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FORTUNE/Yankelovich Partners Corporate Equity Survey: AT&T Slips to Third

 When it Comes To Corporate Equity, Federal Express Has it All;

UPS - its Chief Rival - is a Close Second in Overall Reputation

NEW YORK, Nov. 26 /PRNewswire/ -- When business executives rate the corporations that provide them with products and services, who comes out on top? Federal Express. According to a survey conducted by FORTUNE and Yankelovich Partners, Federal Express is the company with the best corporate equity. In other words, it enjoys the greatest level of awareness and casts the best overall impression among 250 corporate giants that respondents were asked to rate.

Interestingly, United Parcel Service (UPS), Federal Express's major competitor in the international transportation/shipping market, ranked second in corporate equity, while AT&T, which placed first in a similar survey in 1994, was bumped down to third place.

In the annual survey of 7,663 senior and middle management FORTUNE subscribers in the United States, survey respondents rated corporations on a number of major components relating to a company's reputation: their awareness, familiarity, and overall impression of the company as well as their perceptions of the company. For example, does the company instill trust? Does the company add value to customer transactions? Is the company innovative? What is the caliber of management? To what extent does the respondent support the company: Would he or she recommend its products/services or buy stock in the company? The resulting rating is known as "corporate equity," and according to Eileen Collins Neri, FORTUNE's director of marketing research, corporate equity plays a major role in a company's success or failure.

She cautions, however, that corporate equity is intended to be an indicator of a company's corporate reputation, not the reputation of its brand or brands. One of the major goals of the survey is to provide companies with the kind of information they need to understand their relative strengths and weaknesses in the business-to-business marketplace.

Sometimes, a company's equity rating can take a dramatic shift, the study shows. No. 44, Sun Microsystems, for example, shot up a remarkable 17.2 points from 1995 to 1996, making it the most improved company in the survey. Meanwhile, No. 45, Apple, had the greatest fall -- down a total of 11 points over two years.

Among the key findings of the survey:

-- Hospitality, a new industry category in the 1996 survey, brought three

hotel chains into the top 25 corporations in corporate equity ratings: Marriott (No. 11), Hyatt (18), and Ritz-Carlton (23).

-- Eight technology companies are among the top 25 scorers, the most from any industry. They are: Microsoft (No. 5), Hewlett-Packard (7), Sony (9), Motorola (14), Xerox (15), Intel (17), Texas Instruments (19), and IBM (22),

-- Although AT&T dropped to No. 3 in the overall corporate equity rating, it retained the highest score for familiarity. No other telecommunications company ranked in the top 25; in fact, the others lagged far behind. MCI Communications ranked No. 40; GTE, No. 57; BellSouth and Sprint tied at No. 63.

-- Diversified manufacturing companies are well represented in the top 10, with General Electric and 3M capturing the No. 4 and No. 6 spots, respectively.

-- Among pharmaceutical companies, Johnson & Johnson (No. 8) scored highest. Also in the top 25 is Merck (No. 20).

-- Despite negative publicity for No. 10 Eastman Kodak during the past few years, the office/photographic company outranked IBM, which ranked No. 22. These two companies, like Xerox, have consistently been in the top 10% of companies in the study, which is an indication that good corporate equity enables a company to weather bad business cycles.

-- Ford (No. 26) received the highest score in the automotive industry. Its closest competitor was Mercedes, which ranked No. 33. Interestingly, Honda (No. 50), Toyota (No. 51), BMW (No. 52), GM (No. 53), and Chrysler (No. 56) are all virtually neck-and-neck.

-- The highest-ranking airline was American Airlines at No. 21, followed by Delta (25), United (27), and Southwest (32).

-- In the diversified financial services industry, No. 12, American Express took first place. This high standing is particularly noteworthy, given the relatively low stature of banks, insurance companies, and financial services companies in general.

-- No. 38, Citibank garnered the highest score in the banking industry, far outranking Chase Manhattan (90). Tied at No. 38 also is Merrill Lynch, in the investment banking category.

Companies with high corporate equity scores are more effective communicators of information about themselves. They use more channels of communication to a greater extent than do lower-scoring companies. The study shows that business executives learn about companies primarily through magazine articles, newspaper articles, and magazine advertising. Personal dealings and conversations with business associates and peers are also important sources of information about companies. By comparison, popular promotional activities like sporting event sponsorships and direct mail tend to be less effective methods of communication.

 -0- 11/26/96

/CONTACT: Katherine Schneidawind of FORTUNE Public Affairs, 212-522-4071, or fax, 212-467-0455; or Mark Berman of Townsend Consulting, 203-869-1336, or fax, 203-869-1714/

CO: FORTUNE; Yankelovich Partners; AT&T; Federal Express; United Parcel

Service ST: New York IN: FIN SU:

LI-DC -- NYTU068 -- 4390 11/26/96 12:39 EST
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Publication:PR Newswire
Date:Nov 26, 1996
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