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Corporate brand
Core value-based corporate building
brand building
Mats Urde
Head of Lund Brand Management Research Programme, 1017
Institute of Economic Research, Lund University,
Lund, Sweden Received January 2001
Revised July 2001,
December 2001
Keywords Values, Corporate identity, Brands, Brand identity
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Abstract The aim of this article is to introduce a conceptual framework for a corporate brand
building process based on core values. The nature, role, and function of core values are considered
a central part of the value foundation of a corporate brand. In line with this reasoning, a
distinction is also made between three groups of values: organisational values, core values, and
added values. This article is based on research into the brand building efforts of more than 50
major companies over a period of ten years. The Volvo case is used as an illustration and places
special emphasis on internal processes. The role of the core values in the ten steps of the framework
is explored and illustrated. The work is based on first-hand experiences, interviews, and unique
internal strategy documents from Volvo. The discussion defines core values as overarching
concepts that summarise the identity of the corporate brand and as guiding lights for the brand
building process. Another conclusion drawn from the article is that core values are vital for
continuity, consistency and credibility in a value-creating process. The theoretical and practical
implications of using core values as a unifying common thread are discussed in relation to the
paradigm of brand orientation.
Introduction
Imagine this scenario: in order to better understand their company’s corporate
brand and brand-building process, the board of directors asks four members of
their company’s senior management to make presentations about the
company’s values. The CEO, who is the first to speak, highlights the
company credo; he is followed by the human resources manager, who stresses
the significance the organisation’s internal basic values and principles. The
brand manager then gives an overview of the brand values, and finally the
marketing manager summarises the brand essence from a communication
perspective. For many companies this would probably be a nightmare – no
overall clarity, little apparent consistency and a hotchpotch of terminology.
The purpose of this somewhat contrived introduction is to underline
something that is all too often ignored or forgotten, that is that the
understanding, use and implementation of a value foundation for a corporate
brand is often inadequate and elusive.
One reason is the confusion of terms that are used to describe and identify European Journal of Marketing
the various values that help create the identity of a corporate brand. Far too Vol. 37 No. 7/8, 2003
pp. 1017-1040
q MCB UP Limited
0309-0566
This article has benefited greatly from suggestions made by the two anonymous reviewers. DOI 10.1108/03090560310477645
EJM often there is a lack of structure, there is no obvious thread that links the
37,7/8 processes of protecting, building and developing the corporate brand. And all
too frequently, the role and function of the various values are not clearly set out
and ill defined.
The search for the central core of the brand has engaged and fascinated
numerous researchers and experts. As so many organisations and companies
1018 flounder at this stage of the brand building process, the search is well justified.
It is therefore necessary to provide an overview of how values are treated in the
literature. One way is to look at values from three viewpoints:
(1) values that are related to the organisation;
(2) values that summarise the brand; and
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1020
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Figure 1.
There is a continuous
interaction between
value and identity at
three levels
organisation and customers in target group or groups (Melin, 1997; Urde, 1997).
Ideally, a brand – as a sustainable competitive advantage – should be unique
and difficult for competitors to imitate (e.g. Barney, 1991, 1997; Hall, 1992;
Grant, 1995). The value-creating processes take place in parallel. These are
internally, i.e. within the organisation, and externally, i.e. in the awareness of
customers (Figure 2); together they generate corporate brand equity. Keller
(2000, p. 115) defines corporate brand equity:
. . . as the differential response by consumers, customers, employees, other firms, or any
relevant constituency to the words, actions, communications, products or services provided
by an identified corporate entity.
In this article, we are primarily discussing the internal value-creating process;
special emphasis is placed on a company with a corporate brand. The reason
why the external process is also presented is to provide an overview to help the
reader to relate added values to core values, and vice versa.
The internal brand building process (left column, Figure 2) is primarily used
to describe the relationship between the organisation and the brand (see
Figure 1). The objective of this internal process is ultimately to get the
organisation to live its brands (Balmer and Wilkinson, 1991; Balmer, 2001;
Harris and de Chernatony, 2001; Urde, 1994, 1999; Ind, 2001). This is described
in the model as internal brand identity, i.e. the organisations own
understanding of the brand and its commitment to it. The value base
includes the main assignment, i.e. the vision, the organisational values and the
core values. The establishment of this value base within an organisation is a
decisive factor in the production of an internal brand identity. The
organisation’s relationship with the brand will also affect the total internal
relationship to the brand and vice versa.
The external brand building process (right column, Figure 2) is primarily
concerned with relations and interactions between the brand and the customer
(see Figure 1). The objective of this external process is ultimately to create
value and relationships, with the customer’s identity as the basis. To achieve a
strong brand relationship with the customer, it is necessary for there to be an
Corporate brand
building
1023
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Figure 2.
Internal and external
core value-based brand
building process based
on experiences at Volvo
and a series of other
companies
interest in the product and for the choice of brand to be regarded as important,
i.e. there must be brand sensitivity (Kapferer and Laurent, 1992). This is
followed by a need to create brand awareness and positive brand associations
(Aaker, 1991; Melin and Urde, 1991). The added values that the customer
experiences can be functionally, emotionally, and/or symbolically based (de
Chernatony and MacDonald, 1998). If the brand’s image is attractive to the
customer’s own self-image (Higgins, 1987) – real, ideal, or normative – the
basis has been created for a relationship between the brand and the customer.
This is, in turn, the basis for a relationship that can develop into brand loyalty
(Grönroos, 1995).
The framework builds on the idea that a brand’s identity is developed as a
continual and ongoing interaction between the identity of the organisation and
the customer. In this way, the organisation’s values, overall mission, and vision
of what is to be achieved – beyond generating profits – obtain their true
meaning. Brands can therefore be seen as symbols of an organisation’s efforts
and ambitions.
EJM Core value-based brand building – the case of Volvo
37,7/8 In order to illustrate the role of the core values in an internal brand building
process, the case of Volvo is analysed and discussed based on the ten steps in
the framework (Figure 2). The point of departure is the overall task or mission.
automotive and transport products, equipment and systems (AB Volvo, 1997, p. 12).
The core values can contribute to continuity and far-sightedness by also being
a part of the corporate vision.
Core values can be said to fulfil a double function (see Figure 1), as illustrated
by the Volvo case. First, the organisational values are translated into the core
values that guide the organisation’s efforts. Second, the core values are
translated into customer utility value or added value for various target groups.
One of the challenges of implementing core values is that they can be
interpreted in different ways. In the Volvo brand statement, with the aim of
providing a more unified picture of the core values, the brand statement
authors have supplemented the text with short clarifying comments (Figure 3).
This statement may be seen as a summary of the company’s corporate brand
strategy, and establishes a number of principles.
The three core values that the Volvo’s brand statement is based on are
common across the corporation. How they are communicated can vary
depending on the products, target groups, and markets. The goal, however, is for
the three core values to create a common platform for the Volvo corporate brand.
The core value of quality is described as a part of Volvo’s corporate culture
in the brand statement. According to Leif Ahlberg, VP of brand management
for the Volvo Group, “quality is an attitude.” Despite the fact that quality is in
principle a prerequisite for competition, and thus as such not differentiating,
Corporate brand
building
1027
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Figure 3.
The Volvo brand
statement is today in
principle unchanged,
aside from the new
corporate roles and
division of brands
between AB Volvo and
Volvo as one of the
brands under the Ford
Motor Company
EJM Ahlberg emphasises that it is Volvo’s interpretation of quality that makes the
37,7/8 concept unique and distinguishing. Björn Jutendahl, head of market
communication for Volvo Car, argues that quality not only relates to the
product, but also to relations and communication. Volvo’s goal is to have “at
least as good quality, in a broad sense, as the main competitors”.
Safety is Volvo’s primary and most differentiating core value. The goal is for
1028 Volvo to be the world leader in terms of safety in both “construction and
communication”, says Bengt Junemo, a project manager at Volvo Car. At Volvo,
efforts are focused on making safety thinking a natural part of all of the
company’s processes and philosophy. The concept of safety has, however, over
time been given a deeper and broader significance. It has been broadened from
safe products to include personal safety, safety for all passengers, safety for
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others in the traffic environment and safety in relation to the environment. In this
way, the core value of safety has become more intimately related to, for example,
the organisational value of care for people, which in turn is a precondition for
being able to speak about concern for the environment with credibility.
The core value of “concern for the environment” has been disputed within
Volvo, since the products that the company manufactures and markets
undeniably have a negative environmental impact. Within the organisation, it
has, however, been reasoned that Volvo’s commitment and actual track record
in the area of environment qualifies “concern for the environment” as a core
value, according to Sven-Åke Ståhl, global marketing, Volvo Car. This core
value is not yet clearly associated with Volvo by customers, but in its own
circles it is truly established. This situation illustrates how core values can be
an expression for an intention and a part of a desired future identity.
1029
Figure 4.
Four fundamental brand
architectures with
different roles for the
corporate brand. The
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In Volvo’s corporate brand architecture the core values are shared by the
different products, and there is an overall brand identity. In practice, Volvo’s
corporate brand architecture meant that five different product companies could
aim at different target groups under widely varying market conditions. The
core values therefore played a decisive role in co-ordinating the brand building
process. One way of describing the logic of the brand building process at Volvo
is to create a distinction between two levels: corporate brand and product brand
(see Figure 5). These two levels are linked to the three core values, and thus
constitute the basis for corporate brand building and product brand building.
The role of the corporate brand in Volvo’s overall brand architecture is to
give credibility, in, for example, communications with government, the
financial sector, the labour market, and society in general. The individual
product companies contribute to the whole by associating the common brand
with the core values and by living up to and preferably exceeding expectations.
According to the framework, this should take place within the scope of the
corporate core values.
Figure 5.
Core-value framework
linking a corporate brand
to product brands
EJM The framework gives, at the same time, the individual product companies
37,7/8 opportunities to market their products to their customers in different markets.
To increase flexibility for the product companies, extended core values are used
that supplement the corporate core values. Volvo Car has, for example,
“attractive design” as an extended core value. The logic is consequently that
although all brand building must be based on one or several of the corporate
1030 core values, they can also be complemented with one or several extended core
values. During one of our discussions, Leif Ahlberg, VP for brand management
at the Volvo Group, drew a parallel between a core value and a melody that
should always be recognisable, regardless of musical genre or instrument.
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safety is described as “care for man”. This wider interpretation of the notion of
safety means among other things that the perspective has been widened to
encompass more than the car and concern about its passengers. For example,
Volvo has taken part in arranging international conferences on traffic safety
together with the UN-affiliated World Health Organisation (WHO), and the
company is also a sponsor of various research projects dealing with traffic
injuries.
saying that the core value of safety is linked via “the modern family” to the core
value of concern for the environment, while quality as a core value is regarded
as a precondition.
Melin, 1997; Urde, 1997), corporate identity (Olins, 1989, 2000; van Riel and
Balmer, 1997), corporate communications and reputation management (e.g.
Bernstein, 1984; van Riel, 1995; Fombrun, 1996), and organisational theory (e.g.
Senge, 1992). An eclectic approach to research into corporate brand
management (Balmer, 1995) is needed to join the aforementioned areas into a
meaningful whole from which cross-fertilisation and new ideas can flourish.
In an era where it is becoming increasingly important to sustain a
competitive advantage (Balmer, 1995), corporate brands can no longer “just
stand there, they must stand for something” (Wrench, 2001). This article, which
offers a framework on which to build a corporate brand’s value, contributes to
the research into the nature, role and function of the core value.
To conclude the discussion, core values can be defined as all-embracing
terms that sum up the identity of the brand as well as being the guiding
principles for all internal and external brand building processes. A
characteristic of a core value is that it is a dynamic rather than an inactive
description. This implies that the core values shall be guiding factors and
represent a direction for product development, behaviour and communication
processes. Although the core values must be seen as lasting factors, they must
also be dynamic by nature and continually be adapted and developed so as to
encourage a sense of challenge and adventure that is relevant both internally
and externally. It should also be pointed out that because the requirements of
the core values are continually revised, it is not possible to satisfy these
requirements and therefore the company achieves its core values through
action. Neither is it possible to choose or create a core value that is not already
firmly established in the organisation; if this is not the case they are just empty
words. It is not a requirement of the core value to be unique, but it is a
requirement that interpretation and expression are. The creative aspects should
target the interpretation and usage of the core value and not the creation of new
core values.
The purpose of a core value-based brand building process is to establish a
unifying common thread. And the reason for talking about three core values is
to ensure that the functional, emotional and symbolic dimensions of the
EJM corporate brand are all included. Another way of putting this is to say that the
37,7/8 three core values must stand for and persuade through the use of logos (logical
argument), ethos (character and personality) and pathos (feelings).
In the internal brand building process the core values link mission, vision
and organisational values, they also affect the brand architecture, product
attributes, brand positioning and communications strategy. This means that
1036 the core values influence continuity, consistency and credibility in the building
of a corporate brand. The core value can also work as a link between a
corporate brand and product brands.
In the external brand building process, the core values are realised through
added values. It should be understood that they will also affect the image of the
corporate brand.
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Implications
From both a theoretical and practical perspective, there is a need to link core
competencies to core values. The challenge is to organise a company’s resource
base and internal processes in a manner that both strengthens and
differentiates the core value. The goal should be to ensure that the core
values that the corporate brand stands for are expressed as added values that
the customer experiences as useful and unique; they must also be difficult for
competitors to imitate. The factors that link core values and the corporate
brand are decisive for brand equity and competitive strength; and all work
associated with the core value promise is a step towards an increased level of
brand orientation. Such a process must have the full support of the executive
management and the organisation as a whole. The implementation of core
values and organisational commitment are examples of areas that need more
research.
Notes
1. Today, AB Volvo is an independent company that manufactures and markets trucks, buses,
aircraft engines, marine engines, and construction equipment. At the same time, Volvo is an
independent brand for cars within The Ford Motor Company. The Volvo trademark is
jointly and equally owned by The Volvo Group and The Ford Motor Company. Despite the
fact that Volvo as a single company no longer exists, it is the intention of the two
corporations to continue to develop and protect the Volvo brand. A comment by Ford Motor
Company CEO Jack Nasser on CNN when the price of the acquisition reached SEK50 billion
was that “Volvo stands for values that belong to the future”.
2. The background material in this section comes from “The Volvo copy platform and
communication directives” (AB Volvo, 1989) and Perrier (1993).
3. Within the Volvo group this forum is now known as the Group Issue Board: Brand
Mangement. The author was invited to participate in the forum’s first two meetings in 1995.
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74. Veronika Tarnovskaya, Ulf Elg, Steve Burt. 2008. The role of corporate branding in a market driving
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