Tag Archive for: Word-of-Mouth Marketing

Do Dolce & Gabbana’s recent statements about gay adoption strengthen their reputation as fashion’s aging enfants terribles?
Are Madonna and Elton John right to be raising hell or just ignorant of the full statements (made in Italian)?
Will all this help sales, while further building Domenico Dolce and Stefano Gabanna’s reputations?
We define the difference between reputation and brand and discuss cases to better illustrate the matter.

Amazon founder Jeff Bezos is credited with this statement:

Your brand is what people say about you when you are not in the room.

Virgin Group founder Richard Branson is credited with this statement:

Build brands not around products, but around reputation.

What do you think? Do you agree with Jeff Bezos or Richard Branson?

Should we care about brands, or should we focus on reputation instead? Leave a comment below.

Define or stay confused

Before we can answer the above questions, we need to define what these terms mean. A while back I wrote Brand versus reputation: Jeff Bezos, Richard Branson, in which I pointed out that first, brand and reputation are two sides of the same coin and closely related, but nevertheless different concepts. I also disagree with people that say “reputation is part of the brand”. They are related, not the same.

Richard Ettenson and Jonathan Knowles (2008) pointed out the typical factors for a company’s top-notch reputation:

“The company has integrity and is reliable, accountable, responsible and quality-conscious.“

More formally, reputation is the collective representation of multiple constituencies’ perception of the corporation’s behaviour. Accordingly, reputation is about how efforts regarding brand and what the company has done or delivered are seen by its various stakeholders (e.g., investors, costumers, employees and consumer advocates).

Heads or tails, let us define the terms below.

[su_box title=”Brand is a ‘public-centric’ concept” box_color=”#ff9900″ title_color=”#ffffff”]
It is about relevance and differentiation (with respect to the customer, public opinion, supplier). Brand focuses on what a product, service or firm has promised to its clients.
Brand is what the corporation tells the public or its investors, the news it shares about itself or the product, and most importantly, what it wants and aspires to be.
A brand helps reduce uncertainty for a client. The customer knows what they get, such as a hotel chain’s rooms offering the same features (make-up mirror, good hair dryer) as standard around the globe.[/su_box]
So, what is reputation, then? Glad you asked.

[su_box title=”Reputation is an attitudinal construct and ‘word of mouth- / experience-centric’ concept” box_color=”#ff9900″ title_color=”#ffffff”]
Attitude denotes the subjective, emotional, and cognitive based mindset (see Schwaiger, 2004, p. 49), which implies splitting the construct of reputation into affective and cognitive components.
The cognitive component of the construct can be described as the rational outcomes of high reputation. Examples include high performance, global reach and one’s perception of the company (e.g., great employer).
The affective component of reputation is the emotions that respondents have towards a company. Thus, people talk about these things with friends (word of mouth). Media coverage can also influence how we feel toward a company.[/su_box]
Based on an extensive literature review, Schwaiger (2004) proposed an approach to measure reputation for corporations. He tested this in a preliminary qualitative study. Out if these findings he developed a survey to test his measures with a data set. Findings suggest four indices to explain reputation, namely:

1. quality (e.g., product or service),
2. performance (e.g., has vision, well managed, performs well),
3. responsibility (e.g., sustainability, being a good corporate citizen), and
4. attractiveness (e.g., offices, buildings, as an employer).

The above can be used to explain reputation as measured with performance and sympathy toward the company. Your reputation precedes you. It significantly influences your chances of doing business with somebody.

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Does company size matter?

Size definitely matters when it comes to brand. You might have a brand in your part of the woods, but Coca-Cola or Nespresso are still in a different league; they are global. What about your brand? If your company employs less than 250 tull-time employees (what the European Commission calls a small- and mid-size enterprise or SME), you are unlikely to have a global brand.

Your resources will surely not allow you to splash your logo all over the place, so spending money on brand is hard to justify. However, spending resources on keeping your clients happy, while maintaining a good reputation is a no-brainer (i.e. go for it). However, as Emil Heinrich points out, even a SME has a brand in the region where it does business. Hence, this might help recruitment up to about a 100 km radius.

Small shopkeepers do have a local brand.

Are consumer brands becoming less important?

That remains to be seen. Nevertheless, here are two industries with interesting trends.

Food: Craft versus Kraft

In a recent Financial Times article (March 17, 2015 – Craft versus Kraft), Gary Silverman discusses food business trends, in particular how Kraft or Campbell’s Soup are losing market share to small food producers (retrieved March 18, 2015 from http://www.ft.com/intl/cms/s/2/2a238422-c7e0-11e4-8210-00144feab7de.html).

There is a general disinterest in brands.

The millennial generation wants products that are low in salt, sugar or fat. As well, these must be free of artificial flavors and rich in protein or anti-oxidants. This is the result of older American consumers being more prone to obesity, heart disease and other maladies. In turn, the article insinuates that millennials do not want to follow the same path.

The article also points out:

“…how important it has become for food companies to tell consumers an interesting story, replete with details about their products’ ingredients and health benefits. Such narratives give brands the coveted — and elusive — quality of ‘authenticity’.”

[su_box title=”YES – food brands are becoming less important.” box_color=”#ff9900″ title_color=”#ffffff”] In the US, the companies that are winning the game for natural, organic, protein-rich and unprocessed food are quite small.

Accordingly, one’s reputation for being quality-conscious and accountable is increasingly important (remember the neighborhood shopkeeper).[/su_box]

Clothing: #DolceGabbana or #BrandyMelville

The Dolce & Gabbana label came under fire in 2007 for an ad that many felt depicted the gang rape of a woman. The ad was ultimately pulled soon after, but unfortunately, Domenico Dolce and Stefano Gabbana were accused of referring to people who were offended as ‘a bit backward’. Of course, belittling those who took offense is neither acceptable nor in good taste.

Dolce & Gabbana do it wrong – AGAIN!

The above image is from Kelly Cutrone’s tweet about the ad, which she tweeted on March 15, 2015. It got a lot of attention in the US, Canadian, UK and German media, partly because of an interview the two fashion icons given Panorama, an Italian magazine.

According to Dolce & Gabbana, and as stated in the printed interview, “la famiglia tradizionale, fatto di mama papa e figli,“ (a traditional family, comprised of a mother, father, and children). Of course, if one reads the interview more closely, it is clear that the guys are referencing their own upbringing and Sicilian traditions in general. There, this family model is paramount.

What got people like Elton John and Madonna upset was that the fashion designers dared to raise some scepticism about in vitro fertilization and surrogate mothers, mentioning their personal opinions about this. Whilst we may disagree, a democracy thrives on allowing people to state their opinions; castigating them thereafter on social media is an increasing – but worrisome – trend.

Of course we have to forgive Madonna. She is pushing her latest album Rebel Heart, which debuted earlier this month. Sales were lagging until Madonna posted this on Instagram.

Did Madonna “think before she wrote this Instagram post”? SURE – helping her latest album Rebel Heart to push up its lagging sales….

Domenico Dolce and Stefano Gabbana are also the guys who drew applause for sending a pregnant model down the runway as part of their tribute to mothers.

Similarly, some people got rather miffed earlier this year about Brandy Melville, a clothing brand that offers only size small. It clearly discriminates against people of different size. Of course, it is unlikely you will fit in a small size dress if you are over forty. I do not :-) Again, some social media backlash happened. Questions about the viability of the brand continue (see DrKPI and #BrandyMelville). Can such a brand survive or will it simply die, as Abercrombie & Fitch seems to be?

Size Small does not fit all of us, does it?

[su_box title=”Dolce & Gabbana: Social media talk is cheap” box_color=”#ff9900″ title_color=”#ffffff”]Social media poses a substantial risk that opinions communicated by company officials (e.g., as spelled out in documents or stated during interviews) is taken out of context and spread widely.

Using Twitter and Facebook to share news is fine. But please Madonna and Elton John, check the facts before you share.

(Mr. Dolce: “I am gay. I cannot have a child… I am not convinced by what I call children of chemistry, or synthetic children. Uteruses for rent, sperm chosen from a catalogue.” – see Fashion’s ageing enfants terribles).

Finally, talk is cheap. As consumers, let our actions speak louder than words: Don’t buy!

By the way, negative press and social media coverage is better than none… see Benetton below. And here’s a sucker’s bet: I would bet you most of those people who feel outraged or miffed today will likely continue shopping Dolce & Gabbana and Brandy Melville stuff as early as next month! It is so bla bla, superficial…[/su_box]

More brands than Dolce & Gabbana or Brandy Melville have raised controversy: in 1994, Benetton took a fallen Bosnian soldier’s uniform, using its red blood and bullet holes for an ad campaign.

Interesting read: Henry A. Giroux (2014). Benetton’s “World without Borders”: Buying Social Change

Source: Dolce & Gabbana: When reputation damages brand

Bottom Line

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The above examples offer two insights as spelled out below.
[su_box title=”Brand versus Reputation” box_color=”#ff9900″ title_color=”#ffffff”]1 —Corporate brand – reflects what the corporation aspires to be while the me brand reflects what I as an individual aspire to.
Reputation – the other side of the coin – is how people feel about the company or the person.
SMEs should focus on reputation, spending little on building a brand beyond their geographical territory.
Unfortunately, in practice brand and reputation are rarely if ever treated as separate BUT related constructs. This is a dangerous mistake to make.

2 — Corporate reputation is based almost exclusively on perceptions, not real knowledge. Hence, while managing corporate reputation is primarily a corporate communications task, that is not where it ends. Yes, doing good things and talking about them is great, but remember the goal.
To illustrate, companies sometimes appear to spend more money on advertising their good deed than providing money to the cause itself. Not really conducive to a good reputation…
Finally, if you don’t like a brand, its reputation or the owners’ behaviour, don’t just tweet about it, stop buying the product![/su_box]