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Employer Branding

A holistic concept of Strategic Brand Management for attracting and retaining a company’s Right Potentials - with the example of Degussa AG

©2006 Diplomarbeit 76 Seiten

Zusammenfassung

Inhaltsangabe:Abstract:
The information economy, the current demographical trends and other factors will produce a shortage of skilled labour. During the last decade, many labour markets had encountered a shortage of skilled labour. In fact, whole industries have had serious problems to fill vacancies. Many have forecast horror scenarios for the labour market, whereas others have created strategic concepts to cope with it.
The „War for Talent“ and the „Employer of Choice“ concept are leftovers of this period. Employee attraction and retention will continue to be an important issue for many companies in the beginning of the 21st century. The new up-coming competition for talent draws the attention on a new concept, in order to deal with the future challenge - employer branding. Employer branding has moved center stage in the last two years. The strategic relevance of employer branding is still underestimated or unknown.
Employer branding is neither a wonder cure nor a cure-all approach. This thesis and chapters provide an insight in the employer branding concept and its relevance. What does employer branding means, where does it stem from? It also contains a practical guide for developing and implementing an employer branding process, with a short case study of global chemical company.
Do you remember the scenario published in McKinsey´s Quarterly in 1998? The „War for Talent“ - this expression has become synonymous for the labour shortage of High Potentials. The economy was burning white-hot in the late 1990s and companies were scrambling to hire and retain the people they needed. With a boom, talent becomes scarcer because everybody is looking for talented people to fill vacancies. In the late 1990s the „employer of choice“ concept became popular, when the war for talent was about to begin.
The term „employer of choice“ is based on the unwritten promises and expectations that develop the basis of the employment relationship. The collapse of the dot.com industry, followed by a time of recession and downturns causing layoffs and job cuts, has created a surplus of labour. The predicted „War for Talent“ for High Potentials has been postponed. Really?
The current economic landscape has changed dramatically, product lifecycles have grown shorter, products and services are substitutional, innovation is accelerating and customer loyalty is just a pie-in-the-sky. The economy is driven by ongoing changes, globalization, growing complexity and the […]

Leseprobe

Inhaltsverzeichnis


Birger Meier
Employer Branding
A holistic concept of Strategic Brand Management for attracting and retaining a
company's Right Potentials - with the example of Degussa AG
ISBN-10: 3-8324-9643-2
ISBN-13: 978-3-8324-9643-2
Druck Diplomica® GmbH, Hamburg, 2006
Zugl. Universität Paderborn, Paderborn, Deutschland, Diplomarbeit, 2006
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Printed in Germany

page I
Table of Content
T
ABLE OF
F
IGURES
...IV
A
BBREVIATIONS
... V
A
BSTRACT
...VI
1.
R
ENAISSANCE OF THE
W
AR FOR
T
ALENT
... 1
1.1. From the Post-Industrial to the Information Economy ...2
1.2. Working Environment...3
1.2.1. Organization-Employee Relationship...3
1.2.2. Employee Engagement...4
1.2.3. The Job Market Will Become an Employees Market ...4
1.3. Demographical Change ...5
2.
E
MPLOYER
B
RANDING
-
A HOLISTIC CONCEPT OF
S
TRATEGIC
B
RAND
M
ANAGEMENT
... 8
2.1. What Is a Brand? ...8
2.2. Functions of a Brand...9
2.3. What Makes a Strong Brand? ...9
2.4. Brand Management ­ Challenges and Opportunities ...11
2.5. Development of the Employer Branding Concept ...12
2.5.1. The Corporate Branding Concept ...12
2.5.2. Corporate Branding vs. Employer Branding...14
2.5.3. Employer Branding ­ What It Is and Why It Matters!...16
2.5.4. High Potentials vs. Right Potentials ...19
2.5.5. What Determines Employer Branding? ...20
2.6. Employer Branding ­ a Theoretical Foundation ...22
2.6.1. Porter's Competitive Strategy...22

page II
2.6.2. The New Institutional Economics and the Neoinstitutional Paradigm...24
2.6.3. The Psychological Contract...26
2.6.4. The Concept of Brand Equity...28
2.7. Employer Branding ­ a Strategic Perspective...29
2.7.1. Targets of Employer Branding...29
2.7.2. Benefits of Employer Branding...30
3.
T
HE
E
MPLOYER
B
RANDING
P
ROCESS
­
A
P
RACTICAL
R
OADMAP
... 32
3.1. Prerequisites for Successful Employer Branding ...32
3.2. The Employer Branding Process Model ...33
3.3. Strategic Brand Analysis ...34
3.3.1. Self-Analysis...35
3.3.2. Competitor Analysis...35
3.3.3. Labour Market Research ...36
3.3.4. Communication Audit ...36
3.4. Brand Strategy ...37
3.4.1. Brand Architecture...37
3.4.2. Brand Identity ...38
3.4.3. Brand Attributes...39
3.5. Brand Position...39
3.5.1. Brand Touchpoints...39
3.5.2. Brand Communication ...40
3.6. Brand Action Plan...41
3.6.1. Brand Management Roles and Key Responsibilities ...41
3.6.2. Strategic Guidelines...42
3.6.3. Brand Performance Indicators (BPI) ...42
3.7. Brand Tracking...42
3.7.1. Brand Performance...42
3.7.2. Adaptation...43
3.7.3. Brand Development ...43
4.
E
MPLOYER
B
RANDING AT
D
EGUSSA
AG... 43
4.1. About Degussa ...43

page III
4.1.1. Facts and Figures ...44
4.1.2. Degussa Products ...44
4.1.3. The Degussa Workforce...44
4.1.4. Corporate History...45
4.1.5. Company Prospect ...45
4.2. The Employer Branding Background...46
4.2.1. Employer Branding Development...46
4.2.2. Evolution of the Employer Branding Activities ...46
4.2.3. The Employer Branding Strategy...48
4.3. The Employer Branding Process of Degussa...48
4.3.1. Pre-phase ...48
4.3.2. Strategic Brand Analysis...49
4.3.3. Brand Identity ...51
4.3.4. Brand Position ...52
4.3.5. Brand Communication ...53
4.3.6. Brand Action Plan...54
4.3.7. Brand Tracking ...54
4.3.8. Prospect for 2006...55
E
VALUATION AND
C
ONCLUSION
... 56
R
EFERENCES
... VII

page IV
T
T
A
A
B
B
L
L
E
E
O
O
F
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I
I
G
G
U
U
R
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Figure 01:
Survey results concerning employee loyalty, satisfaction and engagement... 4
Figure 02:
Demographical development in industrial nations, age group 35-44 years... 6
Figure 03:
Functions of a brand from a customer and company perspective ... 9
Figure 04:
Brand Identity Dimensions... 10
Figure 05:
Corporate Brand Stakeholders... 14
Figure 06:
Distinctive features of a corporate brand and an employer brand ... 15
Figure 07:
Different views of the meaning of the employer branding concept ... 17
Figure 08:
Determinants of the Employer Brand... 21
Figure 09:
The traditional and psychological contract... 27
Figure 10:
Employer Branding Benefits ... 31
Figure 11:
Employer Branding Process Model... 33
Figure 12:
Employer Brand Identity Dimensions ... 38
Figure 13:
Employer Brand Touchpoints... 40
Figure 14:
Employer Brand Management & Key Responsibilities ... 41
Figure 15:
Degussa product samples ... 44
Figure 16:
Employees by regions ... 45
Figure 17:
Milestones, Degussa Employer Branding ... 46
Figure 18:
Organisation Degussa Global Employer Branding ... 49
Figure 19:
Degussa SWOT-Analysis... 50
Figure 20:
Degussa Labour Market Research... 51
Figure 21:
Development Degussa Employer Brand Identity ... 52
Figure 22:
Development Degussa Employer Brand Identity ... 53
Figure 23:
Degussa Communication Measures ... 54
Figure 24:
Team structure Employer Branding Western Europe... 54
Figure 25:
Degussa Employer Branding Monitoring... 55

page V
A
A
B
B
B
B
R
R
E
E
V
V
I
I
A
A
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I
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O
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CEO
=
Chief
Executive
Officer
e.g.
=
Exempli
gratia
(for
example)
EVP
=
Employee
Value
Proposition
i.e.
=
Id
est
(that
is)
NIE
=
New
Institutional
Economics
no.
=
Number
OECD
=
Organization for Economic Co-operation and
Development
p.
=
Page
pp.
=
Pages
UAP
=
Unique
Applying
Proposition
(UAP)
UFP
=
Unique
Feeling
Proposition
(UFP)
USP
=
Unique
Selling
Proposition
(USP)
Vol
=
Volume
WuV
=
Werben
und
Verkaufen
IMF
=
International
Monetary
Fund

page VI
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The information economy, the current demographical trends and other factors will produce a shortage of
skilled labour. During the last decade, many labour markets had encountered a shortage of skilled labour. In
fact, whole industries have had serious problems to fill vacancies. Many have forecast horror scenarios for
the labour market, whereas others have created strategic concepts to cope with it. The "War for Talent" and
the "Employer of Choice" concept are leftovers of this period. Employee attraction and retention will
continue to be an important issue for many companies in the beginning of the 21
st
century.
The new up-coming competition for talent draws the attention on a new concept, in order to deal with the
future challenge ­ employer branding. Employer branding has moved center stage in the last two years. The
strategic relevance of employer branding is still underestimated or unknown. Employer branding is neither a
wonder cure nor a cure-all approach. The following chapters provide an insight in the employer branding
concept and its relevance. The first three chapters provide the theoretical foundation for the application of the
employer branding approach in practice. Chapter 4 highlights the employer branding activities of an
industrial company, exemplified by a chemical company.
Chapter 1, "Renaissance of the War for Talent" explains the driving forces, which will cause a labour
shortage, and why employees are becoming vital for future corporate success.
Chapter 2, "Employer Branding ­ a holistic concept of Strategic Brand Management" presents the employer
branding process as a holistic brand management process. This chapter presents a short introduction in
branding and brand management. Moreover, it delivers a theoretical foundation for employer branding.
Chapter 3, "The Employer Branding Process ­ a practical roadmap" provides a company with a kind of
blueprint or roadmap for Employer Branding, describing every single process steps and its related tasks.
Chapter 4, "Employer Branding at Degussa AG" describes employer branding in practice, and provides
background information about the employer experience in an B2B-company.
Chapter 5, "Evaluation and Conclusion" discusses the results of this thesis on the one hand and provides a
prospect for the future of the employer branding concept.
The major findings are:
Employer Branding provides a framework for branding the organisation, to examine the characteristics and
attributes, which separates the company from its competitors, for creating a competitive advantage, measure
effectiveness, improve retention, understand the drivers for employee satisfaction and commitment.
Therefore, it is necessary to make clear its strategic relevance and benefits for a company, if used properly.
Understanding employer branding as an strategic brand management concept helps to create a sustainable
relationship with the most valuable asset of the company ­ employees.

page 1 of 56 pages
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Do you remember the scenario published in McKinsey´s Quarterly in 1998? The "War for Talent"
1
­ this
expression has become synonymous for the labour shortage of High Potentials. "The economy was burning
white-hot in the late 1990s and companies were scrambling to hire and retain the people they needed."
(Michaels/Handfield-Jones/Axelrod, 2001, p. 1). With a boom, talent becomes scarcer because everybody is
looking for talented people to fill vacancies. In the late 1990s the "employer of choice"
2
(Alrichs, 2000, p.
2)
concept became popular, when the war for talent was about to begin. The term "employer of choice" is
based on the unwritten promises and expectations that develop the basis of the employment relationship. The
collapse of the dot.com industry, followed by a time of recession and downturns causing layoffs and job cuts,
has created a surplus of labour. The predicted "War for Talent" for High Potentials
3
has been postponed.
Really?
The current economic landscape has changed dramatically, product lifecycles have grown shorter, products
and services are substitutional, innovation is accelerating and customer loyalty is just a pie-in-the-sky. The
economy is driven by ongoing changes, globalization, growing complexity and the changing nature of work.
Companies have to sustain on different markets, which are influenced by dynamics, increasing competitive
pressure. (Teufer, 1999, p.1) For this reason, having a long-lasting competitive advantage becomes more and
more vital to companies, in terms of innovation. Knowledge is becoming the strategic source of innovation,
not the reliance on technology. Hodes CEO Alan Schwartz (2006) points it out: "People ­ talented people ­
solve problems and make sense of things. Not technology. That is what drives the importance of having the
right talent inside a company." Nevertheless, there are emerging social and demographic trends that can
make the recruiting efforts of organizations even harder and might start a new war: for Right Potentials.
4
1
In 1997, a landmark McKinsey and Company study exposed the "War for Talent" as a strategic
business challenge and a critical driver of corporate performance. The "War for Talent" describes
the elements of a new more deliberate approach to talent management. (www.McKinsey.com).
2
An employer of choice is "an organization that is able to meet growth and profitability goals
because it attracts and retains the quality and quantity of employees it needs."
3
There are various definitions of High Potentials in the literature, a definition is added in chapter 2.5.4.
4
A definition for Right Potentials is presented in chapter 2.5.4.

page 2 of 56 pages
1.1. From the Post-Industrial to the Information Economy
The following chapter investigates the changes and developments making the factor "human capital" a firm's
most valuable asset, and "knowledge" the driver of competitive advantage. (e.g. Tucker/Kao/Verma 2005;
Simon et.al, 1995; Lieber, 1995; Scholz 1998; Schweizer, 2001; Brown et. al 2003: Teufer 1999). What
creates the scarcity of qualified personnel and consequently makes it more difficult for companies to fill their
vacancies?
Our economy has developed from a post-industrial to a knowledge-based economy (Hatfield, 1999, p. 50;
Brown et.al 2003, p. 22). The OECD (1996 p. 7) defines the term knowledge-based economy as "economies
which are directly based on the production, distribution and use of knowledge and information. This is
reflected in the trend in OECD economies towards growth in high-technology investments, high-technology
industries, more highly skilled labour and associated productivity gains". According to this definition, a
knowledge-based economy is characterized by the will and ability to create knowledge for economic
purposes and to use it to generate benefits and profits. The transition to a knowledge economy has had
multiple effects on the economy, as well as on working conditions. According to the article of Building a
Strategy To Keep Good People (o. V. 1999), the working environment has changed over the past few years:
(1) increased emphasis on cognitive rather than manual skills, (2) more complex organizational systems, (3)
lack of boundaries across jobs and departments, (4) increased competition and environmental uncertainty, (5)
diversity of the workforce, and (6) global interdependence. This development has created a more complex
working environment. Consequently, the demand for unskilled labour will fall and the demand for skilled
labour will rise. For example in Germany, where the share of skilled labour will rise from 28.4% (1990) to
30.1% (2010), while the amount of unskilled manual labour will fall from 20.1% (1990) to 15.7% (2010)
(Reinberg/Hummel, 2003, p. 3). With knowledge and technology as the economic currency, the majority of
new jobs being created in the developed world require high skill levels and substantial expertise
(Tucker/Kao/Verma, 2005, p. 2). Knowledge is becoming the driving force of innovation and this can only
be acquired through people, making human capital the strategic factor for sustainable growth. For
knowledge-driven economies, sources of strategic advantages (Martin et.al 2004, p. 76) are:
· intangible assets like successful brands and/or
· intellectual capital like knowledge, patents and working experience, relationships
The right talent with the appropriate set of skills is not the only critical factor in any business today. In a
service-oriented economy, success depends not only on the appropriate skill set. Moreover, the most valuable
aspects of jobs are now, as Thomas Stewart describes in Intellectual Capital, "the most essentially human
tasks: sensing, judging, creating and building relationships" (Buckingham/Coffman, 1999, p. 23).

page 3 of 56 pages
As a result, it will become more difficult for companies to find the Right Potentials with the
appropriate skills and the ability to build a company's long-lasting relationships. This is why the
labour market will become a company's key market for future success. Another driving force,
which favours a new battle for talent, is the changing working environment.
1.2. Working Environment
As presented in the previous section, the need for appropriately skilled staff is not the only driver that fosters
the new talent war. The nature of employment itself undergoes significant changes in different areas of the
working environment: (1) employer-employee relationship, (2) employee engagement and (3) employee
satisfaction. The interdependence of employee motivation and business performance will determine a
company's future success.
1.2.1. Organization-Employee Relationship
Since work situations are becoming increasingly non-routine and more complex, the necessity for
organizations to focus on retaining employees who fit in is more and more vital. However, this is where
companies are facing difficulties in the employment relationship, because a new kind of employee is
emerging with changing values and attitudes. This new value understanding is based on the development
from post-material to individual values
5
(Scholz, 1994, p. 4; Rosenstiel et.al 1989, p. 7; Schweizer, 2001, p.
21; Rust, 2004, p. 40) and, according to Jurkewicz (2000, p. 56): "A noticeable shift in attitudes towards
work occurred in the mid-70s when adults were increasingly concerned with personal growth and happiness
and less concerned with defining themselves by their organizational affiliation." Employee engagement
matters for a company and all factors driving employee satisfaction. Employees desire more than just a
competitive salary, benefits or additional monetary incentives. Employees say that the main reasons for
growing dissatisfaction and unhappiness are factors such as an annoying boss and low salary. Consequently,
an employer has to read between the lines. According to Herzberg (1968, p. 3) are the things that satisfy and
motivate people on the job different in kind from the things that dissatisfy them."
The traditional understanding of an employee's role in an organization in which the employee is a simple
wage earner is transforming into a more recognizable relationship. For strategic reasons it is important for an
organization to know the crucial drivers of employee satisfaction and engagement.
5
Additional information to changing values following Noelle-Neumann, 1985, Inglehart, 1979, Opaschewski, 1989,
Rosentstiel et al., 1993.

page 4 of 56 pages
1.2.2. Employee Engagement
How willing and able are workers to contribute to their company's success ­ how engaged are they? What
keeps people at their jobs? "Employees have become more cynical about employment because of layoffs or
the recent recession" (Hornung 2004). According to the Towers Perrin 2004 European Talent Survey, the
European workforce is not highly engaged.
For attracting and retaining people, pay and benefits remain important, but more significant are the intangible
elements of the work experience such as: (1) work-life balance, (2) feeling competent, (3) a challenging job,
(4) recognition for one's work, (5) understanding one's contribution to the overall success of the company.
This creates a new challenge for companies in their efforts to attract new employees and retain existing staff.
Although payment and benefits are still significant factors in choosing an employer, the intangible elements
are gaining more and more relevance for the existing and potential workforce. The employment experience is
becoming a crucial driver of employee satisfaction. A unique corporate culture and a valuable working
environment are important for driving internal employee engagement. However, in order to act as an external
differentiator this has to be perceived by the target audience. A company's new challenge is to connect the
corporate culture with the external corporate image, thus making the intangible tangible. According to the
Towers Perrin European Talent Survey (2004, p. 4) are one of the top drivers of engagement is that a
"company has a good reputation as an employer."
1.2.3. The Job Market Will Become an Employees Market
A great number of studies on employee satisfaction, loyalty and engagement have revealed disturbing signs
of an increasing turnover tidal wave once the recovery is underway. The recent economic downturn created
an employer's market, holding many employees in their jobs, despite growing dissatisfaction (Kaye/Jordan-
Evans, 2006). The results are presented below in Figure 1.
Research & resources
Number of
participants
Results
Gallup Poll
1.5 Million employees loyal and productive: 20%
Not engaged (just putting in time): 55%
Actively disengaged: 19%
Towers Perrin Talent Study, 2003
35,000 employees
19% of today's workforce is disengaged
64% are moderately engaged
only17% are highly engaged
Figure 01:
Survey results concerning employee loyalty, satisfaction and engagement
Source:
www.loveitdontleaveit.com; personal illustration
These results unearth a high number of employees disengaged (55%) with their work, meaning they are less
productive for the company.

page 5 of 56 pages
Why is it so important for a firm to motivate employees and support employee engagement?
The German Towers Perrin 2004 Talent Report (Sebald/Langner/Harbing, 2004, p. 14) revealed a
connection between employee engagement and business performance. Employee behaviour has a significant
effect on consumer behaviour and thereby influences company success. The assumption is that highly
engaged employees are more customer-oriented than those who are not as engaged.
Today the employment situation is marked by uncertainty and employee dissatisfaction. However, the
current economic situation avoids high turnover rates and favours cost cutting in HR retention strategies, but
only for the length of the downturn.
Despite the ongoing and rapid changes concerning the information economy and working environment, there
is one emerging trend that forecasts workforce shortages. This trend, which will have the most significant
effect on the economy, working environment and labour market, is called demographical change.
1.3. Demographical Change
The Economist article "The New Demographics" describes a horrifying scenario for most developed
countries. It says that, "By 2030, people over 65 in Germany, the world's third largest economy, will account
for almost half the adult population, compared with one-fifth now. The figures are pretty much the same for
most other developed countries (...)" (Drucker, 2001). This phenomenon is backed up by new statistical
research. The industrialized nations are encountering a mutual demographical problem:
· Declining birth rates, from 5.0% (1900) to an estimated 1.6% (2050), (Lee, 2003)
· Increased life expectancy, from 40 years (1900) to 80 years (2050) and above (UN, 2003)
· The retirement of the "Baby Boomer Generation"
6
All these developments forecast the same picture for all Western economies (USA, the EU, etc.): As the
baby boomers retire, two people will leave the workforce for every new person that enters. These trends will
dramatically change the workforce of the world's richest economies and will bring about deterioration in
labour quantity. These demographic transition forecasts are shown in Figure 2.
6
The baby boomer generation was born between 1961 and 1989.

page 6 of 56 pages
Figure 02:
Demographical development in industrial nations, age group 35-44 years
Source:
McKinsey&Company, The War for Talent, o.O., 2001, S. 3.
The number of workers aged 35-44 is steadily declining and will continue to do so for the next decade or
more. The percentage of workers remaining who have the skills required by the information economy (i.e.
programming, networks, consulting, etc.) is also declining.
This demographical development causes a possible disequilibrium, between the rising number of vacancies
and, at the same time, the falling number of appropriate applicants. These forecasts, (1) the transition from a
post-industrial to an information economy, (2) the changes of the working environment and (3) the
demographical change, project "... that serious labour shortages will occur when economic recovery
intersects with demographic factors" (Dell/Hickey, 2002), as mentioned above, with the impending
retirement of the baby boomer generation. Therefore, companies are facing serious problems in filling jobs
with appropriate employees (Kirchgeorg/Lorbeer, 2002, p. 1), because alongside the technical skills expected
in most jobs today comes the need for customer service and the presence of sufficient emotional intelligence
in dealing with other people.
This turns the labour market, at least parts of it, from a seller's to a buyer's market, where skilled employees
can select in the employer of their choice. In preparation for the future, employers have to answer the
following questions:
Germany
Year
Italy
Development 1970 - 2020

page 7 of 56 pages
· How can we attract and retain employees?
· What differentiates our company from our competitors?
· What kind of talent do we need?
· How do our target groups perceive us?
· What kind of benefits do we offer?
· What makes us a "First Choice employer"?
· What drives employee engagement and employee satisfaction?
Although there are tendencies showing the requirement for companies to adjust their own recruiting and
retention strategies, the growing demographic and economic development is still underestimated. Talent
identification and growth, as well as engaging employees in the company's vision, values, goals and
leveraging diversity, are not primary targets of CEOs in their list of top management concerns for the year
2008, as reported by the Conference Board Survey "The CEO Challenge 2003" (Rudis, 2003).
All these points constitute the two key issues of my thesis:
· What must a company do to attract and retain the Right Potentials
7
and consequently become a First
Choice Employer?
· What supports a company's effort to create a highly motivated and engaged workforce in order to
withstand this new "Battle for Talent"?
To answer theses questions, the next chapter focuses on the relevance of employer branding as a holistic
concept of strategic brand management. In addition, the next chaptes make clear how the employer branding
approach will support a company's efforts to attract and retain the Right Potentials, in order to cope with the
forthcoming labour shortage.
7
See chapter 2.5.4.

page 8 of 56 pages
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Competing in the global marketplace is becoming a reality for more and more firms. This development
demands the best use of all resources available in order to achieve any possible advantage. Being different
from the competition is the key to achieving a strategic advantage. "Branding has become the snake oil of
modern management. If you believe the brand pundits, branding will cure all ills." (Barrow/Mosley, 2005, p.
57) Having a strong brand means being different and competitive. However, what is a brand and what is a
brand's contribution to corporate success? In order to answer these questions this chapter deals with the
importance of branding and its function of being a long-term source of sustained competitive success. Firstly,
I present an insight into the fundamentals of branding and brand management and provide a general
definition of a brand, and secondly I explain the common terms in the branding context such as brand
identity, brand core and value proposition. I conclude this chapter with a short summary of the challenges
and opportunities of brand management contained in the current brand management thinking ­ holistic brand
management.
2.1. What Is a Brand?
Why are brands important? What functions do they perform that make them so valuable? According to Rita
Clifton (2004, p. 1) branding has been in existence since ancient times and it has developed into a modern
management concept. "The word brand is derived from the Old Norse word brand, which means "to burn",
as brands were and still are the means by which owners of livestock mark their animals to identify them"
(Keller, 2003, p. 3; Blackett, 2004, p. 1). A brand has, according to Domizlaff (1939; 1992, p.97), founder of
the brand technique in Germany, "a face like a man". According to Kotler (1991, p.442), "a brand can be
defined as a name, term, sign, symbol, or design or combination of them which is intended to identify the
goods and services of one seller or a group of sellers and to differentiate them from those of competitors."
Finally, a brand (as a product or service) fulfils two significant functions, (1) identification and (2)
differentiation. According to Keller (2003, p. 13), Esch (2003, p. 23) and Meffert/Burmann (1998, p. 81), "a
brand is something that resides in the minds of the consumers, an unmistakable image of a product or a
service."
This definition makes it clear that a brand is very different from a product or service because a brand may
consist of tangible as well as intangible elements. For my thesis, I use the following general definition of a
brand:
"A brand is the image of a product, service or an organization, which is firmly and unmistakable rooted in
the mind of stakeholders and fulfils a differentiation and identification function."

page 9 of 56 pages
2.2. Functions of a Brand
"Traditionally, brands have focused on external customers or stakeholders by recognising and satisfying their
specific needs" (...) (Hankinsion, 2004, p. 85). A brand serves as the unmistakable characteristic for
products, services and companies through a mix of tangible (functional attributes) and intangible (symbolic
values) elements allowing customers to distinguish the brand from another (identification and
differentiation). Recently brand functions have been seen in a broader range according to the increasing
stakeholder groups. In this case, I rely on two brand-stakeholder relationships in order to uncover the
different functions of brands fulfilled here: the customer and the company perspective as presented in Figure
3.
Customer perspective
Company perspective
· Information chunk: brands are regarded as an
"information chunk" (Jacoby et.al. 1977, p. 209;
Kroeber-Riel/Weinberg, 1999, p. 265), reducing the
complexity of information and thus lowering search
costs
· Risk Reducer: reducing risks in the decision-making
process through attributes and benefits
· Trust: brands guarantee a constant level of quality
generating a brand-customer relationship
· Preference matching: brands meet the expectations
of customers by fulfilling desires
· Differentiation: brands can differentiate from
competitors and be a source of competitive advantage
· Added Value: brands can generate value, e.g. brand
equity, brand loyalty, etc.
Figure 03:
Functions of a brand from a customer and company perspective
Source:
personal Illustration Keller, 2003; Tochtermann (2004); Esch, 2004; Meffert / Burmann, (2002)
In summary, we can say that brand functions vary depending on the stakeholder's perspective. From a
consumer's perception a brand serves as a reference lowering search costs and reducing risk in the buying
process. From a company's perception the brand has the ability to distinguish from its competitors and more
important to create long-lasting value in terms of customer preference and loyalty. It is, therefore, apparent
that brands derive many benefits for both the company and the consumer. "Brands are valuable because they
represent a relationship of trust" (Blackett/Swystun/Liddell, 2003, p. 5). However, what makes a strong
brand?
2.3. What Makes a Strong Brand?
"The power of a brand lies in what resides in the minds of customers" (Keller, 2003, p. 59). In traditional
branding literature, strong brands are reflected by the consumer's perception in the form of brand images,
whereas modern brand thinking has produced a shift from brand image to brand identity as the driver for
creating successful brands. While image focuses on consumers perceptions of brand differentiation, identity
is more concerned with internal elements that make the brand unique (following Boulding, 1956; Kapferer,
1997; Harris/De Chernatony, 2001). So, what exactly is brand identity?

Details

Seiten
Erscheinungsform
Originalausgabe
Jahr
2006
ISBN (eBook)
9783832496432
ISBN (Paperback)
9783838696430
DOI
10.3239/9783832496432
Dateigröße
2.5 MB
Sprache
Englisch
Institution / Hochschule
Universität Paderborn – Wirtschaftswissenschaften, Wirtschaftsenglisch
Erscheinungsdatum
2006 (Juni)
Note
2,3
Schlagworte
arbeitgebermarke marke markenführung personalmarketing markenmanagement
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