Crisis Communication |
by Dr. Dino Sossi
In this class exercise, students were asked to write a Crisis Communication Plan.
The responses below show how various class groups described the underlying crises as well as how to communicate responses across media platforms.
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Crisis Communication Plan #1
Group One – Crisis Communication Plan - Chipotle
Professor Dino Sossi
CM 333
October 28, 2022
I. Introduction:
In 2015, Chipotle Mexican Grill found itself under fire for the spread of E-coli bacteria which prompted the closure of several locations across the United States. Though the findings of the CDC investigation resulted in no specific source of the contaminant, it prompted a social media frenzy and Chipotle found itself amid a major PR crisis. The following paper will further examine the crisis and threats faced by Chipotle as well as provide a comparative analysis and review of the strategies implemented by the company. The findings will conclusively indicate agreement with the original response strategy or suggest alternative strategic methods.
II. Articles Consulted:
- Aamer Madhani, & USA TODAY. (n.d.). Chipotle faces E. coli lawsuit. USA Today. https://remote.baruch.cuny.edu/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=J0E359529498615&site=ehost-live
- Blankinship, D. G. (2015). No Source Found for E. Coli at Chipotle. Time.Com, N.PAG. https://remote.baruch.cuny.edu/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=110847443&site=ehost-live
- Brummette, & Fussell Sisco, H. (2018). Holy guacamole! Framing and the Chipotle contamination issue. Journal of Communication Management (London, England), 22(3), 280–295. https://doi.org/10.1108/JCOM-08-2017-0085
- CDC. (2016). Multistate Outbreaks of Shiga toxin-producing Escherichia coli O26 Infections Linked to Chipotle Mexican Grill Restaurants (Final Update). https://www.cdc.gov/ecoli/2015/o26-11-15/index.html
- Chan, M. (2016). Chipotle’s E. coli Outbreak Stumped U.S. Health Investigators. Time.Com,1.https://remote.baruch.cuny.edu/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=113543465&site=ehost-live
6. Chan, M. (2015). Chipotle Hit With Another E. Coli Outbreak. Time.Com, N.PAG. https://remote.baruch.cuny.edu/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=111900016&site=ehost-live
7. Chipotle, News Releases. (2016, Jan 19). New chipotle food safety procedures largely in place; Company will share learnings from 2015 outbreaks at all-team meeting [Press Release]. Retrieved from https://newsroom.chipotle.com/2016-01-19-mew-chipotle-food-safety-procedures-largely-in-place-company-will-share-learnings-from-2015-outbreaks-in-all-team-meeting
8. Chipotle, News Releases. (2022, Oct 25). Chipotle announces third quarter 2002 results [Press Release]. Retrieved from https://newsroom.chipotle.com/2022-10-25-CHIPOTLE-ANNOUNCES-THIRD-QUARTER-2022-RESULTS
9. Delaney, E. & Gunn, R. (2017) Situational Crisis Communication Theory and the Use of Apologies in Five High-Profile Food-Poisoning Incidents. Journal of the Indiana Academy of the Social Sciences Vol. 20.
10. E. Coli Linked to Chipotle Spreads to 6 States. (2015). Time.Com, N.PAG.
11. FDA. FDA Investigates Multistate Outbreak of E. coli O26 Infections Linked to Chipotle Mexican Grill Restaurants. (2016) USFDA. FDA Investigates an Outbreak linked to Chipotle Mexican Grill A multistate outbreak of E. coli O157 infections linked to Chipotle Mexican Grill U.S. Food and Drug Administration
12. Feeney, N. (2015). Chipotle Tweaking Food Prep Methods After E. Coli Outbreak. Time.Com, N.PAG. https://remote.baruch.cuny.edu/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=111997935&site=ehost-live
13. Wohl, J. (2015). Could E. Coli Scare Cost Chipotle Its ‘Integrity’ in the Long-Term? Advertising Age, 86(21), 0004. https://remote.baruch.cuny.edu/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=110904345&site=ehost-live
14. Xinyan, Z., Mengqi, Z., Cheng, J. (2018). Examining multiplicity and dynamics of publics’ crisis narratives with large-scale Twitter data. Public Relations Review, Volume 44, Issue 4, Pages 619-632. Examining multiplicity and dynamics of publics’ crisis narratives with large-scale Twitter data (sciencedirectassets.com)
III. Background
Chipotle Mexican Grill opened its first restaurant in 1993 in Denver, Colorado founded by Steve Ells, a graduate of the Culinary Institute of America. Ells found inspiration from one of its first key menu items - the Mission Style Burrito, from San Francisco’s Mission District. Today Chipotle’s menu includes a diverse array of Mexican-inspired dishes. Chipotle currently operates 3000 locations both nationwide and internationally. It is “a longtime leader and innovator in the food industry” (Chipotle, 2022). Chipotle is registered under the NYSG ticker CMG and ranks on the Fortune 500 as one of the Most Admired Companies of 2022. It recently reported a 13.7% increase in the third quarter close to $2.2 billion (Chipotle, 2022).
In November 2015, Chipotle came under public scrutiny for an outbreak of E-coli across 11 states resulting in 43 immediate store closures (FDA, 2016). This prompted a CDC investigation the following December. Subsequently, the news coverage spread predominately through the social media platform, Twitter (Brunette, p. 280). The source of contamination could not be identified or traced to a specific cause or food item (CDC, 2016). On January 19, 2016, Chipotle released a press statement highlighting new food safety protocols that will go above and beyond safety standards (Chipotle, 2016).
IV. Type of Crisis
The Chipotle Crisis that Outbroke in July of 2015 within Chipotle restaurants was pertaining to the handling of the foods prepared within the restaurant. While it is unclear on how exactly the E. coli came in contact with the food, it impacted the company tremendously. E. coli is a very toxic bacteria that is a poisonous substance that causes damage to the small intestine in the human body. It causes dehydration due to vomiting, diathermia, and bad stomach cramping. This ultimately caused Chipotle sales and stock prices to plunge. Chipotle was affected twice as they were hit with another outbreak in
Public Safety – According to the article, Multistate Outbreaks of Shiga toxin-producing Escherichia coli O26 Infections Linked to Chipotle Mexican Grill Restaurants (Final Update),
“A total of 55 people infected with the outbreak strain of STEC O26 were reported from 11 states. The majority of illnesses were reported in Washington and Oregon during October 2015. The number of ill people reported from each state was as follows: California (3), Delaware (1), Illinois (1), Kentucky (1), Maryland (1), Minnesota (2), New York (1), Ohio (3), Oregon (13), Pennsylvania (2), and Washington (27) (CDC, 2016)”
While many strains of E. coli can be harmless, there are strains that can be extremely detrimental to a person’s health. Things like kidney failure or death can occur with the stronger strains of this bacterium. In addition, E. coli can be released into the environment through the deposition of fecal matter and can contaminate the waterways in which we use for daily things like showering, water from the faucet, washing dishes, etc. This led to impacting waterways and big bodies of water like beaches and spreading the bacterium in large quantities that can be hard to minimize or control.
b. Financial Loss
In an article published by CNN, Chipotle profits down 82% in wake of E. coli outbreaks by, Jackie Wattles, it was reported that its profits fell to the 82nd percentile. “Although Chipotle did manage to post a profit of $25.6 million this quarter, comparable store sales were down 23.6% and revenue down 16.6% compared to the same period last year. Reactions were mixed. After an initial price jump of about 2%, Chipotle (CMG) stock began trading about 1.7% lower during extended trading hours Thursday evening”(Wattles, 2016). The company’s shares hit low at the 52-week period when calculating profits was due.
c. Reputation Loss
Chipotle's response to the crisis was strategizing the launching of an enhanced food safety program that included the DNA-testing ingredients before they were shipped off to restaurants, altering the way the food was prepped, and upgrading their handling practices. In other efforts, they offered paid sick leave to disincentivize sick employees from working. Additionally, “As part of the 'Behind the Foil' push, the brand showcased all 51 of its ingredients on a billboard in Times Square, ran a two-hour live feed on its Facebook page from the kitchen of a restaurant in Irvine, CA so fans could watch employees chop peppers and onions and stir the ingredients for pico de gallo, and hosted a spelling bee at the 2019 Scripps National Spelling Bee” (Cooper, 2022).
References:
CDC. (2016). Multistate Outbreaks of Shiga toxin-producing Escherichia coli O26 Infections Linked to Chipotle Mexican Grill Restaurants (Final Update). https://www.cdc.gov/ecoli/2015/o26-11-15/index.html
Chan, M. (2016). Chipotle’s E. coli Outbreak Stumped U.S. Health Investigators. Time.Com, https://remote.baruch.cuny.edu/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=113543465&site=ehost-live
Chan, M. (2015). Chipotle Hit With Another E. Coli Outbreak. Time.Com, N.PAG. https://remote.baruch.cuny.edu/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=111900016&site=ehost-live
Cooper, K. (2022, October 6). How chipotle regained Customer Trust after the E. coli outbreak in 2015. CCW Digital. Retrieved October 27, 2022, from https://www.customercontactweekdigital.com/performance-metrics/articles/chipotle-behind-the-foil
Wattles, J. (2016, July 22). Chipotle profits down 82% in wake of E. coli outbreaks. CNNMoney. Retrieved October 27, 2022, from https://money.cnn.com/2016/07/21/investing/chipotle-earnings/
Wohl, J. (2015). Could E. Coli Scare Cost Chipotle Its ‘Integrity’ in the Long-Term? Advertising Age, 86(21), 0004. https://remote.baruch.cuny.edu/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=110904345&site=ehost-live
V. Threats to the Company
Chipotle will be able to prepare new strategies to mitigate its threats and capitalize on its opportunities if it evaluates the threats it faces. Despite the fact that Chipotle has some opportunities to expand, several threats could impede its expansion. The public, customers, media and trendsetters, investors, and the government all pose a threat to the company in the following ways:
General Public and Consumers
Brand awareness would be the most important external factor, which is a problem area for the business. Chipotle Mexican Grill highlights issues with its lack of international recognition and past food safety incidents.
The brand's popularity and revenue may suffer due to the public's possible association with danger. In addition, Chipotle is not well-known outside of the United States, particularly in comparison to rival businesses like McDonald's. This could be a disadvantage, making it hard to expand internationally. If Chipotle wants to continue its plans for expansion in the future, it will need to rebuild its reputation and gain more fans.
Due to food-borne illness, they have lost customers' trust. Because of this, many customers may feel uneasy choosing Chipotle as their daily dine-in option. Ongoing legal proceedings are exacerbating the brand's negative reputation.
The Media and Trendsetters
The company's slow recovery is likely attributed to social media. Chipotle's E. coli outbreak in late 2015 was much worse for the company than it would have been otherwise due to the rapid dissemination of information and, in some cases, false information via social media.
Social media probably played a role in the disparity in how these E. coli outbreaks affected sales results. Chipotle's food safety issues continued to be the subject of jokes on social media long after the initial outbreak, and awareness of the company's issues with food safety was raised in the first place thanks to social media. Since then, platforms like TikTok, Snapchat, and other reel-based platforms like Instagram and Facebook have repeatedly criticized Chipotle for serving online orders, charging high prices, providing poor customer service, and even providing orders in imperfect/improper packaging.
The company faces a grave threat from the fierce competition in the market today. The other contender marks persistently endeavor to get new menus and work on their administration. Therefore, Chipotle can handle the consequences even though it is a well-known brand.
Investors
The pandemic is likely to affect Chipotle's quarterly results. For quite some time, the restaurant industry has been experiencing a decline in customer traffic. We anticipate the pandemic will continue to impact sales and traffic in the upcoming quarters.
Additionally, Chipotle has been incurring ever-increasing costs, which has hurt its profit margins. The company saw an increase in beef prices and an increase in delivery sales expenses during the third quarter. Additionally, the labor required to prepare and serve food has increased due to food safety practices, increasing labor costs that may reduce the profit margin.The supply chain is susceptible to disruptions from time to time. They only have a few suppliers, so even a slight interruption in their current supply chain could hurt their business.
Food costs are another external factor that has an impact on Chipotle Mexican Grill. When discussing a company's environment, this is regarded as one of the most crucial aspects to consider.
Prices rise due to food shortages, and even if a company is willing to pay, it may not always be able to acquire the required products in sufficient quantities. Additionally, Chipotle will likely have to raise prices to cover the costs, providing unsatisfied customers. Together, these factors pose a significant threat to the company's performance.
The Government
Government External factors like politics, the government, and laws can also impact their business. The current economic situation and government policies may affect the company's growth.
Chipotle, which has its headquarters in Newport Beach, was today indicted by the Justice Department on two counts of violating the Federal Food, Drug, and Cosmetic Act by adulterating food. At the same time, it was being held for sale following shipment in interstate commerce.
Prosecutors filed a deferred prosecution agreement (DPA) with the United States District Court in Los Angeles. Chipotle agreed to pay $25 million, the largest fine ever imposed in a food safety case.
Norovirus, a highly contagious pathogen easily transmitted by infected food workers handling ready-to-eat foods and their ingredients, was the source of some criminal charges in Chipotle restaurants. The norovirus can cause severe symptoms like diarrhea, vomiting, and abdominal cramping.
According to United States Attorney Nick Hanna, "Chipotle failed to ensure that its employees understood and complied with its food safety protocols, resulting in hundreds of customers across the country getting sick.”
According to FDA Commissioner Stephen M. Hahn, M.D., "We will continue to investigate and bring to justice any company whose food products present a health hazard to consumers." "The FDA will hold food companies accountable when they endanger the public's health by purveying adulterated food that causes illness outbreaks.
Resources
Affairs, O. of R. (2021, April 21). Chipotle Mexican Grill agrees to pay a $25 million fine to resolve. U.S. Food and Drug Administration. Retrieved October 28, 2022, from https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/press-releases/chipotle-mexican-grill-agrees-pay-25-million-fine-resolve-charges-stemming-more-1100-cases-foodborne
B.S. strategy Insights. (2021, August 20). SWOT analysis for Chipotle 2021. B.S. strategy Insights. Retrieved October 28, 2022, from https://www.bstrategyinsights.com/chipotle-swot-analysis/
CDC. (2016). Multistate Outbreaks of Shiga toxin-producing Escherichia coli O26 Infections Linked to Chipotle Mexican Grill Restaurants (Final Update). https://www.cdc.gov/ecoli/2015/o26-11-15/index.html
Kelso, A. (2021, April 26). How Chipotle's environmental, social, governance work is paying off. Forbes. Retrieved October 28, 2022, from https://www.forbes.com/sites/aliciakelso/2021/04/26/how-chipotles-environmental-social-governance-work-is-paying-off/?sh=1442760e3433
Nanjapla, R. (2020, November 20). An investor's guide to Chipotle and its customers. Market Realist. Retrieved October 28, 2022, from https://marketrealist.com/2019/12/investors-guide-chipotle-and-its-customers/
VI. Initial Press Release
VII. Social Media Strategy
Currently, social media is a “must” regarding PR tools to be utilized. This case was no exception. Social media should be used to convey concern and sympathy over the situation. It is a quicker way to respond to a situation without it getting too far ahead of the company’s ability to mitigate the damage it can cause.
It should send a message that Chipotle cares about the people that got hurt and even more so that nothing else happens. The message should be from three sources:
· Corporate- to show that management is aware of the problem and working to correct it from happening again on a systemwide basis
· Supply chain management- to show that they’re doing their best to ensure that the source of the food is kept up to and better than industry standards
· A line worker to state that they are ensuring that customers get the best service and they take pride in doing so.
The message should be sent in stages so the customer can “track” how high the concern is going in the chain of command. The major positive potential of using social media is to provide the public with a “caring face” for the company. It provides them with a feeling that the company is taking this seriously enough to address it and human enough to care about the consequences. Any follow-up messages should address the corrective actions (if any) to restore confidence to their target market that the company has undertaken great efforts to ensure their customers’ safety.
However, the negative potential is that their customers might see that as “closing the barn door after the cows have escaped”. While I would push for the use of Facebook, I would minimize the use of Twitter and Instagram. While I don’t think there is such a thing as “bad” social media, I believe that there are many instances where a social media site can be mismanaged or mishandled which can make the impact of the original message less positive. I would use these platforms and then allow for the reposting of the original content to generically find its way to other social media.
VIII. Traditional Media Strategy
To combat the situation the company found itself embroiled in, traditional media should be used in order to spread messages from the company, particularly through the use of press conferences and one-on-one interviews with reporters. This use of traditional media should be utilized in order to show the company has understood the severity of the situation and ensure that the public understands the company is working to rectify the problem. While spreading these messages on social media should also be done, traditional media is used by a sizable portion of the public, ensuring that a larger portion of their user base will see these messages they may have otherwise missed on social media.
A message from the company should indeed be sent out to the public, clarifying the company’s understanding of the situation and outlining the next steps of the process to rectify it. This should be done to slow the damage to the brand due to the food contamination, as major publications will have picked up the story and it will be at the forefront of the public consciousness.
The messenger for the company should not be a company spokesman, but instead one of its high-level executives. If a spokesman is used to sending this message, it may create the idea that the company does not care due to the lack of any statements from high-level executives. Through the use of these executives, it helps to create a sense of authenticity and remorse for the company’s role in the situation.
With regards to the timetable of when the message should be released, the company should release a statement as soon as possible once details of the situation occur. By staying on top of the situation, the company can keep more of its credibility by showing professionalism in the wake of a bad situation.
As for the content of the message itself, the message should have two parts. First, it should contain an apology from the company about the situation. This helps to create a sense of empathy with the company, helping to lessen the fallout from the situation. The second part of the message should be the company’s plan of action about the situation, clearly the steps being taken to resolve it as well as any compensation for the victims.
There should be follow-up messages as the situation unfolds, such as the company updating the public once the source of the E.coli has been located and relevant facilities cleaned to prevent further infection. By keeping the public in the loop, the company will show that they are serious about resolving the situation adversely affecting customers.
The major potential positive of the company’s response is the mitigation of damage to the reputation and brand of the company. While the company will still take a hit due to the situation, their response ideally will convince the public they care about fixing it and help to reduce this damage to the company significantly.
The major potential negative is that these messages and interviews exacerbate the problem, revealing flaws within the company that allowed this to happen or making the company appear as if they don’t care. A bad interview with an executive or a poorly worded message about the situation could help to turn the public against the company, further tarnishing the company’s reputation and hurting its short and long-term prospects.
IX. Repair Strategy
Chipotle's future should involve being transparent, implementing a new food safety protocol, more internal audits, and a more robust marketing campaign that highlights chipotle's food quality as well as quality ingredients. These steps should be a part of the company long after this crisis has subsided. Keeping and implementing practices such as these keeps stakeholders committed to the product as well as the company. At the start of repairing the company, top executives such as the chief marketing officer should be let go and denied bonuses. This lets customers and stakeholders know that the company is on to a new horizon.
1. Food Safety Protocol
This is the most important aspect of regaining a stellar reputation and maintaining that stellar reputation. This process involves being transparent about the ingredients and ensuring they are quality items. The handling of the food items should include a new mandatory way of handling food items. Every year across all the brick-and-mortar stores, a mandatory food and safety handling meeting would take place. it would be the one day a year in which all the stores across the states would be learning or relearning proper food handling practices.
2. Robust Marketing Campaign
The next course of permanent action is a robust marketing campaign that focuses on a brand-new era of proper food safety handling. The website should give a detailed history of how the food items are picked from the best farms and how they land in chipotle’s stores. A new tagline that hints at having the best quality food items, so stakeholders get familiarized with the company being associated with only quality food items. A promotional campaign will help as well, once a year (to keep stakeholders excited for this once-a-year event) customers will be able to redeem one food item on the menu for free. (Full-priced item). This keeps customers intrigued and also allows customers to try food items they may have been reluctant to buy.
X. Conclusion
Chipotle designed a robust crisis strategy. They attacked the crisis head-on with responsive solutions. The plan that was enacted guided customers back to restaurants and stakeholders back to the company. Chipotle was able to turn around the company in a few steps. Those steps involved launching new campaigns focused on healthy eating, immediately shutting down restaurants that had the issue as well as enacting new food safety protocols that every location must adhere to. The major lesson learned throughout this scenario is that a crisis can help to be resolved by having a clear-cut plan and enacting that plan effectively.
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Crisis Communication Plan #2
Group 2 CRISIS PLAN OUTLINE
Group leaders Nadine Pierre-Louis (516-782-3719) and Erika Rodriguez (203-417-5089), with group members, Branka Romih (908-499-1614), Shennel Wallace (347-524-4014), Shonelle Williams (718-812-2133).
Nadine Pierre-Louis: Part II and Part IX
Erika Rodriguez: Part IV and Part X
Branka Romih: Part I and Part VIII
Shennel Wallace: Part III and Part VI
Shonelle Williams: Part V and Part VII
All team members met regularly, exchanged their phone numbers, and agreed upon a way to communicate while actively managing the crisis assignment. After the 2nd strategic planning meeting, work was delegated, and team members were assigned critical tasks that needed to be completed. All assigned team members participated in a professional and collaborative manner to accomplish a crisis communication plan which could have been successfully executed in a real-world crisis situation.
*Two classmates were not found after multiple outreach attempts were made via email: Mejia Hector and Graham Lee-ann
I. Introduction
The Subway restaurant chain experienced a crisis in 2015 when Jared Fogle, the main spokesperson for the franchise for the past 15 years, was arrested. He was charged and later pleaded guilty to “possession or distribution” of child pornography and traveling across state lines to have sex with a minor; he was subsequently sentenced to 15 years in prison (Indiana Lawyer, 2015). This crisis presented a major challenge to the reputation and daily operations of Subway restaurants, so they had to develop a crisis communication plan to mitigate this threat. This consisted of evaluating the situation to identify the crisis type, developing a plan to protect the reputation and change the negative perception of the organization, and implementing an action plan on how to repair the damage that was done. Subway distanced itself from him, but later they completely removed any association of Fogle with their brand (Jargon, 2015).
II. Background
Subway was founded in 1965 when 17-year-old Fred Deluca and Dr. Peter Buck a nuclear physicist collaborated over an idea to open up a submarine sandwich shop with the intention of having the shop fund Deluca’s college tuition. The first location of their partnership opened in Bridgeport, Connecticut in August of 1965. By 1974 Deluca and Dr. Buck owned 16 operating submarine sandwich shops spread throughout the state of Connecticut. As the brand continued to grow and flourish Deluca and Dr. Buck ensured always to stay true to the three core values of the company which are: “Always provide exceptional service to valued guests, offer high-quality, flavorful menu options at a great value, and Never stop evolving to improve the Subway® brand” (cite)
To date, Subway has grown to become one of the largest sandwich restaurant brands which are located in over 100 countries with more than 37,000 restaurants readily open to serve its signature sandwiches, wraps, and salads to millions of their guests daily.
In August 2015 Subway brand spokesperson Jared Fogle was charged and accused of child pornography and paying for sex from an underage child. Fogle in turn pleaded guilty to said charges. Prior to these accusations and pleading guilty Fogle was the spokesperson for the Subways brand from years 2000 to 2015. Fogle increased the brand's image as he promoted Subways as being responsible for his weight loss of 245lb by exercising and eating a diet of their sandwiches.
III. Type of Crisis
Subway is a fast-food restaurant that promoted their sandwiches as healthy-fast-food options that helped people lose and maintain their weight. Jared Fogle was a business major student at Indiana University. During spring break, Jared started consuming a turkey Subway sandwich with no mayo or cheese as his lunch and dinner. He became famous due to his “Subway diet” where he was able to lose almost 200lbs from 425lbs in a year. Subway heard about this story, and soon Jared became the company’s spokesman for 15 years. Using a public figure, or an influential image like Jared is a risky marketing technique because once this individual is in trouble, so will the company/s that carries/y a partnership with the individual. In this case, specifically, Subway faced a terrible outcome. Lowe sales were predicted as Jared’s case unfolded, and Subway’s bad reputation grew rapidly. Public safety was slightly endangered because a few social disparities arose, yet it still has a negative effect on the company.
Undoubtedly, after Jared’s downfall, Subway’s sales were impacted for a certain period, and the bad reputation continues to affect the company; along with social disparities that argue about whose actions are interpreted as worse than the others.
Financial Loss/ Lower Sales:
- 1st National commercial with Jared as a spokesman increased Subway’s sales by 20%, giving US sales for the sandwiches a total of $ 3 billion (New York Daily News, 2013).
- Subway has remained private about sales since the event of Jared Fogle. Thus, according to Industry Tracker Technician, average annual sales dropped 3% last year (2015)
- Fogle’s story was so influential that in 2005, sales drop 10% after Fogle’s advertising contract expired.
This indicates that by using a persona with an impactful story like Jared, Subway risked its reputation to its fullest, which consequently impacts its sales. When the individual is found in controversy, a company’s reputation falls, leading to the consumer’s unwillingness to purchase or support the company. –
“The fact that there was a #subway in my high school cafeteria just went from convenient to insidious” – (davehimself @davehimself, August 15, 2015)
Reputation Loss/Bad Reputation:
- Between the first and third quarters in 2015, Subway’s reputation score fell 6 points, from 77-71. From excellent to slightly above average (Maze, 2015)
- Jared’s investigation hurt Subway’s reputation. Brad Hecht, Chief Research Officer states “By any definition, a five-point move in any direction is significant. Their overall reputation has been impacted by the Jared situation” (Maze, 2015).
- The company started to delete history with Jared Fogle as his investigation unfolded. One of the first attempts was to delete a dance game with Fogle’s oversized pants posted on their Facebook page. This indicated that Subway perceived or had an idea of what was coming based on Fogle’s indecent actions.
Public Safety/ Society Differences
- Jared Fogle’s scandal brings a deeper, and more concerning question: Where do we stand as a society?
Some individuals blame Jared directly, while others blame Subway, and others simply do not care as to who stood behind the screen promoting the business. –
“It is much more upset about Chick-Fil-A’s action of reaffirming their support for “biblical definition of the family unit” that did not include same-sex-marriage” There is a difference between what happened with Jared and what happened with Chick-Fil-A” (Carlton, CBS News, 2015).
IV. Threats of the Company
Subways, one of the largest chains, saw a significant hit, and his reputation was severely damaged when the charges against spokesperson Jared Fogle surfaced. When we look at the general public, if subways had acted earlier, fewer people could have been affected on record. They were 14 individuals that came forward claiming Fogel abused them. Here's what we knew in 2009 was a complaint against Fogel by Rochelle Hermanwalron. "He told me that he thought middle school girls were so hot," Herman said. "I was in shock … I actually was questioning, 'Did I really just hear what I think I heard?' I looked over at my cameraman … and he was just astounded," She claims that she has yet to receive a response when she brought this to the attention of the corporate office. "I never got a 'Thank you for emailing' or anything like that, but I sent it, and it did go through." This was also a threat to the general public and consumers, not to mention the investors as well. Subway went on to deny ever receiving this complaint and released the following statement. Subways released a statement saying that it was never brought to their attention before that Fogel was a pedophile, and when it was brought to their attention, they immediately acted. Jared Fogel's at also affected the government and the stakeholders because the feds seized documents from his home that have ties to the company.
V. Social Media Strategy
On Facebook, subways have over 2 billion active users. Twitter, its greatest platform subways, has around 2.4 million. They use the data for collecting feedback from customers. Twitter followers sent over 87,000 tweets that relate directly to customer engagement. Instagram subways have 1.2 million followers; many posts are of their customers with a high level of attention. Subways utilize YouTube sparingly, with only 55 videos on the social media platform.
When the news broke about Jared Fogle, the crisis that affected Subway's fell under catastrophic mainly because it involved misdeeds towards the general public, the customers, and the government. Kalb Ira, assistant professor of clinical marketing at the USC Marshall School of Business, said, "the situation with Fogle highlights the dangers of relying on company spokespeople to represent a brand. A mascot, like the Charmin bear, is a safer choice. When spokespeople get into trouble, or things come out about them, it's definitely going to have some spillover to your brand," he said. Mascots "don't get into trouble." Kalb went on to say that the situation with Fogle highlights the dangers of relying on company spokespeople to represent a brand.
In reviewing the crisis, one thing that stood out was the actions of Jared Fogle, an individual act on act committed with the company's knowledge. "Cindy Mills, who ran a Subway restaurant franchise in Pensacola, Fla., said she started reaching out to Subway executives about Jared Fogle's interest in children after he spoke openly about it with her." As soon as Jared Fogle was arrested, subways immediately severed ties and distanced themselves from the person the act that was committed. "Subway tweeted that the company no longer had a relationship with Fogle and had no further comment." That was their corrective action; however, they never really issued a full apology because then they would be taking ownership of what happened and opening themselves up to litigation and lawsuits. Even though this was brought to their attention the first time, it wasn't until the second time that subways informed the people and the public about the corrective action taken to worsen their relationship with Jared Fogle.
When something like this happens, the best action is a good reaction, a message was sent, but it did not convey the seriousness of the crisis. The message should immediately convey the company's position on the act of working with the community to find a way to repair what damage has been done. Subway Franchisee Advertising Fund Trust SFTAT sent the recovery. The company's use of Twitter and Instagram and their relations to customer engagement those platforms should've been utilized to focus on surface recovery regarding this crisis.
VI. Traditional Media Strategy
Introduction
Any type of crisis is a threat to the integrity, operations, and reputation of a company, and many times this is due to negative publicity and media attention. Today, companies are even more vulnerable to negative social media comments that could go viral in a matter of hours. Thus, proper media strategy and good communication plans should be in place to inform stakeholders of any risks they face and manage the organization's reputation among others (Ozanne et al., 2020). Crisis issues may often be misrepresented or perceived differently by different groups. Therefore, it is essential for an organization dealing with crises to share information to clarify the issue with updated facts in a fast and accurate manner, and they should use multiple media strategies toward that end.
Sharing information via traditional media is common as it continues to be viewed by large groups of viewers on the daily news. However, times have changed and many Americans, especially younger generations, view their news information through traditional platforms as well as digital platforms. As stated by Sanders (2022), Americans 65 and older get information through regular cable TV news (56%) and/or broadcast TV news (53%). Between 21 %– 26 % of young Americans under 30 use cable TV or broadcast TV to receive news, whereas almost 41 % of them state they use social media or YouTube (27%) as a news source (Sanders,2022).
However, the fast growth of social media information and misinformation creates challenges for crisis communicators to distribute messages to affected audiences quickly and in a manner that promotes the accuracy and consistency of information (Freberg et al.,2013). Thus, it is important for the PR team to use various strategies, such as press releases, newspaper ads, or interviews. They could set up a media center so that the company spokesperson can issue a press release, and answer questions if necessary. This is still widely used and well perceived by the majority of the public as the spokesperson can speak directly to the audience, express their emotions, and project the message in the environment they control.
Details to consider when applying traditional media strategy:
Should a message be sent?
The importance of traditional media should not be neglected, and despite the difficulties that organizations may experience, a message should be sent. Crisis communication involves the “sending and receiving of messages to prevent or lessen the negative outcomes of a crisis and thereby protect the organization, stakeholders, and /or industry from damage” (Ozanne, et al., 2020).
Who should send the message? When should the message be sent?
A message should be sent as soon as possible by the organization’s PR team or designated spokesperson. This is usually someone within a company who is well-versed and accustomed to dealing with media (Clawson, n.d.). The message should be concise and clear but also based on available facts, but the PR team should also practice and be well prepared for some tough and unpleasant questions.
What should the message contain?
The main message that the company wants to project to its audience is what the crisis is about, and what the company is doing to correct the issue. Specifically, in Fogle’s case, Subway would clarify the circumstances, but also assert that he is no longer their spokesperson, and that they severed all ties with him.
Should there be any follow-up?
There must be a follow-up press conference to reinstate the suspension of all connections between Jared Fogle and Subway. During this conference, the donations made can be discussed, and apologies can be made public one more time. Social Media is not the best approach because the accusation made are concerning, therefore, the case must be treated with respect and empathy towards those affected. Writing a post through a social platform delivers the wrong message to the public, such can interpret as no interest in the case and those affected by the situation.
What is the major potential positive?
The major potential positive in addressing this issue through a press conference is to clarify the company’s reputation. We want to tell the public, current, and future customers that they can trust Subway and have confidence in not only the food it delivers, but what values the company holds and believes.
What is the major potential negative? (e.g., a press conference is immediate, but reporters cannot be controlled. Also, their follow-up questions and the way that the spokesperson addresses them could end up making the initial crisis worse).
There will be questions that may portray the company as handling suspicious activities. Therefore, it is important to maintain three major points clear and reinstated:
- Company: Subway NO LONGER holds a relationship with Jared Fogle.
- The company was completely unaware of such actions.
- Even before Jared’s scandal, the company started shifting gears and began implementing other advertising strategies that turned away from Fogle’s story. Our focus has already begun on the franchise major interests, and lunch-making ideas.
VII. Repair Strategy
In order for Subway to repair its reputation, the company should actively remove Jared Fogle and his likeliness from stores, commercials, advertisements and the website. As Subway’s only spokesperson and Jared’s compelling story on his weight loss journey, rightfully so people associate his face to the company. To minimize the damage, Subway needs to continue to separate themselves from Jared Fogle and his legal troubles. In addition, I would suggest that Subway donate a considerable amount to a charity founded to help children who are victims of child abuse. The World Childhood Foundation USA’s (Childhood USA) is a foundation created over 20 years ago intended to end sexual abuse, exploitation, and violence against children. Subway should collaborate with this charity and hold a fundraiser or donate a portion of their sales to help end the fight against child abuse. Consumers and the general public will feel more comfortable continuing to buy from Subway if they know that they are taking this allegation seriously and doing something about it rather than trying to sweep it under the rug. This is also good for investors; it shows Subway is taking steps to minimize the damage to the company from the scandal and repair their image in the media. Other than Jared Fogle, no one else should be fired or resign. According to Subway, they were not aware of the claims that Jared Fogle was making in appropriate comments, and when they were aware, they acted immediately. If they continue to get rid of other executives, it will give the impression that they are taking responsibility for Jared’s actions. Since an employee is claiming to have blown the whistle prior about Jared’s actions, corporate culture should be changed to be more transparent and document when any employee is making a report, to avoid this kind of confusion in the future
VIII. Conclusion
Jared Fogle’s weight loss story was so influential on the Subway franchise. This is due to the direct connection the marketing strategy builds about the fast-food sandwiches that in most cases reasoned with customers. Fogle is later arrested for child pornography and for paying minors to exhibit sexual conduct with him. Based on this, Subway decided to fully cut any connections with Fogle, reflecting the danger of relying on company spokespeople to represent a brand (Kalb Iran, Assistant Professor). Since then, Subway has remained private in terms of its sales, but; the outcomes are undeniable. Subway went wrong when it used a spokesman for the brand marketing strategy because it backfires when the same individual faces conflict due to the reflection it portrays on the company. Due to the crisis, lower sales were expected to see, as well as an irreparable bad reputation, and confusion among individuals in the community. Our response of completely removing Jared from all ads relating him to Subway is one way to erase the bad reputation this connection brought to the company. Apologizing to the affected families will help people separate Jared’s reputation from ours. Undoubtedly, Subway received a negative impact from Jared Fogle’s dark and hidden life. In the future, it is best to use other marketing strategies that will only reflect the company’s values.
II. Articles Consulted: Nadine
Web source:
Associated Press. (2022, May 10). Ex-couple linked to Jared Fogle child porn case handed prison sentences. NBCNews.com. Retrieved from https://www.nbcnews.com/news/us-news/ex-couple-linked-jared-fogle-child-porn-case-handed-prison-sentences-rcna28062
Jargon, J. (2015, July 7). Subway, Jared Fogle Suspend Ties. The Wall Stree Journal: https://www.wsj.com/articles/home-of-subway-pitchman-is-raided-1436303668
Academic research:
Can Subway Freshen Up Its Image After Jared? [Radio broadcast transcript]. (2015, July 8). All Things Considered, NA. https://link.gale.com/apps/doc/A421816785/OVIC?u=cuny_baruch&sid=primo&xid=564fc31e
Fogle sentenced to 15 years for pornography, sex crimes. (2015). Indiana Lawyer, 26(20), 24–27.
Morrison, M., & Wohl, J. (2015). Subway ‘Recalibrating’ Strategy Amid Agency Review, Jared Scandal. Advertising Age, 86(16), 0004.
Malcolm, H. (2015, July 9). Experts say Subway will be OK post-Jared. USA Today, 03B. https://link.gale.com/apps/doc/A421130801/AONE?u=cuny_baruch&sid=bookmark-AONE&xid=f7d84a91
Maze, J. (2015). Former subway spokesman jared fogle sentenced to 15 years. Nation's Restaurant News, Retrieved from https://remote.baruch.cuny.edu/login?url=https://www.proquest.com/trade-journals/former-subway-spokesman-jared-fogle-sentenced-15/docview/1734611214/se-2
Maze, J. (2015). Subway: No record of jared fogle complaint. Nation's Restaurant News, Retrieved from https://remote.baruch.cuny.edu/login?url=https://www-proquest-com.remote.baruch.cuny.edu/trade-journals/subway-no-record-jared-fogle-complaint/docview/1708446702/se-2
Morrison, M., & Wohl, J. (2015, August 24). SUBWAY 'RECALIBRATING' STRATEGY AMID AGENCY REVIEW, JARED SCANDAL; CHRIS CARROLL TAKES THE HELM. Advertising Age, 86(16), 0004. https://link.gale.com/apps/doc/A426810150/AONE?u=cuny_baruch&sid=bookmark-AONE&xid=645e26ff
Subway says goodbye to Fogle amid scandal. (2015, July 13). Broadcasting & Cable, 145(25), 4. https://link.gale.com/apps/doc/A422061119/AONE?u=cuny_baruch&sid=bookmark-AONE&xid=68ae195c
Subway pitchman Jared Fogle ensnared in federal probe. (2015, July 13). Indianapolis Business Journal, 36(20), 6. https://link.gale.com/apps/doc/A424990268/ITOF?u=cuny_baruch&sid=bookmark-ITOF&xid=6af2e53d
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Reflection on Crisis Communication |
by Dr. Dino Sossi
Corporations constantly face threats from various actors, actions, and situations. How they respond can impact employees, shareholders, the public at large, as well stability of the corporation as a whole.
Giving CUNY students the opportunity to learn how to fashion Crisis Communication Plans allows them to learn about the substance of corporate threats, the stakeholders involved, as well as how to communicate to the public using traditional and social media communication channels.
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