Product Recalls, Financial Schemes Could Spawn a New Ralph Nader

Product Recalls, Financial Schemes Could Spawn a New Ralph Nader
In Zeal to Appease Wall Street -- not Consumers -- U.S. Marketers Are Sewing Seeds of Their Own Destruction
By Rance Crain
http://adage.com/columns/article?article_id=120190


The series of Chinese product recalls, especially the Fisher-Price debacle, has the capacity to spawn a new Ralph Nader, according to the former Washington editor of Advertising Age, Stan Cohen, who was my first (and best) boss. And, I would add, the interest-rate manipulation schemes that triggered our current housing meltdown only add to that impetus.






"American marketers are fortunate to be operating in a culture that leaves them free to innovate as they see best. But they must never forget that in a democratic society there is a day of reckoning if they get carried away by temptations, such as the exporting of jobs to low-wage and primitive-values societies to the point where consumers find themselves in unsafe markets," Stan told me.

"There has been a sea change in the culture of American business since it built its success on brands consumers could trust. It carries risks that cannot be ignored with impunity. It was easy to respond to an opportunity to serve consumers by bringing down manufacturing costs, but that was relevant only without evading product quality and safety. We now know this side has not received sufficient attention."

Stan sees a major reversal of business tactics on the horizon. He predicts a "shift of responsibility from managements that saw the cultivation of brand-name loyalty as a priority consideration to a generation of management that sees companies and their brands as blue chips in Wall Street's craps game where capital gains pay off far more than a steady flow of profits."

Brand names, Stan believes, were tailor-made for large-scale media advertising. "They offered a signpost that would enable the consumer to identify products that could be trusted. In this new age, advertising has a hard time finding anything meaningful to say. Because there is seldom anything truthful that implies its products may be more reliable than anybody else's.

"Fisher-Price not only allowed the Chinese to ship dangerous products, it even left the testing to them. But more significantly, its American engineers produced a dangerous product [with magnets small enough to be swallowed] and did not protect the company from doing something no less irresponsible than what goes on in China. You cannot blame that on the Chinese.

"Karl Marx was dead wrong when he hyped the virtues of Communism. But he apparently may have had an inspired premonition about Fisher-Price when he wrote that the seeds of self-destruction are built into capitalism."

Stan asserts that "those of us who lived through the Nader era recall that the ad business was caught completely off balance. Even as it courted consumer confidence in brands it failed to see itself as others saw it. Out of the blue, Ralph Nader took center stage. And the rest was history.

"At the moment the political focus is Iraq, but it would be foolish to assume that will not be resolved long before the votes are cast next November. In the issue vacuum that follows, the next Ralph Nader could find a window of opportunity. It's time to get back to reality. What's good for consumers is good for business. All the rest is puffery."

There's no doubt in my mind that many U.S. marketers are sowing the seeds of their own destruction. What happened to Stan's contention that what's best for consumers is best for business -- words that this publication has adopted as its own?

The first priority of business is Wall Street, and corporations are willing to take any expediency to appease the gods of finance. Is it any wonder CMOs have such short tenure?

They don't have the luxury of building great brands -- they've got to produce every quarter.

So all I can say about a new Ralph Nader is: Bring him on.