NEGATIVE PUBLICITY• Negative publicity is a deliberate attempt to managethe publics perception of a subject with an intentionto demote it to an extent that it arouse public interestin it.• It is the adverse publicity that a firm may incur due toa particular reason, which may lead to potentiallydisastrous consequences.• It results in the firm’s reputation among its customersand competitors being badly tarnished.
EFFECTS• Business does not flourish under negative publicity.• Firms may have to call back all their products.• Shares of the firm may take a frightening dip.• Lead to the firm having to shell out millions ascompensation, and the venture might even go bust.
How do you counter it?• Golden rule is- Don’t Panic!• Look into the problem• Work out a plan of counter attack• Follow up progress continually• Give out concrete proofs of safe-practices
History• Coca-Cola was founded in May 1886 by Dr. John Pemberton•Coca-Cola was first sold to the public in Atlanta at Jacob’sPharmacy•Only 9 servings of the soft drink were sold each daySales for the first year were only $50• In 1888 Asa Griggs Candler bought the company and salesincreased over 4000%
• Until 1905, the drink was marketed asa tonic containing cocaine• This stopped the advertisement ofCoca-Cola as being a cure for headachesand other illnesses
Today300 Brands - 200 Nations
International ProductsCanada and BelgiumTaiwan
Sponsorships• Art of Harmony•Boys and Girls Club of America• Children’s Miracle Network• FIFA• NASCAR• Olympics• Special Olympics• Tiger Woods Foundation
Promotions• Diet Coke Movie Mania Give away-win a trip to the Sundance FilmFestival• American Music Awards
NEGATIVE PUBLICITY-COKE•In 2003, it was revealed that several midlevelemployees had rigged a marketing test forFrozen Coke done three years earlier at BurgerKing Restaurants in Virginia.•The scandal led to the departure of the head ofCokes fountain division, and the companyissued an apology to Burger King and itsfranchisees and offered to pay them US$21million.
•In the early 2004, the launch of the Dasanibrand into the European market was cancelledwhen bottles in Britain were found to containelevated levels of bromate, a substance thatcan cause cancer after long-term exposure.•In India, during September 2006, Coca-Colawas accused by the Center for Science andEnvironment (CSE) of selling productscontaining pesticide residues.•Coca-Cola products sold in and around theIndian national capital region contained ahazardous pesticide residue.
•These pesticides included chemicals whichcould cause cancers, damage the nervous andreproductive systems and reduce bone mineraldensity.•Besides, Coca-Cola’s products are alwayslabeled as “junk food”. People criticize Coca-Cola’s beverage contain too much sugar andhigh is calories. It is labeled as one of theimportant factors of causing serious obesityrate in developed countries.•Such negative publicity could adverselyimpact the company’s brand image and thedemand for Coca-Cola products. This couldalso have an adverse impact on the company’sgrowth prospects in the international markets.
History• The Pepsi Cola Company beganin 1898, but it only becameknown as PepsiCo when itmerged with Fruto lay in 1965.• Tropicana was acquired in1998 and PepsiCo merged withQuaker Oats and Gatorade in2001.• PepsiCo’s snack foodoperations (Frito Lay….) hadtheir start in 1932.• PepsiCo began its internationalsnack food operations in 1966.• Until 1997 , it owned Taco Bell,Pizza Hut, KFC.
Companies owned by Pepsico:Frito LayGatoradeTropicana (aquired in 98)Quaker OatsPepsi brandsDiet Pepsi7UPMountain DewLipton Iced tea (partner)MirindaLays/ Doritos…..
NEGATIVE PUBLICITY-PEPSI• Cases being filed against Pepsi that there wassyringes, needles, pins, screws, a crack cocaine vial,and even a bullet have been found in Diet Pepsi cans• “In one week’s time, more than 50 incidents had beenreported to the police, the FDA or the media”.
• Pepsi was not sure of why these incidents were beingreported. Pepsi had to research on why these claims werebeing made against their company.• Pepsi was going to defend their company and not recall anyof their products. Pepsi wanted to show the country thatthere was no possible way that these objects could end upin their products at the different factories.
Ways to Handle Negative Publicity1. Confront the source.2. Make amends.3. Acknowledge mistakes.4. Enlist supporters to speak on your behalf.