Corporate Reputation Affects Consumer Purchase Decisions

weber-shandwick-consumer-shopping-habits-us-uk-china-brazil-jan12.gif57% of US consumers say that they are increasingly checking product labels to see what company is behind the product they are buying, and the same proportion say they get annoyed when it is not obvious what company is behind a product, according to survey results released in January 2012 by Weber Shandwick. Roughly 2 in 5 US consumers also say they hesitate to buy a product when it is not clear what company makes them, and that they do research to learn about the companies that make the product they buy.

The proportions are even higher among developing country respondents: for example, 87% of Chinese consumers and 75% of Brazilian consumers say they are increasingly checking labels to see what company is behind the product they are buying.

Corporate and Brand Disconnect Triggers Negative Reactions

webershandwick-surprised-consumer-actions.jpg54% of the respondents in the 4 major markets studied (Brazil, China, the US, and the UK) said they have been surprised to learn they like a product made by a company they did not like, and almost all (96%) took action after this discovery. The most common action among surprised consumers was to stop buying the product (40%), followed by searching online to find what other products the company makes (34%). However, one-quarter changed their opinion to become more positive about the company, and 20% continued buying the product. Even so, 18% told others not to buy the product, while 17% made negative comments about the product or company to others.

Execs Align With Consumer Discussion Priorities

Data from “The Company Behind the Brand: In Reputation We Trust” indicates that the top 5 company discussion topics among consumers are how they feel about a product they have purchased (69%), the quality of specific companies’ customer service (55%), how specific companies treat their employees (45%), news about a scandal (43%), and how they feel about a company as a whole (40%).

Executives, for the most part, appear to be in sync with customer priorities: when asked how often their companies promote or communicate information about specific company issues, product quality (88%) ranked first, with company reputation (85%) closely following. According to Weber Shandwick, this reinforces the finding that corporate brand and product brand should be treated as equal partners in building reputation.

Word of Mouth Leading Influence on Perceptions

Meanwhile, word of mouth appears to be the leading influence (88%) when examining what impacts consumers’ opinion of a company, although online reviews (83%) and online search results (81%) are also highly influential, as are news sources (79%) and company websites (74%). Other notable sources of influence include awards and rankings (63%), leadership communications (59%), and advertising (56%). Social networks (49%) seem to have the least amount of influence: according to Weber Shandwick, this may be due to companies not yet fully embracing social media in a way that fully resonates with the public.

When executives were asked how important various communication channels are to their companies’ reputations, most agreed with consumers, with 94% citing word of mouth. Also highly rated were news sources (91%), company leader communications (91%), online search results (89%), company websites (89%), online reviews (89%), awards and rankings (88%), and advertising (86%). Once again, social networks appeared at the bottom of the list, although they were cited as influential by almost three-quarters of the executives.

Other Findings:

  • 87% of the executives surveyed completely or mostly agreed that a strong corporate brand is just as important as strong product brands. Among those, the leading reasons cited were that product brands can benefit from the overall reputation of the parent company (65%), and that people care about the companies behind the brands (55%).
  • 86% of the executives said they had increased their companies’ efforts to build reputation over the past few years.
  • Consumers appeared far more confident buying products from a company with an admired standing than from one with a positive share price forecast (53% vs. 21%). Executive were also more likely to say they prefer to see news of an admired standing than of a positive share price forecast (58% vs. 37%).

About the Data: The research was conducted in October and November 2011 among 1,375 consumers (ages 18+) and 575 senior executives in companies with revenue of $500 million or more. Respondents were located in 4 key markets: 2 developed markets (the US and UK) and 2 emerging markets (China and Brazil).