Developing Insights on Branding in the B2B Context

Nikolina Koporcic, Maria Ivanova-Gongne, Anna-Greta Nyström, Jan-Åke Törnroos, Nikolina Koporcic, Maria Ivanova-Gongne, Anna-Greta Nyström, Jan-Åke Törnroos

• Publisher: Emerald Publishing Limited
• Year: 2018
• ISBN:
  9781787562776
• Topic: Business
• Subtopic: Advertising
• Index: Business

This book presents real life business-to-business (B2B) branding cases. The book deploys a theoretical-practical approach, where theoretical and conceptual frameworks related to key branding topics are supported by empirical case studies. Each case helps to illustrate the framework and discuss its applicability in practice. Through the presented exploratory case studies, the authors provide fresh examples from business practice that are easy to comprehend by undergraduate students, and are easily applied by managers in the field. The book consists of three main parts, covering important aspects of B2B branding. It presents several aspects of external as well as internal branding, supplemented by novel approaches in B2B branding. In addition, the book offers examples of best practices, as well as notable mistakes made by companies involved in branding processes. Thus, it provides a holistic perspective, which will enable companies to learn not only about best practices, but also about pitfalls in the area of corporate branding. In addition to the novel practical cases, each chapter provides relevant theoretical underpinnings presented in a simple, down-to-earth manner. The book highlights recent research areas and coming trends within B2B branding. The book is suitable for everyone with an interest in B2B branding, regardless of background or previous knowledge of branding.

Chapter 1

Value of B2B Branding

Wilhelmina Sirén, Michela Airava and Fuad Hasan Khan

Abstract

This chapter presents a short overview of core branding values and provides a description of how to capture them in a business-to-business (B2B) context. However, the reader should keep in mind that the value of branding is a broad term consisting of different aspects, which makes it challenging to capture and present them all in one chapter. For this reason, the authors have chosen to introduce diverse facets of brand identity and image, customer values, and sustainability issues, which are part of the core values of branding in a B2B context. These issues are also elaborated in more detail in Chapters 2, 5, and 10. In addition, the authors present brand-building tools for managers, such as personal selling, direct marketing, public relations, trade shows and exhibitions, as well as advertising and sales promotion. Finally, the applicability of these tools is demonstrated through the practical example of Axel Technologies and their Fuugo service.

Keywords: Brand value; corporate identity; corporate reputation; sustainability; B2B; employer branding

1.1. Introduction

A brand can be described as the distinguishing feature of the company, and the reflection of its qualities is intended to attract the customer (Kotler & Pfoertsch, 2006). A strong brand is perceived to be focused on building and maintaining strong and positive perceptions in people’s minds about the company in focus. However, the phenomenon is, according to Cretu and Brodie (2007), largely exploratory and they state that there has been little systematic testing of the topic. Until recently, the main concepts, theoretical models, and empirical research on branding were unclear, vague, and blurry as regards industrial brands. Due to the lack of sufficient research, especially in terms of corporate branding, we agree with the argument of Ind (1997, p. 2) that: “Corporate branding is one of those things that everyone believes is important, yet there is very little consensus as to what it means.”

The corporate brand is in reality the story we are told about the company, that is, the story that makes the customer prefer one company over another (Kotler & Pfoertsch, 2006). On top of obvious aspects such as the company’s history, products, and so forth, the brand includes expectations, promises, emotions, and social cues. In order to attach certain value to the brand, according to Kotler and Pfoertsch (2006), the company needs to discover what values can be demonstrated in the brand itself. A strong brand needs to intertwine the product with its identity and value and successfully convey them to the customer. The total brand equity is, in its essence, the value that the brand provides for the product or a company (Mudambi, Doyle, & Wong, 1997).

Furthermore, it is commonly argued that branding is only relevant in a business-to-consumer (B2C) context, as it based on “non-rational” behavior, whereas the B2B context is traditionally viewed as based on very rational behavior (Kotler & Pfoertsch, 2006). Products and services associated with B2B business are traditionally chosen after taking into account the “hard facts” which would be the features or functionality, the price, service, quality, and so forth. The prerequisites for this idea is that people in the process of doing business are able to form entirely objective and rational decisions, a statement that has become increasingly questionable (Kotler & Pfoertsch, 2006). This could explain why there are so many distinctive differences between rivals in a specific market who produce nearly identical services or products but yet do not even come close to each other in terms of market shares. This is true for many globally established companies, for instance, the power balance between The Coca-Cola Company and Pepsi. Many would argue that The Coca-Cola Company has a stronger and more distinguished brand which is why they are somewhat superior when it comes to market shares (Yoffie & Kim, 2011).

In addition, several of the most significant brands globally are B2B brands. Some of them are of course operating in a B2C context as well, but the main business is still B2B (Kotler & Pfoertsch, 2006). A strong brand will in many ways give value to a B2B company, as it gives to a B2C company, since the branding in itself gives the company a sense of purpose. In simple terms, the brand helps companies differentiate in the industry by sharing a story, as well as providing an identification tool for products and services (Kotler & Pfoertsch, 2006). Therefore, we can conclude that the modern view on brands and branding has overcome the skepticism and the notion of strict difference between B2B and B2C contexts. The reasons for this are the ever-expanding array of choices and the need to be different in a world where everything seems to be the same. With a valuable brand, companies can distinguish themselves from the rest of the market.

Therefore, the brand value is essentially what all companies strive for (Mudambi, 2002). In other words, companies want to be seen as valuable and also be valuable for that matter. What then does the brand mean for customers? What do potential customers value and how can the company respond and create a substantial and valuable brand offering? The aim of branding for companies in B2B contexts is therefore to optimize branding strategies in order to increase the overall value of their company, products, and services, in comparison to their competitors on the market (Mudambi, 2002). This in turn has an impact on issues such as the firm’s sustainability, brand image, reputation, and identity. These issues are further explored in Chapters 2, 5, and 10.

Increased brand value has a positive influence on B2B customer relationships. However, we need to keep in mind that some customers are far more receptive to a corporate brand, while branding is less important to others (Mudambi, 2002). In order to identify how brand value is achieved and why brand value is important for some but not all customers, it needs to be observed from different contextual standpoints, with a focus on the audience and the specific situation (ibid.). Companies need to understand their brand and what it provides for a specific context, that is how the branding affects the potential customer and customer relationship (Malaval, 2001). However, there is still a considerable amount to learn about B2B branding and how business actors can benefit from a strong corporate brand.

Furthermore, it is important to notice that there are many corporate brands that have been around for decades and also a considerable number that are new to the markets. An example of a strong corporate brand that has been around for a long time is IBM which was founded in 1924 (Kotler & Pfoertsch, 2006). However, time is not always a necessity for building a brand. According to Kotler and Pfoertsch (2006), there are also some brands that have succeeded in building a strong brand under a short period of time, such as Intel, Pentium, and grainger.com. These corporate brands can be timeless and unique, as long as they provide long-term value for the customers.

Hague (2006) suggests that branding can offer the company a different and more profitable marketing approach. In other words, branding makes a company more accessible for the customers and a strong brand can act as a differentiating resource for the company. According to Hague (2006), branding offers the company a favorable profitable stance in the market. This refers to the fact that even though companies may depend on identical raw materials, due to the branding effect, the end product may differ significantly in customers’ minds (Hague, 2006).

According to Kotler and Pfoertsch (2006), a strong brand also simplifies the decision-making process and gives the company the opportunity to have premium prices. Hague (2006) suggests that brands are important, no matter in which industry they operate. The brand is not only what a company sells, it also represents what the company actually does, and even more importantly, what the company is at its core (Kotler & Pfoertsch, 2006). In the literature of Kotler and Pfoertsch (2006), they highlight the benefits of creating brand value and loyalty. According to them, brands support a transition from a transaction-based selling, which is short term, into one that is relationship-based and long term. These statements are supported by Konečný and Kolouchová (2013). The authors argue that companies with strong brands can implement and take advantage of premium pricing of their product or service. This can, furthermore, lead to emotional connections with the customers, which then lead to the creation of loyal customers for the company. Malaval (2001) also suggests that the brand provides opportunities for the company to position itself on the market.

1.2. General Aspects on How to Build a Brand

A strong corporate brand consists of a corporate identity and a reputation. The corporate identity presents the internal aspect or a dimension of a brand (Koporcic, 2017). It is what the company represents to its partners or what the company sets out to be (Kotler & Pfoertsch, 2006). Brand identity is something that is actively constructed by strategists (Aaker, 2002). The identity itself can also be divided into more specific aspects, such as the actual identity and the desired brand identity, since what the company tries to communicate can be very different from the way people perceive the brand to be. Consequently, there is a great difference between the two. The brand identity can be understood as a long-lasting strategic asset that represents the timeless value of a brand. More information about brand identity can be found in Chapter 2.

At the same time, there is an external aspect or a dimension to a brand, presented by the corporate reputation (Koporcic, 2017). The corporate reputation is the reputation of the company (no matter its size) formed and perceived by external companies. According to Cretu and Brodie (2007), company reputation has been described as the combination of how a firm is perceived by other firms, how well the firm meets its commitments and conforms to stakeholders’ expectations, and lastly how well the firm’s overall performance fits with the company’s socio-political environment. They also mention that the company’s reputation is formed by the perceptions of all the stakeholders in the company (Cretu & Brodie, 2007). However, we would argue that the reputation is formed not only by the perceptions of current but also potential business partners, that is, stakeholders (Koporcic, 2017). Brand reputation can therefore play an important role in B2B markets, especially when it is difficult to differentiate companies from each other (Cretu & Brodie, 2007). More information about the brand reputation can be found in Chapter 5.

In addition to a corporate identity and reputation, there are some other aspects of a corporate brand that are worth examining. For instance, the way a company, through its representatives, “speaks” and “behaves” creates the brand personality. The personality can be shown to the customer by a specific writing style, specifically used colors, any specific designs or design features, and also through a person representing the brand. One example of a person who personalized a brand is George Clooney for Nespresso. A brand thus provides a value for the company through its personality, which goes even beyond the company’s products (Hague, 2006).

To understand the deeper meaning of a brand, to communicate its value proposition, and to clarify its stance, de Chernatony (2009) used the concept of “brand promise.” Whether it is a product or a corporate brand, the goal of a brand promise is to create and share a long-term value proposition that corresponds with the customers’ needs (Knapp, 2008). In other words, the brand promise consists of functional and emotional benefits that come with a brand’s product or service experience (Knapp, 2008). However, when building a brand promise, industrial companies need to be careful in order to avoid mistakes and pitfalls. For more information regarding delivering promises correctly, see Chapter 11.

According to Kotler and Pfoertsch (2006), brands are visual and sometimes even physical devices that serve the purpose of identifying and differentiating the company, service, or product from other similar offerings on the market. Therefore, when building a brand, there are aspects to consider and work through in order to achieve a functional brand approach. According to Kotler and Pfoertsch (2006), when building a strong brand, a company needs to consider the following brand elements: name, logo, tagline (or slogan), and finally the brand story. These elements, together with the brand image and reputation form the visual identity of a brand. According to Kotler and Pfoertsch (2006), the brand elements should always somehow reflect the company essence, brand personality, and corporate culture of the business in order to create integrity. They also suggest that the visual identity has to be designed with a long-term perspective, and that in order to assure the consistency of the visual identity, it is helpful for the company to define branding guidelines for the use of each brand element (Kotler & Pfoertsch, 2006). Hence, there are a few “tools” that should be considered when branding a company. It could even be said that the brand-building tools function as the “voices” of the brand. They are the means of marketing communication by which companies aim to inform, remind, or persuade customers about their products or services, either directly or indirectly. Brand-building tools, according to Kotler and Pfoertsch (2006) are personal selling, direct marketing, public relations, trade show and exhibitions, advertising, and sales promotion.

The aspect of the personal selling aligns with what the company is mostly using in its branding strategy. Personal selling is a face-to-face interaction with one or more current or potential customers with the goal to obtain buying orders. In business markets, especially with a restricted number of customers, it is far more common to sell products and services personally, that is, through direct interactions (Kotler & Pfoertsch, 2006). However, it is important to keep in mind this assertion by Hague (2006): “sell yourself first, then your company, then your product.” He also states that there is nothing like personal relationships when creating a business relationship. However, he also alerts us to potential problems, especially where personal relationships are the basis of the business (Hague, 2006). Read more about the role of branding in B2B relationships in Chapters 5 and 6.

Furthermore, branding that targets an organization’s employees, otherwise known as “employer branding” should also be considered as a strong tool for the development of a strong corporate brand. Employer branding is a commonly used term which refers to employer’s reputation and its value proposition to its employees (Barrow & Mosley, 2005). At the beginning of development of this term, there was a concept called “employer of choice.” Employer of choice was used in order to put firms in a favorable position in many ways, such as retaining a positive customer image, increasing workforce retention rates (Lenaghan & Eisner, 2005), increasing financial performance (Becker & Huselid, 1999), and higher returns for the shareholders (Shellenbarger, 1998). All these findings led to the idea of employer branding. According to Ambler and Barrow (1996), employer branding is the package of functional, economic, and psychological benefits provided by employment and identified with the employing company. A more thorough review on the perspective of employer branding can be found in Chapter 4.

Effective communication of brand values is essential in order to become fully aware of the potential of a B2B brand (Kotler & Pfoertsch, 2006). In business markets especially, the main form of brand communication is through the company’s own sales force. Personal selling is an important brand-building tool since it affects the brand reputation of the company...