Slides from B2B Branding Workshop given by Professor Brian Brown of the VCU Business School at SWaMFest VIII, held by the Virginia Association of State College and University Purchasing Professionals (VASCUPP) October 10-11 2012.
1When Does B2B Branding Really Matter? SWaMFest 2012 Dr. Brian P. Brown, Ph.D. Assistant Professor, Marketing Virginia Commonwealth University October 11, 2012
Agenda / Discussion Topics • Introduction • Does B2B branding matter? • Differences between B2B and B2C • Role of branding in B2B settings • Factors that affect branding in B2B settings • Developing B2B brand strategies • Closing Remarks and Q&A
B2B brands may not be equallyimportant to all sellers, all buyers, orin all purchase situations, but… • B2B marketers willing to invest in their brands tend to be rewarded with: – Enhanced reputations – Improved financial performance
Should B2B marketers implementdifferent brand strategies?
B2B brands serve a similar purposeas B2C brands• Reduce risk perceptions• Simplify offering selection; differentiate• Communicate benefits and value of an offering
Simply, differences between B2Band B2C begin with “How do Isatisfy my customers?”• Group buying process• Complex offerings• Nature and diversity of demand• Fewer customers, larger volumes• Long-term buyer-seller relationships
The B2B-Consumer Market Dimensions Continuum Consumer B2B Low Buying Situation Risk High Context Self-Expressive Product-Market Drivers Technological / Utilitarian Individual Purchase Decision Process Group Social Type of Risk Economic and Performance Psychological Variables Impulse Purchases Impulsiveness Rational Discourse External: Icons/Peers Reference Group Influencers External: Best-in-class Internal: Experts Product-Oriented Brand Strategy Approach Company-oriented Variables Product Product and Product Value Product and Associated Associated Imagery Services Traditional / Medium Interactive / Personal Broadcast Marketing Variables Comm. Image-Based Content Technical / Pedagogic 9Brown et al. 2007
Different forces and processes may require different approaches Case Product Market Drivers Focus Utilitarian Self-Expressive Purchase Decision Process Formal / Group B2B Consensually Agreed Needs Individual / B2C Household Private Wants Consumer FocusMinett 2002 10
B2B marketers must understandwhat FACTORS affect brandsensitivity
Brands appear to matter most when purchases are of low to moderate importanceBrown et al. 2011
Small firms more likely to rely on brand information in complex purchase situationsBrown et al. 2012
Buyers tend to place more emphasis on brands when the offering is intangibleBrown et al. 2012
What Influences B2B Brands?• B2B buyers are more brand sensitive in low and high risk situations, but not as much in moderate risk situations. – Brands serve to minimize risk (high risk situations) as well as serve as a cue for choice simplification (low risk situations) – There is evidence to support the so-called “IBM effect.”• Smaller firms more likely to rely on brand information in complex purchase situations. – Smaller firms tend to have limited resources to dedicate to information processing; brands are a mechanism for “overload”• Purchase complexity matters, especially when the offering is intangible – Brands provide a way to manage information in highly ambiguous choice situations
So, what are the implications?• Reinforce brand awareness and emphasize brand values even in low-risk purchase situations• Strong brands should highlight importance of the purchase situation and create perceptions of risk (e.g., bundle)• In complex situations, emphasize brand values when product is intangible• Emphasize brand information when communicating with small companies
Closing Remarks• Brands serve to reduce risk, differentiate, and communicate values• Brands matter in B2B contexts, but the extent depends on various factors (risk perceptions, purchase importance and complexity, offering type, customer type, market, etc.)• Be wary of how B2B differs from B2C context and develop strategies accordingly