Cadbury faced crisis regarding contamination. and how Cadbury used 2 phase strategy to enhance the reputation and credibility.

2. 
Cadbury’s worm controversy.

RISHABH ANAND (PATHANKOT)

LOVELY PROFESSIONAL
UNIVERSITY.

3. Introduction

In 1824, John Cadbury began selling
tea, coffee, and drinking chocolate, which
he produced himself, at Bull Street in
Birmingham, England.

He later moved into the production of a
variety
of
cocoa
and
drinking
chocolates, made in a factory in Bridge
Street .

4. 
John Cadbury became a partner with his
brother Benjamin and the company they
formed was called ‘Cadbury Brothers of
Birmingham’.

5. 

British confectionery company owned
by Mondelēz International
Industry's second-largest co.

Cadbury India began its operations in
India in 1948 by importing chocolates.

Operates in categories – Chocolate
confectionery, Beverages, Biscuits, Can
dy etc.

6. Portfolio

8. Recent conflict

9. Crisis
It is a major unpredictable event that
threatens to harm an operation,
reputation of organization.
 This can result in public scrutiny.
 Effect organization’s normal working.
 Also have some political, legal,
financial impacts on it.


10. Company will be judged on
How much care was taken to prevent
the issue arising in the first place.
 How quickly it respond and managed
the issue
 How well did it communicate?


11. Characteristics of good crisis
mgt.

Fast and active communication

Ability to admit mistakes.

Full appreciation of the needs of all
stakeholders

Clear recovery stage.

Consistent corporate messages.

13. ….and then the worms crawled in

14. Crisis

Just a month before Diwali FDA
Commissioner received complaints about
infestation in two bars of Cadbury Dairy
Milk.

15. 
In eight outlets across Maharashtra,
worms were found in some bars of
Cadbury Dairy Milk.

Inquiry was instituted by the Food and
Drug Administration and negative media
publicity spread like wildfire.

Consequently, sales volume plummeted,
retailer cooperation lessened and
employee morale dwindled. All in all, the
company's credibility suffered extensive
damage

16. Crisis
Reputation and credibility was under
intense scrutiny.
 Sales volumes came down drastically in
the first 10 weeks.
 Employee morale – especially that of the
sales team – was shaken.
 Due to which media coverage touched
close to 1000 clips in print and 120 on TV
news channels.
 People even assumed that every
chocolate could be contaminated.


17. PROBLEMS FACED BY CADBURY
 Cadbury
India Ltd. has begun investigations into reports
that live worms were found in its Dairy Milk chocolate
bars,
 Cadbury’s
statement : We are concerned about these
reports and are investigating it," a company spokesperson
said.
 The
Maharashtra Food and Drugs Administration (FDA)
had announced Monday that it would prosecute Cadbury
India Ltd. after tests indicated "insect infestations" in the
chocolate samples tested.

18. Cadbury’s statement
Infestation was not possible at the
manufacturing stage.
 Raised finger on retailers for
poor/improper storage.
 FDA didn’t accepted that.


It was followed by allegations and
counter allegations.

19. It is storage linked problem.
Not manufacturing linked.
Counter strikes by hitting on packaging of Cadbury.
What about packaging????

20. 
Effects
S
A
L
E
S
30%
Heat of negative publicity

21. CHALLENGE

To Restore confidence in the key
stakeholders.

Build back credibility.

Make customer believe about safety.

To increase the sales.

22. Objectives
To communicate that
 Infestation could never occur at the
manufacturing stage.
 The problem was storage linked.
 Cadbury Dairy Milk continued to be
safe for consumption.
 Let its brands and its performance
speak for it.

23. Remedy
Infestation was Storage-linked
problem, not manufacturing related.
 Sales volumes climbed back.
 Responsiveness of company.
 Significant upward movement in
ratings.


*(They went compared with cola
infestation)

24. We know
you love
it… but
was it
all that
easy ????

25. Project ‘Vishwas’
Set up a media desk to ensure that no
media query went unanswered.
 Key messages.
 Consumers must exercise the same
care.
 Retailed monitored and education
program.
 Significant packaging.
 Toll free num. & E-mail.


29. Phase 2:
In media conference new packaging was
introduced.
 The new ‘purity sealed’ packaging was
launched.
 By investing up to Rs. 15 crore.
 The metallic poly-flow, was costlier by
15%.
 Cadbury didn’t hike the pack price.
 Double wrapping for maximum protection
to reduce infestation possibility.


30. Phase 2
To communicate these changes
 Mr. Amitabh Bachchan was chosen as
brand ambassador to endorse Cadbury.
 To reinforce the credibility of Cadbury.
 Audio-visual with message from star was
prepared.
 The announcement of new pack was
done through Testimonial Ad.


31. Testimonial

Testimonial or show consists of a
person's written or spoken statement
extolling the virtue of a product.

Some one praising a product after
using it or acts like he had used it and
explaining the benefits.

32. Results
Media Coverage:
 media relationship effort clearly helped
in making people and media accept
the fact.
 Reach 380 clips in 11 different
languages.
Sales:
 Climbed back
 Reflects restoration.

33. Results
Image:
Upward movement.
 Image, response, behavior.
 Positive media coverage.


34. Cadbury’s PR
PR department should be independent
same as other departments so that
he/she can take timely action without
other’s concern.
 PR department of Cadbury played a
great job in managing reputation and
goodwill of their organization.


35. …And
then
they
sold
happily
ever