December 15, 2005
DuPont’s Reputation Issues
For more than 200 years, the DuPont Co. has built a solid reputation with the public for innovation, beneficial products and especially safety, experts say.
Whether that reputation is at risk with its ongoing C-8 difficulties will largely depend on those past efforts and any other bad news for C-8 that lies in store, analysts said Wednesday after the company’s landmark environmental settlement.
DuPont’s reputation has endured challenges relating to its products before: gunpowder, lead for gasoline, CFCs and Benlate herbicide.
Years of working to build a positive worldwide image have maintained a good name that endures, said John V. Allen, a brand consultant with Highbridge Consulting in Stamford, Conn.
“They’re going to the bank and withdraw some of that equity now,” he said.
Ideally, DuPont shouldn’t rely only on that reputation, but stay ahead of the issue and continue to press its public relations efforts, said Lee Hornick, program director for corporate image and branding for the Conference Board, a nonprofit group that helps companies cope with marketplace and management issues.
“DuPont has a wonderful history as an organization,” Hornick said. “Basically, they should focus on the legacy, in that ‘We’re here to stay; we’re here to make your life better and easier.’ ”
Advertising isn’t enough to reinforce that image, Hornick said.
“Advertising helps, but the best credibility they can have is really public relations, in the sense that the message is being communicated through op-ed pages. That adds a lot of credibility.”
It’s also crucial for the company to help employees — even to its suppliers and co-branded partners — share the message with customers that its products retain as much value as ever.
“They are in many cases the front-line communicators of the brand,” Hornick said.
DuPont’s strategy of marketing products like Teflon through other brands will likely help it avoid the full impact of bad news, said Allen, who predicted news of the settlement wouldn’t draw much consumer attention.
“I would imagine very few consumers shopping right now at Macy’s for a Teflon pan know who is the chemical company behind it,” he said.
Shaky ground
Heather Langsner, senior analyst at Innovest Strategic Value Advisors in New York, warns that the future may bring more such headlines, and predicts DuPont’s reputation and financial outlook could be challenged if more alarming news breaks. Langsner contends DuPont’s stock — and thus investor confidence in the firm — has already taken a hit because of the C-8 issue, and looks ahead warily to the outcome of further lawsuits and health studies.
“At minimum, I wonder what effect this could have on DuPont with regard to new products DuPont may introduce,” said Langsner, who has been closely following the firm since 2002. “The company has got this headline risk associated with this issue. And right now there’s a lot of headlines circulating about the health and safety risks of nanomaterials,” products that are engineered at the level of atoms and molecules.
Allen said DuPont was wise to settle the case and begin moving on.
“Somebody was thinking in Wilmington when they did this,” he said.
But Langsner suspects DuPont may not necessarily be moving on to better days, and says the company’s statement following the settlement was notably thin on acceptance of responsibility.
“Maybe a little more deference would be nice,” she said. “Penguins have [C-8] in their bloodstreams. A little more humility, please.”
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