Product recalls, particularly with products as fundamentally important as food, can have a significant negative impact on a company's reputation, image and equity in the eyes of key stakeholders, often damaging financial health.
Consumers have been subject to what is a growing number of publicly announced food-related issues of safety and health. Headlines of food recalls, from spinach to chicken to peanut butter to green onions to pet food, have unfortunately become more routine and anticipated. In fact, 79% of adults are aware of the occurrence of food recalls in the US.
Trust is not static
Consumers are also concerned about the incidence of recalls among manufacturers and suppliers of food and pet food products. According to a poll carried out by Harris Interactive in April, 86% of respondents mentioned at least some concern, with 29% indicating that these recalls are a serious concern for them.
Over half of consumers (55%) said that, if a brand they usually purchase is involved with a recall or safety concern issue, they would at least temporarily switch to another brand. In addition, 15% stated they would permanently switch to another brand. These findings suggest that consumer trust is not static. When consumer trust is earned it must be continually reinforced or it can erode, sometimes irreparably, when the brand is under fire.
Impact varies
Consumers have varying levels of familiarity with the six product recalls (all occurred in the past eight months) that were measured in the study. Along with varying familiarity levels, the actual number of consumers able to name the brands involved in the product recalls drops considerably.
For example, the nationwide recall of chicken in February 2007, due to contamination of Listeria monocytogenes, had only 20% of those measured stating they were familiar with the recall. Among those familiar, only two percent could actually name the correct brand involved. In fact a much higher percent (17%) named other industry brands not affiliated with the chicken recall. This is in contrast to the 71% of consumers stating they were familiar with the peanut butter recall in February 2007. In this case, of those respondents familiar with the recall, 46% were able to correctly name the brands involved, and only 12% of respondents attributed the recall to other industry brands.
Measured response needed
In the event of a product recall, brands need to be certain that they do not respond in panic, but rather go to marketing with an urgent but measured response. By working with a research firm that specialises in crisis situations, a brand is able to gain a discreet understanding of the response that is required and the communications that will leverage the brand's equities and mediate consumer trust erosion.
In many cases, research can be conducted overnight among varying stakeholders, and include analysis of the response directly associated to various communication channels and messages.
Strong Brands Weather Storms
One way smart companies have sought to better manage and mitigate negative events and news is to build a stronger brand. Harris Interactive's Brand and Strategy Consulting Group defines a brand as "a unified set of persuasive promises that, when fulfilled, differentiates that brand from competition in a positive, relevant, believable, and personally compelling way."
By communicating that promise and delivering against it, a company builds stronger bonds with consumers and other stakeholders. Over time, those connections become resilient enough to withstand a crisis or negative event. A strong brand is typically a market leader, has a loyal user base, and has a positive image and equity.
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