Corporate Advertising

“Corporate advertising can be defined as paid use of media that seeks to benefit the image of the corporation as a whole rather than its products or services alone”.

Corporate advertising presents the overall identity of the organization and is paid from the company’s overall budget or by the CEO’s office. On the other hand product advertising concentrates on a particular product of the company which is paid by the marketing department.

Advertising to Reinforce Identify or Enhance Reputation

Many companies use corporate advertising to strengthen their identities following structural changes. Larger organizations need to simplify their image to unify a group of disparate activities. Image advertising allows companies to differentiate themselves from rivals.

http://www.herohonda.com/media_print_ads.htm
http://www.bajajauto.com/1024/index.asp

The above mentioned are two ads from the same industry where Hero Honda concentrates on targeting how useful and rigid the vehicle is, where as Bajaj concentrates the awards it has won. Both of them have their own strategies of advertising keeping their brand image and reputation in mind.

Advertising to Attract Investment

Strength of management is the most influencing factor for an investor to invest in a company. Companies use corporate advertising to enhance their image in the financial community. Corporate advertisers assert that the strong financially oriented corporate advertising campaign can actually increase the price of a company’s stock.

Advertising to Influence Options

Often called as issue or advocacy advertising is used by companies to respond to external threats from either government or special interest groups.
For example Saffola oil concentrates on health conscious groups.
http://www.saffolalife.com/default.asp

Who Uses Corporate Advertising and Why?

Larger corporations which tend to be more diversified use corporate advertising to establish a coherent reputation out of a variety of activities, products and services. Controversial companies like Cigarette companies, oil companies and pharmaceutical companies use corporate advertising to deal their image problems. A god corporate advertising can clarify and enhance a company’s reputation. In a closer look the companies invest in corporate advertising campaigns for three main reasons: Increase Sales, Create a Stronger Reputation and to Recruit and Retain Employees

Experience

I had an experience in McDonald’s India branch. I visited McDonalds few years back where they had a general menu that included vegetarian and non vegetarian meal. But due to their beef usage controversy they lost many vegetarian customers. When I visited the restaurant recently, I found the menu is in a completely new format with separate vegetarian and non- vegetarian options for the Indian market.

http://www.mcdonaldsindia.com/ourfood/index.html

Chapters 1 and 2

Chapter 1: The Changing Environment for Business

This chapter tells us how the business environment has changed from the last six to seven decades. It concentrates particularly on how the American Business attitude had been through these years. It analyzes how the corporate communication in context by looking at some of the events that have influenced the operating environment of business.

Attitudes toward American Business through the Years
In 1860s, the creation of the nations transcontinental rail systems and the concomitant need for steel created hazardous working conditions. Soon thereafter, the industrial revolution influenced American industry that changed a model of small workshops and hand tools to mass production in factories. The 1920,s were characterized by a sharply rising stock which finally burst in 1929, which lead to Great Depression. The main cause was the combination of the greatly unequal distribution of wealth throughout the 1920's, and the extensive stock market speculation that took place during the latter part that same decade. By the mid 1940s business started rebounding from the depression as companies geared up for the Second World War. The economies boom continued for the next 2 decades which is considered a “golden age”. But the question is the balance between profit and the public interest. In 1968, 70 percent of the population answered yes to that question which became28 percent by 1999.

The Global Village
Technology has strengthened communication channels around the globe disintegrating national borders. Few Hollywood films like “The China syndrome”, “Wall Street” and “Erin Brockovich” contributed to a negative business image. Individuals have begun to turn large companies to provide the direction that distinct national cultures, communities, and inspirational narratives offered more strongly in the past. The anti-globalization movement has made its impact. Advancing technology, changes in social values, inflation, and media have contributed the alteration of American Business.

To Recognize and To Adapt the Changing Environment
Managers need to recognize that the business environment is constantly evolving. For example McDonald’s in response to Super Size Me launched a revamped healthier menu. Companies must adapt to the changing environment without changing what they stand for or compromising their principles. Some companies seem to getting it right, but most are still getting it wrong. Caterpillar Inc., the world’s largest manufacturer of construction equipment allowed itself to get into battle with United Automobile Workers and decided to replace 12,000 workers over issues of wages and health issues. Nike is known for its unfair wages and working conditions in various parts of the world. Corporate communication must be closely linked to a company’s overall vision and strategy. So the business environments which are constantly changing should not only concentrate on profit maximization, globalization and brand improvisation but also become more social responsible. The mangers should know the importance of effective communication. Though they feel that this is less significant, communication leads the overall efficiency of the company.

Links referred:
http://www.gecko.ac.uk/doc-c/coredoc-c-02.html



Experience
The business environment is constantly changing. I personally experienced the changes in the way I used to travel on trains. In previous days to buy a ticket I need to go to railway station. There was no information about the connecting trains when I planned for long journey. So I used to call my friend and ask him to book for the connecting train in his place. There was no proper information about the ticket confirmation and I used to wait till the date of journey. So indirectly I used to bribe the ticket collectors for the confirmations. But now everything is computerized and the communication strategy became online where I can plan my journey exactly. For booking my ticket and conformations even though for a long journey I now can do everything online sitting in my house and bribery is eliminated completely. Thanks to change in technologies and the way the business environments are changed.

Chapter 2: Communicating Strategically
This chapter discusses how communication theory is important for planning strategies which becomes an overall corporate communication strategy.

Communication Theory
Most of the modern communication theories are based on Aristotle’s major work, “The Art of Rheotric”. Aristotle uses three main components: Speaker, person and the end object or subject, which in modern theories is described as: Organization, Constituency and Messages respectively. The modern communication theories use a circular framework rather than linear which is more realistic.

Developing Corporate Communication Strategies
A company needs to set effective organization strategies. To develop effective corporate communication strategies includes three major subsets
Determining Objectives: An organization has many reasons to communicate, may be to create employee awareness for the changes made or to create a demand for consumers or to get response from the audience they address.
Deciding What Resources are Available: The companies should plan about the resources like Money, Human Resources, Time and Money before they introduce any new product.
Diagnosing the Organizations Reputation: Reputation is what any organization needs to keep in mind to plan future strategies. A damaged reputation can put organizations in deep trouble and they need to spend a lot to get it rectified. So the mangers need to assess the company’s reputation in line with the market expectations from the company.

Analyzing Constituencies
Analyzing constituencies is similar to analyzing audience when a speech is delivered. Constituencies can either from primary or from secondary groups. It depends on the nature, size and reach of their businesses. The manager should make sure that there should be proper channel between both Micro and Macro levels. The constituency’s attitude towards organization is another important factor. If the company has goodwill, it will be easy for the company to penetrate through the market and to achieve its future strategies. When goodwill is lacking communication becomes very difficult for the companies.

Delivering Messages Appropriately
To deliver a message we need to have a proper communication channel. In older days we had very few channels like speaking and writing. But as the technology grew now we have fax, e-mail, voice mail, web and video conferencing etc. It depends on the constituency that the company decides which the medium to use. The company needs to be careful to choose in between direct or indirect structures. Its better for the company not to respond when it doesn’t have appropriate information rather than giving wage information which misleads the public.

Constituency Responses
After the message or the information has finally reached the constituencies feedback or the constituency responses helps to make the necessary changes or modifications in the information.


Reference link:

1. http://www.personal.psu.edu/faculty/s/j/sjm256/portfolio/kbase/Theories&Models/shannon

Experience
I use Reliance communication network mobile phone. It’s a post paid connection where I should pay my monthly bills. The Reliance customer care makes sure that I get my bill amount in three different ways i.e. they send me a SMS, they send a letter and they call me as a reminder. Finally when I go to pay they take my feedback as whether I got all my reminders. So this makes Reliance Communication’s strategies gain them good customer loyalty.

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