Study: Firms’ image vital

Canadians have changed the way they do business with business.An increasingly important factor in a Canadian's buying decision is the overall impression that he or she has about the company behind the product or service, according to a new national study...

Canadians have changed the way they do business with business.

An increasingly important factor in a Canadian’s buying decision is the overall impression that he or she has about the company behind the product or service, according to a new national study of what Canadians think about and expect from the business community.

Evidence of the growing importance of a good corporate profile in an era of more discerning consumers has been building for years.

But what is new and perhaps most startling in the findings of the study, called Market Vision 2000, is the negative impact that a bad image can have.One in four of the Canadians surveyed (26%) said they actively boycotted a company in the past year because of what they consider ‘bad’ behavior on the part of that company.

Extrapolated across the Canadian populace, that would amount to 5.5 million consumers who boycotted companies in the past year.

And a substantial portion of the ‘bad’ behavior that prompted the boycotts was associated with corporate activity.

The field work for the study, developed by Toronto-based marketing and research company Market Vision, was conducted by Consumer Contact, also of Toronto.

The study was based on a sample of 1,000 adult Canadians on a proportionate-to-population basis across Canada.

It was conducted by telephone late last year and involved an extensive base of questions probing Canadians’ feelings and expectations towards business.

Of those who boycotted, 36% of the reasons related to corporate behavior, including the view that a company was environmentally insensitive.

Close behind was the feeling that a company had poor labor relations, followed by the belief that the company abuses animals, and next, because the firm had left the local area.

Poor customer service and poor quality products accounted for 24% of the reasons offered for boycott.

‘Canadian consumers are emerging from this recession with a clear set of personal priorities and expectations,’ says Greg White, president of Market Vision.

‘If a business does not meet their standards, both in terms of the product or service it is offering – and in terms of the relevance of the offerer – then that business simply won’t get on a consumer’s short-list,’ White says.

Not surprisingly, Canadians will also reward companies they believe have worked hard to be relevant and who have let consumers know that.

The study shows that almost to a person Canadians would prefer to do business with companies they judge to be relevant, or ‘good.’

‘Further to that, we found that over 75% of consumers expect companies to do more than just make a good product or deliver a good service at a competitive price,’ White says.

‘To get onto a consumer’s short-list, a company has to be judged to have a relevant offering and be a relevant offerer,’ says Jeannette Tanguay, Market Vision vice-president.

Not one

When asked which companies met the consumers’ definition of excellence, 21% of Canadians could not think of any company.

‘The impact of the relevance of the offerer probably grows in industries whose products or services are not easily differentiated by the consumer,’ White says.

The study shows that consumers have difficulty telling the difference among the products and services provided by companies in the following industries: supermarkets, airlines, pharmaceuticals, banks, trust companies, breweries and oil and gas.

‘It may come as a great surprise, but even the heaviest beer drinker does not see a great deal of difference among the products offered by Canada’s brewers,’ White says.

‘It appears quite clear, that competitive advantage in the 1990s will come not only from marketing relevant and high quality products and services, but also from being seen to share the consumer’s personal concerns and priorities and doing something about them,’ he says.

The study shows that Canadians’ top priorities are: job creation, crime prevention, affordable and accessible health care, protection and clean-up of the environment, protection of women from abuse, helping the elderly, fighting substance abuse, funding medical research, and improving the quality of education.

Those least important to consumers are support for amateur sports, support for the arts and support for professional sports.

The study shows that Canadians feel the business community has a significant role to play in many of these concerns.

In the case of job creation, 80% felt that business has a primary or secondary role, and in funding for medical research, almost half felt business should be accepting major responsibility.

Business is not seen to have a primary responsibility when it comes to support for professional sports.

‘What’s particularly alarming is that business is seen to be doing a good job on those issues not important to Canadian consumers, like supporting professional sports, and at the same time is seen to be doing a poor job grappling with issues of importance, like job creation and clean-up of the environment,’ White says.

‘Any company that is known to be heavily involved in sports, without being seen to have demonstrated an equally energetic commitment to a high priority issue is treading on very thin ice with today’s consumers,’ he says, adding:

‘I am not saying that involvement in professional sports has no benefits. But I am saying that if it’s your only visible commitment, then that’s a prescription for irrelevance, obscurity and, ultimately, bankruptcy.’