Branding in Business to Business Activities:


Implications, Challenges and Opportunities


 


 


Abstract


 


This study is an examination of how three business-to-business marketers have built strong brands. Each firm has arrived at its position of prominence through a different, sometimes indirect, path. The organizations provide valuable lessons on how to build powerful and enduring business-to-business brands.


This study seeks to examine five key areas of business-to-business branding: Brand architecture, Cobranding, Development, Integrated brand communication and in measuring success of branding activities.


This proposed study shall utilize the benchmarking methodology created by the American Productivity & Quality Consortium. The APQC consortium benchmarking methodology was developed in 1993 and serves as one of the premier methods for successful benchmarking in the world. It is an extremely powerful tool for identifying best and innovative practices and for facilitating the actual transfer of those practices.


 


Introduction


Sellers in all product categories, from raw materials to highly engineered machinery, have approached the Internet reluctantly. Because business-to-business (B2B) e-marketplaces initially focused on attracting buyers, low prices naturally took priority over cost savings and growth opportunities that could benefit all participants in the marketplace. The prevalence of reverse auctions, in which sellers try to underbid one another to win particular orders, shows how strongly this ultracompetitive way of thinking has taken root in today’s economy.


From a seller’s standpoint, B2B marketplaces not only offer advantages but also embody some of the Internet’s least attractive tendencies. By efficiently matching sellers and buyers, these marketplaces take costs out of the supply-and-demand chain and increase the market’s efficiency, particularly in the high-volume trading of commodities such as chemicals, metal, and paper (Baumgartner, Kajuter, and Van, 2001). Since customers of B2B marketplaces tend to focus on getting the best price, sellers face cutthroat competition and pressures to standardize products so that they are more directly comparable to the competition’s–thus diminishing the distinctiveness of the brand. B2B marketplaces also erode the direct relationships that sellers had with their customers.


Convinced that visitor volume was the key to attracting investors and advertisers, most business-to-consumer (B2C) Internet start-ups spent heavily on branding, on high-impact public relations, and on innovative techniques such as viral and affiliate marketing. These efforts did boost the growth of start-up e-businesses in the short term, but few of them have been able to convert a solid proportion of surfers into buyers and first-time buyers into repeat ones (The McKinsey Quarterly, 2001).


For many business-to-business organizations, branding historically has been an uncomfortable subject (Schultz and Schultz, 2001). Such firms traditionally have been managed on the basis of the four P’s of marketing: product, price, place, and promotion. Organizations felt that if they built superior products at a low cost, managed the sales and distribution channel well, and promoted the product line, they would achieve marketplace success. Indeed, this has been the hallmark of marketing management for nearly 50 years. Senior management in business-to-business organizations apparently believed that all business purchasing decisions are rationally based. They feared that brand building was a topic suitable only for makers of toothpaste, automobiles, or luxury apparel; it was too emotional, too soft, or too squishy for products that sold through a buying process considered rational.


In recent years, however, a number of factors have contributed to changing this traditional point of view. Firms find it difficult to stand out among a crowded field of companies offering similar and increasingly commodified products and services (APQC, 1998). In many cases, the four P’s are no longer the key to sustainable competitive advantage. In fact, they now are simply the table stakes every company must leverage to simply stay in business (APQC, 1999). Furthermore, the advent of interaction and the Internet encourage a recognized name that is linked to specific capabilities, values, and competencies. And there has been considerable interest in how brand strength translates into increased shareholder value through enhanced cash flows, reduced costs, increased customer retention, and enhanced asset value (APQC, 2000).


Several studies have investigated differences between goods and services advertisements, but no research has examined differences between business-to-business services advertising and consumer services branding in advertising (Kelley and Turley, 1997). The lack of research examining the branding of business-to-business services advertising is surprising because the selection of effective message content strategies is critical to advertising’s success. A survey of advertising professionals indicates the branding of a business is the single most important influence on the success of a service advertising campaign (Korgaonkar, Bernhardt, and Bellenger 1986).


This study is an examination of how three business-to-business marketers have built strong brands. Each firm has arrived at its position of prominence through a different, sometimes indirect, path. However, each has a compelling story of how they grappled with the difficult issues of brand strategy, positioning, brand communication, and results measurement in an industrial or technological context. The organizations provide valuable lessons on how to build powerful and enduring business-to-business brands.


 


Literature Review


Much has been said about the importance of brand management in an increasingly fragmented media marketplace and the tremendous impact of the Internet on traditional media such as those in business to business firms (McDowell & Batten, 1999; Chan-Olmsted & Kim, 2001; Lin & Jeffres, 2001; Owen, 1999). In essence, the exponential growth of the Internet and the continuous development of its broadband distribution systems have changed the rules of competition in many media industries that were already being transformed by the arrival of more competitors, such as multi-channel video programmers, and the introduction of new technologies, such as digital television.


Many scholars (Ainscough & Luckett, 1996; Griffith & Palmer, 1999; Cronin, 1996; Ranchhod & Gurau, 1999; Van Doren, Fechner, & Green-Adelsberger, 2000) have presented extensive lists of the strategic value of the Internet. Most concluded that the Internet allows a business to access global markets, provides mass customization, reduces marketing costs, builds strong business relationships with a greater degree of channel coordination, develops business intelligence, offers heightened communication with various publics to improve corporate image, and improves customer communication and service. In essence, the value of the Internet seems to rest largely on its capabilities to execute marketing and communication functions better than more traditional media and marketing systems.


Traditionally, business-to-business organizations have been highly product-focused, with less focus on brand identity. In such organizations, marketing activity was often spread across a wide, disparate line of products and services, with little forethought given to creating a unifying or enduring identity in the minds of customers. As was mentioned earlier, in recent years a number of leading business-to-business marketers have begun to reconsider the importance of branding in commercial and industrial markets (APQC, 2000). At the same time, they have recognized the critical link that must be maintained between the firm s branding strategy and its overall business strategies. Frequently this has led to redefining the relationship among corporate, divisional, and product-level brands (brand architecture). Such changes have important implications for the roles and responsibilities of those who are tasked with brand identity management (APQC, 2000).


Business-to-business marketers increasingly are joining with other organizations to leverage the value of their brands (APQC, 1999). This might be done through joint marketing alliances, market development partnerships, or cobranding relationships. Best-practice organizations have pursued cobranding relationships of all types more aggressively and successfully than have the sponsor firms.


In the 1998 study Brand Building & Communication: Power Strategies for the 21st Century, one of the most important characteristics that differentiated best-practice organizations from sponsors was the extent to which the partners had articulated a clear, concise, and compelling statement of the brand s essential value proposition or promise.


A key challenge facing branding organizations is how to project a consistent, coherent, and compelling brand identity using an expanding list of offline and online communication tools. Such firms are faced with coordinating brand messages across different communication functions and venues (advertising, public relations, trade exhibits, sales literature, online efforts, etc.) and must ensure that messages from different levels and divisions portray the brand appropriately and consistently (APQC, 1998). Increasingly, smart business-to-business marketers are not stopping at communicating the brand s values and attributes only to customers and prospects (APQC, 1999). Rather, they recognize the importance of internal brand communication.


 


Conclusion and Research Agenda


Business-to-business organizations face a variety of challenges that distinguish their marketing activities from those of their consumer counterparts. They often face long buy-in periods and complex buying processes in which purchasing decisions are ostensibly made using only rational, objective criteria. Furthermore, rapidly changing technology means that products may be obsolete within a few weeks or months of leaving the factory floor. Perhaps most daunting of all, some firms have a traditional managerial mind-set focused on products, production, and distribution rather than creating perceptual value in the minds of customers.


In spite of the unique nature of commercial and industrial marketing, brands are built in the business-to-business arena in much the same way as they are established in the consumer marketplace. Branding is about establishing trust and creditability. Strong business-to-business brands create an intellectual and emotional bond with customers, prospects, end users, channel partners, employees, and other stakeholders. And strong business-to-business brands are clearly delineated from their competitors.


This study sought to examine five key areas of business-to-business branding.


1.Brand architecture- how best-practice organizations balance and manage corporate, divisional, and product brands and leverage brand equities across the organization


2. Cobranding- how business-to-business organizations build brand value through initiatives such as ingredient branding, licensing, composite branding, and sponsorships


3. Development of the brand-value proposition or brand promise- how business-to-business firms use tools and processes to distill the brand to its essential values and articulate a memorable and compelling brand promise to external and internal audiences


4. Integrated brand communication- how leading practitioners plan, budget, and execute brand communication programs across the full spectrum of communication venues to customers, prospects, employees, investors, and other relevant stakeholders


5. Measuring success- how organizations monitor brand equity and determine the return on investment of their branding activities


 


Methodology


This proposed study shall utilize the benchmarking methodology created by the American Productivity & Quality Consortium. The APQC consortium benchmarking methodology was developed in 1993 and serves as one of the premier methods for successful benchmarking in the world. It is an extremely powerful tool for identifying best and innovative practices and for facilitating the actual transfer of those practices.


Phase 1: Plan


The planning phase of the study began in the spring of 2000. During that period, an expert panel was assembled and polled to identify organizations that were believed to have demonstrated excellence in one or more of the five areas of the study’s focus. Each identified companies will invited to participate in a screening process. Based on the results of the screening process, as well as company capacity or willingness to participate in the study, the final list of


three partners will be developed. Finalizing the data collection tools and piloting them within the sponsor group shall conclude the planning phase.


Phase 2: Collect


Two tools will be used to collect information for this study.


1. Detailed questionnaire- quantitative questions designed to collect objective,


quantitative data across all participating organizations


2. Site visit guide- qualitative questions parallel the areas of inquiry in the detailed questionnaire, which serves as the structured discussion framework for all site visits. All partners and sponsors shall complete the detailed questionnaire.


Phase 3: Analyze


After the two phases, the research shall use both the quantitative and qualitative information gained from the data collection tools. The analysis shall concentrate on examining the challenges organizations face in managing, leveraging, communicating, and tracking their brand and the policies and processes that appear to be associated with successful branding practices.


 


Action Plan


           


Timetable


Target Result


Targets and Checkpoints


4-5 weeks


Completion of Proposal


Revisions, Approval, and Change of Topic


6 weeks


Completion of Review of Literature and Methodology


Data gathering difficulties


2 months


Data Gathering, Survey Completion, Tabulation and Interviews


Accommodation from the 3 organizations in terms of questionnaire and interviews. Lack of Resources


2 months


Completion of Analysis, Findings and Result; Completion of Summary, Conclusions and Recommendations


Possible delay from the completion of tabulation of data


 


Resource Requirements


Financial Requirements. Travel expenses shall be the foremost financial cost of this research. Moreover, the tokens that shall be given to the respondents and interviewees shall also account for some cost of the project. Estimated cost for the tokens shall be U0 while transportation cost is estimated at U.

Materials Requirements. The books, journals and articles needed in this study shall mostly come from the library. Moreover, some books unavailable can be bought on bookshops. The cost allocated for this is U0. Moreover, the photocopying and paper requirements for the paper shall cover some U.


Technical Requirements. Computer usages, internet usages and the use of the Statistical Package for Social Sciences (SPSS) software that will be used for the statistical analysis. shall be pegged at US50.


 


References


 


Ainscough, T.L., & Luckett, M.G. (1996). The Internet for the rest of us: Marketing on the Word Wide Web. Journal of Consumer Marketing, 13(2), 36-47.


 


APQC. (1998) Integrated Marketing Communication. Marketing and Sales Strategic Alliances.


 


APQC. (1999) Brand Building & Communication: Power Strategies for the 21st Century. Internet Marketing and Sales Strategies.


 


APQC. (2000) Leveraging Customer Information: Driving Strategic Direction and Marketing Profitability). Brand Building & Communication: Power Strategies for the 21stCentury is the


 


Baumgartner, T., Kajuter, H. and Van, A. (2001) A seller’s guide to B2B markets. The McKinsey Quarterly.


 


Chan-Olmsted, S.M., & Kim, Y. (2001). Perceptions of branding among television station managers: An exploratory analysis. Journal of Broadcasting & Electronic Media 45(1), 75-91.


 


Cronin, M.J. (1996). The Internet strategy handbook: Lessons from the new frontier of business. Boston: Harvard Business School Press.


 


Griffith, D.A., & Palmer, J.W. (1999). Leveraging the Web for corporate success. Business Horizons, 42(1), 3-10.


 


Kelley, S. and Turley, LW. (1997) A comparison of advertising content: business to business versus consumer services. Journal of Advertising, Vol. 26.


 


Korgaonkar, Pradeep, Kenneth L. Bernhardt, and Danny N. Bellenger (1986), “Correlates of Successful Advertising Campaigns of Services: A Survey of Advertising Professionals,” in Creativity in Services Marketing: What’s New, What Works, What’s Developing, M. Venkatesan, Dianne M. Schmalensee, and Claudia Marshall, cds, Chicago: American Marketing Association, 108-110.


 


Lin, C.A., & Jeffres, L.W. (2001). Comparing distinctions and similarities across Web sites of newspapers, radio stations, and television stations. Journalism and Mass Communication Quarterly 78(2), 555-574.


 


McDowell, W., & Batten, A. (1999). Branding TV: Principles and practices. Washington, DC: National Association of Broadcasters.


 


 


Owen, B. (1999). The Internet challenge to television. Cambridge, MA: Harvard University Press.


 


Ranchhod, A., & Gurau, C. (1999). Internet-enabled distribution strategies. Journal of Information Technology, 14, 333-346.


 


Schultz, H. and Schultz, D. (2001) B-to-B Branding: Building the Brand Powerhouse 2001 APQC. This Best-Practice Report is based on a multiclient benchmarking project by the American Productivity & Quality.


 


The McKinsey Quarterly. (2001) Virtually solvent.


 


Van Doren, D.C., Fechner, D.L., & Green-Adelsberger, K. (2000). Promotional strategies on the World Wide Web. Journal of Marketing Communications, 6, 21-35.


 


 



Credit:ivythesis.typepad.com


0 comments:

Post a Comment

 
Top