Presentation

Sehrish Naseer
Roll no: 30613

Perrier

In late 1989 Ronald Davis the President of Perriers U.S.

Operations was extremely happy since Perriers U.S. sales
had risen from $40 million to more than $800 million at
retail

At the same time in May of 1989 in an issue of Fortune

the company was depicted as one of six companies that
compete best

Fortune quotes, These are companies you dont want to

come up against in your worst nightmare. In the business
they are in, they amass crushing market share.

Perrier on Top
Perrier was globally known for its quality due to
low mineral content (particularly sodium)
This occurred because the water spent very little
time filtering itself through minerals
While the water flows underground it met with
different gasses which allows the water to
capture its well known fizz
Not only was Perrier known for being the best,
Perrier owned nine other brands including:
Poland Spring, Great Bear, Calistoga, and Ozarka

Perrier on Top
Bottled water was the fastest growing segment of
the U.S. beverage industry
Perrier controlled 24% of the total US. Bottled-water
business
Perrier was dominating almost 50% of the imported
bottle water sector
Competition like Coca-Cola, PepsiCo, and AnheuserBusch was hardly affecting the sales of Perrier

Perrier Takes a Hit

On a Friday , February 1990 news reached Perriers
executive suite that traces of benzene had been
found in its bottled water
Ronald Davis, President of Perrier Group of America
ordered an intensive recall of all Perrier bottles in
North America
Few days later Perrier S.A. expanded the recall to
the rest of the world

Perrier Caught in a Lie

At first the excuse given by Perrier officials was that the

contamination occurred because an employee mistakenly
used cleaning fluid containing benzene to clean the
production-line machinery that fills bottles for North
America

Traces of benzene were now found in bottles of water in

Holland and Denmark, poor Perrier was now caught in a lie

Perrier now finally admits that benzene naturally occurs in

Perrier water but the problem was now visible because the
workers forgot to replace the filter

Can It Get Worst?

Competitors were obviously salivating at the
opportunity that had just come about
Competitors like Evian, Saratoga, San Peligrino,
PepsiCo's H2OH
Due to this drastic recall Perrier was completely out
of the market for a total of 5 months

Recall Necessary?
Ronald Davis, President of North America Perrier,
later pointed out that the company didnt have to
recall all 70 million bottles of U.S. inventory
Health officials noted that the benzene levels
found did not pose any significant health risk, the
only risk was the image of Perrier

Consequences

By the end of 1990 it was very obvious that Perrier was

not going to regain its market position

Now new big shots had emerged like, Saratoga, La Croix,

and Quibell

Evian at the time was the biggest winner of all

Perriers sales had only reached 60% of pre-recall levels

Perrier did have a sales gain of 3.7% in 1990 but that

was because of performance from domestic brands like
Calistoga and Poland Spring

Major Problems
1. Benzene found in the water
2. Managements drastic decision to recall all Perrier
bottled water
3. Management tried to cover up the issue by lying
4. Staying off of the market for 5 months
5. Management believed that this five month hiatus
would not hurt them (over confidence)

Possible Solution
Change their Whole Image

In the past it has been seen when companies lose their

reputation rather than trying to fix it they create a new
identity

Most people dont even notice its the same company rather
they think its a new company all together

I feel if Perrier comes up with a new identity they will gain

more popularity faster than trying to clean their old one

Possible Solution
Target a different Market

I think they can change the design of Perrier, same bottle same name
but different target

They can make Perrier a drink of the youth

Management would have to change their mindsets and now have to

change their marketing campaigns for a new age group, primarily 1825

I feel Perrier will succeed under this idea because water is the drink
all young people are into, with the fad of being in shape and getting
ready for the summer, Perrier can grasp a lot of attention

Reputational Risk
Financial loss(revenue reductions)
Customer loss
No Crisis management department or they have not do the
crisis management on time
Effects all stakeholders of this company
Negative Publicity

Thank You