Exploring Marketing Communication Tools to Recover or Maintain Brand Image: Application of crisis communication strategy and image repair theory on Volkswagen’s and BP’s corporate scandals

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Exploring Marketing Communication Tools to Recover or Maintain Brand Image:

Application of crisis communication strategy and image repair theory on Volkswagen’s and BP’s corporate scandals

Julia A. Krzystek 11229330

University of Amsterdam

MA in Communication and Information June 2021

Master Thesis Word count: 15740

Supervisor: Dr. Jean H. M. Wagemans Second reader: Dr. Bart J. Garssen

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Table of contents

1. Introduction………... 2

2. Study on Benoit’s Image Repair Theory………. 6

2.1 Benoit’s Image Repair Theory……….. 6

2.2 Relevance of Image Repair Theory as a Tool……….. 9

3. Review of Crisis Communication Strategy……… 11

3.1 Crisis Communication Strategy……….. 11

3.2 Significance of Crisis Communication Strategy……….. 12

4. Application of Marketing Tools on VW and BP Case Studies………. 14

4.1 The Volkswagen Gas Emission Scandal……….. 14

4.1.1 Image Repair Theory Analysis on VW’s CEO Speech……… 15

4.1.2 Marketing Communication and Crisis Communication Strategy on Volkswagen Scandal………. 17

4.2 BP Deepwater Horizon Oil Spill………. 19

4.2.1 Image Repair Theory Analysis on BP’s CEO Speech……….. 21

4.2.2 Marketing Communication and Crisis Communication Strategy on BP Deepwater Horizon Oil Spill………... 23

5. Conclusion………. 26

List of references………... 30

Annex………. 33

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1.

Introduction

The ‘diesel dupe’ nickname sparked in 2015, when Volkswagen (VW) was accused by the Environmental Protection Agency (EPA) for selling cars in the United States with software commonly nicknamed ‘defeat devices’, that assisted them in cheating the tests on gas emission (Hotten, 2015). The diesel engines were installed specifically to detect when they were being tested in laboratories and would automatically switch the cars performance in order to pass the criterion on emissions. The German automotive organisation admitted to the accusations once they became public in order to avoid any further lawsuits, seeing as their sales within America had been high, largely because of their marketing campaigns which called attention to the cars’ low emissions. The EPA’s discovery amounted to approximately 482,000 cars within the United States and the agency further came to realise that Audi and Porsche cars had also been modified along with other VW models, such as the Beetle, Passat, Golf and Jetta. Volkswagen confessed that a lot more cars have been operating with the so-called ‘defeat device’ amounting to 11 million vehicles worldwide (Hotten, 2015). The ‘diesel dupe’ scandal was one of the biggest corporate scandals around the world that gained a lot of attention from the public, as well as governmental organisations subsequently questioning VW’s management and credibility (Tidwell, 2017, p. 6). Along with their board of executives, many others were, and still are affected by the scandal, starting with their workers, car owners, holders, additional firms and individuals advocating for the automotive company (Hotten, 2015).

Whilst corporate scandals are no new phenomenon in today’s society, the scope and predicament from the Volkswagen emission scandal was front-page news for months. The actions by the corporation ignited a tarnished image for the firm and led to scrutiny from governmental agencies and financial institutions (I. G. Blog, 2018). Another major scandal that brought front-page news was the Deepwater Horizon oil spill caused by BP on April 20th, 2010. The Deepwater Horizon rig, which at the time was leased by BP, was situated on a continental shelf by the Macondo oil prospect in the Mississippi Canyon.

In the course of the night on April 20th, a sudden increase of natural gases rushed through a concrete core that was recently installed for future use and resulted in an explosion (Pallardy, 2020). Soon after the incident it was announced that a similar occurrence happened in 2008 on a BP-owned rig in the Caspian Sea, it was proclaimed that both cores were not strong enough to withstand the pressure, seeing as both of them were composed of nitrogen gas in order to speed up the curing. Although the rig’s blowout preventer (BOP) was initiated at the time, it later came to light that the BOP’s set of blades, referred to as ‘blind shear rams’, which are meant to cut through the pipe carrying oil, malfunctioned due to the pipe bending under the pressure of rising gas and oil. This incident is considered the biggest oil spill on record leading to the biggest environmental disaster in American history (Pallardy, 2020).

Analysing these two publicised scandals can highlight the importance of image repair and marketing communication strategies (Holtzhausen, 2009, pp. 165-166). If crisis communication is appropriately planned by an organisation before being confronted with a scandal, image repair strategy may not be needed to repair their reputation, as a crisis management approach can be satisfactory. Within the field of marketing communication there are various marketing channels and tools used for communication that highlight a company’s products, pursuits and values (Dragilev, 2021). Building a marketing strategy is important for a firm from the onset of their business, it is where their identity begins to shape, their values are presented, social responsibilities are demonstrated and where new product announcements take place. The importance of communication within a corporation can become of great value either during a scandal or after it has ensued. This is the case as it can intercept or decrease the level of harm that the allegations may have initially caused to the reputation of the company (Hassan, 2019, p

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89). Marketing communication tools can vary from various areas; communication, public relation, advertising, social media, promotion, and many more. Crisis communication strategy (CCS) is a subspeciality that falls into the public relations channel of marketing communication. Different theories have come about from CCS research, including Benoit’s image repair theory. The purpose of both strategies is what brings these ideas into relevance as their aim is to protect an individual, company or organisations when facing a public scrutiny and challenge to its reputation (Bundy, 2016, p. 166).

To evaluate the performance of the analytical devices used in this thesis, their concepts must be first explained. When a reputation is being threatened, it is not easy for corporations to ‘sweep it under the rug’ and carry on with their usual business. When their image is put to question, their initial response should present a defense mechanism, thus, acknowledge the issue, explain, justify, rationalise or apologise for their actions (Holtzhausen, 2009, pp. 165-166). Seeing as press releases have become much faster, and, in addition, social media has increased the speed of news spreading scandals have become more public and widespread. This puts pressure on firms to act quickly in order to assess the effectiveness of their strategies (Hassan, 2019, p. 87). Although originating from marketing communication strategy, the two theories, image repair theory and crisis communication strategy, differ from each other. The distinction between them begins from the fact that the concept introduced by Benoit tackles the situation at hand. Benoit (1997) brings to light the significance of image to an organisation and, in the efforts of trying to restore their reputation, there are numerous strategies that he elaborates on that contribute to regaining their popularity. When a corporation is faced with a scandal, the phenomena can be used in order to assess what message should be portrayed by the company. Crisis communication strategy on the other hand can be used throughout three steps; prior to a scandal, during and post-crisis. Nonetheless, the two theories are also complementary with each other as they originate from a stream of research that demonstrates a way to examine and account for crisis situations (Hassan, 2019, p. 89).

The reason as to why image repair theory is presented separately from crisis communication strategy and marketing communication is due to the fact that Benoit’s (1997) hypothesis entails a scandal or disgrace to the organisation's image in order to use the theory and be able to assess what message will be portrayed to the audience. Nevertheless, image repair theory is a component of crisis management which is a subspeciality of public relations that falls into marketing communication (Bundy, 2016, p.

1663). Due to marketing communication and crisis communication strategy touching upon the same objectives, these two theories are bestowed together. Naturally, crisis communication centres on a given emergency, however they both focus on the audience, tools, response, message types and goals (Coombs, 2007, p. 166). Crisis communication focal point is on the stakeholders, along with, what effect the company intends to have on them during the crisis. Nonetheless, for both communication fields, the importance of prior planning before a scandal is advised and needs to be assessed within organisations.

During a crisis, a strong marketing communication resembles within delivering a wide-range of messages to the public and in the post crisis period, the company is usually advised to implement a new image of the brand that does not harm the reputation but rather restores it (Hassan, 2019, p. 89). However, since Benoit’s (1997) illustration of image repair theory, this approach has been studied mostly in a descriptive rhetorical context where authors argue against the success of a certain strategy. This brings a limitation to the study surrounding an organisational crisis, as not much comprehensive review has been published.

Therefore the reason for this topic derives from the limited amount of research about the subject (Holtzhausen, 2009, p. 165).

To be able to examine the work of the analytical instruments in this thesis, the two case studies which display resemblance for this topic, need to be reviewed in order to demonstrate the significance of

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the use of communicative tools during crisis situations. From a legal perspective, Volkswagen hired the same law firm (Kirkland & Ellis) that defended BP after their Deepwater Horizon spill disaster, seeing as the legal firm had already dealt with a big corporate scandal it was thought that the legal counselors would have the skills to deal with the growing collection of investigations and lawsuits over the emission scandal. In both situations, Kirkland and Ellis offered assistance in protection against legal battles coming from European and American continent, and in defence in criminal investigations against health risks and deaths (Ruddick, 2015). From the environmental perspective, both scandals had an enormous impact on the ecosystem and wildlife, the horizon oil spill has resulted in long term effects on marine life, birds and groundwater. It has also been recorded as the largest offshore oil spill in US history, spilling over 134 million gallons of oil into the Gulf of Mexico, killing thousands of marine mammals and contaminating their habitat (Helmore, 2020). Volkswagen has also been exposed with environmental impact. Their defeat devices have caused irreversible environmental damage of nearly one million tonnes of air pollution every year, a study has shown that the scandal could shorten thousands of lives due to excess air pollution (Mathiesen, 2018). These events have caused a threat to both organisations' reputation and caused changes to how stakeholders interact with both companies (Coombs et al., 2007, p. 166). The third connection between the two scandals is in the analysis of their crisis management and how they chose to rectify their image. For that reason two case studies are chosen for this thesis, having more than one study to analyse the marketing tools provides the reader with a deeper understanding and allows a comparison on the application of crisis communication strategy and image repair theory.

The contribution of this thesis is to further investigate the use of image repair theory and crisis communication strategy as tools within marketing communication strategy and analyse their influence on the company’s reputation. The intention behind having two case studies, not one, stems from the analytical aspect. Having more than one case study to analyse enables the reader to see a difference between how the two organisations chose to respond to the scandals. Through using the two case studies of Volkswagen and BP, this thesis will take aim at emphasising the significance of crisis management with the usage of the above mentioned marketing domains. The contribution to the scientific subject here is combining the two tools, namely; image repair theory and crisis communication strategy, to gain better insights on crisis response as well as bring awareness for similar cases that should be scrutinised for patterns of strategy use and impact to identify beneficial analysis and image repair patterns. The relevance of corporate scandals derives from researchers beginning to study their patterns and reasons as to why certain crises occurred. Acknowledging them influenced governments in implementing new regulations regarding misconducts in order to place responsibility on corporations and eliminate continuous delinquencies (Watts et al., 2018, p. 958).

This leads to the aim of this thesis which is to examine the applications of various marketing communication tools; crisis communication and image repair theory, with a specific focus on two corporate scandals as case studies. The purpose of this study is to examine their supportive relationship and answer the following question: Does the application of various marketing communication tools, discussed in this thesis, assist an organisation in restoring or maintaining their brand image after a scandal? This thesis will be broken down into five chapters, the first chapter being the introduction focuses on the introduction of the case studies, the communicative phenomena, the relevance of the subject, the presentation of the aim and the contribution of the thesis. In the second and third chapter, an evaluation of theories relevant to this research will be presented which first reviews the correlation between the two studies, then, marketing communication will be introduced and elaborated with the findings on image restoration theory expressed by Benoit along with concepts on crisis management.

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These two chapters will largely pivot around the academic framework of the communication phenomena of the authors and their contribution to the literary studies on the subject. The fourth chapter will give an elaborative description of the two case studies chosen for this thesis, those being the Volkswagen gas emission scandal and the BP Deepwater Horizon oil spill. The essence of this fourth chapter is to understand what happened and how both corporations chose to respond to the events. This chapter will present the application of image repair theory and marketing communication strategy during a crisis and will evaluate both firms’ approaches and analyse whether the chosen strategies have helped the companies come out of the scandals in good light. In chapter five, a conclusion will be given in order to give an answer to the research question and also present a contribution on the theoretical study.

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2. Study on Benoit’s Image Repair Theory

In order to be able to apply the communicative tools to the case studies, marketing communication strategies need to be explained first. A marketing communication strategy is essential when planning out tactics which advertise a company's products or values. From the initial start of the organisation, it is crucial to have a plan to appropriately implement the strategy in all phases of the company’s existence (Hassan, 2019, p. 89). Marketing communication strategy centres around three pillars; what is to be said;

medium, where it should be said; and target, to whom is this message tailored to (Dragilev, 2021). Within their communication plans, corporations may use tools that will focus on how to retaliate the scandal.

Those tools may incorporate activities in public relations, sponsorship, corporate advertising or corporate social responsibility. They may also assist the organisation to enhance their reputation and provide a perception on the environment within the company. It may also bestow a beneficial element by way of maintaining a positive attitude during a crisis. The choice of tools may differ based on the purpose of each message, as well as depending at what stage the company may find itself in. Additionally, the use of social media today has risen significantly, thus a firm should consider the implementation of this in order to spread the message across more channels (Hassan, 2019, p. 89). In this chapter Benoit’s image repair theory will be discussed along with its relevance towards a corporate scandal.

2.1 Benoit’s Image Repair Theory

One of the developed tools within marketing communication strategy is the idea of image repair theory (Hassan, 2019, p. 89). William L. Benoit (1997) expresses his theory on image repair in his article called

“Image Repair Discourse and Crisis Communication” which was directed towards corporations that are faced with a scandal or in a crisis situation. Benoit brings to light the essence of an image to organisations. Putting aside the impressions shared by the audience, the concept of image is the central notion to the field of public relations. The aim of the article is to explain the theory of image repair and focus on which plan of action firms choose when faced with a scandal or crisis situation. The theory is a division of crisis communication which presents strategies that can be applied to understand a personal or corporation crisis (Benoit, 1997, p. 178). By explaining the approach, Benoit first introduces the significance of establishing the nature of the attack; he classifies two possibilities: “the accused is held responsible for an action” or “that the act is considered offensive” (Benoit, 1997, p. 178). If the company is indeed responsible for the misconduct, and if it also is an offensive act, it is of paramount importance how the company chooses to act in response (Hassan, 2019, p. 90). Benoit introduces a proportional relationship between to what extent the reputation can be ruined and how much the organisation is held accountable.

Throughout the time of a scandal, firms may take precautionary measures along with restorative approaches to address their issue. Benoit explores the theory of image restoration discourse as a practical method for use to set in motion responses during a corporate image crisis. When considering a strategy in efforts to repair their image, firms may appoint additional human resources, such as attorneys or marketing specialists, to tackle their misconduct. Nevertheless, Benoit stresses the importance of what first should be considered in efforts of image repair, that is discovering what is the nature of the attack or criticism that induced such a corporate crisis. Although it does not seem reasonable to form unfavorable impressions of a firm if they have not committed the accused action, the corporation needs to take responsibility for the act if they have performed the wrongdoing. Benoit gives examples in what shapes or

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forms responsibility can appear in, for example: a firm may be held accountable for the misconduct that it carried out, encouraged, commanded, expedited or allowed to happen. If the company is accused of something that it did not perform, their image should not be threatened, however, the audience ought to disapprove of the accusation (Benoit, 1997, pp. 177-178).

An audience plays a big role when dealing with the responsibility for an act, Benoit addresses this by saying “perceptions are more important than reality” (Benoit, 1997, p. 178). What this means is that it may not matter whether the firm has in fact committed an offensive act, but rather if it is thought that the business is responsible for it by the audience. Provided that the company is not to be blamed for, their response is an important part in order to convince the public that they are not accountable for the offensive act. As long as the audience believes they are responsible for the misconduct, their image is put at risk. Correspondingly, the question is raised as to whether the act was indeed offensive or whether the act is believed to be offensive by the relevant audience. In this case the company’s response is also critical, if the act in question was not insulting the firm must give efforts to prove to the audience so, however again, if the audience believes otherwise then the company is challenged with forming an appropriate message declaring the opposite. Benoit emphasises the significance of an audience in image repair and therefore, the firm must recognise their most salient audience that it will address. Benoit’s image restoration discourse pivots on message options rather than describing the types of crisis situations or their stages. This theory focuses on five extensive categories of image repair strategies along with sub-categories that act in response to threats (Benoit, 1997, p. 178).

The principles presented by Benoit provide options to consider what strategy to use when facing a crisis (Hassan, 2019, p. 90). To make it easier to understand, the strategies are presented in a table below (Table 1), and their descriptions follow. Denial and evasion of responsibility are the first to address the initial element of an effective attack by lessening or declining the responsibility for the proceedings.

Reducing offensiveness of event and corrective action, the third and fourth category, deal with the second element of an effective attack, that being: diminishing offensiveness of the act for which the accused is held responsible. Lastly, mortification, the fifth category, concerns restoring an image based on asking for forgiveness (Benoit, 1997, pp. 177-179).

Table 1

Image Restoration Strategies (Adapted from Benoit, 1997, p. 179)

Strategy Key Characteristics

Denial

Simple Denial Did not perform act

Shift the Blame Act performed by another

Evasion of Responsibility

Provocation Responded to act of another

Defeasibility Lack of information or ability

Accident Act was a mishap

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Good Intentions Meant well in act

Reducing Offensiveness of Event

Bolstering Stress good traits

Minimisation Act not serious

Differentiation Act less offensive

Transcendence More important considerations

Attack accuser Reduce credibility of accuser

Compensation Reimburse victim

Corrective Action Plan to solve or prevent problem

Mortification Apologise for act

The first acclaimed category by Benoit, with two variants, is denial. An example for this classification is when a firm may be accused of performing an offensive action and in response replying by directly denying the allegations. The company has the right to deny an act it is being accused of or it may deny the fact that it was harmful to anyone. A second variant of denial is shifting the blame whereby the firm may accuse another individual or organisation that is instead responsible for the act (Benoit, 1997, pp. 177-180).

The second category of image restoration strategy is evasion of responsibility. This category comes with four variants. The first sub-category is provocation, which can be explained by the firm that the act they performed was done in response to an already existing offensive act, thus the act can be justified as a reasonable reaction to the provocation. Defeasibility is the second variant explained by Benoit. Here, the firm can claim that it was not informed nor had any control over the elements of the act.

An example of this is a busy executive who may claim missing a meeting and later confessing they were not informed about the change of time of the meeting. If this is the case, the lack of information pardons the non-attendance. Another variant in evasion of responsibility is accident. The firm can declare that the alleged action was done by mistake which can lessen the damage on their image, however if the audience believes otherwise, it can also exacerbate their situation. The last variant in this category is referred to as good intentions. Here, the organisation may suggest that their doing was performed with good intentions, they may present that in their slogan or public message in order to gain more trust from their customers (Benoit, 1997, pp. 177-180).

The third category examined by Benoit is reducing offensiveness. In this category, the accused company may try to reduce their offensiveness of the act with six variations. The first one refers to bolstering, which means a company strengthens their audience’s favourable feelings towards itself in order to counterbalance the negative feelings associated with the misconduct. Doing so, organisations can remind the audience of all the good things it has done or represented in the past, subsequently making up for the offensive accusation. The second variant is attempting to minimise the negative feelings associated

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with the misconduct, downplaying the extent of the damage is one example of minimising. Differentiation is the third option. A company can employ this technique by differentiating the act from other acts alike which seem even more offensive. A choice of words can be used here to make the actions sound eloquently less offensive than they are. Another sub-category of reducing offensiveness is transcendence, whereby the act is presented in a more favourable setting. The company may show research outweighing the negative claims of the action. The second to last variant concerns attacking the accuser of wrongdoing, as counter-attacking the accuser may reduce the damage first brought on the company and place the initial accuser in a questionable position. The final method of this category is compensation. If the victim accepts the company’s offer, this can be financial compensation or an apology, and can help rectify the delinquency (Benoit, 1997, pp. 177-181).

Another category presented in this theory is corrective action, in which the firm pledges to rectify the issue. This particular course of action aims at reinstating the previously existing image or promising to preclude the recurrence of the malpractice. Doing so, the firm can present a set of goals or a plan that corrects the current problem and also prevents it from any future complications. Lastly, the final strategy presented by Benoit is to admit and acknowledge the problem, and ask for forgiveness. This is labelled as mortification. This can be presented with an apology or an official statement from the board, nevertheless a limitation of this strategy is that it may encourage lawsuits from individuals who have been affected by the act. Several analyses carried out by Benoit (1997) illustrate the potential of this theory, confirming its advantage in the field of crisis communication.

2.2 Relevance of Image Repair Theory as a Tool

The research conducted by Benoit presents recommendations to employ the strategies in preparation, analysis, identification and repairing a tarnished image. A crisis contingency plan is a process which prepares a firm for any potential emergencies, and having such a plan in place before a crisis occurs may reduce in response time as well as prevent the possibility of badly judged steps in the initial reaction.

Whether it’s a group of specialists or an individual person, someone in the company should be responsible for crisis management and oversee prompt action when necessary. Although crises may come in different shapes or forms, one should anticipate some potential options. For instance, an airline company should anticipate the possibility of a crash or a restaurant may prepare itself for a complaint concerning food-poisoning. It is recommended by specialists to have these contingency plans reviewed periodically and consider various situations. Once the quandary occurs, it is of importance to acknowledge the nature of the crisis and who the relevant audience is. Knowing the nature of the scandal is analysing the accusations or suspicion, so a company needs to know this in order to respond suitably to the matter (Benoit, 1997, p. 182). Secondly, it must be acknowledged how severe and offensive the accusations are and how the audience has reacted, in order to be able to tailor the response message appropriately.

Identification of the relevant audience is significant to adapt a response which influences the public's opinion. A crisis may affect various groups, therefore customising the message is an important factor of persuasion in addressing the audience; a response to one particular group may be meaningless to another.

Undeniably, when facing a crisis, the firm wants to address as many individuals as possible, hence why prioritising audiences is of value, to ensure the most crucial audience is pleased first and then, step by step, devote time and effort to other groups as much as possible. This can be achieved by delivering separate messages and stressing different matters that correspond to different groups (Benoit, 1997, pp.

182-183).

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In his article on crisis communication, Benoit provides suggestions on an effective method for repairing a tarnished image. Benoit lists three possibilities regarding how one can get around a crisis. One option is redefining the attack, the second alternative is adjusting the focus to another issue and the third possibility is that the accusations did not impact on the audience as expected, however if otherwise the best option for the company to do is deal with the allegations appropriately. With given examples from corporate scandals, Benoit suggests how to tackle image repair. His observations firstly focus on persuasive discourse. One case reveals relevant advice on persuasion: “avoid making false claims; avoid arguments that may backfire” (Benoit, 1997, p. 183). Another case study displays the negative effect of self-serving statements which seemed contradictory to the firm's actions. The first case presents itself with a company’s spokesperson whereas the second study hires an external worker which results in unsuccessfulness. Secondly, if the firm is responsible for the accusations, it should admit to them, not only because it is ethically the correct thing to do, but also because at a later stage it may backfire at the organisation. If the truth comes to light after the firm has denied everything, it may damage their credibility even more and reflect much worse on their image. According to Benoit in this situation, the best solution would be either to attempt to shift the blame or take the responsibility and admit to the accusations (Benoit, 1997, pp. 183-184).

On occasion, shifting the blame may seem successful, however it should not be perceived as a solution to image problems. As in the first case study, the firm shifts the blame to the accuser which was successful as the accusing company needed to apologise for their criticism (Benoit, 1997, p. 184). A firm doing so needs to be convinced that the allegations are not theirs to be blamed for, otherwise the situation may backfire. A comparable strategy to this is defeasibility, if the firm could present factors that are beyond their control to the misconduct it may reduce the blame to a certain extent and help reinstate its image. Provided that the organisation admits to the offensive act, the firm should announce the corrective measures they are planning to do in order to fix what they have done and ensure to prevent any future problems. This can be a very significant part of image restoration, especially for organisations that own responsibility for the misconduct. Corrective action cannot guarantee a successful outcome. Another case Benoit examines, where a company makes use of corrective action, revealed that their strategy failed due to their description containing inaccuracies. Minimising an issue may also not work in favour of the company, as it may stimulate adverse reactions or not necessarily improve the image. Conclusively, multiple strategies can be utilised together, in fact at times it may work more effectively when combining various methods. Benoit describes the theory of image repair discourse in the corporate field with suggestions to those who encounter a corporate scandal who can therefore utilise the theory he presents in the article. It is of essence here to notice that this theory can only be applied during a crisis. Benoit’s suggestions attempt to protect an organisation during a misconduct, that is because, in the course of a scandal, it is the best timing to compose a message in order to repair one's image (Benoit, 1997, pp.

184-185).

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3. Review of Crisis Communication Strategy

The scope of marketing can be defined in numerous ways, many authors write about the topic and give their own definition of the field. Based on these interpretations, it can be concluded that the function of marketing is to establish and fulfil the needs of customers in the most profitable way. Communication on the other hand, can be described as the affair of translating thoughts between customers and organisations.

Thus, marketing communication is a mix of elements that contains tools that are essential for any organisation's success (Tomse et al., 2014, pp. 131-132). Those tools may vary in application depending on the situation a company finds itself at. This brings to the reason as to why they differ from one another.

Crisis communication, which falls under marketing communication, entails the organisation's preparation prior to a crisis, during and once the attention has cooled down from the allegations. Image repair theory, on the other hand, is most commonly applied for once the scandal has come to light and executives must decide what is going to be communicated to their audience (Hassan, 2019, p. 89). Based on what was just said, this chapter will focus on the importance of crisis communication strategy and how it can be applied during a corporate scandal.

3.1 Crisis communication strategy

The importance of being prepared for a crisis truly shows when a company is exposed to a scandal or a crisis as it assists in averting or minimising the extent of damage that the offensive act may cause on the firm’s reputation. Marketing communication and crisis communication strategy (CCS) present a parallel purpose in their objectives, tools, audience, response and in the way the messages are composed (Hassan, 2019, p. 89). Academics frequently highlight the use of communication as a symbolic approach in order to guard the organisation’s image. The symbolic approach, amongst others, refers to crisis communication strategy which organisations employ in efforts to repair their tarnished image (Coombs, 1998, pp.

177-178). Crisis communication focuses more on the perception of the crisis amongst the organisation’s stakeholders’. Two main schemes that apply to CCS are “(1) Managing information which involves the collection and spread of the information related to the crisis, (2) Managing meaning which refers to the efforts involved in influencing the perception of the crisis by people and/or the extent to which the company’s involvement in this crisis” (Hassan, 2019, p. 89). Having a constructive media plan along with an active PR vitality can strengthen a firm before being hit with a crisis (Hassan, 2019, p. 89). Chairman of Bernstein Crisis Management Inc. and author of “10 Steps of Crisis Communication” Jonathan Bernstein recommends courses of action to take when dealing with a crisis (Bernstein, 2017). Bernstein identifies ten measures to build an effective crisis communication plan, however seven of them require implementation prior to the scandal, hence emphasising the significance that the company should be prepared beforehand (Hassan, 2019, p. 89).

Bernstein begins his ten steps by firstly introducing the idea of formulating a crisis communication team as it brings about two benefits; firstly, situations may be preventable and secondly, it can result in optimal and fast responses to any accusations. The second step entails forming a team of senior executives that will serve as the company’s crisis communication team. Thirdly, identifying and training the spokesperson of the company to ensure that during the crisis the individual is prepared to give the appropriate message across different channels. The fourth step is to provide relevant coaching in order to eradicate chances of miscommunication during the mishap (Bernstein, 2020). The fifth course of action relates to establishing a notification and monitoring system. For notification Bernstein recommends

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setting up a social media account to be able to rapidly reach all stakeholders’ concerned with the unfortunate events. Monitoring systems are also crucial in crisis prevention and response as they assist in accurately adapting strategies and logistics. The sixth step is identifying the most important stakeholder that the company needs to focus on when being confronted with a crisis, it can range from their employees to investors or external audience. The seventh measure is developing ‘holding statements’

which can be released promptly after the crisis comes to light. The eighth step cannot be completed before the crisis as it requires assessment of the situation. If the company has taken the precautionary measures of steps one through seven then they will not have to hastily plan a communication crisis but will be prepared and can allocate their focus on evaluating the troubled situation. The ninth initiative is to identify key messages that will have the best impression on the stakeholders during the post-crisis period (Bernstein, 2020). The last measure recommended by Bernstein is making a post-crisis analysis to determine whether the company’s communication strategy has made a change or whether other actions would be required in order to attain more advantageous results. Concluding his article, Bernstein assures that demand for advance preparation has increased in the past decade, however, the author still does not see the progress he would like to with his given suggestions.

3.2 Significance of Crisis Communication Strategy

A situational response is necessary when selecting a crisis strategy, since it emphasises the course of action that should be taken during a scandal, as well as considering measures after a crisis in order to protect the company’s reputation. Coombs (2007) discusses this in his article and gives an elaborative explanation as to why a crisis communication theory is of importance. He begins doing so by introducing situational crisis communication theory (SCCT). The theory supposes that a company’s reputation is threatened by an accusation of misconduct. Crisis communication strategy can prepare an organisation for best defence by evaluating the crisis situation and adopting a response strategy that is optimally suited for the circumstance. Having a crisis communication strategy prepared, prior to a scandal, gives the firm an advantage by knowing already that providing the right information to the public is necessary before considering addressing its reputational distress (Coombs et al., 2007, p. 167). This brings the essence of CCS as it aims to bring awareness to any type of threat, the magnitude, and the potential consequences of an approaching scandal and additionally prepares actions to adopt in order to lessen the threatening allegations to the organisation’s image. Thus, CCS should not only be connotated with ‘reacting to the crisis’ but also amount to preventative measures and being equipped in anticipation of a scandal. If an organisation is prepared with a crisis communication strategy prior to a scandal, then the plan has potential to reduce the size of damage the company could encounter as a result of the accusations, and could also turn a ‘crisis’ into an ‘incident’ (Coombs et al., 2007, p. 169).

As mentioned before, crisis communication strategy and marketing communication resemble parallel purposes. One reason for that would be because CCS originates from marketing communication.

The theory behind both concepts is very similar, naturally, crisis communication focuses on the given time when a corporation undergoes a scandal. However, the preparation beforehand is as significant as having a marketing communication strategy within a company (Coombs et al., 2007, pp. 167-168). For this reason, the two concepts are analysed together in this thesis. In the next chapter, it will be analysed why companies should have both theories incorporated in their company, and if not, how badly it can result in trying to battle a crisis in conjunction with not being prepared. As stated by Bernstein (2020), if a company has a designated crisis manager this person should begin a range of crisis responses once

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identifying the nature of the scandal. The aim of this is to bring the company to a level where it can scale to what extent it can be blamed for the misconduct and its ability to be in charge, that is a key indicator in order to be able to conduct image restoration strategies (Coombs et al., 2007, pp. 167-168). Knowing the amount of reputational damage for the organisation helps assess potential strategies. The stronger the harm, the more strategies will need to be utilised to assist in compensating the victims. Once conscious of the magnitude of the misconduct, CCS should lessen the company's image distortion by showing how the organisation acknowledges the impact on the victims or those affected by the scandal (Coombs et al., 2007, p. 169).

By identifying the crisis and the company’s responsibility, it allows the organisation to begin the initial assessment of the public's opinion and strategy outline. The public’s attitude may reflect on the severity of a scandal and performance history of the company. These two factors have proven to influence the perception of a crisis and have sometimes reduced the mishap (Coombs et al., 2007, p. 169).

Therefore, crisis communication strategy recommends conducting assessments on crisis severity which reflect on the performance history. As soon as that is established, crisis managers can then turn to choosing the correct response strategy for the company. Coombs (2007) combines a list of eight crisis response strategies: (1) an attack on the accuser, (2) denial, (3) excuse, (4) victimisation, (5) justification, (6) ingratiation, (7) corrective action, and (8) full apology. These responses show similarity in Benoit’s image repair theory. This gives significance on both strategies given how interconnected they are with each other. The use of these approaches can differ depending on the audience and severity of the accident therefore it is important for crisis managers to match the right response to the responsibility. These responsibilities may differ for natural disasters, rumors, technical breakdowns, human breakdowns, violence or many more, however if the crisis is mainly caused by the company, it would require firm responses from the organisation such as corrective actions or apologies (Coombs et al., 2007, pp.

171-172).

The significance of owning a crisis communication strategy within an organisation lies within the preparation phase. When a company is confronted with a crisis there usually is no time for considering crisis types for each mishap that occurred. Thus, having a well-equipped crisis portfolio enables companies to respond quickly enough to not allow for more criticism or skepticism from the audience, victims’ families or stakeholders. A crisis portfolio is a plan for any situation a firm may find itself vulnerable in, and, if such a scheme is prepared by specialists, an organisation will find itself well poised for any forthcoming scandal (Coombs et al., 2007, p. 173). Crisis communication strategy provides an organisation with guidelines in order to understand crisis response and apply appropriate measures when being exposed to a scandal. Companies that do not have a contingency plan are more exposed to condemnation, consequently leading to damage to its reputation. A firm’s image is important and thus, crisis managers are significant for protecting the organisation's reputation before, during and after a crisis.

A crisis communication strategy protects the company from their reputation becoming ruined together with collecting, processing, and communicating the information that is essential to address a crisis state (Coombs et al., 2007, pp. 183-184).

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4. Application of Marketing Tools on VW and BP Case Studies

In order to illustrate the working of the analytical instruments in this thesis, the two cases of Volkswagen gas emission and BP Deepwater Horizon oil spill will be studied. The reason why these two case studies are used in this thesis is to present their supportive relationship applied before and during a scandal. With the application of the two case studies an analysis is made between the difference of the use of the marketing strategies, which then is connected to the hypothesis in the conclusion. Hence, a deeper understanding of the tools is presented with two studies rather than just one.

4.1 The Volkswagen Gas Emission Scandal

A group of students from the University of West Virginia began a research study on Environmental Protection Agency (EPA) testing, the study questioned how accurate real-world data would be compared to tests made in laboratory settings (Welch, 2019, p. 4). The testing initially began on Volkswagen Jetta diesel models, it took place on regular roads in order to examine how accurate the EPA methods are when testing automotive emissions (Jung et al., 2019, p. 6). As the research continued, students started recording data that proved the tested cars emit 8 to 35 times more nitrogen-oxides compared to what was authorised by EPA regulations. This was the breaking point for Volkswagen as the study began to reveal the truth of VW’s corporate fraud and deception. Subsequently, the California Air Resource Board and the Environmental Protection Agency were briefed about the difference in their experimentation and began their own investigation in the USA and Europe. After a year of the initial research performed by the graduate students, both federal and state governments confirmed that indeed Volkswagen was committing corporate fraud which led to a legal court case against the German automotive company (Welch, 2019, pp.

4-5). This led to other countries getting involved and opened a wider investigation against the company, questioning the legitimacy of Volkwagen’s emission results (Hotten, 2015).

In 2015 the scandal of Volkswagen, referred to as the ‘diesel dupe’, caused uproar worldwide as the company was found to have installed emission software dubbed ‘defeat devices’ (Hotten, 2015). This operating program enabled sensors to be aware of the distinctive parameters of an emissions drive cycle which was established by the Environmental Protection Agency (EPA). The device was designed to detect when the cars were being tested in laboratories in order to show full compliance with all federal emission levels, however, once on the road the engines switched their mode altering their fuel pressure, injection timing and released more nitrogen-oxide gas than initially shown during testing. This meant that the modified cars permitted up to 40 times greater nitrogen-oxide emission, a smog pollutant which can be linked to lung cancer (Atiyeh, 2019). To this day, how these ‘defeat devices’ actually worked is still unknown, EPA announced that the engines had installed computer software that was able to detect a test scenario by recording speed, engine operation, position of the steering wheel and engine operation. In laboratory conditions, the car would be placed on a ‘stationary test rig’ which is when the device would detect the vehicle being put into a safety mode which changed the device to test mode, but once on a regular road surface, the engines switched out of the modified mode (Hotten, 2015). The misconduct was portrayed with exacerbated determinant due to the fact that years prior to the scandal Volkwagen advertised itself as “clean diesel” cars running on best engines (Zhou, 2016, p. 3). A public apology was issued after the scandal became public by Dr. Martin Winternkorn, VW’s CEO at the time, not admitting to any wrongdoing (Jung et al., 2019, p. 6). Although he recognised the loss of consumer trust, his

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argument was that this trust should be reinstated due to unfairly blaming all of the hard working-employees for the mistake of just a few individuals (Campbell, 2018).

The assessment of Dr. Winterkorn's speech will be given in the next section with the use of image repair theory in order to assess the application and outcome of his speech. Another important aspect of this case study is the long lasting and immeasurable environmental impact this scandal will have on the ecosystem (Zhou, 2016, p. 5). MIT scientists have predicted that the surplus in particulate matter and nitrogen-oxide emissions produced by the ‘defeat devices’ will lead to 60 premature deaths within the US and 1,200 in Europe (Barrett et al., 2015, p. 5). Once the first wave of the scandal had settled in and apologies from VW executives were communicated, Volkswagen began strategic steps to overcome the negative consequences of the scandal (Jung et al., 2019, p 6). When analysing Volksawgen’s recovery, the distinct choice of strategy that helped the automotive giant turnaround from the scandal was key. In order to overcome the public relations ordeal and recover in sales, VW commenced on a four-step course of action within the marketing strategy: “replace, restructure, redevelop and rebrand” (Welch, 2019, p. 7).

The four strategic elements allowed the company to replace the leadership, restructure the institution, redevelop the policy and rebrand the company.

4.1.1 Image Repair Theory Analysis on VW’s CEO Speech

It is of importance to see that the ‘diesel dupe’ scandal corresponds to the image repair theory and crisis communication discussed earlier. First, the speech given by Dr. Winterkorn will be evaluated with the tools of image repair theory presented by Benoit. Then, the four-step strategy adapted by Volkswagen will be assessed through the means of crisis communication and marketing strategy. The speech given by Dr.

Martin Winterkorn can be found in the annex, at the end of this thesis. It was disseminated right after the scandal emerged and was addressed to the general public with the aim of conveying a sincere apology and acknowledging the accusations that the organisation had succumbed to. The phenomena introduced by Benoit can be found in the public speech, specifically; denial: shift of blame, evasion of responsibility:

defeasibility, corrective arms and mortification (Benoit, 1997, p. 179).

The first phenomenon introduced by Benoit (1997) that is noticeable in the speech given by Dr.

Winterkorn is denial, found with the specific variant of the shift of blame. Dr. Winterkorn begins his oration by addressing the general public, while looking straight into the camera with a straight face, in his closing argument the use of shift of blame can be observed as he excuses himself and most of his zealous employees by holding accountable ‘only a few’ of the misconduct:

“...But it would be wrong to cast suspicion on the honest, hard work of so many, because of the terrible mistakes made by only a few. Our team does not deserve that. That is why we are asking you, I personally am asking you, for your trust as we move forward. We will get to the bottom of this...” (Storyful News, 2015).

Despite the fact that Dr. Winterkorn is not denying the accusations nor blaming another company for the allegations, he is suggesting that someone internally is to be blamed for this, excluding himself and many of his workers. Communicating this, he asks his audience to not only believe him but also trust him and the company in order to find out who is responsible for this scandal and ultimately, who can be blamed for it (Benoit, 1997, p. 180). In this part of his oration, Dr. Winterkorn presents the shift of blame in order to regain confidence and assurance in himself and the company from the public. By presenting this choice

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of image repair, the former CEO makes an effort to defend Voklwagen’s image from being tarnished as well as trying to limit accusations and harmful allegations in order to retain the company’s reputation.

The second phenomenon visible within the speech is the evasion of responsibility, specifically defeasibility. This is seen in the beginning of the speech when Dr. Martin Winterkorn focuses on how the irregularities and accusation are contradictory to what the Diesel Group at Volkswagen stands for:

“...the irregularities and our Groups Diesel engines go against everything Volkswagen stands for.

At present, I also do not yet have the answers to all the questions but we are working hard to find out exactly what happened. To do that we’re putting everything on the table as quickly, rigorously and transparently as possible, and we continue to cooperate closely with the relevant government organisations and authorities...” (Storyful News, 2015).

As presented in the statement above, one can tell how Dr. Winterkorn proves to the audience that he allegedly had the lack of information regarding the ‘defeat devices’. According to Benoit (1997) someone who lacks information or any control over a misconduct should be excused from any allegations or accusations. By expressing that he does not have the answers to all the questions may show an absence of knowledge on the installed software and perhaps any control over the delinquency. Trying to support his confession on the lack of information, Dr. Winterkorn ensures the public that he will do anything to be as honest and transparent with any findings that emerge once an internal investigation is initiated and he promises to communicate them with the relevant authorities. As claimed by Benoit (1997), if indeed Dr.

Winterkorn’s ignorance was true and he did not know about the ‘defeat devices’, then he should be excused of any allegations made towards him and the company in addition to Volkwagen’s reputation should not have been harmed. The ones who were truly responsible for the wrongdoing should be paying the price.

The third image theory strategy which is portrayed in the oration is corrective arms. Within this phenomenon the organisation should display or promise a plan that will solve or prevent the issue at hand (Benoit, 1997, p. 181). This can have an effect in several approaches, one of them can be by issuing an official statement promising to prevent any future wrongdoing that would lead to any illegal accusations.

Another approach could be by taking charge and improving formerly existing affairs which have led to the delinquency (Benoit, 1997, p. 181). This strategy is presented twice in Dr. Winterkorn’s speech:

“...Please believe me, we will do everything necessary to reverse the damage. And we will do everything necessary to win back your trust, step by step...” (Storyful News, 2015).

“...We are working hard on the necessary technical solutions and we will do everything we can to revert damage to our customers and employees. I give you my word, we will do all of this with the greatest possible openness and transparency...” (Storyful News, 2015).

In the first part of the above fragments, the former CEO tries to reassure the public that he, together with the company and its workers, will try to do anything to ‘reverse the damage’, therefore correct or fix anything that has led to this occurring. He also tries to gain his audience's sympathy by phrasing his sentences in first person: ‘please, believe me’ and ‘I give you my word’. He further tries to win his customers' faith back by ensuring that he will do anything in his power to undo the harm and win their trust again.

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The fourth and last strategy found in Dr. Winterkorn’s speech is mortification. As Benoit (1997) explains in his article, it might be the right plan of action, however it may also open the organisation up to more lawsuits or accusations. This is presented in the speech:

“...I am deeply sorry that we have broken this trust. I would like to make a formal apology to our customers, to the authorities and to the general public for this misconduct...” (Storyful News, 2015).

Although Dr. Winterkorn apologises and says ‘I am deeply sorry…’ his apology is focused on breaking the trust the company has worked so long for. Once he relates the apology to the misconduct, it may be portrayed by the public as insincere from him since he mentions it after referring to the trust. Another point that should be raised about his sincerity is the fact that he waits until the middle of his speech to give his expression of regret on the scandal. His initial concern in the speech was to make it clear that Volkswagen does not stand nor support such happening, that these accusations should have never taken place, and discusses measures that will be taken in order to find out what exactly happened and why. This is shown in the fragment below:

“...This quick and full clarification has the highest priority. We owe that to our customers, our employees and the public. And to be frank with you, manipulation at Volkswagen that must never be allowed to happen again...” (Storyful News, 2015).

Whilst addressing the issue, Dr. Winterkorn reassures that measures will be taken to fix the issue and prevent any future incidents from happening. He also apologises for the scandal of ‘defeat devices’ and seeks understanding and forgiveness in his apology, although, the use of mortification may not always lead to the most successful strategy used during a crisis. As aforementioned, mortification may open up more controversy (Benoit, 1997, p. 181). After applying the suggestions from Benoit’s article to this speech it may be observed that Dr. Winterkorn attempted to adjust the focus of the scandal on another issue, which was Benoit’s (1997) second suggestion for a corporate crisis. Winterkron did so by pointing the finger to those who were responsible for the misconduct within the company. He applied shifting the blame and excused himself by expressing unknowingness surrounding the issue. By being apologetic to the audience he tried to gain their sympathy and lastly, made it very clear that there will be corrective actions taken against the wrongdoing.

4.1.2 Marketing Communication and Crisis Communication Strategy on Volkswagen Scandal

Various tools within marketing communication can be used in order to retaliate from a scandal.

Implementing those is essential in order to outline a preliminary version of a recovery strategy which will publicise a company’s values, product and pursuit (Hassan, 2019, p. 89). Volkswagen’s endeavour to turn around the scandal and recover their customers' trust led the company to approaching four strategic elements within the crisis communication strategy (Welch, 2019, p. 7). These originate from Bernstein’s strategic steps within crisis management. The four steps, aimed at salvaging the company’s reputation worldwide, that advocate image restoration are: replace, restructure, redevelop and rebrand. Bernstein (2020) elaborates on the assessment of the crisis before proceeding with a plan of action. Therefore, before Volkwagen’s first ‘replace’ tactic, the company had to first evaluate how the public and

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governmental authorities reacted to the allegations. Once this was completed by the organisation, the four restoration procedures came to action (Welch, 2019, p. 7).

The meaning of the word ‘replace’ in the VW situation signified a change in leadership, which can be the first steps towards a recovery (Welch, 2019, p. 7). CEO Dr. Winterkorn resigned within weeks after the scandal came to light and was replaced with an in-house candidate Matthias Müller. This could have been portrayed as a risky move at the time, however, Mr. Müller presented an exceptionally successful work ethic during his prior years within the company, as well as being distanced enough from the scandal itself. Consequently, this replacement was seen as a safe decision. The first course of action, during a corporate crisis, usually entails replacing the leadership at the top. As exposed as this step can be, the following actions of the new CEO determine whether the company will benefit from it or rather go under more scrutiny. Mr. Müller was praised for his dedicated years working for the Volkswagen Group and was given credit for guiding the brand prosperously during the recession. Two days after Dr.

Winterkorn’s resignation, Mr. Müller was appointed the new CEO of the company, with supporting evidence that it was a good choice of appointment that allowed for new measures to tackle the scandal.

Müller moved fast with his decisions to stabilise and restructure Volkswagen and, soon after his promotion, he replaced seven top VW executives, while also eliminating many positions in order to cut company costs (Welch, 2019, p. 8). This was a significant step for the Volkswagen Group in their recovery process that also opened up a door for their second step in the process of restructuring the organisation.

Subsequent to the replacement of leadership, the following step was the restructuring of the organisation (Welch, 2019, p. 8). As part of that tactic, Müller redesigned the focus and leadership of the organisation. In an attempt to increase the efficiency of the company and make smarter decisions, his first course of action was to redirect the tasks usually handled by the CEO to a number of top managers. This shift in task management increased competence by fifty percent. Next, Müller reorganised areas of the company responsible for design, production, sales and strategy which, from that point onwards, were required to report directly to the CEO. In a press conference Müller explained the benefits of this organisational restructuring: “Our new lean structure will enable us to develop the considerable potential of our Company, its brands and employees to great effect. We will see faster decision-making and more efficient action” (Welch, 2019, p. 8). The third step focused on saving the company any unnecessary costs, including a reduced percentage of compensation for the senior executives. This led to further financial allocation; the compensation system was amended to reflect on overall performance of workers and the company’s revenue. Whilst this was a great decision that led to company savings, this move represented a symbolic progress in order to change the people’s opinion on Volkswagen. The initial reaction of the public was not as glorious as hoped for, a shared thought spread around that the cost reductions and the restructuring of the company came a little too late (Welch, 2019, p. 8). Seeing as Volkswagen’s development is to a great extent influenced by unions and German politicians, Müller struggled with tight constraints from labor parties with regards to cutting jobs and creating new positions.

While analysts believed more jobs should have been eliminated, Müller managed to nicely balance political influence with restructuring the company in the most feasible way. During the restructuring of the corporate organisation the company also continued with internal redevelopment and execution of the Volkswagen Group strategy (Welch, 2019, p. 8).

The third component within the crisis management field that Volkswagen used is redeveloping the strategy. This had to be mapped out across different markets and done across each of the company brands:

Audi, Bentley, Lamborghini, Porsche, SEAT, Skoda and Volkswagen (Welch, 2019, p. 9). Müller’s further

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steps in raising awareness for the Volkswagen Group, along with cost reductions and salvaging the Volkswagen image, was a new strategy launched for the namesake brand called “Transform 2025”

(Volkswagen Press Release, 2016). This approach was intended for brand reorientation which was mapped out in three phases. The first phase focused on brand strategy within the years of 2016 to 2020 whereby the focus was on restructuring the company post-crisis, revamping the value chain presented at VW and pursuing new competencies within electric vehicles (Welch, 2019, p. 9). The second phase concern the years 2020 to 2025 in which the VW Group will mainly master its expertise in electrical vehicles to regain their reputation as the world’s leading volume manufacturer. The last phase, starting from 2025, will be subject to a significant global role in influencing electric vehicles and mainly focus on switching its image to sustainability (Welch, 2019, p. 9). Müller claimed that the project “Transform 2025” is the best way to help Volkswagen move forward from the scandal it was exposed to and further build a strong company which customers can rely on. With a drive for electric vehicles, significant investment and dedicated deadlines, the Volkswagen company hopes to achieve a newly reinstated name in addition to an aspiration to partner with other companies. The new strategy does not only concentrate on Volkswagen’s move into electric cars but it also works towards expanding as an automotive giant with intention to move beyond the backlash it received from the emission scandal, thus restoring the brand’s trustworthiness(Welch, 2019, pp. 9-10).

The last step towards their image restoration falls into rebanding Volkswagen’s product. The whole objective of initiating the four-step recovery is for VW to move forward from the ‘diesel dupe’

scandal and establish the company’s new aspirations. This last step was the most important for Müller as, in his opinion, the sooner VW can redefine itself, the sooner it can focus on creating a new image encircling the electric vehicles, mobility, and connectivity. In order to put the misconduct behind, Volkswagen ended all governmental subsidies it received previously for their diesel cars. As Müller stated, it would make a bigger significance for the environment to put the company’s focus and financial aid to promote more environmentally friendly technologies. Therefore, ending the diesel donations and tax reductions would help Volkswagen’s new “Transform 2025” strategy (Welch, 2019, p. 10). After the scandal on gas emissions, the best way to rebuild their brand from scratch is by putting their focus into electric vehicles and focusing on the hottest trends in the industry. If the company’s plan goes as planned, within ten years Volkswagen group will no longer be known for the scandal but rather as the leader in electric mobility.

4.2 BP Deepwater Horizon Oil Spill

It is noteworthy that in order to ensure a full understanding of the crisis and the marketing strategy, first the BP crisis history will be summarised, while the second part will focus on image repair theory and crisis communication of the scandal. The Deepwater Horizon oil spill was a catastrophe that commenced on April 20th, 2010 in the Gulf of Mexico. What is now considered the largest marine oil spill in history was only occluded months after the incident, on September 19th, 2010. However, reports showed that there were still leaks until 2012 (Bryant, 2018). The Deepwater Horizon oil rig, owned by offshore-oil-drilling company Transocean, was hired by BP at the time of the spill. The determining factors for the oil spill were an explosion and a following fire that resulted in the sinking of the Deepwater Horizon. The oil well was positioned on the seabed of, 1,522 meters below the surface, and extended into the rock. On April 20th an unexpected rush of natural gases came flaming through the concrete core which was installed ahead of time to be able to seal the well for future purposes. It was later discovered

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that a similar incident had already occured on a BP owned rig in the Caspian Sea back in 2008. It was assumed that both cores were too weak to hold out against the pressure spawned by the natural gases as both were fabricated from concrete mixture that contained nitrogen gas in order to accelerate curing (Pallardy, 2020).

The fire was reported on April 20th, 2010 at 9pm central zone time, with 126 crew members on board at the time. The surge of natural gases, set by the fracture of the core, went up the Deepwater’s rig towards the platform where it caught fire; killing eleven and injuring seventeen workers. The rig then overturned and began to sink a day and a half later, due to the rupture of the riser which was caused by the drilling mud. In absence of the counteracted upward pressure, oil began to release into the gulf. Attempts to turn on the rig's blowout preventer (BOP), a mechanism designed to close any channels through which the oil could potentially be leaking, failed (Pallardy, 2020). A later investigation on the BOP showed that the blades which were designed to slice through the pipe carrying oil, stopped working because of being crooked under the rising pressure of the gas and oil. Throughout the month, efforts to cover the largest leak kept failing because of the buoyant action of gas hydrates that formed as a reaction of natural gas and cold water. Another approach taken by the BP organisation was employing the ‘top kill’ method which entailed drilling mud pumped into the well to hold back the flow of the oil. However, that also failed. In June, BP changed their course of action and initiated an apparatus called Lower Marine Riser Package cap. Although fitted loosely, this allowed approximately fifteen thousand barrels of oil per day to a tanker.

Over time, this number increased to twenty-five thousand barrels a day, although the leakage into the golf continued. On August 3rd, 2010, BP escorted a ‘static kill’ which resulted in removing the defected BOP and replacing it with a functioning one to lead to ‘bottom kill’ which would permanently seal the leak. By September 19th, 2010, it was announced that the ‘bottom kill’ maneuver was successful and the leak was completely sealed (Pallardy, 2020).

Tony Hayward, the chief executive of BP at the time of the explosion initially reacted to the catastrophe by blaming the happening on a “bad cement job” by the company Halliburton (Bryant, 2011).

However, reporting back to Hayward’s accusation, Halliburton said they noticed “a number of substantial omissions and inaccuracies in the BP report” and the work performed for BP was completed with fulfillment of all BP’s specifications (Bryant, 2011). In BP’s first report published after the explosion and fire, BP blamed rig owners and Transocean for failing in the maintenance management system.

Throughout the months of the oil spill, numerous reports kept being published from BP as well as an international group of experienced professionals blaming each other for the disaster at the Gulf of Mexico. Tony Hayward faced public mortification by first blaming other companies that worked at the rig at the time, then apologising to the U.S. congress, when two weeks later on CNN he stated “I’d like my life back” (Pallardy, 2020). This led to Tony Hayward’s replacement in October 2010, due to these repeated mistakes during the company's crisis isolated the federal officials along with the residents of the Gulf coast. Hayward's numerous apologies and explanations regarding BP’s safety management very quickly became meaningless to the public as new interviews came to light of him blaming others for the catastrophe and claiming to want his life back. Any official apologies given by the former chief executive, whether it was to the U.S. Congress or the public, appeared hollow and brief (Mouawad, 2010, p. 49).

The assessment of Tony Hayward’s two apologetic speeches will be given in the next section in relation to image repair theory to be able to determine the relevance and consequence of his speeches.

Given the fact that Hayward’s initial ‘full of regret’ oration was short, to be able to have a deeper understanding of the analysis, a second speech was chosen to give a better interpretation on how Tony Hayward positioned himself, and the BP organisation. Akin to the Volkswagen case study, what needs to

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