Is Your Company Overestimating the Power of Brands?
The Role of Brands in B2B Markets
The B2B market requires a very different sales and marketing approach than B2C. Yet, companies in the B2B space continue to over emphasize certain sales and marketing activities at the expense of others. This paper explores the principal problems with the current sales and marketing approach in the B2B space and identifies what’s required to improve it. Most B2B companies are committed to building a strong brand. Open any quarterly report, article, or press release and it’s there: “Building a strong brand is at the core of what we want to do. A strong brand will enable us to drive customer adoption and acceptance in the market.” The confidence in the power of a strong brand has compelled B2B executives to invest large amounts of capital in advertising, PR, direct sales, and other “brand building” functions. For instance, IBM, Ariba, and i2 recently committed $60 million to fund a massive PR and advertising effort designed to promote their ecommerce partnership. In August, 3Com announced plans to spend $100 million on an advertising campaign. Much of the effort will focus on emphasizing 3Com’s "focus on delivering functionally rich yet radically simple network solutions for businesses". The logic is that a strong brand will generate sales and customer loyalty. But what does it mean to build a strong brand, and what is the role of brands in B2B markets? Is a strong brand enough? Strong brands are important in both B2C and B2B markets, but the reasons why they are important are not the same. A strong consumer brand can compel consumers to purchase the product, prevent them from switching to competitive offerings, and make them less price sensitive. This is not the case in B2B markets. In B2B markets a strong brand will win you consideration, but in general it will not lead to purchase, to customer loyalty, or to reduced price sensitivity. The salesperson from IBM will usually...
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