B2B Branding for SMEs in Singapore

8/14/2019 B2B Branding for SMEs in Singapore

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Debunking Common Myths of B2B Branding For SMEs

By Dr Wilson Chew, Group Principal Consultant & CEO, StrategiCom

Abstract

Looking at Singapores 2009 Enterprise-50 winners, one cannot help but notice that almost 90

per cent of these exceptional companies are B2B in nature. Yet as everyday consumers, we are

naturally more exposed to consumer brands than B2B ones. But is branding important for B2B

companies? Branding across different types of companies both B2C and B2B, is a key strategy

to achieving a vibrant SME sector and nurturing globally competitive companies.

Introduction

Branding as a philosophy of organisational change is well understood in many B2C organisations;

but this is not the case in the B2B sector, particularly among SMEs. Generally, this is due to the

misconception of corporate and product branding. Lets examine some of the most common

myths ofB2B Branding, and attempt to debunk them.

Brand Myths - Lets Debunk Them

Myth 1: Branding only for Consumer Products; NOT Services

Many B2B SMEs think that branding is for consumer products or consumer-based companies. In

a recent meeting with a successful offshore and marine company, a branding proposition was put

forward and rejected not because of the demerits of the proposition but simply because the

CEOs view was, please pleasewe are not selling Coca Cola. Obviously in his view, corporate

brand building was unnecessary.

To be successful, businesses need to invest in building a strong brand, especially B2B

companies. To Asian SME owners, branding is an emotional consumer-concept based purely on

emotional associations fueling buying decisions. In fact, scholars Cayla and Eckhardt argue that

the two major challenges for Asian brands are negative country of origin perceptions and regional

positioning being intrinsically frail. However, that provides clear opportunities for regional branding

initiatives1 . Brands can achieve a regional positioning by centering on Asian modernity;

1 Cayla and Eckhardt, 2007. "Asian brands without borders: regional opportunities and challenges". Journal: InternationalMarketing Review. Volume: 24, Issue: 4, Pg: 444 - 456. Publisher: Emerald Group Publishing Limited
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capitalising on newfound Asian pride and the confidence that the region is to propel the next wave

of the global economy.

A good corporate brand insures corporate buyers against needing to know everything before they

buy, and against post purchase risks2. In the purchasing of B2B products or services, corporate

buyers rarely know what they want in detail and which brands to choose from. A good brand

stands out3.

It is almost indisputable that a customer will pay more for a service from a reputable service

provider. Companies such as Accenture, IBM, PwC and EDS, extract greater margins than lesser

known competitors, even during economic downturns. Strong brands perform better even in the

equities market4.

Myth 2: Branding is for the Big, I am Small

Irrespective of size and resources, SMEs compete in a squarely competitive environment, filled

with fierce innovative activities, intense competition, and next generation products. This tough

and ever-changing setting provides the interface between SMEs and the need for brand

strategy5.

Perhaps, the fact that big companies such as Intel, Cisco Systems, Ingersoll and Hutchison invest

so much in building their brands may have given rise to the perception that branding is a Big-

Boys game. But it is also important to note that it is the continuous process of brand building

which has helped them become big and it continues to ensure sustainability and market position.

These companies were once medium and small 6.

2 Kapferer, 2004. The New Strategic Brand Management: Creating and Sustaining Brand Equity. 3rd Edition. Publishedby Kogan Page.

3 McDonald et al, 2001. "Corporate marketing and service brands - Moving beyond the fast-moving consumer goodsmodel". Journal: European Journal of Marketing. Volume: 35. Issue: 3/4. Page: 335 - 352. Publisher: MCB UP Ltd

4 Chew, 2007. DMG-StrategiCom Study on Brand Strength versus Share Returns Expectation. A research studyundertaken by StrategiCom and DMG.

5Krake, 2005. "Successful brand management in SMEs: a new theory and practical hints". Journal: Journal of Product &Brand Management. Year: 2005. Volume: 14. Issue: 4. Page: 228 - 238. Publisher: Emerald Group Publishing Limited.

6 Chew & Tai, 2006. Transforming Your Business Into A Brand The 10 Rules of Branding. Book published by MarshallCavendish.
http://www.strategicom.com/brand-strategy.htmlhttp://www.strategicom.com/brand-strategy.htmlhttp://www.strategicom.com/brand-strategy.htmlhttp://www.strategicom.com/brand-strategy.htmlhttp://www.strategicom.com/brand-strategy.html


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Successful branding helps to achieve brand differentiation7. Big and small companies alike must

align their value propositions and unique selling propositions into a coherent message for

perception building. Failing which, you will never be remembered.

Small companies, be it with lesser resources, must not fall into the branding is only for the big

boys trap. SMEs need to build strong brands in their own niche in order to ward off big boys.

Strong brands are built not just by the tactical marketing dollar; but must be coupled with the

collective experience of what it stands for. When SMEs dont think they need branding, they are

set on NOT being the next big story. It is likely they will continue to struggle for growth for a long

time.

Myth 3: My Customers Know Me So No Need for Branding

SMEs think that as long as their customers know them, they do not need branding. They are of

the opinion that close relationships are the be-all of sustainability. While relationships are

important to business, this pre-occupation is a trap which leads to low rate of growth. If such

attitudes are ingrained within corporate culture, companies will find it difficult to acquire new

customers, because it takes a greater effort and a longer time to build good customer

relationships8 .

A strong brand makes it easier for an SME to attract new customers. It is also common

misconception to assume that features and benefits are the factors that drive customers buying.

In reality, business buying decision is greatly influenced by the brand reputation of partners9 .

Research has shown that the real driving force behind market leadership is perceived value

neither price nor inherent product attributes. Hence, do not just bet merely on customer

relationships; build a strong brand so that prospects recognise the brand even before they meet

the brand representatives.

Myth 4: Niche - NO Competition

7Kapferer, 2004. The New Strategic Brand Management: Creating and Sustaining Brand Equity. 3rd Edition. Publishedby Kogan Page.

8 Munoz and Kumar, 2004. "Brand metrics: Gauging and linking brands with business performance." The Journal of BrandManagement, Volume 11, Number 5, 1 May 2004 , pp. 381-387(7). Publisher: Palgrave Macmillan

9 Hutton, 1997. "A study of brand equity in an organizational-buying context." Journal: Journal of Product & BrandManagement. Year: 1997. Volume: 6. Issue: 6. Page: 428 - 439. Publisher: MCB UP Ltd
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Lets start on this note; there is NO such thing as no competition. Products which are patented

and designs which are protected are targets of intellectual property breaches.

Even if an SME is the only player in its own niche, it needs to commit resources to branding

simply because no company is insulated from competition. The more attractive the niche, the

more players it will attract10.

If an SME has first-mover advantage; it must do everything to protect its market presence. When

3M first dominated the innovation" category, the company did everything necessary in

communicating that position internally and externally. Today, 3M has competitors in most of its

markets. First-movers have to start branding from inception and assume total ownership of the

niche category. Branding will enable first-movers the advantage of claiming their place in their

category and dominance in competition11

.

Myth 5: My Product Brands Drive the Business

A name and a logo are identity components of a brand; it is NOT the brand. Brands articulate

values. This encompasses all the associations, perceptions and experiences of the product,

service and the company; at every touch point from sales to billings to after-sales-service12.

Having a name to your product without it communicating certain values, promises or connotations

is futile and empty13. Nevertheless, having well-known product brands is still not sufficient. Some

SMEs fall into the trap of neglecting the corporate brand thinking that as long as their product

brands are strong, they are in good shape.

When SMEs fail to see the benefits of branding the corporation and assume that product

branding is sufficient in sustaining the company, the marketing of each new product becomes a

higher budgeted affair14. A good corporate brand helps propel products within the same group.

Confidence at a corporate level can steer confidence at a product level.

10 Redfern, 2002. "Creating Market Opportunities for Small Enterprises: Experiences of the Fair Trade Movement".Geneva, International Labour Office, 2002

11 Weerawardena et al, 2006. "Does industry matter? Examining the role of industry structure and organizational learningin innovation and brand performance. Journal of Business Research, Volume 59, Issue 1, January 2006, Pages 37-45

12 Chernatony and McDonald, 2003. "Creating Powerful Brands". Third Edition - Paperback. Published by ElsevierButterworth Heinnmann.

13 Tai, 2008. Get A Name The 10 Rules of Naming Brands. Published by Marshall Cavendish.

14 Keller, 1998. "Strategic Brand Management". Published by Pearson Education International. Edition 3. Page 433.


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Take Singtel for example. The confidence which the business brand carries also brings a sense of

confidence to the single telecommunications consumer. There are many telecommunications

providers in the marketplace but they all have varied market and user perceptions as a company.

Further, it is my personal opinion that it takes both the strength of a corporate and product/service

brand for investment attraction.

Myth 6: Advertising is Branding

It is important to note that advertising is a form of marketing and has little to do with branding15.

Branding is the process of determining the product, service or companys positioning,

differentiation and everything else necessary to determining the desired perception of its

stakeholders16. It requires an understanding of the long term goals of the organization, product or

service.

This sore misunderstanding has led SMEs into spending aimless marketing dollars directed at

promoting meaningless brands which receive negligible traction. As SMEs globalise, as much as

it is important to ask, how can we drive new sales quickly? an equally important question is,

can the market accept the brand at the desired price point?

Myth 7: Services Cant Be Branded

In packaged goods, the product is the primary brand. However, with services, the company is the

primary brand17. Successful service brands in the business community today make a case for

service branding as a cornerstone of services marketing.

A very clear and simple example is the comparison of Ernst & Young and a run-of-the-mill

accounting firm. In your opinion, which firm charges the premium and attracts the larger

customer? B2B service-centric companies that neglect the branding of their services often find it

difficult to get new customers and businesses. This results in having to provide trial services for a

lesser price. The falsehood that smaller service companies can never go for big clients is perhaps

15 Rao et al, 2004. "How Is Manifest Branding Strategy Related to the Intangible Value of a Corporation?" Journal ofMarketing. Volume: 68. Issue: 4. October 2004. Page(s): 126-141

16 Chew & Tai, 2008. Killer Differentiators 13 Rules of Growing Your Brand. Published by Marshall Canvendish.

17 Berry, 2008. "Cultivating service brand equity" Journal of the Academy of Marketing Science. Issue Volume 28, Number1 / December, 2000. Pages 128-137. Publisher Springer Netherlands.


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why smaller service firms dont bother to define their differentiation. This is a perfect formula for

borderline performance. Smaller firms can create specialist corporate brands18.

One of the critical components of a successful service brand is brand delivery. The consistency

in the quality of service is something that service companies have great difficulty trying to

maintain and sustain throughout the buying cycle. B2B services in particular are deemed to be

more difficult than B2C service companies because in the latters circumstance, a routine-selling

process can be operationalised. High value and high customization B2B services do experience

greater difficulty. By this same token, it is all the more important for high value service companies

to define their brand.

Myth 8: Products Will Move On Their Own with Reputation

This myth stems from the over-confidence that a strong corporate brand would be sufficient to

move any product or service offering. If the corporate brand and the singular product are

synonymous or if its a service company then this theory may work.

Resellers or distributors who rely on principal brands for revenue generation should seriously

consider developing their own corporate brand, proprietary product brands or augmented service

brands so that their sustainability is not placed at risk19.

Lets return to the 3M example. 3M is known as an Innovation company; creative for its new

product lines. It is also known for its huge range of B2B and B2C products. 3M has a strong

corporate brand which stems from its recent re-position statement, Innovative and Practical

Solutions from a Diversified Technology Company20. It is generally known that a 3M product

would be more readily accepted compared to a similar competing product. Albeit so, 3Ms product

range (which is very wide) is reflected in its tagline, yet each singular product has its own brand

strategy, marketing and operations-to-market teams.

Myth 9: Branding Is a Waste of Money because it cant be measured

18 Moorthi, 2002. "An approach to branding services." Journal: Journal of Services Marketing. Vol: 16. Issue: 3. Page: 259- 274. Publisher: MCB UP Ltd

19 Porter, 1998. On Competition. Published by Harvard Business Review.

20http://solutions.3m.com.sg/wps/portal/3M/en_SG/World/Wide/ visited on 22 January 2010.
http://solutions.3m.com.sg/wps/portal/3M/en_SG/World/Wide/http://solutions.3m.com.sg/wps/portal/3M/en_SG/World/Wide/


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This is the greatest and the most difficult myth to debunk because this misconception is usually

deeply ingrained in the minds of SME business owners. Brands can be measured and are

measured with various scales and measures21 . But whatever the determined methodology, the

underlying agreed understanding is that perception is whats being measured when measuring

the strength of a brand; not sales figures. The strength of a brand and its contribution to sales is

an indirect one. Strong brands make selling easier. Sales figures however, are indicators of

sales effectiveness. While it is true that tactical sales effectiveness can draw in profits for a

company, it does not necessarily mean that brand strategy is not important22.

The simple and clear truth is this: corporate buyers regularly give well-branded firms more

permission in terms of greater allowances and more opportunities than lesser-known competitors.

Corporate buyers are more likely to allow well-branded companies greater access. Any sales and

marketing person who has ever tried to see a prospect knows that when the meeting is set, halfthe battle is won23. One way corporate buyers assess whether an appointment is to be granted

is the knowledge of the existence and perception of such a company. The difference between

those that gain access and those that dont is a strong brand.

Corporate buyers place more trust in well-branded companies. Trust, an intangible quality, is

directly related to the level of brand permission (i.e. the allowance of error with little or no

penalty)24. Branding works on building positive perceptions to influence the hearts of corporate

purchasers even when they are well-informed of the product and services technical

specifications. Strong positive perceptions can draw sales, ceteris-paribas, and the company with

the stronger brandwins.

Conclusion

Just get out and sell more is a common catchphrase in many companies. What many B2B-

SMEs dont realise is that every staff in the company is involved in brand building. Every

interaction with customers contributes to the overall perception and understanding of the brand.

21

Romualdas & Gudaciauskas, 2004. "Brand Valuation Model." Journal of Business Economics and Management. Vol. 5,no. 3, pp. 143-153.

22 Webster, 2000. "Understanding the relationships among brands, consumers, and resellers." Journal of the Academy ofMarketing Science. Issue Volume 28, Number 1. Pages 17-23. Publisher Springer Netherlands.

23 Taylor, 2004. "The importance of brand equity to customer loyalty." Journal of Product & Brand Management. Volume:13. Issue: 4. Page: 217-227. Publisher: Emerald Group Publishing Limited.

24 Chew, 2010. An analysis of trust in a corporate brand in a b2b services context.


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A strong brand will deliver real business returns; although not directly. Research has also

established that there is a correlation between employee-understanding of brand values and

productivity25. This translates to stronger advocacy for the organisation and better standards of

customer service. Studies have also shown that companies with staff, who better understand the

organisation goals defined by the future of the brand, enjoy greater shareholder returns26 . The

reasons are simple. A strong, clear, well-defined brand gives focus to employees; it motivates

them and provides direction and better decision-making in the workplace. Focusing on sales and

cost cutting alone is not enough. Building a strong brand will take you further.

We have examined 9 of the deadliest myths of branding B2B SMEs. Business owners who

continue to trust in them are short-changing themselves. They are wasting new opportunities a

strong brand can bring. When a company has no brand reputation, a lowered price becomes theonly reason for deal making.

About StrategiCom

StrategiCom is a global B2B brand strategy consulting firm headquartered in Singapore with 11offices and 110 consultants & researchers around the world. The industries it serves includeInformation Technology, Oil & Gas, Petrochemicals, Commodities Trading, Business Services,Pharmaceutical, Medical & Healthcare, Transport & Logistics, Construction & Real Estate,Precision Engineering and Electronics Manufacturing. StrategiCom's consultants, researchersand proprietary methodologies provide the catalyst for companies to transform from traditionalbusinesses into differentiated brands.

http://www.strategicom.com

25Backhaus, 2004. "Conceptualizing and researching employer branding." Career Development International. Vol:9. Iss:5. Page: 501-517. Publisher: Emerald Group Publishing Limited

26 Kerin and Sethuraman, 2008. "Exploring the brand value-shareholder value nexus for consumer goods companies."Journal of the Academy of Marketing Science Issue Vol 26, No.4. Pages 260-273. Publisher Springer Netherlands.
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B2B Branding for SMEs in Singapore