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The Age of

Earned Trust:
MSLGROUPs Reputation
Impact Indicator Study
[China Edition]

The MSLGROUP
Reputation Impact Indicator
A major global survey and report that
combines both intuitive and rational
dimensions when studying the
reputation of leading multinationals.

Foreword
The reputation of a corporation is its license to
operate. It has a decisive impact on the success
of the organization and is generally regarded as
one of its most important assets. And yet, we
would argue, there is clearly a need for a much
deeper understanding of the multifaceted
elements that contribute to corporate reputation
than currently exists today.

Anders Kempe
EMEA President for MSLGROUP

MSLGROUP has chosen to take a somewhat atypical approach to the


study of reputation. Moving beyond simple rankings, or analyses of
drivers of reputation alone, we take a more holistic look at how a
company must act to build a strong reputation that can facilitate success
over time. The result of our research is this, the Reputation Impact
Indicator study, part of MSLGROUPs ongoing eorts to create better
knowledge and tools for corporations to better understand how they can
inuence their reputation.
In the study, we have chosen to look at corporate reputation among a
global general public. General public, because how they, as consumers
and citizens, view corporations has a substantial and increasingly
important impact on how other audiences view them. Global, because we
live in an always on and on-demand world, where dierent audiences
are constantly connected to each other. Today, more than ever, a multistakeholder perspective is necessary.
Among many new ndings, the study also conrms a long-held
assumption: actions speak louder than words. The factor with the largest
impact on an organizations reputation is simply how well it delivers its
products and services, and if they are delivered in an ethical manner (you
can of course follow rules and legislation, yet still fail in the court of the
public opinion). In short, the study conrms that being perceived as a
company that consistently delivers high-quality products and services in
an ethical way is what matters most when it comes to building and
maintaining a reputation.
If actions do speak louder than words then does this mean that
communication is of less importance in the building of reputations than
we may have thought? No, on the contrary communication has a very
signicant role that should not be underestimated. Not least when we
consider, as our study shows, that while brands may be global, corporate
reputation is most denitely local. Assuming broad brand awareness
across multiple countries for the well-known global brands covered in the
study, it seems clear that how a company communicates with people in
dierent countries or regions inuences what those people think of a
company, how robust its local reputation is. In this sense, we should think
of global corporate reputation as the sum of a company or brands local
reputations.

The MSLGROUP
Reputation Impact Indicator
A major global survey and report that
combines both intuitive and rational
dimensions when studying the
reputation of leading multinationals.

Foreword

Our study ndings


underline that it is this more
qualitative approach to
brand awareness that is key
to establishing a robust
reputation. And authenticity
and engaging storytelling
are undoubtedly at the heart
of any such approach.

Underlining our commitment to a more holistic view of corporate


reputation, we analyzed how people retrieve the information that they then
use to form an opinion about a company. What we found is that this is
largely an intuitive process, and that abstract knowledge about a
company is not enough to engender a strong reputation in the publics
minds eye. A signicant part of a companys reputation is a matter of
instinct, based on how relatable that company feels. We refer to this as
the Mind Space the company occupies. Here, communication plays an
important role, as an organization needs to communicate its actions
repeatedly and engage with its stakeholders, so as to build clear
associations linked to its core business that can easily be held in a
persons mind. Our study ndings underline that it is this more qualitative
approach to brand awareness that is key to establishing a robust
reputation. And authenticity and engaging storytelling are undoubtedly at
the heart of any such approach.
That an organizations reputation is shaped most by intuitive, gut-felt
pieces does not however mean that reputations can be quickly built.
Instead it means that we have to think in advance: always have the
communicative aspect in mind when making business decisions.
MSLGROUPs Reputation Impact Indicator study is an attempt to dissect
corporate reputation, to study the components of which it is made up, and
to then take a holistic view of each ones relative impact on reputation at
both a global and industry level. I hope you nd the report to be inspiring
and thought-provoking reading.

Kindly,
Anders Kempe

Introduction
Globalization has eliminated many boundaries
to create a more interconnected world. It has
also played a part in enabling companies to
become global brands and conduits of these
connections.
We live in an era where McDonalds, Coca-cola, and Starbucks could be
found just about anywhere in the world, and the companies work very
hard to make sure the same product and quality of service can be found
regardless of location.

Daisy Zhu
Managing Director
for MSLGROUP China

Cultural dierences aside, though, local, highly personal experiences can


greatly aect perceptions of those very same global brands. This is the
premise in the rst-of-its-kind MSLGROUP Reputation Impact Indicator
study in which China is included.
China, along with our new world peers India, Brazil and South Africa,
tops the charts with our signicantly higher Reputation Core scores, that
is we are more optimistic about companies than the developed Western
old world. When a nation is growing and prospering, its understandable
its people would have a more positive outlook. But that doesnt mean we
are less demanding.
A more condent China means companies face greater pressure to earn
the trust of its people. Across the four industry clusters targeted in the
study (pharmaceutical, Internet, FMCG and consumer electronics), China
rated delivering on promises and good customer service as the top drivers
of corporate reputation with respect to customer relationships.
Furthermore, all industries in China oered some level of participation for
customers to create new products and services. None of these items were
signicant at the global level.
The Chinese public is also rigorous about corporate behavior with acting
ethically and being a positive inuence on society the primary drivers of
reputation. Environmental care is particularly important in China, too.
The groundbreaking piece in this study is Mind Space and the
relatability of companies. We can all agree that a companys hardware
the products and services drive much of our opinions about an
organization but its the software the vision, the social responsibility,
the relationships that turns customers into admores or adversaries.
From the study we see that Chinese consumers are demanding better
corporate software and leading the charge in some industries.

Introduction

Overall this study validates some ideas about corporate reputations and
provides a fresh perspective on Chinese views about companies and
brands. More importantly, it provides us with a more plausible metric for
communicators to achieve business goals. This fullls our
Business-Driven Communications positioning. Communications may be
an art but the Reputation Impact Indicator and Mind Space provides the
science. Through our study we can advise communications practitioners
and stewards of corporate reputations on the why and how they can
preserve or enhance their reputations in dynamic China, foster enduring
relationships with stakeholders and contribute to the betterment of
Chinese society.
I hope you enjoy this report and it stimulates new thinking and actions for
you!

Kindly,
Daisy Zhu

Executive Summary

The ndings provide


insight into what drives the
general publics views of
some of the worlds
best-known global
corporate brands.

In the Age of Earned Trust companies need a


holistic approach to build a strong reputation
that can facilitate success over time. The
MSLGROUP Reputation Impact Indicator is
the rst-of-its-kind global study of the general
public to nd reputation trends on a macro and
industry level, as well as lay the foundations of
a reputation framework for additional future
research and insight.
This report highlights the China ndings and summarizes the global
study1. The results provide insight into what drives the views held by the
general public of some of the worlds best-known global corporate brands.
MSLGROUP also carried out in-depth analysis of reputation drivers within
four industry clusters, to study the relative impact of each for a given
industry, and the dierences between the four industries. The selected
industries cover the pharmaceutical, consumer electronics, FMCG and
Internet-based businesses sectors.
The key ndings from the global study include:
The main dimensions driving corporate reputation today are the
perception of a companys products and services, and that companys
business behavior: How well is the company delivering on its core
business promise - represented by the products and services - and is it
seen to be doing so in an ethical, transparent way.
At the industry level there are clear dierences in the relative impact of
dierent reputation drivers within each dimension, e.g. corporate
behavior is signicantly more important in the pharmaceutical industry
compared to the other three industry clusters studied, underscoring the
importance of fact-based input for reputation management.

1.
The eld research was conducted during the last
quarter of 2014, by means of a survey on a
statistically validated sample of the general public in
10 countries, totaling 26,467 qualied respondents.
The survey was complemented with analysis of
social media content for 10 selected companies.

Executive Summary
Reputation drivers linked to actual consumer experience have greater
signicance than corporate reputation when evaluating Net Promoter
Score (NPS). Unsurprisingly, there is a clear correlation between
corporate reputation and NPS, and the most important driver for both is
how well a company is perceived to deliver its products and services.
A strong Mind Space can engender a robust corporate reputation.
There is a correlation between how easy it is for respondents to mentally
associate with a specic company or brand its relatability - and
reputation. High brand awareness alone is not enough. The ideas,
images, feelings one associates with a given company need to be easy
and quick to draw upon, positive in sentiment, and linked to that
companys products and services. Companies that have this clearly
dened Mind Space will enjoy a more robust corporate reputation, while
companies that do not easily invoke such mental associations, or invoke
neutral rather than positive associations, will have a weaker reputation.
There are also dierences for which factors have the largest impact on
reputation between respondents with positive, neutral and negative
associations. For the former, the perception of products and services is
most important, but for the latter group aspects of corporate behavior play
a more signicant role.
Important discoveries from the research:
An optimistic new world versus a skeptical old world. Contrary to
traditional thinking, China, along with new world peers Brazil, India
and South Africa, has a more positive perception of companies than
counterparts in North America, and particularly Europe, where
respondents can be said to demonstrate greater skepticism towards
companies in general.
Brands are global, corporate reputation is local. There are large
variances in the reputation of individual companies at a country level.
Even though a brand is recognized globally, the reputation of the
company is local.
Social media content reects the relative importance of the
reputation dimensions. A large majority of discussions online are
about topics related to company products and services, and this is also
the area with most un-aided engagement. A majority of negative posts
online are related to corporate behavior, conrming the negative impact
of this dimension.

The Study
and yet, we would argue, there
is clearly a need for a much
deeper understanding of the
multifaceted elements that
contribute to corporate reputation
than currently exists today.

Anders Kempe
President, EMEA, MSLGROUP

The Study

Given the sheer volume of


data that now washes across
our screens, it would stand to
reason that a customers
view of a company or brand
is now necessarily arrived at
more quickly, and therefore
intuitively, than in days past.

A New Age, A New Charter for Reputation


With the ever-increasing volume of communication and number of
information channels around us, it is crucial that companies use
fact-based input to evaluate which elements have the largest impact on
their reputation. These factors will of course vary across industries and
markets, and also depend on the audience.
Given the sheer volume of data that now washes across our screens, it
would stand to reason that a customers view of a company or brand is
now necessarily arrived at more quickly, and therefore intuitively, than in
days past. Most reputation modelling or reporting assumes a rational,
deliberative model. None have tried to quantify a more intuitive approach,
let alone gure out how rst impressions turn into long-held views. And
this is one issue at the heart of MSLGROUPs Reputation Impact Indicator
study: How does the intuitive, gut-feeling view an individual holds about a
company impact upon that companys reputation?

The Study

A New Reputation
Framework Combining
Rational Response with
Intuitive Associations:
The MSLGROUP
Reputation Impact
Indicator
Robert Gelmanovski

The MSLGROUP Reputation Impact


Indicator is one of the rst studies to
examine the link between spontaneous,
intuitive associations with companies
and a more deliberate and rational
response to statements about
companies. We aim to layer intuitive
brand associations and expectations
over a more traditional, deliberate
reputation measurement approach with
this study.

The research also sheds light on the


drivers of corporate reputation and the
challenges of managing corporate
reputation from a global perspective.
This has been achieved through a
detailed exploration of the drivers of
reputation and the relative signicance
of each driver across industries and
markets.
The resulting model, the Reputation
Impact Indicator, is based on a
Reputation Core consisting of three
questions:
Do you like company x?
Do you trust company x?
Do you respect company x?

ABOUT THE RESEARCH


The research behind the Reputation Impact
Indicator was designed by Robert
Gelmanovski, a researcher in reputation
management at the Royal Institute of
Technology in Stockholm (KTH) who is
aliated with MSLGROUP in the Nordics, and
Dominic Payling, Director and Head of
Planning & Insight at MSLGROUP in London,
alongside a reference group of senior
consultants from MSLGROUPs global
network.
The research was then conducted by Robert
Gelmanovski.
A statistically validated sample of the general
public aged 1665 in 10 countries was
surveyed in the last quarter of 2014 in online
panels provided by CINT, a company with a
presence in more than 60 countries. A total of
26,467 interviews in 10 countries were
conducted, at least 2,500 interviews per
country. Countries covered: United States,
Canada, United Kingdom, France, Germany,
Sweden, China, India, Brazil, and South Africa.

10
countries

The questionnaire consisted of 38 questions on


reputation, plus background questions on
media consumption, age, and educational
background.

26,467
interviews

The Study

ABOUT THE KNOWLEDGE BASE


Fombrun, Charles J., Naomi A. Gardberg
and Joy M. Sever (2000), The Reputation
Quotient: A Multiple Stakeholder Measure
of Corporate Reputation, The Journal of
Brand Management, 7 (4), pp. 241255.
Wartick, S. (2002), Measuring Corporate
Reputation, Business & Society, Vol. 41
No. 4, pp. 371392.

Answers to the three questions around


the Reputation Core were then
combined and expressed as an index
from 0100, giving an indication of a
companys reputation. In order to better
understand what is driving the
Reputation Core Index we then looked at
four dimensions that contribute to the
building of reputation, each reected
through a number of questions:

Helm, S. (2007), One Reputation or


Many? Comparing Stakeholders
Perceptions of Corporate Reputation,
Corporate Communications: An
International Journal, Vol. 12 No. 3,
pp. 238254.

1. Strength of relationship (how well a


company builds relationships with
external audiences)

Walker, K. (2010), A Systematic Review


of the Corporate Reputation Literature:
Denition, Measurement, and Theory,
Corporate Reputation Review, Vol. 12
No. 4, pp. 357-387.

3. Perception of corporate behavior

ABOUT THE METHODOLOGY


The questionnaire was divided into two parts:
one covering spontaneous associations and
expectations, and a second part with 25
reputation statements with a 7-grade scale
(1 = do not at all agree, 7 = agree completely).
Answers were indexed to a scale 0100. An
index dierence of 2 points was considered
statistically signicant.

2. Perception of products and services

4. Perception of nancial performance


These four dimensions were drawn from
international academic research in the
eld of reputation and are reected in a
number of questions, with each question
then correlated to the Reputation Core
thus identifying reputational drivers.
Underlying the results in each area is
reputation content, i.e. the messages
and conversations linked to a company,
the majority of which are today delivered
and digested via digital channels. We
analyze reputation content across
multiple channels and then link that
content to the reputation dimensions
and the Reputation Core, thus exploring
which pieces of content are building or
eroding reputation.

Respondents were asked to evaluate 41 global


corporations, chosen because of their
worldwide operations and international
outlook, and only respondents with a higher
degree of brand awareness of the companies
(somewhat familiar or very familiar) were
allowed to complete the survey.
In parallel with the quantitative research, online
content was analyzed for 10 of the 41
companies, with this content categorized into
one of the four reputation dimensions of the
MSLGROUP Reputation Impact Indicator
model.
While we have chosen to focus on the overall
ndings and implications of the research for
reputation management, not on
company-specic insights, data about
individual companies is sometimes used to
illustrate a general point.

10

Mind Space: Measuring


the Strength of Brand
Awareness
Companies and brands rely on the
brand awareness metric to validate how
well the organization is doing in a
market or the performance of a
marketing campaign. This metric is
useful in establishing benchmarks and
standards for evaluation, but wouldnt
brands want to know how easy
consumers or audiences were able to
recognize a brand? Is this brand
awareness built on positive, negative or
neutral associations? How does brand
awareness relate to corporate
reputation?
The MSLGROUP Reputation Indicator
Index dierentiates from other
reputation studies by exploring intuitive
reputation awareness or the mental
associations related to a particular
company or brand. When this is linked
to a more rational, deliberate view of
reputation, the results show a profound
impact on corporate reputation: by
creating spontaneous associations with
a company, we create a metric that
demonstrates strength of brand
awareness. We call this capacity
Mind Space.

The Study

MSLGROUPs Reputation
Impact Indicator model
Examining the relationship between the Reputation
Core, the underlying reputation drivers and the
content produced by and about companies.

Reputation
Content

Reputation
Drivers

Reputation
Core

11

The Study

Denitions and explanations


of concepts

Alongside the four


dimensions of reputation,
the study also looks at
intuitive reputation
awareness and the impact
on corporate reputation.
This intuitive aspect of
reputation is then linked to a
more rational, deliberate
view of reputation.

Corporate reputation:
The general collective judgment of a corporation based on
assessments of the impact of performances and actions attributed
to the corporation over time.
NPS, Net Promoter Score:
The inclination to recommend a company.
Brand awareness:
The extent to which a brand is recognized by potential customers,
and is correctly associated with a particular product or service.
Mind Space:
The ease with which a respondent can answer questions about
the company. Measures the strength of brand awareness.
Reputation Core Index:
The measure of corporate reputation used in the study.
A combined score that answers the questions Do you like
company x?, Do you trust company x?, and Do you respect
company x?
Products and services:
The term used for a group of reputation drivers reecting the
quality of the companys oering.

X oers high-quality products/services


X meets customer needs
X oers products/services that are good value for money
X is an innovative company
X produces its products/services in a sustainable way

Corporate behavior:
The term used for a group of reputation drivers reecting a
companys actions and business behavior.

X acts ethically
X is open and transparent about the way the company operates
X has a positive inuence on society
X cares for the environment
X cares for its employees

Relationship:
The term used for a group of reputation drivers reecting the
quality of the companys relationship with its customers.
X involves the customer in the creation of new
products/services
X delivers on its promises
X is open to criticism and suggestions for improvement
X communicates in an honest and sincere way
X oers good customer service
Financial performance:
The term used for a group of reputation drivers reecting a
companys nancial performance.
X is a protable company
X has a capable leadership

12

The Study

with which an image of a company is


created in an individuals minds eye is
an advantage.

A more qualitative
approach to brand
awareness building positive
associations that are easily
accessible in the minds of
stakeholders is therefore a
key to a strong reputation.
And the more closely this
Mind Space is linked to a
companys products and
services, the better.

Brand Awareness is not


Enough, Building a Strong
Mind Space and Positive
Connotations is Key
Only respondents claiming to know the
companies that were surveyed fairly or
very well, and could spontaneously
associate things with the company, were
allowed to answer the subsequent
questions on the drivers of reputation,
meaning all respondents eectively were
brand-aware of the participating
companies. Seventy-eight per cent of
respondents found it easy to come up
with spontaneous associations with a
company, and the Reputation Core
Index was 43% higher among that
group. In other words, occupying a
customers Mind Space the ease

When respondents were asked to dene


these connotations, 53% dened them
as positive, 38% as neutral, and 9%
thought of them as negative.
Unsurprisingly, associating negative
things with a company is linked to a low
reputation score. But what was
surprising was the signicant dierence
in impact upon reputation found
between neutral and positive
associations. Positive associations
resulted in an average Reputation Core
Index that was 60% higher than that of
neutral associations. Clearly a more
qualitative approach to brand awareness
building positive associations that are
easily accessible in the minds of
stakeholders is therefore a key to a
strong reputation. And the more closely
this Mind Space is linked to a
companys products and services, the
better. These ndings were true for all
markets, age groups, and industries
covered in the study.
So, in a world where businesses and
brands are constantly battling for
attention, simply grabbing peoples
attention is not enough. Organizations
need to generate positive Mind Space,
if they are to build a robust reputation.

Share of respondents who thought


it was easy versus dicult to
identify things they associate with
acompany in the survey

Share of positive, neutral,


and negative associations
Dicult

Positive

Easy

Negative
Neutral

22%

09%

78%

38%

53%

13

The Study

Dominant brands are not only recognized, they also


occupy Mind Space in relevant stakeholder groups
that is in line with the qualities with which the brand
wishes to be associated.
Creating a robust and relevant Mind Space goes
beyond creating brand awareness. A company not
only needs to grab attention and make stakeholders
aware of its existence, it needs to create an
impression that allows one to easily attribute
characteristics to the brand, thus increasing the
chances of making it the brand of choice. In this
respect, Mind Space can be said to be the quality
of awareness about a brand.

How do we dene
Mind Space?

Brand

In todays world of speed and transparency, Mind


Space is created from a number of brand
conversation sources. What do we think of when we
hear a particular brand name? How automatically
were those connotations invoked? Are the
characteristics we ultimately associate with a brand
in line with the desired brand positioning?

A robust Mind Space requires two parts.


The things one associates with a company need to
be easily drawn upon, thus making the process
intuitive: if a person has to spend time going
through a structured thought process in order to
work out what they think, then the Mind Space in
question is already weaker than if sentiments are
gut-felt. Secondly, the associations need to reect a
positive, company-specic understanding of the
brand. If the associations are generic and equally
true for all companies in the industry, Mind Space
is also weakened.

Positive associations linked


to a stronger Reputation Core

Neutral associations lead to


a much weaker reputation

85
Positive
associations

Neutral
associations

0
Reputation Core

Company I like

14

Company I trust

Company I respect

The Study

The importance of building positive


associations is also conrmed at the
industry level, with levels of corporate
reputation being signicantly higher
among respondents who associated
positively with a company versus those
who demonstrated more neutral
associations. This was true across all
industries.
One interesting observation here is that
the positive impact of ethical business
behavior and drivers including acts
ethically, and produces its products in
a sustainable way is much stronger

Citizenship dimension drivers


linked to type of association

How the nancial performance of a


company is perceived is also dependent
on whether the respondent judges the
things they associate with a company

Acts ethically

Positive inuence on society

Open and transparent about the way


the company operates

Cares for the environment

Consumer
electronics

Cares for its employees

FMCG

Negative associations

Neutral associations

Positive associations

Pharma

among respondents who judge their


own associations to be negative than
among respondents who associate
positive things with a company. For this
group of respondents, the questions
related to ethical business behavior have
a bigger impact on corporate reputation
than drivers related to product and
service quality, value for money and
meeting customer needs.

15

Internet

The Study

to be positive, neutral, or negative. For


respondents with positive associations,
protable company has a slightly
positive impact on corporate reputation,
whereas for respondents that judge their
associations as negative, the protability
has a strongly negative impact on
reputation. An interesting observation is
the large impact of capable leadership
among respondents with negative
associations. One explanation for this
could be that respondents with negative
associations put more trust in a
companys leadership to change the
perceived negative aspects of their
business.

Financial performance drivers


linked to type of association

Protable company

Good potential for future growth

Capable leadership

Delivers better nancial results than


its competition

Clear vison for its future

Consumer
electronics

FMCG

Negative associations

Neutral associations

Positive associations

Pharma

From the below, we can see that the


attitude of the target group not
surprisingly has a large impact on
corporate reputation, and also that the
relative contribution of dierent drivers
varies signicantly between respondents
with positive and negative attitudes.
Again, this highlights the need to adapt
communication to the relevant audience,
based on a thorough understanding of
their attitudes and motivations.

16

Internet

The Study

Products and services have


the greatest inuence on
corporate reputations in
China as well as the other
markets surveyed, but
corporate behavior is a
stronger driver in China
than the rest of the world.
Acting ethically is the most
important driver for
pharmaceutical companies
in China.
Environmental aspects are
more important for the
Internet industry in China.
Company vision is an
important driver for the
nancial dimension on
corporate reputation.
Environmental care is an
important contributor to
corporate behavior.
Delivering on promises
strengthens relationships
and corporate reputation.

FINDING

Actions Speak Louder


Than Words
What is the strongest driver of corporate
reputation among the general public?
To answer this question and others, we
analyzed the degree to which dierent
attributes of the four reputational
dimensions (perception of products and
services; perception of corporate
behavior; perception of nancial
performance; and strength of
relationship) drive reputation.
Perception of products and services
showed the strongest correlation to the
Reputation Core Index, thus the
strongest reputation driver in China and
all countries surveyed. This dimension
is made up of ve dierent drivers,
which together reects the quality of the
companys oering.
After products and services, corporate
behavior (the degree to which a
company is perceived to be doing
business in an ethical, transparent way)
correlated most strongly with a high
Reputation Core Index. For companies
that scored low on the Reputation Core
Index there is a clear correlation to low
scoring on corporate behavior.

By contrast, nancial performance has


no statistical signicance on corporate
reputation in China, and is the least
important driver for enhancing
reputation among the general public
across all markets surveyed. Financial
performance and the quality of a
companys management obviously has
a dening impact on many other
stakeholders, not least investors, but it is
not surprising that the general public
can be said to form opinions about a
companys reputation rst and foremost
as consumers or citizens, rather than as
investors.
Its worth noting that of the four
dimensions Chinese respondents place
greater importance on corporate
behavior compared with the global
results; the other dimensions were
weaker than the global study. This
challenges the thinking that Chinese
consumers are indierent to how
companies conduct themselves publicly
and arms what we see that as
economic development and social
progress benets China, the public are
increasingly more demanding and are
expecting companies to live up to their
own standards.

The Impact of Dierent Dimensions


on Reputation Core Index

Global
China

Financial
performance

Relationship

Corporate behavior
17

Products
and services

The Study

The general public in China


have higher expectations
on the corporate behavior
of pharmaceutical
companies than of
companies in the other
industries under review.

On an industry level there are


signicant variations in how
dierent reputation drivers
contribute to the reputation core.
We rst look at the reputation drivers
of two specic industry clusters
pharmaceutical and Internet
and then delve into four dierent
dimensions amongst all four
industry clusters.
a. Acting ethically is the
most important driver for
pharmaceutical companies
in China
The reputation drivers for companies
within the pharmaceutical industry
display some unique characteristics:
Although corporate behavior is
important for all industries, it has a
larger impact on reputation within the
pharmaceutical industry. Acts ethically
is most important driver for corporate
reputation in China and second most
important in all industries. Of the top
ve reputation drivers in the
pharmaceutical industry in China, three
are related to products and services

(producing products and services that


are good value for money, produces its
products in a sustainable way, and
oers high-quality products/services)
and two are related to citizenship and
sustainability (positive inuence on
society and produces its products in a
sustainable way).
Unlike the global study, delivering on its
promises, capable leadership and
innovation signicantly impact
reputations of pharmaceutical
companies in China.
Its worth noting that there is a strong
negative impact for the nancial
performance of pharmaceutical
companies and a level of cynicism about
their growth prospects in China. This
may be related to the government
anticorruption campaign in the
pharmaceutical industry which
highlighted a number of problems.
This leads us to believe that people have
higher expectations on the corporate
behavior of pharmaceutical companies
than they do of companies in the other
three industries under review, perhaps
more so in China.

Top reputation drivers


in the pharmaceutical industry

Global
China

10

11

12

1. Oers high quality products/services

8. Has a positive inuence on society

2. Oers products/services that are good value for money

9. Is a protable company

3. Produces its products/services in a sustainable way

10. Has a capable leadership

4. Acts ethically

11. Oers good customer service

5. Meets customer needs

12. Is an innovative company

6. Communicates in an honest and sincere way

13. Has good potential for future growth

7. Is open and transparent about the way the company operates

14. Delivers on its promises

18

13

14

The Study

b. Environmental aspects are more


important for the Internet
industry in China
Companies within the Internet sector
also display an industry-specic pattern.
By far, oering high quality products
and services is the most important
driver in China and the other markets in
the global study. Thats where the
similarities end. In China, environmental
aspects are more important with
sustainable production and care for the
environment among the top drivers.
With growing public concern in recent
years about pollution and natural
resource degradation, respondents in
China clearly see companies playing a
part in caring for the environment.

Respondents in China
clearly see companies
playing a part in caring
for the environment.

Like the pharmaceutical industry, acting


ethically is a signicant driver of
corporate reputation in China. Unlike the
global study, providing products and
services that are perceived as value for
money is a core driver of corporate
reputation in China.
Its worth noting that open and
transparent about the way the company
operates and capable leadership are
not signicant reputation drivers in
China compared with global results.
This may reect a certain reality that
many companies in China, Internet or
not, have some element of state
ownership thus its operations and
leadership are inconsequential.

Top reputation drivers


in the Internet industry

Global
China

10

11

12

13

14

15

1.

Oers high quality products/services

2.

Oers products/services that are good value for money

10. Is open and transparent about the


way the company operates

3.

Produces its products/services in a sustainable way

11. Has a positive inuence on society

4.

Acts ethically

12. Is a protable company

5.

Is an innovative company

13. Has a capable leadership

6.

Meets customer needs

14. Has a clear vision for its future

7.

Cares for the environment

15. Has good potential for future growth

8.

Delivers better nancial results than its competition

9.

Communicates in an honest and sincere way

16. Involves the customer in the creation of new


products/services
17. Oers good customer service

19

16

17

The Study

C. Company vision is an important


driver for the nancial dimension
on corporate reputation

While company protability


isnt an important aspect for
corporate reputations,
delivering better nancial
results over its competitors
is consequential this is
particularly the case for
pharmaceutical and Internet
companies.

Overall, nancial performance of a


company is not a positive driver for
corporate reputation among the general
public in China and globally, but we do
see some statistically conrmed
dierences between industries.
Additionally the impact of this
dimension appears to be aected by
pre-existing views respondents may
hold about a company.
We see wider acceptance for nancial
performance as a driver of corporate
reputation especially in the FMCG and
Internet industries in China. And while
company protability isnt an important
aspect for corporate reputations,
delivering better nancial results over its
competitors is consequential this is
particularly the case for pharmaceutical
and Internet companies.
In general, the companys leadership
have positive contributions to corporate
reputations, especially in the
pharmaceutical and FMCG industries.
Potential for future growth is particularly
important in the consumer electronics
industry.

Company vision is more important in


China that what we see globally. This is
particularly notable in the Internet
industry where vision is ranked much
higher than capable leadership. In the
past, Internet companies in China were
built around CEOs who became
celebrities and role models. However,
the industrys rapid development and
the boom-and-bust of copycat Internet
ventures disappointed Chinese
consumers who have high expectations.
Therefore, genuine innovation has
become an indicator of a companys
value and true dierentiator. This backs
the point that innovation is regarded
highly as a reputation driver in the
Internet industry.
With the exception of FMCG, a high
prot margin has a negative impact on
the reputation of all three other
industries in the global study: protable
seems to be seen as a dirty word. In the
FMCG and Internet industries, strong
company leadership has a positive
impact on corporate reputation but we
do not see the same pattern in the
pharmaceutical and consumer electronic
industries. For consumer electronics
and Internet businesses, a perceived
potential for future growth has a positive
impact, yet by contrast, there is no
statistically conrmed relationship
between this driver and the reputation of
companies in the pharmaceutical and
FMCG industries.

Top reputation drivers of the nancial dimension


within the pharmaceutical industry

Global
China

Has a capable
leadership

Delivers better
nancial results than
its competition

20

Has a
clear vision
for its future

Has good
potential for
future growth

Is a
protable
company

The Study

Top reputation drivers of the nancial dimension


within the consumer electronics industry

Global
China

0
Has
good potential for
future growth

Has a
capable
leadership

Has a
clear vision
for its future

Delivers better
nancial results
than its competition

Is a
protable
company

Top reputation drivers of the nancial dimension


within the FMCG industry

Global
China

0
Has
a capable
leadership

Has good
potential for
future growth

21

Delivers better
nancial results
than its competition

Has a
clear vision
for its future

Is a
protable
company

The Study

Top reputation drivers of the nancial dimension


within the Internet industry

Global
China

0
Has a
clear vision
for its future

Delivers
better nancial results
than its competition

Has
good potential
for future growth

22

Has
a capable
leadership

Is a
protable
company

The Study

d. Environmental care is an
important contributor to
corporate behavior

Compared to the global


results, environmental care
is more important in China,
but surprisingly producing
in a sustainable way has
no statistical signicance
for any of the industries.

Companies commitment to social


issues seems to be largely judged as a
sum of their perceived overall
contribution to society. Acting ethically
and positive inuence on society have
signicant impact on reputation core,
and a change in this driver will bring
about the greatest change for corporate
reputation across all industries. In
China, we see a higher regard for social
inuence in the FMCG and consumer
electronics industries, which perhaps
reects a direct relationship between
brand visibility and community interest.

Surprisingly, care for employees has a


low impact on corporate reputations,
particularly in the pharmaceutical
industry. Compared with global study,
concern for the environment is perceived
to be more inuential than care for
employees. The fact that it was targeted
for corruption in China suggests that
better treatment of company employees
would have strengthened ethical
behavior and improved reputations.

Its especially notable that


environmental care is more important in
China, but producing in a sustainable
way has no statistical signicance for
any of the industries. One could argue
that Chinese consumers understand the
value of protecting the environment but
arent willing to pay more for products
that are produced more sustainably as
they often come at a higher cost.

Impact of the corporate behavior dimension


on the Reputation Core Index

Acts ethically
Open and transparent about
the way the company operates
Positive inuence on society
Cares for its employees
Cares for the environment

Pharma

Consumer electronics

FMCG
23

Internet

The Study

Top reputation drivers of the corporate behavioral dimension


within the pharmaceutical industry

Global
China

0
Acts
ethically

Has a
positive inuence
on society

Cares for
the
environment

Is open and
transparent about
the way the
company operates

Cares for
its
employees

Top reputation drivers of the corporate behavioral dimension


within the consumer electronics industry

Global
China

0
Has a positive
inuence
on society

Acts
ethically

24

Cares for
its
employees

Is open and
transparent
about the way
the company
operates

Cares
for the
environment

The Study

Top reputation drivers of the corporate behavioral dimension


within the Internet industry

Global
China

0
Acts
ethically

Has a
positive inuence
on society

Is open and
transparent about
the way the
company operates

Cares for
its
employees

Cares for
the
environment

Top reputation drivers of the corporate behavioral dimension


within the consumer FMCG industry

Global
China

0
Has a
positive inuence
on society

Acts
ethically

25

Cares for
its
employees

Cares for
the
environment

Is open and
transparent
about the
way the
company
operates

The Study

Interestingly, we see a high level of


openness across all four industries
under review in China where being open
to criticism and suggestions for
improvement impact corporate
reputations, especially in the consumer
electronics industry. Part of this may be
related to signicant policies at
protecting consumer rights in China and
the industrys response by welcoming
suggestions for improvement and
publicizing it.

e. Delivering on promises
strengthens relationships and
corporate reputation
When it comes to the relationship
dimension of reputation (reecting the
quality of a companys relationship with
its customers), delivering on its
promises and good customer service are
the main drivers in China. This seems
reasonable as Chinese consumers buy a
product or service from a business,
thereby establishing a relationship,
albeit a transactional one. When
companies fail to provide or deliver,
consumers begin to doubt and lose
trust, which ultimately erodes the
relationship.

Involving customers in
creating new products and
services reects a deeper
level of customer
engagement in China that
strengthens the relationship
dimension.

Another notable item is the involvement


of customers in creating new products
and services in China with all industries
oering some level of participation. This
aspect was missing at the global level;
there was no statistical signicance in
the FMCG industry. This reects a
deeper level of customer engagement in
China that strengthens the relationship.
It also best illustrates that actions do
speak louder than words.

This is starkly dierent from the global


study where communicating in an
honest and sincere way is the most
signicant driver of this dimension. The
Internet industry in China is the only
cluster that places considerable
importance on this aspect. In an
industry that operates in a virtual world
being authentic and truthful are
paramount to corporate reputations.

Delivers on its promises

Impact of the relationship dimension


on the Reputation Core Index

Communicates in an honest and sincere way


Oers good customer service
Is open to criticism and suggestions for improvement
Involves the customer in the creation of new
products/services

Pharma

Consumer electronics

FMCG
26

Internet

The Study

Top reputation drivers of the relational dimension


within the pharmaceutical industry

Global
China

0
Delivers on
its
promises

Oers
good customer
service

Communicates
in an
honest and
sincere way

Is open to
criticism and
suggestions for
improvement

Involves the
customer in the
creation of
new products/
services

Top reputation drivers of the relational dimension


within the consumer electronics industry

Global
China

0
Delivers on
its
promises

Oers
good customer
service

Is open to
criticism and
suggestions for
improvement

27

Communicates
in an
honest and
sincere way

Involves the
customer in the
creation of
new products/
services

The Study

Top reputation drivers of the relational dimension


within the FMCG industry

Global
China

0
Delivers on
its
promises

Oers
good customer
service

Communicates
in an
honest and
sincere way

Involves the
customer in the
creation of
new products/
services

Is open to
criticism and
suggestions for
improvement

Top reputation drivers of the relational dimension


within the Internet industry

Global
China

0
Delivers on
its
promises

Communicates
in an
honest and
sincere way

Oers
good customer
service

28

Involves the
customer in the
creation of
new products/
services

Is open to
criticism and
suggestions for
improvement

The Study

The B2B industry earned


the highest reputation
core scores in China;
Consumer electronics
placed rst globally.

FINDING

Global Brands,
Local Reputation
A global corporate reputation might well
be the sum of local reputations in each
individual market, but how reputation is
constructed in those markets means that
each must be attended to with insight
and care. This is a signicant challenge
not least given the growing importance
(and reach) of web-based
communication.
Respondents in China are more positive
of the reputations of the companies in
the study, where reputation scores
ranged from 84 to 63. A more telling
story are the dierences between
industry clusters: the B2B industry
earned the highest reputation core
scores in China, well above consumer
electronics and retail industries and
compared to being ranked sixth out of
seven in the global study. In China, the
Internet industry ranks sixth in China,
which is far from second place globally.
The dierences might be explained by
mind space: consumer-focused
industries with a higher relatability for
the general public have a higher
reputation score in the study. Another
part could be attributed to the idea of
respect and how its related to
knowledge. The average Chinese
consumer may not be knowledgeable
about B2B companies but it doesnt
preclude them from respecting them,
especially if they are Fortune 500
Companies. Third-party or independent
rankings provide some assurance of
positive corporate reputation but this
also raises the question about what
really generates like, trust and respect.
As far as local dierences within the
global survey ndings are concorned,
two particular areas stand out:

29

1. Europeans are more skeptical


about companies than
respondents from the BRICS
The average Reputation Core score for
companies was 66, across the 10
countries surveyed. However, the study
found that reputation varies signicantly
between countries and companies: the
lowest Reputation Core score was 28
and the highest 91. Examining dierent
regions we observed that Europeans
rate companies much lower than their
counterparts in North America do, who
in turn lag behind respondents in the
BRICS countries surveyed Brazil,
India, China and South Africa. Indian
respondents produced the highest
average Reputation Core score of 79,
while Swedish respondents evidenced
the lowest average Reputation Core
score of 51. The study demonstrates that
in general, Indians hold corporations in
very high regard, with the lowest
Reputation Core score among the
companies surveyed being 72. These
dierences observed between the old
world and the new world underline the
need for a nely-tuned reputation
strategy, one that avoids a standardized
global denition of reputation.

The Study

For example, GlaxoSmithKline has a


Reputation Core Index score between 42
and 81, the highest being in India and
the lowest in Sweden. On the other
hand, AstraZeneca sees its Reputation
Core score vary between 52 in Canada
and 84 in Brazil. Taken together with the
previous nding regarding dierent
populations overall attitudes to and
views of corporations (less skeptical in
Asia, more so in Europe), this highlights
the challenges facing marketing
communications leaders at global
brands, and the clear need for local
knowledge of the stakeholder
environment.

2. There are considerable market


variations when it comes to a
companys reputation score
Globalization has become one of the
most dominant business trends in the
last three decades, and a signicant
amount of corporate and marketing
communications work is carried out
with the purpose of building a robust,
global corporate brand. Indeed, the
brands we have studied in this research
are companies with an impressive
global presence.
The study demonstrates that despite
having high brand awareness in all
markets, a companys brand can have a
markedly dierent reputation in
individual countries. We found
numerous examples where both the
strength of the Reputation Core and the
associations people make with, and
discussions they have about brands
were very dierent.

Sector scores for the 7 industries covered in the study

Global
China

69

81

72

80

71

0
B2B

Healthcare

Automotive

79

79

80
69

Banking/
nancial
services

30

75

Consumer
electronics

78
73

Internet

77
71

Consumer
retail

The Study

Showing the dierence in


Reputation Core across countries

New world

Reputation Score

Stronger

Weaker

79

India

76

Brazil

75

China

74

South Africa

67

United States

64

Canada

61

United Kingdom

60

Germany

59

France

51

Sweden

Old world

31

The Study

The Reputation Core score of


GlaxoSmithKline in dierent countries

90

81

76
69

67
57

56

56

54

52
42

India

Brazil

China

South Africa

Canada

United
States

United
Kingdom

Germany

France

Sweden

58

57

56

54

52

52

United
States

France

United
Kingdom

Sweden

Canada

The Reputation Core score of


AstraZeneca in dierent countries

90

84
78

77
68

Brazil

China

India

South Africa Germany

Globalization has become


one of the most dominant
business trends in the last
three decades.
32

The Study

has shown a link between a high NPS


score and business success in terms of
sales.

FINDING

Use it, Like it, Recommend


it: The Drivers of
Recommendation (NPS)
Reputation drivers linked to actual
consumer experience are more
important for driving NPS than they
are for corporate reputation.
There are some dierences between
industries, but those dierences are
not as distinct as for the drivers of
reputation.
Some have called it the ultimate
question: Would you recommend a
company to a friend or a colleague? Our
survey attempted to answer this
question by asking respondents to tell
us how likely they were to indeed
recommend the companies surveyed.
Respondents were asked to rate a
company from 0 (not at all likely) to 10
(very likely). By looking at the number
of 9 or 10 answers and subtracting
them from the 06 answers, the survey
produced an NPS. While an NPS can be
negative, most successful companies
have a number of dedicated promoters
or fans and therefore a high NPS score
(more than +50). Independent research2

In this study we correlated high NPS


scores (where respondents indicated
either 910) with the Reputation Core. In
all countries, there was a clear
correlation between a strong reputation
and a high NPS score. While this
conclusion in itself wont raise many
eyebrows, we were able to further
analyze the factors behind this
correlation and uncover precisely which
reputational elements have the strongest
impact on NPS. What we discovered is
that the area of reputation that is most
strongly linked to a high NPS score is
the perception of products and services.
As was the case with overall reputation,
the dimension with the least impact on
NPS among the general public is a
companys nancial performance.

2.
Marsden, P, Alain Samson and Neville Upton (2005),
Advocacy Drives Growth, Brand Strategy
(198), pp.4547.

Reputation dimensions as
drivers of NPS

Financial
performance

Relationship

Corporate behavior

Products and services


33

The Study

As for any dierences between markets


with regard to what drives NPS, we
found none. In all markets, being good
at delivering your oering builds
recommendation levels the most.
At the industry level, we did see some
dierences with regard to what drives
NPS, but those dierences are not as
signicant as for the reputation drivers.
One interesting variation is that a
companys nancial performance is a
positive factor for NPS in the consumer
electronics, FMCG, and particularly the
internet industries. Only where the
pharmaceuticals industry is concerned
do we see a negative impact. One
further dierence is that the relationship
dimension is more important, and will
become even more important, when
compared to ethical business behavior
as a driver of NPS within the consumer
electronics industry.

The area of reputation that


is most strongly linked to a
high NPS score is the
perception of products and
services.

While the importance of the dierent


dimensions where NPS is concerned is
much the same as it is for the
Reputation Core Index, the ranking of
the specic drivers is slightly dierent.
Oers high-quality products and
services still has the largest impact, but
produces its products in a sustainable
way has a bigger impact on NPS than

NPS Driver Strength by Industry

products being seen as value for money


and meeting customer needs.
To have a positive impact on society is
more important for NPS than to act
ethically, which is similar to the impact
of this dimension on corporate
reputation. Caring for employees has
the third largest impact in the category
for NPS, but this piece is of low
signicance when it comes to building
corporate reputation.
With regard to the relationship
dimension, the ranking is also dierent.
Delivering on promises is the most
impactful question for NPS, followed by
delivering good customer service and
communicating in an honest and
sincere way. This is also the inverse of
the ranking where impact on reputation
is concerned.
Not surprisingly, from the observations
above we can see that the drivers linked
to actual consumer experience are more
important for driving NPS than for
corporate reputation. This underlines the
need to carefully evaluate and balance
the message depending on the purpose
of, and audience for communication.

Financial performance
Relationshiip
Corporate behavior
Products and services

Consumer electronics

Internet

FMCG
34

Pharma

The Study

The importance of
perception of products and
services is supported by
our analysis of online
content from the
10 sample companies.

FINDING

Social Media Discussions


Reect the Relative
Impact of the Reputation
Dimension on Corporate
Reputation
The Reputation Impact Indicator
includes an analysis of the relationship
between corporate reputation and
discussions on social media.
The importance of perception of
products and services is supported by
our analysis of online content from the
10 sample companies. For companies
selling products directly to consumers,
the proportion of social media content
related to the products and services
varied between 5090%. Products and
services is also the reputation area
where we observed the most organic
posts, i.e. content and conversations that

Online content classied into


the three dimensions of
corporate reputation

1.

are sustained without active


involvement from the companies in
question. A majority of the
conversations relating to the company
products and services were positive.
Also in line with the importance of the
reputation drivers, the other area where
we observed a number of organic posts
was topics relating to a companys
corporate behavior. These topics created
a high degree of engagement, with
conversations focused on ethical
conduct, transparency, and consumer
rights. In contrast with conversations
around core business, most of the
conversations around corporate
behavior were negative. Linking this to
the main area of research, we noticed,
perhaps unsurprisingly, that companies
with a poor corporate reputation,
evidenced by a low Reputation Core
Index, appeared so largely due to
negative perceptions of their position on
corporate behavior.

Perception of products and services


Perception of corporate behavior/CSR
Perception of nancial performance

McDonalds

2. BP
3. GoldmanSachs
4. Citibank
5. Shell
6. PayPal
7. Microsoft
8. Johnson & Johnson
9. Samsung
10. Google
10

20

30

40

50

60

70

80

Values in percentage points, from data derived through a qualitative and quantative analysis of a sample of content
for each company in each of the 10 countries.

35

90

100

The Study

36% of the respondents in


the study said that online
channels are their main
source of information
about companies.

slope suggests some groups may be


targeted.

FINDING

Demographics and
Media Habits Matter
The development of the Reputation Core
Index among dierent age groups in
China follows a dierent pattern in each
of the four industries. Where Internet
companies are concerned, reputation is
highest in the years immediately after
university and lowers among
middle-aged respondents but rises again
at 51-55 years. The FMCG and
consumer electronics industries follow
each other closely until about 36 years
where they start diverging FMCG
reputation is highest among the 46-50
year olds.
The reputation of pharmaceutical
companies is the most striking the
reputation score peaks among 51-55
year olds but are the lowest in the age
groups before and after. This diers
widely from other industries where
scores generally weaken after 50 years.
This reveals a remarkable picture of
Chinese consumers whose perceptions
about corporate reputation shift widely
in old age. Its reasonable to expect
strong reputation scores for
pharmaceutical companies for older
respondents theres an increasing need
for medicines and other health services
when we age. But the dramatic rise and

Reputation Core Index and education level*

We also see a link between reputation


scores and the educational level of the
respondents with the highest reputation
scores emerging from respondents with
college or university degrees among all
industries. We also found high
reputation scores among respondents
with secondary education levels in the
FMCG and pharmaceutical industries.
Students seem to be generally skeptical
in the study with lower reputation scores
overall, except for the consumer
electronics industry where it rated high.
This suggests that more education
increases knowledge and improves
understanding about companies, thus
helping them form positive opinions
about reputation.
The study also reveals a relationship
between online habits and the
Reputation Core Index: more time spent
online results in a higher reputation
score. This is particularly evident in the
pharmaceutical industry followed by
FMCG and consumer electronics.
Surprisingly, those who spent less than
one hour online scored consumer
electronics companies higher.
The research highlights the increasing
importance of digital channels as a
source of company information.
Whether it comes from corporate
websites or social media, online content
is critical to reputation management.

Secondary
College, university
Still studying

Prescription drugs

FMCG

Internet

* Primary school were excluded due to the low number of respondents

36

Consumer electronics

The Study

Industry Reputation
Core Index by age group* in China

Prescription drugs
FMCG
Internet
Consumer electronics

100

0
1617

1822

2326

2732

3335

3640

4145

4650

5155

5660

* Age 16-17 and 56- were excluded due to the low number of respondents

Industry Reputation
Core Index by age group in Global

Pharma
Consumer electronics
FMCG
Internet

80

0
1617

1822

2326

2732

3335

3640
37

4145

4650

5155

5660

6165

65+

The Study

Where do you mainly get your


information about companies?

13
10

11

12

36%
online

Breakdown:

The rest:

1.
2.
3.
4.

5.
6.
7.
8.
9.
10.
11.
12.
13.

Company websites 16%


Twitter 1%
Facebook 5%
Other online source 14%

38

Other 1%
Newspaper ads 10%
Newspaper stories 10%
TV ads 13%
TV news 17%
Radio ads 2%
Radio news 3%
Magazine ads 1%
Friends or family 7%

The Study

Reputation Core Index and


education level

Primary
Secondary
College, university
Still studying

80

40

0
Pharma

Consumer electronics

FMCG

Reputation Core Index and


online usage

Internet

Less than 1 hour


13 hours
36 hours
More than 6 hours

80

40

0
Pharma

Consumer electronics

FMCG

More time spent online


results in a higher
reputation score

39

Internet

The Observation

The Observations
...A company that is lit up from the
inside and committed to use its
inuence for the betterment of
individuals or society speaks to the
heart of Chinese people, thus
earning unconditional
trust and strengthening "Mind
Space from stakeholders.

Lusha Niu
Director

40

The Observations
In the Age of Earned
Trust, is Your Corporate
Reputation Reputable?
The meaning of reputation diers around the world the meanings arent
always precise but theyre also not incorrect. The MSLGROUP Reputation
Impact Indicator study is our attempt to ll in the gaps and present a
logical, reasonable, and actionable solution to the reputation puzzle. We
now understand three important conclusions from this research:
1) While brands can be global, a companys reputation is very much
shaped at a local level;
Lusha Niu
Director
for MSLGROUP China

2) The Mind Space of stakeholders has signicant inuence over a


companys reputation;
3) To develop reputation-enhancing content for a company, we need to
identify specic reputation drivers and address the reputation core.
Armed with this knowledge, how can I build, re-build, maintain or
improve the reputation of the company I work for or own?
Trust at rst sight does exist in China
Chinese people are characteristically suspicious we have been ingrained
to cast doubt on everything in our lives. So when we learned that China is
more optimistic about the reputations of companies, we didnt believe it.
Yet the results spoke for themselves: Chinese respondents on average
gave higher reputation scores to the 41 companies in the study, and
respondents from Sweden, France, Germany and the United Kingdom are
comparably more skeptical. We are actually living in a less harsh part of
the world and we don't realize it.
Great news but what can or should we do with this new information?
Develop trusting relationships with our stakeholders by delivering
on our promises
Our study shows that among four industry clusters (Pharma, FMCG,
Internet, and Consumer Electronics), Chinese respondents rank delivers
on its promises as the number one driver of a companys reputation
when looking at the strength of its relationships with customers. This
aspect doesnt even register on some industries at the global level.
Why is that?

41

The Observations

Just as the oxytocin


hormone in the human
brain could increase trust,
Mind Space is your
corporate oxytocin. If we
can build a stronger Mind
Space in people, we can
move the needles of
corporate reputation to
make it more trustworthy.

The answer lies in Wuchang () or the Five Constant Virtues of


Confucius. He regarded Xin () as one of the ve most important values
of humanity, which had become compromised during the last four
decades of Chinas opening up. Its inevitable that some areas are
overlooked to allow a nation to prosper economically. However,
individuals, businesses and the government suer in various ways.
Now we are beginning the process of restoring that trust and people are
quickly valuing trust more than ever before. Before, Internet start-ups
could excel in business with a star CEO, but now, they have to deliver on
their promises just to stay in the competition. Consumer electronics
companies can no longer rely on the clout of brand names and fancy new
product launches to keep market share they have to deliver on their
promises. Companies in the FMCG and pharmaceutical industries must
also change to preserve their reputations in China.
Reputation-enhancing content is not what it is, but what it can be
Companies need to do more than just grab attention, it needs to create an
impression that allows stakeholders to easily think about it thus
increasing the chances of making it the brand of choice. We call this
Mind Space - the strength or quality of brand awareness and there is a
positive correlation between Mind Space and a companys reputation.
Just as the oxytocin hormone in the human brain could increase trust,
Mind Space is your corporate oxytocin. If we can build a stronger Mind
Space in people, we can move the needles of corporate reputation to
make it more trustworthy.
So how exactly does that work?
Move away from we know best and move into we know how to
make it best for you
This is not easy. It requires a 180-degree change in mindset, but this
should be the guiding principle of any business that wants to succeed in
China today. When describing corporate behavior, both Chinese and
global respondents rank has a positive inuence on society top of the list
across all industry clusters. But what does positive inuence on society
mean in todays China context?
Our study shows that China values an inspiring and uplifting company
vision more than other countries. A company that is lit up from the inside
and committed to use its inuence for the betterment of individuals or
society speaks to the heart of Chinese people, thus earning unconditional
trust and strengthening Mind Space from stakeholders.
Companies, large or small, are in great need more than ever before of
dening and presenting its own vision to local audiences and ensuring all
actions and operations support this locally. Some of the most successful
global companies failed our reputation test in China because they never
spoke to the Mind Space of Chinese consumers. Companies that rely on
Hong Kong or Singapore as their gateway to mainland China today limit
their chances to go through that gate in the future. As our study proves,
reputation is your license to operate and it denitely is local.

42

The Observations

Mastering the balancing act between the court of law and the court
of public opinion can help build a reputable local operation
We have seen too many examples of companies succeeding in the rule of
law but failing miserably in the court of public opinion in China. As we
operate in the age of earned trust, even courts are sometimes constrained
by public opinion. With the absence of any formal government lobbying
mechanism in China, the only eective channel left for companies to
change public perceptions is by having a direct conversation with the
public and the respected elite.
Make communication strategy part of your China business strategy
Parachuting a US or European-centric communication framework to
China does not increase your companys reputation locally. China no
longer admires other people or other countries for their qualities or traits.
China admires companies that are truly improving the lives of its people,
leaders for inspiring employee excellence, and behaviors that are full of
care and respect.
As communications becomes even more fragmented and digitized by the
second, a sound reputation is no longer a life-long goal. How can we
communicators seize that high reputation moment and maximize it before
the next trend or moment arrives? Money and eort aside, it takes
wisdom and knowledge to transform that what it is today to what it can
be tomorrow.
At MSLGROUP, we believe the journey to help businesses succeed in the
age of earned trust is just beginning: A reputation in China is your
relationship with China.

43

About the Editor:

About the Editor for China Section:

Pr Uhlin is a consultant in the


Corporate Communications practice
at MSLGROUP in Stockholm. He has
a rich experience from communication
in a global environment, and has spent
15 years in Asia working at MSLGROUP
oces in Beijing, Hong Kong, and
Shanghai. Pr has been a senior advisor
to several large multinationals in Asia
and has considerable experience in
both crisis and reputation management.
He has a Bachelors degree in Business
Administration with a Major in
International Marketing, and a Masters
degree in Asian Studies, from the
University of Stockholm, Sweden.

Tzyy Wang applies nearly two decades


of corporate advisory and strategic
communications expertise in the US
and China to enhance MSLGROUP
China's reputation-building initiatives.
She particularly focuses on producing
impactful content for audiences and
enriching teams with global viewpoints.

44

About
MSLGROUP
We are Publicis Groupes strategic
communications and engagement
group, advisors in all aspects of
communication strategy: from consumer
PR to nancial communications, from
public aairs to reputation management,
and from crisis communications to
experiential marketing and events.

About
MSLGROUP
China
As a Business-Driven Communications
Consultancy, were focused on
delivering INTEGRATED, creative
programs through data-based
INSIGHTS, and driven by making a real
IMPACT on business through strategic
communications in the digital age.
MSLGROUP China is a full-service
strategic communications and social
engagement consultancy with more than
200 sta in Beijing, Shanghai,
Guangzhou and Chengdu delivering
business results for some of the worlds
most valuable brands. We were named
China Agency of the Year twice within
four years by The Holmes Report.
MSLGROUP also won accolades from
SABRE, the International PR
Association, the China PR Association,
the International Business Awards, and
Chinas New Media Festival.

45

MSLGROUP.CN
Wei Wei
Marketing Head
wei.wei@mslgroup.com