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Understanding branding

How to manage the essence of your business organization
By Entrepreneur Staff |

Instead of being associated with products, “branding” is regarded more as a potent tool in marketing something quite intangible yet totally indispensable—the company itself. Indeed, the value of corporate branding goes beyond its ability to sell products and services; it delves into the consumer’s perception of what the company is and what it stands for.

Branding in the classic sense is all about distinguishing products and services from competitors by creating their unique identities and positions in the minds of consumers. Corporate branding uses the same tools and methodology used in product branding, but it elevates the approach a step further into the boardroom, where additional issues around stakeholder relations (shareholders, media, competitors, governments, and many others) can help the corporation benefit from a strong and well-managed corporate branding strategy.  

Corporate branding is often wrongly referred to as that exercise by which a company changes its logo’s design, style and color. The truth is, only when a company has got its strategy down pat will all these other elements work to support the overall image and direction it wants to convey. Every piece of marketing communication should reinforce the same image and message about an organization and its products or services. “Corporate identity is simply the image that you want the public to recognize in you,” says Jesus Anthony Bolaños, marketing communications manager of developer Cathay Land. “A good corporate image equates with favorable market acceptance.”

Indeed, in the last decade or so, success in creating a good corporate image has become a very strong driver of financial value for corporations. Corporate brands by themselves have become valuable assets on the company balance sheet, with their market value very often going much beyond book value. In many cases, it is even the main asset.

Companies that are successful in creating a good corporate image are the most likely to create super brands. According to Lindsay Birley and Victor Jeffery, a super brand offers consumers significant emotional and/or physical advantages over its competitors.

“Consumers will clearly pay a significant premium for branded products, as much as 32 percent on average for typical branded goods,” they say in their foreword on Superbrands, a book offering insights into the Philippines’ best known and developed brands. On the corporate side, “Recent surveys indicate that brands may account for 50 to 70 percent of the total value of the company.” Of course, a good name is what brings success to a company. “I have always believed that the company name is the life of an enterprise,” Sony founder Akio Morita once said. “It carries responsibility and guarantees the life of the product.”

When established properly, a corporate brand can encapsulate a company’s vision, personality, positioning, image, and many other dimensions in a simple message. Even if a company has a variety of brands, such as Procter & Gamble, a corporate brand will often help it focus on its core vision, values and corporate objectives—and even to evolve.

Giving priority to corporate branding also leads to cost efficiencies. Since products’ life cycles get shorter and shorter because of stiff competition, companies can recover their development and marketing costs by adopting a single corporate branding strategy that is strong enough to bridge across different product categories. Instead of allocating separate budgets for individual product marketing, a company can combine corporate and product branding strategies to help its management reduce costs and exploit synergies from a new and more focused brand architecture.

The umbrella effect of sound corporate branding reaches into the widest possible market for a company—what is collectively called “brand community”—where customers comprise just one of the assets. Senior executives will be better able to sacrifice short-term gains for long-term brand value. Employees will become more committed and work harder to deliver on-brand work daily. The company’s partners will want to nurture long-term alliances that deliver on its brand promise. Shareholders will stay with it and provide the financial backing that will see the company through.

Your brand is of course only as strong as the sum of your relationships with the members of the brand community. It is well to remember that the companies that succeed in today’s marketplace—those that stand out, are able to charge a premium for their services, and to extend into new business areas—are the ones that harness their emotional connections to all members of their brand communities.

The non-human components of your brand—its product, logos, office and such—represent just half of your efforts in building a strong brand foundation. Focusing on the other and more important human half—your brand assets—enables you to create experiences and build that essential emotional connection with your brand constituencies.

Implementing and nurturing a successful corporate branding strategy involves crucial steps. First, the starting point for corporate branding must be the boardroom, where the chief executive must lead the campaign backed by a strong brand management team. He must make sure customers and stakeholders are not just at the receiving end of corporate branding—but fully involved in the campaign. He must present his vision to employees and turn them into brand ambassadors—people who understand and believe in what exactly the company represents, and are only too happy to communicate exactly what that is to the community at large.

Once you’ve developed and executed a range of well-planned and effective marketing activities to communicate your message, you should measure your brand performance to determine how much value it provides to the company and how instrumental it is in securing your competitiveness. Research will also help you read the business landscape more effectively and plan your future strategies. As an ancient and famous Indian proverb says, “If you don’t have a goal, how can you know when you have arrived?”

This article was originally published in the June 2005 issue of Entrepreneur Philippines.

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