CUSTOMER-BASED BRAND EQUITY IN A B2B SERVICE

ENVIRONMENT: THE CASE OF ERLANG SOLUTIONS

Abstract
This paper aims to address brand building in a business-to-business (B2B) context, and
particular in a Business Service company. The paper focuses on the Customer Based Brand
Equity (CBBE) model and it empirically tests the framework in the market of an Open Source
Business Service provider, named Erlang Solutions. Over the past years there has been a
considerable debate regarding the applicability of brand building initiatives in a B2B context.
The CBBE model is applicable to both a business-to-consumer (B2C) and business-tobusiness (B2B) environment. This study tests the applicability of this framework to a B2B
context, and it examines whether changes are required in a Business Services environment to
products for an Open Source language named Erlang.
1. Introduction
Brand building is becoming increasingly important for organizations in order to explain firm
value, which cannot be achieved by accounting measures alone (Keller, 2001; Aaker and
Jacobson, 2001). Organizations can achieve significant value by building strong brands and
can also achieve customer loyalty, less vulnerability, larger margins (financial performance),
long term competitive position and more favorable customer response to price changes
(Keller, 2001; Mudambi, 2002). The power of branding has been widely acknowledged in
consumer markets, but academics differ in their opinion on brand building in B2B markets.
(Kuhn et al., 2008). According to Aaker (1991), the concepts of branding and brand equity are
becoming significantly more important to decide between industrial purchasing alternatives.
Keller (2001) has developed a model to assist B2C marketers in identifying brand equity. This
model has been crossed over to a B2B context. However the power of branding in
information technology markets remain under-researched (Kuhn et al., 2008). Marketing
strategists differ in their approach on marketing B2B products (Kuhn et al., 2008). Opinions
vary widely, the importance of branding in industrial contexts has increased and brands can
increase value in such an environment (Gordon et al., 1993; Lowa and Blois, 2002; Michell et
al., 2001; Mudambi, 2002; Mudambi et al., 1997; Thompson et al., 1998). Other researchers
argue that brand building belongs in the consumer realm (Lorge, 1998) and undifferentiated
industrial products do not add much value when branded (Thompson et el., 1998). Our work
will build upon the leading branding model (CBBE) developed by Keller (1993; 2001; 2003)
and other relevant research conducted by Kuhn et al. (2008) who have applied Kellers CBBE
model to a B2B context. To date, an application of Kellers model to a High-Technology/
Open Source Software Services B2B environment does not exist, nor does a thorough
empirical study of B2B IT/ Open Source Services environment. As the latter presents a key
research gap, the purpose of this paper is to focus on B2B branding, which has been
historically applied to consumer markets (Aaker 2001) and will elaborate on the applicability
of the CBBE model to Industrial Business Services by examining a specific IT solutions
provider (Erlang Solutions). Therefore, we believe that this research will provide a strong
contribution to the relevant literature. The next section reviews the relevant literature focusing
on Kellers CBBE model. Elements of this model such as brand building and brand
associations will be tested in our empirical work that involved Erlang Solutions. That
company provides support for a specific Open Source Technology namely Erlang and it has
become a market leader for the range of solutions it provides to various market segments.
This is a unique B2B setting to examine as it involves a high evolving and dynamic

environment due to constant technological changes notwithstanding that Erlang Solutions

provides support for numerous aspects and dimensions being a solutions provider. Therefore,
we are not dealing with a basic purchasing / B2B transaction but with an ongoing and multifaceted B2B transaction.
2. BRAND BUILDING
Brand equity has been defined in a number of ways (Hoeffler and Keller 2003). According to
Keller (2009), there is some agreement that brand equity should be dened in terms of
marketing effects uniquely attributable to a brand. Due to the brand association, the outcome
can be different in the marketing of a product or service (Keller 2009). To build a brand
investment in communication, distribution and other activities are needed (Fisher et al. 2010).
Due to the variation of benefits, it is needed to see how relevant brand-building activities
compare with other investment alternatives and it is recommended that managers carefully
analyze the economic potential of brand investments (Fisher et al. 2010). Brand building
success depends on different variables, such as customers predispositions toward brands,
own management capabilities, and competitors activities (Fisher et al. 2010). Possible
benefits documented are (Hoefer and Keller 2003):
- improved perceptions of product performance and greater customer loyalty
- less vulnerability to competitive marketing actions and marketing crises
- larger margins
- more elastic customer response to price decreases, inelastic response to price increases
- greater trade or intermediary cooperation and support
- increased marketing communication effectiveness
- additional licensing and brand extension opportunities.
Benefits vary from organization to organization depending on the marketing skills, resources
and circumstances which the business operates (Hoefer and Keller 2003). When
organizations or consumers are making choices for products or services, brands and brand
management will matter to an organization (Hoeffler and Keller 2003). Therefore,
organizations and marketing teams must understand the role of brands in the customer
decision making process (Fisher et al. 2010).

2.1 Current practices in technology

High-technology companies are increasingly focused on building brand initiatives due to the
assumption of generating long-term profits (Aaker and Jacobson, 2001). Intel is a pioneer in
the high-technology sector with the Intel Inside campaign, which started in early 1990s
(Aaker and Jacobson, 2001). It started as skepticism and changed in a positive providing
enhanced margins, positive associations and sales (Aaker and Jacobson, 2001).
2.2 Kellers Brand Equity Model
Keller (1993, 2001, 2003) has developed the most comprehensive brand equity model
available in todays literature (see also Kuhn et al., 2008). According to Keller (1993), brand
equity is the effect that brand knowledge has on consumer response to the marketing of a
brand, with the effect occurring when the brand is known and when the consumer possesses
favorable, strong and unique brand associations. He has developed the CBBE model (see
Figures 1,2), which identifies four steps for building a strong brand - brand meaning, brand
responses and finally brand relationship (Keller, 2003). Subsequently these four steps consist
of the following brand-building blocks - salience, performance, imagery, judgments,

feelings and resonance, which allow a business to create a strong brand (Keller, 2003). The
overall goal of brand building is to reach the peak of the pyramid.

Source: Keller (2003)

Source: Keller (2003)

The first step of Kellers CBBE model is to ensure brand identity (Kuhn et al., 2008).
Organizations are able to achieve the right brand identity by creating brand salience (Keller,
2003). By pursuing brand salience organizations are able to achieve customer awareness of
the brand, i.e. top-of-mind and ease of recognition of the brand (Keller, 2003). B2B products
also have perceptions of value, image, associations, which are initially met by a companys
sales representative (Gordon et al., 1993). Keller (2003) focuses on individual perceptions of
brands to assess brand equity, which ignores certain influencers affecting B2B brand equity as
well (Kuhn et al., 2008). The second step involves creating brand meaning, which can be
achieved by functional (brand performance) or abstract (image-related) brand associations and
the functional attributes of brand meaning are (Keller, 2003):
- primary ingredients and supplementary features;
- product reliability, durability and serviceability;
- service effectiveness, efficiency and empathy; style and design; and price.

Image-related associations are focused one extrinsic properties such as (Keller, 2003):
- user profiles; purchase and usage situations; personality and values; and history,
heritage and experiences.

Kellers model tends to ignore elements relating to support services and the company
(profitability, market share and reputation), which are of greater importance to B2B
organizations (Kuhn et al. 2008). Quality, reliability, performance and service are of great
importance in an industrial context which Keller (2003) does not recognize, due to the focus
on consumer markets (Kuhn et al., 2008; Bendixen et al., 2004; Michell et al., 2001;
Thompson et al., 1998). Furthermore, individual perception is the focus on the CBBE model,
which ignores other influencers which can have an impact on brand equity, in a B2B context
(Kuhn et al., 2008). The third step focuses on customers responding to the brand, its
marketing activity, and other sources of information, that is, what customers think or feel
about the brand (Keller, 2003). In this step, Keller (2003) identifies six types of brand
feelings: warmth, fun, excitement, security, social approval and self-respect (Kuhn et al.,
2008). This allows organizations to focus on functional, emotional and self-expressive
benefits of brands (Kuhn et al., 2008). The fourth and final step is brand relationship, which
focusses on achieving positive brand responses, which should bring an intense, active loyalty
relationship between customers and the brand (Keller, 2003). This step has four elements:
behavioral loyalty, attitudinal attachment, sense of community and active engagement (Keller,
2001). B2B organizations rely heavily on their relationship with customers, therefore the gain
or loss of a few customers will influence the business performance strongly (Kuhn et al.,
2008). Kellers model (2003) has been further assessed on its applicability in a B2B
environment by Kuhn et al. (2008) for high-technology products. Our research will extend the
above work by conducting qualitative research within a B2B Open Source/ Software services.
The marketing of high-technology products is challenging and the use of brands has been
minimal until recently presenting a research gap we will explore further.
3. METHODOLOGY & FINDINGS
In our empirical work, we employed a qualitative case study methodology aiming to facilitate
the in-depth exploration of the case - in hand and to provide rich knowledge of a specific
context (Eisenhardt, 1989). It was supported by in-depth interviews aiming to learn as much
as possible regarding the perspective of individual participants on Kellers CBBE model
(Keller 2003). Considering that the research is explorative in nature, case study research
supports a more descriptive approach allowing for more rich insights into the research object
(Yin, 1994) notwithstanding that it has been recognised as an increasingly important type of
research (Miles and Huberman, 1984); it is also appropriate for this particular research where
detailed and sensitive information were sought by respondents. Specifically, twelve in-depth
interviews were undertaken with key informants from the following market segments: telecommunications, embedded, payments, messaging. The services that Erlang Solutions
provides emphasize the Open Source Technology named Erlang. Respondents initially
expressed confusion between the brand identity for services tailored around the technology
and the products itself. The first association of respondents is twofold: respondents
distinguish a program language and also mention consulting services, professionalism,
expertise and reliability. A brand slogan also seems of less significance to a B2B Business
Service provider. Respondents understood the reasoning behind a slogan, but denied it was of
any importance whether to choose for Business Services from this organization, or not. Thus
brand associations as portrayed in the CBBE model are of less importance in a B2B
perspective. Technical needs which show expertise are met by a highly skilled workforce and

dedicated resources for projects, which all respondents believe is of great importance for
choosing Business Services. Furthermore, respondents agree that reliability, professionalism
and ease of integration are other factors influencing their specific needs from a service and
technical point of view. Respondents also mentioned that the recent decision to offer support
services is another important factor to consider Business Services from this specific
organization. When respondents are asked about their first association that comes to mind
when mentioning Erlang Solutions, respondents are primarily focused on aspects such as
professionalism, expertise, reliability and specific product offerings. Style and design are not
mentioned as first associations by respondents. When asked about key differentiators from
other competitors, all respondents reply that there is not much competition especially if there
is a need for a functional programming language, with the capabilities of Erlang. Overall,
technical know-how, in-depth knowledge, fast time to market, lower total cost of ownership
(TCO), high skilled personnel, increased return on investment (ROI), total product offering
(from consulting, training to support) are the main drivers to opt for Erlang Solutions and
these provide key dimensions of the brand-building block of the CBBE model (see Figure 2).
Credibility matters significantly, and all respondents answer they would refer these Business
Services to other organizations. However, when a decade of experience was mentioned,
respondents seem to differ on the usefulness of it. Some respondents believe it shows the
maturity of the company and the Services provided which allows the company to be set apart,
others disagree and believe it does not add value. Respondents have a similar resonse when it
involves their opinion about the companys slogan. This is complemented as noted by
respondents via the interaction with the sales force, management and consultants. When asked
about Erlang Solutions, all respondents believe cost is an important factor. However,
respondents also note that there is also a higher risk associated when hiring a lesser-known
Erlang service provider, due to the lack of knowledge and skills. Erlang Solutions offers total
solutions from consulting, software development, training to support etc. Erlang Solutions is
therefore perceived as superior compared to other Business Service companies. Their
perception was created by discussions with both sales and technical people. Respondents
noted the capabilities for choosing Business Services offered by Erlang Solutions and the
associated benefits compared to other competitor offerings. Respondents feel that they have a
close relationship with Erlang Solutions, which shows that feelings as described in the CBBE
model are also of importance for B2B Business Service companies. Due to the technical
nature of the services provided, respondents felt interested in the technology but also to the
relationship that has developed between customer and technical and sales team of Erlang
Solutions. Moreover, respondents do mention that when it comes to making higher up
decisions the purchase process is based on the capabilities and services provided, rather then
the close relationship. Furthermore, respondents emphasized that it is important for sales
staff and technical consultants to understand the needs of the organizations. When asked
about how respondents engage with the brand, they tend to engage via its sales force,
management and consultants only as prospect customers or in the contract period. As
previously mentioned, the role of sales professional is of significance in engaging with the
brand. Respondents feel less necessity to visit the website, or follow news from a business
point of view especially when they have become customers.
4. CONCLUSIONS
This paper illustrated that the CBBE model is applicable to a B2B context especially in a
Business Services environment. Specific strengths and weaknesses of this model were
analysed and the key associations in relation to various aspects and stages of this model were
noted. We envisage that the above will prove beneficial to both academics and practitioners.

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