Brand and Reputation

Today, companies and investors are meticulous about valuing the capital assets including equipment, land, receivables as much as they become interested in the company’s reputation and brand.
Brand and reputation are two correlated concepts which are sometimes used synonymously by some executives. However, there is clear distinction between these two notions. Brand is perception which motivates consumers to pay premium for a product or service than they may otherwise. It embraces quality, variety, experience and value and answers the question of potential consumers what is in this for me. Reputation, on the other hand, is considered as a sum or total public opinion of a company which includes its interactions within society. It embraces statements, corporate culture, policies and answers the question of social consciousness " Is this company doing good ? So while companies build brands to increase profitability and return on investment, they maintain and protect reputation to safeguard credibility and trust. Therefore, it seems that brand is proactive whereas reputation is defensive. However, both play important and critical role in success a company and once one is damaged, it can affect the other one. As Warren Buffett once observed about reputation: “A great reputation is like virginity – ‘it can be preserved but it can’t be restored. Ettenson and Knowles (2008) stated that brand is a “customer-centric” concept that focuses on what a product, service or company has promised to its customers and what that commitment means to them. Reputation is a “company-centric” concept that focuses on the credibility and respect that an organization has among a broad set of constituencies, including employees, investors, regulators, journalists and local communities — as well as customers.

Reputation and brand are often trend in the same direction, particularly in crisis times. We can see in below cases that how reputation scandal can ruin a strong brand and how strong brand can overcome reputation issues. Following VW scandal , the German car giant has admitted cheating emissions tests in the US and its favourability dropped drastically in the US. American and even other consumers seemed to favour other cars if they had a choice. No wonder the carmaker's shares have fallen by about a third since the scandal broke and the group's chief executive at time was resigned when he declared that his company had " broken the trust of our customers and the public". The shift in perception was entirely driven by reputation, not brand when new chief executive on taking up his new post said "My most urgent task is to win back trust for the Volkswagen Group - by leaving no stone unturned," Apple does not seem to have a great reputation, because it has been repeatedly criticized for using factories which abuse workers i.e. using child labour, paying less wage than minimum level and imposing harsh conditions on workers, yet it continues to be one of the world’s most appealing brands and largest company by revenue. The brand appeal has been strong enough to overcome the company’s reputation as an employer that does not care about the community.
Reputation management can be considered as the practice of monitoring a brand by bridging the gap between how a company perceives itself and how stakeholders. consumers connect with a brand by identifying the name, logo, slogan, or design of the company who owns it. Some companies, such as Starbucks, Apple, Nike and Harley Davidson managed to distinguish themselves with creative branding campaigns. Their logo is only one reflection of their brands and represents what people believe they stand for. For example: Starbucks sells coffee and stands for daily inspiration.
Great brands are not just known and trusted, they are loved
Apple sells computers and stands for thinking differently. Nike sells a wide range of sports equipment and stands for just do it. Harley Davidson sells motorcycle and stands for friendship and camaraderie by creating an environment where Harley Davidson owners can ride together, share experience and build friendship.
As such the customers of these companies fall in love with brands, trust them, and believe in their superiority and feel emotionally connected because these are companies who have fulfilled their promises about specific benefits, quality, and value.