Procter & Gamble Tightlipped About PR Surrounding Coupons Controversy

If you're an executive at Procter & Gamble, the media spotlight probably isn't the place you'd like to be right now. Ever since the company announced in January 1996 that it would halt coupons in Syracuse, Buffalo and Rochester as part of a test, it's been a PR rollercoaster ride that's included threatened customer boycotts, a slew of articles and now an antitrust investigation by the New York Attorney General's Office into possible market manipulation. P&G, whose products include Crest, Tide and Ivory, is just one among many companies who have historically relied on coupons to cozy up to customers. For PR practitioners industry-wide, the P&G fiasco may be one of the most poignant lessons they'll learn from this year: Never - despite how well meaning your intentions are - underestimate the power of the press and the public. "Their problem isn't about the business decision they made," said Barry McLoughlin, president of Barry McLoughlin Associates Inc., a Washington, D.C. based firm which provides crisis communications consulting. "Their problem now is how they are managing the perception of that decision." McLoughlin advises P&G's PR and marketing folks to come out again with charts, letters published in newspapers and with signs in stores that show how, by eliminating the coupons, they're passing on savings to customers. "They need to move fast to educate people, to place ads, to work with those in their industry and to speak to the press in an organized, strategic way," he added. But from all accounts, PR NEWS isn't convinced that the company is taking proactive measures to control the frenzy that's evolved from the test they announced they would end April 11. "I'm not going to discuss our PR strategies or the plan we have in place," said Linda Ulrey, the P&G spokesperson fielding queries about the coupon controversy. Ulrey refused to comment on how the company is handling customer and press calls and said the company's decision has been to focus on the coupon test. "We are trying to communicate our messages, and trying to be responsive to questions from editors about the purpose of the test, the test results and how we may use that information," Ulrey added. She said that so far, company heads have found that, during the test period, customers paid the same amount for P&G products as they did prior to the test - sometimes even paying less. But McLoughlin pointed out that's precisely where P&G is missing the boat on handling the PR surrounding this quasi crisis. "They haven't defined the right issue; they've defined the wrong issue - the dollars and cents," added McLoughlin. "In essence, they've ended the test and declared victory but we have no idea how they are responding to criticism." And the criticism, along with the media coverage the coupon move has propelled, hasn't been in small doses. Many media outlets, from CNNFN's online archive to TriState Food News in Monroeville, Pa., have focused on the coupon slashing. But perhaps what will serve as the biggest reminder that P&G's PR hasn't been up to snuff was when The Wall Street Journal ran an April 17, 1997, lead article about the coupon issue and the "brouhaha" that followed. "Landing on the front page of The Wall Street Journal is part of what puts a company in crisis mode," said Donna Lucas, president of Sacramento, Calif. based Nelson Communications. Lucas worked in the Bush administration and now counsels clients on public perception issues along the lines of what P&G is battling. "Often what happens is that people [within corporations] who look at marketing and PR aren't always looking at the public affairs side. This is a perfect example of how politicians and consumer groups can get wind of something and drive an issue." In the case involving P&G, it appears that the potential concerns of customers - the ones in the areas where the coupons were nixed - may not have been taken into account. Part of getting a business perspective on how consumers will respond to a new product or a change is to have a focus group in place and to prepare your audience - a must have component of any PR program. "What Procter & Gamble did here was surprise their customers and hurt a tradition," McLoughlin pointed out. "You shouldn't forget what happened when CocaCola tried to change the taste of Coke and how the public responded. The company realized quickly that what it was really impacting was its relationships with its customers who had it drilled into them what Coke was supposed to be. And CocaCola moved quickly to limit that damage." But it doesn't appear that P&G is doing that yet. It may have something to do with the widely publicized probe by Attorney General Dennis C. Vacco. Any legal predicament will certainly muddy the PR waters for any business. "Consumers have won the first battle, but the war is not over yet," said Vacco in an April 11 release about the coupon debate. "Many customers in Buffalo, Rochester and Syracuse rely on coupons to help make ends meet, especially senior citizens, young families and those on fixed incomes." Still, Ulrey contends that the reasoning behind the coupon elimination was to spark other ways of delivering cost effective (for P&G as well) price cuts to consumers. But in retrospect, it appears that message - the intention to still serve its customers while finding other ways to deliver lower costs based on surveys showing that coupon redemption has declined - has been lost in this PR fiasco. "This is definitely a bizarre situation to be in," McLouglin said. "It appears they were trying their best and ended up creating a problem." (Barry McLoughlin, 202/4295243; Linda Ulrey, 513/9831100; Donna Lucas, 916/4433354)

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