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7
Brand Image and Reputation

7.1. The importance of brand image and reputation management for performance

Perspectives on change in performance, in order to be complete, must take into account the enterprise’s brand image and reputation analysis.

Brand image represents how an enterprise and its products are perceived by the market, that is to say, generally by consumers.

Reputation meanwhile measures the notion of being known by a large number of people. Take note: an enterprise can be very well known without having a good brand image.

7.1.1. Brand image

Brand image must be the focus of regular studies in order to guarantee coherence with the business strategy. The enterprise must be vigilant and must ensure that perceptions on the target market are in tune with its objectives and values. Brand image concerns not only the way enterprises are perceived by the public but also by stakeholders. It is essential to remain alert and understand the decision processes of investors, institutions, banks, partners, suppliers, those currently employed and those to be hired, and of course customers. The enterprise can activate certain levers proactively (communication campaigns, advertising) whereas it will be subjected to others (consumer blogs, comparative sites). It is through these diverse processes and vectors that image and reputation is established.

7.1.2. Brand image measurement criteria

The perception of brand image is measured using objective criteria (high-end, innovative technology) and other more subjective criteria (aimed at the youth, good rapport for quality/price).

As for objective criteria, brand image must be measured on the one hand in absolute terms and on the other hand, in relative terms to competitors or other actors that could be concerned by the enterprise’s development. Of course, marketing studies must be regularly conducted in order to follow the change in the results. Digital techniques make it possible to precisely and almost immediately monitor the behaviors and perceptions of each and every actor.

7.1.3. Anticipation analysis

Brand analysis allows us to better understand the situation at any given time and anticipate decisions to be made that will foster the benevolence of the environment in which the enterprise develops its activities.

7.1.4. Reputation

Reputation can be measured spontaneously or with assistance and presented in the form of a percentage. Studies on reputation are excellent indicators, notably following communication or advertising campaigns.

7.1.5. Means

These brand image and reputation studies can be conducted internally or externally, which reinforces their objectivity. Digitalization opens new possibilities; thanks namely to IoT techniques, sensors can allow for better reactivity. It is possible to get quantitative elements about renown, reputation, and the perceived quality of offered products and services that reveal correlations between the brand’s development and the recent offers launched by the enterprise. Certain criteria can be subjective, for example, the emotion evoked by the enterprise’s advertisements or information from third parties. Digital solutions like social networks, user communities and diverse associations must be considered with utmost attention. Several areas of exchanges arise:

– the enterprise communicates with its ecosystem;
– the environment transmits messages to the enterprise;
– third parties interfere with exchanges between the enterprise and its environment;
– finally, actors intervene simultaneously with the enterprise, its environment and third parties, in a benevolent or malicious manner.

7.1.6. Communicating values

The enterprise must communicate its values, which will reinforce its brand image and reputation. These values can be athletic, sustainable, engaged, ecological, or humanitarian, and can also be quality or safety-oriented, etc.

They can be targeted and expressed according to stakeholders. It is important to develop communication acts and analyze their impacts in order to influence and favor stakeholders’ perceptions. Traditional and structured campaigns can be supplemented by coordinated actions that are available today thanks to digitization. The NPS (Bain & Company’s Net Promoter Score, a tool for measuring customer satisfaction) and the number of “likes” is now part of measuring brand image.

Brand image is the result of the “product/service” combination. It evolves over time, for example, going from the notion of a product towards that of a service in the banking or automotive industry. It is also largely influenced by investments in order to support it, such as advertisement campaigns, multichannel campaigns, direct communications, etc. It contributes to improving reputation by relying on visual and auditory memorization techniques: for example, Nike’s “Just Do It”, McDonald’s “I’m Lovin’ It” or Hallmark’s “When you care enough to send the very best”. Certain slogans resonate strongly with the target audience. However, areas of interest can change based on offers, technological context, ecological context, etc.

7.1.7. The enterprise’s attractiveness

Brand image and reputation are essential for developing an enterprise’s attractiveness. They are levers for entering new markets, growing one’s margins, forming partnership agreements, proposing innovative solutions, and attracting new financial and human resources (new talents, competencies, profiles, etc.), in short, making people want to collaborate with the enterprise.

Internally, the brand image also has consequences on employees. Employee motivation and involvement is measured with 360-degree evaluations (evaluation by the hierarchy, colleagues and also subordinates).

This attractiveness translates to the ease (or lack thereof) of finding competencies on the market that are tailored to the enterprise’s needs. “Employer branding” is an indicator that is looked at by the candidates, training bodies and human resource services.

7.1.8. Brand image deterioration

When the brand and its image deteriorate, the negative consequences for the organization are generally significant and brutal (see Box 7.1 for some examples of this). Even worse, above all they are slow or impossible to correct. The impact on brand image is quite costly, on the one hand, due to the shortfall in turnover and, on the other hand, due to the expenses to be spent in restoring the image that the general public and consumers previously perceived.

Box 7.1. Some examples of brand image deterioration

– In 2015, the image of Volkswagen was heavily tarnished by the scandal due to its cheating on anti-pollution standards in the US, despite the company having built its brand image on trust. Following the so-called “Dieselgate” scandal, where Volkswagen manipulated emission measurements, deceiving its customers by indicating values far below the real values, the group had to face countless lawsuits, billions of euros of fines and updates of cars, and saw some of its managers arrested and condemned to prison sentences.
– In 2010, Toyota, one of the world’s top automobile manufacturers, having built its image on reliability, had to recall millions of vehicles all over the world, beginning with 3.8 million from the Lexus brand because of a floor mat that supposedly caused the death of four people. Then, to avoid other problems, 2.3 million Corolla, Rav4, Camry, etc. had to be recalled. In total, the manufacturing of eight models was stopped in the United States. As management communication failed, Toyota recorded a tumble that brought the Japanese brand back four years in terms of market share.
– The shocking advertisements by the Benetton group focusing on racial and religious issues were ultimately withdrawn, but not without seriously harming the group’s image. Benetton had to face an uprising by its franchisees, furious at having to justify themselves to angry consumers, and especially very unhappy to see their turnover decrease by 10 to 30% because of the controversial advertisements.
– In 1990, the announcement of the presence of benzene in bottles of Perrier, a well-known French brand of carbonated mineral water in the United States, opened up a very serious crisis for the brand. Perrier only got rid of the problem at the price of the withdrawal from sale of all the bottles throughout the world, even if only a few bottles were concerned and the health risks were nil. The company only regained its sales volume 25 years later.
– To be competitive in terms of costs, Nike developed a strategy of subcontracting to predominantly Asian countries, thereby indirectly employing about 550,000 people. A large-scale ethical controversy was then born concerning the non-observance of certain international conventions on freedom of unions, working conditions, forced labor, child labor and wage issues. In 2002, Nike had become the most quoted “unethical” brand, all socio-professional categories combined, while its competitor Adidas enjoyed a good reputation.
– Comparable problems of brand image degradation have affected many other companies, such as Blackberry and Samsung for example, and experience shows that it is always very difficult, is very expensive and can take a very long time to recover from this – if it is even possible at all!

These observations reinforce the necessity of considering brand image and reputation analysis as a high priority, even when all lights are on green. Alerts, including weak signals, must be immediately accounted for and monitored. Brand management requires the implementation of circuits that have the authority and means to react quickly at the right time and with the correct intensity. A brand can disappear very quickly, but proper monitoring can allow brands to last for over a century, for example, Michelin, LVMH, Hermès and many others who are uncontested leaders in their domain.

7.1.9. Rumors and e-reputation

Rumors are a phenomenon that must be taken into account, hence the necessity of observing the environment in which the enterprise evolves. This environment becomes increasingly broad due to globalization and digitization, which multiply the means of communication. E-reputation is the common opinion (information, opinions, exchanges, comments, rumors, etc.) on the Web of a brand, a company or an individual. It corresponds to the identity of that brand or any associated person with the perception that Internet users make of it. It has become a phenomenon that brands try to take advantage of. However, it can also turn against them.

Furthermore, prevailing e-reputation is a pressing matter. In order to be more proactive, it forces us to make investments in acquiring new technology and honing new competences.

7.1.10. Performance and sustainability

A positive brand image, reputation and e-reputation foster the enterprise’s development and performance through easier product commercialization, often with higher price practices and loyalty that allows for easier offer evolution planning.

From the viewpoint of consolidating enterprise performance, brand image and reputation are two invaluable points of vigilance. Allowing budgets for developing them is indispensable. Maintaining them allows the enterprise to anticipate and prepare for potential crises. These investments are indicators of the enterprise’s will to make its development sustainable and reassuring for all stakeholders. Implementing teams in charge of brand improvement actions can give a precious indication as to the ability to anticipate or to react. Brand image and reputation are now inseparable from products or services. They contextualize them and accompany them throughout their life cycle.

Other points that require attention concern the Executive Management’s involvement. The Executive Committee must have indicators that are efficient enough to analyze how the brand’s reputation is evolving and determine what decisions are to be made to adjust the governance or sometimes to react to an emergency. If the decision processes are not implemented with adapted filters, decisions can be late, harsh, costly and risky for sustainability.

Brand image and reputation management require awareness, anticipation, listening and watching, all while integrating new sensors now available if digitization has been implemented. Digitization requires us to continuously put stress on the company's management so that it will be able to make swift decisions with the extent adapted for each situation. Investments concerning digital marketing are becoming increasingly important (Internet networks, blogs, social networks, etc.), sometimes by exceeding the IT investments of other support functions.

7.1.11. Conclusion

Good brand image and reputation foster a more profitable economic situation through easier product and service commercialization often, with higher price levels. Like the other aspects of performance analysis, brand image and reputation cannot be considered in isolation. They must be integrated in a coherent approach to governance.

7.2. Case study: assessing the maturity of brand image management

7.2.1. L’Oréal

The L’Oréal Group agreed to test the questionnaire and evaluate its maturity in terms of sustainable development. The following rubric concerning the “brand image management” was provided to illustrate the method.

The test was conducted by the authors in the form of discussions with representatives from the Group, whom we thank sincerely. The maturity evaluations obtained in this way correspond to perceptions, which would, of course, need to be confirmed by precise audits.

Table 7.1. L’Oréal Group: overview of the maturity of the brand image and reputation focus. Summary of results of the detailed evaluation grid from the guide “Performance durable de l’entreprise : quels indicateurs pour une évaluation globale ?”¹

L’Oréal Group Overview of the brand image and reputation focus	Non-existent	Discovering	Deploying	Under control	Optimized	Comments
					×
The brand, reputation and attractiveness are accounted for in the strategy’s development.					×	Leading position in almost all of its brands and markets.
Ethics and CSR are integrated into the construction of brands and reputation.					×	The environmental and social display is adjusted for each brand, pertinent for consumers and in line with European recommendations in the field.
Levers for managing the brand are activated, such as employees, networks, communication plans, product quality, etc.					×	L’Oréal is very active on social networks, especially among Youtubers, and with all other means of communication utilized to put forward its brand image.
Events that have a strong direct or indirect impact on the brand image are regularly revisited to trigger plans of corrective action.					×	Brand performance is monitored at all times and any event that could impact reputation is brought up without delay
Processes are analyzed in terms of their contribution to the brand image: enhancement andrisk.					×	The sustainable position as the world leader in nearly all markets shows that all of the Group’s practices are in line with this objective.
Partners and sponsors are regularly reviewed so that they are consistent with the researched image.					×	The Group has developed partnerships with its main suppliers in order to incorporate them in their CSR politics and use this to promote its brand image.
The definition of new offers integrates brand image and reputation objectives.					×	Continuous evolution and the creation or acquisition of products aim to satisfy consumers by relying on characteristics specific to each brand.

With the wealth and variety of its brand portfolio, L’Oréal has the ambition of covering all territories regarding beauty and responding to the infinite diversity in consumers’ aspirations across the entire world.

The L’Oréal Group, the world leader in cosmetic projects, is present in 150 different countries and holds an impressive portfolio of 34 international brands: L’Oréal Paris, Lancôme, Vichy, Yves Saint Laurent, Kérastase, etc.

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