Brand Communication and Reputation Management : Assignment

Student Name : Bussa Rahul
Student Id : 1722167
Block: Brand communication
and reputation Management
Course : MSc in International
Business

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Pizza Express Crisis:........................................................................................................................1
The contribution of Media:.....................................................................................................2
Crisis Response strategy of Pizza Express:............................................................................3
The situational crisis communicational theory (SCCT) :.......................................................3
Crisis Management Theory:...................................................................................................4
Stakeholder Theory:...............................................................................................................5
KFC CRISES :.................................................................................................................................5
Contribution of Media ...........................................................................................................6
Crises Response Strategy of KFC .........................................................................................7
Situational Crises Communication Strategy...........................................................................7
Crisis Management theory .....................................................................................................8
Stakeholder theory .................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Success of each organisation depend upon its reputation in market. It does not matter if
that company is large or medium, and to achieve success effective public relations strategies
must be developed by company. It will help in managing reputation by developing good
communication and relationship with its stakeholders. But in this current economy, news related
to financial crisis within organisations has been increasing and company losing with their
reputation in market. Therefore, this assignment present report on financial crisis which faced by
Pizza express in UK which was not handled properly according to report of British Retail
Consortium and KFC case study where....
Below are the two crisis that have handle good and badly
Pizza Express Crisis:
Pizza Express is known for restaurant groups across the United Kingdom with al most
470 restaurants and also with 100 overseas in Europe, Hong Kong, China, India and in middle
east. At present, it is launched in UK with 'PizzaEXpress Live' which offering a wide range of
entertainment to its guest with various fun activities. They are more specialise in making
handmade pizzas (Serrano-Pascual and Jepsen, 2019). Its reputation in UK market is quite high
and large amount of employees are working in this organisation. Organisation also providing
essential support in terms of financial, emotional and medical to people who are in need.
Therefore, it gets successful in creating a well established reputation in business market across
the world. In 2008, a controversy has been arised in which it was reported that company is
paying it staffs less than a minimum wage rate.
But sometimes things did not get well as according to created strategies. Some mistakes
got happened whether it is knowingly or unknowingly. During the year 2018, company is
continuously facing some ups and downs in its business performance, fears is growing for the
future of pizza restaurants. In a recent report, it has been claimed that after pizza express has
emerged with another franchise, company is not repaying its full debt. For repay its debt, Pizza
Express merged with Chinese private equity firm where they have paid three months of debt
which is around £650 million. But the efforts which put by equity firm did not go well and
company faced a down fall in repayment of debt. According to annual report 2017, Total debt
accrued by Pizza Express is amount to more than £1 billion.
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Company have faced interest cost of nearly £90 million and year 2017-18 and have lost
£28.7 million before tax which proved as big financial crisis for company (Booth, 2015). With
this claim, whole pizza chain suffered from rising cost of food, as well as high rents and business
rate. Currently, there is an increase in national living wage and national minimum wage, with
that possible crisis of Pizza Express becomes the latest hit in Britain's high street. As result of
this claim, restaurant chains have suffered losses and many restaurants get closed in the street of
UK.
Currently, according to report of PwC, 14 shops are closing every day and it is the
toughest trading climate which have been faced from past five years. With its continuous result
in first six months of 2018, 2692 stores were shut down by which fashion and electrical stores
have suffered the most. With that, also new openings are getting failed in this sector because of
that closures of stores is been their. With this crisis, London is the area which is hardly hit by this
Pizza Express crisis.
The contribution of Media:
At the time of disclosure of this crisis, media gave so much of popularity to this accident
and started criticising food services of these chains of restaurants. Mainly highlights is on the
Luke Johnson who have launched his career as serial entrepreneur in restaurant industry
(Roshan, Warren and Carr, 2016). Kind of activities which presented by Media result in closure
of many pizza restaurants in marketplace of London. Media also have claimed before for Pizza
Express company, that its owners teaching staff to flirt on consumers, as a result its brand image
got diminished.
For maintaining a good reputation of company, public relation activities plays an
important role. Consumers only get influences if media is showing good image of company in
their news broadcast. Therefore, with the news of financial crisis of Pizza Express, many
independent and franchise retailers struggling in paying rents, salaries to their employees and
with business rates. With this analysis, Chancellor Phillip Hammond promised in its 2018 budget
that they will develop effective strategies for handling these problems and to help such
independent who are suffering from business rates (Eriksson, 2017). In his spring budget, he
promised that he would reduce business rates bill of 500,000 small retailers in coming weeks.
But with the media broadcast, Pizza Express suffered economically as well as with their
reputation in business market.
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Crisis Response strategy of Pizza Express:
These strategies used by management of company for handling its business reputation in
market. Company is preparing such strategies so that they will able to reduce negative image of
brand so that stores which get closed because of financial crises will get re-open. In crisis
response strategies, management of company, search for solution so that its goodwill get rebuild
in the eyes of consumers. It is a process which is designed to prevent damage which have
affected goodwill of organisation and its stakeholders. This management is divided into three
phases which includes pre-crisis, crisis response and post-crisis.
Therefore, for rebuilding good image of Pizza Express company in business market,
Chancellor Philip Hammond in his spring budget 2018 has promised for tacking such crisis
problems and to help other businesses who are depended on company (Gregory, 2016). In his
budget, he also promised that in few weeks or months, strategies will get developed for reducing
business rates of 500,000 small retailers who are struggling in paying rents, salaries and with
business rates.
The situational crisis communicational theory (SCCT) :
This theory developed in the field of crisis communication. This theory suggests that
crisis manager must have to develop strategic crisis responses which handled responsibility
effectively for rebuilding company's image. Main motive of this theory is to offer a
understanding to situation with the usage of which management will able to defend lost
reputation of organisation in business market. This theory also helps in determining reaction of
stakeholder with current crisis of company.
According to this theory, at the time of crisis company must have to give first priority to
protect its brand image among stakeholders then only company have to worried about its
reputation in business market (Harrison, 2016). Therefore, types of crisis which can happened in
organisation are as follows-
Financial Crisis:- this type of crisis occurs in an organisation when crises have hit
business financially. For example: a type of business which do not have fund to pay its debt and
dues such as payment of dividends, interests, repayment of loan etc. Such financial crisis faced
by company when for a considerable period of time, business is facing losses and there is also a
lack of accountability in company. With this situation, company loose with the trust of
customers.
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Circumstances Crisis:- this type of crisis comes sudden in an organisation, because
sometimes things are not in hands of management. Crisis in organisation might get happened
with the cause of technical errors. Because of this crisis, company have to face low degree of
responsibility which result in reputation al threat in business market.
Cluster Crisis:- this type of crisis said as preventable crisis. Under this crisis
management of company has strong type of crisis responsibility (Jones, Wicks and Freeman,
2017). With this result company have threat of reputation lose. Chances of occurring this type of
crisis is because of human error accident.
In case of Pizza Express, company facing financial crisis type, in which they are not able
to repay their debt for longer time of period. Company have approximately £1 billion of total
accrued debt which is a huge amount. With this claim, whole pizza chain suffered from rising
cost of food, as well as high rents and business rate. Chances of rebuilding such crisis is less
because with the report of British Retail Consortium, strategies which offered by chancellor was
unsatisfying and they have called such policies as “wholesale reform” of business rate system.
Crisis Management Theory:
It is the type of management theory which adopted by organisation to deal with
unexpected and disruptive event under which there are chances that it can harm organisation
reputation and its stakeholders. This theory is considered as most important process for handling
public relations. Crisis which faced by Pizza Express is large which has badly affected image of
company in front of customers (Greenwood and Mir, 2018). As a result of which its many stores
get closed in the market of London. Company have faced a huge financial crisis which cannot
get handled by its partner that is a private equity firm of China. To overcome with this issue
company's crisis manager take an immediate approach so that individual retailers who are
struggling with payment of rents, salaries and majorly with business rates does not affect.
Action of such financial crisis present by chancellor of Pizza Express company is through
spring budget report 2018. It is a type of apology message through media, where chancellor has
promised to reduce business rates of 500,000 people and to tackle such problem with appropriate
business strategies. However, with the promise which said by Mr Hammond is not satisfactory in
the eyes of British Retail Consortium and they refer this promise as “wholesale reform” of
business rate system.
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Stakeholder Theory:
It is a type of theory of organisation management and business ethics in which more
emphasis is given to protect value of business stakeholders (What Is Stakeholder Theory and
How Does It Impact an Organisation, 2018). Main aim of every business is to protect and to
create value of its stakeholder so that company get proper support from its stakeholder for
developing business operations. Need of every business is to consider its customers, suppliers,
shareholders, employees and communities. With the development of this theory management
will able to link effective relationship with its users.
Immediate apology by management of company after the occurrence of crisis creates a
positive image in front of stakeholders. If company do not apologise for its mistake then it leads
to a negative image and management loose with the trust of stakeholders. Chancellor of Pizza
express their apology in its spring budget by which they will not able to influence its
stakeholders and also British Retail Consortium remain unsatisfied with company's policies in
which they have promised to reduce business rate of small individual retailers who are struggling
with paying rents, salaries and with business rate.
KFC CRISES :
KFC is also known as Kentucky fired chicken which is American fast food restaurant
operating in different countries. It is the world's second largest restaurant after McDonald. The
restaurant has various outlets in different countries. Almost it is operating in 20,959 locations
and is providing the customers with food products that consist of fried chicken, chicken
sandwiches, Wraps etc. KFC due to its tasty food products have gain customer attractions and is
having a high brand image in the market. This restaurant in February 2018 faced crises due to
shortage of chicken in United kingdom due to which the company have to close its more than
half of the 900 outlets. The crises were faced due to poor and delayed delivery of the chicken to
the outlets.
KFC face logistic problems which hampered their brand image in UK due to shortage of
Chicken in the outlets of KFC at various locations. The outlets were not having chicken to make
recipes which reduced their customers and customers moved to McDonald which reduce the
profitability of KFC. Due to the shortage of chicken the customers were unhappy and called the
police for providing the information about the shortage of chicken (KFC Chicken Crisis: A Royal
Foul-Up In Britain, 2018). The supply issues caused a great harm to KFC which reduced its
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profitability and many of the customers of KFC moved to its competitors. The delivery of the
supply was cause due to its new delivery partner DHL. According to DHL, number of deliveries
were delayed due to operational issues which hampered the brand image of KFC and reduced its
customer base.
The single location which was used as warehouse was the major cause of the delivery of
the KFC ingredients. After KFC changed their delivery partner to DHL from the South African
owned distributor Bidvest. KFC informed to the customers that it have teething problems with its
new suppliers which occurred due after its changed its delivery partner to DHL. Due to closure
of various KFC outlet In UK the public was angry and wanted answers. The main reason which
caused delivery issues were due to decision of KFC to use single depot and lack of contingency
planning. The delayed delivery of the ingredients was caused to the motorcar near the
warehouse due to which the traffic was increase over there which resulted into delivery causes
and their was no backup available with KFC. KFC have to closed many outlets due to depleted
supply of the ingredients. The KFC due to the issues made changes in its menu and there were
limited menus available at the various location in UK. After a week , the various KFC outlets
were opened and they changed the suppliers from DHL to Bidvest.
Contribution of Media
Media after identifying the crises faced by KFC made fun of the situation and posted
various videos and pictures relating to the crises. Moreover, KFC on its website made fun of
itself by describing its supply issue as “the chicken restaurant without chicken ”. BBC news
informed that the KFC workers were struggling due to the crises. The news about the KFC
crises was covered by BBC news, New york times and USA today. There are tweets and jokes
were made on the crises faced by the restaurant by the customers on social media sites such as
twitter, Instagram, Facebook etc. The customers were angry at KFC and called the police for
enquiry. The media provided the updates about the crises and reason of the delivery issues.
The KFC by adopting the PR strategy have made a positive response from the customers
which has helped the restaurant in gaining the customer attraction (How KFC turned crisis
to triumph, 2018). The PR team made a masterpiece by saying “ a chicken restaurant without
chicken . It's not ideal” which helped in gaining the customer attraction. KFC apologize to the
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customers for the inconvenience faced by them due to the situation. The company applauded the
customers and the media for handling the situation.
KFC used humour to respond to the crises which has helped in gaining the customer
back. The company through use of media and various social media sites manage to respond to
the public and apologize to the public for the inconvenience due to the crises faced. Many of the
responses which the company got from twitter, Facebook and other sites were emotionally
driven. KFC used social media to inject humour into the narrative and defused the situation.
Crises Response Strategy of KFC
The following response strategy helped KFC in rebuilding their reputation and gaining
their customer back :
 They could have blame DHL for crises but they took the full responsibility and
continued to provide the customers with faith that the outlet will be reopened gain
(Baryannis and et.al., 2018 ).
 KFC used the Humour and made fun on their website about the chicken shortage and also
were informative to the customers about which restaurant are open.
 KFC in order to respond to the unhappy customer quickly to calm their fears.
 Also, they updated their audience and provided them with response to their inquiries.
The Crisis response strategy helped KFC in responding to the situation and gaining their
customer loyalty and rebuilding the reputation in the market. It used social media sites for
responding to the situation and handling their customers unhappiness. The company by using
Humour for gaining the attraction has helped in attracting the customers to the outlets. The
response of KFC provide positive impact ion the customers which assisted the restaurant in
getting their customers back and providing them with better facilities and fresh chicken recipes.
Situational Crises Communication Strategy
This theory provide understanding of using crisis communication to protect the reputation
of the organisation during the crises by identifying stakeholders reaction about the different
Crises response strategy (Wall and Yu, 2016). According to this theory, organisation must give
the first priority to their stakeholders rather than their brand image. This theory focus on
protecting the customers, supplier and other stakeholders due to the crises. There are different
types of crises which are faced by different companies that consist of the following :
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Circumstances crises : It is a type of crises which the company face due to technical
error and the organisation does not have any responsibility and causes less threat to the company.
This type of crisis are occurred in some circumstances in which the company is not responsible.
Natural crises : These crises is caused due to natural problems such as fire, flood etc.
which may cause the company with financial difficulties and can affect the brand image of the
organisation (Schrempf-Stirling, 2018). In this situation the company is unable to recover the
situation quickly and affect the position of the organisation in whole market.
Last Cluster : According to this type of crises it occurred in the organisation due to the
human error and this type of crises can be recovered (Kim and Choi, 2018). This crisis is also
known as preventive crises which can be prevented in the specific time period. It affects the
company reputation and organisation make efforts to rebuild their reputation in the market and
attract their customers.
In the case of KFC, the crises was occurred due to delayed delivery of the suppliers
which causes the problems and thus it is the last cluster crises or preventive crises which was
faced by KFC. The crises were occurred due to human error which affected the brand image of
KFC due to which many of the customers were angry and moved to the competitor of KFC.
Crisis Management theory
This theory analysis the level of crises which is faced by the company and identify the
impact of the situation on the business and its brand image (Bhatia, 2018). The Crisis
management theory assist in identifying the responses of customers regarding the crises faced by
the company. KFC crisis due to shortage of chicken in their outlets of UK affected the company
profitability and reduce the brand image as there were lot of customers which were disheartened
due to this crisis. The crisis faced By KFC have negative impact on their customers and there
were various question regarding the shortage of chicken at the stores.
The public was making fun of the company and there were jokes and memes were
posted on social media regarding the KFC crisis. In order to overcome the situation KFC make
use of Humour attracted there many customers back towards the stores. The company also made
apology through use of social media to calm their customers. KFC managed the crises by
Apolozing to their customers about the inconvenience faced by them. The KFC use PR strategy
for gaining their customer loyalty back which helped them in getting various customers back
towards the outlet.
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Stakeholder theory
According to stakeholder theory the main purpose of the company is to create value for
its customers rather than only for shareholders. Organisation must provide equal importance to
tall the stakeholders which consist of employees, suppliers, shareholders etc (Friedrich and
Wilson, 2015). By providing the stakeholders with benefits can help in building strong
relationship with the stakeholders which will assist in improving the brand image of the
organisation. Gaining the trust of stakeholders helps the company in retaining them in business
for the long term.
KFC by making an apology to the customers and various stakeholders through use of
social media such as twitter, Facebook, Instagram etc. Provide understanding that the firm have
sense of responsibility and concern for the stakeholders. If the company had not made an
apology that could have made a negative impact on the stakeholders. The company in order to
gain the loyalty of their customers made the apology for the problems faced by them due to the
crisis which provided benefit of the company in gaining their various customers back.
CONCLUSION
From the above study it has concluded about two crisis which were handled nicely and
badly. The first case is related to the KFC crisis of shortage of chicken which hampered the
reputation of the brand in the market and many of the customers were moved to its competitors.
The Company faced the crisis due to delayed delivery by the suppliers which affected the KFC
brand image to the great extent. KFC Used the crisis response strategy for responding to the
situation that has helped the company to overcome the situation and gain their customer loyalty.
KFC was reopened again after the crisis was solved and gain their customer back by using the
crisis management theory in order to reduce the future crisis. Moreover, It made apology to the
stakeholders to gain their trust. Another crisis which was presented in this report is off Pizza
Express company which was not able to handle financial crisis of company efficiently and
Apology made by company is not satisfied British Retail Consortium.
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REFERENCES
Books and Journals
Baryannis, G. and et.al., 2018. Supply chain risk management and artificial intelligence: state of
the art and future research directions. International Journal of Production
Research.pp.1-24.
Bhatia, A., 2018. Treating Children, Feeding Junk Food. Farm to Fingers: The Culture and
Politics of Food in Contemporary India. pp.128.
Booth, S.A., 2015. Crisis management strategy: Competition and change in modern enterprises.
Routledge.
Eriksson, J., 2017. Threat Politics: New Perspectives on Security, Risk and Crisis Management:
New Perspectives on Security, Risk and Crisis Management. Routledge.
Friedrich, B. and Wilson, S., 2015. Coming Home to Roost: How the Chicken Industry Hurts
Chickens, Humans, and the Environment. Animal L. 22. p.103.
Greenwood, M. and Mir, R., 2018. Critical Management Studies and Stakeholder Theory:
Possibilities for a Critical Stakeholder Theory.
Gregory, A., 2016. Public relations and management. In The public relations handbook (pp. 76-
100). Routledge.
Harrison, S. ed., 2016. Disasters and the media: Managing crisis communications. Springer.
Jones, T.M., Wicks, A.C. and Freeman, R.E., 2017. Stakeholder theory: The state of the art. The
Blackwell guide to business ethics. pp.17-37.
Kim, S. and Choi, S. M., 2018. Congruence effects in post-crisis CSR communication: The
mediating role of attribution of corporate motives. Journal of Business Ethics. 153(2).
pp.447-463.
Roshan, M., Warren, M. and Carr, R., 2016. Understanding the use of social media by
organisations for crisis communication. Computers in Human Behavior. 63. pp.350-361.
Schrempf-Stirling, J., 2018. Ethical Issues in the Food Supply Chain. In Food Ethics Education.
(pp. 85-103). Springer. Cham.
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Serrano-Pascual, A. and Jepsen, M., 2019. Introduction: The Political Reinvention of Work in
Times of Crisis. In The Deconstruction of Employment as a Political Question (pp. 1-29).
Palgrave Macmillan. Cham.
Wall, P. and Yu, Z., 2016. Food Safety: Prevention is Better than Crisis
Management. Sustainable Poultry Production in Europe. (31).pp.133.
Online
How KFC turned crisis to triumph. 2018. [Online]. Available through :
<https://www.raconteur.net/business-innovation/kfc-turned-crisis-triumph>
KFC Chicken Crisis: A Royal Foul-Up In Britain. 2018. [Online]. Available through :
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up-in-britain/#160633ed7c06>
What Is Stakeholder Theory and How Does It Impact an Organisation. 2018. [Online]. Available
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organization>
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