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Tech Brands Resilient to Reputation Challenges – Research Study


·         Despite privacy scandals and reputation challenges, consumers continue to rate tech brands positively as sector scores podium finish in global research study

·         Hotel brands rank #1 globally and in UK for overall reputation

·         Banking and telecoms brands close ranking, challenged by negative consumer sentiment and tech disruption

Consumers continue to hold the tech sector in high regard despite scandals tarnishing reputation of some industry giants, according to a global market research study by leading brand valuation and strategy consultancy Brand Finance. The sector ranks joint-third out of the 10 sectors covered in Brand Finance’s research, with a score of 7.0 out of 10 globally, and 6.8 in the UK, higher than that for banking, telecoms, and utility brands.

Steven Thomson, Insight Director of Brand Finance, commented:

“A strong brand reputation is a valuable asset for any business, driving higher customer acquisition, satisfaction, loyalty and advocacy, and the ability to sustain premium or full pricing. The net result is that strong brand equity is a significant contributor to business growth and profitability.”

In the UK, brands such as PayPal (8.0) and Samsung (7.6) enjoy very strong reputations, with Google (7.4) and Amazon (7.4) also in the top 20 out of over 200 tech brands assessed. The mistrust that consumers have developed towards Facebook (5.5) and Uber (5.1) does not erode trust in the sector as a whole.

Steven Thomson, Insight Director of Brand Finance, commented:

“Throughout 2018, tech brands have faced a number of reputational challenges regarding data privacy, corporate practices, tax avoidance, and market dominance. While individual brands have clearly lost their reputations as a result, this has not dragged the whole sector down. Distrust is only apparent where a brand has had a clear lapse in standards or service.”

Hotels Boast Five-Star Rating

Overall, the hotel sector boasts the highest score for reputation (7.3 globally and 7.1 in the UK), with premium hotel brands held in especially high regard, e.g. Mandarin Oriental scoring 7.6 for reputation, but also many mass chains, such as Premier Inn (7.5), receiving high marks from consumers around the world.

Steven Thomson, Insight Director of Brand Finance, commented:

“Across the world, hotel brands are considered more reputable than those in other sectors. It remains to be seen if the negative impact of the unprecedented Marriott data leak spreads to reduce trust in the hospitality industry as a whole, or if – similar to the situation observed in the tech sector – its toxicity will be limited to the brand in question alone.”

Banks and Telcos Lag Behind

Banking brands and telecoms providers continue to struggle to earn the respect of consumers, taking the bottom places globally (6.2 and 6.2) and in the UK (6.2 and 6.0 respectively). In banking, reputation is recovering only slowly since the days of the global financial crisis; in the UK, the average reputation score for banking brands was unchanged vs 2017, with perennial struggler RBS (5.0) still something of a toxic brand, and more recent problems such as the IT meltdown at TSB (5.7) holding back recovery of the sector overall.

As tech brands increasingly move into financial services, the banking sector generally appears vulnerable to encroachment – brands such as Amazon and Google enjoy significantly higher scores for reputation, innovation, and closeness. 

Telecoms providers are in a similar fix – rated lowest of all for overall reputation (6.0) and quality of service (3.2 out of 5). Brands in other sectors are more likely to be seen as ‘consumer champions’, and there is a significant degree of distrust of brands such as Vodafone (only 40% UK consumers trust this brand ‘a lot’ or ‘a little’). As tech and telecoms increasingly overlaps, the telecoms brands need to address this reputation challenge.

Autos Keep Up in the Race

Auto is another sector facing disruption by new technologies, but here the brands appear more resilient. Brand reputation is high, led by premium German brands such as Mercedes (reputation score 7.9 in the UK) and Audi (7.6), with Volkswagen still in recovery mode (6.8). Ratings for trust are matched only by hotels (trust score 61%). Crucially, auto brands also generally rate high for being innovative (at 27% second only to tech both globally and in the UK). From a branding standpoint, the auto leaders can hold their own if they continue to innovate and embrace radical new technologies.

Low-Cost Airlines Hit Turbulence

Airline brand reputation is somewhat mixed, hence the sixth-place ranking in the UK (reputation score 6.7). Asian and Middle-Eastern airlines, such as Emirates (7.6), have the best reputation in this sector globally and in the UK, but many respondents mark them down on ‘value for money’. The reverse is unsurprisingly true for Ryanair, which received the lowest reputation rating of all brands covered in the UK – only 4.5 out of 10.

ENDS

Note to Editors

Brand Finance’s global market research study examines customer sentiments across a variety of metrics, such as reputation, trust, and innovation, measured in 31 markets and 10 industry sectors. The results of the study are used to evaluate the strength and calculate the value of the world’s biggest brands.

Rankings of the most valuable and strongest brands are published in sector and country reports every year following the launch of the Brand Finance Global 500 report. The 2019 iteration of the Brand Finance Global 500 report will be launched on the 22nd of January at the World Economic Forum in Davos.

Brand strength is assessed through a balanced scorecard of factors (such as marketing investment, stakeholder equity, and business performance) and used to determine what proportion of a business’s revenue is contributed by the brand.

Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market.

Brand Finance helped craft the internationally recognised standard on financial Brand Valuation – ISO 10668, and the recently approved standard on qualitative Brand Evaluation – ISO 20671.

Data compiled in Brand Finance studies are provided for the benefit of the media and are not to be used for any commercial or technical purpose without written permission from Brand Finance.

Media Contacts
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k.jagodzinski@brandfinance.com

Sehr Sarwar
Communications Manager
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M: +44 (0)7966 963 669
s.sarwar@brandfinance.com

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About Brand Finance

Brand Finance is the world’s leading independent brand valuation and strategy consultancy, with offices in over 20 locations worldwide.

Brand Finance bridges the gap between marketing and finance by assessing the relative strength of brands and quantifying the financial value of brands. Drawing on expertise in strategy, branding, market research, visual identity, finance, tax, and intellectual property, Brand Finance helps brand owners and investors make the right decisions to maximise brand and business value.

Methodology
Brand Strength Measurement
Brand Strength is the efficacy of a brand’s performance on intangible measures, relative to its competitors. In order to determine the strength of a brand, we look at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance.

A key component of the index is the evaluation of brands from a customer standpoint. Brand Finance conducts a programme of proprietary market research to determine the degree to which brands are familiar, trusted and well-regarded, and connect with people emotionally.

Sector and Country Scope
Brand Finance conducted online survey research covering 31 markets and 10 industry sectors (airlines, auto, banking, beers, hotels, insurance, oil & gas, tech, telecoms, and utilities). Almost 1,700 global, regional, and local brands were assessed, providing full sector coverage of all major brands in a given country. NB: not all 10 sectors were covered in some smaller markets.

Sample Size and Profile
The research was conducted among a global sample of over 54,000 adults aged 18+. The sample was designed to be representative of the online population in each market. Fieldwork was conducted in partnership with major online research providers.

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