What role do brands (or ingredient brands) play in business markets?
Branding has always been more acknowledged in consumer markets than in business markets. The latter has not received much attention in terms of the influence of brands on decision-making process because of the complexity of its environment. In B2C, products are more standardized, mass marketing is used and the relationship between buyer and seller is impersonal. On the other hand, B2B uses a more personal relationship between the buyer and salesperson, decisions are made by a group of members, products are more complex and customized and therefore rely on personal selling for their communication. Rather than end consumers, the focus of B2B is to understand and meet the needs of other businesses. According to de Chernatony & McDonald’s (2003): a brand is a cluster of functional and emotional benefits that extend a unique and welcomed promise. While some studies found brands to cause confusion for buyers in business markets (Saunders & Watt, 1979), more recent ones suggested that brands play a fundamental role in the decision making process and should be considered amongst the different attributes that influence purchase decisions (Sweeney, 2002; Mudambi, 2002). As one manager interviewed in Mudambi’s (2002) study said, “Branding may not be important to everyone, but as long as it is important to some of our customers, we want to know about it”. Hence, the role of brands in business markets has varied greatly in the past years and its degree of importance is constantly changing. This is mainly the consequence of the increased competition in business markets and the need to differentiate. Other changes in the business environment, which have lead to the higher interest in B2B branding, are the increase of the homogeneity of product quality and the decrease of personal relationships due to digital communications (Baumgarth, 2010). It is essential to look at branding in business markets because organizational buyers go beyond aspects such as price and product quality to make their decision. For this reason, the question we are going to evaluate in this paper is: what role do brands (or ingredient brands) play in business markets? We are going to study this by analyzing the findings of different authors: brands’ positioning function, their role of communicators in business markets, and their stimulus of new market opportunities.
Problems with B2B branding:
The complexity of the B2B structure in the decision-making process has lead many to believe that the role branding is less influential than in consumer markets: its influence in organizational decision-making has been characterized as limited. When deciding to make purchase decisions, branding only had a relative importance of 16%. Other attributes such as delivery period (27% relative importance), technology (19%) and availability parts (14%) were found to be more important (Bendixen, Bukasa & Abratt, 2004). Aaker (1991) and Abratt (1986) found that quality was one of the top standards for buyers when making decisions on purchases. Industrial markets revolve around a more complex setting; there is more than one person involved in the purchase decision meaning there is usually a group of members each with different interest in the purchase decision to be made. According to Narayandas (2005) in KONE’s Monospace Launch in Germany, decision makers such as architects, designers, engineers and contractors all have different roles when making their purchase decisions because each of them is focused on responding to his different needs. Kone’s successful launch of MonoSpace in Germany illustrates the advantage of communicating each specific benefit to the decision maker in question. After evaluating the relative importance of attributes to each role player in the decision making unit, it was found that technical specialists...
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