Crisis Memo, September 7, 2014
To: Mr. Greg Creed, CEO of Taco Bell
From: Shambhavi Ray, Carey Consulting
Date: September 15, 2000
Subject: News Release by Friends of the Earth
Statement of Purpose
To minimize brand damage due to the Friends of the Earth news release, our team believes that the recommendations listed in the following memorandum must be followed at the earliest.
A special interest group called Friends of the Earth will be initiating a news release in approximately forty eight hours wherein they will be discussing Taco bell-branded tacos that are manufactured and distributed by Kraft inc. These tacos contain the Cryc9c protein which is a pesticide unfit for human consumption.
Kraft and Taco Bell have a standard license agreement wherein Kraft sells Taco Bell-labeled tacos. Taco Bell in turn receives 4-6% of the sales revenue from Kraft. This partnership is a mutually beneficial one wherein Kraft utilizes the Taco Bell brand and Taco Bell is enabled to launch itself nationally, relying on Kraft's superior distribution channels.
If the Friends of the Earth news release is not nipped in the bud and the situation is not handled suitably, it can be detrimental to Taco Bell in the following ways:
1. Brand damage and loss of market share to other Quick Service Restaurants (QSR's). 2. Weakening of ties between Taco Bell and Kraft as well as between Taco Bell and FRANMAC. 3. Loss of future revenue through license agreements.
Even though Taco Bell neither manufactures nor serves the tacos in question, it is unlikely that the customer or the media will understand this distinction. Since Taco Bell is a QSR, it can increase its market share only by encroaching upon another QSR's market share. Therefore, every revenue stream needs to be preserved and future revenue needs to be kept in mind while dealing with Kraft. By presenting a united front, Taco Bell can leverage Kraft's history...
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