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Corporate Rebranding and the Implications for Brand ArchitectureManagement: The Case of Guinness (Diageo) IrelandLaurent Muzellec a; Mary Lambkin b

a Dublin City University Business School, Ireland b University College Dublin, Ireland

Online Publication Date: 01 September 2008

To cite this Article Muzellec, Laurent and Lambkin, Mary(2008)'Corporate Rebranding and the Implications for Brand ArchitectureManagement: The Case of Guinness (Diageo) Ireland',Journal of Strategic Marketing,16:4,283 — 299

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Corporate Rebranding and the Implications for Brand ArchitectureManagement: The Case of Guinness (Diageo) Ireland

Laurent Muzelleca* and Mary Lambkinb

aDublin City University Business School, Ireland; bUniversity College Dublin, Ireland

(Received 4 September 2007; final version received 29 February 2008)

The interaction between corporate and product brands – the vertical links inbrand architecture – is explored through the case study of Guinness IrelandGroup/Diageo Ireland. The change in the corporate name from Guinness toDiageo was one of the first high profile cases of rebranding and reflects adeliberate strategy of separating the corporate brand from its product brands.This case reveals the complex problem of protecting corporate heritage whilemanaging product and corporate brands to keep them aligned with contemporarymarket requirements. A dynamic brand building model is presented whichsimultaneously addresses the different audiences for the products and thecorporate brand. The paper concludes that a new concept of ‘business branding’,distinct from ‘consumer/product branding’, may allow corporations to reconcilethe need for both corporate accountability and risk limitation while maintainingan effective brand management programme.

Keywords: corporate brand; brand architecture; rebranding; reputation; casestudy; Diageo

Introduction

Corporate brands are believed to be most effective when they sustain a high level of

coherence over time and across stakeholders (Balmer, 1998; Morsing & Kristensen,

2001). Coherence across stakeholders is achieved by reducing the gaps between

internal and external perceptions of the corporate brand (Chun & Davies, 2006), or

between actual and communicated values (Balmer & Soenen, 1999). Coherence over

time is maintained through years of sustained investment in a brand name (Kapferer,

1995; Keller, 2002).

In recent years however, industry restructuring and changing market dynamics

have led many companies to change their historical corporate name and adopt new

brand architectures (Muzellec & Lambkin, 2006). Examples of rebranding include

Andersen Consulting (Accenture) or CGNU (Aviva), Philip Morris (Altria),

Guinness (Diageo). For Guinness (Diageo), the change of corporate name suggests

a move towards a ‘house of brands’ architecture reflecting a deliberate strategy to

separate the corporate identity from that of the company’s products which retain

their own, individual names distinct from the corporate name (Aaker &

Joachimsthaler, 2000; Rao, Agarwal et al., 2004).

Dispensing with a well-established corporate brand name seems at odds with the

idea that corporate brand equity is built on corporate heritage (Aaker, 2000).

Modifying the brand architecture also unsettles the foundations of the corporate

*Corresponding author. Email: [email protected]

Journal of Strategic Marketing

Vol. 16, No. 4, September 2008, 283–299

ISSN 0965-254X print/ISSN 1466-4488 online

� 2008 Taylor & Francis

DOI: 10.1080/09652540802264124

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brand. From a well-known branded house, built on core values and history, the

corporation is adopting a contrived corporate name disconnected from the

company’s heritage and brand portfolio. To understand this possible inconsistency

represents an interesting challenge that this paper attempts to address.

The objective of this paper is to advance our understanding of the phenomenon

of corporate rebranding, in the dynamic context of a change in the brand

architecture. Specific questions addressed are as follows:

N Does a change in the name of the corporate brand lead to a change in the

corporate reputation?

N Does a change in the corporate brand affect the management of the product

brands; in other words, is there an interaction among the different levels in the

brand hierarchy?

N How does the image of the newly established corporate name relate to the

company’s heritage and brand portfolio?

The literature review commences by exploring the traditional foundations of

corporate brand building (i.e. corporate values, culture and image) within the brand

architecture framework. It goes on to recast the conventional concepts in the context

of rebranding and presents a model that identifies the likely direction of effects of

rebranding, over time, and up and down the different levels in the brand hierarchy.

The case of Diageo Ireland is used as a ‘critical’ case to explore the relationships

suggested by our model. This case illustrates a rebranding strategy that has removed

an immediate connection between a corporation, the ex-Guinness Ireland Group,

and one of its main products, Guinness stout. The results and analysis of the case

reveal themes that challenge conventional ideas on corporate brand building.

Literature review

The manner in which product brands and corporate brands relate – the type of brand

architecture – determines the relative importance of corporate culture and values as a

source of competitive advantage. A brand hierarchy or architecture is traditionally

made up of a corporate brand, for instance Nestle or Volkswagen A.G., a family

brand such as Buitoni or Skoda, an individual brand like Octavia and, finally, a

modifier, for instance Light or TDI (Keller, 1998). The various relations can be

illustrated along a spectrum from the ‘branded house’ to the ‘house of brands’,

including ‘endorsed brands’ and ‘subbrands’ (Aaker & Joachimsthaler, 2000). Most

companies employ mixed strategies but it is useful to characterize the two extremes

for the sake of clarity.

In a branded house, the corporate or master brand is sometimes the only driver

or at least the dominant driver of external images (Saunders & Guoqun, 1997). The

master brand is applied as the name for all of the products or services offered. Virgin

provides a typical example: Virgin Cola, Virgin Music, Virgin Airlines and Virgin

Jeans. Other examples include Honda, Philips and Heinz. In such a structure, there is

a two way flow of images: corporate brands take on values from the corporation’s

culture and heritage (Aaker, 2004) as well as from the product portfolio (Brown &

Dacin, 1997). Perceptions of the corporate brand influence the product image

(Berens, van Riel, & van Bruggen, 2005) and perceptions of the product brand are

used to evaluate corporate reputation (Fombrun, Gardberg et al., 2000).

284 L. Muzellec and M. Lambkin


A ‘house of brands’, on the contrary, is made up of a number of different brands

aggregated under a separate corporate name. For instance, Procter and Gamble is

the owner of brands as diverse and disconnected as the dog food Iams, the laundry

powders Ariel and Tide, the toothpaste Crest, the paper towel Bounty and the

diapers Pampers. Here, brand marketing focuses mainly on individual product brand

management. The corporate owner of the brands is not closely tied to its brands. The

brands stand apart and are the principal point of contact with the consumers. The

traditional organisation of the corporation is separated into brand marketing units

which further distance the corporate brand from the consumers (Knox, 2004).

One supposed benefit of separating the corporate brand from its individual

product brands is that it reduces the reciprocal effect of adverse publicity (Aaker &

Joachimsthaler, 2000; Laforet & Saunders, 1994; Rao et al., 2004). However, this is

questionable since consumers are quite likely to know the identity of the corporation

behind the product offerings (Fombrun & van Riel, 2004). Despite clever contrived

product brand propositions, consumers’ images might also be influenced by

corporate behaviour or ‘corporate associations’ (Fombrun & van Riel, 2004).

The concept of brand architecture is a useful diagnostic framework to help map

the often complex collection of brands owned by large companies. However, it is

essentially a static framework that provides a snapshot of the current architecture. It

provides no insight or direction on how this structure does or should evolve over

time, either as a whole or in its constituent parts. In other words, it is not very useful

in providing a horizontal or longitudinal view of evolving brand architectures.

Neither does it offer much understanding of the vertical interactions among the

levels within the hierarchy. It cannot help in establishing the degree to which the

corporate brand influences the product brands or vice versa.

In reality, of course, brand architectures are evolving all the time, partly as a

result of gradual changes in corporate and brand images that are outside the control

of the corporation but also due to structural changes following from acquisitions and

sales of brands. Industry restructuring and changing market dynamics have forced

many companies to re-evaluate critically how the various pieces of the brand

portfolio fit together. This has provoked a wave of rebrandings, usually at the

corporate level, but sometimes also at the product level (Muzellec & Lambkin, 2006).

Rebranding strategies: brand integration or separation

Two broad strategic approaches can be observed among companies going through this

process. The first and most common is an integration strategy – to unite the

corporation and its constituent businesses and products under a single name or master

brand. The second is the opposite of the first and might be described as a separation

strategy, driven by a desire to distance the corporate brand from its constituent

businesses and products. The Guinness/Diageo rebranding is an example of the latter.

The first strategy – integration – is a direct result of the trend towards

consolidation that is happening in many industries. A majority of the mergers and

acquisitions that bring about consolidation are pursued in order to build scale and

market share. To exploit the benefit of this increased market power requires greater

corporate visibility and the simplest and most usual way of achieving this is to unite

all acquired businesses under the one corporate name, usually that of the acquirer.

For example, Vodafone and HSBC have gradually rebranded all of their local

Journal of Strategic Marketing 285


business units until all trade under a single name. In those cases, the brand

architecture evolves towards a ‘branded house’ structure.

The second scenario is when a rebranding exercise is carried out in a deliberate

attempt to create a separation between the corporate brand and its constituent sub-

units, such as the rebranding of Philip Morris as Altria or GuinnessUDV as Diageo.

In fact, a recent study by Laforet and Saunders (2005) has shown that many

companies are moving away from corporate branding strategies to favour mixed

branding tactics (endorsed brands). The authors speculate that this evolution is due

to the need to balance the advantages of corporate dominant tactics such as cost-

efficiency with their disadvantages (risk of reputation loss) but they do not

investigate this assumption.

These two scenarios may be summarised in a new, dynamic rebranding model,

shown in Figure 1.

This model rests on the following set of assumptions. First, differences in image

can be examined horizontally by contrasting corporate images before and after

rebranding, that is, under the old and new corporate names. Second, the vertical

dimension of the brand hierarchy is considered. The interrelation between corporate

images and product brand images is also explored, first in a branded house context,

then in a house of brands context.

This model takes into consideration the evolution of brand architecture

subsequent to a rebranding at the corporate level. Image transfer effects indicate

that when the product and the corporation share the same name, transfers from one

level to the other can be expected. This means that corporate images are driven by

product images and, reciprocally, product images are also the result of corporate

images, at least on some dimensions.

Brand separation, in contrast, refers to the type of relationship among products

and corporate brand in a ‘house of brands’ configuration: when the two entities are

separated by a different name. As a result, their respective images are expected to

become independent of one another. The case of Guinness/Diageo is used to

illustrate the gradual move of a well-known corporate and product brand away from

a branded house structure towards two distinct entities, becoming a house of brands.

Horizontal dynamics: changing from one corporate name to another

The literature on brand name and corporate identity implies that a new name along

with a new visual identity can help to create new image associations (Klink, 2001;

Figure 1. A dynamic rebranding model.



Muzellec, 2005). It may do so by projecting the company distinctiveness through the

total corporate communication mix (advertising, press conferences and releases,

staged media events, etc.) to impress external audiences (Schultz & Hatch, 2001). In

sum, the perception of an organisation will vary depending on its name (i.e.

Guinness or Diageo).

Vertical dynamics: image transfer between the levels of the brand hierarchy

The role played by the name in building images from the corporate to the product

level and vice versa is now considered. A rebranding is the opportunity to measure

and relate corporate and product image when the two share the same name and

when the two share different names and to measure potential image transfers from

one name to the other.

Studies by Berens et al. (2005) and Brown and Dacin (1997) have indicated that

corporate associations do influence product imagery. By corollary, once the

corporate brand has been isolated from its product (via a change of name of thecorporation), the images of product and corporation should become independent

from each other. In sum, the images of the corporation will not be derived from the

product and vice versa.

While the academic literature has mainly focused on the difficulties of the

rebranding process (Lomax & Mador, 2006; Merrilees, 2005; Muzellec & Lambkin,

2006), and the overall complexity of corporate brand building (Balmer & Greyser,

2003), it has not yet taken into consideration the impact of such strategy on other

elements of the brand hierarchy. Drawing on insights from the literature on brandarchitecture and reputation (Dacin & Brown, 2006; Laforet & Saunders, 2005), this

paper seeks to fulfil this gap by studying rebranding in the dynamic context of a

evolution of the brand relationship spectrum.

The transformation of the Guinness plc into Diageo was one of the first instances

in which a large, multinational company deliberately pursued a strategy of

separating its corporate brand from its product brand portfolio. It therefore

presents an interesting case study to explore in order to try to understand the driving

forces behind this strategy and the image effects that resulted. That case is exploredin some detail in the following sections of this paper.

Methodology

A case study-qualitative-approach was chosen because of the exploratory nature of

the research and of the empirical necessity to investigate the phenomenon within its

real-life context. Corporate branding, identity and values are diffuse concepts

embedded in a particular context (Czarniawska, 2000). A single ‘critical’ or

‘instrumental’ case can infer those concepts through qualitative data analysis.

Reliance on a single case might limit the generalisability of the findings; however, acase study may be used as a way to modify existing generalisations (Roche, 1997;

Stake, 1995).

The choice of Diageo was governed by two main factors. First, Guinness was a

very strong, iconic corporate name with a lengthy heritage and a high degree of

positive emotional attachment (Byrne, 1999; Griffiths, 2004). Disregarding a name

with more than 200 years of positive history to adopt a new, contrived name

obviously challenges the notion that corporate brand equity is built through



consistency and years of sustained investment. Second, access to internal data was a

key criterion in the choice; the two researchers knew several key informants within

the corporation who provided further contacts with other senior managers as well as

much valuable data.

The data included internal memos issued at the time of the rebranding,

‘Corporate Brand Tracker’ reports, Diageo Ireland and Northern Ireland annual

reports (years 1998–2005), the Diageo Code of Marketing Practice for Alcohol

Beverages (2003), Diageo corporate websites (www.diageo.com; www.diageo.ie) and

Guinness brand website (www.guinness.com), Diageo and Guinness brand commu-

nication material (advertisements, visits to St James’ Gate Guinness Storehouse),

press clippings from the Irish Times, in particular, the Irish Times supplement on

‘Diageo in Ireland’ from Thursday, 8 September 2005. Secondary data were also

collected from Fast Company, Marketing News and a variety of websites such as

corporatewatch.org, brandchannel.com, all accessed in 2005 as well as books and

videos referenced hereafter.

The data also consisted of semi-structured recorded interviews with seven key

informants who were all managers involved in the administration of the corporate

brand and/or the product brands: one senior executive of the company, two senior

managers in charge of the ‘corporate brand’, and four managers in charge of product

branding. Interviews took place between February 2005 and November 2005 and

lasted between 1 hour and to 1 hour 45 minutes each. The topics covered by the

questions were threefold. The first set of questions pertained to the rebranding

process of GuinnessUDV as Diageo Ireland. The second series of questions

pertained to the description and evolution of the corporate culture and values as well

as product brand values over the past ten years. The third series of questions related

to the interaction between the two levels of branding, before and after the

rebranding. The guidelines provided by Miles and Hubermann (1994) were followed

in the interests of improving the validity of the results of this qualitative study.

Borrowing from Carney (1990), Miles and Hubermann talk about a ladder of

abstraction where the researcher starts with a text and codes the text into categories,

then moves on to identify trends and themes, then to test hunches and delineate deep

structures. Interviews were taped and transcripts subsequently made of each

interview. Additional documents such as annual reports and internal memos were

screened to retain information pertaining to the issue under investigation. The

documents were sorted using matrices and coded in the following categories: history

or general information about the rebranding context; processes; perceptions of the

situation; and finally strategies and visions, which embody the more formal

discourse and views illustrating the brand strategy. This classification was conducted

for the three brand elements under investigation, i.e. Diageo, corporate brand

Guinness and product brand Guinness. The information was placed in a matrix that

allows the identification of differences in the way those brands were managed.

The information gathered was then clustered to move to the next level of

abstraction. This process, which is one of data transformation, led to the

organisation of the rebranding experience of Diageo under the three themes: the

debranding of Guinness Corporation; Diageo, a business brand with socially

responsible values; Guinness Stout, a product as the custodian of an inherited

corporate social ethos. Those themes were then used to modify generalisations about

the vertical/horizontal dynamic rebranding model initially envisaged.



Context

Before introducing the results, it is useful to describe briefly the rebranding context

and the history of Guinness Stout and Guinness Ireland. Despite the fact that the

corporate headquarters of Guinness plc was based in London and that the company

was listed on the London Stock Exchange, Guinness Ireland benefited from an

exceptionally high level of support from the Irish people. As the corporation and the

main product shared the same name, ‘Guinness’ was omni-present in Irish life. The

concluding remarks of Gay Byrne of the video documentary ‘Guinness times: The

story of the Guinness brewery’ summarizes it well: ‘Ireland has been good for

Guinness and Guinness has been good for us.’ This impression was very much

influenced by the fact that Guinness had over the years been an extremely good

corporate citizen both internally and externally.

In 1997, Guinness plc merged with Grand Metropolitan to form Diageo plc. Like

many rebrandings, the adoption of a new name was triggered by a change in the

financial structure of the corporation. At the corporate level, the name change was

considered a necessity because of the need to give a name to a new corporate giant,

which owned a variety of brands all over the world. Grand Met-Guinness had

operations in 180 markets (Diageo Annual Report, 1998). The new entity was also

involved in a variety of market sectors including spirits, wine and beer, but also

packaged food and fast food, which comprised Pillsbury, Totinos Pizza, Green

Giant, Haagen Daaz and Burger King. The new name was to provide a single roof

over a house that was now hosting a complex collection of brands. The new name at

the corporate level (i.e. London) was now Diageo.

By 2000, the decision was taken to integrate the various business units. Guinness

(Ireland) had already formally merged with United Distillers and Vintners to form

GuinnessUDV (Figure 2). In 2001, following a brief internal debate, the executive

board of Diageo plc decided that the Irish operations would have to change their

name to Diageo Ireland: ‘the debate was between the heritage of the Guinness name

and the necessity to reflect our global brand. But in the end, it was the global aspect

that prevailed.’ The implementation of the change, however, was left to the Irish

management.

From a brand architecture standpoint, the merger meant that Guinness stout had

become just one of eight global priority brands.1 The imperative of reflecting a

change of scope and scale in the company’s operation was effectively the main

driving force behind the rebranding of Diageo.

Data analysis

The results of a content analysis of the data are presented under the headings

corresponding to the horizontal change in the brand architecture, that is, a change in

Figure 2. Business logos Ireland (1997–2002).



the corporate brand image over time following a name change; and vertical change in

the brand architecture, that is, a change in the relationships between the corporate

and product brands.

Horizontal change: the corporate image before and after the name change

The effects on corporate image uncovered by this analysis fall broadly into two

stages, first, a debranding stage in which some of the old values are cast off; and thena rebranding stage in which the new name becomes imbued with a new and slightly

different set of values. Each will be discussed in turn.

Corporate debranding: shedding outmoded corporate values

The first underlying theme that emerged from the analysis of the data is the notion of

corporate debranding. This idea is informed by two parallel phenomena. On the one

hand, the omni-presence of the Guinness corporate brand in Ireland has gradually

decreased; on the other hand, Diageo has not been built up as a strong corporate

brand and has not compensated for this reduction of the company’s presence in Irishlife. This is the result of an evolution in the corporate branding strategy.

The flip side of Guinness’s omni-presence in Ireland is that Irishness is also

imbued in the Guinness name, which is not necessarily an advantage for the

corporate brand. The data revealed that the sense of ownership that Irish people

developed over Guinness actually restrained the freedom of action of the

corporation. In accordance with standard corporate brand models (Schultz &

Hatch, 2003; Urde, 2003), corporate branding at Guinness Ireland had been

traditionally rooted in the core values, the culture and history of the company.Although the rebranding was not triggered by a will to ‘debrand’ Guinness – the

name Guinness had always been considered by Irish managers as an asset more than

a liability – a shift in the brand proposition became a managerial necessity in recent

years. Guinness carried an emotional burden that was antithetical to the needs of a

modern, international company:

Issues revolving around corporate sponsorship epitomise this rebranding

paradox. Guinness traditionally sponsored events that were at the core of Irish life

such as the ‘Rose of Tralee’ (a nation-wide beauty/personality competition). Thesponsorship was aligned with the traditional ethos of Guinness Corporation in terms

of community support and social activity. However, it allied the corporation with a

good but old-fashioned image inconsistent with the vision of an imaginative up-to-

date corporation. With the exception of the Wexford Festival Opera, which is

sponsored by Diageo, most national events are now sponsored by specific product

brands such as Budweiser (Irish Derby), Cork Jazz Festival (Guinness) or Kilkenny

Rhythm and Roots (Carlsberg). The name Guinness triggered high expectations that

a modern corporation was unwilling to assume.As Guinness (corporation) gradually pulled out of Irish life, however, it was not

being replaced by Diageo. The new name received limited brand support and

customers had no contact with the brand. According to Diageo senior management,

Diageo means ‘every day, everywhere’. The meaning of the new name is so broad

that it can be considered as neutral or meaningless (Brook, 2002). Furthermore, the

Latin form of the name fails to differentiate this corporate brand name from the

multitude of other newly created corporate brand names. Using Latin-coined names



to express universal values such as liveliness and unity is a common characteristic of

many rebranded corporations (Muzellec, 2005).

As a result of this strategy, the new corporate name has limited brand awareness

and low levels of brand knowledge, which are two fundamental constituents of brand

equity (Kapferer, 1995; Keller, 1998). The corporate brand went from being

omnipresent in Irish life to being almost invisible as there is no brand endorsement.

In July 2004, a survey indicated that 61% of respondents were not at all or not very

familiar with Diageo. In comparison, a year following the name change, Guinness

(which had officially disappeared as a corporate entity) was familiar or very familiar

for 74% of the respondents (Diageo, 2005: Corporate Brand Tracker no. 5).

The debranding of Guinness Corporation, however, gave more flexibility to the

management of the corporate and product brands. This freedom is a characteristic of

individual/mono brands (Laforet & Saunders, 2005). The new corporate identity

‘Diageo’ was not targeted at consumers and the change was intended not to affect

consumers. The Diageo Brand Committee (DBC) identified eight key stakeholder

groupings which included employees, investors, government, community, media,

customers, suppliers, joint venture partners (JVPs), but excluded the actual

consumers of Diageo’s product.

In sum, the rebranding of Guinness as Diageo has resulted in a change in the

level of awareness and in the elaborateness of brand associations, in other words,

there has been a weakening of the corporate brand equity. If corporate branding is

about placing the corporation in the spotlight (Fombrun & van Riel, 2004), the move

from Guinness to Diageo can be considered as a debranding.

This view challenges traditional corporate brand building theory, which focuses

mainly on building awareness and associations (Aaker, 2004; Biehal & Sheinin, 2001;

Hatch & Schultz, 2003). Corporate debranding is about undoing consumers’

expectations by erasing a corporate heritage antithetical to the needs and objective of

an up-to-date corporation. The constraints associated with the everyday running of a

successful business meant that it was difficult for a modern corporate brand to live up to

the expectations created by 250 years of positive social contributions (Simmons, 2006).

By debranding ‘corporate brand Guinness’ gradually rather than abruptly, however,

those positive associations are left to linger in the consumers’ mind. Hence, the corporate

brand tracker shows that two years following the rebranding the Irish population

continues to grade positively a non-existent company, the remembered corporate brand

(Guinness Corporation) continues to outscore the real company (Diageo Ireland).

Corporate rebranding: building a business brand with socially responsible values

If visibility is a key component of the ‘corporate covenant’ (Balmer & Greyser, 2003),

ethos and culture should also be at the heart of corporate brand values (Balmer, 1998).

The corporate ethos of Guinness Ireland historically referred to ‘philanthropy and

patronage’. This corporate culture was reminiscent of the mind-set of the Guinness

family who over the years gave liberally to charitable works (Wilson, 1998). Diageo

corporate culture is far less benevolent and more financially driven.

The brand Diageo is a finance-oriented brand … The company thinks in terms offinancial methods and approaches and a very structured approach of doing business …thinking in terms of shareholder value; the underlying mindset in a way that I have notseen in other companies. But that means providing support for this, a group of



financially aware people to do the job and think that way. (Respondent F, PersonalInterview, 5 August 2005)

To avoid unfavourable corporate associations, the brand Diageo is being

marketed mainly towards stakeholders other than consumers. The brand Diageo is

keen to develop an image of a ‘successful, global, innovative, trustworthy and

socially responsible’ corporate brand. The committee has set the objective for the

‘Diageo brand to become a business icon for the 21st century, famous for its world

class people, brands and performance’ (Diageo Ireland, 22 June 2004: Stakeholder

Tracker, Wave I Findings).

If corporate associations such as ‘Ambition’, ‘Power’ and ‘Performance’ do not

constitute an attractive position for consumers, a ‘successful and innovative’

business brand is an appealing proposition for Diageo’s business partners. The

Diageo name is used as a means to enhance the profile of business partners.

However, if the ethos of the corporation had substantially changed, the evolution of

corporate values reflected in the Corporate Social Responsibility (CSR) programme

has been far subtler. The espoused values in terms of community support are

articulated thus: ‘Inherent to Diageo’s approach to business is the belief that the

countries and community in which it operates should benefit from its presence’ (Diageo

in Ireland, 2005). Following the merger, those CSR programmes continued. GrandMet

Foundation became the Diageo Foundation; Guinness initiatives such as the Digital

Media Hub and the Liberties Learning Initiative were also branded under the name

Diageo. Additional initiatives reinforce the business image of Diageo while capitalising

on the traditional values of Guinness in terms of corporate support.

The second aspect of the CSR programme is industry-related and pertains to the

problem of irresponsible drinking. Here the CSR programme (and its promotion) is

driven by the need for an alcohol company to be perceived as a responsible participant in

society. The slogan ‘Diageo: drink responsibly’ is regularly promoted towards the

general public and the media. Along with the ‘Don’t see a great night wasted’ campaign,

a recent initiative was the addition to the Guinness Storehouse of a ‘Choice Zone’, which

challenges visitors to think about their own consumption habits and behaviour.

The combination of community support and corporate sponsorship has led to a

corporate programme that is more aligned with the overall corporate strategy. Diageo

evaluates its CSR programme by measuring stakeholders’ attitudes and behaviour both

at the business unit level (such as the TNS mrbi, report, Diageo Ireland Stakeholder

Tracker) and at the corporate level by adopting a share value approach to its CSR

policies. Such a level of sophistication in the evaluation of business and social outcomes

of a CSR programme is exceptional (Knox, Maklan et al., 2005).

This second theme of a business brand combining a ‘hard nosed’ culture with

‘socially responsible’ values seems to run counter to the idea of corporate brand

alignment between vision, values, culture and images (Hatch & Schultz, 2001). At

least with regard to culture and values, the rebranding may be regarded as a

misalignment among those constitutive elements of the corporate brand.

Vertical effects on the brand architecture: the product becomes the custodian of thecorporate heritage

The evolution of the brand architecture has also allowed the product brand to capitalise

fully on the Guinness name. As the sole entity that can be referred to as ‘Guinness’, the



product brand has become the custodian of Guinness’s corporate heritage. The

Guinness corporate heritage of being ‘people-orientated’ as well as the Irish roots of the

Guinness dynasty finds its way into the brand image of Guinness Stout.

The mapping of consumer perceptions of the Guinness brand identified three

pillars that constitute the essence of the brand Guinness. Those three pillars are:

goodness; power; and communion (Griffiths, 2004). Arguably, goodness and

communion are partly inherited from the corporate brand Guinness. A brand

manager explains that Goodness is about:

The great brewing heritage, the finest ingredients, but also there is something about thehonesty of the brand, in terms of being active in the community, the legacy of thecompany, Guinness built houses for its workers all around here, also corporatesponsorship events, cultural events throughout Ireland that Guinness has organised.(Respondent E, Personal Interview, 5 May 2005)

Those values are a direct enunciation of the 250 years of positive social

involvement of the corporate brand. As the Guinness corporate brand disappears

and leaves the way open for a new type of corporate brand, some of the values

embodied in corporate brand Guinness are being carried on at the product level.

Advertising carefully and subtly reinforces those inherited, positive historical

associations. In recent years, advertisements for Guinness have been focusing on

the ‘great brewing heritage’ and insist on the quality of the Guinness pint.

The third pillar, ‘Communion’, is mainly derived from the way the product is

being consumed, that is, ‘the way for people to get together through conversation,

people connecting with one another; after a soccer game, after a wedding, after work

on the Friday evening’ (Respondent E, Personal Interview, 5 May 2005). Yet, the

corporate heritage also plays a minor role as it is ‘a little bit about community’ hence

communion is also about the role played by Guinness in the communities in which

the company is implanted in Ireland and around the world. The philanthropic

heritage of the Guinness Corporation is captured and reflected at the product level.

Interestingly, some marketing managers at Diageo acknowledge that the

separation between the product brand and the corporate brand mitigates the risk

associated with modern business life:

Companies make tough decisions during their operating life. We have to make decisionsabout manufacturing capacities, production capacities, maybe close down inefficientsites, sometimes they could be good decisions such as increasing the capacity of theDublin brewery and actually increasing the number of jobs here. Although I don’t thinkthat good news pushes people to drink more Guinness. The alternative is that if we startmaking people redundant, I would prefer that it is associated with the name Diageorather than Guinness. (Respondent E, Personal Interview, 5 May 2005)

The corporate brand is seen as a shield and the social heritage embodied in the name

‘Guinness’ preferably transferred to the equity of the product brand.

This last finding is consistent with the idea that in a ‘house of brands’ type of

configuration, the values of the brands and the corporation may be distanced. The

idea of a symbiosis of values between the corporation and the product brand, which

is implicit in the concept of the branded house (Urde, 2003), can be discarded.

Interestingly, it seems that the evolution of the brand architecture has transformed

Guinness stout as the custodian of some of the inherited corporate values. The

burden inherent in those values (philanthropy, corporate responsibility) has

remained at the corporate level.



Discussion and conclusions

The Guinness/Diageo case has revealed some insights in the area of corporate brand

building and the management of the different audiences of the brands. The

traditional academic view suggests a reliance on heritage in building the corporate

brand (Aaker, 2004; Argenti & Druckenmiller, 2004; Schultz & Hatch, 2001). Many

corporations leverage their heritage by re-interpreting their traditional symbols in a

contemporary light. For example, Well’s Fargo stagecoach roots, the HP garage or

Thomas Edison’s legacy for GE are being used to improve consumers’ corporate

associations (Aaker, 2004).

In the case of Diageo, in contrast, the corporate brand is geared towards present

and future aspirations; the change of name effectively pushes the corporate heritage

down to the product level. Ironically, the emergence of ‘corporate branding’ in the

vocabulary of Diageo senior management has coincided with the evaporation of

corporate awareness and associations in the mind of consumers. If corporate

branding is about placing the corporation in the spotlight (Fombrun & van Riel,

2004), and if brands exist once they are present in the mind of customers (Keller,

1998), one might question the brand status of Diageo. But this contention leads

necessarily to a re-assessment of traditional views on corporate branding.

Corporate rebranding and product branding at Diageo have been characterised

by a sequential and differentiated approach towards theirs various audiences. This

approach seems to run counter to the arguments in the literature in which most

authors argue for alignment across time and across stakeholder groups (Morsing &

Kristensen, 2001), consistency among culture, vision and images (Schultz & Hatch,

2003), and synergies between culture and values (Urde, 1999, 2003). This study leads

to an alternative argument, which is that a certain degree of asymmetry may be

positive in that it allows corporations to maximise the relevance of the corporate

brand message for each audience.

An asymmetrical approach to corporate branding means permitting different

images for different stakeholders. In this view, corporate branding can be conceived

of as a prism through which the corporation is being perceived differently depending

on the stakeholder perspective. The case shows that corporate branding is about

promoting a corporate agenda. In this context, far from seeking synergies between

product and corporate level, disassociation and differentiation of the two strategies

are consciously fostered. The combination of the three underlying themes: corporate

debranding, building a business brand with socially responsible values, and the

product as the custodian of a lost corporate ethos, shows how the marketing

paradox is overcome.

Consumers’ emotional attachment may be a valuable asset at the product level

(Fournier, 1998); yet at the corporate level it can be a burden. An evolution of the

brand architecture towards a ‘house of brands’ allows the corporation to reflect

more accurately its corporate reality. By following a low key, gradual process (no big

advertising campaign), the corporation is managing corporate associations carefully,

which allows the positive opinions of the now disappeared company to linger in the

consumer’s mind. Corporate images have changed while product brand equity has

remained. This process leads to a redefinition of corporate branding and its

relationships with consumers.

The type of corporate brand uncovered by the case could be called a ‘trade or

business brand’. A business brand is more than a simple trade name over a house of



brands (such as P&G) but it is not a full corporate brand (such as 3M, Heinz or

Danone) because it is not visible to consumers. Yet it is a strong name with various

associations for various stakeholders, hence the corporation could be granted the

status of a brand. Trade or business branding focuses then quasi-exclusively on trade

stakeholders and other social partners (e.g. government, media) while the relation-

ship between consumers and the brands is nurtured at the product level. Thismultidimensional approach to branding means promoting different images for

different stakeholders.

This scheme is illustrated in Figure 3.

In this framework, the company shapes a specific image (e.g. ‘forward thinking,

innovative, financially driven’) for its shareholders and suppliers. This image is

imbued with a ‘results-oriented’ corporate culture. In parallel, the image of a

‘socially responsible corporation’ is promoted towards government and the general

public. The socially responsible claim is supported by corporate historical values ofphilanthropy and charity. As for consumers, the company is content to hide behind

its brands. The relationship between the corporation and the consumers is weak or

irrelevant while product brand relationships are strong and differentiated.

Managerial implications

The findings of this research have significant managerial implications. Corporate

brands are a complex combination of culture, values, vision and images, which are

not easily compatible with a big bang approach implicit in major name changes.

Figure 3. Business and product brands: different target audiences.



Culture, values, vision and images evolve over time to the point that it may require

the corporate brand to change the way in which it is communicated. To reflect this

gradual evolution, the introduction of a new corporate brand should be gradual as

well. The reality of a corporation starts to change prior to a change of name and

continues afterwards.

In the case of a merger, companies have first to integrate various operations and

corporate cultures (which is what Guinness did while it adopted the name

GuinnessUDV). Once that process has been completed, it can change its name

more radically. As the company continues to act as it did before the change of

name, it can mitigate the negative impact of introducing a radically new name. By

adopting a stealth strategy of this kind, the equity of the product/corporate name is

less likely to be damaged.

The cost-efficiency of collective communications and the benefit of a shared

reputation and (positive) image transfer may entice companies to move towards

‘branded house’ architecture (Laforet & Saunders, 2005). However, those strategies

also present some risks. For example, the move from BSN to the Danone Group has

increased the company’s exposure, which may now be more prone to boycott when it

takes a decision that is contradictory to its brand proposition (Klein, Smith et al.,

2004). Another example is Nestle whose use of the little nest as being maternal,

loving and warm is cancelled out by negative reactions to the marketing of milk

unsuitable for use in developing countries.

This type of reputation risk, as well as loose positioning and the failure to

leverage the equity of the corporate brand have prompted an increasing number of

companies to move away from the branded house end of the spectrum (Kapferer,

2002; Laforet & Saunders, 2005). Yet rejecting traditional corporate brand models

also has some reputation implications (Schultz, Hatch et al., 2000; Balmer &

Greyser, 2003). Brands are not immune from the criticism of governments, activists

and consumer associations (cf. No logo – Klein, 2000). As a result the corporations

behind those brands need to be perceived as responsible citizens (Fombrun & van

Riel, 2004; Holt, 2002).

The notion of the business or trade brand reconciles the need for corporate

accountability, risk limitation and efficient corporate and brand management. The

framework proposed may be used as a template for companies willing to constrain

their relationship with customers at the product brand level while developing an

independent corporate brand for the relationships with other stakeholders. While

corporate brands are affected by mergers and acquisitions, diversification and

divestment, individual (product) brands retain a stable relationship focus with

consumers. On the other hand, the need for greater accountability is satisfied

through the corporate branding of the CSR programme towards government and

the general public. Because of this separation, the socially responsible actions of the

corporation are not leveraged at product/consumer level, but the separation acts as a

firewall in case of corporate behaviour (e.g. firing off workers) antithetical to the

product brand proposition.

Limitations and directions for further research

The principal limitation is related to the use of a single case study. Although the case

study approach has allowed us to gain a deep insight on the phenomenon of corporate



rebranding, this may have been at the expense of generalisability. For example, the

branding of the CSR programme towards the general public and government but not

towards consumers might be a particular feature of the alcohol industry but not of

others. Yet, considering the strong criticism of global corporations and their alleged

lack of accountability, the model might still be used as a template for any global

company that has to be both accountable to its shareholders and to society at large. In

order to be able to generalise the findings, multiple case studies of various companies in

various industries in different countries would be necessary and this would constitute a

worthwhile direction for future research.

Note

1. Other priority brands are Smirnoff, Johnny Walker, Baileys, J&B Whiskey, Captain

Morgan Rum, Jose Cuervo tequila and Tanqueray gin.

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