The article is a version of a paper published in the Journal of Brand Management (2011).

Ava Maria Hakim
IBM Global Solutions
hakimava@us.ibm.com

The Journal of the Medinge Group, vol. 5, no. 1, 2011

THE TRULY CONSCIENTIOUS BRAND cannot exist in a society based on consumerism. The challenge lies in the sociology of capitalism and a system which has created an environment of producers and consumers that support each other in an ongoing cycle of eco-terror and innovation decadence. Patterns of consumption and the animal spirits driving today’s prevailing economic systems have to change in order to go beyond corporate social responsibility (CSR) and the ethical capitalism that remain closely connected with the profit-responsibility of the corporation to its stakeholders. Positive change has to strike at the core of the problem—the model itself. By doing so, the opportunity exists to develop a sustainable economic and social model versus a model that, by its very nature, has more negative impact than the positive impact created from its “sustainability” efforts.
   The model would have at its core the following five concepts:

• Mass production = mass destruction
• Innovation should be mindful, not landfill
• Measure long term use value
• Quality is a craft
• Consumer needs are basic

Brand management plays a significant role in influencing and affecting consumer behaviour. Changing consumer behaviours and production philosophies, while expanding control of strategic brand direction, will determine the speed at which a socially responsible and environmentally friendly economic model will be developed.

Sustainability is parallel to the horizon
In a line diagram of production, sustainability is the horizontal baseline. This represents the essence of sustainability—the ability to endure the forces that act upon it. It also represents the goal—equilibrium of production with the resources needed to produce. In today’s consumption-based society, demand is increasing the distance from the ‘production’ line to the ‘sustainability’ baseline. As production increases, so does waste and the depletion of resources. This has a multiplying effect with more waste potentially impacting future resources and thereby negating any positive results from other pro-environment initiatives. In Figure 1, nothing is moving toward the ‘sustainability’ baseline. This is the production model of consumerism. Sell more, produce more, use more—in any order you like. Sustainable development defined as ‘that which meets the needs of the present without compromising the ability of future generations to meet their own needs’¹ is not possible in this model. As long as development forces an increasing depletion of resources and continued growth rate of waste, “sustainable development” is in fact an oxymoron.²

Figure 1: Impact of a consumption-based model

   Ethical capitalism and CSR initiatives attempt to change the direction of these lines by injecting innovation. But in most cases the innovation can only impact the angle of the lines. For example, eco-efficient design may decrease the angle of the waste and resource line, but because production continues at the same or increasing rate (fuelled by consumers connecting to sustainability) the impact remains incremental. Similarly the use of renewable resources may decrease the rate of depletion of resources, but without a change in production numbers, the direction remains the same. Rarely is there an impact to the production line because by its nature, capitalism is about production and growth. The consumer becomes both the target and source of this destructive desire for growth.

Concept 1: Mass production = mass destruction
As long as the focus is on producing more stuff for more consumers, the ‘waste’ and ‘resource’ lines move away from sustainability. To move closer to the ‘sustainability’ baseline, both the ‘waste’ and ‘resource’ lines need to change direction—waste needs to be removed and resources need to be used at a rate less than or equal to the natural rate of replenishment.
   ‘Researchers have compared humans’ annual demand for resources with the area of land needed to generate the required resources and absorb the wastes … They calculated that in 1961 human demand for resources was about 70 percent of Earth’s ability to regenerate; by the 1980s demand had grown to equal the annual supply of resources, and by the end of the 1990s it exceeded by 20 percent Earth’s capacity to sustain consumption. “It takes the biosphere, therefore, at least a year and three months to renew what humanity uses in a single year”, so that humanity is now eating its capital, Earth’s natural capital.’³ Buddhist Monk Thich Nhat Hanh uses a powerful metaphor—the Sutra on the Son’s Flesh—to illustrate the outcome of maintaining current consumption patterns.⁴ The moral of the Sutra is that in effect we will be eating the flesh of our children if we do not make changes now to safeguard their future through more mindful consumption.
   To create more goods for more consumers, mass resources are taken from one location, often shipped to another location for development and then sent to distribution points for consumer masses around the world. Waste is created throughout the cycle not just at the end of the product’s life.
   To reduce waste, the amount of goods produced needs to be reduced and changes need to be made in how things are produced. Innovation and quality concepts need to be applied beyond mere product design to eco-efficient production systems—or “eco-systems” of production quality. In these “eco-systems” of production, waste is ultimately recycled into the “natural resource” and quality drives the need for fewer replacements and long-term use value (Anderson, Sarah et al 2004; Wessels, Tom 2006).⁵ Figure 2 illustrates the impact of innovation and quality to production reduction—narrowing the gap between waste and resources.

Figure 2: Impact of reduction in production

Muji, a Japanese retail company that sells a variety of household and consumer goods, was established in 1980 with the idea of ‘completely eliminating wastefulness … It started with careful selection of materials, streamlined processes and simplified packaging. The concept of rationalizing products by totally eliminating wastefulness, and at the same time making them more attractive, is at the heart of traditional Japanese æsthetics’.⁶ The company looked to add quality with a no-label philosophy. They design things based on simple functionality–‘not a fancy towel, but a useful towel. Socks with right angles like feet. Beautifully simple bicycles.’ The Muji design process resists technology and prototypes are produced with paper rather than computers, so as not to encourage unnecessary detail. The manufacturing process is determined on the basis of the consumer’s use of the product, which in turn is a design priority. Finishes, lines and forms are minimized for manufacturing ease. They maintain continuous and open communication with customers through the Quality Products for Everyday Life Research Center—a ‘laboratory’ where they have dialogue with customers to determine what ‘will suffice’. Muji does little or no advertising, gaining recognition purely from word of mouth, and quality of product.

Concept 2: Innovation should be mindful, not landfill
The current nature of innovation is iterative, rapid, and for competition’s sake. In an economic system where greater profit and continued growth is the goal, innovation becomes a source of survival and the means for “beating” the competition. This type of innovation creates an innovation decadence that spews products for the sake of creating something “new” rather than creating something useful or something needed. It produces an array of choices that are essentially the same with minor differences in features designed to appeal to the consumer looking for the latest thing or “lifestyle enhancer”.
   Take a look at the number of bottled water drinks. Carbonated water, sparkling water, spring water, filtered watered, water with flavour, and even water with vitamins (for those who prefer not to get their vitamins through proper nutrition). The water comes in big bottles, little bottles, plastic bottles, squirt bottles. The Container Recycling Institute reports that ‘Americans buy an estimated 34·6 billion single-serving (1 litre or less) plastic water bottles each year. Almost eight out of ten end up in a landfill or incinerator. Hundreds of millions end up as litter on roads and beaches or in streams and other waterways. Taxpayers pay hundreds millions of dollars each year in disposal and litter cleanup costs. That’s 877 bottles wasted every second’.⁷ Yet more than one of the water companies claims to be socially responsible with a sustainability focus.
   Furthermore, innovation focused on product differentiation not only stresses out the natural environment with unnecessary resource usage and waste, but it also causes societal stress as consumers, and labourers struggle to “keep up” with the latest technological advancements.⁸ Innovation in a sustainable model needs to be directed beyond the walls of the corporate cash register and the marketing department. It needs to address the entire product life cycle and focus on the resources not only to create but also to dispose of the product. If innovation ends up in landfill or on roads and beaches, it is not innovation—it is rubbish. Sustainable development requires innovation to define a process that changes production to reduce waste and maintain natural resources.
   Apple, Inc., ranked as the top most innovative company in 2011 by Fast Company,⁹ has an environmental approach that begins at the design stage and provides a comprehensive “cradle-to-grave” approach including a full Life Cycle Assessment. Apple tracks the environmental impact of each product by measuring greenhouse gas emissions for its facilities, the manufacturing process, product packaging, transportation, and customer usage of its products. An environmental report is provided for all products they currently ship. Their recycling programme ‘begins in the design stage, when we create compact, efficient products that require less material to produce. The materials we do use—including arsenic-free glass, high-grade aluminium, and strong polycarbonate—are highly valuable to recyclers, who can reclaim them for use in new products’.¹⁰ These practices enable Apple to drive greater efficiency and develop products that have less impact on the environment.
   Riversimple, a UK-based transport provider with the goal ‘to eliminate the environmental impact of personal transport’ is applying business model innovation to change an entire industry. Riversimple has applied what they are calling ‘whole system design’ to develop a completely new approach to auto manufacturing. This approach looks at the entire system (of business) and optimizes the whole versus focusing on one single subsystem.¹¹
   Today, auto manufacturing is based on a model that generates revenue by “selling more products”. Design and technology are used to sell more products and sell more products more often. By not defining their business as auto manufacturing, the Riversimple model looks to sell mobility as a service—shifting the auto manufacturing model mentality of “sell more products to make more money” to “generate revenue from less product”. The interest of the mobility provider becomes the efficiency, longevity and quality of the vehicle in order to optimize the revenue from each vehicle versus optimizing product sales. Like Muji, Riversimple looks to accomplish their goals via a collaborative innovation environment that is open to the world of designers and engineers.¹²

Concept 3: Measure long-term use value
The real measure of the value of an innovation, or product should be in the long-term life time use value—not share or transactional economic value. Our society of consumerism continually wants and buys the latest, throwing away the “old”. But in an environment of rapid innovation, old becomes younger and younger. Consider the life span of a cellphone—two to five years at the maximum? Nearly 2 billion cell phones were sold in 2007, double the sales number in 2000.¹³ Including the handset, battery and adapter, each represents about one pound of waste that needs to be managed.¹⁴ Add to that all the accessories, whose lifespan is even shorter and it becomes apparent that recycling efforts will have to increase significantly in order to be at all effective. According to Environmental Protection Agency reports, the amount of recycling is increasing, yet the actual percent of what is recycled has remained constant because consumption continues to grow at an ever increasing rate.¹⁵
   By designing for long-term use value rather than short-term profitability, the rate of waste production slows along with the need to produce more and more of the same basic thing. It also means creating a product that is built to last and bringing to market those innovations that make a significant difference—a difference that is worth the overall impact it has across its life time. Wouldn’t it be better to have a cellphone designed with the same principles as a fine Swiss watch? And rather than throwing them away every two years, we pass them along to the next generation who actually longs to use it.
   IWC Schaffhausen has been engineering master timepieces since 1868. The company was founded in Schaffhausen, Switzerland to take advantage of the skilled craftsmen, low wages and location. From the beginning, IWC used invention and innovation to design according to the founder’s ultimate mission: ‘simple but perfect, absolutely reliable mechanical watches for everyday use’. The company began keeping detailed records for every watch that has left the factory since 1885. Since 1885, details of the calibre, materials used and cases have been entered into the records. In the case of later models, the company claims that its service department has the parts and is capable of repairing and maintaining watches from every era since IWC’s foundation in 1868.¹⁶
   Today, IWC is still in Schaffhausen with a few hundred employees. Their timepieces are still produced to the quality goals set at inception with many of its models sought by collectors. Quality, treasured products—products likely to never occupy a landfill.

Concept 4: Quality is a craft
Schumpeter states in Capitalism, Socialism and Democracy that capitalism forced out the artisan and craftsman. ‘The world of the artisan was destroyed primarily by the automatic effects of the competition that came from the capitalist entrepreneur’.¹⁷ Gone with the artisan and craftsman is the passion for producing individual items of quality and moreover, gone is the connection of the producer to the final product. With the assembly line and the “factory” concept (applied even in service organizations today) workers have become more and more disconnected from the final product and from the actual consumer of the product. Rather than one person putting their name on the product and holding accountability, there are now sales organizations that sell, factories that produce, and a whole host of directors driven by their own agendas. In very few cases do sales work in the factory or vice versa. The factory worker has no connection or accountability to the consumer. After all, if there is a problem, the consumer will call the help desk in a low-cost country and be assisted by someone who is “scripted” and has no impact on the design or production of the product. And all sales wants to do is sell. How authentic is that? Yet you will find that many corporations utilizing these practices are also branding themselves as socially responsible.
   In the proposed model, the craftsman is brought back into the picture with the sole responsibility to add more “soul”—to bring back a passion for quality. Quality—not quantity—is the key to sustainability. IWC is one example of the true value of quality. But this also requires that consumers understand the value of quality and change their compulsive buying behaviour. Conscientious brands need to influence conscientious consumption.

Concept 5: Consumer needs are basic
According to Jeffrey Sachs in The End of Poverty: Economic Possibilities of Our Time, ‘the extreme poor and the poor make up about 40 percent of humanity’.¹⁸ He continues, ‘The gulf between today’s rich and poor countries is … a new phenomenon, a yawning gap that opened during the period of modern economic growth … Today’s vast income inequalities illuminate two centuries of highly uneven patterns of economic growth.’ He goes on to explain that this discrepancy is due to the ability of some regions to achieve unprecedented ‘long-term increases in total production’ with technological innovation being the main force behind this achievement.¹⁹ But, at what cost?
   Numerous studies and indices show that human development and satisfaction do not continue to grow with personal expenditures or Gross Domestic Product (GDP).²⁰ ‘Despite high and sustained levels of economic growth in the West over a period of 50 years—growth that has seen average real incomes increase several times over—the mass of people are no more satisfied with their lives now that they were then’.²¹ The Genuine Progress Indicator (GPI), a measure that looks at human development and welfare of a nation in relation to economic progress shows that in fact the ‘well-being’ of Americans has declined even though GDP has increased. Similarly, the Happy Planet Index (HPI) which measures the relative efficiency with which nations convert the planet’s natural resources into long and happy lives for their citizens²² shows a negative correlation between GDP and the changes in HPI. The Index supports the view that ‘Over-consumption in rich countries represents one of the key barriers to sustainable well-being worldwide’.²³
   So although growth is needed to provide 40 per cent of humanity to a standard of living that ensures survival, there appears to be a point where growth no longer provides positive benefits. ‘Growth not only fails to make people contented; it destroys many of the things that do. Growth fosters empty consumerism, degrades the natural environment, weakens social cohesion and corrodes character’.²⁴ This occurs because once basic needs are satisfied, the market and promoters of growth convince us that we need more—more to demonstrate that we are accomplished, that we live a certain lifestyle and that we have meaningful, progressive lives. But meaning does not come from manufactured objects of identity. Moreover, this consumption-based model is not sustainable. It does not positively impact our behaviours, our sense of well-being or the well-being of our society and the planet. Even as global consumption expands without precedence, consumers basic needs are not being met—sanitation, water, food, and happiness.
   The United Nations Millennium Development Goals to cut poverty in half by 2015 are certainly noble. But if the thought is to progress billions of people along the path of the current “high-income”, consumption based countries, the plan is strongly faulted. It has been stated that ‘if everyone in the world were to consume as much as the average consumer in the rich countries we would require four planets the size of earth’.²⁵ Without a change in the culture of capitalism itself, without the development of a more conscientious consumer and society as a whole, the dream of ending poverty may be achievable but totally unsustainable. Such progress will be void of what people really want—happiness.

The role of brand management
To develop the “truly conscientious” brand will require an expansion of brand management’s influence on production, development and areas of innovation. Without some ability to influence the development of products and services, brand management is not managing the brand but simply creating marketing messaging.
   Brand management plays a significant role in influencing consumer behaviour and brand managers have a key role in helping to eliminate those things that drive excessive consumption and social and environmental destruction. Consumption in itself is not a bad thing. Rather it is the increasing rate of consumption by a relatively small part of the global population that puts strain on the environment and forces consumption patterns on others that are not sustainable. Eliminating shallow marketing messaging and “lifestyle” advertising is the first step toward positive change and influencing the development of a conscientious consumer—one that demands quality, eco-efficient products with long-term use value—from all the products that they purchase. The same type of creativity that is applied to developing identities and campaigns needs to be applied to developing products that eliminate wastefulness. The goal is more with less. More meaning, less stuff. More quality, less waste.
   Change has to occur in production and consumption. Corporate social responsibility initiatives typically only address the symptoms and in some cases drive further increases in the rate of production, waste and consumption inequalities. Brand management has the ability to influence both production and consumption, but to do so brand management will also need to change. Brand management has to become the catalyst for sustainable development and an activist for the conscientious consumer. In developing countries, there is great opportunity to create models for sustainable development from which conscientious brands can arise naturally. In developed countries this change will be more challenging but the implications are great. Models to address these challenges deserve further investigation and immediate thought.
   ‘When we’re able to get out of the shell of our small self and see that we are interrelated with everyone and everything, we see that each of our acts affects the whole of humankind, the whole cosmos … Mindful consumption brings about health and healing, for ourselves and our planet.’²⁶

Notes
   1. Our Common Future: Report of the World Commission on Environment and Development. Oxford: Oxford University Press 1987, p. 54. Viewed November 2010, http://www.un-documents.net/ocf-02.htm#I.
   2. S. Harding: Animate Earth: Science, Intuition and Gaia. White River Junction, Vermont: Chelsea Green Publishing Co. 2006; S. L. Hart: Capitalism at the Crossroads: Aligning Business, Earth, and Humanity, 2nd ed. Upper Saddle River, NJ: Wharton School Publishing 2007.
   3. C. Hamilton: Growth Fetish. London: Pluto Press 2004.
   4. T. N. Hanh: The World We Have: a Buddhist Approach to Peace and Ecology. Berkeley, Calif.: Parallax Press 2008.
   5. S. Anderson, et al: Alternatives to Economic Globalization: a Better World Is Possible. San Francisco: Berrett–Koehler Publishers, Inc. 2004; T. Wessels: The Myth of Progress: Toward a Sustainable Future. Lebanon, NH: University Press of New England 2006.
   6. ‘Back to Our Origins, Into the Future’, Muji Global 2010, http://www.muji.com/message/. Viewed November 2010.
   7. ‘Bottled Water’, Container Recycling Institute 2010, http://www.container-recycling.org/issues/bottledwater.htm. Viewed November 2010.
   8. D. Harvey: The Enigma of Capital and the Crises of Capitalism. New York: Oxford University Press.
   9. ‘Most Innovative Companies 2011’, Fast Company, no. 153, March 2011, http://www.fastcompany.com/magazine/153. Viewed March 2011.
   10. ‘Apple and the Environment’, Apple Inc. 2010, http://www.apple.com/environment/. Viewed November 2010.
   11. ‘About us’, Riversimple LLP 2010, http://www.riversimple.com/Content.aspx?type=7&mode=menu&key=136c7243-2378-407e-96cf-750d15de37a8. Viewed November 2010.
   12. Ibid.
   13. Electronics Waste Management in the United States. Washington, DC: Office of Solid Waste, US Environmental Protection Agency 2008, EPA530-R-08-009, p. 11, http://www.epa.gov/osw/conserve/materials/ecycling/docs/app-1.pdf. Viewed November 2010.
   14. B. K. M. Fishbein: Waste in the Wireless World: the Challenge of Cell Phones. New York: Inform, Inc. 2002, p. 23.
   15. Fact Sheet: Management of Electronic Waste in the US. Washington, DC: US Environmental Protection Agency 2008, EPA530-F-08-014, p. 8, http://www.epa.gov/osw/conserve/materials/ecycling/manage.htm. Viewed November 2010.
   16. ‘About IWC’, International Watch Company 2010, http://www.iwc.com/history/. Viewed November 2010.
   17. J. A. Schumpeter: Capitalism, Socialism and Democracy. London: George Allen & Unwin 1976.
   18. J. D. Sachs: The End of Poverty: Economic Possibilities of Our Time. New York: Penguin Books 2005, p. 19.
   19. Ibid., at pp. 28–31.
   20. C. Hamilton, op. cit., at pp. 54–61; S. Harding, op. cit.; J. G. Speth: The Bridge at the Edge of the World: Capitalism, the Environment and Crossing from Crisis to Sustainability. Yale, Conn.: Yale University Press 2008.
   21. C. Hamilton, op. cit., at p. 3.
   22. ‘About the Happy Planet Index’, Happy Planet Index 2·0, 2009, http://www.happyplanetindex.org/learn/. Viewed November 2010.
   23. S. Abdallah, S. Thompson, M. Michaelson, and N. Steuer: The Happy Planet Index 2.0: Why Good Lives Don’t Have to Cost the Earth. London: New Economics Foundation 2009.
   24. C. Hamilton, op. cit.
   25. C. Hamilton, op. cit., at p. 174.
   26. T. N. Hanh, op. cit., at p. 27.

THE EMERGENCE of Corporate Social Responsibility (CSR) has been both rapid and significant. Twenty years ago it was a subject of marginal interest to businesses, but now every organization of any size has a policy on CSR. The growth of CSR is a reflection of the continuing (although sometimes resisted) move to a stakeholder view of capitalism. Some well established businesses had long practiced this philosophy based on an understanding of the inter-connectedness of all their stakeholders; that social well-being, engaged employees, satisfied customers and suitably rewarded investors were inextricably linked. However, for many, CSR has been seen as more utilitarian: a sticking plaster that could heal a company’s reputation and improve its appeal. The challenge here is that in such organizations, CSR is a peripheral activity rather than core to business thinking.

Getting to the core
Organizations often see CSR as a tool to improve the legislative climate, enhance media attitudes and inspire current and potential employees. As a consequence, business television and newspapers are awash with advertising that makes claims for the social virtues and long-term perspectives of corporate brands. Yet most of the activities, while laudable in themselves, remain superficial. Scratch the surface and you find that CSR does not run very deep. When it comes to facing up to dilemmas about doing the right or the expedient thing, there is a temptation to take the easier option and satisfy the short-term needs of shareholders.
   Lorna Tilbian, Executive Director of the London-based bank Numis stresses that reputation-building is about being principled and having a long-term perspective—both of which are subject to pressures. She says, ‘Short-termism influences the managers of the company to cut corners to keep performing on a quarterly basis. The only test that really matters is the test of time.’
   For a business to really commit to CSR, it has to be truly integrated into strategic thinking. This seems to be easier for organizations which are not publicly owned. For example, the privately owned, outdoor sports clothing business, Patagonia, has a long-term perspective and a mission statement that says, ‘to use business to inspire and implement solutions to the environmental crisis.’ The ideal implied here has led the company to move out of businesses that it believes are environmentally damaging, to provide customers with a lifetime guarantee (on the basis it’s better to keep the product you have rather than buy a new one), to provide full traceability on all its products, to develop new materials that are recycled and recyclable and to support actively environmental causes. At Patagonia environmentalism is not an add-on—it permeates everything the company does and says.
   When the whole organization (and its customers) is engaged in adhering to a principle, then it creates a focus for decision-making and moves idea about CSR to the core. At Patagonia there is no CSR department as such, although there are individuals specifically concerned with looking at CSR based issues, rather every person from the receptionist (who developed a frisbee from recycled materials) to the designers (who are driven by environmentalism) delivers on the mission day-in, day-out. It’s part of the reason that Fortune magazine labelled Patagonia the coolest company on the planet.
   Similarly, the Dutch financial services’ group, Rabobank, which has 60,000 employees and 9·6 million customers, has long adhered to policies that are designed to connect it to all its stakeholders. This is not surprising given that it is a cooperative bank that is owned by its members. The continuous dialogue the bank enjoys with its customers and other stakeholders helps ensure it delivers on broader social needs as well as meeting its performance goals. As a symbol of this closeness and the integration of its audiences, anyone who is approved by the bank can visit its new headquarters and wander freely throughout the building.
   Both Rabobank and Patagonia are adept at balancing and integrating different stakeholder needs, but you have to search harder for publicly quoted businesses that deliver on this score. The requirement to deliver ever-increasing returns to shareholders tends to hinder a full-blooded commitment to CSR. We might, for example, look at the Norwegian oil company, Statoil, and its approach to extracting oil from the sands of Northern Alberta in Canada (a contentious issue) and argue that they have been socially responsible in consulting with communities and using sound extraction methods, but we could also counter that true social responsibility would argue against being there in the first place and avoiding the environmental damage.
   One business that has been trying to tackle the dilemma of competing interests, head-on, is Unilever. Last year, CEO Paul Polman stopped providing earnings guidance to investors, in an attempt to move the focus away from short-term returns. Seeing his mandate as more concerned with long term success, he also railed against hedge funds, when he said, ‘They would sell their grandmother if they could make money. They are not people who are there in the long-term interests of the company.’
   Unilever has been integrating its approach to sustainability across its brand portfolio, focusing on renewable resources (such that all the palm oil it sources will be from renewable supplies by 2015) and thinking about the implications not only of the act of purchase but also the use of product.
   Unilever has 400 brands that are used 2 billion times a day around the planet, with about 70 per cent of the greenhouse gas imprint occurring during use. Encouraging sensible and environmentally responsible use of products, therefore, can have a big impact. As Santiago Gowland, VP of Brand & Global Corporate Responsibility, argues, ‘Marketers, with their expertise in innovation and behaviour change, can, and should, be making a significant contribution towards societal goals by enabling consumers to make more conscious choices and encouraging people to adopt conscientious consumption habits.’

Conscientious brands
At the Medinge Group, our annual awards, known as Brands with a Conscience tries to uncover and reward organizations that have integrated corporate responsibility into the core of their thinking: brands such as One Water, that exist to give all their profits away to water projects in Africa, the Swiss private bank, Pictet et Cie that demonstrates a long term perspective and a commitment to environmentalism and Merci, the Paris-based lifestyle retailer whose very existence is based on the idea of improving the lives of people in Madagascar. These brands are all genuinely people-focused and reap benefits in terms of highly motivated employees, committed customers and supportive communities. The interesting challenge is to see whether more businesses (especially larger organizations that can have a significant impact) can fully integrate CSR and become truly conscientious.

Stanley Moss
DiGanZi
diganzi@gmail.com

In the canon of English-language writings on brands and brand management, few documents possess the stature of the legendary McElroy Memorandum known as “Brand Man”. Authored in 1931 by a a 27-year old Proctor & Gamble promotions executive, it inserted into the practice of brand-building seven directives which shaped our perception of brand’s purpose and function in the ecology of the marketplace. This single manifesto created the modern Brand Manager. For more than seven decades its enduring words were regarded with a reverence like that for the Holy Grail, and perpetrated a set of attitudes which beg to be re-examined in the face of brand world today. McElroy is at heart a strategic marketing document. It prescribed dynamic relationships be instituted within teams, and dictated a rigid hierarchical schema for the organization. Its application helped P&G separate brand managers into parallel teams, with each team competing internally with other brands in the company’s portfolio. Teams were mandated to market their own products to the sales force.

While the youthful Neil McElroy understood a brand to represent a cold-hearted economic entity, such a narrow presumption no longer holds exclusively true. The McElroy memo was simply the first step in codifying brands as instruments of an evolving, organic process. The memo limits its focus to fast-moving consumer goods (FMCG), those rapidly-produced products with short shelf lives, which need to be sold in large quantities in order to be profitable; in this particular category new-product creation factors mightily, competition is uppermost in everyone’s mind, and only good performance guarantees brand survival. Business schools, take heed. If McElroy is the foundation for all brands of the future, then we are in for rough waters. That’s because brands are no longer simply tools of marketing departments, or receptacles which hold psychological levers for creating demand and moving product. The equation has upended. Marketing today is a fraction of the brand equation.

We now understand brands to be deeper, broader, more dimensional entities than ever before. But a look at the memo shows why brands became the distorted commercial entities which later came back to haunt Brand Men, and why the discipline engages in such soul-searching, especially in Post-Globalization world.

McElroy’s point 1 shows us clearly where his priorities stand: he directs his Brand Men to take careful heed of units shipped. In the hierarchy of formalization we are dealing with a classic bean-counter mentality. It’s a short-term, simplistic directive which assesses quantity moved as of primary importance. It implies that sheer numbers dictate the highest imperative for brand evaluation. Nothing else takes precedence. There is no future, only an opportunistic present.

Point 2 instructs the Brand Men to examine carefully where brand development is heavy and “progressive”, an interesting and provocative term, especially taken in its historical context. In 1931 “progressive” might have inferred Communist leanings; today the term smacks of fringe cases at the periphery of political movements, possible techno-libertarians advocating secession from the union, free love and anarchy. McElroy asserts that numerical growth is the highest objective, that Brand Men should apply successful treatment to comparable territories. Today’s brand specialist focuses on greater sensitivity to local culture, and pays more attention to local need before overlaying some proven marketing strategy simply because it has worked to sell product elsewhere.

In point 3, McElroy gives five sub-directives for underperforming brands, what he refers to as “light” brand development. He charges his team to study past advertising and promotional history, then evaluate it in the context of the local territory both on supply and consumer sides. Find out the trouble, he writes mysteriously, employing a vast euphemism. Once the weakness has been uncovered, he counsels, make a plan. It’s a statement of pure brute economics, with managers warned to be certain that money budgeted will produce results. Abide by the corporate hierarchy, he goes on, clear it with the District Manager, get buy-in on the local level. In other words, tell your local manager what to do in his own back yard and tell him how to do it. Get him to agree. Next up: hype the sales force, keep them hammering the territory. Write everything down, document, evaluate, assess. In no place does McElroy ask, Is this product needed, redundant, obsolete? Does somebody else make a better one? Do consumers really want it? What consequences does its consumption carry? In 1931 fewer channels of mass media existed for oversight, there was no conception of a problem with disposability and waste, few corporations thought about notions of community, and the term sustainability would not be coined for 40 years. Listen up, brand managers: the world has changed.

Point 4 pins total responsibility on the Brand Manager for the concise communications connected to his brands. This presumes that anything the organization cares to say about product is apt. There is no reference to accurately reflecting product claims, or any consideration of ethical underpinnings. As long as what is said works, it is permitted.

Point 5 addresses the manufacturer’s expenditure at point-of-purchase, quantifying marketing effectiveness at the retail level. We see no recognition of the universe of stakeholder communities which are touched by a product’s existence. Today we acknowledge that advertising adds to mass sensory overload, a form of pollution in an overcrowded environment. McElroy believes if you put the message in front of the consumer, it will be consumed. This is the fundamental corruption of traditional advertising writ large.

Packaging is addressed, but only superficially, in point 6. The Manager is counseled to experiment with and recommend wrapper revisions. We are again firmly in the terrain of marketing, insisting that the package jump off the shelf, differentiated from its competitors, ramping up the claims, doing anything necessary to grab the impulse-driven buying decision. Not a lot of ethics here, and certainly not abiding by Massimo Vignelli’s famous dictum that “the best packages are invisible.”

By point 7, McElroy is back into his corporate ivory tower, advising his Brand Men to see District Managers a number of times a year to discuss any “faults in promotion.” Here is the crux of the unreality: as long as promotion is correctly tweaked, the brand becomes invulnerable. All hinges on the success of promotion, the product lives in a universe independent of any considerations except its own self-interest. Is it any wonder, with subtext like this, that society drifted into a delusional and mindless consumption-driven consciousness?

History is an odd and elastic commodity, which lurches ahead, but mostly plods along, and we have had seventy years of McElroy’s calculating marketing strategies laying claim to the brand. While McElroy is frozen in time, a kind of Peter Pan of brand theory, brand has grown up around the memo. Brands are our silent partners, devices which deliver inspiration, carry promises, help us create our own identities, and stand as symbols for who we are and what we believe. It’s no longer a case of simply selling more units than your competitors. The challenge for Brand Men today is to reflect an understanding of a bigger world out there than one driven by unenlightened self-interest and short-term profits, and that the time is now to focus on truth-telling, to advocate for the greater good, and to always consider the deeper ethical implications of our commercial conduct.

Jack Yan
Jack Yan & Associates, PO Box 14-368, Wellington 6241, New Zealand
jack.yan@jyanet.com

Executive summary
Detroit has not ever used a brand orientation in its automakers’ marketing strategies, and it talks of trimming brands and numbers to allow it to compete. The author believes in being more focused on brands and not losing economies of scale, and building more of what consumers want. The tools are there, such as consumer-targeted blogs, but manufacturers need to use them.

Introduction
Motown has been in trouble constantly since the 1970s. That time, it was its failure to see how the imports were gradually conquering North American market, and when the Arab-Israeli War forced up fuel prices in 1973, the Japanese were already there with models that had great gas mileage. When the second oil shock happened, US companies were still largely ill equipped. Then-Ford president Lee Iacocca noted that sales of its full-size cars were going up, leaving Detroit’s number two without many economy models.¹ The Japanese won again.

Similar patterns began emerging in the 1990s. Then, Detroit was obsessed with trucks and SUVs. It is generally regarded that there is some financial wisdom behind building these large vehicles, as they generate plenty of profit in an industry where US automakers have massive costs, especially relating to union workers’ pensions and healthcare. But it was becoming obvious to only a few that Detroit was leaving its economy models behind, while the Japanese, once again, were sweeping in with up-to-the-minute variants of their Toyota Corolla and Honda Civic.

The author wrote of this folly at the turn of the century, including DaimlerChrysler’s decision to abandon the low-cost Plymouth marque²—in case low-cost, cheap cars became necessary again. In both these cases, the latest (2008) fuel crisis, driven by high prices and speculation, have proven him right. Detroit is scrambling once again, as it did in the 1970s and early 1980s, wondering how to fix itself. And its ideas smack of repetition—since some of them have been proven to have failed the industry before, in other nations.

The problems are long-term ones that cannot be fixed by short-term adjustments. The truck and SUV obsession was a short-term fix, a quest for profits which Chrysler Corp., in particular, rode very well with its Dodge and Jeep lines in the 1990s. But it left Chrysler weak in passenger cars.³ It is to be expected, however, since Wall Street itself has an obsession: that of the quarterly result. This, however, does not bode well for corporations that have to last generations.

Japan seems to lack this problem as investors are perfectly happy for their companies to see out a longer term. While there are exceptions, Toyota has been mostly left to its own devices, its management opting for a gradual evolution of its strategies, cutting costs of manufacture and appointing westerners to the board. It builds, for instance, the Camry and Corolla in more locations than any one US model.

It would be foolhardy to say that Toyota is impregnable. It has weaknesses, in that its cars are considered the equivalent of domestic appliances: reliable but uninspiring. Detroit had attempted such cars before, often with Japanese input. And it found that these models were not true to the various brands owned by Chrysler, Ford and General Motors.

The brand orientation, which necessitates long-term thinking, is what Detroit needs.

This is a bold statement as GM-watchers may be able to point to a failed era where the company did just that. Buick, Cadillac and other GM divisions were, the company claims, run as brands. But this is not true, at least not branding as most professionals understand it. GM made the classic mistake of equating sales to branding: all it did was to regroup into a geographical sales structure and expected its regional heads to maximize sales.⁴ Little consideration was given to the meaning behind each brand, nor was there feedback from consumers. The experiment was deemed a failure.

Others may also point to the failure Ford has had with its brands, even if it has been credited with being a good brand steward of properties such as Volvo and Aston Martin, two which it had acquired in the 1990s. Jaguar, it is pointed out, was always a division that kept needing investment, never making anything for Ford, despite it paying US$2·5 billion. But there, too, Ford misunderstood the Jaguar brand, lumbering it with passé designs that the marque’s customers did not want. While it never wound up merely badge-engineering Ford cars, it cannot be easily argued that Ford’s failures were due to brand management.

The talk around Detroit is of rationalization and killing off brands, getting its costs and sales more into line. GM, it is argued, may have to be content with being a global number-two, and Toyota can remain in its top spot. Retrenchment seems to be the theme.

It’s true that the Big Three need to leave or at least reconsider sectors where they have not created products that the customer wanted. But are they listening? There are enough tools out there on the blogosphere to show that, for example, Ford buyers would prefer the latest European Focus rather than the model it is currently selling. But only GM has made any headway in blogging and listening directly to consumers’ feedback. Ford is blinded by the fact its old-tech Focus is selling well, without realizing that the same behaviour turned the original Ford Taurus from class leader to a has-been model line in less than a generation.

Most of the techniques have existed for decades. Retrenchment and rationalization were pursued by British Leyland in the 1970s on. The company now exists, other than the Jaguar and Land Rover businesses, as an independent company making one MG model, as a division of Shanghai Automotive Industry Corp. Jaguar and Land Rover are owned by India’s Tata Motors.

Toyota, the darling of the motoring press, particularly for its hybrids, does not pursue retrenchment. It is easily argued that it does not have to. But it has been clever in filling niches and using a minimal number of platforms to create a wide variety of cars—something Detroit’s Big Three were once credited with doing and needs to again. Right now, it’s looking at ways to cement the lead, especially in a cost-cutting programme—in the belief that it’s better to do this calmly than being forced to.⁵

This paper deals first with some of the ideas being bandied about the US auto industry for starters, then groups them into techniques that could save the Big Three.

Troubling thoughts in Detroit
Ingrassia⁶ points out that the Big Three have shed 269,440 employees since 2000 and lost a combined $67 billion in the last three years—and that’s not even counting Chrysler for all 12 months of 2007. But at the same time he points out that Fiat turned itself around and posted record profits. Nissan went from lossmaker to profitable in 2001. Chrysler itself was turned around by Iacocca in the 1980s.

The industry, he says, has at least made moves on the union front, which is one of its biggest hurdles.

But some of the ideas that he has found executives mentioning in Motown show the usual maximize-profits-now mentality that landed the automakers into trouble in the first place.

GM
GM has eight brands, and it is believed, some need to go. In fact, GM has more than eight, once one starts counting Opel, Vauxhall and Holden in its overseas arms. Ingrassia reports very geocentric thinking from Detroit: ‘If you’re shopping for a midpriced sedan, for example, G.M. has six. Buick by itself has two. Toyota, by comparison, has just one—the Camry, which sells nearly as many vehicles each year as all six of G.M.’s offerings combined.’⁷

It’s not totally true. Even in the US, Toyota has a Lexus sedan costing what a well equipped Camry would cost. In its home market, Toyota ?elds more than six mid-priced sedans, selling to a smaller total population. While this is a straw-man argument—foreign automakers have a small share in Japan and Toyota nears 50 per cent⁸—the quantity of entrants in any sector is generally not a problem.

The important thing is that each brand is well defined enough without cannibalization. Ingrassia indicates that GM CEO Rick Wagoner is trying to consolidate sales’ channels without trimming the brand line-up. This makes total sense, because there is nothing that suggests that one manager could not oversee two or three brands. The Japanese have generally kept trim structures for its brands. Toyota itself manages three. Having one divisional head oversee two or three brands can work if there are no favourites and each brand’s positioning is well defined and understood.

The short-term thinking is that Saab, Buick, Pontiac, Hummer and Saturn should die. This is the same thinking at DaimlerChrysler that led to Plymouth’s demise. But it is not the same thinking that led to Oldsmobile’s, a GM division, at the turn of the century.

Oldsmobile became an untenable brand for GM because it occupied a very similar market niche—price-wise and psychographically—as Buick. Purists will be able to nit-pick that argument as there were differences between the buyers: Oldsmobile ones sought American quality and tradition, while Buick ones sought presence without arrogance. However, the reality inside GM was that Oldsmobiles were not really given a distinctive character and given that one of branding’s core tenets is differentiation, the brand had failed.⁹

Plymouth, however, was on its way to becoming a distinctive brand with its own design language. Chrysler had already débuted the Plymouth Prowler, a hot rod acting as a halo car for the brand. The next model, the PT Cruiser, was about to be launched, débuting a retro design. The remaining Plymouths, developed as Dodges with different trim, were given scripted badging that hinted at the brand’s more youthful, lively positioning for the 21st century.

A Plymouth division, had it not been for its cancellation under DaimlerChrysler, would have expressed American youthfulness—the PT Cruiser’s initial success illustrated as much—while Chrysler itself would have remained premium, and Dodge sporty.

Instead, Plymouth products were rolled into the Chrysler marque, confusing that brand—diluting it and forcing a repositioning into a sort of American Volkswagen. At least then it posed no greater threat to some of Mercedes-Benz’s lesser models. But Chrysler lost a distinctive brand with value-leading models—which would have helped it today in an age of high fuel prices. Plymouth had stayed away from SUVs and trucks—a great brand image for 2008.

The brand-trimming argument is what caused BL to kill Triumph’s saloons and MG’s sports cars a generation ago. The thinking was that Triumph and Rover saloons competed in the same sector—based on price, they did.¹⁰ Based on brand, they didn’t. There was similar thinking that led to the closure of MG—because Triumph, it was decided, already had a corporate sports car.

The consequence that played out over decades was that BL’s successors lost their economies of scale.

BL was starved of investment, however, which meant it could not have realistically fielded two identical cars with different badges for long. But it had already made steps to group Austin and Morris together, then Jaguar, Rover and Triumph. One divisional head could have overseen well defined brands, putting a sporting version of one saloon into Triumph’s range, and a traditional one into Rover’s. Experts generally agree today, with hindsight, that the failure to understand the distinctive brand attitudes and brand loyalty behind each BL brand caused credible models to be axed.

Even Toyota has been careful in Japan. It fields, for instance, mid-sized front-wheel-drive sedans such as the Camry and rear-wheel-drive models such as the Mark X. They look fairly similar. But it understands that they appeal to different buyers in a market where consumers are likely to be loyal to model lines in the way US buyers are loyal to brands. If this holds true, then Chevrolet, Saturn and Pontiac can coexist, for example.

There is no need to ape Toyota just because it fields just three brands in the US. No US automaker can afford to rationalize its range to that extent, because none has been able to show that a single American brand can sell twice the volume of two defunct brands. A Chevrolet Cobalt might not be able to fill its own shoes as well as that of a Pontiac G5’s, if Pontiac were to be axed. It’s just as likely that those Pontiac buyers would go to the imports. Historically, did Oldsmobile and Plymouth buyers remain with GM and Chrysler after their parent firms killed them?

Brand axeing should take place in cases of overlap or ill de?nition—and a recent example in Japan would be that of Mazda, which bid farewell to many of the marques it tried to create in the early 1990s (such as E?ni and Eunos).

Saab is a distinctive brand that has been starved of new models for years, but it certainly isn’t in as bad a shape as any of Mazda’s old marques. It has two sedans on Opel Vectra platforms, by themselves not that successful. An SUV was put into the range to stop buyers from leaving the marque. Saab’s problems are not down to a brand that has a strong aircraft heritage, the warmth of Swedish culture and a history of innovation—messages that are still continued in its marketing. Saab’s problems are due to the dearth of new models, which means that it fails as a BMW or Mercedes-Benz rival.

It has no ready overlap in the GM universe, and all the brand really needs are new models. GM has made some headway in putting Saab development with its German company Adam Opel. What it needs Stateside is to look at Saab alongside a non-competing GM brand—and any are compatible. In Australasia, Saab is sold alongside HSV and Hummer, two other premium GM brands.

Modern communications could see a very effective platform engineering programme, which GM is already putting in place anyway. This means one team is working on the Opel Corsa E and Daewoo Gentra replacements, which will be sold in the US as the Chevrolet Aveo successor next decade. GM Europe is working on mid-sized cars such as the Opel Insignia and the next Chevrolet Malibu. And GM’s Australian arm, Holden, created the full-size platform underpinning the Holden Commodore and Chevrolet Camaro.

This programme simply needs to be extended further to creating niche vehicles for Saab as well as replacements for its current range—and there is evidence that GM already got that memo. Buick should benefit from this, too: a Lucerne replacement could easily have been developed alongside the Commodore.

Similar arguments could be made in support of Buick’s presence. While that brand has trimmed models in recent years, what it does field is distinctively styled and its brand, too, is well defined. Sheetmetal might cost money, but the majority of R&D goes into automotive architecture—stuff that customers cannot see. Buick and Hummer appeal to very distinctive buyers who are not catered for elsewhere, and Hummer itself is leading the charge into international markets.

That leaves Pontiac and Saturn, which is already benefiting from globalization. Pontiac fields two rebadged Holdens: a large sedan and a truck. Saturn is becoming the American name for Opel: it can easily go from import-fighter to import-seller, provided it keeps its no-nonsense approach to retail, one of its main differentiating factors.

GM has used the rebadging idea well in some markets. In Britain, most Vauxhalls are really Opels—in most of the range, the model names are even the same. For years, Holden used the same method, though now it rebadges several Daewoo models (Daewoo is another GM brand). There is no reason for Pontiac not to have some Holdens, with the rest of the range selling extreme-performance models made in the US. It would increase economies for Holden. Saturnized Opels would also help Opel in Europe reach greater economies there.

If there is one thing that history has taught us is that tastes are cyclical. Muscle cars may be wrong for 2008 but they may be right for 2012. If Pontiac is killed off, can GM successfully deal with that sector then?

The above are cursory brand analyses only. No one should say that that Saturn’s only differentiator is a no-nonsense retail approach. There are plenty of other reasons that Saturn is distinct from Chevrolet or the other automakers’ brands. And those other reasons, especially considering the buyer, probably won’t overlap as greatly as a mere financial, BL-style analysis would suggest.

In fact, Aaker’s ?ve brand equity targets¹¹ are instructive and it is not impossible to maximize all of them, propelling every GM brand to varying degrees of success. GM and its investors need to remember history and why Britain still has a car industry, just one dominated by Japanese and foreign makes.

GM needs to begin by defining its brands and engaging consumer help to get there. It has a good enough support base via its blog, Fast Lane, to which Bob Lutz, its product czar, contributes. People believe their ideas are being heard and Lutz has been making many of the right moves by enlisting the help of global GM divisions. That can only be enriching to brand equity.

One brand that has escaped criticism for the most part is Cadillac, which has at least sorted its design language and styling out, produced products that Americans (especially style-conscious younger consumers) want,¹² so either GM got lucky—or GM has the skill set already within its company.

GM’s other great asset, which it is finally using now with Lutz’s top-down endorsement (another necessity in branding), is its global divisions.¹³ Each has been made a centre of excellence. Each is part of a greater global structure, entrenched in GM behaviour over decades. Toyota centralizes a lot more of its product development, but GM may be able to have each centre work in tandem and bring products to market more quickly.

Ford
Ingrassia is more optimistic about Ford, which has been slimming down, selling Aston Martin, Jaguar and Land Rover. But he is critical of the company’s product range, and rightly so.

At the time of writing, Ford has been enjoying healthy sales in the US with its Focus compact car. However, car enthusiasts have been critical of this model, since it uses an old platform. Even México has the new-platform model in its range, leading some to disbelieve Ford’s reason that the newer model would be priced too highly to be competitive in the US. (Ford also sells the Mazda 3 in the US at a competitive price, and that is on the newer platform.) Alongside the Honda Civic, the Focus seems old hat.

However, expensive fuel and Ford’s widespread US dealer network have meant that the Focus is being snapped up. Some of this is probably due to brand loyalty, too: those that stuck by the company in the days of the truck and the Explorer SUV are looking at the Focus as a simple, bugs-ironed-out model.

As mentioned earlier, strong sales are not always an indicator of long-term brand strength. Should fuel prices come down and people begin repeating their less considerate, energy-consuming behaviours, will they turn to Ford? Many Taurus buyers did not return to the company when they wanted another mid-sized sedan: they went to Toyota and Honda. There are only so many years that a company can sell an old-platform design, and in the age of the internet, car buyers are more savvy than ever.

Ford has a bright spot, says Ingrassia: its CD338 line of sedans (Ford Fusion, Mercury Milan and Lincoln MKZ). He is right, as these have also managed to be sold in South America as well, as premium models. Using an old (but revised and competitive) Mazda Atenza platform, CD338 was developed with good savings, showing that single platforms can be adapted further. The current Taurus, using a Volvo platform, is another example.

But Ford could trim its platforms further and make use of its international divisions. The Ford Mondeo’s European development duplicated that of CD338, and enthusiasts have been supportive of the European car. Ford is ending the duplication with its next B-sector (supermini) car, the Fiesta, which will be sold in Europe, North America, Asia and Oceania.

Ford’s problems in the past were linked to internal politicking, leading many to dismiss the global model. They cite the CDW27 project of the early 1990s to be an example of a car developed in Europe and failing in the US. Its size was often blamed. The reality was that CDW27 was under-marketed, especially as BMW continued to earn sales in the same size segment.

Facing troubles, and with a new leader in the form of CEO Alan Mulally, Ford may well have realized that being a united company has its benefits.

It could do more, as Australian commentators are quick to point out that their countrymen’s big-car expertise is not used sufficiently. But it does make use of Volvo as a safety centre of excellence, and there are signs of change.

From a branding point of view, Ford may well have sorted things with its core brand, steadily sorting its product range out in what appears to be a medium-term plan leading into the mid-2010s.

It has generally been regarded as a good brand steward for Volvo and Land Rover. Jaguar’s problems were detailed earlier and they seem to have been an (expensive) exception rather than the rule. Aston Martin grew under Ford as well.¹⁴

Volvo has been engineering class-leading platforms for the company, it has a well defined brand centring around safety and Swedish design, and it’s a rare case where the (profitable) status quo should be observed. Mazda is Ford’s sporting brand, and seems to trade well on its Japanese origins and philosophy, with halo cars such as the MX-5 and RX-8.

Its problems rest with Lincoln and Mercury. Lincoln was once a proud brand, but with the demise of the Town Car, no longer fields a large luxury model to rival the large Lexus LS and the top Cadillac. Instead, its models are warmed-over Fords, making sense from a cost perspective. Lincoln buyers are indeed different, brand-wise, from Ford ones. But surely they are discerning enough to notice that what they drive does not look that special?

The good news for Lincoln is that it has downsized, something that it failed to do in the 1970s until GM had already made its move. However, Ford is falling into a trap with cars that do not support the Lincoln brand well, and it can hurt the company in the long run. A brand vision was once developed and show cars built (such as one called the Mark IX), demonstrating a renaissance and a design language for the brand. Little seems to have come of it other than adopting the grille design. It shows short-term thinking and Lincoln is being hurt until it can launch more interesting cars. It seriously needs a brand strategy outlined.

If Lincolns are not special, then what of Mercury—which has languished for over a generation? The brand is nearly invisible, it sells cars that are considered upscale Fords, and the company’s financial problems meant that any distinctive models (such as the Cougar) were cancelled.

Mercury could be fixed if Ford simply examines its Japanese affiliate’s range at Mazda, which develops more models than US consumers see. If the brand were defined as a quality import-fighter, it could have a chance at distancing itself from its warmed-over-Ford image. An obvious candidate for “Mercurization” would be the next Mazda MPV.

Chrysler
Chrysler, the smallest player, is now under a private equity firm’s control and is not particularly well positioned. Once a highly respected company in the 1990s, Chrysler had lean R&D processes, exciting niche models and the admiration of American businesses. Forbes called it the Company of the Year.

This was appealing to Daimler-Benz AG of Stuttgart, which took over Chrysler in the late 1990s. As discussed, the Plymouth marque was a casualty. But the takeover was poor in other areas: there were cultural clashes, the brands were never defined to begin with, and the newly merged DaimlerChrysler found dif?culty getting economies of scale with the platforms. Lean R&D suddenly seemed more cumbersome. And the resignations of many of Chrysler’s old bosses—Bob Eaton, Bob Lutz, François Castaing, inter alia—did not do much for the workforce.¹⁵

Dodge was an easy brand to define, alongside Americanness and sportiness. However, Chrysler went from innovative American luxury—its LH big cars were highly acclaimed, as were their successors—to a sort of Volkswagen, having low-priced models such as the Neon and PT Cruiser sitting uncomfortably with the 300 large car.

Brand-wise, Chrysler is all over the place. Ingrassi is right that the company has not fielded a true luxury car for years. It is cooperating with Chery of China on a small car—which might be too little, too late, when it is launched.¹⁶ And when it is launched, where will it go? It would have been ideal for Plymouth.

Meanwhile, Nissan is building a subcompact for Chrysler in South America. Chrysler is building a minivan for Volkswagen at a Canadian plant.

One scenario is to kill Chrysler off, which would dilute Dodge’s brand—since models such as the Chery joint-venture vehicle will have to be absorbed. It would fit as poorly there in buyers’ minds as the PT Cruiser did with the old LHS and 300M large cars. Dodge, after all, has just released a sports car, the Challenger, a retro-design exercise meant to recall an age when its brand was well defined and proud. The Chery JV model could well look sporty—but if it is an economy model, will Chrysler be tempted to put another marque on it?

Having fewer brands will do Chrysler no favours with its future models. Any disease the parent brand has will simply be passed on. Its saving grace is Jeep, which has not been tarnished greatly; in fact, Chrysler has been quite good at managing that brand and, for the most part, delivering the right product.¹⁷

While it might make some sense to streamline further, buyers make their decisions about a brand quickly. Brands are shortcuts so consumers can grasp their message quickly, hence the need for recognizable brand “attitudes”.¹⁸ And Dodge and Jeep have distinct characters that shouldn’t be tampered with for fear of turning consumers away from that easy recognition and brand equity. Chrysler can be redefined as a quality marque, one with a dose of snob appeal but everyday prices—if it can really deliver that quality. Taking the halo effect of the 300, its most recognizable model, and bringing it on to smaller models isn’t a bad idea—but it remains to be practised.

It will never be a Cadillac rival in the foreseeable future, unless some of those rapid R&D and tight inter-business relationships can return to make it a lean niche-filler. Those glory days weren’t that long ago.

The solutions
First, each of Detroit’s Big Three has some homework to do, in understanding their brands’ visions, what they mean, and what they can mean. They can involve the public via the blogosphere, in a country that has high internet penetration. This will show transparency and a willingness to engage with the American car buyer, whom each company needs to win back. Or, they can do the exercise internally with cross-functional groups, but properly¹⁹—there is no more room for a lip-service nod to branding as there was in the 1990s.

Secondly, the Big Three need to understand just what makes their cars appealing. Aaker’s brand equity elements are a good start but the quest for them needs to be constant.²⁰ The Japanese may have used W. Edwards Deming’s principles over decades to get their quality up. American companies need to leap-frog that by being more engaging, being open where Japanese companies act closed. Continued understanding of consumer tastes via the blogosphere is one method; using that to inform future tastes is another. Feedback is important, and it has only recently played a part in the marcom end of the Big Three. Prior to that it only had customer clinics.

Thirdly, there is an untapped generation, namely the young people who are either too young to drive or getting into their first cars now. What has informed their choices? The author is willing to bet that while there are some who love muscle cars, there may be many more impressed by models that conserve energy.

Fourthly, US automakers are among the heaviest R&D investors—and they need to bring more innovation to the market more rapidly.

Fifthly, they need to realize the effect of a loss of economies of scale. The historical models are there. The key is to build the cars consumers want²¹—something that GM and Ford actually do quite well in Europe. If Levitt is right and there is a homogenization of tastes²²—BMW and Porsche operate on this notion, and Toyota does in the mid-sized and subcompact sectors—then foreign bases need to be used more effectively. It’s not about shutting factories and firing personnel, but being more sincere about delivering for future consumers.

Summary
Killing brands, as any observer of British Leyland has demonstrated, is not a solution when those brands are well defined, contribute to economies and have brand loyalty, recognition and perceived quality. Even if a brand contributes to economies alone, it can be saved through repositioning.

The US automakers need to put in play longer-term thinking. Chrysler is most dire at the moment, and Ford, while leaner, could do more with Lincoln and Mercury. Ford itself has excellent product and needs to show it can overcome regional politics. In neither case should they feel forced in delivering short-term results. In Chrysler’s case it may be able to demonstrate to its owners that it can do well without the pressure of share prices.

General Motors has all the necessary ingredients for survival. It has shown a willingness to engage consumers, find ways of making use of its foreign operations and look at ways of retaining brands and economies of scale.

Being true to their brands can help US automakers get back to a strong position. Setting one’s sights lower and claiming easy victories was certainly not the way Toyota rose to number one. Honda climbed from obscurity to Japan’s number two—and it has one of the US’s top-selling models—by setting higher goals. British Leyland should be a constant reminder of what not to do—unless the Big Three want to wind up being subsidiaries of foreign firms, their marques mere reminders of better times.

Notes
1. L. Iacocca and W. Novak: Iacocca: an Autobiography. New York: Bantam Books 1984.

2. J. Yan: ‘Where Is DaimlerChrysler Heading?’, CAP Online, February 12, 2000, <http://www.jyanet.com/cap/2000/0212ob0.shtml>.

3. J. Flint: ‘Company of the Year: Chrysler’, Forbes, January 13, 1997, pp. 83 ff.; q.v. E. A. Robinson: ‘America’s Most Admired Companies’, Fortune, March 3, 1997, p. F-2.

4. M. Kerbs: ‘G.M. Will Pare as Many as 1,000 White-Collar Jobs’, The New York Times, August 5, 1998.

5. P. O’Connell (ed.): ‘The Man Driving Toyota’, Business Week, July 22, 2005 (also online at <http://www.businessweek.com/bwdaily/dnflash/jul2005/nf20050721_7169_db053.htm>).

6. P. Ingrassia: ‘Who Will Survive?’, Condé Nast Portfolio, June 2008, pp. 86–95.

7. Ibid., at p. 93.

8. I. Rowley: ‘Toyota Set to Top 50% Market Share in Japan’, Business Week, ‘The Auto Beat’, November 1, 2007, <http://www.businessweek.com/autos/autobeat/archives/2007/11/toyota_tops_50.html>.

9. See, e.g., E. Shapiro: ‘Is Oldsmobile Name a Marketing Lemon?’, The New York Times, October 29, 1992.

10. The Triumph brand is owned by BMW, which understands that from a branding perspective, it poses a threat to its core range.

11. D. A. Aaker: Managing Brand Equity. New York: Free Press 1991.

12. J. Yan: ‘The Brand Attitudes of Automobiles’, New Age Branding: Concepts and Cases, vol. 1. Hyderabad: ICFAI Press 2002, pp. 101–13, at pp. 105–6.

13. Remaining divisions such as Cadillac simply need to get the product right: the author understands that its much-lauded CTS sedan, for example, still falls well behind its German rivals on the interior. Meanwhile, Opel does acceptable interiors. This is a single example of GM’s unused assets.

14. J. Yan: ‘The Brand Attitudes of Automobiles’, op. cit., at pp. 111–12.

15. Ibid., at p. 111.

16. Not every company has been successful in cooperating with Red Chinese companies. Chrysler has had some experience with its Beijing Jeep venture, among others, but not with Chery.

17. Some cannibalization has been risked with models such as the Jeep Commander, and its low-end passenger-car spin-offs have questionable appeal for the brand long-term.

18. See, e.g. J. Yan: ‘The Brand Attitudes’, op. cit., and W. Olins as quoted in J. Yan: ‘The Attitude of Identity’, Desktop, October 2000, pp. 26–31.

19. See, e.g. J. Yan: ‘The Brand Attitudes’, ibid.

20. Toyota’s success factors are discussed in ibid., at pp. 108–9.

21. See, e.g. G. Green: ‘Meet the Inspirational, Indefatigable Geoff Polites’, Car, June 2008, pp. 130–3, at p. 132.

22. T. Levitt: ‘The Globalization of Markets’, Harvard Business Review, vol. 61, no. 3, May-June 1992, pp. 92–102; cf. M. Griffin: ‘From Cultural Imperialism to Transnational Commercialization: Shifting Paradigms in International Media Studies’, Global Media Journal, vol. 1, no. 1, fall 2002, <http://lass.calumet.purdue.edu/cca/gmj/fa02/gmj-fa02-grif?n.htm>.

This paper has also appeared in CAP Online.

Nicholas Ind
Equilibrium Consulting, pb 5822 Majorstuen, 0308 Oslo, Norway
nind@equilibriumconsulting.com

PDF version

The argument of this paper is a simple one: creating value for customers is an organization-wide responsibility. This is a step removed from most approaches to the subject, which see marketing as an instrumental function and give emphasis to marketing as the primary, if not the sole, driver in building a brand. In this line of thinking, marketing is what marketers do to customers when they take what the company produces and re-present it. Yet marketing is not a department but a process by which the organization connects with the world around it. Also marketing theory and practice should not only be concerned with the external and marketing communications but also with the difficult internal reality of aligning the different parts of the organization.

When marketing only has limited organizational influence—when it is disconnected from other activities within the organization—the challenge of delivering a coherent offer is that much harder. Functional areas push in different directions and the appearance, functionality and presentation of the products begins to lack clarity. Alternatively, if marketing is connected with the rest of the organization; indeed if the whole organization is involved in delivering the brand, coherence is much easier to attain.

If this sounds theoretical, this scenario applies to an actual case: the launch of Apple Computer’s strategy based around the metaphor of a ‘digital hub for a digital lifestyle’. This metaphor, announced by Steve Jobs at Macworld 2001 in San Francisco, expressed a new vision for the brand and encompassed several new Apple products: new computers and integrated hardware for recording CDs and DVDs, iTunes and iMovie. Soon afterwards the metaphor heralded the launch of the iPod, Apple’s expansion into audio products and services and the introduction of Apple’s own retail stores.

At the time, Fortune magazine (November 12, 2001) was moved to compare Apple’s success with Intel’s problems: ‘Why in the world would Apple want to jump from the frying pan of the virtually profitless PC industry into the roaring fire of the hypercompetitive consumer electronics business? After all, just a few days before Apple’s splashy introduction of the iPod, Intel announced that it would close down its own disappointing consumer electronics division, which made, among other things, portable MP3 players, digital still cameras, kiddie videocameras, and a much ballyhooed digital microscope. For starters, the iPod fits right into Jobs’ so-called Digital Hub strategy for the Macintosh.’

The vision encapsulated in the strategic metaphor was not only was a driver for internal cohesion so that the organization could focus on those areas that best delivered the idea but it also became a widely used phrase by the media, such that each new service and product innovation launched by Apple was integrated into the metaphor. The whole process thus became a self-reinforcing circular movement that has enabled Apple to be consistently interesting and interestingly consistent.

One of the developments within marketing thinking that has tried to deal with the problem of marketing’s overtly external emphasis which too often leads to disconnected thinking, has been the emergence of the concept of ‘market orientation’. This approach extends the role of marketing by suggesting its role should be not only to sense movement in the environment but also to shape the organizational response by connecting with other business functions and departments. This indicates the role of marketers: to face simultaneously inwards and outwards and connect the organization and its audiences.

The principles of market orientation
Although the underlying ideas of market orientation have been around since the 1960s, it was two pairs of writers in 1990, who began to define and refine the concept: Narver and Slater¹ and Kohli and Jaworski.² Rather than simply focusing on the point of interaction with customers, they turned inward to explore how organizations could use customer knowledge to build organization-wide responses. Kohli and Jaworski saw the concept as referring to ‘the organization-wide generation of market intelligence, dissemination of the intelligence across departments, and organization wide responsiveness to it.’ Narver and Slater (1990) featured some similar elements, seeing market orientation as: (1) customer orientation; (2) competitor orientation; and (3) interfunctional coordination. However, Narver and Slater’s emphasis is on market orientation as organizational culture.

The virtue of market orientation is that it stresses the importance of connecting the organization together to deliver value to customers. It seeks to overcome the problem of siloization that is prevalent in organizations. Jaworski and Kohli in a 1993 paper addressed three specific questions: (1) why are some organizations more market-oriented than others?; (2) what effect does a market orientation have on employees and business performance?; (3) does the linkage between a market orientation and business performance depend on the environmental context? Based on two national samples the researchers came to the conclusion that market orientation is related to top-management emphasis, the risk aversion of top managers, interdepartmental conflict and connectedness, centralization and the reward system orientation. Moreover, a market orientation is related to overall business performance (but not market share), employees’ organizational commitment, and esprit de corps. And even more important, the connection between market orientation and performance appears to be consistent across environmental contexts that suffer from varying degrees of market turbulence, competitive intensity, and technological change. We might conclude from this that there are no environmental reasons to prevent market orientation and plenty of benefits.

Yet there is one area of market orientation that has been underplayed: implementation. A market-oriented culture is not only about interfunctional coordination or the type of organizational factors that enhance or impede the implementation of the business philosophy. Rather market orientation is a consequence (although it in turn reinforces) of a supportive organizational culture, HR and leadership. To develop this line of thinking we have developed the concept of participatory market orientation: a fusion of internal and external market orientations with an emphasis on realising the potential of market orientation.

Participatory Market Orientation (PMO)
A participatory market oriented philosophy aims to help the organization to become more participatory, such that it involves both its employees and customers actively in the process of brand development. This belief in the value of participation should steer the way investments are made in both internal and marketing activities and recognizes their connectivity. It suggests as a principle that rather than an over-reliance on traditional marketing communications to build a brand that funds are allocated to become entrained (synchronized) with customers and to integrate a relevant organizational response encompassing communications and actions.

An example of this entrainment process at work is the Grathak Katha (consumer’s voice) events held by the Bangladeshi mobile operator, GrameenPhone. GrameenPhone is the leading mobile telecom company in Bangladesh with a 48 per cent share of the market and 16·5 million customers (2007). This is a high growth market, but to take account of low incomes, GrameenPhone’s business model is designed to work with customers whose average spend on mobile telephony is $2 per month.

To better understand its customers and develop innovative ways of selling its services, the company conducts regular market research studies into the performance of its brand and particularly the delivery of customer service. However, in addition to this research, GrameenPhone has initiated a process for removing the distance between the company and its customers. This participative approach involves regular meetings between employees and customers in an environment that is both social and businesslike. The idea is to obtain direct interaction with customers both as a way of enhancing the reputation of the brand and as a means of learning about and learning with customers.

At the event itself, GrameenPhone matches the attendees one-to-one with employees so that there is the opportunity for personal dialogue. On these occasions research is conducted and results presented, new products are discussed and customers provide ideas on new opportunities. The idea is to mix the formal and the informal and such has been the momentum behind the process that music performances at the events are by groups that combine employees and customers playing together.

GrameenPhone has discovered that the quality of the feedback is high and the comments are genuine. Customers are not concerned with trying to either attack or please GrameenPhone, they just try to offer input and to relate their experiences. In one year the company conducted more than 300 events with over 200,000 participants. The key to maintaining the interest in the process both within GrameenPhone and externally with customers is the rapid processing of information, the actions taken as a result of input and the feedback provided.

Marketing Director, Rubaba Dowla Matin, argues that the success is due to the organizational capability to validate, categorize, analyse the data and to involve the relevant teams in the organization. It is these cross-functional customer management teams that play the vital role in determining the nature of the insight and generating action and communication. This investment into deep and direct insight and the willingness to encourage organization-wide participation have been the catalysts behind the success of the initiative and the company’s burgeoning reputation as an innovator.

Overall, when such external–internal investments as that made by GrameenPhone are managed effectively it increases its brand equity, which in turn enhances brand value. This final linkage is based on the premise that enhanced awareness and customer loyalty to the brand is the best indicator of the security of future cash flows. This way of thinking goes beyond market orientation because of its explicit link with brand value and because of the emphasis on engaging audiences to ensure that a market orientation leads to effective action.

Marketing’s role then shifts subtlety in this scenario. When the overall organizational goal is to enhance customer value there is a requirement for an organization-wide commitment to customers and a supportive culture, style of leadership, governance and human resources policies. Partly marketing must have an internal market orientation to help achieve this organization-wide perspective and partly it must be a key element in building bonds with customers and sharing knowledge about them inside the organization; externally sense-making and internally sense-sharing. This internal–external approach builds the brand.

The value of this twin perspective is endorsed by a study of Sweden’s 500 largest companies³ that shows organizations with the highest brand orientation index (BOI), where branding is the hub of operations, are characterized by an ability to combine both an internal and external focus. Interestingly, the profile of high brand-orientation companies is found in roughly the same frequency among business to business and business to consumer companies (50–50) and goods to services (57–43). This study reinforces the link between brand orientation and profitability, by demonstrating the correlation between the two with the group of leaders in terms of orientation showing operating profits almost double the lowest brand orientation group: ‘the most important outcome of this study is that we have been able to establish a clear link between brand orientation and profitability: the more brand-oriented a company is, the more profitable it is.’

In spite of the BOI research, most operationalizations of marketing ideas are developed around products and external markets. Yet it should be clear that a focus on human capital and on enhancing brand delivery capacity is of vital importance in delivering customer value in both products and services.

In recognizing the importance of human capital and internal market orientation, it is clear that external market orientation must be kept in focus. It may be important to ensure that employees are truly engaged, but it must be remembered that the value of this engagement is in the delivery of value to customers. Thus the marketing department should cooperate with the HR department in developing the brand, while it should also work at being finance-orientated to improve understanding of the connection between investments in marketing activities and financial performance. Equally, responses to events, such as a change in competitor activity, a move in market share or new patterns of customer behaviour all require the organization to work in an integrated way across internal boundaries. The ability to do this effectively requires a participatory market orientation (an outside-in, inside-out way of thinking). This is something that the organizational culture has to encourage and that leadership must demonstrate by its communications and actions. Something the BOI study endorses with its (not surprising) discovery that in the most brand-oriented companies, the executive management group is very active in brand-related activity.

Notes
1. J. Narver and S. Slater: ‘The Effect of a Market Orientation on Business Profitability’, Journal of Marketing, vol. 54, no. 5, October 1990, pp. 20–35.
2. A. K. Kohli and B. J. Jaworski: ‘Market Orientation: The Construct, Research Propositions, and Managerial Implications’, Journal of Marketing, vol. 54, no. 2, April 1990, pp. 1–18.
3. Brand Orientation Index: a research project on brand orientation and profitability in Sweden’s 500 largest companies. Label AB in cooperation with Frans Melin, 2005.

Adapted from N. Ind and R. Bjerke: Branding Governance. Hoboken, NJ: Wiley 2007.

Sicco van Gelder
Placebrands
sicco@placebrands.net

Microsoft Word version

1. Introduction
Place branding (for countries, regions and cities) is a relatively new discipline and inevitably people have many questions about it. One important question is how to successfully brand a place. This question actually consists of a number of discrete questions, namely whether:

• Branding is more suitable for some places than for others?
• There are pre-existing factors that increase the likelihood of successful place branding?
• There are factors that improve the success-rate of the brand development process?
• It is possible to predict the success of a place brand strategy?

This paper tries to answer each of these questions by describing the criteria and factors that contribute to successful place branding. By assessing the place, the players and the plans they make, it is possible to predict the likely success of a place branding initiative.

2. Should all places brand themselves?
There is a debate whether all places should be actively branding themselves or that the method is more appropriate to some places than to others. There is a perception that places facing some sort of crisis are more likely candidates than places with stable economic, social and cultural settings.

Although a place that faces a crisis may become acutely aware of the weaknesses of its brand and decide that it is high time to do something about it, there is little evidence to suggest that crises in themselves are a reason to brand a place. This is due to two factors, namely:

• brands are not built (and seldom even destroyed) in a day. Place branding is certainly a long-term endeavour and requires years of consistent and persistent actions for the brand to take shape;
• branding will not help solve the crisis simply because only decisive and targeted actions will do so. The brand will however, provide the context for solving the crises and the brand’s strengths should be applied to the solution. A strong brand will also help to mitigate the effects of a crisis as the crisis will not be (one of) its only claim(s) to fame.

If it’s not places that face immediate calamity, catastrophe or disaster, then which places can most usefully apply branding? Certainly, some kinds of places are more likely candidates for place branding. These include:

• places that face intense and increasing competition. These places are obvious candidates because they need to sharpen their competitive edge to retain or improve their positions. This is currently happening in southern Africa, where the rise of South Africa is putting pressure on the neighbours. In Europe, competition between major cities has increased over the past decade and a place such as Amsterdam finds itself competing with Madrid and Barcelona for visitors, investors, talent and events. Similarly in Asia, Hong Kong is facing more intense competition from the likes of Shanghai and Singapore;
• places that face complex development tasks, such as areas of urban expansion, regeneration and transformation. These places need to have a very strong sense of what they wish to become, what they will offer and how they will function, which is what branding can offer them. Examples are mixed-use waterfront developments that dot the cityscapes around the world: Hamburg, Toronto, Lyon, Melbourne and the like;
• places that face a slow and steady decline. Such places often lose businesses, inhabitants, institutions and events at a pace that doesn’t start the alarm bells ringing until the scale of the problem becomes acutely apparent. These places have the opportunity to stop and even reverse their slide if they act in a concerted effort to shore up their brand. Examples are Southampton in southern England and Cleveland, Ohio in the USA;
• places that have lived through a crisis and need to reinvent themselves. These places have had a major crisis that has completely altered the economic, social and (sometimes) cultural structures. There is no opportunity to reverse the situation and the only thing left is to completely rethink the brand. One of the most obvious examples is Bilbao in Spain that has reinvented itself as a tourist destination after the collapse of its manufacturing base. Other examples of places needing to reinvent themselves are Belfast and Detroit.

3. The likelihood of successful place branding
Not only is there discussion about which places should develop their brand strategies, there is also debate about what preconditions improve the likelihood of success. We find that having the following characteristics contribute to a place’s ability to brand itself:

• unity: the key stakeholders of the place need to agree to come together to shape its future by developing and implementing a brand strategy. This is not a given in most places. Stakeholders have seldom sat together to discuss their shared future and to determine how their views on the subject coincide and differ. And in even fewer places have stakeholders actually decided to act to jointly shape that future. We’ve worked in places where bringing together the stakeholders and getting them to work together was the hardest task of all;
• diversity: places that are more economically, socially, culturally and naturally diverse stand a better chance of developing a strong and effective brand. This is due to the fact that place branding is not an exercise in reduction, but rather one of adding or enhancing layers of richness. Diversity gives such places like Vancouver, Kuala Lumpur and Cape Town their attractive edge;
• initiative: places whose stakeholders already (jointly) undertake (marketing) initiatives. These provide necessary experiences beneficial to the place brand development efforts. This is due to the fact that they have already accepted the need for changes and are taking actions to bring them about;
• experimentation: there also needs to be a willingness to take risks and a certain tolerance towards failure of experiments. Often, accepted ways of working are entrenched and people stick by what they know. Risk aversion is often prominent in some of the large (and bureaucratic) organizations that are key stakeholders of many places.

4. What is required to successfully develop a place brand?
Not only are there existing factors that improve the likelihood of success for place branding. More importantly, there are factors that influence the success of the brand development exercise itself. These are:

• partnership and leadership: a place brand can only successfully be developed and implemented by the key stakeholders of the place. It is not a task to be left to the government alone. The organizations that can shape the future of the place through their actions, investments and communications should come together in partnership and should demonstrate shared leadership in the development and implementation of the place brand strategy. In lots of places, government departments have been tasked to brand and market their city, region or country and the results are mixed at best;
• vision and strategy: the first thing the brand partners need to do is to share and compare their views on the future of the place and make sure that they develop a shared vision of a greater magnitude than the sum of their individual visions. Existing visions often are highly sector-related (in one case we found 23 visions for the same city) and do not rise above the commonplace of a great place to live, with the best possible healthcare and education and jobs for everyone. Once they have agreed a shared vision, the partners need to map out a strategy for the brand of their place that they can jointly deliver;
• appraisal and creativity: the brand partners need to be realistic and understand what has shaped the brand of their place so far, and what has worked in the past and what has not. That should, however, not preclude them from finding new ways of doing things, from developing original ideas and from creating innovations for their place;
• “on brand” implementation: finally, the partners need to involve other stakeholders in realising the brand through actions, investments, attraction programmes and events that demonstrate the brand in action.

There is an immense task here of managing the stakeholders and their activities and communications to ensure that agreed initiatives are carried out, consistently and “on brand”. The brand partners must, therefore, decide how best top organise this task to ensure effective implementation of their plans.

5. When is a place brand a success?
Finally, there is the question of when a place brand strategy can be considered to be successful. In other words, what should the place brand embody of to become successful?

• value and purpose: the brand is a promise of value and one that needs to be kept. The more valuable the place brand is to its key audiences, the more likely they will be swayed by it. The brand also provides a sense of purpose to the place’s stakeholders, as it embodies the things they want to achieve. The stronger this sense of purpose, the more likely that stakeholders will pull together and deliver. Too often the brand of a place does not provide a common purpose, but only a trite slogan: City of Lights (Anchorage), the Friendly City (Orange Country), Get in on It (Baltimore), Every Day Is an Opening Day (Atlanta) and It’s Cooler Here (Edmonton);
• truth: the brand needs to reflect the reality of the place. Place brands are largely built on people’s experiences of the place, on recommendations by trusted endorsers, and on what goes on in the place. Any dissonance between the brand’s promise and these realities harms the place brand’s equity. The experience of the rough immigration treatment meted out to visitors harm the brand of the USA. The scenes of the scores of itinerant labourers sleeping on the streets of Mumbai can come as a shock to a first-time visitor to ‘The Fastest Growing Free Market Democracy’;
• inclusive and for the common good: the brand must appeal to the local community and must provide it with tangible and intangible benefits. Only if the place’s brand is embraced by its population, businesses and institutions will it also be credible to outsiders. In Bangalore local pride groups conflict with what are seen as the “outsiders” of the city’s booming IT industry. In a bid to appease these activists, the city government decided to change the official name of the city to Bengaluru, which is the local pronunciation and the city’s IT companies have started to fly the local flag. Neither move will do much unless the Kannada population of the city feel that they have a stake in the city’s future;
• creativity and innovation: the brand must help to encourage and release the resourcefulness and inventiveness of the stakeholders in their quest for realizing the place brand strategy. The brand should promote new ways of working, investing and communicating and advance new and original ideas, products and services. Newcastle-Gateshead kicked off a flurry of creative activity with the Angel of the North, a huge steel statue along the motorway, and followed this up with the distinct Millennium Bridge, the Baltic Centre for Contemporary Arts and the Sage Concert Hall. All a far cry from its drab and dreary post-industrial past;
• complexity and simplicity: the brand of a place needs to reflect its richness and not try to reduce it to a single utterance or representation. However, at the same time, the core of the brand must be straightforward enough for people to grasp its value easily. Italy stands for style, France for romance and Japan for perfection, but we also know that these places have a lot more to offer that makes them distinctively attractive;
• connectivity: the brand must help to connect up people, businesses and institutions inside as well as outside the place. A brand that allows and encourages people to rally around it stands a far better chance of being successful. In some cases, making use its diasporas’ relationships with the home country help to fan the brand’s flames. Cases in point are Ireland, India and China;
• validity: a brand must remain relevant to its stakeholders and audiences over a long period and it can only do so by delivering consistent value to them. This does not mean that the brand should remain unchanged. The world changes and so do people’s wishes and expectations, the competition (and what they have to offer), and economic, social and cultural developments. It is important to regularly check and preserve the soundness of the brand over time and to take appropriate actions for it to retain its significance.

6. Risks and rewards
Place branding is an intricate activity and chances of doing it successfully rest on a proper understanding of the factors that influence the outcomes. Without understanding the risks involved and how to reduce these to a manageable level, success is unlikely and subsequent failure will simply prove what the (inevitable) critics have said all along: ‘It’s a waste of money that could have been better spent on health, education, housing, infrastructure, etc.’ But if there are possible risks, there are also potential rewards to successful place branding, such as:

• improved and sustainable competitiveness, e.g. for attention, investments, jobs, inhabitants, institutions, visitors and events;
• higher returns on investment, e.g. in real estate, infrastructure, promotions and events;
• coherent development of the place as physical, social, economic and cultural planning join up to realize the brand’s promise;
• pride in the place, as the population, businesses and institutions experience its (renewed) sense of purpose and direction;
• unsolicited praise, approval and endorsement from media, celebrities and (international) institutions;
• increased word-of-mouth among (foreign) target audiences as personal experiences and a wish to be associated with the place create a buzz.

Ian Ryder
British Computer Society
ian.ryder@gmail.com

No brain-food—just a sector anecdote!
The same rules apply: we all know that “rules is rules”, right? Could we try a maybe?!

I recently (nine months ago) took a new position working in a professional body, one of the largest of its kind in the world, which also happens to be a registered charity and incorporated under a Royal Charter. After a lifetime in the corporate world I can tell you: the rules are different! Not the fundamentals of brand strategy, clearly, but the processes and procedures of development and execution.

Perhaps a few words of explanation about ‘Royal Charter’ are needed, because this means little or nothing to anyone outside UK shores.

The only bodies that can award a ‘Chartered’-status professional qualification are those that have been granted a Royal Charter by HM the Queen. Whilst it is a major honour, this has huge implications if you find you want to do anything significant on branding. There are two main issues and several supplementaries.

First, chartered organizations have a governance structure that requires a Trustee Board (TB) to have oversight and ultimate responsibility for performance. This usually comprises volunteers who are part-time, unpaid, and can come from absolutely any walk of life and any professional background. The TB then delegates authority to a CEO and Executive Board who are responsible for the operational execution of the organization’s strategy (and sometimes they don’t!).

Secondly, any change to the organization’s range of activities or, critically, name, must be approved by what is called the Privy Council—essentially a sign off by HM the Queen.

The “supplementaries” include a range of things related to this governance, involving many stake-holders, members included, who feel they can have a say in this and, therefore, not surprisingly there exists the potential for major disagreements between a part-time TB and the full-time team of professionals and EB who, probably rightly, usually believe that they are best qualified to make such key decisions. One of the biggest pains of all, though, are timing and process.

Often a TB will only sit six times a year and, even then, really substantive issues will have trouble finding agenda time. But it can take a staggering 12–18 months just to get approval for a name change and corporate rebrand, which includes the need for a member-approved motion at an Annual General Meeting followed by a Privy Council seal of approval—not guaranteed, and they only meet twice a year!

This is not to say that such organizations are not fun to work in and with, or that they don’t share many of the same brand challenges as their arguably more fortunate commercial brethren, with only “normal” governance and market forces to manage. All the issues of needing to generate commercial revenues in a competitive market-place in a service business still apply. This means all our much-loved challenges of positioning, product development and management, customer service management and indeed brand and marketing strategy development and execution, in the broadest sense, still apply.

The key challenge is that, if you thought your only issue was to convince your CEO and fellow board members who are likely to have both familiarity with marketing principles and have the final decision, then consider the need to first do that, then take it through the process described above. This is where there is a very good chance the majority of your TB–member agreement has to come from people who may never have even heard of the word brand and if they have, it is guaranteed it was in the wrong context and with such limited knowledge that they won’t understand what you are proposing or why.

Rather than this be just a simple “ramble” about how lucky profit-making commercial organizations are—even those B2B companies that still have far too many “critical but knowledge-challenged” individuals—I thought maybe I’d drop in a brief summary of tips for anyone working in, or agencies considering pitching for, this kind of organization.

1. Get a really detailed understanding of the fundamental governance constraints, together with a timetable of key Committee, Council and Board meetings.

2. Understand the background of Trustees so you can see the scale of your challenge, or the extent of your support.

3. Have a very clear plan and timeline, always important but critical in this case.

4. Creating a small sub-group of three or four from the TB to take with you on the journey will make the final TB sign-off so much easier—it may even be passed!

5. Learn to manage uncertainty and develop your proposals and arguments carefully—and make sure you do this a long time ahead!

6. Exercise enormous quantities of patience.

7. Whichever god you believe in—ask for help!

We’re on our journey though, having developed a new marketing strategy alongside the slower development of our brand strategy using a variant of a process model I’ve used before, this time facilitated by one of the really good, smaller brand consultancies, UffindellWest.¹ We will get there, and I look forward to writing up that journey as a case study sometime during 2010.

Note
1. The CEO and owner of which is one of our own Medinge members.

Patrick Harris
thoughtengine
patrick@thoughtengine.co.uk

PDF version

Abstract
This paper considers the importance of employees in the process of building customer experience. The paper states that internal investment is rewarded with consistent, quality customer exchanges. Emphasis is first placed on the positioning of brand management within an organization, and its linkage to strategy. Second, the tools of identity and guiding principles are introduced. These tools are used to activate staff by inviting their engagement and by asking them to review the brand from a personal perspective. Identity encourages employees to interpret corporate identity and apply it to their unique situation and skill set. Guiding principles serve as a platform to nurture desired behaviours in the organization. Together, these two tools better prepare staff to respond to customers. Brand values are presented as the currency to measure the worth of exchanges between organizations and their customers. The paper concludes by presenting a case study of the mobile operator, Orange, during the period 1994–2003.

Introduction
Branding is about people. People build brands. People buy brands. The relationship, at first glance, is a simple one—build a good brand and others will buy it. At the heart of this relationship, however, is another group of people, that of the employees. It is the employees who enact the attributes of the brand and whose actions ultimately foster customer experience—whether good or bad. Staff actions should reinforce the promises a brand makes to its customers. If wisely conducted, this reinforcement breeds more success in terms of sales, awareness and loyalty. Employees have the formidable task of demonstrating the brand by the actions they take. The adage actions speak louder than words is a truth that holds firm in the process of building successful brands.

However, many organizations fall short of representing the brands they espouse. Sometimes, this disconnection is due to uncommon circumstances. These include sudden market shifts that are external to the organization. Internal changes—like the loss of a key figurehead or an organizational merger—are also examples where a disconnection, between the brand attributes and employee actions, can be present. These examples, and others like them, provide resilience tests for brands. The question is, can effective internal brand management help to overcome these difficult periods? Further, can an ongoing internal brand management process help to preserve a healthy relationship between employee actions and customer experiences?

This paper discusses the importance of inward facing brand management. Emphasis is given to the positioning of brand management and its relationship to organizational strategy. Separately, the tools of Identity and Guiding Principles are presented as a means of serving the employee effort to enact the brand attributes. Finally, a case study involving the mobile telephone company, Orange, is introduced for illustrative review.

1. An inward perspective
It was in his seminal paper of 1937, that Ronald Coase prescribed the basic reasoning of a firm.¹ He described the importance of building and maintaining relationships as the very essence of a firm:

A firm, therefore, consists of the system of relationships which comes into existence when the direction of resources is dependent on an entrepreneur.

If consistency of brand experience is sought, this definition suggests the need for a balanced focus of nurturing and serving internal and external relationships. Yet in many brand management efforts, resources are usually dedicated to constructing an outward image of the brand. Advertising, packaging and sponsorship are traditional examples. It is commonly accepted that internal characteristics are transferred to the external environment via the employees of the organization. Further, this transferral may be unintended if left unchecked. This point implies a need to manage, or at least positively influence, the identity that is transferred outwardly—in order to maintain consistency and overall control. Thus, the internal workings of a firm should form an integral part of brand management. Brands today must represent a company’s history, future vision and its outward appearance—as well as the internal representation of the organization. Why then do organizations give little attention to internal brand management?

1.1 The right level
Inward-facing brand management must be considered at the appropriate level if it is to succeed. Brand management when considered as a periphery exercise of a marketing subset, is destined to perform poorly. Brand today is a key element of every transaction the organization engages in and as such should be strategically incorporated into internal activities. Brands do far more than label products or companies. Brands today can:

• change market dynamics;
• span across entire markets and enter new markets; and
• heavily influence industry business models.

Google, Amazon and Napster are examples of brands that have significantly changed the dynamics of entire markets. Virgin, Marlboro and Caterpillar are good illustrations of brands that can span industries or enter new industries. Finally, MySpace and Blackberry are brands of influence that have stimulated enormous changes to business models in their respective markets.

Despite this shift in the influence of brands, intelligent dialogue between brand mangers and the strategic elements of the firm is often lacking. In reality, management of the brand must feature in all that the company undertakes, internally and externally. Brand must be prevalent in strategy, training, objective-setting, working style, facilities and much more. Ind, when discussing the concept of living the brand, argues that brands come to life when internal and external boundaries are blurred.² Most importantly, brand management must also be well integrated into the activities of the organization if it is to deliver quality customer experiences.

But the phrase living the brand does not necessarily express the integration of brand at a strategic level of the organization. Organizations that unite strategy and brand possess cohesive workforces that demonstrate sound direction, incorporate a recognizable approach and present a high quality, consistent customer experience. Ind’s phrase can be extended for organizations that provide a strategic and integrated focus of brand management—being the strategy and living the brand.

1.2 What they do, not what they say
Internal branding should concentrate more on context rather than content. It should focus on why an activity occurs, more than the brand compliance of the activity itself.

A hypothetical example of branding the company canteen is helpful as an illustration. In this circumstance, it is not the branded colour of the crockery or the ability to reinforce company messages on the walls that is critical. Rather, emphasis should be on the behaviours exhibited when serving or receiving food, and on the atmosphere that is conveyed by staff. Behaviours are visible evidence of the brand’s capacity to influence. Too often it is the focus on tangible items that get the bulk of the attention—ensuring that the content meets stringent brand guidelines—while overlooking the contextual settings and behaviours of the people involved.

The relationship between employees and customers is—or at least should be—genuine, two-way and sincere. What is displayed externally is chiefly a reflection of the activities of he internal organization. For this reason, inward brand management should not be limited to providing training material for customer-facing staff only. Instead it should be the creed by which the whole organization elects to live and breathe. Internal activities should always underpin the customer experience sought. Thus, brand management efforts must be focused inside the organization as much as, and possibly more than, they are externally. The key is to provide staff with appropriate tools, allowing them to be the strategy and live the brand.

2. Identity: building understanding
Corporate identity, the persona of an organization, is widely used by companies and agencies alike. It is normally expressed in a hierarchical set of descriptive terms—from, say, vision to values—and provides guidelines for how the organization expresses itself. Corporate identity is a valuable asset of any brand manager’s toolkit.

Corporate identity is not necessarily the best tool for employees, however. A workforce is after all, a collection of people and often, a corporate identity does not adequately speak to each as an individual. Further, individuals see organizational change and shifts in corporate identity as uncomfortable and difficult to accept. Employees take these shifts personally and feel lost when another directive arrives, with a new focus, and the CEO asks for their buy-in—once again.

2.1 Activate, not automate
Inside organizations, it is not buy-in that is necessary, but momentum. Buy-in is a flawed concept that suggests 100 per cent effectiveness in the communication of an idea, 100 per cent belief in it by the listener and 100 per cent efficiency in enacting it. Momentum, however, is created by communicating the gist of an idea and afterwards, encouraging individuals to interpret it, apply it to their unique situation and then use their individual skills to address it. Momentum taps into the collective wisdom of the staff and invites their participation. Here identity is still in use, but it is not an induced corporate identity communicated from the upper echelons of the company. Instead, individual identity is developed by regularly encouraging employees to interact with the company position. This allows them to reach a greater appreciation of its meaning to them personally, or as smaller teams of people. This is how it should be. Identity, used as a tool, allows individuals to increase their overall understanding of the organization and to personally ingest its meaning. Workshops, training programmes and promotion of good dialogue are good methods to achieve this aim.

There are several benefits of the process of engendering identity. First, employees have a stronger personal sense of organizational purpose. They know what to do and why they should do it. Secondly, they are less affected by significant organizational changes that (inevitably) will occur. They take these changes less personally. Thirdly, they are better equipped to see how their role can make a difference to the company as a whole. Fourthly, a company-wide spirit of involvement and responsibility is in action. Overall, their understanding is more consistent through change and this consistency features readily in their work. They can, in effect, be the strategy.

The next step is to help staff to underpin their understanding with appropriate behaviours.

3. Guiding Principles: nurturing desired behaviour
Consistent behaviour cannot be prescribed, nor can cultures be assigned. Cultures are more amorphous than this. Consistent behaviour can be nurtured, however. By nurturing a few desired behaviours, a sought-after organizational culture is more likely to develop. This focus is served well by the concept of Guiding Principles.

Guiding Principles are not rules, because rules are typically prescriptive and describe what can and cannot be done. They are not objectives, either, as guiding principles are interpretable. They possess a high degree of flexibility, while objectives should always adhere to the SMART rule of thumb.³ Finally, guiding principles are not habits, as habits are traditionally out-of-date or unchecked actions that are routinely applied.

Instead, Guiding Principles are a small collection of memorable expressions of behaviour—about three to six in total. They describe behaviour that must be present in order to fulfil strategic and brand aims. Interestingly, guiding principles are useful regardless of changes in circumstances.

Thus, even in times of instability, guiding principles represent the inherent behaviour that individuals can turn to and depend on. Together, they underpin an organizational identity and are necessary to nurture a desired culture. A good example is the following: Everything in moderation, nothing in excess.

This phrase, when applied across a number of individuals, can have different interpretations. To some the phrase indicates the need for a steady, even approach. To others, it might mean that an extreme intake or exposure is acceptable—on occasion, but not regularly. In all cases, individuals will be able to respond in a manner that is in keeping with the desired behaviour, but which suits their situation.

Consider, too, the guiding principle of face to face. To customer-facing staff, its meaning might be very clear: be with the customer whenever possible. To back-room staff, however, it might have usefulness in terms of how they treat email or how feedback is provided to colleagues.

The power of Guiding Principles is that they can be communicated in a straightforward manner, yet their meaning is always personal to each individual and open to interpretation.

The combination of identity and guiding principles is a mobilizing force for organizations. Together, they help to form employee behaviour and to channel employee actions and decisions in desired directions. As a result, the organization becomes more adaptable in terms of the changes it faces, yet will be consistent in its response. Meanwhile, employees are made more aware of the aims of the organization and are actively engaged in delivering its success. They are able to live the brand.

3.1 A cautionary tale
Guiding Principles, together with identity, should hold meaning for the individuals who use them. This is best achieved by allowing a significant cross-section of the organization to develop them. It is not always possible that one set of guiding principles will serve the whole organization and some limited regional or team variation should be encouraged. The process should be highly integrated and inclusive.

However, the commitment to involve staff must be genuine and purposeful. It must be supported by the presence and involvement of senior managers. Employees do notice when they are being served a placebo process. Less-than-genuine attempts to involve staff can result in far fewer committed people than desired—perhaps even an employee revolt. Having a few members of staff involved is a far cry from having an entire workforce mobilized and committed to the cause. Martina Navratilova expressed it fittingly when she described the dedication required to achieve sporting excellence: ‘It’s like ham and eggs. The chicken is involved, the pig is committed.’

4. Where is the customer?
Thus far, this paper has concentrated most of the discussion on the organization itself—not the customer. This is deliberate because it:

• illustrates the yawning gap in internal focus;
• establishes an appropriate sequence of events required; and
• demonstrates the amount of effort that is necessary, in order to deliver desired customer experience.

This in-depth focus on internal matters provides two key brand management deliverables. First, it builds a robust foundation for stimulating desired internal attitudes. These, in turn, become products and services that deliver a valued customer experience. Secondly, undertaking exercises of understanding and behaviour ensures that downstream activities become easier to address and are implemented with greater consistency.

As the mantra suggests, the customer is always right. An inward facing brand process, however, better prepares the organization to respond to customers in the right way.

5. Genuineness and transparency—ready to face the world
In today’s market-place, it is important that any presentation made to a customer needs to be wholly genuine. Further, the organization that delivers the product or service needs to be transparent. This need for genuineness and transparency does not stem from brand management manuals. Rather, this is a necessary organizational response to today’s consumers, who are armed with choices, control and the tribal nature of communities.

5.1 Choices, control and community
In recent times, consumers have gained access to new and powerful tools. In the main, these consumer tools refer to new communication technologies such as the internet, mobile telephony and peer-to-peer connectivity. Less hyped, enabling technologies such as increasing digital storage capacities (i.e. the ability to access, store and transfer large volumes of information) are also critical consumer tools.

While each of these technologies no longer represents stirring news on their own, none of them should be underestimated in terms of the lasting social change that they are introducing. They have the capacity to leapfrog technology generations, connect previously isolated areas, enable the connected portion of the planet to communicate and they provide access to an ever-increasing sea of information.

In brand management terms, these tools have created a state of caveat venditor, where markets provide near limitless choices and the consumer is able to control the exchange. If the company cannot respond, a raft of alternatives is just a mouse click away.

Of particular concern for brand managers is that traditional systems of trust and relationship building are changing at alarming rates. The current generation is the first to be exposed to an endless landscape of sources of trust and the ability to bypass middlemen. As recent as the late 1980s, for example, there were only a few widely acceptable sources of news. Now, news is available from numerous providers, aggregators and commentators—whether in the form of traditional institutions, blogs or others. Indeed, many consumers of news have also become commentators and publishers in their own right.

5.2 A gathering storm
In strategic and brand terms, this means that segments of customers can band together—practically overnight—and shift organizational decisions, in a way that has never been possible before. A few activists can cause years of unwelcome press and lasting grief with court cases against organizations like McDonald’s.⁴ Brand reputations can suffer from reported employment practices in manufacturing assembly plants.⁵ During the construction of this paper, vegetarians united to protest a decision by Masterfoods—makers of Mars and Twix chocolate bars—to use animal rennet in some of its products. The result? Masterfoods publicly admitted that it had made a mistake and reversed the decision.⁶ It is now reported that they are reviewing the broader product range with the diets of vegetarians in mind.⁷

Finally, an illustration involving Apple’s customer base shows the variety of involvement by informal customer tribes over time. From its inception, Apple has attracted an enormously loyal customer base. This was true even during Apple’s lethargic progress in the 1980s.^{8, 9} In those dark days, lore has it that some near fanatical customers even loitered in computer stores to promote Apple products to would-be buyers. Surely this was a welcome if not unexpected asset for Apple at the time.

However, in recent times, that same loyal base has applied pressure to Apple itself—with expert leadership from Greenpeace—to improve Apple’s eco-friendly practices.¹⁰ The success of this orchestrated campaign makes the clear point that no brand can ignore the mobilized wishes of its customer base; particularly a famously loyal one.

The need for transparency and genuineness is not a marketing tool or branding fad. It is not a management theory for organizational development. It is an irreversible fact of business life that every organization must learn to address. This need will only increase as consumer tools improve and as more people have access to them.

Brands can no longer state unrealistic statements of aspiration. The truth is that they never should have done so. Now brands, or at least those that aspire to build valued customer experiences, can only state what the organization can realistically live up to. This requires learning for some, as it is not necessarily the marketing mix that brand managers learned from the era of Madison Avenue thinking.

6. Values—the customer connection
Brand values are one of the more familiar terms used by businesses and brand managers. Brand values are familiar, too, for many customers. This is justifiable, as values are tangible brand management tools to be shared with customers. Organizations should openly state their values and ensure that they are represented in their activities. Simultaneously, customers are able to use the values as benchmarks to evaluate the success of their exchanges with the organization.

Brand values are more resident in the customer domain than identity and guiding principles, discussed previously. Identity and guiding principles are the strategy in flexible form, and help the employees to be the strategy and live the brand. In contrast, brand values are the currency of customer experiences. Each experience can be considered as positive or negative, in a brand sense. Where the brand values are present in a customer exchange and supported by the actions of staff encountered, the transaction can be considered a positive one. In these positive exchanges, the brand is reinforced and the relationship deepens as a result. In contrast, negative transactions occur when the brand values are not evident in the transaction. Here, the customer completes a transaction (or aborts it) but has a less clear understanding of the brand and its position.

Brand-based organizations would do well to treat these measures of brand values as importantly as they do other measures of success. This is because the degree to which brand values are communicated is directly related to how much the consumers buy into the actions of the company and its longer-term perspective.

7. Putting it all together—a case study
The mobile telephone company, Orange, provides an excellent case study for review. Orange was a fast growing, brand-based and industry-in?uencing organization, particularly in the mercurial heyday of 1994–2003. It was the last of four players to launch in the crowded UK market and was heavily dependent on a differentiated position. From this unlikely position, Orange proceeded to excel at providing excellent customer experiences.¹¹

Like many organizations, however, Orange also faced a number of operational issues, internally and externally. Some examples included dealing with interdepartmental rivalries, supplier inconsistencies, overcoming the communication needs of a large employee base and management and staff mismatches at various levels. Again, these are common issues that many organizations face. Orange, however, was able to regularly overcome these issues, or at least manage them, by demonstrating its strong sense of organizational purpose and by encouraging employee engagement with the brand. The brand values were thoroughly incorporated into the entire organization—product development meetings, personal development, employee achievement citations and much more.

During the period mentioned above, a strong sense of understanding and awareness existed in the organization. It would not have been out of place for a highly technical meeting on telecommunications platforms and infrastructure to close with a discussion on how to make the chosen concept look and feel Orange. Further, the senior team, and in particular the CEO, regularly and personally conducted visible deeds that reinforced the values. These deeds were visible to the organization and were passionately recounted, until they became symbols of the organizational identity. They developed into rich seams of company lore that were ardently repeated.

Below are two examples from the period which illustrate:

• one employee’s personal interpretation and application of brand values; and
• how senior management deeds can build lasting, purposeful narrative.

7.1 Doohickey Day
Many technology companies face a challenge in getting the marketing team to understand the technology team and vice versa. Communications between the two groups can become sterile, even where best intentions are present, normally due to a lack of understanding between the two groups. Orange was no exception. A unique solution for Orange was developed, however, by one of its engineers. He created a forum for sharing technical developments in an engaging format, which the marketing team would appreciate. The concept was called Doohickey Day, named for the way that engineers in the Dilbert cartoon strip sometimes convey key technologies to their colleagues.

The forum consisted of engineers who would present innovative and upcoming technological concepts to a crowd of (largely) marketing people. The attendees all sat at round tables, each with a large red button in the centre. Each button played a unique sound when pressed. When speaking, the technology presenters were not allowed to use acronyms or jargon to describe the concept. If this did occur, the attendees could “buzz” the speaker by pressing the red button. At the end of the day, the speaker who had the most buzzes against him was given a penance. The penance? They were made to work in the marketing department for a day!

This process tackled an age-old issue of inter-department communication, but did so in a way that was engaging. In fact, the whole exercise was straightforward, refreshing, dynamic, honest and friendly—reinforcing the ?ve espoused Orange values.¹² Most importantly, the concept was created out of an employee’s personal understanding of how the brand values could be applied to solve an internal issue. It is just one of the many ways that an internal brand management focus helped to signi?cantly in?uence the workings of the organization and ultimately, the services that were developed for customers.

7.2 Customers missing in the boardroom
A second example focuses on just one visible senior management deed that carried particular resonance throughout the organization. It involved two members of the Corporate Strategy team, who were tasked with presenting a concept to the Executive Board. While presenting the early portion of a PowerPoint presentation, the CEO, Hans Snook, thanked the two strategy representatives for their effort and asked them to leave. The presenters quickly pointed out that they were not finished and that they still had more pages to discuss. Mr Snook replied that given that they had already presented a number of pages and that they had not yet mentioned the customer, they were indeed, finished. The embarrassed presenters duly left the now silent boardroom.

The impact of this brief episode was immediate and far-reaching. First, it concentrated the minds of the strategy team for that particular presentation and for every subsequent piece of work undertaken. Second, the board members too took away additional insight that day into how the CEO was absolutely determined to represent the customer at all costs.¹³ Finally, stories about that day meandered throughout the organization, establishing a firm body of lore about the importance of remembering the customer and it served as a constant reminder to the whole of the company.

7.3 Talent-spotting
Readers might see these two examples and look for the role of the brand manager in both, for neither example is a result of a brand-led, marketing initiative. One example cited the insight of a single employee and the other referenced the strong personality of the CEO. Nevertheless, the role of brand managers is still key in both. The stories show the underlying need for brand managers to recognize when brand values are being enacted and to support and endorse these activities. Eventually, support from brand managers with regard to Doohickey Day, helped it to grow from a small gathering of people to a highly engaging exchange for hundreds of attendees. Separately, brand managers religiously built the CEO’s insistence of putting the customer first in every communication exercise.

Brand management in these instances did not translate into the clever invention and leadership of a specific project. Actually, it required the wisdom to locate good values-based examples when they occurred and the dedication to support them thereafter.

7.4 Bene?t for the customer
The Orange example is also beneficial for seeing how the brand values were reiterated externally, in customer exchanges.

From the outset, Orange presented an interesting proposition that people wanted to be a part of. At launch, in 1994 for instance, no product-specific materials were used. Instead a broad brand-awareness campaign was built, in an industry that was woefully lacking in powerful consumer brands. It hinged on the phrase the future’s bright, the future’s Orange, a phrase that is still immensely popular today and which is politely modified with wordplay in media coverage. Below are some examples of how Orange reinforced the five brand values, particularly in circumstances of customer experience.

7.4.1 Friendly and straightforward
The values of friendly and straightforward were in widespread use at all Orange touchpoints. Innovative solutions at that time are now readily recognized as industry standards. These included uncluttered shop environments, a reduced number of simplified talk plans and the absence of technology in all advertising. Customers readily bought into a lifestyle concept instead of making independent, product-based, purchasing decisions. Presentation material relied on brief, but clear phraseology and powerful, supportive images. This approach was in complete contrast to an industry that was technologically oriented and rife with complex explanations. Philosophically, the friendly perspective was internally viewed as a child leading an adult into a safe and rewarding future. Thus, advertising often used children’s concepts such as bicycles and kites, or simple line drawings to explain services.

But even the name Orange, while highly respected today, was seen as innovative and unusual. Practically every operator name at that time featured some aspect of mobile telephony—words like phone, net or cell—and thus, emphasized technology. A few company names existed outside the technology sphere, but the companies failed to market themselves in a non-technological way. Today this use of a company name to distance the organization from mobile technology is in widespread use—Wind, Blue, O², 3 are some speci?c examples—but the process began with Orange.

7.4.2 Honest and dynamic
These values were reiterated in several specific and unique offerings for the industry. Per-second billing and caller identification represented the initial manifestations of honesty and dynamism. Until the arrival of Orange, mobile users paid for minutes or portions of minutes even when using the mobile to make a call of only seconds. The concept of caller identification was unthinkable. Now, per-second billing and caller identification are world-wide industry standards.

Other industry-leading examples included the Orange Value Promise, which gave customers the chance to use other operator tariffs on the Orange network if desired and the Orange Network Promise, where credit was given to users who experienced network connectivity issues.

Orange also influenced the analyst community. Prior to the arrival of Orange, operators were fixated with average revenue per user (ARPU). While ARPU was, and still is, a critical measure, Orange was nevertheless able to introduce the concept of Customer Lifetime Subscriber Value (CLSV). This was a measure of APRU and customer churn, which expressed value over the lifetime of a customer relationship. The analysts of the industry lauded it, as it suited the long-term payback nature of mobile network investment.

Most importantly, honesty was evident in customer relationships. For example, telephone-based customer service staff would willingly indicate to customers when it was felt that they were paying too much by subscribing to the wrong tariff. Customers, pleasantly surprised, would happily migrate to the lower-priced tariff, but thereafter feel inclined to stay with the network longer, underpinning the CLSV perspective above. This is an example of how an extensive internal focus on being the strategy and living the brand ensured that the customer expectations were not just met, but very often exceeded at each exchange.

7.4.3 Refreshing
Collectively, the Orange position represented a refreshing perspective for the industry. Technology was relegated, customer needs were emphasized and communications were clear, but concise.

Moreover, the organization expressed an ability to see beyond its services and even developed the ability to laugh at itself. A good example of this phase was in a run of print advertising which listed activities that could be accomplished with the mobile switched on or switched off. Separately, cinema advertisements of the fictional Orange Film Board reinforced a refreshing perspective. Here the ‘board’ cheekily pitched bogus film scripts with the mobile phone as the star, before stating the core message of Don’t let a mobile phone ruin your movie.

8. Final caution—be careful what you wish for
Striving for excellent customer experiences is what Orange sought and is what most organizations seek. It is difficult to achieve and maintain excellence, as this paper has indicated. Worryingly, however, there are some additional, and perhaps unexpected, pitfalls for successful brands.

Great brands attract talent. People want to be associated with them. They sense the opportunity to display their abilities. Over time, however, great brands attract idlers, too. Idlers are those people who are good at doing very little, surviving instead on the efforts of the people around them. For them, there is less to do in a successful company. They can be more difficult to locate, and they share in a larger reward than if they worked in a lesser organization.

Great brands can also suffer from too much of a good thing. Messages which are constantly stated, but are poorly reinforced by actions, can lead to traits of arrogance or complacency in the organization. Soon, the once valuable programme of community building is perceived as nothing more than corporate propaganda. Sadly, an unending diet of statements, without positive reinforcement, can bring about a culture that is at odds with the brand position that is being espoused.

Finally, great brands can be poor at knowing when the period of success is over. No organization is excellent forever. In fact, the life expectancy of organizations is quite low, according to Arie de Geus.¹⁴ While at Shell as Head of Planning, he searched for benchmarks from other organizations that were, like Shell, at least 100 years old. Interestingly, he and his team found only 40 firms of that age. They concluded that organizations could indeed last longer, but that many of today’s company systems do not nurture this kind of tenure. The result of shorter-term systems is that most organizations will eventually face fundamental change. This could be in their market-place, political system or in the loss of a leader. Each of these examples indicate a need to reevaluate the emphasis in strategy and brand management. The issue here is that while poor and average organizations live in a very real world of knowing that the end could occur at any time, successful organizations are often blind to anything other than business-as-usual expectations.

Conclusion
This paper has discussed brand management and the customer experience. This has been done not by dissecting brand management into its specific components, but by illustrating the robustness of brand management when placed appropriately in an organization. The paper has also highlighted the need to supply employees with tools—identity and guiding principles—to interpret and personally apply organizational attributes. Among other benefits, these employee tools help to breed a consistent and high quality customer experience externally. Both customers and organizations can determine the overall worth of individual customer exchanges by the presence of brand values.

Finally, it is worth reiterating that people are the key ingredient in any branding effort. It is the actions of people inside an organization that feed the experience of those outside the company. The journey of providing quality customer experience is long and can be arduous. It begins at the heart of an organization. It begins with employees who are being the strategy and living the brand.

Notes
1. O. E. Williamson and S. G. Winter: The Nature of the Firm: Origins, Evolutions and Development. New York: Oxford University Press 1993.
2. N. Ind: Living the Brand, 2nd ed. London: Kogan Page 2004.
3. SMART: a popular mnemonic to recall best practice for constructing Objectives. It states that objectives should always be Strategic, Measurable, Achievable, Realistic and Time-based.
4. McDonald’s Restaurants v. Morris & Steel (1999), colloquially known as the ‘McLibel Case’, which, despite the label, McDonald’s successfully argued.
5. Consider the accusations placed on corporations by corporate critics such as Naomi Klein (No Logo) and Michael Moore (Roger and Me, Fahrenheit 9-11, Bowling for Columbine). Consider, too, the resulting difficulties that can occur when trying to defend against same (e.g. establishing the difference between political speech and corporate speech in Kasky v. Nike, Inc. (2002) 02 C.D.O.S. 3790).
6. See www.masterfoodsconsumercare.co.uk/veg_status.asp: ‘At Mars UK we recently changed the source of some of the whey which is used in some of our chocolate products. We have received lots of feedback that this decision has made it difficult for some of you, especially those of you who are vegetarians, to continue to enjoy our products. We made a mistake. We apologise. The consumer is our boss. Therefore we listen to you and your feedback. As a company we value openness, honesty and diversity and we believe that anybody should be able to choose freely from our range of chocolate brands. But being sorry isn’t enough. Therefore we commit to you today, that we at Mars UK will ensure that a selection of your favourite brands—Mars bars, Snickers bars, Galaxy and Maltesers, will be suitable for vegetarians in the near future. To this effect we are starting to change our manufacturing process today. We will keep you informed of our progress against this commitment through regular updates on this website. Please accept our apology and keep talking to us.’
7. See the statement of Dr Annette Pinner, Chief Executive, the Vegetarian Society, at www.vegsoc.org/news/2007/mars.html, May 21, 2007: ‘The Vegetarian Society’s door is always open to companies seeking to better serve vegetarians. A Masterfoods representative has made contact with us and we are very pleased that they now recognise the importance of integrity to all their customers, especially vegetarians. We cannot endorse any planned actions by the company until we receive detailed assurances about the ingredients and processes involved in production but we are delighted that Mars UK has been honest enough to mark the beginning of National Vegetarian Week by admitting that it made a mistake. The best thing they could do now is, of course, to take up our accreditation scheme and earn the right to brand their products as Vegetarian Society Approved.’
8. L. Kahney: ‘Mac Loyalists: Don’t Tread on Us’, Wired, December 2, 2002.
9. S. Captain: ‘Fans Storm Apple’s 5th Avenue Store’, Wired, May 19, 2006.
10. The successful and award winning Green My Apple web-based campaign organized by Greenpeace is now archived. This weblink tells the story of how Greenpeace enticed the Apple customer base to influence the organization’s green policy: www.greenpeace.org/international/news/greening-of-apple-310507.
11. Orange gained the top ranking for customer satisfaction among mobile phone contract customers in the annual J. D. Power and Associates 2005 UK Mobile Telephone Customers’ Satisfaction Study, seven times in the period 1998–2005. In October 2005, Orange won the Mobile Choice Consumer Awards—voted for by readers of Mobile Choice magazine—for Best Network Operator for the fifth consecutive year. In the same month, Orange also won Best International Mobile Operator at the World Communications Awards.
12. Today the Orange.com website cites these five behavioural values alongside three additional values that describe the reputation it seeks: trusted, innovative and responsible.
13. A brief synopsis on Hans Snook, his business philosophy and his time at Orange is in C. Langdon and D. Manners: Digerati Glitterati: High-tech Heroes. Hoboken, NJ: Wiley 2001.
14. Arie de Geus worked for Royal Dutch–Shell for nearly 40 years. His book introduces the concept of treating companies like living work communities. It is regularly short-listed as one of the best management books of all time. A. de Geus: The Living Company. London: Nicholas Brealey Publishing 1996.

Note: This is a post-peer-review, pre-copy-edit version of an article published in Journal of Brand Management, vol. 15, 2007, pp. 102–14; published online October 9, 2007. The definitive publisher-authenticated version, ‘We the People: the Importance of Employees in the Process of Building Customer Experience’, is available online at: www.palgrave-journals.com/bm/journal/v15/n2/abs/2550123a.html.

Jack Yan
CEO, Jack Yan & Associates, PO Box 14-368, Wellington 6241, New Zealand
jack.yan@jyanet.com

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Executive summary
Successful brands on the internet depend on certain ingredients. And unlike offline brands, the process surrounding vision, research, exposition and image differ slightly, even if the ingredients of brand equity remain the same. Importantly, a loose vision, informal research, and tapping into consumer advocacy all help build a strong brand on the internet. All these additionally contribute to whether a brand has acquired secondary meaning in a legal sense, although the existing test needs to be reconsidered.

1. Introduction
Despite some major texts on branding in the last 10 years, from Wally Olins’s The New Guide to Identity,² to Nicholas Ind’s Living the Brand,³ and the Ind-edited Beyond Branding,⁴ branding is a very divisive field. Few have done studies to connect the organization’s vision to business performance, which this author did in 1999, and the majority of companies have still failed to appoint marketers to the boardroom. Meanwhile, others are leading the cutting edge of branding, such as Stefan Engeseth with his new work, One.⁵ There is little bridging research into the integrated marketing communications’ model and the cutting-edge, consumer movement papers; and certainly very little on how brands can be built using the internet.⁶
Before delving into this paper, it is useful to cover what branding is. As outlined in one of the author’s earlier papers,⁷ it may be thought of as:

the methods in which the organization communicates, symbolizes and differentiates itself to all of its audiences.

The word branding has altered in meaning, even amongst the experts such as Olins.⁸ Traditionally, the ‘brand’ was part of ‘identity’, which may be defined as:⁹

the explicit management of all the ways in which the organization presents itself through experiences and perceptions to all of its audiences.

The brand was merely the part of this management that was directed at a consumer, or an audience member, external to the organization.

However, perhaps through media coverage and Naomi Klein’s seminal No Logo,¹⁰ which questioned the ethics behind branding, the word brand entered the vernacular. At the same time, the branding model evolved somewhat: Olins began touting the brand as an ‘attitude’ that described the organization,¹¹ and branding consultants became a little more obsessed with the message being sent to consumers, perhaps in the wake of No Logo. It, therefore, became important to make sure that the vision of the organization took into account the message it would send to consumers as one of its earliest steps, and to make sure what was being communicated inside the organization was identical to what was being communicated outside. The word brand began taking on the meaning once given to identity.

This coincided with another development: the “mainstreaming” of the online world. With consumer input now being sought readily for things such as product development (e.g. online surveys became common and were thought of as a means through which the most current data about the market-place could be sought), and consumers themselves becoming powerfula dvocates for brands (spreading good news via emails, or indeed, bad news), there was less of a distinction between the marketing departments of organizations and the customers themselves.

Therefore, the branding model began looking quite different. Once, organizations could depend on training their staff to tow the official line, expressing the brand in the way dictated by head office. But consumers could not be managed in the same way. They needed to be incorporated into brand-communication decisions, either by (a) inspiring staff members and getting them to work so closely to consumers on the hope of “infectious enthusiasm”, or (b) turning those consumers themselves into a de facto marketing department.¹²

There are good examples of each. The former group is typified by companies in Ind’s Living the Brand,¹³ notably Patagonia. The sportswear company has staff that use its products, while consumers are prepared to talk up its goods. The latter group includes many of the networking services on the web, including LinkedIn (www.linkedin.com). Arguably, the initial growth of Yahoo! (first built while its founders were still at Stanford University), Google (which uses its user base to spread news of its new products), and Flickr (which is being found by web users frequenting blogs and similar services) could be credited to the second method. The author refrains from using the viral marketing term here, largely because it has become hackneyed.

But how does this online growth actually happen and how does it contribute to the strength of a brand? And if this happens, can the internet truly impact on brand equity¹⁴ and related issues, such as providing a brand with secondary meaning¹⁵ in the eyes of the law?

2. The branding process
The logical place to begin is in the regular branding model.¹⁶ The brand begins with a vision, or, indeed, a slogan (if it is far-reaching enough to guide the whole organization). The important things are that the vision is unique and able to summarize the organizational “attitude”. Audiences learn of the vision through such things as the logo and the communications that surround it. These should ideally express the brand’s attitude. They form an association between the symbols such as the logo and the values of the organization.

As stated in an earlier paper, ‘Semiotics are key’:¹⁷

Symbols, logos, etc., signify certain things that form mental pictures in our mind when we interpret them. [A branding] campaign ensures that the correct pictures are formed and that incorrect or earlier ones are replaced.¹⁸ Repeated exposures reinforce meaning, which is why consistency in branding is important.

This leads to brand equity, which is the added value that a brand endows a particular product or service. The author wrote of its consequence:¹⁹ ‘As audiences—whether they are shareholders, future customers, students or any other group—select or think of the brand more frequently, they ultimately contribute to the organization’s business performance in economic or strategic terms.’

Online, the psychological process remains largely the same. In 2001, when the author last explored online brands,²⁰ there were more audience members specifically seeking certain companies’ products and services on the web. Other than online advertising, many web-based brands were not discovered unwittingly, unlike many that appeared on television or in print. However, there was an indication that this was changing as the web became more commonplace.

2.1 Online brands today
It is almost difficult to remember how western business was conducted without the internet and the World Wide Web. The web is often the first destination for any researcher today, for instance.

But there is still no follow-up from the author’s earlier work on how some online brands capture the public’s consciousness and others do not. Most people discovered Google, for instance, through referrals. (At the time of the earlier paper, Google was still unknown, although the firm existed.) Blogger.com, the service that enables web users to maintain public online journals (web logs, or blogs), spread through its logo appearing on the blogs it hosted on the internet—and gained a secondary meaning as a result. Yet other brands remain online, and have done so for years, without influencing the public.

It may be easy to say that Amazon.com, for example, was so revolutionary that by being first-in-sector, it gained mainstream media coverage. That may be so, but there are other ventures that were firsts in their sector that never received that coverage—Fashionbrat, for example, was New Zealand’s first online fashion magazine, but has become forgotten beyond this author’s own coverage. Even some of the first fashion magazines on the internet in Australia (Marie Claire, Fashion Australia) and the United States (Fashion Internet) never captured huge public attention and do not survive today. Something else must be at work.

The author’s earlier work²¹ illustrated that there were some strategic and structural differences between successful online firms and successful offline ones.
Vision. Visions were more fluid, so ventures that were defined too tightly failed: Pets.com and Boo.com, which admittedly had other issues, were defined narrowly and could not shift into new businesses when their original failures became apparent. At the time, the author cited one of his own properties, Lucire, which has survived as a web site and online magazine; while the other two businesses cited have changed only because of changes in their founders’ personal lives. Up to the times of their changes, they had survived well, based on a “loose” vision. By equal measure, Amazon.com survived by branching out from books to DVDs, toys and even lawn furniture.

One issue that was apparent in 2001 was the need to have corporate citizenship. This shift toward more socially responsible firms has become stronger in the last few years, with greater awareness of “anti-brands”.²² Internet audiences tended to be more alert to these anti-brands, some preferring products from entrepreneurial, independent firms.
Research. The earlier research also illustrated that there was a lower-cost and shallower research process, with online entrepreneurs willing to begin their ventures on instinct and relationships with other organizations and customers. Successful online firms were willing to employ modern communication techniques.
Exposition. In communicating the brand, the organization partners with others to help it get its word out. Independent contractors, freelancers and other web sites (through links, and, today, mentions on blogs) become “advocates” for the organization. Those that began offline tended to retain the same brand. (Exceptions exist, such as Condé Nast’s Style.com, the online version of Vogue, though that can still be reached in the United States via Vogue.com.) They also tended to be global in their approach, quoting, for example, US dollar prices, despite their location, and made little use of their own country’s symbols. They also attempted to use as much offline media as possible.

To reach the public, they relied more on below-the-line marketing, and not above-the-line. Part of the reason is budgetary, but they also managed to put out distinctive products or services. The successful firms examined tended to have a more personal and positive “attitude”. They made use of a cynicism against big business to their own advantage.
Image. No changes to how brand image—the consequence of branding—were found between offline and online firms. In other words, all the “hard work” is done earlier, with the results of a strong brand—image, business performance and secondary meaning—unaffected by the medium.

Two brands today may be instructive, as their growth is happening at the time of writing and are considered successes by the media. One is Flickr.com, a photograph-sharing service recently acquired by Yahoo!.Its growth has been gradual, but it shows that a company that did not have a huge marketing budget can become an integral part of the web. (At the time of writing, Flickr has 158,000,000 hits on Google, while a search for “US Supreme Court” results in 37,400,000 hits.) If it follows the pattern of Yahoo!, Google et al, which it is expected to,²³ it will become a normal way for people to share digital photography.

A second brand, which is more fleeting, is the name of a movie. New Line’s Snakes on a Plane, starring Samuel L. Jackson, began pre-production in 2005. The name was mentioned on a blog in August 2005, and its star insisted that the film be called that, after the studio attempted to change it to a more generic Pacific Air 121. Because of its odd name, it began circulating around the web, mostly with bloggers. By the end of the year, Wired had published an article about it in its print edition,²⁴ and unauthorized cups, T-shirts and even a blog (Snakes on a Blog) had been created. Some even went so far as to say that snakes on a plane had become a common phrase akin to ‘C’est la vie’ and had input it into the Urban Dictionary, a site where colloquialisms and slang can be entered.

The buzz was so strong that New Line went back to the studio to shoot for five extra days to satisfy fans.²⁵ A fan-designed logo even became the official logo for the film, to be released in August 2006.²⁶ One news source even believes that a parody line that appeared on a blog will make it into the film.²⁷

Finally, it may be worth considering Google, since it was not as strong at the time of the earlier study. An upstart search engine is now the primary search engine on the internet, with 80 per cent of searches for the author’s own web site coming from it. Google has branched from its core search service into Google Earth and Gmail, neither of which would appear, on the surface, to be connected to finding information. Google Ads has become a force in the online advertising arena, and might be influential enough to branch into offline advertising.

These three represent three very different parts of the web. Flickr is part of the much-vaunted ‘Web 2·0’, which in a layperson’s terms is a more interactive evolution of the World Wide Web where everyone has a chance to create their own dialogues, networks and web sites, with richer user experiences.²⁸ Snakes on a Plane is an intentionally fleeting choice: it was not set up as an online venture per se, and is merely reflective of a conversation taking place on the web. Google is well known and began as a single application in the time of Web 1·0, but is adding services (and has added services) such as Blogger, representative of Web 2·0.

2.2 Do they fit into the branding scheme?
2.2.1 Flickr.com

Flickr’s offering, however, is simply stated. It is a photo-sharing service, with a difference: it allows users to tag their images, thereby ordering them under different topics. Those searching for images for tsunami, for example, will find all photos with that tag, regardless of photographer. Prior to that, photo-sharing services tended to be grouped by users, so they were shared only as far as one user was able to spread the word.

The idea, perhaps, is not new. Del.icio.us, another Web 2·0 service, allows users to group blog posts. Professional photo libraries have been grouped using keywords. Flickr democratized not just the library, but the ability to create those keywords—tags under the latest parlance. The difference was that there was an intent about sharing, and the site is typical of the “social media” made possible by the internet.

But on the surface it appears to be a well defined company with a single offering, enough to tempt Yahoo! into acquiring it. (Google was reportedly interested, too.) However, the original vision was not necessarily of this service.

Flickr co-founder Stewart Butterfield, suffering from food poisoning, had a dream about a multi-player game ‘built around sharing photographs.’²⁹ The original Flickr site actually centred on instant messaging with some digital photography support. Early members were gamers and bloggers, with an interest in photography. Butterfield made use of Flickr’s loose vision to emphasize the strength that was emerging from its user base: users who were conversing but setting the tone using digital photography in their instant-messaging.

That same looseness meant a certain level of experimentation, rather than formal research. Flickr noticed where its strengths were by letting users find their own feet and interests.

Flickr does partner with others to spread the word. But rather than through formal alliances, it does this by bringing its users into the fray. Users become the editors for sorting the photographs. In effect, organization and user are on the same side, in an expression of the One principle espoused most heavily by Engeseth.³⁰

Its strongest advocates were its users, and Yahoo!’s own interest came from an email from a ‘Flickr fanatic in Bangalore, India’.³¹ That eventually led to a $30 million deal.

Flickr is now ranked 90th in Alexa, the service that examines where web sites are placed on the web. It can be said to have a strong image, if measured in brand equity terms: it has ever-rising brand awareness, it is positively considered by its users, there is a great deal of loyalty to the service, and its perceived quality is high. The value of its proprietary brand assets—its trademark and intellectual property—may be considered to be high, given what Yahoo! had paid for the company.

Flickr confirms the original criteria set down by the author for a successful online brand.

2.2.2 Snakes on a Plane
Snakes on a Plane is an unusual choice for this paper. It is not a venture, therefore it could not be said to have a vision per se. It is a movie title whose quirkiness led to an initial round of blogging, an article in Wired, and a decision by the studio to shoot for five more days given the buzz on the internet. That prompted more mainstream media coverage.

The author first heard of Snakes on a Plane as Pacific Air 121, when Lucire was first asked to participate in the movie. The studio, New Line, states now that Pacific Air 121 was a working title used to solicit support, though there are claims that it had wanted to change the name to avoid ridicule.

Its Google references have gone up and down since word first got out that Snakes on a Plane was the decided title. Before January 19, 2006, they rested on 96,900, rising to 461,000 by February 1. However, there was a fall from that point: 380,000 on February 5 and 176,000 on February 15. It was New Line’s decision to shoot extra footage that piqued the interest of the mainstream media, and the hits started on an upward trend: by March 25, this had risen to 880,000.

Given there is no “organization” that is called Snakes on a Plane, it is hard to consider if it had a loose vision or not. Perhaps one could say that its producers had an open mind in considering all the attention the film had received on blogs; and that if the vision was “tight”, there would not have been a reshoot. Nevertheless, this inquiry cannot be academically rigorous.

However, other branding aspects can be considered from the perspective of the production company. Evidently, research was informal and inexpensive: the preference for Snakes on a Plane was signalled most by bloggers, not by the studio. Samuel L. Jackson chimed in to say that the title should be retained, but that appears to be a more recent development. Listening and monitoring blogs indicates a willingness to incorporate modern technology in researching how well the Snakes on a Plane title was being received.

The communication of the name has come from not just the studio—New Line pays lip service to it on its web site and snakesonaplanemovie.com, the official site, is barely more than a home page—but from the internet audience. Therefore, the “advocacy requirement” for a successful online venture is more than present—it could even be said now to be Snakes on a Plane’s raison d’être.

The consequences of all this cannot be measured at this time. Providing the interest in the venture does not wane—as it did in February—then Snakes on a Plane will enjoy a sizeable audience. Perhaps with the extra footage, it now will, because New Line was willing to show it would participate in the dialogue with its advocates. Only then can one measure brand equity—whether the brand loyalty is strong enough to be maintained until the film’s release in August.
Snakes on a Plane could be said to be a brand, notwithstanding the absence of a vision. It symbolizes, communicates and differentiates a product. Furthermore, like Star Wars figurines and the like, the Snakes on a Plane name has extended into cups and T-shirts, even if they are not formally merchandised and endorsed by New Line.

But only on certain aspects can one say for sure that Snakes on a Plane fulfils the earlier criteria. However, on those that can be considered at the time of writing, they are met.

2.2.3 Google
There is less similarity between Google and the other two brands examined to date. It is the oldest venture of the three and has received the most coverage. Its name has become so ubiquitous that it is now a verb: to google means to search for something on the internet,³² specifically using the Google web search service.

The history has been dealt with many times before, and is a familiar story: two Stanford University students began tinkering. Larry Page had a fascination for back links pointing to any given web site and built a program to compile them. The offline press began noticing Google as early as 1998. The Google culture, however, was not one of formality. New ideas emerged from Google’s staff and many were implemented, the most famous being Google News. Google never intended to be in the news-editing service, but Google News analysed stories that a web spider found and ranked them on a page of headlines. By 2000, it had introduced AdWords, a keyword-targeted advertising service. Other acquisitions illustrated that Google was not just about search. If it had a tightly defined vision, none of these developments would have been encouraged, let alone see the light of day.

As told by Heilemann in GQ:³³

But beneath the comically clichéd trappings, Google was becoming something interesting—and powerful. Having cut deals with an array of companies, most critically Yahoo, Google was processing more than 100 million searches a day and indexing an unprecedented 1 billion Web pages. Fueling this growth was a relentlessness about innovation. [Founders] Larry [Page] and Sergey [Brin] were openly, brutally elitist when it came to hiring engineers. (Job applicants, no matter their age, had to submit their college transcripts.) In software and hardware, Google’s innovation was remarkable. Using off-the-shelf components, the company was building what was, in effect, the planet’s largest computing system. And its official mission—“to organize the world’s information and make it universally accessible and useful”—extended far beyond searching the Internet.
“I did not understand when I came to the company how broad Larry and Sergey’s vision was,” [Former Novell CEO Eric] Schmidt says. “It took me six months of talking to them to really understand it. I remember sitting with Larry, saying, ‘Tell me again what our strategy is,’ and writing it down.”

At the same time, the boys had fostered an environment that was flamboyantly idealistic. Search was all, profit peripheral, “Don’t be evil” the corporate motto. (Asked later what the slogan meant, Schmidt would say, “Evil is what Sergey says is evil.”)

In short, Larry and Sergey had already encoded the DNA of the company Schmidt was supposed to run. The character they instilled in Google could be summed up in three phrases: Technology matters. We make our own rules. We’ll grow up when we’re damn good and ready.

The boys’ reality took some getting used to for Schmidt. It wasn’t just the dot-com fripperies that fazed him or the dogs trotting up and down the halls. It was the squatter in his office. (The interloper was an engineer frustrated with the bustle in his own shared quarters. After first attempting to evict him, Schmidt gave up and endured the situation for several months.) He also found himself frequently occupied with grounding Larry and Sergey’s flights of fancy. There was the time the boys suggested having Google enter the business of low-cost space launchings. And the time Larry reportedly tried to ban telephones from a new Google office building.

In terms of research, Google relies on the inspiration of its staff. This informality has almost become legendary, shunned by some traditional business experts and praised by those who believe an entrepreneurial style should be maintained by an organization. At its first post-IPO investors’ meeting, Google was so informal its chef wound up explaining the food on the menu—a move heavily criticized by the Wall Street establishment.

Its growth did come from people spreading the word about the search engine. The initial 1998 press came well before Google secured large financing, and was a direct result of everyday users. Given that the late 1990s and early 2000s saw a dot-com downturn, Google weathered this thanks to users spreading the word and, of course, through delivering a quality service.

Its brand equity is strong. The initial public offering, according to CNN, indicated a worth of $24 billion in 2004.³⁴ Its brand loyalty and perceived quality are high, given that rivals have not managed to dethrone Google. Brand awareness can be little higher—Alexa ranks it at no. 2, behind Yahoo!. Google was found to be a top brand according to Brandchannel,³⁵ while branding shop Landor found it in second but predicts a Google win for 2006.³⁶

There is some negativity relating to its more recent developments—offering Red China a censored version of its search engine, Google.cn, for instance³⁷—but not enough to signal that its image has been tarnished in a major way. Again, only recent events have indicated that Google is anything but a dynamic, entrepreneurial and almost anti-establishment firm—even if its founders are multi-billionaires who have the financial worth of the establishment.

Google also confirms the author’s earlier work on the ingredients of a successful online brand, though it may be useful to examine the consequences of its most recent actions in Red China with Google.cn. The Chinese market itself may opt for other services should the political climate change and the people enjoy greater freedom.³⁸

The three brands examined also illustrate that while the author’s earlier work was directed at Australian and New Zealand enterprises, the rules apply in the United States, too. Indeed, the author advances that they are universal, given the global nature of the internet and very similar online browsing habits between all cultures and creeds.

3. Secondary meaning
It may be worth, in a legal inquiry, to see if the online branding model can endow a brand with secondary meaning.

Traditionally, brands have acquired secondary meaning through ‘advertising or massive exposure’, establishing a trademark ‘in the minds of consumers as an indication of origin from one particular source.’³⁹ Tyndall offers a fairly standard explanation:⁴⁰

A descriptive name, word, term, or mark will have achieved secondary meaning when a significant quantity of the consuming public for the goods and/or services in question understand it to refer exclusively to a particular party. …

Courts examine the following factors in determining whether a name, word, term, or trademark has acquired secondary meaning:
1. The length and manner of use;
2. The nature and extent of advertising and promotion; and
3. The efforts made in promoting a conscious connection between the name, word, term, or mark and the product, service, or business in the minds of consumers.

It is accepted that the antecedents of branding, even in an offline model, do not necessarily provide a brand with secondary meaning. This is usually due to insufficient exposure.

In the internet world, where there is a potential global audience, do the standards for secondary meaning differ? The three examples in §2 can be said to have acquired secondary meaning: they cannot be mistaken either for anything else or having been from anyone else but their creators. They had got there without heavy (conventional) advertising or promotion; instead, it was their user bases or fans that propelled them into the minds of consumers in their market-place.

Indeed, an inquiry into the length of use may be less applicable on the internet: Snakes on a Plane has been mentioned only since around August 2005 and has managed 880,000 hits in Google (in seven months). The internet is not the only place where timeframes are more compressed than they were many decades ago: the same pattern can be found in new product development and in the product life cycle.⁴¹

Only the third factor quoted above may be said to have relevance in an inquiry about secondary meaning in online branding.

One approach may be to obtain Alexa statistics of all web sites, making a judgement on each one to see where a cut-off point might lie between online brands that have acquired secondary meaning and those that have not. However, this may prove unreliable: there are offline brands that have ventured online that have a low Alexa ranking⁴² but possess secondary meaning, such as the New Zealand clothing brand Karen Walker.

The best approach is to examine, instead, how well linked they are on the World Wide Web. As advocates will post about their favourite brands, and provide links to them—especially in the age of citizen media or social media—they will get picked up by search engines.

Google, which ranks sites in its index through an algorithm, is best placed as an analysis tool. The algorithm includes a consideration of how many web pages link to a particular site, and even how credible those pages are. It is partly based on web traffic. Further, it is an international consideration, of consumers worldwide, although given the United States’ position as the leading nation on the internet, there will be more American viewpoints covered. It is also, fortunately, independent: no one person can influence the Google algorithm, even if some lawsuits have been started over it.

Flickr, Snakes on a Plane and Google are all unusual words or terms, but Amazon is not. A search for Amazon does not come up with the river, but Amazon.com, the retailer, first. The first mention of the rainforest is the third site. Only two in the top ten do not refer to the retailer. Within its market, it is highly unlikely anyone would consider Amazon to relate to any other organization but Amazon.com.

In short, if a brand has met the criteria from the author’s earlier paper, summarized here, then it can qualify as a ‘strong online brand’. If, in addition to this,⁴³ it has achieved some success in the Google index, then a future court should regard it as having acquired secondary meaning.

4. Summary
Organizations cannot expect to employ the old, offline rules of branding in an online sphere. But at the same time, they cannot expect that the old rules will apply offline, either.

Importantly, the internet has helped identify consumers who are conscious of corporate social responsibility, and public opinion now favours entrepreneurial-style firms over establishment-style ones. These trends have not changed since the author first examined online branding in a pre-9-11 paper.

But even more vitally, the democratization of media—the emergence of citizen media or social media—has meant that individuals have become brand advocates. Online brands find success through tapping in to their respective advocates, providing them with a “reason to spread” their names. Those that follow these requirements have found success, and some of 2006’s most talked-about brands—new, fleeting and established—have done so, by and large, perhaps unwittingly.

This has an impact on the way secondary meaning is to be considered by the courts, changing drastically any consideration into advertising. This needs to be replaced by a consideration of “chatter” on the World Wide Web, resulting in links or a high Google ranking. Secondly, the consideration into time needs to be altered, as brands can be built on the internet at a rapid pace.

The internet has forced such changes that few organizations can have an offline-only existence, so the processes described in this paper need to be considered in any branding exercise or inquiry into a brand’s or trademark’s secondary meaning.

Notes
1. LL B, BCA (Hons.), MCA. CEO, Jack Yan & Associates (http://jya.net); President, JY&A Consulting (http://jya.net/ consulting).
2. W. Olins: The New Guide to Identity. Aldershot: Gower 1995.
3. N. Ind: Living the Brand: How to Transform Every Member of Your Organization into a Brand Champion, 2nd ed. London: Kogan Page 2004.
4. N. Ind (ed.): Beyond Branding: How the New Values of Transparency and Integrity Are Changing the World of Brands. London: Kogan Page 2003.
5. S. Engeseth: One: a Consumer Revolution in Business. London: Cyan Books 2006.
6. Many of the papers discussing online brand-building are general, without creating a credible model. See, for example, the papers collected at Allaboutbranding.com.
7. J. Yan: ‘Online branding: an antipodean experience’, in Kim, Ling, Lee and Park (eds.): Human Society and the Internet. Berlin: Springer 2001, pp. 185–202.
8. J. Yan: ‘The attitude of identity’, Desktop, October 2000, pp. 26–31.
9. W. Olins: The New Guide, op. cit.
10. N. Klein: No Logo: Taking Aim at the Brand Bullies. New York: Picador 2000.
11. J. Yan: ‘The attitude of identity’, op. cit.
12. Brand managers could well become managers of consumer perceptions some day, helping guide them and feeding them back into the corporate vision. The brand could become a pluralistic “collective of perceptions”, rather than a single idea under the current model. So far, that has not happened, but it is a logical outcome of today’s trends.
13. Op. cit.
14. D. A. Aaker: Building Strong Brands. New York: Free Press 1991.
15. Secondary meaning arises when consumers have come to identify a trademark with its owner over time.
16. J. Yan: ‘Online branding’, op. cit.
17. Ibid., at p. 186.
18. J. Engel, R. Blackwell and P. Miniard: Consumer Behavior, 6th ed. Chicago: Dryden Press 1990.
19. J. Yan: ‘Online branding’, op. cit., a p. 186; q.v. S. T. Cavusgil and S. Zou: ‘Marketing strategy-performance relationship: an investigation of the empirical link in export market ventures’, Journal of Marketing, vol. 58, 1994, pp. 1–21; and R. Dau and P. Thirkell: ‘The relationship between marketing orientation and export performance: further empirical evidence’, Proceedings of the 1996 Australia–New Zealand Marketing Educators’ Conference. Wellington 1996, pp. 369–86.
20. J. Yan, ibid.
21. Ibid., pp. 190 ff.
22. The term is a misnomer, since anti-brands work on the same principles as brands when it comes to the branding process. However, the vision will generally include a rejection of undesirable, unethical behaviour and the embracing of principles including fair wages and the use of sustainable resources.
23. J. McClellan: ‘Tag team’, The Guardian, February 3, 2005, <http://technology.guardian.co.uk/online/story/0,3605,1403974,00.html>.
24. E. Steuer: ‘The best worst movie of the year’, Wired, vol. 14, no. 1, January 2006, <http://www.wired.com/wired/archive/14.01/play.html>.
25. B. Kit: ‘Fan frenzy for “Snakes” is on a different plane’, The Hollywood Reporter, March 23, 2006, <http://www.hollywoodreporter.com/ thr/film/article_display.jsp?vnu_content_id=1002234847&imw=Y>.
26. C. Elsworth: ‘Cult film fans are bitten by Snakes on a Plane’, The Electronic Telegraph, March 25, 2006, <http://www.telegraph.co.uk/news/main.jhtml? xml=/news/2006/03/25/wsnakes25.xml&sSheet=/news/2006/03/25/ixworld.html>.
27. B. Kit, op. cit.
28. Tim O’Reilly of O’Reilly Media Inc. notes the seven ingredients of a Web 2·0 firm as: (a) services, not packaged software, with cost-effective scalability; (b) control over unique, hard-to-recreate data sources that get richer as more people use them; (c) trusting users as co-developers; (d) harnessing collective intelligence; (e) leveraging the long tail through customer self-service; (f) software above the level of a single device; (g) lightweight user interfaces, development models, and business models (original emphasis). See T. O’Reilly: ‘What is Web 2·0’, O’Reilly.net, September 30, 2005, <http://www.oreillynet.com/pub/a/oreilly/tim/news/ 2005/09/30/what-is-web-20.html>.
29. E. Schonfeld: ‘The Flickrization of Yahoo’, Business 2·0, December 2005, pp. 156–65.
30. S. Engeseth, op. cit.; and S. Engeseth: Detective Marketing: Creative Common Sense in Business, 3rd ed. Stockholm: Stefan Engeseth Publishing 2003.
31. E. Schonfeld, op. cit.
32. The author believes the first high-profile usage of the term was in Maid in Manhattan, a film released in 2002. See J. Yan: ‘Branding to youth: the forces at work’, address to Sales and Marketing Executives International, Auckland, New Zealand, March 11, 2003, <http://www.jackyan.com/files/stuff-030311-smeiauckland.shtml>.
33. J. Heilemann: ‘Journey to the (revolutionary, evil-hating, cash-crazy, and possibly self-destructive) center of Google’, Men.style.com, <http://men.style.com/gq/features/full?id=content_422>.
34. ‘Google IPO priced at $85 a share’, CNN.com, August 19, 2004, <http://edition.cnn.com/2004/BUSINESS/08/19/google.ipo/>.
35. R. Rusch: ‘The search is over: Google wins in 2005’, Brandchannel, January 23, 2006.
36. ‘Brands in the news: winners and losers’, USA Today, December 28, 2005, <http://www.usatoday.com/money/advertising/ 2005-12-29-hot-brands-chart.htm>.
37. See, e.g. M. Dickie: ‘Google to launch censored China service’, The Financial Times, January 25, 2006, <http://news.ft.com/cms/s/0cf3fc52-8d0b-11da-9daf-0000779e2340.html>.
38. J. Yan: ‘Yahoo! and Google kowtow—would I?’, Jack Yan: the Persuader Blog, February 11, 2006, <http://www.jackyan.com/blog/2006/02/yahoo-and-google-kowtowwould-i.html>.
39. Black’s Law Dictionary, 5th ed. St Paul: West Publishing Co. 1979.
40. J. M. Tyndall: ‘Secondary meaning’, United States Trademark Law Overview, 2002, <http://home.att.net/~jmtyndall/ustm/secondary.htm>.
41. See, e.g. K. B. Clark, and S. C. Wheelwright (eds.): The Product Development Challenge: Competing through Speed, Quality, and Creativity. Boston: Harvard Business School Press 1995.
42. J. Yan: ‘Online branding’, op. cit., pp. 197–8.
43. The two need to be considered together as the inquiry should be whether a brand has acquired secondary meaning, not a common word or phrase which may appear in the Google index.

This paper has also appeared in CAP Online.

Ian Ryder
British Computer Society
ian.ryder@gmail.com

Microsoft Word version

If you were offered an almost cast-iron guarantee of the route to sustained competitive advantage and a wonderful reputation would you want to know about it? Well let me try to show you what I truly believe is a very simple and easy mantra that makes it possible—but only if your organization truly embraces it as an operating (brand management) practice. Let me begin by explaining something that is really important to understand first, and the reason why the title looks the way it does.

I am very lucky to be able to see quite a lot of academic work and current “think” pieces and for some reason the marketing world, or at least that part of it which purports to write and comment on “branding”, too often makes a misleading distinction between “brand” and “reputation”. The distinction most often indicating that they are independent or can be managed independently—I must address this first so that this article makes sense!

Reputation management is brand management. The only difference is that brand management covers a broader spectrum. I have searched for some time to try and find a usable and easily understood analogy to explain my thinking here, so please allow me to take you through it. Then, as we see how business strategy, derived alongside a set of vision and value statements, is inextricably linked to brand strategy we will see clearly how these impact reputation, why employees are so crucial to that reputation and where the internal and external communications linkages need to be.

I read a paper by a very well known research organization that actually damaged the “reputation” of their “brand” for me! As part of it the author argues, ‘The brand has psychological appeal; reputation appeals to the sense of social responsibility’, which is such a confused expression that if it appeared in one of the Journal of Brand Management papers I was refereeing I would be questioning the author’s understanding of the subject!

My premise is that reputation is to brand as health is to body—allowing for the fact that no analogy is perfect.

Consider: the Body
It is a collection of 6 billion genes manifested in blood, organs, bones etc. all covered up by skin and covered in many places by hair.

The “health” of that body is affected by such things as basic construction of those genes (i.e. luck of the draw actually) but seriously impacted by diet, exercise, sunlight or propensity to drugs, alcohol, tobacco, etc.

“Health” is positively impacted or negatively impacted dependent on how we treat these things and that impact, through our “health management”, will absolutely affect “the body”—it does not exist in isolation. Further, our health is the result (outcome) of the way in which we treat our body.

However, there are things that we can do as part of our “body management” that arguably don’t affect our health, at least nowhere near as directly. We need to cut our hair, manicure our nails or treat our skin with creams to prolong elasticity, youthful looks, etc. (hasn’t worked for me yet though!)

Consider: the brand
It is a collection of lots (not 6 billion!) of “things” manifested in strategies (business, financial, marketing, HR, manufacturing, etc), systems, processes, premises, partners, products, services etc, all wrapped up and “covered” in a brand promise.

In the same way we can take reputation (health) which is also affected by the basic construction (vision, values, culture, operating model) of the business brand (Body) but it is seriously impacted by the behaviour of our people, systems and processes or the way we communicate our attitudes to such things as CSR and customer management. “Reputation” is positively or negatively impacted dependent on how we treat these things and that impact, through our “reputation management”, will absolutely affect our brand—it does not exist in isolation. Our reputation is the result (outcome) of the way in which we treat our brand.

However, there are things that we can or should do as part of our “brand management” that arguably don’t affect our reputation, again, at least nowhere near as directly. We need to manage our corporate identity, trade marks and patents, ensure we have a structured brand architecture and appropriate measurement systems in place.

I know analogies are always open to attack because we can never find the perfect match, but in all my struggles to find one to try and “dispel the myth”, this is so far the best I have found and I hope it makes the relationship clear.

Let us move on then to vision and values. Making these work in any organization is a major challenge and you really should read a book called The Committed Enterprise by Professor Hugh Davidson.1 It is one of the most readable non-fiction books I have ever enjoyed and it presents the results of a very substantial research programme looking at why many organizations fail to implement their vision and values. Two particular tables highlight some keys to success or failure which include:

Failure:
1. Agree vision and values amongst a small group
2. Develop values in a vacuum
3. Keep values vague and don’t measure
4. Allow senior management to flout values
5. Communicate inconsistently
6. Micro-manage the organization brand

Success:
1. Use vision to align and unite stakeholders
2. Establish values that build competitive advantage
3. Convert values to measurable practices
4. Communicate by action, signals and repetition
5. Macro-manage the organization brand

(See the book for the complete list.)

Just this selected list provides so much rich discussion about what impacts our ability to manage our reputation. We will refer to this later to see how the links are made.

Let us consider the more commonly understood primary elements that help to build or destroy reputations. There are three main ones:

• product or service quality;
• customer experience;
• social or environmental record.

Clearly there is a very direct impact on reputation if the physical product bought is of poor quality and fails to do the task for which it was purchased. We have all bought what we think were “bargains” from unknown branded sources only to curse later when the CD didn’t play, or the handle fell off the spade, knife, wheelbarrow, etc. But we also know that even where we are buying a solid, recognized quality brand, there is a large component of “service” in the “total customer experience” associated with that brand—it is not just “service” brands that need to watch out for reputation failures from a service perspective!

Quick example: recently I was looking to replace the Philishave electric shaver that had given me good service for about 12 years—solid product brand experience. I went to several outlets looking for advice on current models and after two experiences in well known suppliers from staff that cared less about what I wanted and knew even less about the product, I was despairing. Then I was walking through Boots (a large retail chemist) and just happened to notice that they had a section containing shavers and, as I stopped to look, I was approached by a lady who asked very nicely if she could help me. To cut a long story short, this lady knew everything I needed to know about the alternatives and handled the interaction so smoothly and in an unpressured way that I bought a model far more expensive than I had originally been considering, and I went away feeling I had enjoyed buying it!

The key morals here are:

• “product” brands often also rely on service to complete the brand experience;
• “channels” are critical and need to be part of your brand management system in order to ensure a consistent, enjoyable brand experience for your customers;
• it was the individual that made the difference.

This is all very self-evident in service businesses where restaurant staff, telephone contacts with such as insurance companies, banks etc. all make good or bad service very immediate. We have all spent much time, I am sure, spreading both good and bad observations around our networks that have either enhanced or detracted from the reputation of those brands!

And so it is that employees, and indeed the wider definition of that, which includes everyone who represents our brand and helps deliver the brand experience that drives our reputation, are absolutely critical to the process. One crushing statistic that I discovered a few years ago in the Journal of Marketing found that in the list of reasons why customers defect, whilst only 9 per cent are lured away by competition, a huge 68 per cent are turned away by an attitude of indifference on the part of an employee!

This is not rocket science! A very simple rule set says:

(a) ensure your employees understand what we mean by a ‘consistent, positive brand experience’;
(b) explain why we need to manage that;
(c) help them recognise and understand their role in that;
(d) engage their commitment to fulfilling their part in the delivery of it;
(e) make the measurement of our performance in achieving it both easy to understand and a matter of public record, so we can see we need to improve, or rejoice that we are retaining delighted customers.

All of the above we now delight in calling brand engagement or embedding.

Which leads us neatly into: what are the links across the organization that contribute to our reputation? Well we have already touched on several, but probably the single most important factor is the CEO of the organization. He or she is responsible for as much as 40–55 per cent of the image and reputation of any corporate brand (depends on which survey you look at), and is also clearly the driver and owner of the company vision and values—note I didn’t say developer of those (refer back to Hugh Davidson’s key failure list).

Common situation: the CEO says: ‘We keep telling them what our vision, values and strategy are and yet I keep seeing employee surveys telling me they don’t get it—how often do they need telling?’ (N.B. this is a genuine Fortune company CEO quote.) The answer of course, is not to tell, but to listen. Listen to the voice of your customers, employees, even your suppliers and respond to that input. Your reputation is created through them and driven by every single experience (moment of truth) they have—it is also instantly changed for the worse but only gradually changed for the better.

So, again, a very short check list:

• from any level of the organization (or brand delivery owner) up to the CEO, the delivery of the brand experience must be absolutely consistent with expected values;
• the “soft”, informal networks are the most true and valuable—listen to them and act upon them;
• your systems or processes must be designed to facilitate customer service and support in line with your values
• measurement systems are crucial. Ensure they are designed to complement and not work against each other—convergent goals. ( Jack Welch, of GE fame, had a passion to create what he called a ‘boundary-less’ culture, which is even further advanced thinking than convergent measurement, but it helped turn GE into the global powerhouse of the 20th century.)

Finally, how do we use vision and values as a route to a strong reputation through alignment of internal and external communications? I refer back again to Hugh Davidson’s list which has communications as the key to either success or failure in the actualization of making vision and values work. Once more this is not difficult although there are many companies out there who try to make it so!

Internal communications
This is not the place to review the myriad tools available to serve internal communications. However, research indicated that the relationship of satisfaction with internal communications and the percentage of those who are prepared to speak highly of the company product or services is seriously connected. On a four-point scale from ‘very low’ to ‘high’, this moves from less than 20 per cent to almost 80 per cent of employees who would speak highly. The jump from the ‘medium’ satisfaction with communication to ‘High’ is staggering though—it more than doubles!

External communications
Again there is a myriad number of ways in which companies “communicate” to their various constituencies, but the key is clarity and consistency. It is no good, for example, espousing a set of values that include care for the environment and then behaving in a way that conflicts with that (one of the problems that the oil and chemical industries have struggled with). In fact, the topic of corporate social responsibility (CSR) has grown out of that very conundrum into a major field of its own. It is not difficult to understand why when you consider just a couple of frightening facts like:

• it has taken only 30 years to consume one-third of the planet’s resources that took 3·8 billion years to make;
• in the past 50 years the world has lost a quarter of its topsoil and a third of its forest cover.

The lesson is, as always, very simple. Do what you say you will do and make sure that the messages being delivered through whichever communication disciplines you have chosen for external audiences, are the same as those being driven internally through training or induction and measurement systems.

Humanity-based strategy
As we move towards the summary, I wanted to share some thinking that began with my esteemed colleagues in the Medinge Group and which resulted in my contribution to our book Beyond Branding. Based around anthropology, this thinking has developed into what I call Humanity-based Strategy (HBS).

Take a look at the four top expectations or needs as expressed by Disney employees and “guests”:

Disney’s vision and values are legendary and they define their “Total Customer Experience” in four elements:

(a) anticipation;
(b) ‘Welcome’;
(c) the Experience;
(d) ‘Goodbye’.

Whichever way you look at this very simple overview, it is quite clear that Disney is thinking about their customers and employees as human beings and for very good reason!

HBS is a very simple, but powerful, concept with just three basic tenets:

(a) people are people first;
(b) manage the reality gap;
(c) create trust and relevance.

Since man descended from the trees we have been driven by a base set of programmed behaviours that always prevail whatever social behaviours we overlay. Your customers’ (and employees’) first reaction to any situation and brand experience will always be the human one—feeling good, or feeling bad. You simply must begin to understand and learn how to manage that.

The reality gap is simply the difference between what you think you are doing to and for your customers and staff, and what you are actually doing—there is always a gap of some kind and this can either be causing you to waste revenue or profit opportunities, or allowing gaps for your competition to enter. Learn what it is and how to manage it.

The two most powerful words in the world of customers: without trust you can have no loyalty of any kind and no “advocation” other than bad press. Without relevance, in both product or service offer and timing, you will be unsuccessful with the sale.

Your vision and values should drive your building and execution of each of these three tenets.

Summary
It has not been possible to address in depth any of the items that I have touched on in this article but I hope you have some pointers to use to examine your own situations, along with some further reading.

Vision and values “fail” in organizations either because of a “flaw” in the vision or failure of the values to create any competitive advantage. However, even if these are not flawed and do lead to competitive advantage, they are executed (and that word has a very interesting double meaning!) by your people, primarily, and supported by the systems and procedures and measurements within your company. It is no good having the best website in the world, easy to navigate, user-friendly and quick, if your distribution process (owned or outsourced) lets you down—your reputation will not survive and prosper!

The last example I will use is, not surprisingly, one that has now moved into the history books as one of the most spectacular: Enron Corporation. It is not my place or intention to question what exactly were Andersen’s values that resulted in the shredding of key papers, the action that was probably more to blame for their “crash” than the questions about their basic audit processes. But it has to be said that if they had been rigorously executing a brand management system, that was linked to the business values and disallowed any such practices because of the reputational impact of failure to conform to values, then they would not have been faced with the disappearance of what was a globally powerful brand. To link back to my opening distinction, the rapidly failing reputation (health) was bringing down the brand (body).

The guarantee!
Lest I fail to do what I am now going to implore you all to do, I did promise to let you in on the six-word secret to sustained competitive advantage through a great reputation and therefore unassailable brand.

Make a promise … keep a promise!

If you just think through what living to this very simple philosophy means, first developed way back in 1987 when I was asked to define brand management, you will realize how powerful it is. A brand is a promise, and a promise is about trust. Your vision and values act as the beacon. Then, using this “mantra” as the guiding principle for the delivery of those will ensure that whatever your business, be it product- or service-based, whatever your channels of selling, support, delivery or after-sales, your incidence of poor customer comment will be so low as to ensure your high reputation is maintained.

Perhaps the last words should come from a gentleman of outstanding credentials (Nobel Award winner) who described, way back in 1937, what business was all about: ‘Fulfilling customer needs via relationships you maintain’ (Ronald Coase: Nature of the Firm).

Says it all really doesn’t it? Good luck!

Reference
H. Davidson: The Committed Enterprise: How to Make Vision and Values Work. Boston: Butterworth Heinemann 2002.