Brand reputation takes its toll

How important is corporate reputation to success? A little? A lot? Or, the wise answer, only over time?

Nestling at the bottom of the Brand Index popularity measures (a leading consumer barometer of over 1000 brands, owned by You Gov) is McDonald’s, one of the world’s most successful retailers. Now it’s true that the McDonald’s brand has certain negative connotations in Europe: for example, it’s American for which, in the era of George Bush, read brash and overconfident. It has compounded this reputation over time by its hamfisted handling of the McLibel case. And latterly, despite a salad offensive, it has not really convinced us that it is anything other than Big Food incarnate, the arch-purveyor of trans fats and high calories to a generation of unsuspecting kiddies.

Has this unenviable reputation really damaged sales? Well, it’s true that the UK has not been its most robust outpost. But despite the dismal popularity ratings, UK sales have visibly improved lately.

Bernard Matthews must be hoping it can take a leaf out of the McDonald’s sales manual. In the last week or so, its popularity rating (never high, according to Brand Index) has plunged so low that it has actually overtaken McDonald’s to become the worst-rated brand in the index.

Matthews’ turkeys come home to roost
We should not be surprised. Bernard Matthews has been a case-book study of how not to weather a crisis. It either lied or was deliberately economical with the truth in disclosing the existence of imported Hungarian part-processed turkey carcasses, in the far from proven conviction that they could not be contaminated with the avian flu raging at the Holton estate. (Despite them carrying, spookily enough, the self-same strain of the virus.) And, to make matters worse, with indecent haste it has been allowed to resume production at the processing plant, built upon the self-same decimated farm estate.

No doubt this resumé does little justice to the complexities of the situation, not least the nightmare EU regulatory framework surrounding the crisis and the rather fragile science being used to influence important decisions. Nevertheless, it’s pretty much the view the public has arrived at, judged by their current aversion to poultry. Supermarkets, to take but one casualty of this crisis, must be ruing Bernard Matthews’ inept handling of the crisis, so inept in fact that its eponymous founder cannot, apparently, be bothered to make a public acknowledgement of it.

Cynicism won’t do
I say ‘inept’, but perhaps the correct word is ‘cynical’. Cynical, in that the turkey season is now over for the duration and Matthews may well believe, so short are people’s memories and so forgiving their natures, that by next Christmas the crisis will be well and truly forgotten. And – who knows? – perhaps that cynicism is justified for the moment. But longer term, the effect may be to implant in people’s minds a still stronger aversion to battery farming methods. Free rangers rejoice; Bernard Matthews, don’t count your chickens.

Others like Cadbury cannot afford to be so complacent. There is no ‘long term’ to worry about: the crisis is here and now.

Looking at the graph (a first for Noises Off), it appears I should eat my words. Last summer, I predicted that of the two crises simultaneously afflicting Cadbury and British Airways, the Cadbury one would have more serious consequences. In fact, to date, the graph shows exactly the opposite. In the wake of the Martin George fiasco, BA has had a number of very public setbacks, some of which will have affected consumers personally. The subsequent damage at Cadbury, though substantial, has escaped public scrutiny, allowing the company to recover in esteem. Rather like BP’s very serious governance crisis, it created a brief splash of publicity but has since been largely a matter for the cognoscenti.

Until, that is, last week. Cadbury once again demonstrated it had lost its grip in the (admittedly minor) Creme Egg labelling fiasco. Much more damagingly, it emerged the Food Standards Agency really is going to prosecute Cadbury, a big smack in the eye for any company – especially one that, historically, has prided itself on a Quaker conscience. The constant drip of revelation, guilt by association and innuendo will take its toll. BA, by contrast, may yet emerge from the clouds.

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