Thursday, June 4, 2015

Will Nestle Do a Cadbury or Coke with its Maggi?

Maggi, a popular brand of noodles, was recently found to contain high content of lead and other harmful chemicals. Maggi is a Nestle product; the company is headquartered in Switzerland. If you compare this fiasco with anything else in the past, we can remember two other cases easily - when Cadbury chocolates were found to contain "worms" (year 2003) and Coca Cola and Pepsi soft drinks were found to contain high levels of "pesticides" (year 2006)! Guess what is similar between Nestle, Cadbury and Coke? All are foreign companies selling in India. And during the current controversy over Maggi, what do you think Nestle management must be planning? If I see history, I guess that would be - a new PR campaign!

I think what must be giving comfort to Nestle is the fact that others like it have been able to successfully rehabilitate themselves after their life-threatening fiascos. Indians, who pride themselves of keeping highest standards of hygiene and purity in matters of food, it seems, don't mind keep eating chocolates with worms and soft drinks with pesticides; so why will they behave differently with noodles?

Amitabh Bachchan must be quick in denying anything fishy in campaigning for lead-infested Maggi noodles, but do you know how he played a pivotal role in “rehabilitating” Cadbury after the "worm controversy"? Yes, that is correct - when Cadbury launched a PR campaign to win back customers incensed over worms, Amitabh was a pivotal part of the advertising campaign. Till date, people remember the biggest cine star of India dancing on TV to sell some chocolates. "Kuchh meetha ho jaye?" It seems we have forgotten about worms as if those never happened… Celebrities may not have direct role in promoting ‘bad’ products, after all they also promote so many other ‘good’ products, but we can't deny how clever marketers use them to win back their lost market share - which in the long term sets a bad precedence.

I know there is an undercurrent prevalent in Indian society, though it gets weaker day-by-day. According to it, the foreign companies and MNCs keep double standards - one for the developed countries and another for the so called "third world". We can't deny there are reasons behind such thinking - till a few years ago, a lot of items like toothpastes by foreign companies did not carry an "expiry date" exclusively when selling in India (and perhaps countries like India). Things have certainly improved over time, but now there is another popular theory, especially among the young educated population – due to which people keep supporting foreign brands even though serious violations are done by those. The basic ideology is that a foreign company from a developed country can "never" do something wrong! Both approaches are extreme and I think the truth lies somewhere in between.

If Maggi wins back its market share even after compromising its product quality, will it be only by a repeat of Cadbury or Cola-Pepsi like clever marketing campaigns, or will it be by rediscovering quality control and by firing people responsible for the lowdown? Only time would tell. But the bottom line is clear - Indian consumers are being taken for a ride and the earlier we wake up, the better for us.

5 comments:

BK said...

Great article Rahul. Indian consumers need to stand up for their rights.

Anonymous said...

Agree. Also interesting to note that all these companies sell the same thing in developed countries with a different (read better) formula. I can personally validate this for coke, dairy milk, lays and maggi (yes maggi too). They are a lot better in Europe and USA thn in India. Indian consumers are always taken for a ride. :) and needless to say Nestlé is already in an overdrive on the mitigation plan.

Anonymous said...

Maggi's case reminded me of the soft drink case for sure. For cadbury, as long as I remember, it was not for batches of products....I remember buying dairy milk in those days after thoroughly checking the expiration date and the condition in which it was stored.
I agree that some MNCs follow double standard or should we call them country specific standard? Why don't we have strict norm and quality control in place to ensure that a higher standard is followed? The MNCs would definitely not follow higher standard in developed countries if they could have go on making huge profit without following/surpassing that standard.

Anonymous said...

Few things that should be highlighted: Cadbury - 2003, Coke & Pepsi - 2006. Internet penetration was very low in India during that time. Today the internet is vastly more influential than back then. Recovery is going to be much harder. Newspapers are discarded, news channels move on to newer stories, but the internet never forgets. Another argument can be made that the storm of information today is so much that people tend to forget faster. But the brand image of Maggi will remain tarnished for some time for sure. How long will depend on a combination of these two points and how they handle PR from now. There were some right responses from Nestle and some wrong ones. Right response: We believe Maggi is completely safe for consumption, but will still take it off the shelves and conduct thorough testing, because the faith of our customers has been shattered. Wrong response: a PR campaign revolving around the phrase, "We don't have 'that much' lead in Maggi." That's just bad PR

Unknown said...

Nice post
I appreciate this

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