Watch Out! 33 More Brands at Risk

Tuesday, October 31, 2006 5:53
Comments Off on Watch Out! 33 More Brands at Risk

It seems like the foreign MNCs just cannot get a break this year when it comes to the implosion of a brands.

15 years ago, the Chinese consumer didn’t have much choice in foreign products, and often the consumer was too immature as a consumer to be too picky. As a result, complaints were not only few, but were also containable.

However, with multinational FMCGs, auto companies, airlines, hotels, retailers, restaurants, etc, etc all rushing into the market, the Chinese consumer has gained some maturity. More importantly though, they now have choices, and with that choice comes the ability to disern between high and low quality. Add the internet to that, and you have a consumer with a somewhat immature consumer pattern with a medium by which they can not only voice their satisfaction, but can also find supporters in their cause. A single text message or blog post in China can move very fast and snowball very quickly.

In several high profile cases (Dell, Apple, P&G, and Sony) recently, multinational manufacturers have seen just how fast this can happen as their brands plummeted in the face of organized consumers in China. Whether it was done in cyberspace, or in the office, Chinese consumers showed companies that they will react when they fell they are not treated in an appropriate manner.

Two months ago it was a blogger who created such an online stir about how poorly Dell addressed a fulfillment issue, that Dell had to pull a complete 180 and recall thousands of computers in China.

Soon to follow was P&G as angry consumers tore apart their office in response to pulling their SK-II product for safety concerns. While the original intention was to be proactive and pull the product until testing could be completed, the execution was less than perfect. Originally willing to accept returns at the counter, it was apparent that the blowback was coming, and in the end they were right. SK-II was just relaunched this week.

Most recently it is Apple (again dealt a cyber blow) when a blogger exposed Apple for not treating U.S. and Chinese consumers the same as Chinese consumers had to pay shipping when getting their new batteries sent to them.

Then as announced yesterday by China’s Institute of Public and Environmental Affairs (China CSR & China Daily) 33 multinational companies (including Pepsi, Nestle, and 3M) have ended up on a “black-list” compiled by local environmental protection agencies.

While the list may or may not be viewed as credible, and the facts may not be fully known, the fact is that these companies have put their brand at substantial risk. The days where companies can try to minimize a problem without fully addressing it, or offering different compensation programs for different markets, are over and in the last few months this point has been proven on several occasions.

For those companies on this list, this may or may not be a problem depending on how widespread this list gets circulated and how quickly the lucky 33 are able to respond.

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