Brand names are important to companies no matter their line of business. A well-respected brand name can provoke images of quality, good nature, and reliability. So it’s no wonder large corporations regularly spend millions of dollars per year to improve their brand images. A study conducted by CoreBrand and reported on by Yahoo! Finance sheds some light on who has the most, and least, respected brand names.
Business advantages and disadvantages
Some companies have an advantage in brand name simply based on what they do. The Hershey Company (NYSE:HSY) ranks as the third most respected brand name, given a boost by the fact people tend to like chocolate. Other names in the top group have products people generally like using. Examples include The Coca-Cola Company (NYSE:KO) and PepsiCo, Inc. (NYSE:PEP) (soft drinks), Harley-Davidson, Inc. (NYSE:HOG) (motorcycles), and Johnson & Johnson (baby products).
But not every line of business comes with an inherent brand likeness. Few would be shocked to see Philip Morris, a subsidiary of Altria Group Inc (NYSE:MO), as part of the least-respected brand list. But the tobacco company is second to Delta Air Lines, Inc. (NYSE:DAL) on the list. Because of negative impressions, and the sometimes harsh realities of airlines, large segments of the population generally dislike passenger airlines. Some of the other names making this list aren’t too surprising, either: J.C. Penney Company, Inc. (NYSE:JCP) with its recent retail rebranding problems, H&R Block, Inc. (NYSE:HRB) in tax preparation, and Capital One Financial Corp. (NYSE:COF) in financial services and credit cards.
We all know the importance of a good brand image, and it’s clear that the major corporations do as well. While watching TV it’s fairly common to see some company trying to show off its good side, whether it’s Bank of America Corp (NYSE:BAC) helping small businesses or BP plc (ADR) (NYSE:BP) cleaning its oil off Gulf beaches. But we have to compare all of these companies with their peers, not just other corporations. After all, people aren’t going to switch from Delta Air Lines, Inc. (NYSE:DAL) to The Hershey Company (NYSE:HSY)’s chocolate.
On the respected-brand-image side, The Hershey Company (NYSE:HSY) is capitalizing well on the public’s love of chocolate. The fact that people don’t explicitly dislike Hershey should help in preventing customers from jumping to other brands, but with many other competitors in the field, there are many other chocolate producers to love. Quite likely, many smaller producers also have their own followings, with at least as much brand dedication as people have to Hershey. And if the chocolate-loving tastes of the public are what drove Hershey near the top of the list, it would only make sense that rivals would also have respected brand names. Clearly, the Hershey brand name has value: Millions instantly recognize it. But its high ranking is most likely driven by a general public fondness for chocolate, particularly Hershey’s chocolate. However, in a nation of chocoholics, this is still a highly prized position.
Moving to the least respected brand names, it’s quite easy to see how Phillip Morris captured its title. Tobacco companies are frequently invoked as pictures of corporate greed, deceptive advertising, and an indifference to human life. But from a purely financial point of view, a public dislike of the Philip Morris brand name is not a major threat to a company that competes with similarly disliked peers. And unlike other companies where customers can easily jump ship, Philip Morris’ products are addictive in nature. Customers could choose an alternative tobacco brand, but a general dislike of tobacco companies would limit the consumer’s perceived benefits of switching. For this reason, I don’t consider Phillip Morris’ position among the least-respected brand names to be a threat to its sales.