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THE COSTS OF NOT HAVING AN ADEQUATE RISK MANAGEMENT: HERSHEY’S MEXICO

In August 2018, the chocolate company Hershey’s decided to celebrate its 50th anniversary in Mexico with an advertising campaign under the slogan do good, it tastes good. The campaign consisted of uploading photos to Instagram of influencers giving a chocolate bar of the brand to people in a vulnerable situation. As in the case of Cerveza Indio, social networks went crazy against Hershey’s , accusing the company of class and racist, since the influencers tend to come from more favored socioeconomic spheres. So, also the influencers                who participated in the campaign were attacked. Some of them tried to defend themselves against criticism, making the situation even worse; while others chose to apologize.

This difference in the reactions and response of the influencers occurred as there was no line of direct communication between Hershey’s and them. Additionally, Hershey’s Mexico did not have social networks through which it could issue official communications in real time. All this meant that there was no way to organize an adequate management of the crisis. Hershey’s Mexico improvised a Twitter account to launch a press release; However, the authenticity of the account was initially questioned since it lacked all the elements of the official accounts of recognized brands.

Now, crisis mitigation was not all bad. The drafting of the communication establishes a link with consumers, commits itself to an evaluation of the mistakes made and appeals to the values ​​of the company. In addition, the media was quickly called upon to clarify the intention of the campaign. What was communicated was positive, but the way in which it was communicated was deficient.

That said, it should be noted that crisis mitigation is generally an expensive process. From a campaign that cost Hershey’s 20 MDP, they got a reputation crisis for social media activism. The cost of mitigating the crisis in this case is unknown, but it is generally an expensive process. Thus, the lesson for Hershey’s of having adequate risk management became extremely expensive.

The suggestion of Political Risks is to integrate an analysis of convergence between the expected profits from an advertising campaign and the political vulnerabilities of the company. Knowing this convergence favors the approach of future scenarios instead of relying on expensive crises to promote learning.

 

At Riesgos Políticos, SC, we can help your company establish effective mechanisms for risk management and crisis management. Contact us at info@riesgospoliticos.com.mx .

 

Photo by Aaron Burden on Unsplash

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