MRKT20024 Integrated Marketing Communications S0146394

Introduction:

Many organisations spend time, resources and effort to build a strong image for their
businesses. Millions are spent on advertising their products and services to create a strong,
impressive brand and donations and charity events are sponsored in order to create an image
of a socially responsible organisation in the eyes of the public. Employees are trained in
corporate dressing and image marketing while research firms help organisations to determine
consumer preferences and opinions of the firms and their products. This article aims to
explain the importance of corporate image, analyse the factors that affect it, and recommend
ways for business organisations to enhance their corporate image. Through different
advertising techniques, companies achieve a growth in the sales of their products and services
by attracting the masses towards them. Different types of advertising techniques aim at
highlighting the product features and bringing about its uniqueness in relation to its
competitors. It helps in the creation of a brand identity and serves as an effective means to
communicate to the world the value of the product or the service.

Corporate Image:

Corporate image is described as the overall impression made on the minds of the
public about a firm (Barich and Kotler, 1991). It is related to the various physical and
behavioural attributes of the firm, such as business name, planning, variety of
products/services, tradition, ideas, and to the impression of quality communicated by each
person interacting with the corporate clients. Corporate image has two principal components:
the functional and the emotional (Kennedy, 1977). The functional component is related to
real characteristics which can be easily measured, while the emotional component is
associated with psychological dimensions which are measured by feelings and attitudes
towards a firm. These feelings are derived from individual experiences with a firm and from
the processing of information on the attributes that constitute functional indicators of image.
Therefore, corporate image is the result of an aggregate process by which the public
compares and contrasts the various attributes of firms. In today’s competitive environment,
many companies need to project a strong and positive reputation to their stakeholders, namely
the employees, consumers, investors and the public.
According to Garbett (1988), companies must try to develop an image that is stable
yet exciting, aggressive, yet public-oriented, diversified yet focused on some specialised

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areas, and generous to employees yet shrewd in its investments. The ability to satisfy the
needs of the different stakeholders helps to generate positive feelings towards the company.
Many organisations spend time, resources and effort to build a strong image for their
businesses. Millions are spent on advertising their products and services to create a strong,
impressive brand and donations and charity events are sponsored in order to create an image
of a socially responsible organisation in the eyes of the public.
Employees are trained in corporate dressing and image marketing while research
firms help organisations to determine consumer preferences and opinions of the firms and
their products. According to Riordan et al (1997), employees are essential to an
organisation’s performance as their perceptions of corporate image are related to their work
attitudes and behaviours, and an organisation’s image can affect organisation performance.
Image perception can greatly influence the actions of employees. This is because corporate
image contributes to an employee’s sense of self and they use image to gauge how outsiders
are judging them. Therefore, it is important that an organisation sends positive signals to its
employees and let them judge for themselves the effectiveness of the organisation in
satisfying their interests and needs.

Corporate Image and its Effect on Customers Loyalty:

Porter (1985) suggests that a good reputation may help a pioneer firm building an
innovative image in the industry, while Franklin (1984) proposes that corporate reputation is
a global and final outcome of the process of building a corporate image. However, based on
the meaning generally accepted for each concept, one observes that both corporate image and
reputation are the external perceptions of the firm.  Corporate image and reputation are thus
the results of an aggregation process which incorporates diverse information used by the
consumer to form a perception of the firm. Even for a consumer who has not yet had
experience with the firm, these perceptions may be formed from other sources of information
such as advertising or word-of-mouth. 
From the perspective of marketing, the impact of corporate image and reputation on
consumer behaviour is well recognized in spite of the lack of empirical evidence. Numerous
authors state that a good corporate image or reputation helps to increase the firm's sales and
its market share, and to establish and maintain a loyal relationship with customers
(Andreassen and Lindestad, 1998). In an investigation on service quality and customer
loyalty in the commercial airline industry, Ostrowski et al. (1993) find that “a passenger's

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image of the carrier which is based on long-term experiences encompassing many service
encounters is more important in explaining customer loyalty than is the evaluation of the
current, single flight.” They also argue that the consumer may consider a bad experience as
an exception to his whole impression of the service provider.

Image Advertising:

Corporate image advertising is an important tool used by corporate marketers to

convey desired corporate identity characteristics, “what we say we are” (Balmer and Greyser,
2006). Corporate claims of “we say we are a socially responsible firm” are particularly prone
to consumer scepticism, potentially hindering the construction of the desired corporate image
in the minds of critical stakeholders, such as consumers.
Corporate image advertising is just one of a variety of communication tools that might
be used to promote the desired corporate identity of the corporate brand or master brand
rather than specific products or services. Such advertising may also take a less direct, or
advocacy form, in which “the company does not promote itself directly but rather promotes
an issue or cause that has an indirect bearing on its operations” (Rossiter and Percy, 1997).
The corporate image advertisement conveys the desired corporate identity via the
advertisement’s executional elements. One way to achieve this is through the advertisement’s
visual elements. British Petroleum (BP), for example, in order to reposition itself as caring
for the environment and distinguish itself from other oil companies, used lower-case “bp”
letters in a “smoother, more child-like” font in its logo, to stand for “beyond petroleum”
rather than BP, made tonal changes to the green and yellow colours used, and made a “greater
use of yellow the incorporation of a sun-like image to convey a sense of solar rather than oil
power” (Wells et al., 2008).
While it is quite common to regard advertising as a major factor in leveraging brand
equity (Lindsay, 1990), it is worth noting that consumers are not passive recipients of image-
laden advertising. Joyce (1991) suggests that "people took away from communications,
including advertising, what they chose to, and indeed brought existing preconceptions to
them". In reality, brand values are subjective, a point stressed by McDonald (1992) who
suggests that "it is consumers and their habit-forming tendencies who create branding;
branding is inseparable from the ability to choose. What advertising does is to
help control the acquisition of value, and give it direction. If we did not advertise, our product
would still acquire a `branding', but it might not be one that we would like".

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The benefits of establishing a perceived customer-identity-based corporate image are

argued to be many: enhanced brand differentiation (McWilliams and Siegel, 2001); brand
equity (Hoeffler and Keller, 2002); competitive advantage (Porter and Kramer, 2002); and
customer loyalty and other positive post-purchase outcomes (Bhattacharya and Sen, 2003).

Techniques for Image Advertising:

Advertising techniques often intend to make a product stand out by throwing light on its
features that make it look different from the rest. Advertising is carried out through different
media so that the advertisements gain a mass appeal. It is brought before the public through
various channels to ensure that the product or the service is noticed by the general public.
Following is a description about the various types of advertising techniques.
 Print advertising makes use of the print media such as magazines and newspapers.
The print media also offers options like advertising through brochures or pamphlets.
The effectiveness of the advertisement made through the print media depends on the
popularity of the media used.
 The use of audio-visual media is another popular advertising technique. Television,
radio have been used in advertising since long.
 Internet advertising that has emerged in the relatively recent times has earned a huge
recognition. Advertisements relate to the subject discussed by the website and
popularity of the website and the position of the advertisement on the web page are
determinants of its noticeability.
 Advertisers use not only the print and the TV and radio channels but also movies to
feature their advertisements. Covert advertising is the practice of indirectly
publicizing a product through movies and TV shows.

Advertising techniques are and should be efficiently used for social causes. Awareness
about certain important subjects, social issues and environmental problems can be effectively
communicated to the public by means of advertisements. The government and other social
organizations are seen implementing public service advertising. But commercial product and
service companies should take the eyes off moneymaking for a little while and come forward
to advertise for a social cause.
Building Corporate Image through Societal Marketing:

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Social, including environmental, problems are many, and consumers have been found
to lack knowledge with the social and environmental issues engaged in firms’ consumer
initiatives. Societal marketing has been shown to create competitive advantages for a
company by building brand awareness, establishing brand credibility, enhancing corporate
image (Ross and Patterson, 1992) and stimulating consumer’s purchase intention (Roy and
Graeff, 2003). Societal marketing can allow corporations to differentiate themselves from
competitors by creating an emotional bond with consumers (Meyer, 1999). In turn, corporate
image can exert a powerful influence on customer attitudes and behavior with several
companies achieving remarkable improvements in corporate image through implementing
societal marketing programs (Kotler, 2003). Many industry surveys support the positive
impact of societal marketing on consumer attitudes and behavior in various countries such as
the USA, the UK, Australia and New Zealand (Business in the Community, 1998; Kaplan,
2002). These surveys all yielded similar results, that is, consumers expressed a more positive
attitude towards a company practicing societal marketing, and additionally prefer to purchase
products associated with a societal marketing program.
Inclusion of social topic information in consumer image advertisement with increase
message diagnosticity and inhibit sceptism toward the message. This will also establishes a
long term commitment to consumer, which benefit both company and society. Unplanned
corporate personality cues will moderate the size and direction of the effects of diagnostic
consumer image advertising cues on consumer sceptism towards those cues.

Assessing Carbon Consciousness by Companies:

In March 2006, ST Microelectronics, one of the leading semiconductor

manufacturers, announced a commitment to reduce its US greenhouse gas emissions by 50
per cent between 2000 and 2010. A recipient of many environmental awards, especially for
efforts to reduce GHG emissions ST Microelectronics hopes to become carbon-neutral by
2010 and has already succeeded in reducing its CO2 emissions by 50 per cent over the past
decade. These commitments are fundamental to company management philosophy and have
resulted in many innovative initiatives: integrating environmental criteria in the performance
evaluation of factory directors; encouraging use of public transportation and car-pooling
among employees; implementing reforestation programmes in Texas, Morocco and Australia
to offset the company’s remaining greenhouse gas emissions(Olivier, 2006)

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According to Hoffman, the economic and strategic impacts of climate change will
depend mostly on capital asset management, the global competitiveness of countries, the
anticipation of institutional changes stemming from the Kyoto Protocol and the ability of the
market to take advantage of the emergence of new opportunities related to climate change
policies.(Hoffman, 2005) Hoffman stresses that companies can benefit from voluntary green-
house-gas reductions through seven aspects: operational improvement, anticipating and
influencing climate change regulations, accessing new sources of capital, improving risk
management, elevating corporate reputation, identifying new market opportunities and
enhancing human resource management. These benefits are not systematic, and
organisational responses to global warming issues are not perfectly linear and monolithic.
These organisational responses depend on contingent factors, particularly the expected
economic impact of green-house-gas reductions, the political and regulatory context
surrounding global warming, scientific or technical aspects and social pressures.
Anticipating impacts of global warming through the promotion of environmental
intelligence may lead to different types of green-house-gas-reduction strategies and
commitments. Several studies have shown that such environmental commitments and
strategies may, for the most part, be described as more or less proactive responses to external
pressure.(Hunt, 1990) Most of these studies urge managers to adopt a proactive response to
environmental issues, taking for granted that this response will be rewarded. Being proactive
supposes implementing actions ‘‘intended to cause changes, rather than just reacting to
change’’.(Collins 2001). Adopting a proactive response may also reduce some financial risks.
First, environmental issues are increasingly used as criteria to evaluate performance on
financial markets and assess good governance. Second, banks and insurance companies are
increasingly taking these issues into account. For example, in the late 1990s, Swiss Re, one of
the world’s leading reinsurance companies, implemented a policy to make its customers more
aware of the financial risks stemming from climate change and it is now pressing large
industrial emitters to substantially reduce their green house gas emissions.
Anticipation of this kind of institutional pressure tends to encourage a proactive
strategy intended to reduce external constraints and protect or improve corporate images. An
improved corporate image can have a positive effect on consumer perception and product
marketing. Even if this improvement is difficult to anticipate and measure accurately, it
reduces the kind of ecological pressure strategy and boycotts directed at green house
emission-reduction-resistant companies.

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Markets are essential to creating a low-carbon economy. Once businesses have to

factor the cost of emitting CO2 and other greenhouse gases into their bottom lines, the power
of the marketplace will start to push toward efficiency, low-carbon fuels, renewable energy,
and so-called carbon-capture-and-storage technologies for coal-fired power. Market- based
pricing is a critical part of the equation but won’t work to rapidly transform our economy to a
low-carbon model without accompanying complementary policy mandates.
There are two ways to regulate carbon across the broad economy, through a cap-and-
trade program and through a carbon tax. Both approaches can work, if designed correctly.
Both are cost-effective, market-based mechanisms and both could be imposed at the same
point in the supply chain, for example at the mine or refinery. The distinct advantage of a
cap-and trade program, however, is that it provides greater certainty with respect to the
objective of limiting emissions. Designing a carbon tax would require policymakers to make
an educated guess about the tax rate needed to hold emissions to the desired level. And
factors such as the rate of economic growth would affect how successful the tax was in
meeting its objective.
Further, by adopting a market-based model for reducing greenhouse gas emissions,
the United States can link up with the rapidly growing international marketplace for carbon
credits. Partly for this reason, some of the world’s leading banks, including Morgan Stanley,
Citigroup, Lehman Brothers Holdings, Credit Suisse, and others are urging the United States
and other industrialized nations to adopt cap-and-trade programs rather than enacting carbon
taxes. These institutions also warn against over-allocating carbon credits—giving too many
credits away for free to carbon-intensive industries rather than requiring those companies to
purchase the credits on the open market. The over-allocation of carbon credits can lead to
price volatility in the marketplace, as Europe has experienced over the past year and a half.
(James Kanter, “Banks Urging U.S. to Adopt the Trade Emissions,” New York Times,
September 26, 2007, sighted http://www.nytimes.com/2007/09/26/business/26bank.html?
ex=1349409600&en=5e05fd3c94fb3f8b&ei=5124&partner=permalink&exprod=permalink).

Conclusion:

Finally, we can see that corporate image is very important to an organisation and
because there are number of components that can affect corporate image. The management
needs to understand how the process of developing corporate image works and how it can
work for their company. Proper development of a good corporate image, together with a good

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business strategy, can enable a company to achieve the necessary competitive advantage in
order to improve its end result and face the challenges in a complex business environment.
Increasingly, importance is being placed on the addition of brand values as the basis for
discrimination at all levels of consumer-business interaction. The brand represents for the
consumer a specific articulation of product performance attributes and a suggested set of
symbolic values and meanings inherent in the received personality. Advertising represents a
most potent source of brand identity. In effect the development of brand image will develop
on both informational and the transformational abilities of advertising with the brand image
formed by the consumer being the composite of both functional and emotional components
absorbed simultaneously.

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