Brands and consumers square off in new battle
Marketers are seeing the rise of the activist-consumer, thanks to social media. Perils of this round-the-clock communication are many if not tackled well
Little did actor Amitabh Bachchan know that recent tweets by him for a malnutrition campaign promoted by health food drink Horlicks would snowball into a controversy. The incident brought into sharp focus the relationship between consumers and brands. People today are not hesitant to pick up issues confronting a brand and Horlicks experienced it closely. Experts and lay consumers had said Horlicks had high sugar, asking Bachchan not to endorse it.
While the actor has yet to respond to such calls, the brand is not alone to find itself on the wrong side of consumer opinion. Starbucks, the world's largest coffee chain, announced a global policy change last month that said that every individual who entered its stores were customers, regardless of whether he or she placed an order.
The change came after protests across the US over the way Starbucks had reacted to two black men waiting in a store for a friend. The men had not purchased anything, prompting the store manager to call the police and get them arrested. Not only did Starbucks change its customer interface policy in the wake of the incident, the coffee chain also held employee training sessions to sensitise its staff against racial discrimination.
N Chandramouli, chief executive officer, TRA Research, which brings out the annual Brand Trust Report, says social media has given rise to an “activist-consumer” — an individual who has a point of view and shares his or her thoughts uninhibitedly. “Quite often this could set off a chain reaction, resulting in the brand facing heat from different quarters,” he says.
The Maggi episode three years ago in India, where the instant noodle came under both regulatory and consumer pressure, is a test case. While the issue began after some samples of Maggi, produced by Nestle India, had monosodium glutamate and lead beyond the permissible limit, it was the ensuing storm over contamination, led by consumers, media and the government, that saw the brand being recalled from retail shelves in the country.
Nearly Rs 3.2 billion worth of Maggi stock was recalled, with Nestle India suffering losses for some time before recovering from the episode. Experts say that consumer opinion can no longer be taken for granted and that brands should be alert at all times. “We are in an age where you never know when a salvo could be fired and by whom. The consumer is indeed king. And being on your toes is the only alternative for brands if they wish to respond suitably to the feedback or views coming from consumers,” says KV Sridhar, founder and chief creative officer, Hyper-Collective.
Cricketer MS Dhoni, who recently dragged real estate company Amrapali to court over unpaid brand endorsement dues, saw consumer fury closely with regard to this. Upset with Amrapali over unfinished projects, some flat buyers had trolled Dhoni on social media some time ago, asking him to desist from endorsing the brand. The incident prompted Dhoni to step down from his role, saying the company should complete its projects on time.
Fast-food major McDonald's, on the other hand, faced consumer ire last year over inflated bills despite a rate cut under the Goods and Services Tax for restaurants. McDonald’s was forced to respond quickly to the tweets by irate consumers and explain why bills appeared the same before and after the tax rate cut. The debate though raked up a storm on social media and prompted consumers to take a long hard look at all bills, including those from other food joints.
KFC, the quick service restaurant from Yum! Brands, meanwhile, faced a huge crisis in the UK this year when the brand had to down shutters across the country owing to a shortage of fried chicken. While the episode was triggered by a change in supplychain partners at KFC, the brand saw a furious consumer backlash, denting its image.
Though the situation returned to normalcy in a week, KFC had by then issued multiple apology tweets as well as newspaper ads highlighting the same. The incident pointed not only to the importance of efficient back-end services, but also that consumers could not be taken lightly at all in any way.
While KFC did win praise for clever use of wit and humour during the crisis, experts say breaking the brand-consumer trust with a sub-par product or no service at all can be tricky. In healthcare major Johnson & Johnson’s case, for instance, this has meant having to shell millions of dollars in damages to consumers who’ve dragged the brand to court over health concerns. In a recent case, a New Jersey couple was awarded $37 million in a lawsuit they brought on J&J for suffering side-effects following long use of its talcum powder. In India, J&J has frequently found itself in the eye of a storm over its baby care products, impacting brand integrity and reputation. This battle is far from over and has ramifications.
In an age when a salvo could be fired from anywhere, brands have to be on their toes constantly, alert to what their consumers want. The onus to track them is on brands if they wish to respond suitably to consumers