PresentationSehrish NaseerRoll no: 30613

Perrier In late 1989 Ronald Davis the President of Perriers U.S. Operations was extremely happy since Perriers U.S. sales had risen from $40 million to more than $800 million at retail

At the same time in May of 1989 in an issue of Fortune the company was depicted as one of six companies that compete best

Fortune quotes, These are companies you dont want to come up against in your worst nightmare. In the business they are in, they amass crushing market share.

Perrier on TopPerrier was globally known for its quality due to low mineral content (particularly sodium)

This occurred because the water spent very little time filtering itself through minerals

While the water flows underground it met with different gasses which allows the water to capture its well known fizz

Not only was Perrier known for being the best, Perrier owned nine other brands including: Poland Spring, Great Bear, Calistoga, and Ozarka

Perrier on TopBottled water was the fastest growing segment of the U.S. beverage industry

Perrier controlled 24% of the total US. Bottled-water business

Perrier was dominating almost 50% of the imported bottle water sector

Competition like Coca-Cola, PepsiCo, and Anheuser-Busch was hardly affecting the sales of Perrier

Perrier Takes a HitOn a Friday , February 1990 news reached Perriers executive suite that traces of benzene had been found in its bottled water

Ronald Davis, President of Perrier Group of America ordered an intensive recall of all Perrier bottles in North America

Few days later Perrier S.A. expanded the recall to the rest of the world

Perrier Caught in a LieAt first the excuse given by Perrier officials was that the contamination occurred because an employee mistakenly used cleaning fluid containing benzene to clean the production-line machinery that fills bottles for North America

Traces of benzene were now found in bottles of water in Holland and Denmark, poor Perrier was now caught in a lie

Perrier now finally admits that benzene naturally occurs in Perrier water but the problem was now visible because the workers forgot to replace the filter

Can It Get Worst?Competitors were obviously salivating at the opportunity that had just come about

Competitors like Evian, Saratoga, San Peligrino, PepsiCo's H2OH

Due to this drastic recall Perrier was completely out of the market for a total of 5 months

Recall Necessary?Ronald Davis, President of North America Perrier, later pointed out that the company didnt have to recall all 70 million bottles of U.S. inventory

Health officials noted that the benzene levels found did not pose any significant health risk, the only risk was the image of Perrier

ConsequencesBy the end of 1990 it was very obvious that Perrier was not going to regain its market position

Now new big shots had emerged like, Saratoga, La Croix, and Quibell

Evian at the time was the biggest winner of all

Perriers sales had only reached 60% of pre-recall levels

Perrier did have a sales gain of 3.7% in 1990 but that was because of performance from domestic brands like Calistoga and Poland Spring

Major ProblemsBenzene found in the water

Managements drastic decision to recall all Perrier bottled water

Management tried to cover up the issue by lying

Staying off of the market for 5 months

Management believed that this five month hiatus would not hurt them (over confidence)

Possible Solution Change their Whole Image

In the past it has been seen when companies lose their reputation rather than trying to fix it they create a new identity

Most people dont even notice its the same company rather they think its a new company all together

I feel if Perrier comes up with a new identity they will gain more popularity faster than trying to clean their old one

Possible SolutionTarget a different Market

I think they can change the design of Perrier, same bottle same name but different target

They can make Perrier a drink of the youth

Management would have to change their mindsets and now have to change their marketing campaigns for a new age group, primarily 18-25

I feel Perrier will succeed under this idea because water is the drink all young people are into, with the fad of being in shape and getting ready for the summer, Perrier can grasp a lot of attention

Reputational RiskFinancial loss(revenue reductions)

Customer loss

No Crisis management department or they have not do the crisis management on time

Effects all stakeholders of this company

Negative Publicity

Thank You

Good or bad

*For example: Firestone is now known as Bridgestone, same company but reinventing their reputation after the bursting tire incident

This group will probably not even know what happened 18 years ago

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