Crisis handling failures: When brands did too little too late
The recent incident where a passenger travelling on an Indigo flight was roughed up by some staffers of the airline at the Delhi airport was severely criticised in different forums and resulted in a lot of negative publicity for Indigo. The fact that the airline first sacked the staff who had shot the video and uploaded it instead of the erring employees was also flayed. That the airline came out with a public apology only after facing flak on social media, added to the fire.
This is not the first time that companies in India have been caught in the wrong foot. A lot of companies that have faced public anger for various reasons have been quick to acknowledge their error and taken proactive and constructive steps to minimise the damage and allay public fears, while at the same time restoring consumers’ faith in their brands.
But there have been several instances where companies failed to address the growing criticisms on time or did enough to restore public faith. In this age of social media, all it takes is one negative comment or an aggrieved consumer or a disgruntled employee to fuel negative fires for the brand. Companies, brands, their PR division, the top management need to be all the more vigilant today to nip any dissonant voice in the bud and proactively act to address genuine concerns.
Adgully takes a look at some of the most infamous recent cases, wherein the companies and brands failed to take timely steps to take care of a crisis situation, which resulted in major backlash, negative publicity loss of faith and even temporary withdrawal from the market.
Not long ago the ratings of Snap Inc., the company that operates popular photo sharing and messaging app Snapchat, hit an all-time low owing to the alleged remark by its CEO Evan Spiegel. All it began when the company’s former employee Anthony Pompliano, in a lawsuit filed in January this year, claimed that the company had not specified the reason for his termination. Later on he went on to reveal that Spiegel had in September 2015 told him, “The app (Snapchat) is only for rich people. I don’t want to expand into poor countries like India and Spain”. Denying any such remarks by Spiegel, Snap Inc. described Pompliano’s allegations as “a disgruntled employee fired for poor performance”. Since the authenticity of the statement wasn’t proved, a report by The Information stated that the 27-year old Spiegel indeed made similar remarks about India. By that time, the damage was already done. India being a ‘sensitive nation’, boycotted Snapchat and many users also uninstalled it from their phones.
Although most of us are back to consuming Maggi Noodles, the bygones in this case of Nestle cannot really be bygones. In December 2015, the Delhi government took a decision of banning Nestle’s Maggi noodles after it was found that brand contained lead and Monosodium Glutamate (MSG) beyond the permissible limit. It was a major setback for the Swiss food major as other states’ governments followed suit. Too much of MSG can cause serious health issues. One of the most favoured comfort foods in India, Maggi’s brand image was in jeopardy, while Nestle failed to take immediate action to address the issue and allay public fears. Retail analysts noted that the sale of the instant noodles brand dropped by 60-70 per cent in the aftermath of the controversy, which continued to haunt the brand for almost two years.
United Airlines is not new to brand identity crisis. The US airline major was in the news some time back after it gave away a two-year old toddler’s paid seat to a standby passenger, saying that the flight was full, which was in violation of flight security as well as a passenger’s rights. In a highly publicised incident, a video of a passenger Dr David Dao being punched and dragged out of his seat in a United Airlines flight in Chicago was widely circulated. The airline came in for even more severe criticism when the reason for such a treatment being meted out to the passenger was revealed – a paid passenger was forcibly off-boarded to accommodate some off-duty crew of United Airlines on the flight. The airline’s clarification that the flight was overbooked failed to cool down the furore. CEO Oscar Munoz apologised and acknowledged that “no one should ever be mistreated this way”. But by that time the damage had been done and it was a classic case of too little too late.
Cadbury Dairy Milk
People of all ages have been gravitating towards chocolates instead of traditional Indian sweets when it comes to ‘Kuch Meetha Ho Jaaye’, and that is what Cadbury Dairy Milk has been capitalising on. However, in October 2003, just a month prior to Diwali, the brand faced a setback when some Mumbaikars complained about finding worms in Cadbury Dairy Milk chocolate bars. Following the complaints, the Maharashtra Food and Drug Administration (FDA) seized the chocolate stocks manufactured at Cadbury’s Pune plant. Negative publicity hit product sales and the brand’s advertising went off air for a month. Slow but steadily, Cadbury rose above the controversy and came back with a powerful revamped packaging, which involved metallic poly-flow for the chocolate bars and roped in superstar Amitabh Bachchan as the brand ambassador.
Just today, news has emerged that hackers stole personal data of 57 million passengers of cab aggregator Uber and that the company, though aware of the data breach, kept it under covers for more than a year. This is not the first time that Uber has found itself in trouble. In India, an Uber driver, identified as Shiv Kumar Yadav, was convicted of raping a 27-year-old woman passenger in Gurgaon in December 2014. It was later found that Yadav is a repeat offender and was involved in a rape case in 2011 as well. Uber came in for severe flak from all corners for failing to carry out set procedures of police verification of its drivers. Following the incident, the Delhi government temporarily banned Uber cab service in the National Capital. Meanwhile, crisis hit Uber again when Eric Alexander, President of Business for Uber Asia Pacific, was fired by the company after he shared the medical records of the 2014 rape case victim. However, CEO Travis Kalanick and Senior Vice-President Emil Michael maintained that legitimate rape victim was part of a conspiracy by rival cab aggregator Ola in a bid to sabotage Uber.
All hell broke loose when German car giant Volkswagen (VW) admitted to cheating emissions test in the United States. As stated in New York Times, the incident came to light after California Air Resources Board in May 2014 conducted an on-road testing of two VW models. The researchers found that when tested on the road, some cars emitted almost 40 times the permitted levels of nitrogen oxide. The issue affected engines manufactured under VW Group brands, including SEAT, Audi, Volkswagen Passenger, and Skoda. The Environmental Protection Agency (EPA) said in September 2015 that it would order Volkswagen to recall seven of its American car models with affected engines, which amount to nearly 600,000 vehicles. It also accused that many VW cars being sold in America had a ‘defeat device’ or software in diesel engines that could change the performance accordingly to improve results. As mentioned in airqualitynews.com, in response to the comments, VW claimed that a drop-off in the number of vehicles fixed had been anticipated, and added that reaching a 100 per cent fix-rate for its vehicles was ‘unlikely’.
In 2013, the Ford Figo ad controversy led to a top executive’s departure from the company’s India team. The global outrage also prompted the resignation of ad veteran Bobby Pawar, then Chief Creative Officer and Managing Partner at JWT India, and Vijay Simha Vellanki, then Creative Director, Blue Hive (a WPP unit dedicated to managing the Ford business). The three ads, which were considered to be sexually offensive, showed women bound and gagged in the trunk of a Ford Figo hatchback. The leaked posters are accused of endorsing rape culture and Italian Prime Minister Silvio Berlusconi’s corrupt activities. Though the advertisements were never used for any of Ford Figo’s campaigns, they were uploaded by a few JWT employees on Ads of the World website. The agency and the client were left with no option but to issue an apology statement.
The fast food major, which has been around over 70 years, was accused of selling French Fries containing beef as a flavouring agent, even though the product was marketed as 100 per cent vegetarian in the Indian market. Not surprisingly, the company faced major backlash by consumers and several vegetarian groups, who also filed a lawsuit against the fast food major. As an aftermath, the company issued an apology and also announced that it would pay $10 million to vegetarians and religious groups in a proposed settlement of all the lawsuits in March 2002. It was not the first time that McDonald’s found itself in trouble. Several lawsuits have been filed against McDonald’s over the years for following unethical practices and controversial advertisements. In recent times, out of a total 55 McDonald’s outlets in Delhi, 43 were shut down. The closure was attributed to the US-based fast food chain’s failure to renew its eating house licences, which is managed by the North and East India licensee Connaught Plaza Restaurants.