Its very challenging when a big brad like PepsiCo with large and diverse custome

Question

Its very challenging when a big brad like PepsiCo with large and diverse customer base get caught up in the sporting scandles, to which they owe nothing. The best way for PepsiCo to move forward from this scandal would be to maintain a graceful silence, unless otherwise required.

A sport like cricket has audience in millions, which means millions of impressions for PepsiCo. In an event of scandal, what matters most is how is the brand being perceived by the audience. PepsiCo should stick to their main reason for sponsoring Pakistan Cricket Team: Sports. The brand endorses the team and not the individual, so in an event of cricketers being implicated in such scandals, PepsiCo should focus on one thing: They are for their fans first. Their responsibility is towards their fans first. So neither defending the team not accusing would look good on the brand's part.

If PepsiCo decides to react or overly engage into any type of response regarding the scandal, which is unrelated to brand's sponsorship to the team, it might risk damaging its own reputation. But this does not mean that PepsiCo should stay silent behind the scene.

Before walking away from the sponsorship, PepsiCo must define their hard lines for doing so. They will have to plan their exit strategy if any of those hard lines are crossed. The main factors to keep in mind in such events are

how much is the brand reputation affected?

Are the audience accusing the brand for the corruption?

Is there any decrease in sales for the brand after the scandals. etc.

Explanation / Answer

4. In January 2010, PepsiCo had signed a 3-year sponsorship deal with Pakistan’s cricket team. Cricket in Pakistan is almost like a religion; nobody watches anything else when cricket is on. A few months later, several Pakistani cricket players were being investigated by Scotland Yard for match-fixing following a test match in London. Ultimately, in November 2011, four players of the team were found guilty by a London court and given prison sentences ranging from 6 to 32 months. What options does PepsiCo have to cope with this scandal? How should it react? What factors should it consider in deciding its response?

Textbook: Global Marketing Management 7th edition Kotabe Helsen

Chapter 13

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