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Philip Kotler

Waldemar Pfoertsch
Oct. 2006
Establishing a B2B Brand
 Establishing brands in a B2B environment is different from
branding to the general public. The role and the mechanism of
an industrial brand strategy have to be more focused than those
pursued and implemented in consumer markets.
 The main difference between B2B and B2C markets can be
found in the nature and complexity of industrial products
and services, the nature and diversity of industrial demand,
fewer customers, larger volumes per customer, and last but not
least, closer and longer-lasting supplier-customer-relationships.
 A holistic branding approach is required, that everything
from the development, design, to the implementation of
marketing programs, processes, and activities is recognized as
intersecting and interdependent.
 The buying situations of B2B companies can be broken down
into three recurring types: the straight re-buy, modified re-buy,
and new task.
Establishing a B2B Brand
 The members of the buying center can be classified
according to their role in the buying decision: the user, buyer,
decider, and influencer. They all have to act considering the
complex influential dimensions on and in the buying center.
 An organizational buying process can encompass the
following stages: problem recognition, general need
description, product specification, search for and evaluation of
potential suppliers, proposal solicitation and analysis, supplier
evaluation and selection, order-routine specification,
performance review.
 Interpersonal and individual factor of the buying center
members are human factors in business decisions.
 Establishing B2B brands encompasses creating trust,
confidence and comfort for all partners in the buying process
 Even commodities can be branded as Tata Steel has done it
Guiding Principle
To Brand or Not to Brand
 Brands cannot be created over night. The decision
to brand a product, line of products, or company needs
to be based on evidence that brands do actually
matter in the respective area.
 The environment for establishing and managing
brands is complex and dynamic. Brand management
is challenging – whether you are in the consumer
goods, services or industrial products sectors.
B2B Branding Decision
 Branding is just as relevant in B2B as it is in B2C. Brands
like Microsoft, IBM, Intel, Dell, SAP, Siemens, Boeing are
vivid examples of the fact that some of the world’s
strongest brands do exist in B2B.
 Branding is not about stirring people into irrational buying
decisions – it is rather an effective and compelling
means to communicate the benefits and value a product or
service can provide.
 Branding is about taking something common and
improving upon it in ways that make it more valuable and
meaningful.
 Trusted brands act as touchstones, offering orientation
the flood of information, and many other benefits and
advantages to buyers.
 A brand is much more than a product, a brand name, a
logo, a symbol, a slogan, an ad, a jingle, a spokesperson;
these are just tangible components of a brand – not the
brand itself!
B2B Branding Decision
 “Brand” comprises various aspects. A brand is a promise,
the totality of perceptions – everything you see, hear,
read, know, feel, think, etc. – about a product, service, or
business. It holds a distinctive position in customer’s minds
based on past experiences, associations and future
expectations. Branding should always start at the top of
a business. Building, championing, supporting and
protecting strong brands is everyone’s job, starting with the
CEO.
 Brands do pay off. Companies with a strong brand can
benefit tremendously from it.
 The most important brand functions in B2B are increased
information efficiency, risk reduction and value
added/image benefit creation.
Branding Dimensions
 Stop underestimating the power of brands in B2B!
Branding should be the thread running through the subject
of Marketing.
 Make a consistent impression with all your stakeholders
at every single point of interaction, and do not forget that
one of the most important things in B2B brand
management is to reduce complexity for the customer.
 Build a strategic brand architecture that supports and
enhances the type and nature of your company and
distinguish between Corporate, Product, and Family
Branding.
 The most common brand strategy in B2B is a corporate
brand in combination with a few product brands. But also,
Ingredient Branding as a form of multi-stage branding,
becomes increasingly relevant for supplies and OEMs.
Branding Dimensions
 The major communication instruments in B2B are
Direct Sales, Direct Marketing, PR, Specialized Press,
Sponsorships, Trade Shows and Exhibitions, Advertising,
Sales Promotion, and E-Marketing.
 It is essential for every brand to implement a
comprehensive and adequate measurement system to
gauge and guide brand success.
 It is crucial to effectively communicate the values of
your brands to your own people.

 Online Branding is a crucial part of B2B brand building.

 Building Brand through Word-of-Mouth is a common


approach in the industrial world. Recently, this old
fashioned method has been enhanced by Internet
technology called Weblogs (blogs)
Acceleration through Branding –
 The brand building process consists of brand planning,
brand analysis, brand strategy, brand building, and brand
auditing.
 Brand building starts with understanding the key
attributes of your products and services as well as
understanding and anticipating the needs of your
customers.
 Mastering brand stability, brand leadership, and
international presence calls for a structured sequence of
the brand building process.
 The power of a brand lies in the customer mind set –
brand equity is therefore a vital strategic bridge from the
past to the future and a set of stored values that consumers
associate with a brand. These associations add value
beyond the basic product functions due to past
investments in marketing the brand and they are captured
in the Customer-Based Brand Equity (CBBE) model.
Acceleration through Branding –
 Brand analysis helps to define and formulate a proper
brand mission, define a brand personality and set brand
values..
 Branding refer to the indispensable conditions that precede
successful branding: Consistency, Clarity, Constancy,
Visibility, and Authenticity.
 Brand strategy consists of developing a strong mission,
positioning, brand promise, and value proposition.
 Successful brands don’t just sell products; they
communicate clear values stretched across a number of
products.
 A key element of success is the framing of a harmonious
and consistent brand architecture across countries and
product lines, defining the number of levels and brands at
each level.
 Brand auditing seeks to measure the strengths and
weaknesses of a brand and the overall brand portfolio.
Success Stories
 Without the living proof that branding efforts in B2B
can be successful some business companies would
probably never think of creating brands themselves.
 Although no company can be successful by imitating
the brand management of another business it can gain
valuable information and hints for their own brand.
 Important questions related to the point of
differentiation, factors of success, and even
similarities can be answered.
Success Story Summary
The selected B2B brand cases demonstrate that brand
building in its various forms supports corporate success in a
dramatic, measurable way. After establishing a seamless,
reliable express delivery worldwide, FedEx focused on
developing its corporate image and reputation.
Maintaining its superior brand image was the top priority
only next to establishing a brand house for sustaining their
competitive advantage.
 Samsung successfully followed a one brand strategy by
establishing one global value proposition with an
emotional approach to increasing brand image for their
B2C products and transferring that image back to their B2B
business areas. Samsung also followed a pre-emptive
investment strategy to comply with innovative consumer
demand and applied communication measures in an
effective and efficient manner.
 Siemens’ new value proposition and business organization
Siemens One, with focus on cross-business leverage, proved
that cross-business communication works. This new brand-
minded leadership transformed the world’s largest electrical
engineering and electronics companies, and one of the oldest
industrial brands to a corporate power house through cross-
selling initiatives.
 Lenovo’s attempt at building a global brand from China was
successful after the integration of the IBM PC division. By
overcoming cultural barriers and streamlining operational
processes, Lenovo filled its brand image with new values. The
possibility is strong that Lenovo will define new product
categories and expand its brand leadership into new regions in
the near future
 Tata Steel has fulfilled its set corporate goals and has been very
successful in branding commodity steel in India. By
segmenting, focusing, and streamlining operations, Tata has
become the preferred supplier in the region. The next big
challenges are already on the horizon; global reach with global
branding.
Branding Pitfalls
 Branding in general is a delicate matter. Branding
in B2B can be even more delicate if one doesn’t
understand what it is all about. There are some
general pitfalls generated by common
misunderstandings related to branding.
 It is important to take careful and well considered
actions related to brand management.
 Brands are just as fragile as they are profitable if
well managed.
Beware of Branding Pitfalls
Pitfalls in B2B branding are unlikely to be anticipated by
newcomers to the branding effort. Beware of the following pitfalls
in order to ensure that branding initiatives will reap results.
 One of the most common misconceptions of branding is that
companies believe that they “own” the brand. No matter what
the business and its corporate executives would like their brand to
be, brand reality is always defined by the customer’s view.
 Some companies think that brands take care of themselves. If
companies let their brand asset deteriorate, the overall company
performance can suffer. We recommend proactive brand
management through brand differentiation or pure re-branding.
 A company may not have their priorities set if it is overrating the
importance of brand awareness instead of focusing on brand
relevance. Managing touch points and messages effectively and
targeting the right customers and stakeholders can assure efficient
use of funds and management time.
 Many businesses mistakenly base their branding strategies
solely around the internal image of their brand. This
type of wishful thinking may lead to lack of objectivity.
By gaining customer input, it can determine the current
brand image, and also discover what is needed to do to
make the brand more relevant.
 Advertising agencies and consultants may do their job
by assisting in developing a holistic brand approach but
the company should determine its own brand identity.
The essence is to learn from failed branding efforts of
B2B companies that jumped into branding without
considering the whole range of brand creation and
steering
Future Perspective
In our constantly changing business environment of new
technologies, globalization and market liberalization, alert
companies are presented with great opportunities. Winning
companies will disrupt old practices and initiate new ones to exploit
major trends. The following trends should be watched and
incorporated into your company’s thinking and business action:
 B2B branding and brand management will become increasingly
important, and the future of brands is the future of business, probably
the only major sustainable competitive advantage. Companies that
are going in this direction are on the right track.
 Branding and social responsibility seeks to create a just and
sustainable world by favoring companies that promote more
responsible business practices, innovation and collaboration.
 Branding in China is in a stage of leap-frogging into the world
market. For decades, China has enjoyed a dominant place in world
manufacturing because of its low-cost labor. Chinese businesses
today are pursuing aggressive branding strategies involving internal
growth or acquiring foreign brand icons and managing them. Both
approaches could lead to world success.
 Design and branding are increasingly important tools for
differentiation. Relevance, simplicity, and humanity – not
technology – will distinguish brands in the future.
To be successful in the B2B world, a holistic branding
approach is required. It should cover everything from the
development and design, to the implementation of marketing
programs, processes, and activities that are intersecting and
interdependent. Marketing and brand management will be
critical to a company’s success in the future.
Marketing Advantages of Strong Brands

 Improved perceptions of  Elastic consumer response


product performance to price decreases
 Greater loyalty  Greater trade cooperation
 Less vulnerable to  Increase in effectiveness of
competition Integrated Marketing
Communication
 Less vulnerable to crises
 Licensing opportunities
 Larger margins  Brand extension
 Inelastic consumer opportunities
response to price increases