Heinz Squeezes Out Highest Consumer Satisfaction Rating

Condiment Company Came Out on Top of All U.S. Marketers in University of Michigan's Annual Survey

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NEW YORK (AdAge.com) -- The most satisfying company in America is H.J. Heinz.
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The pickle purveyor and condiment company beat out ever other marketer in the country in the University of Michigan's American Consumer Satisfaction Index. The Pittsburgh-based company led all food manufacturers with a rating of 90 out of a possible 100 points, besting not only every other food firm but every other company in the U.S. The second-highest score in the index was held by Amazon.com.

So how does a company that participates in a low-interest category like ketchup beat out a high-service company that offers consumer recommendations, easy product tracking and digital downloads?

'Element of trust'
"Heinz has been in the business for a long time," said Claes Fornell, head of ACSI at Michigan and a professor of both business and marketing. "They have a large diversified [number] of alternatives ... not just ketchup, but all kinds of sizes and variations [of products]. [Heinz] has been very good at segmenting the market this way. Plus, there's a high reliability that this product does not break down or malfunction. ... There's an element of trust."

The study numbers are released quarterly for different sectors of the economy. In Heinz's case, the study for non-durables is conducted annually in the third quarter. Out of a pool of 300,000 people, about 80,000 or so consumers are selected to take the annual 16-20 question survey by phone, with approximately 250 respondents for each company. Once the raw data is collected, it then goes into a computerized method that the university has developed to avoid "measurement error and random outside noise," said Mr. Fornell.

Mr. Fornell did, however, note some extenuating circumstances to consider about the group (non-durable goods) and sub-section (food manufacturing) that Heinz is a part of. Heinz is in a category where the marketplace practically ensures high levels of customer satisfaction because the products are generally cheap, so there is very little cost for a consumer to switch brands. There is also little-to-no service aspect involved in the rating, which generally results in higher scores.

Ketchup's path not as complicated
Robert Passikoff, president of Brand Keys, a consumer-loyalty research and strategic planning consulting firm, added that while Heinz should be proud of its brand's success, it has a less complicated path to satisfying customers than Amazon.com.

"The study has to do with whether or not the product lived up to what [Heinz] promised it would do," he said. "The reality is that it's ketchup. The company has been in existence for over 100 years ... by this time, I'm pretty sure that they've got it right."

Regardless, Heinz has sold off many of its core outside interests in the past five years to get back to basics and focus on what it does best. "Our [company] takes enormous pride in providing the highest-quality food products and outstanding service to our consumers," said Heinz spokesman Michael Mullen. "I think our investments in innovation and quality and our expanded consumer marketing are clearly making a difference."

200 new products
That innovation has meant the launch of 200 new products in 2007, up from 150 a year earlier, as well as double-digit increases in marketing spending in both years (15% in '07), Mr. Mullen said. An example is the company using the Weight Watchers Smart Ones brand to produce a new line of frozen dinner entrées that offer a serving of fruit in each package called "fruit inspirations."

Mr. Fornell said the ACSI study was designed 14 years ago to keep companies accountable, and to provide a more-accurate indicator of a company's economic health than a balance sheet provides. It primarily measures three product aspects (in order of significance): assortment, quality of products and services, and price.

Ultimately, however, a solid marketing strategy is the key to high consumer satisfaction. The best companies, he said, offer a plethora of products (brands, packages, sizes and prices) to suit customers of varying tastes and financial means. "Marketing is the most important part of it," he added.
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