You are at the grocery store taking up a box of penne and while you reach for the blue Barilla box, you remembered that , the company’s chairman “Guido Barilla” told an Italian radio show last year – “I would never do [a commercial] with a homosexual family ………. If [gay people] don’t like it, they won’t eat it and they will eat another brand.” After that Barilla was blasted on social media and MoveOn.org boycott petition collected 85,000 signatures within a day. Although Barilla apologized in a video posted to the company’s Facebook Wall, the damage to the company’s reputation had already been done. Chances are you’ll buy the “De Cecco penne” instead.
most-reputable-companies-logosThe Barilla incident is just an example of how dramatically or suddenly a company’s good will can affect consumers’ decisions about what kind of services or products they would like to buy. “That was really a nightmare scenario” says Kasper Ulf Nielsen, cofounder and executive partner of Reputation Institute, It’s a seventeen-year-old reputation management consulting firm which is based in Copenhagen and New York. For the last 9 years his firm has been putting out the “The World’s Most Reputable Companies – Global RepTrak 100” a list of companies that have the best reputations among international consumers . Although Barilla fell twenty one places from its rank last year and it made the list again this year at 55 Number. The survey measures companies’ status in 15 countries all over the world, including China, India, Brazil, Russia, Australia, Spain and France, and though Guido Barilla’s remarks sent the company’s reputation plummeting in the U.K., U.S, Australia, Brazil and India, they didn’t stir up much controversy in countries like Germany, Spain and China, notes Nielsen. [Barilla has been a Reputation Institute client.]
Reputation Institute’s list stands out from other corporate lists we cover, like the most trustworthy and most ethical companies, because it aims to quantify the way companies are viewed by stakeholders or consumers – as Nielsen calls them in 4 areas, that he says determine a company’s success: admiration, feeling, reputation and overall trust. The list measures actual corporate practices rather than public perception. “Perceptions are vital”, he contends. According to the Reputation Institute’s data, only nine percent said they would buy from companies with weak reputations while eighty-five percent of consumers say they would definitely buy products sold by a company with a top reputation.
To put the list together, Reputation Institute collects a list of 130 companies from reputation lists in 30 countries. To be considered for the international list, a company must have revenues of more than $1 billion globally or $6 billion in the U.S. and it must be well known in the 15 countries surveyed. Two U.S. companies, Google GOOG +0.18% and The Walt Disney DIS -0.18%, share the No. one spot this year. Two European companies, Rolex and BMW tie for second place. Japan’s “Sony” comes in next position & another Japanese company, Canon the imaging product maker, comes in sixth position.
Nielsen says, The high-scoring companies have figured out a way to tell stories about themselves that resonate with customers. For instance, aside from appreciating Google for the ubiquity and strength of its product and most people believe that, the company is good to its workers. “It’s important to people to think that a company treats its employees well” says Nielsen. Even though Google spokespeople do not extend themselves to the media very often, the company lets the world know that it offers lots of wonderful perks like subsidized massages, laundry service & a sports complex that houses a roller hockey rink.
Nielsen says, “Disney’s strength is its products.” He observes, “When you’re dealing with emotions and children, people assume you are also doing well for the citizenship at large”. People’s perception is that – “Disney is a company that engages locally.” He added “They also have the sense that the company’s financial performance is strong”. As a matter of fact, Disney stock has gone from $61 in September to $80 in April.
The most remarkable reputation success story this year, says Nielsen: The Korean electronics giant “Samsung” has jumped from No. 43 back in 2011 to No. 16 last year, and now into 10th place this year. The company spends a large amount on marketing and advertising. According to Reuters (international news agency), the budget came to $14 billion last year which is more than Iceland’s GDP. Even though sometimes its product launches fall flat, like giggly women who liked the hand gesture feature because they didn’t want to touch the device while their nail polish was drying, like last year’s Radio City Music Hall introduction of the S4 Galaxy smartphone, which included sexist stereotypes, “Samsung has gotten coverage that consumers love” says Nielsen. Example – Samsung ran a survey meant to publicize its NX30 camera. It polled 5,000 Europeans about their favorite subjects to photograph. Germans prefer to shoot their families while Italians like to take pictures of pasta. Nielsen says, “People were charmed by the survey which made them appreciate the company and its products”
Another company that people all over the world trust and love: Lego, Number nine on the list. “When we talk to consumers about Lego, their eyes light up” Nielsen says. At a time when it’s tough to pry children from their sedentary fixation on digital devices like iPod, parents love the idea that their offspring will encourages creativity and play with a three-dimensional toy. When they were children They also have good memories of building with the colorful plastic blocks & they can play alongside their kids. The company promotes Lego construction as a hobby for adults too.
Due to Reputation Institute’s methodology , There are certain quirks to the list. For instance , It seems odd, that a company like Lego with just $4.7 billion in revenue, would be on the same list as Samsung which banked $178.6 billion in sales last year. But “the assortment of companies comes from the study’s requirement that firms be well known across the 15 countries where it runs the survey” says Nielsen. For instance – Walmart is not known all over the world.
Surveying 60,000 people, Reputation Institute start the study in January and February of this year. It used a master list of one hundred thirty companies, showing each respondent a list of twenty companies from that list and asking if the respondent was very familiar or familiar with each of those companies. If the person was familiar with the company, Reputation Institute then gave them four basic statements: “I trust X company” ,“I respect and admire X company” , “I have a good feeling about this company” & “X company has an overall good reputation.” The respondent rated each statement on a scale of 1 to 7. After that they were asked to rate a series of statements like, “Company X makes or innovates in the way it does business or sells innovative products.” Each of the company was assigned points on a scale of Hundred.
Coca-Cola [No. 52] beat out Pepsi Co [No. 91], with a score of 69.7 versus 66.1. There are two companies at the bottom of the list, Danish brewer Carlsberg and Chinese technology giant Lenovo with a score of 65.4 tied for No. 100. Google and Walt Disney both scored 77.3.
In particular absent from the list like any financial services company or bank. There are also no companies like BP and giants ExxonMobil – These are energy companies, which scored in the 50s says Kasper Ulf Nielsen. The only pharmaceutical company to make the cut is “Abbott Laboratories” , it’s in 84th place with a score of 66.9. Respondents were asked about Pfizer, Eli Lilly, Merck, AstraZeneca, GlaxoSmithKlein and Bristol-Myers Squibb – specifically, But all of those companies ranked below the 65.4 cutoff.
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