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Wal-Mart bribery scandal

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Thu, 03/05/2012 - 16:12
Ted Marzilli
Wal-Mart bribery scandal

Wal-Mart’s Mexico bribery scandal might be causing the retailer some pain in the US and may yet force personnel resignations, but other brands like Target and Taco Bell experienced significantly worse perception crises in the past 18 months and they took two months to mend.

Wal-Mart’s recent consumer perception decline is similar in magnitude to when it was hit with a class-action discrimination lawsuit, with the latter causing the chain to take three weeks to recover in the public eye.

However, YouGov BrandIndex data shows rival Target received a much more significant consumer backlash in summer 2010 when it donated money to a controversial political group. Target didn’t recover from that controversy for seven weeks.

When an Alabama law firm sued Taco Bell in early 2011 for not having enough meat in their products, the dining chain’s consumer perception plummeted as much as the Target incident, and took six weeks to recover, even though the lawsuit was eventually dropped.

Wal-Mart, Target, and Taco Bell were measured with YouGov BrandIndex’s Buzz score, which asks respondents: “If you've heard anything about the brand in the last two weeks, through advertising, news or word of mouth, was it positive or negative?”

YouGov BrandIndex measurement scores range from 100 to -100 and are compiled by subtracting negative feedback from positive. A zero score means equal positive and negative feedback.

Since the New York Times broke the Mexico bribery story, Wal-Mart’s buzz score has declined 15 points, the same drop the chain took when the discrimination lawsuit was filed.

These two crises appear to be less severe than the Target and Taco Bell episodes. Target’s political donation to MN Forward cost them 27 points with recovery time taking seven weeks, while Taco Bell’s meat lawsuit dropped them 28 points with a six-week recovery time.

Wal-Mart Bribery scandal and other brand crises- Buzz scores
Wal-Mart Bribery scandal and other brand crises- Buzz scores
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