Corporate branding in a banking environment

Anne Daffey and Russell Abratt

Corporate branding as a topic has become more popular in recent years (Balmer, 1995a; Mitchell, 1997). It has led to a need for understanding the management approach to corporate branding which requires different skills and approaches when compared to product line branding. Corporate branding needs greater focus than product line branding within marketing or the organisation itself. This study investigates the approach taken by Absa, South Africas largest bank, in the development of their corporate brand, and to determine how they manage their brand on a continuing basis.

The authors Anne Daffey is a Graduate Research Professor and Russell Abratt is Professor and Head of Marketing, both based at the Graduate School of Business, University of the Witwatersrand, Johannesburg , South Africa. Keywords Brands, Corporate identity, Strategy, Banks, South Africa Abstract This study explores the concept and management of a corporate branding strategy in a large South African bank. The authors review the process that Absa Bank took in developing a corporate brand after merging four banks in their group into one new large one. Models of corporate branding are reviewed and then compared with the actual process undertaken by the banks. Interviews were conducted with key managers within the bank as well as in their advertising agency. The results show that Absa bank followed the processes described in the comprehensive models. Electronic access The research register for this journal is available at http://www.emeraldinsight.com/researchregisters The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/1356-3289.htm

Background
Absa (Amalgamated Banks of South Africa) consisted of two major banks, Trustbank and Volkskas, and two former building societies, Allied and United. Allied opened its doors in 1888, and United in 1889. Volkskas opened its doors to the public in 1934 and Trustbank in 1954. Thus, these four organisations were well known and traded under these names for decades. On October 26, 1998, a new Absa replaced Allied, Trustbank, United and Volkskas. In a single move more than 300 years of combined brand equity was scrapped. The Absa group was the biggest of South Africas banks, but definitely not the best (Jaffe, 1998). It was believed that the consolidation of the brands will enable the group to shift its focus away from the individual brands to the specific requirements of the segments in the target market.
It is being done with a view to significantly improving our client service and will enable us to deliver the right product to the right customer at the right price (Abacus, 1998).

This paper investigates what is probably South Africas biggest ever rebranding exercise four long established banking brands being replaced with a single banking brand, Absa.

Conceptual development
Interest in corporate image and the management of corporate identity has grown over the last decade. The work has primarily been led by practitioners, such as Bernstein (1984) and Olins (1989) and academics such 87

Corporate Communications: An International Journal Volume 7 . Number 2 . 2002 . pp. 8791 # MCB UP Limited . ISSN 1356-3289 DOI 10.1108/13563280210426142

Corporate branding in a banking environment Anne Daffey and Russell Abratt

Corporate Communications: An International Journal Volume 7 . Number 2 . 2002 . 8791

as Abratt (1989), Dowling (1986), Gray and Smeltzer (1985), Kennedy (1977), Van Riel (1995) and Balmer (1995a,b), amongst others. There are a range of contributory factors that have contrived to bring image and identity to the fore. These include the need to differentiate because of increased competitive activity and rivalry; the increased recognition of the value of integrated marketing communications; and the shortening of product life-cycles (Markwick and Fill 1997). During the 50 years of the evolution of theory relating to corporate identity management, the emphasis has variously focused on corporate image (during the 1950s), corporate identity, corporate personality, and corporate communication (during the 1970s and 1980s) and more recently on the concepts of corporate reputation and corporate brand management. Balmer (1998) postulates that the key to acquiring a favourable image and reputation is the management of the organisations identity. A study by Balmer and Soenen (1999) to evaluate current methods and models used to audit an organisations corporate identity used the existing literature reviews undertaken by Abratt (1989), Kennedy (1977) Van Riel (1995) and Van Riel and Balmer (1997). This review revealed 13 corporate identity audit models and techniques. An analysis of the models revealed that there was a lack of consensus as regards the elements constituting a corporate identity. In a subsequent study undertaken by Stuart (1999), she examines a number of conceptual models of corporate image formation and corporate identity management produced over the last three decades. Stuart (1999), by taking into account all the significant features of the previous models, provided an updated model that more clearly defines the corporate identity management process. The main concepts are corporate personality; corporate strategy; management and organisational communications; marketing; management and interpersonal communications; the corporate identity/ corporate image interface; corporate image and corporate reputation; environmental influences and organisational culture. The acquisition of a favourable corporate brand is one of the most desired weapons in the armoury of strategic management. In 88

enumerating the attributes of a corporate brand, Balmer (1998) uses the acronym CITE for four distinctive attributes: (1) Culture. A corporate brand is a construct with cultural roots. (2) Intricate. A corporate brand is inherently intricate in nature. It is multidimensional and multidisciplinary, it is made known through controlled, uncontrolled and by word of mouth communication. (3) Tangible. A corporate brand encompasses tangible elements such as business scope, general coverage, performance issues, profit margins, pay scales, design features and architecture. (4) Etheral. A corporate brand encapsulates a host of soft and subjective dimensions which evince emotional responses from stakeholders. The major benefit of a corporate brand is that it differentiates organisations from their competitors.

Research questions
The following research questions are addressed: What was the rationale, or driving force, behind the consolidation of the then existing four brands into one? What are the concepts or elements of the corporate brand development process as used and understood by Absa? What is the approach taken to future management of the newly established corporate brand?

Method
As this study concerns a single organisation, the case study research methodology was used (Perry and Coote, 1994). In-depth interviews were used for collecting data. The interviews were undertaken with 20 key decision-makers in Absa as well as external role-players from the advertising company employed by them. A discussion document was designed from the literature review. Open-ended questions were used to obtain the data. Data were analysed using content analysis in order to identify and isolate the concealed recurring themes.

Corporate branding in a banking environment Anne Daffey and Russell Abratt

Corporate Communications: An International Journal Volume 7 . Number 2 . 2002 . 8791

The sample included the General Manager: Marketing and Sales; the Manager: Corporate Marketing; Marketing Research Director; Manager: Corporate Identity; Group Special Projects Manager; General Manager: Internal Communications; Manager: Media Relations; Corporate Brand Manager; members of the Project Impact Team (name given by Absa to the merger project); and the Chief Executive and Client Service Directors of the advertising agency.

Results
Rationale for combining the four brands into one Various reasons were put forward for the combining of the four brands into one. They can be summarised as follows. Cost benefit: Absa had four brands not much differentiated from each other, all using separately branded letterheads and stationery. A large physical infrastructure or branch network existed to support the four brands; in some small towns all four branches were present creating overexposure. Attempts had been made to differentiate the brands by segment, even though no multibrand strategy really existed, for example, Allied clients were seen as being mass market; and Trust Bank focused on building relationships. On closer investigation of the four brands, each held a percentage of the same type of client across all segments. Advertising and Marketing spend was split up across the four brands. Competition was found between the four brands often at the expense of the Group and customer (market share was decreasing: approximately 50 per cent of credit card business was lost over three years this was partly attributed to the then existing brand strategy). The information technology systems were complicated by the four brands and the different product mix of each brand. Processes and procedures between the different brands were different. The belief therefore that by creating a single brand, economies of scale could be achieved; advertising and marketing spend could be better focused; processes and procedures could make efficient and streamlined; IT spend would be reduced and a more appropriate and smaller product mix could be developed. One of the biggest cost benefits was the branch network infrastructure that 89

could be rationalised. It would also allow the Group to focus on service. Other benefits included reaching a changing South Africa. The Absa that was created in 1992/1993 had a history and was not favourably received by the new government within South Africa. When tenders were made for government accounts in 1994, Absa lost all existing government accounts. The mass market also had previous negative perceptions of the various brand names within the Absa stable. With the amalgamation in 1992/1993, the Absa brand did not develop visually and could not compete with the other major financial services brands within South Africa. This merger was therefore seen as an opportunity by some to create a different image and identity for Absa i.e. some saw it as an opportunity to break with the past. It was also seen as an international trend and therefore the natural thing to do. Elements of and model for the development of a corporate brand within Absa The stakeholders were all communicated with in various ways about the merger, when it would take place approximately (the actual date was kept secret), how it would affect them and what they might need to do in order to facilitate it in the case of staff. The change to the client was mostly seen to be transparent, greater convenience, bigger branches. It was communicated to the clients in terms of the possible benefits better customer service and better focus they would receive. High-net worth clients especially Volkskas clients were communicated with more specifically. Roadshows were held for staff across the country and at the Head Office. Branch staff were seen to be loyal to existing brands, especially the Volkskas brand. There was no existing Absa culture with the exception of Head Office. Branch staff would be required to undergo training for the launch of new products. Branch staff would also obviously be affected by the rationalisation of the branch network there was the fear of possible retrenchments, and morale would probably be affected. The main focus for communications with shareholders was around the financial benefits/prospects of the amalgamation of the brands. It was seen as critical to gain their

Corporate branding in a banking environment Anne Daffey and Russell Abratt

Corporate Communications: An International Journal Volume 7 . Number 2 . 2002 . 8791

confidence in the amalgamation, as without their buy-in the board would be reluctant to go ahead with amalgamation. Most respondents who replied, either staff or clients, were the most critical of the development of a corporate brand. Some respondents mentioned that Volkskas staff and clients were perceived to be the most important. Some saw shareholders as being the most critical. Others saw the Executive Committee of Absa as the most critical, others that the Financial Services Analysts were the most important. The various reasons given for the importance of the various stakeholders are as follows: Staff. The staff represent the most tangible aspects of the brand if the advertising makes the promises then the staff are the people who must fulfil the expectation. it is the domain of the staff to complete the transition successfully they are the brand!. The staff are seen to be those who need to deliver on the brand promise. They are the point of interaction with the client. They are ultimately the moment of truth. Brand is perception based; if you are served by a friendly individual the perception is created that you (staff) care about me. This perception is generated by the staff. They experience the brand, and it is critical how they receive and perceive the brand. The expectations created in the mind of the client are also seen to be critical in terms of the possible future perception of the brand. Volkskas clients were particularly seen to be sensitive to the brand change as it was perceived that there was a high level of existing brand loyalty amongst Volkskas clients. Shareholders. These were seen to be critical as they would influence the decision of the brand in terms of the go ahead for the amalgamation. Executive committee. Their buy-in was seen to be critical to the success of the project, as their commitment and influence were seen to be important in convincing staff and other stakeholders of the importance of the exercise. Financial services analysts. These were seen to be important in the influence they exerted over various shareholders and the 90

general business community in the acceptance of the amalgamation. The various factors mentioned by respondents as the most important elements involved in the development of a corporate brand are: basic marketing disciplines, namely the four Ps of the marketing mix (price, promotion, place and product). A good strategic vision, great people, great products, a commitment and dedicated focus on the goal and the management of the ongoing pressures on the brand was considered essential. In terms of managing the brand strength, leadership and innovation need to be demonstrated. Some saw that in order to successfully implement a corporate brand a holistic system needed to be implemented. The brand is everyones responsibility. All parties must keep the role they play operating at maximum. A common vision is also key. A holistic approach needs to be taken towards the elements through the organisation. Staff must be the brand, must talk the brand and deliver on promises. The brand positioning was to be progressive read into pay-off line (Absa Today, Tomorrow, Together) and approachable hopefully with lasting relationships with clients. A multidisciplinary project team was established with full mandate to manage the amalgamation of the brands. The project was divided into two stages: prelaunch and launch. Prelaunch consisted mainly of communicating the merging of the brands, and the development of a corporate logo. Launch was mostly a celebration of the merger, the launch of a new advertising campaign, the release of the pay-off line, staff launch, logo launch and big direct mail exercise informing clients of the soft benefits. New product offering was released, as well as the defining of the brand personality. A year after the launch a new image campaign was launched amongst staff and clients. Management of the corporate brand Brand vision will be tracked in terms of customer experience. It will also be monitored against competitors. The intention is to evoke emotion in the client through television advertising. The brand should be aspirational and the products offered functional. Sponsorships will be utilised effectively.

Corporate branding in a banking environment Anne Daffey and Russell Abratt

Corporate Communications: An International Journal Volume 7 . Number 2 . 2002 . 8791

Corporate identity needs to be applied with absolute rigidity. The intention is to have a single visual Absa presence. The elements of the brand management process include: corporate wardrobe, branch layout, automatic teller machines, stationery, sponsorship, advertising, promotions/merchandising, visual elements, multidisciplinary approach not sole responsibility of marketing, vision of leadership, staff must represent personality of brand, integrity/honest feel, operational issues, integration, understanding of what brand is throughout organisation, communication awareness, more multiracial representation in organisation and especially executive committee, consensus on the way forward, brand strategy and architecture, and brand managers. Although the brand is relatively new, it was felt that it was necessary to begin valuing the brand in terms of showing some return to stakeholders in terms of the investment made in the brand. It was also felt that it is a way in which marketing could be held more accountable for the performance of the brand.

References
Abacus (1998), Staff newspaper for the Absa Group, Vol. 8 No. 18, p. 1. Abratt, R. (1989), A new approach to the corporate image management process, Journal of Marketing Management, Vol. 5 No. 1, pp. 63-76. Balmer, J.M.T. (1995a), Corporate branding and connoisseurship, Journal of General Management, Vol. 21, pp 24-46. Balmer, J.M.T. (1995b), Corporate identity: the power and the paradox, Design Management Journal, Winter, pp. 39-44. Balmer, J.M.T. (1998), Corporate identity and the advent of corporate marketing, Journal of Marketing Management, Vol. 14, pp. 963-96. Balmer, J.M.T. and Soenen, G.B. (1999), The acid test of corporate identity management, Journal of Marketing Management, Vol. 15, pp. 69-92. Bernstein, D. (1984), Company Image and Reality, Reinhart and Winston, Eastbourne. Dowling, G.R. (1986), Managing your corporate image, Industrial Marketing Management, May, Vol. 15, p. 20. Gray, E. and Smeltzer, L. (1985), Corporate image an integral part of strategy, Sloan Management Review, Vol. 26, Summer, pp. 53-62. Jaffe, H. (1998), Absa aims to match peers with lower costs and better targeting, Business Day, May. Kennedy, S.H. (1997), Nurturing corporate images: total communication or ego trip?, European Journal of Marketing, Vol. 11, pp. 120-64. Marwick, N. and Fill, C. (1997), Towards a framework for managing corporate identity, European Journal of Marketing, Vol. 31, p. 4. Mitchell, A. (1997), Brand strategies in the information age, Financial Times Report, London. Olins, W. (1989), Corporate Identity: Making Strategy visible through Design, Thames & Hudson, London. Perry, C. and Coote, L. (1994), Processes of a case study research methodology: tool for management development? , Australian and New Zealand Association for Management 1994 Conference, Wellington, December. Stuart, H. (1999), Towards a definitive model of the corporate identity management, Corporate Communications: An International Journal, Vol. 4, pp. 200-7. Van Riel, C.B.M. (1995), Principles of Corporate Communication, Prentice-Hall, Engelwood Cliffs, NJ. Van Riel, C.B.M. and Balmer, J.M.T. (1997), Corporate identity: the concept, its measure and management, European Journal of Marketing, Vol. 31, pp. 340-55.

Conclusion
In terms of Stuarts (1999) model, it would appear that Absa have to a large extent considered and/or included most of the elements currently thought necessary for corporate identity management. Absa created a personality for its brand by determining the most desirable characteristics required by the banking public for a financial services corporation. Organisation communications were focused around the generation of desirable management and employee behaviour through the defining of behavioural parameters. It may be too soon to determine the success of the identity management process but measures have been put in place.

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