How to trash your brand – #2
A few months ago, the news was full of the story about Nurofen, a very well-known brand, and how they’ve been caught using misleading advertising for their painkillers.
And it’s a good reminder for every business owner that business reputation is a fragile thing that takes a long time to build, but is easily broken.
Business reputation takes a long time to build, but is easily broken.
In a nutshell, the tablets that Nurofen advertised as being for specific types of pain were, in fact, just the same old Nurofen in every packet. The packets proclaimed that the active ingredient could go “straight to the site of the pain”. (I guess, in a way, that it does – but it also goes straight to every other part of your body as well).
Anyone with a high-school level of chemistry (or probably less) and a few moments to read the back of the packets could tell you that, but it’s taken Australia’s legal system since 2011 to get the offending advertising under control. Now the company has been ordered by the Federal Court to remove all the misleading packaging within 3 months.
The makers of Nurofen were told to withdraw the product way back in 2011, but they chose to ignore the order and just keep on going.
Why did they do it?
But why would a large, trusted brand name continue to sell a product that it had been told to remove from sale by a Government authority?
I presume the company figured that, given the level of fines and penalties, it was more profitable to just keep on selling, but I could be wrong. Bear in mind that these ‘specific pain’ branded products were sold at a much higher price than the “plain” Nurofen.
Isn’t it a shame that a trusted brand (especially one that we’re trusting with our health care) chose to put its reputation at risk? (See previous discussion about Volkswagen and others …
Risk vs Reward
Maybe these big companies and brands have made a risk assessment that the possible risk to their brand image is not enough to stop them engaging in misleading (or even illegal) behaviour.
But not if you’re further down the supply chain
But those of us with businesses further down the supply chain cannot be so bold. We must do everything we can to protect our brand. One thing that our potential (and actual) big customers will not accept in their supply chain is risk – and that includes reputation risk. If you screw up, you can be sure that your big customers will cut you loose very quickly, so their potential damage is isolated.
If you screw up, your big customers will cut you loose very quickly.
So, for us, the possibility of reputation risk has real financial consequences – like losing real contracts, and being barred from ever dealing with that company, or even an entire industry, again.
I spoke recently with a procurement manager from a large company who had awarded a smaller supplier a substantial project. The smaller supplier took the up-front payment, but then failed to deliver – for a whole 12 months. Of course, that put the big company off-side with its customers. I doubt that supplier will ever get another chance in that industry.
A short-term gain may be attractive and very tempting, but the long term pain of a damaged reputation will be worse.
By Bronwyn Reid
4th May 2016