Enviable Reputations Are Built Around a Solid Theme - Article for DTC Perspectives

Comprehensive survey research on corporate reputation supports that building awareness around a relevant and easy-to-relate theme is key to developing a good reputation.

A recent study into views on various industries and large companies conducted by Ipsos among 2,000 American adults shows that the reputation of the pharmaceutical sector is much worse than that of most other industries -- second to last among 14 industries. However, certain individual pharmaceutical companies are highly regarded.

The Ipsos study shows that nearly as many Americans hold an "unfavorable" opinion of the pharmaceutical sector (32%) as have a "favorable" opinion (36%), while 32% are neither favorable nor unfavorable. Among other sectors measured, only the oil and gas industry fares more poorly (66% unfavorable vs. 17% favorable). At the other end of the spectrum, the food and beverage industry and the information technology sector enjoy enviable favorability scores of 67% and 64%, respectively.

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While the reputation of the pharmaceutical industry as a whole is relatively poor, individual pharmaceutical companies do far better--and some of them do better than just about all other companies in any sector. Individual pharmaceutical companies do not, however, escape criticism. Most negative comments directed toward individual companies are generic to the sector and mainly relate to an expectation of profiteering ("They are making too much money at the consumer's expense"; "They are interested in shareholders, not people who have limited incomes to buy medicines"; "They help drive up drug costs").

The reputation of individual pharmaceutical companies varies greatly and an individual company's overall level of goodwill is dependent on three factors: (a) the extent to which it is known, (b) whether its image is built around a relevant and consistent theme, and (c) the degree to which it is recognized as socially responsible.

a. The extent to which it is known

Ipsos' research consistently shows that, except in sectors that are reviled (as is the case of the energy sector these days), familiarity tends to breed favorability. Even in the pharmaceutical industry, the most favored companies are often those that are best known and have developed awareness and goodwill over many years ("I grew up with it. My mother used it").

Familiarity among the general public does not just result in high favorability. It also results in higher ratings on indicators spanning products and services, ethics, management and communications. While those who know companies "very well" are marginally more likely than others to express a negative opinion about a company's performance in specific areas, they are also far more likely to express a positive opinion on most areas.

b. Whether its image is built around a relevant and consistent theme

Companies with the strongest reputations have a top-of-mind "theme" that is unique to them. The theme often takes the form of a flagship product, service or target market--even if, in some cases, that product or market accounts for only a fraction of the company's total business. In judging companies across a variety of indicators, the public can latch on to this theme as a point of reference.

The best regarded pharmaceutical companies have developed their theme around their OTC rather than Rx products. Ipsos compared scores on a variety of reputation metrics for four pharmaceutical companies, all with a strong presence in both OTC and Rx. Among them, two have a corporate trademark that is also a well-known OTC brand (consumers spontaneously refer to these products when asked about the companies' main strengths), while the other two have corporate trademarks associated exclusively with Rx drugs. The two pharmaceutical companies whose trademark is a well-known OTC brand enjoy high reputation scores that are similar to those of the leading CPG and food/beverage companies. They both escape the main criticism of the sector i.e. profiteering. In contrast, the two pharmaceutical companies whose trademark is not associated with a well-known OTC brand receive average-to-low reputation ratings.

Q. Now please rate the performance of [COMPANY] for value for money?

c. The degree to which it is recognized as socially responsible

Over and over, Ipsos' research shows that social responsibility is a key driver of reputation. Most importantly, negative perceptions about a company's social responsibility can generate very damaging word of mouth. Awareness of corporate social responsibility practices and programs can help companies improve, or at least protect their good name. Ipsos provides a research-based list, or a "roadmap", of eight responsible corporate behaviors that applies across all sectors:

Corporate Responsibility Roadmap for the American Public

1. The company provides quality products and services at a reasonable price, i.e., it doesn't come across as making excessive profits at the expense of the consumer;
2. The company provides universal access to its products and services, i.e., it doesn't discriminate against sections of society because of their wealth, age or geography. This is especially pertinent for financial service, telecommunications and pharmaceutical providers;
3. The company treats its employees well (both at home and abroad);
4. The company's activities are not detrimental to the environment;
5. The company communicates clearly about its business, products and services so the consumer is able to make an informed choice. Companies with an overarching corporate brand, especially those in consumer goods, are expected to create awareness of their product portfolio;
6. The company is smart and respectful in its sales, marketing and advertising, i.e., it doesn't adopt aggressive sales techniques, excessive mailings or irresponsible advertising that targets children;
7. The company supports the local economy by sourcing US products and labor (especially so for the retail and automotive sectors);
8. The company is committed to innovation (particularly if it is in technology or pharmaceuticals).

Corporate social responsibility initiatives provide the best return on a company's reputation when they are in sync with the company's theme. The most notable example is that of Johnson & Johnson, a highly-regarded pharmaceutical company whose theme could be summed up as "caring for the health and well-being of families": CSR efforts focusing on care giving, disease prevention and relief efforts at home and abroad undoubtedly reinforce the "caring" image of the company.

Research Methodology

Online interviews were conducted as part of Ipsos' I-Rep program between July 27 and August 2, 2006 with a nationally representative sample of 2,024 adults aged 18 and over from Ipsos' U.S. internet panel. The research investigated the performance of 30 major companies from a variety of sectors on a range of reputation metrics.

About Ipsos Public Affairs

Ipsos Public Affairs serves the needs of American and international organizations with non-partisan and objective strategic research on social and political issues, communications and corporate reputation among both stakeholders and the general public. It has offices in New York City, Washington, D.C., Chicago and Seattle and other cities around the world. Ipsos Public Affairs is the polling partner of The Associated Press, the world's oldest and largest news organization. Ipsos Public Affairs is an Ipsos company, a leading global survey-based market research group with over 6,000 research professionals in 45 countries. To learn more, visit: www.ipsos-na.com/pa/us/