The Value of a Good Corporate Brand
One of my favorite marketing topics is the subject of corporate image.
While I was conducting research for my first book, Corporate Image Management: A Marketing Discipline For the 21st Century, I began looking for illustrations to prove the value of a strong corporate image.
I knew intuitively that a strong corporate image would provide several levels of value to an organization ─ such as financial value, market place value, human resource value and, of course, customer value.
But how to prove this?
Well, an example from the automotive world probably best illustrates the market value of a powerful corporate brand.
In the late 1980s, Toyota and General Motors created a joint venture company in Freemont, California called New United Motor Manufacturing Inc. (NUMMI).
The NUMMI plant produced two identical cars: the Toyota Corolla and the General Motors Geo Prizm. These two cars were produced on the same manufacturing line, using the same raw materials, the same labor, and the same manufacturing process; basically the same of everything. In the computer world we would call these two car models “pin for pin compatible.”
The only difference between the two models was that some of them carried the Toyota Corolla brand name and some of them had the General Motors GM Prizm marque.
Being identical in all but brand name, they should sell for approximately the same price and depreciate at about the same rate, correct?
Perhaps so, but they didn’t.
The Toyota Corolla sold in 1989 for about 10% more than the GM Geo Prizm. It then depreciated more slowly than the Geo Prizm, resulting in a second-hand value almost 18% higher than the American-branded model after five years.
Why the differences?
One has to conclude that the relative strength of the Toyota brand and corporate name, over the General Motors name in the late 1980s and early 1990s, played the first significant role. If car buyers perceived a Toyota named car to be superior to a GM car in the same model class, they would be willing to pay a higher sticker price.
But that wasn’t the entire difference, according to a study by the Boston Consulting Group. The BCG study reported that the after-sales service provided by the Toyota dealer network sustained, and even boosted, the perceived edge of the Toyota name.
In other words, the corporate image management process taken by Toyota to ensure that the service departments at its dealer network wouldn’t tarnish or deteriorate the Toyota brand helped to reinforce the positive attributes of the Toyota identity.
These positive attributes had already given it an edge in the marketplace vis-a-vis a direct competitor brand manufactured in the same facility, using the same materials and labor.
This example shows the direct value of a powerful and well-managed corporate brand.
It was stories such as this, as I continued to conduct my research into the value of corporate branding and corporate image, that led me to conclude that corporate image management is one of the most powerful and potent marketing and management tools available to senior executives for the 21st century.
KEY POINT: corporate image management is one of the most powerful marketing and management tools available.
TAKING ACTION: what are your internal processes for managing your corporate brand and corporate image?
What is the weakest link in your corporate image management chain? What steps can be taken immediately to strengthen this weakest link?
What is the strongest aspect of your corporate image? How can this be further leveraged to develop market leadership for your products or services?
This article is partially excerpted from the book The Best of the Monday Morning Marketing Memo, available in paperback and Kindle formats at Amazon.