Procurement professionals are usually required to set up a cluster of criteria in supplier selection and supplier appraisal. The more comprehensive those criteria are, the more added value the buyers may bring to buying organisations. Besides the five rights as well as the total cost of ownership that purchaser need to consider, CIPS mentions some non-monetary factors which can add more value to the buying organisation. In this blog post, we clarify two factors: Brand & Reputation and explain how they impact on the buying organisation.

The words “Brand” and “Reputation” are sometimes used interchangeably. But they are constructed to aim at different audiences. Now we start with the definition of “Brand” and then “Reputation”.

1. BRAND

Investopedia defines the brand as “A brand is an identifying symbol, mark, logo, name, word, and/or sentence that companies use to distinguish their product from others“

Brand identity and brand image are two sides of the same coin. Brand identity is the visual identity that make your brand stand out. The company can use the logo, colours, accent, slogan, typography and anything else that help customers differentiate your brand from other brands.

Besides, brand image is what customer think about your brand. A brand image is a result of brand identity. A brand image is developed over a certain period of time during which the customer gets to experience and interact with your brand. Perception of customer about your brand is created by customers’ experience or impression with the quality of product/service, customer service, style, logo, name, feature, maintenance service,…and also the sale promotion, advertisement, packaging… All of things aim at cultivating a certain image in customer’s minds. Almost companies try to gain the strong and optimistic brand image in the market to ensure that customers choose to purchase their product/service over competitors. Therefore, the most important task is to associate the brand identity with brand image as closely as possible

Why should procurement professionals consider “brand” in the procurement process?

There are some reasons why purchasers are more likely to buy product/service with strong brand image. The following are some intangible added value that brand can generate:

• Brands provide peace of mind
• Brands save decision-making time
• Brands create difference
• Brands provide safety
• Brands express who we are
• Brands give consumers a reason to share
• …

2. REPUTATION

Reputation is the sum of perceptions about a company’s corporate actions held by the public in the areas where the company operates.

Charles Fombrun’s Reputation Quotient (RQ) is one of the recognised mechanisms for measuring corporate reputation. There are six key dimensions when gauging the overall reputational strength of a company

• Products & Services
• Workplace Environment
• Vision & Leadership
• Financial Performance
• Social Responsibility
• Emotional Appeal

Another research in Germany suggests four additional dimensions:

• Fairness
• Sympathy
• Transparency
• Perceived Customer Orientation

How does the supplier’s good reputation impact on it’s customers?

The research states that if a company’s reputation is positive, then it can be assumed that its product/service will be perceived positively by its customers, which should have an immediate effect on customer willingness to purchase. The researchers find that a positive corporate reputation has a significantly negative influence on customer intention to switch to other providers

References:
1. Brand
2. Brand Identity
3. What is the difference between brand identity and brand image building?
4. 7 reasons why brands matters to your customers
5. How to build a great corporate reputation