P. 1
Corporate Branding-BBVA Group

Corporate Branding-BBVA Group

5.0

|Views: 905|Likes:
Published by Bhooshan Parikh
This paper examins BBVA Group's corporate brand initiative by answering certain questions related to the value-culture-image branding model. The paper analyses the evolution of the BBVA group and explains how far has the BBVA group been successful in achieving the 'ideal bank' image. It also compares the banking giant to the LEGO Group's branding initiative and finally explains in a more generic manner, the effect of the current financial crisis on corporate branding.
This paper examins BBVA Group's corporate brand initiative by answering certain questions related to the value-culture-image branding model. The paper analyses the evolution of the BBVA group and explains how far has the BBVA group been successful in achieving the 'ideal bank' image. It also compares the banking giant to the LEGO Group's branding initiative and finally explains in a more generic manner, the effect of the current financial crisis on corporate branding.

More info:

Published by: Bhooshan Parikh on Mar 14, 2009
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF or read online from Scribd
See more
See less

05/10/2014

Corporate Branding

Term Paper Bhooshan Parikh

1. How will you diagnose BBVA as a corporate brand before they undertake their new brand platform using the VCI-model? BBVA was formed in 1999 with the merger of two Spanish banks Banco de Bilbao Vizcaya (BBV) and Argentaria, and grew to 7000 branches worldwide through a conglomeration of 150 different banks in 37 countries. Although termed as one of the largest banks in the competitive sphere, a decline in performance, decreased customer loyalty and increase in competition was noticed in the years prior to 2000. Although a corporate brand, it seemed that BBVA was not proactively involved in developing its corporate brand image until 2000. As a result, in spite of its image of a large and successful bank, the brand perceptions of the organisation and the stakeholders seemed to be non-aligned. To get a better understanding of the BBVA brand prior to their adoption of the brand platform, we can use the VCI model (Hatch & Schultz, 2008) to arrive at an acceptable diagnosis of the organisation. Vision: The BBVA obviously did not have a clearly laid out vision, but from the information available, they seemed to be working towards global expansion, profit, popularity and worldwide leadership in the banking and financial services. At the same time there seemed to be a lack of clarity in the brand responsibility at the corporate level as this ‘vision’ was not specified to the internal stakeholders. With the rapid expansion that was undertaken by the BBVA group, there was also a doubt regarding the lack of integration of the old and new businesses and the resultant misaligned visions. Culture: The BBVA group had a long history spanning decades and over the years the organisation had developed its own internal culture and ways of doing things. However, with the focus on expansion and growth and the lack of integration, the communication, motivation and education of the entire staff on this subject was adversely affected. There was very little employee involvement and the group’s strategic vision and organisational culture were at a tangent. Image: The stakeholder image of the BBVA group was the worst affected. The loss of loyalty and low customer satisfaction was expected due to the misalignment mentioned in the preceding paragraphs. The employees felt badly treated; the competitors were catching up; and most importantly, the customers did not feel valued. There was no sense of belonging while dealing with BBVA and the customers felt no special association with the group or the BBVA brand. BBVA was a turning out to be a big misfit in the ‘ideal bank’ image that the customers had perceived. Gaps in BBVA VCI: “...this growth damaged Nike’s intuitive connection with its customers.” (Hatch & Schultz, 2008, p.110). The above statement reflects an experience similar to that of the BBVA group. The bank seems to have been caught up in the ‘‘Trap of Success’ (Hayes, 2005) and has been failing to maintain its image in the eyes of its stakeholders, which has led to this current decline. At this point it would be prudent to bring out the missing links in the alignment of the VCI model of BBVA, with particular focus on the stakeholder image.
Bhooshan Parikh Term Paper: Corporate Branding CBS-FTMBA 2008-09

Page 2

Vision-Image:  The foremost gap would be the non-existent strategic vision for the BBVA group. There was nothing that the customers or employees could associate with as far as understanding what the group was striving to achieve.  As seen from Exhibit 1 of the handout, we can see that there has been a decline in the number of branches of BBVA, while other banks have constantly shown improvement.  In spite of a high Uncertainly Avoidance Index (Hofstede, 2005) in Spain (86), BBVA failed to maintain transparency in its activities and could not assess the changes in the customer trends and attitudes across the organisation, which led to decreased customer loyalty and a dismal performance on the free-recall ratings (8%) in comparison with its biggest rival La Caixa (16 %). Culture-Image:  The BBVA management had not given due consideration to who their stakeholders were. It seemed that that the organisation was functioning only towards achieving its ‘vision’ of expansion, growth and profit and paid less attention to what the customers’ needs.  Limited knowledge of consumers’ perceptions in different regions of the business area, segmentation of consumers based on their financial standing, and poor knowledge of consumers’ experiences with BBVA, clearly indicated a wide gap in the culture and image of the BBVA group.  Moreover, the narcissistic attitude of the top management and the slow progress in terms of technology, innovation and services led to further distancing of the customers. 2. Which brand platform will you recommend to the BBVA top management and why? (Exhibit 11) Considering that the main area on which BBVA has lost ground was its image in the eyes of the stakeholders, it is recommended that ‘We work for a better future for people’, be adopted as the new slogan for BBVA. This is best suited as it addresses most of the criteria for an ‘ideal bank’ as per the research data collected from customers. As a result, the BBVA group has the potential to effectively cover or at least minimise the gaps in the alignment of its VCI model. a) Proactive: The slogan gives an impression of being proactive in its efforts towards growth and in the exploring its capabilities with a view to build up on its existing proficiencies in the banking industry. In comparison to the other alternatives, we can see that the alternatives are neither proactive nor foresighted. They emphasise on maintaining the capabilities already possessed and are not looking at exploring different opportunities & enhancing their expertise. Instead, they depict dependence on the customers to provide them with the ways and means to grow. Although the alternative solutions are focused on future with the foundation of the strong history and global presence, they are too vague and abstract for any customer to associate with BBVA.

Bhooshan Parikh Term Paper: Corporate Branding CBS-FTMBA 2008-09

Page 3

b) Differentiation: It also suggests that the bank is actively looking for potential partners to secure its future by creating a strong vision that will allow for future growth. This issue is one of the main benefits that branding can provide as the customers will be able to clearly distinguish BBVA from its competitors and this will lead to an improved image of the group. Looking at slogans of other banks (Exhibit 10 of handout); we can see that they sound too artificial and over-ambitious. Furthermore, the other options available to BBVA are similar in nature; artificial sounding and seemly having been copied from or following what the competitors are doing. c) Competitiveness: The adoption of this slogan will create an impression that BBVA is open to diversification and is striving to carve a niche for itself in the global banking industry by being innovative, future-looking and dynamic in leading and pioneering the transformation of the banking industry. The other two suggestions also convey a similar meaning of looking into the future and being innovative, but at the same time are contradicting in that they emphasise on the current position of the organisation and in maintaining a kind of status-quo in terms of diversification, thus defeating its vision of achieving growth. d) Trust / Transparency: Being clear and concise is what this slogan stands for. It has no hidden meaning and is not vague in relation to the other alternatives available. When people read this slogan they will directly associate it with the image of the bank. This brand slogan has the potential to become synonymous with BBVA and create an image of trust and transparency in the minds of the people. To quote Albert Einstein, “everything should be made as simple as possible, but no simpler”, this only amplifies the justification for the use of this slogan as a simple and effective branding tool. ‘Made for a new world’ and ‘Great like your dreams’ sound very disconnected first to the banking profession and second to the customer himself. e) People focus: As evident from the wordings the slogan is focused towards all the stakeholders, from the employees to the consumers and the stockholders and in helping them to grow. The slogan can act as a motivating factor and encourages the employees to be more resolute in their efforts towards achieving the goals of the organisation. It also creates a sense of togetherness and Esprit de Corps within the working environment in the organisation. The other two suggested slogans on the other hand convey a sense of being organisation or profits focused, and stand out to be a bit ambitious and demanding on the employees. f) Value creation: It is evident that with this slogan BBVA is aiming at the future and that also suggests that with a secure future, the value it can potentially create for its owners (shareholders) is immense. With a stance to lead the innovation and services in the banking sector, BBVA has a very bright future and will be clearly a step ahead of its competitors. This is one aspect which is not covered by the alternatives BBVA has for its slogans. They do not emphasise on creating a long term relationship with customers and rather stress upon providing solutions to customers. g) Belonging / Loyalty: Another important benefit of branding is belonging and that is what this slogan aims to inculcate. With a focus on people, a high level of trust, and creation of immense value for its
Bhooshan Parikh Term Paper: Corporate Branding CBS-FTMBA 2008-09

Page 4

customers, the bank can strengthen long-term relationships with its customers. High quality service, leading change, and being proactive in identifying and solving consumer issues will create a high degree of loyalty. This slogan actually generates a feeling of being available to listen to the problems and issues of the customers and not only to sell the services they have to offer. Again, the other two brands fail to convey this meaning, which is integral to the perception of the ‘ideal bank’. From the above discussion, it can be seen that ‘We work for a better future for people’ covers many of the aspects contained in the alternatives available and is therefore, more encompassing. It not only addresses major issues connected with BBVA’s core business area, but also conveys the human aspect of the group, particularly with respect to all its stakeholders. 3. How will you recommend that BBVA implements its new corporate brand? What are differences and similarities compared with the LEGO Branding process? For an organisation like BBVA, with a strong heritage, all the experiences, learning and capabilities developed over the years would play a vital role in building the image of the organisation, especially when BBVA did not have any specific corporate branding slogan earlier. The general approach would be to utilise the VCI model and achieve an alignment in relation to the meaning contained in the slogan. As the first step, it would be recommended to go down to the ‘grass-roots’ levels of the organisation and look at how the organisation has grown and developed over the years. This will assist in deriving an assessment of the firm’s identity based on its long history and how it compares to the identities of its competitors and to the perceptions of the stakeholders. It is recommended that similar to the LEGO process, a special team with personnel from all key departments should be constituted to work in consultation with an outside consultant(s). When we compare this step to the Cycle One (Who we are) of the LEGO branding process, we can see that the main difference was in the target audience and this governed the vision statement of the two companies. While LEGO has had different approaches (the LEGO DNA) and is focused on families with children, BBVA is more generalised in terms of attracting customers. Conversely, the two companies have adopted a similar process in that they both address the issue of stakeholder image and there was a strong need to pursue corporate branding. Both companies had been overlooking this facet of organisational growth and hence the problems faced were similar viz. Dissatisfied and demotivated employees, disloyalty amongst customers, increase in competition, decline in brand value, and restricted growth. Having done this, the BBVA management should be in a position to assess the competitiveness of the group in terms of the industry, brand image and stakeholders. In the wake of increased competition and declining consumer satisfaction, it would be prudent for the BBVA group to divert its attention to put branding as the top priority. It is recommended that an in depth review be conducted of the internal as well as external stakeholders with a view to gather qualitative data that will help to align the elements of the VCI model. The idea would be to initiate stakeholder involvement to a high level
Bhooshan Parikh Term Paper: Corporate Branding CBS-FTMBA 2008-09

Page 5

and to create a sense of belonging and being part of the whole change process. Moreover, personal interviews, informal correspondence, suggestions, etc. should be welcomed, which should be used as real-time feedback and/or as improvement points for reviewing the branding process. Again, with similar issues being addressed, the manner in which LEGO addressed its external stakeholder issues is similar and different at the same time. Similar in that both organisations considered the involvement of external stakeholders vital for the development of its new image. But the LEGO process is different in that the external stakeholders, i.e. the adult LEGO fans, were directly and extensively involved in the branding process and in the development of its products and services; while in case of BBVA, the stakeholders only provided inputs through market research data and feedbacks. Once the groundwork has been completed the next important aspect would be to communicate the new image and the anticipated positioning attached to that image. Circulating handbooks or flyers will not be a practical approach. Firstly, it would consume some amount of time to get these circulated to all those concerned, and in the process there is a risk that the purpose of the complete exercise would be lost. Secondly, there is a tendency amongst people to disregard such flyers or handbooks and there is a high possibility that some of the individuals might not even read that. Thirdly, and most importantly, this action can prove to be negative in the sense that it conveys a half-hearted effort, some kind of a formality that the management is trying to put across to the employees/customers; such a move would come with an underlined message not to consider it in earnest. Instead, the whole communication process should be divided into internal and external audiences and should be addressed accordingly. For the employees it is important that this new vision becomes a part of the organisational work culture that they should adopt and live by. The management needs to concentrate on its culture, heritage and the new found vision, and should use these intangibles as the strength of the BBVA group to educate its internal stakeholders. It would prove to be highly effective to conduct a workshop or seminar across the entire organisation for this purpose, which will convey the message of the branding process directly and most efficiently to all employees. This workshop should be intensive and should be aimed at encouraging all participants to be reflective and epithetical with the customers while relating to this branding initiative. The employees should be pushed, encouraged and made responsible for the whole process with a view to creating a sense of belonging, trust, cohesiveness and enthusiasm in the employees that will help them pursue this goal with more vigour and motivation. Over time, this vision will come to become a part of the BBVA brand and also of the employees, and BBVA would set a real life example of ‘living the brand’. LEGO experienced that “Strategic branding not only requires the support of the company, but that implementation of brand strategy can alter other elements in the strategic mix”, (The Cycles of Corporate Branding, 2003).

Bhooshan Parikh Term Paper: Corporate Branding CBS-FTMBA 2008-09

Page 6

In relation to the external stakeholders, what the consumers and external stakeholders want to see is something tangible, something that they can see and feel, and something that will help them relate to and differentiate BBVA from the competitors. With this in mind, the designs for the office layout that have been suggested by the design firm should be considered seriously. The designs are highly practical, make the customers feel valued and respected, and convey a direct message of ‘working for people’. The designs bring to life the ‘ideal bank’ perceptions of customers and live up to the images of ‘People focus’, ‘Proactive’ and ‘Belonging’ that the slogan portrays. Most importantly it gives physical evidence to all external stakeholders that the branding process of BBVA is not a farce; that it is indeed something that the organisation lives by and strives to achieve. It portrays the shift in the organisational culture and the improved approach that has been adopted towards making BBVA, in actual fact, ‘working for the better future for people’. It is apt to quote Nobuyuki Idei, CEO of Sony Corporation, “We have to change our culture from the manufacturing industry to knowledge-based global culture; . . . . ; Kind of a reinvention of the business model itself” (The Cycles of Corporate Branding, 2003). This is what LEGO also adopted, and in the case of BBVA this it assumes greater relevance. BBVA has to move on from providing financial services to creating better future for the people. As far as visual imagery is concerned it is recommended that the suggestions by the design firm be used in combination. The photographs, as suggested by the market research data, convey a sense of being honest, transparent and ethical while the illustrations are more inclined towards the human/ emotional elements of the organisational culture. As a move to display both its heritage and its new found image, BBVA should use both of these. This move clearly says that BBVA is not only keeping up with the changes in the customer perceptions but also is pioneering development with foresight into the future. At the same time BBVA is not letting go of its values and heritage and wants to build up a lasting relationship with all its stakeholders. Finally, with proper implementation of the branding process, it would be possible to ensure that the BBVA group regains its lost credentials, improves its positioning in the eyes of the customers and brings about a much needed balance in its VCI model. However, what is more challenging task for the management and all the stakeholders of BBVA is to maintain this position and the focus on this new found initiative in the future. Sustaining change is as important as undergoing the change. The failure to do so to the extent that it leads to co-creation of value for the organisation as well as the stakeholders will render the whole process as a failed attempt. This will not only result in heavy financial losses for the organisation but also result in loss of reputation, morale and customer loyalty and begin the inevitable death spiral which needs to be avoided at all costs. Conversely, the suggested process inherently incorporates a system of continuous feedback from internal as well as external stakeholders of BBVA. Moreover, with stakeholder involvement and creation of a sense of belonging, this branding process has strong support to prevent it from digressing from the intended path. The only issue here for the management is to ensure that the vigour and enthusiasm to

Bhooshan Parikh Term Paper: Corporate Branding CBS-FTMBA 2008-09

Page 7

implement this change is maintained and the core team that was mentioned earlier should be made to oversee the whole process. Not only will this team take over the duties of the branding process after the initial stages of implementation, but they will also be responsible for receiving and providing regular feedback and improvements/changes to the process as required. Other differences that we find in the two processes are the brand community and cost reduction factors of LEGO. These were two very important features of the LEGO branding process since it was the development and involvement of these brand communities that virtually saved LEGO from coming out with ‘failed’ products. To add to this, the financial woes of the company were taken care of through job cuts and by outsourcing activities and thereby cutting costs. BBVA does not face similar circumstances and does not need to resort to cost cutting. Of course, some of the banks under the BBVA umbrella had to be shut down but that number was not significant. In fact it is recommended that they BBVA group undertakes considerable expenditure in order to develop its infrastructure and provide better facilities for the customers, especially in terms of the redesigning of its branches. LEGO also showed that it was prepared to adjust with the market through innovation and technology and through renewal of its core product lines, involvement in internet sales, interactive customised product designs and through life-style products, theme parks and entertainment. BBVA on the other hand was not as ‘imaginative’ or ‘creative’ as LEGO in as far as its products were concerned and had to be contented with service features like kiosks, express ATMs and provision of cabins and conference rooms to customers. Basically, indulgence in modernisation and technological advances formed an important part of the branding process and the subsequent success. 4. What are the main challenges to a corporate brand in financial services in the wake of the financial crisis? During the current economic crisis the financial services organisations have been seen in the most precarious position in recent times. An ever increasing number of financial services organisations are experiencing widespread uncertainty and instability that have led to bankruptcy and liquidation. An accelerated slowdown in the global economic situation and dip in business and consumer confidence has resulted in scarce funding, fluctuating market values and falling demand for financial products and services. We can elucidate the major challenges corporate branding in financial services as under: a) Reputation and focusing on the commercial banking business All banks rely heavily on their reputation, which is governed by the willingness of the customer to trust the bank with his money. As a result branding becomes instrumental for the financial services sector in the current financial crisis. This is because investors and consumers have lost confidence and are being extremely cautious about dealing with financial institutions and getting involved in large financial transactions. The developments in the financial sector over the last year and a half have
Bhooshan Parikh Term Paper: Corporate Branding CBS-FTMBA 2008-09

Page 8

impacted the brand value for the financial service sector as major banks and financial institutions have suffered huge losses in the value of their brands. Moreover, companies have sought to trim their budgets in reaction to the economic downturn by becoming leaner and more efficient. These recent developments have put the consumers in a precarious position with higher fees and lesser personalised services. As a result there is a need to address increasing customer expectations for price and service, especially with increased competition. by the financial services in the present times. b) Value creation through increasing efficiency, productivity and controlling risk Organisations will need to demonstrate thorough understanding and control of their risks to rebuild investor confidence and attract funding and stabilise their businesses in the short term. Going forward, many may need to transform their business models and associated performance objectives and incentives as part of a more sustainable long-term approach to value creation. There is a desperate need to improve the efficiency and effectiveness of the operations of the financial services with a view to controlling costs and managing employee performance. Another key issue being faced by the financial services is to strike a balance between technology and human intervention. To be more efficient and more economical use of technology becomes imperative, but on the other hand, tends to reduce the human interaction with the customers. This line is getting thinner and increasingly difficult to tread upon for most financial services organisations. c) Optimism in to gain from the crisis It is not going to help the organizations to sit and brood over their worries in the current financial crisis. It is one of the biggest challenges for them to ‘see light at the end of this long and dark tunnel’ in terms of finding new opportunities and feasible solutions to sustainability and growth. To establish medium and long-term goals and have the ability to foresee beyond the crisis will be a formidable task. Moreover, converting current threats into medium and long-term opportunities, not only for survival but also for growth and increased profitability, is one aspect that these organizations need to work at. d) Joining hands with competition This is taking place all over the business world, no matter how difficult companies find to get along together. Poor market and currency values require financial services institutions should also consider their peers not just as competitors but also as potential partners, parents or subsidiaries. In order to ensure that the stakeholders’ interests are not damaged, keeping the organisation fit for merger is turning out to be a big challenge for many a financial services institution. Improvements in retention levels through improved customer management and customer segmentation is one of the biggest issues being faced

Bhooshan Parikh Term Paper: Corporate Branding CBS-FTMBA 2008-09

Page 9

References: Hayes, J., The Theory and Practice of Change Management, Hayes J. 2nd Edition, Palgrave Macmillan Hofstede, G., Cultures and Organizations: Software of the Mind, 2nd (Revised) Edition, McGraw-Hill Professional, 2005 Schultz, M., Hatch, M.J., Taking Brand Initiative: How Companies can align Strategy, Culture, and Identity through Corporate Branding, 1st Edition, Jossey-Bass, 2008 Journals, Articles and Internet sources: BBVA: From Selling Services to Being a Brand, ECCH, case 506-207-1 (Copyright © 2006 INSEAD) Branding the Bank: Brand Value in the Financial Services Sector, The Weekly Corporate Report, Issue # 1254, September 1, 2003 The Cycles of Corporate Branding: The Case of the LEGO Company, Schultz, M., Hatch, M.J., California Management Review, Vol 46, No.1 Fall 2003 http://www.bbva.com/TLBB/tlbb/jsp/ing/conozca/index.jsp http://www.pwc.com/Extweb/industry.nsf/docid/5159EA4DF816D2A185256AE6006A8466 http://wharton.universia.net/index.cfm?fa=viewArticle&id=1589&language=english

Bhooshan Parikh Term Paper: Corporate Branding CBS-FTMBA 2008-09

Page 10

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->