Holmes Report 28 Jul 2012 // 11:00PM GMT
Three-quarters (75 percent) of executives at companies that manage products under multiple brand names now believe that a strong parent brand reputation is as important as the company's individual product brands, according to a survey by global public relations agency Weber Shandwick and KRC Research.
A majority of these companies have increased their corporate reputation-building efforts in the past few years, according to The Company Behind the Brand: In Reputation We Trust, which suggests that it may be critical for product brands to be transparent about their ownership, even in cases where a company has made thoughtful and strategic decisions to lessen the exposure of the corporate brand.
The first segment of the study, released in early 2012, reported on the growing interdependence of product brand and corporate reputation in an age of increased transparency.
"For today's well-informed and highly connected consumer, purchase decisions are increasingly based on the company behind the brand and what that company stands for," says Leslie Gaines-Ross, chief reputation strategist at Weber Shandwick. "Historically, multi-brand organizations more extensively marketed their product brands over their corporate brands, but their future success might entail determining how to bring the corporate brand forward to realize the full potential of all their reputational assets."
Despite the agreed upon advantage of leveraging the parent brand to enhance the reputation of the product brands, the survey also revealed that many multi-brand executives aren't fully embracing consumers' increased scrutiny of the company behind the products they buy. While more than eight in 10 single-brand executives recognize that consumers are increasingly checking labels and doing research to identify the company behind the brand, significantly fewer multi-brand executives recognize how proactive and discerning consumers are about what they buy.
"Unless it is a strategic imperative to reduce the visibility of the parent brand, any product advertising, labeling or additional relevant customer information should clearly identify the enterprise brand," says Micho Spring, Weber Shandwick's global corporate practice chair. "Otherwise, consumers are left to do their own investigative work. And, they will do it and announce any discrepancies to the world."
Approximately seven in 10 consumers (69 percent) say they frequently or regularly discuss how they feel about a product they bought. Other top talking points are customer service, how employees are treated, company wrong-doing and their feelings about the company as a whole (its reputation).
Multi-brand executives say they are promoting company reputation as much as product reputation (81 percent and 80 percent, respectively). However, they fall short of communicating some key drivers of company reputation compared to their single-brand counterparts, particularly how employees are treated. There is a particularly large gap between single- and multi-brand companies when it comes to communicating about their workplace (73 percent vs. 52 percent, respectively).
"Companies that are proud of their records for employee satisfaction should not be reluctant to communicate these qualities and tout their awards or placement on 'best of' lists,” says Gaines-Ross. “These credentials help drive the overall reputation of a company, regardless of how many brands it markets, and possibly influence purchasing behavior."