COM 655 3-3 Analytical Paper #1
The term “brand” has come to mean not only a company’s name or product, but is now associated with that company’s identity. When a consumer contemplates a brand, she is not only thinking of only a specific product of a specific company, but rather, that product or company within the larger context of the brand: a living, breathing personality (Fan, 2005). Much as a brand’s logo and/or tagline become associated irrevocably with a product, so does its ethical identity and values become indelibly imbued within all associations of that brand (Tybout & Calkins, 2011). Small wonder, then, that how a brand conducts itself ethically directly affects its reputation, its sales figures and market share, and its overall presence in its industry, because members of the target market judge the brand by their own the values, ethics, and the personality (Fan, 2005).
Ethical lapses, either perceived or actual (though it can be argued that this is a distinction without a difference), can grievously affect a company’s reputation, and as a result, directly affect said company’s bottom line (Doorley & Garcia, 2015). One egregious example of how a company failed at ethical practices, open communication and corporate responsibility can be found in the pharmaceutical company, Valeant. Valeant publicly purported its mission to focus on distribution rather than R&D, and to be fair, its stock prices rose steadily at first (Gandel, 2015). Until it was discovered that Valeant had raised the prices of two of its critical and widely-used heart medications by 300% and 700% respectively (Knoer, 2016). These price hikes were a clear violation of the principles of corporate responsibility, and therefore it is only reasonable to assume that its audience—which unfortunately (for Valeant) included not just the individual consumer, but also all sizes of hospitals, influential politicians, and ultimately the federal government)—would extrapolate overall responsibility and behavior in a negative manner (Melewar, Sarstedt & Hallier, 2012). It is possible that Valeant could have admitted these very visible lapses in ethics and corporate responsibility, and thereby halted the reputational decline that it was experiencing (demonstrated by a steep drop in stock prices), but this would have required the use of open, honest communication with its public audience (including its shareholders) along with complete mortification strategy, i.e., taking total responsibility for the lapses and showing true remorse to gain the audience’s sympathy (Coombs & Holladay, 2010); instead, Valeant continued to hide its pricing policies and suspicious industry alliances, in effect hastening said reputational decline. It appears that by the time Valeant finally realized that open communication was a positive reputational enhancement, it was too late: its stock prices took yet another dive after a conference call to disclose fraudulent activity. One can speculate that Valeant resorted to changing its brand name to Bausch Health Companies Inc. in order to mend its image and start rebuilding its reputation; it can perhaps similarly be interpolated that the use of the name “Bausch” will allow it to piggy back on Bausch and Lomb’s superior industry reputation, and perhaps enable Valeant to redeem itself by allowing its former brand identity to fade away and be forgotten.
Ethical considerations are so crucial for a brand that even with a strong public reputation, a perceived misstep or lapse in ethical integrity may significantly damage said brand’s reputation. Chick-Fil-A is a such a case study: it is a brand that positioned itself first and foremost as an ethical brand with a religious foundation (Daily Herald, 2012). In the conservative and religious South, the company’s practice of being closed on Sundays reinforced its brand identity and naturally found favor with its audience; so much so, in fact, that the company’s leadership felt comfortable disparaging same-sex marriage publicly (Stafford, 2012) and actively donating to anti-same-sex-marriage activists (Horovitz, 2014). This perceived ethical lapse led to such a backlash from even governmental agencies, especially in the more liberal North-East, that when Chick-Fil-A decided to expand nationally, its public relations strategy had to be completely revamped and expanded, and its brand identity just as completely reinvented. In an era in which the practice of public relations has to be sensitive to political and cultural differences within the same market boundaries, Chick-Fil-A could no longer be the Church-family-friendly restaurant (the dissenting audience likely did not care why the Chick-Fil-A brand had positioned itself the way it had, only that it had positioned itself thus (Doorley & Garcia, 2015)); it instead had to become the courteous, considerate, healthy, and customer-centric restaurant. It had to rely on the ethical values of courtesy, compassion, health and sustainability to reform its brand identity in the eyes of its audience.
These examples clearly demonstrate the value of brand identity within an ethical context, and perhaps the main clue as to why this is is in the word “identity.” The general public associate the word with something a person owns, the embodiment of that person. With regard to brand identity, the concept of identity has led to not only to a personification of a company or a product (the essence of the creation of a brand (Tybout & Calkins, 2011), but also to the elevation of human/personal/persona status of said company or product. The feelings of betrayal or trustworthiness, disgust or elation that traditionally are associated with living, breathing beings are now being attributed to intangible personifications.
References
Chick-fil-A makes another statement on giving controversy — but still no clarity. (Newspass:[_]). (2012). Daily Herald (Arlington Heights, IL). Retrieved from http://ezproxy.snhu.edu/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=edsbig&AN=edsbig.A303074975&site=eds-live&scope=site
Coombs, W. T., & Holladay, S. J. (Eds.). (2010). The handbook of crisis communication. Malden, MA: Wiley-Blackwell
Doorley, J., & Garcia, H. F. (2015). Reputation Management: The Key to Successful Public Relations and Corporate Communication[VitalBook file.] (3rd ed.).
Fan, Y. (2005). Ethical branding and corporate reputation. Corporate Communications, 10(4), 341-350. Retrieved from http://ezproxy.snhu.edu/login?qurl=https%3A%2F%2Fsearch.proquest.com%2Fdocview%2F214190336%3Faccountid%3D3783
Gandel, S. (2015, September 7). Valeant: A timeline of the big Pharma scandal. Fortune. Retrieved from http://fortune.com/2015/10/31/valeant-scandal/
Horovitz, B. (2014). Chick-fil-A offers a new public face. The Christian Century, (10), 19. Retrieved from http://ezproxy.snhu.edu/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=edsgbc&AN=edsgcl.371969727&site=eds-live&scope=site
Knoer, S. J. (2016, September 7). How to stop immoral drug price increases. Time. Retrieved from http://time.com/4475970/stop-immoral-drug-prices/
Melewar, T., Sarstedt, M., & Hallier, C. (2012). Corporate identity, image and reputation management: a further analysis. Corporate Communications: An International Journal, 17(1). doi:10.1108/ccij.2012.16817aaa.002
Stafford, L. (2012). MARKETING: Handling PR: The debate on Chick-fil-A: Chain takes low-key stance in controversy. Experts disagree on how to tackle uproar over leader’s remarks. (Business). The Atlanta Journal-Constitution (Atlanta, GA). Retrieved from http://ezproxy.snhu.edu/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=edsbig&AN=edsbig.A298646325&site=eds-live&scope=site
Tybout, A. M., & Calkins, T. (2011). Kellogg on Branding: The Marketing Faculty of The Kellogg School of Management [Kindle Version].