Archive for the ‘Mktg – Product Recalls’ Category

Ouch: Dreamliners grounded … lithium battery concerns.

January 17, 2013

According to Reuters

The FAA has grounded Boeing’s 787 Dreamliner passenger jets while battery-related problems are investigated.

The plane has been plagued by recent electrical problems – raising concerns over its use of lithium-ion batteries.

Engineers and regulators are making checks – primarily to the plane’s batteries and complex electronics systems.


Here’s my take on the situation ….


Children’s Tylenol is back, but will Mom buy?

November 22, 2010

TakeAway:  The first children’s Tylenol products are returning to drugstore shelves after a long safety recall, and maker Johnson & Johnson now faces the tricky task of persuading parents to buy the pain reliever again. 

The company has taken a low-key approach and must walk a messaging tightrope, providing reassurance that it has fixed its problems without calling so much attention to them that safety concerns resurface.

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Excerpted from WSJ, “Tylenol for Kids Returns to Shelves” By Jonathan Rockoff, November 18, 2010

Bottles of the grape-flavored version of children’s Tylenol have begun reappearing in pharmacies across the country half a year after several J&J over-the-counter children’s medicines were pulled because of manufacturing problems.

The recalls have cost the company hundreds of millions of dollars in lost sales and prompted a shake-up of manufacturing and management.  The quality problems included floating metal particles in the medicines and the potential for excessive concentrations of an active ingredient.

To get parents to return to Tylenol, J&J must combat not just the hit to its reputation but also the encroachment of rival brands, which have been taking over shelf space in drugstores. Cheaper private-label brands are also gaining amid the tough economy as sales of branded medicines drop.  Loyalty to Tylenol’s pain pills, a strong indication that customers will buy the product, dropped 7% in the past year, according to an annual survey in August of 35,000 Americans.  Among over-the-counter pain medicines, Tylenol ranked behind rivals Advil, Aleve and Excedrin in terms of customer loyalty after trailing only Advil in 2009.

“You don’t want to always be apologizing, because that cues the wrong response. You want to be cuing the core emotional benefits that Tylenol delivers,” said the chief executive of a company that consulted for J&J.  There are no signs in stores calling attention to the return, and packaging appears similar to the box before the recall.

Tylenol is a signature brand for J&J, which also sells prescription drugs and medical devices. The company’s swift withdrawal of the medicine during a fatal tampering episode in 1982 endeared J&J and Tylenol to generations of consumers.  Some of that goodwill persists, even after the most recent recalls.

Edit by AMW

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Full Article:

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Lessons from Toyota’s quality snafu

January 29, 2010

Ken’s Take:

(1) Kudos to Toyota for stepping up with a J&J Tylenol-like response in the market … especially since the analogous Audi problem turned out to be bogus.  It’ll hurt Toyota  in the short-run, but pay dividends in the long-run

(2) Press reports have a tinge of “good for them, good for US” … seem to overlook that most of the vehicles are made in the U.S.  Hmmm

(3) GM will regret its direct attack during during Toyota’s sales cessation period.  I’m as competitive as the next guy (ok, more competitive), but what goes around comes around … Just watch and remember.

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Consumer Reports, the bible of the car-buying public, now rates Ford’s quality higher than Toyota’s.

Excerpted from WSJ:Toyota: Too Big, Too Fast, Jan. 28, 2010

Three or four years ago senior Honda executives demanded to know from their underlings how arch-rival Toyota could expand its production and sales so quickly and still keep its quality intact.

Now they’re getting the answer: Toyota’s once-vaunted quality actually was eroding.

In fact, Consumer Reports, the bible of the car-buying public, now rates Ford’s quality higher than Toyota’s.

General Motors held the title of “world’s largest car company” for decades before things began to go wrong there. Toyota grabbed the top spot last year, and things started going awry in just a matter of months.

This week the company suspended the sale of eight different models, including the popular Corolla, Camry and Avalon, for potential safety problems. Next week Toyota will halt production at the five North American factories that make those vehicles.

The company also expanded a recall that already was the largest in automotive history. Some 4.8 million Toyota cars and trucks might suffer from sticking accelerator pedals or faulty floor mats that seem to grab the accelerator and can cause the car to accelerate out of control. Several deaths have been attributed to the problem.

How could this possibly happen to the car company that was the undisputed leader in quality, the company that all the others from Germany and America and even Japan wanted to emulate? The answer is almost too simple.

Toyota is suffering from trying to get too big, too fast. It went on a headlong expansion spree around the world.

In doing this Toyota abandoned one of the pillars of its conservative culture: never building a new product in a new factory with a new workforce.

Any new Toyota factory, anywhere in the world, would first build a vehicle that Toyota was making at one of its existing plants. That approach minimized quality-control variables.

But in 2006 Toyota started building its first full-size pickup truck at a new factory with a new workforce in San Antonio, Texas. That truck, the Tundra, was recalled both for the gas-pedal issue and for another problem, potential corrosion of the vehicle’s frame.

In 2005 Toyota recalled 2.38 million vehicles in the U.S., which was slightly more than the number of cars and trucks the company sold in America that year. 

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Another question is how quickly Toyota can resolve the unintended acceleration issue. It’s a problem with a curious history.

In the mid-1980s Audi was accused of having a similar problem, and its U.S. sales almost evaporated. But the issue, fed by media hysteria, turned out to be bogus.

Toyota’s acceleration problem appears to be the real thing. The company has pinpointed specific likely causes—linkages in the gas-pedal mechanism and the size of the floor mats.

In an era when cars have more microchips than many desktop computers, these things are amazingly low tech.

Reports yesterday said Toyota was zeroing in on a repair: inserting a “spacer” in the pedal mechanism that would increase the tension in a spring and help prevent sticking.

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The company remains the leader in gas-electric hybrid technology. Toyota is reversing its overexpansion and reducing excess capacity by closing a plant in California, and postponing plans to build another plant in Tupelo, Miss.

Because it is Japan’s biggest auto maker by far, Toyota tends to be insular. One pressing need is for Toyota to develop a new generation of talented and trusted local leadership in the many countries where it operates. It’s impossible for a small inner circle in Japan to run a global company effectively in the long run. 

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The immediate question is what Toyota’s dramatic moves will do to its reputation.

Consumers might (and should) give the company credit for taking unprecedented and costly action in the interest of protecting their safety. But many Toyota owners are worried, and brand-loyalty ratings have begun to drop.

In last year’s J.D. Power Customer Retention Survey, Toyota lost the top spot to Honda for the first time since the poll began six years ago. Toyota and Lexus still hold the second and third positions in the survey, but the trend has to be discomfiting.

General Motors, meanwhile, has begun offering special discounts to Toyota owners who trade in their cars, a marketing move that might backfire the next time GM has a big recall.

Attention! Food safety alert …

February 2, 2009

Excerpted from Marketing Daily, “CPGs Are Improving Their Recall Response” by Karlene Lukovitz, Dec 5, 2008

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During the past two years, the U. S. Department of Agriculture (USDA) and the U.S. Food and Drug Administration (FDA) issued nearly 500 food safety alerts…

A recent consumer survey … found that 58% of respondents who had heard about product safety and/or quality problems changed their buying habits. Consumers turn away from such products for more than nine months, on average, increasing the likelihood that they will discontinue the use of the product or brand entirely.

“Consumers are becoming less tolerant of recalls, with more than 50% changing their product choices … As these consumers continue to buy different products, product manufacturers can expect lower sales and run the risk of damage to their brands.”

So how well-prepared are CPGs when it comes to product recall response time? Better than many consumers might assume, it turns out.

According to new research…24% of CPGs can currently trace and track a product and issue a 100%-correct recall alert within 6-24 hours, 20% can respond within 1-6 six hours, 12% within 1-2 days, and 8% within 1 hour. However, for another 20%, the response time is between two and five days…CPGs reported having specific goals for further recall response improvement…

Consumers can get food product alerts delivered by email by signing up for free membership in The service also says it will deliver unbiased articles on food safety issues and advice on safe food handling from academics who are experts in the field.

“Consumers have to become their own food safety advocates by actively searching for recalls and alerts”…

Edit by SAC

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Consumer tolerance of product recalls is declining. While recalls negatively affect brand value, companies with fast response times are more likely to retain the trust of their customers.

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Full Article:

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