03 Jul NEW STUDY BY GLOBEONE SWITZERLAND: NO PURPOSE, NO BRAND!
Swiss companies are too egocentric in their brand positioning. They usually talk about their own product and rarely emphasize the purpose behind their brand for the general public. This is the key finding of the new Purpose Study by the management consultancy Globeone.
The study analyzes the official brand claims of 238 leading companies in Germany, Switzerland, the USA, China and Brazil. The claims serve as an important indicator of whether and how companies communicate their purpose. The key question here is why a company exists at all and what benefits it can bring to the general public.
72 percent of the assessed Swiss brands have an established claim. Almost half of all communicated claims (48 percent) are egocentric and discuss only the company or its products. The other half (45 percent) addresses the individual customer, but neglects any larger societal group. A very noteworthy finding from this study is that, while 55 percent of the evaluated Swiss firms communicate the benefits of their products in an emotional way, only every seventeenth company (6 percent) explains the benefits of its products for the larger society on the basis of a true purpose.
This is a surprising shortfall. Experts like the Nobel Prize winner Daniel Kahnemann have long since proven that purchase decisions are usually made on an emotional basis and are justified rationally only after the purchase. A clearly defined true purpose plays a decisive role here because it explains the “why” behind a brand and thus creates the emotional context. According to Carina Hauswald, Managing Director of Globeone Zurich, Swiss companies have a lot of potential to improve: “Swiss companies will need to do better at addressing why their business exists in their communications strategies. Having a more relevant purpose for their products and services will allow them to generate a greater appeal to the broader community.”
In comparison, international companies communicate the higher purpose of their products more than their Swiss counterparts – 14 percent of international brands claim to have one compared to only 6 percent of Swiss brands. This trend also holds true for emerging markets like China and Brazil. However, the overall brand communication of international firms is still dominated (54 percent) by a logical and functional tonality emphasizing the product’s use or rational benefit. A little more than half of the companies (49 percent) use themselves as the central theme and a little over a third (35 percent) already focus on the customer, yet without providing a meaningful context to a larger societal group. The Brazilian and Chinese firms included in the study tended to have a stronger focus on themselves and were less emotional. In contrast with companies in the emerging markets, Western companies tended to communicate far more emotionally.
“What is especially notable is that Swiss companies tend to communicate a higher purpose significantly less than even Chinese or Brazilian firms,” Ms. Hauswald said about the results of the study. “This militates against the more general trend according to which Western companies tend to communicate more emotionally than companies from emerging markets. Swiss companies therefore need to be very careful not to overlook the developing innovations in the field of marketing. They need to improve their brand communication to broaden the emotional appeal of their products and services to the greater community and the customers of the future, such as Millennials”, Ms. Hauswald advises.
The model developed by Globeone helps companies to better understand their own positioning and to optimize it taking into account the international environment. However, the use of a strong purpose goes far beyond the development of a brand claim – it must be lived by the entire organization, because otherwise the credibility of such a positioning is not given. Ideally, a company communicates its purpose through an authentic corporate story that illustrates why the company exists, thereby building a strong emotional bond with its stakeholders.