The value of the corporate brand
John Lloyd, 1994
This article was first published in BAT Bulletin, the quarterly magazine of the British-American Tobacco Company.
A company cannot choose whether or not to have a corporate identity. Every company has one. The only choice in the matter is between controlling the identity or leaving it to chance. John Lloyd, Creative Director of Lloyd Northover and corporate identity specialist, takes a look at the importance of a corporate identity and the issues surrounding it.
A company that carefully manages the visual signals and messages it sends to its various audiences will influence and to some extent control the way that people perceive the organisation.
Just as an individual person's identity is composed of a multitude of elements: physical characteristics, clothing, the kind of things a person says and does, so a company's identity is no less complicated.
First impressions count
A corporate identity is how an organisation presents itself to the world through appearances, words and behaviour. Sight is our most powerful sense and so it is not surprising that visual impressions play an extremely important part in influencing how people think about a company.
First impressions really do count. Untidy reception areas, chipped tea-cups, dirty uniforms, poorly presented letters, incoherent sales literature – all these things and many more instantly put an organisation at a disadvantage.
Increasingly, business people, academics and market researchers are acknowledging the power and importance of visual identity in influencing corporate reputation and business performance.
In his book The Imagination, Theodore Leavitt, the Harvard Business School Professor, says: 'Common sense tells us and research confirms that people use appearances to make judgements about realities.'
And Michael Porter, also of Harvard Business School, is on record as saying that: 'A strong sense of corporate identity is as important as slavish adherence to business unit financial results.'
Bob Worcester the chairman of the market research company, Mori, points to the importance of corporate identity when he says: 'There is an almost straight line relationship between product recommendation and excellence of corporate image.'
Corporate identity counts
Many companies appreciate the value of product brands and trademarks and yet still fail to see the value of corporate identity which is the brand of the company itself.
For some companies the product brand is exactly the same as the company brand. Coca-Cola is a product and a company. For other companies the company brand identifies the company only, and has no visual or verbal connection with product brands. British-American Tobacco Company is an example of such a company brand.
Even though it may not be used directly on products, a company brand – the corporate identity – is as important as a product brand. Just as a product brand communicates brand values and brand personality, so a company brand can embody and project corporate values, quality standards and corporate culture.
In other words, if we think of the company as a product then it follows that a strong corporate identity will help it to communicate effectively with clients and others and to project a consistent, cohesive, high quality image in all its territories.
A corporate identity has to be effective in relation to many audiences. For employees it can be a visible embodiment of quality standards and can provide a focus for loyalty, teamwork and corporate pride.
It is also valuable in representing the company among suppliers, business partners, local communities and governments.
Important for new markets
A good corporate identity facilitates the entering of new markets. Before products can be introduced to new territories or joint venture deals can be done the ground has to be prepared and the way smoothed. When Procter and Gamble moved into Eastern Europe a year or so ago, it first did so under its corporate identity banner. The brands then followed.
A corporate identity can help to differentiate a company from competitors; can be subtly, almost subliminally, persuasive and can have a positive influence on the acceptability of the company.
A well-known advertisement, written for McGraw Hill by advertising man, David Ogilvy, made a strong case for corporate advertising that can equally be applied to corporate identity. The advertisement read as follows:
I don't know who you are.
I don't know your company.
I don't know your company's product.
I don't know what your company stands for.
I don't know your company's customers.
I don't know your company's record.
I don't know your company's reputation.
Now - what was it you wanted to sell me?
Moral: sales start before your salesman calls.
A seal of quality
Corporate identity assumes greater significance for BAT as it develops its approach to trade marketing. When the emphasis is placed on service to and partnerships with retailers, the corporate identity becomes more important in signalling and reinforcing notions of excellence, expertise and quality of service.
In recent years some companies have started, to use corporate identity as a seal of quality in direct relation to products. Nestlé, for example, now places its name on the front face of packaging for products such as KitKat. Lever also now strongly endorses its brands like Persil on the front face of packs.
In these cases the corporate identity acts as a guarantee of quality to the consumer. It also claims ownership of these high quality brands and through close association heightens the image of the company.
When used in this way, a corporate identity can provide a platform for the introduction of entirely new products and brands. The corporate endorsement instantly gives the new product credibility and authority.
In some industries, such as consumer electronics, product life cycles are becoming shorter and shorter. A product is barely launched on the market before it becomes obsolete. In cases like this it is the corporate identity that provides continuity, gives reassurance to customers, reflects quality standards and helps to differentiate products that in most other respects are identical.
What is in a logo?
A corporate identity consists of much more than a logo. The design of communications materials, the quality of working environments and the behaviour of employees all contribute to the creation of a company's identity.
But it is the logo that lies at the heart of any corporate identity system and that reflects the corporate character at a glance.
A well conceived corporate logotype is not ephemeral like an advertisement or a promotional campaign. It is a powerful and long lasting communications vehicle that gives value year after year. The best logos outlive advertising campaigns, product life-cycles and even individuals.
From time to time a company will review its corporate identity to ensure its continuing effectiveness.
Sometimes a review results in the development of a completely new corporate identity system – new logo, new colours and so on. But, more often than not, a corporate identity review leads to a strengthening of an existing corporate brand. Over the years Shell has made subtle improvements to its visual identity and is currently introducing revised design standards to its retail forecourts.
Ford, ICI and many other long established companies have also made subtle improvements to their identities over the years.
When you have a famous and well-recognised corporate brand, with much goodwill attached to it, it makes sense to keep it but make it work harder.
If an ambitious company is to seize the opportunities unfolding before it and to fulfil its objective of becoming the global leader in its field, it needs to present a co-ordinated, cohesive and professional corporate identity to everyone with whom it comes into contact.
Looking like the kind of company you want to become is an important step. Getting there will then be a little easier.