Companies That Retool Reputation See Stock Boost

Businesses with better reputations reap rewards in the stock market, reports BusinessWeek. This graphic shows how some company’s stock would appreciate if the companies had more street cred. A spin campaign won’t do the trick, though, reputation is based on concrete action…

If there is a negative image based on a poor record of reliability, safety, or labor relations, “please don’t hire a PR company to fix it,” says strategy professor Phil Rosenzweig…”Correct the underlying problem first.

Do good things, and then tell people about them.

What Price Reputation? [Business Week] (Thanks to FMF!)

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  1. tcp100 says:

    Can I please repeat this part:

    “please don’t hire a PR company to fix it,” says strategy professor Phil Rosenzweig…”Correct the underlying problem first.

    Businesspeople, please repeat this mantra:

    Just because Marketing says so, doesn’t make it true.

  2. strandist says:

    I can understand the change in reputation for all of those except Pepsi/Coke. Does Pepsi have more street cred than Coke? Granted, I’ve not seen much outside of Atlanta (i.e. Coke Capital of the World) and North Carolina, but it always seemed to me that Coke was viewed as the more premium/premier brand.

  3. Hawk07 says:

    @strandist:

    I think it more has to do with the way they run their businesses and the way they’re viewed by the public and investors. Look at Wal-mart vs. Target. Wal-Mart is a lot larger, but Target is considered to be like Wal-Mart, but cleaner, friendlier and better quality products.

  4. capnfive says:

    pretty sad that wells fargo is the reputation standard for banking… closing my account there was a happy day for me.

  5. Hawk07 says:

    Another thing, from my experience, Pepsi has always been internally the better brand. Coke is more well known, but Pepsi has been the much better investment for quite some time. Coca-Cola has remained relatively stagnant as of lately while Pepsi has done considerably well marketwise.

  6. Tallanvor says:

    @strandist: Coke as a more premium product? I wouldn’t have thought many people would consider either of them as being a premium brand (well, except as compared to swill like RC).

    According to the link, “Coke’s superior brand and distribution strengths, CCW believes, are overpowered by the perception of endless management and performance struggles since the death CEO Roberto Goizueta nearly a decade ago.”

    I don’t know how that translates into “public perception” though… I think they’re probably more concerned with investor perceptions.

  7. foghat81 says:

    CVS Walgreens. Of course, I could be biased b/c I live in the town next to Revco’s* old HQ.

    *Revco was a large regional chain purchased by CVS in 1998 and had a near-lock on the area. Walgreens barely even showed up until shortly after the buyout/name change.

  8. kerry says:

    I’m actually a little surprised by the Walgreens/CVS comparison. I grew up with Walgreens, and encountered CVS while in college on the east coast. Now that they’ve moved into the midwest, I find their stores to be cleaner, friendlier and more convenient than Walgreens, which seems a little staid and outdated by comparison. Seems almost similar to the perceived differences between Target and Wal-Mart.

  9. tcp100 says:

    @kerry: Walgreens is more of a “older reputation” thing; there’s probably a comfort associated with it. I’ve personally never seen a big disparity between CVS and Walgreens, nothing compared to the difference between say Target and Wal-Mart. I think the differences between Target and Wal-Mart are -huge-, whereas CVS and Walgreens, I can take or leave either – depending on the store.

    (We’ve got a really crappy CVS next to us ,and two more within a mile that are great.. The Walgreens back home is just as nice as the nicest CVS, though.)

  10. foghat81 says:

    half my comment got whacked. odd.

    either way, i agree w/ Kerry. The point i was trying to add was that around here Revco was the really big dog and Walgreen only showed up a few yrs back after CVS bought Revco. Almost all our suburban stores are new and I find little difference in the stores themselves. I stick w/ CVS b/c I’m used to them and for the Extra Care Bucks deals!

  11. nlatimer says:

    Coke vs Pepsi? I choose Coke. But neither one can hold a candle to Jones.

  12. nachas101 says:

    Welcome to the land of fudged numbers…
    Whenever I hear or read stories like this, I always say: Prove it.
    Yeah, yeah, yeah – Final four costs employers billions! This costs billions, the next thing costs millions.
    Horsesqueeze.
    Not one way to prove definitively that reputation could actually affect market value.
    Gee, if only CVS had the reputation of Walgreens.
    Ummmm, am I the only one who remembers the thousands of mom and pop pharmacies that were put out of business by Walgreens AND CVS?
    What reputation?

  13. rmz says:

    I’m an RC Cola kind of guy, myself. Shame you can’t find it very easily in restaurants these days anymore. :(

  14. Greasy Thumb Guzik says:

    Since I’m in Chicago & Walgreen’s has owned Chicago for decades, now that CVS has come here in a big way I see what I’m missing.

    CVS charges more for everything & I do mean everything.

    Anytime you have a high value coupon at CVS, the cashiers have to get a manager to OK it.
    Not at Walgreen’s.

    I’ll stick with Walgreen’s, I save money that way.

  15. azntg says:

    My neighborhood is just saturated with pharmacies. There is at least 9 competing pharmacies within a 10 block radius of my house (only counting chain pharmacies and not including local pharmacies).

    My 15 years of living in the same neighborhood, I’ve saw Genovese (which became Eckerd which became Rite Aid), Walgreens, Rite Aid, Duane Reade, Eckerd and most recently, CVS. As a matter of fact, I’m wondering what’s going to happen to the two Rite Aid stores, which are right next door to each other (the older of the two was once Genovese and the newer of the two was a Rite Aid).

    I think the “If [company one] had the reputation of [company two]” concept is BS. Nothing ever plays out that way in real life, ever! It’s only reality in the contorted dreams of marketers

  16. Shadowman615 says:

    @rmz: When I was in college I worked for a short stint at an Italian restaurant that served RC Cola. I clearly remember one lady who threw a fit about how “…so many Italian Restaurants were serving RC just to be trendy these days! Bring me a coke or nothing at all!” I still don’t know what the hell she was talking about, but funny nevertheless.

  17. Shadowman615 says:

    Wells Fargo? The same Wells Fargo that funds all of the payday loan places? [consumerist.com]

    I don’t know why this article thinks they have a better rep than Wachovia.

  18. satyricrash says:

    Reputation? Pepsi always seemed like embarrassing trailer trash to me, whether it was their advertisements or their marketing or brand designs or their sweeter, more syrupy taste. Huh. But I’m not Gordon Gecko, so what do I know.

  19. Avery says:
  20. AcidReign says:

    .
    .
    &nbsp &nbsp Pepsi has extremely rigid quality standards. And, they make Mt. Dew and Sierra Mist, too. Mt. Dew is where most of that growth comes from. Also, Pepsi owns Frito-Lay, too.

  21. Thrust says:

    Seeing a lot about Coke n’ Pepsi… Coke itself wins against Pepsi (tho I side with the blue can), but Pepsi’s OTHER flavors outsell Coke (7up, Dew, Crush, etc)…

    Pepsi is also winning on the restaurant end. McDonalds’ deal with Coke is perhaps the most lucrative one in the whole soda industry, but Pepsi goes for volume. Pizza Hut, KFC, Arbys, Harveys, Dominos – Vs Coke’s A&W and McGutrot.

  22. AcidReign says:

    &nbsp &nbsp 7up’s NOT a Pepsi product. They are part of Cadbury Schwepps, which also owns Dr. Pepper. Pepsi’s lemon-lime drink is Sierra Mist. Naturally, it’s sweeter.

  23. silent-tone says:

    PepsiCo & Frito Lay products (Pepsi, mountain dew, gatorade, aquafina, sobe, tropicana, quaker, some starbucks stuff) have experienced significant growth in the past year in the U.S. It was something like 4 times the overall population growth. In most countries outside of the United States Pepsi is a more popular brand than Coca Cola.

    Also, Pepsico is a fairly responsible company. They provide decent benefits to employees, 100% charitable donation matching, health conscious changes to their products, a few months ago, became the largest green energy purchaser in the nation, by buying credits for all of their north american offices and manufacturing facilities. Full disclosure: I’m employed by PepsiCo.