Abstract
“ Mummy, I’m hungry” - “ Just 2 minutes!”
“Ma, Bhook lagi”….. – “Bas do minute”
Nobody can forget the beautiful ads, where steaming bowls of Maggi appeared on the dining table in a jiffy!
Where 2 minutes is supposed to be the ‘limit of patience’, Maggi hit the right spot with the launch of its extremely popular ready-to-eat Maggi noodles, which became a big hit with mothers and children, and later, bachelors, and still later, working couples!
The Brand Ambassadors, Amitabh Bachchan, Madhuri Dixit and Preity Zinta, endorsed Maggi noodles and the company’s emotional advertising helped to connect effectively and make customers even more eager to try the next variety of Maggi!
The fact that Maggi was from the stable of Nestle of Switzerland, with a fabulous reputation and brand name by itself, made it even more popular among the teeming millions in India!
However, little was the company to know that their undisputed leadership, company’s name, brand name and value would go through testing times, which is a lesson for any MNC corporate that they should not take their customers for granted and, more importantly, they should not take their customers for a ride! (unless they are Ola or Uber!!!)
While MNCs face stringent Government and governance guidelines in developed nations, along with severe penalties for violations, they always perceived ‘developing nations’ (which unfortunately, till today, also includes India in the list!) as more accommodative and ‘flexible’ in their approach towards violations!
However, little did Nestle realize that one man, Sanjay Singh, a Food Inspector in Uttar Pradesh, could turn their corporate life upside down in a short period!
The renowned corporate, which became a reviled corporate quite quickly during this period, tried its ‘ghamand’ (arrogance), denial, refusal, corporate style automated responses, silence, stubbornness, playing with the law (in Courts), then capitulation, recall of Maggi and the entire management can probably be joked upon for decades for converting a small fine of USD4,500. (about ₹0.3 million) into a humongous and humiliating loss of close to USD0.5 billion!
To add insult to injury, Maggi’s market share of 77 per cent came down to 55.5 per cent (by Nestle’s claims), which could have been much lower in actuality!
Problem Analysis
What Nestle did wrong initially:
Reacted late. Ignored Government laboratory test reports that MSG and Lead were above acceptable levels. Did not print the fact on Maggi packets that Maggi contained added MSG! Ignored consumer comments on social media. Maintained silence for too long, leading to suspicion of wrong doing! Issued auto-responses to all concerns raised by consumers. Ignored the media initially. Ignored the fact that 30 Government lab tests had convincingly showed that Maggi was ‘unsafe and hazardous for human consumption’!
a) Ignored the impact of the Indian Government ban on Maggi going international, where Nepal and then some African nations took the decision to withdraw Maggi citing concerns on consumer health.
b) Again, maintained silence when protestors, in anger, smashed and set fire to Maggi packs and also photos of the Bollywood stars who had endorsed Maggi.
c) Nestle India’s executives were indecisive and reacted late!
d) Their quality head was overconfident of their quality checks and, therefore, did not take further action.
e) In a VUCA world, Nestle knowingly contributed to the Volatility, Uncertainty, Complexity and Ambiguity of the situation!
What Nestle did right to salvage the situation subsequently?
Recalled Maggi, resulting in a gigantic, logistical exercise which was well publicized!
Assured customers that Maggi would be back quite soon!
Created a Maggi information hub on its website, enabling customers to see facts!
Issued press statements (albeit, too late!) on its Maggi recall efforts to strike the right chord among the public, particularly mothers!
Invited journalists to take a tour of its Quality Assessment Centre (in stark contrast to ignoring the media earlier!).
Recalled its Indian CEO and replaced him with an Indian CEO (which was a good game plan!).
Got the support of the Bombay High Court judgement.
Relaunched Maggi within 5 months!
Launched a social media campaign #WeMissYouToo on YouTube, starring bachelors and moms with video testimonials!
Produced tests on about 3,500 samples, which showed that Maggi was safe!
Introduced Maggi Hot Heads and created 12 variants of Maggi!
In hindsight, the Indian management team would have thought hard on where they went wrong and whether they had actually and factually lived upto the Nestle India statement which is given below:
Proposed Solution
MNCs operating in India have realized, over a period of time, that discerning Indian consumers have always valued
When trust is broken, the consequences are disastrous—for the Company!
Changing lifestyles, double incomes, fast paced corporate and personal life, need for speed, etc., have resulted in consumers requiring quick solutions to anything—hence the 2 minute ‘patience limit’!
Maggi admirably filled this need, until the disastrous fiasco which put a bad dent in their image and created unimaginable bad publicity for Nestle and Maggi!
Conclusion
In the end, the MNCs need to realize that
While consumer memory is short, they cannot take consumers for granted! They need to have just 1 degree of separation with the consumer/customer (not 6 degrees of separation as is popularly thought in the matter of relationships between people!). Customer Centricity is the mantra! In this VUCA world, reputations can be badly damaged in less than 2 minutes!