Case Study: Cadbury Crisis Management (Worm Controversy)

October 2003, just a month before Diwali, the Food and Drug Administration Commissioner received complaints about infestation in two bars of Cadbur Dair !il", Cadbur #ndia$s flagship brand with over %0& mar"et share' (e ordered an en)uir and went directl to the media with a statement' Over the following 3*wee" period, resultant adverse media coverage touched close to +000 clips in print and +20 on ,- news channels' #n #ndia, where Cadbur is s non mous with chocolate, the compan $s reputation and credibilit was under intense scrutin ' .ales volumes came down drasticall in the first +0 wee"s, which was the festival season/ retailer stoc"ing and displa dropped, emplo ee morale 0 especiall that of the sales team 0 was sha"en' ,he challenge was to restore confidence in the key stakeholders 1consumers, trade and emplo ees, particularl the sales team2 and build back credibility for the corporate brand through the same channels 1the media2 that had )uestioned it'

#n defense, Cadbur issued a statement that the infestation was not possible at the manufacturing stage and poor storage at the retailers was the most li"el cause of the reported case of worms' 3ut the FDA didn$t bu that' FDA commisioner, 4ttam 5hobragade told C63C*,-+7, 8#t was presumed that worms got into it at the storage level, but then what about the pac"ing 0 pac"aging was not proper or airtight, either wa s it$s a manufacturing defect with unh gienic conditions or improper pac"aging'9

,hat was followed b allegations and counter*allegations between Cadbur and FDA' ,he heat of negative publicit melted Cadbur $s sales b 30 per cent, at a time when it sees a festive spi"e of +: per cent' For the first time, Cadbur $s advertising went off air for a month and a half after Diwali, following the controvers ' Consumers seemed to ignore their chocolate cravings'

Remedy:
A focused and intense communications program was implemented over the ne;t si; months to rebuild credibilit and restore confidence among the "e sta"eholders' ,he results<

#n media, the "e message that infestation was a storage*lin"ed problem, not manufacturing related, found widespread acceptance' Across the board, media carried Cadbur $s point*of*view on the issue' .ales volumes climbed bac" to almost to pre*crisis levels eight wee"s after the launch of new pac"aging 0 a concrete step ta"en b the compan to minimi=e the incidence of infestation' ,his reflected consumer confidence in the brand and the compan ' ,here was significant upward movement in ratings amongst consumers on parameters li"e compan $s image, responsiveness of compan and behavioral parameters li"e intention to bu Cadbur chocolates'

,he last two helped to restore faith in the corporate brand among the trade and emplo ees' Marketing Challenges and Ob ectives ,he incident came close on the heels of a cola controvers where a scientific laborator declared colas unsafe due to high levels of pesticide' ,he jur was still out on that issue and so this incident ac)uired political overtones with parties decr ing Cadbur as an irresponsible !6C' Andrea Dawson* .hepherd, >lobal Corporate Communication Counsel, Cadbur .chweppes called it ?the worst worm infestation*related crisis an where in the world$' ,he immediate objective was to get the following "e messages across<

#nfestation could never occur at the manufacturing stage

,he problem was storage lin"ed/ this without alienating trade channels Cadbur Dair !il" continued to be safe for consumption

,he challenge was to restore confidence in the "e sta"eholders 1trade and emplo ees, particularl salespersons2 and build bac" credibilit for the corporate brand through the same channels 1the media2 that )uestioned it'

Strategy:
#t was decided from the start to address the issue head*on and ta"e whatever steps were necessar to restore confidence' (aving historicall maintained a low profile with the media and let its brands and its performance spea" for it, the compan began to cultivate relationships with the media and turn it into an all and a credible, independent endorser to rebuild sta"eholder confidence'

!hase ": !resenting Cadbury#s vie$ (October%&ecember '(())

,he da the crisis bro"e, the agenc set up a media des" to ensure that no media )uer went unanswered' From Da + ever stor carried Cadbur $s point of view'At the first media briefing organi=ed b the agenc , the Cadbur $s !anaging Director addressed consumer concerns with the following "e messages<

#nfestation is a storage lin"ed problem' #t is safe to eat Cadbur chocolates' Consumers must e;ercise the same care in purchasing a chocolate as the would when bu ing an food item'

At a second media briefing about two wee"s after the first incident was reported, Cadbur announced significant steps to restore consumer confidence' Called @roject -ishwas 1,rust2, this entailed<

A Aetail monitoring and education program underta"en on a war footing to address storage problems' .ignificant pac"aging changes to ?reduce dependenc on storage conditions as much as possible$ 0to be launched within two months'

An Bditorial Outreach program with 3+ media editors across : most affected cities was orchestrated b the agenc to get senior Cadbur spo"espeople to

share their version of events in one*on*one meetings' ,he trade, and consumers, were reached nationall through a press ad ?Facts about Cadbur $, released in :: publications in ++ languages' #t presented facts about Cadbur manufacturing and storage and highlighted corrective steps being ta"en b the compan ' ,his was a public statement of the corporate stand on the issue' ,he trade was supported with posters and leaflets to help them share Cadbur point*of*view with their customers' A response cell with a toll free number and an e*mail id were put in place to give trade a means to directl contact the compan with an issues the faced* reinforcing the compan $s commitment to )ualit ' From the beginning, a series of town hall meetings were held with senior managers addressing emplo ees to ensure the were updated on the proactive actions being ta"en b Cadbur to manage media, help trade and ensure future occurrences of such incidents were "ept to the minimum' Aegular email updates from the !D were also used to communicate the compan $s point of view and to ensure consistenc of messaging since emplo ees are the compan $s ambassadors'

!hase ': !ackaging change (*anuary% March '((+)

,he new ?purit sealed$ pac"aging was launched in Canuar 200D' 3 investing up to As +: crore 1As +:0 million2 on imported machiner , Cadbur $s revamped the pac"aging of Dair !il"' ,he metallic pol *flow, was costlier b +0*+: per cent, but Cadbur didn$t hi"e the pac" price',his entailed double wrapping for ma;imum protection to reducing the possibilit of infestation' ,his was a big step involving investment of millions of dollars and getting on stream a production process in 7 wee"s,that would normall ta"e about si; months' ,o communicate these significant changes the compan was ma"ing, Cadbur brought in a brand ambassador to reinforce the credibilit that the compan had demonstrated through its actions' Amitabh 3achchan, a legendar #ndian film star, was chosen, as he embodied the values of Cadbur as a brand and connected with all of #ndia 0 mothers, teenagers, children, media persons and trader partners' A media conference was organi=ed in !umbai to launch the new pac"aging' And this was followed with press conferences in cities worst affected b the crisis 0 @une and 6agpur in !aharashtra and Cochin in 5erala' #n these conferences, media persons were encouraged to compare the old and new

pac"s with an innovative comparison "it and e;perience the significant changes in pac"aging first hand' An audio visual with a message from Amitabh 3achchan, was beamed to build credibilit and e;citement' >iven that much of the damage had come from television coverage, a video news release with pac"aging shots and factor shots was given to television channels to control the visual messaging' .imultaneousl , senior Cadbur spo"espersons had one*on*ones with the Bditors of the Outreach program initiated in 6ovember 2003' Another audio visual with a message from the star was used in a series of sales conferences to enthuse and reassure salespersons' And this helped to rebuild confidence in the salespersons to go and sell the product more convincingl and confidentl to the trade' ,he announcement of the new pac" was done through a testimonial advertisement on ,- called ?.incerit $' #t consciousl addressed the problem head*on, with the superstar tal"ing straight into camera about how before doing the ad he first convinced himself about the )ualit of Cadbur chocolates b visiting the factor ' Consumers respected the brand for not s"irting the issue but ac"nowledging it and giving a solution to the problem ',his was @ublic Aelations using a ,- Commercial to get "e messages acrossE

Results:

Media Coverage< ,he media relationship effort clearl helped in ma"ing media accept that the infestation was genuinel caused b storage*lin"ed problems' From the start, all media reports carried the Cadbur $s point*of*view' 3ad news automaticall gets great coverage' (owever, the agenc helped Cadbur get a total of 3%7 clips in over ++ languages covering the new pac"aging, and its benefits, in Canuar 200D' ,he 3usiness ,oda clip is a t pical representation of the changed media perception and a better understanding of the problem over a three month period' Sales< .ales volumes, which declined drasticall between wee" + and wee" +0 of crisis, climbed bac" almost to the pre*incident levels b wee"' Fithin 7 wee"s of introduction of new pac"aging and communication' ,his is a clear reflection of restoration of consumer and hence trade confidence in the corporate brand' ,mage< ,here was significant upward movement in ratings amongst consumers on parameters li"e compan image, responsiveness of compan and behavioral parameters li"e intention to bu Cadbur

chocolates' Fhile the new product introduction and advertising had their role to pla in the changing consumer perceptions, the media$s positive coverage and the trade$s positive pre*disposition pla ed a huge part in helping Cadbur regain its reputation in the mar"et'

-otes: Role of !ublic relations

@A concerns the total communications of our total organi=ationGgroup of organi=ations' #t is unli"e advertising, where ou are sharing s"ills of planning, creative and media bu ing teams with an out*sourced agenc ' @A calls for a ver intimate understanding of the total inner wor"ings of our organisation at all levels 0 wor"ers to 3oard levels' #t re)uires the integration of "nowledge and communications' #t is not a part time job for a !ar"eting .ervices !anager' #f it is to wor" and serve the larger objective, the @A department should be independent, servicing others li"e production, personnel, mar"eting, finance, corporate agendas' ,herefore, the @A (ead should be part of the top management team 0 reporting directl to the CBO' (e also needs to share ever one$s confidences' ,he @A department of Cadbur $s pla ed a ver effective role in managing the reputation and "eeping up the goodwill of the compan '