Tiffany Hayden Shellabarger

Marketing 710

Instructor: Dr. Timothy Johnston

June 20, 2001

Perrier

Background

Perrier’s history can be traced back as early as 1863.

In 1984 Perrier became the number one mineral water company worldwide with

markets established in Canada, the Arab countries, South Africa, Germany,

Australia, Japan and in the United States.

In February of 1990, 72 million bottles were taken off the market in the

USA, after a few traces of benzene were discovered in twelve bottles,

Gustave Leven decided to withdraw the entire US production ( 160 million

bottles) and a short time thereafter withdrew the same in five other

countries (Germany, Canada, Denmark Japan and Holland) thus destroying a

total of 280 million bottles world-wide. In April, Perrier -after ten weeks

absence - was back on the market, but was not widely available in the United

States until 5 months later.

Benzene - Harmful?

Benzene is a naturally occurring toxic substance that can effect the

pulmonary or respiratory system and the gastrointestinal tract. Benzene is

one of three components found in gasoline.

The following are side effects from benzene:

coughing, choking, gagging, aspiration pneumonitis (inflammation of the

lung tissue due to swallowing the wrong way), fever, difficulty breathing,

breathing too fast, cyanosis (turning blue when there is not enough

oxygen), swelling of lung tissue, coughing up blood, respiratory arrest

(can’t breathe/code blue), irritates the GI tract

Worst case scenario: you die from the inability to breathe.

Who might be effected?

Anyone who has a pulmonary disorder including asthma or emphysema. (Even

trace amounts that a normal human being would not be able to notice by even

the slightest cough could throw someone with a pulmonary disorder into

respiratory arrest.)

Small children would also be effected because of the smaller dosage needed

for their size.

Do we have to wait until we have a huge problem to correct it?

We should follow Johnson & Johnson’s famous Tylenol game plan which consists

of three phases:

Phase I: Figure out what actually happened.

Phase II: Assess and contain the damage.

Phase III: Try to get the product back on the market.

Concerns/Solutions:

Immediate losses will be incurred. (Johnson & Johnson incurred immediate

losses of $100 million.) Immediate losses do not have to affect long term

profitability.

Poisoning of the brand itself. (Perrier as we know it has been around since

1888. Tylenol had been in existence a little over 20 years when its

products were injected with cyanide.) The brand symbolizes something natural

and healthy; we cannot afford to lose that reputation.

Market shares will plummet temporarily. (Johnson & Johnson’s market share

plunged from 35.3% to below 7%.) temporarily - not permanently.

Lawsuits will occur in the event of a death or damage. reason to deal with

the danger

Copycat problems will occur. Other contamination with other water sources,

Firestone vs. other tires -new news

Competitors will be quick to take advantage of the situation.

5 important factors:

1. Keeping communication lines open. (Let the public know that you are

concerned about their health and will not release the product until the

problem is corrected.)

2. Taking quick, corrective action. (Remove any potential health hazard.)

3. Keeping faith in the product. (Advertise promoting trust in the

company.)

4. Protecting the public image at all costs. (Emphasize social

responsibility.)

5. Aggressively bringing back the brand. (Get the product back on the market

as soon as the problem is corrected.)

When product safety is in jeopardy, quick corrective action must be taken

regardless of the cost!

It is not worth the risk!