7 Takeaways from Pepsi’s Controversial Commercial

Pepsi commercial falls flat

Event Summary

Pepsi experienced a firestorm of controversy when they released a commercial that seemingly belittled the Black Lives Matter protest movement. The commercial was released on April 4th, 2017. It featured a group of protesters on one side and a group of police officers on the other side. It cuts to model Kendall Jenner having a photo shoot, while the protest is happening outside. She notices the protest and proceeds to give a can of Pepsi soda to one of the police officers. This commercial upset many people because it made protests looks like a cheerful event, by featuring dancing, a live band and people smiling and laughing. Pepsi responded by removing the commercial and issuing an apology. Kendall Jenner also received a large amount of backlash for the commercial, but chose to stay silent on the matter and not make any public comments.

Background of PepsiCo

Pepsi was introduced in the late 1890’s by a pharmacist named Caleb Bradham in New Bern, North Carolina. The drink was originally called “Brad’s Drink” until later modified to Pepsi-Cola when the company was officially launched in 1902 from a back room of Bradham’s pharmacy (Pepsi, 2017). Bradham believed that his product was a healthy choice that aided digestion so he took the root word of “dyspepsia” and the kola from the nuts used in the recipe, and made it Pepsi-Cola (Pepsi, 2017).

As the company started to grow, Pepsi-Cola became an official trademark on June 16th, 1903. By the following year, Pepsi-Cola syrup sales reached close to 20,000 gallons sold and because of this Bradham thought it was time to introduce pre-bottled Pepsi-Cola with the slogan “The Original Pure Food Drink”. By 1910, there were 240 franchises open in 24 states throughout the United States with syrup sales of over 104,000 gallons.

World War I approached in 1914, making the cost of sugar skyrocket. This caused Pepsi-Cola to create a supply shortage and didn’t meet the quantity demanded. By the time the war ended the price of sugar went from 3 cents to 28 cents per pound. Pepsi-Cola filed for bankruptcy in 1923 and its assets were sold.

Pepsi-Cola served as a strict drink product until they expanded their operations to include food when they merged with Frito-Lay in 1965 and became what we know it as now, PepsiCo.

Pepsi continued to fluctuate in value, but as of 2012, PepsiCo was ranked #41 on the Fortune 500 list.

Timeline of Pepsi Incidents and How They Handled Them

From 1984 to the present there have been several incidents that Pepsi was involved in, and they handled the incidents in many different ways.

1984

What Happened?- Michael Jackson was filming for a Pepsi commercial, and his hair was caught on fire and it spread, suffering a second and third degree burn on his face and scalp. However, in 2009, when he died, there was an accusation that because of the burns, he became addicted to the drugs and medication that help him ease the pain and make him sleep.

Pepsi’s Action – Pepsi gave him $1.5 million compensation payment. Jackson donated that money to a California Medical Center, where he was treated.

1993

What Happened?- A Steinberg grocery store clerk in Ontario discovered a syringe in a Pepsi can and   mistaken it for a straw. Then, many stories of syringe-laden cans of Pepsi swept the United States. At least 52 reports of tampered Pepsi cans in at least 23 states were made. Some claims were a wood screw, a bullet, broken sewing needle, etc were found in Pepsi cans.

Pepsi’s Action – Pepsi and the Food and Drug Administration went on an investigation and concluded that these reports were hoaxes, it didn’t take long to setting to set up – One just needed a can of Pepsi and syringe. Then, Pepsi released a campaign to reassure buyers. Officials at bottling plants went to the press and demonstrated that it is impossible to place an object in a can, and if it were, then they can easily be detected. FDA supported the fact and spread the message. FBI made 20 arrested people who planted syringes.

2009

What Happened? – Fred DeNegri was grilling in his backyard in Ormond Beach, Florida and when he opened a Diet Pepsi, and went for a gulp, he started gagging because it tasted horrible. He emptied the can in a sink there were heavy remains in the can. He had to shake the can. He called the Poison Control and FDA and found that it was either a frog/toad.

Pepsi’s Action – FDA conducted an investigation at a Pepsi bottling plant in Orland for 7 days after, and did not find any adverse conditions or association to the problem. When asked if Pepsi believed they were not responsible for the frog getting into the can, their response was that they stated all the facts and they could not comment beyond that.

2013

What happened? –  Mensud Djelmo, 42 was accidentally killed inside a Pepsi Plant in St. Louis. He was trapped in a packing unit machine and he was found by an employee returning from his break and called the police.

Pepsi’s Action – Police have few details about the accident. Company officials with Pepsi did not respond to Daily Riverfront Times’ request for comment. No action was made.

2017

What Happened? – Pepsi created an advertisement that depicted Kendall Jenner solving a crisis between protesters and police with a can of Pepsi and a smile. The advertisement made people imply that it was related to Black Lives Matter and anti-Trump protest that includes a woman standing up to law enforcement officers and multicultural teenagers marching in the streets.

Pepsi’s Actions – First, Pepsi defended the advertisement saying that they were trying to project a global message of unity, peace and understanding, However, a few hours later, they apologized to Kendall Jenner and said that the advertisement did not intended to create this type of interpretation, “ they missed the mark”.

Timeline of Kendall Jenner Pepsi Controversy – Black Lives Matter

This a timeline of how Black Lives Matter began and what led up to the Pepsi advertisement with Kendall Jenner

February 26, 2012 – The Black Lives Matter Movement officially began when a neighborhood watch volunteer shot 17-year-old, Trayvon Martin.

August 9, 2014 – Michael Brown is killed in Ferguson, Missouri by and a police officer, Darren Wilson.

November 23, 2014 – Tamir Rice, a 12-year-old is shot by a police officer after carrying a toy gun in Ohio.

July 7, 2016 – Five police officer are killed by a sniper at a Black Lives Matter protest in Dallas.

January 20, 2017 – Black Lives Matter activist crash security checkpoints to disrupt Donald Trump’s inauguration.

Jan 24, 2017 – Black Live Matter were resentful of peaceful Women’s March against Trump.

April 4, 2017 – The Pepsi Ad commercial with Kendall Jenner was released, and thought they were trying to promote unity, peace, and understanding.

April 5, 2017 – People started reacting on twitter saying that the Pepsi advertisement was trivializing the Black Lives Matter.

Stakeholders

Pepsi address the concern to the public and its stakeholder about the recent advertisement with the TV celebrity Kendall Jenner. With the controversial advertisement, the stock price had an unexpected increase from the airing of the commercial. The most important stakeholders to the least important is: consumer and customers, communities, employees, investors, and government.

At the time of the event of the Kendall Jenner commercial, the stock ownership for has an above average price ownership with about 1.19 billion share held for the company from a monthly overview. Taking a look at a daily stock chart from a third party charting source such as stock chart the view of the tells a frame of the event from April 5th  to following week when Pepsi apologies were made public.

From the perspective of investors, they did not like the image of what Pepsi presented, which showed a decline in price after April 5th. After about a week the stock increased after the controversy, since people were engaged with the topic. From the communities and customers perspective was a mix review as some people like and dislike the company. Katie Scott a writer for The Peak 95.1FM radio wrote her article that a survey was conducted called the “Morning Consult survey” which explain the following, “44 % of people have a more favorable view after watching the ad. Only 25 % of those surveyed had a less favorable view of the company” (Scott, 2017). Even through social media show negative message the overall result show more people were fine with the ad and would more than likely buy a Pepsi.

What Pepsi has done is resolve the conflict of the protest with black lives matter. The response to bring people together has brought mixed feeling towards communities nationwide. And throughout its future the time will tell of how advertising affect people and a new era for sending a message for improving society.

Social Media Responses

Responses to the commercial from people on social media were swift and overwhelmingly negative. About 24% of all social media responses to the commercial were negative, which is high for an ad (Jennifer Maloney, Wall Street Journal). The majority of the backlash took place on Twitter. The hashtag Pepsi was a top trending topic because so many Twitter users were tweeting about the commercial.

Twitter users were upset that the commercial appeared to minimize how serious Black Lives Matter and police brutality protests are. For example, Twitter user Taryn Finley posted:

The second image is from a 2014 Black Lives Matter protest in Baton Rouge, Louisiana, for the police shooting of Alton Sterling. The women in the photo is Ieshia Evans (CBS News, July 15, 2016). Many people have compared the image of Kendall Jenner giving a can of Pepsi to police officers as a “peace offering”, to the picture of officers backing away from Ieshia Evans as she approaches them. It appears that Pepsi was making light of the Ieshia Evans photo and downplaying the intensity of that event.

Bernice King, the youngest daughter of Dr. Martin Luther King Jr., took to Twitter to voice her disapproval of the commercial. She made this post in regards to the Pepsi commercial:

The picture shows her father being held back by police officers. She mocks Pepsi’s commercial by sarcastically saying that her dad should have offered the officers some Pepsi and maybe the officers wouldn’t have been as aggressive towards her father.

Pepsi’s Response to Criticism

In the aftermath of the backlash from the media, Pepsi had to find something that would save themselves. In response to the criticism, Pepsi used the easiest form of communication to address their apology. They used Twitter to respond to just about everyone. They removed all forms of media in regards to the Kendall Jenner advertisement. Their main response was as shown below.

Pepsi uses a generic message to prompt people with comments and questions to message them further in their DM’s.

Takeaways of the Incident

 

1.) Tell the truth

After receiving criticism for the commercial, Pepsi was transparent about the message they intended to put out. They said that the commercial was intended to spread a message of peace and unity.

2.) Prove it with action

Pepsi pulled the commercial from being played. They issued an official statement, which acknowledged that the commercial had missed the mark and apologized to customers. Pepsi also apologized to Kendall Jenner.

3.) Listen to stakeholders

The price of Pepsi stocks did fall initially after the commercial was released. However, a week after the incident, stock prices went up.

4.) Manage for tomorrow

Considering that sales of Pepsi products were not adversely affected by the commercial, Pepsi didn’t have to make any major changes. They just removed the commercial.

5.) Conduct public relations as if the whole enterprise depends on it

The majority of the criticism revolved around the fact that people felt as though Pepsi didn’t understand the pain and struggle that protesters endure. By issuing a straightforward apology, removing the commercial and remaining silent, Pepsi prevented any more damage from being done.

6.) Realize an enterprise’s true character is expressed by its people

No one in PepsiCo was thrown under the bus for the release of the commercial. The company stood firm in its apology by saying that the company as a whole wanted to the commercial to be something that would unify people.

7.) Remain calm, patient and good-humored

Pepsi issued one apology for the incident and upfront about their mistake. This makes the company seem honest and willing to accept criticism from consumers.

Looking Ahead

With every year to come, Pepsi will face frequent challenges and controversies just like they have before. Pepsi shall continue to market their products and attempt to connect with their community while still being sensitive to ongoing political climates but they must maintain a relatively positive image in the media and staying out of the spotlight.
As Pepsi expands their product line, we can hope to see an increase in revenue along with an affirmative impression globally.

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