Company name is everything

Image can be fragile, elusive in the corporate area with perceptions hard to change

October 30, 2005|By ANDREA K. WALKER | ANDREA K. WALKER,SUN REPORTER

One minute, you're one of the most profitable companies in the country, riding a wave of success. The next, you're the face of corporate misdeed.

The attention that continues to dog Wal-Mart Stores Inc. over its labor practices and McDonald's Corp. over nutrition reflects the predicament that a handful of the most famous companies face when their names, once synonymous with business success, become shorthand for misbehavior and fodder for late-night TV comedians.

"Once you perceive a culture in a certain way, people don't change their perceptions very quickly," said Eugene Fram, a marketing professor at the Rochester Institute of Technology College of Business.

From John D. Rockefeller's Standard Oil Co. to "Big Tobacco" to Microsoft Corp., many iconic brands over the decades have faced and sought to counter such public-enemy perceptions, whose origins are at times self-inflicted. The Internet has heightened the ability of critics to cast a company as evil - and of companies to counter the portrayals.

Some of these companies have mounted successful efforts to counter criticism. It's not a coincidence that the attempts often coincide with a need to rejuvenate the bottom line. Marketing experts say companies are wise to confront such situations head-on. Some image problems persist in spite of responses; others seem to fade with time.

"At the end of the day, reputation management is the most important thing that a company can engage in," said Sandy Hillman, who helped state Comptroller William Donald Schaefer build Baltimore's image when he was the mayor and now heads the public relations practice at Trahan, Burden & Charles Inc.

"There's nothing more important than to protect your reputation."

Wal-Mart acknowledged its negative vibe this year when it began what for it was an unprecedented public relations blitz. The world's largest retailer opened its Arkansas headquarters and made top executives available to the media after a succession of damaging reports describing accusations of discrimination and the chain's use of illegal immigrant workers. Early last week, Lee Scott, Wal-Mart's chief executive officer, encouraged Congress to adopt a higher minimum wage, and the company announced new environmental standards and better accessibility to its worker health plan.

But the company's image was retarnished by midweek after an internal company memo that examined ways to cut health care costs, including discouraging older people from working there, was first publicized by The New York Times. Practically overnight, the company's efforts to be viewed as a good corporate citizen were dismissed as talk.

A Wal-Mart executive said its strategies weren't adopted with bad publicity or pressure from outside groups in mind.

"These are things that are good for our customer and our business," said Andy Ruben, a vice president at Wal-Mart responsible for implementing new environmental standards. "... Our image will be what our image will be."

Others say organized campaigns can pressure change.

"We think this is a definite sign that our campaign is working," said Nu Wexler, a spokesman for Wal-Mart Watch, a Washington nonprofit affiliated with organized labor aimed to draw attention to Wal-Mart, whose workers are not unionized. "We're skeptical, but the environmental piece in particular is a step in the right direction."

McDonald's has faced a similar challenge. After sagging sales, it launched a new image-building campaign in 2003 with a new slogan and customer service improvements, such as assuring clean restrooms and getting back to basics that were integral to the franchiser's long success. A stale image and a public perception that it was partly responsible for the country's growing obesity problem created a double whammy. A 2004 documentary, Super Size Me, about filmmaker Morgan Spurlock's ill-health effects after eating McDonald's daily for a month, solidified the perception.

Last week, the company announced it will put nutrition labels on its products. It promoted the move as an advance but also rekindled discussion about its role in fattening America.

"I think if the climate were not so hyperactive about food companies taking responsibility for feeding their consumers healthier food, it probably wouldn't have happened," said Ron Paul, president of Technomic, a Chicago food-consulting company. But, he said, "I don't think it's coming from a large outcry from consumers."

Sometimes the negative imagery is more in the minds of interest groups, politicians and the media than the larger, consuming public. Regulators' pursuit of Bill Gates' Microsoft Corp. did little to hurt the company's long-term profitability, although it generated negative headlines for years about a threatened breakup.

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