Branding in the Industrial Markets: Why We Care, How We Put It to Work February 22, 2011 Shari L.S. Worthington Telesian Technology
Branding Adds Value• Branding makes the buying decision process easier• Helps reduce the risk of buying the wrong product• Adds value to a company’s intangible assets• Can create price premiums• Branding is a distinct form of DIFFERENTIATION – Do you sell commodities or solutions?
Brand Value of Top 10 65.3$B 58.7 57.1 51.6 33.7 32.1 30.9 29.4 29.2 23.6 Coca Micro IBM GE Nokia Toyota Intel Mac- Mercedes Disney Cola -soft Donald’s Benz Legend: % of B2C sales % of B2B sales Source: Interbrand 2008
Brand Functions• Increased information efficiency – Branded products have recognition value• Risk reduction – Ensure and legitimize buying decisions, since buyers often have a penchant for avoiding risk• Value-added or image benefit creation – Brand is the shorthand value image of the company• The more recognized a brand among members of the buying team, the more likely that the “hurdles” for approval will be lessened
Role of B2B Brands Secure Future Create Brand Business LoyaltyDifferentiate Differentiate Marketing Brand Risk Reduction Information Efficiency Value Added Create Increase Preferences Sales Command Create Brand Price Premium Image
Branding Triangle: Consistency Required CompanyGeneral Public Collaborators Customers
Branding Checklist: Brand Identity• Are you conveying a consistent brand identity to your target audience? (logo, colors, designs etc)• Does your brand identity accurately reflect the company/product’s key attributes?• Does your staff understand what your brand stands for and their role in delivering on your brand promise?• Do you always deliver on your brand promise?• Is your brand identity protected – do you have a set of guidelines on how the various brand elements should be used?
Branding Checklist: Brand Awareness• Is your brand easily recognized by your target audiences?• Is your brand top of mind when your target audiences consider purchasing?• Does your brand feature on all relevant marketing material?• Competitive position/market awareness – Do you understand your brand positioning in the marketplace? – Do you have a competitive edge in the marketplace? – Are you aware of potential opportunities in the market?
Branding Checklist: Competitive Positioning• Do you understand your positioning in the marketplace?• Does your brand have differentiating benefits associated with it in customers’ minds?• Do your intended customers believe your intended positioning in the marketplace?
Branding Checklist: Process• Is your organizational structure, operations and culture aligned with your brand values?• Do you review your brand and what it stands for each year?• Do you have systems in place to continually monitor your brand internally and externally
Brands Are One of the Few Opportunities to Differentiate• In a world where product offerings are getting more similar, brands can make a difference – Greater willingness to try products & services – Less time needed to close the sale after offering – Greater likelihood that a product is purchased – Willingness to pay a price premium – Less sensitivity to prices increases
Rockwell Automation National InstrumentsControl Technology Corp. SoftPLC
Consistency Across Brand-Customer Relationship Publicity PR/ Advertising Business Trade shows/ cards Presentations Innovation, Ongoing Word of Mouth R&D Relationship & Pre-Selection Referral Web Site/ Networking Web Banners BrandPublications Products and Proposals Services Technical Sales Support Purchase & Usage Collateral Experience Customer Service & Care Delivery Training Packaging Sales Product Representative Performance
Visual Identity Guidelines• Available and usable across all intended markets, such as URL• Meaningful: capture essence of brand• Memorable: distinctive, easy to remember• Protectable• Future oriented: position for growth, change, success• Positive associations• Transferrable: new products, new markets
Competing Through Branding: Buying Behavior• A recognized brand name with positive customer perception has advantage at all stages of decision making – Determine that a need exists – Determine product specifications – Acquire solution providers – Cull the bids/proposals to a short list – Evaluate the short list, or get revised proposals/bids
Competing Through Branding: Buying Behavior• ―A recognized brand name with positive customer perception has advantage at all stages of decision making‖ – Cut the short list to finalists – Presentations – Final evaluation and choice – Post purchase relationship
Defend Market Position• There will be imitators, so… – Market up — build relationships with management above the influencers to reinforce the decision process – Market down – build relationships with the lower level users of the product or service – Market sideways – build relationships in other parts of the organization to facilitate translation of the current or future products within the customer organization• Whenever there is any doubt, the customer is likely to use what they are already familiar with
InBranding: Ingredient Branding• An essential ingredient or component of a product has it’s own brand identity• Most B2B companies are single-stage marketers – Marketing efforts directed to next stage in value chain, their customers• Multistage branding is directed at two or more downstream stages of the value channel
Ingredient Branding• Goal is to create customer demand for the ingredient at the retail level so consumers ―pull‖ the product through the distribution channel – Forces middle stages to use the ingredient• ―Ingredient‖ should capture an essential part of the end product – Intel processors are the ―heart‖ of the PC
Push & Pull BrandingSales-promoting from theIngredient supplier to the Sales-promotion to the final customer B2B Customer Ingredient- Producer Supply-push Demand Supply Incentives to Pull demand creation at the B2B customer Final Product Demand pull Producer OEM Push Incentives for the demand creation of a Supply-push Demand Supply certain ingredient in Incentives for the final product demand creation Final User at the final customer