“Improving the chemistry”
Identity and image research at the sBU X
Marijke Oosterhuis s – 1273418
University of Groningen
Faculty of Management and Organization Technology Management
Amersfoort, April, 2006
Supervisors: Mr. M.E. Boon (1st supervisor Rijksuniversiteit Groningen) Mr. H.A. Ritsema (2nd supervisor Rijksuniversiteit Groningen)
Ms. A (supervisor Company A)
Ms. A (supervisor Company A)
“The author is responsible for the contents of this thesis. The copyright of this thesis rests with the author.”
Preface
This thesis is about the identity and image of a sub-business unit of Company A named sBU X. This identity and image research is written on behalf of the marketing department, where I was able to do my internship, my research and to gain some valuable experiences.
I would like to thank all the employees of the sBU X, and give special thanks to my supervisors at the sBU X: Ms. A and Ms. A. They provided me with all the information I needed and they were always there for me when I needed their assistance. I would like to thank the marketing managers, Mr. B and Mr. B, as well, for all the help and information they provided me during this internship.
At the Rijksuniversiteit Groningen, Mr. Boon supported me and provided me with valuable advices during this research period. I would like to thank him for this. I also appreciate it a lot that I could always contact him, even after office hours. Special thanks as well to Mr. Ritsema, who provided me with some valuable recommendations and was even willing to read my concept thesis during his holiday.
Last, but definitely not least I would like to thank my parents, who made it possible for me to study and who supported me during all the years at the university. Special thanks to Mischa as well. He supported me during the lasts six months; he was always available to listen to me and to review the chapters I wrote.
With the support of all the persons named above and the support of all my friends I was able to write this thesis and to make recommendations for the sBU X. I wish the sBU X all the best in the future and hope that they gained some valuable insights in their identity and image from this research. With this thesis I finalize my wonderful study time in Groningen.
April 2006
Marijke Oosterhuis
Management summary
Reorganizations within Company A have led to a new focus for the sBU X. The business of Product A was appointed as “platform for growth” and therefore it became a main focus in the overall strategy of sBU X. The sBU X is aiming to become the second player in the market of product A. While prodcut A is a “platform of growth”, the strategy for Product B is to maintain the same level of sales in a declining market. According to the BU management, sBU X needs a renewed focus that is more outward oriented. In line with this, sBU X would like to know what image clients have of sBU X. In particular, they want to know which aspects of the image are good and which aspects of the image can be improved. With this information sBU X can, if necessary, change aspects in their way of doing business, in order to serve clients better.
The goal of this research is to investigate the image as well as the identity. The identity is included, because sBU X would like to know which identity is send out to the clients and if there are differences between the way clients see sBU X and how sBU X likes to be seen by the employees and the management. By inquiring identity and image, information is gathered to support the decision making process on a strategic level. Another aspect which is included in this research is innovation. The urge to innovate comes from the management team of Division A and the board of Company A; they would like sBU X to be innovative. However, sBU X does not know on which aspects they need to be innovative according to the clients. By investigating on which aspects clients would like sBU X to be innovative, sBU X can anticipate on the wish of the clients.
In order to give an answer on all that is stated above the following research question is formulated:
What is the identity and the image of Company A’s sBU X for the products Product A and Product B?
After a review of the literature, the identity is split in two parts: the desired and actual identity. The image is split in two parts as well: the desired and actual image. To reveal the desired identity, in- depth interviews and a review of strategic documents are used. In the desired identity, eleven points have been revealed and all these points have there own corresponding attributes. The attributes are found by interviews with employees, managers, clients and previous research. These attributes form the base of a questionnaire which is used to reveal the actual identity and the desired and actual image. To reveal the actual identity the questionnaire is sent to 31 employees. The research population for Product A consists of 189 clients and for Product B of 75 clients.
The desired identity for both products is formulated as: sBU X wants to be environmental responsible, innovative, reliable, customer focused and wants to serve the customers with a high quality and high service against a fair price. Besides, sBU X wants to be known as the main supplier who provides solutions, has know-how and is concerned with safety.
The actual identity of the sBU X for both products is that sBU X is a company with a good quality of the products, has a lot of know-how, provides a lot of services, is reliable and concerned about safety. The actual identity for Product B is almost the same as the actual identity of Product A. This is not very surprising, because many employees have contact with clients of both products. The difference between the desired identity and the actual identity is the greatest on the points ‘innovation’, ‘customer focus’ and ‘solution provider’.
Concluding from the questionnaire regarding the image of Product A, the clients would like sBU X to have a lot of know-how and customer focus and want that sBU X provides them with high quality and services. The fact that sBU X is reliable and is concerned about safety issues is part of the desired image too. Moderately important in the desired image are the points ‘solution provider’ and
‘innovation’.
The actual image is revealed with the help of the same questionnaire. Clients of Product A currently see sBU X as a company which is delivering products with a high quality and that is concerned about safety. The image on the points ‘know-how’ and ‘reliability’ is high. The clients do not have a very good image of sBU X on the points ‘service provider’, ‘solution provider’, ‘innovation’, ‘customer focus’ and
‘main company’. The differences between the desired and actual image is large or moderate on the points ‘customer focus’, ‘reliable’, ‘service provider’ and ‘innovation’.
In the desired image for the clients of Product B are quality and safety of great importance. Besides, the clients see it as optimal when sBU X is reliable, has know-how, provides them with services and solutions and has customer focus. The clients do not see it as optimal if sBU X is doing very well on the points ‘innovation’ and ‘main company’.
The actual image for clients of Product B is the following: sBU X is doing well on the points ‘safety’ and
‘quality’ and doing moderately well on ‘know-how’, ‘service provider’ and ‘reliable’. On these points the image is regarded as positive. sBU X is not doing very well on the points ‘customer focus’, ‘solution provider’, ‘main company’ and ‘innovation’. The difference between the desired and actual image is large on the points ‘customer focus’ and ‘solution provider’.
The difference between the actual identity and actual image is significant for Product A on the points
‘service provider’ and ‘innovation’. On these points the identity that is send out is interpreted differently by the clients. On the other points the difference is not significant, which means that the identity sent out by sBU X is the same as the image interpreted by the clients. For Product B, a significant difference can be found on the points ‘know-how’, ‘innovation’ and ‘main company’.
The answer on the sub question about innovation is split in two parts: innovation on product level and innovation at service level. Some clients of Product A say that a more superior quality is an improvement which sBU X can make in order to innovate. For Product B no type of innovation is named by the clients of sBU X on product level.
A few possible innovations at service level are mentioned by the clients of Product A. Examples are faster decision making, more factories, an online databank and the possibility of transportation by boat. Clients of Product B, talk about four possible improvements: a more commercial intensive policy, a more selective distribution policy, becoming less rigid in their policy and attitude and improvements in the delivery time.
It is recommended to start improving the points for which a large gap exists between the desired and actual image. For Product A, sBU X should first improve the point ‘customer focus’, followed by the points ‘reliable’, ‘service provider’, ‘innovation’, ‘quality’, ‘safety’, ‘know-how’ and ‘solution provider’.
The attributes which should be improved for the points with both a large difference between the desired and actual image and with a high importance, are given below. There exists a large difference on the point ‘customer focus’ for Product A. It is recommended to start improving the image on the attributes ‘flexible’ and ‘good documentation’, followed by the attributes ‘cooperation when solving problems’, ‘good sales crew’, ‘think along with clients’, ‘good communication’, ‘broad product range’, ‘ frequent visit of a representative of sBU X’ and ‘accepting last minute orders’. It is recommended to improve the identity on the attributes simultaneously. The identity should be improved on the attributes which are mentioned above as well, with the exception of the attribute ‘good sales crew’. On the attributes ‘accessibility’ and ‘being flexible at deliveries’, the identity should be improved as well. On the point ‘reliable’, sBU X should improve the identity on the attributes ‘availability of the product’,
‘continuity of quality of the delivered product’ and ‘delivering good quality’. The last point is ‘service provider’, with a moderately difference between the desired and actual image. The image should be improved on the attributes ‘good logistical services’, ‘good technical services’, ‘delivering services’ and
‘good customer service’. The identity should be improved on the attributes ‘good logistical services’
and ‘delivering services’.
For Product B, the attributes which should be improved for the points with a gap between the desired and actual image are given below.
There exists a large difference on the point ‘customer focus’. It is recommended to start improving the image on the attributes ‘cooperation when solving problems’ and ‘think along with clients’, followed by the attributes ‘accepting last minute orders’, ‘being flexible at deliveries’, ‘flexible’, ‘good documentation’, ‘good communication’, ‘good sales crew’, ‘accessibility’ and ‘frequent visit of a representative of sBU X’. It is recommended to improve the identity on all the attributes simultaneously. The identity on the attributes which are mentioned above should be improved as well.
The last point which is of high importance and with a large difference between the images is the point
‘solution provider’, a large gap exists between the desired and actual image. The image and the identity should be improved for the attributes ‘cooperation when having problems’, ‘offering technical
solutions’ and ‘having the right test-equipment’. On the points ‘reliable’, ‘safety’, ‘service provider’,
‘know-how’ and ‘innovation’, there exists a moderate difference between the desired and actual image.
The attributes on which sBU X is not performing very well should be improved.
It is recommended to improve the identity through internal communication with employees. The image should be improved by an effective corporate communication. A communication plan helps to improve the corporate communication.
Apart from the recommendation regarding identity and image, some other recommendations are given as well. The employees are not aware of all the activities regarding innovation and there is a gap between the desired identity and actual identity on most of the points. Therefore, it is recommended to improve the internal communication. Another aspect recommended to improve is the segmentation within sBU X. There are many advantages of a good segmentation. In order to segment the market correctly, a segmentation scheme is given in the recommendations. The last recommendation says something about the appearance of sBU X in Germany. It is recommended to act with a single vision.
The clients should not get the impression that employees are willing to act in line with their wishes, but that the management does not allow them to do this.
Table of Contents
Chapter 1 Introduction ... 9
1.1 Background of the company ________________________________________________ 9 1.2 Recent organizational developments _________________________________________ 9 1.3 Background of the problem ________________________________________________ 10 1.4 Introduction in Product A and Product B _____________________________________ 11 1.4.1 Description of Product A ... 11
1.4.2 Description of the product Product B... 12
1.5 Structure of this thesis ____________________________________________________ 12 Chapter 2 Research Design ... 13
2.1 Type of research _________________________________________________________ 13 2.2 Research objective _______________________________________________________ 13 2.3 Research question _______________________________________________________ 13 2.4 Boundary Conditions _____________________________________________________ 13 2.4.1 Limitations... 13
2.5 Theoretical concepts______________________________________________________ 14 2.5.1 Identity ... 14
2.5.2 Image... 14
2.5.3 Relationship identity and image ... 15
2.5.4 Reputation... 17
2.5.5 Image and reputation: Interchangeable?... 18
2.8 Research Model __________________________________________________________ 20 2.9 Sub questions ___________________________________________________________ 20 2.10 Research approach _______________________________________________________ 21 Chapter 3 Methodology... 23
3.1 Data Collection methods __________________________________________________ 23 3.1.1 Interview Technique ... 23
3.1.2 Measurement techniques used to reveal the desired and actual identity... 24
3.1.3 Measurement techniques used to reveal the desired and actual image ... 24
3.1.4 Measurement scale ... 25
3.2 Research population ______________________________________________________ 26 3.3 Data analysis ____________________________________________________________ 27 3.4 Reliability and validity_____________________________________________________ 28 Chapter 4 Analysis of the market environment ... 29
4.1 Product A _______________________________________________________________ 29 4.1.1 Segment 1... 30
4.1.2 Segment 2... 30
4.1.3 Segment 3... 31
4.1.4 Segment 4... 31
4.1.5 Segment 5... 31
4.2.1 Segment 1... 32
4.2.2 Segment 2... 32
4.2.3 Segment 3... 33
4.2.4 Segment 4... 33
4.2.5 Segment 5... 33
4.2.6 Segment 6... 34
4.2.7 Segment 7... 34
Chapter 5 Analysis ... 35
5.1 Response rate ___________________________________________________________ 35 5.1.1 Non-response research ... 36
5.2 Reliability of the data _____________________________________________________ 38 5.3 Desired Identity __________________________________________________________ 38 5.4 Results Product A ________________________________________________________ 42 5.4.1 Actual Identity Product A ... 42
5.4.2 Desired and actual identity Product A ... 45
5.4.3 Analysis open question Product A ... 46
5.4.4 Desired image ... 47
5.4.5 Actual image Product A ... 47
5.4.6 Desired and actual image Product A... 49
5.4.7 Difference identity and image Product A ... 51
5.5 Results Product B ________________________________________________________ 54 5.5.1 Actual identity Product B... 54
5.5.2 Desired and actual identity Product B ... 56
5.5.3 Result open questions Product B... 58
5.5.4 Desired image Product B... 58
5.5.5 Actual image Product B ... 59
5.5.6 Desired and actual image Product B... 61
5.5.7 Difference between identity and image ... 63
5.6 Differences between segments _____________________________________________ 65 5.7 Innovation_______________________________________________________________ 65 5.7.1 Innovation at product level... 66
5.7.2 Innovation at service level ... 66
Chapter 6 Conclusion... 67
Chapter 7 Recommendations ... 74
7.1 Minimizing the difference between identity and image __________________________ 76 7.1.1 How to improve the image ... 77
7.1.2 How to improve identity ... 79
7.2 Segmentation process ____________________________________________________ 79 Postscript ... 81
Bibliography ... 82
Chapter 1 Introduction
In chapter 1, the background of the company, the recent organizational developments as well as the related problems will be described. Paragraph 1.4 will describe the relevant aspects of Product A and Product B and their relevant markets. This profound knowledge is helpful for a more in-depth understanding of this topic.
1.1 Background of the company
It’s more than likely that in some way, you are using a product involving Company A1 every day.
Products like antidepressants, salt, paint, toothpaste, cosmetics, plastics and glass are just a small selection of the involvement of Company A in our daily life.
Company A is a multinational company that serves customers around the world with healthcare products, coatings and products. Company A has operations in 80 countries and is global leader in many markets. The company currently employs over xx people. In addition to strong positions in Western Europe, the United States of America and Japan, geographic expansion is currently focused on Eastern Europe, Asia Pacific, and Latin America. The activities are divided into three different groups, labelled Pharma, Coatings and Products. In 2005, Company A generated sales of xx million euro.
The history of Company A can be traced back as far as 1777. The development from a small company to a multinational has partly been the result of organic growth, but mainly due to a carefully planned series of acquisitions and divestment2.
This research will be executed at the sub-Business Unit (sBU) X3, a unit of the Business Unit (BU) Divisoin A, a division of the Products group. This sBU was set up in January 1993 after a big reorganization of the whole organization of Company A.
The sBU X is selling Product B, Prodcut C, Product D, Prodcut E and Product A4. These so called ‘eco products’ are products related to re-use, recycling and eco-solutions, aiming at a positive impact on the environment. Product A and Product B are the two products which are included in this research because; the markets are large and can be understood fully within the six months.
The BU is responsible for annual sales with an amount of xx million euro and the sBU X for an amount of xx million euro. Product A and Product B are the two products which are included in this research because; the markets are large and can be understood fully within the six months.
1.2 Recent organizational developments
In this paragraph, the recent organizational developments will be described. These developments are the beginning of some problems as experienced at the sBU X and described in the next paragraph.
The developments are described in chronological order.
In 2003, Company A grew after they became the only owner of the Company B. Before this operation Company A had a 50% share. The plant in Ibbenbüren is producing both of the products included in this research, Product A (only product E5 and product F6) and Product B. Before 2003, sBU X bought product E and product F from Company B and the other products from other Product A producers;
nowadays Company A is producing its own product E and product F.
1 See annex 1 for the organization scheme of Company A.
2 See annex 2 for the development from a small company to a multinational.
3 See annex 3 for the organization scheme of sBU X.
4 With Product A is meant, Aluminium- and Iron salts or their mixtures. All Product A sold by sBU X are stated in annex 4.
5 Product, described in annex 4.
The sales of the products Product A and Product B were, before 2004, divided between the only two sBU's of Company A, named sBU X and sBU Z. The sBU Z was responsible for the sales of all the products for the so-called key accounts, the big clients. Responsible for the sales of all the products for the other clients was the sBU X. This changed in 2004 when the disentanglement of the sales organization took place. The disentanglement of sales led to a new structure of the sales organization of both sBU's. The sBU Z is now responsible for the sales of Chlorine and Caustic Soda for all types of clients and the sBU X is now responsible for the sales of the products Product C, Product B, Product A and Product D, including the key accounts.
Apart from the above mentioned changes, the group of Company A reorganized their businesses as well after a change in strategy. In 2004, the business of the group delivered a strong performance, the best in years, but the overall Products portfolio performed below the Company A targets of an EOI7 above 10%. In order to establish a long-term sustainable position, an in-depth review of the business segments was conducted. As a result of that review, the Products group decided that certain businesses will be strengthened and several other businesses, which did not meet the criteria of an EOI above 10%, should be divested. The Products group developed a plan for reorganization on the basis of the in-dept review of the business segments. The reorganization started in April 2005, resulting in five new BU’s; ‘R’, ‘S’, ‘T’, ‘U’ and ‘V’, instead of the former nine. The five BU’s are nowadays called “platforms for growth”, formed to strengthen the existing leadership positions of Company A and to concentrate on expanding core activities in the selected market segments.
Besides the above stated changes, the organization of the BU changed as well. The former three BU’s were integrated in the new BU headed by Business Unit manager W. So, after the reorganization the BU ‘W’ and the BU ‘X’ became both a sBU. The BU is supported by Manufacturing and Technology Services as well as staff functions for Control and Information Technology, Human Resources and Communication.
1.3 Background of the problem
After all the reorganizations, BU manager W. said in ‘Basics’8 (2005): “Implementing all these activities and integrating the business, (…………), require some internal focus. But while restructuring internally, it is equally important that we keep up our service levels to our customers. Too much internal focus can lead to distraction from our business".
The organizational developments as described above have led to a new focus for the sBU X. The business of Product A was appointed as “platform for growth” and therefore it became a main focus in the overall strategy of sBU X. The sBU X is aiming to become the second player in the market of product A after Company Competition9. At the moment, sBU X is only producing the products E and F and is buying the other products from other producers. While Product A is a “platform of growth”, the strategy for Product B is to maintain the same level of sales. Although the market is declining, due to many alternatives for Product B, sBU X is aiming for the same level of sales annually, what implicitly means that the market share needs to grow.
After all the reorganizations, sBU X needs a renewed focus that is more outward oriented. In line with this, sBU X would like to know what image clients have of sBU X. In particular, they want to know which aspects of the image are good and which aspects of the image can be improved. With this information sBU X can, if necessary, change aspects in their way of doing business, in order to serve clients better. If sBU X can serve and treat the clients in a way they would appreciate, sBU X has a good chance of growing in the Product A market, or gaining market share in the Product B market. For a company, it is always important to know what your current clients appreciate, nowadays and in the future, because knowledge is a resource in the economy nowadays (McColl-Kennedy & Schneider, 2000).
In the Three-year-Operational-Plan (TOP), written in 2004, the strategy, in the literature also known as desired identity (Van Grinten, 2004), is described by the managers of sBU X. The managers describe how they would like sBU X to be seen. The strategy of sBU X is written by the management team,
7 A target for the returns
8 “Basics” is the internal employee newspaper of Company A.
9 A company name of a producer of products.
without the participation of all the employees. The desired identity has not been translated to an overall mission and vision and therefore the strategy is not accessible for all the employees. The lack of a mission and vision makes that the employees of sBU X have nothing to identify them with. By investigating identity, the opinion of the employees will be involved in this research. By investigating the identity together with image, the possible differences between how clients see sBU X and how sBU X likes to be seen are demonstrated. In order to grow respectively in sales or in market share the differences between identity and image need to be as small as possible.
By inquiring identity and image, information is gathered to support the decision making process on a strategic level. The essence of the problem consists of three different aspects: the new strategy, the lack of information about how clients see sBU X and finally, the fact that sBU X is not aware of which identity is send out to the clients by the employees.
sBU X wants to serve the clients as good as possible. Therefore, it is important to know if there are differences between the clients in the different segments. If there are differences, sBU X can treat the clients in the different segments differently in order to serve each client as good as possible.
Therefore, information is gathered about the differences in images between the different segments for both products.
An important aspect is customer driven innovation in the strategy of sBU X (TOP, 2004). Normally the urgency to innovate comes from the environment, which is constantly changing at a fast pace. For the sBU X the urge to innovate comes from the management team of Base Products and the board of Company A; they would like sBU X to be innovative. However, sBU X does not know on which aspects clients would like sBU X to be innovative. In order to be successful in innovation, knowledge of what clients appreciate is important. The innovation on product level is difficult because the environment is mature, which means that the kind of products and their markets are known. Although innovation on product level is difficult, it is still important to be innovative to survive. By investigating on which aspects clients would like sBU X to be innovative, sBU X can anticipate on the wish of the clients.
The following problem area’s can be summarized from the above stated description.
- No knowledge about the identity of sBU X.
- No knowledge about the image of sBU X.
- Differences between identity formulated by managers and identity perceived by employees.
- No knowledge about the differences between the images in the different segments.
- No knowledge about on which aspects clients would like sBU X to be innovative.
1.4 Introduction in Product A and Product B
Before proceeding to the next chapter, the research design, a short introduction in the products Product A and Product B will be given. Both products are not commonly known and therefore a short introduction is needed. The technical details about the products are stated in annex 4 and annex 5.
The different markets segments and the developments is these segments are described in chapter 4.
1.4.1 Description of Product A
Product A are metal salts in aqueous solutions. These metal salts are suitable for flocculation, coagulation and precipitation10.
Water supply and water purity have never been more important, because the water quality rules are becoming ever more stringent, complex and costly. Companies and communities of all sizes must meet federal standards and sometimes a maze of state and local regulations, as well. Therefore, most companies are finding they must clean their water both before and after they use it (Business Communication Co., 2004).
Company A is mostly producing the products Products E and F in I in Germany and in S in Sweden.
Some small quantities are produced in L and B. In L has Company A a co production with Company C.
In B are the products produced by Company D and are purchased by sBU X to bring into the market.
Product E is purchased with a low quality and the quality is upgraded on the plant in I. Company A does not produce all the other products. The mixtures of products, are mixed on the plant in I. There are plans to invest in a new aluminium plant in B. In Sweden Company A opened in December 2004 a plant to provide the market of Prodcut A in Sweden with products.
1.4.2 Description of the product Product B
Product B11 is a strong oxidizing agent used for its bleaching, sanitation, cleaning, odour reduction and disinfection properties. In Western Europe, most of the product is produced as a fatal by-production of chlor-alkali processes. Company A is producing Product B in two concentrations, xx g/l and xx g/l.
In the textile and fibers industries Product B is used for the removal of unwanted colourings (bleaching). The disinfecting properties of Product B are important for the several industries (cleaning of installation) and detergent industry (substance of product). Oxidation with Product B improves the properties of starch. For some applications both Product G and Product B can be used. Due to the costs and safety aspects of liquid and gaseous Product G, many original consumers of Product G have decided to use Product B instead.
Product B is one of the most effective and fast-acting disinfectants. It is effective against all types of microbes including bacteria, viruses, moulds and spores. The mode of action of Product B involves penetration of the cell membrane, followed by a reaction with the enzyme systems. The product is highly effective at low concentrations and temperatures; this is a great benefit of Product B. A disadvantage of the use of Product B is the possible formation of dangerous by-products and the eco- toxicological effects.
In the Netherlands is Product B produced in plants in R and H. In Germany the products are produced in I and B and in Sweden on the plant in S.
1.5 Structure of this thesis
In this paragraph the structure of this thesis will be presented shortly. The first chapter is an introduction in which the problems as well as the recent developments have been described. In chapter two, the research objective and question will be given as well as the explanation of the theoretical concepts. The sub questions and research model can be found in chapter two as well.
Chapter three is about the methodology used during this research. The measurement methods, research population and reliability of this research will be given. In chapter four the business environment will be described. Chapter five gives an answer on several sub questions and gives all the results of this research in order to give an answer on the research question in the conclusion in chapter six. Recommendations are given in the last chapter, namely chapter seven.
11 See for technical aspects annex 5
Chapter 2 Research Design
In the previous chapter the reason for this research is explained. In this chapter the research design will be described, starting with the type of research, research objective, research question and boundary conditions. After that the theoretical concepts of identity, image and reputation will be described and the definition used and research model will be given. This chapter ends with the sub questions, following form the research model, and the research approach. The methodology used during this research will be given in chapter 3.
2.1 Type of research
There are different types of research as scientific research, social relevant research, policy relevant research, policy support research and problem solving research (De Leeuw, 2001). The first three are completely theoretical and therefore not practicable for this research. The last two types of research involve research of the practical situation. A problem solving research looks at the whole problem and tries to solve the whole problem. A policy support research intends to produce useful knowledge.
Knowledge that is practicable for a client in a specific situation and it satisfies a part the total cater of knowledge. Policy support research supports the policy by the means of the production of relevant and reliable knowledge (De Leeuw, 2001).
The most practicable type of research is for this research ‘policy support’. The information of the research will be translated into recommendations, on this way the information will be useful for sBU X.
The recommendations can support the basis of the current policy for identity and image or, can be a reason for a change in the policy of the sBU X.
2.2 Research objective
On basis of the problem description in the previous chapter, the following research objective has been formulated:
The purpose of the research is to give insight in identity of the sBU X and the image that the clients of the products Product A and Product B have of sBU X. Besides, useful recommendations needs to be given about which aspects of the identity and image needs to be improved, in order to support the policy regarding identity and image.
2.3 Research question
The research objective leads to the following central research question:
What is the identity and the image of Company A’s sBU X for the products Product A and Product B?
2.4 Boundary Conditions
- Clients in the markets of The Netherlands, Germany, Belgium and France are included in this research.
- The products Product A and Product B are included in this research.
- The employees who have direct contact with the clients, the marketing assistants, the technical service and development employees, the customer service desk employees and the sales managers, are included.
2.4.1 Limitations
- The research must meet the demands of the University of Groningen.
- The research must be finalized within 7 months.
- There is no budget for this research.
2.5 Theoretical concepts
Concluding from research objective and research question, identity and image are the concepts which have to be measured. There are many different definitions of identity and image in literature. To choose the right concept and to use a good definition, the concepts are described in this paragraph.
2.5.1 Identity
“Recently, companies have been experiencing a period in which the corporate identity landscape has become more active and more crowded. Consequently, corporate managing of identity and image has become more salient” (Balmer & Greyser, 2002).
Van Riel and Balmer (1997) state that there are three main developments in the area of identity which variously equate corporate identity with graphic design, with integrated corporate communication and last, with a multidisciplinary approach which draws heavily on organizational behaviour.
Originally, corporate identity was synonymous with organizational logos, the company house style and visual identification. The realization by graphic designers and marketeers of the efficacy of consistency in visual and marketing communications led to a number of authors arguing that there should be consistency in formal corporate communication (Van Riel & Balmer, 1997).
Subsequently, the understanding of corporate identity has gradually broadened and is now taken to indicate the way in which an organization’s identity is revealed through behaviour, communications, as well as through symbolism to internal and external audiences (Van Riel & Balmer, 1997; Olins, 1978;
Balmer & Wilson, 1998). According to Margulies (1977) identity means the sum of all the ways a company chooses to identify itself to all its publics. There is a growing realization that corporate identity is a broad concept that embraces several management disciplines. There is a consensus that a key element of an organization’s identity is to be found in the values held by personnel (Balmer &
Wilson, 1998).
Academics acknowledge that a corporate identity refers to an organization’s unique characteristics that are rooted in the behaviour of members of the organization. They argue that senior managers can narrow the gap between the actual and desired corporate identity through marshalling the corporate identity mix (communications, symbolism and behaviour) (Van Riel & Balmer, 1997). According to Bromley (2000), corporate identity is the way that key members conceptualize their organization.
Van Grinten (2004) states that the concept of identity can be split into two parts: the desired identity and the actual identity. The managers formulate the desired identity in a strategic plan and the actual identity is what employees think is characteristic for their organization. This is shown to the clients.
Most of the times, there is a gap between the actual and desired identity (Van Grinten, 2004).
The working definition of identity is given on the base of this sub paragraph. The view, which started with Olins (1978) who defined corporate identity as the indication of the way in which an organization’s identity is revealed through behaviour, communications, as well as through symbolism to internal and external audiences, is adapted in this research. This means that identity is viewed as a broad concept that embraces several management disciplines. The working definition can be stated as:
Identity is sum of all the ways a company chooses to identify itself to all its publics, revealed through behaviour, communications, as well as through symbolism.
In this research is about the sBU X, sBU X is a part of a company. The definition of identity states that a company chooses to identify itself to all its publics, but this does not mean that the definition is not practicable for this research. The identity at Company A is not formulated at corporate level. This is because the products sold are so diverse that it is not possible to formulate one identity. The only aspect which is formulated on corporate level are the symbols which are used: the visual identity. The ways the management chooses to identify itself to all its publics, revealed through behaviour and communication, is formulated on sBU level. Therefore, the definition of corporate identity is in this case practicable for sBU X.
2.5.2 Image
According to Bernstein (cited in Hatch and Schultz, 1997), image is not what the company believes it to be, but the feelings and beliefs about the company that exist in the minds of its audiences. There are many definitions of image found in the literature. The definitions are mostly similar, but sometimes
the definitions are totally different. Some similar definitions of the concept of image are stated by Margulies (1977), Van Grinten (2004) and Dowling (1986). Image is the perception of the company by different publics (Margulies, 1977). Image is the pictures, associations and experiences that different groups have of an organization. These pictures, associations and experiences are important factors for success (Van der Grinten, 2004). Dowling (1986) and Van Rekom (1997) define image as the set of meanings by which an object is known and through which people describe, remember and relate to it.
Bromley (1993) on the other hand describes image somewhat different: image is the way an organization presents itself to its publics, especially visually. This description looks like the definitions of identity as stated by Van Riel and Balmer; Olins; Balmer and Wilson in paragraph 2.5.2. A clarification can be that Bromley belongs to the second stream of what the meaning of identity is, as stated by Van Riel and Balmer (1997) in paragraph 2.5.2. The definition of identity as formulated in the third stream; that identity embraces several management disciplines which gradually broadened (Van Riel and Balmer, 1997), was probably not accepted by Bromley by that time. So the communication part, as stated in the definition of image from Bromley, is the same as the definition of the third stream of identity as described by Van Riel and Balmer.
Boulding (1956) points out that, it is not mere knowledge and information that direct human behaviour, but rather the images we have – not what is true, but what we believe to be true. Marziliano (1998) states that the corporate image is not just a matter of window dressing but can be the leading indicator of whether a company will survive in the future. Martineau (1958) states the same and points out that it is important for the corporate image to be liked, because any functional and price attributes of the product will be filtered through an emotional lens in the buyer’s mind. Barich and Kotler (1991) state, that a company has a strong image if customers believe that they get a high value when they buy the product from a company.
Dutton & Dukerich (1991) state that feedback to the organization from the environment provides a mirror in which the organization can see itself in an undesirable light relative to its normally more positive self-concept. This mirroring prompted the organization to try to change the undesired external image by taking action.
By reviewing the literature on image some contradictory definitions showed up. The definition used in this paper is formulated on the base of the definitions given in this sub paragraph. In this paper, image is seen as the feelings and beliefs about a company that exist in the minds of its audiences. So, image is seen as an external aspect, as an attitude, and is not only seen as the communication to the publics. The definition of image as used in this paper is:
Image is the set of meanings (pictures, associations, and experiences) by which an organization is known and through which different groups describe, remember and relate to it.
In this research, only the clients are included. Therefore, the term ‘different groups’ can be replaced with the term ‘clients’ in the definition of image as stated above.
2.5.3 Relationship identity and image
This sub paragraph clarifies the relation between identity and image. Van Riel (1996) gives in his book a model that explains the relationship between image and identity; this model can be found in figure 2.1. In this figure, image is seen as a reflection of identity, but there are more aspects influencing the creation of an image as, for example, the environment. Identity is, in this mode, seen as the total aspects of the way an organization can express itself and expose its personality. These aspects include behaviour, communications and symbolism (Van Riel, 1996).
Figure 2.1: Relationship corporate identity and image in a bigger perspective (Van Riel, 1996) According to Van Rekom and Van Riel (1993) is corporate image always starting with an organization’s corporate identity. The organization’s identity is perceived and interpreted by stakeholders in terms of its image. Strategy has the task of managing the image that stakeholders hold of the organization, directly and indirectly, by adapting an organization’s corporate identity. Van Rekom and Van Riel (1993) clarify this in figure 2.2 with the identity-image-strategy triangle.
Figure 2.2: The identity-image-strategy triangle (Van Rekom & Van Riel, 1993)
Chajet (1989) agrees with the model in figure 2.2 and says that corporate identity is the most visible element of a corporate strategy, as well as the single element most responsible for a company’s image. Strategy, in figure 2.2, means the direction to follow and is formulated by the managers. The strategy has a direct influence on identity and image. Identity and image are interrelated; this means that changes in one concept can cause a change in the other concept. Van Rekom and Van Riel (1993) clarify with figure 2.2 that a change in image is not only possible through a change in identity, but that a change in strategy can also cause a change in image. Each connecting line between identity, image and strategy stands for communication, symbols and behaviour. Through communication, symbols and behaviour the strategy can affect image and identity and visa versa.
According to Van Rekom (1997), corporate identity is the set of meanings by which an object allows itself to be known and through which it allows people to describe, remember and relate to it. Whereas corporate image resides in the heads of the stakeholders, corporate identity resides in the organization. Gioai et al. (2000) acknowledge the interrelationship between image and identity as well.
They state that image starts with identity and because of that, image often acts as a destabilizing force on identity, frequently requiring members to revisit and reconstruct their organizational sense of self.
Floor and Van Raay (2003) developed a model in which they clarify the relation between identity and image. They state, just as Van Grinten (2004) did in paragraph 2.5.1, that there are two kinds of
Strategy
Image Identity
Corporate Identity Corporate mix
strategy
Behaviour Communication Symbolism
Corporate Image
Organizational performance - Financial - Sales - Environment - HRM - Etc.
History of culture
Environment
identity, desired identity and actual identity. Besides, they state that there are two kinds of image as well, desired image and actual image. The identity is communicated to the clients through communication as is shown in figure 2.3.
Figure 2.3: Identity and image (Floor and Van Raay, 2003)
Concluding from this paragraph, identity and image are seen as interrelated, meaning that changes in one concept can cause a change in the other concept. This view is adapted from Van Rekom and Van Riel (1993) and Van Riel (1996).
Floor and Van Raay (2003) give, in table 2.1, six different possibilities what to do if the identity and image measured are different from each other.
If the image is positive If image is negative Image is better than identity Improve identity Improve identity first, and
improve image next.
Image = Identity Maintain identity and maintain image
Improve identity first, and improve image next.
Identity is better than image Improve image Improve image first, and improve identity next.
Table 2.1: Identity and image, if they are not measured the same (Floor and Van Raay, 2003)
2.5.4 Reputation
By going through the literature, the concept of reputation showed up several times in connection with identity and image. The concept of reputation is described in this sub paragraph in order to have a complete picture of the concepts of identity and image.
Reputation is gained experience with an organization over a longer period of time (Van der Grinten, 2004). Publics construct reputations from available information about firms’ activities originating from the firms themselves, from the media, or from other monitors (Fombrun & Shanley, 1990). Reputation is rooted in trust and is ethically shaped over time (Ettorre, 1996). There is evidence to support the notion that a favourable corporate reputation gives an organization a competitive advantage (Van Riel
& Balmer, 1997).
In marketing research ‘reputation’ focuses on the nature of information processing, resulting in
‘pictures in the head’ of external subjects, attributing cognitive and affective meaning to cues received about an object they were directly or indirectly confronted with (Fombrun & Van Riel, 1998). According to Bromley (1993), corporate reputation is the way key external stakeholders groups or other interested parties actually conceptualize that organization.
According to Fombrun and Rindova (1996), a corporate reputation is a collective representation of a firm’s past actions and results that describes the firm’s ability to deliver valued outcomes to multiple stakeholders. It gauges a firm’s relative standing both internally with employees and externally with its stakeholders, in both its competitive and institutional environments.
Fombrun (1996) states that a corporate reputation represents the net affective or emotional reaction of customers, investors, employees, and the general public to the company’s name. According to Dowling (2001) is reputation the attributed values evoked from the person’s corporate image. Figure
Actual identity
Desired identity
Actual image
Desired image Corporate communication
Fombrun does not explain this model any further and is not giving any clarification why he is seeing image and reputation as different aspects.
Figure 2.4: From identity to reputation (Fombrun, 1996)
By going through all the literature, there is lot of confusion about the related concepts of image and reputation. Some authors state that the concepts are different; others say that they are interchangeable.
The literature written about the interchangeability of the concepts of image and reputation is limited.
For this research, it is important to measure how clients think about the sBU X. Therefore, a correct use of the concepts image and reputation is important. In order to make a considered decision of the use and the measurements of concepts, a new sub question arises; are the concepts of image and reputation interchangeable? The next sub paragraph is written to find out if these concepts are interchangeable and to make a considered decision of the definitions of the concepts that will be used in this research.
2.5.5 Image and reputation: Interchangeable?
The concept of image has been introduced a long time ago into the literature. According to Van Riel (1996), the concept of reputation is pretty new in literature, introduced in the beginning of the nineties.
It was used instead of, or next to the concept of image. However Bolger already talks about the concept of reputation in 1959. He stated that the concept of reputation is in 1959 sometimes popularly called image.
Looking at the definitions in the previous paragraphs of image and reputation, there is a lot of similarity between the two definitions. Both, image and reputation, is described by pictures in the head of the stakeholder. The only difference stated by the authors is that reputation is formed over time. To work with a good definition of image and reputation, the interchangeability between the concepts needs to be clarified.
Gotsi and Wilson (2001), the only authors who are trying to clarify the interchangeability, reviewed different viewpoints in the marketing literature in an attempt to clearly define the concept of corporate reputation and identify its relationship with corporate image. The literature review by Gotsi and Wilson (2001) has indicated that throughout the years definitions offered for the term corporate reputation by marketing academics and practitioners could be broadly merged into two dominant schools of thought.
These includes the analogous school of thought, which views corporate reputation as synonymous with corporate image, and the differentiated school of thought, which considers the terms to be different and, according to the majority of the authors, interrelated.
Although a lot is written about image and reputation, there still is not a clear statement about the interchangeability of the concepts, not even by Gotsi and Wilson (2001). Authors have adopted different, sometimes even contradictory definitions for the term corporate reputation. For example, Mason (1993) says that a company’s image is created of a company’s reputation. This is the opposite of what Fombrun (1996) stated that different images make one reputation. Goia et al. (2000) describes different forms of image, one of that forms is reputation. Ettorre (1996) states the opposite; many ingredients go into a company’s reputation and one of them is image.
Shenkar and Yuchtman-Year (1997) state in their article something interesting. They describe various terms used to describe the relative standing of organizations. In economics; the preferred term is reputation and in marketing; the preferred term is image.
The most known Dutch author and professor of this field is Professor Van Riel. By reviewing his work something strange showed up. Van Riel is not consequently using the concepts of image and reputation. In his work of 1999, Van Riel states that the methods for measuring image and reputation are the same. On the other hand in 1996, he states that reputation is a popular new concept that has been used the last five years. After 1999, he defines all measurements as reputation measurements and is not using the concept of image anymore. Van Riel is changing from using the concept of image in his articles to using the concept of reputation, but he is not giving any justification why he is doing this. In 2004, Van Riel is still using reputation measurements and he says that there are relevant differences between the concepts of image and reputation. For the clarity of this topic Van Riel has been contacted and asked to explain his change in the use of the concepts of image and reputation and the difference between the concepts.
Van Riel says that he is using the concept of reputation more because in the international literature the concept of reputation is broader accepted. In the United States, the concept of reputation is used and because the United States are very influential, the rest of the world is using the concept of reputation as well. According to Van Riel, there exist no difference in the concepts of image and reputation and therefore he belongs to the analogous school of thought, as described above by Gotsi and Wilson (2001).
Conclusion interchangeability
By taking a view of all stated above, it can be concluded that there is a difference between image and reputation in the English language; however this difference is not enormously. The difference exists in the time aspect; reputation is formed over time. Most authors in the field of image and reputations belong to the different school of thought, as described by Gotsi and Wilson (2001) in paragraph 2.5.5.
This view, that the concepts of image and reputation are different, is adapted in this paper.
The differences between the concepts exist in the literature. Nonetheless this paper is written with the prospect to carry out a field study. For field studies, it is impossible to measure only image or only reputation. The two concepts are too interrelated and cannot be measured solely. This has also implications for the interchangeability of the concepts.
It can be concluded that the concepts are not interchangeable in literature, but in practice they are.
This clarifies why there is so much confusion about both concepts. The literature is seeing the concept as different, describe them as different, but do not give different methods to measure the concepts because they are too interrelated. In practice, the concepts are used as interchangeable because the methods to reveal image and reputation are both exactly the same.
The sBU X wants to know how clients of the products Product B and Product A see sBU X. It does not matter whether this thinking is formed over time whether it is based on a single experience with the organization. sBU X, looking at the strict definition in literature, would like to know the image of sBU X.
This paper will include an image research and the concept of reputation, according to literature, will not be measured. The method used to measure identity and image is described in chapter 3.
Although the concept of reputation will not be used further in this paper the definition will be given in order to be complete.
A corporate reputation is a collective representation of a firm’s past actions and results, and is formed over time, and describes the firm’s ability to deliver valued outcomes to multiple stakeholders.
