Corporate Communications
8. Brand values, branding and rebranding
For each of a corporate’s audiences the company may be presented in a different way and perceived through a different perspective. Shareholders, for example, will view the firm as a legal and financial entity; customers and clients will view it through a series of products and services; while other stakeholders will view it primarily through their brand or brands.
“Branding is the process by which companies distinguish their product [and other] offerings from competition” (Jobber and Fahy, 2009, p. 135). As the commonalities between legal entities and products/services become less-differentiable, brands permit corporates to distinguish those entities and products by developing associations that affect audiences’
perceptions and ease the communications between the organisation and members of those groups.
The world’s largest brands
Earlier, we mentioned that one of the World’s largest companies – one of the Trillion-Dollar Club – is Alphabet. This company is better known by its main brand (Google).
Research group Kantar BrandZ ranks companies based on their “brand value,” each year.
This differs from the market capitalisation given earlier, and is based on the brand’s total financial value (contribution it brings to its parent company, the brands proportional impact on its parent company’s sales and quantitative survey data, sourced from over 170,000 global consumers. The end result is a holistic look at a company’s brand equity,
reputation, and ability to generate value. Many of the same names are found again, but they have different ‘values’ that are related to the brand rather than the corporate. A notable exception to the top group, for example, is Saudi Aramco – despite being one of the world’s largest corporates – does not appear on Kantar BrandZ’s top 100. Tesla, which was ranked sixth by market capitalisation in 2021, is ranked 47th by brand value.
Among the trends noted in Kantar BrandZ’s 2021 report are the biggest brands keep outgrowing the smaller ones; and companies which invest in marketing and research and development are also among those with the highest values and growth rates (Kantar Brand, 2021).
Creating a distinct corporate identity, brand and corporate personality has potential benefits:
• It can fix the company (or its products/services) in a location in the consumer’s mind (some have been so successful that the brand name has capitulated the generic word e.g. Biro);
• It can communicate or develop the organisation’s heritage (name any well-known Champagne house).
• It can add value (representing core beliefs or characteristics).
• It can add financial value (strong brands drive higher growth rates, product values, share prices and acquisition values);.
• It can have positive effects on customer perceptions, preferences and purchasing habits.
• It can function as a barrier to competition.
• It can support advertising through below-the-line promotion of the entity.
• It can help build communities.
Its importance can be seen among corporates which have been involved in mergers and acquisitions – where there have traditionally been high failure rates, in part attributable to the undue attention that is given to short-term financial and legal issues to the detriment of long-term identity and communication issues, inadequate recognition of the impact of leadership issues on identity and communication, and failure to secure the goodwill of a wide range of stakeholder groups common to both companies (Balmer and Dinnie, 1999). Its importance can also be viewed by brand valuations attributed to companies by independent advisors such as Kantar.
Corporate branding can be seen as a process by which companies distinguish their product and service offerings from competitors. It permits customers to develop a short-cut
association between the values of the organisation (e.g. quality v economy) and the products or services they consume (purchase, own and/or use). This is not just a case of
communicating the values alongside the product/service, but of building a distinct perception of the company and all is related assets which can be used to position the company, what it does and what it makes in its marketplaces. This perception is often based on the heritage of the company or brand – its history, background, context and culture e.g. Ferrari sports cars.
Indeed, brands with strong heritage can give rise to sub-brands or brand extensions e.g.
Dove Soap and Deodorant. The brand’s perception can equally be built around other elements, e.g.:
• Its core meaning e.g. the brand LEGO is derived from ‘play-well’ in the company’s home country.
• Its traditional place in the marketplace (the brand domain) e.g. Audi is perceived as more upmarket than other brands manufactured by the same company, VAG (which includes other brands such as Volkswagen, SEAT, Skoda). This can be, literally, a place e.g. British Airways.
• Its characteristics or descriptions e.g. The Body Shop or Vodafone Mobile.
• Its value associations i.e. the core characteristics of the brand such as up-market or economical e.g. Rolls Royce versus Hyundai.
• Its personality i.e. its similarity to other things that share similar characteristics e.g.
Tony the Tiger for Kellogg’s Frosties. The personality can be achieved through celebrity endorsement or sponsorship e.g. sports clothing and leading Premiership footballers. Some products reflect the identity of the customers who buy and use it them.
• Its complimentary assets i.e. the presence or absence of other, like assets or brands e.g. the Apple suite of products.
Corporates have options about the extent and depth to which they pursue a brand strategy:
• For larger companies, a family or umbrella brand strategy is usually pursued, whereby the same brand is used for all products and services e.g. Ford, Google, Heinz. Often a shortened version of the company’s legal name is used – one that is easy to pronounce and memorable such as Shell. It is particularly suited to
companies that have a large product portfolio. The goodwill attached to the company is extended as brand equity to its tangible products and intangible services, and continuously enhanced through positive communication – above the line advertising and sponsorship. The main benefit, from a communications perspective, is
coherence, but that is also its potentially biggest risk – if a specific product or service receives unfavourable publicity, the whole family of products and services, and the organisation itself, will be tarnished. Most of the World’s most valuable brands share their name with their corporate owners e.g. Microsoft, Coca-Cola.
• A strategy of applying individual brand names to a specific product or group of products is used where it is believed that each brand needs a unique and different identity, often completely separable from the company itself e.g. Procter & Gamble uses its corporate name minimally, and instead promotes unique identities for its Pampers and Head & Shoulder brands. A positive with this approach is that
individual and distinctive brands can be independently promoted and effectively have their own, mini-corporate identity. Such an identity is often associated with the key benefits of the product or service e.g. Right Guard deodorant.
• Often a mix of family and individual branding (so-called combination branding) is used e.g. Kellogg’s Frosties. This makes use of the positives of both company and product/service brand name, but can be confusing to customers.
• Some companies prefer, or are compelled by their place in the value chain, to allow their company or brand name give precedence to other, stronger or more customer-facing organisations or brands in the value chain. This is most acutely seen in food marketing, where manufacturers may produce their own-branded produce but also manufacture own-label brands for a distributor or retailer (own-label brands). In developed economies growth in own-label brands outstrips growth in manufacturer brands.
• Brand stretching is less-utilised but can be very valuable, and is used where a company with strong brand equity extends the brand name to unrelated products or markets e.g. Virgin which was originally a music producer but which now runs everything from trains to space tourism.
• Co-branding combines two brands, either physically or in terms of communications.
The former is where two brands are physically combined into a new, single product or service e.g. Guinness used as an ingredient in a sauce product.
• Rebranding involves the replacement of one or several, brands with a new brand.
Rebranding
Another of the World’s largest companies – previously best known as Facebook but including other organisational brands such as WhatsApp combined in 2021 to form Meta.
This reflects the culmination of ownership, organisational structure and cultural changes internally and a response to what the company claims is “a change in the metaverse - the next evolution of social connection – [the] company’s vision is to help bring the metaverse to life” (Meta, 2021). The rebranding covered what the company considered to be what it is, what it builds, what its actions are, who its community are and its resources. Initially the rebranding was superficial, adding a new visual logo to the existing product and service representations of the company, but the rebrand is also part of a more extensive
reconfiguration of all aspects of the brand.