How Eveready distanced itself from Union Carbide and prospered

Ramya Ramamurthy & Molshree Vaid, Moneycontrol.com, November 30, 2006
This may sound like the beginning of a bad joke – but what do you get when you put together 16 brand communication experts and advertisers together to brainstorm and write down their strategies for tackling a crisis over 48 hours?
Well, advertisers begin to sound like PR counsels; the PR folks sound suspiciously like the brands they defend and the consumer activists, well simply put, sound enraged!
In times of crisis, straightforward PR fights fire better than innovative advertising. When faced with a financial or legal crisis, the golden rule calls for direct communication backed by immediate action.
Social scientist, Shiv Viswanathan told CNBC-TV18, “I would like brands to apologize in the Japanese style, when it makes a mistake. I don’t think Indian brands know how to say sorry and if they don’t know how to say sorry, then how can you have forgiveness?”
In a crisis crunch, speed is the brand’s biggest ally. In 2003, a rumour about ICICI’s supposed bankruptcy created havoc in the market. Depositors withdrew nearly Rs 550 crore over 72 hours and the company’s MD, KV Kamath had to go on television to stem the panic.
Executive Director & CEO, FCB Ulka, MG Parmeswaran says, “I remember how ICICI got into the act. They were talking on national TV and came forward to say that we don’t have cash problem and our NPA is under control.”
President & COO, Lintas India, Pranesh Mishra says, “In the hours of crisis, the PR takes the upper hand in terms of strategy. Paid-for advertising is always more suspect because it has the disadvantage of being the manufacturers perception of the problem.”
But dousing the crisis is never just a simple choice of PR over advertising. As Managing Director of Union Carbide, Vijay Gokhale, was brought in to head the company when it faced its biggest calamity – the Bhopal gas tragedy – in which over 20,000 people were killed in 1984.
Union Carbide’s first response was defensive PR, but while it proved a setback to the company, it worked wonders for the brand-Eveready.
Ex Chairman Emeritus, Union Carbide India, Vijay Gokhale says, “What we had done immediately after the Bhopal gas tragedy is, we stopped advertising. We waited about 2 to 3 months and then we distanced Eveready from Union Carbide, wherever we could under the law. We removed the words Union Carbide and our retail stood by us. Sales of Eveready hardly got affected. Maybe temporarily – for one month, then it got back to the old market share of above 44%, and it has grown thereafter.”
While recalling brands is the single most effective act to recover public faith and trust, brands prefer to protect their topline over brand image. Even in the case of the cola company, where a recall of tested samples was possible, the company in question still preferred to slug it out with the CSE in the media. This, say brand experts, could be the new defense option for brands under fire in the future.

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