“Adored, venerated and coveted by customers and organisations alike, corporate brands represent one of the most fascinating phenomena of the business environment in the twenty-first century” (Olins, 2000; Lewis, 2000; Pauvit, 2000; Balmer, 2001a; Bickerton, 2000; Balmer & Gray, 2001; Hatch & Schultz, 2001; Ind, 2001; Newman, 2001; Simoes & Dibb, 2001). Corporate brands have several advantages, like communicating the values of the brand, they differentiate themselves from their competitors and they enhance the esteem and loyalty from their stakeholder groups (Balmer, 2001b). In todays global market with more competition it is important for brands to stand out and differentiate themselves. Differentiation requires the whole corporation to positioning themselves and not just the products (Hatch & Schultz, 2001). Coca-Cola, the world's most valuable corporate brand, is estimated to be worth $142 billion and $84 of this sum is credited to the goodwill associated with the corporate brand. This means that more than half (59%) of the book value of Coca-Cola is due to the fact they are a corporate brand according to Interbrand/Citibank (Barwise, Dunham, & Ritson, 2000).
However, is corporate branding for everyone? According to Hatch & Schultz moving from product brand to corporate brand is not always the right solution. It will be a big step, but if a company successfully can build a corporate brand there will be great competitive advantages.
This paper examines if and how Coop, with different product brands, can benefit if they choose to become a corporate brand instead of product brand.
This paper will research if Coop with the use of the corporate triangle could move from product brand to corporate brand. To become a successful corporate brand strategic vision, organizational culture and corporate image has to work together (Hatch & Schultz, 2001). In this paper the main focus will be on Coop Danmark.
Differences between product brands and corporate brands
Corporate and products brands differ from each other in several aspects. The most obvious is that the focus shifts from the product to the corporation. The product brands is managed by middle managers whereas the corporate brand is managed by the CEO. Corporate brands attract attention and gain support of multiple stakeholders whereas with product brands it is customers. The communication mix of corporate brand is the total corporate communication whereas with product brands it is marketing communications. The time horizon of a product brand is short and is only as long as the product lives, whereas in corporate brands it is long. There is a difference of what is important for the company, in product brand it is functional and corporate brand is strategic. (Hatch & Schultz, 2001; Balmer, 2001a)
The case of Coop
Coop Danmark is owned by Coop AMBA, the former FDB. Coop is a cooperative with 1.4 million members, all with equal voting rights. Coop Danmark is an umbrella brand, with different branches under the corporate brand, called sub brands or product brands. The product brands are Irma, Superbrugsen, Fakta, FaktaQ, Kvickly and Dagli'Brugsen. Together with Coop in Norway, Sweden and Finland, Coop Danmark own Coop Trading, the biggest purchasing organisation in Scandinavia. Coop trading centralises purchasing as a way to ensure large bulk discounts for all of the Coop organisations in the Scandinavian countries. Coop core business is grocery retailing and the vast majority of its revenue is from their hypermarket, supermarket, discounter and convenience store chains. Coop Danmark is the largest grocery retailer in Denmark with a market share of 30%, closely followed by Dansk Supermarked with a share of 29.6%. Coop announced in 2014 that they intended to make significant price reductions of a number of organic food products. This is a way to aim at contributing to continual growth in the organic segment and a way to strengthening its image as a socially and environment responsible player.
Coop's strategic direction is to strive to strengthen its brand on other parameters than price because of the intense price competition on the Danish grocery market. This includes an even stronger focus on organic products, social and ethical values, which will support the organisational profile. Another strategy for differentiating from competitors is an increased focus on local products, which are only sold by Coop (Passport 2014).
Coop has in the past couple of years expressed how they have begun to become more and more socially responsible. Coop has focused on getting their customers to buy more organic and fair trade products and Coop is the absolute leader in sales of organic products (Passport 2014). Coop has showed different ways they support and care for the society, Coop has six main focus areas, that they announced in their social responsibility report, “Sammen om bedre mad”, in 2014.
The six focus areas are; human rights, better working conditions, environment and climate, involvement in the community, consumer conditions, good business practice.
In 2013 Coop received “CARE Prisen 2012”, as a result of the visionary CSR work with CARE Danmark. Coop announced in 2013 their plan to convert all of its 40,00 tonnes of food waste into biogas by 2015. In 2014 Coop took the the lead in changing consumers' mind set when shopping for groceries. Instead of the price, Coop wants consumers to focus on the quality of the products, which will improve the overall brand image of Coop. (Passport 2014)
The Coop card
Coop supports customer retention through its cross-chain loyalty program. The programme launched in 2013 and now has more than 1.4 million members. Since the launch of the Coop-card, cardholder have purchased for 37% more than non-cord holders. (Passport 2014)
If Coop was to turn into a corporate brand instead of an umbrella brand with product brands, the whole organisation has to become the corporate brand. A successful corporate brand attracts relevant stakeholder, communities and audience around shared values that differentiate the organisation. A corporate brand is not just about differentiation, but also about belonging. For a corporate brand to succeed, it has to attract key stakeholders to the organisation and encourage them to feel a sense of belonging through the expressed values. This sense of belonging affects the behaviours and decisions of how the company is built. To become a successful corporate brand, the organisation has to make use of the attractive force and offer symbols that will keep on helping stakeholders experience and express their values and as a result keep them active. (Hatch & Schultz, 2001).
Strategic vision is the central idea behind the organisation that represents and expresses the top management's aspiration for what the company wishes to achieve in the future. (Hatch & Schultz, 2001)
Coops' strategic vision is “Coop wants to be the best and most responsible place to work and shop”.
A successful corporate brand builds their visions from redefinitions and reinventions of core values, if a company shift from one value set to another, it will confuse the customers. Although the vision can stretch the organisation towards new goals, it has to connect with the heritage of the company (Hatch & Schultz, 2001). In 1993 SuperBrugsen began to sell organic products cheaper, so that organic products could be bought buy anyone, so when Coop's vision, wishes to sell better products, it is a part of their heritage to care for their customers to buy organic.
Organisational culture is the organisations' values, beliefs and basic assumptions that represent the heritage of the organisation and communicates the meaning to its members. The culture of the organisations is established through how the employee of all ranks feel about the organisation they are working for. (Hatch & Schultz, 2001)
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