Corporate Image of British Petroleum (BP) - Term Paper Example

CORPORATE IMAGE A corporate image of any company refers to how the company is ostensible.It refers to the original identity of any company that sets it apart from the others in the market, and what the public perceives it to be; its principals and its place in the market. The marketing department and the public relations department, of any company seemingly strive to build a positive image of the company in the minds of its target audience. This positive icon is important, so that the public better understand what they can expect from a certain company and for the company to better facilitate their products. Every company needs a market and a public where to sell its products. This would only be possible if the company is known to the public, and they have a picture in their minds regarding it. This picture has to be positive; otherwise it could cost the company. A positive image increases a company’s credibility. This image is somewhat build through advertising, where the company portrays itself. Such advertising is not sales-oriented, but takes the help of the public relations department to promote a better reputation and name-awareness of the company. Corporate advertising uses strategies to build a sense of buoyancy and fascination among the consumers’ as well as the others in the industry. The whole company is advertised and branded, not just the products and services. Corporate image is an amalgamated psychological image, which continues to change, according to the firm’s products, strategies, media coverage and other events. The corporate image is a public opinion of the company, and does not necessarily echo the company’s actual image, size or position. Corporate image is flexible and can change unexpectedly. It could go from best to worst, in hours, because of any scandal or any news, even fake, that found its way into the media, and that highlights a negative aspect of the firm. For example, in the 1990s The Food Lion supermarket faced a scandal that accused the store of unhygienic practices, which was a fraud; but the store was forced to withdraw from the Houston, Oklahoma, Louisiana, and Dallas/Fort Worth Metroplex markets, which it had recently entered, because of bad publicity. Or it could go from worst to good overnight, by a feature printed in the Wall Street Journal, or any other newspaper; written by a reporter who was impressed by your services. It is very unpredictable. Companies use advertising techniques to improve their depiction. Brands represent a philosophy; for example The Apple Computer Company has survived a lot of ups and downs, regarding its corporate image. Apple appealed to those computer users who were innovative and creative, who wanted to see themselves as unique and free-spirited people. Apple also faced complains and criticism for its iPhone 4, where there was a connectivity problem. Apple refused to accept that it was a technical error, instead asked the consumers that iPhones have to be held differently. Nowadays, the public relations departments are also involved in positive corporate image building. CORPORATE IMAGE AFFECTS BUSINESS SALES Corporate image helps consumers remember your company. How will people buy your products or services if they are not even aware that your company exists. According to the Gallup Poll, companies today are only 16% responsible, as compared to the 70% in 1968 (Argenti 5). In business, what matters most is what the public thinks and beliefs; and the public trust is what must be upheld and should not be broken. (Argenti 11) The public trust in global companies is going in negative numbers. The statistics have been calculated by subtracting the percentage of distrust from the percentage of trust, expressed by the public during surveys. This shows that the public no longer trust the global companies, to upheld their rights and cater to their needs. (Argenti 15) Companies having good standing are more likely to achieve and maintain their status and public trust in the market. They have less risk going bankrupt. Companies with a positive corporate image have in the past become giant conglomerates and have achieved the status of “corporate super brand”. One of the factors that can affect the image of any firm is the benefits a customer is receiving for the price they are paying for it. The culture of any firm is also an important aspect that can determine the image of any company. (Dowling summary) The most bona fide image that a company can hope for is the one that truly reflects the company’s original face. A company has to showcase its positive points to all the people involved. They include the general public, suppliers, customers, employees, advertisers etc. they are the ones who affect a company’s reputation, and are also directly affected by it. Companies that have a positive and long term corporate image have proven to be more competent than other companies. These are the companies with whom customers have lifelong relations, and to whom the employees are dedicated and more dynamic. A company has a lifetime job of upholding its image. Media is one source that could be useful in creating and molding the public in the favor of the company. But at the same time it could be harmful, as only a slight controversy could become very big with the help of the media. These controversies can have a very diverse affect on the image of the company. They could create a doubt in the customers mind, regarding the credibility of the company. This could affect and diminish the sales. Once the public hears that a certain product of a certain company was not up to the standards or have experienced any negativity regarding any product or service; they start to avoid the company altogether, with the reason that if one of the products can fail, how can the rest be up to the mark. Customers never forgive nor forget. If the company has a good reputation of serving its customers well, it would not have to spend a lot of time and money convincing the public for its products and services. The customers will trust the company to cater better to their needs. Secondly the potential customers will help advertise your company through word-of-mouth; besides customers usually don’t like to visit new and unknown firms, when they can have one that they already know about. Then the company cannot build and maintain their name if they do not fulfill the requirements and expectations of their clients and customers. There should be a consistency and reliability. The stakeholders must have complete trust over the company’s abilities to cater to their needs. Trustworthy and Dependable corporations have a better chance of attracting potential investor and financier. It improves chances of a better growth and development. ELEMENTS OF CORPORATE IMAGE Corporate image is usually thought of as composed of three major components. These could include the company’s logo, and mission and vision statement; referred to as corporate design. The company’s logo is a visual language communicating the company’s principles. It is a picture showing what the company is and what is does, thus imparting the mission statement visually. Then advertising, publicity campaigns, and other related information is referred to as corporate communication. A company’s culture, norms and values are also considered a part of the corporate image. These could also include the employee’s behavior and attitudes towards the company and the customers. The corporate image once developed must then be communicated to the stakeholders. The communication presents another great problem for the company. Communicating in this dynamic world has become a challenge. Therefore, technology has now been defined to help companies better portray the image they want to showcase. (Goodman summary) BRTISH PERTOLEUM The BP’s Gulf Coast oil spill was the worst in the history. This spill proved to be the worst scandal that could harm the BP’s image, which was said to be environmental friendly. It was one of the tree companies shortlisted for the US Government’s Safety Award for Excellence. The company was criticized for not taking into account the prospects that would have avoided the spill. “The spill began after the Deepwater Horizon drilling rig exploded on April 20, killing 11 people.” (The New York Times) The company first tried to drive mud in the hole to stop the flow of oil. Although the company expressed sanguinity regarding this method, of controlling the situation, it soon became evident that it was not working. The company was slow to act and underestimated the situation. The management was very disappointed that this project of an underground well in the Gulf of Mexico, of the company has failed. It seemed that the BP management did not take this matter seriously, and were not at all concerned with the conditions and the problems of the people affected by their mistake. The lack of empathy on behalf of the BP management left the entire public dumbfounded. It is very necessary for a company to have a correct tone, and words when expressing apology for a disaster that occurred because of a company’s failure. But if the statement is made timely and in the appropriate tone, it could help improve the company’s image. The BP tried to protect its image after the disaster, by featuring its CEO to apologize to the public and define ways that are been used to correct the situation. This campaign was met by criticism. The CEO tried to shift the blame by saying “this was not our accident”. "The Gulf of Mexico is a very big ocean. The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume"; statement made by the CEO to the Guardian newspaper made the company seem cold and indifferent. Some wanted the CEO to be removed, because he has lost his credibility. Others wanted the company to fix the mistake before trying to fix its own image. The company had branded its image as “Beyond Petroleum” officially in 2001. It has lowered the sulfur content in its oil products and is involved in other positive environmental friendly products, such as the “Federal On-Scene Coordinator Approves Gulf Coast Shoreline Clean-Up Completion Plan Milestone Paves Way for Restoration Work”. It has also tried to create awareness among the public regarding the alternative energy sources, that could be used and that are environment friendly. BP also ensured the health and safety of the residents by supporting air and water monitoring programs. It also employed new technologies such as ‘wave gliders’ to monitor the dispersed and dissolved oil in water, as well as the oxygen content and water quality. It is also currently participating in an assessment of natural resource injuries in the Gulf of Mexico with federal and state trustee. The company issued press releases that informed the public of the damage caused, and the strategies that were being used by the company to cater the situation, and prevent further damage, and to correct the damage already done.  As of 31 December 2010, BP had spent $17.7 billion for the response activities. BP took responsibility for the cleanup and also for the welfare and safety of millions who were affected. Mother Jones Magazine, an investigative journal has named the BP “as one of the ten worst corporations in both 2001 and 2005”. The BP Company faced a 10-40 percent decrease in sales, following the deep horizon oil spill. The company suffered a loss of $ 3,324,000 (amount in thousands) in Dec 2010. The company first took several measures to stop the oil flow from the rig. They tried to contain the spill. They were determined to compensate the people, businesses and government affected, to whatever extend that was necessary. BP made payments totaling $5 billion, during 2010; and will pay an additional amount of $1.25 billion each quarter till 2013. BP was devoted to cleaning up the mess that was created, both on-shore and off-shore. The BP also worked with the wildlife and rehabilitation organizations to help restore the wildlife and marine life to the normal conditions. The BP’s efforts were immense regarding the rescue and safety of nearly 48000 individuals involved. The BP always has commercials featuring the environmental-friendly side of the company and then the consumer-friendly services they provide. After the oil spill of 2010, the company featured animated commercials that portrayed the deep regret of the company at the disaster, and expressed deep feelings of apology for all the people who were affected. The CEO of BP Tony Hayward, also starred in an advertisement, where he apologized for the damage caused, and promised to take of the situation and take safety measures to prevent this from happening again. The corporate image is the lifeline of any industry or company. It would guarantee success and failure, and it is unpredictable. Companies spend most of their energies trying to build a good reputation, because good reputations earn you loyal customers, and investors. Commercials can help build trust and relationship with the consumers, but at the same time spoof of commercials can ruin the reputation of the company. BP started out as a product range and then slowly and gradually became a brand name. Before the 1917s, the fuel for cars and other motor vehicles was sold under the name of “Palm Tree Oil”. After 1917s the fuel was marketed and sold under the name of “British Petroleum” (BP), but the company was not branded by this name until forty years later. Even before the company could be officially called BP, this tag-name was eminent in all of Europe. In the 1920s, the credit for creating the first BP logo went to Mr. AR Saunders. The first logo consisted of a shield outline, and within that were the letters ‘BP’ written in boxy style with wings. The logo was practically of every color; red, blue, black, green, yellow, white. Within the next ten years, two colors dominated; they were green and yellow. The reason behind them being the preferred colors is not known. The franchise in France was the first one to launch this color scheme, followed by the Swiss and then the British. The old red pumps of Britain when painted the new green were seen as to better mix with the scenery. This remained the logo for nearly eighty years. In 1998 BP merged with Amoco, and the name was changed to BP Amoco. Likewise the logo also changed; the shield was combined with the Amoco’s torch. BP became a group of companies in 2000 and brought forward a whole new concept. The new logo was a sunburst of green, yellow and white. It was the Helios, the Sun God of Greece’s symbol; and defined energy in its different dynamic forms. BP also portrayed their new policies that were compatible with their brand name and what they believe in; that are ‘better people, better products, big picture, beyond petroleum’. After the Gulf of the Mexico oil disaster, the public was widely criticizing the CEO of BP, Tony Hayward. The BP took a bold step to counterbalance the criticism by replacing Tony Hayward by Robert Dudley. Tony Hayward remained in position for three years, starting from 2007 and ending in 2010 and under his reign the company achieved some successes. However, as BP prides itself as a company with strong ethics and their logo also represent themselves as a company going beyond the traditional concept of a petroleum firm. Bob Dudley was the main board director of BP and managed the US operations. Lately he was managing the unit, recently established, for the cleaning-up and the rehabilitation, after the Gulf of Mexico oil disaster. Tony Hayward, on stepping-down from the post believes that, BP has shown great accountability in accepting the blame and trying all the measures possible to restrain its effects to the minimum. The BP management wants to increase the credibility of the company by changing the CEO and some of its policies. They want their company to move forward with the new policies and that too under the new leadership, so that the company retains its reliability. The change in policies is a result of the lessons learned from the oil well disaster; the company wishes not to make the same mistakes again. Tony Hayward will eventually leave the company after working there for nearly thirty years. Hayward was widely criticized for his insensitive comments and statements regarding the spill; all of which revealed the company was not responsible for what happened and that they have no control over it. Bob Dudley is following a insensitive leader, and the fact that he is from USA and has spend a lot of time in the Gulf, makes him a popular candidate for the position, in such conditions. Hayward will still be working in close cooperation with Dudley, which shows the trust that the company has in Hayward’s technical skills. The first advertisement launched by the BP was a personal apology by the CEO Tony Hayward. In it he deeply regretted the mistake that caused such great problems for the people of the Gulf, and assured the public that every possible action was being taken to rectify this mistake as soon as possible. He also mentioned that the company is solely responsible for the compensation due to the affected public. However, this ad was not able to derive the intended result; the public did not find any new information in it. BP was spending nearly $50 million on its advertisement campaigns. They created a whole new category of television ads with the help of a public-relations firm. The BP has also launched ads promoting tourism and economic restoration along the Gulf coast, tilted “Best Season”. These ads helped promote the message that, even after such a huge disaster, the Gulf coast is still open and is still a prominent and popular tourism spot. REFERENCES Argenti, Paul A. Corporate Communication. Boston: McGraw-Hill/Irwin, 2007. Print [Online] Available at: (http://www.iabc.com/education/pdf/Argenti_RFLunch.pdf) Dowling, Grahame R. Creating Corporate Reputations: Identity, Image, and Performance. Oxford: Oxford University Press, 2001. Print Goodman, Michael B. Corporate Communications for Executives. Albany: State University of New York Press, 1998. Internet resource. http://www.corporate-images.com/fckeditor_userfiles/file/Corporate%20Image.pdf http://www.papalattyafroreggae.com/creating-a-corporate-image.html http://www.nytimes.com/2010/05/30/us/30spill.html?sq=BP%20strategy%20of%20Gulf%20of%20mexico%20spill&st=cse&adxnnl=1&scp=1&adxnnlx=1322502286-Nw65C00VUYjyYPtfz0B2eg http://www.fsb.org.uk/firstvoice/assets/corporateid-feb2005-mar2005.pdf http://online.wsj.com/article/SB10001424052970204226204576600532996920582.html?KEYWORDS=BP+image+Gulf+of+Mexico+spill http://en.wikipedia.org/wiki/BP http://www.guardian.co.uk/business/2010/jun/01/bp-response-oil-spill-tony-hayward The Wall Street Journal: BP Rolling Out New Ads Aimed at Repairing Image. June 7, 2010 [Online] Available at: (http://online.wsj.com/article/SB10001424052748704002104575290993225476092.html) British Petroleum (BP): New ads promote tourism along the Gulf coast. [Online] Available at: (http://www.bp.com/sectiongenericarticle.do?categoryId=9039335&contentId=7072076) British Petroleum (BP): BP CEO Tony Hayward to Step Down and be Succeeded by Robert Dudley. July 27, 2010 [Online] Available at: (http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7063976) British Petroleum (BP): Brand and Logo. [Online] Available at: (http://www.bp.com/sectiongenericarticle.do?categoryId=9014508&contentId=7027677) Read More