Coca Cola Crisis in India 2003 - Assignment Example

Questions and Answers What are the key problems that Gupta should face in the long and the short term? The first and most rational issue that Gupta faces is to ensure that any and all traces of toxins are summarily removed from Coca Cola products and distributions networks. Only then will it be possible to consider what the next logical move for the company should be. Due to the fact that the issues that have been noted in the case study appear to be a systemic type of problem associated with poor quality control and inattention to the health and safety of the environment and the product, it will be further necessary for the Coca Cola Beverage Company to engage these in decisive ways prior to attempting to regain a degree of trust within the community and within Coke’s target market/demographic. It is important to note that this degree of trust is the cornerstone upon which any type of image recovery or customer trust will be built upon. Accordingly, these questions and answers will hinge upon building this degree of trust and seeking to engage key elements within the consumer base. Furthermore, an obvious recourse would be to attempt to re-engage the market with the understanding and belief that Coca Cola brand is investing all available energy and capital to remedy any quality control issues that might have existed previously. As a means towards accomplishing consumer trust on this matter, Coca Cola may wish to point to its civic activism within the recent past, both within India, and around the world as a means to convince the shareholder of the serious nature in which Coca Cola takes such an action. As a means to accomplish both the long and the short term goals that have been mentioned, it will be incumbent upon Coca Cola to prove their overall level of seriousness by providing demonstrable actions to the Indian marketplace that clear and decisive actions have been taken to remedy any prior shortfalls that may have been exhibited. How long would you evaluate the crisis? Unfortunately, a situation like the one that has been listed is not one that Coca Cola can recover from over the span of a few months or even years. Similarly, as anyone that is familiar with marketing will point out, the amount of time it takes to re-engage consumer trust and ensure the market that the firm is not typified by its most negative actions and the consequences thereof is a costly and time intensive process. Due to the fact that the findings were so damning, it will take Coca Cola a very long period of time to both rectify the damage done to the brand’s image as well as to seek to effectively engage future consumers with the overall benefits of the brand. Although the process will not be quick or cheap, such is the responsibility of Coca Cola and defines any hope of increased future success within India. It should be noted that a great deal rests on the means by which Coca Cola attempts to re-engage its consumers. If the plan of action is nuanced by attempting to prove the legitimate ways in which Coca Cola has taken steps to increase quality control, improve domestic resources that are used in the Coca Cola bottling enterprise or provide environmental improvement for the local community, then it is likely the process will achieve a marginally higher level of success than if Coca Cola continues to stonewall and/or demand that its product meets all safety regulations. In this way, the amount of time that general recovery from such a public relations disaster may take is a function of response. How well prepared was Coke India to deal with the CSE’s allegations? With respect to the level of preparation for such a crisis that Coca Cola exhibited, it is the belief of this student that it was extraordinarily low. Rather than being able to engage with CSE’s release and provide an adequate response, Coca Cola’s explanation of the situation appeared to be a mere stonewalling of the information associated with CSE’s revelation. Naturally, this did not improve with time as Gupta and Coca Cola assets within India began to threaten legal action as a way to silence the reports that were being presented in the media with relation to Coca Cola. Such a response was a complete breakdown in public relations and business crisis management. Rather than attempting to stifle the reports, Coca Cola’s interests within the representative consumer base would have been to deny that the allegations were true but to ensure the shareholder that even if a fundamental break in quality control had emerged that Coca Cola would pour all available resources into seeking to remedy such a situation. In this way, although the fallout might have been no less severe, the growth and recovery of brand image would have been demonstrably positive. Moreover, the way in which Coca Cola, or any firm for that matter, chooses to re-engage the consumer base after such a disaster of public relations is one of the most important determinants in the prognosis of the firm being able to realize a measure of future success. What is your recommendation for Coke’s Communication strategy? Who are the key constituents? With regards to the second part of the question, the key constituents are all consumers within the nation of India (and to an extent regionally as well). As such, the level of engagement and recovery time, and money invested into such a communication strategy will encompass will be unprecedented. However, rather than just saying that Coca Cola will need to engage the entire population in order to rectify such a fundamental breakdown in trust, it may be beneficial to the firm to differentiate the market just as they did when they were attempting to gain market share. As the firms marketing department noted, two distinct India’s exist; the first being the urban India that shares many traits with other large population centers around the world and has a level of education and affluence that is not exhibited elsewhere – the second is of course the rural/poorer population that comprises upwards of 80% of India’s 1 billion people. Although there are a number of ways that Coca Cola’s communication pattern may seek to engage these shareholders, it is the belief of this author that the most beneficial would be to perform a sampling of each group and determine what their key concerns are with relation to the crisis. From such a baseline, it will then be possible to speak to the individual shareholder needs and concerns rather than providing a “shotgun blast” of perhaps useless information that shareholders may not understand or identify with. Although time is of course of the essence with relation to attempting to rectify a situation like this, it would be beneficial to Coca Cola, or any such firm suffering such a breakdown in consumer confidence issue, to take the necessary time to analyze the public sentiment and craft a thoughtful and careful, albeit timely, response that could re-engage key shareholders and prove the level of commitment that Coca Cola is willing to provide with relation to this issue. Could Coke have avoided this crisis? Although hindsight is always 20/20, it is the belief of this author that Coca Cola could have easily avoided this crisis. Anytime a firm operates via subsidiaries, it should be the understanding of all involved that the subsidiary and all shareholders within the process can have a profound impact on the way in which the firm is viewed. Accordingly, although such a process may be expensive, it should be incumbent on any company that is interested in protecting its reputation as well as its overall ability to generate income and continue to develop within a given market to provide a level of oversight and monitoring for their requisite components. Although it would be impossible to monitor every single aspect of the process at all times, key concerns such as the ones that CSE addressed would not necessarily have been a surprise to the Coca Cola firm had such a level of oversight been put into practice (Banks 2007). Similarly, the concerns that were expressed by CSE were not something that was limited to a single bottling plant or a single link in the Coca Cola production process; rather, they were systemic problems that could be attributed to Coca Cola and its methods of production throughout the entire subcontinent. As a function of this, even a small monitoring mission could have likely uncovered many of these disturbing facts prior to CSE doing so. In such a way, it could have been the responsibility of the Coca Cola Company to engage its shareholders and work to rectify such a situation long before it came to the attention of the shareholders and consumers. What should Gupta do now? Although the bulk of these answers have centered on what Coca Cola did wrong and what the future prognosis for the firm might be, this particular question asks what steps Gupta should take in order to limit the severity of the backlash and work to re-assert Coca Cola’s dominance and civic responsibility back into the minds of the consumer. However, as has been previously stated, the first and most important concern that Gupta must face is to engage with the consumer, admit wrongdoing, and set out a broad and overarching plan that will seek to rebuild and redefine Coca Cola’s tarnished image while all the time promoting a higher degree of social responsibility, checks and balances, and environmental concern. Additionally, it is incumbent upon Coca Cola to differentiate the needs and concerns of different sectors of their target audience. Rather than providing a broad overarching response that they hope will fix the situation, a better idea would be to analyze the market, the demographics, and the key concerns that exist within the Indian consumer base and speak to these specifically. History gives evidence of a number of firms that have sought to respond inappropriately to the key concerns of a consumer base and have suffered disastrous consequences as a result. Furthermore, rather than attempting to deny and all allegations, Gupta and Coca Cola should weather the storm by behaving as responsible corporate citizens and accepting blame where blame is due. In this way, the level of trustworthiness that the firm exhibits will be reflected within the consumer base as a function of the way in which consumers appreciate the steps that the Coca Cola Beverage Company engages in the given topic in question. Reference Banks, K. (2007). Crisis communications : a casebook approach. Mahwah, N.J: Lawrence Erlbaum Associates. 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