THE POWER OF CORPORATE BRANDS
Tuesday, 02 December 2008 06:30
Corporations often ask whether they should build their products into brands or build a corporate brand. The fact is that both types of brands have a role to play within the business structure. Traditionally product brands have had a higher exposure to the public with companies focusing their entire marketing budget on them; however the importance of a strong corporate brand is becoming better understood especially in markets and categories that are heading to homogeneity at a high speed. Competition in the business environment is getting tougher by the day and for a brand to achieve and maintain a unique positioning and competitive advantage is becoming more difficult and more expensive.
A strong corporate brand elevates a company away from homogeneity by differentiating its product offerings through the company’s overall customer value proposition. This is why you will find a consumer insisting that they want a TV set from a particular company, while the reality is that the technology in most TV’s today is exactly the same. Even more intriguing is that the consumer is willing to pay a premium price.
The corporate brand should be the foundation of an all encompassing organization wide business strategy that goes far beyond marketing activities, by provides a decision making framework and enabling a consistent brand experience throughout the organization. Corporate brand strategy enables the company and the management team to implement the long term vision, create unique positions in a cluttered market for the company and its product brands and unlock the leadership potential within the organization. This, in the long term, creates a distinct competitive edge even in a homogenous market.
A product brand that stands alone without backing from a strong corporate brand requires much more effort and resources to launch and support. An important aspect about the corporate brand is that it lends instant credibility to any new product that is rolled out. Sony is a corporate brand that is able to easily roll out a new piece of electronic equipment which is rapidly accepted by consumers, be it a DVD or Playstation.
Globally, corporate brands have become very strong drivers of the financial value of companies and organizations, with market value sometimes much beyond book value. Interbrand’s 2005 survey of the top 100 brands showed corporate brands like IBM, General Electric and Intel valued at USD 53.3 billion, USD 46.9 billion and USD 35.5 billion respectively.
Akio Morita, the founder of Sony once said “I have always believed that the company name is the life of an enterprise. It carries responsibility and guarantees the quality of the product”
The writer is the Chief Executive Officer of Interbrand Sampson East Africa , a strategic brand consultancy firm.
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