Global Brands Need To Close Gap Between Performance And Citizenship
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Global Brands Need To Close Gap Between Performance And Citizenship

Global brands have more work to do to close the gap between their performance in the marketplace and their citizenship.

Holmes Report

Global brands have more work to do to close the gap between their performance in the marketplace and their citizenship, according to the inaugural Global Corporate Reputation Index, released today by Burson-Marsteller and sister agencies including Landor Associates and Penn Schoen Berland.

The survey is based on a proprietary model developed by PSB and draws on consumer interviews in the BrandAsset Valuator study conducted by sister firm BrandAsset Consulting, which asks consumers to choose the qualities they associate with thousands of companies, including both performance- and citizenship-related attributes that translate into overall corporate reputation.

Performance measures the perceived success of a company’s products and services. Citizenship is a measure of the less tangible aspects of a company’s reputation. The strongest companies typically rank nearly 30 percent above their industry averages on citizenship, while outperforming their industries on performance by an average of 20 percent. Nevertheless, for most companies, citizenship continues to significantly lag performance, indicating many are still paying inadequate attention to this category, despite the increasing role it plays in today’s marketplace.

According to Burson chief executive Mark Penn: “This Index shows that companies have an opportunity to strengthen their reputation by demonstrating and communicating more actively their commitment to good corporate citizenship. By sector, banks and oil companies have the most work to do while tech companies are still enjoying the glow from their innovation and vision.”

The tech industry scored the highest overall, but concerns about its citizenship are masked by its extreme scores on vision and innovation. The apparel industry shows the largest gap between citizenship and performance indicating continuing concerns about how its products are manufactured.

“In an increasingly transparent world, isolated programs and insufficient or insincere commitments will undermine corporate reputations,” say the firms. “On the other hand, visible, authentic, and consistently delivered citizenship programs build successful corporate reputations and brands that stand the test of time. Good corporate citizenship really is good business.”

The survey provides evidence that great reputations are built over time, as many of the companies with the strongest reputations are also those that have the longest histories. In fact, 20 of the top 25 companies were founded before 1950, with the oldest tracing its roots all the way back to 1865. The top companies have an average age of 87 years, suggesting that the ability to withstand the test of time translates well into overall reputation.

Consumers in China award the highest reputations of all the markets in the study, while consumers in Japan and Brazil are the most critical of companies.

And with the negative headlines of recent years surrounding the perceived role of the banking industry in the global financial crisis, it is not surprising that this industry scores lower than nearly all other industries on overall reputation. However, there are notable regional differences, with banks suffering the most on both performance and citizenship in the US and Russia, while scoring comparatively stronger in China and Brazil.
 

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