Special Report

The 10 Least Respected Companies in America

Coca-Cola Co. (NYSE: KO) and PepsiCo Inc. (NYSE: PEP) are the most respected brands in the United States. While Coke has enjoyed this status for six years straight, Pepsi moved up from being the sixth most respected brand in 2012.

24/7 Wall St. reviewed consultancy firm CoreBrand’s recent report on brand reputation. CoreBrand measured the familiarity and favorability of 1,000 companies. Familiarity is based on how widely known the companies are, and favorability is based on how well people think of these companies. The report identified the top 100 brands for familiarity with the lowest favorability scores. Companies such as Delta, Philip Morris and H&R Block are widely known yet not favorably viewed. These are the least respected companies in America.

Click here to see the least respected companies

To earn a high level of respect, explained CoreBrand CEO Jim Gregory, “consistency over time is probably the most important thing.” Not surprisingly, many of the most highly regarded companies, including PepsiCo, Coca-Cola, Hershey and Harley Davidson, have made products that are easily identified with the parent company. They also have done well financially, have had few problems with management, and rarely have had problems with product or service quality.

The companies with the worst levels of respect, on the other hand, have failed to maintain a strong brand image relative to their wide recognition. This could be because of a perception that the company is badly managed or that its relationship with customers has been damaged because of management’s mistakes. Best Buy went through a cycle of declining sales and executive turnover, the latter of which played out very visibly in the press. As Gregory explained, “A company can address one big issue, and it usually doesn’t cause a lot of damage to a company.” But, he added, “when you have one thing after another [go wrong] over a long period of time, it does cause damage to the brand.”

Turmoil within the organization is one of the biggest factors working against many of the least respected brands. J.C. Penney, for example, which ranked as the fourth-least respected company, has recently fired its relatively new CEO, Ron Johnson, who made several strategic changes during his tenure, and placed former CEO Mike Ullman back in charge. Ullman changed the business model — again. “For J.C. Penney, just about the time that their rebranding effort was beginning to make some headway, ‘boom’ they go through a changed management and then have another change,” Gregory noted. He added that the people surveyed for this report typically did not appreciate companies that “go through multiple strategic changes in a short amount of time.”

While nearly all the least respected brands have dealt with short-term PR and management issues, another reason many are not respected can simply be because of the industries they are in. For example, Delta’s brand respect is not terrible, but relative to its size it is poor. The company’s bad ranking is in part the result of its restructuring after its messy merger with NorthWest in 2008. It is also, Gregory noted, “somewhat endemic of the industry. The airline industry is not a very strong industry in terms of favorability.” Similarly, Philip Morris is in the generally unfavorably viewed tobacco industry.

CoreBrand’s new report, “Brand Respect: The Most and Least Respected Corporate Brands,” is based on a review of the country’s largest companies pulled from a poll of U.S. executives at 1,000 companies. In order to identify the least respected brands, the report identified the top 100 brands for familiarity with the lowest favorability scores. Both scores range from one to 100.

These are the least respected companies in America.

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