Dyson School of Applied Economics and Management

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BP vs. the Big Spill

By Eric Bellin, Kayla DeBriyn, Elizabeth Kelley, Kirstyn Lightcap

History proves that companies are capable of recovering from even the worst scandals. In 1982, for example, Tylenol faced a crisis when it was found that several deaths had occurred and that there was a connection between the deaths and Tylenol. Although it was later found that it was not the company’s fault, Tylenol’s share of the market plummeted. However, after recalling its products and delivering a strong PR campaign, the company rebounded in almost no time at all. This instance of scandal was fairly isolated and overall did not affect that many people. But what happens when an error by your company causes one of the most destructive oil spills in history, one that affects millions of lives and nearly devastated an important area of our environment?

This was the case of BP Global, one of the major oil and gas companies in the world. In April of 2010, the explosion of a drilling unit owned by BP resulted in the rupture of one of their oil wells, causing crude oil to gush out into the water. It was predicted that thousands of barrels of oil were being lost on a daily basis, amounting to millions of gallons. The oil eventually washed onto the shores of Louisiana, Mississippi, and Alabama, to name a few states. For months new areas were discovered to be affected; in October, nearly six months after the spill occurred, researchers found oil on the seafloor, especially in the Gulf of Mexico. Thousands of birds and marine life were killed. The effects were predicted to be long-lasting and long-reaching on both the environment and the fishing market in that area. Recovery for BP seemed near impossible.

And yet, within only a few months the public seemed to forget the destruction. As one can see in the graph below, there was a surge in searches for both “BP” and “Spill” in April of 2010, obviously as a result of the catastrophe hitting the news. Both reached a peak in June 2010 as more facts and stories flooded households across the U.S. But by September of 2010, the search levels of both terms had nearly dropped all the way to the levels they were at before the incident.

Numerous apology messages were sent to the public via Youtube and TV commercials, and the CEO of BP Tony Hayward announced he would step down in October of that year. However, this highly rapid and unlikely change in the public’s attitude can be attributed mainly to BP’s high brand equity. As in the case of Tylenol, which is and always been a highly respected brand by the public, the higher a company’s brand equity is, the faster it can recover from a disaster. For BP, its brand was strong enough that the public was able to quickly look past all the destruction caused.

To see Tony Hayward’s apology, watch the video below:

References (6)

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    Overt Collusion - Advertising - BP vs. the Big Spill
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    Overt Collusion - Advertising - BP vs. the Big Spill
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