Branding in B2B

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Branding in B2B Markets
Business Marketing Term Paper


CONTENTS

INTRODUCTION3
A MODEL OF BRANDING IN B2B MARKETS4
CURRENT BRANDING PRACTICES5
DIFFERENCE BETWEEN B2B BRANDING AND B2C BRANDING7
IMPORTANCE OF BRANDING IN BUSINESS TO BUSINESS MARKETING11
AVOIDING THE PITFALLS15
REFERENCES20


INTRODUCTION
With the growth of e-commerce and global competition, business-to-business (B2B) marketers are asking whether branding, especially corporate branding, can help improve their competitive position in the new economy. Although the power of branding is widely accepted in consumer markets, the nature and importance of branding in business markets is unclear and under-researched. The key question motivating the research is to whom is branding important in B2B markets. The assumption is that branding is important to some, but not all, business customers. Price and tangible attributes of products in highly competitive markets often differ only slightly. To prevent their products from becoming commodities, companies seek to differentiate themselves with service, with the company brand, and with brands at the product level. Organizational buyers have long been known to consider service and other more intangible aspects of the offer, in addition to price and product quality. To Aaker, “Many industrial purchase alternatives tend to be toss-ups. The decisive factor then can turn upon what a brand means to a buyer.” Some industrial buyers may be more receptive to branding than are others. This paper provides an exploratory study of to whom branding is important. The business literature, although limited, does include explorations of brand naming, industrial brand value, and brand equity. Brand-naming strategies were found to have mixed effectiveness. Beyond brand naming, industrial brand value is a function of the expected price, the expected benefits of the basic product, the expected quality of the augmenting services, and the brand intangibles. Brand equity as buyers' willingness to pay a price premium for a favoured brand over a generic or unknown brand; recommend the brand to peers; and give special consideration to another product with the same company brand name. Managers are willing to pay a 4–6% price premium to suppliers “whose product and service performance is likely to be superior to other vendors.” Brand loyalty is synonymous with firm loyalty. Loyalty to distributors is as important as loyalty to manufacturers. Branding is not important to all organizational buyers, or in all situations. Buyers indicate that they were most likely to choose well-known brands when product failure would create serious problems for the buyer's organization or the buyer personally; the product requires greater service or support; the product is complex; and under time and/or resource constraints. A MODEL OF BRANDING IN B2B MARKETS

A model of B2B branding rests on the assumption that branding offers customers functional, emotional, and self-expressive benefits. The next step in model development is to place branding attributes into the context of organizational buyer behaviour, and to determine to whom branding attributes are important. The model links the key aspects beginning with the recognition of a purchase need, buyer characteristics, purchase characteristics, the perception of attribute importance, the decision process, and the final choice.

Buyers consider three bundles of attributes, namely the product, the augmented services, and branding. Product attributes include price and physical product properties. Price includes aspects such as the quoted price, but also the degree of discount, payment terms, financial support, etc. Several types of augmented services are commonly evaluated, including technical support services, and ordering and delivery services. Technical support services take the form of design advice, product testing support, and troubleshooting. Ordering and delivery services include...
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