Mars Recalls Tips from Johnson & Johnson to Save Reputation Long-Term

Article by Lizzy Peper | esPResso Committee Member

On Jan. 8, one German woman found a less than sweet surprise in her Snickers bar when she discovered a piece of red plastic in her candy. The woman’s complaint sparked the recall of Mars products across 55 countries that were produced at the same Netherlands plant.

Mars, Incorporated released a statement on Feb. 23 that explained its voluntary recall and stated, “We believe this was an isolated incident, but we’ve made a precautionary decision to voluntarily recall a number of SNICKERS®, MARS®, MILKY WAY® and CELEBRATIONS® products.” The recall affected a variety of countries in Europe, but did not extend to the United States.

Although the spokesperson for Mars Netherlands declined to comment on the financial impact that the recall would have on both the production facility and the company as a whole, Mars’ stock values have dropped 23 points since the incident, according to City A.M.

No matter the economic damage that Mars experiences, the company’s voluntary recall of possibly affected products allowed it to maintain its reputation. Although the company believed the piece of plastic to be a specific, isolated incident, Mars put the safety of its customers by taking precautionary measures.

Similar actions were taken by Johnson & Johnson when Tylenol capsules containing cyanide led to the death of seven individuals. The company immediately recalled bottles of Tylenol across the country and launched an investigation. Although, like with the Mars Snickers bar, the cyanide incident was an isolated situation, Johnson & Johnson was able to build a trustworthy, credible reputation with its customers.

Even though the voluntary recall of Tylenol cost Johnson & Johnson millions of dollars in the short term, the company’s positive reputation allowed it to eventually increase the value of its stock and attract more stockholders such as Michael Holland from the Holland Balanced Fund. “It’s one of the reasons it is the largest holding in my fund,” he told the New York Times in a follow-up article about the recall in 2002.

If Mars continues to put its customers’ concerns and safety before its profits, it is likely to follow a similar path to Johnson & Johnson and benefit from both an increase in stock value in the long-term and a credible company reputation.

Photo courtesy of Pixabay.

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