Coca Cola in Belgium

1) How could the Belgium problem surrender damaged Coca Cola? Coca-Cola had been creating a really strong and happy image, and people had great sympathy for the brand. But because of the Belgian scandal, the credibility of the umbrella brand was being doubted. First of all, customers ( master(prenominal)ly from Belgium and France at the beginning) were scared of drinking Coca-Cola products. For example, parents did not penury their kids to get contaminated. More so, the brand was not giving a specific reason for these incidents, and by not reacting soon enough the quality of their products was at stake.Because of that, the Belgian government imposed strict hygienic conditions to recover the right to sell their products again. Therefore, the rest of europiuman countries had an excuse to distrust the brand, flush if the Belgian authorities reacted a bit extremely due to the former chicken crisis. Suppliers and distri exceptors around Europe were also impacted. Coca-Cola, as a worl d(a) brand, had had to trust its bottlers to follow the quality set the company held, but this scandal challenged the current control of Coca-Cola over its suppliers plants.But these suppliers also were scared of the consequences of their relationship with Coca-Cola in this crisis. Coca-Cola also suffered a financial impact because of this crisis. The onanism of their products had a negative impact on the second quarter net income of the year 1999, with a decrease of 21%. Not only that, but the apostrophize of the entire operation escalated to $103 million. All around the world investors were afraid of the money invested in the company, and this affected a decrease of the share value on surround Street.The competitors saw this crisis as an opportunity, and increased their promotion in order to steal part of Coca-Colas market share. They took advantage of Coca-Colas weak image during those days to claim their get high quality. Despite all of this damage during June and July (part ly due to the slow reaction of Coca-Cola), by the beginning of August the core users of Coca-Cola brands had find oneselfed the same purchasing intent than sooner the crisis. Hence, we can conclude that even if there was a big impact in the short term, this crisis did not affect the image of the company in the tenacious term. ) Is the problem solely limited to Belgium? Solely to Europe? Or is it a global problem? It is worth mentioning that this was the first crisis of these characteristics that Coca-Cola suffered. Until then, it had been the most famous and successful global company, but a located problem in a relatively small country as Belgium had repercussions in Wall Street. It is true that the center of Europe was the most affected area for this problem the cases of sickness were reported in Belgium and in France only, but it also affected the rest of the European market (Luxemburg and Dutch, for example.It even made the European Commission involved, which recriminated the company for not giving enough explanations. However, it was not only the Eurpean market who was affected they reported a worldwide issue of 1% of sales, and during 10 days they lost a 13% in share value. Therefore, the Atlanta Headquarter had to react, and Douglas Ivester (CEO) had to make a public international apologies. Nevertheless, Coca-Cola is produced locally sooner than globally, so they could have reduced this global impact by informing about the production and distribution process.In conclusion, the brand image and reputation of Coca-Cola was affected globally, but especially in Europe, as it is where it had direct impact. Although thanks to Coca-Colas strength, its global profitability only received a short term impact. 3) Is it feasible for the company to regain its image? In this particular case, we already know that Coca-Cola was able to regain its image. But it is interesting to see what were the reasons of the recovery, and whether they can be used by former(a) comp anies.First of all, this crisis started as a phenomenon of mass hysteria, which happen periodically. They tend to have huge impact in the short term, but the long term is barely affected. close to recent example would be the avian flu, which had few casualties but caused a great disturbance. Second, the company had more than enough resources, the know-how and the influence to regain the confidence of its stakeholders by communication. After all, they were highly regarded by most consumers and markets, and recognized as a global, caring brand.Third, we have now (not that much in Coca-Colas particular case) the example of early(a) global brands that had comparable problems and were able to recover, through both communication and other acts. One very well known problem was that of Nike, and the whole scandal of electric razor labor during the 90s and early 00s. They reacted fast, and instead of trying to cover it up, admitted it and acted in order to end the problem, and convince t heir stakeholders that they had 4) If you had to design an announce campaign, what objective would you propose? And what actions other than advertising would you undertake?The scandal suffered in Belgium was also a reason for European authorities (and each countrys authorities) to expose their doubts about Coca-Cola. Thus it would be advised to have an all-around campaign to prove the companys integrity and its commitment on social responsibility in front of all of the stakeholders, not only the consumers. Some ideas we discussed that could be included in this campaign during the hysteria are the following * The crisis was directly linked to Coca-Cola cans. Because of that, Coca-Cola should promote bottles rather than cans.Unconsciously the human brain would not link the bottles with the crisis. * The main focus of the campaign should be on emotional arguments, as functional arguments are compromised. * Similar to the first idea, prevent damage over other brands (Fanta, Nestea) by advertising them individually, so the consumers do not link them directly to Coca-Cola. These communications could be supported with PR. If we can convince the media of the commitment on quality, positive comments allow for help calm down the consumers and minimize the impact of the hysteria.John Emsleys article in The Independent is the perfect example of of how this comments can benefit Coca-Cola. Some ideas we discussed that could be changed in the company after the hysteria are the following * Redefine the companys mission, to better show commitment with its stakeholders and with social corporate responsibility. * More collaboration with local governments on social projects. * Stronger conditions for suppliers, or stronger control over them, in order to make it harder for these crisis to appear.