 "Keyoor Purani")
Sumanto Chattopadhyay
Executive Creative Director, South Asia, O&M
While product recalls are not common in India, developed markets are accustomed to them: from baby food to medicines to cars, products in a wide variety of categories have been subjected to recalls for many decades now. But with globalisation coming late to India and consumer rights gaining ground only recently, brands have not bothered with recalls and so Indians have little experience of them.
A product recall may raise questions in consumers' minds. But it is still the wisest course of action for a brand with an eye on the long term. In the case of EcoSport, the best thing about the recall is that it has taken place before the part suspected to be faulty led to breakdowns or accidents. This is a huge positive. If something untoward had happened with any of the cars sold before the recall - or if it had been done as a reaction to protests and bad publicity - it may have had a negative impact on the brand.
As things stand, Ford gets a fillip to its brand image for being forthright. Consumers see that the company cares enough about them to own up to a possible defect and take preventive steps. If the manufacturer quickly rectifies the flaw in all the cars sold so far, then the negative impact on EcoSport will be a mere blip in an otherwise rising brand graph.
Even when products have had to be recalled after causing harm to consumers, brands have been able to bounce back - thanks to proper handling of the crisis surrounding the recall. The 1982 Tylenol recall is a classic case. Seven people died in Chicago after taking cyanide-laced capsules of America's leading pain medicine. The cyanide had been introduced into the capsules by an unknown suspect after they reached shop shelves.
Johnson & Johnson (J&J) immediately recalled the product from the entire country - over 30 million bottles - and stopped all advertising. Although the tampering did not happen at the company end, it assumed full responsibility, incurring a staggering loss in the short run and seeing their market share plummet.
J&J came back with triple tamper-resistant packaging, changed the capsule into a tamper-resistant caplet, made persuasive presentations to the medical community about their safety measures, offered a discount to customers and emphatically restated their commitment to public safety in the media. The end result: the brand successfully recovered from its near-death experience.
To understand the psychological impact of a product recall, one can liken the brand to a person. Take the case of journalist Fareed Zakaria. He quickly admitted to and apologised for plagiarising a column last year. He initially faced negative publicity and suspension from Time and CNN. But once his employers cleared him of making an unintentional mistake he was reinstated and his image, which had temporarily dulled, quickly regained its gloss - thanks to Zakaria being fast and forthright about admitting to and rectifying an honest mistake.
It's quite simple, really. If brands behave like decent, honest citizens, they may suffer temporary setbacks in their life but ultimately end up prospering. In times of crisis, that is a lesson worth recalling.
Associate Professor, Marketing, IIM Kozhikode
Safety related product withdrawals are few in the Indian context compared to developed markets due to the lack of general awareness on safety and the regulatory framework in the country for many product categories. However, as product recalls are on the rise - many of them voluntary like in the case of EcoSport - Indian companies need to develop recall readiness to deal with emergencies. From healthcare to food, from automobile to electronics, a company's recall-readiness can help avoid a small failure from turning into a crisis.
Recall-readiness demands attention mainly on three broad areas: institutionalising product safety, developing recall management infrastructure and managing any resultant reputation crisis.
EcoSport's recall at this stage raises issues primarily in the area of safety planning. This case, where a product was recalled within weeks of its launch, brings forth the importance of attention to safety at the product development stage, formal safety inspection and in-home product testing. In a hurry to grab the opportunity and/or fight a competitor, the growing complexity in a product category like automobile and aggressive product-development goals may diffuse the commitment to safety.
The aggressive pricing goal of EcoSport may have made its engineers overlook some critical issues. Ford Pinto's recall decades ago was attributed to the 'limits of 2000'-Iacocca's 2000 pound weight and $2000 cost limits; Nano's problems in 2010 were attributed to its aggressive pricing goal.
Companies should take a cue from the absence of a robust disaster management infrastructure in the country and the fallout of that. They need to pay attention to issues such as recall organisation by instituting a multifunctional committee with clear managerial assignment of the recall and related issues, the development of logistics and information channels and product and customer databases. Nokia's successful recall in 2007-08 due to battery problems demonstrated such readiness, which only improved as it internalised the learning. This came in handy when Nokia went for the charger recall in 2009.
Hopefully, Ford will institutionalise such infrastructure in India post the EcoSport experience. That said, the company seems to have recognised the impact of a safety-related reputation crisis. The quick, proactive, voluntary recall announcement, particularly when the media was celebrating the success of the brand, definitely required courage and foresight. It was a daring effort as the brand holds critical significance in the company's portfolio with large investments in its facilities in Chennai and Sanand. The company could not have afforded to take a bigger, longer-term risk by not recognising, delaying or denying the problem.
From all these instances one thing comes out clearly: it is crucial to track complaints, investigate the suspected problems and before the consumers or the media discovers them, accept them to avoid a bigger crisis and a possible loss of trust in the brand. American baby stroller brand Mclaren got delayed by a day in announcing the recall. The media broke the story creating enormous customer and brand management problems.
