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Maggi Crisis – Goes beyond numbers

Sales may climb back but reputation will remain scarred

Rs 320 crore loss or 10,000 trucks required destroying 27,000 tonnes of noodles – these are staggering figures people are talking about but is Maggi crisis simply a business loss to Nestle? The answer is clearly NO.

What comes to our mind when we think of Maggi? – “Two Minutes” Right? In others words a quick snack to satiate our hunger pangs. However, Nestle’s response to the recent Maggi crisis has been far from quick, resulting into an ‘Epic PR disaster’ impacting their long-term reputation.

As reputation management professionals, we have a lot of lessons to learn from what may eventually become one of the most popular cases of crisis communications. Here are Meri Maggi Lessons –

Never underestimate a challenge, however small – During the course of our career come many situations, which could become benign once handled appropriately. However, if the same situation is left unattended, it has the potential to become a crisis, as big as the one Nestle is facing currently.  On hindsight, it appears that Nestle did not realize that one test result in Uttar Pradesh would snowball into a series of events finally resulting in the ban of a product, which ruled the segment for over thirty years.

Issue a holding statement – It is important for the stakeholders to know and know asap that the company cares and acknowledges the fact that there exists an issue. It just makes the company more humane and enhances people’s level of tolerance for it. A simple statement acknowledging the situation with a brief mention that the company is looking into the details would suffice. This has to come out within the first or the second day. Any further delay reduces its impact substantially. Staying silent is a big No No.

A good example of this is the response of ICICI Bank when Cobra post crisis hit about two years ago.

Have a crisis communication plan in place – When crisis hits, it is important for communication experts to handle the crisis instead of running from one decision maker to another, internally, for approvals. A robust crisis communication plan keeps the engine well oiled for it to start moving as soon as the start button is pressed. Nestle seemed to be caught napping here. Even the decision to roll back the product came more as a compulsion than willingness to stop consumers from consuming something that is believed to be hazardous.

Engage with stakeholders – Maggi held its first press conference over a month after the first outbreak. Too late to convince or even communicate to any stakeholder group. By then opinions are formed, statements are made and the reputational damage is done.

Also, when asked by a reporter what took them so long to even come open in public, the spokesperson responded that they were “engaging with authorities”. Certainly that’s important but stakeholder engagement need not be sequential.

Another aspect is influencer and media engagement to at least get a balanced perspective out, if not all positive.

Train the spokesperson to deal with local media – Media in each country behaves differently. Indian media is one of the most aggressive media globally. But the Nestle spokespeople did not seem to be aware of this nuance and their whole conduct in the press conference left a very tentative feeling even amongst the general audience.

Leverage brand strength – As communicators we should understand our brand strength and leverage that. For instance in case of Maggi the brand strength is the loyalty across age groups, yet instead of leveraging that, Nestle seemed to be complacent about it. Roll back came as an afterthought, or communication with public appeared as a necessary evil. A simple decision to roll back the product well in advance could have created an impression that the company cares.

Most of us have grown up eating Maggi. We are all aware from the beginning that it is not a healthy snack, yet each one of us have enjoyed it and has some memories associated with the product – be it a  “masti time meal” during college days or a friend we depend on to sail us through a lonely night or our travel partner – all of us have a story of Meri Maggi.

Hence unlike other similar crises such as Cadbury Dairy Milk or Pepsi, this crisis has gone beyond business and has touched emotional chords. Couple that with the complacent or slow approach of Nestle, the reputation risk has multiplied.

We do not know what has triggered this crisis – Is it actually a bad product or is it politically motivated or competition planted. Of course I wonder, why suddenly authorities thought of carrying out the tests for a product, which has been ruling the segment for last three decades. Whatever the trigger may be, Nestle needs to quickly launch a 360 degree campaign and tell a compelling story.
Depending on people’s short memory it could revive sales in the next 6-8 months, but the reputational scar will never heal.

Mitu Samar, Founder, Eminence – a reputation management company

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