A Reputation that Matters
Corporate marketing in business-to-business organizations
L.J. Huis in het Veld, BSc
Master Thesis Marketing August 2008
Supervisors
Rijksuniversiteit Groningen
Dr. K.J. Alsem
Mail: K.J.Alsem@rug.nl
Drs. K. Visser
Mail: Karla.Visser@rug.nl
Royal Boskalis Westminster nv
Drs. R.T. Berends
Mail: R.T.Berends@boskalis.nl
A Reputation that Matters
Corporate Marketing in business-to-business organizations
L.J. Huis in het Veld, BSc
Studentnumber: 1334794
Zwaluw 6
2411 ME Bodegraven
Mail: LJHuisinhetVeld@gmail.com
SUMMARY
“You can’t build a reputation on what you’re going to do.” - Henry Ford
Corporate marketing is the management of the balance between the corporate identity and the expectations of stakeholders), in order to create an appealing corporate reputation at stakeholders.
The present study focuses on the expectations of stakeholders to make corporate marketing practices more effective.
The traditional focus of marketing is the customer. Corporate marketing is a reformulated definition of marketing which recognizes all stakeholders. The attention for responsible organizations combined with extended information networks creates the relevance for organizations to deal with a broader stakeholder audience. The focus on the general public was chosen, due to the lack of attention of this vague stakeholder group in the academic literature and the relevance for business organizations
The convergence of corporate marketing concepts enabled the formulation of a conceptual model for the management of the reputation in business organizations. The framework consists of three main corporate marketing concepts; corporate identity, image and reputation and the stakeholder expectations. The expectations of the general public were formulated as: trust and responsibility. The expectations are related with the corporate reputation dimensions; quality, performance, responsibility and attractiveness.
A survey with questionnaires and interviews investigated the conceptual framework. A combined research approach was used to capture the mental presentations of stakeholders of the business organizations. Interviews and focus groups provided qualitative data based on open (free description) questions. The focus group was also used to validate the research results. The reliability of the data and categorization was guaranteed through the use of a second judge. Closed (Likert scale) questions were used to provide quantitative data for factor- and regression analysis.
Three research locations were identified around infrastructural projects of contractors. The sample population consisted of inhabitants of local communities around the projects and users of the infrastructure.
The response of the sample group (N=110) was divided in two groups for analysis. The group with the highest awareness (N=62) was used to test the conceptual model. A factor analysis was used to reduce the number of items from the corporate marketing concepts. The conceptual framework is reformulated in an empirical model.
Organization, orientation and character were the empirical corporate identity dimensions. Organization represents the characteristics of a business organization. Orientation and character revealed the distinctive values, which create the unique positioning in the minds of stakeholders. The dimensions are in line with the claims of a identity.
The original reputation dimensions; quality, performance, responsibility and attractiveness were confirmed. A new reputation dimension was identified and labeled as growth potential. Growth potential refers to the potential development of the organization and employees.
Trust and responsibility were formulated as the expectations of the general public. The empirical model presents trust as one dimension. Responsibility was divided in four dimensions: employment, society, ethical & legal and economic. Employment is the creation of jobs for stakeholder groups.
Society is the expectation to execute projects, which benefit the environment and society. The expectation to execute operations in line with the written and unwritten norms and regulations is the ethical and legal responsibility. Generating profit as a organization is the economic expectation of the general public.
Corporate familiarity is introduced within the study and is the effectiveness of the corporate marketing practices in business organizations. The concept refers to the awareness of individual stakeholders with the corporate name and the (un)expressed associations of the organization.
A categorical regression analysis was used twofold. First, the analysis presented insights in the relations between the corporate marketing concepts of the empirical model. Secondly, the level of corporate familiarity was indicated.
The corporate identity dimensions were significantly indicating the dimensions of the perceived corporate reputation. The dimension; responsibility was not explained. The reputation dimensions indicated the stakeholder expectations through employment, society and ethical and legal. The dimensions contribute to a higher evaluated corporate familiarity. The familiarity with business organizations is explained through the dimensions of the empirical corporate marketing model.
Quality of the products and services and the growth potential are the reputation dimensions which create the distinctive and preferred position towards the general public.
The empirical model enables executives to manage the corporate reputation based on the corporate identity and the expectations of stakeholders. The empirical model presents academic knowledge and practical insights in the effective influence of the corporate reputation of business organization.
Key words –Corporate marketing, corporate identity, corporate image, corporate reputation, corporate branding, stakeholder expectations
PREFACE
“The way to gain a good reputation is to endeavor to be what you desire to appear.” – Socrates
The process of creation and influencing the reputation of an entity was noticed in the time of Socrates.
The creation of a reputation is simple. The creation of a desired reputation is not simple. The process of gaining a desired reputation remains relevant these days, for every individual and organization.
The master thesis is the end result and completion of an international study experience. The master thesis is a master piece of academic know-how and practical insights of the corporate branding of business-to-business and business-to-government organizations. A word of thanks is appropriate, to all the persons, who contributed to this achievement.
For the feedback, support and academic discussions I would like to thank dr. Karel Jan Alsem of the University of Groningen. It was an honour to graduate under his supervision. His vision as a branding expert contributed to the focus and content of the thesis and the study. I would like to thank Karla Visser for the evaluating of the report as second supervisor in such a short notice.
During the internship at Royal Boskalis Westminster nv, I have conducted the research of the master thesis with great pleasure. I would like to thank all the persons of the fourth floor, especially the investor relations department. The discussions with the group director Roel Berends made an impression.
From this position I would like to thank the experts and respondents of the survey, interviews and focus groups for their time and opinions. A special word of thanks to Patrick van Huet as a friend and data mining expert of Wehkamp. His role as second judge was of significant value for the study.
Last but not least I would like to thank my parents, family and friends for their support during the research period. Special thanks to my girlfriend for her support and motivation during the graduation period.
The result of this study has contributed to the hands-on practice of corporate marketing. The thesis presents the final outcomes of the research. I hope you will enjoy reading it.
Lex Huis in het Veld
August 2008/ Rotterdam, The Netherlands
TABLE OF CONTENTS
SUMMARY 4
PREFACE 6
1. INTRODUCTION 9
1.1 Developments & Literature 9
1.1.1 Market Developments 9
1.1.2 Literature 11
1.1.3 The Academic Gap 12
1.1.4 Significance of the study 13
1.2 Royal Boskalis Westminster nv 13
1.3 Research Design 14
1.4 Research Method 14
1.5 Conclusion 15
2. THEORETICAL FRAMEWORK 16
2.1 Definitions & Concepts within Corporate Marketing 16
2.1.1 Corporate Marketing 16
2.1.2 Corporate Personality & Identity 20
2.1.3 Corporate branding 23
2.1.4 Corporate Image 23
2.1.5 Corporate Reputation 24
2.1.6 The competitive advantage 25
2.1.7 Conclusion 26
2.2 Stakeholder Communications and Relations 28
2.2.1 Stakeholder Relationships 28
2.2.2 Reputation Management 30
2.2.3 Conclusion 31
2.3 Measuring Corporate Marketing 32
2.3.1 Capturing perceptions 32
2.3.2 Measuring Corporate Reputation 33
2.3.3 Measuring Expectations of the General Public 35
2.3.4 Measuring Identity 35
2.3.5 Conclusion 36
2.4 The Conceptual Model 37
2.5 Analyzed Conceptual Model 38
3. RESEARCH DESIGN 39
3.1 Research Method 39
3.2 Data Collection 39
3.3 Data Analysis 43
3.4 Conclusion 43
4. RESULTS 44
4.1 Survey Sample 44
4.2 Awareness Organizations 45
4.3 Stakeholder Expectations 47
4.4 Associations with the Organisations 48
4.4.1 Associations with organizations, industry and projects 48
4.4.2 Expectations of the public 49
4.4.3 Corporate Familiarity 49
4.5 Conclusion 50
5. CORPORATE MARKETING DIMENSIONS 51
5.1 Corporate Identity Dimensions 52
5.2 Corporate Reputation Dimensions 53
5.3 Stakeholder Expectation Dimensions 54
5.4 Conclusion - 55 -
6. CATEGORIAL REGRESSION ANALYSIS - 56 -
6.1 Conditions and Choice of Analysis - 57 -
6.2 The Corporate Marketing Model - 58 -
6.2.1 Identity and reputation dimensions - 58 -
6.2.2 Reputation and expectations dimensions - 58 -
6.2.3 Corporate Familiarity - 60 -
6.3 Conclusion - 61 -
7. DISCUSSION & CONCLUSIONS - 62 -
7.1 Conclusions - 63 -
7.1.1 The empirical model - 63 -
7.1.2 Corporate familiarity - 64 -
7.1.3 Measuring corporate marketing concepts - 65 -
7.2 Limitations and further research - 66 -
7.3 Implications - 67 -
BIBLIOGRAPHY - 68 -
APPENDIX - 76 -
1. INTRODUCTION
“Everything you can imagine is real.” Pablo Picasso
In a research of Thijsen (2007) results were shocking about the current state of reputation management within 151 Dutch companies from different industries. In the study, only 9 % belonged to the group which is actively managing and measuring the corporate reputation. Nevertheless, all interviewed directors were convinced about the urgency and value of corporate reputation management. Especially the holist character of corporate reputation makes managing and measuring corporate reputation difficult (Thijsen, 2007).
The bottom line of a distinctive and favorable corporate reputation is the achievement of a sustainable competitive advantage. A favorable reputation results in higher profit margins and legitimacy, which are vital for business survival and economic growth. A corporate reputation therefore supports the strategic business goals. Sustainable relationships with stakeholders build the corporate reputation. A marketing approach enables identification of stakeholder expectations. The management of the expectations creates the competitive advantage of corporations these days.
The attention and relevance of managing reputation is discussed in paragraph 1.1. Paragraph 1.2 introduces the organization as the case within the present study. Paragraph 1.3 provides an overview of the research questions. Paragraph 1.4 outlines the method to answer the questions. The last paragraph presents an overview for the structure of the report.
1.1 Developments & Literature
Increased attention towards social and environmental issues and the rise of digital networks, have influenced business activities. This paragraph presents an overview of the relation between the developments and the relevance of corporate marketing for business organizations.
1.1.1 Market Developments
Terms as corporate governance and corporate social responsibility have entered the board rooms of organizations the last decades. Three interwoven developments are distinguished as pressures and reactions of business organizations: (1) corporate social responsibility (CSR), (2) sustainable development and (3) a stakeholder approach to strategic management (Wheeler, Colbert & Freeman, 2003). The commitment of organizations to improve the stakeholders environment and society well- being, summaries the development of CSR. Sustainable products and services should enable future generations of having a better quality of life.
The increased attention on the above trends drives organizations to a strategy with a 360 degree stakeholder focus (Mohr, Webb & Harris, 2001). The change in the strategic approach is urgent, to manage the expectations of the broadened audience of stakeholders. Corporations are perceived as a part of society, which creates responsibilities towards the corporate environment (Goffee and Jones, 1998). According to Goffee and Jones (1998), should modern corporate strategies be social and solider, to acquire the legitimacy to perform business activities. Business activities are compared with
the value for society and the environment. Synergies between the social and corporate goals create positive associations towards the organization. Including stakeholder expectations is thus of strategic importance to create a desired reputation within the corporate environment. The change in strategy requires a shift of the marketing focus.
Information Networks
The availability of information and the interconnectedness between stakeholder groups has increased in the digital era (Balmer & Gray, 2000). Four drivers of the development of the information process are identified. The speed of receiving and retrieving information has become faster, though the use of digital networks. Secondly, the ubiquity of information has increased. Information has become available to a wider public. This makes targeted communication more difficult and the risk of misinterpretation through non-intended receivers of the communicated message is evident. Thirdly has the interactivity of the networks increased. The communication between individuals, but also between individual and organization has increased. Digital networks and forums make activities more transparent, due to the accessibility of the networks.
The developments demand a higher level of integrated and controlled communication. Corporate branding within the digital era continues outside the controlled corporate communication activities (Trimk, 2002; Topilan, 2003). Thus, although the internet and digital networks have become part of the business model (Topilan, 2003), the process of branding a coherent and favorable reputation in the minds of stakeholders, has become more difficult (Einwiller & Will, 2002).
Marketing Focus
From the traditional view point are the investors and the customers the most important stakeholder groups. From the 70’s a modern view point was introduced which focused on the value creation for all stakeholders. Especially business-to-consumer organizations recognized the potential for developing environmental issues into competitive advantages. The marketing which focused on environmental concerns was labeled as: green marketing (Wasik, 1996). An entrepreneurial and environmental strategy has been proposed as the enviropreneurial marketing strategy, to create a competitive advantage with the focus on stakeholder concerns besides the investors and customers.
(Varadarajan, 1992). The new marketing strategies had impact on the reputation of the organization and the business performance (Menon & Menon, 1997).
The shift in the marketing focus required a collective perspective on multiple stakeholder communities.
Interacting with stakeholder networks and anticipating on stakeholder needs is the strategy to create a competitive advantage (Fombrun & Astley, 2000).
The creation of value is main objective of organizations within market economies. Value creation generates profit, which are vital for business survival. Creating value with stakeholder relationships is the basis for the corporate marketing approach (Freeman, Colbert & Wheeler, 2003). Corporate marketing practices are thus essential drivers for the economic growth of the corporation. Markwick &
Fill (1997) formulated eight factors, which explain the increased attention for management and measurement of the corporate reputation as outcome of profitable stakeholder relationships.
• Need for differentiation, because of increased competition
• Shortening product life cycles
• Diversification and consolidation of activities
• Media cost inflation
• Redefinition of marketing in terms of developing and maintaining relationships
• Increasing recognition of the value of integrated marketing
• Finer approaches to segmentation
• Increased evidence of the impact of crises to the corporate brand
Based on the above factors is the relevance of the corporate marketing approach evident. The stronger influence of stakeholders in the business model and the broadened stakeholder audience make consistent corporate marketing practices valuable.
1.1.2 Literature
The academic field of corporate marketing consists of multiple perspectives. Corporate marketing is the management of the balance between the corporate identity and the stakeholder expectations.
Various academic schools have studied the concept of corporate marketing. Fombrun and Van Riel (1997) found six academic perspectives regarding the management of the corporate reputation:
1. The economic view:
a) Game theory: Reputation is the perception which others have of the corporate values.
(Weigelt & Camerer, 1988).
b) Signaling theory: Managers make strategic use of a company’s reputation to signal attractiveness, such as the quality to the company’s constituents (Shapiro, 1983).
c) Capital and labor market: Companies rent the reputation of their agents to signal investors, regulators, and other publics about the firm’s probity and credibility (Wilson, 1985).
2. The strategic view:
Strategies call attention to the competitive benefits of favorable reputations (Rindova &
Fombrun, 1999).
3. The marketing view:
Reputation is the corporate brand image; building brand equity requires the creation of a familiar corporate brand, which has favorable, strong and unique association (Keller, 1993).
4. The organizational view:
Reputations are the experiences of employees; the corporate culture and identity shape firm’s business practices and the kind of relationships that managers establish with stakeholders.
5. The sociological view:
Reputation rankings are social constructions through the relationships that a corporation has with stakeholders in a shared institutional environment.
6. The accounting view:
The corporate reputation needs to be included in financial reporting standards as an intangible asset among observers.
Figure 1.2: Convergence of academic corporate marketing concepts (Knox and Bickerton, 2003)
The six viewpoints present the multidisciplinary character of the concept of the corporate marketing and the corporate reputation. The concepts are embedded in multiple academic perspectives. In practice refers corporate marketing to corporate brand management. The corporate reputation is considered as a strategic asset for the organization, which is manage through corporate marketing (Fombrun and van Riel, 1997; Greyser, 1999; Aaker and Joachimsthaler, 1999).
The difference between traditional marketing and corporate marketing is the focus of value creation of the (corporate) brand. Brands are from the traditional viewpoint focused on products and services.
Corporate brand management is based on the corporate name and the organization. Traditional brand management aims to influence the buying decision. Corporate brand management is focused on the establishment of a desired corporate reputation. The concepts are converging, due to overlapping definitions (Knox and Bickerton, 2003). The converging concepts of traditional and the corporate marketing viewpoints, are presented in figure 1.2.
1.1.3 The Academic Gap
The academic field of corporate marketing is evolving (Knox and Bickerton, 2003; Balmer and Greyser, 2006). The challenge is to translate the conceptual models into a coherent framework of management practices. The developments in the corporate environment (section 1.1.1) and the converging academic literature (section 1.1.2) present the urgency, for the shift in focus of the marketing literature. Marketing has become relevant to a wider stakeholder audience.
Within the marketing literature was, due to the traditional perspective, the value creation towards customers and investors the main topic. Other stakeholder groups are seen as not relevant or part of another academic school. The focus towards the multiple stakeholders requires another approach which has to be studied.
The second academic gap is found in the focus of organizations. The traditional customer focus of marketing, makes studies towards the audience of business-to-business or business-to-government organizations rare. Secondly are the studies for business-to-business organizations often conceptual.
The results are often based on business-to-consumer research. Empirical studies in the corporate marketing literature focused on business-to-business organizations are rare.
The third academic gap from the corporate marketing field is the attention towards the various stakeholder groups. The main studied stakeholder groups are investors, customers and employees within multiple academic schools. The most difficult stakeholder group, due to the vague definition, is the general public. As proven in the previous paragraphs is the stakeholder group highly relevant for study, due to the global developments (see section 1.1.1).
Corporate marketing from the perspective of business organizations with a focus on the general public is thus hardly studied. The relevance for marketing literature and business organizations has been described and seems to be evident.
1.1.4 Significance of the study
The present study is of a significant value to create knowledge regarding the corporate marketing for business organizations. In section 1.1.3 are gaps identified in the academic literature. The present study has two significant elements contributing to the corporate marketing literature:
1) An empirical based corporate marketing model for business organizations.
2) A stakeholder approach to the model, with the focus on the less studied stakeholder group:
the general public.
The objective for the present study is thus to create a model for business organizations to improve the corporate marketing practices. Constructing the model will create empirical and academic knowledge for the corporate marketing literature. The focus on the general public, as a presumably hard to categorize stakeholder group, increases the academic and practical value.
The conceptual corporate marketing model will be tested in the environment and industry of contractors. The marketing strategies of these organizations are basic and defensive (Van der Jagt, 2005). The organizations within the contracting industry focus mainly on operational processes. The organization were the study will be executed is Royal Boskalis Westminster nv.
1.2 Royal Boskalis Westminster nv
The present study is conducted at Royal Boskalis Westminster nv. An introduction of the organization is found in the annual report:
Royal Boskalis Westminster nv is an international group with a leading position in the world market for dredging services. The core activities are the construction and maintenance of ports and waterways, land reclamation, coastal defense and riverbank protection. The company holds important home market positions in and outside of Europe and targets all market segments in the dredging industry.
Boskalis has a versatile fleet of over 300 units and operates in over 50 countries across five continents. (Annual report Royal Boskalis Westminster nv 2008)
Boskalis wants to create a preferred position within (key) stakeholder groups. Improving the corporate marketing practices is required, to establish a stronger and favorable reputation. The board of management of Boskalis presented the following management question:
How should Royal Boskalis Westminster formulate the corporate marketing strategy to improve the corporate reputation at stakeholders?
1.3 Research Design
The management question of Boskalis connects with the topic within the study. The present study aims to construct create a corporate marketing framework for business organizations. The management question is re-formulated for the present research. The question which is studies in the present research is;
To structure the answer of the research question, seven sub-research questions are formulated.
The main difference between the academic research question and the management question is the focus of the stakeholder groups. The marketing within business-to-business organizations towards the stakeholder groups: employees, investors and clients are based on personal relationships.
Departments within the organization have close contact with these primary stake groups. Employees for example are contacted through a human resource management department, investors through the investor relation department and the clients are served by individual project managers.
Potential employees, investors and clients are part of the general public. Due to the focus on the general public, the value of the present study increases, due to the unknown connections with the stakeholder group and the lack of responsibility within one concentrated department of the organization. Marketing and the communication with the vague stakeholder group makes the study relevant for the entire business organization, as every corporate interaction with the environment builds the corporate reputation.
1.4 Research Method
The academic literature of corporate marketing is a mixture of different academic schools and overlapping concepts and definitions. In order to create a clear view of the academic field, from a marketing perspective, desk research and expert interviews are used to construct a conceptual corporate marketing model.
Secondly is the conceptual model is tested in the case Boskalis and three other contractors. The reputation of the contractors is investigated as a benchmark for the contracting industry. A direct competitor (Van Oord) of the same size is selected and the two largest, stock owned contractors in The Netherlands (BAM & Heijmans) were selected. A survey consisted of questionnaires and interviews, is executed around inhabitants and users of infrastructural projects. The relevance of these individuals representing the general public is higher, due to the confrontation with the organization.
1. What are corporate marketing concepts and dimensions?
2. What is the value of relations with stakeholders?
3. How should corporate marketing concepts be measured?
4. Which corporate marketing dimensions influence the corporate reputation?
5. Which dimensions are relevant for the corporate reputation of the general public?
6. How effective contribute the dimensions to the corporate reputation of a business organization?
How is corporate marketing in business organizations contributing to the corporate reputation of the general public?
The dual approach (questionnaires and interviews) presents a solution for the discussion in the literature for measuring the corporate marketing concepts.
The questionnaire consists of closed - (Likert scale) and open questions and will be used for quantitative analysis. The interviews identified the corporate mental representations of the individuals.
Thirdly is the database used, to construct the empirical corporate marketing model. A factor analysis will reveal the corporate marketing dimensions. With a regression analyses is the strength and direction of the dimensions calculated. The relation between the dimensions and the influence towards the reputation is studied. The associations from the interviews and the questionnaire are used for qualitative analysis with a focus group and a second judge.
1.5 Conclusion
The urgency of managing corporate reputation is proven. Developments from the environment demand a strategy for business organizations, to cope with the wider stakeholder audience.
Stakeholders from the general public are the focus of the present study. The creation of a competitive advantage, through corporate marketing practices, is the objective of corporate marketers.
A survey with interviews and a structured questionnaire provides the qualitative and quantitative data for the present study. The results of the study are presented in throughout the master thesis.
In chapter 1 the background and structure of the present academic study was outlined. Section 1.1 described the developments within the environment of organizations. The academic gap within the academic literature is identified. In section paragraph 1.2 the organization for the case study is introduced. Section 1.3 provides the problem statement and research questions. Section 1.4 presented the research method of the study.
Chapter 2 presents the theoretical background framework presented. The concepts of the academic corporate marketing field are defined and a conceptual framework is revealed. Section 2.1 presents an overview of corporate marketing concepts. In section 2.2 is the value of the corporate reputation discussed. Section 2.3 is an evaluation of the measurement methods of corporate marketing reputation. Sections 2.4 and 2.5 present the conceptual and analytical model for the study.
In chapter 3 is the research design outlined. The focus of the study is identified in section 3.1. The method for data collection and analysis is presented sections 3.2 and 3.3.
Chapter 4 presents the general findings and results of the survey. Sections 4.1 and 4.2 present general findings of the survey sample. Section 4.3 presents the corporate awareness of the individuals. Section 4.4 reveals the expectations of the stakeholders. Section 4.5 presents the qualitative results of the interviews.
Chapter 5 presents the result of the factor analysis. Sections 5.1 till 5.3 present the empirical corporate marketing dimensions. Section 5.4 presents the empirical corporate marketing model.
Chapter 6 estimates the influences between the corporate marketing concepts. A new concepts is revealed; corporate familiarity, as the reputation for business-to-business organization in the general public. Chapter 7 is the reflection of the present study. The results as presented in chapter 4 till 6 are discussed. Directions for further research are identified and conclusions are drawn.
2. THEORETICAL FRAMEWORK
“Marketing isn’t a battle of products; it’s a battle of perceptions” (Ries & Trout, 1993)
In this chapter is the academic literature studied regarding the topic of corporate marketing. The aim of the literature study is to create a theoretical framework, which structures the blurred field of definitions and concepts within the academic literature. (section 2.1).
Secondly the chapter focuses on the relationships between organisations and their stakeholders (section 2.2.). This should reveal the core of marketing; to map the needs ad expectations of the individual’s general public.
The measurement methods of reputation and image are studied in section 2.3. Within the academic literature is a discussion about the best method to capture these mental representations. The present study aims to increase the value of methodology, through using the main stream thoughts in reputation measurement and evaluating these methods.
Section 2.4 presents the analytical model which is an overview of the relations and concepts which are tested in the survey in order to answers the research question.
2.1 Definitions & Concepts within Corporate Marketing
Multiple scholars have investigated the concepts of corporate marketing. Balmer, Van Riel, Schwaiger, Harris, He, Aaker, Fombrun, Greyser, Melewar, Jackson and Olutayo Otubanjo are leading scholars within the corporate marketing literature.
The models of Balmer and Gray (2000) and Marwick and Fill (1997) are used in this section to pin down the concept of corporate marketing. A converged model is presented to understand the concepts of corporate marketing The concepts in corporate marketing and the difference with traditional marketing are discussed in section 2.1.1. The concepts within the corporate marketing are presented in the following section: corporate personality and identity (2.1.2), corporate branding (2.1.3), corporate image (2.1.4) and corporate reputation (2.1.5).
2.1.1 Corporate Marketing
Kotler and Levy (1960) were the first marketers publishing the idea that marketing should focus on the branding of the entire corporation as an entity. Marketing practices should be applied to all areas of business, instead of only products and services related issues.
From the traditional viewpoint is marketing aiming to influence the buying decision of customers. The attention for marketing in business-to-consumer organization is therefore high. Marketing has entered the corporate domain (Balmer and Greyser, 2006), meaning that the science of marketing has become applicable towards a broader audience and is less product or service focused.
Corporate marketing perceives the environment of the organization as a set of (inter)related stakeholder groups and networks (Kotler, 1978, 1999; Capron & Hulland, 1999; He & Balmer, 2007).
Corporate marketing has thus an institutional-wide orientation towards all stakeholders. Table 2.1 presents the main differences between traditional marketing and corporate marketing.
The main question of corporate marketers presents the orientation of the concept: Can we, as an institution, have meaningful, positive and profitable on-going relationships with customers, and other stakeholder groups and communities? (Balmer, 2006). The answer of the question is found in two models . The model (figure 2.1) of Markwick and Fill (1997) and the model of Balmer and Gray (2000) (figure 2.2) present the daily interplay of organizations with the topic of corporate marketing. The connection with the first chapter is evident through the developments and the communication linkages, with and between stakeholders.
The corporate identity is the start of the process to create a profitable corporate reputation. Markwick and Fill (1997) consider corporate marketing as branding practices which are formulated out of the corporate identity. Balmer and Gray (2000) also consider the corporate identity as a starting point for corporate branding practices, but have a stronger focus outside the organization. In both models is, through a combination of communication efforts (based on the corporate identity) and external influences, the corporate images and corporate reputation in stakeholder networks established.
Developments in Marketing
Dimensions Traditional Marketing Corporate marketing
Orientation
Customer
Understanding customers needs and behaviors
Stakeholder
Understanding present and future stakeholders needs and behaviors
Organizational support
Co-ordinated organizational activities Undertaken to support customer orientation
Co-ordinated organizational activities Undertaken to support stakeholder orientation
End focus
Profit orientation Focus on profit, rather than sales
Value creation
Profit maximization is primary goal, but not the only focus. Meeting stakeholder demands is
also important
Social Obligations
Community welfare
Obligation to meet consumers and society long term interests
Future stakeholder an societal needs Balancing current stakeholder and society
needs with those of the future and show sensitivity to organizational heritance Table 2.1 Differences between traditional marketing and corporate marketing (Balmer, 2001)
Organization &
Marketing Communications
Planned Communications Self analysis
Management Communications
Strategic Marketing Corporate
Personality
Corporate Identity
Corporate Image
Corporate Reputation Environmental Influences
Unplanned Cues
Organization Development Management Communications
Objectives &
Positioning Management Communications
Image Research Figure 2.1 The main components of the corporate marketing process. (Markwick & Fill, 1997)
Effective corporate marketing is the leverage of the corporate name or brand within the stakeholder networks, in order to create a strong(er), (more) positive and favorable reputation (Wilson, 2001;
Keller. 2001; Kay, 2006). Corporate marketing prioritize stakeholders groups and identifies the strategies in order to focus on the most effective leverage of the corporate name (Fombrun, 1996;
Hatch & Schultz, 1997).
The focus on the needs and expectations of stakeholders, as a marketing concern, is not presented in both models. The overview of Balmer and Gray (2000) present the linkages between communications outside the organization in detail, but remains vague regarding the establishment of a competitive advantage. To establish a competitive advantage, a organization should be able to create a profitable reputation. To create the profitable reputation, the needs, interests and expectations of stakeholder should be included the corporate marketing framework. In order to establish a more comprehensive understanding of corporate marketing field, the models are combined.
This section presents corporate marketing as: the management of the balance between the corporate identity and expectations of stakeholders, in order to create an profitable corporate reputation. The creation of a profitable reputation is thus found in the balance between the expectation of the stakeholder and the components of the corporate identity. The perceived fit between the expectations of stakeholders and the corporate identity of the corporation, creates a better or worse evaluation of the organization. The evaluation is a heuristic in the minds of stakeholders to value the organization.
Figure 2.2: Corporate marketing in relation with developments (Balmer & Gray, 2000)
Figure 2.2 presents the field of corporate marketing as the balance between the identity of the corporation and the expectations of stake holders.
The metaphor of a balance, is an abstract understanding of how corporate marketing works.
The management of the balance exists of branding practices to establish a positive and profitable image and reputation. The dimensions (the weights) of the key concepts within
corporate marketing determine the evaluation of the organization. The management of the balance between the corporate identity and the expectations of stakeholders is a thus strategic decision. The strategic decision focuses on the positioning of the organization. The process of transferring the positioning towards the stakeholders is done through the corporate communications (as within figure 2.1 and 2.2). The corporate communications practices are branding of the organization name. This is the branding of the corporate name.
Aaker (1996) and Keller (2003) studied the (corporate) branding process. Branding is the process of creating a logical brand structure within the minds of stakeholders. The corporate brand exists thus in the minds of the stakeholders and is a heuristic to evaluate the organization.
The function of branding is thus to give meaning to the corporate brand. The problem of establishing a consistent meaning is difficult caused through the different interpretation of the communications through individual stakeholders. This phenomenon is defined as: polysemy (Kay 2005).
The attachment of associations with the corporate name creates a heuristic, which stakeholder use to evaluate the organization. In order to create a sustainable competitive advantage, the associations should be strong, favorable and unique (Keller, 2003).
Corporate marketing is the management of the balance management of the balance between the corporate identity and expectations of stakeholders, in order to create an profitable corporate reputation. Corporate marketing focuses on multiple stakeholder groups and networks. The corporate branding process is used to create meaning to the corporate name, based on the balance between the corporate ideinty and the expectations of stakeholders.
Corporate Image/ Reputation
Stakeholder Expectations
Figure 2.2 Corporate Marketing and key concepts Corporate Identity
Dimensions of Corporate Marketing
2.1.2 Corporate Personality & Identity
In the model of Markwick & Fill (1997) is the corporate identity based on the personality of an organization. In this section is the concept of corporate identity discussed to understand the basis for corporate marketing practices.
Markwick & Fill (1997) define corporate personality as the organizational development of employees.
Olins (1978) describes the corporate personality as the soul and spirit of the organization. Employees
‘are’ the organization and the cultural mix of departments and individuals within the organization represents the personality of an organization. The reason for understanding the corporate personality is to clarify the drivers of the organizational behavior. Cornellissen and Harris (2001) describe the concept of corporate personality as: the all expression of the firm. The personality is the first step towards the identity of the organization. Cornellissen and Harris (2001) provided three metaphors which describe the relation of corporate personality and identity within the literature (see: figure 2.3).
The corporate personality is embedded within the corporation and develops with the organization towards the identity (Abratt & Shee, 1989). Corporate personality represents the inner values and feelings of the individuals within the organization. Corporate behavior is based on unspoken values and feelings. The corporate identity is the spoken and communicated concept of the corporate personality. Communications and (un)controlled influences are the linkages between the concepts.
All organizations have a corporate identity (Abratt and Shee, 1989; Bernstein, 1984, Olins, 1990).
Multiple scholars investigated the concept of corporate identity and similar concepts as; organizational identity, business identity and visual identity. A general accepted definition in the literature is never formulated. Balmer (2001) identified 15 explantions for the lack of consensus and the vague definition.
To create a definition and understanding of the concept, multiple and leading scholars made a statement about corporate identity: ``The Strathclyde statement'' (see appendix).
Corporate identity seems to exist from a mix of corporate strategies, symbols and behaviors. The minimal requirement of a corporate identity is the creation of a distinction between organizations. An
1. Corporate identity as an expression of the corporate personality
2. Corporate identity as a organisational reality
3. Managing multiple identities
Corporate Identity
Corporate Personality
Corporate Identity
Corporate Identity Management
Corporate Images Corporate
Identities Corporate Identity
Figure 2.3 Metaphors of corporate personality
Corporate reputation management
Associations with corporate identity
Olins (1978), 1989), Bernstein (1986), Birkigt and Stadler (1986), Lux (1986), Abratt (1989) Balmer (1995, 1998) Gutjahr
(1995), van Riel (1995). Van Riel and Balmer (1997), Balmer and Soenen (1999)
Cheney (1991, 1992) Heath (1994), van Riel and Balmer (1997) Marzilliano (1998)
Corporate Images
identity makes the organization identifiable. Albert and Whetten (1985) established three claims for a corporate identity:
- Claimed central character: features that are seen as the essence of the organization - Claimed distinctiveness: features that distinguish the organization
- Claimed temporal continuity: features that exhibit over time
The AC²ID Test is a general accepted distinction between five kinds of identity (Balmer, 2001, 2003):
AC²ID Test Kind of Identity Definition
Actual The identity in the present situation
Communicated The sum of the total corporate communication efforts of the organization Conceived The perceptions of the organization through stakeholders
Desired The identity as formulated through the board of management
Ideal The optimal identity positioning of the organization in a specific context Table 2.3 : The AC²ID Test (Balmer, 2001, 2003)
The distinguished identity could be compared with the concepts of corporate marketing. The actual identity is the identity within the current status. The communicated identity refers to the process of translating the corporate personality, in to a spoken and formulated identity. The conceived identity seems to have a strong refers with the concepts of the corporate image and reputation (section 2.1.3 and 2.1.4) The desired identity is the branding goal of the corporate marketer. The ideal identity seems to be related with the corporate image. The positive associations in a specific stakeholder group and setting. The ideal identity is flexible and presents multiple aspects of the organization.
The objective is to establish alignment between the five concept identities. The level of alignment between the five identities reveals the strategy of the organization to control the perception of the stakeholders. The effectiveness of the process (corporate branding) is thus based on the level of the alignment between the identities (Balmer & Greyser, 2003).
Corporate identity is discussed as an asset. The perspective of an asset provides evidence of the existents and distinctiveness of the organization (Olutayo Otubanjo & Melewar, 2007). The concept of corporate identity as a manageable asset makes the use of the identity interesting. The present study sees, in line with Olutayo Otubanjo & Melewar, 2007, corporate identity as a manageable asset, derived from the corporate personality. As stated before is the corporate identify defined as: the communicated corporate personality, based on a strategic decision, to provide a positive distinction in relation with other organizations.
The study of Olutayo Otubanjo &. Melewar (2007) presented the interrelated concepts and dimensions of the corporate identity. The concepts of symbolism, behavior and corporate communications (van Riel & Balmer, 1997) are integrated into a framework to manage the corporate identity.
Multidisciplinary refers to the interconnectedness of the concepts within the corporate identity mix. The framework is based on the corporate personality, as described through Cornelissen and Harris (2001) (Balmer and Greyser, 2006). The model is labeled as the corporate identity mix (see figure 2.4).
Figure 2.4 The new corporate identity mix (Olutayo Otubanjo &. Melewar, 2007) Symbolism
The visual aspect of corporate identity has been a school of thought within the corporate marketing literature. Visual representations of the organizations, communicate symbols of the corporate personality towards stakeholders (Markwick & Fill, 1997). Visual representations of the corporation create the identification, distinction and differentiation of the corporation within stakeholder networks (He and Balmer, 2005).
Behavior
Behavior of organizational members is spontaneously (personality) or regulated through formal management structures (He and Balmer, 2005). The presented behavior is the means-end result of the values within the organization. Organizational behavior in the external environment creates expectations and associations of stakeholders (Jackson, 2004).
Corporate Communications
Markwick & Fill (1997) and Balmer and Gray (2000) presented the corporate communications as the linkages between the corporate marketing concepts. The fit between corporate identity and the communicated identity determines the effectiveness of the communication (Ind, 1992; Van Riel, 1997).
Corporate communications are the controlled activities, which translate the corporate identity into corporate images outside the organization (Dowling, 2001). Consistency of the corporate communication (mission, vision, philosophy and essence) is essential to build strong reputations and images (van Riel, 1995). Van Riel (1995) sees the corporate communication as three main practices:
management, marketing and organization communication.
The corporate identity is the communicated corporate personality, based on a strategic decision, to provide a positive distinction with other organizations. The management of the corporate identity is a mix of symbolism, behavior and corporate communications (Olutayo Otubanjo & Melewar, 2007).
2.1.3 Corporate branding
Corporate branding is the process of creating associations between the corporate name and elements from the organizational environment (Gioia, Schultz, & Corley, 2000; Kay, 2006). The associations should connect with (parts of) the corporate identity (Van Rekom, 1997). The combination of the corporate name with the associations is defined as the corporate brand. “A corporate brand involves the conscious decision by senior management to distil and make know the attributes of the organizations identity in from of a clearly defined branding proposition. This proposition underpins organizational efforts to communicate, differentiate and enhance the brand vis-à-vis key stakeholders groups and networks.(Balmer, 2001)” The corporate brand is considered as marketing paradigm from Vargo and Lusch (2004). The corporate brand is more tangible and thus more measurable and manageable in relation with a corporate identity or reputation (Grunig, 1999).
The difference between corporate brands and product brands is (1) the corporate brands focuses on all internal and external stakeholders, instead of only customers. Secondly is the corporate brand based on a broader marketing mix and (3) is experienced and communicated through all the corporate communication channels (Balmer, 2001).
The companies which are ranked high in global reputation studies, use the same brand name at the corporate and product level (Clifton & Maughan, 2000; Roberts &Dowling, 2002). The management of one corporate brand, is more cost effective in comparison with managing a complete portfolio of brands for the corporation (Aaker, 2004). The branding of the organization through the corporate communications establishes the corporate image and reputation in the minds of stakeholders.
2.1.4 Corporate Image
The branding of the corporate name, in combination with the external influences (Markwick and Fill, 1997) and tertiary communications (Balmer and Gray, 2000), create perceptions in the minds of stakeholders (Blaich, 1993). The net result of the interactions, experiences, beliefs, feelings knowledge and impressions which stakeholders have with an organization is defined as the corporate image. The specific association from the individual viewpoint, makes the corporate image a context specific concept. The benchmark of individual stakeholders is based on the portfolio of information sources and past experiences of individual stakeholders (Bernstein, 1984; Jiang, 2000).
The corporate image of the general public consists of associations with the organization regarding social and environmental topics, as discussed in chapter 1. Corporate images exists on multiple levels; from stakeholder groups till the level of a individual. A organization has thus multiple images (Fombrun, 1993), due to the context specific character of the corporate image and the existens of multiple stakeholder around the organization (Bernstein, 1984; Topalian, 1984; Hatch and Schultz, 2000; Jiang, 2000). The corporate image is managed through the corporate communications, behavior and symbolism from the corporate identity mix (Markwick & Fill, 1997; Olutayo Otubanjo &. Melewar, 2007).
