Cadbury's worm case
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The document discusses the Cadbury worm controversy, which began when live worms were found in Cadbury Dairy Milk bars in Maharashtra, leading to significant media backlash and a decline in sales. Cadbury India's response included investigating the issue, attributing the problem to retailer mishandling rather than manufacturing, and implementing a media strategy to restore consumer confidence. Ultimately, the company reintroduced its brand with new packaging and improved public relations efforts, resulting in a recovery of its sales and reputation.
Cadbury's worm case
- 2. Cadbury’s worm controversy. RISHABH ANAND (PATHANKOT) LOVELY PROFESSIONAL UNIVERSITY.
- 3. Introduction In 1824, John Cadbury began selling tea, coffee, and drinking chocolate, which he produced himself, at Bull Street in Birmingham, England. He later moved into the production of a variety of cocoa and drinking chocolates, made in a factory in Bridge Street .
- 4. John Cadbury became a partner with his brother Benjamin and the company they formed was called ‘Cadbury Brothers of Birmingham’.
- 5. British confectionery company owned by Mondelēz International Industry's second-largest co. Cadbury India began its operations in India in 1948 by importing chocolates. Operates in categories – Chocolate confectionery, Beverages, Biscuits, Can dy etc.
- 6. Portfolio
- 9. Crisis It is a major unpredictable event that threatens to harm an operation, reputation of organization. This can result in public scrutiny. Effect organization’s normal working. Also have some political, legal, financial impacts on it.
- 10. Company will be judged on How much care was taken to prevent the issue arising in the first place. How quickly it respond and managed the issue How well did it communicate?
- 11. Characteristics of good crisis mgt. Fast and active communication Ability to admit mistakes. Full appreciation of the needs of all stakeholders Clear recovery stage. Consistent corporate messages.
- 13. ….and then the worms crawled in
- 14. Crisis Just a month before Diwali FDA Commissioner received complaints about infestation in two bars of Cadbury Dairy Milk.
- 15. In eight outlets across Maharashtra, worms were found in some bars of Cadbury Dairy Milk. Inquiry was instituted by the Food and Drug Administration and negative media publicity spread like wildfire. Consequently, sales volume plummeted, retailer cooperation lessened and employee morale dwindled. All in all, the company's credibility suffered extensive damage
- 16. Crisis Reputation and credibility was under intense scrutiny. Sales volumes came down drastically in the first 10 weeks. Employee morale – especially that of the sales team – was shaken. Due to which media coverage touched close to 1000 clips in print and 120 on TV news channels. People even assumed that every chocolate could be contaminated.
- 17. PROBLEMS FACED BY CADBURY Cadbury India Ltd. has begun investigations into reports that live worms were found in its Dairy Milk chocolate bars, Cadbury’s statement : We are concerned about these reports and are investigating it," a company spokesperson said. The Maharashtra Food and Drugs Administration (FDA) had announced Monday that it would prosecute Cadbury India Ltd. after tests indicated "insect infestations" in the chocolate samples tested.
- 18. Cadbury’s statement Infestation was not possible at the manufacturing stage. Raised finger on retailers for poor/improper storage. FDA didn’t accepted that. It was followed by allegations and counter allegations.
- 19. It is storage linked problem. Not manufacturing linked. Counter strikes by hitting on packaging of Cadbury. What about packaging????
- 20. Effects S A L E S 30% Heat of negative publicity
- 21. CHALLENGE To Restore confidence in the key stakeholders. Build back credibility. Make customer believe about safety. To increase the sales.
- 22. Objectives To communicate that Infestation could never occur at the manufacturing stage. The problem was storage linked. Cadbury Dairy Milk continued to be safe for consumption. Let its brands and its performance speak for it.
- 23. Remedy Infestation was Storage-linked problem, not manufacturing related. Sales volumes climbed back. Responsiveness of company. Significant upward movement in ratings. *(They went compared with cola infestation)
- 24. We know you love it… but was it all that easy ????
- 25. Project ‘Vishwas’ Set up a media desk to ensure that no media query went unanswered. Key messages. Consumers must exercise the same care. Retailed monitored and education program. Significant packaging. Toll free num. & E-mail.
- 29. Phase 2: In media conference new packaging was introduced. The new ‘purity sealed’ packaging was launched. By investing up to Rs. 15 crore. The metallic poly-flow, was costlier by 15%. Cadbury didn’t hike the pack price. Double wrapping for maximum protection to reduce infestation possibility.
- 30. Phase 2 To communicate these changes Mr. Amitabh Bachchan was chosen as brand ambassador to endorse Cadbury. To reinforce the credibility of Cadbury. Audio-visual with message from star was prepared. The announcement of new pack was done through Testimonial Ad.
- 31. Testimonial Testimonial or show consists of a person's written or spoken statement extolling the virtue of a product. Some one praising a product after using it or acts like he had used it and explaining the benefits.
- 32. Results Media Coverage: media relationship effort clearly helped in making people and media accept the fact. Reach 380 clips in 11 different languages. Sales: Climbed back Reflects restoration.
- 33. Results Image: Upward movement. Image, response, behavior. Positive media coverage.
- 34. Cadbury’s PR PR department should be independent same as other departments so that he/she can take timely action without other’s concern. PR department of Cadbury played a great job in managing reputation and goodwill of their organization.
Editor's Notes
- #24: *another problem.