Reputation – impact and importance for brand success

9 February 2024
Reading time 4 minuty

A company’s balance sheet, which consists of assets and liabilities, will not include a number of intangible assets, such as contacts and customer lists, know-how and access to markets, business procedures, and corporate reputation, among others. It can be one of the most important and sometimes even the most valuable intangible asset of a company exceeding both the value of tangible fixed assets and financial resources of the organization.

Companies with better reputations are rated by investors as lower-risk investments. By this, customers investing in them may agree to a lower return, provided the investment is safe. Reputation is not only a harbinger of success and helps build trust, but also helps in financial decisions acceptable to shareholders and helps sell products at higher prices[1]. Reputation is of great importance to all types of organizations, whether government, business or non-profit. When it’s good, it helps achieve goals, maintain competitiveness and future prospects, ensuring recognition from all stakeholder groups[2]. Reputation is also a source of differentiation in the marketplace, building its own path for the company, its own distinctiveness that distinguishes not only the brand and the company from its competitors, but also its products and services.

The importance of reputation is growing with the increase in the number of similar products, the phenomenon of globalization, the availability of information, increased media attention to business, advertising saturation and stakeholder activity[3]. In a globalized world, brands as symbols of a company, what it does, what it does, what it sells, become the glue that integrates organizations and embodies its reputation[4]. The respect and trust, and sometimes even admiration, that certain companies or brands enjoy have a direct impact on relationships with business partners, suppliers, the supply of the best personnel, the conditions for obtaining financing and the entire social spectrum in which the organization operates[5].

Reputation directly affects not only whether customers want to use the services or purchase the products offered by a company, but also whether other stakeholders trust the organization and want to work with it. Just as in the 360-degree employee evaluation model, in the marketplace a company is evaluated by those who deal with it on a wide variety of levels. Reputation is derived from the familiarity of the brand that the customer uses, knows or recognizes, as well as its perceived uniqueness as a brand that nothing can replace, or is very difficult to replace[6]. We don’t have to be a user, customer, or even a potential customer of Rolex, a fan of Walt Disney movies or Legos, however, to be aware of what a brand represents and the reputation it enjoys among users, even becoming a symbol, or at least a distinctive representative of its industry.

Three levels can be distinguished that affect the perception of a company and the formation of opinions about it. The first is formed if we obtain information based on our own experience, when we are a customer, a user of products and services of a brand. The second level is information based on what our acquaintances, friends, even random people who give us their own or heard opinions about the brand, company, product. The third group of information sources are those obtained from the media, advertising and other forms of corporate communication[7]. Reputation especially can be useful if stakeholders have to make decisions based on incomplete or contradictory decisions, or have too little or too much information to make a rational choice in the time allotted. Other situations may include low involvement in the purchase process of a particular product or service and lack of time for lengthy analysis[8].

The more often in a given market we choose a company on the basis of a recommendation, especially when it was made by individuals or organizations that have had direct contact with the company, its products, services and manner of service, the more important the role of its reputation seems to be. In an era of high competitiveness, the lack of a good reputation means fewer chances to sell goods and services. A customer, trusting reputation, will choose the product of a company he knows and believes, or at least one he has heard is reliable. In many sectors, the need to develop a proper reputation is a very serious barrier that must be overcome in order to not only succeed, but to establish a presence in the market at all. Professional services such as financial, consulting, legal, among others, are of exceptional importance here, and developing a reputation for those entering the market is a difficult and lengthy process[9].

Charles Fombrun, president of the U.S.-based Reputation Institute, defined reputation as “a common assessment of an organization’s past actions and their effects, reflecting the organization’s ability to generate results that are valuable to its stakeholders.”[10]

In Fortune magazine’s most well-known ranking, the quality of management, ability to attract and retain valuable personnel, social responsibility, innovation, quality of products and services, financial fundamentals, long-term investment value, wise use of corporate assets and efficiency in conducting global business are all taken into account when creating industry rankings[11]. The Reputation Institute, on the other hand, looks at product and service offerings, innovation, workplace, governance, citizenship, performance and leadership in its RepTrack survey[12].

Figure 2.1 RepTrack methodology

rep trak - Public Dialog Warszawa


[1] A. Kaul, A. Desai, Corporate Reputation Decoded: Building, Managing and Strategising for Corporate Excellence, London, Singapore 2014, s. 3
[2] T.C. Melewar, Facets of Corporate Identity, Communication and Reputation, Routledge Tylor and Francis Group, London and New York 2008, s. 122
[3] C.J. Fombrun, C.B.M., van Riel Fame and fortune. How successful companies build winning reputations, New York 2004. s.7
[4] W. Olins, O marce, Instytut marki polskiej, Warszawa 2004, s.114
[5] Ibidem, s.114
[6] J.N. Kapler., The new strategii brand management, London and Philadelphia 2008, s. 26
[7] Essential of …, op.cit. s.46
[8] Ibidem, s. 47
[9] T. Dąbrowski, Reputacja przedsiębiorstwa. Tworzenie kapitału zaufania. Wolters Kluwer Polska, Kraków 2010 s.28
[10] J. Dalton, Reputation and Strategic Issue Management, London School of Public Relations, UK s.228, file:///C:/Users/user/Desktop/PUBLIKACJE/Komunikacja%20korporacyjna%20monografia/Reputacja/J.Dalton%20reputation.pdf [dostęp: 13.01.2017]
[11], Od 1997 roku Hay Group jest partnerem magazynu FORTUNE przy identyfikowaniu i tworzeniu rankingu „najbardziej podziwianych firm”
[12] Ch.J. Fombru., L.J. Ponzi, W. Newburry, Stakeholder Tracking and Analysis: The RepTrak® System for Measuring Corporate Reputation, Corporate Reputation Review, Vol. 18, no 1, 2015 Macmillan Publishers Ltd.

Read more

Agencja do zarządzania Public Affairs

Agency to manage Public Affairs

Public Affairs is the field that deals with managing an organization's relationships with its stakeholders. These include groups with an...
9 February 2024
Czas czytania: < 1 minuta

INFLUENCER MARKETING- czym właściwie jest i co może dać marce?

INFLUENCER MARKETING – what exactly is it and what can it give a brand?

It's marketing activities based on the recommendations of an individual (influencer) to a given audience. It's communication by people who...
9 February 2024
Czas czytania: 3 minuty

Jak wybrać agencje PR? Gdzie szukać? Od czego zacząć?

How to choose PR agencies? How to find one? How to start?

These are questions that can keep many people working on the client side awake at night. From the CEO, to...
9 February 2024
Czas czytania: 5 minuty