Theodore Levitt had pointed out in Marketing Myopia (1960) that the oil industry had been just lucky as new uses for oil was discovered outside the industry and demand continued to grow. Starting as a medicine, oil found new uses in kerosene lamps,oil home heating and finally automobiles. Marketing was primarily distribution and you really did'nt expect a mass product recall problem as in different pharmaceutical product recalls.
With a heightened awareness of environmental issues,the leak has escalated to a strange and new problem of the "upstream product recall." Unlike the Union Carbide Bhopal gas leak the oil leak is playing out in slow motion and frankly I was expecting a resolution soon after my last post on this topic. As of today one report suggests that BP has spent 700 Million $ and the bill is escalating.
Doug Suttles the BP Chief Operating Officer has the unenviable job of facing the huge public outrage and daily media scrutiny. Let's hope that the leak stops on Wednesday when the "Top Kill" method is tried out.
In the meanwhile, organizations should think about how to deal with upstream product problems that reflect so badly on their brand. These incidents are very rare but in a world of socially connected media the brand and corporate reputation fallout is just unimaginable. Long after the oil is cleaned up, the stain will stay forever online.