Managing the Corporate Brand - a Reputation Perspective

Adored, respected and coveted by customers and organisations alike, corporate brands represent one of the most fascinating phenomena of the business environment in the 21st century. Their importance is unquestionable. Brands, in their various forms, are integral to our everyday existence. This is particularly the case at the organisational level where the concept of the corporate brand now enjoys wide currency in business parlance. There is an increasing realisation that corporate brands serve as a powerful navigational tool to a variety of stakeholders for a lot of purposes, including employment, investment and, most importantly, consumer buying behaviour.

Corporate branding has been defined by Van Riel (2001, p. 12) as: "a systematically planned and implemented process of creating and maintaining a favourable reputation of the company with its constituent elements, by sending signals to stakeholders using the corporate brand."

Creating a coherent perception of a company in the minds of its various stakeholders is a major challenge faced by many companies. Particularly in large multinational corporations speaking with one voice is a challenging task. Especially when grown through extensive merger and acquisition activities, large companies often comprise multiple subsidiaries and subsequently multiple brands and cultures. Managing the signals these diverse corporate subsets send out to their stakeholders is often impeded by various aspects such as historic turf wars between divisions, cultural and language differences, deficient management structures and unclear responsibilities, or simply by spatial separation. Furthermore, incoherence in messages and difficulties in coordination are often fostered by communication representatives' narrow focus on their particular stakeholder groups.

For example, investor relations representatives only have a small community of investors in mind. Those responsible for a certain product brand focus on their particular customer base and the internal communicators primarily see their recipients, the employees. Such thinking in a box and acting in narrow realms of stakeholder groups often leads to the communication of messages that might be suitable for each individual stakeholder group, yet all in all the picture drawn of the company as a whole is blurred or even contradictory.

This article asserts that a stronger integration of the different internal units responsible for stakeholder relations is needed in order to foster more coherencies in messaging and to eventually generate a coherent corporate brand image and favourable corporate reputation. The management process of creating and maintaining a coherent corporate brand image in the minds of each individual stakeholder which is the basis for a favourable overall corporate reputation shall be labelled corporate branding.

The importance of corporate brands has been ignored in the literature for a very long time. It was only during the 1990's when branding and communications consultants went on to assess what is called as a 'corporate brand' (King, 1991). Writers about a few decades ago always focused on the importance of a 'company brand' rather than a 'corporate brand'. However, there is an overarching explanation as to why there has been a growth in the importance of studying a 'corporate' rather than a 'company' brand. Some of the early academic work in the area of corporate brands reached a broadly similar set of beliefs. The importance of staff in corporate brand building was emphasised, as was culture. The role of the chief executive as brand manager was also stressed. Balmer (1995) also said that the new millennium would witness increased importance being assigned to the corporate brand. It can also be found in academic literature that marketing scholars have largely ignored the challenges presented by corporate brand management.

The reasons for this short sightedness can be seen in a lot of branding and marketing textbooks, which though acknowledge the importance of corporate brands but fail to highlight the following attributes:

* corporate brands have a wider scope and management as compared to product brands;

* corporate brands have multi-stakeholders rather than customer orientation and

* the traditional marketing framework is not sufficient when one is studying a brand at a corporate level

Most of us today fail to understand the difference between what is and what is not a corporate brand. Brands such as McDonalds, British Airways, Vodafone, Virgin and Manchester United are examples of organisations with clear corporate brands. However, in the case of Procter & Gamble, Unilever and Diageo, it is more the product brands that have a clear recognition as compared to the corporate brand. In such cases organisations face a lot of difficulties in building their corporate brand because of their stronger focus on building their product brand portfolio. A corporate brand may be viewed as a contract in that the company needs to articulate its accord with its key stakeholders by demonstrating, unceasingly and over time that it has kept true to its corporate branding pledge. As such, the brand name and/or logo play an important part in creating awareness and recognition but also as 'signs' of assurance. However, a number of authorities have cautioned against seeing branding as a one-way process that affects the image of those engaged in some form of branding partnership such as customers and employees. This is because these groups also have a key role in defining a brand's image (Johansson and Hirano, 1999).

The relationship of corporate reputation to the success of a brand

Corporate Reputation has never been considered so important than it is today. In the recent years it is not just the markets which have nose dived in the corporate world but it is the corporations themselves. Scandals such as that of Enron and WorldCom have seriously hampered the trust among stakeholder groups and widespread public scepticism about company ethics. If we look at the case of Andersen, the major reason why the company ceases to exist is because of the negative reputation that built up over a short period of time. Since the mid-1980s senior managers have recognised the strategic necessity of building and sustaining a favourable corporate reputation to create corporate competitive advantage. This recognition has been reflected by a wealth of academic publications that have highlighted the value of a favourable corporate reputation as a means of enhancing an organisation's financial value, influencing intention to buy, acting as a mechanism for assuring product/ service quality, influencing customer and employee loyalty, and offering inimitability to the organisation. Authors over the years have also recognised that an organisation's corporate reputation is affected by the actions of every business unit, department and employee that comes into contact with another stakeholder.

Reputation is a concept more generally known to us as how an organisation lives up to the expectations of its stakeholders. A firm with a good overall reputation owns a valuable asset 'goodwill': brand names, corporate logos and customer loyalty. Brands in general are used by the consumers as a symbolic meaning in their recognition and decision making process. Often brands develop a 'personality' of their own that has an effect on whether users decide the product's image is consistent with their needs. With this 'personality' often goes a reputation as well. Brand names can often be repositories for a firm's reputation: high quality performance on one product can often be transferred to another product via the brand name.

For a firm expanding its product line, a well-known brand name can be advantageous in facilitating user acceptance of the new product because of its existing brand reputation. Family branding, that is a company placing the same brand name on all products in a product line, enjoys the distinct advantage of instant recognition, benefiting from the "halo effect" of the brand's established reputation. This leveraging effect has led some firms to enter new fields under the same name ? brand franchise extension. The advantages of such an approach are the facilitation of the adoption process and acceptance of new products, since users assume new products have the same quality level as existing ones; a minimal cost of branding to the manufacturer, extensive advertising for brand name awareness and preference will not be necessary; and user response will tend to be faster, thereby reducing the introduction stage in the product life cycle where profits are negative.

In addition, another advantage often obtained is the greater ease in gaining distribution (particularly shelf space) due to its familiar name. While the reputation of the established brand name can facilitate the introduction of a new product, any problems with the new product can, conversely, affect the saleability of all items bearing the same name. If consistency in new product quality is not maintained, user dissatisfaction may result which may carry over to older, successful brands in the line. Family branding, therefore, places high demands on quality control because every single item is considered representative of the entire line. A lower quality item may hurt sales of the better quality products. Promotion of a better quality product may result in credibility gaps among potential buyers. A new product failure may well tarnish the reputation of sister products carrying the same brand name. One bad egg may well spoil the entire basket.

Reputation is thus the assessment of the continuous sustainability over time of an attribute of an entity. This assessment is based on the entity's willingness and ability to perform repeatedly an activity in a similar fashion. Reputation is an aggregate composite of all previous transactions over the life of the entity, a historical notion, and requires consistency of an entity's actions over a prolonged time for its formation. A firm will lose its reputation if it repeatedly fails to fulfil its stated intentions. Having a good reputation also insures high quality firms will be larger and have more customers since fewer customers will depart from high quality firms in the long run and more will arrive because of word-of mouth activity from other customers. Thus, to become successful and hence profitable, brands must develop a positive reputation.

Gaurav Bahirvani
MBus.(UK,2004), MSc.(UK,2003), BMS.(INDIA,2002)
Corporate Brand Development Consultant
Manchester, England, United Kingdom.
Email: gaurav.bahirvani@gmail.com

____________________

Advertisement: Honest Riches - Click Here!

Advertisement: Lost AdWords - Click Here!

Advertisement: Get $1 Million A Month In Google Pay-Per-Click Ads Free! - Click Here!

Advertisement: Who Loves Money? - Click Here!

Advertisement: SEO Elite, the GrandDaddy of SEO Software - Click Here!

---

Brand Image - Brand Identity - Brand Strategy - Brand Identity Guru

Consumers perceive and accept many brands within a certain trade group in different ways. By personifying a brand (How would you describe brand X if it were... Read More

Trademark Issues in the Mobil Auto Business

There have always been trademark issues and lawsuits in the mobile auto service business. I know this because I own several such businesses. We first noticed a... Read More

Personal Branding: Characteristics of a Strong Personal Brand

How many times have you been at a networking function and been lost for words when asked "what do you do"?We all have. But do you see... Read More

Corporate Logo Design ? 6 Keys to Success

A corporate logo design should be highly instrumental in building your corporate identity and should successfully exude the company's attitude. The viewers must have some idea about... Read More

Introduction to A Branded World: Adventures in Public Relations and the Creation Of Superbrands

You'd have to labor to shield yourself from the power of Branding; it's hard to avoid it in today's business and social climate. Even in the backwoods... Read More

Articles: The Perfect Branding Tool

If you own a web-based business, you're probably aware of the need for things like link exchanges, lead-purchasing, SEO copy, banner ads and all of the "traditional"... Read More

Standing Under the Umbrella And Still Getting Wet

Make More Money Making a Name for YourselfCalling all realtors, financial planners, insurance brokers, multi-level & network marketers, and anyone else who works in the precarious and... Read More

Not So Stationary Stationery

The elements and functionality of the basic stationery system is changing. With the advent of email, fax, web and cell phones, stationery systems must be adjusted to... Read More

Notable News - The Branding Myth

How many times have you heard of seen advertising for a graphic design company that states that they do branding?If you think branding is a logo, letterhead,... Read More

How a Great Tagline can Help your Business

"Just do it." "We try harder." "The Ultimate Driving Machine." "Be all that you can be." Taglines are one of the best ways of branding a product,... Read More

You Bored Me at Hello - Top Three Strategies for Networking Your Brand

"You had me at hello," those famous words from the movie Jerry McGuire let Tom Cruise know that Rene Zellweger's character was hooked from that point and... Read More

Brand Identity and the CEO

This week I spent a few hours with a highly successful CEO discussing his brand identity questions and concerns. "What do the most successful brand initiatives have... Read More

Brand Positioning - Brand Image

That cross-trainer you're wearing -- one look at the distinctive swoosh on the side tells everyone who's got you branded. That coffee travel mug you're carrying --... Read More

Im Just Starting, Why Do I Need a Logo Design?

Businesses eager to open often give little thought to their identity. With so much to get done, designing an appropriate logo hardly seems like a top priority.... Read More

Boston Web Design Branding - Brand Identity Guru

A branding company's website purpose is to design websites that will attract attention, give a professional image and support the message you are trying to convey in... Read More

What Make Us Unique and Different

Starting a business can take a lot of time, money, and energy. And because we don't want to completely re-invent the wheel, we often want to copy... Read More

Could Ray Kroc have founded McDonalds in the Era of Sarbaines Oxley?

Over regulation of our free markets is stifling our growth in America and killing the next superstar Entrepreneurs. Let's discuss just how bad it really is. Let's... Read More

Branding ? Brand Identity Guru

Brands are important aspects of any business, but unlike money or bricks, mortar and paperclips, a brand is an intangible aspect of business. It lives in people's... Read More

The Face of Your Business, Part I

When we initially started our businesses, we had to decide how we were going to market ourselves. Kind of an obvious statement - every business has to... Read More

Blonds Have More Fun!

In the book, The Blond Knight of Germany, American authors Toliver and Constable detail the life of the greatest fighter pilot to ever fly, Germany's Erich Hartmann.... Read More

The Big Uneasy: Clearing the Clouds of Guess

People often come to me to assist them with developing their brand because they are unable to accomplish the business success they desire. They're experiencing what we... Read More

Don?t Overlook Your Email When Considering Your Brand Identity

You wouldn't skip letterhead when sending out a sales letter - Or would you?How many emails do you send each day? If you are anything like me,... Read More

Setting the Right Price

One of the ways people get to know you is by the identity you project. Your company name, the way you present yourself, your business card and... Read More

How Brand as an Intellectual Property has Led to Corporate Globalisation?

IntroductionGlobalisation is referred to as a set of profound material changes that have an impact on relations between societies in the past few decades. The identifiable features... Read More

Santa - The Brand

Every Christmas Eve, a burglar named Santa busts into homes around the world, but he has never been charged with B&E. He has one of the best,... Read More

Branding 101: Why Its Critical to Business Success and How to Do It Right

What's Your Brand?A brand is a product/company personality that helps distinguish it from the competition. It evolves out of the product essence. So, what's yours? Quality? Service?... Read More