Coca-Cola’s Reputation
Coca-Cola is the most-recognized trademark and brand name in the world today. The company has always demonstrated a strong market orientation, making strategic decisions and taking actions to attract, satisfy, and retain customers.
Coca-Cola’s promise states that the company exists “to benefit and refresh everyone who is touched by our business”.
Because the company is so well known, the industry in which it operates is so pervasive, and it has such a strong history of market orientation, the company has developed a number of social responsibility initiatives to further enhance its trademarks.
These initiatives are guided by the company’s core beliefs in the marketplace, workplace, community and environment.
Crisis Situation
Contamination Scare:
In June 1999, about 30 Belgian children became ill after consuming Coke products. Although the company recalled the product, the problem soon escalated. The Belgian government eventually ordered the recall of all Coca-Cola products, which led officials in Luxembourg and the Netherlands to recall Coke products as well.
Coca-Cola took several days to comment formally on the problem, which the media quickly labeled a slow response.
France soon reported more than 100 people sick from bad Coke and banned all Coca-Cola products until the problem was resolved. Soon thereafter, a shipment of Bonaqua, a new Coca-Cola water product, arrived in Poland contaminated with mold.
In each of these instances, the company’s slow response and failure to acknowledge the severity of the situation further harmed its reputation.
Racial Discrimination Allegations:
In the spring of the same year, 1,500 African American employees sued Coca-Cola for racial discrimination. Their lawsuit, which eventually grew to include 2,000 current and former employees, accused the company of discriminating against them in pay, promotions, and performance evaluation.
Although, Coca-Cola strongly denied the allegations of racial discrimination, the lawsuit evoked strong reaction within the company.
Eventually, Coca-Cola paid $193 million to settle the racial discrimination lawsuit.
Lawsuit: Coca-Cola misleads consumers that Coke is natural, healthy:
A new lawsuit contends that The Coca-ColaCo. has deceived consumers into thinking that Coca-Cola is a natural and healthy drink as consumer preferences have moved away from carbonated soft drinks.
The lawsuit, filed Aug. 22, 2014 in federal court in Massachusetts, contends that sales of Coca-Cola "are fueled by false and deceptive representations that Coca-Cola is not only a healthy product, but one free of artificial flavoring and chemical preservatives."
"Faced with clear evidence that it was losing market share because consumers increasingly preferred beverages without artificial flavoring and chemical preservatives, The Coca-Cola Company, owner of the brand, responded, not by providing consumers with what they wanted – a natural and healthy drink – but by deceiving them into thinking that Coca-Cola was natural and healthy when, in fact, it contained artificial flavoring and chemical preservatives," the lawsuit contends.
Another major legal battle is challenging the company's advertising for its “Simply Orange” orange juice.
Questions:
What role does corporate reputation play within organizational performance and social responsibility?
Develop a list of factors or characteristics that different stakeholders may use in assessing corporate reputation.
Are these factors consistent across stakeholders? Why or why not?