Mattel announced Aug. 1 it was recalling 1 million Fisher Price toys, many featuring Nickelodeon and Sesame Street characters, after it found they contained excessive levels of lead paint. About two-thirds of the toys, made by a contract manufacturer in China, reached shelves, company officials said. No injuries were reported.
The massive recall will cost the marketer some $30 million, but it stands to lose a lot more than that. At stake is consumer trust for the Fisher Price brand, long held up as a standard bearer in quality and safety by the most cautious -- and squeamish -- buyers: parents of infants and toddlers.
"It's a million products, so in the grand scheme of things, it's not that significant," said Andy Bateman, CEO of Interbrand, New York. "But it's such a big issue in the public consciousness because it's about our children."
Only a month ago, Mattel posted second-quarter profits that jumped 15% on sales of Fisher Price and Hot Wheels. Even battered Barbie was showing signs of life, with international sales up 6%, her best showing in four years. Though Barbie's U.S. sales were down 5%, Mattel had been crowing over initiatives including a branded MP3 player and a website to bring Barbie into the digital age.
Branding experts so far have said the El Segundo, Calif., company is doing a good job of handling the recall and continued transparency is the only way to win back consumer trust.
"The early signs look very good. ... [Mattel] has been very transparent," Mr. Bateman said.
When a product is recalled, it's crucial for marketers to give out as much information as possible, said Allen Adamson, managing director of the New York office of branding consultancy Landor Associates.
"You need to be upfront, direct and very proactive. The louder they send out this message, the better it is for their brand," Mr. Adamson said.
Steven Addis, CEO of branding firm Addis Creson, Berkeley, Calif., said Mattel should specifically say which products are safe and which are hazardous. "If they pull back, parents are going to assume the worst," he said.
Mr. Bateman also said the toymaker would be smart to get involved in online forums about the toys.
To get the word out about the toxic toys, the marketer relied mostly on news outlets, opting against paid ads, a Fisher-Price spokeswoman said. The marketer put an easy-to use chart on its website with the name, number and image of products recalled, and tracked all communication in the media related to the recall, including blogs, consumer affairs call notes and radio, newspaper and broadcast clips.
The recall, which comes months after poisonous pet food made in China was yanked off U.S. shelves, has raised safety questions about foreign-made products. "There is so much worry now that 'Made in China' is going to conjure up skull and crossbones in peoples' minds," Mr. Addis said.
But with a proactive response from Mattel, "the potential upside is [consumers saying] 'Good for you guys. You spotted the problem; it was contained,'" Mr. Bateman said.