Reputation Building on the internet

We have all seen the internet rising as a new medium of social and economic horizon. Its growth has facilitated the rise of various new business models that sell products and services through interactivity, direct exchange between sellers and vendors, and virtual co-presence. Such new business models have given rise to the least expected online business management challenges like Reputation Building.

“Institutional environment plays an important role”

So how do firms build their reputations online???

Advertising is one of the most common ways firms use in their effort to build their brand’s reputations for quality. It builds a firm’s reputation by communicating firm-centric information about their products, services or identity which in turn increases the awareness and interests of the firms with the audience.

Institutional environment plays an important role within which multiple actors constitute to building a company’s reputation. One such central actor is the MEDIA which distributes information across various channels. Mass communication research has indicated that Media has the power to influence the Public opinion by focussing the public’s attention to specific issues and ignoring others. In a similar way, industries drive the Media to cover certain brand’s more than others thus making it an important factor in building brands.

Ultimately, the value of the brand within the audience is derived from the summary and combination of communications of the past attitudes and behaviours of the brand. Therefore, the audience need time to reach synthesis and companies have incentives to compress this time; which is why they may engage in activities that enable them to leverage on others reputation. While newly public brands leverage on the reputation from their underwriters, old and/or established brands leverage through strategic partner selection. Therefore, associating brands with highly regarded actors can also help firms build on to their brand.

To be thought about..

Factors like growing information exchange among stakeholders and low cost of information acquisition on the internet help companies build their reputation online. Meanwhile other characteristics like lower entry barriers, competition and comparatively lower consumer awareness about all of the existing products and services are likely to interfere in the process of reputation building.

A synthesis of both, challenges as well as advantages makes reputation building on the Internet a source of generating an un-imitable competive advantage against firms of various dynamics who have failed to practice Branding.