Recently Jan Rijkenberg raised some interesting points in an article in which he questioned the importance, indeed the relevance, of underpinning individual brands with the identities of their corporate owners. It does brands no favors, he suggests, to collectivize them as part of the bigger entity. In so doing, he maintains, they lose their individuality and therefore their specific appeal. It’s a well-argued and reasonable case that cautions against big picture corporate brands overshadowing their assets and diluting their valuable personalities to fit with a bigger body’s self-aggrandizing agenda.
Personally, I can see a case for corporate brands – but I think their roles are specific, and that there are clear responsibilities that come with running a diversified portfolio. I also believe that, too often, Rijkenberg is absolutely right.
So, let’s start with when an owner’s brand might be useful. I agree with Rijkenberg that there are specific activities that are much more suited to the corporate brand than the individual marques.
- The investor brand – if the company is publicly listed, then that entity needs to be speaking in a branded and clear way to investors and the markets. It must explain not only who the brands are but also how they have collectively performed. By allocating this responsibility to the owner rather than the individual brands, the corporate entity is able to talk to the investment market about the same entity they have invested in. Receiving reports from the individual brands would be neither practical nor legal. So, if you are a large beverages company for example, and you are publicly listed, it makes sense to feed back to the markets on how the portfolio as a whole has performed.
- Corporate social responsibility – for the same reason it makes sense for the whole entity to discuss the programs it is running at a brand level and a wider corporate level. This enables the efforts of each brand to be seen in a wider context.
- Internal – the people responsible for managing the brands within a corporate structure should be accountable to the same rules and behaviors as each other and the rest of the organization. So it also makes sense for example that, in an employer brand sense, a large corporate would want to talk about its collective values and behaviors. We could debate for some time as to whether in many cases these amount to little more than platitudes, but there’s no denying that this too is a corporate-level responsibility and therefore should be linked to that brand.
None of this is contentious. Where it becomes more knotty is when organizations look to overtly extend the ownership of the corporate entity into the brands themselves – as Unilever and P&G have done in recent years for example. From a corporate investor point of view, this makes sense because it provides a clear portfolio footprint. Consumers can see which brands are part of which entity and the hope of the marketers is that the goodwill will halo to the corporate brand, and vice versa.
Many people know that reputations take a long time to build and a short time to damage. Several companies are known and admired for their contributions to environmental sustainability and worker welfare. Toyota, for instance, received well-deserved kudos for introducing its hybrid Prius automobile, which gets 50 miles per gallon. GE won praise for its Ecomagination effort to make money by solving environmental problems, having launched green industries such as wind power and solar panels. Starbucks is admired for using purchasing practices that help coffee farmers achieve a decent income, and Reebok was the first in its industry to adopt standards for fair treatment of workers.
On the other hand, there are certainly enough examples of companies that draw criticism for their indifference. Walmart periodically gets into the news when its employees loudly complain about low pay and the lack of benefits. Nike had a public relations disaster when it was discovered that its overseas manufacturers were using child labor.
One needs to look at five questions when rating a company’s overall reputation:
- Does the company produce good or excellent-quality products and services? If the answer is no, there’s no need to ask any of the other questions.
- Does the company show good profits over the long term? If not, people aren’t likely to trust it.
- Does the company have good management or visionary management, or are its leaders asleep at the wheel?
- Does the company have dedicated employees, suppliers and distributors? This will come across in good teamwork and satisfied stakeholders.
- Does the company exhibit social responsibility in a meaningful way? This last question adds another level to the company’s overall reputation.
Contributed to Branding Strategy Insider by: Philip and Milton Kotler, excerpted from their book, Market Your Way To Growth with permission from Wiley Publishing.
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There are several benefits from employing a corporate branding strategy which a corporation can exploit. First of all, a strong brand including a corporate brand is no less or more than the face of the business strategy hence portraying what the corporation aims at doing and what it wants to be known for in the market place. The corporate brand is the overall umbrella for the corporations' activities and encapsulates its vision, values, personality, positioning and image among many other dimensions. Think of global banker HSBC which has successfully implemented a stringent corporate branding strategy. They employ the same common expression throughout the globe with a simple advertising strategy based on the slogan "The world's local bank". This creative platform enables the corporation to bridge between many cultural differences, and to portray many faces of the same strategy.
A corporate branding strategy creates simplicity as it always will stand on top of the brand portfolio as the ultimate identifier of the corporation. P&G has notoriously been known for a multi-brand strategy (partial brand portfolio pictured above) and yet again, the corporate brand P&G is still what encapsulates all activities by the company. Depending on the business strategy and the potential need for more than a one-brand architecture in the case of P&G, which markets many different brands under their umbrella, a corporate brand can very often assist the corporation and the management to focus in on the core vision and values. Once this overall platform has been established and implemented, it serves as a great stepping stone for revisiting any other brands in the corporations' portfolio and to have a new approach and look at their various brand identities. This ultimately will lead to the final brand architecture of the corporation and set the strategy for how branding and brands will play an important role to achieve the corporate objectives.
The competition in the global business environment is tough and achieving a unique position and competitive advantage is becoming more and more difficult and expensive. The high level of investment necessary to maintain production capabilities and rising cost of R&D for product differentiation, makes strong marketing capabilities and unique brands pre-requisites for modern companies to cover these heavy investments. How can companies and management teams catch up?
Corporations around the world are increasingly becoming aware of the enhanced value which corporate branding strategies can provide for an organisation. Branding in the classic sense is all about creating unique identities and positions for products and services hence distinguishing the offerings from competitors. Corporate branding employs the same methodology and toolbox used in product branding, but it also elevates the approach a step further into the board room, where additional issues around stakeholder relations (shareholders, media, competitors, governments and many others) can help the corporation benefit from a strong and well-managed corporate branding strategy. Not surprisingly, a strong and comprehensive corporate branding strategy requires a high level of personal attention and commitment from the CEO and the senior management to become fully effective and meet the objectives.
Corporate branding is often, but wrongly, referred to as an exercise where the company logo, the design style and color scheme are changed. Naturally, these are important elements to evaluate and potentially change at a later stage once the strategy has been decided upon. It is often accompanied with a new corporate slogan, and then everyone expects results to occur during the project. Corporate branding is a serious undertaking which entails more skills and activities than just an updated glossy marketing facade with empty jargon.
Corporate branding is a potentially strong tool for re-aligning a corporate strategy and ensures that the corporation – big or small – is leveraging adequately on the un-tapped internal and external resources. There are10 crucial steps on the way to a successful corporate branding strategy, and they can serve as a useful guide for any corporate branding project.
1. The CEO needs to lead the brand strategy work
The starting point for corporate branding must be the board room, which is also serving as the most important check-point during the project. The CEO must be personally involved in the brand strategy work, and he/she must be passionate and fully buy into the idea of branding. To ensure success despite the daily and stressful routine with many duties at the same time, the CEO must be backed by a strong brand management team of senior contributors, who can facilitate a continuous development and integration of the new strategy.
2. Build your own model as not every model suits all
All companies have their own specific requirements, own sets of business values and a unique way of doing things. Therefore, even the best and most comprehensive branding models have to be tailored to these needs and requirements. Often, only a few but important adjustments are needed to align them with other similar business models and strategies in the company to create a simplified toolbox. Remember that branding is the face of a business strategy so these two areas must go hand in hand.
3. Involve your stakeholders including the customers
Who knows more about your company than the customers, the employees and many other stakeholders? This is common sense, but many companies forget these simple and easily accessible sources of valuable information for the branding strategy. A simple rule is to use 5% of the marketing budget on research and at least obtain a fair picture of the current business landscape including the current brand image among stakeholders, brand positioning and also any critical paths ahead. Simply do not forget the valuable voice of your customers in this process.