Sunday, 7 June 2015

CORPORATE INDIA AND THE CONSUMER : MAGGI / INSURANCE AND ITS LESSONS



Is the consumer really the king, as a multitude of marketing books proclaim her to be? Or is it a mere empty nice-sounding statement? Recent events would lead the cynic to question the entire premise of “king” or “queen” or anything remotely comparable; conversely, these same events would lead the avid supporter to comment “It is a mistake”, or “it wont happen to me” or “This is a one-off event”, jumping to the defence of Corporate India, who cuts their paycheck in that they are employees in some company or the other. Well, the same Corporate India cuts my paycheck, and I see no reason to defend it, or not ask  some pretty hard questions of it.


Before we continue, read this beauty from the Times of India Article : “I am the real hand behind Maggi action, 'junior' food inspector says” : “Not to be outdone, Singh said he had followed the case for more than a year; … he picked up Maggi samples from a Barabanki market on March 10, 2014. "We sent them to a Gorakhpur lab for investigation. The tests showed presence of lead and high levels of monosodium glutamate … Singh said he wanted to be doubly sure before he took on such a major company. So, he collected the samples again and sent them for a separate test. "The results were the same. The noodle had eight times higher than permissible presence of lead and MSG … "I notified Nestle about the irregularities. The firm challenged the tests and demanded a fresh test at the Central Food Laboratory in Kolkata. Even there, the results were the same


A few startling {or not-so-startling} facts jump at you : firstly, that the tests were repeated thrice on fresh samples, and that secondly  this was escalated to the company. We have no knowledge of the internal steps they took {to be fair, we are not supposed to have any}; why didn’t the company act on its own, after a unilateral investigation, and pull out the suspect stocks from the market? Why were the stocks still on sale even a year after the incident? Assuming this was limited to a particular batch, why wasn’t immediate action taken? Why were similar results found in several states in tests recently conducted? Why was a new product launched without prior approval from the regulators, in defiance of the laws of the nation?



The FSSAI also noted that a new product, Maggi Oats Masala Noodles with Tastemaker, was launched in the market without product approval necessary under Section 22 of the FSS Act. “What is disturbing to note is that the company had already released the said product in the market without completing the process of risk assessment and has been promoting its sales. This is illegal and a serious violation of the FSS Act, Rules and Regulations,” it said. - See more at: FSSAI order: All nine Maggi Noodles variants off the shelves


This article isn’t about Maggi, or Nestle; it is about Corporate India and the Consumer. I could have just a easily used any other example : it is just that this is a fresh case, and recent in public memory; it is also the first case in India that has lead to a nationwide recall forced by regulatory developments. Finally, it is easily the best documented and hardest-hitting case in India in my memory.


The question that emerges is : for us in Corporate India, is the Consumer really the king? Is the customer really the center of the organization, and do all departments and levels connect with equal vigour and attention to customer needs? Had this been the case, any number of complaints in the consumer courts would not have happened; take the example of misspelling in Insurance. This Article {Business Standard :  Insurance mis-selling our problem, too: RBI}  exposes the concerns and the reality. The article lists 168482 complaints of fraudulent business practices. I could, with a little research, quote many more examples; but these two should suffice.


Do our internal systems really encourage a consumer-focused team? What do we do when sales dip : blame the sales and marketing teams – or do a deeper analysis of what competitive reasons {along the lines of the 4Ps as well as the broader environment} were there behind the slack  in sales, before blaming the sales team? Do we really have a system, an operational system wherein the customer-facing people are responsive towards customer feedback, and is there in existence a functional and operating feedback mechanism? Is it really feasible for an employee to give negative feedback without fear of personal loss regarding excesses? Do employees trust the feedback mechanisms, whistleblower initiatives, and other internal systems to escalate problem areas?


Sure, we have the consumer as the king or queen when we design the product; but when it comes to running the business, somewhere along the lines, the consumer centricity gets lost in all the hoopla around numbers and profits and returns on investment. Internal checks cease to be as rigorous, practices get condoned {168432 complaints, remember?} and thus become ingrained. And once you reach an acceptability status, then the worries recede, focus is lost, and complacence sets in. Things which ought to set an alarm ringing get ignored. Short cuts get taken; the pressure to deliver numbers leads to slackening of controls on all departments in an enterprise.


Our approach – internally – is to get the numbers; just sell to the consumer. How do we reconcile this with the consumer is king? Be it FMCG or be it Insurance, the approach is the same; I know, having done both. In both the cases above {FMCG / Insurance}, it is clear that there were gaps in both consumer centricity, and a manifest disregard for the written law, if the enclosed report is correct. These 2 cases reveal two aspects : one, the product design and manufacturing aspect, and the other the sales aspect. And in both cases, it becomes obvious that the consumer is not the king.


You know lead is dangerous to Humans; how did the high lead content get into the product? If it was one sample – it could be an error in the Lab; but, based on current data and evidence, this has been revealed in a multitude of tests in several places. Either you made an error : or they did. If they did, please prove them wrong scientifically; all of us would be thankful to you. Similar is the case of insurance mis-selling : prove the customer complaints as flawed – or look in a mirror and chance the internal systems and processes to make them more robust.


Moving on, are our employees aware of the requirements of the law in our respective product categories? If you say yes, prepare to answer my questions on the legal requirements – and be sure to state specifics and laws. Do we really know the laid-down laws relating to our products? Answer : I have yet to attend a training in any company that teaches the legal framework governing the industry in detail. Reason : apparently, it doesn’t concern us in Sales and Marketing! We are expected to sell, without fully understanding the legal framework!


Let me underscore : we, the actual sales people, are expected to sell without having even an iota of knowledge of the laws relating to the consumer as they are applicable in our industry! And, as the icing on the cake, management pundits claim that the consumer is king. She may be the queen while acting in concert to determine marketshare; but she certainly isn’t the queen on an individual basis, that much is certain.


If the consumer were the king or queen, quality certifications would be much more rigorous than is currently the case; vendors would be expected to and grilled on quality for each dispatch or replenishment; each consignment would be checked; the first complaint gets action from the very top of the company; the first customer complaint of proven misconduct gets the sales and marketing guy terminated without notice regardless of performance data; each customer facing function would get top priority and so on and so forth. That this doesn’t happen is a manifest truth.



So Tell Me, Corporate India, Tell Me : One Of Your Own Employees : Is The Consumer Really King? Further, if companies think that they can continue to operate with the same internal systems and processes that they have hitherto taken recourse to, they are missing the signs on the wall : increasing consumer activism, regulatory activism, court activism, and a much more aggressive central government combined with an overactive media and social media. You don’t have a choice:


Corporate India, Change! Or, this time, it is the Government and the Market that might force you to change!


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