Local implementation of a Global brand

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Local implementation of a Global brand

Research at: ING Direct Australia

University: Rijksuniversiteit Groningen Graduate: Sophie van Berckel

Place & date: Amsterdam 14 December 2003

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Preface

This thesis is a culmination of my study at the Rijksuniversiteit Groningen. I finished this assignment but it would have been difficult without the support and advice of a number of persons. My sincere thanks go out to all the people at ING Direct who made me feel part of the company and who where always willing to assist in my research. I sincerely express my gratitude to Vaughn Richtor and Christine McConnell for giving me the opportunity to do this assignment and for all their time and effort they spent in supporting me.

I also want to thank my mentors of the Rijksuniversiteit Groningen, Pieter Kamminga and Huib Stek, for their advice, guidance and support throughout this research and thesis writing. They made me view problems from a different perspective and were always very helpful. Despite the ten hours time difference, we had regular and constructive correspondence.

The last ten months have been a great experience and I really enjoyed working for ING Direct in Australia.

Sophie van Berckel Amsterdam, 14 December 2003

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Summary

ING Direct Australia, a subsidiary of ING Direct Headquarters in The Netherlands, is implementing the global brand of ING Group into its organisation. From this global brand a local translation has been made and the local brand values, associated with this local brand intent, need to be implemented in the daily activities of the employees and in their communication towards colleagues and customers. The local brand intent of ING Direct Australia is: To redefine banking in the eyes of our customers and employees. This intent is supported by the following values: fresh and different, simple and straightforward, Approaching every task with energy, our actions affect our customers, Inspire confidence, the opportunity to improve. Management within ING Direct Australia has identified that in between the business units of ING Direct in Australia problems exists about how to ‘roll out’ this brand intent. In some areas the living of the brand values is not going very well The research objective is twofold: 1) To successfully further implement the ING Direct brand values into ING Direct Australia so that brand alignment within ING Direct Australia is achieved. 2) To give more insight in the possible problems that arise from the implementation of one global brand into ING Direct and ING Australia and give recommendations about how these effects can be resolved or leveraged. The research question is: What are the problems that prohibit successful further implementation of the global brand of ING Group into the operation of ING Direct Australia and how can these be resolved or reduced?

Internal marketing was used in order to identify and resolve or reduce the problems with regard to brand alignment. Within the Internal marketing literature, we looked for implementation issues, and found the model of Ahmed and Rafiq (1995) which addresses the issue of implementation. The model consists of three steps to take, from which the second and the third step were appropriate to use in this research. The model deploys six marketing elements to constitute an internal marketing mix; these are product, participants, process, price, promotion and place. The product, which was set in the first phase, Direction, can be seen as the change that is required within ING Direct in order to get the employees to start to live the brand values and act and behave according to these brand values. Because of the fact that the implementation of the brand values already started, this phase is past time. In the second phase of the model, Path, a segmentation needed to be made of the employees (Participants) involved in the process of change on basis of internal marketing research and specific barriers of each segment towards the change needed to be identified. This was done by conducting a questionnaire partly based on an organisational culture theory of Hofstede in order to discover if subcultures exist between the different departments or between management levels of the organisation. Furthermore interviews were conducted in which special attention was paid to organisational factors that were provided by Ahmed and Rafiq as instruments to activate the change with, but which are also acknowledged by Interbrand as important factors to discover if the organisation aligns to the brand. These factors are: organisational structure, culture, reward systems, power and leadership, benefits/disadvantages for the employee and training. Within the interviews, these organisational factors were paid special attention to, in order to discover to what extent the different areas in the organisation align with the brand. When making the segmentation, these organisational factors were taken into account. In this way problems with regard to brand value implementation were identified and the reason for these problems was discovered. In the third step, Action, actions needed to be undertaken to help resolve the problems found in the second step. Process, price, promotion and place were used in order to find solutions for the problems regarding brand alignment.

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Some benefits of the implementation of the brand values for the employees of ING Direct Australia were identified. Because of the brand values employees feel more one, globally as well as locally. They also think that customer service increases because of the use of the values. Lastly employees find that the brand values give them direction where to go within the organisation. However more were identified that need to be resolved or reduced in order to successfully live the brand values.

Problems with regard to brand alignment that are present in the whole organisation of ING Direct Australia are:

- Growth: departments start working for themselves and little islands within the organisation start to appear. This results in a deterioration of the communication and information flow within the whole organisation. Furthermore when departments are only focussing on themselves subcultures can start to exist which will prohibit successful living of the brand values.

- No commitment of management towards the brand values: In order to start living the brand values it is very important that management and executives give examples by behaving and communicating according to the brand values. However, the majority of managers is not committed to the brand values as appeared from observation and interview results.

- No alignment of performance measurement systems and brand values: Although management of ING Direct Australia urges its employees to take initiative, an employee will be marked down if he/she makes a mistake. This results in risk avoiding behaviour where the orders of the manager or team leaders are precisely followed and no responsibility is taken. Inspire confidence is because of this, difficult to achieve but this also counts for the other values. Apparently, there is too little acknowledgement in work given by the managers or team leaders of a team or department. Especially the processing people do not get enough acknowledgements in their work

With regard to the segmentation that needed to be made in this phase, can according the above outlined problems only one segment (namely all the employees) be identified.

Regarding the problems outlined below, the Direct unit and the Bank unit can be identified as two different segments.

Problems that are only present within the Bank unit are related to the organisational factors:

- Culture: The Bank has more employees who used to be in banking before and who have a slightly different mentality than the employees do in Direct. The Bank culture does not really align with the brand promise.

- Products: The Bank offers products that they make as simple as possible, but mortgage products are just more complicated than savings products. The products can be bought on line but always need some explanation and the maintenance of those products is much more difficult. A fee is attached with most products the clients buy. When a client wants to change some details, much more time is needed in compare to the Direct products and a fee is asked. When a client wants to get a mortgage, quite a lot of paper work and administrative information is needed from the customer, which causes a lot of processing work for the people working in those areas in the Bank.

- Operating systems: The older systems of the Bank limit the employees who work in that part of the bank to align the brand values to the way of doing their job. Many jobs within the Bank Unit consist of processing data. A lot of this processing work is still done manually, whereas with more advanced systems this could be done automatically.

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Because these factors do not align with the brand values it is very difficult for the employees working in the Bank Unit to align their work and communication towards colleagues and customers with these values.

Problems with regard to brand alignment between ING Direct Australia and ING Australia are:

- Culture: Because of a different culture within both companies, different priorities are set, regarding customer service. ING Australia is dealing with problems at the moment (regarding the Joint venture with ANZ, regarding the disappointing results that the company achieved the last years). These problems limit the possibility to improve the customer service. This results in a problem regarding the managed funds product. This product is offered through the direct channel of ING Direct, but invested by ING Australia. When ING Direct wants to find an answer to a customer’s question about the customer’s managed funds product, ING Australia needs to be consulted. ING Direct Australia usually has to wait long for the information needed so the customer has to wait as well. This is not how ING Direct Australia usually works and this can damage the ING Direct customer service reputation.

- Systems: Because of the fact that ING Australia is a Joint Venture between ING Group and ANZ, and the organisation is in the middle of a reorganisation, systems are not in place yet. This results in bad customer service, which is not refreshing at all and which could harm ING Direct, if we take the point of view that the customer only sees one ING.

- Global organisational structure: Both companies have to report to different head quarters. This makes it difficult to make appointments about external brand communication which can result in contradictory ads, or ads that harm the other company. The result is that the external brand communication of ING Direct Australia and ING Australia does not align.

In Action, phases three of the model of Ahmed and Rafiq (1995), through internal positioning recommendations were given about what things will need to change in order to achieve brand alignment. Internal positioning aims to create a package of actions to overcome identified variers as well as to fulfil employee needs. Effective positioning requires careful management of the remaining elements of the internal mix, namely Process, Price, Promotion and Place. In the element Process, management is proposed as the ‘mechanism’ that has to enact the change. From results of interviews and questionnaires appeared that the majority of managers within ING Direct Australia is not or not fully committed to the brand values. Problems will be resolved and will not occur in the future if management creates more commitment among themselves and their employees. Davis (2001) identifies four management styles that can be used in an internal marketing program. These are directive controlling, persuasive selling, consultative marketing and relationship marketing. Consultative marketing is the style that best fits the organisation of ING Direct Australia. With help of consultative marketing attempts are made to open up two way channels of communication. Employees are listened to and encouraged to provide their input and ideas. Programs or products are then adapted based on this input. Input of the employees about issues regarding the brand values will be important to resolve problems and to prevent problems from occurring in the future.

Furthermore it has been advised that performance measurement systems within the whole organisation have to be aligned to the brand values, and initiative taking by employees needs to be promoted within these systems.

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Within the element of Price the benefits identified by the employees have to be emphasized by management. The price of the implementation will be that especially the employees of the Bank have to adapt their way of working, behaving and communicating to the brand values.

The Promotion tool is used to create more awareness and acceptance for the brand values within the Bank unit of ING Direct Australia. Furthermore it has to be used to create awareness for the growth and the consequences of this growth. Management has to communicate clearly that communication and information flow are important for a successful business. It must be promoted that if employees foresee or experience any problems in reaction to the growth or in relation to other issues, they can tell their manager, so that problems are identified in an early stage. In this way employees’ input is used. Also in their communication towards ING Australia, management of ING Direct Australia should promote the brand values. This is useful in order to solve the problems with regard to the managed funds product. A brand protocol has to be developed to make sure that in the future brand communication of both organizations aligns with each other.

Within Place, it has been recommended that management has to revise the systems used within the Bank unit. These systems need to be replaced by new, updated systems, so that product offering and work align more with the values. Furthermore, job swaps need to take place between the Direct and the Bank unit, in order to mix cultures and get more of a Direct culture in the Bank unit.

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Table of figures

FIGURE 1 GLOBAL STRUCTURE OF ING GROUP... 11

FIGURE 2 ING DIRECT AND ITS BUSINESS NAMES... 12

FIGURE 3 ORGANISATIONAL STRUCTURE ING DIRECT AUSTRALIA... 13

FIGURE 4 ORGANISATIONAL STRUCTURE ING AUSTRALIA... 14

FIGURE 5 ORGANISATIONAL STRUCTURE OF ING IN AUSTRALIA... 15

FIGURE 6 RESEARCH PLAN MODEL... 22

FIGURE 7 BRAND HIERARCHY... 26

FIGURE 8 ING GROUP GLOBAL BRAND INTENT... 28

FIGURE 9 ING DIRECT GLOBAL BRAND INTENT... 30

FIGURE 10 MULTI LEVEL MODEL OF AHMED AND RAFIQ (1995)... 37

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General introduction

In January 2003 this graduation project started at ING Direct Australia. The project is an obligatory part of the curriculum of International Business cluster of Management and Organisation at the University of Groningen.

The research that will be described in this thesis took place in ING Direct Australia, an organisation of ING Group. It covers the topic of global branding. ING Direct Australia started the implementation of the local translation of global brand intent into the

organisation a year ago. Problems with regard to this implementation were identified.

Different departments had different ideas about how to implement and execute the living of the brand values, values that are associated with the brand intent. In this research an answer will be found to the following research question:

What are the problems that prohibit successful further implementation of the global brand of ING Group into the operation of ING Direct Australia and how can these be resolved or reduced?

In this first part the profile of the company will be described. Company information will be provided and the two companies that are involved in this research, ING Direct Australia and ING Australia, will be extensively described.

After the first chapter, the thesis will be discussed in four parts. In the first part, which consists of Chapter 2, the background of the research problem will be briefly discussed from where the research objective and the research question will be outlined that will be answered in this thesis. Furthermore the sub questions that derived from the research question will be given. In this chapter also the methodology of this research will be discussed. A research plan model illustrates all the activities that will be done in this research to finally come to an answer to the research question.

In the second part the background and present situation of the implementation of the local brand values will be outlined. This part consists of chapter 3 and 4. In the third chapter, the background of the problem will be extensively discussed. This will be useful in getting a better understanding of the research problem and topics that have to be taken into account when finding answers to the research question. The concept of branding will be briefly outlined and background information about the development and the reasons ING has for developing the global brand will be given. The Direct brand intent and the local brand values that ING Direct Australia developed will also be outlined. The fourth chapter gives an outline of the present situation of the implementation of the local brand values. With the results of the interviews and questionnaires that will be held in this research, a good picture can be given of the present situation of the living of the brand values.

In the third part of this research a theoretical model will be proposed that will be helpful in finding the problems that occur with brand alignment and in finding solutions for the research problem in order to successfully live the brand values. This will be discussed in Chapter 5. In chapter 6 the application of this model will be illustrated and additional theories useful to acknowledge in this research will be used. Also the impact of the presence of ING Australia, the managed funds and insurance company in Australia, which is the only other ING organisation in Australia that is also operating on the retail market will be discussed.

In the last part, in chapter 7, actions will be proposed that will result in brand alignment within ING Direct Australia. When brand alignment is achieved, successful living of the brand values is achieved. This part will be closed with an overall conclusion and evaluation of this research which will be described in Chapter 8 and 9.

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Chapter 1 Profile of the company

Introduction

To be able to get a good understanding of the research problem and the reason why the research is conducted, it is important to know more about the structure and background of the company in which the research is conducted. In this chapter the profile of ING will be outlined. First a description of ING Group, the headquarter organisation, will be given.

Then the concept of ING Direct will be explained. After this a closer look will be given to the ING businesses in Australia, from which ING Australia and ING Direct Australia will be more extensively outlined.

1.1 ING Group

ING Group is the name of the international parent under which many different financial businesses are structured. ING Group is a global financial institution of Dutch origin offering banking, insurance and asset management to over 50 million private, corporate and institutional clients in 65 countries. ING comprises a broad spectrum of companies that increasingly serve their clients under the ING brand. The total workforce of ING Group consists of over 110,000 people. ING Group originated in 1990 from the merger between Nationale-Nederlanden and NMB Postbank Groep. Combining roots and ambitions, the newly formed company called itself 'Internationale Nederlanden Group'.

Market circles soon abbreviated the name to I-N-G. The company followed suit by changing the statutory name to 'ING Groep N.V.'. Since the merger, ING Group experienced a decade of rapid expansion. The company expanded mainly through autonomous growth, but it also made several large international acquisitions. Key to ING is its distribution philosophy: 'click–call–face'. This is a flexible mix of Internet, call centres, intermediaries and branches.

1.2 ING Direct 1.2.1 History

ING Direct started in Canada and emerged its business to 7 other countries in the world;

Spain, Italy, France, England, USA, Germany and Australia. ING DIRECT opened in April 1997 from its call centre in Toronto, Canada. Canada was meant to be a pilot project.

If things went well, ING would roll out the ING DIRECT concept elsewhere. If not, tough luck. As it turned out, things went very well, and Spain and Australia opened in 1999, followed by France and the United States in 2000, Italy in 2001 and the UK in 2003. All ING Direct businesses around the world, execute the same business model. Globally there are more than 6 million total customers.

1.2.2 Concept

ING Direct is not a regular bank. It does what is in the name; it deals direct with the customer either via telephone, internet, or automatic voice system. The main service ING Direct offers is their savings product. Clients can transfer money from their existing bank account to their savings account at ING Direct and receive an interest, which is undoubtedly higher than the interest they would receive at a conventional bank. There is no minimum amount of money obligated; one can start saving with one dollar. ING Direct distributes its products through internet and telephone. 24 hour, 7 days a week clients are

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able to transfer money in and out of their savings account. The reason that ING Direct can offer this high interest rate is because this bank has no branches and does not use mass advertising.

ING Direct is an entity on its own within ING Group (see fig 1.1). ING Direct Headquarters (HQ) reports directly to the European business Unit. The CEO of each country reports directly to ING Direct HQ. ING Direct HQ is located in Amsterdam, The Netherlands.

Figure 1 Global structure of ING Group

1.3 ING in AUSTRALIA

1.3.1 ING Direct Australia and ING Australia

This research is limited to ING Direct Australia and ING Australia. These two organizations will be discussed extensively in this paragraph. First ING Direct Australia will be discussed. First the history of the organisation will be discussed followed by an outline of the different services they offer and the different business units the organisation has. Also a picture of the organisational structure will be shown. Then the business of ING Australia will be discussed in the same order. In the end of this paragraph the other ING organizations that are operating in Australia will be briefly described.

ING Direct Australia

ING Direct in Australia opened its business in 1999. ING Bank and ING Direct were structured under one business because ING Direct needed the bank license of ING Bank to start its business. ING Bank already existed then and since 1999 is structured in the organisation of ING Direct. The legal name of ING Direct Australia is ING Bank Australia

Executive Board ING Group

ING Europe

ING Americas

ING Asia/

Pacific

ING Asset Management Supervisory Board

ING Group

ING Direct HQ

E-business

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three business units within ING Direct operate under the name of ING Bank towards the customer. The brand name of their product is ‘ING Bank’. ING Direct has no bank branches; all business is done via telephone or Internet.

The organisation consists of three business units and six support units. The business units are The Retail Mortgage Group, Commercial Property Finance and Direct sales and Operations. The Retail Mortgage Group (RMG) and the Commercial Property Finance group (CPF) operate towards the customer under the name of ING Bank. The Direct Sales and operations channel operates under the name of ING Direct.

The support services are Marketing, Funds and Investment, Risk management, Human Resources, Finance and IT. They provide the services of their Unit to all the business units.

ING Direct Australia is, as all other ING businesses in Australia, a bank without branches.

Figure 2 will make clearer under what name the business units operate.

Figure 2 ING Direct and its business names

In this thesis the distinction between the different business units within ING Direct

Australia will be very important. So Direct sales and operations Unit will be called’ Direct’

and the Retail mortgage Group Unit and CPF Unit will be called ‘Bank’. The organisation as a whole will be called ‘ING Direct’.

Description of Business units

The Direct sales and Operations operates under the name of ING Direct. The services that this Unit offers are the “real ING Direct” products, which are also offered in the other ING Direct subsidiaries around the world. Direct sales and operations offer straightforward products via telephone, Internet or mail. The call centre is the pulse of the business at ING Direct. It is open every day, 24 hours a day in order to provide ideal accessibility to customers. An average of 80% of calls is answered within 10 seconds. This means that a client can have access to her/his account or open an account 24 hours/ 7 days a week. Up to today, ING Direct sells two products, the Savings Maximiser and Mutual Funds. For Business Unit

Organisation

Retail Mortgage Group (RMG)

Products:

- Home loans

Direct Sales and Operations

Products:

- Savings product - Managed investments Commercial Property

Finance (CPF)

Products:

- Construction and development loans - Term loans

ING Customer

ING Bank ING Direct

Brand name

towards customer

IING Bank Australia Limited(ING Direct)

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both products the client needs to have a bank account at any conventional bank. From that particular bank account the client can put money in the Savings Maximiser account or in the Mutual Funds account. With the Savings maximiser, the client can earn a high variable rate of interest, and he/she does not have to pay any bank fees (normally one has to pay bank fees in Australian banks, so this is a big advantage for the people in Australia). There are two different Mutual Funds products, which are the True Blue (only Australian funds) and the All-rounder (funds from all over the world ING Bank Australia/ ING Direct is, as all other ING operations in Australia, a bank without branches.

The Retail Mortgage Group (RMG) distributes a range of competitive and flexible retail home and investment loans through mortgage brokers and financial advisers. The Mortgage group Unit markets a range of simple, flexible, and highly competitive loan products designed specifically around customer needs. The mortgage products are distributed through the retail channel by brokers and mobile agents. These brokers and agents sell ING branded products to the customer. In the wholesale channel the mortgage managers distribute products. In the wholesale channel “bold” products are sold to mortgage managers, who brand the product themselves.

RMG sells its products under the name of ING Bank.

Commercial Property Finance division deals with its clients through it own sales force.

The primary function of Commercial property Finance is to provide loan facilities > $ 2 million to assist in the acquisition/ re-finance of commercial real estate or in the construction of commercial/ residential real estate. Just since the first of January 2003 Commercial Property Finance became part of ING Direct. Before that, CPF was part of ING Bank N.V. Due to a financial construction, CPF is now structured under ING Direct.

But confusing enough, it operates under the name of ING Bank.

Figure 3 Organisational structure ING Direct Australia

CEO

CPF Direct S&O

RMG

F&I Finance

Markt.&Comm.

HRM

Risk O&C Risk L&O

IT

Support units Business units

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ING Australia

Before ING Australia was renamed in March 2001, it was known as Mercantile Mutual.

Mercantile Mutual was established in 1878 in Sydney after three Sydney businessmen came up with the idea to start a distinctly Australian insurance company after gathering financial backing from friends and supporters during a cricket match in November 1877.A number of ING's Dutch founding companies have also been in business for over one hundred years, one of which began operating in Australia in the 1950s. In 1982 this Dutch company (Nationale Nederlanden (Aust) Ltd. (NN)) acquired a 50 percent interest in Mercantile Mutual. In 1987 Nationale Nederlanden increased its stake in Mercantile Mutual to 100 %. In 1994 Mercantile Mutual gained a banking license and transformed its name to ING Mercantile Mutual Bank. In 2001 ING Australia became a joint venture with ANZ. Because ING has the majority of the shares, in 2001 the name of the bank changed to ING Australia. The major businesses of ING Australia are funds management and life insurance. The other products that they offer are superannuation, retirement incomes, Unit trusts and banking. ING Australia operates in the corporate and in the retail market. They sell their products and services through intermediaries.

Figure 4 Organisational Structure ING Australia

There are several other different ING operations in Australia, delivering services to both the retail and the corporate market. These will be briefly outlined below.

ING Real Estate

This organisation provides property investment management services. This includes the management of property trusts listed on the Australian Stock Exchange, as well as property development and project management for ING funds and third parties.

ING Bank N.V., Sydney Branch

ING Bank N.V. provides wholesale corporate and investment banking services as well as commercial property finance.

ING Investment Management

Marketing Customer Service

Distribution Management Corporate & Financial

Business Technology People & Culture

ANZ Distribution Integration

New Zealand

Chief Executive Officer

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This ING organisation provides investment management services for ING funds and third parties, covering all major asset classes, including international funds managed by ING’s global network.

QBE Mercantile Mutual

This is the only ING organisation in Australia, which does not have the name of ING. QBE Mercantile Mutual is a 50/50 Joint Venture between Mercantile Mutual Insurance (Australia) - a member of the ING Group, and QBE Insurance (Australia). It provides general insurance products exclusively through professional insurance intermediaries.

These different organisational structures are illustrated in the figure below:

Figure 5 Organisational structure of ING in Australia

ING Group

EC Europe EC USA EC Asia

ING Direct HQ Hong Kong HQ

ING Australia (JV with

ANZ) QBE

Mercantile Mutual ING Real

Estate ING Bank

N.V., Sydney Branch ING Direct

Australia

ING Investment Management

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Chapter 2 Research problem and methodology

Introduction

In this chapter the assignment ING Direct Australia provided will be outlined. Hereafter, the problem situation will be outlined after which the research objective and the research question of this research will be presented. Then a brief description will be given of the theories that will be used in this research and the research method will be outlined. This chapter ends with a research plan model in which will become clear what the structure of this thesis is and how the research has been conducted.

2.1 Initial assignment

The need and demand for this assignment came from the CEO of ING Direct Australia.

Purpose of the project

Identify the issues arising from the implementation of the global brand of ING Group into the operation of ING Direct Australia and give recommendations to resolve these issues.

The project is a paper highlighting the issues and explaining the consequences for brand alignment and recommending some local solutions to help resolve some of the issues.

In the following problem analysis it will become clear what the background of the problem is from which this assignment occurred.

2.2 Background/ cause of the problem

Over the last ten years, ING Group has grown steadily into one of the largest international financial service providers in the world. However, outside the Netherlands the ING name is hardly known. And in the Netherlands, the ING name is associated much more with banking than with insurance and asset management.

One of the reasons for ING's lack of global name recognition/awareness can be found in the multi-branding strategy that ING has followed until 2001. Many companies within the ING Group operate under a different name than ING. And those companies that operate under the ING name use the brand in a variety of different ways in different regions.

Research amongst customers, ING managers and external stakeholders on the present positioning of ING showed that there is no consistent idea about what ING stands for.

Some find it an ambitious, modern company, while others find it conservative, distant and cold. There is also much uncertainty about ING's nature: is it a bank, is it an insurance company, or is it an asset manager? ING thought it was time to develop one global brand to overcome these issues and to benefit of the size and stature of the organisation as a whole. This is the trigger of the decision to develop one global brand for all the different companies.

A Group Brand intent has been developed. A brand intent is what you want your customers and partners to experience and, in turn, think and feel about ING (ING intranet). This ING Global Brand intent consists of 12 brand values. Brand values are from a marketing or consumer perspective, the promise and delivery of an experience. It is the code by which the brand lives. The brand values act as a benchmark to measure behaviours and performance.¹

1 www.ideographic.net/tools/brand_glossary.html

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Because the marketing concept of ING Direct is a little different from the other ING operations, a separate Global ING Direct brand intent has been developed. This brand intent derives directly from the Group brand intent and is almost the same, but is adapted to the marketing concept of ING Direct. ING operations can make a local translation of the Group brand intent, which means that they can adapt the brand intent to local demands.

ING Direct operations make a local translation of the ING Direct brand intent.

Within ING Direct Australia this local translation has already been made. In November 2002 a culture survey was conducted within ING Direct Australia. All employees had to fill out a survey and interviews with a selection of employees were conducted. With the results of this survey, the ING Direct global brand and associated values the local brand intent and associated values were developed. The implementation of the local brand values started in March 2003 with presentations about the global brand and the brand values. The CEO of the organisation gave these presentations. A few weeks later, “the Cube” was launched. This is a promotion device that was given to every employee and will be given to every new employee, to put on his or her desk as a reminder of the brand values. A few weeks after the Cube was launched, screensavers appeared on every computer desktops, with the values on it. Executive Committee and managers have started to promote the brand values in their daily work.

Management within ING Direct Australia has identified that in between the business units of ING Direct in Australia problems exists about how to ‘roll out’ this brand intent.

Alignment of the brand value execution both internally and externally, has to be achieved and that is not the case at the moment of this research. With internal communication, communication towards other employees and shareholders is meant. External communication is communication towards customers. The fact that ING Australia, the life insurance and managed funds company of ING in Australia, is also operating on the retail market. This has consequences for the propagation of the brand values as well.

Both ING Direct Australia and ING Australia made separate translations of the global brand intent. ING Australia made a local translation of the ING Group global brand Intent.

ING Direct Australia made a local translation of the ING Direct global brand intent, which derives directly from the ING Group Global brand intent. And because ING Australia and ING Direct both operate on the retail market, alignment in their propagation of the ING brand is important. The way ING Direct Australia propagates its brand is of influence on the image of ING Australia and vice versa.

The CEO has asked to do research on the consequences that occur with the implementation of this global brand. What are the problems that exist between the different business units, how did they occur and how can they be solved in order for the implementation of the brand values to be successful and for brand alignment to occur? And what is impact of the existence and activities of ING Australia in relation to the brand communication towards the customer? From this initial research proposal a research objective and research question have been developed.

2.3 Research objective and research question

From the problem background and the initial assignment ING Direct Australia proposed, a research objective and question has been developed.

The research objective is twofold:

•

To successfully further implement the ING Direct brand values into ING Direct Australia so that brand alignment within ING Direct Australia is achieved.

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•

To give more insight in the possible problems that arise from the implementation of one global brand into ING Direct and ING Australia and give recommendations about how these can be resolved or reduced.

Research question:

What are the problems that prohibit successful further implementation of the global brand of ING Group into the operation of ING Direct Australia and how can these be resolved or reduced?

Explanation of words:

- ‘Further implement’ because ING Direct Australia already started with the implementation of the local brand values in their organisation and is in the middle of the process.

2.4 Sub questions Background information

1. a. What are the initial key reasons for ING Group to implement a global brand?

(Chapter 3)

b. What is the global brand intent of ING Group? (Chapter 3)

c. What is the local brand intent of ING Direct Australia? (Chapter 4)

The local brand values have already been developed. But to get a good understanding of the development of the local brand values and where they come from, it is useful to take one step back to see why ING decided to develop this brand, what the global brand of ING is and how the local brand intent of ING Direct Australia evolved from this global brand intent (question 1 a –c). It is useful to know ING’s reasons to implement a global brand in order to know why this research is necessary and where the decision of such a big project comes from. This brand intent was the starting point for the development of the local brand values of ING Australia and of the local brand values of ING Direct Australia. So this information is needed to understand how the local brand values of both companies have been developed. Secondary research will be conducted to find an answer to these questions. Marketing reports, minutes of meetings, organizational surveys, ING Intranet and the Internet will be used to get more information about the company and the research problem.

Analysis

3. Which theoretical concepts are applicable to the subject of brand alignment?

(Chapter 5)

4. How can theoretical concepts be used to identify problems that occur with brand alignment within ING Direct Australia? (Chapter 6)

5. Which problems occur as a result of the presence of ING Australia concerning the further implementation of the brand values of ING Direct? (Chapter 6)

In this phase of analysis, a theoretical model will be outlined that are applicable to the research problem (question 3). Furthermore, with help of this model, problems that occur with brand alignment will be identified within ING Direct Australia and between ING Direct Australia and ING Australia (question 4, 5). With results of primary research (observation, interviews and questionnaires) and results of question 3, answers will be found to these questions.

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Actions

6. Which actions should be taken to achieve brand alignment within ING Direct Australia? (Chapter 7)

In order to successfully implement the brand values different departments within ING Direct will need to do different things to be able to live and propagate the brand values.

The Cube and the screensaver have already been distributed. Maybe some more promotion such as training, workshops, or other things, is needed to make the living of the brand values more successful. Or maybe some more structural things, like systems, will need to be adapted. For the third step, the results of the interviews and questionnaires will be used and theoretical knowledge will be applied.

2.5 Theories

ING Direct Australia, a subsidiary of ING Direct Headquarters in The Netherlands, is implementing the global brand of ING Group into its organisation. From this global brand a local translation has been made and the local brand values, associated with this local brand intent, need to be implemented in the daily activities of the employees and in their communication towards colleagues and customers. Management within ING Direct Australia has identified that between the business units of ING Direct in Australia problems exist about how to ‘roll out’ this brand intent. In some areas the living of the brand values is not going very well.

In this research Internal Marketing will be used in order to find and resolve the problems within ING Direct Australia with regard to the living of the brand values. Within the Internal marketing literature, we looked for implementation issues, and found the model of Ahmed and Rafiq (1995), which addresses the issue of implementation. The model consists of three steps from which the second and the third step are appropriate to use in this research. In the second step a segmentation needs to be made of the employees involved in the process of change on basis of internal marketing research and specific barriers of each segment towards the change need to be identified. This will be done by conducting a questionnaire partly based on an organisational culture theory of Hofstede (1991), in order to discover if subcultures exist between the different departments of the organisation. Furthermore interviews will be conducted in which special attention will be paid to organisational factors that are provided by Ahmed and Rafiq (1995) as instruments to activate the change, but which are also acknowledged by Interbrand as important factors to discover if the organisation aligns with the brand. These factors are: organisational structure, culture, reward systems, power and leadership, benefits/disadvantages for the employee and training. Within the interviews, special attention will be paid to these organisational factors, in order to discover to what extent the different areas in the organisation align with the brand. When taking these organisational factors into account with the segmentation, problems with regard to brand value implementation can be identified and the reason for these problems can be discovered. Based on the results of questionnaires and interviews a segmentation of the employees involved in the process of change can be made and actions will be identified that need to be undertaken in order to create brand alignment. Furthermore problems for each segment with regard to successful implementation of the brand values will be identified.

In the third step, Action, actions need to be undertaken to help resolve the problems found in the second step. Instruments are provided by Ahmed and Rafiq (1995) that are important in the enactment of the change. A theory of Davis (2001) on management styles in relation to internal marketing will be used in this phase.

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2.6 Primary data collection 2.6.1 Observation

Observation has been done, during the period the information for the research was collected. We have been doing research within the company for almost 6 months and during that period information was collected through observation as well. The role that we fulfilled with regard to observation can be classified as the participant observer. In this role the researcher reveals his/her purpose as a researcher. Both the researcher and the subjects are aware of the fact that it is a fieldwork relationship. The researcher is particularly interested to gain the trust of the group (Saunders, Lewis and Thornhill, 2000).

2.6.2 Questionnaires

The questionnaire is partly based on an organisational culture theory by Hofstede (1991) developed, with which it is possible to identify the subcultures and test whether the culture fits the strategies set out for the future. With the results of this questionnaire we will see if the existing problems occur out of cultural differences within the departments. Because the brand values discussed in this research are only implemented in ING Direct Australia the questionnaire is only conducted within ING Direct Australia. The questionnaire consisted of 15 questions, from which 2 were open and 13 multiple choice. Within this questionnaire, 7 multiple-choice questions were related to the organisational culture theory of Hofstede (1991). The other 8 questions were about the brand values, what the respondents’ opinion on these values was and how he/she would use the brand values in his/her daily work.

117 questionnaires were distributed. 93 questionnaires were returned, which gives a response rate of 80 %. The total number of employees within the company is 500, so almost 20% of the employees have been surveyed. The questionnaires were distributed through the whole company. In each business Unit 25% of the total employees in that Unit were handed out a questionnaire. In this way, comparisons between different business units could be made.

2.6.3 Interviews

A total of 22 interviews were conducted. 17 interviews were conducted with employees of ING Direct Australia and 6 with employees of ING Australia.

The implementation of the brand value is a top-down issue. The Executive Board has decided to integrate branding issues into the overall group strategy and make it one of the key objectives of the overall strategic plans. A Global Branding Committee, with brand specialists and senior managers from all over ING, coordinates the re-branding and repositioning initiatives together with a dedicated Branding Department. ING intranet) Therefore the interviews within ING Direct Australia were undertaken with managers and team leaders. The interviews were conducted with the middle management of the company (managers and team leaders). This group of employees was chosen because they have the responsibility of a team of employees and they have to report to managers above them. In this way it was possible to research the communication of the brand intent from top to middle management and from middle to low management. “Middle managers are key to delivering the brand promise. Their role is to infuse their teams and their operations with a practical commitment to living the brand” (Interbrand, 2001, p. 4). One manager in almost every business Unit was interviewed. Of the Direct Operations Contact centre, Marketing and HRM Unit one or two more managers were interviewed. This was done because in

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those business units, employees know more about the brand intent than in the other business units. Marketing and HRM helped developing the brand intent. The Contact centre is very important in propagating the brand. Employees in the contact centre are on the phone with customers the whole day so it is very important that the brand intent is well implemented as soon as possible in that Unit.

The interviews that were conducted within ING Direct Australia were semi- structured. “In semi- structured interviews, the researcher will have a list of themes and questions to be covered although these may vary from interview to interview. This means that you may omit some questions in particular interviews, given the specific organisational context, which is encountered in relation to the research topic. The order of questions may also be varied depending on the flow of the conversation. On the other hand, additional questions may be required to explore your research question and objectives given the nature of events within particular organizations” (Saunders, Lewis and Thornhill, 2000, p. 243/244).

In the interviews questions were asked about the Cube and the local brand values and what tensions and problems the interviewees noticed with the living of the brand values. Also questions concerning the organisational factors were asked. Brand alignment with ING Australia was also a topic that was covered during the interviews. Finally the results of the questionnaires were discussed and asked more feedback about. The fact that these different topics had to be covered was the reason that semi structured interviews were conducted.

For the five interviews that were conducted within ING Australia, managers were interviewed for the same reason as been given before. The interviewees were either working on the marketing department, people/culture department or contact centre department. These departments were chosen because in these departments the topic of global branding was known the best.

The interviews within ING Australia were unstructured. “Unstructured interviews are informal. You would use these to explore in depth a general area in which you are interested….the interviewee is given the opportunity to talk freely about events, behaviour, and beliefs in relation to the topic area” (Saunders, Lewis and Thornhill, 2000, p. 243/244).

The interviews within ING Australia were mainly focussed on the effects of having one global brand within ING Direct Australia and ING Australia. This was a very general, broad topic and because the interviews were so informal, the interviewees talked freely. At the time of the first interview, nothing was known about the feelings of ING Australia employees towards the topic. A lot of things, which have impact on the topic, were discovered by giving the interviewees the opportunity to talk freely.

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2.7 Research model

Figure 6 Research Model

Explanation of research model

This research model shows the path, the road map, to solving the problem situation: reach the objective and answer the research question. The arrows in the model represent a relation between the variables in the model. The dark coloured boxes at the bottom of the model represent the goal of this research and expected final outcome.

In the first step, the research problem will be defined. This evolves from the initial research problem that has been identified by ING Direct Australia.

Choice of a theoretical model

Application of theory in order to identify problems that occur

with brand alignment

Providing solutions for the identified problems with regard to brand alignment

Analysis

Actions

Define the problem situation

Interviews and questionnaires

Actions to create brand alignment

Insight in issues with ING Australia

Background &

present situation Problem definition

Outline of background information

Secondary data collection

Problems resulting from the presence of ING Australia Interviews and

questionnaires Observation

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Based on secondary data collection and observation in the second step background information about the research problem is outlined. This will be useful in getting a better understanding of the research problem. The concept of branding will be briefly outlined and background information about the development and the reasons for developing the global brand will be given. The Direct brand intent will also be outlined and the local brand values ING Direct Australia developed. Furthermore actions so far regarding the implementation and the present situation of the brand values will be outlined.

In the third step of this research a theoretical model will be proposed. This model will be helpful in finding the problems that occur with brand alignment and solutions for the research problem in order to successfully live the brand values. In the application of this model, additional theories useful to acknowledge in this research, will be used. Also the impact of the presence of ING Australia will be outlined.

In the last step, actions will be proposed, that will result in brand alignment within ING Direct Australia. When brand alignment is achieved, successful living of the brand values is achieved.

2.8 Limiting conditions

Limiting conditions have to be made in order to conduct a research that is well focused.

Within these boundaries, the research has to be conducted. There are two kinds of limitations, limitations regarding the result (product limitations) and limitations regarding the research process (process limitations).

Product limitations:

- The scope of the research is limited by Australia

- Only ING Direct and ING Australia will be involved in the research.

- Only the local brand intent implementation of ING Direct Australia will be researched.

Process limitations:

The research is conducted in for the Rijksuniversiteit Groningen, faculty of Management and Organisation

We will conduct the research personally.

2.9 Structure of thesis

This thesis will be structures in the following order:

Chapter 1: Profile of company

Chapter 2: Research problem and methodology Chapter 3: Research problem background

Chapter 4: Local brand values and Present situation Chapter 5: Theory

Chapter 6: Application of theories

Chapter 7: Actions to create brand alignment Chapter 8: Conclusions

Chapter 9: Evaluation

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Chapter 3 Research problem background

Introduction

This chapter will start with general information about brands and branding. What is a brand and what is a global brand? (Section 3.1). However, to get a good understanding of the problem situation at ING it is useful to take one step back in time and see how ING came to the decision to develop a global brand and what the content of this global brand is (paragraph 3.2). In paragraph 3.3 issues that are important to know with regard to ING global branding will be discussed. The development of the ING group global brand will be discussed as well as the elements of the Group brand intent. Furthermore, the translation from a global to a local brand intent will be explained. In paragraph 3.4 the actual content of the ING Group global brand intent and the ING Direct global brand intent will be outlined.

3.1 Brands and branding

Most people think a brand is just the name of the product or service. However, except for the name, it is much more. Different thoughts exist about the definition of a brand. John Mariotti (1999) states that ‘A brand or a brand name, as some people call it, is a simplified,

“shorthand” description of a package of value upon which consumers and prospective purchasers can rely to be consistently the same (or better) over long periods of time. It distinguishes a product or service from competitive offerings. A brand is a trusted promise of quality, service and value, established over time and proven by the test of repeated use and satisfaction’. Al Ries and Laura Ries (2000), writers of the book ‘The 22 immutable laws of branding give a very basic explanation of the word: ‘brand is nothing more than a word in the mind, albeit a special kind of word. A brand name is a noun, a proper noun, which like all proper nouns is usually spelled with a capital letter.’

Geoffrey Randall (1997) refers to brands by distinguishing brand image and brand identity:

‘Brand image = what exists in the mind of customers. It is the total of all the information they have received about the brand and so on.

Brand identity = what we transmit to the marketplace; it is what is under our control, provided that we understand the essence and expression of our brand.’

Global branding is yet another concept in the literature of branding. A global brand can, according to Randall (1997), be described as a brand that has the same brand essence, identity and values, a brand that uses the same strategic principles and positioning, a brand that has basically the same product/service everywhere, with only minor variations and which employs the same marketing mix as far as possible.

A global brand is one, which shares the same strategic principles, positioning and marketing in every market throughout the world, although the marketing mix can vary. It carries the same brand name or logo. Its values are identical in all countries; it has substantial market share in all countries and comparable brand loyalty. The distribution channels are similar (de Mooij, 1997).

3.2 ING reasons for global branding

In June 2001 ING Group developed a global brand for several reasons. These reasons are:

- To create customer value and to guide customers

Results of market research show that customers are looking for recognition. They want a financial brand that stands for reliability and quality. Apparently, customers perceive a

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large global brand, as more reliable than the smaller local brands. When communicated consistently, the reliability of the brand and with that of ING is enforced.

- To create one common culture

ING started their businesses internationally with a multi-branding strategy. This means that the organizations that they acquired or had a joint venture with, operated under their own names. All the operations, which belonged to ING, had there own organisational culture and did businesses in their own way. Now ING wants to create more connection between the loosely coupled business units. This will be achieved by doing business under one global brand that has values according to which the employees have to do their work.

When employees all over the world start behaving and doing businesses according to the brand values as stated by the Global Brand Intent, one common culture could be created and consistency of the global brand will be achieved.

- To create synergy and cost advantages

Investing only in one brand, instead of 60 different brands can create cost advantages.

With the creation of one global brand, the structure of ING Group also changed. More integration of business units was realised to create synergy within the different businesses.

- To become a global player

To become a global player, a company and their business units need to carry the same name all over the world.

- To distinguish themselves from their competitors

The force of ING is that it has the ability to offer a wide product range through multiple distribution channels. Therefore ING wants to position itself as an integrated financial services provider. One brand, which stands for so many different services, creates an opportunity for ING to distinguish themselves from their competitors.

- To reposition in certain markets

When changing to the ING name, especially smaller business units will benefit from ING’s reputation by associating themselves more closely with the ING name. (e.g. ING Reliastar in the USA, clearly benefits from the name awareness of ING Direct).

- To create shareholder value

Brands have become an increasingly dominant element of corporate value. The brand equity of Coca-Cola, for example, represents 60% of the company’s market value. A strong brand will create shareholder value. Furthermore, when cost savings or synergies are achieved through the use of one global brand, value for shareholders is also created.

- To attract the best employees

Companies that have strong brands and loyal customers tend to have employees who take pride in their jobs and feel good about them selves. Good staff is the key to good customer service, which results in customer loyalty.

Until 2001 ING has followed a multi- branding strategy. This is one of the reasons for ING’s lack of global name recognition/awareness. Many companies within the ING Group operate under a name other than ING. And those companies that operate under the ING name use the brand in a variety of different ways in different regions. (ING intranet)

3.3 Important issues with regard to ING global branding Introduction

In the previous paragraph the reasons ING had for developing a global brand, have been discussed. But what is this global brand? In paragraph 3.3.1 an explanation will be given of the elements of the brand intent. Then the development of the ING Group global brand will

Local implementation of a Global brand