Brand vs. reputation: managing an intangible asset.
A number of trends affect the way organisations manage both their brands and reputations.
Market factors: Globalisation of markets makes them increasingly homogeneous and has encouraged organisations to restructure in response. Customers are more knowledgeable and have greater access to information. They have higher expectations based on past promises from organisations competing for their patronage. Traditional brand values, such as quality and safety, have become factors. Organisations also are finding it increasingly difficult to establish a difference in physical products.
Work-place factors: Technological advances have made organisations increasingly transparent. It is easier for customers and other stakeholders to get information on companies, products and services. As this has happened the boundaries between audience groups have broken down, making it impossible to segregate audiences and target them with separate messages. Employees are becoming more questioning and are less likely simply to take an instruction and get on with it.
Organisational responsibilities: As society puts increasing importance on business ethics, organisations need to reconsider their brand values. Having the cheapest or highest quality products is no longer the only thing that wins customers - "corporate citizenship" is now the buzz phrase.
For these reasons, more and more organisations are recognising the link between corporate reputation and competitive advantage. A strong corporate reputation can attract and retain the best stakeholders - whether they be consumers, investors or employees. It can attract customers, ensure a licence to trade and, in times of crisis, win "the benefit of the doubt." A sound corporate reputation allows an organisation to achieve its business objectives better.
This recognition has led to the growth of a new discipline - reputation management. Often, but not always, contained within a corporate communication function, reputation management is about building a sound reputation and keeping it strong.
But what exactly is "corporate reputation," and how do you manage such an intangible asset? And how does "corporate reputation" relate to "corporate brand" - something that many marketing departments have been managing for years?
Brand vs. Reputation
Generally, marketing people tend to talk about "brand" and "brand management," and communication people tend to talk about "reputation" and "reputation management." Brand management is principally concerned with the consumer and uses marketing techniques. The management of reputation is concerned with other audiences and uses corporate communication (or PR) techniques.
Our research found many similarities in managing corporate brand and corporate reputation. Some gaps and overlaps, however, were reducing the effectiveness of the work of the marketing function as well as the communication functions.
From the results of this research, we have developed a model for the effective management of corporate brand and reputation.
Defining Corporate Reputation and Brand
Some define corporate reputation as "corporate identity" - the image conjured up by the mention of a company's name. It can be positive or negative, strong or weak.
Others define corporate reputation as the collective opinion of stakeholders toward an organisation based on its past record. In this case a good reputation is "awarded" to organisations who are seen by stakeholders to be fulfilling their own definition of "good corporate behaviour" or with whom they have had positive experiences in the past.
Branding is a process for distinguishing one product from another (brand positioning) and the features that enable stakeholders to choose one product over another (brand personality), At a corporate level, features that enable a customer (or employee or investor) to choose one organisation over another include a wide range of factors, from product value and quality to financial security, customer care and an organisation's ethics record.
But the brand is more complex than just the features an organisation chooses to distinguish it from its competitors. Tim Ambler in his article "Are Branding and Marketing Synonymous?" describes brand as "the collective term for all the accumulation for the future once the immediate impact of transaction has been deducted." Ambler recognised that a company's brand is not made up of just the promises an organisation makes to the stakeholder; the stakeholder's past experience of the organisation affects it. Therefore, an organisation's brand equity is its unique added value plus or minus the "impact of transaction."
The two definitions of both brand and reputation can be seen as two aspects of the same thing.
First, brand and reputation must identify features that will make stakeholders view the organisation more positively, and then successfully communicate to those stakeholder groups that those positive features exist.
Brand and reputation must ensure that the actual experiences stakeholders have with an organisation are positive, and more important, that they fulfil the promises made in stage one.
Corporate Reputation and Brand: Who Is in Control?
The way the stakeholders interpret and evaluate an organisation's distinguishing features, along with their experiences of the organisation, is as important as what those features are and whether they are implemented.
Keeping this in mind, we can separate the two aspects of brand and reputation described above according to whether they are controlled by the organisation or by the stakeholder, as in the model.
Box One: Organisational Identity
Box Two: Organisational Image
Box Three: Organisational Performance
Box Four: Organisational Reputation
In our model, identity is the way an organisation wishes to be seen. The organisation develops "brand values" and "brand identity" to represent these wishes. The values do this through words, and the identity through visual cues with which the values can be associated.
The second part of the model is image. This is the way an organisation's stakeholders interpret its brand values and brand identity. Stakeholders will look at an organisation's identity and, depending on how well it is constructed and communicated, they will interpret it correctly or incorrectly, positively or negatively.
The third part of the model is performance. At the point where stakeholders interact with the organisation, they experience the organisation's quality of products or service, its behaviours and its applied values. To maintain positive perceptions with the stakeholder at this point, the organisation needs to ensure that brand values are indeed fulfilled.
The fourth part of the model is reputation. From the image a stakeholder has of an organisation and reassessment on the basis of experiences with that organisation, the stakeholder develops a new attitude toward the company - the collective attitudes of all stakeholders at this stage form an organisation's full reputation. Given that it is rooted in the substance of an organisation, the reputation is relatively more stable than the image, which is abstract and transient.
Developing a Management Process
In this model of brand and reputation, identity is how an organisation wishes to be seen, and reputation is how an organisation is seen. If management of brand and reputation is successful the two should be the same. Reputation is created by:
* the identification of values that stakeholders will deem positive and the successful communication of those values to the stakeholder groups (by managing the organisational image)
* ensuring the performance of the company fulfills those values so that stakeholders' experiences of the company equal the identity claims (by managing the organisational performance)
Having broken down the concept of brand/reputation into four components - identity, image, performance and reputation - we can identify four stages of management, each related to one of the boxes in the model above,
- managing identity: Identify the "values" that will best enable the organisation to fulfil its business objectives (e.g., ensure sound investment, successful recruitment, a licence to operate and competitive advantage). These values might include quality, reliability, customer service, ethics, financial security and good treatment of employees.
- managing image: Express the identity to each stakeholder audience. Usually, this will be done through a combination of "brand identity" and communication processes; some generic and some suited to each audience (e.g., logo, advertising for customers, team brief for employees).
- managing performance: Embed the values and image within the organisation's operations to ensure that the way an organisation operates lives up to the values it endorses. If an organisation promises next-day delivery, a system needs to be built so that goods are always delivered the next day. Failure to live up to this promise will be more harmful than if the promise had never been made in the first place. Similarly, if an organisation recruits employees on the basis of a quality training programme, a system needs to be built where they receive quality training.
- managing reputation: Organisational reputation is formed by stakeholders reassessing their "image" of an organisation based on the individual's experiences of its operations. Thus organisational reputation is made or broken by the stakeholder. To successfully manage reputation, the organisation needs to communicate its identity successfully and embed its values into its operations, ensuring that the reputation the stakeholder forms is aligned to the desired identity. At this stage the organisation needs to evaluate its achievements. It needs to ensure that organisational reputation is:
* aligned to the desired organisational identity
* creating the required impression with important stakeholder groups
The Difference Between Brand and Reputation
Research shows that brand and reputation managers are dealing principally with the same things. Distinctions can be made between different components of brand and reputation, and some of these components could be called brand and some called reputation.
We found that many organisations make a distinction between brand and reputation according to the audience being communicated with. But the labels used for each of these components are actually irrelevant. It is important to recognise that although these different components need to be managed effectively, each is working toward the same objective.
This in mind, does it matter if an organisation separates the management of its brand and reputation between different functional divisions?
It is not necessarily problematic for certain aspects of brand and reputation to be managed in this way. For example, communication may benefit from being split between departments that specialise in specific stakeholder audiences.
Communication techniques that work best will vary from group to group and, providing that core communication is aligned, need not be run by an integrated function for best results. To segregate the management of brand and reputation, however, is problematic. To be successful in developing coherent and consistent values and embedding those values into an organisation's operations, brand and reputation management needs to be driven centrally in an organisation, because:
It is impossible to segregate audiences, as many individuals belong to more than one stakeholder group. If different messages are communicated to different groups, then these individuals will see inconsistencies in what an organisation says. Such inconsistency damages the credibility of the organisation. Thus the organisational identity should be the same for each audience.
Reputation management is also about ensuring that an organisation's values are reflected in its operations. Every function needs to be involved in the management of brand and reputation. If values are generated in different functions, there will be conflict when they are embedded into an organisation's operations.
Thus the effective management of brand and reputation needs a central function driving the organisation's strategy by identifying the organisational identity that will fulfil business objectives. By developing this strategy centrally, the organization will ensure that each communication function will be expressing the same values to its specific stakeholder audiences. What is more, the operational processes of the organisation can be developed so that values can actually be achieved.
The strategy does not need to be developed at the board level. While it is true that to be successful a brand strategy needs the "buy in" of senior executives, some people refer to the CEO as the ultimate reputation manager in any organisation. Directors of each function will need to be involved in both developing and implementing strategy; the organisation can benefit from having a specialist whose full-time function is driving this strategy rather than making it another task for those at the very top.
The management processes for both brand and reputation are the same. The key to making brand and reputation management effective is in the four components of our model: identity, image, performance and reputation. Often, the importance of ensuring that stakeholder experience lives up to brand promises is forgotten simply because it is not the responsibility of the communication or marketing or human resources function.
Alison Rankin Frost is director and Chris Cooke is associate director, Context Consulting, a London-based consultancy specializing in brand, reputation and communication.
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|Date:||Feb 1, 1999|
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