In recent years, from marketers to business executives, from small and medium-sized businesses to global leading companies, they all emphasize the importance of branding. Then what is branding and why is it so important for the company?
Branding provides a way for a firm to differentiate its products offering from those of its competitors and can be used to represent the name of a firm and its entire products assortment, one product line or single item.1
4.1.2 Corporate Branding
When the company reaches a certain level of success, it starts to think of corporate branding as branding strategy. Then what is corporate branding? In a narrow definition, as opposed to product branding of specific products or services, corporate branding can refer to the practice of promoting the brand name of a corporate entity which means all of the firm’s products are branded with same name or at least part of name.2
Then what role does the corporate branding play in the business especially in today's highly competitive business environment?
If a company possesses strong company brand with name recognition and consumer confidence, it can facilitates to achieve positive and consistent image with consumer loyalty. Especially, important concepts of corporate brand are differentiations and belongings. Corporate brand attracts people around the recognizable values and symbols that differentiate the company.3 At the same time, if corporate branding works, it is also because it expresses the values of desire that attract stakeholders to the corporation and encourage them to feel a sense of belonging.
1 Dhruv, Grewal and Michael, Levy. Marketing. New York: McGraw-Hill Education, 2013.
2 Wikipdeia Corporate Branding, accessed May 10th,2017. https://en.wikipedia.org/wiki/Corporate_branding
3 Hatch, Mary Jo and Schultz, Majken. Bringing the corporation into corporate branding. Bingley, WY: The Emerald Research. 2001. p.6. http://www.emeraldinsight.com/
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Moreover, corporate branding also results in significant economies of scope since an advertising campaign can be used for every product marketed by a firm.4 And when the company focuses all that investment into one brand like Samsung Electronics, it gets a lot of brand leverage effect. Meanwhile, if the company focuses its communication around not just the uniform brand message, but around focused products, it is called flagship products such as Samsung Galaxy.5 It’s been about less than 20 years ago, since Samsung Electronics started to build so called corporate branding in the customer’s mind. This will be explained in more detail in the next chapter.
According to the Corporate Excellence business foundation,
Corporate brand is used not only to ensure the application of business strategy but also to design it. Brands are increasingly becoming cultures, manners of seeing life and ways of doing things that have to be shared with customers, although they first have to be cultures created and defended by employees. “6
Therefore, the importance of corporate branding is increasing; it not only affects multiple stakeholders, which includes employees, customers, investors, etc., but also impacts many aspects of companies such as the evaluation of product and services, corporate identity and culture, sponsorship, employment applications.7
4.2 The VCI Alignment Model
The basic principle of the Vision - Culture - Image (VCI) Alignment Model is the greater coherence between what the company’s top management seeks to accomplish, what the
4 Wikipedia Corporate Branding, op. cit.
5 Bloomberg BusinessWeek, “Online Extra: Samsung's Goal: Be Like BMW”, August 1st, 2005, Special Report, accessed May 15th, 2017.
https://www.bloomberg.com/news/articles/2005-07-31/online-extra-samsungs-goal-be-like-bmw
6 Corporate Excellence Centre for Reputation Leadership. Linking a brand’s DNA to a company’s strategy: the vital role played by identity and culture. Madrid: the Corporate Excellence Centre for Reputation Leadership, 2012.p.1.
7 Wikipedia Corporate Branding, op. cit.
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company’s employees know and believe, and how its external shareholders perceived the company, the stronger brand will be.
Figure 4.2 the VCI Alignment Model8
Source: Schultz, Majken and Hatch, Mary Jo. Taking Brand Initiative: How Companies Can Align Their Strategy, Culture and Identity Through Corporate Branding. San Francisco: Jossey Bass, 2008. p.11.
Figure 4.2 shows the framework of corporate branding as underpinned by processes linking strategic vision, organizational culture and corporate images. These three elements form the foundation of corporate branding. To enhance or maintain corporate brand alignment, the company must pay attention to these three elements simultaneously.
8 Schultz, Majken and Hatch, Mary Jo. Taking Brand Initiative: How Companies Can Align Their Strategy, Culture and Identity Through Corporate Branding. San Francisco: Jossey Bass, 2008. p.11.
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4.2.1 Strategic Vision, Organizational Culture, Stakeholder Images
The combination of corporate vision, organizational culture, and stakeholder images should represents in one way or everything the organization is.9 The definitions of each element are as below.
Strategic vision
Strategic vision is the core idea of the company which expresses top management’s aspiration for the company future to be.10
Organizational Culture
Organizational culture is the internal values, beliefs among employees that embody the heritage of the company and manifests in the ways employees feel about the company.11 Stakeholder Images
It is views and impressions of corporation developed by its external stakeholders; includes the view of customers, shareholders, media, general publics, and so on.
Changes in stakeholder expectations cause an increasing number of corporations to integrate marketing, communications and corporate social responsibility into corporate branding.
Corporate branding needs to be managed effectively throughout the life of the company to gain stakeholders’ enduring trust. 12
The Alignment Problem and Gaps
Every corporation needs specialists and specialized functions to do business such as strategic planning, human resources, customer relations, marketing. However, when it comes to branding, integrate across functions is imperative. If different groups doing different things, they pull the brand to different directions and fail to realize synergies. Lack of integration fragments the company identity conversation and puts corporate brand at risk. VCI alignment will help the company achieve the corporate integration.
9 Schultz, Majken and Hatch, Mary Jo. op. cit., p.13.
10 Schroeder, Jonathan E. and Salzer-Morling, Miriam. Brand Culture. Abingdon: Routledge, 2005. p.16.
11 Schroeder, Jonathan E. and Salzer-Morling, Miriam. op. cit., p.16.
12 Schroeder, Jonathan E. and Salzer-Morling, Miriam. op. cit., p.16.
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According to Majken Schultz and Mary Jo Hatch, it is useful to keep addressing the three central questions of the VCI model: Who are we? What do others say about us? Who do we want to be in the future and what will our stakeholders think about us when we get there?
These questions will help the company in finding VCI gaps that threaten corporate brand.
Alignment Assessment Tools
Majken Schultz and Mary Jo Hatch found helpful tools to diagnose VCI alignment which can also be used in combination: Stakeholder surveys (survey members of organization along with other stakeholders), dialogue between middle managers from key business functions, dialogue between brand managers and stakeholders and events that connect stakeholders to each other via brand.
4.3 Summing up Branding
The corporate branding requires very complicated and sophisticated organizational practices and requires organization-wide support. It needs to be managed in relation to the interplay between vision, culture and image; and it requires effective communications among top management, members of the organization and external stakeholder.
Today, in the era of high competition, the corporate branding is getting more important.
People care about the corporation itself behind the products, and their opinions about the company affect the opinions of company’s products or services.
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