While our coverage of Leger’s brand reputation research focuses on the most-reputable 100 brands among Canadian consumers — strong brands all with national presence — major declines in positivity scoring from year to year indicates changes among consumer attitudes.
For instance, there’s little wonder that Volkswagen is the biggest loser in the 2016 Leger Brand Reputation Survey. When your top brass are involved in a global emissions cheating scandal involving some 11 million vehicles, it tends to leave a bad taste in consumers’ mouths.
“Honest conversations are a key component of building a strong reputation with stakeholders,” said Kim West, partner and chief client officer at National Public Relations (which partnered with Leger on the study). “Transparency – even in the darkest moments – demonstrates that there is a commitment to authenticity at all levels of an organization. Serving the truth ‘straight up’ is not only needed as a way of thinking, but is something that truly needs to become part of a company’s DNA.”
But Volkswagen isn’t the only brand experiencing a fall in the rankings. Here’s a look at some of the companies that slipped and the challenges they face.
Scroll down for the Top 100 Leger Brand Reputation results
Down 28 places to #77
Even though PepsiCo’s brand portfolio is diverse (including brands such as Frito-Lay snacks, Naked juices and Quaker Oats), its reputation is closely linked to its namesake brand, which helps explain why PepsiCo lost ground in Leger’s ranking.
“What comes to mind is cola and that is what this [decline] captures, more so than their diverse offering,” says Darren Dahl, a marketing professor and senior associate dean at the University of British Columbia. “People aren’t drinking cola. It is just not a growth area in North America.”
Last summer, the company tried to rally with a new version of Diet Pepsi, replacing aspartame with another artificial sweetener that has less perceptual baggage. But it backfired in Canada when people were annoyed it was available only in the U.S.
“Often brands fail to reinvent themselves and inspire a new set of consumers and that is, sadly, the Pepsi story,” says Dahl, who is quick to point out the brand still carries a lot of equity and different product lines on which to capitalize.
As consumers demand healthier options, PepsiCo is making an effort. The company recently introduced a new line of craft sodas — 1893 Original Cola and 1893 Ginger Cola — that pay homage to its founding year. With promises of “real ginger” and “natural kola nut extract,” it’s an effort to appeal to a new Pepsi generation.
• The 10 most reputable brands in Canada
Down 21 places to #87
Remember when HMV was the perfect place to while away an afternoon? Today, how people consume and buy music is dramatically different and so too is HMV’s 2016 ranking, as it tumbles more than 20 spots.
“HMV simply doesn’t have as large a footprint as they used to. Their stores are increasingly irrelevant in the current market — they don’t have the presence,” says Toronto-based retail marketing consultant Ed Strapagiel. “That’s not to say there isn’t a role for HMV, but it is simply not as big a factor in people’s lives.”
These days, HMV has just over 100 locations in Canada. Earlier this year, the closure of HMV’s Toronto store at 55 Bloor St delivered a high-profile blow.
Owned by Re:Capital, a subsidiary of London-based restructuring firm Hilco Capital (owner of HMV in the UK), the brand is repositioning itself with a new Ticketmaster partnership, a digital offering and in-store experience that moves well beyond CDs and DVDs to embrace vinyl records and turntables, headphones, apparel, and other gifts and collectibles.
According to Nielsen’s 2015 Canadian music industry market report, while total album sales dropped by 3% from 2014 and CD sales were down 8%, vinyl sales jumped 30% — perhaps HMV is on to something.
Down 18 places to #95
Read the business section of any newspaper and you know where this is going: Yahoo has huge awareness, but its will-they-or-won’t-they-be-sold saga, massive layoffs and free-falling revenue has investors and consumers losing faith.
Macquarie Capital analyst Ben Schachter said it best in a research note earlier this year when Yahoo announced yet another restructuring plan: “Given that we have covered the stock for 15-plus years now, let’s just say that we are not going to give them the benefit of the doubt on this one.”
It seems the public agrees: Yahoo’s latest plan to cut 1,700 jobs and find a buyer have the brand back in the spotlight, but not in a good way.
“Brands have a lifecycle. Some last hundreds of years and maybe Yahoo is one that is much shorter,” says Dahl, adding that when it comes to reputation, staying power is a key influencer. “People ask, ‘is this brand going to be relevant in my life five to 10 years from now.’”
Down 16 places to #91
“SC Johnson is a product-driven brand, and product-focused companies tend to invest in their products instead of their corporate branding,” says Mitchel Osak, managing director, strategic advisory services for Grant Thornton LLP.
And SC Johnson’s products — Windex, Fantastic, Pledge, Glade, Ziploc — while useful, are not exactly sexy.
SC Johnson’s bread and butter is a low-engagement category that doesn’t lend itself to strong brand loyalty, says Osak. “People just don’t care — the category is less interesting for people.” He admits he’s among the legions of consumers opting instead for competitively-priced private label brands in the tinfoil aisle.
And consumers who are engaged tend to be so for environmental reasons, with many opting for a growing assortment of eco-friendly cleaners.
SC Johnson is fighting back, however, with a new U.S.-based branding campaign valued at US$20-$30 million. The goal – driven by research showing consumers trust family companies more than they do big corporations — is to emphasize the SC Johnson values, which include an in-house greening effort.
In an interview with Advertising Age, company chairman and CEO Fisk Johnson said, “my aspiration, honestly, is to be the most-trusted company in our industry. What we want is when people see Windex, they know it’s an SC Johnson product, and they know it’s a family company.”
The Automotive Sector
• VW down to #226 from #67
• Honda down to #30 from #26
• Toyota down to #40 from #34
• Mazda down to #89 from #83
• Subaru down to #100 from #87
• Ford down to #104 from #90
• Hyundai down to #110 from #96
• GM down to #137 from #119
• Chrysler down to #162 from #144
• Nissan down to #86 from #73
Marketing focuses its annual coverage of Leger’s reputational study on the 100 best-performing brands, but the company’s rankings extend beyond that number and it is into those triple-digit findings we must go to track the declines in the automotive business.
Volkswagen’s fall from grace is easy to explain, says Alan McGee, a marketing professor at Georgian College’s Automotive Business School of Canada: “Being caught intentionally cheating on emissions testing will certainly affect the way the public views your company and brand name.”
VW went into free fall, but the auto sector as a whole took a hit, with every company slipping in the rankings.
Osak calls it the class effect. “There is evidence now that VW wasn’t the only cheater and that has gotten out.”
Volkswagen aside, the sector struggles with negative PR says McGee. “What do we typically see in the media about the automotive industry? Usually, it is how many vehicles are being sold, how much money is being made (or lost) by OEMs, or that some company has just announced a massive recall of vehicles for safety issues. There has not been a lot of positive news about the industry in the last few years.”
Save for Tesla, which is the big disrupter, turning the sector on its head. According to a survey from Kanetix.ca, about half of Canadians (48.7%) would consider an electric or hybrid car for their next purchase.
That’s if they bother. Car ownership doesn’t have the same allure it once did, especially among urban millennnials who instead value access over ownership, championing ride-sharing or car-hailing services.