Much has been written about the effects of various branding strategies involving the use of brand names, logos, fighting brands, and links of branding to the success of certain products, however, little attention has been paid to the success of branding strategy based on employee perceptions. This study explored various employee perceptions within the Nestlé Corporation, such as branding strategy, importance of the name, effect on sales, and costs vs. benefits of the company logo on their perceptions of the global image based on both current and future branding. The results indicate that stand alone brands owned by Nestle may not necessarily need to carry the Nestle brand name for success in the marketplace and that there would be more benefits of adding the Nestle logo to struggling brands than costs, based on employee opinions. There is a statistically significant and positive relationship between the collective global image of Nestle, based on current brand offerings, and the over-all branding strategy. This suggests that Nestlé's current global image based on their brands is a product if the collective perception of its employees.
A company's branding strategy often has a large impact on the success or failure of a particular product. This is especially true for large, multi-national corporations because it effects how the consumer correlates a product with the manufacturer. Some large companies choose not to use the manufacturer name and/or logo on all their brands. Often, a company name is wellknown within business circles but unfamiliar to the average consumer, in which case, dissonance can prevent consumers from recognizing the brand name. Other companies pick and chose which of their products will carry the corporate brand name. When Nestlé wanted to enter into low-calorie frozen food, it was felt that the Nestlé corporate brand could not extend into this category, therefore, Nestlé branded the products as part of the Stouffers line and left the Nestlé name to items like the Crunch bar (Nelson and Vogler, 2002).
A fundamental problem with regards to international branding is that firms currently do not pay enough attention to their employees' expertise regarding brand strategy (Davies and Chun, 2002). If a company is able to make a consumer look at a certain product for a fraction of a second longer than its competitors' products, the probability purchase intent increases significantly (Sandom, 2008). Therefore, the way a company brands its products can have a direct link to the success of the product and the brand. This encouraging framework, however, does not mean that employee perceptions of the strategy will be positive; without which the performance of both the brand and the company will be hindered in a significant fashion. Therefore, there exists a need for research to be done regarding how employees feel about current and future brand strategies in order to maximize company potential (Whitelock and Fastoso, 2007).
Due to the complexity of balancing proper brand strategies for multi-national enterprises, balancing which products should carry the manufacturer name and/or trademark is an essential consideration (Onkvisit and Shaw, 1989). It is necessary, therefore, to look into studies to see if using a company's name on all products helped or hindered product sales. There exists a need for research regarding whether or not Nestlé is currently using their corporate name to its full capacity. Effective utilization of international branding strategies takes into account whether stand alone brands need a corporate name to be successful, how sales will be affected by using corporate brand names, and what the benefits of adding a corporate name or logo would be compared to the potential costs. By exploring employee perceptions of these facets of international branding, we can determine if a multi-national firm's global image is a product of its employees' collective perceptions.
The primary objective of this study is to examine the context of the relationship between the global image of the Nestle Corporation and employee opinions of the firm's various branding strategies. The key independent variables are stand alone brands owned by Nestle, effect of the company brand name on sales, benefits vs. costs of using the company logo, and Nestlé's current global image as a product of its employee's perception. The rest of this paper details the theoretical foundation, empirical methodology, analysis and results, and conclusions.
Stand Alone Brands owned by Nestlé
Key reasons for a company to operation multiple brands in a global marketplace included the creation of economies of scale, increase market potential, and capitalization on consumer preferences (Pitta and Franzak, 2008). When firms operate international brands they must decide how they will use their corporate brand name in the marketing their various products. The advantage of using a corporate brand name is that the product will receive instant recognition and will benefit from the corporation's existing goodwill (Rooney, 1995). There can be many pitfalls to using a global name, however, including issues with language and the brand name's translation into other languages. Another concern is the complications that often arise from brand acquisition, as Nestlé often purchases many of its products (Daniels, Radebaugh and Sullivan, 2009).
A corporate brand must have a strong image for any product to benefit from its name (Nelson and Vogler, 2002). In the consumer goods sector, however, there are many companies that decide not to brand all their products under the corporate name. The lack of the corporate brand name can be what allows the company to have more than one product compete in a very specific category such as laundry detergent (Nelson and Vogler, 2002). Previous work suggests that while taking full advantage of a corporate brand is essential, sub-branding and similar strategies may be more appropriate for certain brands (Turpin, 2005). It is not always obvious where it is appropriate to use a global brand name; in Nestlé's case, their strategy is mixed.
When deciding on brand architecture for its products a company has three main choices: brand building, borrowing, or brand milking (Turpin, 2005). The benefit of building a single brand allows immediate recognition in the global market. Nevertheless, the use of a brand name extension can, at times, be illogical depending on the competition level and consumer preferences. For instance, when a company has two or more products that compete in the same market or the brand name has a better recognition than the company's name, it would not make sense to use that parent name (Schultz, 2002).
Previous work also suggests that vertical branding strategies, which typically include subbranding, that certain brands may not need the mark of a master brand in order to operate successfully (Farquhar, Han, Herr, Ijiri, 1992). Avon is an example of a company that successfully decided not to always use the corporate name as the predominate brand name when entering the international market (Daniels, 2009). Many other firms have realized the benefits of using vertical integration with respect to its branding strategies. With respect to the research presented above, the following hypothesis is proposed:
H1: Stand-alone brands produced by Nestlé may not need the Nestlé name for success.
Effect of Corporate Brand Name On Sales
As previously mentioned, for a product to gain value from a corporate brand, the corporate brand itself must have high brand awareness (Nelson and Vogler, 2002). A product can obtain value from a corporate brand through the direct use of the brand name or through cobranding. Co-branding can potentially aid in aligning value among brands and build brand equity; one case example of such was the relationship that Adidas built with the New Zealand Rugby team (Motion, Leitch and Brodie, 2003). Previous work suggests that whatever extension strategy is chosen, if a new product is congruent with the organization's activities and is of low complexity, a co-branding strategy appears to be preferable (d'Astros, Colbert, Fournier, 2007).
A firm using co-branding should not be worried that the parent brand name will cloud consumer's perception, as it has been proven that consumers are quite capable of indentifying the value of related brands which range from hotels to mobile phone belonging to the same parent company (Rotfeld, 2008). One case example of this is Marriott; people see Marriott, Renaissance, Courtyard, and Fairfield Inn separately, instead of a Marriott conglomerate. Rotfeld says that although each hotel used the Marriott name within each of their logos each hotel has its own nuances that make each a distinct brand (2008). With respect to the research presented above, the following hypothesis is proposed:
H2: Struggling brands produced by Nestlé that do have the Nestlé name will be better known and, therefore, more successful.
Benefits vs. Costs of Using The Company Logo
Many factors can affect brand performance, some of which include: reputation, loyalty, and most fundamentally brand recognition itself (Wong and Merrilees, 2007). Brands have the ability to give a product immediate recognition and value (Daniels, 2009). In this sense, logos or corporate trademarks can help foster brand awareness, hence, it can be assumed that if the product is highly valued the company will benefit from adding the logo to its packaging. Previous work suggests that as effective marketing has become harder in recent years, effective use of trademark and logos have become increasingly more important (Bell, 1998).
A recent study to understand the effectiveness of logo utilization looked at the effect of licensing the Sony name to Nyko gaming controllers for the Sony PlayStation. In this study there were three study groups, one was the Nyko controller without the Sony name, and the second was a Nyko controller with the Sony name and the third was a Sony controller. The results showed that the Nyko products that were "officially licensed by Sony" were seen as more reliable and of better quality then those without the Sony logo. In fact, they had statistically significant results to conclude that in some cases a licensed logo of a well know brand is likely to have a similar effect on the product as the brand name itself (Saqib and Manchanda, 2008).
When a logo with a strong brand image is added to a product it stands to financially benefit from the use of company logo. With respect to the research presented above, the following hypothesis is proposed:
H3. Adding the Nestlé logo to products would financially aid struggling brands.
Employees Perceptions Of Global Image
Due to the proven benefits, most companies try to breed a culture where employee and customer values align. Ultimately, a company is constantly looking at ROI when dealing with customers as well as employees, which means the firm must complete a cost-benefit analysis and measure total rewards ("How to Go Strategic", 2008). Strategically speaking, the employees' perception of their company's current global image should run parallel to the image of the customer. In addition, brand image, company image and employee trust have a mediated influence on customer value through customers' perceptions of service quality (. Surprisingly though, an employee's perception of their company's image does not always align with that of the customer.
Corporate branding loses much of its potency unless managers realize that the diverse attitudes of various stakeholders must be incorporated if corporate brand management is to be successful (Hulberg, 2006). In addition, a 2003 study of service workers in Singapore indicates if a company provides positive benefits to its employees then those employees will make a conscious decision to return the good favor by being more loyal to the company (Lee, Lee and Lum, 2008). As employees are more satisfied, they will then in turn place more effort on developing a positive company image.
Even though employee perceptions and global image affect each other they often do not match. For instance, in a 2001 study of several retailers, it was observed that customer loyalty was equally as high in stores that had a higher employee turnover ratio (Davies and Chun, 2002). Therefore, it can be concluded that there is a correlation among employee's attitudes and perception, but too often they are not congruent. With respect to the research presented above, the following hypothesis is proposed:
H4: Nestlé's current global image is a product of its employee's perception and attitudes.
Samples And Data Collection
There were two separate populations that were explored in this study. The first population included is friends, family and co-workers of the group members in the Southern NJ area, ages 18 to 54. The second population explored consists of approximately 800 employees in the Nestlé Corporation across various international departments. Consumer opinions of which products belong to Nestlé were gathered in survey 1 and analyzed in accordance with employee opinions of each independent variable, gathered in survey 2. Company employees rated their respective opinions and perspectives on the basis of various scales in order for the data to be quantifiable for the analysis. The final samples comprised of 31 consumers for the survey 1 and 52 employees for the survey 2.
The method of data collection chosen for the survey 1 was distribution to random consumers across the Southern NJ area. Responses as well as time frame needed for completion varied across consumers with different demographic and psychographic information. Many were enthusiastic about their responses and were surprised to hear how close or far they were from being correct. The method of distribution chosen for the survey 2 was an e-mail attachment sent from the President of Nestlé Business Services and the Vice President of Marketing to employees in Switzerland, Solon, Glendale and Sales in the Northeast. Data from each survey, as well as each independent variable employed were analyzed separately to avoid problems with multi-collinearity, which was used later in the statistical analysis.
Empirical Model and Variable Specifications
This study was designed to explore the key independent variables of standalone brands owned by Nestle, effect of the company brand name on sales, benefits vs. costs of using the company logo, and Nestlé's current global image as a product of its employee's perception. The specific empirical models are as follows:
brndIMAGE = ao + bi brndSTRAT + e ChgIMAGE = ao + bi brndSTRAT + b2 nameSUC + b3 nameSALE + b4 nameBEN + e
(brndIMAGE) is employee perception of Nestlé's global image based on current brands
(ChgIMAGE) is employee perception of global image if branding strategy was changed
(brndSTRAT) is employee perception of the success of Nestlé's current branding strategy
(nameSUC) is employee perception of the importance of having the Nestlé name for success
(nameSALE) is employee perception of the effect of adding the Nestlé brand name to products on sales
(nameBEN) is employee perception of whether the benefits would outweigh the costs of adding the Nestlé corporate logo to their products
It was important for this study to measure various aspects of international branding to whether or not Nestlé employees feel improvement in their branding strategy is needed, which could potentially lead to greater wealth creation (Greenhalgh, 2002). To investigate the effect of the independent variables on the current and prospective global image of the Nestlé brand, a simple regression analysis and a step-wise statistical (OLS) multiple regression analysis were employed, using SPSS statistical packaging software. In general, multiple regression analysis can be used to determine the strength of a relationship as well as the over-all variance, multicollinearity, statistical significance, and otherwise identify the most important of the independent variables in relation to the dependent variable (Cryer and Miller, 1994). The use of multiple regressions was appropriate for this study because of the need to determine the linkage between the dependent variable with each of the independent variables. The strength of the relationships (R), and whether or not the variables were statistically significant were also key factors.
Empirical Results and Statistical Analysis
The data collected from the survey 1 consisted of consumer perceptions about which of the listed products were made by Nestlé. The results support that the current brand strategy used by Nestle is effective in spreading brand awareness and raising brand equity. Although the products that officially carried the official brand name and logo were far more recognized by consumers, many company products that did not carry the brand name were also identified as a company product. In addition, many of the products with substantially lower comparative sales were less recognized as a Nestle product. This supports the direct link between brand recognition and sales, and also suggests that including a brand name and/or logo to boost sales would be feasible. The sample size was representative and included non-probability sampling error reduction in the research method.
Table ? offers descriptive statistics, including means, standard deviations, minimums and maximums for the regression models used to analyze the data in survey 2. The data collected from survey 2 consisted of opinions and perceptions from 28 males and 24 females. Employees from all divisions were included in the sample size (e.g. marketing, sales representatives, brand management, account management, executives, etc.). The mean of brndIMAGE or employee's perceptions of Global Image was 3.98, with a standard deviation of 0.754. The minimum was 2 and the maximum was 5. The mean for brndIMAGE is closer to the maximum, suggesting that employee's perceptions of the firm's global image on current brands are mostly positive. Standard deviations of the independent variables ranged from 0.804 to 1.080, suggesting that there is a steady amount of differentiation in the independent variables for the overall sample. Similarly, the mean for ChgIMAGE or the employee's perception of global image if branding strategy was changed for brands was 3.79, the minimum was 2 and the maximum was 5. This suggests that employee's perception of Nestlé's global image is consistent with the firm's branding strategies.
Table 3 presents correlation matrix data and statistical model information that shows whether or not each variable is statistically sig- nificant based on their correlation co-efficient. There appears to be statistically significant, as well as both positive and inverse relationships present in both the simple and multiple regres- sion models. The perception of brand strategy has a correlation coefficient of 0.389 at the 99% confidence level and reinforces the relationship between employee's perception of brand image and their perception of the branding strategies. In the multiple regression model, there are significant correlations between all of the independent variables to the employee's perception of Nestlé's global image if branding strategy were changed. The employee's perception of whether the benefits would outweigh the costs of adding the Nestlé logo on their products, which had a correlation coefficient of 0.72 and is significant at 99.9%.
The correlation of nameBEN to brandSTRAT and nameBEN to nameSale also proved to show correlation. Employees' perception of whether the benefits would outweigh the costs of adding the Nestlé logo to their products had a negative correlation of -0.278 at a 90% level of significance to the employees' perception of the success of Nestlé's current branding strategy and a correlation coefficient of 0.419 at 99.9% significance
to the employees' perception of how adding the Nestlé name to products would affect sales. These correlations show a mixture of positive and inverse relationships in relation to employee's perception if the branding strategy was changed, as well as both positive and negative correlation between the independent variables.
Table 4 (previous page) presents regression co-efficients and t-statistics for the regression model that was used to test the relationship between the dependent and the independent variables. The adjusted r2 values are 0.715 and 0.62 respectively. Hence, the model is useful for exploring the relationship between employee perception of Nestlé's current global image, the global image if branding strategies were changed, and the independent variables. Consistent with prior correlation analysis findings, the coefficients of brndIMAGE on brndSTRAT and chngIMAGE on brndSTRAT are statistically significant at the 0.01% level, suggesting that it is an accurate indicator that standalone brands may not need the Nestle brand name. The relationships between the dependent variable and brandSTRAT and nameBEN were also found to be statistically significant at the 0.001% level.
These findings suggest that there is a strong relationship between employee's perceptions of image based current brands and their perceptions of global image if branding strategy was changed for brands and these variables and that further study and evaluation should be considered in order to construct a study with a larger sample size to reinforce this. Furthermore, all variance inflation factors were less than 1.4, indicating that multi-collinearity is not a problem in this model. Finally, the F-ratios of these models were 63.243 and 19.209, indicating that the over-all model was statistically significant at the 0.001% level, and thus re-enforcing the overall reliability of the model. T statistics (as indicated in parenthesis in Table 4) support the hypothesis that standalone brands may not need the parent corporate brand name for success, that adding the logo to Nestle products may provide more benefits than costs, as well as that Nestlé's current global image truly is a product of its employees' perceptions. The over- all models are listed as follows:
brndIMAGE = ao + (0.306) brndSTRAT + e
ChgIMAGE = ao + (-0.287) brndSTRAT - (0.161) nameSUC + (0.173) nameSALE + 0.719 nameBEN + e
Conclusions and Implications
Based on the analysis and results, we can conclude that Nestlé's current branding strategies are effective, and that standalone brands may not need the Nestle name to succeed, and that the benefits of adding the Nestle trademark may outweigh the costs. Having a firm's employees perceptions of the company's global image aligned with their current branding strategies seems to be effective. Furthermore, we can conclude that Nestlé's current global image is definitely a product of its employee's perception and attitudes. The strength of the empirical model and the statistical significance show that the context of the relationship between branding strategies and employee opinions of those strategies should be aligned in order to create value. One implication of the strong correlation between employee perceptions of a firm's global image and branding strategies is the prospect of future research exploring this linkage. The findings of study suggest that there is an absence of relationship between employee's perceptions of image based current brands and their perceptions of global image if branding strategy was changed for brands and whether or not struggling brands produced by Nestlé that do have the Nestlé name will be better known and, therefore, more successful. Re-evaluation of the link between employee perceptions of current global images based on current brands and the effects of using a parent brand name on all products to increase sales should be examined.
The major limitations of this study were the lack of diversification within each sample, and the relatively low total sample sizes employed. Further study with the appropriate sample size and research method is imperative to test the criteria regarding why certain products would or would not need the Nestlé name for their specific industry. This study has effectively laid the foundation for further study on the effect of employee perceptions on international branding strategies. Also, further study regarding vertical branding strategies across multiple industries is warranted. Firms should make an effort to study their employees' perceptions of their domestic and international branding strategies in order to foster a stronger and more positive global image.
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Michael Ba Banutu-Gomez, Rowan University
Patrick T. Coyle, Rowan University
Sandy J. Ebenhoech, Rowan University
Kevin A. Fallucca, Rowan University
Chris M. Minetti, Rowan University
Michele M. Sarin, Rowan University
Michael Ba Banutu-Gomez has received his bachelor in Sociology and Applied Social Relations at Eastern Connecticut State University. He received his Master in Management at Boston University. He received his Ph.D. at Case Western Reserve University - Wetherhead School of Management, Department of Organizational Behavior. Michael Ba has presented his research work at professional conferences in the US and in Europe. He worked for Bank of America, the Massachusetts Department of Social Services, and for Oxfam America where he was the Coordinator for West Africa Program and Horn of Africa Program. Michael Ba is an Organizational Development Consultant. Along with his wife Shandra he runs a consulting firm called Banutu Consulting Firm. He has done consulting in the US, Africa, Asia and Europe. Michael Ba has done consulting for GEM - Global Excellence in Management Innovation and they have conducted leadership and certificate training program for chief executive officers and government officers worldwide. Michael Ba has taught at Illinois Institute of Technology and Robert Morris College. Presently Michael Ba Banutu-Gomez is an Associate professor at Rowan University; Willam G. Rohrer College of Business.
Dr. Banutu-Gomez has published his work in various professional business journals as well as in the Daily Observer newspaper in The Gambia. He recently published a book about Africa, titled "Africa We Owe it to Our Ancestors, Our Children and Ourselves."…