Our Thinking

Six Big Differences Between Corporate Brands and Product Brands

February 2020

By David Linsley, Principal Strategy

The fact that you’re reading this article hopefully means that you have more than a passing interest in branding so I’m going to save you from having to read a “what is a brand” intro – suffice it to say, it’s not a logo.

Many people think that product branding is the same as corporate branding. Some of this confusion is due to brand development being a relatively young subject and one that has been changing, increasingly rapidly, over the past few decades. This evolution has outstripped the pace of change in understanding and language of the topic so the word ‘brand’ has to span significant differences in meaning.

The fact that the word ‘brand’ can relate to both product brands and corporate brands (amongst others) is a bit like the word ‘cat’ applying to both kittens and lions. Whilst both cats have things in common — furry carnivore, typically with long tail, sharp teeth and retractable claws — you really need to know what you are committing to before you decide to take one home.

Similarly, product and corporate brands share several key characteristics — visual identity design, aim of shaping and aligning perceptions, desire to drive preference and/or price premium — however, the similarities end there. Understanding the following set of differences can help companies and brand owners appreciate why corporate brands should not be treated in the same way as product brands, ensuring they roar like lions, not kittens, and ultimately drive enterprise value.

1. Who is it aimed at?

Product brands aim at customers. Corporate brands aim at (almost) everyone. A product brand may have a range of products within it and a complex customer chain to target (end users, distributors, integrators, providers, procurement, regulators etc.), but it basically has one focus – to influence customers’ buying decisions.

Corporate brands, in addition to their customer chains, have to relate to current and potential employees, financial markets, media and politicians, and the communities they inhabit. Not only is this a wider set, but each of these audiences have significantly different expectations about the role of the brand and what it needs to stand for. With this increased complexity the corporate brand needs to be specifically crafted so that it can inspire and be meaningful for each audience while maintaining coherence overall.

2. What is its role?

Unsurprisingly, who the brand is aimed at directly impacts its role. For a product brand, this is typically just customers while a corporate brand must balance the needs of a wider range of constituents:

  • For customers, the corporate brand, like a product brand, has to functionally position and differentiate the offer, share why it’s unique, and describe what it can do for them, ultimately leading to positive associations and a preference to buy.
  • For employees, the corporate brand communicates what kind of organization they work for, why it exists, and why they should be fully engaged with the company, sharing its cultural values and striving to deliver on its aims. A corporate brand must also reach potential employees in order to beat the other brands in the talent war.
  • For investors and financial markets the corporate brand needs to tell the story of where the organization is going, what kind of investors it needs, and how it will safeguard success into the future.
  • For regulators, media, and public the corporate brand has to help them to understand why the company matters and to engender trust.

3. Who calls the shots?

For products, the key branding decisions might be made by the Head of Product, the Sales Department, or the Chief Marketing Officer. If there is a limited set of products or they are synonymous with the company – like Red Bull – product brand decisions may even be made by the CEO.

Corporate brands, with their broader set of stakeholders, should not leave key decisions with Sales & Marketing. Corporate brands need top level ownership from executive leaders in Human Resources, Investor Relations, Finance, Corporate Communications, and Strategy. Ultimately, to balance these varied roles, the corporate brand must have a guardian who champions a consistent, cohesive, and strategically sound vision for the brand. The CEO should be the one to shoulder this responsibility and can, as with Steve Jobs and Apple, or Richard Branson and Virgin, become synonymous with the corporate brand.

4. How is it defined?

The majority of product brands are, quite rightfully, designed around insights into customer segments and the features that meet changing customer needs. Essentially, these brands are defined from the outside-in. On the other hand, to have a meaningful purpose and values that are intrinsic to the company’s beliefs and aspirations, corporate brands need to reflect a view from the inside-out. This means that it is important to look at the legacy of the organization, unique internal attributes, company culture, and its long-term strategic vision. There needs to be a balance between the internal and external perspectives to safeguard against undiluted corporate narcissism at one extreme and vanilla customer-centricity at the other. Crucially, the strongest corporate brands are built around a genuine and meaningful purpose for the company and not a superficial add-on. Unilever, with their “making sustainable living commonplace,” is a great example, as is IKEA’s “to create a better everyday life for the many people.”

5. How is it experienced?

We all know how we interact with product brands and the channels they use – from broadcast advertising, web presence, and sales approaches to the product experience itself. Corporate brands also express themselves through these routes, but in order to reach the full range of stakeholders it must use other, often more profound, modes of experience.

  • Customers experience it through the physical experiences of the stores, showrooms, event stands, facilities, and HQs as well as through the conversations the company has with them through sales staff, websites, and contact centers.
  • Employees experience it in the culture of the workplace, celebrations, punishments, the way the CEO talks to them (or doesn’t), intranets, emails, canteens, job listings, and even rumours.
  • Investors experience it through annual reports, meetings, press releases, forecasts, and interviews.
  • The public experiences everything the company does whether through news reports, sponsorships, disasters or donations, investments, or infidelities.

6. Where’s the impact?

Product brands tend to dine out on just the one metric – revenue (with loyalty as a side-order). A corporate brand’s impact is much broader. It can span multiple sectors and product ranges, impacting sales through cross-selling and increased customer engagement. By creating a strong culture, the corporate brand can also inspire a motivated workforce, reduce HR costs, deliver higher performance, and be more adaptable to change should the company need to transform itself. With a clear and genuine narrative, fully-aligned with the business strategy, companies can build greater brand value and improve market valuation. And, since corporate brands typically have much greater durability than products, any value-creation can be sustained for a longer lifespan.

These six questions are key to understanding the differences between corporate and product brands, and ultimately why the branding processes are quite different. This is not to say that synergies cannot be cultivated from between the two (such as Google or Facebook), but understanding the difference helps ensure you reach all audiences effectively.

So the next time you meet someone who believes that product brands are all you need to think about or talks about branding without clarifying which they mean –  just send them this article; because when you are responsible for shaping your corporate brand, you need to be aware that there is a big difference between a kitten and a lion – and it is hard to make a kitten roar!

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Straightline is an international brand strategy and design consultancy. We work with leaders of global and emerging businesses to develop brand strategies and creative solutions that help organizations improve their business and bottom line. To have a conversation about your brand, contact us.

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