Loss of Brand Equity at PeopleSoft

Techtel market opinion research provides insights into a brand's strengths and weaknesses. In the case of PeopleSoft, Techtel's quarterly tracking studies revealed underlying weakness in the market's perception of the brand, and in this case, of the entire enterprise software category.  

The chart shows a declining Opinion Ratio™ for PeopleSoft manufacturing applications. The data is based on quarterly surveys of Techtel's IT Market Panel, and is drawn from respondents who had software purchase influence and were in companies of 100 or more employees. The Opinion Ratio™ is a comparison between positive opinion of a product against all opinions—positive and negative. It captures changes in the balance of opinion for a product. Sustained upward movement is good, and for well-established brands a flat pattern is common. However, prolonged declines in a product's Opinion Ratio™ are often a sign of trouble.

In this case, PeopleSoft experienced several quarters of decline in positive opinion during 1998 and early 1999, while negative opinion remained largely unchanged. This brought the ratio down. Then, positive opinion began to recover, but negative opinion also rose for several quarters at an even faster rate, causing further declines in PeopleSoft's opinion ratio.

These changes in opinion coincided with a broader slowdown in ERP software sales, due in part to year-2000 preparations as well as mounting market concerns about ERP as a cost-effective and easy-to-deploy technology. PeopleSoft had a difficult year in 1999, with slowing sales, declining earnings, and a weak stock.

(PeopleSoft staged a recovery in 2000 with the launch of its Web product line.)

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