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Crisis Management Final


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Crisis Management Final

  2. 2. OBJECTIVES<br /><ul><li>Importance of Communication and Crisis Management
  3. 3. Some cases of Crisis Faced by renowned Companies (JOHNSON & JOHNSON</li></ul> and BAUSCH & LOMB)<br /><ul><li> Corporate Communication
  4. 4. Crisis Communication Failure : The Bhopal Gas Tragedy (1984)
  5. 5. Communication Goof-Up : Motron Add</li></li></ul><li>IMPORTANCE OF COMMUNICATION<br />How your business manages or fails : The communication game may make or break your business.<br />Your business units may have performed excellently well but failure to confront the matter tactfully will lead your business nowhere except a ditch.<br />
  6. 6. INFORMATION DISCLOSURE<br />A crisis creates an Information Vacum that needs to be filled as soon as possible. <br />Do not wait for too long to take action in case of a crisis situation.<br />If the void isn’t filled timely, your competitor will, and they may not have the best interest of your business in mind.<br />
  7. 7. COMPANIES IN CRISIS<br />Johnson & Johnson : Tylenol<br />BAUSCH & LOMB ReNu MOISTURE LOC<br />
  8. 8. Case 1 : JOHNSON & JOHNSON ‘s TYLENOL<br />In 1982, Johnson & Johnson&apos;s Tylenol medicine commanded 35 per cent of the US over-the-counter analgesic market – accounting for 15 p.c. of the company&apos;s profits.<br />The drug accidently got laced with cyanide, consequently seven people died <br />Widespread panic was there, all fearing that it might take epidemic form.<br />Contd. . . . . .<br />
  9. 9. It acted quickly – recalling Tylenol from all the outlets.<br />Decided product not to be re-established on the shelves until better product protection is developed.<br />Finally, the firm came out with Tamperproof Packaging, to prevent such similar incidents in future.<br />Contd. . . . .<br />
  10. 10. The features that made J & J crisis handling a success in this case were that :<br />They acted quickly.<br /> They made a conscious effort to ensure that immediate corrective measures were taken to avoid recurrence of the problem in future.<br />They showed themselves to be putting up Consumer Safety on the First Priority (even at the cost of some losses), thereby establishing a basis for Trust among the customers.<br />
  11. 11. CASE 2 : BAUSCH & LOMB<br />January 2006, Singapore : Health officials noticed a sudden increase in the number of cases of keratitis reported by contact lens users. <br />February 2006 : Singapore&apos;s Ministry of Health alerts the public stating, 18 of the 22 patients affected by keratitis, used ReNu Moisture Loc. <br />39 cases of keratitis discovered between Jan. - Feb. 2006 in Singapore, 34 patients confirmed of using ReNu Moisture Loc. <br />Similar cases reported in Malaysia and Hong Kong too.<br />Contd. . . .<br />
  12. 12. In February 2006, B&L stopped shipments of ReNuMoistureLoc to Singapore and Hong Kong, still maintaining that the infection was not linked to their product. <br />As B & L stopped shipments of ReNuMoistureLoc, US retail giants like CVS Corp. (CVS), Wal-Mart Stores, Inc., Walgreen Co. (Walgreens) pulled ReNuMoistureLoc off their store shelves. <br />Contd. . . . .<br />
  13. 13. Crisis Management at Bausch & Lomb –The ReNu Moisture Loc Controversy<br />&quot;Bausch & Lomb&apos;s first priority is the health and safety of consumers. If there is a problem with our product (ReNu with Moisture Loc), we&apos;ll find it and we&apos;ll fix it. If there&apos;s not, when we come back, you&apos;ll be able to know with absolute certainty that we&apos;ve taken every possible step to ensure your safety.&quot; <br /> - Ronald Zarrella, CEO, Bausch & Lomb Inc. (B&L)<br />Contd. . . . . <br />
  14. 14. April, 2006: B & L voluntarily, asks US retailers to temporarily remove ReNu Moisture Loc from their shelves. <br />Recommends consumers switch to other lens care solutions, while the investigation is on.<br />However, the organization had not done enough to inform the 30 million wearers of contact lenses in the US about the full extent of the problem. <br />Analysts felt that B&L should have informed the public about the health issues linked with ReNuMoistureLoc as soon as it had come to know about it. <br />
  15. 15. WHAT IS CORPORATE COMMUNICATION?<br />Wikipedia defines it as Communication which goes to all staff. <br />It serves as the liaison between an organization and its publics. <br />Organizations can strategically communicate to their audiences through Public Relations and Advertising functions.<br />Typically responsible for production of :<br /><ul><li>The Annual Reports
  16. 16. Promotional Brochures
  17. 17. Employee Communications </li></li></ul><li>DIFFERENCES BETWEEN MARKETING and CORPORATE COMMUNICATIONS<br /> MARKETING CORPORATE<br />customer multiple stakeholders<br />defined set of channels multiple channels<br />controlled communication variety of communication types<br />positions a product or service positions an entire organization <br />more room for creativity less room for creativity<br />needs to be consistent with needs to be consistent product/ brand attributes with corporate/identity attributes<br />
  18. 18. The Trade<br />InfluentialGroups<br />Government(s)<br />Business Partners<br />The Media<br />Local<br />Financial<br />Prospective Employees<br />Customers<br />General Public<br />Internal<br />THE CORPORATE COMMUNICATIONS WHEEL<br />O<br />R<br />N<br />I<br />M<br />V<br />E<br />Products/ Services<br />Advertising<br />N<br />N<br />The<br />Industry<br />E<br />Direct Marketing<br />and<br /> Correspondence<br />Sponsorship<br />T<br />Brand<br />Corporate<br />NewMedia<br />Corporate & Marketing PR<br />THECORPORATION<br />Alliances<br />Permanent Media<br />Business<br />Personal Presentation<br />Country of Origin<br />and<br />T<br />Partnerships<br />E<br />Point of Sale<br />Impersonal Presentation<br />N<br />N<br />Literature<br />E<br />V<br />M<br />The Corporate Communications Wheel: Balmer and Greyser. (Adapted from D. Bernstein (1984))<br />I<br />R<br />N<br />O<br />
  19. 19. Crisis Communication Failure : BHOPAL GAS TRAGEDY (1984)<br />Leakage of toxic gases from UCIL’s pesticide plant in Bhopal exposing more than 500,000 people. <br />One of the world’s worst Industrial disasters till date.<br />During the night of December 2-3, 1984, large amounts of water entered tank 610, containing 42 tonnes of methyl iso-cyanate. <br />The resulting reaction raised the pressure, forcing emergency venting of pressure from the MIC holding tank, releasing a large volume of toxic gases.<br />Presence of iron in corroding non-stainless steel pipelines accelerated the reaction and a mixture of poisonous gases flooded the city of Bhopal, causing massive panic as people woke up with a burning sensation in their lungs.<br />
  20. 20.
  21. 21. Communication Issues In Bhopal Gas Tragedy <br />Safety Measures Instruction Manuals were in English only and not in local language.<br />Vast cross-cultural differences between the parent company and their Indian Counterparts.<br />The Authorities did not communicate with people and Govt. on time; ran away from their CSR.<br /> Inadequate alarming systems for meeting crisis situations like this.<br />Huge Mgmt. gap and inter-institutional communication between UCIL and their Indian Counterparts.<br />
  22. 22. Communication Goof-Up : Motrin Add<br />
  23. 23. The ad suggested that moms who “wear” their babies on their bodies were “tired” and “cranky” and are just burdened down with being connected to their babies all of the time.<br />What we say or what is said in advertising is crucial to the marketing impact that is made with consumers. <br />After a flurry of emails, backlashes from bloggers and phone complaints, they immediately offered a statement of apology and promptly removed the ad from their site. <br />
  24. 24. I am the Vice President of Marketing for McNeil Consumer healthcare. I have responsibility for the Motrin Brand, and am responding to concerns about recent advertising on our website. I am, myself, a mom of 3 daughters. We certainly did not mean to offend moms through our advertising. Instead, we had intended to demonstrate genuine sympathy and appreciation for all that parents do for their babies. We believe deeply that moms know best and we sincerely apologize for disappointing you. Please know that we take your feedback seriously and will take swift action with regard to this ad. We are in process of removing it from our website. It will take longer, unfortunately, for it to be removed from magazine print as it is currently on newstands and in distribution.<br />-Kathy<br />Kathy Widmer<br />VP of Marketing - Pain, Pediatrics, GI, Specialty<br />McNeil Consumer Healthcare<br />215-273-8192<br /><br />
  25. 25. Questions ?<br />
  26. 26. THANK YOU<br /><br />