PERRIER CRISIS
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OUTFRONT Nothing Comes Between Me and My SUV "I've climbed r -• and gor swimming with shai ks, but I won't ¡ PSYCHOLOGY I People panic about nuclear power, then ride bungee jumping, and I've never like a bicycle without a helmet. They blame a tire, but forgive the roller coasters because those things] vehicle that rolls over. There's a reason. BY MELANIE WELLS AND ROBYN MEREDITH D EADLY COMBINATION: A TIRE from Eirestone and a sport utüity vehicle from Eord. The first of these two brands will emerge from the rollover scandal badly, perhaps fatally, damaged in the U.S. market. The other will survive. Indeed, sales of the Eord Explorer suffered only a small dip in August. Is this response by consumers the result of a careful weighing of the driving risks? Not at all. It reflects a fundamental principle of risk percep- tion: that people are far more fearful of things they don't control than things they do. Statistics—for exam- ple, the fact that SUVs have a higher propensity to roU over than do station wagons—don't matter. Which is more dangerous, a bicycle or a nuclear power plant? The statis- tics say that bicycles are the killers— Risky business: If we can control it, we don't fear it. 773 deaths in 1998. Nukes didn't kill anyone. But people's hunches run the other way. They worry more about tornadoes (130 deaths a year) than crossing the street (2,708 deaths), more about commercial jets (0.03 deaths per 100 million passenger miles) than about driving at night (16,480 between 8 p.m. and 4 a.m.). It's that control issue. If the Shore- ham nuclear plant moves in next door, you are a passive recipient of the risk. But nobody makes you ride a bicycle. aren't in my control," says John Ross, author oí Living Dange ously: Navigating the Risks i Everyday Life. People buy SUVs becaus they "play to our need to fee powerful," says Richard Cale professor of psychology West Virginia Wesleyan Colfl lege. "Driving these big cars makes us feel superior, inde- structible and in complete con- trol." Tires, by contrast, don't j do much for our self-esteem—nor do we have any control over them. So if sport utilities come with risk, people are able to rationalize it by per- suading themselves they have control over the situation. This perception combines with another common psy- chological failing—overconfidence. We feel we are better at whatever we do—driving, day-trading, swimming with sharks—than other people are at the same endeavors. "Most people will tell you that they are above-average Back From the Dead Bridgestone's expensively acquired brand name Firestone is endangered. Is it doomed? Maybe not. Some well-established brands have rebounded from similar crises. The classic example: Johnson & Johnson's Tylenol, which bounced back after seven people died from swallowing cyanide-laced capsules. Here are others. —Melanie Wells GERBER CRISiS: Nearly 400 reports of sliv- ers of glass in jars of Gerber baby food in 1986. No serious injuries, but company's market share skidded. REACTION: Accused media of exaggeration. Refused a recall, even sued Maryland for banning sales. But boosted ad spending. WHERE IT !S TOOÂY: Sales recov- ered by 1988. Company dominates baby-food business. LESSON: Sometimes groveling isn't better. JACK IN THE BOX CRISIS: E. coli bacteria in bamburger blamed for deatbs of three children in 1993. Scrapped 200,000 pounds of patties. Settled with victims, stockholders, suppliers and franchisees for an estimated $100 million. WHERE IT IS TODAY: Company sales bave increased steadily. Insti- tuted strong food-safety programs. Í. i^;SO:M If all else fails, pay people off. PERRIER CRISIS: In 1990,13 bottles of Perrier, then the dominant bottled-water brand, were found to have traces of benzene. REACTION: Then-owner Source Perrier quickly recalled 160 million bottles, even though health risk was minuscule. WHtRE IT IS TODAY: Perrier, now a division of Nestlé, is the largest bottled-water company in the U.S., with a third of tbe business. LESSON: Strong brand name trumps all. AiRTRAN CRISIS: On May II, 1996 a VaiuJet DC-9 plunged into the Everglades ii ar Miami, killing all 110 people aboard. REACTION: In 1997 the company merged with little-known AirTran Airways and took its name. WHERE IT I . TODAY: After flying in the red for ;n - :. profit in the fi. -; LESSON: Ch; turned a 199.
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Perrier crisis, Back from the dead
Transcript of PERRIER CRISIS
O U T F R O N T
Nothing Comes Between Me and My SUV "I've climbed r -• and gorswimming with shai ks, but I won't ¡
PSYCHOLOGY I People panic about nuclear power, then ride bungee jumping, and I've never like
a bicycle without a helmet. They blame a tire, but forgive the roller coasters because those things]
vehicle that rolls over. There's a reason.
BY MELANIE WELLS
AND ROBYN MEREDITH
DEADLY COMBINATION: A TIRE
from Eirestone and a sport utüityvehicle from Eord. The first of
these two brands will emerge from therollover scandal badly, perhaps fatally,damaged in the U.S. market. The otherwill survive. Indeed, sales of the EordExplorer suffered only a small dip inAugust.
Is this response by consumers theresult of a careful weighing of thedriving risks? Not at all. It reflects afundamental principle of risk percep-tion: that people are far more fearfulof things they don't control thanthings they do. Statistics—for exam-ple, the fact that SUVs have a higherpropensity to roU over than do stationwagons—don't matter.
Which is more dangerous, a bicycleor a nuclear power plant? The statis-tics say that bicycles are the killers—
Risky business: If we can control it, we don't fear it.
773 deaths in 1998. Nukes didn't killanyone. But people's hunches run theother way. They worry more abouttornadoes (130 deaths a year) thancrossing the street (2,708 deaths),more about commercial jets (0.03deaths per 100 million passengermiles) than about driving at night(16,480 between 8 p.m. and 4 a.m.).
It's that control issue. If the Shore-ham nuclear plant moves in next door,you are a passive recipient of the risk.But nobody makes you ride a bicycle.
aren't in my control," says JohnRoss, author oí Living Dangeously: Navigating the Risks iEveryday Life.
People buy SUVs becausthey "play to our need to feepowerful," says Richard Caleprofessor of psychologyWest Virginia Wesleyan Colfllege. "Driving these big carsmakes us feel superior, inde-structible and in complete con-trol." Tires, by contrast, don't j
do much for our self-esteem—nor dowe have any control over them.
So if sport utilities come with risk,people are able to rationalize it by per-suading themselves they have controlover the situation. This perceptioncombines with another common psy-chological failing—overconfidence.We feel we are better at whatever wedo—driving, day-trading, swimmingwith sharks—than other people are atthe same endeavors. "Most people willtell you that they are above-average
Back From the DeadBridgestone's expensively acquired brand name Firestone is endangered. Is it doomed? Maybe not. Some well-established
brands have rebounded from similar crises. The classic example: Johnson & Johnson's Tylenol, which bounced back after
seven people died from swallowing cyanide-laced capsules. Here are others. —Melanie Wells
GERBER
CRISiS: Nearly 400 reports of sliv-ers of glass in jars of Gerber babyfood in 1986. No serious injuries, butcompany's market share skidded.
REACTION: Accused media ofexaggeration. Refused a recall, evensued Maryland for banning sales.But boosted ad spending.
WHERE IT !S TOOÂY: Sales recov-
ered by 1988. Company dominates
baby-food business.
LESSON: Sometimes groveling
isn't better.
JACK IN THE BOXCRISIS: E. coli bacteria in bamburgerblamed for deatbs of threechildren in 1993.
Scrapped 200,000pounds of patties. Settled withvictims, stockholders, suppliersand franchisees for an estimated$100 million.
WHERE IT IS TODAY: Companysales bave increased steadily. Insti-tuted strong food-safety programs.
Í. i ;SO:M If all else fails,
pay people off.
PERRIERCRISIS: In 1990,13 bottles ofPerrier, then the dominantbottled-water brand, were foundto have traces of benzene.
REACTION: Then-owner SourcePerrier quickly recalled 160 millionbottles, even though healthrisk was minuscule.
WHtRE IT IS TODAY: Perrier, nowa division of Nestlé, is the largestbottled-water company in the U.S.,with a third of tbe business.
LESSON: Strong brand nametrumps all.
AiRTRAN
CRISIS: On May II, 1996 a
VaiuJet DC-9 plunged into
the Everglades ii ar Miami, killing
all 110 people aboard.
REACTION: In 1997 the company
merged with little-known AirTran
Airways and took its name.
WHERE IT I . TODAY: After flyingin the red for ;n - :.profit in the fi. -;
LESSON: Ch;
turned a
199.
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