Dallas Business Consultant Elijah ClarkDallas Business Consultant Elijah Clark

Crisis Management

Case in point: After the launch of the Fitbit Force, a wrist-worn product that tracks fitness activity, 1.7% of more than 100 million users began developing skin rashes where the device was being worn. CEO James Park, responded almost immediately to the news, delivering an apology and initiating a product recall with a full refund for all of the devices. Later, test results showed that users were likely experiencing allergic contact dermatitis which is an itchy rash and caused largely by a substance that comes into contact with the skin. The likely cause of the rash, in these instances, was users not properly cleansing the area of their skin beneath the device, which was very often worn all day, every day. The Fitbit Company could have easily blamed the rash on user error, but instead decided to take full responsibility and issue a recall. Instead of dealing with customer backlash, due to the company’s timely, and proactive response, the company continues to do well, having maintained their integrity in the marketplace as well as the trust of their customer base.

At the other end of the spectrum, Kryptonite, a leading manufacturer of bicycle locks, had a crisis in 2004. After an internet video had surfaced of a user hacking the well-respected company’s lock, many more videos and complaints began forming. The videos showed how the lock could be easily unlocked by jamming it with a plastic pen. Kryptonite eventually did address the situation, but weeks later, with a product recall and an explanation that the issue dealt with all types of cylinder locks including those associated with vending machines and some automobile ignitions. Because it took the company an extended period of time to respond, customers and the media continued to smear the company’s brand for days. This led to a loss of customer trust and a near irreparably tainted brand. Beyond the cost of the recall, millions of dollars have been spent to rebuild the company’s reputation.

When dealing with a crisis, the focus is centered on brand trust and risk. A crisis should be addressed through direct contact whenever possible as in the case of Fitbit where users received an email from the CEO about the recall versus the use of mass social media. It is also important to recognize that media outlets and third parties have the capability to either preserve or damage customer-to-brand trust. Consumer relationships and widespread brand trust are essential during a crisis, and your business cannot afford to neglect the element of the media if you want to retain customers. Marketing strategies during a crisis should also project that your company remains adaptive and is present during the crisis.

Business Crisis Management

Definition of crisis management

A crisis management is the way that a person or business handles an emergency. In a family, this could be a member having to suddenly go to the hospital because of an accident. In a business, a crisis can be anything from a defective product recall or an economic change that causes a drop in sales.

How crisis management relates to business

Within the marketing industry, having the ability to understand and react promptly when crisis arises is crucial for maintaining the businesses market share, trust, and reputation. Not managing a crisis properly can have the potential to damage carefully developed equity, and spoil consumers’ quality perception (Chen, Ganesan, & Liu, 2009).

Personal experience with crisis management

As an online marketer, I run into crisis management issues oftentimes on a weekly basis. Each week I monitor my clients websites ranking through analyzing Yahoo, Bing, and Google search engines for algorithm changes. It’s normal for search engines to change their algorithm and I do advise my clients that their website rank may change drastically if such a change occurs that may affect their website. Once this happens, a site that previously ranked on the first page could drop out of the search engine completed. As this occurs, It usually causes a loss in site traffic and sales. The solution to this is for me to research and analyze the issue, check whether it’s a search engine issue or a website issue and then correct or explain to the client that recovery is impossible.

Summary of About the Crisis Marketing and The Crisis of Marketing

This article focuses on the global economic-financial marketing crisis. According to the article, marketing may be just the solution for many companies to get out of the crisis, but what is sadder is that a lot of them do not realize it (Cornelia & Mihaela, 2011). The article tackles the subject of why marketing is needed within a failing economy and how to successfully implement new strategies to help increase and sustain profit and productivity.

Avoiding negative impacts of a crisis

Research has indicated that a proactive strategy may have positive consequences on consumer perception if the crisis is responded to with a constant, active, and firm response (Chen, Ganesan, & Liu, 2009). The business being affected should respond quickly to the crisis and should focus their attention on building and strengthening consumer trust. During a crisis, marketing strategies should be analyzed and focus on resonating emotionally with the consumer through a human, friendly language (Cornelia & Mihaela, 2011). Without proactively managing the crisis, the risk of negative impact rises.

 

Credits

Cornelia, M., & Mihaela, B. (2011). ABOUT THE CRISIS MARKETING AND THE CRISIS OF MARKETING. Journal Of Academic Research In Economics, 3(3), 311-316.

Chen, Y, Ganesan, S., & Liu, Y. (2009). Does a firm’s product-recall strategy affect its financial value? An examination of strategic alternatives during product-harm crises. Journal of Marketing, 73(6), 214–226.

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