Executive Summary Corporate Branding
My literature study and empirical research took off with the assignment of developing a corporate brand model for international organizations. The reason for research was addressed to the strategy transition of international organizations, from a local responsiveness strategy to a transnational strategy, which requires a healthy balance between the extent of integration and local responsiveness. A problem for young international organizations is the lack of cross border brand recognition, especially in case of multiple business units scattered across continents or countries. Hence, development of integrated strategic marketing and communication structures are often lacking. A shortfall of brand integration and brand awareness will be often recognized by corporate management and business unit managers. To fulfil my research I have formulated the following questions;
- Which general characteristics of corporate branding can be defined?
- Which criteria can be drawn from the theory of corporate branding?
- Which criteria can be formulated on the basis of Q2 and how to classify these?
- Which appreciation can be defined for the effectiveness and strength of corporate branding?
To guide me through the process of research, I have reflected my logical and sequential research steps in a conceptual model of research. This conceptual model starts with studying of scientific theories and concepts of corporate branding to create a common understanding of corporate branding and all facets of branding in particular. I have added an interview with a brand manager and case studies to strengthen the literature study with real world data, experiences and lessons to learn.
My literature research study has revealed that corporate branding can be defined as the process to maintain, continue and create a positive corporate reputation and associations using the power of a brand, which in return is a promise to the consumer at which the brand has formed a set of perceptions about a product, service or business. This is the interface where internal and external associations, such as acknowledgement and recognition of innovative orientated solutions and services, are built or even damaged. General corporate brand characteristics involve features or qualities, related to corporate branding, serving to identify this phenomenon among other brand propositions. My literature research exposed four general characteristics of corporate branding;
- Corporate branding involves autonomous brands with an umbrella or source brand architecture and defines the organization behind the product and/or service.
- Corporate branding is most often related to mature brands which characterize it by; a rich heritage and valuable roots, its assets and capabilities, the employees being brand ambassadors, its values and value discipline, a dedicated local or global orientation, and a visible citizenship practice.
- Corporate branding characterizes itself by brand transparency which encapsulates the brand vision, brand values, brand personality, brand positioning and brand image.
- Corporate branding incorporates brand consistency across the organization, the products and services, lead by dedicated brand groups or a brand manager.
I have addressed corporate branding as a holistic strategic tool that could contribute significantly to international business development. Efficiency and economy of scale are important instruments to deliver success and competitive advantage, through acts of innovation which involves investments in competence, assets and brand reputation. The so called "think globally - act locally" balancing act evokes centralized functions and decentralized organizational structures within a common framework. Corporate branding fulfils thereby an internal and external key function for settling the right set of brand association liaised with organizations. Not only to communicate the identity and reputation but also to communicate corporate value drivers.
My case studies have demonstrated that strategic brand management mistakes can lead to severe business losses over a long period of time. Good brand management practice goes beyond product management and could deliver a significant contribution to long term corporate success. For that reason corporate and local management need to maintain a realistic and objective market view by monitoring market dynamics over time. Brand strategy and brand identity communication must be clear and understood for all stakeholders with a strong focus on specific customer segments. Consistency is critical to brand image and customer perceptions which are hard to change once settled in the mind of customers.
My interview with a Caterpillar brand manager was open and constructive. I have learned that Caterpillar has built her brand model around trust and integrity where the brand can be seen as a vehicle to connect Caterpillar to their customers and enable them to identify the promise they buy. Understanding why people choose for a product or brand is most valuable. To balance the integration and differentiation aspect, Caterpillar diffuses her brand knowledge by organising brand advocate seminars, training programs, and email news letters. Caterpillars brand architecture is the foundation of strategic brand decisions and proactive brand management. Brand equity is measured every second year by assessing the actual brand performance among their customers. Communication tools are developed to safeguard brand performance driven by the key brand attributes. A brand owner structure is in place to manage the brand(s) and to have a clear understanding of brand responsibilities and accountabilities.
Being conscious of the (aggressive) growth strategy, international organizations need to undertake action to avoid serious hindrance of their business development over the coming years. Corporations will not succeed by simply doing more of what they are doing now; they need to do some things differently. This is where holistic brand management and corporate branding becomes a powerful strategic marketing tool. International organizations would benefit from a well-defined corporate brand model. Without loosing sight of scattered brand issues among the business units, I have emphasised my advice and recommendation on a structured brand model (the cause) rather then generating operational individual business unit action list (the consequence). I prefer a sustainable strategic approach above a short term operational actions to build and maintain a well defined international brand reputation. For that reason I recommend to carry out the following strategic proposition;
- Implement a brand equity model.
- Set-up transparent brand architecture.
- Establish brand ownership and brand managers.
- Improve brand building programs
Whether all recommendations will lead to instant success depends on many factors. Nonetheless I am fully confident that all above mentioned recommendations will contribute significantly to better brand performance and to a more structured and transparent marketing and communication organization. Last but not least I would like to emphasize both size of the coin by highlighting the critical success factor and pitfalls.
Critical success factors can be addressed as;
- Effectiveness of implementation.
- Understanding of urgency and reason for change.
- MT Management support and trust.
- BU management support and trust.
- Willingness of employees.
- First quick wins.
Pitfalls can be addressed as;
- Doing nothing and continuing today what we have done yesterday.
- Implementing without full understanding and support of MT and local business unit managers.
- Implementing without proper preparation, milestones and Deming-cycles (Plan, Do, Check, Act cycle)
- Implementing without ownership, accountability and responsibility.
Ronald van Haaften