MURDER ON ELM STREET

IIPM : EXECUTIVE EDUCATION

Recalls hit customers badly, and may also destroy brand value, but if they are not done in a timely way, the repercussions could be even more deadly

“A bullet once fired out of the barrel cannot be recalled.” Nor can the target save himself normally, unless, of course, the target is Neo and we are talking about the scintillating Matrix trilogy; where Keanu Reeves enthralls us with his bullet dodging skills.

Ahem... well, coming back to reality, companies that face the flak for ‘unproductive’ products, find themselves in a similar situation. They can recall products, but by then, it’s normally too late; the damage is done; the target has been shot; and the company’s image gets a bigger blow in turn. And the latest victim is Cadbury. The horrendous milk scandal in China has forced the British chocolate giant – Cadbury Plc to direct Cadbury Asia Pacific (its Asian arm) to recall 11 types of its Chinese-made chocolates (manufactured in Beijing & distributed in Taiwan, Hong Kong & Australia) as tests revealed presence of melamine-laced dairy content in the sweets. Kraft Foods Inc. (Oreos) and Mars Inc. (M&Ms and Snickers) are also investigating claims by Indonesian authorities that high traces of the chemical have been found in their products.

The road to corporate glory is replete with failures; and recalls too, which plague some of the best names. Take Sony, which recalled four lakh units of Sony Vaio laptops due to potential burn hazards from overheating and short circuits. Hondo Motors recalled 5,81,353 mini vehicles in Japan to fix a faulty fuel pump that could cause the engine to stop. Nokia issued a product advisory to recall close to 46 million Nokia-branded BL-5C batteries between December 2005 and November 2006, when it received complaints that in rare cases, the batteries could potentially overheat while charging, causing the battery to dislodge.

So what can such ‘late in the day amends’ achieve? Graham Hales, Group Chief Communications Officer, Interbrand opines, “A product recall may cause uncertainty in a brand and may therefore place the brand under greater scrutiny of choice amongst its competitors.” But David Haigh, CEO, Brand Finance counters, “If handled professionally product recalls can strengthen brand equity.” The company must ensure that trust is not broken and recall is swift and efficient. Hales points out that “the risk of allowing inferior or under-performing products to represent the brand will cause greater loss in the long term.”

Another mistake that most companies do, which ostensibly leads to customer losing their faith in the brand is blaming their out-sourced manufacturing units for the entire problem. Cadbury chocolates were manufactured in Hong Kong, Nokia had outsourced the manufacturing of batteries to Japan-based Matsushita Battery Industrial. But putting the blame on an outside party will only dilute the brand equity. “Customers can’t be won with excuses and buck passing,” avers Haigh.

Difficult as it may sound, the company has to admit, apologise, and make amends swiftly. To err is human; to persist in error is develish; and in this case, suicidal as well.

Savreen Gadhoke

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Programme :- SUPERIOR COURSE CONTENTS
Now IIPM's World-Class Education... for everybody!!
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON

IIPM’s 36th Glorious Year of Academic Excellence
4Ps Power Brand Awards 2007
When IIPM comes to education, never compromise
Why Study Abroad When IIPM Gives You 3 global Advantages!
IIPM Ranked No. 1 B-School In Global Exposre - Zee...