The Interface Between Brand Equity and Employees

Introduction

It is an acknowledged fact that brands play a significant role in the world of businesses. Brands impact on employees, firms’ performance, markets, customers and other dimensions. On the part of employees, brands shape the attitudes, behaviour and value systems (Kimparkorn & Tocquer, 2010). Strong bands are noted to be instrumental in enhancing customer loyalty, market share of firms, as well as contributing to the increase of profits and other valuable assets (Kimpakorn & Tacque, 2010). As such, it is evident that brand equity is influenced by multifaceted and inter-disciplinary approaches.

 This essay therefore is an exploration of the interface between brand equity and employees. The interface explored in this essay focuses on both service industry and manufacturing sector. In the course of revealing the interface between brands and employees, the essay shall also attempt to examine  some other issues such as the various theories found outside the field of marketing that have informed issues of brand equity and employees, various constructs created in the area and the different contributions  that have been made in the past five years. It also exposes possible areas or opportunities for further research. Before embarking in the actual task of exploring the interface between the two variables, it is worth to conceptualize the key concepts used in this work; brand and brand equity.

Brand and Brand Equity Defined

 A brand can be conceptualized or rather defined as; ‘feelings, impressions, perceptions and attitudes of employees towards the company (Schlager, Bodderas, Maas & Cachelin, 2011). From this definition it is apparent that ‘brand’ is of central consideration in a company. On the other hand, brand equity has numerous definitions or conceptualizations as well. Keller (2003) defines brand equity as the difference in customer response to marketing activity. In other words, this refers to the various ways customers react to various modalities, strategies, approaches and techniques used by marketers. Such reactions and responses can be positive or negative. On the other hand, brand equity is conceptualized by Aeker as set of both assets and liabilities associated with brand name and symbol that adds or reduces the value provided by products or services to the firm (1991).

The Interface between Brand Equity and Employees

There is a strong correlation between brand equity and employees. From a human resource perspective that; human resources are the most important assets of any organization it is apparent that even on issues of brands, employees have a strong impact. People working in an organization bring to the work place their experience, knowledge, skills, minds, values, beliefs, similarities as well as differences. For employees, the extent to which they are committed to the brands produced by the firm has strong influence on service brands (Kimparkorn & Tocquer, 2010). If the employees are committed to brands, they are likely to promote services that are offered through communicating the quality and types of products.

Brands equity influences attitudes, values and behaviour of employees (Kimparkorn & Tocquer, 2010). Positive employees’ behaviour, values and attitudes are also necessary in shaping and creating strong and successful brands (King & Grace, 2008). It can therefore be argued that; the two mutually reinforce one another. Brands shape employees while employees shape brands and ultimately; they both contribute to the overall performance of the firm in terms of enhancing profitability and shares. This interface is vital for businesses. Strong and good brands are more likely to shape employees’ values, attitudes and behaviour positively while poor brands do the reverse.

Equally important, employees serve as brand ambassadors and in so doing, they influence a great deal brand equity (King & Grace, 2008). Employees being part of the society play a bigger part in influencing sells and dispensation of information about brands or products that are produced by firms. Employers do use their skills and knowledge to act as ambassadors of different brands. At some points, they broadcast about brands via the media, in other instances, they use the brands and hence promoting brand awareness and through other ways. Many companies, nowadays for instance have outfits that are put on by employees or services that are given to their workers. It is common for example here in Tanzania to see people around the city wearing t-shirt written Vodacom with a list of brands and services offered, others put on caps or hats with symbols of Airtel Tanzania and so on.  All these help employees to act as brand ambassadors.

Employees’ attitudes have strong impact on customers’ experiences (Cachelin, Maas, Schlager & Bodderas, 2011). Customers can either be impressed or disappointed by the attitudes of employees. Good employees’ attitudes are instrumental in enhancing the experience of customers. Understanding that employers’ brands are key in shaping the attitudes of customers, it is essential that there is a clear link and efforts to make sure that firms’ or employers’ brands impart positively on employees’ attitudes. Furthermore, as emphasized by Kimpakorn and Torcque (2010), customer’s experience with the brand is vital as it shapes their opinions and future associations with the brand.

Additionally, as the interaction that prevails between employees of the firm and customers is crucial in enhancing brand equity, it is essential that employers and organizations impart on employees, the desired image of the brand and capacitate them to clearly distil all brand values. This will in turn help create meaning of the brands and ultimately foster positive relationships between employees and customer. All these will in their combination; enhance firms’ profitability, performance and sustainability.

Theories outside marketing that influence brand equity and employees

I think that there are a number of theories outside marketing that are used to inform the interface between brand equity and employees. Principally, the immense influence of theories governing human resources management such as the instinct theory of motivation and the Employee Based Brand Equity theories cannot be underestimated (King & Grace, 2009). It is in no doubt that motivation theories are instrumental in looking at the relationship between brand equity and employees. Other theories that are also useful include; identity, leadership and self-determination theories (Morhart, Herzog & Tomczak, 2009). Besides, as knowledge is of great value for employees to be able to disseminate information on the brand, knowledge based theories have also been useful in informing the interface between brands and employees.

Emerging Constructs

From the readings, there are several constructs that seem to emerge. They include; King and Grace (2010) term as openness; the extent to which employees are receptive to organizational dialogue and Brand Commitment a well as Employee Based Brand Equity (EBBE). Other constructs are such as; the centrality of knowledge dissemination, information generation, role clarity and human factors. Human factors are in this case defined as; the extent to which employees perceive that they are being treated in a humane way by their organization. This is thought to manifest through different ways namely; being respected, communication various information, ensuring trust and cooperative interactions.

                                               Opportunities for further research          

More research is needed into such areas as customer outcomes that emerge from good employees’ attitudes or strong brands. Besides, there is a need to research on the kind of leaders or employer’s attitudes and behaviour that have a greater possibility of reinforcing transformational attitudes to employees and hence fostering brand equity. It is also worth conducting research to examine the extent to which employees contribute to brand equity. Apart from that, research is necessary to find out the relationship between employees commitment in different companies, customer satisfaction and companies’ profitability. Further research can also be centred on examining employees brand commitment in various service industries and the antecedents of employers brand commitment.

Conclusions

From the foregoing discussion, it has been established clearly that brand equity and employees have a mutually reinforcing relationships that impact businesses positively or negatively. Employers’ economic value, reputation, development, diversity and social values influence employees’ satisfaction and identification. As such acceptable and legitimate values of employers are likely to influence employees’ satisfaction and identification with the brands and overall improving the services offered. More research also needs to be carried to find out other factors that mediate the interface between brands and employees. It is also imperative to note that the interface between employees and brand equity discussed above can vary substantially depending on the type or kind of sector being examined. Certainly, the interface differs between service and manufacturing sectors.

References

Kimpakorn, N. and Tocquer, G. (2010). Service Brand Equity and Employee Brand Commitment. Journal of Service Marketing, 24 (5), 378-388.

King, C. and Grace, D. (2010). Building and Measuring Employee-based  brand equity. European Journal of Marketing, 44 (7/8), 938-971.

Lindgreen A., Beverland M.B.,&  Farrelly F.,(2010).From strategy to tactics: Building, implementing and Managing brand equity in business markets. Industrial Marketing Management 39, 1223-1225

Morhart, F. M.; Herzog, W and Tomczak, T. (2009). Brand-specific leadership: Turning Employees into Brand Champions. Journal of Marketing, 73 (5), 122-142.

Schlager, T.; Bodderas, M.; Maas, P.; and Cachelin, J. L. (2011). The Influence of Employer Brand on Employees’ Attitude Relevant for Service Branding: An Empirical Investigation. Journal of Services Marketing, 25 (7), 497-508.

Outside-in marketing approach and strategy

Jeff Bezos, the founder and chairman of Amazon.com is a champion of the outside-in marketing approach and strategy; said,’’ Rather than ask what we are good at and what else can we do with that skill, you ask, who are our customers? What do they need? And then you say we’re going to give that to them regardless of whether we have the skills to do so, and we will learn these skills no matter how long it takes…There is a tendency I think for executives to think that the right course of action is to stick to the knitting— stick with what you are good at. That may be a generally good rule, but the problem is the world changes out from under you if you are not constantly adding to your skill set” (Lyons 2010, p.20).

Reference

Lyons, Daniel (January 4, 2010), “The Customer Is Always Right,” Newsweek, 85–86.

Adam Smith famous quotation

    ”It is not from the benevolence of the baker, the brewer and the butcher that we get our daily meal but from their own interests”  Adam Smith (1723-1790)

In a nutshell, He/she is described as a capitalist employer seeking profit; a risk taker, a monopolist, a coordinator an innovator and an organizer of means of production. A person of all these attributes in operations may be termed as entrepreneur.He is a person who organizes, operates and assumes the risk of a business venture.

Failure Is the Secret to Success

By Richard Branson / Source: Business Day

    I recently hosted the annual Sunday Times Fast Track 100 event at my Oxfordshire home. It brings together leaders from the 100 fastest-growing private companies in Britain, a number of other leading entrepreneurs and a few aspiring entrepreneurs from the Branson Centre for Entrepreneurship in Johannesburg and from the British government's Start-Up Loans Scheme, which Virgin administers.

We spent the day listening to each other and sharing stories of achievement and innovation. There was lots of laughter and some great conversations. Looking at the people gathered around our dinner table, I had a wonderful opportunity to reflect on what makes a successful entrepreneur. I found myself going back to basics: the three key attributes that can make a real difference to a person's career.

While I've touched on these points before, some of the entrepreneurs' stories highlighted them in new ways. If you have these basics down, you can give your risky idea a go with the confidence that you're prepared to ride out any trying times ahead.

1. Keep it simple

The best and most successful ideas are those that improve people's lives. Their founders often have a simple plan focused on a single product or service, one that is prompted by frustration.

Paul Lindley, the founder of Ella's Kitchen, started his business because he could not get his daughter to eat. He wanted to create a convenient product that would make mealtimes fun for babies and young children, along with their parents.

Paul came up with the idea of producing colourful, tactile pouches filled with organic meals. The innovative recipes wowed parents and toddlers alike, and took market leaders such as Heinz and Hipp Organic in Britain by surprise, since their rather stale offerings relied on glass jars and traditional flavours. Ella's Kitchen has captured 19% of the market in the UK and copycats are packaging their products in pouches.

As he told his story, it was clear that Paul truly loves his work. He turned his momentary frustration about the difficulty of feeding his daughter into something that is making mealtimes more enjoyable for families.

2. If at first you don't succeed...

Few first ventures work out. It is how a novice entrepreneur deals with failure that sets that person apart. In fact, failure is one of the secrets to success, since some of the best ideas arise from the ashes of a shuttered business.

If you are an entrepreneur and your first venture wasn't a success, welcome to the club — every successful businessperson has experienced a few failures along the way. In the US, most investors will look at an entrepreneur's past failures before making a decision, not because they are worried about it but because they want to see that the person can withstand the occasional knock. Resilience is one of the hallmarks of an entrepreneur who stays in business in the long term.

Talking with the team who runs the Branson Centre in Johannesburg, I was heartened by Dylan Jonsson's story, as it shows that our entrepreneurs are learning from their mistakes and building new ventures. Dylan is a trained chef who started a restaurant, which then failed because of poor planning. However, he has since launched his next venture, A Thyme to Dine, which is a catering business that also sells four types of chocolate balsamic reductions he developed while running the restaurant.

This skill in identifying a winning formula despite his despair at seeing his restaurant close marks Dylan as one to watch. Some of his sauces and drink powders have been picked up by two national chains in South Africa and he is looking to start international sales soon.

3. Are you having fun yet?

If you don't like being an entrepreneur, you're doing it wrong. When you can't wait to get to work in the morning and you are generally having a good time, there is a far greater chance that you'll create a positive, innovative atmosphere and your business will flourish.

Keith Bete, a Branson Centre entrepreneur, epitomises this attitude perfectly. He founded Ubuntuism, a clothing venture based on Ubuntu, an African humanist philosophy that focuses on building a peaceful, prosperous community where riches are shared and people are treated with respect. His passion and enthusiasm is infectious: everyone he met at the conference wanted to buy a T-shirt and learn more about his company.

How have these three traits helped you in your career? Have you picked yourself up after a failure?

The success of yesterday

The success of yesterday if not improved upon will be a failure today.The success of today is just good for today.Unless strategies are changed to carter for tomorrow challenges; what you call   success today will be a great shame tomorrow.

How International business & Multinational companies can spearhead innovation in developing countries

This is the essay that contains summary of key findings on how international business act as a source of innovation in countries behind technology frontier and the role that MNCs  in enhancing innovation in developing countries and explanation on scope of theoretical advancement.

How international business acts as a source of innovation in countries behind technology frontier

Globalization has facilitated international business through trade expansion due to greater integration of economic and social activities around the world. In the same vein expansion of international trade has been propelled due to reduction in communication and transportation costs combined with trade liberalization (Dahlman, 2008). Moreover, Globalization has facilitated world economy through openness to trade, Foreign Direct Investment of Multination firms, the use of international location as sources of patenting by MNCs and international migration of world population between countries (Athreye & Cantwell, 2007).

International business has assisted the generation of technology in the developed and developing countries especially in the general purpose technologies such as Information technology and Bio technology. This has been made possible due to demand of new technological innovations, human capital and existing technology. Moreover it has caused new nations to emerge as technology producers. For example there has emerged some countries without US patenting of technology such as Singapore, S. Korea, India, Taiwan, Sweden, China, Israel, Finland, Russia and New Zealand (Athreye & Cantwell, 2007).Among these countries, for example, Singapore has emerged as new technology producers through FDI while Korea didn’t depend much on FDI but depended on trade, copying, reverse engineering and technology licensing plus enhancing the R&D policies and development in higher education (Glass and Sagi, 1998).

Additionally, International business has made possible new emerged technological producer countries to have a share of patents and licensing revenues which are the measure of technology development of a country. This is facilitated by private R&D and Government policies that have enabled the upgrading of technologies in these countries. Licensing as a measure of technological innovation has gained large speed from 1990’s to date. Nonetheless, licensing is more sensitive to local institutions and Governance of a specific country; this implies licensing flourishes in the countries with adequate institutions (Athreye & Cantwell, 2007).

THE ROLE OF MULTINATIONAL COMPANIES IN INNOVATION OF COUNTRIES BEHIND TECHNOLOGY FRONTIER

Piscitello (2003) argued that Multinational companies have become important economic agents with respect to generation, commercialization and international transfer of technological knowledge. Technology generated by the MNC can be used in its home country or to its subsidiaries to generate rents. MNC and FDI observe that knowledge is the key source of ownership and advantage held by them; hence, multinational firms are viewed as distributor and integrated innovation network that enables the firms to assimilate, generate and diffuse knowledge on a global basis. Knowledge or technology flows from multination firms manifests itself in terms of  R&D capabilities and equipment, manufacturing know how, marketing resources, work practices and managerial techniques, supplier and distribution expertise; it  involves physical transfer of resources to new locations or sharing resources without physical transfer between parts involved.

Liefner, Hennemann and Xin (2006) argued that in the process of technological upgrading and innovation; companies in the developing world make use of knowledge originating from foreign companies or universities or Public research organizations. Cooperation with foreign companies helps domestic companies to get new ideas that enable them to enter the market with new products. Moreover, Balcet and Evangelista (2005) argued that subsidiaries of MNC tend to rely more than domestic firms on innovations developed externally and on tight technological linkages with parent company and other firms of multinational group they belong to. This implies that domestic companies can absorb new knowledge from different sources including foreign companies. Furthermore, domestic companies make use of international linkages in innovation process depending on their absorption capacities which is in the form of knowledge base, skilled human resources and some form of in house knowledge generation.  This concur with Cantwell and Athreye(2007) statement that MNC through their FDI promotes technological catch up to the countries that have already acquired sufficient absorptive capacity and spill over through skilled labour and innovation infrastructures such as R&D institutions.

Marin and Bell (2005) argued that Multinational Companies’ subsidiaries are leaky containers at the end of the technological transfer process of technology spill over. This implies that MNCs subsidiaries own knowledge creation and have significant source of spill over potential.  However, limited absorptive capacity of the domestic firms can act as a constraint of the technology transfer tunnel. Innovation Spill over occur in the advanced industries such as electronics than traditional industries because they employ skilled workers and undertake more of R&D. Moreover Glass and Sagi (1998) argued that technology transfer from FDI is linked to the rate of imitation of best technology available by the local firms.

Indicators of leaking  of MNC subsidiaries technological innovation to domestic firms are such as R&D intensity(Reported expenditures on R&D), employees’ training intensity, Skills intensity of employment of people employed in production such as engineers, professionals and technicians; others are  Investment in licensed technology (Evidenced in licensed designs, know how), Investment in capital embodied technology-Investment on IT, Investment on equipment for innovation and  report on expenditure to introduced new products. However, Spill over is not automatic phenomenon as it occurs to a particular group of domestic firms that do  investment in technology infrastructures and in training of human resources (Marin & Bell (2005)

Eapen (2012) argued that domestic firms with network ties to foreign firms compared to those without ties are better positioned to overcome innovation technological search and technological search constraints. Additionally, the network ties based on friendship basis facilitate technological search between foreign and domestic firms. This is because knowledge transfer is not easy as many MNCs fear competitive cost of sharing information with domestic competitors. This is because knowledge and information given to competitors costs the giver in terms of relative competitive position. However at times the foreign firms can have incentive of sharing information with domestic competitors due to personal relationship between decision makers on both sides of foreign and domestic firms as well as due to anticipation of future reciprocity of information that is valuable they expect to receive in return. Moreover, domestic firms with past ties with foreign firms are likely to possess complementary routines and capabilities relevant to the technology. Network with foreign firms help to reduce innovation technology search and transfer constraints.

Meyer and Sinani (2009) argued that Local firms experience inward FDI as both competitors and a source of advanced technologies and managerial knowledge. Spill over benefits increases with technological gap between local recipient firms and foreign investors. Although Institutional development attracts FDI, Very poor and very rich countries benefit alike from inward FDI. This argument is also supported by Zhou and Xin (2003) who found that relationship between MNC and local firms is interdependent and evolutionary. This imply that when local firms collaborate with MNC; the MNC provide them with vital technological and organizational training of which local firms can use them strategically to develop market networks and innovative capacity. Learning capacity is however improved by research and development facilities, presence of other related enterprises and developmental state in a market oriented cluster. Moreover, MNC depend on local firms for marketing and servicing of their products, they transfer considerable technical and management expertise resources to local firms such as R&D capacity, firms market expertise and opportunity for advancement and growth.

Balcet and Evangelista (2005) argued that the international spread and decentralization of innovation activities takes place from MNC to domestic firms when the combination of various factors are in operational such as good scientific infrastructures and human capital in the host country, Size and growth rates of foreign markets, High R&D intensity, capacity of the MNC to manage efficiently complex research systems and innovation networks, firms with complimentary or similar technological capability abroad, high  cost of research and lack of scientific infrastructure in the home country.

Greatest scope for continued theoretical advancement

Governments and policy makers should not only concentrate on attracting foreign investors but they should encourage appropriate ties between domestic firms and foreign companies that will serve as channels of innovation spill over. Target should be to specific groups of domestic firms that have higher potential for absorbing innovation spill over; those domestic firms with complimentary capabilities and lower resistance to change (Eapen, 2012)

Moreover technological innovation catch up such as licensing tend to flourish in the countries with adequate Institutions. This means ethics has a role in facilitating technological innovation. Therefore theoretical advancement should be geared on the areas of ethics to explain the importance of enforcing good governance among developing countries nations since local institutions and good governance of a specific country play a great role in making innovation possible; put it differently licensing flourishes in the countries with adequate institutions (Cantwell and Athreye, 2007).

Conclusion

International business has assisted the emergence of new nations as technology producers without US patenting of technology. This has been possible due to openness to trade, Foreign Direct Investment of Multination firms, use of international location as sources of patenting by MNCs and international migration of world population between countries (Athreye & Cantwell, 2007). Additionally, MNCs has enhanced technological innovation flows in developing countries technology through  R&D capabilities and equipment, manufacturing know how, work practices and managerial techniques, supplier and distribution expertise; firms market expertise and opportunity for advancement and growth through innovation technology search and transfer. Furthermore scope for continued theoretical advancement should focus on encouraging appropriate ties between domestic firms and foreign companies as they serve as channels of innovation spill over; additionally enforcing adequate institutions should be prioritized since it is a prerequisite behind innovation catch up.

UNDERSTANDING SUSTAINABILITY

 Meaning of Sustainability

Sustainability is a buzzword commonly used by business leaders, politicians, activists and academicians just to mention a few. It is a word used to mean different things to different people (Shearman, 1990). Shearman (1990) argued that sustainability as a word carry no meaning other than a modifier to the context in which it is used. Additionally, it is a discriminating term that distinguishes sustainable and unsustainable instances. Moreover it differs from the context in which it is used. Sustainability can be used as a dictionary meaning (lexical meaning) and implicative definition which explain the significance of something with the focus on long term orientation.

There are three pillars of sustainability which are environment, society (social) and economy sustainability (Hacking & Guthrie, 2008) but I concur with Shearman (1990) who added ethics and good governance as another pillar of sustainability to make four pillars of sustainability. Social definition of sustainability is continued satisfaction of human needs such as food, security freedom, education, employment and recreation whereas the ecological definition of sustainability refers to continued productivity and functioning of ecosystems whereas sustainable economic development refers to continued process that sets its goal towards the improvement of social well being through the production and acquisition of economic goods or services (Shearman, 1990). Packalen (2010) defined sustainability as a discourse about ways of thinking, values, culture and lifestyle that aim at shaping human kind for a desirable future. Implying that if one wants to make sustainability agenda sustainable, one has to start by changing people’s way of thinking into right and positive thinking then other variables in the sustainability equation such as economy, environment and biodervisty will be sustainable as well.

The term sustainability, however, has been politicised deliberately to justify the significance of environmental sensitive programs and usage of funds (O’ Riordan, 1988).This implies that people who consider sustainability as a word that refers to external physical environment only are wrong since they forget very important element in the sustainability equation called human element. Human element comprises of individuals, societies, business leaders, military and political leaders. That is why Packalen (2010) commented that in order to have sustainable world for human kind in the future, all stakeholders must be involved. Additionally, Karp (2003) argued that management of many corporations fail because they think very narrowly based on language of economics and profit gains only without thinking about vast needs of other stakeholders such as employees, local and  central governments, biodiversity and societies/communities where the businesses operate just to mention a few.

Similarly, World commission on environment and development (1987) pointed out critical issues that need to be considered in the pursuit of sustainability or sustainable development such as political systems that secure effective citizen participation in decision making, economic system that is able to generate surpluses, technological knowledge on self reliant and sustainable basis, social system that provides for solution for the tension arising from disharmonious development, production system that respects the obligation to preserve the ecological base for development, technological system that search for new solutions and international system that fosters sustainable patterns of trade and finance plus administrative system which is flexible and has capacity for self correction.

This essay takes its definition on sustainability from Shearman (1990) and Packalen (2010).