Perrier's Overresponding to a Crisis

(1) In responding to the detection of benzene in its bottled water, Perrier might have better handled the problem by issuing a sales halt on its product while it investigated the issue further. This would have prevented the extensive damage to its brand name and marketing efforts. It could even actually have done nothing to halt sales, since health officials in the U.S. and France had found that the benzene levels did not constitute a significant risk. Overreacting to protect customers from minute amounts of benzene that over the short term could not be harmful was a mistake, and virtually any less drastic course would have been preferable.

(2) Perrier's price-cutting during its comeback was also a mistake. Price-cutting sends the wrong signal to the buying public that a product is not really worth its usual price and needs to be discounted to sell. Perrier's price has always been part of its cachet, and by discounting it the company damaged its elite image and made it look like a bargain-basement brand. Perrier was understandably concerned about getting people to buy its product again after the benzene scare, but a better approach more in keeping with its brand image would have been to offer a high-end free gift with purchase, such as a bottle carrier in a Louis Vuitton- or Gucci-type print.

(3) The primary customers for Perrier and Evian are likely to be the same high-income people who are concerned about status, health, and tast