Sony, Nestle, Procter & Gamble and other brands lost 5 billion a year

In the past year, multinational corporations have faced a public relations crisis in the Chinese market: Sony, Nestle, Procter & Gamble, Dell, etc. have all been listed on the list as examples of learning companies. Some even called 2005 multinational corporations in China. Year of problem." Zhuoyue consulting firm, a well-known consulting company in Shanghai, estimated that in 2005, multinational companies lost at least 5 billion yuan in China due to the public relations crisis, and their corporate image was seriously damaged.

A few days ago, Zhuoyue Consulting provided its “Corporate Crisis Case Report on Multinational Companies in China in 2005”. In its summary of cases, the following eight multinational companies are quite representative. The origins of the crisis and its countermeasures have left many lessons worth learning for companies in 2006.

Nestle's "Iodine exceeds the standard": the biggest failure in crisis management in 2005

In May 2005, “Nestle” Gold Growth 3+ milk powder was found to be excessive in iodine quality sampling in Zhejiang, followed by similar discoveries in Beijing and Kunming. However, Nestlé has not given further replies on recalls or returns, resulting in the return of most consumers. On June 5th, Nestle’s top Chinese executives apologized to consumers for their iodine excess of powdered milk. On June 8, the National Standards Committee publicly stated: "Infant formula that does not meet the requirements of iodine should be prohibited from production and sales." In late June, Nestlé’s technical director admitted that Nestlé had paid an expensive price!

Lesson: Because after the crisis broke out, crisis management was incomplete, inaction was not even intended, and Nestle became the biggest failure in the crisis handling of multinational corporations in 2005. There are three major shortcomings: First, the company's sense of crisis is weak, crisis warning and avoidance mechanisms are imperfect; secondly, the public and the media are skeptical, lacking effective communication mechanisms; and third, crisis response and follow-up processing methods are simple.

Passive negativity is its main problem. It initially remained silent; then, although it apologized, it did not recall the product; from promises only to retired, to agree to return, and then apologetic statements, almost all in the industrial and commercial administrative law enforcement departments, media, consumer demand and supervision, and lawyers It can only be achieved under external pressures such as evidence, which can only arouse the public's continued dissatisfaction.

Sony "Problem Camera": Revealing the Most Essential Problem

In early December of last year, Sony's 6 models of 30 batches of digital cameras were characterized as "failed" in Zhejiang spot checks. Afterwards Sony questioned the testing standards and started crisis public relations. On December 16, Sony began to apologize to consumers and announced that all cameras involved had stopped selling. On December 19th, Sony issued a statement for the third time, acknowledging the negligence of work-related staff in the production plant, which was an internal management issue and promised to accept consumer returns.

Lessons learned: Sony appears to be more mature, but promises have not been fulfilled immediately. Many of the consumers who had returned to the camera suffered an embarrassment. Previously, there were reports that Sony's Nanjing repair station had given the user an “on-line” due to no response. At the end of last year, the Beijing Municipal Bureau of Statistics informed the economic census data and exposed some of the companies that had violated the regulations. Sony was shocked to list: "Total merchandise sales" was reported at 1.8 billion yuan.

Oishi "Footwear": Treating stakeholders

In September 2005, the outgoing employee of Oasis revealed the inside story. After the brand sponsored the use of clothes to some program groups, it re-sold the “slippers”. This was the first time that a foreign fashion brand was recovered in China due to sponsored products. Sold again was exposed. Alice Chang, CEO of Shanghai Trading Co., Ltd. Zhu Junhao, expressed that this behavior is a hidden rule in the industry, and peers do the same.

Lessons learned: Companies must always keep in mind the "Stakeholder Communication Rules." It is necessary to give a reasonable explanation to the employees and consumers, that is, where is the problem with the poems? What measures have been adopted; and also to actively communicate with competitors. The company not only failed to find out the reasons for itself, but also expressed its unfavorable opinions on the competitors. The situation will certainly be even more unfavorable.

Google Maps Storm: Forget Social Responsibility

On October 13, 2005, Google replaced the “China's province” text on Taiwan’s map with a mobile arrow, which was promptly corrected after being strongly questioned by the outside world.

Lessons learned: IT companies that specialize in technology must also assume corresponding social responsibilities.

Pfizer erroneous remarks: Company executives must be cautious

On May 18, 2005, at the Fortune Forum in Beijing, Pfizer's president Jeffrey Kendler said that "two-thirds of the world's counterfeit drugs come from China." On May 23, Pfizer corrected its claim that this statement was wrong.

Lessons learned: A well-established corporate governance system should include more senior management of the company. Leaders must pay more attention to corporate image and be cautious.

Dell "Mail Doors": Responsibility for the Employees' Behavior

On May 30, 2005, Dell's sales staff “demonized” Lenovo’s emails and were exposed by the media. On August 1, the president and CEO of Dell, who visited China, formally apologized.

Lesson: The work behavior of serving employees is, of course, a concrete form of corporate behavior. Obviously shirking responsibility is not helpful.

P & G "SK-II Security Crisis": Stars Have Side Effects

At the beginning of March 2005, Jiangxi consumers filed P&G to court because after using SK-II products, not only the magical effect of propaganda but also skin burns occurred. On April 7, Wang Hai reported to the State Administration for Industry and Commerce the Procter & Gamble SK-II advertising fraud consumer.

Lesson: P&G issued only two statements after the incident, emphasizing that its products have no problems, lack of effective media communication, and ignoring the feelings of consumers. It is difficult to get public sympathy. Second, ask Carina Lau to prove that the company's “cleanness” is a failure. In a crisis of trust caused by a technical problem and false advertising, the star has no credibility at all. Instead, it makes consumers think that advertising stars support the brand because of their interest. The involvement of celebrities can only increase the effectiveness of the event, and public opinion that may have been dull will become a hot spot.

Honda Accord "Wedding Gate": Indifference criticized

On January 9, 2005, a 2004 Hangzhou Honda Accord car broke into two due to an impact. The accident caused the five people in the car to die 3 and 2 injured.

Lessons learned: Although the inspection report later proves that the car does not have quality problems, Honda has clearly violated the “sincere communication principle” in the crisis management process. The attitude of indifference once shown after the accident was criticized by public opinion.