Baurs healthcare is the leading importer and distributor of healthcare specialties in Sri Lanka, which is a strongest subsidiary of A. Baur & Co. (Pvt.) Ltd, established in 1897. The precision, ethics and quality which is a hallmark of Switzerland is in the foundation and culture of the company.
This report provides a qualitative assessment of facts with regards to the current context of the corporate reputation of Baurs healthcare and more precisely encounters how the integration of corporate communication might assist for the development of overall reputation of the organization.
The integration of communication mix will definitely assist the organization to have a continuous and interactive dialogue with its stakeholders in order to establish & enhance overall reputation.
Today, the healthcare industry is highly competitive and dynamic industry due to the fact of emerging cheaper generics which lead to erode the new and innovative molecules from the market. In such conditions, integrating the communication mix will help Baurs healthcare to deliver more values and interact and engage with their stakeholders in order to establish the overall reputation and the long term sustainability of the organization as well.
According to the mini survey conducted recently among stakeholders of Baurs healthcare regarding the current reputational standing of the company, it is identified that the organization implementing different communication tools do not have positive impact on developing corporate reputation.
So, Baurs healthcare should focus more on developing and integration of the overall communication elements to enhance corporate reputation which is in line with the corporate objectives of the organization in order to improve our core values and better corporate image among eyes of the stakeholders.
The reputation among stakeholders of an organization has been recognized as an asset (intangible asset) of the company, which is built over a period of time. This has become a key strategic driver of the organization in today’s competitive business arena.
The positive reputation is key source of distinctiveness for an organization, which can differentiate from its competitors; produce support for and trust in the organization and its products (which in turn may enhance its stability and resilience in times of change and crisis); and help it to attract and retain quality staff, business partners and allies (Fombrun & van Riel, 2004).
So, the communication towards their stakeholders is a vital process of the organization which facilitates the company to inform, remind, differentiate and persuade their internal and external customers in order to develop the overall reputation of the organization.
Many authors have been described “Corporate reputation” in different ways and according to Fombrun, 1996, “corporate reputation is the overall estimation in which a company is held by its constituents. A corporate reputation represents the ‘net’ affective or emotional reaction (i.e. good or bad, weak or strong) of customers, investors, employees, general public and other stake holders to the company’s name”.
Doorley & Garcia, 2007 has been expressed the organizational reputation by the simple formula;
Reputation = Sum of Images = (Performance and Behaviour) + Communication
Corporate reputation of the organization could be driven by following strategic drivers,
A good reputation gives more resilient than a bad one and organizations with a good reputation are more favourable (Lyon and Cameron, 2004, P.226). Research shows that reputation has an impact on the perception of the management style and purchasing decision as well (Yoon et al., 1993, P. 226).
A positive reputation of the organization will attract & retain qualified staff (Eccles et al., 2007, P. 104) and determines investor’s satisfaction and loyalty (Helm, 2007, P. 33).
CredibilityThere are four facets of corporate communication,
Corporate Identity or Brand Corporate Communication
Source: Frombrum, 1996
Some commentators (van Riel & Fombrun, 2007; Van Bekkum et al., 2008) regard the emergence of reputation as a bi-product of the integration of corporate communication. So that the organizations are increasing the need to integrate their communication activities, in order to a more coherent and consistent set of messages is given to stakeholder groups.
The Corporate Reputation Chain;
Identity Retention Loyalty
Source: adapted from Davies et al. (ibid P. 76)
Davis et al. distinguish the different elements of reputation by audience; identity is the internal view of the company, which can directly link to staff retention and attracting new talent employees. Image is the view of the company held by external stakeholders (i.e. customers) and this directly links with organizational performances. Reputation is the collective term of all stakeholder views, which includes identity and image
A strong corporate reputation generates confidence in the present as well as the future of the organization and can strengthen the company’s success by;
driving profitable sales in fragmented markets
attracting, motivating and retaining talented employees
attracting capital resources and strategic business partners
facilitating entry into new markets
defining corporate financial value (market capitalization)
In the case of Baurs healthcare, the integration of communication activities to all the major stakeholders, both internally & externally will helps to establish its corporate reputation as an ethical & valued healthcare partner in the pharmaceutical industry, which gives the company an edge over its competitors in the market.
Integrated communication is a coherent approach to the development of communications in organizations in terms of streamlines the communication activities by working from a centrally co-ordinated strategic framework (van Riel & Fombrun, 2007, P. 22). Hallahan defined the integrated communication as “the coordinated use of a variety of different promotional communication tools towards a single objective”. Integration of communication involves “a total coordination of all communications for maximum message impact on a target group of customers and which includes the content and messages, channels, stakeholders and consumers, and results” (Kliatchko, 2008)
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In today’s business environment, communication plays a crucial role and mechanism in constituting organizational reputation among its stakeholders. Consequently, public scandals are a major threat to reputation because they can bring organizations into a crisis situation and create an impact on the profitability and sustainability of the company. So, the eventual role of the integrated communication is to convey a consistent message to both internal & external stakeholders in order to prevent the filtration of message in the communication flow until reaches to the end receiver. The effective integrated communication approaches foster companies to effective utilization of communication resources in order to build long term sustainable stakeholder relationships.
In fact, to be successful in today’s business environment, organizations need to integrate their corporate communication efforts, which encompass all three elements of the mix: management, marketing and organizational communication.
1.4.1 Corporate communication mix
Corporate communication is “a management function that offers a framework for the effective co-ordination of all internal and external communication with the overall purpose of establishing and maintaining favourable reputations among stakeholder groups upon which the organization is dependent” (Cornelissen, 2008)
The audiences of corporate communication could be described as below,
Source: Fill, 2011
The principle activities of corporate communication include;
There are three main categories of formal communications are performed by organizations today in relation to their key internal and external stakeholders, and these are usually explained as the corporate communication mix (van Riel, 1995) as follow,
Corporate Identity Management Process;
Corporate Identity Self Analysis Planned Cues
Management Organization &
ResearchManagement Management & marketing
Source: adapted from Fill (2002, P. 298)
Strategy Guru Grants (1996) suggests four basic mechanisms which can help integrated communications at corporate level,
Rules and Directives – procedures, rules, guidelines, standardize information and communication systems
Sequencing and process design – organizing and documenting business processes
Organizational Routines – establishing and reinforcing (education, training and documenting) routines or protocols for handling situations
Group problem solving – establishing mechanism for formal and informal cross disciplinary communication and collaboration
Different text books have described that organizations could be achieved several aims and purposes by managing an effective corporate communication. Such as,
To give substance and transparency to the profile of the “company behind the brand”
To communicate corporate identity and brand features in a way that actively supports the projection of the organizations ideal or desired identity
To mobilize internal and external support for the organization’s mission and strategic objectives
To manage risks to the organization’s license to operate and / or particular strategic plans, which may arise from withdrawal of internal / external support as a result of crisis impacting the organization’s image and reputation
In Baurs healthcare point of view, it has been identified that they used several communication tools in the corporate communication process;
Direct marketing / personal selling
Public relation activity
1.5 Benefits of integrated communication
Integrating corporate communication brings several benefits to the organization;
Preserving the corporate brand and enhancing reputation
Integrated communication can help organizations to ensure the consistency, enhance the strength and clarity of their corporate brand. When communication is integrated, the organization’s employees can effectively become its “brand ambassadors” & reinforcing the company’s desired brand image with the outside world.
Managing crisis situation
When an organization drives through a crisis situation, communicating to all of its internal, external and connected stakeholders with one voice is perhaps more critical than ever. When the communication is integrated, corporate communication professionals do not have to make decisions with blinders in a crisis scenario. So, their awareness of what is going on across the entire organization and industry becomes a critical tool for managing communication when the pressure is on to provide explanation and information in short order.
Optimizing business outcomes
The success of an organization measures in the form of achieving desired business outcomes from specific organizational goals to the enhancement of shareholder values. Development of corporate reputation is one of the main focuses of integrated communication & means it creates the competitive advantage of the company. So, competitive advantage is the strategic driver of organizations today in which to boost the performance of the organization.
Communication is always targeting towards stakeholders and it creates an interactive dialogue between the organization and its internal & external stakeholders. When the communication is integrated, all the communication channels being centrally coordinated and the engagement with customers and other stakeholders are high.
1.6 Current integrated communication practices of Baurs Healthcare
Communications is a crucial mechanism of organizations today, where different messages are exchanged among its stakeholders through a common set of symbols. A Baur & Company Ltd is a well established and diversified organization in Sri Lanka, which represents in several business / industry segments. Baurs Healthcare is a successful and emerging business subsidiary of A Baur & Company today, which holds a leading position in the pharmaceutical market in Sri Lanka.
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It is important to understand the current context of corporate communication at Baurs Healthcare in order to identify the level of integration of their communication activities. Currently Baurs Healthcare does not have specific objectives and strategy regarding the integration of communication activities in terms of improving corporate reputation, but organization uses different mix of communication tools that are targeting to establish and improve individual brand performance.
There is no formal process to manage the corporate reputation through different communication activities that are taking place. There has never been a proper management and monitoring system to channel the information or a system to generate any feedback on the ongoing direct marketing & sales promotion activities, public relation initiatives, CSR activities, sponsorships â€¦etc that they are offering to the society and the healthcare profession. And also, it is unable to see any key performance indicators are in place to monitor any form of reputational activity that takes place.
With regards to the communication practices of Baurs Healthcare, the company is moving away from mass media advertising techniques to implementation of specific, targeted and more focus direct marketing efforts. The mass media advertising was considered as viable at past, but today, the company has realized the advertising on television and other mass media channels involve high promotional budget and which gives a minimal level of direct response and engagement with their stakeholders or unpredictable target audience. In addition, according to the government rules and regulations (i.e. Cosmetic, Devices and Drugs Act. on 1980) of the pharmaceutical industry in Sri Lanka the advertising of any pharmaceutical products or brands (except Schedule 1 items) on mass media channels, including television and radioâ€¦etc is strictly prohibited. Generally mass media advertising helps organization just to establish their corporate image & reputation, nothing for brand building or brand awareness.
Today, the organization has realized to use precisely targeted promotional tools, such as direct marketing and personnel selling efforts are vital processes of Baurs Healthcare of its marketing communication system. In the case of pharmaceutical business, organizations or their representatives should have a direct & face to face interaction / engagement with the customers (i.e. healthcare professionals – HCP’s) due to the nature of product / services. So, personal selling could play a major role in terms of communicating right message to right customers. In order to maximize the effects of personal selling, the organization uses different printed promotional materials (i.e. Brand Detail Aids, Brand Reminders and Branded Complimentsâ€¦.etc) and Medical Representatives conduct a face to face discussion (medical detailing session) and interactions with the target customers (HCP’s) for their respective brands.
When it comes to sales promotion, Baurs Healthcare could implements various promotional efforts in order to achieve promotional objectives and to stimulate demand of the product among desired stakeholders. Promotions is the process where building and maintaining relationships by persuading and informing one or more target audiences. To achieve this end, organizations tend to utilize a considerable level of resources on promotional efforts and it helps to enhance relationships existing and potential customers (Pride & Ferrel, 2006). When it targets to health care professionals, such as doctors, nurses, chemistsâ€¦etc the organization uses sampling, discount / margins (wholesale margin & retail margin), special bonus schemes and free offers for bulk purchases. Sampling is one of the standard & frequently using sales promotional tools by the company with the purpose of getting them experienced & clinical exposure of their brands, when it targets to doctors. The bonus scheme & free offers are using to doctors & chemists as a short term promotional tool.
The organization currently engage with CSR (Corporate Social Responsibility) activities, such as donations, charity projects with Red Cross Association, environment protection projects, â€¦ etc in order to establish and maintain its corporate reputation. Most of CSR activities perform alone with its parent company of A. Baur & Co. Ltd at the corporate level.
Like other pharmaceutical organizations, Baurs Healthcare currently offering sponsorships to the health care professionals in Sri Lanka. The organization involves for the Continuous Medical Education (CME) of medical doctors to participate and conduct local and foreign medical meeting (i.e. Medical Conferences) and support to local professional medical associations to conduct local events and activities.
The integrated communication provides a definite backup for the effective smoothing among the operations and coordination of the organization. A greater emphasis has been given in efforts on helping people to find information and not just for communication of information. The efforts of coordination and integration of all communication activities needs to be improved by Baurs Healthcare, which helps organization to have a better financial performance in order to create share holder values and long term sustainability of the organization.
The potential to develop and establish integrated communication within the environment of Baurs Healthcare
The potential role of developing an integrated communication is to convey a consistent message to customers and other stakeholders. Today, Baurs Healthcare implements communication efforts to educate customers have not always conveyed a consistent message. Thus properly planned integrated communication strategies are required. So, effective integrated communication approaches enable organization to optimum utilization of promotional and communication resources and to build longer term sustainable customer relationship.
The potential to develop and establish an integrated communication approach is acknowledged by the concept of “Common Starting Points (CSP)” in an organization. The developing CSP functions are more important to implement and to establish an effective communication within the organization (van Riel, 1995). The concept of CSP defines the framework to implement as a solution for the challenge of balancing the flexibility and integration in the organization. In addition to CSP, organization can acquire few more approaches to establish an integrated approach of communications, such as “Common End Point (CEP)” and “Common Process Rules (CPR)” and to initiate an integrated communication a balance between centralization and decentralization of organizational integration is required (Christensen et al, 2008). This can be graphically presented as follows.
Centralization and decentralization of organizational integration,
Source: Christensen et al (2008), Emerald article: The Organization of Integrated Communications; Toward Flexible Integration. European Journal of Marketing
According to above diagram, the corporate level marketing is also another important aspect to enhance the potential of developing integrated communications (John and Stephen, 2006). The multiple exchange relationships among networks and stakeholder groups is one of key attributes of developing the corporate level marketing.
The other important aspect in this regard is temporal dimension related to relationship. So, the potential of integrated communication will depend on several factors (Christensen et al, 2008), such as,
availability of a corporate brand,
drivers supporting a corporate brand,
stakeholder expectation diversity,
current context of image (clarity vs. confusion) and
communication expertise and structural context (i.e. marketing structure, degree of centralizationâ€¦etc)
Therefore the ability to integrate the communication process is a powerful competency and it will be a fundamental in building the reputation of an organization. So, the absence of integration in the external communication process of an organization could result in obvious confusion on its corporate reputation.
Recommendations to introduce and improve integrated communication for Baurs Healthcare
This particularly section describes some recommendations to enhance integrated communication efforts at Baurs Healthcare in order to achieve successful long term business potentials. As identified and described earlier, Baurs Healthcare does not have proper strategies and action plans for integrated communication at the corporate level and below given are some recommendations as to how the organization can improve this specific aspect of the communication.
Baurs Healthcare should undergo a structural change, particularly for marketing functions in order to enhance the integration of communication efforts. Since the organization currently represent as a local distributor of several overseas healthcare providers, there is not a consistent and uniformity of their messages at the corporate level. Each agency offices work independently and communicate differently to its stakeholders according their product portfolio and services that they offer. But, ultimately whole organization (Baurs Healthcare) should position as an ethical health care provider of quality products / services at affordable prices. So, there should be a uniformity and consistency of all their communication activities alone with the corporate communication to establish the desired reputation. We would recommend creating a new position (General Manager) for corporate communication to its existing marketing structure and every communication activities of each pharma business division should process through this person and he / she could be the contact person for media or any other external audience with regards to external communication. The proposed marketing structure as follows,
A. Baur & Co. Ltd
Agri – Business
Travels & Optics
Surgicals & Diagnostics
(Marketing Managers in-charging of foreign health care suppliers / providers are reporting to the respective General Managers of each division)
As we identified earlier, today the organizational communication activities moving away from mass media channels. But we would recommend using certain type of mass media, specially print media as a communication tool. Since the organization is all about health and people, it is ideal to use certain health related medical and public journals / magazines to communicate medical articles and disease awareness articles towards HCP’s and public respectively. It helps organization to build a good image and reputation among its stakeholders.
Baurs Healthcare should take more attention to enhance public relation (PR) activities to establish and maintain mutual beneficial and meaningful relationships among organization its stakeholders. Healthcare professionals are key decision makers / endorsers in the healthcare delivery system and organization should build a good image and reputation among them. This could be facilitated by offering sponsorships to conduct local and international medical education events (i.e. local and foreign medical congresses, conferences â€¦etc) and financial support to professional organizations, such as medical associations (Sri Lanka Medical Associations – SLMA, Sri Lanka College of Physicians, Sri Lanka College of General Practitioners â€¦etc) to conduct their medical events. Since the ultimate decision maker to purchase a health care product is patients / general public, organization should implement some PR activities, such as public events (medical clinics & donations, public forum for medical education, press conferences) and community building projects to build and maintain mutual relationships with them.
Personnel selling are the most effective communication tool in the health care market today, which involves face to face discussions and interactions with HCP’s. We would recommend recruit / use qualified and competent (communication) staff (sales team) and scientific promotional materials could be designed with localized campaign (local clinical data and publications, local visuals / images / taglines) in order to add emotional appeals and practical approaches for the communication process. This enables organization to develop and maintain a strong relationship and positive reputation among its stakeholders.
Most of the current CSR activities are managing through its parent company of A. Baur and Co. Ltd. and those are not specific or relevant to the health care business. Since the parent company presenting for various business segments and stakeholders are different in the health care business, we would recommend initiating own CSR projects by Baurs Healthcare targeting to industry related projects, such as donations and financial assistance to conduct health clinics for rural and poor public, infrastructure development support for rural health systemâ€¦etc.
Today, the sales promotion has been established as one of the frequently using communication tool for most of the pharmaceutical organization in Sri Lanka. This has noted that certain organization used to practice sales promotion in unethical manner by offering unlimited bonus and free goods to persuade healthcare professionals (i.e. doctors, pharmacists & other stocking channels) to stock their brands. This led the industry to create a negative reputation among stakeholders. It is appropriate and recommending Baurs Healthcare to establish a standard bonus & free offer for each purchases & it should be properly communicated (transparent) to all the stakeholders in the industry. It is better to incorporate with their Codes of Conduct (Standards of Business Conducts) – SOPs of Sales and Promotional Activities and all employees should adhere this as an ethical practice.
The current promotional code of the company is bit old and which was established in 1990. Most of guidelines and practices that are recommended in the code are not practical and not up-to-date. We would recommend to revise and up-date the promotional code for Baurs Healthcare and it is better to get advised from industry experts and key opinion leaders related to the pharmaceutical industry. The code of conducts should cover most of specific areas, such as ethical promotions / communications, organizational integrity and transparency â€¦.etc. The designated position of General Manager – Corporate Communication should take the responsibility to revise and accountability to monitor / evaluate periodically.
Baurs should also focus attention on internal communication where the employees are one of the most powerful message transfers in the communication process. Organization should always inform and must aware to the internal staff about new initiatives and any decisions are taking by the company before it communicates to outside stakeholders. We can utilize internal communication tools, such as intranet, internal memos, notice board, regular conferences / meetingsâ€¦etc for this purpose and must settle their inquiries or objections then and there.
Reputation is one of the most crucial elements to any organization today, as it leads to long term financial performance and competitive advantage. Corporate reputation is associated with several factors and integrated communication is the most vital factor in health care business. A successful communication plan consisting of analyzing the current communication efforts, implementation and managing of communication activities, monitoring the outcomes of those activities and further developing could definitely assists Baurs Healthcare to develop and maintain a strong and sustained reputation among stakeholders.
Task 02 – White Paper (Words count: 1,850)
2.0 “Corporate branding to improve corporate reputation”
2.1 Benefits of developing corporate reputation,
Corporate reputation is an identity and recognition of the organization among its stakeholders and which gives several benefits,
Improving competitive advantage,
As described by many authors, the positive reputation can enhance the competitive advantage of the company and its brands. Good reputation will always leads to customers to identify, recognize and select the particular brand of the relevant organization over that of competitor’s brand even though they are available at the same price.
Baurs Healthcare has been established as a quality and affordable medicines providers among healthcare professionals and patients, which enhances them to identify and select Baurs medicines over the same medicines from competitors at the same price. They will also be willing to incur a premium to buy Baur’s products due to the strong reputational accolades. This will also increases brand awareness and build brand loyalty, acting as an entry barrier to new entrants and increasing pressure for existing competitors. This will le
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