Published by Rebecca Berryman – 96535162
In recent times, we have seen many companies; even companies that have previously been very reputable recall a defective product.
For example on the 3rd February this year Tripod Farmers Pty Ltd issued a voluntary recall of their prepacked salad mixes as a result of salmonella poisoning and in February 2015 Nanna’s Frozen Berries were recalled due to a link to hepatitis A.
Picture: Ellen Smith
What is the impact of these product failures on consumers purchasing these products in the future?
When looking at the impact of a product recall on consumer behaviour there are several different factors that will effect the company’s reputation and the consumers’ willingness to purchase the product in the future. Firstly, the type of product recall is important and the impact that it would have on the consumer. For example the more adverse the effect of the defect, the more harmful the recall will be to the company’s reputation. (Matos, Rossi, 2006).
Where the brand has established itself in the market and their perceived level of expertise will also have a major impact on how the consumer feels about the recall and their willingness to purchase from that brand in the future. A well-established brand is far more likely to have consumers purchasing from them again in the future if the recall was a one off. Whereas a new brand who makes a product recall will find it much more difficult to rebuild consumer confidence in their brand and are most likely better off rebranding. (Hee-Kwon, 2011).
Unlike the factors mentioned above one factor that the company still has control over when learning of a defect is how the defect and recall is communicated to consumers and the general public. Evidence suggests that if done well a product recall it can actually increase a consumer’s loyalty in the brand. (Malone, 2010). The most important factor in the communication is when it is communicated and whether or not it is a voluntary recall (the company decides to make the recall announcement before it is forced to do so) or involuntary (it is forced to do so by authorities) (Magno, 2012). A timely, voluntary recall increases the consumers trust in the organisation and the likelihood that the consumer will purchase the product or brand in the future. Management of the recall and whether or not the company takes responsibility for the defect or if the company attempts to blame other companies or its environment for the defect will impact the likelihood of consumers purchasing the product or brand in the future. (Magno, 2012) Honesty is an important feature throughout the communication process. Volkswagen has recently demonstrated how not to communicate a product shortfall with 64% of US vehicle owners no longer trusted Volkswagen, and only 25% holding a positive view of the company. It is important for the company to consider not just the communication to their consumers but also communication to the public at large. For example MATOS, ROSSI 2006, found in their study that the consumers of a car from the brand making a recall reacted differently from those owning a car from a different brand.
Product recalls can have either a positive or negative impact on the company, the brand and future sales depending on the defect (this is most likely to be outside of the company’s control once the defect has actually occurred) and how the company chooses to manage the defect, which is well within what the company can control once it becomes aware of the defect. Timely, honest information is the key to a successful product recall.
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