There are few more effective ways to send people scurrying for the
sick bag than to have big corporations come out of the shadows and boast
about what marvellous chaps they are.
But, like it or not, this tactic is being used more and more. Nestle and
Kellogg are among many companies now experimenting with corporate
branding. The motives behind corporate campaigns vary widely, but all
are symptomatic of a new-found enthusiasm for corporate
The question is, why are companies doing it and why do they think it
In the current marketing climate, when such a premium is placed on
accountability, it is surprising that corporate branding is receiving
Compared with product-related initiatives, it is hard to measure its
impact and justify its expense. It also seems to fly in the face of
well-documented findings that tell us the modern consumer is
ultra-cynical, especially toward companies with controversial pasts
trying to sell a new, improved image.
So, what are we to make of campaigns such as that from British Nuclear
Fuels, which included lavish TV ads to persuade us of the virtues of
nuclear power, and the ads by Monsanto, trying to explain its work in
genetically modified food? And how about Nestle, which has been steadily
increasing the prominence of the corporate brand across its portfolio?
These companies have very different reasons for leveraging the corporate
brand, but they all think it will strike a chord with consumers.
Camelot is another company to have shown its faith in the strategy, by
appointing Sue Slipman as its first director of social
Having suffered its own ’fat-cats’ brouhaha last year, Camelot will be
looking hard to improve its reputation.
When you consider the external forces acting on companies in all
sectors, the fact that many fall back on the corporate brand is easier
The increasing difficulty of carving out a competitive edge, the cost of
supporting single brands and the pressure for corporate responsibility
from government, action groups and the City all make corporate branding
seem a sensible - if a little woolly - marketing option.
For companies used to the more exact art of brand-led marketing,
corporate campaigns can be fraught with uncertainties.
Kellogg’s recent activities in this area show how hard it can be. It was
persuaded to launch a corporate campaign when, following a Henley Centre
study, it discovered it was the UK’s most trusted brand.
Its ’Serving the nation’s health’ campaign was launched to show Kellogg
as a champion in the fight against teenage anorexia and other
food-related social problems. But just four months later the campaign
was dropped (Marketing, July 16) and now Kellogg is back to
product-related pushes. The official line is that this is part of a
rejig of its European strategy, but this is the second high-profile
corporate campaign to be dropped after ’Mrs K’ was shelved last
November, suggesting to many that Kellogg can’t find a sure-fire way to
exploit the umbrella brand.
Impact of ethics
The increasing influence of corporate ethics in decision-making is one
of the main factors driving the rise of the corporate brand. Jackie
Kavanagh, head of corporate communications programmes at BT, explains:
’Price and technological prowess, product quality and service are
Things like corporate ethics are becoming the real differentiator.
’Customers almost expect you to be doing these (ethical) things and are
happy to know about them. You have to give them information and let them
make their own minds up. People are much more ad-literate than they are
given credit for.’
The time is certainly ripe to attach new values to the corporate
Many of New Labour’s policies will significantly raise expectations
about companies’ behaviour. For example, the government is funding an
ethical trading unit, and there is a new Fairness at Work
Pressure for good behaviour and transparency has mounted through the
Cadbury, Greenbury and Hampel committees on corporate governance. Using
their recommendations, the Institute of Management audits board-level
Mark Hastings, its policy adviser, says: ’Integrity and ethics come
close to the top of the list. For companies to succeed they have to be
perceived to care; it improves the connection between the business and
Sophisticated consumer groups are appealing to an expanding and more
opinion-led news media. Monsanto is directly in the pressure-group
firing line. Last year, when ad agency Bartle Bogle Hegarty began
working for Monsanto, a group of naked protesters hit the headlines when
it took over the roof of the agency’s Soho office.
The reaction of Sheila McKechnie, head of the Consumers’ Association, to
Monsanto’s conciliatory ad campaign shows how corporate marketing can
easily be seen as superficial and meaningless. She says: ’Monsanto will
have to work hard to restore trust after the contempt with which it
treated consumers with its strategy for introducing genetically modified
When a company does something like that it seems to me that all the
propaganda in the world won’t do anything to shift that image.’
Research by Corporate Edge, the new corporate strategy arm of CLK MPL,
suggests she may be right. It found that 65% of respondents supported
Iceland’s decision not to stock bio-engineered foods, and 26% said they
would choose to shop at Iceland rather than another frozen-food retailer
as a result.
Debate will rage for some time about true consumer awareness and
motivation when it comes to how much they favour ethically well-behaved
Paul Edwards, chief executive of The Henley Centre, is pragmatic, using
Tesco’s Computers for Schools programme as an example. ’People know
there is a deal going on. People know there’s a profit to be made.
People know it’s business. They’re prepared to go along with the game as
long as it seems like a fair contract,’ he says.
For Monsanto, BT, Shell and Camelot, corporate branding has more to do
with PR than anything else. It is all about projecting a human face for
a company that has suffered, or still suffers, from a bad public image.
Yes, there are additional benefits from leveraging the corporate brand,
such as motivating staff and pleasing shareholders, but for many the
’we’re not so bad really’ factor is the most important.
For fmcg companies, the motivating factors are less clear, but that’s
not stopping them. As well as Kellogg and Nestle, Cadbury has made a
concerted effort to increase the prominence of its name on all
confectionery and spin-off products and spent pounds 870,000 on the
masterbrand ’Tastes like heaven’ campaign in the year to May (ACNielsen,
Richard Frost, a Cadbury spokesman, says: ’It is certainly important for
us to have people understand what sort of business we are, and research
suggests buying opinions are influenced by what people think of a
company. It is nevertheless very important to remind people that we make
the best chocolate. We are sure that this is the most important thing to
In financial services, Sarah Weller, retail marketing director of Abbey
National, says stronger corporate branding is a logical development in a
market where customers may be confused by the rash of new entries into
the market. ’All the banks and all the building societies sell
everything. And so does Tesco and so does Virgin. What are customers to
make of that?’
Despite this, Weller is sceptical about the effectiveness of marketing
on the Abbey National corporate platform. ’It is something that is
unlikely to be part of our public profile in a promotional sense. It is
kept separate from our commercial activities. We do get PR coverage (of
corporate activities) but not to leverage against the commercial
activities of the bank. In retail, certainly we have said it is key that
this is kept separate, and we won’t use it as a selling tool in the
foreseeable future,’ she says.
One of the main reasons marketers may be cautious is because it is still
so hard to demonstrate its effectiveness. As Jonathan Hall, head of
marketing at Corporate Edge, says: ’Financial directors and chief
executives want to know how they can measure the effect of the corporate
branding exercise. But actually relating something like responsiveness
to public opinion to the bottom line is a very difficult thing to
Maggie Mullen, a senior partner in the valuations section of
Pricewaterhouse-Coopers, says rough estimates can be made: ’You can set
up measures in the same sector looking at those that protect their
image, espouse the brand image and carry it through the organisation to
market and see that they tend to generate higher returns. But it is an
The real bottom line here is that corporate branding is no panacea.
Consumers respond well to companies they respect. This can be in the way
they treat their staff, the environment or simply in being consistent to
long-held brand values. But in many cases this respect is based on the
company’s track record, rather than any communications campaign.
Perhaps the most powerful and effective corporate brand - and one that
stands strong with the minimum of marketing support and expense - is
Marks & Spencer. Its green plastic bag is as powerful a corporate
advertisement as all those glitzy efforts produced by BNFL and BT.
Companies that use corporate branding as an extension of their
crisis-management strategy could find it falls on deaf ears. Using
corporate branding to win back lost consumer trust will quickly fail; it
has to have the equity and goodwill there in the first place before it
can start drawing on it.
And for all those fmcg companies thinking of investing in corporate
branding, think carefully about what there is to be gained and whether
it is not worth letting the brands that built the corporation do the
talking for you.
HOW IMPORTANT IS CORPORATE BRANDING TO YOU?
A Corporate Edge survey of leading UK companies found that corporate
branding is clearly much more important to them (72% said ’very’) than
it is to consumers (45% ’very’).
The majority of companies (80%) said its power will increase in the next
few years. For most, the corporate brand guardian is the ceo (58%) or
marketing director (42%). The car industry appears to admit to a certain
neglect of corporate branding; respondents rated the importance of it to
their own companies as low and a corresponding lack of interest from
FMCG is the least convinced, not believing it boosts sales: 50% of them
said it wouldn’t rise above product branding.
Increasing competition (22%) and the need for a sustainable strategic
tool (21%) are far and away the most popular reasons for increasing
importance to their sector. For their own companies this shifted to
organisational identity and focus (24%) and internal recognition of
corporate brand value (19%). Creating trust scored low on both counts.
The top three corporate brands admired by respondents were Virgin (54%),
Coca-Cola (49%) and Marks & Spencer (30%).
The response rate was 23% from a sample totalling 300.
HOW PIRC MADE SHELL REVIEW ITS CORPORATE BRAND
The City is a keen supporter of companies using integrity as a marketing
tool. Bodies such as the Pensions and Investment Research Consultants
(PIRC) wield enormous power. Set up in 1986 to research ethical,
environmental and social issues, it now represents 60 pension funds and
the UK’s ten biggest fund managers. Together these control pounds 150bn.
PIRC both recommends how they should vote on issues and offers a voting
service. Shell discovered PIRC’s power to its cost through a resolution
tabled at its AGM last year, challenging its policy on Nigeria and the
Anne Simpson, joint managing director of PIRC, says: ’Shell is
financially buoyant and internationally known. But the company’s ability
to retain customer confidence, keep government confidence and ride the
next wave of ethical concerns required a whole new corporate
PIRC has since been involved in a project to re-engineer the culture of
Shell - a programme that began over three years ago and the results of
which are about to be revealed.
Intensive research into perceptions of how Shell does business will have
far-reaching implications on how it positions its corporate brand in the
future. Simpson says her sights are set on companies in all areas:
’There is a mood of complacency engendered by people thinking this is
only a problem for certain sectors. The environment is an issue for
every business. Since PIRC was set up, it has crossed from an ethical,
’saving the planet’, issue into a financial one.’