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Industry News  Competitive Intelligence Earning a reputation; Leger's Dave Scholz on... |
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Earning a reputation; Leger's Dave Scholz on the difference between corporate reputation and brand value. And why the maker of the BlackBerry finished 69th in our survey
Print - FPinfomart - Marketing Magazine - Wednesday June 4th, 2008
Corporate reputation can be a difficult concept to get a handle on. We are often so wrapped up in a company's tangible products and services that we end up thinking about brand value or brand reputation rather than corporate reputation. It's an easy mistake to make and in some instances it may not be a mistake.
In this year's Corporate Reputation Survey from Leger and Marketing, as in other years, organizations that Canadians regularly see, visit and shop at received favourable reputation scores. Awareness is a big component of corporate reputation but it is not all that goes into it.
Corporate reputation can be defined as a measure of intangibles. When Menu Foods in Mississauga, Ont. lost significant money after the tainted pet food crisis last year, it was not physical product or infrastructure that was lost; it was a loss of reputation. The biggest problem for Menu Foods was that we, as consumers, were not aware of the company prior to this crisis. So, it had no reputation capital to fall back on. A company that builds up good reputation capital can weather a storm better than one that has none.
Mattel, for instance, is an organization with a solid reputation. This past year it also had a crisis when excessive lead levels were found in the toys it manufactured in China. Mattel also saw its share price drop as a result, but not as badly as Menu Foods, and it rebounded much quicker. Mattel managed the crisis better because it was able to fall back on a good reputation built up over years.
Brand equity is a part of corporate reputation but it is not all that goes into corporate reputation. Beyond awareness and brand equity, a reputation is built on public perceptions of that company as a good employer, a quality provider, reliable and dependable, trustworthy, dynamic and a benefit to the community.
In some cases, product or brand equity and corporate reputation can become inexplicably tied. An organization like Toyota has brands (Corolla or Camry, for example), but consumers are more comfortable making a reference to Toyota than to Camry. The Toyota brand is valued by Canadians and we see the brand equity it has built up as a positive aspect of Toyota's corporate identity, which is why the automaker made our top 10.
Conversely, let's look at Research in Motion (RIM) and its BlackBerry. Many of us own a BlackBerry but we never refer to RIM as part of the product. We will say, "I'll send you a message on my BlackBerry." But never: "I'll send you a message on Research in Motion's wireless device." In this case, the corporate entity and the product brand seem to be two distinct identities, with the product having higher appeal than the corporation. RIM comes in at 69 on our list this year. While it's a significant increase from its 91st spot in 2007, I am sure the RIM executive who told one of my colleagues last year that the study is "wrong" because their brand is better than 91st place will still not be satisfied.
That said, a recent Financial Times article listed BlackBerry as the top brand for "Brand Value Growth." Here is where it becomes difficult to distinguish brand equity from corporate reputation. The simple solution is to remember that brand value is part of corporate reputation and that one does not equate to the other.
To test out the further relationship between brand and corporate reputation we looked at a number of different measures this year. For RIM, Apple and Unilever we asked about the corporate entity, but we also asked about their brands. For Research in Motion, the maker of BlackBerry, and Apple, the maker of Mac and the iPod, the results show that a brand alone does not make a reputation (see chart). RIM and Apple saw no appreciable difference in their two reputation scores.
But Unilever did score significantly higher when we equated a brand name with their corporate name. The Dove campaign has been very successful, and when we told Canadians that Unilever is the maker of Dove, its ranking shot up to 26 from 76. The mix of how reputation determinants affect overall reputation scores is different for every company, and with Unilever, the Dove campaign (which is about image, values and identity, not just products) could certainly carry them to higher levels. Or, to put it another way: If Unilever ever wanted to launch a corporate reputation improvement plan, a simple change of name to "Unilever, the maker of Dove soap" could give them a rise of 50 ranking points on our scale overnight.
Dave Scholz is vice-president at Leger Marketing in Toronto
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