Perceptual Alignment of Retail Brand Image in Corporate Branding: A study of employee perceived stakeholder alignment and effects on brand equity

Abstract: The term perceptual alignment is used in various research fields to describe the extent to which individuals share the same perceptions about an object or idea. Perceptual alignment is important from a corporate branding perspective because strong corporate brands express associations and sources of ideals that are attractive and appealing to the stakeholders related to the organisation. This expression, when aligned with the stakeholders, is assumed to create a sense of belonging to the organisation and the brand, which affects the attitudes, decisions and behaviours of the stakeholders.

This thesis examines perceptual alignment based on retail brand image from the employee’s perspective, and whether employees share the same retail brand perceptions as their perceived stakeholders involving the perceived customers, top management, colleagues, and closest manager. A strong alignment suggests a coherent brand, and the corporate branding literature assumes that strong alignment is a pre-requisite for successful corporate brand performance. However, this conceptual assumption has not been extensively examined and tested. The few existing quantitative studies that have investigated the relationship between perceptual alignment and performance outcomes have provided mixed results. This has created the need for more empirical research regarding the effects of perceptual alignment, especially related to brand performance. This study is one of the first to examine the relationship between perceptual alignment of retail brand image from the employee perspective in relation to other perceived stakeholders and the effects on internal, external and economic performance outcomes related to brand equity. This thesis labels this form of perceptual alignment as employee perceived stakeholder alignment.

The thesis highlights the development of corporate branding in the retail sector and draws primarily from two central themes: (1) the importance of alignment between stakeholders’ brand perceptions, and (2) the role of employees in the corporate brand-building process.

Based on three main quantitative studies in the retail sector, the results show that employee perceived stakeholder alignment plays an important role in strengthening the brand. The results also contribute to the general corporate branding literature, as the findings demonstrate the importance of distinguishing between two types of perceptual alignment. One type is based on current perceptions (beliefs about what the retail brand stands for today) and another based on ideal perceptions (meaningful and relevant beliefs about what the retail brand should stand for) between stakeholders. The findings show that the two types of perceptual alignment, as well as employee perceived alignment with different involved stakeholders, have varying effects on internal, external and economic performance outcomes.

On a conceptual level, this thesis shows how perceptual alignment can tie corporate branding and brand equity together into a single integrated conceptual framework of corporate brand equity, where perceptual alignment is illustrated as a multiplier. Finally, this thesis provides corporate and retail managers with several managerial implications that can be used to build stronger brand equity through employee perceived stakeholder alignment.