How Important is the Name Behind the Brand?

Published Jul 2001

Insights into one of the intangibles of brand marketing - the link between corporate behaviour and buying a brand have emerged recently in two international surveys.

In the United States a study undertaken by Harris Interactive for M Booth & Associates, New York showed that people claim to have directly made decisions against the brand impacted by an adverse event or experience or influenced others to do so.

• 59% said they refused to buy the company’s products and services any more,
• 46% said they transferred their buying to a competitor,
• 25% said they told their family and friends not to buy from the company.

Respondents said organisations who broke their trust and caused this type of action included Firestone, Nike, AT&T, ExxonMobil and United Airlines.

And in New Zealand a survey by Turnbull Porter Novelli and NFO CM Research showed that corporate reputation is more important than ever in influencing consumers to support a brand.

Among the findings were:

• consumers are more likely to support companies that are perceived to be reliable, caring and community minded,
• organisations and brands with core ‘Kiwi’ values will win acceptance and support,
• international companies and brands cannot afford to ignore ‘Kiwi’ culture,
• companies exhibiting social connections are rewarded in increased sales, customer loyalty, share value and employee morale,
• companies should ‘clothe their brand’ in the communities in which they operate,
• corporates must walk the talk.

The New Zealand survey also showed that corporates should be conscious of the ‘iceberg effect’ - assume a given level of complaints is only a tiny proportion of what lies beneath the surface. Also that dissatisfied customers will tend to stay away (or complain to others) rather than complain directly.

The view that customers simply vote with their feet is supported in the US study which said that only 15% wrote a letter to the company expressing their dissatisfaction. More simply abandoned the brand and told others to do so too.

PR implications:

• Brand attributes are only one factor. Corporate reputation is equally important.
• Corporate reputation has to be managed - to involve the company in activities consumers value and to limit damage and communicate when there are problems.

Interestingly The Australian Financial Review recently delved into the same issue.

Based on an article from the ‘New Statesman’, it looked at what companies such as Coca-Cola, McDonalds, Citibank and Nokia are doing to sell the corporation as well as the brand. It also quoted several leading international marketers.

Key points from the article include:

• The idea of a ‘brand’ has taken on a life of its own, offering ideas and innovations that have little, if anything, to do with the product or service being offered;
• To combat consumer reaction against this kind of cynicism, many companies are adopting the role of ‘corporate citizenship’, where there is an ethical consideration for consumers in choosing a product or service;

The article ‘Guerilla advertising’ appeared in The Weekend Australian Financial Review, July 21/22, “The Fin” section.