Crisis Communication Memo

Statement of Purpose
To minimize brand damage due to the Friends of the Earth news release, our team believes that the recommendations listed in the following memorandum must be followed at the earliest.

Background
A special interest group called Friends of the Earth will be initiating a news release in approximately forty eight hours wherein they will be discussing Taco bell-branded tacos that are manufactured and distributed by Kraft inc. These tacos contain the Cryc9c protein which is a pesticide unfit for human consumption.

Kraft and Taco Bell have a standard license agreement wherein Kraft sells Taco Bell-labeled tacos. Taco Bell in turn receives 4-6% of the sales revenue from Kraft. This partnership is a mutually beneficial one wherein Kraft utilizes the Taco Bell brand and Taco Bell is enabled to launch itself nationally, relying on Kraft’s superior distribution channels.

If the Friends of the Earth news release is not nipped in the bud and the situation is not handled suitably, it can be detrimental to Taco Bell in the following ways:

1. Brand damage and loss of market share to other Quick Service Restaurants (QSR’s). 2. Weakening of ties between Taco Bell and Kraft as well as between Taco Bell and FRANMAC. 3. Loss of future revenue through license agreements.

Discussion
Even though Taco Bell neither manufactures nor serves the tacos in question, it is unlikely that the customer or the media will understand this distinction. Since Taco Bell is a QSR, it can increase its market share only by encroaching upon another QSR’s market share. Therefore, every revenue stream needs to be preserved and future revenue needs to be kept in mind while dealing with Kraft. By presenting a united front, Taco Bell can leverage Kraft’s history for making quality products that have stood the test of time. If Taco Bell distances itself from Kraft and blames them for the crisis in public, other companies may be hesitant in partnering with Taco Bell in the future, thus jeopardizing future revenue sources and goodwill in the market.

Due to Taco Bell’s business model involving Franchisees, it is imperative that FRANMAC be kept in mind when handling this situation. Taco Bell cannot afford to have a disgruntled FRANMAC in addition to negative publicity.

There is also a need for a Crisis Management Policy at Taco Bell that provides a set of protocols to be followed when such a crisis occurs in the future.

Recommendations
It is advisable that you keep in mind that this is an extremely time sensitive issue and that you have barely forty eight hours before the Friends of the Earth news release goes public. The following guidelines are preemptive measures aimed at making the Friends of the Earth news release

insignificant.

1. Contact Kraft immediately. This must be done via video conference in order to emphasize the urgency of the situation. Inform them of the news release but keep in mind that no blame is to be placed on Kraft. Kraft will also need to be advised to contact the FDA in order to initiate product recall. Since Kraft controls the distribution channels, the recall should be fairly easy for them. It should also be suggested that Kraft reevaluate their relationship with Aventis, the creator of the corn with Cryc9c, even though it is an indirect one. It is imperative that Kraft be assured of your full support through this crisis.

2. Contact FRANMAC to inform them of the news release and create a task force. This must be done via video conference to inform the franchisees of the news release and also to reassure them of the situation being under control. If you do this through any other channel, it will be difficult to show your sincerity to your franchisees. Discuss the creation of a task force that comprises of Taco Bell executives as well as members of FRANMAC in order to protect the franchisees against shortage of cash if sales plummet. This task force must also create a manual for franchisees that simplifies the crisis management process. Said manual must be revised according to the feedback that is received.

3. Release a preemptive public apology. Before Friends of the Earth has a chance to inform the general public about the presence of Cry9c in the grocery store tacos, break the news yourself via a press conference. Emphasize that Cryc9c exists only in grocery store tacos and not restaurant Tacos but do not blame Kraft. Apologize sincerely for the oversight but do not take questions at the end of the press conference because the details about Cryc9c are sketchy right now. Give the customers a toll free number and a website where they can find more information

about Cryc9c. Ensure the customers that this is an anomaly given Kraft’s reputation and legacy.

Next Step
To ensure effectiveness and efficiency during future crises, it is essential to create a crisis management policy within Taco Bell. This policy must create a general framework within which crisis management functions in the company. As advised, brand preservation, stakeholder protection and public relations are crucial for minimizing the negative impact of a crisis. When dealing with a crisis, it is crucial keep the future in mind. Appropriate channels must be used in order to maximize impact during communication and “war rooms” must be created for the crisis management team to function optimally. Finally, the company must be prepared for anything and must plan for the worst while hoping for the best.