Product Recalls Hurt Wal-Mart’s Brand Perception

September 10, 2007

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Brand perceptions of Wal-Mart have suffered as a result of the series of product recalls of toys produced in China, according to a new study. Marketing consultancy Strategic Name Development conducted a study of 503 participants regarding perceptions of Wal-Mart and Target, Brandweek writes (via MediaBuyerPlanner).The study showed that only 40 percent of respondents felt they could trust Wal-Mart to protect them from products made in China; 39 percent of respondents said they were more fearful of buying products from Wal-Mart, with 22 percent saying they were more fearful of buying products from Target.

Fifty-six percent said they felt Wal-Mart was more interested in profits than people; 41 percent felt that way about Target.

Respondents also felt that Wal-Mart “sold out the American consumer just to make a buck,” and that it has been “my policy to avoid all things associated with China, including Wal-MartA?AA¢AA¢aAA¬A?AA¦ I haven’t been [there] in three months and I used to go weekly.”

Many consumers have decided they would rather buy products made in India, particularly for pet food, prescription drugs and toys (with 78 percent, 74 percent and 73 percent saying they prefer India over China respectively). In only four out of 25 categories – automotive, cell phones, computers and flat screen TVs – did consumers prefer Chinese products.

Jack Trout, president of Trout & Partners, a marketing strategy firm based in Old Greenwich, Conn., calls this a “gigantic problem” for both China and Wal-Mart.

A Wal-Mart rep says the retailer hasn’t seen evidence of such findings at the registers, and points out that Wal-Mart has been the only retailer to publicly announce a new safety-net check and test program for toys.

Of course, Mattel’s brand has also been hurt by the recalls.

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