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Maggi row: Five things Nestle should have done to combat the crisis

business Updated: Jun 08, 2015 12:04 IST
Gaurav Choudhury
Gaurav Choudhury
Hindustan Times


Maggi’s entry into the Indian markets in the 1980s and its rapid success as an easy-to-cook snack are often cited as a management case study. Today, the company is battling a credibility crisis rocked by allegations that the much-loved product instant noodle contained seven-times the permissible level of lead.

On Friday, India's food regulator ordered the withdrawal of Maggi noodles from the market amid growing food safety concerns, dealing a fresh blow to manufacturer Nestle India which is struggling to contain the spiralling crisis that has knocked about 10% off its share price. Nestle bowed to pressure and announced late on Thursday an India-wide recall of the two-minute noodle.

The responses of the conservative Swiss company to the crisis, however, have left many management analysts baffled. Here’s a list of five things that Nestle India should have done, but didn’t.

PROTECT THE MASCOT: Every successful corporate story is mostly defined by a single brand that symbolises its character. Think Apple, think iPhones. Think Nestle India, think Maggi. Protecting the mascot’s reputation and credibility is non-negotiable.

Misstep #1 Nestle allowed its icon (Maggi) to be the target of a controversy that questioned its reputation. From a marketing standpoint guarding against such slip-ups figure high on DON’TS list.

CHOOSE THE RIGHT P: Product, pricing, promotion and packaging: the value of each P varies depending on the nature and intensity of the crisis. Product clearly stands out as the most important in most cases.

Misstep #2 You don’t need to be a marketing guru to tell you which P was important for Nestle. It’s the Product (Maggi), which the company should have attached the most value and significance.

The controversy around the popular snack has assumed enormous proportions. (Reuters)

DRAFT A MEDIA PLAN: The language of credibility has a different grammar. Media-- mass and social-- plays the role of conjunction in this dialect. Grabbing eyeballs 24x7 is important.

Misstep #3 Being conservative is good, but not quite in a crisis involving its most iconic product. Reaching out proactively through media should have been the first boxes to tick in the To Do list. Avoiding media is a strict NO NO.

DON’T BE IN DENIAL: This is the age of class action suits and consumer activism, aided ably by real-time consumer activism. Conditional acceptance of allegations can work wonders in limiting potential damage.

Misstep #4 Nestle continues to remain in denial. Its argument: Maggi is safe. But an offer to recall or withdraw existing stocks from shop shelves immediately after the controversy broke out could have prevented things getting out of hand.

EDUCATE, EDUCATE, EDUCATE: Each brand has a soul and a distinct character. That’s what distinguishes a cult brand (say a Harley Davidson mobike) from an average brand. Constant education about the brand is a standard operating procedure to keep crisis at bay.

Misstep #5 Nestle’s representatives have been hardly seen either at retail stores or popular vends offering to clear the air. Neither has it come out with any unusual videos or campaigns to educate loyal patrons.


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