Building Corporate Equity: The Importance Of Being Earnest

(This is the first part of the article on corporate communications written by Khalid Jamal and published in the Hindu BusinessLine)

'He that steals my purse steals trash', says Iago in Shakeshpeare's Othello, 'But he that filches from me my good name makes me poor indeed.'
Imagine talking to a friend who at the end of the conversation turns around and asks your name. You will be foxed or perhaps think that he has a short memory. But think of him as your target audience and your perspective changes. Whereas you can take heart and re-introduce yourself, companies do not have the chance or the proximity to establish a timely rapport.

Market forces result in fierce competition and businesses experience a measured evaluation by people and institutions alike. Today's organizations have the difficult task of widening their appeal and establishing a strong corporate equity. They are becoming increasingly aware that they should have a consistent and sustained image-building programme to survive the 'short memory' of target groups, and to combat the volatility in the business environment. The business environment, the marketplace, the society, consumers and their aspirations are all undergoing a dynamic transformation which turns established beliefs and traditions on their heads. These changes decide the rules of the game as well as throw up situations that question the very fundamentals of organizations. Developing a deliberate policy for building corporate reputation and image is necessary.

It is imperative, in this context, that companies have a clearly defined communications strategy aimed at creating, nurturing and protecting the 'corporate equity'.

The pertinent question is how to do it? Will the traditional (product) branding exercises be sufficient or should the process include branding the company, separately. The sheer depth, universality of appeal and the holistic approach required for branding the company, make it a more complex exercise than product branding.

The BRANDING THE COMPANY

Any exercise in corporate branding requires a thorough understanding and close examination of the company's personality and the business environment in which it operates. It has to go beyond the usual conventional 'advertising and promotion' mode so as to appeal to the wide spectrum of target groups a company deals with.

A well thought out exercise for company brand building should go beyond talking about tangible assets (traditionally, the product and its features/benefits), and should instead emphasize the intangibles and latent strengths of an organization.

The strengths could include characteristics such as trustworthiness, social conscience or the image of the organization. Brand Building involves projecting the company's image consistently, through the established and evolving media vehicles. But with enough flexibility to respond to the challenges thrown up by the environment.

Corporate branding is a deliberate attempt at creating strong associations with the company's name. Recall the images associated with such names as Tata, Godrej, Philips, Siemens, ABB, P&G and many more. Despite the occasional beating that the image of these organizations might have taken, the core of the image, that is their inherent reputation, remains intact across all target groups. One can possibly argue that their enviable image remains intact because they have been around for decades and have invariably been the pioneers. But the real question remains: is it possible to create the kind of corporate equity that these names command?

The answer is a forceful, if conditional, YES. It is possible only if the companies are willing and ready to allocate resources for corporate-equity-building. There is a discernible advantage to the company due to the favorable disposition of target groups, and the public understanding that is developed facilitates operational success, makes people more receptive towards the organisation's products and services - and more importantly - towards its fundamentals and continued existence.

UNDERSTANDING CORPORATE BRANDING

Given the misgivings and misunderstandings that prevail about corporate equity and its nature, let us attempt to understand a few key concepts and their relevance in the current business environment.

A SPIRITED EXISTENCE

A company or an organization not only produces and markets goods and services but has a spirited existence, with a personality, values, vision, emotions, mission and ambition of its own. It supposedly conducts itself responsibly to achieve its business objectives and, in the process, contributes to the betterment of the society - primarily through wealth creation and value addition in innumerable ways.

THE PUZZLE OF PERCEPTION

By corporate equity, we imply the value attached by the target groups to the existence and activities of a business, though the value may vary with time and across segments. Public perception is a result of the reputation fostered by the activities of the organization and its attempts to project itself. This perception revolves around the intangible aspects of an organization. These intangibles highlight company strengths, that surpass products, and create an aura around the organization. Consider NDDB's image, beyond Amul, as a success in the cooperative movement; the engineering giant ABB's image of engineering feats that 'touch (improve) one's life'; Philips' image as an innovator committed to do things better or Dr. Reddy's Lab's reputation for its R&D in healthcare.

Some of the micro-change drivers that will force organization to build corporate equity are:

The changing profile: Increased literacy levels and exposure to media has sharpened the awareness of consumers, making them fastidious and active about issues such as industrial hazards and environmental impact of organization's activities. This reality is augmented by the changing demographic profile actuated by increasing income across all levels, decreased flight to cities and availability of better opportunities, all of which have resulted in improved living standards and changed attitudes to work. The age old doctrine of 'austerity' is steadily giving way to 'enjoying' life. The abundance of information as a result of the media boom has resulted in increased awareness about wide-ranging topics. Consumers seek redressal for defective (or even falling short of promise) products, are concerned about ecological issues, are aware of available choice and can participate in socio-political debates. One can imagine the impact of mainline media's reach and power in this century. Add to it the cascading effect of the internet, events, direct marketing, outdoor advertising and alternative media which have well developed infrastructure to deliver information, and the possibilities are mind-boggling.

Never the same again : One can be sure that the marketplace and mechanism for information-sharing will never be the same again. As a result of public awareness, characteristics of business operations such as products, means and methods adopted for production, the way an organisation is run, by whom, and its contribution to society are all coming in for a regular and close scrutiny by the public. How it fares on these counts would greatly determine the marketing successes of the organization. For, when the organization's image is marred on broad parameters, the chances of marketing success would also be remote.
The transitory business environment : The macro changes are shifting the focus from products and brands to organizations, who have begun to feel the need to build corporate equity and obtain maximum mileage out of it. Some of the emerging macro changes that are fueling the need for corporate equity are :

Fragmented markets : Changing consumer needs are fragmenting the segments, leading to a constant emphasis on niche segments for survival. But the fact remains that even niche segments are getting cluttered and there is really very little to differentiate among brands. Due to the competitive pressure of the marketplace and indefinite brand equities, companies have to distinguish themselves and create a distinct and substantial equity.

( For continuation, please refer to the next article Cultivating An Image which is the 2nd part)

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