SlideShare a Scribd company logo
1 of 19
Principles of Management
&
It’s Domiciliary in
“The Emerging Markets”
A Presentation by..
Abhizar Bootwala
The Company..
• Pharmacist, John Styth Pemberton first introduced the refreshing taste of
Coca-Cola in Atlanta, Georgia in 1886.
Pemberton concocted a caramel-coloured syrup in a brass kettle in his
backyard. He first "distributed" the new product by carrying Coca-Cola in a
jug down the street to Jacobs Pharmacy.
• Initially sold as a patent medicine for 5 cents a glass.
• Pemberton claimed that it cured diseases such as headache, impotence,
and morphine addiction.
The First Coca-Cola Ad
The yester years..
• 1886 - Sales of Coca-Cola averaged nine drinks per day.
• 1887 - Businessman Asa Griggs Candler acquires stake in the company
and in 1888 incorporates it as the Coca Cola company.
• 1893 - In January "Coca-Cola" was registered in the U.S. Patent office.
• 1917 - 3 Million Coke's sold per day.
• 1919 - Buy-over of Coca-Cola to business-man Asa Griggs Candler for $
25 million.
• 1925 - 6 Million Coke's sold per day.
• 1927 - The first Coca-Cola Radio advertisement.
• 1929 - Coca-Cola was made available through vending machines.
• 1950 – First television Advertisement.
• 1977 - The Coca-Cola contour bottle was patented.
• 1978 - Two litre plastic bottles introduced.
• 1982 - Diet Coke was introduced in July targeting health conscious
consumers.
• 1993 - Coca-Cola exceeds sales of 10 Billion cases worldwide.
• 1993 - Advertising slogan -"Always Coca-Cola".
• 1995 – Coke consumed aboard the Space Shuttle Discovery
• 1907-1948
The Coca-Cola expands its bottling operations in:
Hawaii, Philippines, France, Belgium, Bermuda, Colombia, Honduras, Italy,
Mexico, Haiti and Burma, China, Guatemala, Holland, Spain, Venezuela,
Morocco, Germany, Australia, Scotland and many more.
Prologue:
• 1999 - Coca-Cola Enterprises has one of their worst public relations
nightmare in its 113 year history.
• 8th June, 1999 - Students in Bornem, Belgium noticed that the coke they
had purchased had a bad smell. School administrators called the Coca-
Cola Enterprises (CCE) plant that morning to complain.
• CCE is a European bottler owned 40% by Coca-Cola with plants in
Antewerp, Dunkirk & Ghent.
• At the same in the town of Belsele, city officials called and complained of
bad smelling coke from vending machines
• Now Coca-Cola realized that a crisis was occurring.
• 14th
June, 1999 - Luc Van den Bossche bans sales of all Coca-Cola
soft drinks from the three plants Antwerp, Dunkirk, and Ghent.
CCE withdraws15 million cans and bottles.
• Coca-Cola, Coca-Cola Light, Sprite, Nestea, Aquarius lemon, orange, and grapefruit,
Bon Aqua, Kinley Tonic and Lilt.
• However continues to mishandle the situation by not giving clear information
to the public and health officials. They declared that there was no real
problem and all bottles with codes DU, DV and DW had been removed.
• Despite this 38 more students became ill.
• CCE later realises that list was incomplete and that all cans stamped with
the code DX and DP should have been removed.
• Problems continue. France officials complained that incorrect information
was being provided by CCE.
• With additional problems being reported in France, Coca-Cola finally put
its public relations damage control into action.
• 24th
June, 1999 – Belgian health authorities end a 10 day ban on Coke
products.
• 25th
June, 1999 - CCE holds a news conference in Brussels denying that the
drinks posed any health risk.
• Douglas Ivester CEO and Chairman said that production would resume
immediately and that he expected Coca-Cola products to be back in Belgian
stores within two weeks. He also offered to pay medical costs if anyone fell
ill.
• Damage had already been done.
• Information was delayed and often misleading.
• People in Europe lost confidence in Coca-Cola products.
• At least 100 people became legitimately sick.
Predicament:
• Coca-Cola's financial performance suffered a major setback due to the
Belgian crisis.
• Negatve impact on Coca-Cola's overall second-quarter net income in the
fiscal year 1999, coming down by 21% to $942 million.
• Entire operation of destroying recalled products cost CCE $103 million
• 5% decline in the bottler's revenues.
• 6% decline in cash operating profit.
SWOT Fragmentation
Strengths:
• Strong brand recognition across the globe.
• Coca-Cola is the second most recognizable phrase after “Ok”.
• Company valued at $ 67000 Million in 2006.
• It has become a part of the World culture. Emotional attachment with the brand.
• Owns 4 of the top 5 soft drink brands in the world: Coca-Cola, Diet coke, Sprite
and Fanta.
• Largest manufacturer, distributor and marketer of non-alcoholic beverages.
• Operations supported by strong infrastructure owning 32 beverage concentrate
and syrup manufacturing plants. Also now manufactures juice concentrate.
• Aggressive branding and advertizing resulted in re-building a powerful image of
the company
Weaknesses:
• The proposition demonstrated the gap in capabilities of the company
officials as they issued statements contradicting one another.
• An apology to consumers came more than a week after the first public
reports that people had fallen ill. It was not until June 18,10 days after the
first schoolboy became dizzy and nauseated after drinking a Coke that top
company officials arrived in Belgium. And when Coke did begin to respond,
it tried to minimize the reports of illness.
• Also the company officials initially viewed the contamination to be a minor
problem clearly proving the lack of foresight.
• Being addicted to Coca-Cola also is a health problem, and has other side-
effects on teeth which is an issue for health care.
• Sheer carelessness, chaos, panic caused an incomplete transmission of
recall codes further worsening the case.
• All of these un-coordinated and disarrayed activities led to the ban on sales
of all of Coke’s products. The situation had worsened to the extent that the
health minister of France was quoted saying that “That a company so
expert in advertising and marketing should be so poor in
communicating on this matter is astonishing.”
• This definitely had an evident effect on the sales numbers and the revenue
of the company.
Opportunity:
• Coca-Cola’s bottling system also allows the company to take advantage of
the infinite growth opportunities around the world.
• The incident of the European children gave Coca-Cola the opportunity to
develop a system that will quickly respond to crisis.
• This incident also gave the company an opportunity to look into other
avenues of solutions and not to just rely on the first instinct.
• These opportunities improves the brand image and also will help increase
the affection for the company in the hearts of the people.
Threats:
• Such a crisis also has the competitors on their heels de-faming the brand
name as is evident with the advertisement campaigns amidst the cola wars.
• The consumers can easily switch to other beverages with little cost or
consequences.
• With Coca-Cola not responding neither quickly nor with its senior most
spokesperson it definitely threatened the company’s image as 74% of the
sales revenue was being generated from the European nations.
• Such an incident can also result in the withdrawal and even severing of
support from the co-branding partners where a good amount of revenue is
generated by means of sponsorship and partnership.
• With the company taking such a weak stand for the issue its also faced
dejection from the political and the legislative fronts of the locale.
Synopsis:
• The planning and implementation process of the SWOT analysis of the
problem clearly highlights the importance of a crisis management plan so
that major areas of vulnerability can be identified and therefore addressed.
• Response time is critical in minimizing damage to image and/or brand
image.
• Contingency planning is crucial to ultimate success in dealing with
opportunities and threats to companies.
• Moreover, because factors of impact vary from country to country and
culture to culture, it is very important that response plans are developed for
each location and include input from local management and public officials.
• We must understand that Perception does become Reality. In this case,
the company’s silence as they attempted to identify the source of the
problem led to a loss of public confidence.
• The longer the management delays a response, the more the opportunity
for permanent damage to the psychological bond that connects the
consumer to company image and reputation.
• The crisis management was more complicated in Coke’s crisis as the
bottler’s were not owned directly by the parent company.
• Thus the company needs some way to bring members of its top corporate
management together with other decision makers and other information
providers so that a response can be made public quickly.
• It took CCE an entire week to get Douglas Ivester, Coke’s CEO to Europe.
In a crisis of such a magnitude, the public looks for the No. 1 person to be
doing something significant.
• So while we do not know what Coke’s crisis management process was, it
appears not to have moved speedily.
• It is also important that the company have evolved a culture that in a crisis
like this will put foremost on the table the health of the customer.
• In coke’s instance the company had information about people who had
become ill weeks prior to these incidents. They should have released that
information. Instead they chose to not disclose the same thinking that it was
irrelevant.
• Even though you feel the information is irrelevant, one should get it out –
because that allows people who may think it is relevant to go through
whatever process they want to go through.
• It is imperative that the local personnel who have built a rapport and
credibility with the local customers and political units be included as a visible
part of the immediate response plan. In our case, there was a recent
change in the political leadership in Belgium, and the necessary rapport
between the company and the government had not been established.
• Another important consideration in critical incidents such as this is the
preservation of brand image. Thus nostalgic memories, product, confidence
of the people in the company and other such intangibles must be
maintained to preserve and protect the company and its long term position
in the market.
Coca Cola: Belgian PR Crisis

More Related Content

What's hot

Coca-Cola India Case Study
Coca-Cola India Case StudyCoca-Cola India Case Study
Coca-Cola India Case StudyAnna Sandgren
 
Coco-cola product line
Coco-cola product lineCoco-cola product line
Coco-cola product lineKarthik Nv
 
Coca-Cola Presentation
Coca-Cola PresentationCoca-Cola Presentation
Coca-Cola PresentationWasim Haidar
 
Unethical practices done by coca cola company
Unethical practices done by coca cola companyUnethical practices done by coca cola company
Unethical practices done by coca cola companyRavichandra Devadiga
 
Marketing strategies of coca cola
Marketing strategies of coca colaMarketing strategies of coca cola
Marketing strategies of coca colaProjects Kart
 
Case Study on Coca Cola Company
Case Study on Coca Cola CompanyCase Study on Coca Cola Company
Case Study on Coca Cola CompanyRAJWANT KAUR
 
Coca cola Business Model
Coca cola Business ModelCoca cola Business Model
Coca cola Business ModelSayan Biswas
 
Marketing strategies of coca cola (1)
Marketing strategies of coca cola (1)Marketing strategies of coca cola (1)
Marketing strategies of coca cola (1)Pinnakk Paul
 
Unethical Business by Cocacola
Unethical Business by CocacolaUnethical Business by Cocacola
Unethical Business by CocacolaNethan P
 

What's hot (20)

Business proposal
Business proposalBusiness proposal
Business proposal
 
Main ppt on coca cola
Main ppt on coca colaMain ppt on coca cola
Main ppt on coca cola
 
Coca-Cola India Case Study
Coca-Cola India Case StudyCoca-Cola India Case Study
Coca-Cola India Case Study
 
Coco-cola product line
Coco-cola product lineCoco-cola product line
Coco-cola product line
 
Coco cola
Coco colaCoco cola
Coco cola
 
Coca cola
Coca colaCoca cola
Coca cola
 
Coca-Cola Presentation
Coca-Cola PresentationCoca-Cola Presentation
Coca-Cola Presentation
 
Unethical practices done by coca cola company
Unethical practices done by coca cola companyUnethical practices done by coca cola company
Unethical practices done by coca cola company
 
coca cola presentation
coca cola presentationcoca cola presentation
coca cola presentation
 
Coco Cola CSR
Coco Cola CSRCoco Cola CSR
Coco Cola CSR
 
Sales and distribution management at coca cola
Sales and distribution management at coca colaSales and distribution management at coca cola
Sales and distribution management at coca cola
 
Marketing strategies of coca cola
Marketing strategies of coca colaMarketing strategies of coca cola
Marketing strategies of coca cola
 
Case Study on Coca Cola Company
Case Study on Coca Cola CompanyCase Study on Coca Cola Company
Case Study on Coca Cola Company
 
Coca cola Business Model
Coca cola Business ModelCoca cola Business Model
Coca cola Business Model
 
Coca cola 4 p s
Coca cola 4 p sCoca cola 4 p s
Coca cola 4 p s
 
Marketing strategies of coca cola (1)
Marketing strategies of coca cola (1)Marketing strategies of coca cola (1)
Marketing strategies of coca cola (1)
 
Coca cola
Coca colaCoca cola
Coca cola
 
coca cola
coca colacoca cola
coca cola
 
The Coca Cola company
The Coca Cola companyThe Coca Cola company
The Coca Cola company
 
Unethical Business by Cocacola
Unethical Business by CocacolaUnethical Business by Cocacola
Unethical Business by Cocacola
 

Viewers also liked

Corporate Social Responsibility Case Study: Coca Cola India
Corporate Social Responsibility Case Study: Coca Cola IndiaCorporate Social Responsibility Case Study: Coca Cola India
Corporate Social Responsibility Case Study: Coca Cola IndiaAsma Muhamad
 
STRATEGIC MANAGEMENT Evaluation & Control Edited
STRATEGIC MANAGEMENT Evaluation & Control EditedSTRATEGIC MANAGEMENT Evaluation & Control Edited
STRATEGIC MANAGEMENT Evaluation & Control Editedanto101211
 
Levi's Marketing Plan
Levi's Marketing Plan Levi's Marketing Plan
Levi's Marketing Plan Dawoine Camel
 
Conflict management and negotiation
Conflict management and negotiationConflict management and negotiation
Conflict management and negotiationC0ff33
 
Coca cola case-study
Coca cola case-studyCoca cola case-study
Coca cola case-studySam Renbarger
 
Levi's Brand and Product Strategy
Levi's Brand and Product StrategyLevi's Brand and Product Strategy
Levi's Brand and Product StrategyAnyarat Priyawat
 

Viewers also liked (7)

Corporate Social Responsibility Case Study: Coca Cola India
Corporate Social Responsibility Case Study: Coca Cola IndiaCorporate Social Responsibility Case Study: Coca Cola India
Corporate Social Responsibility Case Study: Coca Cola India
 
PR CaseStudies
PR CaseStudiesPR CaseStudies
PR CaseStudies
 
STRATEGIC MANAGEMENT Evaluation & Control Edited
STRATEGIC MANAGEMENT Evaluation & Control EditedSTRATEGIC MANAGEMENT Evaluation & Control Edited
STRATEGIC MANAGEMENT Evaluation & Control Edited
 
Levi's Marketing Plan
Levi's Marketing Plan Levi's Marketing Plan
Levi's Marketing Plan
 
Conflict management and negotiation
Conflict management and negotiationConflict management and negotiation
Conflict management and negotiation
 
Coca cola case-study
Coca cola case-studyCoca cola case-study
Coca cola case-study
 
Levi's Brand and Product Strategy
Levi's Brand and Product StrategyLevi's Brand and Product Strategy
Levi's Brand and Product Strategy
 

Similar to Coca Cola: Belgian PR Crisis

Similar to Coca Cola: Belgian PR Crisis (20)

Marketingplan
MarketingplanMarketingplan
Marketingplan
 
Shweta pareek public relation-book ppt
Shweta pareek public relation-book pptShweta pareek public relation-book ppt
Shweta pareek public relation-book ppt
 
Cocacola
CocacolaCocacola
Cocacola
 
Coca cola Brand Management
Coca cola Brand ManagementCoca cola Brand Management
Coca cola Brand Management
 
Cocacola
CocacolaCocacola
Cocacola
 
Cocacola
CocacolaCocacola
Cocacola
 
Cocacola
CocacolaCocacola
Cocacola
 
Cocacola
CocacolaCocacola
Cocacola
 
Cocacola
CocacolaCocacola
Cocacola
 
coco cola
coco cola coco cola
coco cola
 
Cocacola co. analysis
Cocacola co. analysisCocacola co. analysis
Cocacola co. analysis
 
Coca cola
Coca colaCoca cola
Coca cola
 
Coca cola
Coca colaCoca cola
Coca cola
 
Minute Maid- Marketing Course (New Product)
Minute Maid- Marketing Course (New Product)Minute Maid- Marketing Course (New Product)
Minute Maid- Marketing Course (New Product)
 
coca cola
coca colacoca cola
coca cola
 
Company Facts of Coca-cola
Company Facts of Coca-colaCompany Facts of Coca-cola
Company Facts of Coca-cola
 
Company of Coca-cola
Company of Coca-colaCompany of Coca-cola
Company of Coca-cola
 
The coca cola-company
The coca cola-companyThe coca cola-company
The coca cola-company
 
Statistical Analysis.
Statistical Analysis.Statistical Analysis.
Statistical Analysis.
 
Coke recall current scenarios,conclusion,self-learning
Coke recall current scenarios,conclusion,self-learningCoke recall current scenarios,conclusion,self-learning
Coke recall current scenarios,conclusion,self-learning
 

More from Abhizar Bootwala

Online Video Collaboration for Manufacturing Industry - Summary Report
Online Video Collaboration for Manufacturing Industry - Summary ReportOnline Video Collaboration for Manufacturing Industry - Summary Report
Online Video Collaboration for Manufacturing Industry - Summary ReportAbhizar Bootwala
 
Online Video Collaboration for Manufacturing Industry - Full Report
Online Video Collaboration for Manufacturing Industry - Full ReportOnline Video Collaboration for Manufacturing Industry - Full Report
Online Video Collaboration for Manufacturing Industry - Full ReportAbhizar Bootwala
 
Liability Insurance: An Indian Perspective
Liability Insurance: An Indian PerspectiveLiability Insurance: An Indian Perspective
Liability Insurance: An Indian PerspectiveAbhizar Bootwala
 
Opening a Hotel in Khajurao: A Business Simulation Project
Opening a Hotel in Khajurao: A Business Simulation ProjectOpening a Hotel in Khajurao: A Business Simulation Project
Opening a Hotel in Khajurao: A Business Simulation ProjectAbhizar Bootwala
 
Australia & New Zealand Foreign Trade & Relationship with India
Australia & New Zealand Foreign Trade & Relationship with IndiaAustralia & New Zealand Foreign Trade & Relationship with India
Australia & New Zealand Foreign Trade & Relationship with IndiaAbhizar Bootwala
 
Tata Nano: Erasing A Negative Perspective (Advertising)
Tata Nano: Erasing A Negative Perspective (Advertising)Tata Nano: Erasing A Negative Perspective (Advertising)
Tata Nano: Erasing A Negative Perspective (Advertising)Abhizar Bootwala
 
Energy Drinks Market In India (Red Bull Focus)
Energy Drinks Market In India (Red Bull Focus)Energy Drinks Market In India (Red Bull Focus)
Energy Drinks Market In India (Red Bull Focus)Abhizar Bootwala
 

More from Abhizar Bootwala (7)

Online Video Collaboration for Manufacturing Industry - Summary Report
Online Video Collaboration for Manufacturing Industry - Summary ReportOnline Video Collaboration for Manufacturing Industry - Summary Report
Online Video Collaboration for Manufacturing Industry - Summary Report
 
Online Video Collaboration for Manufacturing Industry - Full Report
Online Video Collaboration for Manufacturing Industry - Full ReportOnline Video Collaboration for Manufacturing Industry - Full Report
Online Video Collaboration for Manufacturing Industry - Full Report
 
Liability Insurance: An Indian Perspective
Liability Insurance: An Indian PerspectiveLiability Insurance: An Indian Perspective
Liability Insurance: An Indian Perspective
 
Opening a Hotel in Khajurao: A Business Simulation Project
Opening a Hotel in Khajurao: A Business Simulation ProjectOpening a Hotel in Khajurao: A Business Simulation Project
Opening a Hotel in Khajurao: A Business Simulation Project
 
Australia & New Zealand Foreign Trade & Relationship with India
Australia & New Zealand Foreign Trade & Relationship with IndiaAustralia & New Zealand Foreign Trade & Relationship with India
Australia & New Zealand Foreign Trade & Relationship with India
 
Tata Nano: Erasing A Negative Perspective (Advertising)
Tata Nano: Erasing A Negative Perspective (Advertising)Tata Nano: Erasing A Negative Perspective (Advertising)
Tata Nano: Erasing A Negative Perspective (Advertising)
 
Energy Drinks Market In India (Red Bull Focus)
Energy Drinks Market In India (Red Bull Focus)Energy Drinks Market In India (Red Bull Focus)
Energy Drinks Market In India (Red Bull Focus)
 

Recently uploaded

Memorándum de Entendimiento (MoU) entre Codelco y SQM
Memorándum de Entendimiento (MoU) entre Codelco y SQMMemorándum de Entendimiento (MoU) entre Codelco y SQM
Memorándum de Entendimiento (MoU) entre Codelco y SQMVoces Mineras
 
Entrepreneurship lessons in Philippines
Entrepreneurship lessons in  PhilippinesEntrepreneurship lessons in  Philippines
Entrepreneurship lessons in PhilippinesDavidSamuel525586
 
Introducing the Analogic framework for business planning applications
Introducing the Analogic framework for business planning applicationsIntroducing the Analogic framework for business planning applications
Introducing the Analogic framework for business planning applicationsKnowledgeSeed
 
Church Building Grants To Assist With New Construction, Additions, And Restor...
Church Building Grants To Assist With New Construction, Additions, And Restor...Church Building Grants To Assist With New Construction, Additions, And Restor...
Church Building Grants To Assist With New Construction, Additions, And Restor...Americas Got Grants
 
Excvation Safety for safety officers reference
Excvation Safety for safety officers referenceExcvation Safety for safety officers reference
Excvation Safety for safety officers referencessuser2c065e
 
Guide Complete Set of Residential Architectural Drawings PDF
Guide Complete Set of Residential Architectural Drawings PDFGuide Complete Set of Residential Architectural Drawings PDF
Guide Complete Set of Residential Architectural Drawings PDFChandresh Chudasama
 
Appkodes Tinder Clone Script with Customisable Solutions.pptx
Appkodes Tinder Clone Script with Customisable Solutions.pptxAppkodes Tinder Clone Script with Customisable Solutions.pptx
Appkodes Tinder Clone Script with Customisable Solutions.pptxappkodes
 
How Generative AI Is Transforming Your Business | Byond Growth Insights | Apr...
How Generative AI Is Transforming Your Business | Byond Growth Insights | Apr...How Generative AI Is Transforming Your Business | Byond Growth Insights | Apr...
How Generative AI Is Transforming Your Business | Byond Growth Insights | Apr...Hector Del Castillo, CPM, CPMM
 
The McKinsey 7S Framework: A Holistic Approach to Harmonizing All Parts of th...
The McKinsey 7S Framework: A Holistic Approach to Harmonizing All Parts of th...The McKinsey 7S Framework: A Holistic Approach to Harmonizing All Parts of th...
The McKinsey 7S Framework: A Holistic Approach to Harmonizing All Parts of th...Operational Excellence Consulting
 
Onemonitar Android Spy App Features: Explore Advanced Monitoring Capabilities
Onemonitar Android Spy App Features: Explore Advanced Monitoring CapabilitiesOnemonitar Android Spy App Features: Explore Advanced Monitoring Capabilities
Onemonitar Android Spy App Features: Explore Advanced Monitoring CapabilitiesOne Monitar
 
Unveiling the Soundscape Music for Psychedelic Experiences
Unveiling the Soundscape Music for Psychedelic ExperiencesUnveiling the Soundscape Music for Psychedelic Experiences
Unveiling the Soundscape Music for Psychedelic ExperiencesDoe Paoro
 
20220816-EthicsGrade_Scorecard-JP_Morgan_Chase-Q2-63_57.pdf
20220816-EthicsGrade_Scorecard-JP_Morgan_Chase-Q2-63_57.pdf20220816-EthicsGrade_Scorecard-JP_Morgan_Chase-Q2-63_57.pdf
20220816-EthicsGrade_Scorecard-JP_Morgan_Chase-Q2-63_57.pdfChris Skinner
 
BAILMENT & PLEDGE business law notes.pptx
BAILMENT & PLEDGE business law notes.pptxBAILMENT & PLEDGE business law notes.pptx
BAILMENT & PLEDGE business law notes.pptxran17april2001
 
TriStar Gold Corporate Presentation - April 2024
TriStar Gold Corporate Presentation - April 2024TriStar Gold Corporate Presentation - April 2024
TriStar Gold Corporate Presentation - April 2024Adnet Communications
 
digital marketing , introduction of digital marketing
digital marketing , introduction of digital marketingdigital marketing , introduction of digital marketing
digital marketing , introduction of digital marketingrajputmeenakshi733
 
Jewish Resources in the Family Resource Centre
Jewish Resources in the Family Resource CentreJewish Resources in the Family Resource Centre
Jewish Resources in the Family Resource CentreNZSG
 
Planetary and Vedic Yagyas Bring Positive Impacts in Life
Planetary and Vedic Yagyas Bring Positive Impacts in LifePlanetary and Vedic Yagyas Bring Positive Impacts in Life
Planetary and Vedic Yagyas Bring Positive Impacts in LifeBhavana Pujan Kendra
 
Send Files | Sendbig.comSend Files | Sendbig.com
Send Files | Sendbig.comSend Files | Sendbig.comSend Files | Sendbig.comSend Files | Sendbig.com
Send Files | Sendbig.comSend Files | Sendbig.comSendBig4
 
WSMM Technology February.March Newsletter_vF.pdf
WSMM Technology February.March Newsletter_vF.pdfWSMM Technology February.March Newsletter_vF.pdf
WSMM Technology February.March Newsletter_vF.pdfJamesConcepcion7
 
Darshan Hiranandani [News About Next CEO].pdf
Darshan Hiranandani [News About Next CEO].pdfDarshan Hiranandani [News About Next CEO].pdf
Darshan Hiranandani [News About Next CEO].pdfShashank Mehta
 

Recently uploaded (20)

Memorándum de Entendimiento (MoU) entre Codelco y SQM
Memorándum de Entendimiento (MoU) entre Codelco y SQMMemorándum de Entendimiento (MoU) entre Codelco y SQM
Memorándum de Entendimiento (MoU) entre Codelco y SQM
 
Entrepreneurship lessons in Philippines
Entrepreneurship lessons in  PhilippinesEntrepreneurship lessons in  Philippines
Entrepreneurship lessons in Philippines
 
Introducing the Analogic framework for business planning applications
Introducing the Analogic framework for business planning applicationsIntroducing the Analogic framework for business planning applications
Introducing the Analogic framework for business planning applications
 
Church Building Grants To Assist With New Construction, Additions, And Restor...
Church Building Grants To Assist With New Construction, Additions, And Restor...Church Building Grants To Assist With New Construction, Additions, And Restor...
Church Building Grants To Assist With New Construction, Additions, And Restor...
 
Excvation Safety for safety officers reference
Excvation Safety for safety officers referenceExcvation Safety for safety officers reference
Excvation Safety for safety officers reference
 
Guide Complete Set of Residential Architectural Drawings PDF
Guide Complete Set of Residential Architectural Drawings PDFGuide Complete Set of Residential Architectural Drawings PDF
Guide Complete Set of Residential Architectural Drawings PDF
 
Appkodes Tinder Clone Script with Customisable Solutions.pptx
Appkodes Tinder Clone Script with Customisable Solutions.pptxAppkodes Tinder Clone Script with Customisable Solutions.pptx
Appkodes Tinder Clone Script with Customisable Solutions.pptx
 
How Generative AI Is Transforming Your Business | Byond Growth Insights | Apr...
How Generative AI Is Transforming Your Business | Byond Growth Insights | Apr...How Generative AI Is Transforming Your Business | Byond Growth Insights | Apr...
How Generative AI Is Transforming Your Business | Byond Growth Insights | Apr...
 
The McKinsey 7S Framework: A Holistic Approach to Harmonizing All Parts of th...
The McKinsey 7S Framework: A Holistic Approach to Harmonizing All Parts of th...The McKinsey 7S Framework: A Holistic Approach to Harmonizing All Parts of th...
The McKinsey 7S Framework: A Holistic Approach to Harmonizing All Parts of th...
 
Onemonitar Android Spy App Features: Explore Advanced Monitoring Capabilities
Onemonitar Android Spy App Features: Explore Advanced Monitoring CapabilitiesOnemonitar Android Spy App Features: Explore Advanced Monitoring Capabilities
Onemonitar Android Spy App Features: Explore Advanced Monitoring Capabilities
 
Unveiling the Soundscape Music for Psychedelic Experiences
Unveiling the Soundscape Music for Psychedelic ExperiencesUnveiling the Soundscape Music for Psychedelic Experiences
Unveiling the Soundscape Music for Psychedelic Experiences
 
20220816-EthicsGrade_Scorecard-JP_Morgan_Chase-Q2-63_57.pdf
20220816-EthicsGrade_Scorecard-JP_Morgan_Chase-Q2-63_57.pdf20220816-EthicsGrade_Scorecard-JP_Morgan_Chase-Q2-63_57.pdf
20220816-EthicsGrade_Scorecard-JP_Morgan_Chase-Q2-63_57.pdf
 
BAILMENT & PLEDGE business law notes.pptx
BAILMENT & PLEDGE business law notes.pptxBAILMENT & PLEDGE business law notes.pptx
BAILMENT & PLEDGE business law notes.pptx
 
TriStar Gold Corporate Presentation - April 2024
TriStar Gold Corporate Presentation - April 2024TriStar Gold Corporate Presentation - April 2024
TriStar Gold Corporate Presentation - April 2024
 
digital marketing , introduction of digital marketing
digital marketing , introduction of digital marketingdigital marketing , introduction of digital marketing
digital marketing , introduction of digital marketing
 
Jewish Resources in the Family Resource Centre
Jewish Resources in the Family Resource CentreJewish Resources in the Family Resource Centre
Jewish Resources in the Family Resource Centre
 
Planetary and Vedic Yagyas Bring Positive Impacts in Life
Planetary and Vedic Yagyas Bring Positive Impacts in LifePlanetary and Vedic Yagyas Bring Positive Impacts in Life
Planetary and Vedic Yagyas Bring Positive Impacts in Life
 
Send Files | Sendbig.comSend Files | Sendbig.com
Send Files | Sendbig.comSend Files | Sendbig.comSend Files | Sendbig.comSend Files | Sendbig.com
Send Files | Sendbig.comSend Files | Sendbig.com
 
WSMM Technology February.March Newsletter_vF.pdf
WSMM Technology February.March Newsletter_vF.pdfWSMM Technology February.March Newsletter_vF.pdf
WSMM Technology February.March Newsletter_vF.pdf
 
Darshan Hiranandani [News About Next CEO].pdf
Darshan Hiranandani [News About Next CEO].pdfDarshan Hiranandani [News About Next CEO].pdf
Darshan Hiranandani [News About Next CEO].pdf
 

Coca Cola: Belgian PR Crisis

  • 1. Principles of Management & It’s Domiciliary in “The Emerging Markets” A Presentation by.. Abhizar Bootwala
  • 2.
  • 3. The Company.. • Pharmacist, John Styth Pemberton first introduced the refreshing taste of Coca-Cola in Atlanta, Georgia in 1886. Pemberton concocted a caramel-coloured syrup in a brass kettle in his backyard. He first "distributed" the new product by carrying Coca-Cola in a jug down the street to Jacobs Pharmacy. • Initially sold as a patent medicine for 5 cents a glass. • Pemberton claimed that it cured diseases such as headache, impotence, and morphine addiction.
  • 5. The yester years.. • 1886 - Sales of Coca-Cola averaged nine drinks per day. • 1887 - Businessman Asa Griggs Candler acquires stake in the company and in 1888 incorporates it as the Coca Cola company. • 1893 - In January "Coca-Cola" was registered in the U.S. Patent office. • 1917 - 3 Million Coke's sold per day. • 1919 - Buy-over of Coca-Cola to business-man Asa Griggs Candler for $ 25 million. • 1925 - 6 Million Coke's sold per day. • 1927 - The first Coca-Cola Radio advertisement. • 1929 - Coca-Cola was made available through vending machines. • 1950 – First television Advertisement. • 1977 - The Coca-Cola contour bottle was patented. • 1978 - Two litre plastic bottles introduced.
  • 6. • 1982 - Diet Coke was introduced in July targeting health conscious consumers. • 1993 - Coca-Cola exceeds sales of 10 Billion cases worldwide. • 1993 - Advertising slogan -"Always Coca-Cola". • 1995 – Coke consumed aboard the Space Shuttle Discovery • 1907-1948 The Coca-Cola expands its bottling operations in: Hawaii, Philippines, France, Belgium, Bermuda, Colombia, Honduras, Italy, Mexico, Haiti and Burma, China, Guatemala, Holland, Spain, Venezuela, Morocco, Germany, Australia, Scotland and many more.
  • 7. Prologue: • 1999 - Coca-Cola Enterprises has one of their worst public relations nightmare in its 113 year history. • 8th June, 1999 - Students in Bornem, Belgium noticed that the coke they had purchased had a bad smell. School administrators called the Coca- Cola Enterprises (CCE) plant that morning to complain. • CCE is a European bottler owned 40% by Coca-Cola with plants in Antewerp, Dunkirk & Ghent. • At the same in the town of Belsele, city officials called and complained of bad smelling coke from vending machines • Now Coca-Cola realized that a crisis was occurring.
  • 8. • 14th June, 1999 - Luc Van den Bossche bans sales of all Coca-Cola soft drinks from the three plants Antwerp, Dunkirk, and Ghent. CCE withdraws15 million cans and bottles. • Coca-Cola, Coca-Cola Light, Sprite, Nestea, Aquarius lemon, orange, and grapefruit, Bon Aqua, Kinley Tonic and Lilt. • However continues to mishandle the situation by not giving clear information to the public and health officials. They declared that there was no real problem and all bottles with codes DU, DV and DW had been removed. • Despite this 38 more students became ill. • CCE later realises that list was incomplete and that all cans stamped with the code DX and DP should have been removed. • Problems continue. France officials complained that incorrect information was being provided by CCE.
  • 9. • With additional problems being reported in France, Coca-Cola finally put its public relations damage control into action. • 24th June, 1999 – Belgian health authorities end a 10 day ban on Coke products. • 25th June, 1999 - CCE holds a news conference in Brussels denying that the drinks posed any health risk. • Douglas Ivester CEO and Chairman said that production would resume immediately and that he expected Coca-Cola products to be back in Belgian stores within two weeks. He also offered to pay medical costs if anyone fell ill. • Damage had already been done. • Information was delayed and often misleading. • People in Europe lost confidence in Coca-Cola products. • At least 100 people became legitimately sick.
  • 10. Predicament: • Coca-Cola's financial performance suffered a major setback due to the Belgian crisis. • Negatve impact on Coca-Cola's overall second-quarter net income in the fiscal year 1999, coming down by 21% to $942 million. • Entire operation of destroying recalled products cost CCE $103 million • 5% decline in the bottler's revenues. • 6% decline in cash operating profit.
  • 11. SWOT Fragmentation Strengths: • Strong brand recognition across the globe. • Coca-Cola is the second most recognizable phrase after “Ok”. • Company valued at $ 67000 Million in 2006. • It has become a part of the World culture. Emotional attachment with the brand. • Owns 4 of the top 5 soft drink brands in the world: Coca-Cola, Diet coke, Sprite and Fanta. • Largest manufacturer, distributor and marketer of non-alcoholic beverages. • Operations supported by strong infrastructure owning 32 beverage concentrate and syrup manufacturing plants. Also now manufactures juice concentrate. • Aggressive branding and advertizing resulted in re-building a powerful image of the company
  • 12. Weaknesses: • The proposition demonstrated the gap in capabilities of the company officials as they issued statements contradicting one another. • An apology to consumers came more than a week after the first public reports that people had fallen ill. It was not until June 18,10 days after the first schoolboy became dizzy and nauseated after drinking a Coke that top company officials arrived in Belgium. And when Coke did begin to respond, it tried to minimize the reports of illness. • Also the company officials initially viewed the contamination to be a minor problem clearly proving the lack of foresight. • Being addicted to Coca-Cola also is a health problem, and has other side- effects on teeth which is an issue for health care.
  • 13. • Sheer carelessness, chaos, panic caused an incomplete transmission of recall codes further worsening the case. • All of these un-coordinated and disarrayed activities led to the ban on sales of all of Coke’s products. The situation had worsened to the extent that the health minister of France was quoted saying that “That a company so expert in advertising and marketing should be so poor in communicating on this matter is astonishing.” • This definitely had an evident effect on the sales numbers and the revenue of the company.
  • 14. Opportunity: • Coca-Cola’s bottling system also allows the company to take advantage of the infinite growth opportunities around the world. • The incident of the European children gave Coca-Cola the opportunity to develop a system that will quickly respond to crisis. • This incident also gave the company an opportunity to look into other avenues of solutions and not to just rely on the first instinct. • These opportunities improves the brand image and also will help increase the affection for the company in the hearts of the people.
  • 15. Threats: • Such a crisis also has the competitors on their heels de-faming the brand name as is evident with the advertisement campaigns amidst the cola wars. • The consumers can easily switch to other beverages with little cost or consequences. • With Coca-Cola not responding neither quickly nor with its senior most spokesperson it definitely threatened the company’s image as 74% of the sales revenue was being generated from the European nations. • Such an incident can also result in the withdrawal and even severing of support from the co-branding partners where a good amount of revenue is generated by means of sponsorship and partnership. • With the company taking such a weak stand for the issue its also faced dejection from the political and the legislative fronts of the locale.
  • 16. Synopsis: • The planning and implementation process of the SWOT analysis of the problem clearly highlights the importance of a crisis management plan so that major areas of vulnerability can be identified and therefore addressed. • Response time is critical in minimizing damage to image and/or brand image. • Contingency planning is crucial to ultimate success in dealing with opportunities and threats to companies. • Moreover, because factors of impact vary from country to country and culture to culture, it is very important that response plans are developed for each location and include input from local management and public officials. • We must understand that Perception does become Reality. In this case, the company’s silence as they attempted to identify the source of the problem led to a loss of public confidence. • The longer the management delays a response, the more the opportunity for permanent damage to the psychological bond that connects the consumer to company image and reputation.
  • 17. • The crisis management was more complicated in Coke’s crisis as the bottler’s were not owned directly by the parent company. • Thus the company needs some way to bring members of its top corporate management together with other decision makers and other information providers so that a response can be made public quickly. • It took CCE an entire week to get Douglas Ivester, Coke’s CEO to Europe. In a crisis of such a magnitude, the public looks for the No. 1 person to be doing something significant. • So while we do not know what Coke’s crisis management process was, it appears not to have moved speedily. • It is also important that the company have evolved a culture that in a crisis like this will put foremost on the table the health of the customer. • In coke’s instance the company had information about people who had become ill weeks prior to these incidents. They should have released that information. Instead they chose to not disclose the same thinking that it was irrelevant. • Even though you feel the information is irrelevant, one should get it out – because that allows people who may think it is relevant to go through whatever process they want to go through.
  • 18. • It is imperative that the local personnel who have built a rapport and credibility with the local customers and political units be included as a visible part of the immediate response plan. In our case, there was a recent change in the political leadership in Belgium, and the necessary rapport between the company and the government had not been established. • Another important consideration in critical incidents such as this is the preservation of brand image. Thus nostalgic memories, product, confidence of the people in the company and other such intangibles must be maintained to preserve and protect the company and its long term position in the market.