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Brand Management
MK542E
Brand Building and Corporate Reputation

Dr. Dildar Hussain

Assistant Professor
ESC Rennes School of Business
Office No. 327
dildar.hussain@esc-rennes.com

Chapter Overview
Overview
What brand and corporate reputation means
Corporate social responsibility
Recent research in these domains

Learning Objectives
Understanding meanings and importance of brand and corporate reputation
Discuss and apply process of reputation building
How corporate reputation is measured
Discuss and apply CSR concept across industries

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Introduction

Brands increasingly seen as corporate interface

Financial scams and failure to comply with ethical production norms can harm the
brand
Brands under more pressure to deliver for investors, shareholders, employees, and
other stakeholders
Therefore, brands are being called upon to play the role of ambassador for the
organization
The brands need to ensure that
Brand values are never compromised
Are constantly maintained over time and space

Dilemma Facing Modern Brands -1

Anti Globalism
Anti globalization activists blame big brands of being led mainly by greed, exploiting the
worlds citizens and the environment
Others also argue that there have been examples where big brands forced small brand out of
the market through fair or unfair practices

Common features shared by bad brands

They opt for short term profits
Short term profits at the expense of long term brand building activities
Typically such organizations focus on short terms sales through discounts, rebates, contests,
etc., instead of providing an emotional reason for purchase
Mostly organizations move their production to low cost and low quality locations
Better option - to have long term focus on cost reduction and being the low cost producer
through research and development

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Dilemma Facing Modern Brands -2

Failing to build relationship with customers

Due to short term focus, these brands fail to build relationship with consumers
They fail to understand consumers expectations
Trusted brands have higher risk of offending customers as compared to exciting brands

Fail to recover
These brands fail to react on unfavorable reports
Even if they try, it is very hard to recover
Brand reputation risk is he single biggest risk companies face these days
Several organizations have established special unit to take care of these issue
e.g., Barclays formed a Brand and Reputation Committee that puts it at par with financial risk

Three Types of Risk

If brands have value, they can lose it
Brand equity
Turning the brand into a commodity or failing to differentiate from competitors
Companies put brand equity at risk when the compete on price for a longer period of time
It can also be caused by brand misalignment - failing to deliver promise, misaligned extensions

Reputation risk
Reputation risk involves losing the brand quality
and trust built over time
Due to some sudden mishap or any other reason
( Coke example)

Marketplace risk
Reflects changes in economy , industry or marketplace or consumer preferences
Constant revitalization of brands
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Brand and Corporate Reputation

Brand reputation is concerned with both tangible and intangible perceptions of what
it is good at
It embraces wider audience such as the supply chain, shareholders, and the society at
large
Perceived quality and credibility underpin reputation
Four types of credibility
True positive: A company says it will do and the does it
True negative: A firm indicates it will not do something and then does not do it
False positive: A firm indicates it will do it something and then fails to do so
False negative: A firm says it will not do something and then goes ahead and does it

Measuring Corporate Reputation - 1

Ranking measures
Ranking by media is one of the most widely accepted measures of reputation
Financial soundness
Long term investment value
Use of corporate assets
Innovativeness
Quality of companys management
Quality of companys products and services
Ability to attract, develop, and retain talented people
Acknowledgement of CSR

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Measuring Corporate Reputation - 2

Brand equity scales

This measure attempts to evaluate soft or intangible aspect of corporate reputation
Quality of products
Advertising level
Sponsoring activities
Conducting factory tours
Long-established traditions
Highly regarded employment with the firm
Well trained employees
Strong management
Costs of advertising
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Profitability

Measuring Corporate Reputation - 3

Image measures
Measuring store or corporate images employing Likert or semantic differential scales
Store layout clean, decor , etc.
Service - checkout, helpful, friendly
Product mix wide selection, brand names, quality
Price good value, reasonable prices, special offers

Identity measures
Measuring interface between the actual and desired identity using interviews, observations,
focus groups, etc.
Calculating composite reputation scores based on various dimensions e.g., CSR, management;,
innovation, etc.

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Corporate Social Responsibility

A concept whereby the organizations consider the interests of society by taking

responsibility for the impact of their activities on customers, employees, shareholders,
communities, and the environment in all aspects of their operations
The scope if CSR is beyond the statutory responsibility
The company needs to assess the cost-benefit ratio
Positive relationship between corporate social performance (CSP) and corporate
financial performance (CFP)

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Todays Video

http://www.youtube.com/watch?v=yTiEzRIBqq8

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Case Study

Repositioning the AXA Brand

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dildar.hussain@esc-rennes.fr

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