Thursday, April 19, 2007

Product Recalls and Bans.. (Yes, it's a bit work related)


So yes; I've probably been posting about tat for a while (or random metaphors/analogies), so have a question I've been asked. It's a little bit short (because I have been working on it whilst doing the day job), but fuck it. Here you go.

"Over the past few years, companies have been forced to issue many more product recalls. This trend is driven partly by changes in legislation and the manufacturing process, partly by changes in consumer behaviour. What should we do to address this?"

As the question notes, product recalls are driven by a variety of factors; from changes in customer preconception, to societal pressures, to basic defects.

If I were to assess the notion of recalls, I would first have to frame the problem. A DTI study in 2000 (found here), found that (as, I imagine, most would suspect) the biggest problem is due to actual product defects – things being physically wrong with the product. Electrical fault accounted for 46% of the recalls.

And, as the study goes on to outline, the recalls occur more frequently with price perceptions (items under £10 have under a 10% recall rate). Get past £10, and defect recalls occur far more frequently.

These two pieces of information create the principal insight. If your product is liable to cost over £10, then clearly the manufacturing process and testing is of paramount importance. Additionally, if your product utilises electricity or could be choked on by little people, care must be taken to pre-test ahead of all else.

However, if I was to try and address the problem over every market and attempt to apply a ‘one size fits all’ solution to the problem, I would research a number of case studies, ranging across a variety of industries. From FMCG problems, white good manufacturers, the auto industry, the pharmeuticals and more besides.

These case studies would provide part of a factual base in order to learn how to address the problem, as well as helping to pre-empt any problems contained within certain types of organisations.

Given the need for those who produce programmes for the computer to beta test, surely it should apply to other industries? One virus or glitch can fuck you in the eyes of the consumer. And you don't want to do that to a consumer that has more power to broadcast just how much you fucked with them. No more slow moving, silent monoliths.

Of course, to be entirely honest, there is a certain sense of chaos surrounding the legislative procedure, as well as no way of knowing which way public opinion will swing about a certain product or service (take Bernard Matthews ‘Turkey Twizzlers’ as a prime example of this).

But certainly, I believe doing this research and avidly pre-testing, testing, testing after launch and not rushing products through R&D is crucial if one is not to end up with mass recalls and a huge dent in company reputation.

If I was a consultancy, that's what I'd suggest. Do your homework, test thoroughly and above all else, hire a a good PR department that is quick on the draw; because no-one can legislate for changing demands and thinking.

Additionally (and Shel Israel would agree), get a company blog; you can instantly get involved with a direct dialogue with your consumer and head recalls off at the pass. If you are a big multinational, a PR company is a must though; you run the risk of your corporate blog getting swamped (especially if it is a mass recall).

That's what I'd do. How about you, faithful readers?

6 comments:

Daniel Mejia said...

Well, funny enough I have been working in something related to that (remember that planning task I was talking about). This case was about outboard motors, which is one of the main business of the company.

About recalls, there are a couple of things that I have find out:

1. When a motor presents a problem, we give the best service and mantenaince to fix the motor as fast as we can. Our competence give away a whole new motor to replace the broken one.

Now, the overall consumer may feel at first very happy to have a brand new motor, but when you`re talking about fishermans (our main consumers), this people need to trust in the machine they have, so if every now and then the motor brokes and it has to be changed entirely this means is not a very trust worthy machine.

2. When you are introducing a new technology to the market, it`s definetely an interesting strategy, because is a very fast way to gain a share of the market, to actually induce people to try your product and to reduce the number of units of the competence in the market.

It`s a risky strategy, because you are offering a brand new machine and you may get in change a piece of crap...

3. You`re absolutely right about how the companies should follow the market, made some R&D projects and have a well-rounded infrastructure to support the demand and give the proper service. Any trouble with the machine could be a backfire to the company, and even discourage the consumer forever to buy again that brand / product.

I hope this could help you with something. If you need a proper case study and you think this experience from the other side of the Atlantic may work for you, just let me know.

Marcus said...

I hate being a consumer.

erin said...

what do you want to do in advertising?

i'm in the same boat, check out my blog at http://planningnewbie.blospot.com

good luck in your endeavors!
I'll check back for more postings.

*share ideas*

Will said...

Hello Erin - nice to hear from you.

I have already gotten into the business as an account planner (of some description).

Keeping this blog running to offer advice etc/maintain my online self (Confessions of an Advertising Man has already been done, sadly).

Mat said...

I think the "let's do some research" angle is a bit of a planning stand-by; and one that (however attractive it is to us) isn't always so attractive to clients.

You're right about the engagement; that's very important. Engage before you have a crisis; that way they're more likely to listen to you. Following the "Dell Hell" incident, Dell's blogger-engagement programme meant that they were well-prepared to deal with the "Exploding batteries" story.

I'd say that the biggest changes that the internet has brought about are:

- "More recalls" -- I can tell that what's happening to my iPod/Dell Laptop/etc. isn't just a freak occurrence. Flaws in manufacturing QA processes are highlighted much faster than they ever were before
- "Unfair recalls" -- Consumer action can force the recall of Sony BMG CDs that were working just fine.

On the other hand, the web provides us with a vital tool to alert us to issues (set up monitoring systems and alert triggers) -- if we get good at this, we should be able to "head them off at the pass", like you say.

And we have to include the web in our crisis planning ("post news of recall on website immediately", "buy appropriate search keywords within 24 hours", "alert key consumer sites", "alert key category bloggers")

Will said...

Mat - you are quite right; the 'do some more research' is definitely a bit of a cop out - though no amount of research will prepare you for someone using the product in a ridiculous way - remember the Maniac Mansion 'hamster' fiasco:

http://en.wikipedia.org/wiki/Maniac_Mansion

The turnaround is frightening, as a result of the web. People get caught out. So be real, and live up to your promises. And if you can't quite, either don't launch or have a conversation BEFORE you are caught short, in order to explain yourself.

The PR process has gone from 4 days to 2 hours, I think it's fair to say.

Funny you should mention Dell - their 'idea storm' and suchlike shows that they are (finally) attempting to listen to consumers. We shall see how well it works, or whether they've been irrevocably damaged in the eyes of the consumers they have been trying to safeguard..

 
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