The Company as a Brand
Corporate Reputation and
Competitiveness
Lecture 4
Lecture Objectives
• To explore what in ‘branding can be applied
to the management of corporate reputation
20%
10%
20%
10%
20%
20%
What is a brand?
• A company with a price advantage can be
undercut. A company with a performance
advantage can be outflanked. But a company
with an emotional difference can potentially
demand a premium forever. David Ogilvy
• The most important aspects of a brand are the
associations we make with the brand name,
particularly the more affective (emotional) ones.
THE MARKETING MIX
People
Place
Product
Customer
Offer
Service
Promotion
Sales
Price
Advertising Sales Ratio
Product
New Cars
Hair Colourants
Cereals
Washing up liquid
Coffee
Analgesics
Ratio %
2.29
34.53
8.02
14.05
4.94
11.35
Brands and Advertising
Rank
1
2
3
4
5
6
Advertiser
P&G
BT
Vauxhall
Ford
Renault
Kellogg
% on TV
90.5
59.1
55.2
67.8
54.2
76.5
Today’s Brands are Corporate
Brands
• Multiple stakeholders: customers,
employees, shareholders, the media,
suppliers.
• Multiple channels: Direct, Intermediaries,
the Internet.
• Multiple product types: Products and
Services, Umbrella brands and extensions.
• The Service Economy
People
Place
Product
Customer
Offer
Service
Promotion
Sales
Price
Fashion Retailers
Customer Numbers
Electrical Retailers
Advertising Spend
Advertising Spend
Source: Davies (1991)
The Different Roles of
Advertising
• Advertising can create a brand image for a
physical product
• The customer recreates the imagery in use
• Advertising can communicate a brand for a
service or corporate brand
• Advertising an image for a service which is
not matched by the experience is a mistake
How Reputation is Created
From
Bernstein
(1984)
The COO Effect
• "Before 1918 nobody knew where a product
came from. In that year Germany lost the
First World War. To punish German
industry and to warn the European
consumer of that time, German
manufacturers were obliged to put on each
product they exported 'Made in Germany'
labels (in English). Very soon it became a
sign of quality", (Morello, 1984: p.5).
The COO Effect
• “Generalized images created by variables
such as representative products, economic
and political maturity, historical events and
relationships, traditions, industrialization
and the degree of technological virtuosity
which will have effects upon consumer
attitudes additional to those emanating from
the significant elements of the products.”
Bannister and Saunders (1978)
The Industry Effect
God made the wicked grocer for a mystery
and sign,
That men might shun the awful shops and go
to inns to dine,
GK Chesterton
Corporate v Product Branding
• The case of own brands competing with
national brands
• Own brands have many cost advantages
• They often lack cache, but not always!
• They have an image for poor quality…but
• Other corporate brands are seen as quality
signs
100
80
RETAILER ADDED VALUE
Overheads
and Profit
60
MANUFACTURER ADDED
VALUE
Advertising
40
Direct
Costs
RAW MATERIALS
20
SUPER
STORE
OWN
BRAND
No 2 BRAND
NO 1 BRAND
0
MANUFA
CTURER
COSTS
% MARKET LEADER RSP
120
Supply Chain Cost Structure: Margarine
Image cluster
Timotei
Natural
Gentle
Relaxed
Quiet
Conservative
Active
Sociable
Young
Cheap
Happy
Curious
15
25
9
12
9
2
-
Sainsbury’s
Frequent use
9
18
3
17
-
Wash and Go
Tesco’s 2 in 1
2
45
6
6
21
2
2
4
2
0
30
3
6
3
12
-
The Theft of Image
Positioning
Positioning is the place the product occupies
in consumers’ minds relative to competing
products.
Positioning is the way the product is defined
by consumers on important attributes.
Positioning (Ries and Trout)
• Positioning is what is distinctive about you,
what sets you apart from the rest
• Positioning is not what you do to the
product or service. Positioning is what you
do to the mind of the prospect. You position
yourself in the mind of the prospect.
• Positioning requires a frame of reference,
usually the competition.
Competitive Strategy (Porter)
• Strategy is concerned with identifying how
you intend to meet your corporate
objectives
• Competitive Strategy involves positioning a
business to maximise the value of the
capabilities that distinguish it from its
competitors.
Speciality
Wholemeal
Wheatmeal
White, sliced
High fat breads
Price
Fraser
Principles
M&S
Next
Debenhams
BHS
Littlewoods
C&A
Evans
Etam
Dorothy
Perkins
River
Island
New
Look
Top Shop
Mail order
Miss
Selfridge
Understanding Brands: The Use
of Metaphor
• Metaphor is (literally) false (Roger is a lion)
but our view of the target (Roger) is
transformed and illuminated by the lion
metaphor
• Metaphor helps us to understand the
complex through the medium of something
more familiar
3 Main Root Metaphors
Brand as
Asset
Brands can be valued
Brands can and should
be protected
Brand as
Person
Brand as
differentiating
mark
A Brand has a
Personality
Brands can be invested
in
We can have a
relationship with
a Brand
A Brand is a
Name
Brands can be bought
and rented
We are loyal to
Brands
A Brand is
a Symbol
Brands can be used for
different businesses
Brands have
reputations
Brands are sources of
economic power
Brands have
Values
Metaphors and
Sub Metaphors
for a Brand
Potential New Root Metaphor
Brand as Role
Brand as
Pilot
Brand as
Partner
Brand as
Family
Brand as
Seducer
Virgin
Cobranding
Virgin v
Nivea
Cigarette
brands
Retailer as
agent
IBM Intel
Brand
extensions
as brother
etc
Cosmetics
Ford
Firestone
Cars
Seeing Brands as People
• Qualitative research: ‘What newspaper
would the brand read? Where would it go
on holiday? What car would it drive?’
• Quantitative research: On a scale from 1 to
5 with 1 meaning strongly disagree and 5
meaning strongly agree, if MBS came to
life as a person how well would ‘friendly’
describe its personality?
Summary
• Many Branding ideas can be applied to
managing corporate reputation
• One exception is the value of advertising