In absence of a strong defence from Nestle a perception will gain credence in customer’s mind that it has taken a surreptitious route to ‘add’ glutamate - to overcome legal hurdles - instead of adding it directly they have used raw materials & ingredients which contains glutamate. Legally they cannot be prosecuted & presence of these elements will enhance the flavour which will get customers to consume more.
In addition, more collateral damage is likely to be caused to Nestle - perceptions will gain ground in customer's mind that
- Nestle is not sure of what it does & therefore every claim it makes should be taken with a pinch of salt.
- To achieve its business objective it can adopt surreptitious means keeping its interest ahead of customers.
Result - customer will stop trusting the brand & its reputation will may be tarnished. Sooner than later it will impact their business.
If you were the decision maker at Nestle, how would you handle this controversy?
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In this series, Rajesh Srivastava, Business Strategist and Visiting Faculty at IIM Indore gives you a regular dose of strategy case studies to help you think and keep you one step ahead as a professional as compared to your peers. Rajesh is an alumnus of IIM Bangalore and IIT Kanpur and has over 2 decades of experience in the FMCG industry. All previous Strategy with RS posts can be found here
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