Consumer loyalty is at best “a sometime thing.” There is all kinds of evidence to substantiate that.
In 1982, Johnson & Johnson was beset by a criminal who poisoned Tylenol that killed seven people. However, the culprit never was caught. The company instituted a plan to rescue its reputation. It placed an aluminum cap on all its bottles to ensure that the contents would remain intact, and spent a great deal of money on advertising to explain that action to the public, so eventually the company regained its reputation. Consumers returned and the company retained its loyal following.
In 2008, Schneider Foods’ meat products were contaminated by bacteria; that led to a massive recall of all its products. The company underwent an extremely thorough revamping of its processing machinery, soon discovering the source of the problem. It shut down its operations and, fortunately, eliminated the pollutant. Then an enormous publicity program took place. Soon the public resumed its buying of Schneider products.
With automobile companies, the picture is different. At one time General Motors had more than 50 per cent of the car market. Later, it ignored consumer preferences and failed to keep pace with competitors. GM’s sales plummeted and in 2009 the public switched to other automobile producers, so GM’s sales sank even further; that one-time giant went bankrupt. Now “the jury is out.” One cannot determine at this time if the consumers will return to that car maker. Previously, many major car companies also failed, such well known brands as Studebaker and Packard. Their many years of prominence did not entail continued consumer loyalty.
Toyota has become the world’s largest car maker, with a great reputation for quality products. Still, one thing after another has proved to be faulty in recent years, the accelerator pedal, brakes and the steering mechanism. Now sales have plunged, with the future in doubt. The company’s president subsequently apologized, but it is premature to know if Toyota will regain its former lustre.
Hence, consumer loyalty, like voter loyalty, is far from assured. Here in Canada the federal Conservative Party collapsed in an ensuing election from an overwhelming majority of seats in Parliament, to a near extinction, retaining only two seats. Voters were angered by the U.S. Free Trade Agreement and the arrogance of Prime Minister Brian Mulroney. It has taken 20 years for voters to return the Conservatives to power and, after two elections, they have only been able to muster two minority administrations.
Obviously, consumer loyalty, like voter loyalty, is unstable. The public is fickle, so whether or not consumer-voter trust can be retained usually is far from certain. It all depends on the steps taken to maintain or to regain public favour, to merit widespread approval.