Mktg 450

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• Mktg 450
• Session 3
• Winter 2003

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(No Transcript)
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Crisis

• Product becomes linked to unfavorable
  characteristics or events.

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Imaginary Problems

• Imaginary
• Tropical Fantasy

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Tropical Fantasy - 1

• Brooklyn Bottling Company was founded in 1937
• Near bankruptcy in mid-1980s when (33 year-old)
  Eric Miller inherited it from his grandfather.
• Targeted the Jamaican and minority communities of
  New York City
• Product's name changed Crown Glory to Tropical
  Fantasy
• 49 price printed on the bottle cap
• Bottle size increased from 12 oz. to 20 oz.
• Product sales increased 50 to 15 million

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Tropical Fantasy - 2

• In April 1991, a rumor campaign was launched
  against the company
• Handbills were distributed by kids paid 5 by an
  unknown person.

ATTENTION!!! ATTENTION!!!    Please be advise.
Top Pop and Tropical Fantasy, also Treat 50 sodas
are being manufactured by the Klu Klux Klan.
Sodas contain stimulants to sterilize the black
man, and who knows what else!!!   You have been
warned. Save the Children
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Tropical Fantasy 3

• Quickly, the company launched a counterattack.
• A black PR firm was hired to address the media.
• Free samples were distributed and additional
  monies were spent on advertising.
• The company hired a detective firm to find the
  source.
• A spokesperson from the Klu Klux Klan announced
  that they were not in the soft drink bottling
  business
• Minority newspapers printed editorials and
  columns denouncing the rumor.
• About 3 months later, sales returned to normal

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Crisis Management

• Product Design
• PG Rely tampons (toxic shock syndrome) after
  allegations of causing 38 deaths, the brand
  withdrawn from market

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Crisis Management

• Product Tampering
• Tylenol deaths caused by attempt at corporate
  extortion (Chicago)
• Sudafed deaths caused by marital
  strife(Seattle)

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Crisis Management

• Product Design
• PG Rely tampons (toxic shock syndrome) brand
  withdrawn from market
• Audi Sudden Acceleration Syndrome(lost sales
  for many years)

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Audi Sudden Acceleration Syndrome
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Production Labor Problems

• Production
• Fur industry
• Circus Animals
• Makah Indians whale hunting

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Makah Indians
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Production Labor Problems

• Production
• Fur industry
• Circus Animals
• Makah Indians whale hunting
• Labor
• Nike, Kathy Lee Gifford child labor
• Airport security

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McDonalds Study
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Crisis Management

• Product Design
• PG Rely tampons (toxic shock syndrome) brand
  withdrawn from market
• Audi Sudden Acceleration Syndrome(lost sales
  for many years)
• Intel Pentium Chip math error(internet as
  powerful Word of Mouth)
• Quicken Income Tax errors (quick response, no
  lasting effect)

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Production Labor Problems

• Production
• Coca Cola European bottling problems
• Jack in the Box eColi
• Labor
• Nike, Kathy Lee Gifford child labor
• Airport security

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Imaginery Problems

• Imaginary
• Tropical Fantasy
• Corona Beer
• Mountain Dew
• PGs devil worshippers

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Corona
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Mountain Dew
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Mountain Dew
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Mountain Dew
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PG
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Approaches to Crises

• Do Nothing
• Refutation
• Storage strategy
• Retrieval strategy
• Counterattack
• Apologize and go on

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Information Flow in Public Opinion
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Do Little or Nothing

• Microsofts Hidden Messages(why does N Y C N
  Y C)?
• Starbucks Central Area Boycott in reaction to
  police shooting of black man.

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Do Little or Nothing

• When to use information lacks credibility,
  represents a short-term problem and/or is
  unlikely to be widely known.
• Ford anti-environmentalist boycott

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Refutation

• Acknowledge the crisis and then try to dispel it
  or its consequences
• Foreign objects in Diet Pepsi cans
• Ford vs. Firestone

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Information Flow in Public Opinion
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Refutation

• When to use when likely to gain the trust and
  support of the media

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Storage

• When how use early in the crisis to set the
  agenda and influence how individuals think about
  the problem.
• E.g., Clinton-Lewinsky (private action, all about
  sex versus public official lying under oath)
• Microsoft Giving consumers better software not
  destroying the competition.

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Retrieval

• When and how Focus on positive thoughts not
  likely to remind individuals of the problem.
• E.g., Philip Morris Meals on Wheels
• name change
• ALTRIA Latin for high

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Counterattack

• When and How focus on the negatives of the
  individuals spreading information about your
  problem.
• E.g.,
• GM attacks NBC News
• Phillip Morris attacks ABC News
• Political quick response teams

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Apologize and Go On

• When and How other methods will be ineffective
  or will prolong the problem
• E.g., Lee Iacocca apologized for Chryslers
  turning back the odometer on cars before
  reselling them

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(No Transcript)
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Approaches to Crises

• Do Nothing
• Refutation
• Storage strategy
• Retrieval strategy
• Counterattack
• Apologize and go on