Ethical branding and corporate reputation

The purpose of this paper is to explore the concept of ethical branding and its link to corporate reputation. Brands have traditionally been studied only as an economic construct. Brands, as a social construct, have not yet been fully understood due to the lack of research.

The paper discusses major issues with references to existing literature and practical examples.

In the conventional brand models the value of brand equity is defined and measured by its economic performance in financial terms. This model has a number of deficiencies. First, two basic elements are missing: legality and ethics, which form the foundation of brand equity. A good brand must be a legal as well as ethical one. Thus brand value needs to be assessed by both financial and ethical measures. Second, conventional brand models focus largely on product brands rather than corporate brands. Brands and branding have such a profound impact on the society as whole and not just on these people who buy them. There is a wider public, in addition to shareholders and consumers, who may be potentially affected by the branding decisions. The impact of branding on these stakeholders should also be taken into consideration. An ethical brand enhances the firm's reputation; such a reputation reinforces the brand in turn. On the other hand, any unethical behaviour will severely damage or even destroy the total intangible asset as evidenced by the recent high profile corporate scandals.

The paper questions the conventional branding practice, and explores the links between ethical branding and corporate social responsibility. Many questions remain to be addressed.

Ethical branding could provide the company with a differential advantage as a growing number of consumers become more ethically conscious. It could also help overcome the increasing consumers' scepticism and cynicism towards branding communications.

The paper is perhaps the first to raise the importance of ethics in branding.