Corporate identity – the management of the process of change in the name/logo in the context of brands’ merger Joana Cesar Machado Paulo de Lencastre Pedro Dionisio Universidade Catolica Portuguesa E-mail: jcmachado@porto. ucp. pt E-mail: plencastre@porto. ucp. pt Instituto Superior de Ciencias do Trabalho e da Empresa E-mail: pedro. dionisio@imr. pt Abstract
The creation of strong corporate identity, including identity signs, is crucial for companies to encourage positive attitudes in its different target publics (Dowling, 1993; Van Riel & Balmer, 1997), and may provide an important competitive advantage (Simoes, Dibb & Fisk, 2005). The corporate name and logo are two essential components of the corporate identity construct, since they are the most pervasive elements in corporate and brand communications (Henderson & Cote, 1998; Schechter, 1993), and play a crucial role in the communication of the desired positioning strategy (Alessandrini, 2001; Van Riel & Van den Ban, 2001).
The reasons for changes in the brand identity signs are numerous, nevertheless mergers are one of the main events leading to a new name and logo (Ettenson, 2004; Kapferer, 1997; Dellatre, 1999 and 2002; Stuart & Muzellec, 2004). Furthermore, the building of a strong and clear corporate visual identity is critical for the merger’s success (Balmer e Dinnie,1999; Melewar, 2001; Rosson e Brooks, 2004).
On the other hand, we should notice that there is a need for empirical research in the domain of the management of corporate identity, namely visual identity (Melewar, 2001), as well as studies that examine the reaction of the several audiences to the management of corporate identity (Simoes, Dibb & Fisk, 2005). The aim of this study is therefore to give an answer to the following research questions: 1. In a merger situation, what type of behaviours can organisations assume in terms of corporate identity, in particular, in respect to the identity signs (name and logo)? . How are the different corporate identity change options perceived by consumers (recognition, affect, associations)? Conceptual background In the first part of the conceptual background we define the brand, departing from the Peircean conception of a sign[1], as a concept established in three columns: the sign column (name, logo), the object column (product, organisation) and the interpretative column (the image in the different target publics of the brand) (Mollerup 1997; Lencastre 1997).
Next we present the most relevant theoretical perspectives on the name and logo, the key elements of the brand identity mix, given their generalised use and legal protection, and explain how these identity signs may contribute to the creation of brand awareness and the formation of brand associations.
In the third part, we explore the most relevant perspectives on corporate identity, and present an holistic view of the construct, which may include corporate symbols, communications and behaviour (Balmer, 2001; Hatch and Schultz, 1997; Van Riel and Balmer, 1997), but also the mission, philosophy and values (Abratt, 1989; Balmer, 1994; Simoes, Dibb & Fisk, 2005), or organisational culture (Baker & Balmer, 1997; Melewar & Jenkins, 2002; Stuart, 1998).
Our focus is on one of the dimensions of the corporate identity construct, namely the main identity signs – names and logos – that the organisation uses to identify itself, to communicate its mission and values and delineate the relations with its audiences (Alessandrini, 2001; Henderson e Cote, 1998; Van Riel & Van den Ban, 2001). In the fourth part we present a conceptual framing of corporate image, and suggest that corporate identity and corporate image are closely interrelated, because perceptions among various audiences often build on overall communication instruments used by organisations (including names, logos/symbols, etc. (Dacin e Brown, 2002; Zinkhan e al, 2001). Finally, we present a typology of the corporate identity structures that organizations may assume in the context of a merger, based on the literature review and on a documental analysis of recent mergers (see table 1). We describe each one of the nine alternatives identified, showing their main advantages and disadvantages. Model Through this research we want to understand how consumers react to changes in corporate identity signs (namely, name and logo), in the context of a brand merger (see Figure 1 ). The approach to this model implies two studies.
The first one’s aim is the definition of a typology of corporate identities structures that may be adopted in the case of brand mergers, and the second one will analyse consumers’ perceptions of each one of the alternatives available. Considering previous research, the present study models three perceptions of the brand identity signs that appear to be consistently important: recognition, ability to evoke positive affect and ability to elicit a common set of associations (Henderson e Cote, 1998 and 2003; Janiszewski e Meyvis, 2001; Klink, 2001 e 2003; Kohli et al. 2005; Schechter, 1993; Stafford et al, 2004). Recognition is the most desirable memory effect for the identity signs, since most companies use their company name with their logo (Henderson e Cote, 2003). Furthermore, since we need to use fictional scenarios involving real brands, recognition is a more suitable dependent variable when compared to recall. The identity signs recognition can have two dimensions: correct recognition and false recognition. False recognition occurs when people believe they have seen the brand sign, when in fact they haven’t (Atkinson & Juola, 1973 and Jacoby e Dallas, 1981).
The affective reactions are critical at the level of brand signs, because consumers can transfer that affect to the product or organisation, with very little processing (Henderson & Cote, 1998; Schechter, 1993). Furthermore, in low involvement situations, the affect attached to the identity signs may be one of the few elements that differentiates the offer (Hoyer e Brown, 1990; Leong, 1993). Previous research suggests consumers’ evaluation of the organization’s logo directly influences their evaluation of the organization (Schechter, 1993; Stafford et al. 2004). The probability of affect transfer depends on its nature (positive or negative), on the intensity of affective reactions and on the way signs are associated to products and organisations. Several authors refer that the name and logo should evoke the same intended set of associations, and communicate one clear message (Durgee and Stuart, 1987; Keller 1993; Kopp et al. , 1990; Vartorella, 1990). Semiotics literature suggests that this meaning can be obtained through the analysis of the nuclear or consensual meaning evoked by the logo (Perrussia, 1988).
Previous research shows that identity signs which elicit a shared set of associations are better liked, transfer more positive affect to the organisation, and are better recognized than signs with an ambiguous meaning (Henderson and Cote, 1998; Schecter, 1993). Finally, the less ambiguous the organization’s identity signs, the more likely its intended positioning will be shared across a variety of people (Stafford et al. 2004) Additionally, clear meaning also helps the association between the logo and the organization it represents (Durgee e Stuart, 1987; Henderson e Cote, 1998).
Method This research will focus on the banking and on the food and beverage sectors. In the first phase of the study, we use qualitative research to gain an in-depth understanding of the different behaviours in terms of corporate identity that organisations may assume, in the context of a merger. The evidence we will collect includes published document, communication material and in-depth interviews. We will gather background information on the identity signs (corporate names, logos/symbols) of the corporate brands prior and after the merger.
The in-depth interviews with senior/management executives – who either participated in, or were knowledgeable about, the corporate identity strategy carried out during the merger- will help understand how the process of corporate identity change was managed, and provide insight into the alternative corporate identity structures that were considered. During this phase we will conduct focus groups to validate the typology of corporate identity structures developed. In the second phase, we will analyse how consumers react to the different alternatives typified.
Therefore, we will use the typology of corporate identity structures to create fictional scenarios evolving real brands. It is important to use fictional scenarios, so that the impact of external issues, related to marketing activities of the brands is minimized. During this stage we will administrate a survey questionnaire among consumers to measure their response towards each one of the typologies, in terms of recognition, affect and associations. Because of the number of stimuli and variables, we will use different samples of subjects to generate the ratings (Henderson e Cote, 1998; Schechter, 1993).
Thus, one group of consumers will evaluate recognition, and the another group will answer to affect and associations (meaning). To evaluate recognition we will present eight solutions of the different typologies identified in a slide-show with each solution appearing for some seconds; then we will perform a distraction activity; next, we give the subjects a booklet containing the eight alternatives studied and some randomly selected distracters, and will ask them if they recognise any of the solutions presented.
In respect to affect, it will be evaluated based on three affective scales (not at all favorable/very favourable; not at all likeable/very likeable; not at all desirable/very desirable) (Azjen and Fishbein, 1980; Klink, 2001; Klink, 2003; Kohli et al. , 2005). Subjects will be given a booklet with each page containing one alternative of each one of the typologies studied followed by seven point differential scales.
In the second half of the booklet, we will measure meaning, asking the subjects to list the first associations that came to mind when they look at each one of the corporate identity alternatives presented (Henderson and Cote, 1998 and 2003; Durgee and Stuart, 1987). Contributions and limitations At the level of fundamental investigation, the study intends to improve the knowledge about the management of brand identity signs, within the context of brand management and communication, and in particular corporate identity.
Considering that mergers are one of the main reasons for changes in names and logos, the development of a typology of corporate identity structures that organisations may assume after a merger will be a strong contribution. On the other hand, the analysis of consumer reactions to changes in the corporate brand’s name and logo will have a significant contribution for the development of the research in the domain of corporate identity signs and corporate image.
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