Marketing and selling in favourable economic conditions:

Brand management in B2B context

Series by : Prasanna perera, marketing & management consultant, chartered marketer, CIM U.K.

Article 11

Prasanna perera

When brand management is spoken about most think about Nike, Apple, Coca Cola, Starbucks, Pepsi Cola etc., In a Business to consumer (B2C) context, all organizations pay attention to brand building and management.

Is brand management relevant to B2B companies? Definitely. In fact, some of the strongest brands are business to business (B2B). Take for example Caterpillar (CAT), Intel, Dell, SAP, Boeing, Airbus, Microsoft, General Electric and Cisco systems. Hence, this brief article will address B2B brand management.

The Power of B2B Brands

Many business and industrial brands have a long history. General Motors (1908), Tetra Pak (1951), Siemens (1847), Goodyear (1898), Microsoft (1975), IBM (1924) to name a few. As in the case of B2C brands, B2B brands too provide opportunities for differentiation and the ability to charge premium prices.

The role of B2B brands can be summarized as follows: The Role of B2B Brands (Source : Kotler and Pfoertsch)

B2B brands with strong identities are able to differentiate from competitive offerings. Examples IBM, HP, Intel. This differentiation results in abilities to command price premiums and create a distinct brand image or identity. For example IBM computers command higher prices than others. Caterpillar likewise when compared with Japanese competitor brands.

Intel is a great example of a B2B brand, that has created a distinct preference. This preference acts as a barrier to people switching to competitors products.

The main goal of most B2B companies is to maximize sales revenue and profits. Hence, companies with strong brands will be able to accomplish this twin goals. Examples would be Makita and Bosch in Power Tools, Microsoft in operating systems and SAP in ERP systems.

B2B Brand Management in practice

Siemens

Is one of the worlds largest electrical engineering and electronics companies, and one of the oldest industrial brands. (Founded more than 157 years ago.) Siemens activities are focused on six key areas : Information and Communications, Automation and Control, Power, Transportation, Medical and Lighting and Business Services.

The key strengths of the brand are its power of innovation, strong customer focus, global presence and financial solidity. A few years back Siemens decided to set up several company programmes to increase the effectiveness and efficiency of its business. Within these programmes, One Siemens is an initiative focusing on innovation, customer service and global competitiveness. This strategy was to improve market penetration and drive growth in new fields by enhancing cooperation across the entire company.

Haier

Haier is an interesting example of B2B brand building in China. Haier is a diversified manufacturer of more than 80 products ranging from refrigerators, washing machines, air conditioners, cell phones and televisions.

Haier's global branding approach is to extend Haier's strong domestic brand reputation into the West by introducing innovative products for niche consumer markets and then expanding gradually. Haier now aggressively pursues a globalization strategy on several international fronts, selling to 160 countries and owning 13 factories outside China!!

FedEx

The basic principle of a general delivery service, lies at the heart of the FedEx business. Transportation, logistics and movement of goods fits the FedEx brand. The focus of the brand, though rests on what it identifies : express networks. The brand provides customers peace of mind and a sense of security. The brand promise of FedEx, is the guaranteed next day delivery, absolutely, positively.

Whilst most brands focus either on business or on consumers, FedEx keeps them both on its radar screen.

The primary target is the B2B world, but in order to ensure its leadership status, FedEx also builds the brand inside the B2C universe. Maintaining its reputation and brand image is a top priority concern and the CEO regards guarding and championing the brand as an important part of his job. Major branding decisions are made by the Director of Global Brand Management.

B2B Branding Pitfalls / Blunders

One of the most common misconceptions of branding is that companies are convinced that they own the brand. This is not true. A brand is not always what a company wants it to be. It is a promise to your customers, and the relationship customers have with the brand.

Some companies surprisingly think that brand building has some kind of domino effect once activated and successful it just keeps on going and going. Unfortunately brands do not take care of themselves. Proactive brand management is the key to success : Do not react, act.

Many businesses make the mistake of vastly overrating the importance of brand awareness. Whilst brand awareness is important, a brand also has to convey a meaningful and relevant brand message effectively targeted to reach customers and stakeholders.

Brand Management cannot be delegated to external parties. A strong and comprehensive brand approach requires a high level of personal attention and commitment from the CEO and the other senior management. The branding mantra needs to be elevated into the board rooms.

Conclusion

As you would realize by reading this article, B2B Brand Management is being practiced globally. However, there is room for improvement when compared with B2C Brand Management. In B2B brand building, the Corporate Brand is very important. The strength of the Corporate Brand needs to be leveraged to build product and service brands.

"Take B2B brand building seriously. There are fortunes to be made."

(Author)

References

Kotler, P and Pfoertsch, W., B2B Brand Management, Springer Kotler, P and Keller, K., Marketing Management, Prentice - Hall