Brands today are increasingly being held accountable for their products, their brand strategy and their operations. VW’s emissions scandal; Samsung’s exploding Galaxy Note 7; and United Airlines overbooked flight fiasco have all made considerable headlines recently.
What is significant about the United Airlines story, which wiped $250 million from its share price, is that it may well not have even been reported on 10 years ago. But the ubiquity of social media connected smart phones means any incident – however minor or brief – can be reported on and shared instantly.
The rise of social media, and the chance to instantly call-out bad practices, not to mention a society increasingly used to whistleblowers, means brands are coming under more constant and regular scrutiny than ever before. All of which can have a significant impact upon a brand’s reputation and with it, it’s consumers’ loyalty and share price.
Definition of brand reputation
Brand reputation is associated with perceptions about a brand over time. Reputation is a broad idea and can cover a full spectrum of ideas from harder elements such as financial security through to softer elements such as ethical business practices.
Against this backdrop of increased importance of maintaining – and potentially rebuilding – a reputation, Kadence International wanted to understand what defines a brand’s reputation, and importantly how it differs across different markets.
We undertook a survey of 2,000 consumers in 9 Asian markets – Indonesia, Philippines, Thailand, Vietnam, Malaysia, Singapore, New Zealand, Taiwan and Australia – to look at how reputation is viewed in each market.
All consumers were aged 18 – 55, with a 50/50 mix of gender. All respondents had to have a good awareness of consumer brands, of which they were the sole or joint decision maker at purchase. Kadence looked at 4 main factors – Successful Leadership; Fair pricing; Responsibility and Trust.
4 main factors contributing to brand reputation
Of the four factors across the markets, Trust came out as the most important factor for consumers (91%). Followed by Responsibility (89%). The closeness of these two factors – and the gap between the softer elements of Trust and Responsibility and Fair pricing (83%) and Successful Leadership (82%) – suggests that it is these softer elements that consumers think of when they consider reputation.
It is true that a damaged reputation can impact a business’ profitability and leadership, but it is less likely to be seen as a defining factor of reputation itself.
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Trust
Interestingly, more traditional and less Westernised SEA markets (Malaysia 92%, Philippines 93%, Indonesia 95%, Thailand 92%, Vietnam 93%) placed a higher emphasis on Trust than more developed markets (New Zealand 90%, Australia 87%, Singapore 89%). Suggesting Trust was a more defining factor of reputation for these more traditional markets.
According to the Global Corruption Barometer, less Westernised markets are more associated with corruption compared to the developed markets in the study, which may explain why consumers in traditional SEA markets place a greater emphasis on trust.
But what is Trust? The study further broke Trust down into different elements – ‘a brand you can trust’; ‘has a positive impact upon society’; and ‘are honest and ethical in the way they conduct business.’ For some markets – Indonesia and Philippines, all factors were important in driving Trust.
Whereas for the developed markets of Singapore, New Zealand, and Australia, having a positive impact upon society was a significantly weaker driver of trust (75%, 73%, 74%, respectively) compared to Indonesia and Philippines (92% and 90%).
Being honest and ethical was also a weaker driver of trust for Australia (77%) compared to the study average (85%), and much lower than the Philippines (92%), again suggesting a difference in interpretations of reputation across markets.
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Successful Leadership
There were also clear differences emerging in the importance of Successful Leadership to reputation. For Philippines (89%) and Thailand (88%), though this remained the least important factor, it was significantly above the study average (82%). In contrast, for New Zealand (72%) and Australia (71%), there is a much weaker emphasis on Successful Leadership as a factor in reputation.
‘Successful leadership’ was broken down into three factors – ‘offer investors a good financial return’, ‘are typically the first to market with new products and services’, and ‘are well known’ – highlighted additional market differences.
Being well known came in particularly low for Singapore (58%), New Zealand (51%) and Australia (57%) compared to the study average (65%), but for Philippines (75%), Thailand (79%) and Vietnam (74%), this took on a stronger defining factor of reputation.
Offering investors a good financial return, was seen a more critical aspect of reputation for Malaysia (75%) compared to Australia (53%) and New Zealand (50%). This is not to say a good financial return is not important to Australasia, but is less likely to inform their understanding of a brand’s reputation.
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Market differences
There were also country nuances across the study. Such as, to Australian consumers nearly all factors of reputation fall away in comparison to Fairness – which was the most important single attribute for the market. Further underlining the ‘fair go’ mentality Down Under.
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The reputation ideal, versus brands they consider
The study also asked consumers what they considered to be reputable brands, and to rate these reputable brands on the same factors. In this way, the study was able to pick apart which factors people say are important to reputation in abstract, and which factors actually define brands they consider to be reputable.
Despite Successful Leadership being the lowest people’s abstract assessment of reputation, it actually came out as the biggest factor defining reputable brands mentioned – specifically being well known and being the first to market with new products.
This may suggest that while consumers pay lip service to broader ideas of reputation – such as limiting environmental impact – in truth a brand’s core business success defines its reputation. However, against this, one softer reputation stood out as being a core driver of reputation in abstract and as defining factor of reputable brands – having a positive influence on society.
It is true, then, that Successful Leadership does have a role to play in driving reputation, but to a very real extent a brand’s broader societal influence cannot be underplayed.
