Coke Crisis: It's the Pause That Perplexes

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Things go better with Tylenol. That may be the hard lesson for Coca-Cola as precautionary bans on the sale of its products in parts of Europe were extended Monday for a second week. In the textbook study of corporate crisis management, Johnson & Johnson averted disaster in 1982 by moving even before the government intervened to recall and repackage Tylenol after seven people died from swallowing cyanide-laced painkillers. Although nobody has died or even gotten seriously ill from drinking suspect Coca-Cola products, the company has moved sluggishly to head off the p.r. disaster created by the impression -- however fallacious -- that its products cause illness.

"There’s been awful lot of criticism of Coca- Cola’s apparent failure to take seriously the fallout among consumers from this crisis," says TIME Brussels bureau chief James Graff. "The key here is to respond very quickly with total openness, but besides initially withdrawing 2.5 million bottles and cans, everything the company has done subsequently has been in response to a government order. Coca-Cola has also faced complaints from the media about not being sufficiently responsive to their inquiries -- it’s amazing that one of the world’s largest consumer-products corporations didn’t have a better p.r. strategy lined up to deal with a crisis of this type." The company’s response may be conditioned, in part, by the fact that medically, at least, the imbroglio may be something of a storm in a Coke can. The Atlanta Journal Constitution reports Monday that following medical reports that the "illness" supposedly brought on by imbibing Coke was primarily psychosomatic, the company is insisting that it’s not embroiled in a public-health crisis. But perception is everything in the battle for brand loyalty in a market that comprises a substantial number of teenagers. Just ask the makers of such unheralded sodas as Virgin Cola, whose market share has trebled within a week.