corporate branding-bbva group

Corporate Branding Term Paper Bhooshan Parikh

Bhooshan Parikh

Term Paper: Corporate Branding

CBS-FTMBA 2008-09

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


CBS-FTMBA 2008-09

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


CBS-FTMBA 2008-09

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


CBS-FTMBA 2008-09

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


CBS-FTMBA 2008-09

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


CBS-FTMBA 2008-09

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


CBS-FTMBA 2008-09

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

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CBS-FTMBA 2008-09

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. Improvements in retention levels through

improved customer management and customer segmentation is one of the biggest issues being faced

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.

Bhooshan Parikh


CBS-FTMBA 2008-09

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

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