Background

Pepsi recently had a bit of controversy over a commercial the company released in April 2017.  The commercial featured Kendall Jenner, a white supermodel, stopping what is perceived to be a Black Lives Matters protest by offering the police a can of Pepsi (Smith, 2017) (Appendix A).  Immediately the backlash began with people taking to social media to mock the commercial and call it out for being blind to the issues going on in society.  Bernice King, the daughter of Civil Rights Leader, Dr. Martin Luther King, offered up this tweet:

The commercial was released on Tuesday, April 4, 2017.  It was taken down the following day.
Pepsi apologized with the following public statement: “Pepsi was trying to project a global message of unity, peace and understanding. Clearly, we missed the mark, and we apologize,” Pepsi went on to say “We did not intend to make light of any serious issue,” (Smith 2017).  

The commercial was produced by Creator League Studio, which is Pepsi’s in-house production company.  The principal and lead writer of the commercial spoke out the day the commercial was pulled.  “This is a good example of what happens when you don’t get the objective input of a classic agency relationship that can say, ‘We need to save you from your worst impulses,’” said Charlie Hopper (Baysinger & Malone, 2017).  

Theory Analysis: Crisis Management

In under 48 hours, Pepsi responded to the entire situation.  Pepsi’s use of Crisis Management Theory helped the company respond to the situation quickly and effectively.  While Pepsi didn’t have much of pre-crisis phase, the company responded when the crisis hit.  Their crisis response strategy was Deal.  Pepsi immediately apologized and took corrective action by removing the ad.  There was no placing blame and no playing the victim.  

Pepsi could have avoided this crisis through environmental scanning.  Pepsi more than likely knew of the social situation going on, however, they did not look deep enough.  Pepsi did not identify any warning signs that the commercial would backfire. Pepsi has always used celebrities to sell their products. However, their choice of a white supermodel seemingly solving a societal issue between African-Americans and police was completely missed as a red flag.  

Social media impacts crisis management by limiting the amount of time an organization can respond because of how fast information can spread.  Pepsi experienced this first hand because that is exactly how the backlash occurred.  While social media can be a hinderance, it’s important to note that social media is how Pepsi was alerted of the issue.

Following a crisis, reputation management is important.  Pepsi’s quick action lends itself to helping ensure the company didn’t take too hard of a hit from the backlash.  Apologizing and taking corrective action has allowed Pepsi to move on from the commercial fiasco.  

Overall, Pepsi’s crisis management helped them to recover with minimal negative impact to the company.  Yes, there was a brief time of mockery and criticism, but it did not last long.  

Theory Analysis: Relationship Management Theory

When looking at this commercial, Relationship Management Theory could be applied.  Pepsi made their product a part of the public.  Relationship Management Theory has a few variations of how it defines relationship.  For the purpose of this analysis, relationship is defined as ‘‘the state which exists between an organization and its key publics in which the actions of either entity impact the economic, social, political and/or cultural well-being of the other entity.’’ (Ledingham & Bruning, 1998, p. 62).

In Pepsi’s statement released following the backlash the company said it “… was trying to project a global message of unity, peace and understanding…” (Smith 2017).   Pepsi was trying to unite people by making its product the key unifier.  Pepsi seems to be aware of the current situation in society and it wanted to be a part of that relationship.   Unfortunately for Pepsi, the commercial did not impact the social, political or cultural-well being of its key public.

The theory can also be applied to the communication Pepsi had with its key publics following the commercial.  According to researchers, communication is a strategic tool to manage relationships (Maxwell & Carboni, 2014).  While Pepsi did release a statement, there was no real communication between Pepsi and its publics beyond that message.  Most people can agree that when they make a mistake, they want to move on quickly and that is what Pepsi did.  The CEO did not say anything for more than five months.  Poor communication with Pepsi’s key publics could negatively impact the relationship.  

Another key tool that could have been applied during the campaign is relationship mapping.  Looking at a company’s stakeholders and knowing which ones take priority can help guide any campaign.  According to Simmons research (Appendix B), the majority of Pepsi drinkers are African-American.  This should have been enough information for Pepsi to understand who their key public is and how they may react to the Kendall Jenner commercial.

Theory Analysis: Situational Theory of Publics

Pepsi could have used Situational Theory of Publics to identify their target public and how that public would react to the commercial.  The theory helps us understand how people communicate and how they seek information about an issue, especially during a crisis. James Grunig, who is credited with developing this theory, defines publics as groups that “formed around issues… that waxed and waned as problem and issues changed” (Grunig, 1997, pp. 5).  Grunig laid out four types of publics (Grunig, 2013, pp. 835):

1. Active public: This is the group of people that would look for information about the issue and is the most likely to become an activist for the issue.
2. Aware public: They are on their way to being an active public but cannot move to act on the issue because they feel they have a roadblock or constraint in their way.  They may not understand how the issue is important in their lives.
3. Latent public: They have no awareness of the issue and how it relates to them.
4. Nonpublic: Not a potential stakeholder

Pepsi could have applied SToP to determine who their active public would be in a commercial about a protest.  Given the extent of Black Lives Matter protests, and their communications on social media, it comes as no surprise then, that African-Americans were the active public in regards to the commercial.  It also comes as no surprise how quickly people got involved on social media, whether it was mocking the ad or speaking out against it.  

Pepsi may have also realized that the use of a white supermodel may not be the best representation of a protest crowd in light of our current social environment.  

For many African-Americans, the current situation with police officers is very much a crisis.  Applying SToP to the campaign would have made Pepsi aware that social media was a key form of communication, which is exactly how the backlash ensued.  

Using SToP to identify the key public early on, and understanding how vocal and active they are, may have changed the way Pepsi approached the commercial.  

Pepsi’s Response & Outcome Discussion

Pepsi responded to its crisis quickly and took responsibility for the insensitivity, all while explaining what they company was trying to do.  Pepsi’s ability to respond helped reduce the long-term effects of the problem by outright addressing the issue and correcting the issue by removing the commercial.  The commercial does still exist on the internet, which Pepsi cannot control.

The controversy of the ad didn’t seem to hurt the company’s bottom line.  PepsiCo traded marginally higher at $112.17 following the commercials release and subsequent removal (Baysinger & Malone, 2017).  Pepsi’s initial response and quick reaction may have helped mitigate long-term backlash.

The CEO of Pepsi spoke out about the controversy in September 2017.  “This has pained me a lot because this company is known for diversity, and the fact that everybody who produced the commercial and approved the commercial did not link it to Black Lives Matter made me scratch my head,” CEO Indra Nooyi said (Blay 2017).   

This statement is interesting because it shows that the CEO was clueless about the commercial.  In the article, the CEO does not take any responsibility.  Nooyi says that she ”had not seen that scene,” referring to Jenner giving the police officer a can of Pepsi.  That indicates that she saw the commercial, just not the last few seconds.  

Kendall Jenner will reportedly address the issue in the upcoming season of Keeping Up With The Kardashians (Blay 2017).   It will be interesting to see if Pepsi will implement any new crisis management measures when the episode airs.  Discussion of the commercial will likely come up again on social media.  It seems like it would be a good opportunity for Pepsi to work on not only Reputation Management but Relationship Management as well.  Maybe we will see a new campaign that better expresses unity and peace.

The negative outcome for Pepsi appears to be minimal.   

Conclusion and Discussion

Pepsi had such an opportunity to continue its tradition of using celebrities and being edgy with its commercials.  That would mean that Pepsi would have done its part in environmental scanning.  If the company wanted to address the social issue of the Black Lives Matter movement, they should have picked a celebrity that relates more to the movement.  Colin Kaepernick would have been a much better choice.  Kaepernick’s protests have been gaining attention and have been peaceful.  The point is, the company should have chosen someone with more authority to represent the movement, whoever that may be.  Pepsi should not have involved police in the commercial, let alone give that magical can of Pepsi that solves an issue as old as time.  Pepsi could have focused on it’s intended theme of peace and unity successfully if the company paid more attention to what was going on in society.

If Pepsi wanted to create a commercial that sent a message of peace and unity, it took the wrong approach from the start.  Protesting, in general, shows some sort of divide.  There is one key element of the commercial that sent things downhill, the police officer.  The idea that a can of soda can make everything better between African-Americans and the police is extremely insensitive to the current societal situation.  Had that element been left out, then perhaps there would not have been any backlash.  If Kendall Jenner were walking through the streets supporting her fellow protesters and giving them a refreshing beverage, then maybe the perception would have been different.  Of course, Pepsi could have avoided the protest aspect altogether.  

I don’t believe Pepsi was trying to be malicious in the making of this commercial.  The company didn’t argue with the backlash; there was an apology and a halt put on the commercial.  It was more likely a case of simply not realizing how insensitive the commercial would come across.  

Pepsi did a pretty good job correcting the situation.  Only time, and the next Pepsi campaign, will tell if the company has learned its lesson.  

References

Baysinger, T. & Malone, S. (2017, April 5) Pepsi pulls Kendall Jenner ad after social media backlash. Retrieved from http://www.reuters.com

Blay, Z. (2017, September 22 ) Pepsi CEO: Kendall Jenner Ad ‘Made Me Scratch My Head. Retrieved from http://www.huffingtonpost.com

Grunig, J. E. (1997). A situational theory of publics: conceptual history, recent challenges, and new research. In D. Moss, T. MacManus, & D. Vercic (Eds.), Public relations research: an international perspective (pp. 3-48). London: International Thomson Business Press.

Grunig, J. (2013). Situational theory of publics. In. R. L. Heath (Ed.), Encyclopedia of Public Relations (pp. 835-836). New York:Sage Publications Inc.

Ledingham, J. A., & Bruning, S. D. (1998). Relationship management in public relations:Dimensions of an organization-public relationship. Public Relations Review, 24(1), 55–65.

Maxwell, S. & Carboni, J. (October 2014). Stakeholder communication in service implementation networks: expanding relationship management theory to the nonprofit sector through organizational network analysis. International Journal of Nonprofit and Voluntary Sector Marketing, 19(4), 301-313.

Smith, A. (2017, April 5) Pepsi Pulls Controversial Kendall Jenner Ad After Outcry. Retrieved from http://www.nbcnews.com

 

Appendices

Appendix A

Kendall Jenner Pepsi Commercial “Jump In”

https://www.youtube.com/watch?v=JGlaqWbqsnU

Appendix B

Simmons Crosstab: Pepsi ethnicity