China Business:Social media has answer for 'Ask Me'

Kelvin Wickham. Photo / File

Fonterra turned to Chinese social media - particularly Weibo - to cleanse its brand in the wake of the botulism scare.

"It was a serious event and there's no going away from it," said Kelvin Wickham, Managing Director China and India at Fonterra. "We suffered a serious impact here, particularly reputation-wise and with consumers, but also with our sales in the consumer area."

The botulism scare proved to be a false alarm. But it was the latest in a series of incidents in China which our biggest company has had to address to protect its reputation.

"We found that a lot of consumers were confused, because New Zealand does have a very good reputation here. We found Fonterra wasn't that well known, but New Zealand was.

"On the business side the consumer branded business was hit in the first couple of months because of the uncertainty of our consumers," adds Wickham.

Fonterra spent a significant amount of time investing in direct channels of communication with consumers, looking to increase the transparency of its grass to glass model and restore lost confidence. Consumer research showed that a serious cleansing of the brand was required in the public domain.

"We had to do quite a lot of work moving through that phase into recovery and rebuild.

"It's very important to acknowledge that we still have to continue to work at the improvements highlighted from the reviews.

"We need to demonstrate what we have learned from this and make sure we communicate that to our consumers and stakeholders here so that we can come out in a stronger position."

Looking to engage directly with concerned customers, the "Ask Fonterra" and "Ask Me" campaigns proved a great success on Chinese social media platform Weibo.

"Instead of trying to push facts out there in a very analytical way, we wanted to talk with consumers and have them ask questions.

"We had directors up here to visit the market following the incident.

"We sent them to the supermarkets with Ask Fonterra T-shirts on. What we found was that consumers asked simple questions - 'are these products safe?'. A simple reassurance goes a long way."

From post-campaign surveys, Chinese consumers appeared to appreciate the openness of Fonterra and understand that it was a precautionary measure.

"Consumers gave us support for the fact that we were upfront and honest and the did the right thing with that regard," says Wickham. "There are still people that are confused though and that is something that will just take time. You can never reach all of your consumers, It's an enormous and highly fragmented market.

"We have now recovered in terms of sales and the consumer business has overcome that after the first quarter, partly because of the ongoing campaigns we've used.

"We're no back ahead of last year and continue to grow and roll-out".

The ingredients business - the core of Fonterra's operation in China held steady in the wake of the crisis, with major manufacturers an easier proposition to deal with than end-consumers of Fonterra's branded goods.

"It's necessary for us that we keep investing in stakeholder management and continue to invest time spent talking to consumers to ensure the message gets out there. We call it the ongoing rebuild."