Crisis In Odwalla Corporation

The Odw wholea corporation, a result juice producer ground in California has al vogues been a staunch supporter of natural ingatherings, though sadly those natural fruits created a vitriolic risk to at least 71 people in the f all of 1996. The partnership was linked to a large identification number of products containing apple juice that was spoil by the deadly e-coli O157H7 bacteria.The death of a 16-month-old barbarian in Evans, Colorado was the first of umteen illnesses that were directly linked to the participations products, most of which contained cloud apple juice. In fact the confederation ended up commemorateing 70% of its list product on the shelves in the join States and Canada. (Mogel, 2002, p. 222) The outbreak had been swift and the fellowship is very very much praised for its agile and particularly humanitarian solution to the maculation. The selling campaign they embarked on with the assistant of a merchandising crisis worry team up is actua lly plunder winning.At the term of the crisis, Odwalla appe atomic number 18d to do everything right. It responded to what it called a freak item by pulling the suspect juice and offering to pay medical expenses. The quick recall and its warm and fuzzy mountain range prompted favorable comparisons with Johnson and Johnson for its handling of the Tylenol incident.The sign response to the problem is crucial to the marketing arena as it is a way in which notees end see in a recent strategic spatial relation the ways in which marketing can affect crisis management positively for a guild in dire straits. though the eventual court rulings and the findings of an inquiry did non match the universal personification associated with the crisis marketing it did save the keep company from almost genuine disaster that would likely lead to the company folding in disgrace. Certainly if the instruction that was discovered during the investigation, made by the courts had been visible(p renominal) to the public during the crisis the company and its prepareers would have lost everything.Odwalla pleaded guilty to criminal charges of selling tainted apple juice. It paid a $1.5 zillion fine, the largest ever assessed in a forage industry outcome by the nutrient and Drug Administration. Federal investigators now bring up that Odwalla had unremittingly accepted blemished fruit and ignored warnings by its own rubber team. Moreover, as sales plummeted 90 percentage, company officials maintained an inside/outside brass covering up company malfeasance enchantment positioning Odwalla as a dupe along with those who it had pois mavend.Though the ethics of the location are suspect from a business stand backsheesh they were crucial in the proximo success of the company. Industry standards have since changed a great deal and Odwalla readily stepped in line with industry standards for pasteurizing its product, something that they had long resisted still at long la st in 2002 became an FDA requirement excluded still by unfit labeling equitys, warning consumers of the pasteurize nature of a product. Though in that location are still suspicions associated with the situation, the right answers to tough crisis marketing can be found in the case studies of the situation.Odwalla acted right off. Although at the point where they were first notified the link was uncertain, Odwallas CEO Stephen Williamson enjoin a complete recall of all products containing apple or carrot juice. This recall covered around 4,600 retail outlets in 7 states. Internal task teams were organise and mobilized, and the recall costing around $6.5m was stainless at bottom 48 hours. What the company didnt do was to avoid responsibility. On all media interviews, Williamson evince sympathy and regret for all those impact and immediately promised that the company would pay all medical costs. This, allied to the prompt and house-to-house recall, went a long way towards whole customers that the company was doing all it could.The intended publics of the communication theory associated with the e-coli crisis all receive the information the company intended to convey, including eventual fault in production, though this was after the crisis had been dealt with and didnt receive much air time.The intended publics received observance of the recall and everything that was being done to jibe that the problem would stop there, including sweet plans of put to death for flash pasteurization as strong as a new form _or_ dodge of government associated with new industry wide changes eventually utilize by the FDA.The FDA began implementing further guidelines that needed juice producers to show a item diminution of bacteria in their juice. It is this law that has now, after years of discussion and public comment periods, come into effect. This is not a pasteurization law, it is a bacteria reduction law that requires juice producers to reduce the bact eria in their juice and to develop a HACCP (Hazard Analysis and Critical Control Point) system that ensures they keep records that would among other things, enable becoming recalls and trace backs if the need arose.The industry has since implemented a great deal of the new standards and come into compliance with a system that will greater protect the public. In a sense the outcome could be considered the legacy of the crisis as Odwalla has continued to be a leader in the theatre of food safety engineering effectuation that is often use as a model for other crisis situations.The success of the layer can be seen in a recent work detailing the award Odwalla and its crisis management marketing firm receivedAn independent AOL survey showed that 86 percent of online respondents supported Odwalla and would return as consumers. former(a) surveys showed 94% of those polled were aware of the E. coli outbreak 96% of those aware approved of Odwallas handling of the crisisOdwalla successfull y reintroduced products after the recall, and continues to introduce new products at a normal rate (Mogel, 2002, p. 226) accessionally the financial as hearty as consumer confidence issue is still one that is reviewed by industry leaders as they are more likely in todays climate to create at least a minimal plan for the potency of such a problem within their own business. Odwalla also showed specific crisis management skills, with the help of their crisis consultants in their ability to quickly reach their home(a) as well as external publics as they instituted an infixed open door policy come with by a collective meetings that are still held today to keep the internal public abreast with current require and shortfalls in the company, as quickly as possible.Internal communications were key Williamson conducted regular company-wide conference calls on a day-by-day basis, giving employees the chance to ask questions and purport the latest information. This approach proved so p opular that the practice of quarterly calls survived the crisis. (CSR case studies in crisis management Odwalla, 2006, at http//www.mallenbaker.net/csr/CSRfiles/crisis05.html) financial markets responded to the communications effort stock price was $19 prior to the crisis, dropped to $9 immediately after, and has risen to $13. (Mogel, 2002, p. 226)All the intended publics were clearly communicated with the best possible outcome the company could have foreseen at the beginning of the crisis. oneness point of intrigue is also associated with the avenues that were used in this crisis, during the information age.One strategic element in this crisis management situation is that even as early as November 1996, Edelman and Odwalla took full advantage of the Internet to represent reporters and consumers immediate access to information nearly the recall. Although Odwalla did not have a incorporated or promotional Web grade, the companys crisis-related site was up and running within 4 8 hours. Based on its experience in the Odwalla case, Edelman PR has developed an online response product that enables clients to establish crisis preparedness sites on their Intranets. (Mogel, 2002, p. 227)The technology of the day was utilized to its fullest, in addition to a multimedia campaign explaining to those who had the product that was recalled to dispose of it and also telling customers and those touch on of their intention to produce accountability with touch on to the crisis.