Staying power: Strong brands

Having a strong brand can keep a company going through the tough times, but the magic doesn't last forever.

A company can change its look, its CEO or even its ownership, but those major corporate makeovers have little effect on how consumers view the strength of its brand. That’s good news for many of the companies whose brands continue to top our third annual survey of the country’s best- and worst-managed brands, but not so good for those that are just not making the right connections with their consumers. “A company has to make a lot of mistakes to turn customers against a strong brand,” says Jeannette Hanna, vice-president of brand strategy at Toronto-based Cundari SFP, which conducted the survey with the Strategic Counsel. “However, customers don’t give any slack to companies they perceive as having a weak brand.”

Take Canada’s largest grocery chain, Loblaws. Despite problems keeping its stores properly stocked, a massive reorganization of senior management and a plummeting stock price, the Loblaws brand, as well as its private-label, President’s Choice, continue to score with consumers. While both brands slipped this year, 11% of the nearly 1,000 business professionals and managers surveyed still named Loblaws as one of Canada’s best-managed brands, and 14% picked President’s Choice. By comparison, coffee-and-doughnut chain Tim Hortons came out on top with 38% selecting it as the nation’s top brand. Loblaws’ decent showing doesn’t mean it can afford to rely on its past glories, but it does buy it some time. “The strength of the Loblaws brand means that its customers will likely give it a second chance to get things right,” says Hanna.

The same holds true for WestJet Airlines. Even though the Calgary airline paid millions to Air Canada this year after admitting to illegally accessing its rival’s computer network, 19% still think it’s one of Canada’s best brands. Air Canada’s legal victory, meanwhile, did nothing to improve the perception of its brand, with 34% naming it the worst-managed brand. Air Canada was ranked second on the worst list last year, behind the now defunct Jetsgo airline. The WestJet scandal was just background noise for most flyers and didn’t touch on the airline’s promise of friendly and on-time flights, says Alan Middleton, professor of marketing at York University’s Schulich School of Business, in Toronto. Most Air Canada customers, however, still remember the company’s bad service, late flights and other frustrating experiences. “It takes years of neglect or mismanagement to destroy a strong brand, and even longer to rejuvenate a brand that has fallen into disrepair,” says Middleton.

Another example of brand resiliency can be found in Molson Canadian. The company has had some memorable marketing campaigns ? such as “I Am Canadian” and “the Rant,” where a dedicated beer drinker listed all the things that made him uniquely Canadian ? but it hasn’t done much since merging last year with American beer giant Adolph Coors Co. “Molson Canadian used to be one of the most exciting brands in Canada, but it’s been years since anything interesting was done with that brand,” says Middleton. Yet, our survey found it’s still one of the country’s top brands.

The Internet-based survey was conducted in mid-October and asked participants to rank Canada’s best- and worst-managed brands overall, as well as the best-managed brands in more than a dozen separate sectors. The survey’s methodology was tweaked this year to ensure respondents were more equally distributed across Canada. That resulted in more regional brands making it onto the list. Hydro Québec appeared on the list of worst-managed brands for the first time, while St-Hubert, the Quebec-based chicken restaurant chain, beat out well-known rivals such as Swiss Chalet, the Keg and Boston Pizza as the second-best restaurant brand, behind only Tim Hortons, the best-managed overall brand for the third year in a row. “Tim’s is so deeply embedded into Canadian culture and society that it has become a Canadian icon,” says Tim Woolstencroft, managing partner of the Strategic Counsel.

Tim Hortons wasn’t the only company to make a repeat showing. Indeed, eight of the Top 10 brands have been on the list for the past three years. And while top-ranked companies such as Tim Hortons, Canadian Tire and Cirque du Soleil continue to shine financially, corporate setbacks and challenging market conditions at Loblaws and WestJet Airlines failed to blemish consumer perceptions about those brands. Many of the companies considered to have the worst brands are also repeat offenders. Canadian discount retailer Zellers and telecommunications companies such as Bell Canada and Rogers Communications have all been on the worst-managed brands list before. While 9% of respondents named Bell (or Bell Mobility) as one of Canada’s best-managed brands, 16% ranked it among the worst (another 9% named Bell ExpressVu, the satellite television provider, as one of Canada’s worst brands). Telco companies tend to fare poorly in branding surveys, because companies find it difficult to distinguish themselves in what is a highly competitive and cutthroat industry. “It is very difficult for the telcos to make a clear emotional connection with their customers,” says Hanna.

But, branders take heart: it’s not impossible for companies to overcome consumer hostility and build a well-respected brand. For the first time in the survey’s three-year history, a bank has made it onto the list. TD Canada Trust was named one of the best-managed brands by 9% of those surveyed. By pushing the customer-service reputation made famous by Canada Trust, the company has been one of the few banks to really connect with its customers, says Middleton. “TD Canada Trust’s marketing has helped it overcome the ambivalence most Canadians have to the big banks,” he says.

One thing that just about all the best-managed brands have in common is a strong emphasis on customer satisfaction. That, plus a lot of customer goodwill (such as that built into brands like Loblaws and WestJet), can help companies weather future turmoil ? for a while, anyway. “A strong brand gives a company permission from its customers to both succeed, as well as to fail,” says Middleton. “But you can’t fail forever. Eventually companies have to deliver on the promise of their brands.”

Grading the brands

We asked nearly 1,000 people to tell us which Canadian brands they think are the best- and worst-managed. Tim Hortons was voted the best brand in the country for the third year in a row, while Air Canada tumbled to the bottom.

Best-Managed Brands 2005 2006 Worst-Managed Brands 2005 2006
Tim Hortons (THI) 52% 38% Air Canada (ACE.A) 30% 34%
Canadian Tire (CTC.A) 16% 20% Bell, Bell Mobility (BCE) 14% 16%
WestJet (WJA) 13% 19% Rogers Wireless (RCI.B) 13% 11%
Cirque Du Soleil 19% 18% CBC 10%
Presidents Choice (L) 26% 14% Zellers 8% 10%
Molson Canadian (TAP) 14% 11% Toronto Maple Leafs 10%
Loblaws 20% 11% Petro-Canada (PCA) 9%
Bell, Bell Mobility (BCE) 9% Hydro Québec 9%
TD Canada Trust (TD) 9% Bell ExpressVu (BCE) 9%
Shoppers Drug Mart (SC) 10% 8% Future Shop (BBY) 9%