers’ confidence in a brand’s products and services. By directly facing crises, adopting a positive attitude, taking actions, realizing effective communications with consumers, and settling the problems comapnies and brands are facing, the impact of crises can be effectively reduced. 数据来源:CIC IWOM Data Panel -179% -169% -180% -204% -159% -155% -118% -196% -210% -194% -67% -91% -92% -35% 2% -930% -992% -979% -503% -358% -250% -1100% -1000% -900% -800% -700% -600% -500% -400% -300% -200% -100% 0% 100% Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7 多美滋 可口可乐 雅培 Drop in purchase intention of Affected Brands in Crisis Early stage of crisis – declare non-involvement Netizens’ comments (Abbott) still wants to hide the truth. Why? Strongly despise it. link It is Abbott that doesn’t want to be named!!! Where is the 120-item quality testing system promoted in its ad…link Mid stage of crisis – exposed the alleged hiring of fake online personas to mislead consumers Netizens’ comments How much money will you be paid for saying this so confidently? Hire fewer fake online personas and show more sincerity. Don’t treat consumers as fools. Abbott, you’ve already known from your surveys that most of your consumers are highly educated people. Who do you want to cheat with these fake online personas and irrelevant replies? link Later stage of crisis – make announcements, explain about precautionary recalls, still face questions and Netizens’ comments #Restore the truth about Abbott in past 72 hours # There are so many fake online personas. Abbott, your PR strategies are so childish. link #Restore the truth about Abbott in past 72 hours # No facts at all. Most comments are made by all kinds of fake online personas. link Abbott declared it had nothing to do with the crisis Confirmed as one affected enterprise, Abbott announced product recalls Dumex and Coca- Cola promised investigations and product recalls 25
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 -140% -120% -100% -80% -60% -40% -20% 0% 0 300,000 10月18日 10月19日 10月20日 10月21日 10月22日 10月23日 Unit: No. of Microblog posts PI Change 3.2 Starbucks Criticized for Fat Profits: Microblog Warning of Potential Risk, Failing to Proactively Respond, Crisis Eventually Triggered by Media Questions and Too Late to Take Actions Main Course of Starbucks’ being criticized for higher prices and fat profits in China October 8, 2013 CCTV-2 finance channel quoted on their Microblog a report by China Business News – Starbucks China Makes Extravagant Profits: Profit Margin 16 Times Higher Than in Europe. link The Microblog tweets was quoted by several media agencies including People’s Daily and the Voice of China on their Microblog accounts. They also released reports and blamed Starbucks for higher prices in China. link October 14, 2013 Several media agencies including People’s Daily and CBN issued further reports about Starbucks and disclosed the price difference of Starbucks’ products in and outside China. link October 20, 2013 CCTV reported a survey upon the global prices of Starbucks coffee and criticized Starbucks for higher prices and fat profits in China. link October 21, 2013 Starbucks China made the official announcement and declared that its operating cost and market motivation are completely different in the Chinese market. It also claimed that the company’s pricing in China cannot be compared to that in the United States due to different dimensions. link October 23, 2013 Starbucks CEO Howard Schultz told CNBC that the company was taken aback by Chinese media complaints that the chain charges too much for its coffee. He said their cost structure in doing business in China and the investments they’ve made to build that business gave them the position where they had to charge a little bit more than in the other markets. He added the people who did the story understand it and he thought the story was now behind them. link -140% -120% -100% -80% -60% -40% -20% 0% 0 10,000 20,000 30,000 10月8日 10月10日 10月12日 10月14日 10月16日 10月18日 Unit: No. of Tweets PI Change Analysis of Microblog Buzz about CCTV’s Attack upon Starbucks’ Fat Profit (2013.10.8 – 2013.10.18) Data Source: Sina Weibo, CIC IWOM Data Panel CCTV-2 quoted a media report about Starbucks’ “extravagant profits” in China Media complained about Starbucks’ higher prices in China Analysis of Microblog Buzz about CCTV’s Attack upon Starbucks’ Fat Profit (2013.10.18 – 2013.10.23) CCTV presented a survey upon global prices of Starbucks coffee Starbucks China made an announcement in reply to CCTV’s “high pricing” criticism Starbucks CEO replied to the media 10/8 10/10 10/12 10/14 10/16 10/18 10/18 10/19 10/20 10/21 10/22 10/23 26
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 Retweets : 70,511 Comments: 30,288 Layer: 15 CCTV Xinwen Starbucks 新京报 Caijing.com CCTV-13 Retweets : 6,228 Comments: 2,596 Layer: 11 People’s Daily Global Times 向思哲 Limboman Study Hard Lawyer Zhang Kai Beijing News CCTV-2 “Is It True?” 3.2 Starbucks Criticized for Fat Profits: Crisis Started from Microblog Reports. Microblog and Media Communication Caused Public Outcry The comments made by KOLs, particularly the verified Microblog accounts, always have a higher level of credibility. They could easily trigger big influence by spreading brand crises and guiding the online opinion. In Starbucks’ crisis, several media agencies including CCTV-2 and People’s Daily had already made reports and tweeted on their Microblog accounts on Starbucks’ higher prices and profit margin , before special features were published and caused intense discussions on the Microblog platform. However, all of these had not aroused sufficient attention for the brand. Data Source: CIC IWOM Data Panel. In the above charts of Microblog communication, each dot represents a Microblog user that participates into the communication. Each line between two dots represents one quote. Starbucks China Makes Extravagant Profits: Profit Margin 16 Times Higher Than in Europe: Miss Zhu took on a travel to the United States during the National Day holiday and spent 3 US dollars (around 18 yuan) for a short sized latte at a Starbucks in the country, but the price in Shanghai is 27 yuan, which is over 30% higher. In fact, Starbucks’ operating profit in China is far higher than in the United States and even 16.8 times higher than in Europe. The high profit has supported the company’s high-speed expansion in the Chinese market. link Starbucks China Not Only Charges Coffee Higher, Mugs Are Also More Expensive by Nearly 50%: A mug is charged at 10 US dollars at a Starbucks store in Seattle of the United States. With a 9% tax included, the total price would be 10.9 US dollars. Furthermore, the mug was made in China. However, a similar mug is sold at around 100 yuan in China. http://t.cn/zR5SUHY How could the price difference become so big for a China-Made Starbucks mug? link #Survey on prices of Starbucks coffee # Prices of 354ml Tall Sized Latte: A 354ml tall sized latte is charged at 27 yuan in Beijing, 24.25 yuan in London, 19.98 yuan in Chicago, 14.6 yuan in Mumbai. What do you think? http://t.cn/zRI9WCP link 2013-10-8 2013-10-14 2013-10-20 Retweets: 367 Comments: 221 Layer: 4 CCTV-2 Coolscaler 爱飞de螃蟹 27
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 3.2 Starbucks Criticized for Fat Profits: Lowered Purchase Intention Warns of Crises. Prompt Responses Reduce Influence Before being exposed by CCTV Xinwen, Starbucks had already suffered the influence from CCTV-2 and related media. Its purchase intention declined and warned of a potential brand crisis. After the crisis had erupted, the focus shifted to attacks on the media’s contradictions due to netizens’ reverse psychology towards mainstream media. However, the negative buzz about the brand on the Microblog platform and the anomalous effects generated upon the brand’s purchase intention should have gotten more attention from the brand. These could be taken as early warning signals to alert proper judgement and deal with the crisis. The brand should have actively made plans to avoid or reduce the influence of the crisis. Drop in purchase intention over Pre-crisis Level (2013.10.8 – 2013.10.18) Phase One: CCTV-2 posted a Microblog report and questioned Starbucks’ higher prices. The tweet was quoted by other media (2013.10.18 – 2013.10.23) Phase Two: A CCTV programme exposed the problem of fat profits, which was hotly quoted by media agencies at Microblog and caused wide attention Data Source: CIC IWOM Data Panel -105% -90%-98%-89% -72% -52%-57%-49%-45%-51% -35% -200% -100% 0% 10月8日 10月10日 10月12日 10月14日 10月16日 10月18日 -35% -40% -127% -95% -64% -51% -200% -100% 0% 10月18日 10月19日 10月20日 10月21日 10月22日 10月23日 Netizens’ Comments CCTV’s criticism against Starbucks is quite right. Isn’t it the truth? The marketing strategies were adjusted once it entered the Chinese market. A common brand has transformed into a so-called posh one in China. One drink costs tens of yuan! I will never drink it in China. link The price is so high. I wanted to drink it several times, but finally held back. link Netizens’ Comments Never drink. Why should I waste money and pretend to be a poser at Starbucks? link Tall-sized Frappuccino is not only expensive, but it can also make me awake whole night. I don’t have the luck to enjoy it. link Starbucks is cheating in China. Better not drink or buy! link CCTV-2 criticized Starbucks China at its official Microblog for making extravagant profits CCTV News aired a global survey upon the prices of Starbucks coffee 10/8 10/10 10/12 10/14 10/16 10/18 10/18 10/19 10/20 10/21 10/22 10/23 28
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 3.3 Volkswagen DSG Gearbox Problems Main course of Volkswagen’s DSG gearbox issue: Volkswagen’s recall elevated purchase intention March 15, 2013 CCTV exposed the safety problems of Volkswagen’s DSG gearbox at the programme 3.15 Evening. link Volkswagen made an announcement in reply and promised to make communications with consumers as quickly as possible for settlement. link March 16, 2013 AQSIQ made an announcement and requested Volkswagen to initiate a recall over faulty DSG gearboxes. link Volkswagen China announced at its Microblog that it would launch a product recall to fix the DSG problems. Related details would be disclosed very soon. link March 20, 2013 Volkswagen announced that it had decided to launch a voluntary recall for cars installed with troubled DSG gearboxes starting from April 2, 2013. link Volkswagen made explanations on its Microblog and answered the questions about the recalled cars. link -500% -400% -300% -200% -100% 0% 0 20,000 40,000 60,000 80,000 100,000 3/15 3/17 3/19 3/21 3/23 3/25 3/27 No. of Tweets PI Change Analysis of Microblog Buzz about Volkswagen’s DSG Gearbox Problems Exposed by CCTV (2013.3.15 – 2013.3.27)CCTV exposed the safety problems of Volkswagen’s DSG gearbox at the 3.15 Evening programme Volkswagen announced to launch a voluntary recall over the DSG problems Volkswagen announced a voluntary recall for part cars equipped with DSG gearboxes Unit: No. of Microblog tweets Data Source: Sina Weibo, CIC IWOM Data Panel 29
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 3.3 Volkswagen DSG Gearbox Problems: Make Responses in Official Microblog at the First Instance. Take Active Measures to Deal with Crisis The Consumer Rights Day on March 15 is the typical time when corporate and brand crises are exposed. This could always cause big buzz volume and wide attention from the public. Volkswagen and Apple made timely responses to their crises while Yoshinoya made the announcement upon its crisis within 24 hours. After the safety problems of DSG gearboxes were exposed, Volkswagen replied in its official Microblog within only one hour. It made the swiftest reaction among all concerned brands and thus attracted more attention. Compared with the other brands, Volkswagen’s negative buzz kept at a lower level and the crisis duration was also shorter. March 15 Within 1 Hour Within 4 Hours Within 24 Hours Volkswagen’s Announcement in Reply to CCTV’s Report about DSG Gearboxes at 3.15 Evening. Volkswagen Group (China), Volkswagen Group (China) Import Co. Ltd., Shanghai Volkswagen and FAW-Volkswagen pay firm attention to CCTV’s report about the DSG problems at the 3.15 Evening programme on March 15. Enhancing customers’ satisfaction has long been our priority. We have attached great importance to the report and would contact customers as quickly as possible for settlement. 2013-3-15 21:35 Quotes (20,842) Comments (12,957) In reply to the problems of inferior product warranties exposed at CCTV’s 3.15 Evening programme, Apple told Tech.Sina in its announcement* that the company works closely with its network of more than 500 authorized service centers in over 270 cities across China. “Our team is always striving to exceed our customers’ expectations and we take any customer concerns very seriously.” http://t.cn/zYd7pCk 2013-3-15 23:43 Quotes (5,423) Comments (3,162) Beijing Yoshinoya Apologizes for Operational Oversight and Takes Quick Corrective Actions – Hop Hing Group Holdings Limited noted today’s report in the Beijing Times, which indicated that two stores of Yoshinoya in Beijing had failed to follow its operational guidelines. The company responded quickly this morning by carrying out a thorough investigation and immediately suspended business operations in the implicated stores. Hop Hing apologizes for its operational oversight. 2013-3-15 16:38 Quotes (343) Comments(194) The results of statistical analysis show responding swiftly and actively can help reduce the crisis duration and negative buzz. During the procedure of crisis handling, brands should make reactions as quickly as possible. By conducting investigations or taking other measures to explain and reply, showing a proactive, positive, careful and practical attitude, and realizing communications with consumers, brands should strive to settle crises peacefully, amicably and honestly. Note: *Tech.Sina published at the first time Apple’s statement upon the customer service problems exposed at CCTV’s 3.15 Evening programme at the Microblog account. 30
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 3.3 Volkswagen DSG Gearbox Problems: Actively Respond and Face Problems, Take Measures to Deal with Crises Volkswagen quickly responded to the quality issue by initiating product recalls, which highlighted its CSR and high responsibility to their products. Although the company was questioned by consumers for the quality problem, causing negative buzz and negative influence upon its brand image, the recall was still acknowledged by consumers. The attitude of facing crises and taking active measures can benefit the recovery of the brand image. By settling the problems consumers are concerned with, the brand could regain consumers’ confidence on its products and services. -408% -309% -429% -263% -119% -134% -110% -454% -261% -105% -135% -85% -90% -35% -562% -474% -474% -435% -276% -191% -182% -600% -400% -200% 0% Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7 VW DSG APPLE YOSHINOYA Drop in purchase intention in the Crises of Volkswagen, Yoshinoya and Apple over Pre-crisis Levels Volkswagen’s attitude and response by actively recalling problem cars was widely recognized Volkswagen’s attitude of recalling problem DSG is fairly acceptable. link DSG gearboxes will be recalled finally. This is really gratifying. link Volkswagen still deserves affirmation for its attitude of recalling DSG gearboxes. link Data Source: CIC IWOM Data Panel Apple’s purchase intention was recovered more quickly than that of Volkswagen and Yoshinoya mainly thanks to the influence of the 8:20 incident. Netizens gradually turned against CCTV and made jokes about the incident, which distracted people’s attention to Apple’s problematic customer services exposed by CCTV. 31
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 Chapter Four Implications and Recommendations
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 Respond right after a crisis has broken out, but don’t rush to any conclusions In Crisis Management in the Social Era in 2012, we found the best result is achieved in terms of crisis management and subsequent recovery when a company makes the first response within 8 hours after a crisis has broken out. By studying the twenty cases of 2013, we find better effects could be reached if a company doesn’t make conclusions too early, but sincerely promises to conduct investigations and take quick actions. When a crisis erupts, admitting or denying it at the first instance might not bring the best impact to restoring purchase intention. In addition, follow-up measures are very important. During the process of dealing with PR crises, all brands must have the attitude of conducting investigations honestly and thoroughly, clearly explaining the true causes, making relevant judgments upon the issues, keeping conscientious and rational, providing detailed and complete solutions, and actively building communication channels with consumers. Naturally, all these must be based upon the principle of respecting the truth. 33
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 Within 7 days after a crisis outbreak, purchase intention provides a basis for the optimization of crisis management strategies. On the first day after a crisis outbreak, purchase intention starts to change significantly. Within four days after the crisis outbreak, the drop in purchase intention will always reach a peak level. Within seven days after the crisis breaks out, purchase intention could rebound to various levels depending on different response strategies. By monitoring the changes in purchase intention, enterprises can evaluate whether their crisis management strategies are appropriate at specific time nodes, and make adjustments correspondingly. 34
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 Appendix – Brand Statements in Crisis Cases
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 Announcements of Major Brands Affected by Fonterra’s Botulism Scandal Abbott Made Inconsistent Announcements: after Denial, Abbott Admitted Involvement and Launched Recalls August 3, 2013 link August 6, 2013 link 36
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 Announcements of Major Brands Affected by Fonterra’s Botulism Scandal Dumex Recalled Possibly Contaminated Products and Suggested Consumers to Stop Consumption link 37
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 Announcements of Major Brands Affected by Fonterra’s Botulism Scandal Coca-Cola Claimed Safety of Products, Conducted Investigations on Request and Recalled Products 回应 一:可口可乐大中华区声明 (2013年8月4日)我们一向将产品的质量和安全放在首位。收到恒天然公司通知后,我们立即和相关部门配合,展开全面排 查。现已确认:根据恒天然公司提供的批号,相关的4,800公斤原材料中4,775公斤已立即被安全隔离,其余25公斤已用于生产 个别批次的美汁源果粒奶优。 由于我们生产过程中采用超高温杀菌工艺以及饮料弱酸性的抑制作用,国内外科研专家以及我们的研究人员一致认为,相 关批次的饮料产品是安全的。 为消费者提供优质产品对我们至关重要。为让消费者放心,我们会积极配合相关部门针对此事件所采取的行动。目前我们 正在追溯受影响产品的生产和发货记录,并予以召回。消费者如需了解详情,可拨打我们产品上的热线电话。 我们将强化对恒天然公司的监管以避免类似事件的再次发生。 回应二:可口可乐大中华区声明 (2013年8月5日)随着追查和召回工作的开展,我们已经确定了25公斤受恒天然公司事件影响的乳清蛋白仅用于一个批次的产 品并只售往了三个省份,即2013年3月5日于06:50-17:50之间在东莞厂生产的批号末尾为“DGP6” 的菠萝口味果粒奶优, 该批次产品仅售往云南(3273箱),广西(788箱)和广东(14967箱)。 由于生产中采用超高温杀菌工艺以及饮料弱酸性的抑制作用,这些产品可以安全饮用。尽管如此,为了让消费者放心并积 极配合政府的相关措施,我们正在云南,广西和广东召回2013年3月5日生产的这一批次的所有产品。我们在中国的所有产品 都是安全的。 致云南,广西和广东的消费者和客户: 关于2013年3月5日生产的菠萝口味果粒奶优产品的说明 我们的产品召回仅限于上述三地,且只限于2013年3月5日生产的菠萝口味果粒奶优产品。我们产品的生产日期明示在产品 包装上。您可致电产品包装上的热线电话。由此造成的不便,我们表示歉意。我们正在采取措施加强对供应商的监管。 link 38
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 Announcement of Starbucks upon High Pricing Problem Explain Pricing Strategies & Causes and Thank Consumers for Recognition 星巴克中国声明 亲爱的中国顾客们, 近期我们注意到了媒体对于星巴克定价的相关报道,星巴克公司对此非常重视,并希望在此和大家沟通。 秉承星巴克一贯的价值理念,自1999年进入中国市场以来,我们始终致力于在盈利和社会良知之间取得平衡。 星巴克专注于向顾客提供全方位的体验,并带来卓越的价值。在中国,星巴克不断投入产品研发创新;同时提升门店的设 计,使每一家星巴克门店都成为独一无二的“第三空间”;并投入大量资源,如成立“星巴克中国大学”来培训和提升我们 的星级咖啡师,保持我们与顾客之间的情感连接,并满足顾客和当地社区不断变化的需求。这些都是星巴克提供给顾客的价 值所在。 与其他国家和地区相比,星巴克在中国市场的运营成本和市场动因是完全不同的。因此,对比星巴克在中、美市场的价格 差异并不是一个基于同一维度的比较。星巴克在全球各个国家的定价策略都是长期的,并且是根据不同产品及不同市场的具 体情况,以及各种运营成本的动态变化而综合考虑、评估和制定的。 在此,我们衷心感谢中国消费者对星巴克的长期支持与认可。未来我们将继续努力,关注消费者的需求,以此为基础不断 提升,向大家提供全方位的星巴克体验。在倾心提升顾客的体验和价值的同时,我们也将持续致力于星巴克伙伴(员工)的职业 发展与成长,并积极回馈当地社会,努力成为社区的好公民。 谢谢! 星巴克中国 2013年10月21日 link 39
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 Announcement of Volkswagen upon DSG Gearbox Problems Follow Related Government Authorities’ Requests, Voluntarily Recall on Concerned Products, Open Channels for Queries 大众汽车关于中央电视台3.15晚会针对DSG报道的声明。大众汽车集团(中国)、大众汽车(中国)销售有限公司,上海大众和一汽-大 众非常重视3月15日中央电视台3.15晚会节目对DSG问题的报道。提升客户满意度一直是我们的首要任务。我们高度重视该报道,并将以 最快速度联系消费者予以解决。 2013年3月15日 link 大众汽车集团(中国)、一汽-大众和上海大众联合声明:大众汽车一直并将继续积极配合相关主管部门的工作。大众汽车将实施主动召 回以解决DSG问题。有关召回具体细节,大众汽车将于近期公布。2013年3月16日。 2013年3月16日 link 【2013年3月20日,北京】近日,大众汽车集团(中国)、大众汽车(中国)销售有限公司、一汽-大众汽车有限公司、上海大众汽车有 限公司按照《缺陷汽车产品召回管理条例》的要求,向国家质检总局递交了主动召回报告。作为负责任的汽车制造企业,大众汽车集团与 我们的合资合作伙伴本着严谨的原则,将共同主动召回共计384,181辆配备七速双离合变速箱(DQ200)的车辆。 在极个别情况下,本次召回范围内的车辆因变速箱内机电单元的电子故障或者油压不足可能导致动力输出中断;上述情况发生时,车 辆其它最重要的相关系统如转向、制动等在功能上不受影响。驾驶者能够保持对汽车的操控并且将车安全驾驶至停止。 所有目前生产和销售以及经销商库存中的车辆均不受上述问题影响。 大众汽车集团(中国)、大众汽车(中国)销售有限公司、一汽-大众汽车有限公司、上海大众汽车有限公司将免费为召回涉及的车辆 更换改进的变速箱机电单元。同时,出于对客户负责的考量,我们将免费为用户提供升级后最新的控制软件。 自2013年4月2日开始,我们将通过相应特许经销商通知召回范围内的用户,请用户将车辆送到相应品牌经销商进行召回检查和维修。 用户可致电以下客服热线进行咨询: 大众汽车(中国)销售有限公司 400-188-0888 一汽-大众汽车有限公司 400-817-1888 上海大众汽车有限公司 400-820-1111 用户也可通过登录国家质检总局网站 www.aqsiq.gov.cn,国家质检总局缺陷产品管理中心网站 www.dpac.gov.cn,中国汽车召回 网 www.qiche365.org.cn 或拨打国家质检总局缺陷产品管理中心热线(010-59799616、65537365),了解本次召回的更多信息。 2013年3月20日 link 40
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 Announcements of Apple and Yoshinoya Apple Paid Attention to Suggestions, Yoshinoya Apologized and Took Corrective Actions 苹果公司致力于生产世界一流的产品,并为所在市场的消费者提供无与伦比的用户体验。这也是为什么我们在每一家苹果零售 店的 Genius Bar 天才吧提供深受消费者喜爱的面对面支持。我们也与全国270多个城市的超过500个授权服务点密切合作。 我们的团队一直努力超越消费者的期望,并高度重视每一位消费者的意见和建议。 link link 41
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013© 2014 OgilvyPR • CIC About Ogilvy Public Relations WHO ARE WE? Ogilvy Public Relations operates the largest and most influential PR network in China as well as in the Asia Pacific region, and our success is largely rooted in two Ogilvy philosophies:  We are devoted to being the “most local international company and the most international local company”, a position that allows for deep, original insight into local markets yet brings a global perspective to everything we do.  We believe that the brand comes before all else. In the world today, brands interact with stakeholders, employees governments, and consumers on many different levels. Using our proprietary 360˚ Brand Stewardship methodologies to manage all of the points of contact between a brand and the public, Ogilvy PR strives “to be the agency most valued by those who most value brands.” DISTINGUISHED BY OUR NETWORK  China’s strongest network, with more than 400 professionals in offices across China including Beijing, Shanghai and Guangzhou.  Sister companies in advertising, customer relationship management, media planning and buying, interactive media, promotional campaigns, and identity development.  Most awarded network in Asia  Campaign Asia-Pacific Awards, Gold Winner, Greater China PR Agency of the Year, Ogilvy PR Hong Kong (2013)  Campaign Asia-Pacific Awards, Silver Winner, Greater China PR Agency of the Year, Ogilvy PR China (2013)  2013 Awards from: Public Affairs Gold Standard Awards, Asia Pacific SABRE Awards, Promotional Marketing Awards of Asia, PR News Awards  Part of a highly awarded agency  Holmes Report Most Creative Agency of the Year (2013)  Holmes Report Best Digital Consultancy of the Year (2013) DISTINGUISHED BY OUR RELATIONSHIPS  Long-standing relationships with multinational companies such as IBM, adidas, Pfizer, UPS, Lenovo, Intel, and Mercedes-Benz.  Close alliances with influential forums such as the Business Week Conferences, EIU, World Economic Forum, FORTUNE Global Forum, The BOAO Forum for Asia, and the Women’s Forum.  Long-standing, strong relationships with local and foreign media groups operating in China and throughout the region.  In 2005 we established the “Tsinghua-Ogilvy Public Branding Programme” to work with Chinese government officials in supporting the growth of the communications industry in China.  We maintain close working relationships with key government ministries and organizations, including the Ministry of Commerce, the State Food and Drug Administration, the Administration of Quality Supervision, Inspection, and Quarantine, and the Ministry of Environmental Protection.
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013© 2014 OgilvyPR • CIC About CIC CIC is China's pioneering social business intelligence company. CIC enables businesses to fully leverage the power of social media and Internet Word of Mouth (IWOM) intelligence across the organization. Since coining the term IWOM in 2004, CIC has pioneered the industry to help companies meet their social media marketing and social business needs by providing customized research, consulting services, as well as technical solutions , all from an objective, third party perspective. In addition to helping companies leverage social media intelligence for more informed decisions, CIC is monetizing the social business industry in China by creating an integrated social business support system. CIC utilizes its own patent pending technology to capture millions of online conversations and ‘makes sense of the buzz’ by assembling them into easy to understand intelligence and provides interpretation which informs strategic decisions and leads to action. CIC gathers and mines over 100 million naturally occurring consumer comments every month from a range of uniquely Chinese social media platforms including blogs, BBS and social network sites and applies its unique, China-derived methodology and indexes to provide a detailed and comprehensive picture of the social media landscape and its implications for business. CIC has well over 3.8 billion mentions of brands and products from well over 1 billion consumer comments that have been indexed and archived. In early 2012, as China’s pioneering social business intelligence company, CIC consented to acquisition by WPP’s Kantar Media, the media research and insight division of Kantar, expanding their social offering across Asia Pacific markets. (Press release) CIC will continue to provide social business intelligence from an unbiased, third-party perspective, to the world’s leading brands and agencies. Learn more about CIC, click here: www.ciccorporate.com CIC 2013 White Papers Review: 2012 Crisis Management in The Microblog Era (CIC & Ogilvy PR) | View ‘From social media to social business ‘ Topic 3: Social Business Development Roadmap in China | View Beauty industry white paper (CIC &Sina weibo) | View (Chinese only ) 2013 White Paper on Travel (CIC & GroupM Knowledge ) | View Find more CIC industry white papers, visit IWOM Back Story. Shanghai Headquarters: 4th floor, Building 6, Fenglin Link, 485 Feng Lin Road, Xuhui District, Shanghai, 200032, China Phone: +86 – (0)21 64049191 Fax: +86 - (0)21 6432 5559 Beijing Branch: Room 801, Union Plaza, No.20 Chaowai Road, Chaoyang District, Beijing, 100020, China Phone: +86 – (0)10 65886560 Contact us: marketing@cicdata.com Weibo.com/seeisee Douban.com/host/CIC Tudou.com/home/iwomchina Linkedin.com/companies/359113 Huaban.com/seeisee i.youku.com/seeisee slideshare.net/CIC_China @cicdata Facebook.com/CICcorporate instagram.com/seeiseechina pinterest.com/seeisee
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013© 2014 OgilvyPR • CIC This study is the sole and exclusive property of Ogilvy PR and CIC. Any usage of the research and contents of the report or slides will be deemed a violation of Ogilvy PR and CIC’s intellectual property. Ogilvy PR and CIC reserve the right to legal action to protect its ownership rights. Disclaimer
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013 Yongyu Ji Associate Director Ogilvy Public Relations +8621 - 2401 7184 Yongyu.Ji@ogilvy.com Contact us Sina Weibo @奥美中国 Debby Cheung President China/ Hong Kong Ogilvy Public Relations +8621 - 2405 1888 Debby.Cheung@ogilvy.com Michelle Yu Associate Research Director CIC +8621 - 6404 9191 ext. 8880 Michelle.Yu@cicdata.com Contact us Sina Weibo @seeisee Connie Leung SVP Consulting Business & Marketing CIC +8621 - 6404 9191 ext. 8881 Connie.Leung@cicdata.com
    • ©2013CIC© 2014 OgilvyPR • CIC Crisis Management in the Social Era in 2013