No doubt, they represent one of the most fascinating business phenomena in today’s world. But then, managing a corporate brand is really that simple as it appears?
David Aaker
Vice-Chairman of Prophet, Professor Emeritus of UC Berkeley
A corporate brand is definitely a powerful option to lead the charge in the marketplace. Products and services are hard to differentiate as it’s often difficult for them to communicate in a cluttered media environment and without any exceptional feature they can be quickly copied. A corporate brand, on the other hand, is unique because it represents people, programs, values and heritage. However, there are some challenges to face when it comes to manage the brand.
Well, the foremost is to maintain the relevance of the brand. What business is the firm in? What product scope is associated with the firm? In what product arenas does it have credibility? For what problems is the brand a solution? The corporate brand boundaries directly affect the relevance span and its potential to extend into new product-markets. So, changing a corporate brand is like turning a large ocean liner – it turns slowly and uses a lot of energy doing so. It requires not only new strategies but also a new image. The difficulties that Xerox and Kodak have had in past rest on their strong associations with copiers and cameras. In both cases they have struggled to enter the broader world in which digital imaging systems are dominant.
Second challenge is in terms of creating value propositions. Too many corporate brands in effect have no value proposition. They are simply large, stable firms that can be trusted to deliver adequate products and services but with no point of distinction. Such a corporate brand is vulnerable. A corporate brand will work best only when it delivers a benefit. It could be a functional benefit based on its strategy. Dell with its direct model generated explicit benefits that included customisation and access to the latest technology. It could also be an emotional or self-expressive benefit.
Further, the risk in leveraging a corporate brand is that the resulting brand equity and the businesses on which it rests are vulnerable to visible negatives. However, when a controversy arises, the accepted best practice, when possible, is to admit the wrong doing or at least admit that there is a problem and immediately provide a visible fix. For instance, Johnson & Johnson, when faced allegations with regards to the tapering with the package of its Tylenol brand, it immediately pulled the affected packaging from the market and designed a new package. The impact of this action has lingered for well over a decade.
The challenge is also to manage the brand in different contexts. For instance, the GE brand needs to fight the fight in jet engines, appliances and in financial services with GE Capital. How can one brand, particularly a corporate brand accomplish that multi-task? One answer is that the brand identity needs to be adapted to each context so it can win the day. So innovation at GE Appliance might be a bit interpretation than innovation in GE Capital. If that is not enough, it might be necessary to augment the identity for a context. Perhaps, GE Jet Engines have a technology dimension not seen in the other GE business units.
One can even face a challenge in making the brand identity emerge. The brand might start with an image but will want to move that image toward a band identity – a set of aspirational associations for the corporate brand to perform its assigned roles. For that to happen, the brand identity needs to be developed, which depends answers to the questions like: What the corporation can deliver? What will be credible given their current erceptions to actually develop and deliver meaningful programs? What will resonate with customers?
The final challenge that one faces in managing a corporate brand is – when to leverage the brand? In contexts involving service, such as retailing or financial services, corporate brands in driver roles will often be compelling because organisational associations such as concern for customer service, being friendly, and being efficient are more likely to be the basis for customer loyalty. However, the corporate brand is not always well suited for being a product master brand. In general, the corporate brand will be unlikely to be helpful for new products when it is too associated with one product class, when it lacks a relevant value proposition because its equity is not applicable, or when it has negative associations. In those cases the option is usually to create a new brand and consider using the corporate brand as an endorser role.
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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David Aaker
Vice-Chairman of Prophet, Professor Emeritus of UC Berkeley
A corporate brand is definitely a powerful option to lead the charge in the marketplace. Products and services are hard to differentiate as it’s often difficult for them to communicate in a cluttered media environment and without any exceptional feature they can be quickly copied. A corporate brand, on the other hand, is unique because it represents people, programs, values and heritage. However, there are some challenges to face when it comes to manage the brand.
Well, the foremost is to maintain the relevance of the brand. What business is the firm in? What product scope is associated with the firm? In what product arenas does it have credibility? For what problems is the brand a solution? The corporate brand boundaries directly affect the relevance span and its potential to extend into new product-markets. So, changing a corporate brand is like turning a large ocean liner – it turns slowly and uses a lot of energy doing so. It requires not only new strategies but also a new image. The difficulties that Xerox and Kodak have had in past rest on their strong associations with copiers and cameras. In both cases they have struggled to enter the broader world in which digital imaging systems are dominant.
Second challenge is in terms of creating value propositions. Too many corporate brands in effect have no value proposition. They are simply large, stable firms that can be trusted to deliver adequate products and services but with no point of distinction. Such a corporate brand is vulnerable. A corporate brand will work best only when it delivers a benefit. It could be a functional benefit based on its strategy. Dell with its direct model generated explicit benefits that included customisation and access to the latest technology. It could also be an emotional or self-expressive benefit.
Further, the risk in leveraging a corporate brand is that the resulting brand equity and the businesses on which it rests are vulnerable to visible negatives. However, when a controversy arises, the accepted best practice, when possible, is to admit the wrong doing or at least admit that there is a problem and immediately provide a visible fix. For instance, Johnson & Johnson, when faced allegations with regards to the tapering with the package of its Tylenol brand, it immediately pulled the affected packaging from the market and designed a new package. The impact of this action has lingered for well over a decade.
The challenge is also to manage the brand in different contexts. For instance, the GE brand needs to fight the fight in jet engines, appliances and in financial services with GE Capital. How can one brand, particularly a corporate brand accomplish that multi-task? One answer is that the brand identity needs to be adapted to each context so it can win the day. So innovation at GE Appliance might be a bit interpretation than innovation in GE Capital. If that is not enough, it might be necessary to augment the identity for a context. Perhaps, GE Jet Engines have a technology dimension not seen in the other GE business units.
One can even face a challenge in making the brand identity emerge. The brand might start with an image but will want to move that image toward a band identity – a set of aspirational associations for the corporate brand to perform its assigned roles. For that to happen, the brand identity needs to be developed, which depends answers to the questions like: What the corporation can deliver? What will be credible given their current erceptions to actually develop and deliver meaningful programs? What will resonate with customers?
The final challenge that one faces in managing a corporate brand is – when to leverage the brand? In contexts involving service, such as retailing or financial services, corporate brands in driver roles will often be compelling because organisational associations such as concern for customer service, being friendly, and being efficient are more likely to be the basis for customer loyalty. However, the corporate brand is not always well suited for being a product master brand. In general, the corporate brand will be unlikely to be helpful for new products when it is too associated with one product class, when it lacks a relevant value proposition because its equity is not applicable, or when it has negative associations. In those cases the option is usually to create a new brand and consider using the corporate brand as an endorser role.
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
The Sunday Indian:- B-SCHOOL RANKING SCAMSTERS EXPOSED!For Exclusive Footage by Sunday Indian Click Here
Business Standard Exposes the Outlook Magazine Money Editor
Don't trust the Indian Media!
IIPM ISBE Programmes
Follow Arindam Chaudhuri on Twitter
IIPM B School on Twitter
Management guru Arindam Chaudhuri’s latest blockbuster book, Discover The Diamond In You
IIPM 2-year full time Programme (leading to the award of the MBA degree from IMI)
B-schools expect higher rate of campus placements this year
Arindam Chaudhuri (IIPM Dean) – ‘Every human being is a diamond’
IIPM Best B School – EVENTS
IIPM conceptualized the grand final of Dare ‘10 — the most prestigious of international B-school student quizzes
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