The crisis management strategy adopted recently by a leading Vietnamese company left quite a lot to be desired.
In late January the Tan Hiep Phat Beverage Group, one of Vietnam’s biggest drinks manufacturers, received a complaint from a customer who said he found a dead fly in a bottle of its Number One drink. He sought a payment of VND1 billion ($46,511), or he would print and distribute 5,000 leaflets making the claim. After three negotiation sessions, the company agreed to pay VND500 million ($23,255) to buy his silence. The man, however, was then arrested by police for extortion.
The case made headlines on local media and in social networks and triggered widespread controversy. Social networkers on Facebook believed that Tan Hiep Phat had reported the man to the police while pretending to negotiate. Customers have the right, under laws on consumer protection, to seek redress from manufacturers when problems with their products are detected. Lawyer Nguyen Tan Thi from the Ho Chi Minh City Bar Association said that the man had not violated the law.
According to Dr. Dang Thanh Van, Thanhs Brand’s CEO, the public may not sympathize with the man but believe he was cheated by Tan Hiep Phat. “I think the company went about it the wrong way,” she said. “Its actions will surely damage its reputation.” Similarly, Dr. Nguyen Cuong, a lecturer at a Hanoi university, said that in this particular case the message sent by Tan Hiep Phat to consumers is cold and tough. “The company isn’t expressing any respect for consumers,” he said. “Taking a hostile attitude towards consumers is wrong, regardless of the circumstances.”
Local communications expert Khuat Quang Hung said that Tan Hiep Phat’s actions were aimed at directing attention away from questions over product quality. “The crisis management adopted by the company was smart but crude,” he added. “It showed a lack of humanity as a core value of the company. When this value disappears, so will the company.”
Mr. Le Quoc Vinh, Chairman and CEO of the Le Group of Companies, agreed that the company’s response was too tough. It’s true, he said, that similar complaints have been staged by rivals to damage a company’s reputation. But consumers will now be concerned that there is no redress for them if they find problems with Tan Hiep Phat’s products, and they will approach the media instead of the company. “They may even inform its competitors,” he said. “This is a major crisis for the company.” The company should have adopted an active attitude in cooperating with the media to provide accurate information, rather than offering to negotiate and then reporting the man to the police. Enterprises who act responsibly towards their consumers will be more favored and successful than others. “Actions count for more than words among consumers,” he said.
Others, meanwhile, believe that Tan Hiep Phat limited its losses. In other countries with stricter legal frameworks, a company in a similar predicament would have to suspend production and review its production system and open up to quality control inspections by authorities. This would see the company lose a large amount of money and maybe even its reputation.
This is not the first time the company has been embroiled in consumer complaints over project quality. In 2009, local media reported that authorities had found nearly 67 tons of expired flavoring in the company’s warehouses in Ho Chi Minh City and Binh Duong province. Its image as a responsible company may have already taken a battering in the minds of many consumers.
- Tan Hiep Phat