EDWIN CESPEDES edwincespedes96@yahoo.com September 23, 2011 BU.930.610.G1.

FA People & Markets Professor Thomas A Crain Memorandum Taco Bell Corporation: Public Perception and Brand Protection

Memorandum Taco Bell Corporation: Public Perception and Brand Protection

Memo by Edwin Cespedes, Johns Hopkins University Carey Business School

MEMORANDUM

To: Ms. Laurie Gannon, Public Relations Director Taco Bell Corporation From: Mr. Edwin Cespedes, Senior Consultant, EC Consultant Group Date: September 18, 2000 Subject: Proposal to develop a communications strategy to handle the Taco Bells taco shells Star Link situation, to improve public perception and to establish brand protection.

Proposal As a senior consultant for the EC Consultant Group, I would like to propose a project to develop a contingence plan and to handle a smart communications strategy, after the phone call that you, as the Public Relations Director of Taco Bell, received late in the afternoon of Friday, September 15, 2000. As you told us, your companys Government Relation team informed you that a special interest group in Washington DC would hold a press conference early this week to discuss Taco Bells labeled taco shells sold by Kraft Foods, which might contain a corn ingredient unapproved for human consumption. Moreover, we are aware of the story published on todays printed edition of the Washington Post about the findings on the taco shells by the group know as Friends of the Earth. Is our understanding that the taco shells in question come from Kraft Foods

Inc. Nevertheless, do you think that announcing that the problematic taco shells are manufactured, distributed and sold by Kraft in grocery stores, and that Taco Bells participation is limited to being the licensor of the logo and trademarks, is enough to prevent the public from thinking that the taco shells are not Krafts but Taco Bells? No, in fact, if you take no further action in this matter, the publics perception is going to be dictated by both the announcement of the special interest group from Washington DC and the story of the Friends of the Earths findings, published today on the Washington Post. Therefore, we urge you to follow the recommendations on this memo.

Specifically, EC Consultant groups proposal will focus on reducing the impact of the crisis, and the negative effect that this situation with the taco shells can bring upon the Taco Bell brand.

Rationale Considering the short and long term negative effects that the findings can produce on the Taco Bell markets, Taco Bell would benefit from a closer examination of its own programs and restrictions on the use of the Star Link corn, a product approved only for animal consumption, or on the use of any other genetically modified foods. Taco Bell would also benefit from a full disclosure of the situation, indicating that the problem is restricted to Krafts taco shells, and that until now, Taco Bell was not aware of the situation. A thoroughly researched and well-developed contingence plan and communications strategy will help you achieve a corporate social responsibility image, and increase the restrictions on the presence of biotech foods in the Taco Bells food supply.

Research Plan EC Consultants envision four stages to this project: (1) The first stage will involve Taco Bells key stakeholders and Krafts key stakeholders, including shareholders, producers, and suppliers, and will include: - Preserve the important commercial relationship with Kraft Foods. - Act side by side with Kraft Foods to recall al of the taco shells affected with Star Link. - Identify genetically modified crops and segregate them from conventional ones if necessary. - Review the licensing agreement between Taco Bell and Kraft Foods. - Make the public aware of the situation on which the taco shells produced by Kraft are the only ones with the problem, and do not involve Taco Bell shells. - Taco bell needs to adhere to food regulations and it needs to know what is legal to use on the taco shells. (2) On the second stage EC Consultants will then conduct a review of industry best practices related to the use of genetically modified crops in the food industry, including: - Current regulation systems and public policies affecting genetically modified foods. - Studies linking any problems or diseases to the use of Star Link by animals or humans. - Allergenicity issues posed by biotech foods at the approval stage.

(3) Once the first two phases are complete, EC Consultants will analyze the results, develop a list of key findings, and engage the strategic communications team in developing a communications plan. (4) Finally, EC Consultants will present its findings and recommendations to you and selected leadership in the food industry for feedback. communication strategy and implementation plan. Our report will include a

Resources and Budget I understand that Taco bell is a low margin company that doesnt have much money for a big advertisement campaign. Nevertheless, it is important to understand the long ramifications that this negative news can bring on Taco Bells sales. Taco Bell franchises sales will probably be hurt by the recall, even though the affected taco shells were supplied only to supermarkets. advertisement needs to be tripled. communication should be use: - Hold a press conference with major news agencies, disclosing the situation and indicating the steps that Taco Bell will take. - Create a press release on relevant newspapers. - Put a message on Taco Bells website informing the public about the problem. - Create a hotline where sick and affected people can call and receive information. - Create pamphlets with information and federal and state regulations, and showing how Taco Bell is adhering to them. Thus, Taco Bells budget for marketing and Furthermore, the following channels of

Conclusion After the taco shells Star Link crisis, a contingence plan and a smart communications strategy are important for Taco Bells preservation of the image and market. Not only will such a strategy reinforce Taco Bells reputation as a forward thinking and responsible company, but it may well save its business, both by reducing the damaging impact that this episode will bear on its sales, and by developing new campaigns to revitalize its image as a transparent and responsible company. In addition, it is

important to show to the public that Taco Bells is working closely with Kraft Foods, in a true alliance to alleviate the situation and to prevent it in the future. This initiative provides a way for Taco Bell to distinguish itself from the competition, by implementing a full disclosure policy and by practicing food industry process that are fully aligned with governmental laws and regulations.

Note: As a business memorandum this text does not include citations or references, but due to the academic environment on which it takes places, the references are as follow:

References

OROURKE, James (2001), Management Communication, A case-Analysis Approach, Pearson Education Inc, (2001, 4th edition, Pages 51-58)

JOHNSON, Laura E (2008), Proposal/Memo Assignment 2, Proposal to develop an implementation plan and communications strategy to make waste management in Booz Allen Hamilton facilities more environmentally friendly. Revised January 18, 2009