Dell’s massive recall of some 4.1 million notebook batteries is more than just a
costly technical blunder. It also risks losing the company years of brand
equity.
But research firm CoreBrand gives Dell high marks for acting
decisively to resolve the problem, which could result in some of its
notebooks overheating and possibly catching fire.
“What Dell is doing is very forthright. It will be an expensive solution,
but it will be worth it to maintain their brand and mass appeal,” Jim
Gregory, CEO of brand research firm CoreBrand, told internetnews.com.
Gregory added that Dell has spent years establishing a low cost, quality
image it can’t afford to risk.
“Everyone wants low cost, but not to the point of also being afraid of
the product,” said Gregory. “There has to be a level of quality associated
with the brand that you can count on and that’s what Dell wants to protect.”
For the past 16 years, Corebrand has produced a quarterly corporate
branding index that benchmarks corporate brands across the U.S.
This week, CoreBrand released results for some significant Internet brands
that have gained or lost ground over the past three years (tracking the first
quarter of 2004 through Q1 2006).
The CoreBrand index tracks 1,200 brands in 47 industries. The company
said it gathers “familiarity” and “favorability” data, (favorability is
broken out into investment potential, perception of management and overall
reputation) on these brands from 12,000 senior business decision makers in
the top 20 percent of U.S. corporations.
CoreBrand then uses a combination of familiarity and favorability scores
to arrive at a 0-100 number it calls Brand Power.
Amazon’s Brand Power score, for example, has dropped 4 points (10
percent) over the past three years. CoreBrand attributes the drop to
industry volatility and competitive pressures.
Yahoo’s Brand Power score increased 5.7 points (12 percent), while eBay
has largely held steady. Gregory said he thinks Yahoo has been greatly
helped by the decline of AOL.
“A lot of people, myself and many of my friends, switched to Yahoo, which
has built up its content and is free, versus AOL which charges,” said
Gregory. (There are recent signs that AOL wants to shift to
more of a free model).
Some of the most recent Brand Power scores include:
- Yahoo: 53.9
- E*Trade: 27.7
- Ebay: 44.5
- Amazon.com: 37.4
- Google: 35
CoreBrands notes that while Google’s number may seem low, it’s risen
quickly the past three years.
The biggest Brand Power drop was 50 percent by CNET Networks. CoreBrand
said CNET’s favorability rating dropped twice as much as its familiarity.
Although CNET’s fall is dramatic on a percentage basis, the reason is the
brand does not have anywhere the power of heavy hitters like Yahoo and eBay.
CoreBrand only gave CNET an 8 Power Brand score three years ago, and that
number has since dropped by 4 points.
