Thursday, August 16, 2007

Product Recall and Customer Problems

Product Recalls have been in news for the last few days. The news that Nokia is replacing 46 Million batteries has pulled down the stock price of Nokia. Similar recall of toys from Mattel has also been creating news, especially as it is related to high content of lead and magnets in toys. Mattel has put on it's website voluntary safety recall facts in trying to show it's responsiveness to consumers. Companies have denied that It would have much influence on the image of the brand in the eyes of the consumers, but experince tells us that product recalls do have an adverse impact on the standing of the brand in the eyes of the consumers.

The problems mainly is with the trade and the channel partners who would be involved in the recall process. The channels are designed for pushing products out and not for taking them back from customers and there is resistance from the trade to get involved in the process atleast in the Indian context. This is despite the incentives provided for the recall.

I remember two cases of product recall where the customer experince was not good. In 1996-7 there was a problem with steering component of Maruti800 and the company offered to replace it free of cost to the customers provided they came to the dealer where they had purchased the car. Though might look very logical and simple but the fact was that we stayed a good 500 kms from the nearest dealer made the ordeal quite painful. The second experince was with that of pens, though one the face of it replacing a pen (Parker) should have been easier, but the hassles involved with the retailer and the company's attitude left a bitter taste in the customer mouth. The company was Luxar Writing Instruments.the Indian parnter of Parker.


Infact, I feel that the problem of recall if handled carefully can become one more opportunity to reinforce the image of the company as being a customer-oriented . A touch-point which if handled properly can lead to more long-term relationship with the customers...

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