Friday, March 29, 2024

Fonterra wants top-three image

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Fonterra has improved its reputation with Kiwi people but still has a long way to go before being among the most respected companies.
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Its marketing campaigns over the last 18 months had improved Fonterra’s image, chief executive Theo Spierings told dairy farmers at the annual meeting in Taranaki late in October.

He showed figures that turned around from 35% unfavourable and 16% favourable to 45% favourable and 11% unfavourable in six surveys from April 2016 to July 2017.

“We have shifted our reputation from ninth to fifth and changed the minds of 1.5 million New Zealanders,” he said.

A spokesman for Fonterra said the company had invested in its reputation because of two fundamentals of the industry – farmers were doing good work that was not well-known and research showed New Zealanders were no longer aware of how dairying was done.

The media campaign began early last year with the #4.31AM series featuring former All Blacks captain Richie McCaw.

Follow-ups highlighted environmental efforts, dairy product purity, innovation, global reach, onfarm technology and the ongoing Milk For Schools programme.

The Open Gates day on December 10 would showcase onfarm improvements and put people in touch with dairy farmers.

Surveying by Colmar Brunton had shown a steady improvement in reputation following each phase of the media campaign, done through television commercials, on Fonterra’s website and through social media.

“The results have been strong and positive and the feedback good so we are pleased with the momentum that has built up.”

The spokesman said Fonterra had no shortage of themes to be used in future media campaigns.

“Going further will require even greater determination and our objective for 2018 is to push into the top three ranking.”

However, that was like playing at home, against pre-selected opposition.

Fonterra had not yet made the top 20 in the Colmar Brunton Corporate Reputation Index. Its latest results were published in March.

The annual publication measured the reputation of the 100 largest consumer-facing companies in NZ by revenue, plus financial services companies.

Colmar Brunton’s chief client officer Sarah Bolger said the headline index was more a generic reputation measure than Fonterra’s commissioned research.

Air NZ was top of the index for the third year running, followed by Toyota and Z Energy.

Companies with a high reputation index scored well on trust, which NZ consumers placed above other factors and higher than consumers in other countries.

In 2017 Fonterra had scored well in one of the four pillars of the index, that of success and leadership.

It was among dominant and established companies with multinational activities, like Apple, Coca Cola Company and BP.

Those companies were well-known, first to market with new products and services and offered investors good returns.

Fonterra’s own reputational survey was done by Colmar Brunton using the Rep Z model and measured the dairy co-operative against selected comparative corporates.

While not disclosing who those were Bolger said they would be other companies against which Fonterra chose to benchmark itself.

Massey University School of Management senior lecturer Robert Davis said Fonterra had been strong in product marketing but as an organisation it was relatively unknown.

“It is essentially a community of small farmers and it hasn’t previously communicated their values and meaning to the public.”

Once embarked on image and reputation building, Fonterra had to be aware that just one bad animal welfare incident or another botulism scare could be a huge setback.

The reputational survey results were a good start and a significant movement but Fonterra would be pushing on to achieve 80-90% favourable responses.

Davis said the Open Gates day would generate a huge amount of social media to continually reinforce that farmers and the co-operative were doing what was required environmentally.

That didn’t wash with University of Auckland marketing lecturer Vicki Little who said all the reputational effort and expense boiled down to corporate social responsibility and Fonterra’s share price.

NZ had, in the past, an extensive farming model that would be the envy of most other countries for producing high-value foods but intensive dairying had muddied that.

Most urban people, now including those in NZ, were divorced from food production realities.

While individual farmers continued to do the very best they could and understood their social licence to operate, the excesses of the corporate farming image were dominant.

Little said Fonterra had little option but to do the marketing campaign and from what she saw it was doing it well.

“But it boils down to greenwashing the indefensible if the industry doesn’t reform its worst aspects.”

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