Corporate brand building in startups and SMEs

2.3.3 Corporate brand building in startups and SMEs

Many new businesses begin their journey by focusing on just one product, and therefore a corporate brand is often synonymous with the product brand. When new ventures’ offering expands to multiple products, a corporate brand can act as their roof brand. (Witt & Rode 2005) Thus, it is necessary to look into what the corporate brand building offers to startups and SMEs to profound the view on the brand building process of new businesses. It can be described that “the corporate brand defines the firm that will deliver and stand behind the offering that the customer will buy and use” and therefore is characterized principally by organizational associations (Aaker 2004, 6). A corporate brand can be seen as a better approach for small businesses as it assists interaction with not only customers but also

other stakeholders and can therefore offer more advantages than product brands (Merrilees 2007).

A corporate brand can offer many advantages to the company. When services and products are becoming increasingly similar, a corporate brand can present a way of differentiation to the organization. A corporate brand may increase the credibility and trustworthiness of the organization as consumers have a tendency trust an organization more than a product. Brand management becomes easier when a corporate brand is used across products and markets. (Aaker 2004) In addition, it gives the opportunity to increase visibility and awareness for both the company and its offerings, and therefore provides economies of scale and scope (Witt & Rode 2005). When the focus is on only one mother brand, limited resources have a smaller impact to brand building (Aaker 2004). However strong product brands are also beneficial and can complement corporate branding (Merrilees 2007).

The company’s essence, meaning its values and priorities, character and purpose are expressed by the corporate brand (Aaker 2004; Rode & Vallaster 2005). The corporate brand consists of the internal part, corporate identity, and the external part, corporate image (Rode & Vallaster 2005). Corporate identity has four core components that are developing around the founder or an organizational team: corporate culture, corporate design, corporate behavior and corporate communication (Rode & Vallaster 2005; Witt &

Rode 2005). It connects the organization with the customer (Aaker 2004). Corporate identity can be evolving independently and therefore is not always developed consciously (Juntunen et al. 2010). It can be arising from the internal personnel’s daily operations and from the company’s product (Juntunen et al. 2010). It has been noticed that the corporate identity is similar to the owner-manager’s who is usually developing the company most actively (Juntunen et al. 2010).

Corporate image can be defined as “the projection of corporate identity targeted at the company’s external key stakeholders” (Rode & Vallaster 2005, 122). It reflects the external stakeholders’ view of the corporate identity (Juntunen et al. 2010). Without positive corporate identity, positive corporate image cannot be achieved (Witt & Rode 2005). Corporate identity is build through interaction with the audience and can be modified in direct or indirect ways by the company (Rode & Vallaster 2005; Juntunen et al.

2010). A positive corporate image is especially important when startups are trying to compete against well-known large corporations and to entice new customers to try their products (Witt & Rode 2005).

Rode and Vallaster (2005) suggest that to become successful startups should define their business concept, values and philosophy, align their corporate identity and corporate culture, communicate about their corporate identity internally and externally, and recruit employees who have aligned values with the corporate culture to improve corporate behavior. Defining the company’s purpose before its establishment is recommended to facilitate management of the company and to develop positioning in the market (Rode &

Vallaster 2005). Corporate branding can therefore start before the company is founded (Juntunen et al. 2010; Juntunen 2012). Furthermore, small businesses should pay attention to corporate identity, values and culture before launching (Merrilees 2007).

Internal branding process should be concise and consistent if the startup wishes to achieve positive perceived corporate brand (Witt & Rode 2005).

Urde (2003, 1035-1036) presents core-value based brand building process that divides company’s values to organizational values, core values and added values to “ensure that the functional, emotional and symbolic dimensions of the corporate brand are all included”. The purpose of this process is to build a common thread that unifies the brand.

The organizational values represent what the organization stands for and set the base for the core values. The core values are lasting factors outlining the brand identity and representing the guiding principles for the brand building process both internally and externally. They should be showing the direction where the company is heading but be also adaptive to encourage development. The core values have an impact on “the brand architecture, product attributes, brand positioning and communications strategy” and they connect mission, vision and organizational values in the internal brand building process (Urde 2003, 1036). A corporate brand and product brands can be even linked with the core values that are required to have a connection to the company’s core competencies.

The core values are affecting the corporate image and realized through added values in the external brand building process. The added values show the functional, emotional or symbolic benefits that a brand offers in the customer’s mind and link the internal and external process together. It is important that these added values are not only useful and unique to the customer but also hard to copy by the competitors. (Urde 2003)

Juntunen et al. (2010, 116-117) divide corporate brand building into six functions:

“defining the corporate personality, brand-oriented strategic planning, creating and maintaining corporate identity, creating consistent brand communication, assuring employees’ involvement, and creating a corporate image”. The brand building process starts already with the pre-establishment stage before the company is founded and the branding efforts begin within the company. This stage includes defining the corporate

personality with the help of entrepreneur’s family, friends and financers, establishing corporate branding relationships with stakeholders, and determining a brand oriented corporate strategy. Well-defined core values and strategic planning with a focus on the brand are setting the foundation of a corporate brand. The entrepreneur’s impact on the corporate values is significant since in the early stages the values are close to the entrepreneur’s own values. (Juntunen et al. 2010)

During the early growth stage, these functions are maintained and revised, a corporate brand identity and image are created, involvement of employees in the process is assured, consistent brand communication is created, and feedback is collected from the internal and external stakeholders to monitor the process. After defining corporate values and taking a strategic approach on branding, corporate identity is created while making sure that it is consistent with the corporate brand. Finally a corporate image can be created when the essence of the corporate brand is understood within the organization and among its employees. Internal and external communications have an important role throughout the corporate brand building process. The process should continue with ongoing improvement throughout the existence of the company by collecting and analyzing feedback and renewing and maintaining the brand. This improvement process keeps the corporate brand strong in the changing environment. (Juntunen et al. 2010)