The paper "The Factors And Linkages Which Impact Corporate Reputation " is a wonderful example of a Marketing Case Study. Volkswagen is an automobile company that has been the market leader for many years. It is operational in more than thirty countries thriving more in China and the European countries. However, as the report has documented, Volkswagen found itself in a reputational crisis following its evasion of meeting the emission standards of their diesel engines. The report has documented the internal, external, and relational forces that led to Volkswagen’ s reputational crisis and their consequences.
The report has also highlighted the different definitions of corporate reputation and analyzed the common issues and differences in these definitions. Additionally, it has evaluated the building blocks of corporate reputation concerning the Volkswagen Company tackling aspects like the organizational culture, values, strategy development. The building blocks have been analyzed using Fill’ s model. Kapferer’ s Brand Identity Prism has also been incorporated in the report for analysis of the building blocks while identifying the gaps that exist in the corporate brand. The report has documented the role that the organization, management, and marketing communications play in providing the linkages between the building blocks as well as evaluating the gaps that exist between them.
Also, the report has assessed the importance of corporate reputation concerning Volkswagen Company. The Consumer Reputation Index (CRI) has been identified as a method for measuring corporate reputation which has been applied to the Volkswagen Company. Following Volkswagen’ s tarnished reputation; the report has given some recommendations of what it could do to restore its good corporate reputation. Brief Overview of the Volkswagen Company The Volkswagen Group is an international automobile manufacturer which is the leading passenger model.
It was ranked among the top five brand-driven car models in the year 2015 (Rhodes, 2016). The Volkswagen Company is focused and dedicated to the delivery of ‘ environmentally sound and safe’ vehicles. The main brands of the Volkswagen include Porsche, Audi, Skoda, and Volkswagen AG (Rhodes, 2016). The company operates in more than 30 nations with its primary focus in China as well as the European countries where it has twelve distinct brands. Additionally, the Volkswagen Company also provides a broad range of different financial services.
Some of these financial services include banking, leasing, financing, some fleet management and insurance activities (Rhodes, 2016). Reputational Crisis The Volkswagen Company was involved in a diesel scandal which was dubbed ‘ diesel dupe (Burki, 2015). ’ The Environmental Protection Agency (EPA), established that several of Volkswagen vehicles that were being sold in the United States had software or rather a ‘ defeat device’ in their diesel engines (Burki, 2015). This device could detect when the vehicles were being subjected to any tests, and could then alter their performances accordingly so that the results could be improved.
Volkswagen admitted that approximately 11 million of their cars globally were already fitted with that ‘ defeat device (Burki, 2015). ’ Consequences of the Scandal After admitting to this practice, Volkswagen began undergoing numerous problems in the market especially because by this time their reputation was damaged. They incurred some explicit costs which included legal fees, government fines, recall costs, as well as some expected loss concerning their operating income (Krall and Peng, 2015). Their financial analysis reported that they accumulated some costs which added up to about 15.6M pounds.
Additionally, there were also some non-quantifiable costs which were associated with this damage involving reduced brand equity as well as the losses in the investor and employee confidence in the company (Krall and Peng, 2015). Despite Volkswagen issuing the appropriate compensation for the vehicles that were affected and numerous press releases to try to repair their reputational damage, it was evident that there was still more that had to be done to regain the consumer trust (Krall and Peng, 2015).
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