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Nestle: Case of bad rumor management

5,March, 2016
 

Nestlé and overturned the government’s ban on Maggi noodles following additional tests from three independent laboratories with lead content well within the permissible limits.’

I had written earlier this week on how Lipton had made an excellent effort at containing rumors of worms in the tea bags in my post Lipton: A Lesson in Rumor Management.

The funny thing about rumors is that there are 2 kinds, as we all know from our personal experiences. When a rumor starts you don’t know if it is true or false. Either way it tends to grow virally almost in geometric progression. And all the time the public waits for a confirmation on the truth or falsity of the rumor and anxiously at that.

But in the Nestle Maggi case in India most of the public was left wondering if Nestle was charged unfairly. I quote from the Nestle Global Website.

‘In light of growing consumer confusion due to an Indian government laboratory detecting lead levels above permissible limits, Nestle India announced that it would temporarily stop selling Maggi noodles until the situation was resolved. The Food Safety and Standards Authority of India (FSSAI) issued an order to recall Magginoodles from the Indian market and banned its sale and production.

Nestle India consequently filed a legal petition with the Bombay High Court, seeking a judicial review of this order. The Court ruled in favor of Nestle and overturned the government’s ban on Maggi noodles following additional tests from three independent laboratories with lead content well within the permissible limits.’

So if Nestle was in fact innocent and had been wrongly charged, could they have done something about it?

Rumor Management

Any rumor can grow rapidly taking the shape of the Diffusion Curve proposed by Dr Everett Rogers almost 50 years ago. Once the rumor starts, it moves up very quickly to take the shape of the normal distribution curve.

Original chart by Dr Everett Rogers. Improvisations to include rumors by Prabhakar Mundkur.

The challenge in rumor management is that unless the rumor is quelled effectively at the ‘innovators’ stage it will start to take an upward turn. This means that instead of seeing how the curve grows, we need to figure out how to kill the curve quickly in its formative stages. The blue dotted lines in the above graph represent the points at which the graph can be prevented from growing for which positive actions need to be taken for its decline. Once it has passed the ‘early adopters’ stage it would have gained so much momentum that it would become impossible to quell it. In rumor management the emphasis is on how to kill the growth of the curve and bring it back to zero.

Nestle let the rumor grow. The confirmation of MSG in Nestle’s Maggi Noodles was in April 2015. The main line media announced it on May 20 a month later. They had a whole month to think about it. They could have recalled the product themselves if they had any doubts of the eventual consequences. Or it is possible they thought the government wouldn’t take it too seriously, the media would forget about it and the controversy would die a natural death by just plainly observing silence on the issue.

Nestle handled Communication Badly

Nestle cut off all lines of communication instead of using them. They didn’t speak to their consumers. They didn’t talk to the journalists who were hounding them for a statement. Instead all the journalists got was a computer generated impersonal statement. On social media their responses were passive. There was no protest. No one got the feeling that they were being wronged. In fact they seemed more than willing to give in to a kind of passive submission.

So Nestle let the rumor keep on growing while Nestle stayed in denial. Their global website for the longest time did not even acknowledge the problem. In the meantime even Maggi lovers who kept pledging their love for the brand got tired.

And then the loyal consumers too gave in to the rumor. The brand suffered, which is a pity. Because it is a great brand that India loves and if only Nestle had managed the rumor it would have been where it always was.

Nestle and Greenpeace

But this is not the first time Nestle has had a run in on problems of this kind. In 2010 Nestle had a run in with Greenpeace.

I reproduce the Green Peace accusation verbatim.

Need a Break? So does the Rainforest

Nestle, maker of Kit Kat, uses palm oil from companies that are trashing Indonesian rainforests, threatening the livelihoods of local people and pushing orang-utans towards extinction.

We all deserve to have a break – but having one shouldn’t involve taking a bite out of Indonesia’s precious rainforests. We’re asking Nestle to give rainforests and orang-utans a break and stop buying palm oil from destroyed forests.

Nestle’s response unfortunately was to ask for a withdrawal of the video claiming infringement of copyright, so it was finally taken off YouTube. Greenpeace then moved the video to Vimeo where it again went viral. Finally it ended in an outbreak of criticism on mainstream media around the world. Once again Nestle helped the rumor curve to grow to its fullest before they apologized. By that time the damage was done.

Nestle finally gave in to Greenpeace’s attacks. Greenpeace then was forced to make this announcement.

A big ‘Thank You!’ to the hundreds of thousands of you who supported our two-month Kit Kat campaign by e-mailing Nestle, calling them, or spreading the campaign message via your Facebook, Twitter and other social media profiles. This morning, Nestle finally announced a break for the orang-utan – as well as Indonesian rainforests and peatlands – by committing to stop using products that come from rainforest destruction.

There is one lesson to be learnt in all this. If you are in the wrong it’s better to apologize and change track immediately rather than act nonchalant and righteous, because you really need to kill the viral growth of the rumor curve. The more it grows the more it damages your brand. But when someone accuses you of any wrong, even when you are in the right, please defend yourself immediately as in the Nestle India case.

As someone once said an unchallenged lie often becomes the truth.

The article is written by Prabhakar Mundkur, an ad veteran who has spent 35 years in advertising and worked in India, Africa and Asia. He is currently Chief Mentor with Percept H, a JV between Hakuhodo of Japan and Percept Ltd in India.

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