Exxon Mobil, Chevron and BP Amoco all get dangerously low brand reputation ratings from the buying public – ratings that are at or below the mid-point of the rating scale - for trustworthiness and for contributing to slowing global climate change and protecting the environment.
Their products get uniformly mediocre ratings – ratings that are barely above the mid-point of the rating scale.
Oil companies can prosper even though the public does not trust them or believe they are doing all they should to protecting the environment and feels their products are only mediocre.
Standard Oil, established in 1870, was the world’s largest integrated oil company until it was broken up in 1911 by the United States’ Supreme Court, which deemed Standard Oil was not being operated for the benefit of the nation.
The geographic division of Standard Oil became independent companies with the right to continue using resources that formerly belonged to Standard Oil.
Standard Oil of California is now Chevron; Standard Oil of New Jersey is Exxon Mobil; and Standard Oil of Indiana (originally American Oil Company of America (Amoco) plus British Petroleum) is BP Amoco. These three companies have developed and are now managing their own Brand identities.
Between 2002 and 2008, Exxon Mobil’s brand strength weakened. The percent of consumers familiar with the Exxon Mobil Brand decreased from 88% to 83%. In addition, Exxon Mobil’s reputation for trustworthiness and for products declined.
Information on changes in Chevron’s and BP Amoco’s brand strength between 2002 and 2008 is not available for 2002. However, their brands in July 2008 are not significantly stronger that the Exxon Mobil brand. The prudent assumption is that all oil companies’ brands lost strength between 2002 and 2008.
In July 2008, pressed by the energy crisis, the federal government is again evaluating Exxon Mobil, Chevron, BP Amoco, and other oil companies to see whether they are operating to the nation’s advantage.
Congress is debating whether so-called “windfall” or “excess profits” of oil companies should be taxed and the money used for other purposes. Massive government spending programs are contemplated to fund the development of alternative energy source so as “break the nation’s addition to oil.”
The indictment of Senator Ted Stevens on charges of failure to report gifts from an oil service company – but not on bribery for doing favors in return for those gifts – also puts a negative spotlight on the probity oil industry.
The brand strengths of all three of these major oil companies is now so weak that neither they or other oil companies can expect little support from the public to protect their profits and their autonomy from adverse federal government regulations.
In July 2008, we measured the Brand strengths of Exxon Mobil, Chevron and PB Amoco by surveying 481 Americans by telephone. The methodology used in 2008 was first employed in 2002 by Leo J. Shapiro & Associates to measure the Brand strengths of the thirty companies included in the calculation of the Dow Jones Index of stock prices. Exxon Mobil was included among the thirty.
About This Report
This report presents information pertinent to measuring change in the strength of oil company brands.
Information for 2008 comes from telephone interviews conducted during the first ten days of July 2008 with 480 consumers sampled from the nation at large.
Information for 2002 comes from interviews conducted September through November with 1,350 consumers sampled from the nation employing the same questions that were used in 2008.
Presentation of Research
Nature of Brands
Exxon Mobil, Chevron, and BP Amoco exist as Brands in the theatre of the mind consisting of memories of real and imagined experiences. These memories, when brought to consciousness by the Brand name, logo or other Brand symbol, create expectations that influence how people feel, what they think, and how they act.
A brand’s influence on purchase decisions and other behaviors depends on its:
- Familiarity – how well it is known
- Seductiveness – promises it projects about its products
- Trustworthiness – belief the brand fulfills its promises
- Distinctiveness – in the case of oil companies, the survey measures
how consumers rate the brand on its contribution to slowing
global climate change, world wide warming and protecting the
environment
Familiarity
Unless consumers recognize a Brand name, the Brand cannot move them to action. Chevron has an edge in moving the public to action over its two key competitors, in that it is known to 90% of consumers compared to Exxon Mobil with 80% and BP Amoco with 73%.
A Brand that is only superficially familiar to the consumer is less able than a Brand that is highly familiar to move consumers to action. Chevron is superior to its two competitors in terms of the degree to which consumers feel they are familiar with the Brand.
Measured on a nine-point scale with “9” being the highest degree of familiarity and “1” the lowest, Chevron leads for degree of familiarity with a rating of 7.30 among those at all familiar with Chevron, compared to 6.92 for Exxon Mobil among those at all familiar with Exxon Mobil and 5.87 for BP Amoco among those at all familiar with it.
Relation of familiarity to brand strength ratings
Consumers who rate Exxon Mobil and Chevron Highest (9) for degree of familiarity give these two Brands lower ratings for trustworthiness and for protecting the environment than do consumers who give Exxon Mobil and Chevron slightly lower ratings (8 and 7) for familiarity.
In effect, consumers who feel they know the most about Exxon Mobil and Chevron down-rate them for trustworthiness and for their contribution for slowing climate change and protecting the environment.
Unlike Exxon Mobil and Chevron, BP Amoco’s rating for trustworthiness and for protecting the environment is higher among those who give BP Amoco the Highest (9) rating for familiarity than among those who give it a somewhat lower (7 and 8) familiarity rating.
For all three companies, however, ratings given by consumers for all attributes are higher among consumers who rate their familiarity with the company high (9, 8 and 7) than among those who rate their familiarity with the company low (6 or lower).
On the face of it, the flow of information that affects ratings for trustworthiness and protecting the environment is more favorable for BP Amoco than for Chevron or Exxon Mobil.
The statistics in table that follows display the relationship between ratings given to brands when differences between brands for familiarity are statistically minimized.
Products: Seductiveness of product promise projected by the brand
Each Brand strives to enhance its strength by demonstrating and communicating the excellence of its products.
Chevron rates highest for products (6.21), closely followed by BP Amoco (6.19) with Exxon Mobil in third place (6.09).
Trustworthiness: Belief the Brand Fulfills Its Promises
Whatever else a Brand may be, it is critical that consumers believe it to be trustworthy – that it will fulfill the promises projected by its Brand and meet its obligations to the community.
Trust can be built naturally over an extended period during which customers, prospective customers and others whose decisions are important to the Brand’s success actually experience how well the Brand fulfills its promises.
Chevron has the highest rating for trustworthiness (4.53), followed by BP Amoco (4.42) with Exxon Mobil in third place (4.21). It is noteworthy that the ratings for trustworthiness of all three brands are weak – below the mid-point of the nine point rating scale.
It is noteworthy that trustworthy ratings for all three brands are below the mid-point of the rating scale. On the face, the public does not trust any of the three companies.
Protect the environment
Chevron is rated highest for its contribution to slowing global change and protecting the environment (rating of 5.18), followed by BP Amoco (rating of 4.97) and Exxon Mobil lowest (4.62).
Again, it is noteworthy that ratings for all three companies fall below the mid-point of the nine point rating scale. In a brief, the public does not believe that any of the three companies are fulfilling their obligation to slow climate change and protect the environment.
A companies failure to fulfill their obligation too slow climate change can be consequential, The rapid rise in the cost of oil and the continuation of a wicked combination of inflation and faltering incomes triggers intense consumer effort to cut back spending on gasoline and on fuel used to heat homes,
Under the lash of necessity, consumers now strive to conserve energy. As a way to rationalize the steps they are now taking to conserve energy the public is drawn toward supporting the “green” movement to protect the environment.
The July 2008 study finds 39% of the public strongly believe human activity causes global climate change; 23% adamantly deny that the global climate is changing, leaving a balance of 38% who do not accept either extreme view.
The 77% majority of the public who strongly or somewhat believe that human activity is causing global climate change and damaging the environment leaves a minority of only 23% of the public who totally reject the idea that the global climate is changing.
(For a more detailed discussion of the relation between the rising cost of oil and the “green” movement see “STAGFLATION: BITTER MEDICINE GOOD FOR THE ENVIRONMENT” which is posted on www.8Sages.com.)
ACTION IMPERATIVES
Oil companies’ ratings for trustworthiness and for contributing to slowing global warming are dangerously low.
Exxon Mobil and Chevron need to be cautious in using advertising to communicate information about their companies in an effort to enhance their brand strength in that higher consumer familiarity with these two brands is associated with lower ratings for trustworthiness and for protecting the environment.
IN CLOSING
To get a sense of brand strength’s susceptibility to change, a measurement is scheduled to be made after Exxon Mobil’s advertising has run the Olympics. That September measurement when compared to the July measurement has the potential for measuring the effect of advertising done by Exxon Mobil during the Olympics on the reputation of Exxon Mobil and the reputations of its two key competitors.
To request more cross-tabulations data about this report and the survey, or to be kept informed about further findings from ongoing research on this topic, contact 8SAGES.com.