Earlier we have showcased “How to handle a crisis of your brand!” moving ahead let us look at some case studies on crisis management to see what we can learn from them.
All companies should be ready to cope with future brand crises, as they can harm the credibility and reputation. Complaints are unavoidable, no matter how large a business is or how common they are.
We should learn from others’ mistakes and use the effective strategies of successful firms for ourselves. Some of these PR crises mentioned below have been brought to our attention from the public calling brands out on social media for their mishaps.
Aamir Khan – Snapdeal
Snapdeal became a punching bag for those who blamed actor Aamir Khan for his derisive views on the topic of intolerance in India.
On Twitter and Google’s Play store (where it has an app), Snapdeal was under fire, after Aamir Khan said his wife suggested moving away from India because of the country’s increasing intolerance. Many customers took to social media to reveal that they gave low reviews to the Snapdeal app in app stores as a protest against Aamir Khan, and even users began started uninstalling it.
Within months of the Bollywood actor’s comments on alleged bigotry in the country that made him and the giant e-commerce subject of serious criticism, Snapdeal agreed not to renew its contract with Aamir Khan as its brand ambassador.
Facebook’s biggest setback
Facebook had a grand plan to connect millions of Indians to the internet. By providing restricted access to the Internet through a suite of websites and facilities, including the largest social network in the world.
Facebook seemed to think that at this chance, Indians would run. They found themselves scorned instead, facing claims that the company was seeking to create an unfair marketplace that benefited its goods.
This project was banned in India, part of a $45 Mil campaign that has been a loss to the social networking giant.
Samsung’s exploding phones
Within weeks of the launch, Samsung clients in South Korea announced that the phones were on fire. The tragedy struck. By 2nd Sept 2016, the company stopped making the phone, and replacements sent. Samsung lost $26 billion in value in the stock market.
The battery issues blindsided Samsung as it undertook the largest smartphone recall in history (2.5 million phones), including 1 million in the United States.
At a cost of at least $6 billion, it halted manufacturing and scrapped the product. If public relations experts are to be believed, the cost to the brand could be just as severe.
Indian regulators banned Maggi noodles in April 2015 after its tests found excess lead in noodle samples. As a result of the ban, Nestle lost more than Rs 500 crore (US$ 77 million), forcing it to dispose of over 37,000 tons of Maggi noodles.
In August, a court ruling reversed the ban, but Maggi’s image was ruined, and it was difficult to recover sales.
The Nestlé team was slow to respond to customers on social media. Its silence was viewed by many Indians as an admission of guilt. On May 21, the Twitter handle for Nestlé India had one tweet on the subject. It was not until June 3rd when Maggi India showed engagement on the Twitter Handle.
The monitoring of social media could have given valuable insights into consumer sentiment and defined the emerging PR crisis.
There was no crisis management strategy for company officials. They didn’t think ahead or plan for contingencies, or maybe they could not do so. Though they talked about test results with government officials, they did not suggest alternate methods.
Maggi did not recognize the social and political problems of India’s PR crisis. Nestlé’s Maggi PR crisis in India demonstrates several crucial public communications lessons. The debate over reports of lead levels in noodles shows that it is significant to convey the truth, if not, for the facts themselves.
That is a lesson learned the hard way by Nestlé executives in India.
Tata Sons vs Cyrus Mistry: Battle for the Board
The company’s first chairman from outside the Tata family was Mistry. Although the elimination of Cyrus Mistry as chairman of Tata Sons is not the largest business story to emerge from India, the Tata Company stocks fell by 3.16% in the stock market after the removal of Mistry which created a lot of panic in the market. Tata Power and Tata Motor were down 3%, while Tata Steel traded at a low of 2%.
Cyrus Mistry believed that some poor decisions were made by the Tata group and they were trying to cover them up.
Ratan Tata regretted the confidential report of the board was made public and that this had caused all the uncertainty. Mistry filed his reply alleging that he was expelled from his office and submitted some documents to show that Mr. Tata had interfered with his work.
The Tata Group’s boardroom-war offers volatile, and some of the best, live lessons for teaching in business schools. For the strategic class, these will provide excellent lessons.
Johnson & Johnson baby powder case
In October, after the FDA detected trace quantities of asbestos in a container, Johnson & Johnson recalled 33,000 bottles of baby powder. Almost 20,000 cancer patients have filed lawsuits alleging that J&J talc products are connected to their tumors.
Johnson & Johnson faced thousands of lawsuits around the US, claiming that they failed to alert customers of the risk of asbestos that could cause cancer in their talc-based products.
Lawsuits and billions of dollars paid to individuals who say the substance caused their cancer, the move came after revenues fell by 60 % in the last 3 years.
A US court upheld a ruling that ovarian cancer was caused by talcum powder marketed by Johnson & Johnson and ordered the pharmaceutical giant to pay damages of $2.1 billion.
In 2018, the Missouri Court of Appeals cut more than half of the $4.4 billion awarded by a jury to 22 individuals.
In 2020, Johnson & Johnson announced that the talc-based baby powder in the United States and Canada will be discontinued, citing low demand.
Tanishq Ad Controversy
Tanishq became the latest victim after the release of their 45-second ad depicting a pregnant Hindu woman driven by her Muslim mother-in-law to a baby shower.
The biggest criticism leveled at the ad was that it supported the so-called ‘love jihad’ – a controversial word used to refer to hazardous inter-faith relationships.
#BoycottTanishq has been trending on social media for the last few days, with different parts of the parts of society calling it for ‘promoting Love Jihad. Celebrities like Kangana Ranaut have entered the bandwagon and attacked the ads and the whole brand.
Criticism had an impact on the closing of the session at Rs 1,229.75 per share, with the shares of Titan Company Limited, the owner of Tanishq, dropping by 2.18 % or Rs 27.35 on the BSE.
Tanishq pulled down the commercial from its social media accounts and its official YouTube channel following the uproar and apologized for hurting religious sentiments.
Eros Now’s offensive Navratri posts
Digital streaming giant EROS Now faced strong criticism from Netizens following their controversial social media posts on the Navaratri festival. Actress Kangana Ranaut also took to her Twitter handle and called out the company for posting suggestive Navratri posts.
The posts had texted with double entendre (meanings) with photos of Bollywood celebrities such as Katrina Kaif, Kareena Kapoor Khan, Salman Khan, Ranveer Singh, and others. Also, as per the Hindu tradition, each day of Navratri is dedicated to one of the nine avatars of goddess Durga, but EROS Now posted images of actresses wearing skimpy attires to celebrate the celebration of various days of Navratri on their Instagram handle.
#BoycottErosNow remained a top trend on Twitter ever since netizens slammed the ad campaign for its distasteful representation and linking it with the auspicious festival of Navratri.
The posts hurt Hindu sentiments and outrage was observed on social media which sparked the #BoycottEros trend. The share prices of Eros Now Plummeted by 2.52% in just two hours following this trend. Eros finally reacted by removing the controversial posts and apologized for the same.
Celebrities such as Kangana Ranaut and a few politicians too have strongly reacted against such distasteful posts being promoted on social media hurting religious sentiments.
Be prepared by following these tips to prevent any potential crises. With the right strategy in place, you can turn negative PR circumstances into massive growth and positioning opportunities for your brand!
If you’re potentially worried that your brand could experience a crisis, we can help! From diligent planning for all potential circumstances to immersive preparation for scenarios so that you can have peace of mind.
Connect with us today to find out how your Brand Crisis Management will help us support you.