Freia as a firm no longer exists. Rating it number 1 on a corporate reputation survey will not bring it back.

KNOWLEDGE @ BI: Reputation

In May 2018, Freia was crowned RepTrak’s 2018 Most Reputable Company in Norway. Unfortunately, the chocolate bar should never have even been nominated, much less given the award.

Why not? The reason is simple; Freia is not a company. It is a tasty bit of chocolate that enjoys a solid consumer position in Norway. As a brandmark it clearly has a strong consumer reputation driven by innovation, quality and other relevant product attributes.

However, as a product it is neither socially responsible, a good working place, nor ethical. Those are behaviors for which the owner of the Freia brand products should be known – Mondelez International.

A brand or a company?

The annual RepTrak ranking list of Norway’s most well-known companies is tabulated by asking a representative sample of Norwegians to nominate a firm they believe has the best and worst reputations.

Obviously, many Norwegians still see Freia as a company, as enough of them nominated Freia that they made the list to be evaluated. But Freia has not been a company since they were purchased by Kraft Foods in 1993, then later subsumed into the Mondelez brand portfolio. Including them as a company in a corporate reputation study is not only problematic, it should not have been done.

Ole Christian Apeland, who handed the award to Mondelez Norway’s managing director Gro Krigsvoll, acknowledges that Freia is not a corporation, but a part of Mondelēz Norway. However, he supported their inclusion in the 2018 survey by stating that “Apart from the financial and legal aspects Mondelēz acts as Freia in Norway. That is why we chose to include Freia when it was nominated to take part in this year’s study.”

In commenting on the RepTrak award, a spokesperson for Mondelez in Norway, said, “Our Mondelēz International brand is where we invest our resources when we think about reputation to corporate audiences. As a house of brands our consumer facing brands are a strong part of people’s lives and we’re pleased when they get recognized.”

The logic of both Apeland and the Mondelez representative is wrong for two reasons.

  1. Methodologically it is wrong to gather perception ratings on product brands when the attributes being measured are organizational ones.
  2. Second, it is wrong because survey results on Freia cannot serve as a proxy to understand Mondelez’s corporate reputation.

In other words, it is incorrect to assume that if people perceive Freia as ethical, then Mondelez must be ethical.

Interplay between brand and reputation

Corporate and product brands are ‘owned’ by the organisation. Reputation is the collective perception of an organisation’s stakeholders. These perceptions are influenced by the branding efforts (corporate and product) but also influenced by everything we see and hear about an organisation either directly or indirectly.

Some fast moving consumer goods companies (FMCG), such as Heineken, have a clear connection to their corporate brand and their (leading) product brands. The company and the product have the same name. This results in higher corporate brand awareness among the general public, making it easier to find consumers willing to share their views about the company.

However, other FMCG companies operate as ‘a house of brands’ and communicate to consumers predominantly through their product brands. This includes firms like Orkla. But even these companies are increasingly visible in the public domain and the general public is more sophisticated now in its understanding of the company behind the product. This is also the case for Mondelēz, although it is perhaps still less well known than its previous incarnation as Kraft Foods.

The challenge for a house of brands

Freia is truly a little part of Norway (“Et lite stykke Norge”), but unfortunately, it is even a smaller part of giant Mondelez, a firm that probably only a minority of consumers may know enough about to rate. This is the challenge for a house of brands. Its products may be well known but the firm behind them completely anonymous. This means that many firms who really do perform well on many drivers of corporate reputation are ignored by consumers when asked who their favourite firms are.

This is why many firms are struggling to associate their less-known parent firm name with popular brand names. The logic being that if a consumer knew who was the parent firm behind a product they might be more positive to purchasing their products.

It is also easy to understand why Norwegians have not quite given up on Freia as a firm. Mondelez maintains a website for Freia that very much gives the impression that it still exists. And there is no doubt that if Freia Sjokolade Fabrikk existed today it would be well deserving of a high ranking on RepTrak’s Most Reputable Companies. Johan Throne Holst was recognized in his time for his prodigious support of social issues, the firm was profitable, and it appears to have treated its employees well.

The ratings game

RepTrak and other standardised metrics and rankings definitely have their place as indicators of a company or its brand positioning. If played correctly, the rankings and ratings management game can be of great benefit to organisations in signalling their value to stakeholders. But if they are to be used as valid input into sophisticated brand and reputation intelligence gathering for strategic use, one should be very mindful of the methodologies applied and take each ranking at face value for what it is.

The truth is that Freia as a firm no longer exists and rating it number 1 on a corporate reputation survey will not bring it back.

References:

  • Argenti, P. A. and B. Druckenmiller. 2004. Reputation and the Corporate Brand. Corporate Reputation Review. Vol. 6 Issue 4, p368-374.
  • Brønn, P. S. (2018). Åpen eller Innadvendt: omdømmebygging for organisasjoner (2. utgave). Oslo: Gyldendal.
  • This article was first published in Communication for Leaders 2019. Communication for Leaders is a Science Communication Magazine published by the Centre for Corporate Communication and the Department of Communication and Culture at BI Norwegian Business School.
    Link to E-magazine: https://issuu.com/bi_business_school/docs/communication_for_leaders_2019

Comments?:
Send your comments and questions regarding this article by E-mail to forskning@bi.no

Text: Professor Peggy Simcic Brønn, BI Norwegian Business School and Dennis Larsen, ReputationInc.

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