The 1999 Coca Cola Crisis - Essay Example

Executive Summary Coca Cola products are some of the most well – known drinks and carry a global brand identity. The development of this product haschanged over a time frame of several years to provide consumers with several options for beverages. Currently, Coca Cola offers over 3,000 products in the form of beverages in over 200 countries that the products are offered in. The company began in the 1880s and is based on providing beverage products that offer satisfaction to consumers. The brand uses ideas of creativity and innovation for advertising products as well as for the creation of new tastes in the company (Coca Cola, 2010). Despite the success and growth of Coca Cola, there have been different problems that have arisen over time. One of the problems that occurred was in 1999, when products sold in Europe, specifically in Belgium, led to several children getting sick as a result from drinking Coca Cola products. This paper will examine the basic background of the crisis, what went wrong with Coca Cola and how the company had to recover from the position. Specifically, there will be an analysis of the social and economic implications of the time which changed the attitudes toward the Coca Cola beverages and which led to the crisis. There will also be an evaluation of the several theories that caused the reaction from society. The paper will then recommend ways in which Coca Cola could have prevented this crisis from occurring and other actions that could have been taken to change immediate responses to avoid similar difficulties in the future. Background The 1999 Coca Cola crisis was preceded by a number of developments. Coca Cola began with a mixture of water and syrup or sugar that was added as a bottled product. This beverage was used specifically as a snack type of beverage aimed at children and youth. After 1892, the beverage grew from a product and into a business, which was incorporated by Asa Candler. The company quickly grew into a regional then national business in the US. By the 1920s, the beverage had expanded into various regions of the world and began to emerge as one of the most popular brands and drinks. By the 1940s, Coca Cola was offered as a beverage in conjunction with the company’s sponsorship of events such as the Olympics, which added to its continuous growth and success. The market and brand of Coca Cola, until the mid – 1980s, was incorporated into a signature drink for political and social movements. Sponsoring events and specialized advertising campaigns that were related to concepts such as the Olympics allowed Coca Cola to become easily recognized and to gain prestige within communities. After the 1980s, Coca Cola began to change the way that it was advertised, specifically by becoming the “new coke.” The approach that was used with marketing was defined first by the health craze that was beginning to emerge worldwide. This health craze inspired Coca Cola to advertise alternative products, such as fruit juices and beverages that were known to provide energy and health benefits, as opposed to a beverage without nutritional value. After introducing these products, Coca Cola was able to add in different concepts and approaches that were associated with sports, specifically by sponsoring various events and advertising in areas where beverages and snacks were most popular. More importantly, the “new coke” and the older brands were marketed with cultural affiliations to provide a different understanding of the product (Coca Cola, 2010). To advertise the products, Coca Cola began to add the fruit juices and healthier drinks into different niche markets, such as for those who were interested in maintaining health. New Coke was incorporated into advertising campaigns for health, such as sporting events, specifically to show that the beverage could help individuals to maintain their health. The older products were divided into a different market as a snack for those who weren’t concerned about health and were interested in the original taste o Coke. Problem The outbreak of sickness that occurred in Belgium began with over 100 students getting sick after drinking Coca Cola products. There were several students at one school who began to complain, followed soon by complaints of other students in Europe, India and Asia getting sick after drinking the beverage. The problem led to the students being tested to determine if they had been poisoned or if there were indications of hazardous substances that were in the beverages. The testing led to refuting the claims that the product had any chemicals that would have caused the sickness. As a result, researchers (Nemery et al, 2002) who were trying to find the problem with the sickness stated that it was a problem based off sociogenic responses to the beverage. The sociogenic response meant that there was a social craze that led children to believe that the Coca Cola beverages were sick, which then caused them to become sick through the psychological belief. Other researchers (Nemery et al, 2002) who studied the crisis believed that this was related to social influences that led to the belief in illness from the products (Nemery et al, 2002). The incident with the Coca Cola crisis in Belgium led to theorists and researchers finding that there were no chemicals or contaminants in the product. Since the crisis had affected so many children, researchers (Johnson & Peppas, 2003) began to point to other potential problems that led to the crisis. The first belief that arose claimed that the beverage made the children sick was specific to the other crisis’ that had occurred in the past year. Mad cow disease was introduced into Europe during this time, associated with findings that eating meat would lead to illness and possibly death. Belgium had also experienced a second health crisis with animal feed in which the carcinogen dioxin had been added into a company’s feed, which became harmful to both the animals and humans. Researchers (Johnson & Peppas, 2003) believed that the several health crisis is what led to the belief that Coca Cola also had chemicals and problems with their beverage. The crisis began when parents of the children stated that the beverage had a strange taste which was followed by the claims of illness by the hundreds of children. The result was Coca Cola withdrawing their products, specifically as instructed by the Belgian Health Ministry (Johnson & Peppas, 2003). Coca Cola also added into the crisis by the lack of response from the initial complaints. After hearing about the strange taste, there was no initial response. It took one week after the claims were made about the illnesses for Coca Cola to give a public reaction and to begin moving forward with considerations from the illness. The lack of response led to more problems as many consumers began to distrust the company and the mixtures that were in the beverage. Analysis There are several reasons why the crisis occurred within Belgium in response to Coca Cola’s products. The crisis was a direct result of the complaints from the strange taste and the beliefs that children had and responded to with the product. The first part to this is the lack of communication that was offered toward the products and the way that the mixture was made. The Coca Cola products that were made during this time didn’t have ingredients or other ways to find what was added into the product. The commercials and advertisements furthered this as they were focused on campaigns to gain popularity. Instead of telling consumers what to expect with the taste and the products, there was little to no way for a consumer to know what they were drinking. The crisis resulted because consumers didn’t have a way to know what was included in the consumption of their beverage. The other health crisis’ and the beliefs that were surrounding the current community was defined during 1999. The other crisis’ that occurred led to areas such as Spain and France immediately banning products until there was a regulation on food. However, other areas in Europe didn’t do this, which led to a lack of pre-cautions taken. Coca Cola, despite the bans and other health crisis, didn’t communicate the safety of its products. The inability to define the mixture of products and specific health aspects then led to assumptions about the product and contributed to the eventual health scare (Taylor, 2000). Since Coca Cola didn’t communicate the ingredients through advertisements or basic labels, it could have led to assumptions with a different taste. Since chemicals and a lack of regulations were on other foods, consumers could have easily assumed that the change in taste also meant that chemicals or harmful substances could have been added into the beverage. The inability to take precautions was followed by the lack of public relations that was established on a global basis during this time. To grow its public relations efforts, Coca Cola would have had to be more than a distributor and manager of its products. Instead, there would have had to be consistent marketing and associations, such as through health organizations and stores where the product would have been sold in Europe. This would have provided an understanding of the products and safety that was a part of the health issues. Understanding the cultural, political and socioeconomic factors would have changed the outcome that occurred before it happened. Instead, the products began to be banned in different places in Europe, eventually which led to the belief that there were problems with the product. Since Coca Cola had warning signs of this from France and Spain, it should have looked toward opportunities to communicate with the cultural and socioeconomic components in the different regions. Creating a different level of relations across borders could have helped to eliminate the miscommunication that occurred with the specific products (Wakefield, 2001). Since the product was known as a social and psychological crisis, the lack of public relations can also attribute as one of the main problems. Another problem that led to the crisis was from the lack of communication that occurred afterwards. Even though Coca Cola was blamed for the sickness, there was little to no response after the event occurred. Researchers (Buzby, 2001) stated that it took over a week for Coca Cola to respond to the incident and to find a way to resolve different matters. The lack of communication that happened after the crisis and the eventual banning of the beverage led to levels of distrust with the product. For consumers in this region, this led to a questioning of what was in the products as well as a distrust about what was occurring and what was offered through the corporation. This also showed a lack of service toward the consumers that were loyally buying the products. At the same time, some of the illnesses were legitimate. Since Coca Cola didn’t respond as quickly, this showed that there may have been health issues in the products, making it difficult for Coca Cola to recover. The result was a different perception of the safety of the company’s product, resulting from the lack of communication which in turn contributed to the inability to reach the same demand for the beverages in Europe (Buzby, 2001). To deal with the crisis, Coca Cola initially removed the products from Belgium under the provisions of the government. The ban was removed at a later date and Coca Cola was able to place their beverages back into Belgium. However, the lack of consumer confidence and indifference after the incident led to Coca Cola redefining how they approached the European market. To alter what had occurred, they were required to change their marketing plan and to work on public relations activities in the area to regain consumer confidence. To do this, Coca Cola began by launching beverages to segmented markets and targets that would be more interested in the products. This was followed by stronger marketing campaigns that communicated the safety and health of the products. By doing this, Coca Cola was able to meet the demands of quality and safe food products that reinforced the company’s overall reputation of the beverages in the community. The information provided after the incident and initial responses contributed the recovery of the Coca Cola products in Belgium and other European markets which had fallen off after the crisis (Verbeke, 2005). Recommendations and Conclusion The Coca Cola crisis that occurred in 1999 in Belgium is one that couldn’t have been prevented. Misunderstandings from the health conditions as well as the way that society responded led to the drop in popularity of its products with several misunderstandings of related to what was occurring. However, Coca Cola could have taken different precautions that would likely have reduced the chance individuals would have made these assumptions. Looking at public relations and marketing activities to communicate a sense of safety despite the health crisis is one of the concepts that would have changed the outcome of the crisis. More importantly, Coca Cola could have changed the way that they were communicating with the different cultures in Europe by heightening sensitivity toward the social and economic situations. For instance, after the crisis occurred, Coca Cola could have responded in a timely manner and with a different approach toward those who were affected. Telling the consumers what was in the product, ensuring the safety and responding by saying they would help with medical assistance would have helped to build customer loyalty. Responding in less than a week would have also helped to stop the crisis. At the same time, the products could have been defined as safe before being placed on the shelf to create a different response from the community. Even though the Coca Cola crisis led to a drop in sales and earnings in Europe, there was still the ability to prepare for future developments. From this situation, Coca Cola was able to define some of the safety issues and hazards that were unable to be meet. After this crisis, there was the opportunity to develop different responses in terms of the levels of communication that were used for consumers, specifically in relation to health and safety. Defining the mixtures in the drinks and relating them to safety and health issues could prevent further crises from occurring. Not only was there the ability to have different relations with the public regarding health and safety issues, but also a different understanding of cultural and social differences as applied to various regions of the world. For Coca Cola to continue as a multinational company, there is the need to create a different set of terms and definitions that relates to the socioeconomic considerations in various regions. As Coca Cola is able to craft a stronger public relations program, the easier it will be for the company to distribute the correct marketing terms and communication in various regions of the world. While the Coca Cola crisis hurt the organization, the recovery and changes that have been implemented since then have helped the company to stay strong. The initial crisis hurt the company’s global reputation. Since the 1999 crisis, Coca Cola has had to redefine the marketing, public relations and communication used as a response to what has occurred. Doing this has created a different understanding of what is needed to distribute products not only as a beverage but as a company with a global brand. Considering the political, social, cultural and economic concepts in various regions, also provides a difference in the success of the company while building on consumer relations in different markets. References Buzby, Jean. (2001). Changing Structure of Global Food Consumption and Trade. Washington DC: US Department of Agriculture. Coca Cola. (2010). The Coca Cola Company History. Retrieved from: http://www.thecoca-colacompany.com/ourcompany/mission_vision_values.html. Johnson, Victoria, Spero Peppas. (2003). Crisis Management in Belgium: the Case of Coca – Cola. Corporate Communications: an International Journal. (8), (1). Nemery, B, B Fischler, M Boogaerts, D Lison, J Willems. (2002). The Coca – Cola Incident in Belgium, June 1999. Food and Chemical Toxicology. (40), (11). Taylor, Maureen. (2000). Cultural Variance as a Challenge to Global Public Relations: a Case Study of the Coca – Cola Scare in Europe. Public Relations Review (26), (3). Verbeke, Wim. (2005). Agriculture and the Food Industry in the Information Age. European Review of Agricultural Economics (32), (3). Wakefield, Robert. (2001). World Class Public Relations: A Model for Effective Public Relations in the Multinational. Journal of Communication Management (5), (1). Read More