The Portuguese cork industry, backed by the Portuguese government, is undertaking an American-style campaign with a green twist.

Actually, “twist” might be the wrong word, because the campaign seeks to encourage wineries to use cork stoppers rather than aluminum twist-off caps or stoppers made of plastic and other synthetic materials. The campaign includes advertising, public relations, a Web site, events and a presence in social media like Facebook and Twitter.

The campaign promotes cork by playing up what are proclaimed as its significant advantages over alternatives on environmental and sustainability grounds. That separates it from other efforts that have sold the use of cork for bottles on the issue of taste.

To underline that message, the campaign refers to cork as “natural cork” and carries the theme “Approved by nature.”

There are also some unconventional elements to the campaign like coasters made of cork that will proclaim “Put a cork in climate change.”

The campaign is being handled by the Los Angeles, New York and San Francisco offices of Sitrick & Company, the public relations and communications agency, which has brought in the Citizen Group in San Francisco, a shop that specializes in what its founder, Robin Raj, calls pro-social marketing and “building citizen brands.”

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“Glenn Bunting would also like you to believe that Jeremiah Masoli isn’t a thug. Formerly an investigative reporter for the Los Angeles Times, where he spent 22 years, Bunting is currently managing director of Sitrick & Company, a crisis management firm. Sitrick’s San Francisco office, which Bunting manages, was made aware of the case through a friend of the Masolis who was a local lawyer and knew its details. After meeting Masoli and his parents and researching the case, Bunting and a colleague agreed to represent the family. It was Bunting who noticed the line in the police report about Embry and his roommates giving another Oregon player a lift later that night. Bunting followed up by asking Masoli to approach the player — long snapper Jeff Palmer — and have him sign a statement as to what he witnessed.”

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As the economy continues to throttle more and more
financially borderline corporations, troubled companies
and their advisers are increasingly turning to what is
known as the “363 sale” to engineer their way out of
bankruptcy and liquidation. General Motors did it;
Chrysler did it; the Chicago Cubs did. Companies as
diverse as publisher Freedom Communications and
government information technology contractor
BearingPoint are turning to 363 sales to secure a future
for their businesses.

Often negotiated as part of a pre-negotiated or prepackaged
Chapter 11, the 363 sale, named after the section of
the Bankruptcy Code in which it is found, allows debtors
to sell assets “free and clear” of all liens, claims and
encumbrances. It also provides a controlled process for
entertaining and evaluating bids and completing the sale
process expeditiously.

But while the 363 process may be straight forward and
relatively swift, the potential for disrupting the business
is not. From the time the possibility of a sale process is
announced to the time it is completed may mean
serious distraction to the debtor’s ongoing business, as
employees, customers and vendors, in particular,
ponder the future of their jobs, their business relationships
and the products they purchase. And those
imponderables surely impact a business’ performance
during this time and have a direct impact on how it is
valued during the process.

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Marketing and public relations experts say what the company does in coming days will be key to preserving its image.

Glenn Bunting, managing director for the Los Angeles-based crisis management firm Sitrick and Co. said SeaWorld needs to respond promptly and proactively.

“They need to review every safety precaution,” he said. “They need to explain how it happened, why it happened and make sure it doesn’t happen again to reassure the public.”

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According to a recent poll, the former presidential candidate is now historically disfavored. After taking the opinions of 678 North Carolina Voters, Public Policy Polling announced on Jan. 19 that with a 15% approval rate, Edwards was the most unpopular person it had ever polled — and this is from the state that gave us Jesse Helms. Another poll named him the most disappointing person of 2009. Yes, Edwards has come a long way from those blissful days when all most people hated him for was his $400 haircuts.

Image consultants and PR managers, who are professionally optimistic, say it’s possible for him to rehabilitate his public image, but not easy. First up, he has to come totally clean and he has to do so in front of a camera. On Jan. 21, just shy of Quinn Hunter’s second birthday, Edwards issued a statement that finally copped to him being her father. “It was wrong for me ever to deny she was my daughter and hopefully one day, when she understands, she will forgive me,” the press release said. Nuh-uh. For a doozy like that, you have to front up personally, say the experts. “I can’t emphasize enough — the tone of voice is the most important element,” says Mike Sitrick of the PR firm Sitrick and Company. “This is an art, not a science.”

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The “Made in China” label has been rocked by product safety scandals and quality concerns. Who is most affected and how do companies respond when their brand name is on the line?

November 30, 2009 – By JASMINE AKO

With US$338 billion of goods imported from China in 2008, the United States hopes it is getting its money’s worth. A three-year spat of consumer safety controversies, however, continues to leave buyers wondering.

In the past few years, the “Made in China” label has taken a serious hit, with the most notorious recalls hitting close to the American home. In March 2007, Menu Foods, a Canadian pet foods company, recalled over 60 million cans of pet food contaminated with the plastic additive melamine, added to raise measured protein levels. Two months later, Foreign Tire Sales Inc. was ordered to recall 450,000 faulty tires imported from a Hangzhou company. And in August, Mattel recalled around 21 million lead-tainted toys in a span of five weeks.

From Barbie dreamhouses to off-road vehicles, consumers and businesses alike are rightfully concerned.

“What I saw was a deliberate attempt to bamboozle Western customers about where products were actually made by setting up ‘five star’ and ’shadow’ factories,” says Alexandra Harney, author of The China Price: The True Cost of Chinese Competitive Advantage. “These five star factories are essentially Potemkin plants maintained to give Western buyers the impression that their goods were made under safe, healthy, legal conditions that conformed to the buyers’ codes of conduct.”

These “for show-only” plants are the ones that Western companies see, while the actual production of goods is made in what Harney describes as shadow factories.

“In these factories, workers are not paid the legal wage, they have no insurance, and they work far longer hours than China’s law or the companies’ codes of conduct mandate,” Harney explains. “Because the buyers never see the shadow factories, they have no idea whether substandard materials or ingredients are being used on the production lines there.”

Paul Midler, author of Poorly Made in China, encountered similar situations in China as a supply-chain management expert for American and European companies.

“In China, factory workers often are not very open with what they’re making,” Midler says. “What you’ll see is that factories will make changes to specifications unilaterally without checking with their customers…until factory owners can stop doing this out of habit, then the risk of product failures is still there.” BusinessWeek reported a similar trend in 2006, noting that factory owners are increasingly adept at concealing violations.

While Americans have fretted about sub-par goods, it is Chinese consumers that have experienced the most ill effects. In September 2008, a large Chinese dairy company, the Sanlu Group, was found to be the central culprit in one of the country’s largest consumer safety scandals. Six infant deaths in eastern China and Gansu province were linked to tainted baby formula containing the melamine additive. Another 860 infants were hospitalized, and 300,000 other Chinese were sickened after drinking milk products.

Adding to the controversy was speculation that the scandal had been covered up to prevent bad media coverage in the run up to the 2008 Olympic Games in Beijing. According to some sources, Sanlu began receiving complaints as early as December 2007, yet held off on reporting problems to authorities. In September 2008, the New Zealand government went public with news of the tainted formula, information it received from the domestically based dairy company Fonterra, a partner of Sanlu. The Chinese company quickly took a nosedive in public opinion, and after months of legal skirmishes and prison sentences for several top executives, the company went bankrupt in December 2008.

Midler has worked with dozens of manufacturers with China-based production lines. In his book, he attributes the many cases of product defects he saw to “quality fade,” or “the deliberate and secret habit of widening profit margins through a reduction in the quality of materials.”

“Very often in China, quality is not seen as something that can help a company build up its reputation and expand market share,” Midler says. “Very often quality is seen as a barrier to profitability. A lot of times when importers are pushing for higher quality, sometimes, bad things happen.”

Chinese manufacturers, however, are not solely to blame. “In China’s case, you have additional problems: farmers in particular are often poorly educated; there are hundreds of thousands of companies in any industry; class action lawsuits against companies are extremely difficult; and there is very little investigative reporting to expose wrongdoing by companies,” Harney adds.

American companies doing business in China should be aware of these problems, but also must take the initiative to ensure their products are being made safely.

“For American companies that do business in China, it’s a complex place,” adds Seth Faison, who reported from China for the New York Times. Now the deputy head of Sitrick and Company, a global strategic communications firm, Faison sees certain cultural barriers as adding to the problem. “They need to understand the historical mindset of Chinese businessmen and officials that they are dealing with.”

But what happens when the damage is already done? Prevention is the ultimate goal, but when the leaded dolls and protein-maximized milk hit the streets, American and Chinese companies must deal with the ensuing tidal wave of bad public relations.

“My advice, having been through several situations like that, is tell the truth,” Faison explains. “If you have bad news that you have to put out, put it out quickly and completely, because hiding bad news always looks worse if the bad stuff comes out later.”

One international public relations professional, who asked to remain anonymous, offers similar advice, suggesting that companies dealing with product safety issues act quickly and publicly, immediately recall the tainted or altered product to deal with the crisis, and emphasize the importance of their customers’ welfare through vigorous public response.

He also noted that most Chinese manufacturing firms seek to control lines of communication rather than engage customers, seeking to steer any negative coverage through personal relationships rather than an established PR crisis strategy.

“Figure out a way to tell your story in a way that ordinary people can understand,” Faison urges. “I can’t stress enough how important it is to be able to frame things in a way that’s understandable.”

While Chinese companies are quickly catching on to the importance of public relations, global PR firm Weber Shandwick reports that there are still false impressions in China about what public relations truly entails. “Public relations is synonymous with organizing events and entertainment and there is much to be done to change the image of the industry so the brightest university students see PR as a serious career.”

Midler adds that Chinese companies often do not experience the same repercussions as big-name American and international brands. “The reputational damage that you might like to see with a scandal really isn’t as applicable in China as it might be in some other environments,” he says. “Suppliers are usually hidden from the marketplace. Importers from the United States have brand names that are exported from small, medium-sized companies that don’t have brand names.”

Harney adds, “In the US, the threat of litigation or brand damage through media exposure puts pressure on companies to monitor product safety more closely. The vast number of companies makes it harder for the Chinese government to monitor them adequately. Farmers and businessmen may not always understand the consequences of the chemicals they are adding to their products to improve productivity or lower costs.”

Only a handful of Chinese brands garner the international recognition to feel lasting global ill will to their brands. As with with the Sanlu case, however, reputation within the Chinese marketplace clearly matters. And while American consumers have a bevy of consumer safety groups, the Chinese public is becoming its own product quality watchdog.

“While the traditional media is very heavily regulated by the government, the internet allows more freedom,” says Jeremy Goldkorn, founder of Danwei.org, a popular English-language blogs that operates in China. “This has become the place where scandals very often break.”

Although the Internet does provide a means for people in China to express their opinion, it is still heavily regulated. Danwei itself was blocked in July 2009. In response, Goldkorn wrote in an article for The Guardian, “Censorship contributes greatly to the crisis of trust that many complain of in China.” This lack of information only makes sensitive issues, such as product safety concerns, more controversial.

Due to factors such as censorship, Goldkorn sees China as an entirely different environment for PR work as opposed to the US. “It really depends on the industry, and also, things work very differently here than they do in the US,” he notes. “Now a lot of companies are trying to use social networks like Facebook and Twitter to do promotions, but those two companies are blocked in China. It could be pretty much everything you name in terms of how PR is done in the United States – it would be done differently here.”

Countering negative public opinion may take a different form in China, but U.S. and international companies appear to be learning some lessons: 2009 has seen far fewer major safety scandals than just two years prior.

Midler, however, notes that it is the hidden safety scandals that are a concern. “For every single major quality fiasco, the sort that would make the papers, there were probably hundreds of smaller disasters that never got any publicity at all,” Midler writes.

Large recalls persist – Toyota recently recalled nearly 700,000 made-in-China vehicles due to faulty electrical switches, while flawed tires and valve stems on some American cars have led to three fatalities. But building the adequate oversight and infrastructure to ameliorate these problems takes time.

“Product safety problems in China are not going to disappear, just as they haven’t disappeared in America or anywhere else,” Harney asserts. “Western buyers and governments are more aware of these issues than they were in the past. And quality control is certainly higher on the agenda of the Chinese government and many Chinese suppliers as a result of the scandals of 2007.”

American companies must work to build relationships with their Chinese suppliers that provide more open modes for communication, and come up with strong preventative measures to counter not only potential product defects but also public relations crises.

Faison offered his own take on what should be done to prevent future scandals.

“Whether it is an American company that is sourcing products that are manufactured in China, or if it is a Chinese company exporting to the United States, they need to find a way that can underscore safety records, the consistent ability to produce reliable consumer goods that are not tainted in any way, and to show that when [unsafe] products come up they are usually restricted to a small number percentage wise of total exports in China.”

The U.S. remains incredibly reliant on China for manufacturing its goods. In terms of toys alone, 80% of those in the U.S. are made in China. As long as country’s labor force keeps churning out goods and U.S.-Sino trade relations remain open, there will be little slowdown.

“Barring a wave of protectionism, it is highly unlikely that the tide of globalization will reverse,” Harney says. “China is a player in all major global supply chains today, from vitamin C to airplane parts, and its role will only get bigger.”

ROMANS: Sarah Palin back in the monologues and headlines. Her new book, “Going Rogue,” is out today. She was on “Oprah,” sat down with Barbara Walters as well.

So, how much Sarah Palin is too much Sarah Palin?

Joining us now to talk about it, public relations consultant, Ken Sunshine from San Francisco; media strategist, Glenn Bunting.

Ken, let me ask you first. What’d you think about her performance yesterday?

KEN SUNSHINE, VETERAN PUBLIC RELATIONS CONSULTANT: It’s — she’s doing what she needs to do to sell books and appeal to her base. Look I work with a lot of people selling books. That’s what you do, go on Oprah, do Barbara Walters, you go to the people that are going to buy your book first and you — I don’t think there’s anything more. I don’t think she’s running for President by doing what she did, she might eventually. But has a long way to go to be taken seriously for candidate.

ROMANS: When she was a candidate for vice President, she had this famous interview with Katie Couric that many people said just stoked all of this, all of this concern among her base, but also derision among democrats that he didn’t know what she was talking about. Listen what she talked about that Katie Couric interview.

(BEGIN VIDEO CLIP)

SARAH PALIN, FORMER VICE PRESIDENTIAL CANDIDATE: My friend opens the curtain for me to get backstage and there’s the perky one again with the microphone and the cameras rolling. And I’m like, dang; just give me a couple minutes —

OPRAH WINFREY, HOST: The perky one, you mean Katie?

PALIN: With all due respect, yeah.

WINFREY: Because you’re pretty perky, too.

(END OF VIDEO CLIP)

ROMANS: Glenn, was that a dig and was that too much? What did you make of that?

BUNTING: Yes, I thought it was too much. You know, this is a chance for Sarah Palin to reintroduce herself to the American people. And she ought not to squander it by taking shots at Katie Couric or the media or these anonymous McCain campaign staffers. You know, I think that the Katie Couric interview was a bad one for her. She should be honest and humble about it and she should move on and talk about the things that she wants to talk about.

ROMANS: You say her original advice to her after the campaign would be to go back to Alaska, to get more experience, to think more about policy. She did go back to Alaska, but she resigned the governorship. Now what do you think she should be doing and what kind of a — what kind of image should she be cultivating?

BUNTING: Well, you know, it depends whether she wants to be a pundit or whether she in the back of her mind wants to run for President? If she wants to be a pundit, sex sales and she’s got a lot of salacious things she can talk about.

But if she wants to be taken seriously, I think it’s an opportunity for her to sit down, figure out what her core convictions are, and really demonstrate to the American people a level of sophistication and intelligence that’s kind of been lacking. I mean I think she’s widely seen as a lightweight and I think this is a chance — many people get the opportunity to kind of rewrite and to start over. And she has that chance right now. So she ought to be studying things about policies and things that she’s interested in that show a different Sarah Palin.

ROMANS: And you know what Ken, we don’t know what she wants to do. We don’t know if she wants to right books or she wants to be a pundit or a TV host as some has said or if she has a future in politics. She was asked about 2012, she said, all I know for sure, and she’s said this before. All I know for sure is that my son is going into kindergarten.

Meanwhile, a CNN opinion research poll shows that 28% of Americans polled think she’s qualified to be President, ranking her below Mike Huckabee, Mitt Romney, Hilary Clinton, and others. You can look at that poll a couple of ways. She’s not a candidate for office, you know, national office, yet 28% of the people think she is qualified, but a lot of other people think she isn’t. What’s next for Sarah Palin?

SUNSHINE: You know the fact that you’re guessing, publicly, and lots of other pundits are, makes her a winner here. You know, right now, I think she’s having a little fun zinging it to the people that she thinks didn’t serve her well. And also selling a lot of books and becoming a media darling. And she has become, in a weird way, a media darling.

I don’t think it’s conceivable she would ever become President, but she’s going to titillate everybody for a while and I think frankly she’s doing a masterful job.

ROMANS: Well she’s going to be a national figure, and so would you be recommending she do these sorts of things? That she does Oprah and Barbara Walters? Is she overexposed? Does she open herself to risk that there’s a gaffe or something?

SUNSHINE: To sell books, she’s doing exactly what she needs to do. To become President, she ought to — like Glenn said, she ought to study the issues and become a little more sophisticated. She’s not doing any of that.

ROMANS: OK, Ken Sunshine, public relations consultant. Thank you so much. And Glenn Bunting, media strategist, thanks you, both of you, Kiran.

And we also have with us Glen Bunting, managing director of Sitrick and Company, a public relations firm specializing in crisis management and media strategy join us from L.A. Thanks to both of you for being with us.

KEN SUNSHINE, FOUNDER, SUNSHINE, SACHS, & ASSOCIATES: Glad to be here.

CHETRY: So it seems that everywhere we turn, as we’ve said, we’re going to be seeing a lot of the president. He’s appearing on five network shows, he’s doing late-night. He has been giving some speeches at rallies. He was at the University of Maryland yesterday.

Ken, what do you think? Is there a risk of overexposure in trying to get out your message?

SUNSHINE: I don’t think so. I think, frankly, he was underexposed for too long, particularly on this health care bill. And he’s turning it. He’s turning public opinion. He’s playing offense as opposed to defense, which is the cardinal rule in a political fight like this.

He’s going against the misinformation that was out there or the wild exaggerations — pulling the plug on grandma. And this guy knows how to sell something and he’s pretty good at politics. He reminds me of the campaign, and when he gets in campaign mode, it’s hard to bet against him.

CHETRY: Now, Glen, you say as a media strategist, you wouldn’t advise most of the time for your clients to do back-to-back-to-back interviews. Do you think there is a risk for overexposure, and why?

GLENN BUNTING, MEDIA STRATEGIST: Well, I do. I think that Ken ’s right. He is the person that you want selling his program. And when he is in campaign mode, as he proved, there is nobody like him. He is the best. And the American people do want to hear from him.

But we would never really recommend that one of our clients do five interviews like this, and it really has to do with preparation. It has to do with your ability to tell your message. And he has five journalists who are going to be gunning for him. Each are going to be trying to get him to slip up, to get their kind of “gotcha” moment.

And I just think that it’s a very risky strategy. He’d be much better off doing one, maybe two. Doing five, I think it’s a bit of a high-wire act.

CHETRY: And Ken, this is also interesting. When you do so many appearances and you’re out there, is there a risk that people sort of start to tune you out?

I mean, even the president, who we know is great when he speaks at the rallies, he was really credited with being a great campaigner and getting people very fired up. But at the same time, is there a tune-out risk?

SUNSHINE: You know, there could be a tune-out risk if he weren’t doing the same kind of shows, most of which are Sunday morning, geared to a very specific demographic of opinion-makers, and it doesn’t permeate middle America directly. If he were doing every primetime show on network television, it would be different.

But I think it’s very clever. It also ups the ante. Mess with him. Look the president in the eye and say that he’s going to pull the plug on grandma.

It also is seizing the moment and becoming offensive again as opposed to being defensive. This guy knows how to campaign. He’s in campaign mode, and that is what I think has turned the corner on this very complicated debate.

CHETRY: Glen, it’s interesting, Suzanne Malveaux, our White House reporter, brought up one aspect that I thought was interesting, which is, is there a possible fear that perhaps he wasn’t getting his message out the way that he wanted to get it out before, which is why he’s being forced to now go on so many shows and try to sell this health care pitch, that the pitch wasn’t working before?

BUNTING: Well, I don’t think…

SUNSHINE: I think he was forced…

BUNTING: He was relying on other people to do it, and that’s kind of the problem, you know, is that it was the spinmeisters, it was the people in his administration. And it began to just sound like clutter. And I think that he’s able to get through that.

And the American people have a lot of questions, primarily, how is he going to pay for it? And I think that’s what he really has to focus on.

And, you know, this may be more of a policy problem than a P.R. problem. People have a hard time believing right now, you know, based on his message, that it is going to be solving waste, fraud, and abuse is the way to pay for this. And he’s really got to kind of nail that one. I assume that that’s what he’s going to be asked about. And so, I think he has to have some good answers.

CHETRY: Right.

BUNTING: And I think the American people want to hear from him. And so, that’s really his challenge.

CHETRY: And Ken , before we go, is this sort of a double-edged sword for the White House? The media — members of the media constantly asking for interviews. Then they grant five interviews plus a Letterman appearance, and then we ask, is he overexposed? Is it a no-win situation in some ways?

SUNSHINE: It’s great. I love when the media gets what it wants and then complains about.

(LAUGHTER)

It it’s just the perfect media storm for the media to overanalyze the issue, as they always do.

The fact is that health insurance companies are a lot less comfortable with the argument now as opposed to what they were a month or two ago, when I think they brilliantly seized the issue.

And the president will, I think, change the whole course of this argument by being as aggressive and as, frankly, risky as he is. The one risk could be the “gotcha” moment, you know, the one interview that gets him to say something stupid or something that could be misinterpreted.

But I would bet against that really happening. But that is the one risk, in answer to your previous question.

CHETRY: All right, well, we’re out of town. I want to thank Ken sunshine and Glen Bunting for coming on and talking about it with us this morning. Great perspective from both of you, thanks.

SUNSHINE: Thank you.

BUNTING: Thanks.