B2B Brand Management

Philip KotlerWaldemar Pföertsch

October 2007

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To Brand or Not to Brand

Positive B2B Branding Decision

With holistic brand approach

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Guiding Principle

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Caterpillar

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MTU Aero Engines

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Accenture

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B2B ≠ B2C

Complexity of Industrial Products Derived Demand

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B2B ≠ B2C

Internationality

Organizational Buying

Buying Situation new task straight re-buy modified re-buy

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B2B ≠ B2C

Buying Center

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Buying stages

Stage 1: Problem recognition Stage 2: General need description Stage 3: Product specification Stage 4: Search for and evaluation of

potential suppliers Stage 5: Proposal solicitation and

analysis Stage 6: Supplier evaluation and

selection Stage 7: Order-routine specification Stage 8: Performance review

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Brand Relevance in relation to the Buying Situation and the stages in the Organizational Buying Process.

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Human Factors in Business Decisions

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Klueber Lubrication

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Airbus

http://events.airbus.com/A380/seeing/indexminisite.aspx

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Brand Influence on Buying Decision

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B2B Brand Relevance

Proliferation of similar products and services

Increasing complexity Incredible price pressures Globalization Hypercompetition Increasing Complexity High Price Pressures

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Neptune Orient Lines Limited

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Intel vs. AMD

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SAP

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Magna International

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Brand Relevance and Brand Functions in a B2B Environment.

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Importance of Brand Functions in B2C vs. B2B

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Brand Relevance According to Context Factors

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B2B Brand History

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The Role of B2B Brands

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Creating Trust, Confidence and Comfort through Branding

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Branding Commodities

Customers perceive value for commodities means lowest price.

The only distinct point of differentiation of commodities is price.

The solution for such a dilemma is:

Create a strong brand that customers know and trust

Elevated above price and feature competition.

Commodities can be branded successfully.

Examples: Acme Bricks, Tata Steel

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The Role of Emotions in B2B Branding

Rational factors are usually used only to legitimate their decisions.

Identified emotional brand attributes Be aware of decisions influenced by

emotion

Industrial brands Lovemarks examples are Caterpillar, Cessna, IBM or Zeiss

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Chapter 2 Summary 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.

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 could be brand as our examples Acme Brick or Tata Steel show.

Emotions in B2B Branding play a major role in business decisions, even they are note easy notable.

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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 communica tion measures in an effective and efficient manner.

Cemex introduced branding management to successfully place itself in Mexico, its home market, and is now expanding around the globe. The Cemex corporate brand serves as an umbrella that encapsulates the vision, value, personality, positioning and image of the company. Having been decisive in the proper development of their B2B initiatives, Cemex serves as branding role model for many companies in Latin America and throughout emerging economies

After Lou Gerstner reinvented IBM, achieving a dramatic turnaround during the 1990s, Sam Palmisano’s task was to strengthen the synergy and technology of the organization so that it would work for their customers. Palmisano’s strategy was based on a new value proposition: On Demand. The core idea was that IT systems would include customers and suppliers, information and computer resources and would be available on-demand when needed. All IBM business units were charged with delivering this value proposition. In addition, the business model was transformed into that of a service company where hardware is only the starting point of a business relation.

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 engi neer ing 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.

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Contact

Prof. Dr. Waldemar A. PförtschInternational BusinessHochschule Pforzheim+49-171-536 8998

waldemar@pfoertsch.com