The writer has a Master's Degree in Economics. She enjoys researching and writing about economic and business issues.
In the past decade, both businesses and academic researchers have become increasingly more interested in the concept and practice of brand purpose, which has been identified as a new key to success for organizations in the context of increasing global competition and high demands from customers (Ignatius 2019). For example, according to a report by IPSOS (2015), more than half of companies with a brand purpose had higher revenue than their rivals with no brand purpose. Companies with a clear purpose guiding their action were also reported to capture more market share and expand much more rapidly. Employees in these companies also claimed to have higher satisfaction and tended to stay more loyal with the companies. A purposeful brand also allows the companies to attract top talents, differentiate themselves from myriads of others in the market, and answer the reasons for their existence and ways forwards (Annweiler 2019)
In spite of the growing importance of brand purpose, the academic research into this concept, its practice, attributes, practices and related dimensions has still not been proliferated, and many areas of research in brand purpose have been left untouched (Alegre et al. 2017). This article provides a brief overview of the definition of brand purpose, how to choose a right purpose for an organization, brand purpose strategy execution and communication, and the long-term impacts of brand purpose on the consumer-brand relationship.
The Definition of Brand Purpose
In its simplest form, a brand purpose states the reasons for the existence of an organization beyond profit maximization. It also extends further than purely just product benefits and organizational objectives to also reflect the customers’ values and the societal beliefs (Ipsos 2015). Hsu (2017) defined purpose as a motivational statement for the impact that the brand wants to make for the world through its existence. The statement must be inspirational and future-oriented, addressing the larger social, economic, and environmental causes that the brand commits to advance. Mirzaei et al. (2021) argued that although there is nothing wrong with going with profit maximization as a brand purpose, there exists a push towards the adoption of a higher social purpose for brands to generate both profits and social welfare, committing to making sustainable impacts and improving people’s life. As a reward for companies’ hard work to realize their higher purposes, they can gain a competitive advantage and drive their business growth.
While they are seemingly related and have often been used interchangeably, brand purpose is different from brand mission. Mission plays an important role in business management, defining the company’s direction for future growth and its operational space, defining its most essential and permanent way of being in a timeless way (Papulova 2014). Through its mission statement, the company communicates its internal meaning to the relevant internal and external stakeholders. Additionally, other components of a mission statement might include its products, technology, philosophy, competencies, image, etc. (David & David 2003). Hence, mission is more internally driven as the company looks for a space in the world to position itself, serves its target audience and contributes to the development of the world with its products, services, competencies, and so on. On the other hand, the essence of brand purpose is the notion of transforming the external world, including the market and the society, for the better through the service of the brand, reshaping the world into its more advanced and sustainable form. Purpose is both internally and externally driven, and it becomes part of the brand identity, encompassing all aspects of the business operation and strategy (Hajdas & Kłeczek 2021).
Similarly, brand purpose also surpasses an organization's social responsibility program. Social responsibility program is adopted by firms in response to both legal requirements and marketplace competition. It emphasizes the ethical practices of businesses to not only make profits but also contribute to some aspects of the social development, solving issues such as poverty, inequality, environmental degradation, and exploitation of natural resources and low-cost labor in developing countries. Corporate social responsibility also enables the company to earn positive reputation and win consumers who increasingly boycott unethical or socially irresponsible brand (Hopkins 2004). While corporate social responsibility is good, and in many instances, it converts the reputation gained from the corporate social responsibility activities into brand equity, the social value bestowed on a brand from its positioning and recognizability (Mahmood & Bashir 2020), corporate social responsibility is not the purpose. Purpose aims to benefit all stakeholders for the time being and far into the future; it is a goal pursued by the organization and transforms the organization in its pursuit. It lies in the organizational belief, passions, actions, and is displayed and integrated in every decision made by the organization. By calling corporate social responsibility a purpose, marketers risk purpose-washing its brand, focusing only on the surface meaning of purpose and the “feel good” clique and forgetting the long-term impact of the action (Pontefract 2017).
Strategies to Choose a Brand Purpose
Considering the importance of brand purpose guiding the company’s current operation and future development, it is crucial for it to identify the appropriate purpose that is meaningful, authentic, and relevant for now and in the future. Nonetheless, the world is constantly changing and there are many uncertainties in the future. As a result, there are several factors that a company should take into consideration in developing its purpose.
Kramer (2017) proposed a systemic approach which he called the Guiding Purpose Strategy to help companies establish their Purpose, finding the meaning that unifies the whole organization and makes employees feel passionate and engaged with the work. Accordingly, the system is based on the onion principle. To be specific, the most tangible elements create the outside layer of the onion, namely the information layer, giving operational information such as who, where, when. The next layer, which is knowledge layer, gives information as to how to do things. The knowledge layer contains the organization's know-how including the process, procedure, technical infrastructure, etc. These assets are accumulated over years of business operation and brought together the expertise and experience of the employees in the past and the present. The know-how must evolve to reflect the new emerging trends and knowledge in the larger social and industrial context, enabling the organization to stay up-to-date and compete with other organizations. Finally, at the heart of the onion is the know-why layer, answering the questions why the organization exists and do the things the way it does with the people it has. The know-why is the wisdom of the organization and it becomes more and more important to the new generations of workforce. Applying the framework to Apple Inc., one of the leading technology giants, it can be seen that the company’s core purpose, the know-why was defined by Steve Jobs as to “Humanizing Technology”, which is achieved through the combination between art and technology with the work of purposeful and passionate employees of Apple, an innovative company built and led by him (Kramer 2017).
According to Accenture (2018), there existed several factors that influence a brand purpose including geography (companies in more developed markets tend to venture into the realm of meaning and collective values, while companies in developing markets/ third world countries are still seeking for their identity), product categories (purpose is more important to service/experience sales than basic product sales), brand maturity (established brands have already perfected their meaning through the product reputation, while emerging brands utilize purpose as a way for product differentiation), customer demographics (there exist generational differences towards to adoption of brand purpose), and ecosystem.
Strategies to Communicate Brand Purposes
Regarding profit-seeking companies’ strategies to communicate brand purpose to customers, Accenture (2018) suggested that to successfully activate a brand purpose, the brand first must humanize its brand, giving the brand the human personalities and place it within the human’s world to see how it fits and the values that it offers, and connecting with stakeholders in a human way. To do so, it is important to involve the feedbacks of the brand’s stakeholders such as employees, customers, suppliers, partners etc., asking the right questions and developing close emotional ties with the stakeholders. Second, the purpose must be communicated clearly in a genuine way. Authenticity has become the key to winning customers’ trust in today’s world. Brand authenticity consists of such dimensions as continuity (the brand consistently pursues a purpose over time), integrity (the brand embraces moral principles and behaves ethically), originality (the brand is unique and stays true to itself), and credibility (the brand is reliable and sticks to its promises) (Portal et al. 2019). If the brand purpose does not seem authentic and come from its long-term strategy and innate culture, it will be hard to convince and buy in stakeholders’ support for its purposes. Third, the company should find new creative ways to communicate its purposes not only to customers but also to all stakeholders in its ecosystem. It can also invite stakeholders to engage more with the communication process, investing in the brand and playing a role in advancing the purpose (Accenture 2018).
In terms of purpose communication strategies for non-profit organizations (NPOs), Mirzaei et al. (2021) examined the practices of some leading NPOs in the countries to attract more volunteers and funding. Studying 4 brands in 5 different non-profit categories with NPOs among the top 100 NPOs with active Facebook page, the authors gathered related brand communication text in their Facebook posts, and analyzed the text using Leximancer. They found out that there are 4 main dimensions of NPO purposes communicated through their social media which are change, support, empower and fight. The focus dimensions vary depending on the NPO’s category. For instance, NPOs in the Education/ Children category emphasizes support and empowerment while NPOs in Culture have less clear concentrated purposes. Hence, the authors suggested that NPOs should communicate their higher purposes as an umbrella that shapes all other related brand attributes such as its personality, and image. Moreover, brand purposes can be diversified or concentrated, and they should reflect the core values of the NPOs’ products or services to enhance its credibility and originality. Regardless, the purposes must be determined early for consistency and can extend beyond the 4 dimensions mentioned in the study.
Impacts of Brand Purposes on Customer-Brand Relationship
Many marketers have quickly adopted brand purposes as a new way to promote their products and develop a long-lasting relationship with customers. As customers feel motivated and connected with the brand purposes, they have more trust in the brand, buy its products, and even join hands to fulfil the purposes with the brand, leading to positive social improvements (Hsu 2017). Moreover, when the brand represents a certain social purpose and meaning, customers view it as a potential partner and obtain further values from the product besides its functional values such as emotional values and social values (Loureiro 2012). Furthermore, Hajdas and Kłeczek (2021) proposed that the use of purposeful branding can empower customers, giving them the opportunities to change their practices and having control over things previously controlled by the marketers. In particular, the customers can have the power to support or averse a brand, adopting or resisting the brand’s persuasive tactics, by evaluating the authenticity and relatability of brand purposes and determining whether they can relate to the purposes. From changes in customers’ behaviors and decisions, brand purposes can also transform the society by collectively influence customers’ purchases on a larger scale. Subsequently, the use of brand purposes can lead to either higher brand attachment or brand aversion.
In sum, with technological advances and the rise of social media, customers scrutinize the brand more closely than before, judging not only its products but also its values and meaning. Therefore, the adoption of valuable and desirable brand purposes can provide a new competitive advantage for a brand to inspire its customers and employees, innovate its products, and advance positive social changes. To do so, the brand must select suitable purposes that are relevant, authentic, and true to its core competencies, and communicate the purposes clearly and strategically to all stakeholders. As a reward for its purposes, the brand can form a deeper and long-lasting relationship with its customers.
Accentur, 2018, To affinity and beyond: From me to we, the rise of the purpose-led brand, Accenture Strategy, Dublin.
Alegre, I, Berbegal-Mirabent, J, Guerrero, A. & Mas-Machuca, M. 2017, ‘The real mission of the mission statement: A systematic review of the literature’, Journal of Management and Organization, vol. 24, no. 4, pp. 456–473.
Annweiler, B 2019, Point of purpose : how purposeful brands attract top employees, seduce customers, & fuel profit, 1st ed, Noteworthy Books, Olso, Norway.
David, F & David, F 2003, ‘It’s time to redraft your mission statement’, Journal of Business Strategy, vol. 24, no. 1, pp. 11-14.
Hajdas, M & Kłeczek, R 2021, ‘The real purpose of purpose-driven branding: consumer empowerment and social transformations’, Journal of brand management, pp. 1-15.
Hopkins, M 2004, Corporate social responsibility: an issues paper, International Labour Organization, Geneva.
Hsu, C-K 2017, ‘Selling products by selling brand purpose’, Journal of Brand Strategy, vol. 5, no. 4, pp. 373-394.
Ignatius, A 2019, ‘Profit and purpose’, Harvard Business Review, Volume 3.
Ipsos 2015, Simply, better brand purpose. Why brands need to be superheroes, Ipsos ASI, UK.
Kramer, M 2017, ‘Brand purpose: The navigational code for growth’, Journal of brand strategy, vol. 5, no. 4, pp. 373–394.
Loureiro, S 2012, ‘Consumer-brand relationship: Foundation and state-of-the-art’, in: H. Kaufmann & M. Panni, eds. Customer- Centric Marketing Strategies: Tools for Building Organizational Performance, IGI Global, Hershey, pp. 413-434.
Mahmood, A & Bashir, J 2020, ‘How does corporate social responsibility transform brand reputation into brand equity? Economic and noneconomic perspectives of CSR’, International Journal of Engineering Business Management, Volume 12, pp. 1-13.
Mirzaei, A, Webster, C & Siuki, H 2021, ‘Exploring brand purpose dimensions for non‑proft organizations’, Journal of Brand Management, vol. 28, no. 2, pp. 186–198.
Papulova, Z 2014, ‘The Significance of Vision and Mission Development for Enterprises in Slovak Republic’, Journal of Economics, Business and Management, vol. 2, no. 1, pp. 12-16.
Pontefract, D 2017, Stop Confusing CSR With Purpose, viewed May 2021, <https://www.forbes.com/sites/danpontefract/2017/11/18/stop-confusing-csr-with-purpose/?sh=5d87e2353190>.
Portal, S, Abratt, R & Bendixen, M 2019, ‘The role of brand authenticity in developing brand trust’, Journal of strategic marketing, vol. 27, no. 8, pp. 714-729.