Sometimes a corporate branding strategy requires a complete repositioning of the company. Often an entirely new name is developed in order to cast aside prior associations. For instance, re-branding is sometimes the path of least resistance for a post-merger company. Re-branding often enables by-passing the touchy political problems created from win–lose perceptions generated in merger siutations. In the accounting industry, for instance, early mergers between PriceWaterhouse and Coopers & Lybrand led to naming the merged firm as PriceWaterhouseCoopers – Lybrand was dropped entirely. When the accounting firm of Arthur Andersen developed significant revenues from its management consulting activities, it created a separate business unit that it named Andersen Consulting. When a rift subsequently developed between
High brand value of local/affiliated brand High brand value of endorsing company Strong market share local/affiliated brand Weak market share local/affiliated brand Stand alone Medium endorsement Weak endorsement Strong endorsement
Figure 5.7 Levels of corporate endorsement Source: van Riel (2002)
the accountants and the consultants in the 1990s, the firm broke out its Andersen Consulting group entirely. After much legal wrangling over use of the Andersen name, the consultants settled on a renaming of their division – and Accenture was born. The process took place very quickly – it took less than 90 days for the firm to select a new name, building eye-catching communi- cations campaigns (see Figure 5.8), in order to build worldwide acceptance and recognition of its new identity with internal and external audiences. Ironically, the company that had sought so hard to keep the Andersen name – and lost it – turned out to have been the real winner: In 2002, its former parent Arthur Andersen was indicted and found to guilty of obstruction of justice charges relating to the collapse of the energy giant Enron. The firm was subsequently dissolved and the Andersen name has now completely disappeared from the corporate landscape.
Employee attitudes are a critical factor in a company name change. If the change is not communicated carefully to the employees, the whole campaign can founder on their scepticism (Muir, 1987). Employees need to have a feeling of belonging, and of being part of a shared culture. They need to be proud of the company they work for, and of everything connected with it. These matters cannot be left to chance. In order to arouse feelings of loyalty, the organization must create symbols, such as flags, rituals, and names. The company must make use of rituals and ceremonies to celebrate what it is, and the reason for its existence. Beliefs must be constantly confirmed (Olins, 1989). If this does not happen, the company can easily stagnate.
Consider British Airways, a company created in 1973 from a merger between BOAC and BEA. Observers indicate that there had been little preparation for the merger and no careful introduction of the new company. As a result, employees failed to identify with the new company, and some ten years after the merger, many still displayed flags of their old companies on their desks. The company was managed in a military fashion, and its service had a bad reputation. In the early 1980s, a start was made towards rectifying the situation. A new management team developed a strategy rooted in giving good customer service. A new logo was introduced to draw attention to the changes, and to the “reborn” British Airways. In this way, the company managed to lose its claim to being the “worst airline in the world” (Diefenbach, 1987). Indeed, in the early 1990s, dramatic growth enabled the company to claim title to the official tagline as “the world’s favorite airline”, based on its top rating as flying more passenger miles than any other airline.
Ultimately the symbols used by a company consist not only of its names, but of images that strengthen and support its actions and communications.
ESSENTIALS OF CORPORATE COMMUNICATION
Visual images such as photographs, illustrations, non-verbal graphics, brand marks, and logos are powerful symbols for implementing a corporate branding strategy. The power of these symbols lies in the increased attention which they attract to the communications of the company. A good symbol reduces the volume of redundant communication a company needs to broadcast.
A corporate brand generally consists of both a logo and a tagline. When effectively designed, the two work together as a script in eliciting organiza- tional associations in people’s minds with everything that the company is trying to communicate. Signs in shopping streets are an example. Even in strange cities, people quickly recognize internationally used symbols, espe- cially when they are in familiar colors. The bright red and yellow colors used to feature Kodak products around the world readily comes to mind. It’s a familiar guidepost signalling to tourists everywhere the presence of a retailer of film products.
The chemical industry is a good example of companies taking this approach. Having documented the negative reactions people have to the idea of “chemicals”, firms have explicitly implemented a strategy of describing the industry using the more favorably received term “chemistry”. For instance, the American Chemistry Council is the group that represents chemical manu- facturers. Its tagline is “Good Chemistry Makes it Possible”. Similarly, most pharmaceutical firms now self-consciously describe themselves as involved in the “Life Sciences” rather than the drug industry. Pfizer’s tagline is “Life is our Life’s Work”.
Conclusion
Corporate branding has become more important in the past years. The veil of “corporate silence” that historically prevailed is no longer possible. Externally, legal rules regarding corporate disclosure are forcing a greater degree of transparency and openness than ever before. Internally, employees, customers, and investors seek greater clarity and understanding of a company’s com- mercial and non-commercial activities. Everyone is therefore clamoring for knowledge of the company behind the brand, of its core competencies and socially responsibility.
Selecting a corporate branding strategy is no simple matter. Corporate managers are sensitive to the matter and often find themselves in conflict with managers of the company’s diversified business units. Research shows, however, that the conflicts run along more or less predictable patterns. Problems
ESSENTIALS OF CORPORATE COMMUNICATION
that would normally take years to resolve can be prevented focusing corporate branding decisions on rational criteria.
Corporate branding strategies must of necessity be customized to the complexity of the market situations that organizations face. Endorsement by a corporate brand sets the context for the design of the total communication system that the company can carry out. It provides the bandwidth that local business units must fit into.
This chapter has set forth key considerations that managers should take into account in selecting a corporate branding strategy. To prevent lasting turmoil, we recommend initial internal and external research as input into the decision-making process. It should be followed by careful assessment of the rational factors involved in selecting a specific corporate branding strategy. Only when it can be convincingly shown that a significant parenting advantage can be achieved will corporate endorsements be accepted. Naturally this can partly be steered by intensely profiling the corporate brand in all relevant markets. An endorsement stemming from the company behind the brand is only useful if the corporate brand is strong. The corporate brand can only be used as an endorsement vehicle if it is known and appreciated by relevant stakeholders. Investing in corporate branding is therefore a matter of balancing potential benefits against costs.
In sum, our experience with re-branding programs suggests the following generalizations:
1. Corporate branding initiatives almost invariably develop from pressures by corporate audiences for increased clarity and transparency of com- munication from the company. These pressures are generally met with resistance from marketing-oriented managers.
2. No amount of negotiation will produce an optimal corporate brand. To develop and implement a corporate branding strategy requires strong and assertive leadership.
3. Symbolic support is important. Once a decision to implement corporate branding has been made, the launch must be signaled with appropriate internal and external messaging and hoopla.
4. Implementation of a corporate brand invariably generates resistance. Often the source of the resistance can be traced to lack of care in the setting of rules for business units to follow, and monitoring their execution. Managers of business units often ignore or bend the rules, and debate the way in which the organization is visually trying to communicate its identity. This is one of the crucial moments in the corporate branding process and requires
determined leadership to avoid slippage and a return to the status quo ex ante.
5. Branding is a Sysiphian process that has to be repeated over and over again: when a new CEO takes office, internal discussions about the merits of the corporate brand are likely to start all over again.
Discussion Questions
1. Identify corporate brands whose principal target audiences consist of either investors, employees, or consumers.
2. Explain how specific decision-making models can be applied in a company to identify points of resistance to a corporate branding strategy.
3. Describe the types of organizational associations that are essential in transferring positive brand value from the corporate level to the product level.
ESSENTIALS OF CORPORATE COMMUNICATION
A R E P U TAT I O N
P L AT F O R M
A reputation is not a play thing A reputation is not a toy . . . remember this one day
your reputation is what you make of it not just what they say
Shana McMillen
The nomenclature that a company makes visible in the names, symbols, and house style it selects are a visual representation of the corporate brand. However, the corporate branding process involves, not only the selection and presentation of visual styles and other sensory input, but also the selection of specificmessaging content that managers want to convey in their corporate communication. Careful examination of strong corporate brands demonstrates that most of them anchor their corporate communication around a core reputation platform that creates a “starting point” for more detailed descriptions of the company’s strategic position and direction. Most reputation platforms and the communications derived from them are designed to create specific organizational associations in the minds of observers. In particular, reputation platforms are “starting points” for the development of what van Riel (2000) calls “sustainable corporate stories”. Research confirms that strong and consistent application of symbolism and story-telling is associated with stronger corporate reputations and better valuations (Fombrun and van Riel, 2004).
This chapter examines how companies can build reputation platforms and select a nomenclature and corporate stories that follow from them. Logos, taglines, starting points, and stories are powerful expressions of underlying
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reputation platforms around which companies build strong corporate brands. The distinguishing characteristic of a reputation platform is that everyone recognizes the company on the basis of that platform. To use a musical analogy, a reputation platform is like the “hook” in a song or the major chords in a score – it consists of the melodic riff around which a score is built. Numerous improvisations of the melody are rendered throughout the company as busi- ness unit managers interpret and adapt the reputation platform to the needs of their local audiences (Hatch, 2003). The key to effective corporate com- munication lies in preventing day-to-day messaging from straying too far from the melodic line.