Paper short abstract:

This study seeks to understand the practical barriers to achieving brand orientation across an organization. Its findings suggest that the degree of differentiation, the organizational balance of power, and a strong dependence on a corporate brand impede the implementation of brand orientation.

Paper long abstract:

This study seeks to explore the practical obstacles to achieving brand orientation across an organization as a whole. In recent years, the implementation of brand orientation—defined by Urde (1999) as "an approach in which the processes of the organization revolve around the creation, development, and protection of brand identity in an ongoing interaction with target customers with the aim of achieving lasting competitive advantages in the form of brands"—has received increasing attention. Research has found that brand orientation has a positive influence, not only on brand performance, as in brand equity, but also on financial performance. In practice, however, it appears to be harder for most firms to implement brand-oriented strategy throughout the whole organization than the literature suggests. Nonetheless, we know little about why it is so difficult to achieve brand orientation and how to avoid related difficulties. To address this research gap, this analysis employs a single case study of Shiseido, a major, long-established Japanese cosmetics company which has been trying unsuccessfully to implement brand orientation for a decade.

In-depth interviews with managers and employees suggest three hindrances: differentiation and inconsistency between departments as to performance objectives; power imbalances between departments; and an organizational culture which had been more focused on the corporate, "Shiseido" brand rather than a number of individual product brands. In Shiseido, problems with differentiation and departmental power imbalances are particularly significant in the design department, which deals with package design, advertising, and shop shelf design. The department had maintained high independence and held strong power over other departments, which led to the communication to customers of a brand identity inconsistent from the original. Our findings suggest that the degree of differentiation and the balance of power within an organization have influence on the penetration of brand orientation in the whole organization. It also hints that strong dependence on a corporate brand has a negative effect on product brand orientation.