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Key Index Shows Credibility Falls 25 Percent in Six Months
LIVONIA, Mich.—While BP has borne the brunt of public outrage in the wake of the Gulf oil spill, the image of the entire oil industry and the broader energy industry has taken a drastic dive, according to recent research from Market Strategies International.
According to Market Strategies’ E2 (Energy + Environment) Index, which measures consumer perceptions of the energy industry’s economic contribution to the US economy, environmental performance and credibility on environmental issues, the oil industry’s image has plummeted from a score of 40 in December 2009 to 30 in June 2010 – a 25 percent decline in six months. The overall E2 Index, which encompasses all sectors of the energy industry, has fallen from 48 to 43, a decline of more than 10 percent.
The fallout from the Gulf oil spill will have a long-lasting impact on how oil companies shape their overall business strategies and how they frame their marketing messages, according to Jack Lloyd, a vice president in the Energy Division at Market Strategies.
“The crisis in the Gulf has awakened consumer skepticism about the oil industry and its relationship with the environment,” Lloyd said. “While the oil spill was unique to BP, it has caused consumers to question whether a similar incident could happen to other companies. The entire industry will be under intense public scrutiny for the foreseeable future.”
The E2 Index measures the industry as whole and individual sectors, including coal, oil, natural gas and electricity generation and distribution, separately. The index is measured on a 100-point scale. Market Strategies established the index in Q1 2008. At that time, the overall Energy Industry Index was 40 and the Oil Industry Index was 29. However, both scores began to rise in the latter half of 2008 and by December 2009, had reached 48 and 40, respectively.
Market Strategies’ E2 research has identified five public opinion segments that share distinct attitudes and preferences on energy/environment issues, and it is not just the environmentalists who think less of the oil industry. In fact, the two segments that had the highest opinions of the oil industry prior to the Gulf oil spill have seen the largest percentage drop in their E2 Index scores.
The “Carbon is King” segment, which is the only one of the five to favor increased reliance on fossil fuels, saw its rating of the oil industry fall from 59 in late 2009 to 40 in June 2010. Other segments and their ratings of the oil industry include:
“The oil industry and the energy industry at large had gained significant credibility in the minds of consumers from early 2008 to late 2009,” Lloyd said. “Much of the goodwill generated by the industry in the past two years has been wiped out by the Gulf oil spill. All energy companies need to take a long, hard look at their environmental policies, customer perceptions and marketing strategies to begin the process of working to regain the trust of the American consumer.”
About E2: Energy and the Environment
A total of 1,010 interviews were completed online with consumers across the nation in late May and early June 2010. The respondents were recruited via an online panel to reflect key characteristics of the U.S. population. The data have been weighted to bring the sample characteristics into even closer alignment with the population.
Market Strategies International
Market Strategies International is a full-service market research and consulting firm with extensive experience in the communications, energy, financial services, healthcare, and technology sectors. Market Strategies employs more than 325 senior consultants, researchers, statisticians, and project managers and specializes in the areas of customer satisfaction and loyalty, market opportunity assessment, market segmentation, message and communications testing, usability evaluation, and brand assessment and management. Founded in 1989, Market Strategies is the 20th largest research firm in the world according to “Honomichl Top 25,” published in the August 2009 issue of Marketing News. Visit www.marketstrategies.com for more information.
Decus Strategic Communications, for Market Strategies InternationalMike DeVilling, 248-875-4207
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