Parent company reputation drives consumer product decisions: global study

The study, conducted in fall 2011 by KRC Research, surveyed 1,375 adult consumers and 575 senior executives in companies with revenue above $500 million across four important markets: the US, the UK, China, and Brazil.

Other key findings from The Company behind the Brand: In Reputation We Trust include:

• 70 per cent of consumers check product labels to determine the identity of the parent company
• 67 per cent get annoyed and 56 per cent hesitate to buy a product when they can’t determine the parent company
• 54 per cent report being surprised to learn the identity of a product’s parent company, with 40 per cent of the surprised shoppers saying they stopped buying the product
• 69 per cent regularly discuss products they have purchased, but are also likely to discuss customer service, how a company treats employees, scandals or wrongdoing, and the company’s overall reputation
• More consumers (43 per cent) are likely to discuss negative news than corporate good deeds (37 per cent), environmental efforts (31 per cent), or community service (29 per cent)

Of interest to marketers and advertising professional in Asia, Chinese respondents exhibited a markedly stronger tendency to seek out the identity of corporate parents, and to base their buying decisions on factors such as the parent company’s environmental stance (see table below).

Executives responding to the study were well aware of the importance consumers place on corporate reputation, with 87 per cent agreeing that corporate brand carries as much weight as strong product brands, and 65 per cent agreeing that product brands benefit from the overall reputation of the company. As among consumers, these associations were even stronger among Chinese executives, with 96 per cent agreeing that product and corporate brands carry equal weight.