1. Brand crisis and brand communication
The Pepsi Case
Brand crisis and brand communication

2. PepsiCo in numbers Global leader in the food and beverage industry
Over $63 billion in net revenue in 2016
Global portfolio of 22 diverse brands.
PepsiCo is a global leader in the food and beverage industry with over $63 billion in net revenue in 2016 and a global portfolio of 22 diverse brands. Some of the top brands, besides Pepsi, are Lipton, Tropicana, Lays and Aquafina.

3. PepsiCo Our Mission Our Vision
Our mission is to be the world's premier consumer products company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.
Our Vision
"PepsiCo's responsibility is to continually improve all aspects of the world in which we operate - environment, social, economic - creating a better tomorrow than today."
Our vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company.
Throughout PepsiCo’s history, the main strengths identified are advertising and marketing efforts. As the business started growing, PepsiCo recognized the essential role of promoting the brand through daring commercials with relevant, popular celebrities in order to increase sales. This strategy is still deeply rooted in their advertising strategy today; in 2016, PepsiCo spent $2.5 billion on advertising and marketing activities.
Leading PepsiCo’s marketing activities is their mission
Another corporate element guiding their communications is its vision, which is described as:

4. History of PepsiCo The focus on advertising 30s - based on price
40s - patriotic and uplifting campaigns
50s - embracing the youth
80s until today - celebrities, pop and youth
During the Great Depression, the consumer spending slowed and PepsiCo adapted their offer to suit the market.
PepsiCo continued focusing on marketing - during World War II, the brand introduced a commercial that was patriotic and warming during the hard time, which is still recognized as a part of PepsiCo’s advertising heritage today.
In the 50s, the brand moved from positioning itself based on price to a product embracing a new lifestyle in terms of hip and sociable. The new advertising strategy was focused on the younger generation, which was becoming the PepsiCo persona and brands biggest target group. The brand introduced a variety of successful campaigns that emphasized the youth and people living the life to the fullest, such as “Now It’s Pepsi, for Those Who Think Young” and “Pepsi Generation”.
PepsiCo was highly associated with pop culture, and the approach continued on and in the beginning of the 80s with the campaign “Pepsi. The choice of a new generation”, which featured the “King of Pop” Michael Jackson and created extensive marketing success. PepsiCo’s alignment with pop cultures has grown to be a part of the brand identity. Over the years, the company made several with well-known celebrities the face of their campaign, including Cindy Crawford, Shakira, Britney Spears and Beyoncé in the 90ths and 00ths.

5. Zoom-in: Pepsi Campaigns
Live-for-now history
Inspire people to live to the fullest
Featuring celebrities, such as Nicki Minaj and Beyoncé
The aim to become a global leader of pop-culture
In 2012, PepsiCo launched its global campaign “Live for now”, which is in line with the brand strategy and corresponds with previous campaigns, such as “Pepsi Generation”. The campaign aims to inspire people around the globe to live life to the fullest. Throughout the years, the commercials featured well-known celebrities: among others, Nicki Minaj and Beyoncé.

6. Live for Now Anthem
The next chapter of the global campaign “Live for Now” was the new commercial featuring the celebrity model, Kendall Jenner that launched in April 2017

7. Backfire
#BlackLivesMatter Standing up for the unjustified deaths of several African-Americans, racial inequality, racial profiling, police brutality and violence against African-Americans
Women’s March Standing up for social justice and human rights issues ranging from race, ethnicity, gender, religion, immigration and healthcare
→ Brand hypocrisy!
Taking a Stand with Pepsi
vs.
Taking a Stand in Baton Rouge
Hongwei
However, when we review PepsiCo’s history, we found that PepsiCo did not have a long history associated with a racially-diverse topics. When PepsiCo's commercial is associated with the Black Lives Matter movement,it is not surprised to result in A backlash.
Corporate Hypocrisy→ Gaps: occur at many points in the reputation management process
Others comments also support our point: Stakeholders criticize that, Kendall Jenner - a white celebrity - consumes or commodifies the Black Lives Matter protest. Even the daughter of Martin Luther King stated that she felt insulted by this commercial by Tweeting “If only Daddy would have known about the power of #Pepsi”. Social media exploded;

8. Managerial Questions What should the management’s first response be?
What should the management consider as a perspective when developing the next commercial?
How can the company prevent a similar event from occuring in the future from a communication perspective?
Hongwei
In the short term, the management’s first response?
In the long term, what is the perspective for the next commercial
In the long term, by means of the communication perspective, how to prevent similar events from recurrence?

9. Short Term Key Issues Alternatives Actions
Define key issues on short term
Define alternatives to address key issues
Define actions based on suggested alternatives
Ellen - Guide Discussion
Hongwei & Zana - Write Notes on Whiteboard

10. A Pepsi a day keeps the problems away
Long Term
Alternative 1
A Pepsi a day keeps the problems away
Alternative 2
Thirsty? Pepsi!
Alternative 3
Throwback Thursday
Ellen - Guide Discussion
Hongwei & Zana - Write Notes on Whiteboard

11. Pepsi Response Short Term
"Pepsi was trying to project a global message of unity, peace and understanding. Clearly we missed the mark, and we apologize. We did not intend to make light of any serious issue. We are removing the content and halting any further rollout. We also apologize for putting Kendall Jenner in this position."
Initial response defensive
Official apology
Removed the commercial
Ellen
While critics accused PepsiCo of leveraging anti-Donald Trump resistance, Black Lives Matter, the Women’s March and other movements in order to sell their product, the company initially responded to Adweek:
“This is a global commercial that reflects people from different walks of life coming together in a spirit of harmony, and we think that’s an important message to convey”
Short after, the brand decided to respond with an official statement that included an apology:
"Pepsi was trying to project a global message of unity, peace and understanding. Clearly we missed the mark, and we apologize. We did not intend to make light of any serious issue. We are removing the content and halting any further rollout. We also apologize for putting Kendall Jenner in this position."
Additionally, a PepsiCo spokesperson explained:
"The creative showcases a moment of unity, and a point where multiple storylines converge in the final advert. It depicts various groups of people embracing a spontaneous moment, and showcasing Pepsi’s brand rallying cry to 'Live For Now,' in an exploration of what that truly means to live life unbounded, unfiltered and uninhibited."
Lastly, the company also pulled the commercial from the internet. PepsiCo’s CEO Indra Nooyi explained to Fortune:
"The minute I saw people upset, I pulled it. And you know what, it’s not worth it. There were people on both sides, but at the end of the day, our goal is not to offend anybody."
With regards to the short term alternatives, PepsiCo’s response was initially in line with the second alternative. However, the corrective action shortly after - taking the commercial offline and publishing an official apology - is similar to the first alternative suggested.

12. Pepsi Response Long Term
The Super Bowl 2018 commercial
Ellen
With regards to the long term, PepsiCo recently released their Super Bowl 2018 commercial wherein they review their past campaigns by displaying old commercials, working with celebrities that appeared in previous commercials, and by stating i.e. ‘this is the PepsiCo that your dad used to drink. The tagline ‘Live for Now’ has been replaced with ‘This is the Pepsi’. Considering the aforementioned alternatives, one can recognize that PepsiCo’s commercial revolves around the emotional connection to the brand. This decision corresponds with alternative three.

13. Case Summary In the short term
Brand crisis caused by Live for Now Anthem
In the long term
Brand identity
Brand image
Corporate communication-->corporate hypocrisy
Hongwei
Brand crisis: a crisis strikes a brand or organization, damage to its reputation as well as its capital often occurs. However, brands with a strong reputation will recover faster from a crisis through developing effective brand communication and (corrective) actions on the short- and long term. According to Augustine (1996), the vital part after the crisis is for the company to contain, resolve and benefit from the crisis.
Brand identity: Over time, the consistent quality and security represented by a brand encouraged by advertising allow it to develop an identity of its own (word of month)
Brand image: Association: emotional measure of the perceived brand value (brand image)
Brand communication: Corporate communication: linkages between the building blocks (Corporate personality, Corporate identity, Corporate image, Corporate reputation)
Corporate Hypocrisy→ Gaps: occur at many points in the reputation management process