No matter how careful a company is, bad things can happen to its brands. The part that is within the company’s control is how it decides to handle crises when they occur.
The company most respected for its crisis management capabilities is Johnson & Johnson. When a problem emerges with a Johnson & Johnson brand, the company addresses it immediately, and never tries to cover it up.
For instance, when the company learned that its Tylenol brand of painkillers had been tampered with in a
It ordered that the Tylenol product be taken off the shelves of every outlet in which it was sold, rather than just the specific supermarket where it had been tampered with.
Once the recall was in effect, Johnson & Johnson announced that it would not put Tylenol painkillers back on the market until the product was more securely protected. This meant making sure Tylenol had tamper-proof packaging, and so the company designed individually packaged pills in foil bubbles. Of course, both the recall and the repackaging cost Johnson & Johnson a lot of money, but this short-term loss was more than compensated by the fact that Tylenol’s brand was preserved in the long term. Some experts have argued that the Tylenol brand eventually benefited from the crisis, because consumers were so satisfied and reassured by the company’s response.
Not all brand crises are handled so effectively. In 1990 high levels of the toxic substance benzene were discovered in bottles of Perrier. The company had little choice but to recall the product. Within a week the company withdrew 160 million bottles worldwide.
However, when the media first found out about the problem Perrier did not know what to do. For a brand whose whole identity was based around the idea of ‘natural purity’, the benzene incident was clearly a disaster.
Although the recall had been announced straightaway, Perrier’s information vacuum started to provoke even more consumer anxiety than there would have been otherwise.
Furthermore, although the company set up a 24-hour hotline in the
Perrier therefore made a bad situation worse and failed to tackle the global implications of the crisis.
Of course, the Perrier brand is still fizzing away. Indeed, when Perrier returned to the shelves it was accompanied by the successful ‘Eau! Perrier’ advertising campaign. However, Groupe Perrier was taken over by Nestlé in 1992, and the brand has still not been able to regain its pre-1990 volume share.
Lessons from Perrier
- Don’t hide the truth. ‘Managing news in crisis, not just wars, is not about trying to suppress bad news – that will lose your credibility,’ says Martin Langford, managing director of Burson-Marsteller’s corporate and public affairs practice. ‘Consumers and journalists are far too smart. You’ve got to be dead straight with the media because your employees will be if you’re not.’
- Don’t breach the consumer’s trust. A brand has been defined as the capitalized value of the trust between a consumer and a company. Breach that trust, and the brand is in trouble.
- Accept that global brands need coherent communications policies. A global brand such as Perrier cannot ignore the fact that problems in the
United Stateswill be able to impact on sales in Europe. Such a brand needs a common purpose throughout the organization, so the response to a crisis can be co-ordinated.
- Recognize that some brands’ crises are worse than others. The benzene contamination was the worst possible crisis to afflict a brand associated with natural purity.