CHAPTER 11
MANAGING BRAND RELATIONSHIPS AND IMAGE

“If anyone can build a brand, it is the customer. Marketers cannot do that. They can only create favourable conditions for a brand image to develop in customers’ minds.”

INTRODUCTION

This chapter discusses two important concepts in marketing, brand and image. First, the nature of a branding process and a definition of a brand is analysed. Taking a relationship approach, brands are seen as brand relationships, which are affected by a number of brand contacts that occur during an ongoing relationship between a customer and a supplier or service provider. In the latter sections of the chapter the image concept is explored. The functions of image on a company are discussed, along with possible reasons for a bad image, and actions that should be taken to improve image are presented. After having read the chapter the reader should understand the importance of branding for service providers and the characteristics of creating service brands and brand relationships, as well as the role of image and how image can be improved in various situations.

WHAT IS A BRAND? A TRADITIONAL VIEW

The brand concept is well established in marketing. The first brands in a modern marketing sense were developed a century ago. However, during the second half of the 20th century brands and branding became central issues in marketing. Most discussions of brands are related to physical products, especially consumer packaged goods. Only during the last 30 years or so has an awareness of the importance of creating service brands emerged. Now it is widely recognized that branding is a vital issue for service organizations as well.¹

The American Marketing Association offers the following definition of a brand: ‘A name, term, sign, symbol or any other feature that identifies one seller’s product or service as distinct from those of other sellers.’²

From a service perspective at least, two objections can be made: this definition misses the key characteristic of service as a process, and it excludes the customer.

First, it explicitly points out issues such as name, term, sign, symbol and feature, but does not address the fundamental characteristic of service, which is that service is a process and the consumption of service can be characterized as process consumption. Because service is perceived in processes in which the customer normally also participates, this service process undoubtedly creates a distinction between the service of one provider and that of another. Of course, names, terms, signs and so on may also contribute to the brand, but the service process (or service production process) has to be at the heart of service brands, because it is there that the most profound impression on the customer’s view of the service is created.

Second, this definition excludes the customer. Brands are viewed from the marketer’s point of view as something that the firm creates. Much brand development, or brand building as it is often incorrectly labelled, has been based on such a perspective in practice. The marketer uses a number of planned marketing communication efforts to develop a distinct brand, and the customer is expected to form an image of the brand that corresponds to the intended brand.

In reality this is of course not the case, but this view of a brand and branding is due to the normally used branding processes for physical goods, where planned marketing communication is the main instrument employed.³ In a consumer goods context this has been a successful way of creating brands, because the good is pre-produced and already exists when the branding process starts. In reality, developing and designing the products is the first phase of a branding process, but it is seldom explicitly considered as that. The goods and their features are taken as given, and branding is thought to start from there. The goods always include the same features, and if proper market research has been done, customers like or accept these features and they correspond to the benefits the customers are looking for. A bottle or can of soft drink or a breakfast cereal cannot be developed into a successful brand if the customers do not like the taste of the soft drink or the breakfast cereal. Because in the case of goods the base for a successful brand already exists in the form of the goods themselves, the central part of the branding process automatically becomes a planned marketing communication issue using distinct communication media, such as television, newspapers, direct marketing and the Internet.

The development of social media has added a new dimension of customer influence on brands and branding. Conversations between customers and potential customers, for example on Facebook, and postings on YouTube, may have a decisive impact on customers’ perceptions of brands. The tune ‘United Breaks Guitars’ posted on YouTube by a musician mistreated by this airline is a dramatic example of this. The Internet and mobile technologies have enabled customers to engage with, for example, hotels’, restaurants’ and tour operators’ brands through favourable or unfavourable remarks on their websites or on those of other organizations, such as Trip Advisor. On the other hand, firms also have the potential to influence the branding process by actively using social media, and the Internet and mobile technologies.⁴ This has, however, also lead to a considerable amount of fraud. Firms may make fake postings on websites, but customers also engage in fraud, for example in online auctions. The role of social media will be discussed in detail in Chapter 12.

Because a service as a process is a much less standardized base for branding, the situation changes and the importance and involvement of the customer increases dramatically. The first and often critical mistake in service branding is to consider the service process (and its functional quality) and its outcome (and the technical quality) as a given, and outside the branding process.

Finally, when working with brands and brand management one must not become too focused on branding in itself. After all, branding is only a means of doing better in a competitive situation. As Rust et al. point out, ‘brands exist to serve (the firm’s) customers’.⁵ If a firm becomes too preoccupied with branding as such, this may detract from the basic issue of developing a customer base and maintaining relationships with existing customers.⁶

BRAND IMAGE AND IDENTITY

One of the problems with the discussion of brands and branding seems to be the distinction between brand and brand image that is often made. Brand image is the image of the goods or service that is formed in the customer’s mind. The term brand identity can be used as a description of the image of the brand that the marketer wants to create.⁷ Keeping apart the concepts of a brand and brand image somehow gives the impression that a brand can be created and can exist without the presence of the customer.⁸ According to this view, the customers form an image of a readily created brand. Following this line of thought, the misleading expression ‘brand building’ has emerged. In reality, customers continuously receive inputs about the brand that is being created, and they relate to these brand messages on a continuous basis, to the extent that they observe them and react to them consciously and unconsciously, thus forming the brand image in their minds (compare the customers’ creation of meaning in the relationship communication model presented in Chapter 10). This is the case with service as well as with physical goods. This can be put another way: a brand is not first built and then perceived by the customers. Instead, every step in the branding process, every brand message, is separately perceived by customers and together add up to a brand image, or brand for short, which is formed in their minds. As Anne Rindell points out, based on previous experiences with a firm or an offering, customers always carry with them an ‘inherited’ image. In brand management firms should keep this image heritage in mind.⁹

When including the customer in the branding process, there is no need to make a distinction between a brand and a brand image. For the customer brand is always brand image. Therefore, the brand as a concept is always an image. Hence, in this book when we talk about a brand, we always refer to it as an image in the minds of customers. In this way brand and brand image are synonymous.

In conclusion, the term brand identity can be used as a concept that describes the image of the brand that the marketer wants to create in the minds of customers. It is the goal to be achieved. A brand is the image that is actually formed in their minds. Branding is the process of creating this image.

As we have already noted in this chapter, ‘brand building’ is often used to mean branding. However, this is incorrect and even misleading and dangerous, because it gives the impression that the marketer can create a brand by himself. From this follows that after the brand has been ‘built’ it can be offered to customers. In reality, as we shall see in the following sections, the customers’ role is much more active in the branding process. Whatever the marketer does, it is the customer who decides whether an intended brand is developing or not. If anybody builds a brand, it is the customer. As LEGO is reported to state: ‘[W]e own the brand name, our customers own the brand.’¹⁰ The role of the marketer is to create frames for the development of a brand in the minds of customers, by providing an appropriate physical product, service process and supportive communication using various means of planned marketing communication. If the marketer has been successful in creating this branding ‘frame’, a brand image that corresponds to the intended brand identity is developing, otherwise it is not.

BRAND RELATIONSHIPS AND BRAND CONTACTS

When observing the customer’s active role in branding, our understanding of the brand changes. It is no longer something that exists in a vacuum, something that can be transferred to customers. Rather, it is something that continuously develops and changes when the customer relates to the flow of brand messages, originating for example from employees, systems and physical product elements in the service process, from planned marketing communication, Internet websites, word of mouth and discussions in social media. In this way a relationship between the customer and the brand emerges and develops. This brand relationship gives goods, services or the combination of the elements of a solution meaning in the minds of the customers.¹¹ Therefore, the brand, as brand image, is the consequence of how a given customer perceives his relationship with a brand over time.

Schultz and Barnes¹² state that a brand relationship develops in a series of brand contacts experienced by customers, where they either experience a brand message to which they are exposed or are involved as co-producers. They define a brand contact as an image and information-bearing experience had by a customer or a potential customer, regardless of where this experience takes place or what kind of experience it is. In Figure 11.1 examples of such brand contacts are illustrated.

FIGURE 11.1

Brand contacts forming a brand relationship.

In the figure a number of brand contacts are depicted to illustrate the concept. Depending on the situation, the types of brand contacts experienced by a customer will differ. For a soft drink, product messages and planned communication messages dominate, although service messages and unplanned communication messages may occur in the brand relationship. The marketer may, for example, develop a waste management system to collect empty cans. This system sends a service message to consumers. For some people this message adds favourably to the brand in their minds, for others it does not. For bank service, service messages and planned communication messages dominate, but product messages, and also unplanned communication messages through word-of-mouth and conversations on social media, may occur in the brand relationship. For example, gold and platinum credit cards signal prestige, which for some consumers creates a positive extra to the bank brand in their minds. For others, such cards do not have that branding effect. In an ongoing relationship the customer experiences various kinds of brand contacts on a continuous basis.

In Figure 11.1 the time perspective is missing. In Chapters 9 and 10 we discussed the communication process (consisting of planned communication messages) and the interaction process (communicating product and service messages) and how, following a successful integration of the elements of these two processes, a relationship dialogue can be developed and maintained.

In Figure 11.2 sources of brand contacts of a retail bank is illustrated. Customers’ brand relationship is based on a variety of brand contacts, indicated in the figure. Managing some well and neglecting others, thereby perhaps letting them communicate negative brand messages, creates confusion and an unfavourable brand relationship where the brand value declines. As the figure clearly demonstrates, a service brand is a function of how customers perceive a large number of communication messages originating from a variety of brand contacts, and of how they create meaning out of them.

FIGURE 11.2

Retail banking: an example of brand contacts.

BRAND VALUE, BRAND EQUITY AND A RELATIONSHIP-ORIENTED DEFINITION OF A BRAND

In this context the term brand value is used as the customer’s perception of how valuable a given good, service or solution is to him in comparison with other alternatives.¹³ If the brand value declines over time, the customer will be more open to other solutions and more interested in communication messages from other firms. On the other hand, if the brand value increases, the likelihood that the customer will stay loyal can be expected to increase. In the same way it can be seen that brand value is important to suppliers, distributors and other network partners.

Because the brand value to customers is the basis for achieving sales and thus for creating value to the firm out of a brand, the value of brands to customers is important. However, a brand also provides value to the firm. The more customers consider a brand valuable, the more sales can be expected to be achieved. The term brand equity is used to describe the value of a brand to the firm. It can be defined as follows:

The differential effect that brand knowledge has on the customer response to the marketing of that brand. Equity occurs when the customer is familiar with the brand and holds some favorable, strong and unique brand associations in memory.¹⁴

This differential effect evolves over time and can be either positive or negative. The term brand equity means the value of service or a good to the firm. The higher the brand equity, the more valuable the product is to the firm.

Finally, a brand can be defined as a brand image based on the customer’s perception of his brand relationship:

A brand image (often plainly called a brand) is created in continuously developing brand relationships where the customer forms a differentiating image of a physical good, a service or a solution including goods, services, information and other elements, based on all kinds of brand contacts that the customer is exposed to and engaged with.

This definition corresponds well with Ambler’s short and simple definition of brand equity, according to which brand equity is ‘what we carry around in our heads about the brand’.¹⁵ According to this definition of brand equity and the brand relationship definition above, it is meaningless to try to develop a brand without taking into account the relevant customers’ and potential customers’ ways of relating to and engaging with branding activities. Also, in a relationship context, the expression ‘to build a brand’ is inaccurate, because it implies that the marketer can initiate and implement activities that create the brand. This of course is not true. The brand is created in the mind of a customer following a flow of brand contacts – interactions between customer and supplier or service provider, including physical products, service processes, information, etc., and planned marketing communication elements, Internet websites and social media discussions – in the ongoing relationship between the two parties. Creating brand relationships is an accurate and descriptive term for the process of developing and maintaining a brand in the minds of customers, potential customers and other stakeholders over time.

For a true brand relationship to exist, the ‘heart and mind’ of a customer must have been captured by the service (or good or solution) and the firm providing that service, so that an emotional attraction and a state of connectedness have been reached. Unless this level of attraction has been created, the brand relationship is actually only a latent relationship.

If a brand relationship has been created and nurtured so that a customer feels attached to a given service and believes that this service, or any other type of offering, is different from competing service, active and favourable word of mouth can be expected to follow. The customer will feel motivated to talk about this service and make remarks on social media, and will do so. The marketer has achieved brand involvement from the customer.¹⁶ Strong brand involvement means that a customer feels positively involved with the service and the service process of a given supplier or service provider. This often makes the customer himself an effective marketer of the service. A high degree of brand involvement means that a true brand relationship exists. Brand involvement can be enhanced through well-managed interactions with customers and also, for example, through brand communities on the Internet.¹⁷

HOW TO CREATE SERVICE BRAND RELATIONSHIPS

When branding service, two circumstances have to be kept in mind:

• There is no ready-made, standardized product to be taken as a starting point for the creation of brand relationships. Instead the service (production) processes themselves are at the heart of the branding process.

• The basis for the branding process is often the company itself and its service processes, not separate services (although firms may sometimes create service that is separable from the company itself).

In the context of physical goods the key issue in the branding process is usually planned marketing communication efforts using distinct marketing communication media (planned communication messages) implemented by the marketer, whereas the product itself is a supporting element. It should include features and benefits that the customers are interested in and relate to. Designing the product is, of course, a part of the branding process here, too, but in practice, it is often taken for granted that the product is readily designed to support the intended brand identity, and therefore it is not thought of as a part of the branding process. Marketing communication (planned communication messages) is then the most important aspect that a brand manager spends time and money on.

In the context of service, planning and managing the service process is at the heart of the branding process. Planned marketing communication is only a supporting element in the branding process. If the service process leads to negative brand value, planned communication efforts can seldom compensate for that. A service marketer who concentrates on planned communications as key branding activities is always at risk of failure. He may have created brand awareness, a knowledge of the existence of a service and perhaps also of the brand identity the firm wants to create, but this is only a promise made about the brand. This brand promise may not be fulfilled by the service process. If this brand fulfilment is missing in the mind of a customer, a brand image which corresponds to the wanted brand identity is not developing and the branding process has failed.

If the service process is not managed as part of the branding process, it may easily provide negative brand contacts which effectively counteract the planned communication efforts. As will be discussed in Chapter 15, a customer-oriented service process that consistently includes favourable brand contacts is largely dependent on the existence of a supportive service culture in the organization. If such a culture exists, the service process will effectively contribute to a planned brand identity. Thus, an intended brand emerges when the values of the customers and the values of the organization and its employees do not conflict with each other, but complement each other. In brand management the term internal branding is often used to describe this need to internally match the internally existing and externally wanted values of a firm as a basis for creating a favourable brand image.¹⁸ For brand images to develop the brand identity must be marketed internally as well.¹⁹ For many firms the internal branding issue is even more challenging than external branding.

Assuring that a firm’s employees accept and embrace the firm’s brand promise to its customers is also labelled employee branding.²⁰ Often this term is used interchangeably with internal branding, and also with internal marketing. Sometimes the term employer branding is used. One of the most important means of employee branding is a good example demonstrated by managers and supervisors. If they by their behaviour support the brand promise, customer contact employees will most likely adjust their behaviour accordingly.

The firm’s intended brand, the brand identity, and the relationship of the employees to the organization is sometimes called employee brand identification. If a firm’s employees feel alienated from the organization and its management, low brand identification by the employees is probably developing.²¹ In a situation like this the employees will probably not support the promised brand through their performance as well as they would in situations where the employee brand identification is high. Employee branding and internal branding will be discussed in Chapter 14 under the rubric internal marketing.

In Figure 11.3 the service branding process is illustrated.²² The starting point should be an analysis of the brand image that the firm wants its customers and other stakeholders, such as shareholders, financing institutions, network partners and employees, to have. This is the wanted brand identity. Through planned marketing communication, a brand awareness is then created. The purpose for doing this is twofold. First of all customers (and other stakeholders) are made aware of the existence of a given service. Secondly, provided that the planned communication efforts support and do not counteract the customers’ experiences of the service firm and the service process and its outcome (the functional and technical quality of the service), these experiences are supported by the brand promise of marketing communication efforts. In the service branding process the experiences customers have with the firm and the service process form the brand fulfilment. Primarily, this brand fulfilment leads to a perceived brand image that the customers (and other stakeholders) develop in their minds, whereas in this process the planned communication efforts are only supportive. In the figure this is indicated by the dotted line from the brand awareness box to perceived brand image.

FIGURE 11.3

The service branding process.

Although the branding process illustrated in Figure 11.3 looks structured, it is only the branding process – making brand promises and creating brand-fulfilling experiences – that is manageable, the formation of the brand image is not. The brand emerges for the customer in his mind through a continuous brand formation process, whereas the marketer should create the right circumstances for a desired brand image to develop. Hence, if one wants to use the widely misused expression ‘brand building’, it is the customers who build the brand. The marketer can under no circumstances do that.

We can summarize the branding of service in the following way:

• The main task in the branding process is to manage the service (production) processes so that they provide the customers with positive brand contacts and corresponding brand message, which create brand fulfilment, and ultimately favourable brand relationships.

• The planned marketing communication efforts are only supportive activities in the creation of brand relationships.

• In addition, brand enabling through internal efforts (internal branding) is required to prepare and motivate employees in the organization and, for example, in distributor and other network partner organizations to actively contribute to successful brand fulfilment.

Furthermore:

• Even a good service brand concept can and will be destroyed by a malfunctioning service process.

• The service process will not contribute to the emergence of an intended brand, if the brand identity that the firm is aiming at is in conflict with the corporate culture.

• If the service process does not create a positive brand image in the minds of customers, normally this cannot be compensated for by planned marketing communication supporting a brand identity that is not manifested in the service process and in the organizational culture.

Based on the service triangle presented in Chapter 2, Brodie and his colleagues have developed a service–brand–relationship triangle to help researchers and practitioners alike to understand the multi-faceted aspects of branding.²³ The model is illustrated in Figure 11.4.

Leonard Berry presented a systematic view of how to ‘cultivate service brands’ in order to develop brand equity.²⁴ His suggestions, which are based on an in-depth study of a number of firms providing excellent service, include four strategic viewpoints that should be taken into account in order for the firm to cultivate brand equity and to create brand relationships that pay off:²⁵

1. Be different.

2. Determine your own fame.

3. Make an emotional connection.

4. Internalize the brand.

FIGURE 11.4

The service–brand–relationship triangle.
Source: Adapted from Brodie, R.J., Glynn, M.S. & Little, V., The service brand and the service-dominant logic: missing fundamental premises or the need for a stronger theory? Marketing Theory, 3(3); 2006: 372. Copyright Sage Publications Ltd. Reprinted by permission.

Be different. Firms with good and recognized brands never offer their service as a commodity. It is differentiated in a way that makes it distinguishable in a way that creates an interest among current and potential customers. Such firms innovate rather than imitate existing offerings, and their service is presented in a different way compared to the competition. In this way brand relationships which differ from those of the competitors are created. In the minds of the customers of these firms, the brand is distinct and different. It creates a brand image which distinguishes the offering from competing offerings in a favourable way.

Determine your own fate. Firms with good and appreciated brands develop something that is important and valuable to their customers. Differentiating the service from that of the competitors is a necessary starting point, but it is not enough. The service must be considered valuable to the customers. If the customers do not find an offering supportive to their everyday practices, less or no value-in-use emerges for them, and no brand relationships develop. Branding is a way for firms to demonstrate their mission and organizational values to customers. Therefore, firms that determine their own fate will perform their service better than their competitors. As a consequence, good word-of-mouth is also created, and customer-to-customer discussions on social media enhance the brand.

Make an emotional connection. Good customer relationships often include an emotional bond between the firm and its customers. The customers feel an emotional connection to the firm. Service always has an emotional string attached, and therefore, firms with good brands attempt to reach beyond the mere logical and economical aspects of an offering. They develop feelings of trust, attraction, affection and closeness among their customers. Brands should reflect the customers’ own core values, which often may go beyond what is purely logical from a physical or economic point of view. Of course, this does not come by itself, it has to be earned by the firm. Firms which manage to make themselves meaningful to their customers (the ultimate goal for marketing) can also make this emotional connection with them.

Internalize the brand. The brand image can be promoted by communicational efforts, such as advertising campaigns, but ultimately the brand and a brand relationship are to a large degree created in service encounters. Any kind of service encounter can either make or break the relationship. Often, but of course not always, service employees have a central role. In the service encounters employees either support or destroy the branding process. Firms with good brands invest in internalizing the brand relationship inside the organization. Therefore, firms with good brands consider internal marketing important.

In conclusion, the key to successful branding can be summarized in the following five points:

1. A brand is always an image in the minds of customers (and other stakeholders).

2. Brands cannot be built. The firm can only create favourable circumstances that facilitate the evolvement of a brand as an image in the minds of customers. (‘If anyone builds the brand, it is the customer’).

3. Customers’ experiences with brand contacts are the key to how a brand image evolves, and managing brand contacts is at the heart of branding.

4. Marketing communication and the creation of brand awareness are only supporting activities in branding.

5. Internal branding is instrumental for successful brand management.

So far in this chapter we have discussed brand relationships and brands as brand images. In the rest of the chapter we will turn to another aspect of image, the image of a company as an organization. However, it should be remembered that company image and brands as images are closely related.

MANAGING COMPANY IMAGE

The image of a company or any other organization, international, nationwide or local, represents the values customers, potential customers, lost customers and other groups of people connect with the organization. The image may vary depending on which group is being considered, and may even vary between individuals. However, there is some common perception of the organization, which may be very clear and well known to some groups and unfamiliar to other groups.

Image exists on several levels. A large network organization, such as a restaurant chain, has an overall company image. In addition to this, a local organization, such as a local restaurant, has a local company image. If many outlets or offices belong to a local organization (for example, a range of car rental locations belong to the same local franchise-holder which, in turn, is part of a nationwide car rental organization), each individual outlet may very well have an image of its own, in addition to an overall local image.

Company images on different levels are interrelated. The overall image influences the perception of the local organization (i.e. the local image) and the image of an individual office or outlet to some extent depends on the local image. Moreover, the various images can affect each other in different ways. Very large customers, such as financial organizations, are more inclined to be influenced by company image. Smaller and local customers are more interested in local image. For a local firm, overall company image and local image may be virtually the same thing.

It is important from a management point of view to note that a local unit is inevitably affected by the company image of the bigger organization of which it is a part. On the other hand, service operations in many respects are local, which presents a good opportunity for a local organization to develop an image of its own among its local customers. For example, if a hotel has a bad reputation on the corporate level, a specific hotel in that chain may nevertheless develop a strong and favourable local image, which helps to attract customers.

From the company’s point of view, a distinct local image may be tolerated within limits, whereas too-different local images may be harmful as far as the pursuit of a corporate strategy is concerned. If the images of local hotels are too diverse, it may be difficult to maintain a clear company image. This, of course, is a very context-specific issue.

However, again, service is local, and most customer relationships are local. Therefore, corporate-level management should not automatically try to streamline the images of all hotels. Local business environments and societies are different, and a too-streamlined local image may damage business. The issue of streamlining or differentiating local images in relation to a desired corporate image is a management concern, where the strengths of disparate local images should be compared with the need for a clear corporate image. Sometimes there is a conflict involved, sometimes not.

THE IMPORTANCE OF IMAGE

A favourable and well-known image, overall company image and/or local image, is an asset to any firm, because image has an impact on customer perceptions of the communication and operations of the firm in many respects. The role of image is at least fourfold. For the sake of simplification, no distinction between overall organizational image and local image is made here:

1. Image communicates expectations.

2. Image is a filter moderating experiences.

3. Image is a function of expectations as well as of experiences.

4. Image has an internal impact on employees as well as an external impact on customers.

First, image communicates expectations, together with external marketing campaigns such as advertising, direct mail and personal selling, and word-of-mouth communication. Here we will only consider customer relationships, but image works in a similar manner in relation to other stakeholders as well. Furthermore, image has an impact on expectations, and it also helps people to screen information, marketing communication as well as comments in social media and word of mouth. A positive image makes it easier for a firm to communicate effectively, and it makes people more perceptive to favourable word of mouth. Of course, a negative image has a similar effect, but in the opposite direction. A neutral or unfamiliar image may not cause any damage, but it does not increase the effectiveness of communication and word of mouth either.

Second, image is a filter that moderates experiences and influences the perception of the performance of the firm. Technical quality and functional quality are both seen through this filter. If the image is good, it becomes a shelter. Minor problems, even occasional more serious problems of a technical or functional quality nature, can be overlooked due to this sheltering effect. However, this only works for a short period. If such problems continuously occur, the effect of this shelter diminishes, and the company image will change. This filter has the opposite effect as well. An unfavourable image makes customers feel more dissatisfied and angrier with bad service than they would otherwise be. A neutral or unfamiliar image does not cause any harm in this respect, but it does not provide a shelter either.

Third, the image is a function of the experiences as well as of the expectations of customers. When customers develop expectations and experience reality in the form of the technical and functional quality of the service, the resulting perceived service quality changes the image. If the perceived service quality meets the image or exceeds it, image is reinforced or even improved. If the firm performs below image, the effect will be the opposite. Also, if the image is not clear or well known to customers, it is developed and given distinct positive or negative features by customer experience.

There is a fourth effect of image that is important to management. Image has an internal impact on employees as well as the external effect on customers. The less clear and distinct the image is, the more this may affect employee attitudes towards the organization as an employer. This, in turn, may have a negative influence on the employees’ performance and thus on customer relationships and perceived quality. On the other hand, a positive image of, say, a firm with excellent service, communicates clear values internally and may thus strengthen positive attitudes towards the business among its employees. Such a firm easily attracts good employees, too.

DEVELOPING IMAGE

Frequently we hear managers say that the image of their firm is poor or unclear or old-fashioned. Far too often they try to solve this problem without analysing it and the reasons behind the unfavourable image. This, in turn, leads to poor decisions and actions. For example, cosmetic actions, such as corporate image advertising campaigns or actions involving other means of mass communication, are often turned to in situations where they will not solve the actual problem. Such actions have a limited positive effect, or in the worst case a negative effect.

There is a well-known saying that image is reality.²⁶ Therefore, image development or image improvement programmes have to be based on reality. If the company image is unknown, but the firm performs well, there is a need for planned marketing communication. But if its image is bad and the firm does not perform well, the basic problem is different. The organization faces a real problem, not only a communication problem.

First, one has to analyse why there is an image problem. Basically, there are two possible reasons: the organization is known but has a bad image; or the organization is not well known and, therefore, has an unclear image or an out-of-date image based on old customer experiences.

If the image is negative in one way or the other, the experiences of the customers are probably bad. There may be problems with technical and/or functional quality. In such a situation, if management calls upon an advertising agency to plan an advertising campaign offering the message that the firm is service-oriented, customer-conscious, modern or whatever the message may be, the result may be fatal. At best, the campaign will be a waste of money; however, there are cases where such actions have had much more serious consequences. A national retail chain in a European country suffered from a poorly service-oriented image. It invested extensively in a corporate advertising campaign which communicated good service, customer-conscious employees, a pleasant shopping atmosphere in its retail outlets, and so forth. In the short term, sales improved, but in the long term, sales decreased again to where they had been and even fell below this level. The organization’s already bad image was further damaged.

The lesson is that because image is reality, if market communication does not fit reality, reality normally wins. An advertising campaign that is not based on reality only creates expectations that will not be fulfilled. If expectations are higher than they used to be, but reality has not changed, the perceived service quality is affected in a negative way, and the company image will be damaged.

If the image problem is a real problem, only real action will help. Real problems with the performance of the firm, its technical and/or functional quality, cause an image problem. If the poor image is to be improved, internal actions to improve the performance of the firm are needed.

If the company’s image is unknown, there is a communication problem. The firm may be entering a new market, where it is unknown, or the nature of its business may lead only to sporadic customer contacts, which means that customers never develop an in-depth image of the firm based on experience. Also, the firm’s reality may have changed so that it is, say, more customer-conscious and service-oriented than before, but this has not yet been fully appreciated by its customers. Therefore, the image is not yet as good as it should and realistically could be. The image will improve eventually, when enough customers become sufficiently experienced with the new reality. However, if the firm communicates this change to the market, this process will probably take less time. In these situations an image problem is really a communication problem, and improved marketing communication offers a solution.

Furthermore, it is always possible to support a company’s image using various means of planned communication. The layout of websites, advertisements, brochures, packages and letterheads and the design of offices and delivery trucks may support a given image if they are in line with it. On the other hand, modern office design and advertisement layouts do not improve a firm’s image if the performance of the firm is perceived as being old-fashioned and bureaucratic.

In summary, it is important to realize that image portrays what exists in reality; image is not what is communicated through planned marketing communication if the communicated image does not correspond with reality. When there is an inconsistency between real performance and communicated image, reality wins. The planned communication of the firm is perceived as untrustworthy, which damages image even more. If there is an image problem, management should analyse the nature of the problem thoroughly before taking action. A communication problem can and should be solved by improved communication. However, if there is a real problem, if the negative or otherwise unfavourable image is due to bad performance, the image can be improved only by internal action, the objective of which is to improve performance. Only in a second phase can planned communication be used, when the real performance-related reason for the poor image has been removed.

NOTES

1.  Berry, L.L., Cultivating service brand equity. Journal of the Academy of Marketing Science, 28(1), 2000, 128–137 and Brodie, R.J., Whittome, J.R.M. & Brush, G.J., Investigating the service brand: a customer value perspective. Journal of Business Research, 62(3), 2009, 345–355.

2.  Bennet, P.D., Dictionary of Marketing Terms, 2nd edn. Chicago, IL: American Marketing Association, 1995.

3.  See, for example, Rindell, A. & Strandvik, T., Brand evolution – brands evolving in consumers’ everyday life. European Business Research, 22(3), 2010, 276–286 and Rindell, A. & Iglesias, O., Context and time in brand image constructions. Journal of Organizational Change Management, 27(3), 2014, 756–768.

4.  The role of social media, the Internet and mobile technologies in branding and various possibilities for their use in general and in service branding are discussed in de Chernatory, L., McDonald, M. & Wallace, E., Creating Powerful Brands, 4th edn. Oxford: Butterworth Heinemann, 2011.

5.  Rust, R.T., Zeithaml, V.A. & Lemon, K.N., Customer-centered brand management. Harvard Business Review, 82(Sept), 2004, 110.

6.  Rust, Zeithaml & Lemon, op. cit.

7.  Aaker, D.A. & Joachimsthaler, E., Brand Leadership. New York: The Free Press, 2000.

8.  Rindell & Strandvik, op. cit.

9.  Rindell, A., Image Heritage. The Temporal Dimension in Consumers’ Corporate Image Constructions. Helsinki/Helsingfors: Hanken School of Economics, Finland, 2007. See also Rindell & Iglesias, op. cit.

10.  See Gyrd-Jones, R.I. & Kornum, N., Managing the co-created brand: value and cultural complementarity in online and offline multi-stakeholder ecosystems. Journal of Business Research, 66(9), 2013, 1484–1483, where the branding process in Lego is studied.

11.  See Schultz, D.E., Barnes, B.E., Schultz, H.F. & Azzaro, M., Building Customer-Brand Relationships. Armonk, NJ: M.E. Sharpe, 2009.

12.  Schultz & Barnes, op. cit., p. 46.

13.  In the literature brand value is often referred to as the value of a brand to a firm. See, for example, Melo, T & Galan, J.I., Effects of corporate social responsibility on brand value. Journal of Brand Management, 18(6), 2011, 423–437.

14.  Keller, K.L., Conceptualizing, measuring and managing customer-based brand equity. Journal of Marketing, 57(Jan), 1993, 1–22. See also Keller, K.L., Strategic Brand Management: Building, Measuring and Managing Brand Equity, 2nd edn. Englewood Cliffs, NJ: Prentice-Hall, 2003. However, sometimes brand equity is also related to the value for customers of a brand. See, for example, Aaker, D.A., Managing Brand Equity: Capitalizing on the Value of a Brand Name. New York: The Free Press, 1991, where brand equity is defined as ‘the set of assets (and liabilities) linked to a brand’s name and symbol that adds (or subtracts from) the value provided by a product or service to a firm and/or that firm’s customers’ (p. 16; emphasis added).

15.  Ambler, T., Marketing and the Bottom Line: The New Metrics of Corporate Wealth. London: Financial Times/Prentice-Hall, 2000, p. 14.

16.  See Lindberg-Repo, K. & Grönroos, C., Word-of-mouth referrals in the domain of relationship marketing. Australasian Marketing Journal, 7(1), 1999, 109–117. See also Andersen, P.H., Relationship marketing and brand involvement through web-enhanced brand communities: the case of Coloplast. Industrial Marketing Management, 34(1), 2005, 39–51, where the author discusses the evolvement of brand involvement on the Internet.

17.  See Andersen, op. cit.

18.  See Schultz, M. & de Chernatony, L., The challenges of corporate branding. Corporate Reputation Review, 5(2–3), 2002, 105–112.

19.  Mitchell, C., Selling the brand inside. Harvard Business Review, 80(Jan), 2002, 99–106.

20.  King, C. & Grace, D., Examining the antecedents of positive employee brand-related attitudes and behaviours. European Journal of Marketing, 46(3–4), 2012, 469–488. See also Miles, S.J. & Mangold, W.G., Positioning Southwest Airlines through employee branding. Business Horizons, 46(6), 2005, 535–545, and, for example, Kimpakorn, N. & Tocquer, G., Service brand equity and employee brand commitment. Journal of Services Marketing, 24(5), 2010, 378–388, and Schlager, T, Bodderas, M, Maas, P. & Cachelin, J.L., The influence of employer brand on employee attitudes relevant for service branding: an empirical investigation. Journal of Services Marketing, 25(7), 2011, 497–508.

21.  See Hurrell, S.A. & Scholarios, D., ‘The people make the brand’: reducing social skills gaps through person-brand fit and human resource management practices. Journal of Service Research, 17(1), 2014, 54–67, and Löhndorf, B. & Diamantopoulos, A., Internal branding: social identity and social exchange perspectives on turning employees into brand champions. Journal of Service Research, 17(3), 2014, 310–325.

22.  See Berry, L.L., Discovering the Soul of Service. New York: The Free Press, 1999, p. 200, where a service brand meaning model illustrating a similar process is presented.

23.  Brodie, R.J., Glynn, M.S. & Little, V., Brands and relationships and the service dominant logic. Marketing Theory, 3(3), 2006, 363–379.

24.  Berry, op. cit.

25.  Berry, 1999, op. cit. See also Berry, 2000, op. cit.

26.  See Bernstein, D., Company Image & Reality. Eastbourne: Holt, Rinehart and Winston, 1985.

FURTHER READING

Aaker, D.A. (1991) Managing Brand Equity: Capitalizing on the Value of a Brand Name. New York: The Free Press.

Aaker, D.A. (1996) Building Strong Brands. New York: The Free Press.

Aaker, D.A. & Joachimsthaler, E. (2000) Brand Leadership. New York: The Free Press.

Ambler, T. (2000) Marketing and the Bottom Line: The New Metrics of Corporate Wealth. London: Financial Times/Prentice-Hall.

Andersen, P.H. (2005) Relationship marketing and brand involvement through web-enhanced brand communities: the case of Coloplast. Industrial Marketing Management, 34(1), 39–51.

Bennet, P.D. (1995) Dictionary of Marketing Terms, 2nd edn. Chicago, IL: American Marketing Association.

Bernstein, D. (1985) Company Image & Reality. Eastbourne: Holt, Rinehart and Winston.

Berry, L.L. (1999) Discovering the Soul of Service. New York: The Free Press.

Berry, L.L. (2000) Cultivating service brand equity. Journal of the Academy of Marketing Science, 28(1), 128–137.

Brodie, R.J., Glynn, M.S. & Little, V. (2006) The service brand and the service-dominant logic: missing fundamental premises or the need for a stronger theory? Marketing Theory, 6(3), 363–379.

Brodie, R.J., Whittome, J.R.M. & Brush, G.J. (2009) Investigating the service brand: a customer value perspective. Journal of Business Research, 62(3), 345–355.

Calonius, H. (1986) A market behaviour framework. In Möller, K. & Paltschik, M. (eds), Contemporary Research in Marketing. Proceedings from the XV Annual Conference of the European Marketing Academy. Helsinki: Helsinki School of Economics and Hanken Swedish School of Economics, Finland, pp. 515–524.

de Chernatory, L., McDonald, M. & Wallace, E. (2011) Creating Powerful Brands, 4th edn. Oxford: Butterworth Heinemann.

Duncan, T. & Moriarty, S. (1997) Driving Brand Value. New York: McGraw-Hill.

Gyrd-Jones, R.I. & Kornum, N. (2013) Managing the co-created brand: value and cultural complementarity in online and offline multi-stakeholder ecosystems. Journal of Business Research, 66(9), 1484–1483.

Hurrell, S.A. & Scholarios, D. (2014) ‘The people make the brand’: reducing social skills gaps through person-brand fit and human resource management practices. Journal of Service Research, 17(1), 54–67.

Keller, K.L. (1993) Conceptualizing, measuring and managing customer-based brand equity. Journal of Marketing, 57(Jan), 1–22.

Keller, K.L. (2003) Strategic Brand Management: Building, Measuring and Managing Brand Equity, 2nd edn. Englewood Cliffs, NJ: Prentice-Hall.

Kimpakorn, N. & Tocquer, G. (2010) Service brand equity and employee brand commitment. Journal of Services Marketing, 24(5), 378–388.

King, C. & Grace, D. (2012) Examining the antecedents of positive employee brand-related attitudes and behaviours. European Journal of Marketing, 46(3–4), 469–488.

Lindberg-Repo, K. & Grönroos, C. (1999) Word-of-mouth referrals in the domain of relationship marketing. Australasian Marketing Journal, 7(1), 109–117.

Löhndorf, B. & Diamantopoulos, A. (2014) Internal branding: social identity and social exchange perspectives on turning employees into brand champions. Journal of Service Research, 17(3), 310–325.

Melo, T & Galan, J.I. (2011) Effects of corporate social responsibility on brand value. Journal of Brand Management, 18(6), 423–437.

Miles, S.J. & Mangold, W.G. (2005) Positioning Southwest Airlines through employee branding. Business Horizons, 46(6), 535–545.

Mitchell, C. (2002) Selling the brand inside. Harvard Business Review, 80(Jan), 99–106.

Rindell, A. (2007) Image Heritage. the Temporal Dimension in Consumers’ Corporate Image Constructions. Helsinki/Helsingfors: Hanken School of Economics, Finland, 2007.

Rindell, A. & Iglesias, O. (2014) Context and time in brand image constructions. Journal of Organizational Change Management, 27(3), 756–768.

Rindell, A. & Strandvik, T. (2010) Brand evolution – brands evolving in consumers’ everyday life. European Business Research, 22(3), 276–286.

Rust, R.T., Zeithaml, V.A. & Lemon, K.N. (2004) Customer-centered brand management. Harvard Business Review, 82(Sept), 110–118.

Schlager, T, Bodderas, M, Maas, P. & Cachelin, J.L. (2011) The influence of employer brand on employee attitudes relevant for service branding: an empirical investigation. Journal of Services Marketing, 25(7), 497–508.

Schultz, D.E., Barnes, B.E., Schultz, H.F. & Azzaro, M. 2009, Building Customer-Brand Relationships. Armonk, NJ: M.E. Sharpe.

Schultz, M. & de Chernatony, L. (2002) The challenges of corporate branding. Corporate Reputation Review, 5(2–3), 105–112.