Question

11.2 Public Relations Crisis Communication Discussion

Public Relations communication is an extremely effective means of developing social capital for companies when it is handled well.  

Crisis communication is another type of bad-news communication, and how this type of communication is handled often determines the success, or failure, of a company; and the future outcome for entire industries.  

Often during, or following, a crisis the organization might incorporate some use of public relations communication to assist the public in understanding how the organization is handling the crisis and how they are trying to mitigate the consequences of the crisis.

Do some online searching and find a crisis situation. Read about how that crisis was handled, and how communication was provided from a public relations standpoint and also from a crisis standpoint. Submit a discussion post evaluating how the communication was handled and suggesting how it might be handled more appropriately.

Answer 1

Whenever the topic of Crisis management is considered in India. The most important case that comes to mind is the Cadbury Crisis of 2003.

In October 2003, just a month before Diwali, Cadbury found itself in deep trouble when a few instances of worm-infested Dairy Milk bars were reported in Maharashtra. The Maharashtra Food and Drug Administration was quick to respond and seized the inventory at Cadbury’s Pune plant.

The company took the crisis head-on and responded by launching a PR campaign within three weeks of the controversy. Cadbury issued a statement claiming that infestation was impossible at the manufacturing stage and it was the poor storage by the retailers that were the likely cause of the infestation. But the FDA did not entertain this explanation as infestation at the storage level indicated improper packaging. Either way, it was assumed to be a manufacturing defect with unhygienic conditions or improper packaging. These exchanges between Cadbury and the FDA resulted in a 30% reduction in sales during the Diwali period which usually gives the company a 15% spike in sales. Things looked bleak, as Cadbury’s advertising was turned off and consumers refused to take a risk in the wake of the crisis.

As a crisis management plan:

Cadbury launched Project Vishwas that addressed consumers, media, and employees emphasising quality checks, product knowledge, and storage tips. It also installed a media desk to respond to any queries with respect to the product.

Cadbury’s MD and a key spokesperson had a direct conversation with media editors as part of an ‘Outreach’ program in 2003.

But the most important action to bring Cadbury back on track was undertaken in January 2004. The company invested Rs. 15 crores on imported machinery to revamp the packaging of Dairy Milk. The double packaging and metallic poly flow encasing cost the company an extra 10-15%, but Cadbury did not raise the packaging price.

Furthermore, Cadbury roped in Amitabh Bachchan as a brand ambassador, a man who gained the respect of Indians for decades because of his humble, honest, and integrity-driven persona. Amitabh Bachchan put his reputation on the line and got involved in some heavy-duty endorsement to pull Cadbury out of the crisis. These activities supported by a 15 percent hike in ad spending gave a glimmer of hope that the crisis was about to end.

Buy June 2004, the efforts of Cadbury reaped its rewards. Consumer confidence was back as the brand emotionally resonated with the consumers. Since the brand always had an emotional connection with the audience, they saw this crisis as an unintentional mistake rather than a betrayal by the brand.

Following this, the sales quickly rose back to pre-crisis levels. The main reason for the success of Cadbury’s crisis management was its quick response to the situation and its ability to tackle the situation in such a way that it would instil a sense of appreciation within the consumers. Post the crisis, Cadbury conducts its supply chain process with great caution and as a result it has not faced any controversy since then, and it continues to lead the Indian chocolate market.