REACTIONS AND RESPONSES: HOW THEY REALLY AFFECT YOUR BUSINESS

Although a company may not realize it, social media, can easily make or break a brand, especially in the case of consumer packaged goods.  A key example of this occurring is in the case of PepsiCo’s Tropicana. According to both a critical study, “Tropicana: Social Media Teach Marketers A Branding Lesson,” and “Study of the Impact of Changes on OJ Demand,” Tropicana faced an enormous challenge in 2009 when they decided to rebrand their already iconic packaging. The larger than life orange and straw combo was ditched for a more “natural” look in order to compete with Coca Cola’s “Simple Orange”, despite the fact that consumers identified with the current design.

The new packaging featured a large glass of “freshly squeezed” juice, an orange color scheme on every container regardless of pulp, and the words “100% Orange Pure and Natural” directly in the center of the container. The Arnell Group, the company responsible for the redesign, also opted to change the cap of the bottle to imitate half of an orange and reflect the squeezing of natural juice when opening the container.

Because of the readily available communication made possible by social media, Tropicana’s response to their redesign was immediate. They quickly learned that consumers did not like the new packaging at all, and that they had ignored previous positive feedback on their old design. Consumers called the new design “Ugly,” “Generic-Looking and Cheap,” and continuously state it was reminiscent of a no-name brand. The sales of the brand plummeted 20% in the first month that the new product was on the shelves. Their failure to react or listen to customer input from the beginning led the company to make a poor decision in ruining a strong branding image. Although the company had invested approximately $35 million in the new design, they eventually heeded customer complaints via social media and switched back to the old packaging by the end of the year. Although this was the smartest decision in response to negative feedback, the switch cost the company approximately $27 million.

A recent article by Forbes, “Why Ignoring Social Media Complaints Is a Huge Mistake,” looks at many common blunders made by companies in regards to their corporate transparency. Author Roger Dooley points out that it is much easier to keep an existing customer than search for a new one, however companies often to fail to do this. They neglect to respond to even positive tweets or posts about their brand, which can lead to a negative opinion of the brand because of the lack of transparency. Dooley points out that the most effective tool a company can have is an apology. When a customer is unhappy with a brand or corporation, a simple “we’re sorry” is often enough to provide quality customer service and keep the consumer loyal to the brand. According to Dooley, 50% of consumers only give the brand one week to respond to a question before ceasing business with that brand. In Tropicana’s case, they eventually responded to complaints – but it took nearly a year to implement the original packaging. If they had remained transparent from the beginning, paid attention to and responded to customer attachment to the straw-in-orange, perhaps the company could have saved a lot of money and retained much of their fan base.

-Jen Parravani

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~ by goodpackagedconsumers on October 8, 2012.