/ 30 May 2012

South Africa’s most-respected companies

Woolworths is one of the companies that South Africans respect the most.
Woolworths is one of the companies that South Africans respect the most.

Take a bow, Coca-Cola South Africa. After all the questions have been asked and answered and all the numbers crunched, it again takes the number one spot in the Top Companies Reputation Index. It scored 88 out of a possible 100 points that incorporate all aspects of reputation: brand, trust as an employer and corporate citizen as well as trust as a source of products and services.

It is a remarkable achievement for the company to build such an incredibly strong brand around a product that comprises little more than water, sugar, flavouring and bubbles. Luckily, margins on the soft drink are pretty good, allowing Coca-Cola to invest heavily in brand publicity and corporate social investment, and sponsoring things close to our heart, such as sport and music events.

In terms of the category for spontaneous association with a good reputation, Pick n Pay took top spot. Congratulations, Nick Badminton and team. He may have resigned from Pick n Pay in a surprise move in February, but his leadership of the company over the past five years has resulted in it being spontaneously recalled by 26% of consumers as having a good reputation. This put it streets ahead of its nearest challenger, Woolworths, followed by Edcon, Vodacom, Coca-Cola, Standard Bank, Shoprite, Absa, MTN and FNB (It is interesting to note that Checkers, the more premium brand in the Shoprite Group, came in a long way behind its big brother, the budget-minded Shoprite chain.)

The fact that Pick n Pay did so well in this category should be heartening news to its shareholders. The company has been placed under the microscope by investors and analysts as its share price has languished and market share fallen. But shoppers, although perhaps buying their bread, tea and toilet paper from the competition right now, still have a soft spot and deeply seated trust in this supermarket chain, providing fertile ground for a big turnaround.

Familiarity
Interestingly, Pick n Pay is also second only to the government of South Africa in terms of familiarity – 98% of South Africans know about it, compared to 94% for Shoprite.

And then there are the companies that have managed to anger consumers. After all, for every happy customer there is an outraged former customer. Asked which companies come to mind in terms of bad reputation, Shoprite (19%) is far ahead of the next group on the list, Edcon (7%). Pep, Eskom, Cell C, Absa, Pick n Pay, Spar, African Bank and the government follow, each with only a small percentage of naysayers.

It is important to note that the spontaneous association with reputation category is quite distinct from the rest of the research. In the latter, respondents were grilled on specific companies they knew well, whereas in this category it was any company that came to mind.

Spontaneous association with a good reputation is more important than many companies may believe: it actively changes buying decisions. Eighty percent of people said ”yes” to the question: Did you specially choose to buy from a company because you believe it has a good reputation? This was up from 74% last year. Asked whether they would specifically avoid buying from a company with a poor reputation, 51% said they would, up from 44% last year.

The percentages possibly reflect the growing activism among consumers to punish brands they feel are not behaving properly, as well as that people become more conservative in their buying decisions when times are tight economically.

So although Coca-Cola won top honours overall in the scientifically calculated Top Companies Reputation Index, Pick n Pay was lauded as the company South Africans trust most with their gut.

 

M&G Newspaper