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Business-to-Business Branding: Building the Brand Powerhouse

  • ID: 40878
  • Report
  • July 2001
  • 213 pages
  • American Productivity & Quality Center, APQC
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For many business-to-business organizations, branding historically has been an uncomfortable subject. Such firms traditionally have been managed on the basis of the four “P’s” of marketing: product, price, place, and promotion. Organizations felt that if they built superior products at a low cost, managed the sales and distribution channel well, and promoted the product line, they would achieve marketplace success. Indeed, this has been the hallmark of marketing management for nearly 50 years. Senior management in business-to-business organizations apparently believed that all business purchasing decisions are rationally based. They feared that brand building was a topic suitable only for makers of toothpaste, automobiles, or luxury apparel it was too emotional, too soft, or too squishy for products that sold through a buying process considered rational.

In recent years, however, a number of factors have contributed to changing this
traditional point of view. Firms find it difficult to stand out among a crowded field of companies offering similar and increasingly commodified products and services. In many cases, the four “P’s” are no longer the key to sustainable competitive advantage. In fact, they now are simply the table stakes every company must leverage to simply stay in business. Furthermore, the advent of interaction and the Internet encourage a recognized name that is linked to specific capabilities, values, and competencies. And there has been considerable interest in how brand strength translates into increased shareholder value through enhanced cash flows, reduced costs, increased customer retention, and enhanced asset value. This study is an examination of how eight business-to-business marketers have built strong brands. Each firm has arrived at its position of prominence through a different, sometimes indirect, path. However, each has a compelling story of how they grappled with the difficult issues of brand strategy, positioning, brand communication, and results measurement in an industrial or technological context. The organizations provide valuable lessons on how to build powerful and enduring business-to-business brands.

Twenty-two companies participated in the study. Among them were 14 sponsoring
organizations that helped shape the areas of inquiry and select which companies would be asked to host site visits. The remaining eight organizations participated in the study as partners. These firms had been identified through expert research as leading practitioners in one or more of the five focus areas. Partners provide the best-practice benchmarks against which sponsors can examine and compare their own branding practices and policies.

Focus of Study

This study sought to examine five key areas of business-to-business branding.

1. Brand architecture-how best-practice organizations balance and manage corporate, divisional, and product brands and leverage brand equities across the organization

2. Cobranding-how business-to-business organizations build brand value through
initiatives such as ingredient branding, licensing, composite branding, and

3. Development of the brand-value proposition or brand promise-how business-to-business firms use tools and processes to distill the brand to its essential values and articulate a memorable and compelling brand promise to external and internal audiences

4. Integrated brand communication-how leading practitioners plan, budget, and execute brand communication programs across the full spectrum of communication venues to customers, prospects, employees, investors, and other relevant stakeholders

5. Measuring success-how organizations monitor brand equity and determine the
return on investment of their branding activities

Overview of Report Findings

Business-to-business organizations face a variety of challenges that distinguish their marketing activities from those of their consumer counterparts. They often face long buy-in periods and complex buying processes in which purchasing decisions are ostensibly made using only rational, objective criteria. Furthermore, rapidly changing technology means that products may be obsolete within a few weeks or months of leaving the factory floor. Perhaps most daunting of all, some firms have a traditional managerial mind-set focused on products, production, and distribution rather than creating perceptual value in the minds of customers. In spite of the unique nature of commercial and industrial marketing, brands are built in the business-to-business arena in much the same way as they are established in the consumer marketplace. Branding is about establishing trust and creditability.

Strong business-to-business brands create an intellectual and emotional bond with customers, prospects, end users, channel partners, employees, and other stakeholders. And strong business-to-business brands are clearly delineated from their competitors. The best-practice partners detailed in this report have established unique and distinctive presences in their respective markets. In most cases, these brands have successfully extended their reach from the bricks-and-mortar world to the Internet. Partner firms are far more likely than sponsors to report they have a clearly differentiated brand identity, report much higher levels of immediate recall, and believe they have
achieved higher rates of customer retention than have their competitors. Furthermore, most are able to command a premium price for their products and services.

Brand Architecture

Traditionally, business-to-business organizations have been highly product-focused, with less focus on brand identity. In such organizations, marketing activity was often spread across a wide, disparate line of products and services, with little forethought given to creating a unifying or enduring identity in the minds of customers. As was mentioned earlier, in recent years a number of leading business-to-business marketers have begun to reconsider the importance of branding in commercial and industrial markets.

At the same time, they have recognized the critical link that must be maintained between the firm’s branding strategy and its overall business strategies. Frequently this has led to redefining the relationship among corporate, divisional, and productlevel brands (brand architecture). Such changes have important implications for the roles and responsibilities of those who are tasked with brand identity management. Additionally, brand architecture policies and standards must be developed in a way that fosters the firm’s future growth, its entry into e-commerce, and its ability to adapt rapidly to changing market conditions and organizational forms. The report explores three key findings related to issues of brand architecture.

1. Effective business-to-business branding establishes a strong corporate or competency platform that supports multiple products and audiences and links to the organization’s business strategies.

2. Business-to-business brands need high-level champions.

3. Brand architecture provides a solid but flexible framework for future growth, easing the introduction of new offerings and the absorption of acquisitions.


Business-to-business marketers increasingly are joining with other organizations to leverage the value of their brands. This might be done through joint marketing alliances, market development partnerships, or cobranding relationships. This section examines practices in the latter category by focusing on four primary types of cobranding relationships: licensing, ingredient branding, composite branding, and sponsorships. Best-practice organizations have pursued cobranding relationships of all types more aggressively and successfully than have the sponsor firms. The report examines two key findings related to cobranding programs.

1. Strong business-to-business brands leverage their strength through cobranding relationships.

2. Cobranding relationships must be carefully developed and managed to ensure
consistent and appropriate portrayal of the brand

Development of Brand-Value Proposition or Brand Promise

In the 1998 study Brand Building and Communication: Power Strategies for the 21st Century, one of the most important characteristics that differentiated best-practice organizations from sponsors was the extent to which the partners had articulated a clear, concise, and compelling statement of the brand’s essential value proposition or promise. The goal of the current study is to examine how business-to-business organizations successfully create industrial, commercial, or technology brands. What processes are used? What research is conducted? Who is involved? And what outside resources provide guidance or assistance? Partner organizations invest significant resources in understanding the brand from the standpoint of its many customer segments, as well as from the perspective of employees, channel customers, and even the financial community. Two major key findings are used as the basis for understanding how organizations determine and express the heart of the brand.

1. The brand promise is not a catchy slogan or tag line. It must be grounded in
customer needs and linked to value delivery.

2. Powerful brands create an enduring and compelling aura of leadership, authority, and uniqueness.

Integrated Brand Communication

A key challenge facing branding organizations is how to project a consistent,
coherent, and compelling brand identity using an expanding list of offline and online communication tools. Such firms are faced with coordinating brand messages across different communication functions and venues (advertising, public relations, trade exhibits, sales literature, online efforts, etc.) and must ensure that messages from different levels and divisions portray the brand appropriately and consistently. Increasingly, smart business-to-business marketers are not stopping at communicating the brand’s values and attributes only to customers and prospects. Rather, they recognize the importance of internal brand communication. They align the promises to customers with the internal policies and procedures that enable employees to meet their commitments. Best practices regarding brand communication are grouped under four primary key findings.

1. The most important characteristics of brand communication are: sufficiency,
consistency, stability, and focus.

2. Strong brands adapt and refine external communication elements over time but
remain true to their heritage.

3. External brand communication must portray the brand’s strength, image, and
leadership across a variety of vehicles and audiences.

4. Great brands are built from the inside out.
Measuring Success

Measuring the success of branding programs is a challenging and complex task. A
model of brand equity is presented that includes five primary components: awareness, brand identity and image, retention and advocacy, perceived quality, and financial values. These components are measured in regard to the firm’s competitors and its various constituencies (customers, employees, investors, etc.). The model forms the basis for a recommended brand metrics framework. However, it is noted that the metrics for some areas are far more developed and well-established than for others. For example, a number of well-established and useful tools measure aspects of brand awareness, brand identity and image, and perceived quality. Metrics of customer retention and brand valuation, however, have only recently gained a degree of prominence, and their use is not yet widespread among the study participants. Best practices regarding measuring success are compiled under one key finding.

1. Success metrics must integrate multiple components of brand equity in a robust model encompassing qualitative, quantitative, and financial measurement.

Benchmarking Model: The Four-Phased Methodology


The consortium benchmarking methodology was developed in 1993 and serves as one of the premier methods for successful benchmarking in the world. It is an extremely powerful tool for identifying best and innovative practices and for facilitating the actual transfer of those practices.

Phase 1: Plan
The planning phase of the study began in the spring of 2000. During that period, an expert panel was assembled and polled to identify organizations that were believed to have demonstrated excellence in one or more of the five areas of the study’s focus. This list was expanded to include input from the Business Marketing Association, the Institute for the Study of Business Markets, and from secondary research sources. Each identified company was invited to participate in a screening process. Based on the results of the screening process, as well as company capacity or willingness to participate in the study, the final list of eight partners was developed. A kickoff meeting was held in June 2000 during which the sponsors refined the study scope, provided input on the data collection tools, and indicated their preferences for site visits to partner organizations.

Finalizing the data collection tools and piloting them within the sponsor group
concluded the planning phase.

Phase 2: Collect
Two tools were used to collect information for this study.
1. Detailed questionnaire-quantitative questions designed to collect objective,
quantitative data across all participating organizations
2. Site visit guide-qualitative questions parallel the areas of inquiry in the detailed questionnaire, which serves as the structured discussion framework for all site visits.

All partners and sponsors completed the detailed questionnaire. Additionally,
five partner organizations (Caterpillar, Cisco, Hewlett-Packard, Lucent, and Rockwell Automation) were selected to host half-day site visits attended by sponsors and members of the study team. Furthermore, an extended telephone interview using the site visit guide was conducted with Dell Computer. The study team prepared written reports (case studies) of each site visit and interview and submitted them to the partner organizations for approval or clarification.

Phase 3: Analyze
The subject matter experts and Apqc analyzed both the quantitative and qualitative information gained from the data collection tools. The analysis concentrated on examining the challenges organizations face in managing, leveraging, communicating, and tracking their brand and the policies and processes that appear to be associated with successful branding practices. The analysis of the data, as well as case examples based on the site visits, is contained in this report.

Phase 4: Adapt
Adaptation and improvement stemming from the best practices identified through
a consortium study occur after the sponsor organizations begin to apply key findings to their own operations. Apqc staff members are available to help sponsors create action plans appropriate for the organization based on the study.
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4 Sponsor and Partner Organizations<BR><BR>A listing of the sponsor organizations in this study, as well as the best-practice (“partner”) organizations that were benchmarked for their innovation and advancement in business-to-business branding.<BR><BR>6 Executive Summary<BR><BR>A bird’s-eye view of the study, presenting the key findings discovered and the methodology used throughout the course of the study. The findings are explored in detail in following sections.<BR><BR>15 Findings<BR><BR>An in-depth look at the 12 key findings of this study. The findings are supported by quantitative data and qualitative examples of practices employed<BR>by the partner organizations.<BR><BR>127 Partner Organization Case Studies<BR><BR>Background information on the partner<BR>organizations and their branding practices.
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